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<SEC-DOCUMENT>/in/edgar/work/0000897069-00-000505/0000897069-00-000505.txt : 20001016
<SEC-HEADER>0000897069-00-000505.hdr.sgml : 20001016
ACCESSION NUMBER:		0000897069-00-000505
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20000929
ITEM INFORMATION:		
ITEM INFORMATION:		
FILED AS OF DATE:		20001013

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			REGAL BELOIT CORP
		CENTRAL INDEX KEY:			0000082811
		STANDARD INDUSTRIAL CLASSIFICATION:	 [3560
]		IRS NUMBER:				390875718
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		8-K
			SEC ACT:		
			SEC FILE NUMBER:	001-07283
			FILM NUMBER:		739842
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		200 STATE ST
				CITY:			BELOIT
				STATE:			WI
				ZIP:			53511
				BUSINESS PHONE:		6083648800
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		200 STATE STREET
					CITY:			BELOIT
					STATE:			WI
					ZIP:			53511-6254
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	BELOIT TOOL CORP
						DATE OF NAME CHANGE:	19730522
</FORMER-COMPANY>

						FORMER COMPANY:	
							FORMER CONFORMED NAME:	RECORD A PUNCH CORP
							DATE OF NAME CHANGE:	19690320
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 8-K
<TEXT>



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 8-K


                                 CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

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


                Date of Report
                (Date of earliest
                event reported):      September 29, 2000


                            Regal-Beloit Corporation
              --------------------------------------------
             (Exact name of registrant as specified in its charter)


   Wisconsin                        1-7283                      39-0875718
- ---------------                     ------                      ----------
(State or other                 (Commission File               (IRS Employer
jurisdiction of                     Number)                  Identification No.)
incorporation)



                 200 State Street, Beloit, Wisconsin 53511-6254
           ----------------------------------------------------------
          (Address of principal executive offices, including zip code)


                                 (608) 364-8800
                          -----------------------------
                         (Registrant's telephone number)

<PAGE>

Item 2.   Acquisition or Disposition of Assets.
- ------    ------------------------------------

          On September 29, 2000, Regal-Beloit Corporation (the "Company")
acquired through a wholly-owned subsidiary ("Purchaser") all of the issued and
outstanding shares of capital stock ("Leeson Stock") of Leeson Electric
Corporation, a Wisconsin corporation ("Leeson"), pursuant to a Stock Purchase
Agreement, dated as of August 7, 2000, as amended by First Amendment to Stock
Purchase Agreement, dated as of September 29, 2000 (the "Stock Purchase
Agreement"), among the Company, Purchaser, Leeson and Leeson's shareholders
("Leeson Shareholders"). The Company's acquisition of the Leeson Stock and the
consummation of the transactions related thereto are referred to herein as the
"Acquisition."

          As consideration for the Leeson Stock, the Company paid to the Leeson
Shareholders approximately $260 million in cash at the closing of the
Acquisition for a debt-free company. The purchase price paid to the Leeson
Shareholders is subject to a post-closing adjustment based on the net working
capital at September 29, 2000, as set forth in the Stock Purchase Agreement. The
purchase price paid by the Company in the Acquisition was determined on the
basis of arm's length negotiations between the parties. There is no material
relationship between Leeson and the Company or any of its affiliates, directors
or officers or any of their associates.

          The Company funded the Acquisition through proceeds from borrowings
through credit facilities provided under a Credit Agreement, dated as of
September 29, 2000 (the "Credit Agreement"), among the Company, M&I Marshall &
Ilsley Bank, as Administrative Agent, and Swing Line Bank, Bank of America,
N.A., as Documentation and Syndication Agent, Banc of America Securities LLC,
Lead Arranger and Book Manager and each of the Banks party to the Credit
Agreement.

          The description contained herein is qualified in its entirety by
reference to the Stock Purchase Agreement, the Credit Agreement and a News
Release dated October 2, 2000, which are filed as Exhibit 2, Exhibit 4 and
Exhibit 99, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.

          In connection with the Acquisition, the Company, through Leeson,
acquired all of the issued and outstanding shares of capital stock of Leeson
Canada Inc. and Leeson Electric International, Inc. (collectively, the "Leeson
Subsidiaries"). Leeson and the Leeson Subsidiaries are engaged in the business
of developing, manufacturing, selling and distributing AC and DC electric motors
and other motor and related products. It is the intention of the Company to
continue to operate the business of Leeson and the Leeson Subsidiaries as part
of the Company's operations.


                                      -2-
<PAGE>

Item 7.   Financial Statements , Pro Forma Financial Information and Exhibits.
- ------    -------------------------------------------------------------------

          (a) Financial Statements of Business Acquired.
              -----------------------------------------

          The required financial statements for Leeson are not filed with this
Current Report on Form 8-K, but will be filed as soon as practicable and in no
event later than December 12, 2000.

          (b) Pro Forma Financial Information.
              -------------------------------

          The required pro forma financial information is not filed with this
Current Report on Form 8-K, but will be filed as soon as practicable and in no
event later than December 12, 2000.

          (c) Exhibits.
              --------

          The exhibits listed in the accompanying Exhibit Index are filed as
part of this Current Report on Form 8-K.


                                      -3-
<PAGE>

                                   SIGNATURES
                                   ----------

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                     REGAL-BELOIT CORPORATION



Date:  October 13, 2000              By: /s/ Kenneth F. Kaplan
                                         --------------------------------------
                                     Kenneth F. Kaplan
                                     Vice President, Chief Financial Officer and
                                     Secretary



                                      -4-
<PAGE>
                            REGAL-BELOIT CORPORATION

                   Exhibit Index to Current Report on Form 8-K
                            Dated September 29, 2000


Exhibit
Number                               Description
- ------                               -----------

(2)            Stock Purchase Agreement, dated as of August 7, 2000, as amended
               by First Amendment to Stock Purchase Agreement, dated as of
               September 29, 2000, among Regal-Beloit Corporation, LEC
               Acquisition Corp., Leeson Electric Corporation ("Leeson") and
               Leeson's shareholders.*

(4)            Credit Agreement, dated as of September 29, 2000, among
               Regal-Beloit Corporation, M&I Marshall & Ilsley Bank, as
               Administrative Agent, and Swing Line Bank, Bank of America, N.A.,
               as Documentation and Syndication Agent, Banc of America
               Securities LLC, Lead Arranger and Book Manager and each of the
               Banks party to the Credit Agreement.*

(99)           News Release dated October 2, 2000.




- ------------------------
*    The schedules and exhibits to this document are not being filed herewith.
     The registrant agrees to furnish supplementally a copy of any such schedule
     or exhibit to the Securities and Exchange Commission upon request.


                                      -5-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>STOCK PURCHASE AGREEMENT
<TEXT>



                            STOCK PURCHASE AGREEMENT


                                  By and Among


                            REGAL-BELOIT CORPORATION,


                             LEC ACQUISITION CORP.,


                          LEESON ELECTRIC CORPORATION,


                                       AND


                 THE SHAREHOLDERS OF LEESON ELECTRIC CORPORATION





                                 August 7, 2000


<PAGE>

                      AGREEMENT AND PLAN OF REORGANIZATION

                                TABLE OF CONTENTS


ARTICLE I. DEFINITIONS.........................................................1
      1.1.     Defined Terms...................................................1

ARTICLE II. PURCHASE OF SHARES.................................................6
      2.1.     Purchase and Sale of Shares.....................................6
      2.2.     The Closing.....................................................6
      2.3.     Payment for Shares..............................................7
      2.4.     Estimated Balance Sheet; Closing Balance Sheet..................7

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF INDEMNIFYING SHAREHOLDERS......12
      3.1.     Organization and Authority.....................................13
      3.2.     Authority; Validity............................................14
      3.3.     No Violation...................................................14
      3.4.     Third Party Consents...........................................14
      3.5.     Financial Statements...........................................14
      3.6.     Tax Matters....................................................14
      3.7.     No Material Adverse Change.....................................17
      3.8.     Absence of Certain Changes.....................................17
      3.9.     Assets.........................................................18
      3.10.    Bank Accounts..................................................19
      3.11.    Litigation.....................................................19
      3.12.    Compliance With Law............................................19
      3.13.    Insurance......................................................19
      3.14.    Material Contracts and Commitment..............................19
      3.15.    Labor Matters..................................................21
      3.16.    Employee Benefit Plans.........................................22
      3.17.    Environmental Matter...........................................23
      3.18.    Proprietary Right..............................................24
      3.19.    Real Property..................................................25
      3.20.    Accounts Receivable............................................26
      3.21.    Product Matters................................................26
      3.22.    Customer; Supplier and Sales Representatives...................26
      3.23.    Affiliates' Relationships to the Company.......................27
      3.24.    Management Information System..................................27
      3.25.    Assets Necessary to Business...................................27
      3.26.    No Brokers or Finders..........................................27
      3.27.    Limitation on Representations and Warranties...................27

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
      SHAREHOLDERS............................................................28


<PAGE>

      4.1.     Power..........................................................28
      4.2.     Claim and Proceedings..........................................28
      4.3.     Validity.......................................................28

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND
      NEWCO...................................................................28
      5.1.     Organization...................................................28
      5.2.     No Violation...................................................29
      5.3.     Authority; Validity............................................29
      5.4.     Third Party Consents...........................................29
      5.5.     Investment Intent..............................................29
      5.6.     Financing......................................................29

ARTICLE VI. COVENANTS.........................................................29
      6.1.     Access to Information and Records..............................30
      6.2.     Conduct of Business Pending the Closing........................30
      6.3.     Filings........................................................31
      6.4.     Consents.......................................................31
      6.5.     Publicity......................................................32
      6.6.     Title Insurance; Surveys and Estoppels.........................32
      6.7.     Disclosure Schedule............................................33
      6.8.     Releases and Resignations......................................33
      6.9.     Subsidiary Stock...............................................34
      6.10.    Indemnification of Directors and Officers......................34
      6.11.    Shareholder Representative.....................................34
      6.12.    Employee Matters...............................................34
      6.13.    Access; Retention of Records...................................35
      6.14.    Exclusivity....................................................35
      6.15.    Certain Transactions...........................................35
      6.16.    Certain Payments...............................................35
      6.17.    Tax Matters....................................................36
      6.18.    Noncompetition Agreements......................................39

ARTICLE VII. CONDITIONS PRECEDENT TO PARENT'S AND NEWCO'S
      OBLIGATIONS.............................................................39
      7.1.     Representations and Warranties True on the Closing Date........39
      7.2.     Compliance With Agreement......................................39
      7.3.     Absence of Litigation..........................................39
      7.4.     Consents and Approvals.........................................39
      7.5.     HSR Act Waiting Period.........................................39
      7.6.     No Material Adverse Change.....................................39
      7.7.     Contribution of the Stock......................................40
      7.8.     Environmental Assessments......................................40
      7.9.     Funding........................................................40
      7.10.    Documents to be Delivered by Company or Company Shareholders...40


                                       ii
<PAGE>

ARTICLE VIII. CONDITIONS PRECEDENT TO COMPANY SHAREHOLDERS'
      OBLIGATIONS.............................................................42
      8.1.     Representations and Warranties True on the Closing Date........42
      8.2.     Compliance With Agreement......................................42
      8.3.     Absence of Litigation..........................................42
      8.4.     Consents and Approvals.........................................42
      8.5.     HSR Act Waiting Period.........................................42
      8.6.     Documents to be Delivered by Parent and Newco..................42
      8.7.     Estimated Purchase Price.......................................43

ARTICLE IX. INDEMNIFICATION AND SURVIVAL......................................43
      9.1.     Survival; Remedies for Breach..................................43
      9.2.     Indemnification on Behalf of Indemnifying Shareholders and
               Company Shareholders...........................................44
      9.3.     Indemnification by Parent......................................46
      9.4.     Indemnification by Company.....................................47
      9.5.     Procedures for Indemnification.................................47
      9.6.     Procedures for Third-Party Claim...............................47
      9.7.     Environmental Matters..........................................48
      9.8.     Material Qualifiers............................................50
      9.9.     [Subrogation...................................................50

ARTICLE X. TERMINATION OF AGREEMENT...........................................51
      10.1.    Causes.........................................................51
      10.2.    Effect of Termination..........................................51
      10.3.    Right to Proceed...............................................51

ARTICLE XI. DISPUTE RESOLUTION................................................52
      11.1.    Dispute........................................................52
      11.2.    Process........................................................52
      11.3.    Negotiations...................................................52
      11.4.    Mediation......................................................52
      11.5.    Submission to Adjudication.....................................53
      11.6.    General........................................................53

ARTICLE XII. MISCELLANEOUS....................................................54
      12.1.    Further Assurance..............................................54
      12.2.    Assignment; Binding Effect.....................................54
      12.3.    Law Governing Agreement........................................54
      12.4.    Amendment and Modification.....................................54
      12.5.    Notice.........................................................54
      12.6.    Expenses.......................................................56
      12.7.    Entire Agreement...............................................56
      12.8.    Counterparts/Facsimile.........................................57
      12.9.    Headings.......................................................57
      12.10.   Construction...................................................57



                                      iii
<PAGE>

      12.11.   Specific Performance...........................................57



                                    Exhibits
                                    --------

Exhibit A                 Ownership of Shares
Exhibit B                 Escrow Agreement
Exhibit C                 Noncompetition Agreement
Exhibit D                 Opinion of Company Shareholders' Counsel
Exhibit E                 Opinion of Parent's and Newco's Counsel
Exhibit F                 Releases



                              Disclosure Schedules
                              --------------------

Schedule 1.1              Indebtedness
Schedule 3.1(a)           Foreign Qualifications
Schedule 3.1(c)           Capitalization
Schedule 3.1(e)           Officers and Directors
Schedule 3.3              No Violation
Schedule 3.4              Consents
Schedule 3.5              Financial Statements
Schedule 3.6              Tax Matters
Schedule 3.7              Material Adverse Changes
Schedule 3.8              Certain Changes
Schedule 3.9              Assets
Schedule 3.10             Bank Accounts
Schedule 3.11             Litigation
Schedule 3.12             Compliance with Laws
Schedule 3.13             Insurance
Schedule 3.14             Material Contracts
Schedule 3.15             Labor Matters
Schedule 3.16(a)          Employee Benefit Plans
Schedule 3.16(c)          Employee Benefit Plan Compliance
Schedule 3.16(d)          Payments and Vesting
Schedule 3.16(e)          Certain Benefits
Schedule 3.16(f)          New Benefit Plans
Schedule 3.17             Environmental Matters
Schedule 3.18             Proprietary Rights
Schedule 3.19(a)          Real Property
Schedule 3.19(c)          Option to Purchase
Schedule 3.19(f)          Village of Grafton
Schedule 3.21             Product Matters


                                       iv
<PAGE>

                              Disclosure Schedules
                              --------------------

Schedule 3.22(a)          Customers and Suppliers
Schedule 3.22(b)          Sales Representatives; Distributors
Schedule 3.22(c)          Sales of Other Companies' Products
Schedule 3.23             Affiliates Transactions
Schedule 6.15             Certain Transactions
Schedule 9.2              Indemnifying Shareholder Percentages


                                       v
<PAGE>

                            STOCK PURCHASE AGREEMENT

          THIS STOCK PURCHASE AGREEMENT is made as of August 7, 2000, by and
among REGAL-BELOIT CORPORATION, a Wisconsin corporation ("Parent"), LEC
Acquisition Corp., a Wisconsin corporation ("Newco"), LEESON ELECTRIC
CORPORATION, a Wisconsin corporation ("Company") and the Shareholders of Company
listed on the Signature Page (individually a "Company Shareholder" and
collectively, the "Company Shareholders").

                                    RECITALS

          A. The Company and the Subsidiaries are engaged in the businesses of
manufacturing, distributing and selling electric motors and power transmission
equipment (the "Business").

          B. Newco is a wholly owned subsidiary of Parent.

          C. Parent desires to acquire all of the outstanding shares of the
capital stock of the Company.

          D. Company Shareholders own all the issued and outstanding shares (the
"Shares") of capital stock of the Company.

          E. Company Shareholders desire to sell the Shares to Newco upon the
terms and conditions herein set forth.

          NOW THEREFORE, in consideration of the Recitals and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, do hereby agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

          1.1. Defined Terms. As used in this Agreement, the terms below shall
have the following meanings. Any of such terms, unless the context otherwise
requires, may be used in the singular or plural, depending on the reference.

          "Agreement" shall mean this Stock Purchase Agreement, as the same
shall be amended from time to time in accordance with its terms.

          "Base Working Capital" shall mean Forty-one Million Eight Hundred and
Seventy-three Thousand Dollars ($41,873,000).

          "Buildings" shall mean the asset categories of buildings, building
improvements and land improvements.

          "Buying Group" shall mean, collectively, Parent and Newco.
<PAGE>

          "Closing" shall mean the conference to be held at 10:00 A.M. Central
Time, on the Closing Date at the offices of Quarles & Brady, 411 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, or such other time and place as the parties
may mutually agree to in writing, at which the transactions contemplated by this
Agreement shall be consummated.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Common Stock" shall mean the authorized shares of the Company's
Common Stock, $1.00 par value.

          "Company Employees" shall mean any persons employed by Company or any
Subsidiary.

          "Disclosure Schedule" shall mean the Disclosure Schedule, dated the
date of this Agreement, delivered by the Shareholder Representative on behalf of
the Indemnifying Shareholders to the Parent and Newco contemporaneously with the
execution and delivery of this Agreement and as the same may be updated from
time to time after the date of this Agreement and prior to the Closing Date in
accordance with the terms of this Agreement.

          "Effective Time" shall mean 11:59 p.m. on the Closing Date.

          "Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment, including Laws relating to
emissions, discharges, generation, storage, handling, transportation, release or
threatened release of Hazardous Substances into the environment, including but
not limited to, the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Comprehensive Environmental Response, Compensation and Liability Act and the
Environmental Protection Act, all as in force and effect as of the Closing.

          "Environmental Insurance" shall mean a fully paid binder of
environmental insurance with terms and with a carrier reasonably acceptable to
Parent, including but not limited to, an aggregate coverage of Five Million
Dollars ($5,000,000), a deductible no greater than the amount of the deductible
remaining available under Section 9.7(e)(ii) and policy duration of not less
than five (5) years.

          "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

          "ERISA Affiliate" shall mean each entity that is, or has ever been,
required by Code Sections 414(b), (c), (m) or (o) to be aggregated with the
Company or any Subsidiary.

          "Escrow Agent" shall mean Marshall & Ilsley Trust Company.

          "Escrow Agreement" shall mean the Escrow Agent Agreement in the form
of Exhibit B attached to this Agreement.

          "Estimated Purchase Price" shall mean Two Hundred Sixty Million
Dollars ($260,000,000); minus the amount of the Estimated Net Indebtedness; as
such amount may be


                                      -2-
<PAGE>

adjusted pursuant to Section 2.4(b) and which shall be paid by Newco to Company
Shareholders pursuant to Article II of this Agreement on the Closing Date, less
the amount delivered to the Escrow Agent.

          "Estimated Net Indebtedness" shall mean the amount of the Net
Indebtedness as shown on the Estimated Balance Sheet.

          "Estimated Working Capital" shall mean the Working Capital as shown on
the Estimated Balance Sheet.

          "Financial Statements" shall mean the consolidated financial
statements of the Company and Leeson Canada Inc. consisting of (i) the
consolidated balance sheets of the Company and Leeson Canada Inc. as of December
31, 1999 and 1998, and the related consolidated statements of income, retained
earnings and cash flows for the years then ended, together with the auditor's
report thereon, and (ii) an unaudited consolidated balance sheet of the Company
and Leeson Canada Inc. as of April 30, 2000 and the related unaudited statement
of income for the interim period then ended and the corresponding period of the
preceding year.

          "GAAP" shall mean United States generally accepted accounting
principles as consistently applied by the Company.

          "Government Entity" shall mean any court, arbitrator, department,
commission, board, bureau, agency, authority, instrumentality or other body of
any government, whether federal, state, municipal, foreign or other.

          "Hazardous Substance" shall mean any substance defined or regulated as
a pollutant, contaminant, or hazardous waste or substance under Environmental
Laws, including but not limited to, polycholorinated biphenyls ("PCBs"),
petroleum or petroleum fractions or asbestos.

          "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.

          "Indemnified Party" shall mean any Party seeking indemnification under
Article IX of this Agreement.

          "Indemnifying Party" shall mean the Party from whom the
indemnification is sought under Article IX of this Agreement.

          "Indemnifying Shareholders" shall mean Daniel L. Doerr, Christopher L.
Doerr and David E. Doerr.

          "Inventory" shall mean all raw materials, supplies, manufactured or
purchased parts, goods in process, finished goods and scrap located at, or en
route to or from, the Company or any Subsidiary, or on consignment with any
third party.


                                      -3-
<PAGE>

          "Investment Canada Act" shall mean the Investment Canada Act, R.S.C.
1985, Chap. 28 (1st Suppl.), as amended.

          "Knowledge of Company" or "Company's Knowledge" shall mean the actual
knowledge of: Daniel L. Doerr, Christopher L. Doerr, Frank Poja, Mary Fonder,
Ronald Clarke, David Spude, Rick Meyer or Ann Wagner.

          "Law" shall mean any foreign, federal, state, local or other
governmental law, rule or regulation of any kind, and the rules and regulations
promulgated thereunder.

          "Machinery and Equipment" shall mean all machinery, dies, tools and
patterns, vehicles, equipment, furniture, fixtures, computer equipment,
leasehold improvements and construction in progress of the Company and
Subsidiary, wherever located.

          "Losses" shall mean damages, liabilities, deficiencies, claims,
actions, demands, judgments, interest, losses, or costs or expenses of whatever
kind including reasonable attorneys' fees, including loss of profits, punitive
damages or other special or consequential damages; provided, however, that
"Losses" shall not be calculated by using a multiple of earnings, book value or
other similar measure which may have been used at arriving or which may be
reflective of the Purchase Price.

          "Net Book Value" shall mean, for any asset, the amount equal to the
net book value of that asset, and for any liability, the book amount of such
liability.

          "Net Indebtedness" shall mean: (a) any indebtedness for borrowed money
(including current maturities of such debt, and including but not limited the
indebtedness described in the Schedule 1.1 of the Disclosure Schedule); minus
(b) any cash or cash equivalents; as shown on the Estimated Balance Sheet or the
Closing Balance Sheet, as the case may be.

          "Noncompetition Agreements" shall mean the Noncompetition Agreements
between Parent, Company and the Persons described in Section 6.18, in
substantially the form of Exhibit C attached hereto.

          "Order" shall mean any order, judgment, writ, injunction, ruling or
decree of a Government Entity.

          "Parties" shall mean, collectively, the Company, Company Shareholders,
Shareholder Representative, Parent and Newco.

          "Person" shall mean a natural person, corporation, limited liability
company, trust, partnership, government entity, agency or branch or department
thereof, or any other legal entity.

          "Purchase Price" shall mean: Two Hundred Sixty Million Dollars
($260,000,000); minus (a) the amount of Net Indebtedness to which the Company or
any Subsidiary is subject as of the Closing Date, minus (b) one-half of the cash
surrender value of


                                      -4-
<PAGE>

the life insurance policies on Christopher L. Doerr and Daniel L. Doerr, and
minus (c) the adjustments to Purchase Price determined in accordance with
Section 2.4.

          "Real Property" shall mean any real property owned or leased by the
Company or any Subsidiary.

          "Shareholder Representative" shall mean the Person or Persons
appointed to that position as provided in Section 6.11 of this Agreement.

          "Subsidiaries" shall mean Leeson Canada Inc., an Ontario corporation,
and Leeson Electric International, Inc., a Wisconsin corporation.

          "Tax" or "Taxes" shall mean all taxes, levies, charges or fees
including, without limitation, income, profits, corporation, advance
corporation, gross receipts, transfer, excise, property, sales, use,
registration, alternative or add-on minimum, estimated, value-added, severance,
stamp, occupation, premium, windfall profits, environmental, custom duties,
capital stock, license, payroll, pay-as-you-earn, employment, withholding,
social security, FICA, workers' compensation, unemployment, disability, Pension
Benefit Guaranty Corporation Premiums, real property, personal property, ad
valorem, single business and franchise or other governmental taxes or charges,
imposed by the United States or any state, territory, county, local, provincial,
foreign government, or other taxing authority, however denominated, whether
disputed or not, and such term shall include any interest, penalties or
additions to tax attributable to such taxes, whether disputed or not.

          "Tax Return" shall mean any report, return, declaration, estimate,
claim for refund, information statement or statement relating to Taxes,
including any form, schedule, or attachment thereto, required to be filed or
supplied to a taxing authority in connection with Taxes, and including any
amendment thereof.

          "Third-Party Claim" shall mean a legal proceeding, action, claim or
demand instituted by any third person or governmental entity.

          "Working Capital" shall mean (A) the Net Book Value of all accounts
receivable, inventory, prepaid expenses and other current assets other than cash
and cash equivalents,; minus (B) the Net Book Value of all accounts payable and
accrued expenses (other than Net Indebtedness); as shown on the Estimated
Closing Balance Sheet or the Closing Balance Sheet, as the case may be.

          Other Terms. The following terms shall have the meaning set forth in
the Sections of this Agreement listed on the following table:


                                      -5-
<PAGE>

                                                       Agreement
                    Term                              Section No.
                    ----                              -----------

             Acquisition Proposal                         6.14
             Allocation Schedule                        6.17(f)
             Ancillary Instruments                        3.2
             Business                                   Recitals
             Closing Balance Sheet                       2.4(c)
             Closing Date                                 2.2
             Company                                    Recitals
             Shareholder Representative                   6.11
             Company Shareholders                       Recitals
             CPR                                          11.4
             Cut-Off Date                                9.1(a)
             Dispute                                      11.1
             Employee Benefit Plan                      3.15(a)
             Environmental Action Items                9.7(a)(ii)
             Escrow Amount                               2.3(b)
             Estimated Balance Sheet                   2.4(a)(i)
             Independent Accountants                     2.4(f)
             Investigation and Remediation             9.7(c)(i)
             Material Contracts                           3.13
             Newco                                      Recitals
             Parent                                     Recitals
             Pro Rata Share                              2.3(a)
             Replacement                                  11.6
             Request                                      11.4
             Shares                                     Recitals
             Updated Disclosure                          6.7(b)

                                   ARTICLE II
                               PURCHASE OF SHARES

          2.1. Purchase and Sale of Shares. Subject to the conditions precedent
hereinafter contained, on the Closing Date, Newco shall purchase from each of
the Company Shareholders, and each of the Company Shareholders shall sell to
Newco the number of Shares owned by such Company Shareholders as specified in
Exhibit A.

          2.2. The Closing. The Closing shall take place on or before the third
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the Parties will take at the
Closing itself) but in no event later than October 15, 2000, or such other time
and date as the Parties may mutually determine (the "Closing Date"). The
consummation of the transactions contemplated hereby at the Closing shall be
effective as of the Effective Time.


                                      -6-
<PAGE>


          2.3. Payment for Shares. On the Closing Date, subject to the terms and
conditions herein contained, upon surrendering the certificates evidencing the
Shares duly endorsed or accompanied by duly executed assignments separate from
certificate (or an affidavit of lost certificate in form and substance
reasonably acceptable to Parent), Parent shall cause Newco to pay to the Company
Shareholders, the Purchase Price as follows:

               (a) Cash to Shareholders. The Estimated Purchase Price (as
adjusted in accordance with Section 2.4), less the amount paid to the Escrow
Agent pursuant to subsection 2.3(b) below, by wire transfer of immediately
available Federal funds to each Company Shareholder of an amount equal to such
Company Shareholder's proportionate share thereof based upon the respective
percentage ownership of the Shares as set forth in Exhibit A hereto (such
percentage ownership hereinafter referred to as such Company Shareholder's "Pro
Rata Share").

               (b) Cash to Escrow. Newco shall pay to the Escrow Agent Two
Million Five Hundred Thousand Dollars ($2,500,000) (the "Escrow Amount") by wire
transfer of immediately available Federal funds. The Escrow Amount shall be
held, invested and applied by the Escrow Agent in accordance with the Escrow
Agreement. Upon final determination of the Closing Balance Sheet, the Escrow
Agent shall pay to the Company Shareholders One Million Five Hundred Thousand
Dollars ($1,500,000), less any claims made but not yet paid. Upon completion of
the investigation and remediation of the Environmental Action Items in
accordance with Section 9.7, the Escrow Agent shall pay to the Company
Shareholders the remaining Escrow Amount, less any amount for claims made but
not yet paid. Notwithstanding anything to the contrary contained in this
Agreement, the Escrow Amount shall not constitute part of the Purchase Price
unless and until disbursed by the Escrow Agent to the Company Shareholders. For
all purposes, including without limitation financial reporting and income
taxation, the Escrow Amount shall constitute consideration for the purchase of
the Shares which is contingent upon disbursement to the Company Shareholders
from the Escrow Amount on the terms and conditions contained in the Escrow
Agreement.

         2.4. Estimated Balance Sheet; Closing Balance Sheet.
              ----------------------------------------------

               (a) Pre-Closing Deliveries. No less than five (5) business days
prior to the Closing Date, the Company shall prepare and deliver to Parent for
Parent's review and approval:

                    (i) a pro-forma balance sheet (the "Estimated Balance
Sheet") of the Company and the Subsidiaries which, except as set forth in
Section 2.4(j), shall be prepared in accordance with GAAP on a basis consistent
with the Company's April 30, 2000 balance sheet;

                    (ii) a calculation of the Estimated Working Capital based on
the Estimated Balance Sheet; and

                    (iii) a calculation of the Estimated Net Indebtedness based
on the Estimated Balance Sheet.


                                      -7-
<PAGE>

               (b) Initial Purchase Price Adjustment. For purposes of Closing,
the Estimated Purchase Price will be adjusted if the Estimated Working Capital
is less than the Base Working Capital. If the Estimated Working Capital is less
than the Base Working Capital, then the Estimated Purchase Price will be
decreased on a dollar-for-dollar basis by the amount of such deficiency.

               (c) Preparation of Closing Balance Sheet. As promptly as
practicable, but in no event later than sixty (60) days following the Closing
Date, the Shareholder Representative will cause the accounting firm of Arthur
Andersen, LLP to prepare a balance sheet (the "Closing Balance Sheet") of the
Company as of the Closing Date and a calculation of the Working Capital and Net
Indebtedness as of the Closing Date based on the Closing Balance Sheet. Except
as set forth in Section 2.4(j), the Closing Balance Sheet and the calculation of
the Working Capital and Net Indebtedness shall be prepared in accordance with
GAAP on a basis consistent with the preparation of the Company's April 30, 2000
balance sheet.

               (d) Bases for Objection. The only bases upon which Parent may
dispute any matter in the Closing Balance Sheet or the calculation of the
Working Capital or Net Indebtedness are: (i) the inaccuracy of such matter,
whether factually or numerically; or (ii) the Closing Balance Sheet was not
prepared as provided in this Agreement.

               (e) Objection by Parent. The Closing Balance Sheet and the
calculation of Working Capital and Net Indebtedness shall be final and binding
upon the Parties unless Parent objects to any matter in the Closing Balance
Sheet or the calculation of the Working Capital or Net Indebtedness within
thirty (30) calendar days after receipt of the Closing Balance Sheet by: (i)
notifying the Shareholder Representative in writing of such objection; and (ii)
providing the Shareholder Representative with a detailed statement describing
the basis for such objection along with Parent's calculation of the Working
Capital and Net Indebtedness. If the Shareholder Representative agrees with the
objection of the Parent, the Estimated Purchase Price, as adjusted pursuant to
Section 2.4(b) above, shall be further adjusted in the manner set forth in
Section 2.4(h) of this Agreement. If the Shareholder Representative does not
agree with the objection of Parent or with Parent's calculation of the Working
Capital or Net Indebtedness, the Shareholder Representative shall, within
fifteen (15) days after receipt of the objection of Parent, notify the Parent in
writing of such fact. Shareholder Representative and Parent shall agree to
release from the Escrow any amount not in dispute pursuant to Section 2.3(b).

               (f) Independent Accountants. The Parties shall thereafter use
their reasonable best efforts to resolve the dispute; provided, that, if the
Parties are unable to resolve their dispute within thirty (30) days following
the expiration of the fifteen (15) day period described above, by notice of
Parent or the Shareholder Representative to the other, the disagreement between
the Parent and Shareholder Representative may then be submitted by either party
for resolution to the Chicago, Illinois office of PricewaterhouseCoopers, LLP,
or to the Chicago, Illinois office of such other firm of independent certified
public accountants of national standing which has not provided substantial
services to Parent, the Company, Shareholder Representatives or any of their
affiliates and which firm is agreed to in writing by the Parent and Shareholder
Representative (the "Independent Accountants"). If the Parent and



                                      -8-
<PAGE>

the Shareholder Representative are unable to agree on the Independent
Accountants within ten (10) days after the receipt of such notice, the
Independent Accountants shall be the Chicago, Illinois office of a "Big 5"
accounting firm chosen by lot (after excluding any such firm that has provided
substantial services to the Parent, the Company, Shareholder Representatives or
any of their affiliates). The Parties agree to execute a reasonable engagement
letter if requested by the Independent Accountants. The Independent Accountants
shall act as an arbitrator to determine, based on the provisions of this Section
2.4, only those matters in dispute. Within ten (10) business days after the
Independent Accountants have been retained, the Parties shall deliver to the
Independent Accountants and the other Party, such Party's position with respect
to each matter in dispute. Within five (5) business days after the expiration of
such ten (10) day period, each Party may deliver to the Independent Accountants
and the other Party such Party's response to the other Party's position on each
matter in dispute. With each submission, each party may also furnish to the
Independent Accountants such other information and documents as it deems
relevant or such documents or information that may be requested by the
Independent Accountants with appropriate copies or notification being given to
the other Party. The Independent Accountants may, at their discretion, conduct a
conference concerning the disagreement with Parent and Shareholder
Representative, at which conference each party shall have the right to present
additional documents, materials and other information and to have present its
advisors, counsel and accountants. In connection with such process, there shall
be no hearings, oral examinations, testimony, depositions, discovery or other
similar proceedings conducted by any party or by the Independent Accountants.

               (g) Decision. The Independent Accountants shall choose one of the
two positions on each disputed matter within forty-five (45) days after the
submissions provided for in subsection (e) above have been delivered to the
Independent Accountants. The Independent Accountants determination as to each
item in dispute shall be set forth in a written statement delivered to the
Parent and the Shareholder Representative and shall be final and binding on the
Parties. The Independent Accountants shall determine the proportion of their
fees and expenses to be paid by each Parent and the Company Shareholders, based
primarily on the degree to which the Independent Accountants have accepted the
positions of the respective parties. Any portion of the fees and expenses of the
Independent Accountants which are the responsibility of the Company Shareholders
shall be included as a liability on the Closing Balance Sheet.

               (h) Adjustments. The proposed Closing Balance Sheet and
calculation of Working Capital and Net Indebtedness shall be revised as
appropriate to reflect any agreement between the Parties with respect to the
Closing Balance Sheet or any decision of the Independent Accountants pursuant to
Section 2.4(f) and the Estimated Purchase Price shall be adjusted as follows:

                    (i) In the event that the Working Capital based on the
Closing Balance Sheet as so revised is in excess of the Estimated Working
Capital, Parent shall pay such excess to Company Shareholders; provided,
however, Parent shall not be required to pay the Company Shareholders pursuant
to this subsection 2.4(h)(i) more than the amount by which the Purchase Price
was reduced pursuant to Section 2.4(b) above. In the event that the Estimated
Working Capital is in excess of the Working Capital based on the


                                      -9-
<PAGE>

Closing Balance Sheet as so revised, the Company Shareholders shall pay such
excess to Parent.

                    (ii) In the event that the Net Indebtedness based on the
Closing Balance Sheet as so revised is in excess of the Estimated Net
Indebtedness, the Company Shareholders shall pay such excess to Parent. In the
event that the Estimated Net Indebtedness is less than the Net Indebtedness
based on the Closing Balance Sheet as so revised, Parent shall pay such excess
to the Company Shareholders.

                    (iii) Any amounts owing to Parent pursuant to this Section
2.4(h) shall be paid from the Escrow Amount in accordance with the terms of the
Escrow Agreement. In the event that the amount to be paid to Parent pursuant to
this Section 2.4(h) exceeds the Escrow Amount, the Indemnifying Shareholders
shall wire to Parent in immediately available Federal funds such excess. In the
event that the Company Shareholders are entitled to a payment pursuant to this
Section 2.4(h), Parent shall pay the Company Shareholders the amount of such
payment and the Escrow Amount shall be disbursed to the Company Shareholders.

               (i) Payment. Any payment pursuant to Section 2.4(h) of this
Agreement shall be made within three (3) business days after an agreement
between the Parties with respect to the Closing Balance Sheet or any decision of
the Independent Accountants pursuant to Section 2.4(f) and shall include
interest on the amount due from the Closing Date to and including the date paid
in full at an annual interest rate equal to 7.5% rate of interest. Any payment
to the Company Shareholders shall be made by wire transfer to such account as
may be designated by the Shareholder Representative who shall be responsible to
disburse such amount to the Company Shareholders in accordance with their Pro
Rata Share.

               (j) Exceptions. Notwithstanding the foregoing, the Closing
Balance Sheet and the Estimated Balance Sheet: ----------

                    (i) shall include year-end adjustments required by GAAP and
any other adjustments resulting from the transactions contemplated in this
Agreement;

                    (ii) shall reflect the Net Book Value of all of the assets
of the Company and the Subsidiaries and the Net Book Value of all of the
liabilities of the Company and the Subsidiaries, in each case on a consolidated
basis;

                    (iii) shall include as a liability thereon; provided, that,
to the extent the Company and not the Company Shareholders benefit from a tax
deduction after paying any such expenses following the Closing Date, only the
net amount of such liability after taking into account the benefit of such
deduction shall be included as a liability:

                         A. the fees of Arthur Andersen, LLP in preparing the
Closing Balance Sheet to the extent not paid prior to Closing or out of the
Estimated Purchase Price;

                         B. the fees of Arthur Andersen, LLP, Quarles & Brady,
LLP, Robert W. Baird & Co. Incorporated, Keyser Mason Ball, LLP, Northern


                                      -10-
<PAGE>

Environmental, the environmental consultants conducting the compliance audits
and Phase I environment site assessments, and other advisors or consultants of
the Company, Company Shareholders and the Shareholder Representative, in each
case to the extent not paid prior to Closing or out of the Estimated Purchase
Price;

                         C. the obligations of the Company to pay the "stay
bonuses" as described in Schedule 3.16(d) of the Disclosure Schedule, to the
extent not paid out of the Estimated Purchase Price;

                         D. the obligation of the Company to participants in
the Company's stock appreciation rights plan described in Schedule 3.16(a) of
the Disclosure Schedule, to the extent not paid out of the Estimated Purchase
Price;

                         E. the Taxes payable by the Company as a result of the
Section 338(h)(10) Election;

                         F. the Taxes payable by the Company post-closing as a
result of the disposition of any assets described in Section 6.15; and

                         G. the fees and expenses of title insurance policies
(but not the endorsements required by Parent) described in Section 6.6, to the
extent not paid prior to Closing or out of the Estimated Purchase Price.

                         H. the obligations of the Company for payroll or other
deductions from employees from payment to third parties on a future date; and

                         I. the obligations of the Company pursuant to Schedule
3.16 (a)(9) and (11).

                    (iv)  shall not include as an asset or a liability thereon:

                         A. any of the assets or liabilities described in
Section 6.15; or

                         B. any notes payable by the Company to any Company
Shareholder or any notes receivable by the Company from any Company Shareholder.

                         C. any accrual or reserve for Hawaii 2001 sales
contest.

                    (v) for purposes of the Closing Balance Sheet only, shall
include an Inventory asset line item based on a schedule detailing the results
of a physical inventory conducted by the Company and observed by representatives
of the Buying Group, including but not limited, to Arthur Andersen, L.L.P.
within three (3) days of the Closing Date, and be prepared in accordance with
GAAP.


                                      -11-
<PAGE>

                    (vi) shall reflect an increase in certain reserves
designated by Parent in a dollar amount equal to the product of (A) Thirty-Two
Million (32,000,000) less (the aggregate purchase price allocated in accordance
with Section 6.17(f) to the Machinery and Equipment and Inventory less such
assets' aggregate adjusted tax basis), times (B) .23 (the "Allocation
Adjustment"); provided that (x) the Allocation Adjustment shall be reduced by
the product of (the aggregate Purchase Price allocated to Buildings less such
assets' aggregate adjusted tax basis (the "Difference")) times .05, but only to
the extent such Difference results in Section 1250 of the Code recapture to the
Company Shareholders; and (y) the Allocation Adjustment amount shall be in
addition to any increases/decreases in the reserves determined in accordance
with subsection 2.4(j)(i) above. To the extent that the parties make a Section
338(h)(10) Election with respect to Leeson Canada Inc., and the allocation of
Purchase Price to assets of Leeson Canada Inc. in excess of such assets'
aggregate adjusted tax basis (the "Spread") creates taxable income to Company
Shareholders that results in taxes computed at rates in excess of the applicable
capital gains rates (less applicable tax credits), the Parties agree to
equitably adjust the Allocation Adjustment to offset such difference.

               (k)  Cooperation.

                    (i) The Shareholder Representative will make the work papers
and back-up materials used in preparing the Closing Balance Sheet, and any
related books, records and representatives of Arthur Anderson, LLP, available to
Parent and its accountants and other representatives and to the Independent
Accountants resolving any claim concerning the Closing Balance Sheet at
reasonable times and upon reasonable notice at any time during (A) the
preparation of the Closing Balance Sheet, (B) the review by Parent of the
Closing Balance Sheet, and (C) the resolution by the Parent and the Shareholder
Representative of any objections to the Closing Balance Sheet.

                    (ii) Parent will, and will cause the Company to, make the
work papers and back-up materials used in (or necessary for) the Closing Balance
Sheet, and any books, records and financial staff of Parent and the Company and
their accountants and other representatives, available to the Shareholder
Representative and Arthur Andersen, LLP and their other representatives and to
the Independent Accountants resolving any claim concerning the Closing Balance
Sheet at reasonable times and upon reasonable notice at any time during (A) the
preparation of the Closing Balance Sheet, (B) the review by the Shareholder
Representative of Parent's objections to the Closing Balance Sheet, and (C) the
resolution by Parent and the Shareholder Representative of any objections to the
Closing Balance Sheet.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES
                          OF INDEMNIFYING SHAREHOLDERS

          All representations and warranties of the Indemnifying Shareholders
are made subject to the exceptions which are noted in the Disclosure Schedule
and in any other schedules attached to this Agreement, as supplemented from time
to time by the Company Shareholders hereafter and prior to the Closing Date in
accordance with the terms of this Agreement. Each representation and warranty is
true and correct on the date hereof, and shall


                                      -12-
<PAGE>

survive the Closing of the transactions as provided for herein. Subject to the
foregoing, the Indemnifying Shareholders hereby represent and warrant to Parent
and Newco as follows:

          3.1. Organization and Authority.

               (a) The Company is a corporation validly existing and in active
status under the Laws of the State of Wisconsin. Each Subsidiary is a
corporation validly existing and in active status under the Laws of the
jurisdiction of its incorporation. The Company is, and each Subsidiary is, duly
qualified to conduct business as a foreign corporation, and is in good standing,
in each jurisdiction wherein the character of the properties owned or leased by
it, or the nature of its business, makes such licensing or qualification
necessary. Any states or other jurisdictions in which Company or a Subsidiary is
licensed or qualified to do business are listed in the Disclosure Schedule.

               (b) The Company and each Subsidiary have all requisite corporate
power and authority to own, operate and lease its properties and to carry on its
business as and where such is now being conducted.

               (c) The Disclosure Schedule sets forth: (i) the authorized
capital stock of the Company and each Subsidiary; (ii) the name of the
shareholders of the Company and the Subsidiaries and (iii) the number of shares
of capital stock of the Company and each Subsidiary owned by each shareholder
thereof. No shares of capital stock of the Company or any Subsidiaries are
issued or outstanding except as set forth in the Disclosure Schedule. All of the
outstanding shares of the Common Stock and all of the outstanding the shares of
capital stock of each Subsidiary have been duly authorized and validly issued,
are fully paid and nonassessable, except, with respect to the Company and Leeson
Electric International, Inc., as set forth in Section 180.0622(b) of the
Wisconsin Statutes, as judicially interpreted. The outstanding shares of the
capital stock of each Subsidiary owned by the Company are free and clear of all
liens, claims, encumbrances and restrictions. No shares of capital stock of, or
other ownership interest in, the Company or any Subsidiary are reserved for
issuance and, except for this Agreement, there are no outstanding options,
warrants, rights, subscriptions, claims of any character, agreements or
understandings relating to the capital stock of the Company or any Subsidiary
pursuant to which the Company or a Subsidiary is or may become obligated to
issue or exchange any shares of its capital stock.

               (d) Except for the Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
other corporation or have any direct or indirect equity or other ownership
interest in any entity or business. No Subsidiary owns, directly or indirectly,
any capital stock or other equity securities of any other corporation or has any
direct or indirect equity ownership interest in any entity or business.

               (e) The officers and directors of the Company and each of the
Subsidiaries are set forth in the Disclosure Schedule.

               (f) True and complete copies of the charter documents of the
Company and each of the Subsidiaries have been delivered to Parent. The minute
books of the Company and the Subsidiaries which have been provided to Parent for
examination contain


                                      -13-
<PAGE>

complete and accurate records of all material corporate action taken by the
Board of Directors and stockholders of the Company and the Subsidiaries.

          3.2. Authority; Validity. The execution and delivery of this Agreement
and the other documents and instruments to be executed and delivered (such other
documents sometimes referred to herein as "Ancillary Instruments") by the
Company pursuant hereto and the consummation by Company of the transactions
contemplated hereby and thereby have been duly authorized and approved by the
Board of Directors of the Company. No corporate act or proceeding on the part of
Company is necessary to authorize this Agreement or the Ancillary Instruments or
the consummation by Company of the transactions contemplated hereby and thereby.
This Agreement constitutes, and when executed and delivered, the Ancillary
Instruments to be executed and delivered by Company pursuant hereto will
constitute, valid and binding agreements of Company, enforceable against Company
in accordance with their respective terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights
generally, and by general equitable principles.

          3.3. No Violation. Except as set forth on the Disclosure Schedule, the
execution and delivery of this Agreement and the Ancillary Instruments by the
Company and the consummation by Company of the transactions contemplated hereby
will not cause a violation under any provision of (a) the Articles of
Incorporation or Bylaws of the Company or any of the Subsidiaries; (b) any
Material Contract to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary may be bound; or (c) any Order or Law of any
Government Entity to which the Company or any Subsidiary is subject.

          3.4. Third Party Consents. Except for the expiration of the applicable
waiting period under the HSR Act, the notice requirements under the Investment
Canada Act and for the third party consents listed on the Disclosure Schedule,
no material approval, authorization, notice, consent or other action by or
filing with any Person is required for the Company's execution, delivery and
performance of this Agreement or the Ancillary Instruments and the consummation
of the transactions contemplated hereby.

          3.5. Financial Statements. The Disclosure Schedule contains complete
and accurate copies of the Financial Statements. All of such Financial
Statements (a) have been prepared in accordance with the books and records
regularly maintained by the Company and the Subsidiaries, (b) fairly present the
assets, liabilities, financial condition and results of operation of the Company
and the Subsidiaries and (c) were prepared in accordance with GAAP consistently
applied throughout all periods, subject, in the case of the interim statements,
to normal year-end and audit adjustments and any other adjustments described
therein and to the absence of footnotes thereto.

          3.6. Tax Matters.
               -----------

               (a) The Company and the Subsidiaries have filed all federal,
state, local and foreign Tax Returns required to be filed by each of them and
have paid or made adequate provisions for the payment of all Taxes due on such
returns. All Tax Returns filed by the Company and each Subsidiary for each
taxable period were complete and accurate in all respects. Except as set forth
in the Disclosure Schedule, no Tax Returns the due date of which


                                      -14-
<PAGE>

was on or after December 31, 1994, filed by the Company or any Subsidiary have
been audited and no claims for additional Taxes for any taxable period have been
made by any taxing authority and are pending. The Company and each Subsidiary
has duly withheld and paid all Taxes which it is required to withhold and pay
relating to amounts heretofore paid or owing to any employee, independent
contractor, creditor, Company Shareholder or any other third party.

               (b) Neither the Company nor any Subsidiary has been a member of
an affiliated group (within the meaning of Section 1504(a) of the Code) filing a
consolidated federal income tax return.

               (c) Neither the Company nor any Subsidiary is (i) a party to, is
bound by, or has any obligation under, or potential liability with regards to,
any Tax allocation or Tax sharing or Tax indemnification agreement or similar
contract or arrangement, or (ii) has any liability for the Taxes of any person
under Reg. ss. 1.1502-6 promulgated under the Code (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise.

               (d) Except as set forth in the Disclosure Schedule, neither the
Company nor any Subsidiary has received from the Internal Revenue Service or any
other taxing authority any notice of underpayment of taxes, assessment of
additional Taxes, or other deficiency which has not been paid nor any objection
to any Tax Return filed by Company or any Subsidiary. Neither the Company nor
any Subsidiary has entered into any agreement or granted any waiver extending
the statutory period of limitations applicable to any Tax Return. There are no
disputes or other legal proceedings relating to Taxes. No power of attorney has
been granted by or with respect to the Company or any Subsidiary with respect to
any matter relating to Taxes.

               (e) Since January 1, 1994, no claim has been made or asserted by
a jurisdiction where the Company or a Subsidiary does not file Tax Returns that
the Company or such Subsidiary is or may be subject to Taxes assessed by such
jurisdiction.

               (f) The Company properly and timely filed a valid election under
Code Section 1362 to be treated as an S corporation as defined under Code
Section 1361 for Federal income tax purposes effective on November 1, 1987 and
has a corresponding election in effect under the laws of Wisconsin, Illinois,
Minnesota, North Carolina and Ohio effective on November 1, 1987. Such elections
have remained in effect since such times. Except for transactions contemplated
by this Agreement, neither the Company Shareholders, the former Company
Shareholders nor the Company have taken any action nor omitted to take any
action, nor has any event or transaction occurred, that would result in the
revocation or termination of any such elections at any time. The Company does
not have any "net unrealized built-in gain," as such phrase is defined in
Sections 1374(d) of the Code.

               (g)      There are no liens for Taxes (other than current Taxes
not yet due and payable) upon the assets of the Company or any Subsidiary.


                                      -15-
<PAGE>

               (h) Neither the Company nor any Subsidiary is a party to or bound
by any contract, agreement, plan or arrangement covering any Company Employee or
former Company Employee of the Company or any Subsidiary nor is there any
agreement or understanding (including this Agreement) that the Company or any
Subsidiary is a party to that under any circumstances could obligate the
Company, or any Subsidiary, to make payments to Company Employees or former
Company Employees that, individually or in the aggregate, could give rise to any
payment (nor have any payments been made) that would not be deductible pursuant
to Sections 280G or 162 of the Code).

               (i) Neither the Company nor any Subsidiary has applied for any
Tax ruling, entered into any closing agreement with a taxing authority, filed an
election under Code Section 338(g) or Code Section 338(h)(10) (nor has a deemed
election under Code Section 338(e) occurred), filed any consent under Code
Section 341(f) or agreed to have Code Section 341(f)(2) apply to any disposition
of a subsection (f) asset (as defined in Code Section 341(f)(4)) owned by the
Company or Subsidiary as the case may be.

               (j) Neither the Company nor any Subsidiary has been a United
States real property holding corporation within the meaning of Code Section
897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii) and Parent and Newco are not required to withhold Tax on the
purchase of the Shares by reason of Code Section 1445.

               (k) The Company has made available to the Parent true and correct
copies of all requested Federal and state income franchise, and other Tax
Returns with respect to Company together with true and correct copies of all
requested accountants' work papers relating to the preparation thereof.

               (l) Neither the assets of the Company or any Subsidiary are
treated as "tax-exempt use property" within the meaning of Code Section 168(h)
nor secure any debt the interest of which is exempt from Tax under Section 103
of the Code. Neither the Company nor any Subsidiary is a party to any safe
harbor lease within the meaning of Section 168(f)(8) of the Internal Revenue
Code of 1954, as in effect prior to amendment by the Tax Equity and Fiscal
Responsibility Act of 1982. Neither the Company nor any Subsidiary have been the
"distributing corporation" (within the meaning of Section 355(c)(2) of the Code)
with respect to a transaction described in Section 355 of the Code within the
3-year period ending as of the date of this Agreement. Except for Leeson Canada
Inc., neither the Company nor any Subsidiary have participated in an
international boycott as defined in Code Section 999. Neither the Company nor
any Subsidiary has agreed, nor are either required to make, any adjustment under
Code Section 263A, 481(a) or 482 (or similar provision of any Tax law) by reason
of a change in accounting method or otherwise. Neither the Company nor any
Subsidiary has a permanent establishment in any foreign country, as defined in
any applicable Tax treaty or convention between the United States of America and
such foreign country. The Company and each Subsidiary are in compliance with the
terms and conditions of any applicable Tax exemptions, Tax agreements or Tax
orders of any government to which it may be subject or which it may have
claimed, and the transactions contemplated by this Agreement will not have any
adverse effect on such compliance. Since January 1, 1994 , neither the Company
nor any Subsidiary has received a written tax opinion with respect to any
transaction, nor has the Company received a written tax opinion with respect to
any


                                      -16-
<PAGE>

transaction relating to the Company or any Subsidiary, other than a transaction
in the ordinary course of business. Neither the Company nor any Subsidiary is
the direct or indirect beneficiary of a guarantee of Tax benefits or any other
arrangement that has the same economic effect with respect to any transaction or
Tax opinion relating to the Company or any Subsidiary. Neither the Company nor
any Subsidiary is a party to an understanding or arrangement described in
Section 6111(d) or Section 6662(d)(2)(C)(iii) of the Code. Neither the Company
nor any Subsidiary is a party to a lease agreement involving a defeasance of
rent, interest or principal.

               (m) Leeson Canada Inc. is not (and has never been) engaged
in a United States trade or business and is not subject to Taxes of the United
States nor any state or local taxing jurisdiction thereof.

               (n) The provision made for Taxes set forth on the face of the
unaudited balance sheet (excluding in any notes thereto) of the Company and each
Subsidiary as at April 30, 2000 is sufficient for the payment of all taxes at
April 30, 2000, and for all years and periods prior thereto. Since April 30,
2000, except as set forth on the Disclosure Schedule, the Company has not
incurred any Taxes other than Taxes incurred in the ordinary course of business
consistent in type and amount with past practices of the Company and each
Subsidiary and other than Taxes which incurred in connection with the
consummation of the transactions contemplated by this Agreement.

          3.7. No Material Adverse Change. Since April 30, 2000, there has been
no material adverse change in the business, financial position, or results of
operations of the Company and the Subsidiaries, taken as a whole. Except (i) as
and to the extent disclosed in the Disclosure Schedule; (ii) liabilities or
obligations to perform or pay under the executory portion of any Material
Contract, or under the executory portion of any other agreement or commitment of
any kind by which Company is bound and which was entered into in the ordinary
course of business, is on commercially reasonable terms, and is consistent with
Company's past practices; or (iii) as and to the extent reflected or reserved
against in the unaudited balance sheet of the Company as of April 30, 2000,
neither Company nor any Subsidiary has any material liabilities other than
liabilities and obligations incurred since April 30, 2000 in the ordinary course
of business.

          3.8. Absence of Certain Changes. Since April 30, 2000, and except as
disclosed on the Disclosure Schedule, neither the Company nor any Subsidiary
has:

               (a) redeemed, purchased or acquired any shares of its capital
stock;

               (b) issued any shares of its capital stock or securities
convertible into any capital stock;

               (c) incurred any Indebtedness;

               (d) discharged or satisfied any material debt or obligation;

               (e) sold, assigned, transferred or leased any of its material
assets, except in the ordinary course of business;


                                      -17-
<PAGE>

               (f) cancelled or discharged any material debt or claim;

               (g) made or granted any bonus or wage or salary increase to any
Company Employee, except in the ordinary course of business, or made or granted
any increase in any Employee Benefit Plan;

               (h) suffered any material damage, destruction or casualty loss,
whether or not covered by insurance;

               (i) made any change in any method of accounting or accounting
policies;

               (j) amended its charter documents;

               (k) entered into any material agreement other than in the
ordinary course of business; or

               (l) received notice of any general labor dispute or disturbance,
other than routine individual grievances which are not material to the Business.

          3.9.  Assets.
                ------

               (a) The Company and each Subsidiary have good and marketable
title to all of its respective assets and properties free and clear of all
mortgages, liens, claims, security interests, encumbrances and restrictions
except (i) those listed on the Disclosure Schedule, (ii) liens for taxes not yet
due or which are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been made, and (iii) municipal and zoning
ordinances and easements for public utilities, none of which matters in the
foregoing clauses (ii) through (iii) interfere with the use of the property as
currently utilized or affect the marketability of title thereto.

               (b) All of the Company's and the Subsidiaries' tangible property
currently being used in the operation of their business are in good operating
condition and repair, subject to normal wear and tear.

               (c) Except as set forth in the Disclosure Schedule, all of the
tangible personal property owned by the Company or the Subsidiaries is located
on the Real Property, except goods in transit sold in the ordinary course of
business.

               (d) To the extent materially necessary to operate the business of
the Company, all computer hardware, software, databases, systems and other
computer equipment (collectively, "Software") used by the Company or the
Subsidiaries can be used during and after the calendar year 2000, without error
relating to year 2000 problems relating to the processing, calculating,
comparing, sequencing or other use of the data, except to the extent that a
failure to do so would not reasonably be expected to have a material adverse
effect on the Company.


                                      -18-
<PAGE>

          3.10. Bank Accounts. The Disclosure Schedule sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company or any Subsidiary maintains a safe
deposit box, lock box or checking, savings, custodial or other account of any
nature, and the type and number of each such account.

          3.11. Litigation. Except for benefit claims made by participants in
the Employee Benefit Plans of the Company and any Subsidiary, Company Employees
in the ordinary course or as set forth in the Disclosure Schedule, there is no
action, suit, arbitration, inquiry, proceeding, governmental investigation or
claim, whether civil, criminal or administrative, pending or, to Company's
Knowledge, threatened against Company or any Subsidiary, employee, officer or
director in connection with the business, operations or affairs of the Company
or any Subsidiary. The Disclosure Schedule sets forth all litigation to which
the Company or any of its Subsidiaries or directors (in such capacity) have been
parties since 1997. Neither the Company nor its business or assets is subject to
any Order of any Government Entity.

          3.12. Compliance With Law.
                -------------------

               (a) Compliance. Except as set forth in the Disclosure Schedule,
the Company and Subsidiaries are in material compliance with all applicable
Laws.

               (b) Licenses and Permits. The Company and the Subsidiaries have
all governmental licenses, permits, approvals, authorizations and consents and
all certifications required for the conduct of the Business (as presently
conducted) and operation of the facilities used in the Business. All such
licenses, permits, approvals, authorizations, consents and certifications are in
full force and effect. Except as set forth in the Disclosure Schedule, the
Company and Subsidiaries are and have been in material compliance with all such
permits, licenses, approvals, authorizations, consents and certifications.

          3.13. Insurance. The Disclosure Schedule contains a complete list and
description of all insurance policies maintained by the Company and the
Subsidiaries. Since January 1, 1997, the Company and the Subsidiaries have not
had a lapse of insurance coverage and have not had any application for insurance
coverage denied. Such insurance policies are in full force and effect and
Company and the Subsidiaries have not received any notice of any cancellation of
such insurance. There is no claim by Company or any Subsidiary pending under
such policies as to which coverage has been questioned, denied or disputed by
the underwriters of such policies, and to the Company's Knowledge, no basis
exists for denial of any claim under any such policy.

          3.14. Material Contracts and Commitment.
                ---------------------------------

               (a) The Disclosure Schedule sets forth a complete list of each
executory contract and lease to which the Company or a Subsidiary is a party
(the "Material Contracts") which constitute:


                                      -19-
<PAGE>

                    (i) a lease of personal property involving annual
consideration in excess of $75,000;

                    (ii) a Real Property lease;

                    (iii) a labor union or other collective bargaining contract;

                    (iv) a loan agreement, promissory note, letter of credit, or
other evidence of indebtedness (other than advances to Company Employees less
than $25,000 in the ordinary course of business) whether as a signatory,
guarantor or otherwise;

                    (v) an agreement not to compete in any business or
geographic area;

                    (vi) an agreement with a shareholder, officer or director of
the Company or any Subsidiary;

                    (vii) an employment agreement with any Company Employee or
consultant;

                    (viii) a partnership, limited liability company, joint
venture or similar agreement;

                    (ix) a guarantee or similar agreement;

                    (x) a sales representative or distributor agreement with the
top twenty-five (25) of each in terms of total dollar sales in fiscal 1999;

                    (xi) a mortgage, security agreement, sale/leaseback
agreement or other agreement which effectively creates a lien on any assets of
the Company or any Subsidiary;

                    (xii) an agreement for the purchase of capital assets or for
remodeling or construction which involves payment of $100,000 or more;

                    (xiii) a purchase order for merchandise or supplies which
involves payments of $100,000 or more and is not terminable by the Company
without cost or penalty upon sixty (60) days' or less notice;

                    (xiv) a sales contract or commitment which involves
shipments of product valued at $250,000 or more and is not terminable by the
Company without cost or penalty upon sixty (60) days' notice or less;

                    (xv) a power of attorney; or

                    (xvi) any other agreement not covered by the preceding
subsections which (A) involves payments or other obligations in excess of
$100,000, (B) is otherwise material to the operation of the Business.


                                      -20-
<PAGE>

               (b) The Company has made available to Parent true, correct and
complete copies of the Material Contracts, including, without limitation, all
amendments and modifications thereto.

               (c) All of the Material Contracts are valid, binding and
enforceable obligations of the Company or a Subsidiary, as the case may be, and
to the Company's Knowledge, the other parties thereto. Except as disclosed in
the Disclosure Schedule, neither the Company nor any Subsidiary is in breach or
violation of, or default under, any provision of any Material Contract. To the
Company's Knowledge, no third party is in breach or violation of, or default
under, any provision of any Material Contract, nor has any event or omission
occurred which through the passage of time or the giving of notice, or both,
would constitute default thereunder.

          3.15. Labor Matters.
                -------------

               (a) Neither the Company nor the Subsidiaries are a party to any
labor agreement with respect to their respective employees with any labor union.
Except as set forth in the Disclosure Schedule, in the last five years, neither
the Company nor the Subsidiaries have experienced any general labor disputes,
work stoppage or, to the Company's Knowledge, union organization attempts.
Except to the extent set forth in the Disclosure Schedule, (a) the Company and
each Subsidiary are in compliance with all applicable Laws respecting employment
practices, terms and conditions of employment and wages and hours; (b) neither
the Company nor either Subsidiary is engaged in any unfair labor practice; (c)
there is no unfair labor practice charge or complaint against Company or any
Subsidiary pending or, to the Company's Knowledge, threatened before the
National Labor Relations Board or any similar state or provincial agency; (d)
there are no administrative charges or court complaints against Company or any
Subsidiary concerning alleged employment discrimination or other employment
related matters pending or, to the Knowledge of the Company, threatened before
the U.S. Equal Employment Opportunity Commission or any other government entity
(or equivalent commission or government entity in a foreign jurisdiction); and
(e) no question concerning representation by a union has been made to the
Company or, to the Company's Knowledge, is threatened respecting the employees
of the Company.

               (b) The Company and the Subsidiaries have complied with the
applicable provisions of federal immigration and labor law, and, in particular,
has, to the Company's Knowledge, employed only those individuals authorized to
work in the United States as required by the Immigration Reform & Control Act of
1986 (as amended) and its underlying regulations. Neither the Company nor the
Subsidiaries have in the past five years been the subject of any inspection,
audit, investigation, raid, complaint, or other proceeding involving the
Immigration and Naturalization Service, the Department of Justice, or the
Department of Labor regarding its compliance with these laws. Neither the
Company nor the Subsidiaries have in the past five years been warned, fined, or
otherwise penalized because it has failed to comply with these Laws and, to the
Company's Knowledge, no such action has been threatened against it. Neither the
Company nor the Subsidiaries have ever complied with all requirements for the
completion, reverification and updating, and maintenance of INS form


                                      -21-
<PAGE>

I-9 for all of its current employees and for any other individuals employed
within the three years prior to the Closing Date. 3.16. Employee Benefit Plans.

          3.16. Employee Benefit Plans.
                ----------------------

               (a) The Disclosure Schedule sets forth all written pension,
medical, dental, life, accident insurance, employee welfare, disability, group
insurance, and other similar fringe or employee benefit plans, programs and
arrangements, and any severance agreements or plans, vacation and sick leave
plans, programs, arrangements and policies, including, without limitation, all
"employee benefit plans" (as defined in Section 3(3) of ERISA), which are
currently provided to, for the benefit of, or relate to, any current or former
Company Employees, and non-employee directors of or consultants to the Company
or any Subsidiary, or any dependent thereof. The items described in the
foregoing sentence are hereinafter sometimes referred to collectively as
"Employee Benefit Plans," and each individually as an "Employee Benefit Plan."
Except as set forth in the Disclosure Schedule, no Employee Benefit Plan is a
"multiemployer plan" (as defined in Section 4001 of ERISA) or other pension plan
subject to Title IV or ERISA, and neither the Company nor any Subsidiary nor any
ERISA Affiliate has ever maintained, contributed or been obligated to contribute
to any such plan.

               (b) To the Knowledge of Company, there have been no "prohibited
transactions" within the meaning of Section 406 or 407 of ERISA or Section 4975
of the Code for which a statutory or administrative exemption does not exist
with respect to any Employee Benefit Plan, and no event or omission has occurred
in connection with any Employee Benefit Plan which could have a material adverse
effect on the Company and the Subsidiaries, taken as a whole, under ERISA, the
Code or any other Law applicable to any Employee Benefit Plan.

               (c) With respect to each Employee Benefit Plan, except as set
forth in the Disclosure Schedule: (i) all payments due from the Company or any
Subsidiary to date have been made and all amounts properly accrued to date as
liabilities of Company and any Subsidiary which have not been paid have been
properly recorded on the books of Company or any Subsidiary; (ii) all applicable
Laws and regulations, including but not limited to ERISA and the Code have been
satisfied, except where failure to do so would not result in any material
liability to the Company and the Subsidiaries, taken as a whole; (iii) each
Employee Benefit Plan has been administered in accordance with its terms and the
terms of its summary plan description; (iv) each Employee Benefit Plan which is
intended to qualify under Section 401 of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to such
qualification that takes into account the changes required by TRA `86, its
related trust has been determined to be exempt from taxation under Section
501(a) of the Code, and to the Company's Knowledge, nothing has occurred since
the date of such letter that has or is likely to adversely affect such
qualification or exemption; (v) there are no actions, suits or claims pending
(other than routine claims for benefits) and no audits by any Governmental
Entity pending with respect to such Employee Benefit Plan or against the assets
of such Employee Benefit Plan, and to the Company's Knowledge, no act or
omission has occurred which could result in any such actions, suits or claims
(other than routine claims for benefits); and (vi) no accumulated funding
deficiency, as defined in ERISA or the Code, or reportable event, as defined in
ERISA, has occurred.


                                      -22-
<PAGE>

               (d) Except as set forth in the Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not (i)
entitle any current or former Company Employee to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee or former employee or (iii)
result in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not available.

               (e) Except as set forth in the Disclosure Schedule, no Employee
Benefit Plan provides benefits, including, without limitation, death or medical
benefits (whether or not insured) beyond retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii) death or
retirement benefits under any Employee Benefit Plan that is an employee benefit
pension plan, (iii) deferred compensation benefits that are accrued as
liabilities on the books of the Company or Subsidiary, or (iv) disability
benefits under any employee welfare benefit plan.

               (f) Except as set forth in the Disclosure Schedule, neither the
Company nor any Subsidiary has an announced plan or legally binding commitment
to create any additional employee benefit plans or to amend or modify any
existing Employee Benefit Plan, except to the extent required by Law.

               (g) With respect to each Employee Benefit Plan, the Company has
made available to Parent true and correct copies of:

                    (i) the plan document, all amendments thereto, the summary
plan description and any summary of material modifications thereto, and any
other related document (including but not limited to the trust agreement
maintained with respect to such plan);

                    (ii) Form 5500 annual reports for plan years beginning in
1998 and the preceding two years; and

                    (iii) with respect to each Employee Benefit Plan that is
intended to be qualified under Code section 401(a), the most recent favorable
determination letter issued by the Internal Revenue Service

          3.17. Environmental Matter.
                --------------------

               (a) The Company and the Subsidiaries are in material compliance
with applicable Environmental Laws, except as set forth in the Disclosure
Schedule.

               (b) Except as set forth in the Disclosure Schedule, there is no
litigation nor any demand, claim, hearing or written notice of violation pending
or to the Company's Knowledge, threatened against the Company or any Subsidiary
in connection with any Environmental Laws, and the Company has not received any
written notice from any Government Entity that the Company or any Subsidiary is
in violation, or is allegedly in violation of, does not comply or allegedly does
not comply with, is responsible or potentially


                                      -24-
<PAGE>

responsible for the investigation or cleanup of Hazardous Substances under, or
that there is a basis for liability or alleged liability under, any
Environmental Law.

               (c) Except as set forth in the Disclosure Schedule, there are no
past or present conditions, acts or omissions with respect to the operations of
the Business, the activities of the Company or any Subsidiary or the condition
of any Real Property currently or formerly owned or leased by Company or any
Subsidiary that could reasonably be expected to give rise to any claim, remedy
or penalty against or obligation of the Company or any Subsidiary under any
Environmental Law.

               (d) Except as set forth in the Disclosure Schedule, the Company
and all Subsidiaries has obtained all Permits necessary for the operation of the
Business as it is currently being conducted under Environmental Laws. All such
Permits are in full force and effect and the Company and all Subsidiaries are in
material compliance with the terms and conditions of such Permits.

               (e) Except as set forth in the Disclosure Schedule, the Real
Property does not contain underground storage tanks, friable asbestos or PCBs
other than as may be contained in electric transformers in compliance with
Environmental Laws.

               (f) Except as set forth in the Disclosure Schedule, neither the
Company nor any Subsidiary has entered into any agreement that requires it to
pay, reimburse, guaranty, pledge, defend, indemnify or hold harmless any person
for or against liabilities or costs arising in connection with Hazardous
Substances or under Environmental Laws.

          3.18.  Proprietary Right.
                 -----------------

               (a) The Disclosure Schedule lists all patents, patent
applications, trade names, trademarks, service marks, trademarks registrations,
service mark registrations, trade mark applications, service mark applications,
registered copyrights, and copyright applications owned by or licensed to the
Company or any Subsidiary (the "Proprietary Rights"). The Disclosure Schedule
also lists any material intellectual property licenses granted by the Company or
a Subsidiary to any third party or by any third party to the Company or a
Subsidiary.

               (b) There is no claim against the Company or any Subsidiary
alleging that the Company or any Subsidiary infringes on the proprietary rights
of others pending or, to the Company's Knowledge, threatened. Neither the
Company nor any Subsidiary infringes on the proprietary rights of others and, to
the Company's Knowledge, the Proprietary Rights of the Company and the
Subsidiaries have not been infringed by any third party.

               (c) In order to conduct the business of the Company or any
Subsidiary, as such is currently being conducted or proposed to be conducted,
the Company and any Subsidiary do not require any proprietary rights other than
the Proprietary Rights or rights granted or afforded to or by the Company or any
Subsidiary pursuant to a Material Contract.


                                      -24-
<PAGE>

               (d) All royalties and minimum royalties payable under any license
agreement to which the Company or a Subsidiary is a party as of the date hereof
have been paid. The Company and the Subsidiaries are not in breach or of or
default under any such license or other agreement. Each license agreement is a
valid obligation of the Company or such Subsidiary. Except as set forth in the
Disclosure Schedule to Seller's Knowledge, there are no facts which would render
any of the Proprietary Rights invalid or unenforceable.

          3.19.  Real Property.
                 -------------

               (a) The Disclosure Schedule contains a complete and accurate list
of all the Real Property.

               (b) All of the Real Property has rights of access to public roads
and, to the Knowledge of the Company, there is no pending or threatened
restriction or denial, governmental or otherwise, upon such access.

               (c) Except as set forth in the Disclosure Schedule, there is not,
to the Knowledge of the Company, any claim of adverse possession or prescriptive
rights involving any of the Real Property.

               (d) There is no (i) outstanding Order requiring any repair,
alteration, or correction of any existing condition affecting any Real Property
or the systems or improvements thereat; or (ii) structural, mechanical, or other
defects of material significance affecting any Real Property or the systems or
improvements there at (including, but not limited to, inadequacy for normal use
of mechanical systems or disposal or water systems at or serving the Real
Property).

               (e) Except as set forth in the Disclosure Schedule, neither the
Company nor any Subsidiary has any option or right to purchase any real estate
and no other party has any option or right to purchase any Real Property that is
owned by the Company.

               (f) There are now in full force and effect for each location of
Real Property where required duly issued certificates of occupancy permitting
the Real Property to be legally used and occupied as the same is now
constituted. The Real Property is zoned so as to permit as a matter of right the
current uses thereon. The Real Property is in material compliance with all
building codes, statutes, Laws, ordinances, rules and regulations, and all
restrictions, covenants and agreements of record. To the Company's Knowledge, no
condition or matter exists (including without limitation any law, ordinance or
regulation) that would render the Real Property unsuitable for or prohibit its
current use. Except as set forth on the Disclosure Schedule, no special
assessments currently affect the Real Property, and, to the Company's Knowledge,
there are no planned or public improvements which may affect the Real Property.
No portion of the Real Property is located in a flood plain, flood prone, or
flood hazard area or in a wetlands area. To the Company's Knowledge, neither the
whole nor any part of the Real Property is subject to any Order to be sold or is
being condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed.


                                      -25-
<PAGE>

          3.20. Accounts Receivable. All of the accounts receivables of the
Company and the Subsidiaries to non-affiliated parties reflected on their
respective books and records represent arm's length sales actually made in the
ordinary course of business and, to the Knowledge of the Company, are not in
dispute.

          3.21. Product Matters.
                ---------------

               (a) Except as set forth in the Disclosure Schedule, there is no
pending, or to the Company's Knowledge, threatened product warranty claim
alleging damages in excess of $50,000 (whether or not covered by insurance).

               (b) Except as set forth in the Disclosure Schedule, there is no
pending, or to the Company's Knowledge, threatened claim arising out of an
injury to individuals or property as a result of owning or using any product
manufactured or sold by the Company or any Subsidiary alleging damages in excess
of $50,000 (whether or not covered by insurance).

               (c) Since 1995, there has been no adverse judgement or other
final adjudicated claim or suit against the Company alleging a defect in design,
construction or manufacture of products manufactured by the Company or any
Subsidiary.

               (d) Since January 1, 1995, there have been no product recalls
with respect to any products manufactured by the Company or a Subsidiary (other
than products returned in the ordinary course of business). To the Company's
Knowledge, no facts or conditions exist which could reasonably be expected to
result in such a recall campaign or program.

               (e) The products manufactured by the Company or any Subsidiary
have been designed and manufactured so as to meet and comply with all applicable
governmental standards and specifications in effect when the products were sold.
Such products have received all applicable government approvals necessary to
allow their sale and use.

          3.22.  Customer; Supplier and Sales Representatives.
                 --------------------------------------------

               (a) The Disclosure Schedule sets forth a list of the top fifteen
(15) customers and the top ten (10) suppliers of the Company and any Subsidiary
by dollar volume of sales and purchases, respectively, for the last two
completed fiscal years. To the Company's Knowledge, the top twenty-five (25)
customers and top fifteen (15) suppliers will continue to be customers or
suppliers of the Company after the Closing. None of said customers or suppliers
has notified the Company or any Subsidiary that it intends to discontinue its
relationship with the Company.

               (b) The Disclosure Schedule sets forth a list of all sales
representatives and top twenty-five (25) distributors of Company or any
Subsidiary. Except as set forth in the Disclosure Schedule neither the Company
nor any Subsidiary has terminated any of these sales representatives or
distributors in the past three years. To the Company's Knowledge, such sales
representatives and distributors will continue to be sales representatives


                                      -26-
<PAGE>

and distributors of the Company after the Closing. None of the said sales
representatives or distributors has notified the Company or any Subsidiary that
it intends to discontinue its relationship with the Company or any Subsidiary.

               (c) The Disclosure Schedule contains a list of the top
twenty-five (25) manufacturers or distributors for which the Company or any
Subsidiary serves as a sales representative, dealer or distributor of such
company's products or services. To the Company's Knowledge, said manufacturer's
or distributors will continue to be manufacturers or distributors to the Company
after the Closing. None of said manufacturers or distributors has notified the
Company or any Subsidiary that it intends to discontinue its relationship with
the Company or any Subsidiary.

          3.23. Affiliates' Relationships to the Company. All leases, contracts,
agreements or other arrangements between the Company or any Subsidiary and any
"Affiliate" (as defined in the Securities Exchange Act of 1934) of the Company
or any Subsidiary are set forth in on the Disclosure Schedule. No Affiliate has
any direct or indirect interest in (i) any entity which does business with the
Company or any Subsidiary or is competitive with the Company's business, or (ii)
any property, asset or right which is used by the Company or any Subsidiary in
the conduct of its business. All obligations of any Affiliate to the Company or
any Subsidiary, and all obligations of Company or any Subsidiary to any
Affiliate, are listed on the Disclosure Schedule.

          3.24. Management Information System. The Company's and the
Subsidiaries' management information systems have functioned substantially as
intended and, to the Company's Knowledge, do not contain any defects which would
have a material adverse change on the Company and the Subsidiaries, taken as a
whole.

          3.25. Assets Necessary to Business. The assets and properties of the
Company and the Subsidiaries include all assets necessary for the Company and
the Subsidiary to carry on the Business as currently conducted.

          3.26. No Brokers or Finders. Neither Company nor any of its directors,
officers, employees, Company Shareholders or agents have retained, employed or
used any broker or finder in connection with the transaction provided for herein
or in connection with the negotiation thereof, except Robert W. Baird & Co.
Incorporated.

          3.27. Limitation on Representations and Warranties. Except as set
forth in this Article III, the Company makes no express or implied warranty of
any kind whatsoever, including with respect to (a) any information furnished by
the Company or its financial advisor, Robert W. Baird & Co. Incorporated, or any
of the Company's other representatives or agents, (b) the physical condition or
value of any of the assets of the Company, (c) the value of the Common Stock, or
(d) the future profitability or future earnings performance of the Company or
the Subsidiaries. Without limiting the generality of the foregoing, other than
the representations and warranties set forth in Section 3.17 and the
indemnification in Section 9.7, no other representation or warranty in this
Agreement shall apply with respect to any Environmental Law, Hazardous
Substances or any other environmental matter.


                                      -27-
<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                             OF COMPANY SHAREHOLDERS

          Each Company Shareholder severally represents and warrants Parent and
Newco as follows. Each representation and warranty is true and correct on the
date hereof, and shall survive the Closing as provided herein.

          4.1. Power. Such Company Shareholder has full power, legal right and
authority to enter into, execute and deliver this Agreement and the Ancillary
Instruments to be executed and delivered by such Company Shareholder pursuant
hereto and to carry out the transactions contemplated hereby and has the legal
right, power and authority to transfer, assign and deliver such Company
Shareholder's Shares and the shares of Leeson Canada Inc. as provided in this
Agreement, and such delivery will convey to Newco good and marketable title to
such shares, free and clear of all liens, claims, agreements and encumbrances of
any kind whatsoever.

          4.2. Claim and Proceedings. There is no legal action, arbitration, or
investigation pending, or to such Company Shareholder's knowledge, threatened
against such Company Shareholder that could adversely affect or prevent the
purchase and sale of the Shares and the shares of Leeson Canada Inc. owed by the
Company Shareholder.

          4.3. Validity. This Agreement has been duly and validly executed and
delivered by such Company Shareholder and when executed by each other party
thereto is, and when executed and delivered the other Ancillary Instruments to
be executed and delivered by such Company Shareholder pursuant hereto, will
constitute valid and binding agreements of such Company Shareholder, enforceable
in accordance with their respective terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors' rights
generally, and by general equitable principles.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES
                               OF PARENT AND NEWCO

          Parent and Newco each represent and warrant to the Company and Company
Shareholders as follows. Each representation and warranty is true and correct on
the date hereof, and shall survive the Closing of the transactions as provided
herein.

          5.1. Organization. Parent is a corporation validly existing and in
active status under the Laws of the State of Wisconsin. Parent has all requisite
corporate power to enter into this Agreement and the Ancillary Instruments to be
executed and delivered by Parent and to carry out the transactions contemplated
hereby and thereby. Newco is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Wisconsin. Newco has all
requisite corporate power to enter into this Agreement and the other documents
and instruments to be executed and delivered by Newco and to carry out the
transactions contemplated hereby and thereby.


                                      -28-
<PAGE>

          5.2. No Violation. The execution and delivery of this Agreement by
Parent and Newco and the consummation by Parent and Newco of the transactions
contemplated hereby will not cause a breach or violation of or default under any
provision of (a) the Articles of Incorporation or Bylaws of Parent or Newco; (b)
any contract to which Parent or Newco is a party or by which Parent or Newco may
be bound; or (c) any Order or Law of any Government Entity to which Parent or
Newco is subject.

          5.3. Authority; Validity. The execution and delivery of this Agreement
and the Ancillary Instruments to be executed and delivered by Parent and Newco
pursuant hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of Parent and Newco
and by Parent as the sole shareholder of Newco. No other corporate act or
proceeding on the part of Parent or Newco is necessary to authorize this
Agreement or the other documents and instruments to be executed and delivered by
Parent or Newco pursuant hereto or the consummation by Parent or Newco of the
transactions contemplated hereby and thereby. This Agreement constitutes, and
when executed and delivered, the other documents and instruments to be executed
and delivered by Parent and Newco pursuant hereto will constitute, valid and
binding agreements of Parent or Newco, enforceable against Parent and Newco in
accordance with their respective terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights
generally, and by general equitable principles.

          5.4. Third Party Consents. Except for the exception of the applicable
waiting period under the HSR Act and for notice requirements under the
Investment Canada Act, no material approval, authorization, notice, consent or
other action by or filing with any Person is required for Parent's or Newco's
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.

          5.5. Investment Intent. Buying Group is acquiring the Shares for their
own account, for investment or operational purposes, and not with a view to
resale or for distribution of all or any portion of the Common Stock.

          5.6. Financing. Newco is a newly formed entity which has conducted no
business other than in connection with the transactions contemplated by this
Agreement. Parent has received a commitment letter from Bank of America, N.A.
and M&I Marshall and Ilsley Bank pursuant to which Parent and Newco are to
obtain, subject to the terms and conditions therein, funds which shall be
sufficient to consummate the transactions contemplated hereby. Parent has
delivered true, correct and complete copies of the commitment letters to the
Shareholder Representative. Parent is not aware of any material financial reason
to believe that Parent and Newco would be unable to secure the financing
necessary to effectuate the consummation of the transactions contemplated by
this agreement.

                                   ARTICLE VI
                                    COVENANTS

          From and after the date of this Agreement, the parties shall comply
with the following covenants:


                                      -29-
<PAGE>

          6.1.  Access to Information and Records.
                ---------------------------------

               (a) During the period prior to the Closing, the Company shall
give Parent, Newco, their counsel, accountants and other representatives:

                    (i) reasonable access during normal business hours to all of
the properties, books, records, contracts and documents of the Company and the
Subsidiaries for the purpose of such inspection, investigation and testing as
Parent or Newco deems appropriate, including but not limited to, soil or
groundwater sampling (and Company shall furnish or cause to be furnished to
Parent, Newco and their representatives all information with respect to the
business and affairs of Company and the Subsidiaries as Parent or Newco may
reasonably request);

                    (ii) with the prior consent of the Company in each instance
(which consent shall not be unreasonably withheld), access to employees, agents
and representatives of the Company for the purposes of such meetings and
communications as Parent or Newco reasonably desires; and

                    (iii) with the prior consent of Company in each instance
(which consent shall not be unreasonably withheld), access to vendors, customers
and others having business dealings with Company. All such access shall be
coordinated with the Shareholder Representative.

               (b) The Confidentiality Agreement between Robert W. Baird & Co.
Incorporated as attorney-in-fact for the Company, and Parent dated June 7, 2000
shall remain in full force and effect.

          6.2. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as set forth in this Agreement or as otherwise
approved in writing by Parent (which approval shall not be unreasonably
withheld), the Company and the Subsidiaries shall comply with the following
covenants:

               (a) No Material Changes. The Company and the Subsidiaries will
carry on the Business in the ordinary course and in substantially the same
manner as heretofore and will not make or institute any material changes in its
methods of purchase, sale, management, accounting or operation.

               (b) Maintain Organization. The Company and the Subsidiaries will
take such action as may be commercially reasonable to maintain, preserve, renew
and keep in favor and effect the existence, rights and franchises of Company and
the Subsidiaries and will use commercially reasonable efforts to preserve the
business organization of Company and the Subsidiaries intact, to keep available
to Company the present officers and Company Employees, and to preserve its
present relationships with suppliers and customers and others having business
relationships with the Company and the Subsidiaries.

               (c) Contracts. Neither the Company nor any Subsidiary shall enter
into any contract outside of the ordinary course of business or which requires a
payment or


                                      -30-
<PAGE>

other obligation in excess of $100,000. Neither the Company nor any Subsidiary
shall amend, supplement or modify any lease for Real Property.

               (d) Capital Expenditures. The Company and the Subsidiaries shall
not commence any new capital expenditures in excess of $100,000.

               (e) Taxes. The Company and the Subsidiaries shall pay all Taxes
and Tax assessments before such Taxes or Tax assessments become delinquent
unless contested in good faith by appropriate proceedings and notice is provided
to Parent. Neither the Company nor any Subsidiary shall, except as otherwise
consented to in writing by Parent, make any Tax election or settle or compromise
any material federal, state, local or foreign Tax liability.

               (f) No Corporate Changes. Company shall not amend its Articles of
Incorporation or By-Laws or make any changes in authorized or issued capital
stock.

               (g) Maintenance of Insurance. Company shall maintain all of the
insurance in effect as of the date hereof.

               (h) No Transfer of Shares. No Company Shareholder shall transfer
or attempt to transfer any of the Shares except to Parent of Newco pursuant
hereto; and Company shall refuse to accept any certificates for Shares to be
transferred or otherwise to allow such transfers to occur upon its books.

               (i) No Dividends. Except as provided in this Agreement or as
described in the Disclosure Schedule, Company shall not declare, set aside or
pay any dividend or make any other distribution in respect of Company's or any
Subsidiary's capital stock, and neither Company nor any Subsidiary shall redeem,
purchase or otherwise acquire any capital stock of Company or any Subsidiary.

               (j) No Sale of Assets. The Company and its Subsidiary shall not
dispose of any assets other than in the ordinary course.

          6.3. Filings. Within three (3) business days following the execution
of this Agreement, each Party shall, in cooperation with the other Parties, file
or cause to be filed any notifications required to be filed by it under the HSR
Act with the Federal Trade Commission and the Antitrust Division of the
Department of Justice and shall furnish to the other Parties all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other Parties. Parent and Company
shall each be responsible for one-half of all filing fees in connection with
such filings. Prior to making any communication, written or oral, with the
Federal Trade Commission, or the Antitrust Division of the Department of Justice
or any Canadian governmental authority with respect to this Agreement or the
transactions contemplated hereby, each Party shall consult with the other
Parties with respect thereto.

          6.4. Consents. The Company and Indemnifying Shareholders will use
commercially reasonable efforts prior to Closing to obtain all consents
necessary for the consummation of the transactions contemplated hereby.


                                      -31-
<PAGE>

          6.5. Publicity. All general notices, releases, statements and
communications to employees, suppliers, customers, the public and the press
relating to the transactions contemplated by this Agreement shall be made only
at such times and in such manner as may be mutually agreed upon by the
Shareholder Representative and the Parent; provided, however, that any party may
make a public announcement of the proposed transaction, if, in the written
opinion of counsel, such announcement is required to comply with any Law or any
rule or regulation of any securities exchange or securities quotation system and
such Party shall, to the extent practicable, consult with the other Parties with
respect to such announcements and give reasonable prior written notice of its
intent to issue such announcement.

          6.6.  Title Insurance; Surveys and Estoppels.
                --------------------------------------

               (a) With respect to the owned Real Property, within 10 days after
this Agreement is executed, Company, at its expense, shall provide Newco with a
title insurance commitment issued by First American Insurance Company (the
"Title Company"), pursuant to which the Title Company shall agree to issue to
Newco a standard ALTA Form B-1992 owner's policy of title insurance, in the full
amount of the Purchase Price reasonably allocated to such owned Real Property,
insuring good and marketable title to the owned Real Property (expressly
including all easements and other appurtenances thereto), subject only to those
liens and encumbrances (i) listed on the Disclosure Schedule, (ii) liens for
taxes not yet due or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been made, and (iii)
municipal and zoning ordinances and easements for public utilities, none of
which matters in the foregoing clauses (i) through (iii) interfere with the use
of the property as currently utilized, and (iv) other exceptions reasonably
acceptable to Buying Group (but with all standard exceptions deleted). Such
title policies shall include such endorsements as Buying Group may reasonably
request, including without limitation, (i) nonimputation endorsement, (ii)
zoning 3.1 endorsement, (iii) owners comprehensive endorsement insuring over
violations of title covenants, conditions and restrictions, (iv) access
endorsement, (v) "same as" survey endorsement, (vi) location endorsement, and
(vii) contiguity endorsement. The Company Shareholders shall pay for the title
insurance policies by including the cost thereof in the Estimated Balance Sheet
and the Closing Balance Sheet. Parent shall pay for the cost of any endorsements
requested by the Buying Group.

               (b) Survey. With respect to the owned Real Property, within 30
days after execution and delivery of this Agreement, Company, at Parent's
expense, shall provide to Newco original current surveys of the owned Real
Property, certified to Newco and to the Title Company, prepared by registered
surveyors reasonably satisfactory to Buying Group, which surveys shall be
prepared in accordance with the 1997 Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys (including all Table A Items except contours), and
pursuant to the accuracy standards of an Urban Class A Survey.

               (c) Estoppel Certificates. For the leased facilities set forth in
the Disclosure Schedule, the Company will use commercially reasonable efforts to
obtain Estoppel Certificates from the landlords of each facility in a form
reasonably satisfactory to Parent's counsel.


                                      -32-
<PAGE>

          6.7.  Disclosure Schedule.
                -------------------

               (a) Contemporaneously with the execution and delivery of this
Agreement, the Company Shareholders are delivering to Parent the Disclosure
Schedule, which is accompanied by a certificate signed by the Shareholder
Representative stating that the Disclosure Schedule is being delivered pursuant
to this Agreement and is the Disclosure Schedule referred to in this Agreement.
The Disclosure Schedule is deemed to constitute an integral part of this
Agreement and to modify the representations, warranties, covenants or agreements
of the Company and Company Shareholders contained in this Agreement. The
inclusion of any item in the Disclosure Schedule shall not be construed as an
indication of the materiality or lack of materiality of such item. The Company
and Company Shareholders shall use reasonable efforts to number all exceptions
noted in the Disclosure Schedule to correspond to the applicable section of this
Agreement to which such exception refers, however, an item enclosed in one
section of the Disclosure Schedule which is relative to another section of the
Disclosure Schedule shall be deemed disclosed in such other section, but only if
a person reading such item would reasonably conclude that such an item is
relative to the other section.

               (b) Prior to the Closing Date, the Company may amend, update or
supplement the Disclosure Schedule (an "Updated Disclosure") from time to time
by written notice to Parent. If requested by Parent, the Shareholder
Representative shall meet and discuss with Parent any change in the Disclosure
Schedule made by the Shareholder Representative. For purposes of determining the
fulfillment of the conditions set forth in Section 7.1 as of the Closing, the
Disclosure Schedule shall be deemed to include all information contained in any
supplement or amendment thereto made on or before the Closing. For purposes of
determining the accuracy of the representations and warranties contained in
Article III or Article IV and the liability of Indemnifying Shareholders or
Company Shareholders with respect thereto under Article IX, the Disclosure
Schedule shall be deemed to include only that information contained therein on
the date of this Agreement and shall be deemed to exclude any information
contained in any Updated Disclosure.

          6.8. Releases and Resignations.
               -------------------------

               (a) Releases. At the Closing, each Company Shareholder shall
deliver, and shall cause Frank Poja, David Spude and Ronald Clarke ("SAR
Participants") to deliver, general releases to the Company, in substantially the
form of Exhibit F hereto, releasing the Company and the directors, officers,
agents and employees of the Company from all claims to the Closing Date and for
any severance or termination benefits resulting from termination, if any,
post-Closing, except (i) as may be described in written contracts attached to
the release and excepted from such releases, (ii) compensation for the period
through Closing and excepted from such releases, and (iii) this Agreement and
Ancillary Documents. At the Closing, Buying Group shall deliver to Company
Shareholders and directors a release in substantially the form of Exhibit F
hereto.

               (b) Resignations. At the Closing, each Company Shareholder who is
an employee, officer or director of the Company, SAR Participants and each
director of the Company shall, if requested by Parent, tender their resignations
or confirm their retirement


                                      -33-
<PAGE>

dates as employees, officers and directors of the Company and any Subsidiary.
Severance or termination obligations of the Company or any Subsidiary resulting
from such resignations or retirement, if any, shall be the obligation of Company
Shareholders.

          6.9. Subsidiary Stock. Immediately prior to the Closing, each Company
Shareholder shall contribute his/her/its capital stock of each Subsidiary to the
Company in accordance with such transfer documentation as be may reasonably
acceptable to Parent.

          6.10. Indemnification of Directors and Officers. Until the fifth
anniversary of the Closing Date, Parent shall not take, nor permit the Company
or Newco to take, any action so as to amend the provisions of the Articles of
Incorporation or Bylaws of the Company or any of the Subsidiaries providing for
indemnification of directors and officers, if such amendment would adversely
affect the rights of any person who shall have served as a director or officer
of Company or any of the Subsidiaries prior to the Closing. This covenant of
Parent may be enforced after the Closing Date by the Shareholder Representative
on behalf of any person whose rights are adversely affected by any such
amendment. After the Closing, the Company shall indemnify the former officers
and directors of the Company to the fullest extent permitted by applicable Law;
provided that indemnification owing from any Indemnifying Shareholder under
Article IX of this Agreement who is an officer or director of the Company shall
not be deemed for any reason to be a claim covered by indemnification owing to
such Company Shareholder by the Company under any law, by-law, insurance policy
or agreement whatsoever.

          6.11. Shareholder Representative. By signing this Agreement, the
Company Shareholders hereby irrevocably make, constitute and appoint Christopher
L. Doerr and Daniel L. Doerr as their true and lawful attorney-in-fact to take
all actions required under this Agreement on behalf of the Company Shareholders
(including, without limitation, the resolution or dispute of any claims) in
their name and stead and further ratify and approve all such actions as their
own. So long as there is more than one Shareholder Representatives, the
Shareholder Representatives may only act by agreement of both Shareholder
Representatives. In the event of the death, inability to act or declination to
act of either Christopher L. Doerr or Daniel L. Doerr, then the other shall act
as the Shareholder Representative hereunder as if there were only one
Shareholder Representative. In the event of the death, inability to act or
declination to act of both Christopher L. Doerr and Daniel L. Doerr, then a
successor Shareholder Representative shall be selected by the Company
Shareholders owning a majority of the Common Stock as of the Closing Date.

          6.12. Employee Matters. Except as provided in Section 6.8, for a
period of twelve (12) months after the Closing Date, Parent and Newco shall
cause the Company to maintain welfare and pension benefit plans, programs and
arrangements which are, in the aggregate, for the employees who are employees of
the Company immediately prior to the Closing Date and continue to be employees
after the Closing Date, no less favorable, taken as a whole, then those provided
by the Company immediately prior to the Closing Date.


                                      -34-
<PAGE>

          6.13.  Access; Retention of Records.
                 ----------------------------

               (a) After the Closing and for a period of six (6) years, the
Buying Group shall afford access to those employees of the Buying Group or the
Company who were Company Employees prior to the Closing Date. Any such access
shall be: (i) at the request of the Shareholder Representative; (ii) scheduled
and provided on a reasonable basis taking into account the business requirements
of Parent and the Company; and (iii) for any purpose relating to the Business of
the Company prior to the Closing Date involving defense of legal proceedings or
tax matters described in Section 6.17 below. The Company Shareholder requesting
such access shall pay all reasonable out-of-pocket expenses, excluding wages and
salaries, incurred by Parent and the Company in connection with this Section
6.13(a).

               (b) Retention of Records. The Buying Group shall retain all books
and records relating to the Company's pre-closing tax, accounting or legal
matters for a period of at least six (6) years from the date hereof.

          6.14. Exclusivity. From the date of this Agreement until the Closing
or the date this Agreement is terminated under Article X, the Company shall not,
and shall not permit any officer, director, employee or representative of the
Company or any Subsidiary to: (a) initiate or encourage the initiation by others
of discussions or negotiations with third parties or respond to (other than to
decline interest in) solicitations by third parties relating to any merger, sale
or other disposition of any equity securities or the assets of the Company (an
"acquisition proposal"), (b) enter into or participate in any discussion,
negotiation or agreement with respect to any such acquisition proposal, or (c)
furnish any non-public information to any third party in connection with an
acquisition proposal. The Company shall promptly advise parent of any
acquisition proposal or inquiry regarding the making of an acquisition proposal,
including any requests for information, the material terms and conditions of
such request and the identity of the person making such a request or proposal.

          6.15. Certain Transactions. Prior to Closing, the Company and/or
Company Shareholders may be a party to the transactions described in Schedule
6.15 of the Disclosure Schedule.

          6.16. Certain Payments.
                ----------------

               (a) Immediately following the Closing: (i) Company shall repay
the outstanding indebtedness of the Company or a Subsidiary for borrowed money
owed to the Company Shareholders as specifically set forth in the Disclosure
Schedule, and (ii) each Company Shareholder shall repay the Company or any
Subsidiary any indebtedness for borrowed money such Company Shareholder owes to
the Company or any Subsidiary.

               (b) Parent shall cause the Company to pay any liabilities
included in the Estimated Balance Sheet or the Closing Balance Sheet pursuant to
Section 2.4(j) when they become due. To the extent that the cost of any
liabilities described in Section 2.4(j) are not reflected in the Closing Balance
Sheet, the Company Shareholders shall reimburse the Company or Newco for such
payment after the Closing Date.


                                      -35-
<PAGE>

          6.17. Tax Matters. The following provisions shall govern the
allocation of responsibility for certain Tax matters and the payment of Taxes
following the date of this Agreement.

               (a)  Tax Periods Ending on or Before the Closing Date.

                    (i) Between the date of this Agreement and the Closing Date,
Company Shareholders shall file, or cause Company and each Subsidiary to file,
on a timely basis all Tax Returns that are required to be filed by Company and
each Subsidiary prior to the Closing Date (taking into account any extensions of
time to file) and pay or cause Company to pay all Taxes due and owing thereon.
No position shall be taken on such Tax Returns that would materially adversely
affect Parent, Company or any Subsidiary after the Closing Date without the
written consent of Parent.

                    (ii) Except as set forth in subsection 6.17(a)(iii) below,
Parent shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Company and each Subsidiary for all periods ending on or
prior to the Closing Date which are filed after the Closing Date historically
filed by the Company and each Subsidiary in a manner consistent with the Tax
Returns previously filed in the relevant jurisdiction (to the extent such is
consistent with the current applicable laws in such jurisdiction). Company
Shareholders shall reimburse Parent for Taxes of Company and each Subsidiary
with respect to such periods within three (3) days after payment by Parent,
Company or Subsidiary of such Taxes to the extent such Taxes are not reflected
in the reserve for Taxes (rather than any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) shown on the face of
the Closing Balance Sheet.

                    (iii) Company Shareholders shall pay all federal, state, and
local income or franchise Taxes accruing on or before the Closing Date. Company
Shareholders shall cause to be prepared and timely and properly filed on behalf
of Company Shareholders and Company all returns and filings with respect to
federal, Wisconsin and other state income or franchise taxes accruing on or
before the Closing Date. Company Shareholders shall prepare such returns and
filings at their expense. No position shall be taken on such Tax Returns that
would materially adversely affect Parent, Company or any Subsidiary after the
Closing Date without the written consent of Parent.

                    (iv) All Tax Returns shall be determined by closing
Company's and Subsidiary's books and records as of and including the Closing
Date, or if the allocation of an item of income, loss, deduction or credit
cannot be definitely allocated to an ascertainable date, such item shall be pro
rated on a daily basis. Company Shareholders and Company agree that they each
shall consent to the election pursuant to Code Section 1377(a)(2) (and any state
equivalent election) with respect to all transfers of ownership during Company's
current tax year. Company Shareholders shall obtain the consent to such
elections from each person who owned stock at any time during its current
taxable year on or prior to Closing and shall cause Company to timely and
properly file such elections.

               (b) Tax Periods Beginning Before and Ending After the Closing
Date. Parent shall prepare or cause to be prepared and file or cause to be filed
any Tax


                                      -36-
<PAGE>

returns of Company and each Subsidiary for Tax periods which begin before the
Closing Date and end after the Closing Date. Parent shall deliver any such Tax
Return prepared by Parent to the Company Representative for the Company
Representative's review and approval at least fifteen (15) days before such Tax
Return is due. Company Shareholders shall pay to Parent within three (3) days
after the date on which Taxes are paid with respect to such periods an amount
equal to the portion of such Taxes which relates to the portion of such Taxable
period ending on the Closing Date to the extent such Taxes are not reflected in
the reserve for Taxes (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) shown on the face of the
Closing Balance Sheet. For purposes of this Section, in the case of any Taxes
that are imposed on a periodic basis and are payable for a Tax period that
includes (but does not end on) the Closing Date, the portion of such Tax which
relates to the portion of such Tax period ending on the Closing Date shall (x)
in the case of any Taxes other than Taxes based upon or related to income or
receipts, be deemed to be the amount of such Tax for the entire Tax period
multiplied by a fraction the numerator of which is the number of days in the Tax
period ending on and including the Closing Date and the denominator of which is
the number of days in the entire Tax period, and (y) in the case of any Tax
based upon or related to income or receipts be deemed equal to the amount which
would be payable if the relevant Tax period ended on the Closing Date. Any
credits relating to a Tax period that begins before and ends after the Closing
Date shall be taken into account as though the relevant Tax period ended on the
Closing Date. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with prior practice of the
Company.

               (c) Cooperation on Tax Matters.
                   --------------------------

                    (i) Company Shareholders, Company and the Subsidiaries and
Parent shall reasonably cooperate, and shall cause their respective affiliates,
officers, employees, agents, auditors, and representatives to cooperate, in
preparing and filing all Tax Returns, and in resolving all disputes and audits,
appeals, hearings, litigation or other proceeding with respect to all taxable
periods relating to Taxes. Such cooperation shall include the retention and
(upon the other party's request) the provision of records and information which
are reasonably relevant to any such filing, audit, appeal, hearing, litigation
or other proceeding and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. Company Shareholders and Parent agree (A) to retain all books and
records with respect to Tax matters pertinent to Company and its Subsidiaries
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by the
other party, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing authority
and (B) to give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party so
requests, Company Shareholders or Parent, as the case may be, shall allow the
other party to, if transferred, make copies of such books and records, or, if
destroyed or discarded, to take possession of such books and records.

                    (ii) Parent and Company Shareholders further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be necessary to
mitigate, reduce or


                                      -37-
<PAGE>

eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).

               (d) Transfer Taxes. Notwithstanding any other provisions of this
Agreement to the contrary, all sales, use, transfer and other Taxes incurred in
connection with the transactions contemplated by this Agreement shall be paid by
Company Shareholders, and Company Shareholders shall, at their own expense,
accurately file or cause to be filed all necessary Tax Returns and other
documentation with respect to such Taxes and timely pay all such Taxes. If
required by applicable law, Parent, Company and/or the Subsidiaries will join in
the execution of any such Tax Returns or such other documentation.

               (e) Section 338(h)(10). The Company Shareholders, Parent, and
Newco shall join in a making a timely, effective and irrevocable election under
Section 338(h)(10) of the Code and an election under Section 338(g) of the Code
with respect to Leeson Canada Inc. (and any corresponding equivalent elections
under state, local or foreign tax law, including an election under the
equivalent to Section 338(g) of the Code in those jurisdictions where an
election under Section 338(h)(10) is not permitted) (collectively a "Section
338(h)(10) Election") with respect to the purchase and sale of the Shares to
treat such purchase and sale as a deemed sale of assets for federal income tax
and state income and/or franchise tax purposes, and, at Parent's request, a
Section 338(h)(10) Election with respect to any Subsidiary. The Company
Shareholders and Parent shall jointly prepare as appropriate the Section 338
Forms (as hereinafter defined) to the extent such preparation has not been
completed prior to the Closing and shall timely make any required filings and
take any and all other actions necessary to effect the Section 338(h)(10)
Election. Each Company Shareholder shall include in his Federal income tax
return for the taxable period which includes the Closing Date any Section 338
Forms that are required to be so included on account of the Section 338(h)(10)
Election. The Company Shareholders and the Parent shall cooperate fully, and in
good faith, with each other in making the Section 338(h)(10) Election. "Section
338 Forms" shall include, without limitation, any "statement of section 338
election" and IRS Form 8023 (or any successor form, together with any schedules
or attachments thereto) that are required pursuant to Treas. Reg. Section
1.338-1 or Treas. Reg. Section 1.338(h)(10)-1.

               (f) Allocation of Purchase Price. In the event one or more
Section 338(h)(10) Elections are made, the parties hereto agree that the
Purchase Price and the liabilities of the Company (and Subsidiaries as
appropriate) (plus other relevant items) will be allocated to the assets of the
Company (and Subsidiaries as appropriate) for all purposes (including Tax and
financial accounting purposes) pursuant to an allocation to be agreed upon by
the Shareholder Representative and Parent within sixty (60) days of the Closing,
provided however the aggregate purchase price allocated to the Machinery and
Equipment and Inventory in excess of such assets' aggregate adjusted tax basis
shall not exceed Thirty-Two Million Dollars ($32,000,000). The Parties agree
that the allocation of the Purchase Price amongst Machinery and Equipment,
Inventory and Buildings shall be such that the Allocation Adjustment as
determined in Section 2.4(j)(vi) is a positive number. The Parent, Company
Shareholders, Company and the Subsidiaries will file all Tax Returns (including
amended returns and claims for refund) and information reports in a manner
consistent with such agreed upon allocation. The parties shall exchange mutually
acceptable IRS forms (and any


                                      -38-
<PAGE>

equivalent local, state and foreign tax forms) reflecting such allocations which
are to be filed with the IRS and/or any applicable state, local or foreign tax
authority.

          6.18. Noncompetition Agreements. At the Closing, Company Shareholders
shall cause to be delivered to Company and Parent a Noncompetition Agreement,
substantially in the form of Exhibit C hereto, duly executed the Indemnifying
Shareholders and Company Shareholders who are Christopher L. Doerr's adult
children, providing that such Person shall not compete with the Business as
currently conducted by the Company for a period of five (5) years in any
territory in which the Company is currently doing business or proposed to do
business, and further, providing that each Person shall not solicit or hire any
Company employee for a period of two (2) years from the Closing Date.

                                  ARTICLE VII
                        CONDITIONS PRECEDENT TO PARENT'S
                             AND NEWCO'S OBLIGATIONS

          Each and every obligation of Parent and Newco to be performed on the
Closing Date shall be subject to the satisfaction prior to or at the Closing of
each of the following conditions:

          7.1. Representations and Warranties True on the Closing Date. Each of
the representations and warranties made by the Indemnifying Shareholders and the
Company Shareholders in this Agreement shall be true and correct in all material
respects when made and shall be true and correct in all material respects at and
as of the Closing Date as though such representations and warranties were made
or given on and as of the Closing Date, except for any changes permitted by the
terms of this Agreement or consented to by Parent.

          7.2. Compliance With Agreement. The Company and Company Shareholders
shall have in all material respects performed and complied with all of their
agreements and obligations under this Agreement which are to be performed or
complied with by them prior to or on the Closing Date.

          7.3. Absence of Litigation. No litigation shall have been commenced or
threatened against Parent, Newco, Company, Subsidiaries, the Company
Shareholders or any of the affiliates, officers or directors of any of them,
with respect to the transactions contemplated hereby which would prevent the
Closing.

          7.4. Consents and Approvals. All material approvals, consents and
waivers that are required to effect the transactions contemplated hereby shall
have been received, and executed counterparts thereof shall have been delivered
to Parent or Newco at or prior to the Closing.

          7.5. HSR Act Waiting Period. All applicable waiting periods related to
the HSR Act shall have expired.

          7.6. No Material Adverse Change. During the period from the date
hereof to the Closing Date, there shall not have occurred any event, change,
occurrence or circumstance


                                      -39-
<PAGE>

having, or which could reasonably be expected to have, a material adverse effect
on (a) the properties, operations, prospects or business of the Company and the
Subsidiaries, taken as a whole; (b) the ability of the Company to conduct the
Business after the transaction in substantially the manner now conducted; or (c)
the ability of the Company or Company Shareholders to perform their obligations
hereunder.

          7.7. Contribution of the Stock. All of the issued and outstanding
common stock of each Subsidiary shall be owned by the Company.

          7.8. Environmental Assessments. The results of the environmental
audits to be conducted by the Company in consultation with Parent (Phase I and
Phase II site assessments and compliance audits) shall not have disclosed any
past or present condition, process or practice with respect to the Company or
any property owned, occupied or operated by the Company or any Subsidiary which
is not in full compliance with all applicable Environmental Laws, if a
reasonable estimate by Parent of the cost of remediation, or the potential
liability to third persons arising from such condition, process or practice, or
the cost of bringing the Company or any Subsidiary or such properties into full
compliance with all applicable Environmental Laws, would exceed Five Million
Dollars ($5,000,000) in the aggregate with respect to all matters described in
this Section.

          7.9. Funding. Buying Group shall have received or have available the
proceeds of financing contemplated by the commitment letter described in Section
5.6 sufficient to finance the purchase of the Shares

          7.10. Documents to be Delivered by Company or Company Shareholders. At
the Closing, Company and Company Shareholders shall have delivered to Parent and
Newco the following documents, in each case duly executed or otherwise in proper
form:

               (a) Stock Certificate(s). Stock certificates, or, if applicable,
an affidavit of lost certificate in form reasonably acceptable to Parent,
representing the shares duly endorsed.

               (b) Compliance Certificate. A certificate signed by the
Shareholder Representative that each of the representations and warranties made
by the Indemnifying Shareholders in this Agreement is true and correct in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as of the
Closing Date (except for any changes permitted by the terms of this Agreement or
consented to in writing by Parent), and that the Company and Company
Shareholders have performed and complied in all material respects with all of
their obligations under this Agreement which are to be performed or complied
with on or prior to the Closing Date.

               (c) Opinion of Counsel. A written opinion of Quarles & Brady,
LLP, counsel to Company and Company Shareholders, dated as of the Closing Date,
addressed to Parent and Newco, substantially in the form of Exhibit D hereto.


                                      -40-
<PAGE>

               (d) Noncompetition Agreements. The Noncompetition Agreements,
duly executed by the parties thereto.

               (e) Certified Resolutions. Certified copies of the resolutions of
the Board of Directors of the Company, authorizing and approving this Agreement
and the consummation of the transactions contemplated by this Agreement.

               (f) Escrow Agreement. The Escrow Agreement, duly executed by the
Company, the Shareholder Representative and the Escrow Agent.

               (g) Articles; Bylaws. A copy of the Articles of Incorporation of
Company and each Subsidiary certified by the appropriate jurisdiction of
incorporation and a copy of the Bylaws of Company and each Subsidiary certified
by the secretary of Company and each Subsidiary, respectively.

               (h) Incumbency Certificate. Incumbency certificates relating to
each person executing any document executed and delivered to Parent or Newco by
the Company pursuant to the terms hereof.

               (i) Pay Off Letters. Pay off letters representing all of the
Indebtedness of the Company and the Subsidiaries outstanding at Closing.

               (j) Title Insurance; Surveys and Estoppel Certificates. The title
insurance policies, and surveys and any estoppel certificates which the Company
has obtained as described in Section 6.6 hereof.

               (k) Releases. The releases referred to in Section 6.8 hereof.

               (l) FIRPTA. A properly executed FIRPTA Notification Letter, in
form and substance reasonably satisfactory to Parent, which states that shares
of capital stock of the Company do not constitute "United States real property
interests" under Section 897(c) of the Code, for purposes of satisfying Parent's
obligations under Treasury Regulation Section 1.1445-2(c)(3), and, as agent for
the Company, a form of notice to the Internal Revenue Service in accordance with
the requirements of Treasury Regulation Section 1.897-2(h)(2) and in form and
substance satisfactory to Parent, along with written authorization for Parent to
deliver such form of notice to the Internal Revenue Service on behalf of the
Company upon the Closing.

               (m) Other Documents. All other documents, instruments or writings
reasonably required to be delivered to Parent or Newco at or prior to the
Closing pursuant to this Agreement and such other certificates of authority and
documents as Parent or Newco may reasonably request.


                                      -41-
<PAGE>

                                  ARTICLE VIII
                         CONDITIONS PRECEDENT TO COMPANY
                            SHAREHOLDERS' OBLIGATIONS

          Each and every obligation of Company Shareholders to be performed on
the Closing Date shall be subject to the satisfaction prior to or at the Closing
of the following conditions:

          8.1. Representations and Warranties True on the Closing Date. Each of
the representations and warranties made by Parent and Newco in this Agreement
shall be true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Date as though
such representations and warranties were made or given on and as of the Closing
Date.

          8.2. Compliance With Agreement. Parent and Newco shall have in all
material respects performed and complied with all of their agreements and
obligations under this Agreement which are to be performed or complied with by
them prior to or on the Closing Date.

          8.3. Absence of Litigation. No litigation shall have been commenced or
threatened against Parent, Newco, Company, Subsidiaries, the Company
Shareholders or any of the affiliates, officers or directors of any of them,
with respect to the transactions contemplated hereby which would prevent the
Closing.

          8.4. Consents and Approvals. All material approvals, consents and
waivers that are required to effect the transactions contemplated hereby shall
have been received.

          8.5. HSR Act Waiting Period. All applicable waiting periods related to
the HSR Act shall have expired.

          8.6. Documents to be Delivered by Parent and Newco. At the Closing,
Parent and Newco shall deliver to Company Shareholders the following documents,
in each case duly executed or otherwise in proper form:

               (a) Compliance Certificates. A certificate signed by the
President of Parent and a certificate signed by the President of Newco that each
of the representations and warranties made by Parent and Newco in this Agreement
are true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any changes permitted by the
terms of this Agreement or consented to in writing by Company), and that Parent
and Newco have each performed and complied in all material respects with all of
their obligations under this Agreement which are to be performed or complied
with on or prior to the Closing Date.

               (b) Opinion of Counsel. A written opinion of Foley & Lardner,
counsel to Parent and Newco, dated as of the Closing Date, addressed to the
Shareholder Representative, in substantially the form of Exhibit E hereto.


                                      -42-
<PAGE>

               (c) Certified Resolutions. A certified copy of the resolutions of
the Board of Directors of Parent and Newco, and of the sole shareholder of
Newco, authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement.

               (d) Incumbency Certificates. Incumbency certificates relating to
each person executing any document executed and delivered to the Company or the
Company Shareholders by Parent or Newco pursuant to the terms hereof.

               (e) Escrow Agreement. The Escrow Agreement, duly executed by
Parent, Newco and the Escrow Agent.

               (f) Non Competition Agreements. The Non Competition Agreements,
duly executed by the parties thereto.

               (g) Release. The releases referred to in Section 6.8 hereof.

               (h) Other Documents. All other documents, instruments or writings
reasonably required to be delivered to Company or the Company Shareholders at or
prior to the Closing pursuant to this Agreement and such other certificates of
authority and documents as Shareholder Representative may reasonably request.

          8.7. Estimated Purchase Price. Parent or Newco shall have delivered
the Estimated Purchase Price in accordance with Section 2.3 of this Agreement.

                                   ARTICLE IX
                          INDEMNIFICATION AND SURVIVAL

          9.1. Survival; Remedies for Breach.
               -----------------------------

               (a) Each and every representation and warranty made by the
Indemnifying Shareholders, the Company Shareholders, Parent or Newco in this
Agreement shall survive the Closing, but shall terminate on the date that is
twelve (12) months after the Closing Date and thereafter be of no further force
or effect (the date on which any representation or warranty terminates in
accordance with this Article IX being referred to herein as the "Cut-off Date"
for such representation or warranty); except:

                    (i) there shall be no Cut-Off Date for the representations
and warranties of the Company Shareholders contained in Article IV;

                    (ii) the Cut-Off Date for representations and warranties of
Company Shareholders contained in Section 3.17 shall be five (5) years after the
Closing Date; and

                    (iii) the Cut-Off Date for representations and warranties of
Company Shareholders contained in Section 3.6 shall be the date on which the
statute of limitations relating to Tax subject to indemnification expires.


                                      -43-
<PAGE>

               (b) Any covenant or agreement contained herein or in the
Ancillary Instruments shall survive the Closing Date.

               (c) Any representation or warranty that would otherwise terminate
at the Cut-off Date with respect thereto shall survive if the notice referred to
in Section 9.2(c) or Section 9.3(b), as the case may be, of the breach or
inaccuracy thereof shall have been given on or prior to the Cut-off Date with
respect thereto to the party against whom indemnification may be sought, and
such shall survive until such time as any claim for indemnification is finally
settled in accordance with the terms hereof.

               (d) The indemnification obligation of Indemnifying Shareholders
contained in Section 9.7(a)(i) hereof terminates on the date that is seven (7)
years after the Closing Date. Notwithstanding the foregoing, Indemnifying
Shareholders may, at their expense, substitute Environmental Insurance for its
obligations to provide indemnification under Section 9.7(a)(i) in years six(6)
and seven (7).

               (e) After the Closing, the indemnities set forth in this Article
IX shall be the exclusive remedies of the Company Shareholders, Company, Parent
and Newco for the breach of any covenant, agreement, representation or warranty
in this Agreement by the Company Shareholders, Company, Parent and Newco, as the
case may be, and the Parties shall not be entitled to a rescission of this
Agreement or to any further indemnification rights or claims of any nature
whatsoever in respect thereof, all of which the Parties waive. Notwithstanding
the foregoing, the Parties acknowledge and agree that the provisions and
restrictions of the Noncompetition Agreements are necessary to protect the
legitimate continuing interests of Buying Group in acquiring the Shares and that
any violation or breach of any provision of those agreements will result in
irreparable injury to the Buying Group and Company for which a remedy at law
would be inadequate and that, in addition to any relief at law which may be
available to Buying Group and Company for such violation or breach, and
regardless of any other provision contained in this Article IX, Buying Group and
Company shall be entitled to injunctive and other equitable relief as a court
may grant after considering the intent of this Agreement and the Noncompetition
Agreements.

          9.2. Indemnification on Behalf of Indemnifying Shareholders and
Company Shareholders.

               (a) Indemnifying Shareholders. To induce Parent and Newco to
enter into this Agreement and to purchase the Shares, the Indemnifying
Shareholders hereby agree to, subject to the provisions of this Section and the
other Sections of this Article IX, severally, but not jointly, and in accordance
with the percentages listed on the Disclosure Schedule, indemnify, defend and
hold harmless the Buying Group from and against, any and all Losses incurred or
sustained or suffered by, or imposed upon, with respect to or by reason of:

                    (i) the breach of any representation or warranty of the
Indemnifying Shareholders contained in Article III of this Agreement;


                                      -44-
<PAGE>

                    (ii) the breach of any covenant or agreement of the Company
Shareholders set forth herein;

                    (iii) Taxes for any taxable period which ends on or prior to
the Closing Date or resulting from the transactions contemplated hereby
(including, without limitation, as a result of any Section 338(h)(10) Election),
to the extent such Tax is not adequately reserved for on the Closing Balance
Sheet.

               (b) Company Shareholders. To induce Parent and Newco to enter
into this Agreement and to purchase the Shares, each Company Shareholder agrees
to, subject to the provisions of this Section and the other Sections of this
Article IX, individually indemnify, defend and hold harmless the Buying Group
from and against, any and all Losses incurred or sustained or suffered by, or
imposed upon, with respect to or by reason of the breach of any representation
or warranty made by such Company Shareholder contained in Article IV of this
Agreement;

                    For purposes of this Article IX, the term "Buying Group"
shall include all of the Buying Group's directors, officers, employees and
controlled or controlling persons.

               (c) Limitations. Notwithstanding anything to the contrary in this
Agreement, the Buying Group shall not be entitled to indemnification under
Section 9.2(a) or Section 9.2(b):

                    (i) with respect to a claim for indemnification hereunder
related to the title of Real Estate with respect to which there is a title
insurance policy in effect, except to the extent the Buying Group has first
unsuccessfully attempted to recover upon such title insurance;

                    (ii) to the extent of the value of any net tax benefit
actually realized (by reason of a tax deduction, basis reduction, shifting of
income, credit, deduction or otherwise) by the Buying Group or the Company in
connection with the Loss that forms the basis of Buying Group's claim for
indemnification hereunder taking into account the tax detriment of any recovery
or anticipated recovery on the Buying Group's claim for indemnification;

                    (iii) with respect to any claim for indemnification
hereunder, unless Buying Group has given the Shareholder Representative written
notice of such claim, setting forth in reasonable detail the facts and
circumstances pertaining thereto, (A) as soon as practicable following Parent's
discovery of such claim, but only to the extent such delay actually prejudices
the Indemnifying Shareholders and (B) prior to the applicable Cut-Off Date;

                    (iv) to the extent of any insurance proceeds received by the
Buying Group in connection with the facts giving rise to such indemnification
(and the Buying Group shall seek full recovery under all insurance policies
covering any Losses to the same extent as they would if such Losses were not
subject to indemnification under this Agreement);


                                      -45-
<PAGE>

                    (v) with respect to a breach of a representation or warranty
for a single course of conduct, related set of circumstances, occurrence or
event unless the Losses suffered by the Buying Group arising therefrom from such
breach of the representation or warranty exceed Twenty-Five Thousand Dollars
($25,000), and, in such event, Buying Group shall be entitled to indemnification
in full for the total loss with respect to such claim subject to the limitation
contained in this Section 9.2(b)(v);

                    (vi) for any Losses for the breaches of representations or
warranties in Article III as to which the Buying Group otherwise may be entitled
to indemnification hereunder (without giving effect to this clause (vi)), until
such Losses exceed One Million Dollars ($1,000,000) and then only for such
Losses in excess of One Million Dollars ($1,000,000); and

                    (vii) for any Losses in excess of Twenty Million Dollars
($20,000,000) (over and above the One Million Dollars ($1,000,000) in Losses
which are the obligation of the Buying Group pursuant to Section 9.2(b)(vi)
above), all such Losses in excess of Twenty Million Dollars ($20,000,000) being
the responsibility of the Buying Group.

               (d) Exceptions to Limitations. Notwithstanding the foregoing, the
limitations contained in Section 9.2(c)(vi) and (vii) shall not apply to
indemnification obligations relating to (A) any breach of a Company Shareholder
representation or warranty regarding the Shares or the shares of Leeson Canada
Inc. under Article IV which shall solely be the responsibility of the applicable
Company Shareholder, (B) any breach of the representations and warranties
contained in Section 3.6(f) hereof, (C) any breach of a representation or
warranty resulting from an Updated Disclosure (other than non-liability breaches
consented to by Parent) of which Company had Knowledge of such breach as of the
date of this Agreement; or (D) the separate indemnification provided in Section
9.7(a), for which limitations on such indemnification are contained in Section
9.7(e).

               (e) Noncompetition Agreements. Each Indemnifying Shareholder
shall be solely responsible for a breach of his respective Noncompetition
Agreement,

          9.3. Indemnification by Parent.
               -------------------------

               (a) Subject to the provisions of this Section and the other
Sections of this Article IX, Parent agrees to indemnify the Company and the
Company Shareholders and hold them harmless (and agrees to indemnify and hold
harmless any persons adversely affected by Parent's failure to comply with
Section 6.10 of this Agreement) from and against any and all Losses incurred or
sustained by or imposed upon the Company or the Company Shareholders (or such
persons) with respect to or by reason of any failure, breach, default,
inaccuracy or lack of performance on the part of Parent or Newco of any of their
respective representations, warranties, agreements or covenants under this
Agreement.

               (b) Notwithstanding anything to the contrary in this Agreement,
the Company Shareholders (and such persons) shall not be entitled to
indemnification under Section 9.3(a) with respect to any claim for
indemnification hereunder unless the Shareholder Representative has given Parent
written notice of such claim, setting forth in reasonable detail


                                      -46-
<PAGE>

the facts and circumstances pertaining thereto, (i) as soon as practicable
following the Shareholder Representative's discovery of such claim and (ii)
prior to the applicable Cut-off Date.

          9.4. Indemnification by Company. Subject to the terms and conditions
of this Article IX and until the Closing, the Company hereby agrees to
indemnify, defend and hold harmless Buying Group from and against all Losses
asserted against, resulting from, imposed upon or incurred by Buying Group,
arising out of or resulting from:

               (a) the breach of any of the representations or warranties
contained in Article III of this Agreement, or

               (b) the failure of the Company or Company Shareholders to comply
with any of the covenants and agreements contained in this Agreement which were
required to be performed by the Company or any Company Shareholder.

          9.5. Procedures for Indemnification.
               ------------------------------

               (a) If an Indemnified Party shall claim to have suffered a Loss
for which indemnification is available under Section 9.2 or 9.3, as the case may
be (for purposes of this Section 9.5, regardless of whether such Indemnified
Party is entitled to receive a payment in respect of such claim by virtue of
paragraph (b) of Section 9.2), the Indemnified Party shall notify the
Indemnifying Party in writing of such claim within the time periods provided
herein, which written notice shall describe the nature of such claim, the facts
and circumstances that give rise to such claim and the amount of such claim if
reasonably ascertainable at the time such claim is made (or if not then
reasonably ascertainable, the maximum amount of such claim reasonably estimated
by the Indemnified Party). In the event that within forty-five (45) days after
the receipt by the Indemnifying Party of such a written notice from the
Indemnified Party, the Indemnified Party shall not have received from the
Indemnifying Party a written objection to such claim, such claim shall be
conclusively presumed and considered to have been assented to and approved by
the Indemnifying Party following receipt by the Indemnifying Party of a written
notice from the Indemnified Party to such effect.

               (b) If within the forty-five (45) day period described in
paragraph (a) above the Indemnified Party shall have received from the
Indemnifying Party a notice setting forth the Indemnifying Party's objections to
such claim and the Indemnifying Party's reasons for such objection, then the
Parties shall follow the procedures set forth in Article XI below with respect
to the resolution of such matter.

          9.6. Procedures for Third-Party Claim.
               --------------------------------

               (a) Any Indemnified Party seeking indemnification pursuant to
this Article IX in respect of any Third-Party Claim shall give the Indemnifying
Party from whom indemnification with respect to such claim is sought (i) prompt
written notice of such Third-Party Claim and (ii) copies of all documents and
information relating to any such Third-Party Claim promptly after their being
obtained by the Indemnified Party; provided, that


                                      -47-
<PAGE>

the failure by the Indemnified Party to so notify or provide copies to the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
to the Indemnified Party for any liability hereunder except to the extent that
such failure shall have prejudiced the defense of such Third-Party Claim.

               (b) The Indemnifying Party shall have the right, at its option,
and expense, to defend against, negotiate, settle or otherwise deal with any
Third-Party Claim with respect to which it is the Indemnifying Party and to be
represented by counsel of its own choice, and the Indemnified Party will not
admit any liability with respect thereto or settle, compromise, pay or discharge
the same without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, so long as the Indemnifying Party is contesting or
defending the same with reasonable diligence and in good faith; provided, that
the Indemnified Party may participate in any proceeding with counsel of its
choice and at its expense; provided further, that the Indemnifying Party may not
enter into a settlement of any such Third-Party Claim without the consent of the
Indemnified Party, which consent shall be not unreasonably withheld, unless such
settlement requires no more than a monetary payment for which the Indemnified
Party is fully indemnified by the Indemnifying Party or involves other matters
not binding upon the Indemnified Party; and provided further that, in the event
the Indemnifying Party does not, within fifteen (15) days after it receives
written notice of the Third-Party Claim from the Indemnified Party, agree in
writing to accept the defense of, and assume all responsibility for, such
Third-Party Claim as provided above in this Section 9.6(b), then the Indemnified
Party shall have the right to defend against, negotiate, settle or otherwise
deal with the Third-Party Claim in such manner as the Indemnified Party deems
appropriate, in its sole discretion, and the Indemnified Party shall be entitled
to indemnification therefor from the Indemnifying Party to the extent provided
under this Article IX.

          9.7. Environmental Matters.
               ---------------------

               (a) Separate Indemnification. Without limiting the generality of
the indemnification provided in Section 9.2, the Indemnifying Shareholders
hereby agree to severally, but not jointly, and in accordance with the
percentages listed on the Disclosure Schedule, indemnify, defend and hold
harmless Buying Group from and against any Losses asserted against, imposed on,
or incurred by the Buying Group, directly or indirectly, in connection with or
by reason of (i) (A) the Company's purchase of assets and assumption of
liabilities and leases from the Sandor Corporation or Sandor CA, Inc. relating
to Environmental Laws or Hazardous Substances, (B) the occupancy by the Company
of any property or premises in Sedalia, Missouri prior to the Closing Date
relating to Environmental Laws or Hazardous Substance, (C) the transportation,
handling, storage, treatment or disposal of Hazardous Substances at or from the
Sedalia, Missouri properties or premises prior to the Closing Date by the
Company, or (D) the breach or inaccuracy of any representation or warranty
contained in Section 3.17 as it relates solely to the properties and premises in
Sedalia, Missouri, or (ii) the matters identified during the environmental
investigations (Phase I (but only to the extent identified in the
"recommendations" Section of such Phase I report and excluding Phase I
assessments of the Sedalia properties) and Phase II site assessments and
compliance audits) prior to Closing conducted by Company, Parent or their
consultants or disclosed in the Disclosure Schedule which require investigation
or remediation of, or to bring


                                      -48-
<PAGE>

into compliance, the Company, its businesses, facilities and assets pursuant to
all Environmental Laws (the "Environmental Action Items").

               (b) Remediation. The Indemnifying Shareholders shall cause the
Company to investigate and remedy the Environmental Action Items prior to
Closing or, to the extent such investigation or remedy is not effected prior to
Closing and the cost thereof is not reflected on the Closing Balance Sheet,
shall pay or reimburse the Company for payment of the cost of effecting such
remedy after the Closing.

               (c) Access and Assistance. With regard to any matter for which
the Indemnifying Shareholders have an indemnification obligation under Section
9.2(a) as a result of a breach of a representation and warranty contained in
Section 3.17 hereof or under Section 9.7(a), and for which a claim has been
asserted as provided in Section 9.5 or Section 9.6 above (the "Environmental
Claims"):

                    (i) Company Shareholders and Buying Group acknowledge and
agree that the Company shall retain responsibility for the management of the
investigation, removal, closure and/or clean-up relating to the environmental
claims ("Investigation and Remediation"), but shall consult with Shareholder
Representative and Shareholder Representative's counsel as the Investigation and
Remediation plans are developed, and Buying Group shall consider in the plan
development all proposals made by Shareholder Representative. Buying Group shall
obtain the consent of Shareholder Representative for any Investigation and
Remediation action, which consent shall not be unreasonably withheld. The
Company agrees that during the course of the Investigation and Remediation, it
will obtain competitive bids for any required Investigation or Remediation
services and will use commercially reasonable efforts to minimize the cost of
the Investigation and Remediation as long as the Investigation and Remediation
is completed in accordance with applicable Environmental Laws in effect at the
time conducted. Notwithstanding the foregoing, Parent shall not be required to
accept institutional controls as part of any Investigation and Remediation
action.

                    (ii) Buying Group shall (A) provide the Shareholder
Representative and its agents and representatives reasonable access to the
relevant real estate (but only to the extent that the Buying Group has a right
to provide such access) to conduct its own investigation or testing with regards
to the matter; provided, however, that the Shareholder Representative and its
agents and representatives shall not unreasonably interfere with the operations
on the real estate and shall restore such real estate to the condition existing
prior to the investigation and testing activities and the Indemnifying
Shareholders shall provide to the Buying Group, copies of all sampling data
obtained on behalf of the Indemnifying Shareholders or in the possession or
control of the Indemnifying Shareholders; (B) provide the Shareholder
Representative with the results, including analytical data, of any investigation
or testing conducted by the Buying Group or, if available to the Buying Group,
any third party; (C) give the Shareholder Representative and its agents and
representatives a reasonable opportunity to participate in any discussion or
negotiation with any governmental authority concerning such matter; (D) cause
its employees to cooperate with the Shareholder Representative and to afford the
Shareholder Representative, its agents and representatives access to relevant
records relating to the matters which may be the Indemnifying Shareholders'


                                      -49-
<PAGE>

responsibility under this Agreement; and (E) provide Shareholder Representative
and Shareholder Representative's counsel with complete copies of all drafts and
final reports, bids, notices, correspondence and other communications with any
governmental or regulatory authority concerning such matter.

               (d) Disclosure Schedule. For purposes of determining whether and
to the extent to which Buying Group is able to seek indemnification from the
Indemnifying Shareholders under Sections 9.2 or 9.7(a)(i)(D), for the inaccuracy
or breach of any representation or warranty set forth in Section 3.17, the
language "Except as set forth in Schedule 3.17" shall be disregarded and the
information set forth in Schedule 3.17 shall be deemed not to have been
disclosed to the Buying Group. The parties acknowledge that the sole purpose of
including such schedule in the Disclosure Schedules is to determine whether the
condition set forth in Section 7.1 has been met by the Company Shareholders for
purposes of Closing.

               (e) Limitations on Separate Indemnification. Notwithstanding
anything to the contrary in Section 9.2, the indemnification obligations of
Indemnifying Shareholders under this Section 9.7 shall be subject to the
following limitations only:

                    (i) There shall be no deductible or basket for
indemnification of Losses relating to the Environmental Action Items;

                    (ii) Buying Group shall not be entitled to indemnification
under Section 9.7(a)(i) unless the aggregate of the Indemnifying Shareholders'
indemnification obligation pursuant to Section 9.7(a)(i) (but for this Section
9.7(e)(ii)) exceeds One Hundred Twenty-Five Thousand Dollars ($125,000), and
then only for those Losses in excess of One Hundred Twenty Five Thousand Dollars
($125,000)); and

                    (iii) Except for the limitations contained in Section 9.2(d)
which shall apply to all indemnification claims, Indemnifying Shareholders'
indemnification obligations under Sections 9.2 and 9.7 shall not exceed Twenty
Million Dollars ($20,000,000).

               (f) Sedalia Properties. Buying Group agrees to vacate the two
Sedalia properties no later than August 1, 2001.

          9.8. Material Qualifiers. For purposes of determining whether and to
the extent to which Buying Group is able to seek indemnification from the
Indemnifying Shareholders under Section 9.2 for the inaccuracy or breach of any
representation or warranty, the use of the term "material" as a qualifier in any
such representation or warranty, except as used in connection with "Material
Contract" or "material adverse change," shall be disregarded, and all claims for
such indemnification shall be determined as if the term "material" was not
present in such representation or warranty.

          9.9. Subrogation. In the event the Indemnified Party incurs any Losses
for which the Indemnifying Party is responsible hereunder, the Indemnifying
Party shall, upon


                                      -50-
<PAGE>

payment of any such Losses to the Indemnified Party, be subrogated to the rights
of any claims the Indemnified Party or the Company may have against any third
party.

                                   ARTICLE X
                            TERMINATION OF AGREEMENT

          10.1. Causes. This Agreement and the transactions contemplated hereby
may be terminated at any time prior to the completion of the Closing as follows,
and in no other manner:

               (a) By mutual consent of the Parties;

               (b) By written notice from Parent to the Shareholder
Representative if:

                    (i) any of the conditions provided for in Article VII of
this Agreement have not been satisfied or waived by Parent or Newco in writing
and the Closing has not occurred by October 15, 2000 or the date of such notice,
whichever is later; or

                    (ii) the Closing has not occurred by October 15, 2000, for
reasons other than the failure of the Parent or Newco to perform their
respective obligations hereunder; or

               (c) By written notice from the Shareholder Representative to
Parent and Newco if:

                    (i) any of the conditions provided for in Article VIII of
this Agreement have not been satisfied or waived by the Shareholder
Representative in writing and the Closing has not occurred by October 15, 2000
or the date of such notice, whichever is later; or

                    (ii) the Closing has not occurred by October 15, 2000, for
reasons other than the failure of the Company or Company Shareholders to perform
their obligations hereunder.

          10.2. Effect of Termination. In the event of a termination of this
Agreement by Parent or the Shareholder Representative under subsections
10.1(b)(i) or 10.1(c)(i), the Parties shall have such rights and remedies in law
or in equity as the Law may provide. The respective obligations of the Parties
pursuant to Sections 6.1(b), 6.5, 10.2, 12.2, 12.3, 12.5, 12.6 and Articles IX
and XI shall survive any termination of this Agreement.

          10.3. Right to Proceed. If any of the conditions specified in Article
VII hereof have not been satisfied, Parent and Newco, in lieu of any other
rights that may be available to them, may waive their rights to have such
conditions satisfied prior to Closing and may proceed with the transactions
contemplated hereby, and if any of the conditions specified in Article VII
hereof have not been satisfied prior to Closing, the Shareholder Representative,
in


                                      -51-
<PAGE>

lieu of any other rights that may be available to it, may waive its rights to
have such conditions satisfied and may proceed with the transactions
contemplated hereby.

                                   ARTICLE XI
                               DISPUTE RESOLUTION

          11.1. Dispute. As used in this Agreement, "Dispute" shall mean any
dispute or disagreement between Parent (for itself or on behalf of Newco) and
Company or the Shareholder Representative (on behalf of Company Shareholders)
concerning the interpretation of this Agreement, the validity of this Agreement,
any breach or alleged breach by any party under this Agreement or any other
matter relating in any way to this Agreement, except for a dispute or
disagreement relating to the Closing Balance Sheet, which shall be resolved
pursuant to Section 2.4 of this Agreement and the Noncompetition Agreements,
which shall be resolved in accordance with their terms.

          11.2. Process. If a Dispute arises, the parties to the Dispute shall
follow the procedures specified in Sections 11.3, 11.4 and 11.5 of this
Agreement.

          11.3. Negotiations. The parties shall promptly attempt to resolve any
Dispute by negotiations between the Parent and the Shareholder Representative.
Either the Parent or Shareholder Representative may give the other Party written
notice of any Dispute not resolved in the normal course of business. The Parent
and the Shareholder Representative shall meet at a mutually acceptable time and
place within ten (10) calendar days after delivery of such notice, and
thereafter as often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the Dispute. If the Dispute has not been
resolved by these Persons within thirty (30) calendar days of the disputing
party's notice, or if the Parties fail to meet within such ten (10) calendar
days, either the Parent or the Shareholder Representative may initiate mediation
as provided in Section 11.4 of this Agreement. If a negotiator intends to be
accompanied at a meeting by legal counsel, the other negotiator shall be given
at least three (3) business days' notice of such intention and may also be
accompanied by legal counsel.

          11.4. Mediation. If the Dispute is not resolved by negotiations
pursuant to Section 11.3 of this Agreement, the Parent and the Shareholder
Representative shall attempt in good faith to resolve any such Dispute by
mediation. Either the Parent or the Shareholder Representative may initiate a
mediation proceeding by a request in writing to the other party (the "Request"),
and both parties will then be obligated to engage in a mediation. The proceeding
will be conducted in accordance with the then current Center for Public
Resources ("CPR") Model Procedure for Mediation of Business Disputes, with the
following exceptions:

               (a) if the Parties have not agreed within thirty (30) calendar
days of the Request on the selection of a mediator willing to serve, CPR, upon
the request of either the Parent or the Shareholder Representative, shall
appoint a member of the CPR Panels of Neutrals as the mediator; and

               (b) efforts to reach a settlement will continue until the
conclusion of the proceedings, which shall be deemed to occur upon the earliest
of the date that: (i) a


                                      -52-
<PAGE>

written settlement is reached; or (ii) the mediator concludes and informs the
Parties in writing that further efforts would not be useful; or (iii) the Parent
and the Shareholder Representative agree in writing that an impasse has been
reached; or (iv) is sixty (60) calendar days after the Request and none of the
events specified in Sections 11.4(b)(i), (ii) or (iii) have occurred. No Party
may withdraw before the conclusion of the proceeding.

          11.5. Submission to Adjudication. If a Dispute is not resolved by
negotiation pursuant to Section 11.3 of this Agreement or by mediation pursuant
to Section 11.4 of this Agreement within 100 calendar days after initiation of
the negotiation process pursuant to Section 11.3 of this Agreement, such Dispute
and any other claims arising out of or relating to this Agreement may be heard,
adjudicated and determined in an action or proceeding filed in any state court
sitting in Milwaukee County, Wisconsin or in any federal court sitting in
Milwaukee, Wisconsin.

          11.6. General.
                -------

               (a) Provisional Remedies. At any time during the procedures
specified in Sections 11.3 and 11.4 of this Agreement, a party may seek a
preliminary injunction or other provisional judicial relief if in its judgment
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite such action, the parties will continue to participate in good faith
in the procedures specified in this Article XI of this Agreement.

               (b) Tolling Statue of Limitations. All applicable statutes of
limitation and defenses based upon the passage of time shall be tolled while the
procedures specified in this Article XI of this Agreement are pending. The
Parties will take such action, if any, as is required to effectuate such
tolling.

               (c) Performance to Continue. Each Party is required to continue
to perform its obligations under this Agreement pending final resolution of any
Dispute.

               (d) Extension of Deadlines. All deadlines specified in this
Article XI of this Agreement may be extended by mutual agreement between the
Parent and the Shareholder Representative.

               (e) Enforcement. The parties regard the obligations in this
Article XI of this Agreement to constitute an essential provision of this
Agreement and one that is legally binding on them. In case of a violation of the
obligations in this Article XI of this Agreement by either the Parent or the
Shareholder Representative, the other party may bring an action to seek
enforcement of such obligations in any court of Law having jurisdiction thereof.

               (f) Costs. The parties to the dispute shall pay: (i) their own
costs, fees, and expenses incurred in connection with the application of the
provisions of this Article X of this Agreement; and (ii) fifty percent (50%) of
the fees and expenses of CPR and the mediator in connection with the application
of the provisions of Section 11.4 of this Agreement; provided that, prior to the
Closing, the Shareholder Representative's costs, fees


                                      -53-
<PAGE>

and expenses shall be paid by the Company, and after the Closing, the
Shareholder Representative's costs, fees and expenses shall be paid by the
Company Shareholders.

               (g) Replacement. If CPR is no longer in business or is unable or
refuses or declines to act or to continue to act under this Article XI of this
Agreement for any reason, then the functions specified in this Article XI of
this Agreement to be performed by CPR shall be performed by another Person
engaged in a business equivalent to that conducted by CPR as is agreed to by the
Parent and the Shareholder Representative (the "Replacement"). If the Parent and
the Shareholder Representative cannot agree on the identity of the Replacement
within ten (10) calendar days after a Request, the Replacement shall be selected
by the Chief Judge of the United States District Court for the Eastern District
of Wisconsin upon application by any party hereto. If a Replacement is selected
by either means, this Article XI shall be deemed appropriately amended to refer
to such Replacement.

                                  ARTICLE XII
                                  MISCELLANEOUS

          12.1. Further Assurance. From time to time, at a Party's request and
without further consideration, the other Parties will execute and deliver to the
requesting Party such documents and take such other action as the requesting
Party may reasonably request in order to consummate more effectively the
transactions contemplated hereby.

          12.2. Assignment; Binding Effect.
                --------------------------

               (a) The rights and obligations of a Party hereunder may not be
assigned, transferred or encumbered without the prior written consent of the
other Parties; provided, however, that Parent and Newco may assign their rights
and obligations under this Agreement to one or more of their wholly-owned
subsidiaries, but such assignment shall not relieve either Parent or Newco of
its obligations hereunder.

               (b) Subject to Section 12.2(a) above, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns. This Agreement is not intended to
confer upon any person other than Parent, Newco, Company Shareholders and the
Company any rights or remedies hereunder.

          12.3. Law Governing Agreement. This Agreement shall be construed and
interpreted according to the internal Laws of the State of Wisconsin, excluding
any choice of law rules that may direct the application of the Laws of another
jurisdiction.

          12.4. Amendment and Modification. Parent, Newco, Company and
Shareholder Representative may amend, modify and supplement this Agreement, and
any of the terms, covenants, representations, warranties or conditions hereof
may be waived, only by a written instrument executed on behalf of Parent, Newco,
Company and the Shareholder Representative.

          12.5. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by


                                      -54-
<PAGE>

telecopier, facsimile transmission or other electronic means of transmitting
written documents; or (c) sent to the parties at their respective addresses
indicated herein by registered or certified U.S. mail, return receipt requested
and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:

          If to Parent or Newco, to:

              Regal-Beloit Corporation
              Attn:  Henry W. Knueppel
              200 State Street
              Beloit, WI  53511
              Facsimile:  (608) 364-8818

          with a copy to:

              Foley & Lardner
              Attn:  Benjamin F. Garmer, III
              777 East Wisconsin Avenue
              Milwaukee, WI  53202
              Facsimile:  (414) 297-4900

          If to Company:

              Leeson Electric Corporation
              Attn:  Mr. Christopher Doerr
                     Mr. Daniel Doerr
              2100 Washington Avenue
              Grafton, WI   53024-0241
              Facsimile:  (262) 377-4799

          with a copy to:

              Quarles & Brady LLP
              Attn:  Henry J. Loos, Esq.
              411 East Wisconsin Avenue, Suite 2040
              Milwaukee, WI  53202
              Facsimile:  (414) 271-3552


                                      -55-
<PAGE>

          If to Shareholder Representative (prior to Closing):

              Leeson Electric Corporation
              Attention:  Mr. Christopher Doerr
                          Mr. Daniel Doerr
              2100 Washington Avenue
              Grafton, WI  53024-0241
              Facsimile:  (262) 377-4799

          with a copy to:

              Quarles & Brady LLP
              Attn:  Henry J. Loos, Esq.
              411 East Wisconsin Avenue, Suite 2040
              Milwaukee, WI  53202
              Facsimile:  (414) 271-3552

          If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Delivery to the Shareholder Representative shall constitute delivery to
all Company Shareholders. Any Person may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section.

          12.6. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:

               (a) Brokerage. Robert W. Baird & Co. Incorporated shall be
compensated by the Company Shareholders. Parent and Newco represent and warrant
to the Company and the Company Shareholders that, other than J.P. Morgan (who
shall be compensated by Parent) for purposes of a fairness opinion, there is no
broker involved or in any way connected with the transfer provided for herein on
their behalf.

               (b) Other. Except as otherwise provided herein, each of the
Parties shall bear its own expenses and the expenses of its counsel and other
agents in connection with the transactions contemplated hereby.

          12.7. Entire Agreement. This Agreement and the Ancillary Instruments
embody the entire agreement between the Parties hereto with respect to the
transactions contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set forth or
provided for herein or executed contemporaneously or in connection herewith.


                                      -56-
<PAGE>

          12.8. Counterparts/Facsimile. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile copies of
signatures shall constitute valid and binding obligations of the signing party
once delivered by facsimile to the other Parties.

          12.9. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

          12.10. Construction. Where any group or category of items or matters
is defined collectively in the plural number, any item or matter within such
definition may be referred to using such defined term in the singular number.

          12.11. Specific Performance. IT IS AGREED THAT, PRIOR TO CLOSING
(EXCEPT AS CONTEMPLATED IN THE LAST SENTENCE OF SECTION 9.1(d) ABOVE), THE
PARTIES HERETO AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY
OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR
SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE
PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF
THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS HEREOF IN
ANY COURT OF THE UNITED STATES OR ANY STATE HAVING JURISDICTION, THIS BEING IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.




                                      -57-
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

                                    REGAL-BELOIT CORPORATION


                                    By:
                                       -----------------------------------
                                    Title:
                                          --------------------------------


                                    LEESON ELECTRIC CORPORATION


                                    By:
                                       -----------------------------------
                                    Title:
                                          --------------------------------


                                    SHAREHOLDERS:


                                    ---------------------------------------
                                    Daniel L. Doerr


                                    ---------------------------------------
                                    Christopher L. Doerr


                                    ---------------------------------------
                                    David E. Doerr

                                    Christopher L. Doerr Grantor Retained
                                    Annuity Trust of 1995


                                    By:
                                       -----------------------------------
                                    Title:
                                          --------------------------------



                                    ---------------------------------------
                                    Mary K. Bach Filla


                                      -58-
<PAGE>

                                    David E. Doerr Grantor Retained Annuity
                                    Trust of 1995


                                    By:
                                       -----------------------------------
                                    Title:
                                          --------------------------------



                                    ---------------------------------------
                                    William D. Whitney


                                    ---------------------------------------
                                    John C. Widstrand


                                    ---------------------------------------
                                    Christopher L. Doerr, Jr.


                                    ---------------------------------------
                                    Melissa L. Doerr


                                    ---------------------------------------
                                    Jennifer R. Doerr


                                    ---------------------------------------
                                    Helen L. Bach


                                    LEC ACQUISITION CORP.


                                    By:
                                       -----------------------------------
                                    Title:
                                          --------------------------------


                                      -59-

<PAGE>

                   FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
                                  By and Among
             REGAL-BELOIT CORPORATION, LEC ACQUISITION CORP., LEESON
                  ELECTRIC CORPORATION, AND THE SHAREHOLDERS OF
                           LESSON ELECTRIC CORPORATION


          THE FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "First
Amendment") is made and entered into as of this 29th day of September, 2000, by
and between REGAL-BELOIT CORPORATION, a Wisconsin corporation ("Parent"), LEC
ACQUISITION COP., a Wisconsin corporation ("Newco"), LEESON ELECTRIC
CORPORATION, a Wisconsin corporation ("Company") and the Shareholders of Company
(collectively, the "Shareholders").

          WHEREAS, the parties entered into the Stock Purchase Agreement by and
among Parent, Newco, the Company and Shareholders dated August 7, 2000 (the
"Agreement").

          WHEREAS, the parties disagree as to whether the makewhole premium with
respect to the repayment of the indebtedness under that certain Note Purchase
Agreement dated as of May 15, 1996 (as amended, the "Note Agreement") by and
between the Company and State of Wisconsin Investment Board ("SWIB") and that
certain 7.19% Senior Note dated May 15, 1996 (the "Note") executed by the
Company and payable to SWIB, should be included in the definition of "Net
Indebtedness" and "Estimated Net Indebtedness" for purposes of calculating the
Purchase Price.

          WHEREAS, the parties have agreed to resolve this dispute as set forth
below.

          NOW THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and conditions herein contained, the parties agree as follows:

     1. Section 2.4(i) shall be added to the Agreement to read in its entirety
as follows:

          (i) SWIB Makewhole Premium. Pursuant to a pay-off letter dated
September 21, 2000, the makewhole premium is $446,901.09. In compromise of the
dispute, the Working Capital (as defined in the Agreement) shall be reduced by
$134,070.

     2. On behalf of the Buying Group (as defined in the Agreement), Parent and
Newco hereby waive any breach of any representation or warranty within the
Agreement made by the Indemnifying Shareholders relating to any breach or
default of the Note Agreement resulting from the consummation of the
transactions contemplated by the Agreement.

     3. Except as modified by this First Amendment, the Agreement shall remain
in full force and effect.

<PAGE>

          IN WITNESS WHEREOF, each party has caused this First Amendment to
Stock Purchase Agreement to be executed as of the date first written above.

                                       REGAL-BELOIT CORPORATION


                                       By:
                                          ------------------------------------
                                       Title:
                                             ---------------------------------


                                       LEESON ELECTRIC CORPORATION


                                       By:
                                          ------------------------------------
                                       Title:
                                             ---------------------------------


                                       LEC ACQUISITION CORP.


                                       By:
                                          ------------------------------------
                                       Title:
                                             ---------------------------------


                                       SHAREHOLDERS:

                                       By:
                                          ------------------------------------
                                           Daniel L. Doerr,
                                           Shareholder Representative


                                       By:
                                          ------------------------------------
                                           Christopher L. Doerr,
                                           Shareholder Representative



                                      -2-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>CREDIT AGREEMENT
<TEXT>


                                CREDIT AGREEMENT

                         dated as of September 28, 2000

                                      among

                            REGAL-BELOIT CORPORATION,

                         VARIOUS FINANCIAL INSTITUTIONS,

                           M&I MARSHALL & ILSLEY BANK,
                  as Administrative Agent and Swing Line Bank,

                                       and

                             BANK OF AMERICA, N.A.,
                     as Documentation and Syndication Agent




                         BANC OF AMERICA SECURITIES LLC,
                         Lead Arranger and Book Manager



<PAGE>

                                TABLE OF CONTENTS
                                                                            Page

SECTION 1  DEFINITIONS.........................................................1
    1.1    Definitions.........................................................1
    1.2    Other Interpretive Provisions......................................13

SECTION 2  COMMITMENTS OF THE BANKS; BORROWING AND CONVERSION
           PROCEDURES; LETTER OF CREDIT PROCEDURES; SWING LINE LOANS..........14
    2.1    Commitments........................................................14
           2.1.1     Revolving Loans..........................................14
           2.1.2     L/C Commitment...........................................14
    2.2    Loan Procedures....................................................14
           2.2.1     Various Types of Loans...................................14
    2.2.2  Borrowing Procedures...............................................14
           2.2.3     Conversion and Continuation Procedures...................15
    2.3    Letter of Credit Procedures........................................16
           2.3.1     Issuance Procedures......................................16
           2.3.2     Participations in Letters of Credit......................17
           2.3.3     Reimbursement Obligations................................17
           2.3.4     Limitation on Obligations of Issuing Banks...............17
           2.3.5     Funding by Banks to Issuing Banks........................18
           2.3.6     Repayment of Participations..............................18
    2.4    Swing Line Loans...................................................18
           2.4.1     Swing Line Loans.........................................18
           2.4.2     Swing Line Loan Procedures...............................19
           2.4.3     Refunding of, or Funding of Participations in,
                     Swing Line Loans.........................................19
           2.4.4     Repayment of Participations..............................20
           2.4.5     Participation Obligations Unconditional..................20
    2.5    Commitments Several................................................20
    2.6    Certain Conditions.................................................21

SECTION 3  NOTES EVIDENCING LOANS.............................................21
    3.1    Notes..............................................................21
    3.2    Recordkeeping......................................................21

SECTION 4  INTEREST...........................................................21


                                       2
<PAGE>

    4.1    Interest Rates.....................................................21
           4.1.1     Interest Rates for Revolving Loans.......................21
           4.1.2     Interest Rates on Swing Line Loans.......................21
    4.2    Interest Payment Dates.............................................22
    4.3    Setting and Notice of Eurodollar Rates.............................22
    4.4    Computation of Interest............................................22

SECTION 5  FEES...............................................................22
    5.1    Non-Use Fee........................................................22
    5.2    Letter of Credit Fees..............................................23
    5.3    Up-Front and Funding Fees..........................................23
    5.4    Agents' and Lead Arranger's Fees...................................23

SECTION 6  CHANGES IN COMMITMENT AMOUNT; PREPAYMENTS..........................23
    6.1    Changes in Commitment Amount.......................................23
           6.1.1     Scheduled Reductions of the Commitment Amount............23
           6.1.2     Mandatory Reductions of the Commitment Amount............24
           6.1.3     Voluntary Reduction or Termination of the Commitments....24
           6.1.4     Optional Increase in Commitment Amount...................24
    6.2    Prepayments........................................................25
           6.2.1     Mandatory Prepayments....................................25
           6.2.2     Voluntary Prepayments....................................25
           6.2.3     All Prepayments of Revolving Loans.......................25

SECTION 7  MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES....................25
    7.1    Making of Payments.................................................25
    7.2    Application of Certain Payments....................................25
    7.3    Due Date Extension.................................................25
    7.4    Failure to Make Payments...........................................26
    7.5    Setoff.............................................................26
    7.6    Proration of Payments..............................................26
    7.7    Taxes..............................................................27

SECTION 8  INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS
    8.1    Increased Costs....................................................28
    8.2    Inability to Determine Rates, etc..................................29
    8.3    Changes in Law Rendering Eurodollar Loans Unlawful.................30
    8.4    Funding Losses.....................................................30


                                       3
<PAGE>

    8.5    Right of Banks to Fund through Other Offices.......................31
    8.6    Discretion of Banks as to Manner of Funding........................31
    8.7    Mitigation of Circumstances; Replacement of Affected Bank..........31
    8.8    Conclusiveness of Statements; Survival of Provisions...............32

SECTION 9 REPRESENTATIONS AND WARRANTIES......................................32
    9.1    Organization, etc..................................................32
    9.2    Authorization; No Conflict.........................................32
    9.3    Validity and Binding Nature........................................32
    9.4    Financial Condition................................................33
    9.5    No Material Adverse Change.........................................33
    9.6    Litigation and Contingent Liabilities..............................33
    9.7    Ownership of Properties; Liens.....................................33
    9.8    Subsidiaries.......................................................33
    9.9    Pension Plans......................................................33
    9.10   Investment Company Act.............................................34
    9.11   Public Utility Holding Company Act.................................34
    9.12   Regulation U.......................................................34
    9.13   Taxes..............................................................34
    9.14   Solvency, etc......................................................34
    9.15   Environmental Matters..............................................34
    9.16   Information........................................................35
    9.17   Leeson Electric Acquisition........................................35

SECTION 10 COVENANTS..........................................................36
    10.1   Reports, Certificates and Other Information........................36
           10.1.1    Audit Report.............................................36
           10.1.2    Quarterly Reports........................................36
           10.1.3    Certificates.............................................36
           10.1.4    Reports to SEC and to Shareholders.......................37
           10.1.5    Notice of Default, Litigation and ERISA Matters..........37
           10.1.6    Subsidiaries.............................................38
           10.1.7    Management Reports.......................................38
           10.1.8    Other Information........................................38
    10.2   Books, Records and Inspections.....................................38
    10.3   Insurance..........................................................38


                                       4
<PAGE>

    10.4   Compliance with Laws; Payment of Taxes.............................38
    10.5   Maintenance of Existence, etc......................................39
    10.6   Financial Covenants................................................39
           10.6.1    Minimum Net Worth........................................39
           10.6.2    Funded Debt to EBITDA Ratio..............................39
           10.6.3    Interest Coverage Ratio..................................39
    10.7   Limitations on Debt................................................39
    10.8   Liens..............................................................40
    10.9   Mergers, Consolidations, Sales.....................................42
    10.10  Use of Proceeds....................................................42
    10.11  Further Assurances.................................................43
    10.12  Transactions with Affiliates.......................................43
    10.13  Employee Benefit Plans.............................................43
    10.14  Environmental Laws.................................................43
    10.15  Unconditional Purchase Obligations.................................43
    10.16  Inconsistent Agreements............................................43
    10.17  Business Activities................................................43
    10.18  Advances and Other Investments.....................................43
    10.19  Margin Stock.......................................................44
    10.20  Leeson Acquisition Agreement.......................................44
    10.21  Non-Guarantor Subsidiaries.........................................45

SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC..........................45
    11.1   Effectiveness......................................................45
           11.1.1    Notes....................................................45
           11.1.2    Resolutions..............................................45
           11.1.3    Consents, etc............................................45
           11.1.4    Incumbency and Signature Certificates....................45
           11.1.5    Guaranty.................................................46
           11.1.6    Opinions of Counsel for the Company and the Guarantors...46
           11.1.8    Officer's Certificate....................................46
           11.1.9    Compliance Certificate...................................46
           11.1.10   Other....................................................46
    11.2   Conditions to All Credit Extensions of Credit......................46
           11.2.1    Compliance with Warranties, No Default, etc..............46
    11.3   Confirmatory Certificate...........................................47


                                       5
<PAGE>

SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.................................47
    12.1   Events of Default..................................................47
           12.1.1    Non-Payment of the Loans, etc............................47
           12.1.2    Non-Payment of Other Debt................................47
           12.1.3    Other Material Obligations...............................48
           12.1.4    Bankruptcy, Insolvency, etc..............................48
           12.1.5    Non-Compliance with Provisions of this Agreement.........48
           12.1.6    Representations and Warranties...........................48
           12.1.7    Pension Plans............................................48
           12.1.8    Judgments................................................49
           12.1.9    Invalidity of Guaranty...................................49
           12.1.10   Change in Control........................................49
    12.2   Effect of Event of Default.........................................49

SECTION 13 THE AGENT..........................................................50
    13.1   Appointment and Authorization......................................50
    13.2   Delegation of Duties...............................................51
    13.3   Liability of Agents................................................51
    13.4   Reliance by Agents.................................................51
    13.5   Notice of Default..................................................51
    13.6   Credit Decision....................................................52
    13.7   Indemnification....................................................52
    13.8   Agents in Individual Capacity......................................53
    13.9   Resignation or Removal of Agent....................................53
    13.10  Withholding Tax....................................................54

SECTION 14 GENERAL............................................................55
    14.1   Waiver; Amendments.................................................55
    14.2   Counterparts.......................................................56
    14.3   Notices............................................................56
    14.4   Computations.......................................................56
    14.5   Regulation U.......................................................56
    14.6   Costs, Expenses and Taxes..........................................57
    14.7   Captions...........................................................57
    14.8   Successors and Assigns.............................................57
    14.9   Assignments; Participations........................................57
           14.9.1    Assignments..............................................57


                                       6
<PAGE>

           14.9.2    Participations...........................................58
           14.10     Governing Law............................................59
           14.11     Indemnification by the Company...........................59
           14.12     Forum Selection and Consent to Jurisdiction..............60
           14.13     Waiver of Jury Trial.....................................60


                                       7
<PAGE>

                                    SCHEDULES

SCHEDULE   1.1       Pricing Schedule
SCHEDULE   2.1       Commitments and Percentages
SCHEDULE   2.3.1(a)  Existing Letters of Credit
SCHEDULE   9.6       Litigation and Contingent Liabilities
SCHEDULE   9.8       Subsidiaries
SCHEDULE   9.15      Environmental Matters
SCHEDULE 10.7        Existing Debt
SCHEDULE 10.8        Existing Liens
SCHEDULE 14.3        Addresses for Notices


                                    EXHIBITS

EXHIBIT A            Form of Note (Section 3.1)
EXHIBIT B            Form of Compliance Certificate (Section 10.1.3)
EXHIBIT C            Form of Guaranty (Section 1)
EXHIBIT D            Form of Assignment Agreement (Section 14.9)
EXHIBIT E            Form of Request for Increase in Commitment
                     Amount (Section 6.1.4)


                                       8

<PAGE>
                                CREDIT AGREEMENT


        This CREDIT AGREEMENT dated as of September 29, 2000 (this "Agreement")
is entered into among REGAL-BELOIT CORPORATION, a Wisconsin corporation (the
"Company"), various financial institutions (together with their respective
successors and assigns, the "Banks"), BANK OF AMERICA, N.A. (in its individual
capacity, "Bank of America"), as documentation and syndication agent, and M&I
MARSHALL & ILSLEY BANK (in its individual capacity, "M&I"), as administrative
agent.

        In consideration of the mutual agreements contained herein, the parties
hereto agree as follows:

        SECTION 1 DEFINITIONS.

        1.1 Definitions. When used herein the following terms shall have the
following meanings:

        Acquisition means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of all or substantially
all of any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the Subsidiary is
the surviving entity.

        Administrative Agent means M&I in its capacity as administrative agent
for the Banks hereunder and any successor thereto in such capacity.

        Affected Bank means any Bank that has given notice to the Company (which
has not been rescinded) of (i) any obligation by the Company to pay any amount
pursuant to Section 7.7 or 8.1 or (ii) the occurrence of any circumstances of
the nature described in Section 8.2 or 8.3.

        Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.

        Agent-Related Persons means the Administrative Agent and any successor
administrative agent arising under Section 13.9, the Documentation and
Syndication Agent, the respective Affiliates of the foregoing, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

        Agent means each of the Administrative Agent and the Documentation and
Syndication Agent.


                                        9
<PAGE>

        Agreement - see the Preamble.

        Asset Sale means the sale, lease, assignment or other transfer for value
by the Company or any Subsidiary to any Person (other than the Company or any
Subsidiary) of any asset or right of the Company or such Subsidiary (including
any sale or other transfer of stock of any Subsidiary, whether by merger,
consolidation or otherwise), excluding sales of inventory in the ordinary course
of business.

        Assignee - see Section 14.9.1.

        Assignment Agreement - see Section 14.9.1.

        Bank - see the Preamble. References to the "Banks" shall include the
Issuing Bank and the Swing Line Bank; for purposes of clarification only, to the
extent that M&I (or any successor Issuing Bank or Swing Line Bank) may have
rights or obligations in addition to those of the other Banks due to its status
as Issuing Bank or Swing Line Bank, its status as such will be specifically
referenced.

        Bank of America - see the Preamble.

        Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Prime Rate.

        Base Rate Loan means any Loan which bears interest at or by reference to
the Base Rate.

        Base Rate Margin - see Schedule 1.1.

        Business Day means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required to be closed in Milwaukee,
Wisconsin or Chicago, Illinois and, if such day relates to a Eurodollar Loan,
means any such day on which dealings in Dollar deposits are carried on in the
interbank eurodollar market.

        Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.

        Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by Moody's Investors Service, Inc., (c)
any certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers


                                        10
<PAGE>

acceptance, maturing not more than one year after such time, or overnight
Federal Funds transactions that are issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $500,000,000, (d) any
repurchase agreement entered into with any Bank (or other commercial banking
institution of the stature referred to in clause (c)) which (i) is secured by a
fully perfected security interest in any obligation of the type described in any
of clauses (a) through (c) and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such Bank (or other commercial banking institution) thereunder and
(e) investments in short-term asset management accounts offered by any Bank for
the purpose of investing in loans to any corporation (other than the Company or
an Affiliate of the Company), state or municipality, in each case organized
under the laws of any state of the United States or of the District of Columbia.

        Code means the Internal Revenue Code of 1986.

        Commitment means, as to any Bank, such Bank's commitment to make
Revolving Loans, to participate in Swing Line Loans and to issue or participate
in Letters of Credit under this Agreement. The amount of the Commitment of each
Bank as in effect on the date of this Agreement is set forth opposite such
Bank's name on Schedule 2.1.

        Commitment Amount means $450,000,000, as such amount may be reduced or
increased from time to time pursuant to Section 6 or 12.

        Commitment Reduction Date - see Section 6.1.1.

        Company - see the Preamble.

        Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter.

        Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the consolidated net income (or loss) of the
Company and its Subsidiaries for such period, excluding any extraordinary gains
during such period.

        Controlled Group means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.

        Credit Extension means the making of any Loan or the issuance of any
Letter of Credit.

        Debt of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, whether or not evidenced by bonds, debentures,
notes or similar instruments,


                                        11
<PAGE>

(b) all obligations of such Person as lessee under Capital Leases which have
been or should be recorded as liabilities on a balance sheet of such Person, (c)
all obligations of such Person to pay the deferred purchase price of property or
services (excluding trade accounts payable in the ordinary course of business),
(d) all indebtedness secured by a Lien on the property of such Person, whether
or not such indebtedness shall have been assumed by such Person (it being
understood that if such Person has not assumed or otherwise become personally
liable for any such indebtedness, the amount of the Debt of such Person in
connection therewith shall be limited to the lesser of the face amount of such
indebtedness or the fair market value of all property of such Person securing
such indebtedness), (e) all obligations, contingent or otherwise, with respect
to the face amount of all letters of credit (whether or not drawn) and banker's
acceptances issued for the account of such Person (including the Letters of
Credit), (f) all Hedging Obligations of such Person, (g) all Suretyship
Liabilities of such Person, (h) all Synthetic Lease Obligations of such Person
and (i) all Debt of any partnership in which such Person is a general partner.

        Debt to be Repaid means any Debt so designated on Schedule 10.7.

        Designated Proceeds means the remainder of (a) all Net Cash Proceeds
received from all Asset Sales after the Effective Date minus (b) the sum of (i)
$50,000,000 and (ii) the aggregate amount of all Net Cash Proceeds previously
applied to reduce the Commitment Amount pursuant to Section 6.1.2.

        Documentation and Syndication Agent means Bank of America, N.A. in its
capacity as documentation and syndication agent hereunder.

        Dollar and the sign "$" mean lawful money of the United States of
America.

        EBIT means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense and income tax expense.

        EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period.

        Effective Date - see Section 11.1.

        Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release of Hazardous Substances or injury to the environment.

        Environmental Laws means all federal, state or local laws, statutes,
common law duties,


                                        12
<PAGE>

rules, regulations, ordinances and codes, together with all administrative
orders, directed and enforceable duties, licenses, authorizations and permits
of, and agreements with, any governmental authority, in each case relating to
environmental matters.

        ERISA means the Employee Retirement Income Security Act of 1974.

        Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the FRB, for determining the
aggregate maximum reserve requirements applicable to "Eurocurrency Liabilities"
pursuant to Regulation D or any other then applicable regulation of the FRB
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.

        Eurodollar Loan means any Loan which bears interest at a rate determined
by reference to the Eurodollar Rate (Reserve Adjusted).

        Eurodollar Margin - see Schedule 1.1.

        Eurodollar Office means with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or, if applicable, such other office or offices through which
such Bank determines the Eurodollar Rate. A Eurodollar Office of any Bank may
be, at the option of such Bank, either a domestic or foreign office.

        Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, (a) the BBAM Libor rate per annum for a period equal or
comparable to such Interest Period appearing on Bloomberg as of 10:00 A.M.
Chicago time, two Business Days prior to the beginning of such Interest Period
(it being understood that if two or more such rates appear on Bloomberg, the
rate shall be the arithmetic mean of such rates, rounded upward, if necessary,
to an integral multiple of 1/10,000th of 1%); or (b) if the rate described in
clause (a) is not available, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of M&I two
Business Days prior to the beginning of such Interest Period by major banks in
the interbank eurodollar market as at or about 10:00 A.M., Chicago time, for
delivery on the first day of such Interest Period, for a period equal or
comparable to such Interest Period and in an amount equal or comparable to the
amount of the Eurodollar Loan of M&I for such Interest Period.

        Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/10,000 of 1%) determined pursuant to the following formula:

                 Eurodollar Rate     =      Eurodollar Rate


                                        13
<PAGE>

               (Reserve Adjusted)           1-Eurocurrency
                                             Reserve Percentage

        Event of Default means any of the events described in Section 12.1.

        Executive Officer means the chief financial officer, the president or
the executive vice president of the Company.

        Exemption Representation - see Section 7.7.

        Existing Letter of Credit means each Letter of Credit listed on Schedule
2.3.1(a).

        Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.

        Fiscal Quarter means a fiscal quarter of a Fiscal Year.

        Fiscal Year means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1999") refer to the Fiscal Year ending on December 31 of
such calendar year.

        Foreign Subsidiary means each Subsidiary of the Company which is
organized under the laws of any jurisdiction other than, and which is conducting
the majority of its business outside of, the United States or any state thereof.

        FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.

        Funded Debt means all Debt of the Company and its Subsidiaries,
excluding (i) contingent obligations in respect of undrawn letters of credit and
Suretyship Liabilities (except, in each case, to the extent constituting
Suretyship Liabilities in respect of Debt of a Person other than the Company or
any Subsidiary), (ii) Hedging Obligations and (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries.

        Funded Debt to EBITDA Ratio means, for any Computation Period, the ratio
of (i)


                                        14
<PAGE>

Funded Debt as of the last day of such Computation Period to (ii) EBITDA for
such Computation Period.

        GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

        Group - see Section 2.2.1.

        Guarantor means, at any time, Leeson Electric, Hub City, Inc., Marathon
Electric Manufacturing Corporation and each other Subsidiary that has executed a
counterpart of the Guaranty at or prior to such time (or is required to execute
a counterpart of the Guaranty at such time), excluding any such Person which has
been released from its obligations under the Guaranty in accordance with the
terms hereof.

        Guaranty means the guaranty substantially in the form of Exhibit C
issued by the Guarantors.

        Hazardous Substances means any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substance as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic
substance, oil or hazardous material or other chemical or substance regulated by
any Environmental Law, excluding household hazardous waste.

        Hedging Obligations means, with respect to any Person, all liabilities
of such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.

        Immaterial Law means any provision of any Environmental Law the
violation of which will not (a) violate any judgment, decree or order which is
binding upon the Company or any Subsidiary, (b) result in or threaten any injury
to public health or the environment or any material damage to the property of
any Person or (c) result in any liability or expense (other than any de minimis
liability or expense) for the Company or any Subsidiary; provided that no
provision of any Environmental Law shall be an Immaterial Law if the
Administrative Agent has notified the Company that the Required Banks have
determined in good faith that such provision is material.

        Interest Coverage Ratio means, for any Computation Period, the ratio of
(a) EBIT for such Computation Period to (b) Interest Expense for such
Computation Period.


                                        15
<PAGE>

        Interest Expense means, for any Computation Period, the consolidated
interest expense of the Company and its Subsidiaries for such Computation Period
(including all imputed interest on Capital Leases and Synthetic Leases).

        Interest Period means, as to any Eurodollar Loan, the period commencing
on the date such Loan is borrowed or continued as, or converted into, a
Eurodollar Loan and ending on the date one, two, three or six months thereafter
(or, during the first thirty days following the Effective Date, seven days
thereafter), as selected by the Company pursuant to Section 2.2.2 or 2.2.3;
provided that:

               (i) if any Interest Period would otherwise end on a day that is
        not a Business Day, such Interest Period shall be extended to the
        following Business Day unless the result of such extension would be to
        carry such Interest Period into another calendar month, in which event
        such Interest Period shall end on the preceding Business Day;

               (ii) any Interest Period (other than a seven-day Interest Period)
        that begins on a day for which there is no numerically corresponding day
        in the calendar month at the end of such Interest Period shall end on
        the last Business Day of the calendar month at the end of such Interest
        Period; and

               (iii) the Company may not select any Interest Period if, after
        giving effect to such selection, the aggregate principal amount of all
        Eurodollar Loans having Interest Periods ending after any Commitment
        Reduction Date, plus the aggregate amount of all Letters of Credit
        scheduled to be outstanding as of such Commitment Reduction Date (taking
        account of any scheduled increases or decreases in the amount available
        under any such Letter of Credit), would exceed the Commitment Amount
        scheduled to be in effect after giving effect to the reduction thereof
        on such Commitment Reduction Date; and

               (iv) the Company may not select any Interest Period which would
        extend beyond the scheduled Termination Date.

        Investment means, relative to any Person, (a) any loan or advance made
by such Person to any other Person, (b) any Suretyship Liability of such Person
and (c) any ownership or similar interest held by such Person in any other
Person.

        Issuing Bank means M&I in its capacity as an issuer of Letters of Credit
hereunder and any other Bank which, with the written consent of the Company and
the Agents, is the issuer of one or more Letters of Credit.

        L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
applicable Issuing Bank at the time of such request for the type of letter of
credit requested; provided that to the extent any such letter of credit
application is inconsistent with any provision of this Agreement, the applicable


                                        16
<PAGE>

provision of this Agreement shall control.

        LC Fee Rate - see Schedule 1.1.

        Lead Arranger means Banc of America Securities LLC in its capacity as
the sole and exclusive arranger of, and book manager for, the facilities
hereunder.

        Leeson Electric means Leeson Electric Corporation, a Wisconsin
corporation.

        Leeson Acquisition means the acquisition by the Company of all of the
outstanding stock of Leeson Electric pursuant to the Leeson Acquisition
Agreement.

        Leeson Acquisition Agreement means the Stock Purchase Agreement dated as
of August 7, 2000 among the Company, LEC Acquisition Corporation, Leeson
Electric and the shareholders of Leeson Electric.

        Letter of Credit means any Existing Letter of Credit and any standby
Letter of Credit issued by an Issuing Bank pursuant to Section 2.1.2 and 2.3.

        Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.

        Loan means a Revolving Loan or a Swing Line Loan.

        Loan Documents means this Agreement, the Notes, the Guaranty and the L/C
Applications.

        M&I - see the Preamble.

        Margin Stock means any "margin stock" as defined in Regulation U of the
FRB.

        Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the business, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole or (b) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Company or any
Guarantor of any Loan Document.

        Multiemployer Pension Plan means a multiemployer plan, as such term is
defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.


                                        17
<PAGE>

        Net Cash Proceeds means:

        (a)     with respect to any Asset Sale, the aggregate cash proceeds
                (including cash proceeds received by way of deferred payment of
                principal pursuant to a note, installment receivable or
                otherwise, but only as and when received) received by the
                Company or any Subsidiary pursuant to such Asset Sale, net of
                (i) the direct costs relating to such Asset Sale (including
                sales commissions and legal, accounting and investment banking
                fees), (ii) taxes paid or reasonably estimated by the Company to
                be payable as a result thereof (after taking into account any
                available tax credits or deductions and any tax sharing
                arrangements), (iii) amounts required to be applied to the
                repayment of any Debt secured by a Lien on the asset subject to
                such Asset Sale, (iv) any portion of such cash proceeds which
                the Company specifies in writing to the Agents will be used
                within 180 days to purchase assets which will replace the assets
                sold in such Asset Sale or to complete a Permitted Acquisition
                (it being understood that any such cash proceeds not so used
                within such 180-day period shall become Net Cash Proceeds on the
                last day of such period) and (v) any portion of such cash
                proceeds which are used by the Company or a Subsidiary to retire
                Debt (including Loans) incurred to consummate a Permitted
                Acquisition during the 90 days preceding receipt of such Net
                Cash Proceeds; and

        (b)     with respect to any issuance of equity securities, the aggregate
                cash proceeds received by the Company or any Subsidiary pursuant
                to such issuance, net of the direct costs relating to such
                issuance (including sales and underwriter's discounts and
                commissions and legal, accounting and investment banking fees).

        Net Worth means the Company's consolidated stockholders' equity.

        Non-Use Fee Rate - see Schedule 1.1.

        Note - see Section 3.1.

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

        Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.


                                        18
<PAGE>

        Percentage means, as to any Bank, the percentage which (a) the
Commitment of such Bank (or, after termination of the Commitments, the principal
amount of such Bank's Revolving Loans plus the participation interest of such
Bank in the outstanding Swing Line Loans and in the Stated Amount of all Letters
of Credit) is of (b) the aggregate amount of the Commitments (or after
termination of the Commitments, the aggregate principal amount of all Revolving
Loans and Swing Line Loans and the Stated Amount of all Letters of Credit);
provided that, if and so long as any Bank fails to fund its participation in any
Letter of Credit or Swing Line Loan when required by Section 2.3.5 or 2.4.3,
such Bank's Percentage shall be deemed for purposes of this definition to be
reduced to the extent of the defaulted amount and the Percentage of the
applicable Issuing Bank or the Swing Line Bank, as applicable, shall be deemed
for purposes of this definition to be increased to such extent. The Percentage
of each Bank as in effect on the date of this Agreement is set forth opposite
such Bank's name on Schedule 2.1.

        Permitted Acquisition means any Acquisition by the Company or a
Subsidiary which satisfies each of the following requirements: (i) no Event of
Default or Unmatured Event of Default has occurred and is continuing at the time
of, or will result from, such Acquisition; (ii) the Person to be acquired is in,
or the assets to be acquired are for use in, the same or a similar line of
business as the Company and its Subsidiaries or a reasonable extension thereof;
(iii) if the aggregate consideration to be paid by the Company and its
Subsidiaries in connection with such Acquisition (including Debt assumed, but
excluding capital stock of the Company) exceeds $25,000,000, the Company shall
have delivered to the Agents a certificate demonstrating that, after giving
effect to such Acquisition, the Company will be in pro forma compliance with the
covenants in Section 10.6; (iv) in the case of the Acquisition of a Person, the
Board of Directors (or equivalent governing body) of the Person being acquired
shall have approved such Acquisition; and (v) after giving effect to such
Acquisition, the Commitment Amount shall exceed the Total Outstandings by not
less than $10,000,000.

        Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or other
entity, whether acting in an individual, fiduciary or other capacity.

        Prime Rate means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by M&I as its "prime rate". (The
"prime rate" is a rate set by M&I based upon various factors, including M&I's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above
or below such announced rate.) Any change in the "prime rate" announced by M&I
shall take effect at the opening of business on the day specified in the public
announcement of such change.

        Required Banks means Banks having combined Percentages of more than 50%.

        Revolving Loan - see Section 2.1.1.


                                        19
<PAGE>

        SEC means the Securities and Exchange Commission.

        Significant Subsidiary means, at any time, any Subsidiary having (a)
assets with a value not less than 5% of the total value of the consolidated
assets of the Company and its Subsidiaries, taken as a whole, or (b) revenues
not less than 7.5% of the consolidated revenues of the Company and its
Subsidiaries, taken as a whole, for the most recently completed period of four
consecutive Fiscal Quarters.

        Stated Amount means, with respect to any Letter of Credit at any date of
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.

        Subordinated Debt means any Debt of the Company which has maturities and
other terms, and which is subordinated to the obligations of the Company and its
Subsidiaries hereunder and under the other Loan Documents in a manner, approved
in writing by the Required Banks.

        Subsidiary means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares or other ownership interests as have more than 50% of the
ordinary voting power for the election of directors or other managers of such
entity. Unless the context otherwise requires, each reference to Subsidiaries
herein shall be a reference to Subsidiaries of the Company.

        Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

        Swing Line Bank means M&I in its capacity as swing line lender
hereunder, together with any replacement swing line lender arising under Section
13.9.

        Swing Line Loan - see Section 2.4.1.

        Synthetic Lease means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13 and (ii) the
lessee will be entitled to various tax and other benefits


                                        20
<PAGE>

ordinarily available to owners (as opposed to lessees) of like property.

        Synthetic Lease Obligations means, with respect to any Person, the sum
of (a) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (b) all
obligations of such Person to pay the purchase price for property leased under
Synthetic Leases assuming such Person exercises the option to purchase such
property at the end of the lease term.

        Termination Date means the earlier to occur of (a) December 30, 2005 or
(b) such other date on which the Commitments terminate pursuant to Section 6 or
12.

        Total Outstandings means, at any time, the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans plus the aggregate
Stated Amount of all Letters of Credit.

        Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and Eurodollar Loans or borrowings.

        Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.

        1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.

                (b) Section, Schedule and Exhibit references are to this
        Agreement unless otherwise specified.

                (c) (i) The term "including" is not limiting and means
        "including without limitation."

                        (ii) In the computation of periods of time from a
                specified date to a later specified date, the word "from" means
                "from and including"; the words "to" and "until" each mean "to
                but excluding", and the word "through" means "to and including."

               (d) Unless otherwise expressly provided herein, (i) references to
        agreements (including this Agreement) and other contractual instruments
        shall be deemed to include all subsequent amendments and other
        modifications thereto, but only to the extent such amendments and other
        modifications are not prohibited by the terms of any Loan Document, and
        (ii) references to any statute or regulation are to be construed as
        including all statutory and regulatory provisions consolidating,
        amending, replacing, supplementing or interpreting such statute or
        regulation.


                                        21
<PAGE>

               (e) This Agreement and the other Loan Documents may use several
        different limitations, tests or measurements to regulate the same or
        similar matters. All such limitations, tests and measurements are
        independent and each shall be performed in accordance with its terms.

               (f) This Agreement and the other Loan Documents are the result of
        negotiations among and have been reviewed by counsel to the Agents, the
        Company, the Banks and the other parties thereto and are the products of
        all parties. Accordingly, they shall not be construed against the Agents
        or the Banks merely because of the Agents' or the Banks' involvement in
        their preparation.

        SECTION 2  COMMITMENTS OF THE BANKS; BORROWING AND
              CONVERSION PROCEDURES; LETTER OF CREDIT PROCEDURES;
              SWING LINE LOANS.

        2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:

        2.1.1 Revolving Loans. Each Bank will make loans on a revolving basis
("Revolving Loans") from time to time before the Termination Date in such Bank's
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the Total Outstandings shall not at any
time exceed the Commitment Amount. Amounts borrowed under this Section 2.1.1 may
be borrowed, repaid and reborrowed until the Termination Date.

        2.1.2 L/C Commitment. (a) The Issuing Banks will issue Letters of Credit
from time to time before the Termination Date, in each case containing such
terms and conditions as are permitted by this Agreement and are reasonably
satisfactory to the applicable Issuing Bank and the Company, at the request of
and for the account of the Company (or jointly for the account of the Company
and any Subsidiary) from time to time before the date which is 30 days prior to
the scheduled Termination Date; and (b) as more fully set forth in Section
2.3.2, each Bank agrees to purchase a participation in each such Letter of
Credit; provided that (i) the aggregate Stated Amount of all Letters of Credit
shall not at any time exceed $15,000,000; and (ii) after giving effect to the
issuance of each Letter of Credit, the Total Outstandings shall not at any time
exceed the Commitment Amount.

        2.2    Loan Procedures.

        2.2.1 Various Types of Loans. Each Revolving Loan shall be either a Base
Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall
specify in the related notice of borrowing or conversion pursuant to Section
2.2.2 or 2.2.3. Eurodollar Loans having the same


                                        22
<PAGE>

Interest Period are sometimes called a "Group" or collectively "Groups". Base
Rate Loans and Eurodollar Loans may be outstanding at the same time, provided
that (i) not more than eight different Groups of Eurodollar Loans shall be
outstanding at any one time and (ii) the aggregate principal amount of each
Group of Eurodollar Loans shall at all times be at least $3,000,000 and an
integral multiple of $1,000,000. All borrowings, conversions and repayments of
Loans shall be effected so that each Bank will have a pro rata share (according
to its Percentage) of all types and Groups of Loans.

        2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed promptly by written confirmation thereof) to the
Administrative Agent of each proposed borrowing not later than (a) in the case
of a Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such
borrowing, and (b) in the case of a Eurodollar borrowing, 10:00 A.M., Chicago
time, at least three Business Days prior to the proposed date of such borrowing.
Each such notice shall be effective upon receipt by the Administrative Agent,
shall be irrevocable, and shall specify the date, amount and type of borrowing
and, in the case of a Eurodollar borrowing, the initial Interest Period
therefor. Promptly upon receipt of such notice, the Administrative Agent shall
advise each Bank thereof. Not later than 1:00 p.m., Chicago time, on the date of
a proposed borrowing, each Bank shall provide the Administrative Agent at the
office specified by the Administrative Agent with immediately available funds
covering such Bank's Percentage of such borrowing and, so long as the
Administrative Agent has not received written notice that the conditions
precedent set forth in Section 11 with respect to such borrowing have not been
satisfied, the Administrative Agent shall pay over the requested amount to the
Company on the requested borrowing date. Each borrowing shall be on a Business
Day. Each borrowing shall be in an aggregate amount of at least $3,000,000 and
an integral multiple of $1,000,000.

        2.2.3 Conversion and Continuation Procedures. (a) Subject to the
provisions of Section 2.2.1, the Company may, upon irrevocable written notice to
the Administrative Agent in accordance with clause (b) below:

                        (i) elect, as of any Business Day, to convert any
                outstanding Revolving Loan into a Revolving Loan of a different
                type; or

                        (ii) elect, as of the last day of the applicable
                Interest Period, to continue any Group of Eurodollar Loans
                having an Interest Period expiring on such day (or any part
                thereof in an aggregate amount not less than $3,000,000 or a
                higher integral multiple of $1,000,000) for a new Interest
                Period.

                (b) The Company shall give written or telephonic notice
        (followed promptly by written confirmation thereof) to the
        Administrative Agent of each proposed conversion or continuation not
        later than (i) in the case of conversion into Base Rate Loans, 11:00
        a.m., Chicago time, on the proposed date of such conversion; and (ii) in
        the case of a conversion into or continuation of Eurodollar Loans, 10:00
        a.m., Chicago time,


                                        23
<PAGE>

        at least three Business Days prior to the proposed date of such
        conversion or continuation, specifying in each case:

                        (1) the proposed date of conversion or continuation;

                        (2) the aggregate amount of Loans to be converted or
                continued;

                        (3) the type of Loans resulting from the proposed
                conversion or continuation; and

                       (4) in the case of conversion into, or continuation of,
               Eurodollar Loans, the duration of the requested Interest Period
               therefor.

               (c) If upon expiration of any Interest Period applicable to any
        Eurodollar Loan, the Company has failed to select timely a new Interest
        Period to be applicable to such Eurodollar Loan, the Company shall be
        deemed to have elected to convert such Eurodollar Loan into a Base Rate
        Loan effective on the last day of such Interest Period.

               (d) The Administrative Agent will promptly notify each Bank of
        its receipt of a notice of conversion or continuation pursuant to this
        Section 2.2 or, if no timely notice is provided by the Company, of the
        details of any automatic conversion.

               (e) Unless the Required Banks otherwise consent, during the
        existence of any Event of Default or Unmatured Event of Default, the
        Company may not elect to have a Loan converted into or continued as a
        Eurodollar Loan.

        2.3    Letter of Credit Procedures.

        2.3.1 Issuance Procedures (a) On the Effective Date, each Existing
Letter of Credit shall be deemed to have been issued hereunder and shall be a
"Letter of Credit" for all purposes hereof.

               (b) The Company shall give notice to the Administrative Agent and
        the applicable Issuing Bank of the proposed issuance of each Letter of
        Credit on a Business Day which is at least three Business Days (or such
        lesser number of days as the Administrative Agent and such Issuing Bank
        shall agree in any particular instance) prior to the proposed date of
        issuance of such Letter of Credit. Each such notice shall be accompanied
        by an L/C Application, duly executed by the Company (together with any
        Subsidiary for the account of which the related Letter of Credit is to
        be issued) and in all respects satisfactory to the Administrative Agent
        and the applicable Issuing Bank, together with such other documentation
        as the Administrative Agent or such Issuing Bank may reasonably request
        in support thereof, it being understood that each L/C Application shall
        specify, among other things, the date on which the proposed Letter of


                                        24
<PAGE>

        Credit is to be issued, the amount of such Letter of Credit, whether
        such Letter of Credit is to be transferable and the expiration date of
        such Letter of Credit (which shall not be later than seven days prior to
        the Termination Date). The Company may not request, and no Issuing Bank
        shall issue, any Letter of Credit if, after giving effect to such
        issuance, the aggregate amount of all Letters of Credit scheduled to be
        outstanding as of any Commitment Reduction Date (taking account of any
        scheduled increases or decreases in the amount available under any such
        Letter of Credit), plus the aggregate amount of all Eurodollar Loans
        having Interest Periods ending after such Commitment Reduction Date,
        would exceed the Commitment Amount scheduled to be in effect after
        giving effect to the reduction thereof on such Commitment Reduction
        Date. So long as the applicable Issuing Bank has not received written
        notice that the conditions precedent to the issuance of a Letter of
        Credit have not been satisfied, such Issuing Bank shall issue such
        Letter of Credit on the requested issuance date. Each Issuing Bank shall
        promptly advise the Administrative Agent of the issuance of each Letter
        of Credit by such Issuing Bank and of any amendment thereto, extension
        thereof or event or circumstance changing the amount available for
        drawing thereunder (it being understood that no Issuing Bank shall
        increase the amount of, or extend the term of, any Letter of Credit
        unless a replacement Letter of Credit having substantially the same
        terms as such increased or extended Letter of Credit could be issued at
        the time of such increase or extension).

        2.3.2 Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit (or, in the case of the Existing Letters of
Credit, on the Effective Date), the applicable Issuing Bank shall be deemed to
have sold and transferred to each other Bank, and each other Bank shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Percentage, in such Letter of
Credit (or, if applicable, all Existing Letters of Credit) and the Company's
reimbursement obligations with respect thereto. For the purposes of this
Agreement, the unparticipated portion of each Letter of Credit shall be deemed
to be the applicable Issuing Bank's "participation" therein. Each Issuing Bank
hereby agrees, upon request of the Administrative Agent or any Bank, to deliver
to such Bank a list of all outstanding Letters of Credit issued by such Issuing
Bank, together with such information related thereto as such Bank may reasonably
request.

        2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the applicable Issuing Bank for each payment or
disbursement made by such Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Base Rate Margin from time to time in
effect plus, beginning on the third Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the


                                        25
<PAGE>

Administrative Agent whenever any demand for payment is made under any Letter of
Credit by the beneficiary thereunder; provided that the failure of such Issuing
Bank to so notify the Company shall not affect the rights of such Issuing Bank
or the Banks in any manner whatsoever.

        2.3.4 Limitation on Obligations of Issuing Banks. In determining whether
to pay under any Letter of Credit, no Issuing Bank shall have any obligation to
the Company or any Bank other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by an Issuing Bank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence and willful misconduct, shall not impose upon such Issuing Bank any
liability to the Company or any Bank and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.

        2.3.5 Funding by Banks to Issuing Banks. If an Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the
Administrative Agent for the account of such Issuing Bank, in full or partial
payment of the purchase price of its participation in such Letter of Credit, its
pro rata share (according to its Percentage) of such payment or disbursement
(but no such payment shall diminish the obligations of the Company under Section
2.3.3), and upon notice from the applicable Issuing Bank, the Administrative
Agent shall promptly notify each other Bank thereof. Each other Bank irrevocably
and unconditionally agrees to so pay to the Administrative Agent in immediately
available funds for the applicable Issuing Bank's account the amount of such
other Bank's Percentage of such payment or disbursement. If and to the extent
any Bank shall not have made such amount available to the Administrative Agent
by 2:00 P.M., Chicago time, on the Business Day on which such Bank receives
notice from the Administrative Agent of such payment or disbursement (it being
understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the
Administrative Agent for the applicable Issuing Bank's account forthwith on
demand for each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate from time
to time in effect and (b) thereafter, the Base Rate from time to time in effect.
Any Bank's failure to make available to the Administrative Agent its Percentage
of any such payment or disbursement shall not relieve any other Bank of its
obligation hereunder to make available to the Administrative Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Administrative Agent such
other Bank's Percentage of any such payment or disbursement.


                                        26
<PAGE>

        2.3.6 Repayment of Participations. Upon (and only upon) receipt by the
Administrative Agent for the account of the applicable Issuing Bank of
immediately available funds from or on behalf of the Company (a) in
reimbursement of any payment or disbursement under a Letter of Credit with
respect to which a Bank has paid the Administrative Agent for the account of
such Issuing Bank the amount of such Bank's participation therein or (b) in
payment of any interest thereon, the Administrative Agent will pay to such Bank
its pro rata share (according to its Percentage) thereof (and such Issuing Bank
shall receive the amount otherwise payable to any Bank which did not so pay the
Administrative Agent the amount of such Bank's participation in such payment or
disbursement).

        2.4    Swing Line Loans.

        2.4.1 Swing Line Loans. Subject to the terms and conditions of this
Agreement, the Swing Line Bank may from time to time, in its discretion, make
loans to the Company (collectively the "Swing Line Loans" and individually each
a "Swing Line Loan") in accordance with this Section 2.4 in an aggregate amount
not at any time exceeding $15,000,000; provided that, after giving effect to the
making of each Swing Line Loan, the Total Outstandings shall not exceed the
Commitment Amount. Amounts borrowed under this Section 2.4 may be borrowed,
repaid and (subject to the agreement of the Swing Line Bank) reborrowed until
the Termination Date.

        2.4.2 Swing Line Loan Procedures. The Company shall give written or
telephonic notice to the Administrative Agent (which shall promptly inform the
Swing Line Bank) of each proposed Swing Line Loan not later than 1:00 p.m.,
Chicago time, on the proposed date of such Swing Line Loan. Each such notice
shall be effective upon receipt by the Administrative Agent and shall specify
the date and amount of such Swing Line Loan, which shall be $100,000 or a higher
integral multiple thereof. So long as the Swing Line Bank has not received
written notice that the conditions precedent set forth in Section 11 with
respect to the making of such Swing Line Loan have not been satisfied, the Swing
Line Bank may make the requested Swing Line Loan. If the Swing Line Bank agrees
to make the requested Swing Line Loan, the Swing Line Bank shall pay over the
requested amount to the Company on the requested borrowing date. Concurrently
with the making of any Swing Line Loan, the Swing Line Bank shall be deemed to
have sold and transferred, and each other Bank shall be deemed to have purchased
and received from the Swing Line Bank, an undivided interest and participation
to the extent of such other Bank's Percentage in such Swing Line Loan (but such
participation shall remain unfunded until required to be funded pursuant to
Section 2.4.3).

        2.4.3 Refunding of, or Funding of Participations in, Swing Line Loans.
The Swing Line Bank may at any time, in its sole discretion, upon at least three
Business Days' notice (or same day notice if an Event of Default exists) to the
Company and the Agent (it being understood that any notice delivered after 9:00
A.M. (or, if an Event of Default exists, 11:00 A.M.), Chicago time, shall be
deemed received on the next Business Day), on behalf of the


                                        27
<PAGE>

Company (which hereby irrevocably authorizes the Swing Line Bank to act on its
behalf) deliver a notice to the Administrative Agent (which shall promptly
notify each Bank of its receipt thereof) requesting that each Bank (including
the Swing Line Bank in its individual capacity) make a Revolving Loan (which
shall be a Base Rate Loan unless the Company makes a timely request for a
borrowing of Eurodollar Loans) on the date specified in such notice in such
Bank's Percentage of the aggregate amount of Swing Line Loans outstanding on
such date for the purpose of repaying all Swing Line Loans (and, upon receipt of
the proceeds of such Revolving Loans, the Administrative Agent shall apply such
proceeds to repay Swing Line Loans); provided that if the conditions precedent
to a borrowing of Revolving Loans are not then satisfied or for any other reason
the Banks may not then make Revolving Loans, then instead of making Revolving
Loans each Bank (other than the Swing Line Bank) shall become immediately
obligated to fund its participation in all outstanding Swing Line Loans and
shall pay to the Administrative Agent for the account of the Swing Line Bank an
amount equal to such Bank's Percentage of such Swing Line Loans. If and to the
extent any Bank shall not have made such amount available to the Administrative
Agent by 2:00 P.M., Chicago time, on the Business Day on which such Bank
receives notice from the Administrative Agent of its obligation to fund its
participation in Swing Line Loans (it being understood that any such notice
received after 12:00 noon, Chicago time, on any Business Day shall be deemed to
have been received on the next following Business Day), such Bank agrees to pay
interest on such amount to the Administrative Agent for the Swing Line Bank's
account forthwith on demand for each day from the date such amount was to have
been delivered to the Administrative Agent to the date such amount is paid, at a
rate per annum equal to (a) for the first three days after demand, the Federal
Funds Rate from time to time in effect and (b) thereafter, the Base Rate from
time to time in effect. Any Bank's failure to make available to the
Administrative Agent its Percentage of the amount of all outstanding Swing Line
Loans shall not relieve any other Bank of its obligation hereunder to make
available to the Administrative Agent such other Bank's Percentage of such
amount, but no Bank shall be responsible for the failure of any other Bank to
make available to the Administrative Agent such other Bank's Percentage of any
such amount.

        2.4.4 Repayment of Participations. Upon (and only upon) receipt by the
Administrative Agent for the account of the Swing Line Bank of immediately
available funds from or on behalf of the Company (a) in reimbursement of any
Swing Line Loan with respect to which a Bank has paid the Administrative Agent
for the account of the Swing Line Bank the amount of such Bank's participation
therein or (b) in payment of any interest on a Swing Line Loan, the
Administrative Agent will pay to such Bank its pro rata share (according to its
Percentage) thereof (and the Swing Line Bank shall receive the amount otherwise
payable to any Bank which did not so pay the Administrative Agent the amount of
such Bank's participation in such Swing Line Loan).

        2.4.5 Participation Obligations Unconditional. (a) Each Bank's
obligation to make available to the Administrative Agent for the account of the
Swing Line Bank the amount of its participation interest in all Swing Line Loans
as provided in Section 2.4.3 shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any set-off,


                                        28
<PAGE>

counterclaim, recoupment, defense or other right which such Bank may have
against the Swing Line Bank or any other Person, (ii) the occurrence or
continuance of an Event of Default or Unmatured Event of Default, (iii) any
adverse change in the condition (financial or otherwise) of the Company or any
Subsidiary thereof, (iv) any termination of the Commitments or (v) any other
circumstance, happening or event whatsoever.

        (b) Notwithstanding the provisions of clause (a) above, no Bank shall be
required to purchase a participation interest in any Swing Line Loan if, prior
to the making by the Swing Line Bank of such Swing Line Loan, the Swing Line
Bank received written notice specifying that one or more of the conditions
precedent to the making of such Swing Line Loan were not satisfied and, in fact,
such conditions precedent were not satisfied at the time of the making of such
Swing Line Loan.

        2.5 Commitments Several. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation (if any) to
make a Loan on such date, but no Bank shall be responsible for the failure of
any other Bank to make any Loan to be made by such other Bank.

        2.6 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, and no Issuing
Bank shall have any obligation to issue any Letter of Credit, if an Event of
Default or Unmatured Event of Default exists.

        SECTION 3  NOTES EVIDENCING LOANS.

        3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
note substantially in the form set forth in Exhibit A, with appropriate
insertions, payable to the order of such Bank in the principal amount of all of
such Bank's Loans hereunder.

        3.2 Recordkeeping. Each Bank shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.

        SECTION 4  INTEREST.

        4.1   Interest Rates.

        4.1.1 Interest Rates for Revolving Loans. The Company promises to pay
interest on the


                                        29
<PAGE>

unpaid principal amount of each Revolving Loan for the period commencing on the
date such Revolving Loan is made until such Revolving Loan is paid in full as
follows:

               (a) at all times such Revolving Loan is a Base Rate Loan, at a
        rate per annum equal to the sum of the Base Rate from time to time in
        effect plus the applicable Base Rate Margin from time to time in effect;
        and

               (b) at all times such Revolving Loan is a Eurodollar Loan, at a
        rate per annum equal to the sum of the Eurodollar Rate (Reserve
        Adjusted) applicable to each Interest Period for such Loan plus the
        Eurodollar Margin from time to time in effect;

provided that, unless the Required Banks otherwise agree in writing, at any time
an Event of Default exists the interest rate applicable to each Revolving Loan
shall be increased by 2%.

        4.1.2 Interest Rates on Swing Line Loans. The Company promises to pay
interest on the unpaid principal amount of each Swing Line Loan for the period
commencing on the date such Swing Line Loan is made until the date such Swing
Line Loan is paid in full at a rate per annum agreed to from time to time
between the Company and the Swing Line Bank; provided that if at any time the
Banks become obligated to fund their participations in any Swing Line Loan
pursuant to Section 2.4.3, such Swing Line Loan shall thereafter bear interest
at the rate applicable from time to time for Base Rate Loans pursuant to Section
4.1.1.

        4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
and at maturity. Accrued interest on each Eurodollar Loan shall be payable on
the last day of each Interest Period relating to such Loan (and, in the case of
a Eurodollar Loan with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. Accrued
interest on each Swing Line Loan shall be paid on the dates agreed to from time
to time by the Company and the Swing Line Bank; provided that if at any time the
Banks become obligated to fund their participations in any Swing Line Loan
pursuant to Section 2.4.3, interest on such Swing Line Loan shall be payable on
the last day of each calendar quarter and at maturity. After maturity, accrued
interest on all Loans shall be payable on demand.

        4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Administrative Agent,
which shall give notice thereof to the Company and each Bank. Each determination
of the applicable Eurodollar Rate by the Administrative Agent shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable
error. The Administrative Agent shall, upon written request of the Company or
any Bank, deliver to the Company or such Bank a statement showing the
computations used by the Administrative Agent in determining any applicable
Eurodollar Rate hereunder.

        4.4 Computation of Interest. All determinations of interest for Base
Rate Loans (including any Swing Line Loan bearing interest at or by reference to
the Base Rate) when the


                                        30
<PAGE>

Base Rate is determined by the Prime Rate shall be made on the basis of a year
of 365 or 366 days, as the case may be, and the actual number of days elapsed.
All other computations of interest shall be computed for the actual number of
days elapsed on the basis of a year of 360 days. The applicable interest rate
for each Base Rate Loan shall change simultaneously with each change in the Base
Rate.

        SECTION 5  FEES.

        5.1 Non-Use Fee. The Company agrees to pay to the Administrative Agent
for the account of each Bank a non-use fee, for the period from the Effective
Date to the Termination Date, at a rate per annum equal to the Non-Use Fee Rate
in effect from time to time of the daily average of such Bank's Percentage of
the unused portion of the Commitment Amount. For purposes of calculating usage
under this Section, the Commitment Amount shall be deemed used to the extent of
the sum of the aggregate outstanding principal amount of all Revolving Loans
(but not Swing Line Loans) and the Stated Amount of all Letters of Credit. Such
non-use fee shall be payable in arrears on the last Business Day of each
calendar quarter and on the Termination Date for any period then ending for
which such non-use fee shall not have theretofore been paid. The non-use fee
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days.

        5.2 Letter of Credit Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of the Banks pro rata according to their
respective Percentages a letter of credit fee for each Letter of Credit in an
amount equal to the applicable LC Fee Rate per annum in effect from time to time
of the undrawn amount of such Letter of Credit (computed for the actual number
of days elapsed on the basis of a year of 360 days); provided that, unless the
Required Banks otherwise agree in writing, the rate applicable to each Letter of
Credit shall be increased by 2% at any time that an Event of Default exists.
Such letter of credit fee shall be payable in arrears on the last Business Day
of each calendar quarter and on the Termination Date (and, if any Letter of
Credit remains outstanding on the Termination Date, thereafter on demand) for
the period from the date of the issuance of each Letter of Credit to the date
such payment is due or, if earlier, the date on which such Letter of Credit
expired or was terminated.

        (b) The Company agrees to pay each Issuing Bank a fronting fee for each
Letter of Credit issued by such Issuing Bank in the amount separately agreed to
between the Company and such Issuing Bank.

        (c) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the applicable Issuing Bank, for its own account, such fees and
expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations.

        5.3 Up-Front and Funding Fees. The Company agrees to pay to the
Administrative Agent for the account of the Banks pro rata according to their
respective percentages such


                                        31
<PAGE>

up- front and funding fees as are mutually agreed to by the Company and the
Banks.

        5.4 Agents' and Lead Arranger's Fees. The Company agrees to pay to the
Agents and the Lead Arranger such fees as are mutually agreed to from time to
time by the Company, the Agents and the Lead Arranger.

        SECTION 6  CHANGES IN COMMITMENT AMOUNT; PREPAYMENTS.

        6.1   Changes in Commitment Amount.

        6.1.1 Scheduled Reductions of the Commitment Amount. The Commitment
Amount shall be reduced on each of the following dates (each a "Commitment
Reduction Date") by the amount set forth opposite such date:

               Commitment Reduction Date             Amount of Reduction
                       January 1, 2002                      $25,000,000
                       January 1, 2003                      $25,000,000
                       January 1, 2004                      $30,000,000
                       January 1, 2005                      $35,000,000.

        6.1.2 Mandatory Reductions of the Commitment Amount. If, on any date on
which the Company or any Subsidiary receives proceeds from any Asset Sale, the
amount of Designated Proceeds exceeds $1,000,000, the Commitment Amount shall be
immediately reduced by the amount of Designated Proceeds (rounded down, if
necessary, to an integral multiple of $1,000,000).

        6.1.3 Voluntary Reduction or Termination of the Commitments. The Company
may from time to time on at least five Business Days' prior written notice
received by the Administrative Agent (which shall promptly advise each Bank
thereof) permanently reduce the Commitment Amount to an amount not less than the
Total Outstandings. Any such reduction shall be in an amount not less than
$10,000,000 or a higher integral multiple of $1,000,000. The Company may at any
time on like notice terminate the Commitments upon payment in full of all
Revolving Loans and Swing Line Loans and all other obligations of the Company
hereunder in respect of such Loans and cash collateralization in full, pursuant
to documentation in form and substance reasonably satisfactory to the applicable
Issuing Banks, of all obligations arising with respect to the Letters of Credit.
All reductions of the Commitment Amount shall reduce the Commitments pro rata
among the Banks according to their respective Percentages.

        6.1.4 Optional Increase in Commitment Amount. So long as no Event of
Default or Unmatured Event of Default exists or would result therefrom, the
Company may, by means of a letter to the Agents substantially in the form of
Exhibit E, request that the Commitment Amount be increased by (a) increasing the
Commitment of one or more Banks which have agreed to such increase (it being
understood that no Bank shall have any obligation to increase its Commitment


                                        32
<PAGE>

pursuant to this Section 6.1.4) and/or (b) adding one or more commercial banks
or other Persons as a party hereto with a Commitment in an amount agreed to by
any such commercial bank or other Person; provided that (i) no commercial bank
or other Person shall be added as a party hereto without the written consent of
the Administrative Agent (which shall not be unreasonably withheld); (ii) in no
event shall the Commitment Amount be increased by more than $50,000,000 during
the term of this Agreement without the written consent of all Banks; and (iii)
the Company may not request any increase pursuant to this Section 6.1.4, and no
such increase may take place, after December 30, 2003. Any increase in the
Commitment Amount pursuant to this Section 6.1.4 shall be effective three
Business Days (or such other period of time as may be agreed upon by the
Company, the Administrative Agent and the Banks or other Persons participating
in such increase) after the date on which the Administrative Agent has received
and accepted the applicable increase letter in the form of Annex 1 to Exhibit E
(in the case of an increase in the Commitment of an existing Bank) or assumption
letter in the form of Annex 2 to Exhibit E (in the case of the addition of a
commercial bank or other Person as a new Bank). The Administrative Agent shall
promptly notify the Company and the Banks of any increase in the Commitment
Amount pursuant to this Section 6.1.4 and of the Commitment and Percentage of
each Bank after giving effect thereto. The Company acknowledges that, in order
to maintain Loans in accordance with each Bank's Percentage, a reallocation of
the Commitments as a result of a non-pro-rata increase in the Commitment Amount
may require prepayment of all or portions of certain Loans on the date of such
increase (and any such prepayment shall be subject to the provisions of Section
8.4).

        6.2    Prepayments.

        6.2.1 Mandatory Prepayments. On each date on which the Commitment Amount
is reduced pursuant to Section 6.1.1 or Section 6.1.2, the Company shall make a
prepayment of Loans (or, to the extent required after all Loans have been
prepaid, provide cash collateral for outstanding Letters of Credit) in an amount
equal to the excess, if any, of the Total Outstandings over the Commitment
Amount as so reduced.

        6.2.2 Voluntary Prepayments. The Company may from time to time prepay
Loans in whole or in part, without premium or penalty, provided that the Company
shall give the Administrative Agent (which shall promptly advise each Bank)
notice thereof not later than (a) 10:00 A.M. (or, in the case of prepayment of
Swing Line Loans, 12:00 noon), Chicago time, on the date of such prepayment
(which shall be a Business Day), in the case of Base Rate Loans and Swing Line
Loans, and (b) three Business Days prior to the date of such prepayment, in the
case of Eurodollar Loans, in each case specifying the Loans to be prepaid and
the date and amount of prepayment. Subject to Section 2.2.1, each partial
prepayment of Revolving Loans shall be in a principal amount of $3,000,000 or a
higher integral multiple of $1,000,000.

        6.2.3 All Prepayments of Revolving Loans. Prepayments of Revolving Loans
shall be applied pro rata to the applicable Revolving Loans of all Banks in
accordance with their Percentages. Any prepayment of a Eurodollar Loan on a day
other than the last day of an Interest Period therefor shall include interest on
the principal amount being repaid and shall be subject to


                                        33
<PAGE>

 Section 8.4.

        SECTION 7  MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

        7.1 Making of Payments. All payments of principal of or interest on the
Loans, and of all non-use fees and Letter of Credit fees, shall be made by the
Company to the Administrative Agent at its principal office in Milwaukee in
immediately available funds not later than noon, Chicago time, on the date due;
and funds received after that hour shall be deemed to have been received by the
Administrative Agent on the next following Business Day. The Administrative
Agent shall promptly remit to each Bank its share (if any) of all such payments
received in collected funds by the Administrative Agent. All payments under
Section 8.1 shall be made by the Company directly to the Bank entitled thereto.

        7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Administrative Agent on or before the date of such payment or, in the
absence of such notice, as the Administrative Agent shall determine in its
discretion. Concurrently with each remittance to any Bank of its share of any
such payment, the Administrative Agent shall advise such Bank as to the
application of such payment.

        7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a payment of interest on a Eurodollar Loan,
the result of such extension would be to extend the due date for such payment
into another calendar month, in which case such due date shall be the
immediately preceding Business Day) and any extension of time shall be reflected
in computing interest and fees.

        7.4 Failure to Make Payments. Unless the Company or a Bank has notified
the Administrative Agent, prior to the date any payment to be made by it is due,
that it does not intend to remit such payment, the Administrative Agent may, in
its sole and absolute discretion, assume that the Company or such Bank, as the
case may be, has timely remitted such payment and may, in its sole and absolute
discretion and in reliance thereon, make available such payment to the Person
entitled thereto. If such payment was not in fact remitted to the Administrative
Agent in immediately available funds, then:

               (i) if the Company failed to make such payment, each Bank shall
        forthwith on demand repay to the Administrative Agent the amount of such
        assumed payment made available to such Bank, together with interest
        thereon in respect of each day from the date such amount was made
        available by the Administrative Agent to such Bank to the date such
        amount is repaid to the Administrative Agent at a rate per annum equal
        to (a) for the first three days after demand, the Federal Funds Rate
        from time to time in effect and (b) thereafter, the Base Rate from time
        to time in effect; and


                                        34
<PAGE>

               (ii) if a Bank failed to make such payment, the Administrative
        Agent shall promptly notify the Company, and the Company shall pay such
        corresponding amount to the Administrative Agent, together with interest
        thereon in respect of each day from the date such amount was made
        available by the Administrative Agent to the Company at a rate per annum
        equal to the interest rate applicable to the applicable borrowing.
        Nothing in this clause (ii) shall be deemed to relieve any Bank from its
        obligation to fulfill its Commitment or to prejudice any rights which
        the Administrative Agent or the Company may have against any Bank as a
        result of any default by such Bank hereunder.

        7.5 Setoff. The Company agrees that each Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, each
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with such Agent or such
Bank.

        7.6 Proration of Payments. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 8.7 or in connection with an
assignment or participation pursuant to Section 14.9 or any payment to the Swing
Line Bank in respect of a Swing Line Loan) on account of principal of or
interest on any Loan (or on account of its participation in any Letter of Credit
or Swing Line Loan) in excess of its pro rata share of payments and other
recoveries obtained by all Banks on account of principal of and interest on
Loans (or such participations) then held by them, such Bank shall purchase from
the other Banks such participation in the Loans (or sub-participations in
Letters of Credit or Swing Line Loans) held by them as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery.

        7.7 Taxes. (a) All payments of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the Company hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Company will:

               (i)  pay directly to the relevant authority the full amount
        required to be so withheld or deducted;


                                        35
<PAGE>

               (ii) promptly forward to the Administrative Agent an official
        receipt or other documentation satisfactory to the Administrative Agent
        evidencing such payment to such authority; and

               (iii) (except to the extent such withholding or deduction would
        not be required if such Bank's Exemption Representation were true) pay
        to the Administrative Agent for the account of the Banks such additional
        amount or amounts as is necessary to ensure that the net amount actually
        received by each Bank will equal the full amount such Bank would have
        received had no such withholding or deduction been required.

Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Bank with respect to any payment received by the Administrative Agent or
such Bank hereunder, the Administrative Agent or such Bank may pay such Taxes
and the Company will (except to the extent such Taxes are payable by a Bank and
would not have been payable if such Bank's Exemption Representation were true)
promptly pay such additional amounts (including any penalty, interest and
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted.

        (b) If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Banks, the required receipts or other required documentary
evidence, the Company shall indemnify the Banks for any incremental Taxes,
interest or penalties that may become payable by any Bank as a result of any
such failure. For purposes of this Section 7.7, a distribution hereunder by the
Administrative Agent or any Bank to or for the account of any Bank shall be
deemed a payment by the Company.

        (c) Each Bank represents and warrants (such Bank's "Exemption
Representation") to the Company and the Administrative Agent that, as of the
date of this Agreement (or, in the case of an Assignee, the date it becomes a
party hereto), it is entitled to receive payments hereunder without any
deduction or withholding for or on account of any Taxes imposed by the United
States of America or any political subdivision or taxing authority thereof.

        (d) Upon the request from time to time of the Company or the
Administrative Agent, each Bank that is organized under the laws of a
jurisdiction other than the United States of America shall execute and deliver
to the Company and the Administrative Agent one or more (as the Company or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Forms W-8ECI or Forms W-8BEN or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.

        (e) If, and to the extent that, any Bank shall obtain a credit or other
tax benefit with respect to any Taxes indemnified or paid by the Company
pursuant to this Section 7.7, such


                                        36
<PAGE>

Bank agrees to promptly notify the Company thereof and thereupon to use
reasonable efforts to provide the Company the benefit of such credit or other
tax benefit.

        SECTION 8  INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
LOANS.

        8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency

               (A) shall subject any Bank (or any Eurodollar Office of such
        Bank) 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 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 Eurodollar Office imposed by the
        jurisdiction in which such Bank's principal executive office or
        Eurodollar Office is located); or

               (B) shall impose, modify or deem applicable any reserve
        (including any reserve imposed by the FRB, but excluding any reserve
        included in the determination of interest rates pursuant to Section 4),
        special deposit or similar requirement against assets of, deposits with
        or for the account of, or credit extended by any Bank (or any Eurodollar
        Office of such Bank); or

               (C) shall impose on any Bank (or its Eurodollar Office) 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 (or in the
case of Regulation D of the FRB, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under its Note with respect thereto,
then within 10 Business Days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Administrative Agent), the Company shall pay directly to such
Bank such additional amount as will compensate such Bank for such increased cost
or such reduction.

        (b) If any Bank shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any


                                        37
<PAGE>

change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such controlling Person could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
controlling Person's policies with respect to capital adequacy) by an amount
deemed by such Bank or such controlling Person to be material, then from time to
time, within 10 Business Days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Administrative Agent), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
Person for such reduction.

        8.2 Inability to Determine Rates, etc. If with respect to any Interest
Period:

               (a) the Administrative Agent determines (which determination
        shall be binding and conclusive on the Company) that by reason of
        circumstances affecting the interbank eurodollar market adequate and
        reasonable means do not exist for ascertaining the applicable Eurodollar
        Rate; or

                (b) Banks having an aggregate Percentage of 40% or more advise
        the Administrative Agent that the Eurodollar Rate (Reserve Adjusted)
        will not adequately and fairly reflect the cost to such Banks of
        maintaining or funding such Eurodollar Loans for such Interest Period
        (taking into account any amount to which such Banks may be entitled
        under Section 8.1) or that the making or funding of Eurodollar Loans has
        become impracticable as a result of an event occurring after the date of
        this Agreement which in the opinion of such Banks materially affects
        such Loans;

then the Administrative Agent shall promptly notify the other parties thereof
and, so long as such circumstances shall continue, (i) no Bank shall be under
any obligation to make or convert into Eurodollar Loans and (ii) on the last day
of the current Interest Period for each Eurodollar Loan, such Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan.

        8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or


                                        38
<PAGE>

convert into Eurodollar Loans (but shall make Base Rate Loans concurrently with
the making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Base Rate Loan. Each Base Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "Affected Loan") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.

        8.4 Funding Losses. The Company hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the
Administrative Agent), the Company will indemnify such Bank against any net loss
or expense which such Bank may sustain or incur (including any net loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain any Eurodollar Loan), as
reasonably determined by such Bank, as a result of (a) any payment, prepayment
or conversion of any Eurodollar Loan of such Bank on a date other than the last
day of an Interest Period for such Loan (including any conversion pursuant to
Section 8.3) or (b) any failure of the Company to borrow, prepay or continue, or
to convert any Loan into, a Eurodollar Loan on a date specified therefor in a
notice of borrowing, prepayment, continuation or conversion pursuant to this
Agreement. For this purpose, all notices to the Administrative Agent pursuant to
this Agreement shall be deemed to be irrevocable.

        8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.

        8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.

        8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
Bank shall promptly notify the Company and the Administrative Agent of any event
of which it has


                                        39
<PAGE>

knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.7 or 8.1 or (ii) the occurrence
of any circumstance of the nature described in Section 8.2 or 8.3 (and, if any
Bank has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Administrative Agent). Without limiting the foregoing, (x)
each Bank will designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described in clause (i)
or (ii) of the preceding sentence and such designation will not, in such Bank's
good faith judgment, be otherwise disadvantageous to such Bank; and (y) if any
Bank fails to notify the Company of any event or circumstance which will entitle
such Bank to compensation pursuant to Section 7.7 or 8.1 within 90 days after
such Bank obtains knowledge of such event or circumstance, then such Bank shall
not be entitled to compensation from the Company for any amount arising prior to
the date which is 90 days before the date on which such Bank notifies the
Company of such event or circumstance.

        (b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Administrative Agent
(and upon notice from the Company such Affected Bank shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Commitment, its
Loans, its Note, its participation in Letters of Credit and Swing Line Loans,
and all of its other rights and obligations hereunder to such replacement
bank(s) or other financial institution(s) for a purchase price equal to the sum
of the principal amount of the Loans so assigned, all accrued and unpaid
interest thereon, its ratable share of all accrued and unpaid non-use fees and
Letter of Credit fees, and any amounts payable under Section 8.4 as a result of
such Bank receiving payment of any Eurodollar Loan prior to the end of an
Interest Period therefor and all other obligations owed to such Affected Bank
hereunder).

        8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.

        SECTION 9 REPRESENTATIONS AND WARRANTIES.

        To induce the Agents and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or participate in Letters of Credit
hereunder, the Company represents and warrants to the Agents and the Banks that:

        9.1 Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Wisconsin;
each Subsidiary is duly organized, validly existing and in good standing under
the laws of the state of its organization;


                                        40
<PAGE>

and the Company and each Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect) and has full power and
authority to own its property and conduct its business as presently conducted by
it.

        9.2 Authorization; No Conflict. The execution and delivery by the
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of the
Guaranty and the performance by each of the Company and each Guarantor of its
obligations under each Loan Document to which it is a party are within the
organizational powers of the Company and each Guarantor, have been duly
authorized by all necessary organizational action on the part of the Company and
each Guarantor (including any necessary shareholder, partner or member action),
have received all necessary governmental approval (if any shall be required),
and do not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the certificate of incorporation, partnership agreement, by-laws or
other organizational documents of the Company or any Guarantor or of any
agreement, indenture, instrument or other document which is binding on the
Company, any Guarantor or any other Subsidiary or (c) result in, or require, the
creation or imposition of any Lien on any property of the Company, any Guarantor
or any other Subsidiary.

        9.3 Validity and Binding Nature. Each of this Agreement and each other
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors' rights generally and to general principles of
equity; and the Guaranty is the legal, valid and binding obligation of each
Guarantor, enforceable against such Guarantor in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors' rights generally and to general principles of equity.

        9.4 Financial Condition. The audited consolidated financial statements
of the Company and its Subsidiaries dated December 31, 1999 and the unaudited
consolidated financial statements of the Company and its Subsidiaries dated June
30, 2000, copies of each of which have been delivered to each Bank, were
prepared in accordance with GAAP (subject, in the case of such unaudited
statements, to the absence of footnotes and to normal year-end adjustments) and
present fairly the consolidated financial condition of the Company and its
Subsidiaries as at such dates and the results of their operations for the
periods then ended.

        9.5 No Material Adverse Change. Since December 31, 1999, there has been
no material adverse change in the financial condition, operations, assets,
business or properties of the Company and its Subsidiaries taken as a whole.


                                        41
<PAGE>

        9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6.

        9.7 Ownership of Properties; Liens. Each of the Company and each
Subsidiary owns good and, in the case of real property, indefeasible title to
all of its properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and material claims
(including material infringement claims with respect to patents, trademarks,
copyrights and the like) except as permitted pursuant to Section 10.8.

        9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
Schedule 9.8.

        9.9 Pension Plans. (a) During the twelve-consecutive-month period prior
to the date of the execution and delivery of this Agreement or the making of any
Loan hereunder, (i) no steps have been taken to terminate any Pension Plan other
than a "standard termination" in accordance with Section 4041(b) of ERISA and
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by the Company of any material liability,
fine or penalty.

        (b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the Company or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.

        9.10 Investment Company Act. Neither the Company nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.


                                        42
<PAGE>

        9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.

        9.12 Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.

        9.13 Taxes. Each of the Company and each Subsidiary has filed all
Federal tax returns and other material tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.

        9.14 Solvency, etc. On the Effective Date (or, in the case of any Person
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof (and after giving effect to any right of contribution and
subrogation), (a) each of the Company's and each Guarantor's assets will exceed
its liabilities and (b) each of the Company and each Guarantor will be solvent,
will be able to pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts and will have
capital sufficient to carry on its business as then constituted.

        9.15 Environmental Matters. The Company conducts, in the ordinary course
of business, a review of the effect of existing Environmental Laws (excluding
health, safety and land use matters) and existing Environmental Claims
(excluding health, safety and land use matters) on its business, operation and
properties, and as a result thereof, the Company has reasonably concluded that
such Environmental Laws and Environmental Claims, including those specifically
disclosed in Schedule 9.15, could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

        9.16 Information. All information heretofore or contemporaneously
herewith furnished in writing by the Company or any Subsidiary to either Agent
or any Bank for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of the Company or any Subsidiary to any Bank pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and none
of such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Agents and the Banks
that (a) any projections and forecasts provided by the Company are based on good
faith estimates and assumptions believed by the Company to be


                                        43
<PAGE>

reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts will likely differ from projected or forecasted results and (b) any
information provided by the Company or any Subsidiary with respect to any Person
or assets acquired or to be acquired by the Company or any Subsidiary shall, for
all periods prior to the date of such Acquisition, be limited to the knowledge
of the Company or the acquiring Subsidiary after reasonable inquiry).

        9.17   Leeson Electric Acquisition.

               (a) The representations and warranties made by the Company and
LEC Acquisition Corp., and (to the best of the Company's knowledge) the
representations and warranties made by all other parties, in the Leeson
Acquisition Agreement (i) are true and correct in all material respects on the
date hereof and (ii) will be true and correct in all material respects as of the
Effective Date (except to the extent such representations and warranties relate
solely to an earlier date, in which case they were true and correct in all
material respects as of such earlier date).

               (b) To the best of the Company's knowledge, the Leeson
Acquisition complies in all material respects with all applicable legal
requirements, and all necessary governmental, regulatory, shareholder and other
consents and approvals required for the consummation of the Leeson Acquisition
have been, or prior to the consummation thereof will be, duly obtained and in
full force and effect.

               (c) The execution and delivery by the Company and LEC
Acquisition Corp., and (to the best of the Company's knowledge) by Leeson
Electric, of the Leeson Acquisition Agreement, and the consummation of the
Leeson Acquisition, will not (a) violate any provision of law or any order,
decree or judgment of any court or other government agency which is binding on
the Company or any Subsidiary (including any entity which will be a Subsidiary
after giving effect to the Leeson Acquisition) or (b) contravene or conflict
with, or result in a breach of or default under, any provision of the
certificate of incorporation, partnership agreement, by- laws or other
organizational documents of the Company or any Subsidiary (including any entity
which will be a Subsidiary after giving effect to the Leeson Acquisition) or of
any material agreement, indenture, instrument or other document which is binding
on the Company or any Subsidiary (including any entity which will be a
Subsidiary after giving effect to the Leeson Acquisition).

        SECTION 10  COVENANTS.

        Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:

        10.1 Reports, Certificates and Other Information. Furnish to each Bank:


                                        44
<PAGE>

        10.1.1 Audit Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year, a copy of the annual audit report of
the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by Arthur Andersen LLP or other independent auditors of recognized
standing selected by the Company and reasonably acceptable to the Required
Banks, together with a written statement from such accountants to the effect
that in making the examination necessary for the signing of such annual audit
report by such accountants, they have not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or, if they
have become aware of any such event, describing it in reasonable detail.

        10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated balance sheets of the Company and its
Subsidiaries as of the end of such Fiscal Quarter, together with consolidated
statements of earnings and cash flows for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, certified by an Executive Officer.

        10.1.3 Certificates. (a) Contemporaneously with the furnishing of a copy
of each annual audit report pursuant to Section 10.1.1 and of each set of
quarterly statements pursuant to Section 10.1.2, (i) a duly completed compliance
certificate in the form of Exhibit B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by an
Executive Officer, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it; and (ii) an updated organizational chart
listing all Subsidiaries.

        10.1.4 Reports to SEC and to Shareholders. Within 15 days after the
filing or sending thereof, copies of all regular, periodic or special reports of
the Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to either
Agent or any Bank upon request therefor); copies of all registration statements
of the Company or any Subsidiary filed with the SEC (other than on Form S-8);
and copies of all proxy statements or other communications made to shareholders
generally concerning material developments in the business of the Company or any
Subsidiary.

        10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:

               (a) the occurrence of an Event of Default or an Unmatured Event
        of Default;


                                        45
<PAGE>

               (b) any litigation, arbitration or governmental investigation or
        proceeding not previously disclosed by the Company to the Banks which
        has been instituted or, to the knowledge of the Company, is threatened
        against the Company or any Subsidiary or to which any of the properties
        of any thereof is subject which, if adversely determined, might
        reasonably be expected to have a Material Adverse Effect;

               (c) the institution of any steps by any member of the Controlled
        Group or any other Person to terminate any Pension Plan other than a
        "standard termination" in accordance with Section 4041(b) of ERISA, or
        the failure of any member of the Controlled Group to make a required
        contribution to any Pension Plan (if such failure is sufficient to give
        rise to a lien under Section 302(f) of ERISA) or to any Multiemployer
        Pension Plan, or the taking of any action with respect to a Pension Plan
        which could result in the requirement that the Company furnish a bond or
        other security to the PBGC or such Pension Plan, or the occurrence of
        any event with respect to any Pension Plan or Multiemployer Pension Plan
        which could result in the incurrence by any member of the Controlled
        Group of any material liability, fine or penalty (including any claim or
        demand for withdrawal liability or partial withdrawal from any
        Multiemployer Pension Plan), or any notice that any Multiemployer
        Pension Plan is in reorganization, that increased contributions may be
        required to avoid a reduction in plan benefits or the imposition of an
        excise tax, that any such plan is or has been funded at a rate less than
        that required under Section 412 of the Code, that any such plan is or
        may be terminated, or that any such plan is or may become insolvent;

               (d) any cancellation (without replacement) or material change in
        any material insurance maintained by the Company or any Subsidiary; or

               (e) any other event (including any violation of any Environmental
        Law or the assertion of any Environmental Claim) which might reasonably
        be expected to have a Material Adverse Effect.

        10.1.6 Subsidiaries. Promptly upon any change in the list of its
Subsidiaries from that set forth on Schedule 9.8 (or in the most recent notice
pursuant to this Section), notification of such change.

        10.1.7 Management Reports. Promptly upon the request of either Agent or
any Bank through the Administrative Agent, copies of all detailed financial and
management reports submitted to the Company by independent auditors in
connection with each annual or interim audit made by such auditors of the books
of the Company.

        10.1.8 Other Information. From time to time such other information
concerning the Company and its Subsidiaries as either Agent or any Bank through
the Administrative Agent may reasonably request.


                                        46
<PAGE>

        10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, either Agent (which may be
accompanied by any Bank) or any representative thereof upon reasonable prior
notice to inspect the properties and operations of the Company and of such
Subsidiary; and permit, and cause each Subsidiary to permit, at any reasonable
time during normal business hours and with reasonable notice (or at any time
without notice if an Event of Default exists), either Agent (which may be
accompanied by any Bank) or any representative thereof to visit any or all of
its offices, to discuss its financial matters with its officers and its
independent auditors (and the Company hereby authorizes such independent
auditors to discuss such financial matters with either Agent (which may be
accompanied by any Bank) or any representative thereof, provided that the
Company shall have the right to be present at any such discussions so long as no
Event of Default exists), to examine (and photocopy extracts from) any of its
books or other financial or operating records and, at any time an Event of
Default or Unmatured Event of Default exists, to conduct field examinations of
the accounts receivable, inventory and equipment of the Company and its
Subsidiaries.

        10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon request of
either Agent or any Bank through the Administrative Agent, furnish to such Agent
or to the Administrative Agent for delivery to such Bank a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by
the Company and its Subsidiaries.

        10.4 Compliance with Laws; Payment of Taxes. (a) Comply, and cause each
Subsidiary to comply, in all material respects with all material applicable laws
(including Environmental Laws and ERISA), rules, regulations, decrees, orders,
judgments, licenses and permits; and (b) pay, and cause each Subsidiary to pay,
prior to delinquency, all Federal taxes and all other material taxes and
governmental charges against it or any of its property and all other lawful
claims which, if unpaid, would by law become a Lien on its property; provided
that the foregoing shall not require the Company or any Subsidiary to pay any
such tax, charge or claim so long as it shall contest the validity thereof in
good faith by appropriate proceedings and shall set aside on its books adequate
reserves with respect thereto.

        10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.9) cause each Significant Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect).


                                        47
<PAGE>

        10.6   Financial Covenants.

        10.6.1 Minimum Net Worth. Not permit Net Worth to be less than the sum
of (i) $220,000,000 plus (ii) 50% of Consolidated Net Income for each Fiscal
Quarter ending after October 1, 2000 (excluding any Fiscal Quarter in which
there is a loss) plus (iii) 75% of the Net Cash Proceeds of all issuances of
equity securities by the Company or any Subsidiary (other than issuances to the
Company or another Subsidiary) after the Effective Date.

        10.6.2 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to EBITDA
Ratio as of the last day of any Computation Period to exceed the applicable
ratio set forth below:

                Computation                              Funded Debt to
               Period Ending:                            EBITDA Ratio
               -------------                             ------------

        Effective Date through March 31, 2001            3.75 to 1.0
        June 30, 2001 and September 30, 2001             3.50 to 1.0
        December 31, 2001 through September 30, 2002     3.25 to 1.0
        December 31, 2002 and thereafter                 3.00 to 1.0.

        10.6.3 Interest Coverage Ratio. Not permit the Interest Coverage Ratio
as of the last day of any Computation Period to be less than the applicable
ratio set forth below:

                Computation                                 Interest
               Period Ending:                            Coverage Ratio
               -------------                             --------------

        Effective Date through September 30, 2001        2.25 to 1.0
        December 31, 2001 through September 30, 2002     2.75 to 1.0
        December 31, 2002 through September 30, 2003     3.25 to 1.0
        December 31, 2003 and thereafter                 3.75 to 1.0.

        10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:

               (a) obligations in respect of the Loans, the L/C Applications
        and the Letters of Credit (including obligations under the Guaranty);

               (b) Debt arising under Capital Leases; provided that the
        aggregate amount of Debt arising under all Capital Leases (other than
        Capital Leases listed on Schedule 10.7 and refinancings thereof
        permitted by clause (j)) shall not at any time exceed $15,000,000;

               (c) Debt secured by Liens permitted by subsections 10.8(f), (g)
        and (j); provided that the aggregate amount of all such Debt shall not
        at any time exceed


                                        48
<PAGE>

        $15,000,000;

               (d) Debt outstanding on the date hereof and listed in Schedule
        10.7 (excluding Debt to be Repaid);

               (e) Debt of Subsidiaries owed to the Company;

               (f) Hedging Obligations of the Company or any Subsidiary to any
        Bank or any Affiliate of a Bank incurred in the ordinary course of
        business for bona fide hedging purposes and not for speculation;

               (g) unsecured Debt of the Company to Subsidiaries;

               (h) Debt to be Repaid; provided that all Debt to be Repaid shall
        be repaid on the Effective Date;

               (i) Subordinated Debt;

               (j) refinancings of any Debt permitted under subsections (c) and
        (d) above so long as the terms applicable to such refinanced Debt are no
        less favorable to the Company or the applicable Subsidiary than the
        terms in effect immediately prior to such refinancing;

               (k) unsecured Debt of the Company or a Subsidiary denominated in
        Canadian dollars and obtained from one or more lenders located in
        Canada; provided that the aggregate amount of all such Debt shall not at
        any time exceed an amount equivalent to $7,500,000; and

               (l) other unsecured Debt of the Company; provided that the
        aggregate amount of all such Debt shall not at any time exceed
        $25,000,000.

        10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:

               (a) Liens for taxes or other governmental charges not at the time
        delinquent or thereafter payable without penalty or being contested in
        good faith by appropriate proceedings and, in each case, for which it
        maintains adequate reserves, provided that no notice of lien has been
        filed or recorded under the Code;

               (b) Liens arising in the ordinary course of business (such as (i)
        Liens of carriers, warehousemen, mechanics and materialmen and other
        similar Liens imposed by law and (ii) Liens incurred in connection with
        worker's compensation, unemployment compensation and other types of
        social security (excluding Liens arising under ERISA) or


                                        49
<PAGE>

        in connection with surety bonds, bids, performance bonds and similar
        obligations) for sums not overdue or being contested in good faith by
        appropriate proceedings and not involving any deposits or advances or
        borrowed money or the deferred purchase price of property or services,
        and, in each case, for which it maintains adequate reserves;

               (c)     Liens identified in Schedule 10.8;

               (d) attachments, appeal bonds, judgments and other similar Liens,
        for sums not in the aggregate exceeding $10,000,000, arising in
        connection with court proceedings, provided the execution or other
        enforcement of such Liens is effectively stayed and the claims secured
        thereby are being actively contested in good faith and by appropriate
        proceedings;

               (e) easements, rights of way, restrictions, minor defects or
        irregularities in title and other similar Liens not interfering in any
        material respect with the ordinary conduct of the business of the
        Company or any Subsidiary;

               (f) subject to subsection 10.7(c), Liens on assets of any Person
        which becomes a Subsidiary after the date of this Agreement, provided
        that such Liens existed at the time such Person became a Subsidiary and
        were not created in anticipation thereof;

               (g) subject to subsection 10.7(c), purchase money security
        interests on any property acquired or held by the Company or any
        Subsidiary in the ordinary course of business, securing Debt (other than
        Debt under Capital Leases) incurred or assumed for the purpose of
        financing all or any part of the cost of acquiring such property;
        provided that (i) any such Lien attaches to such property concurrently
        with or within 20 days after the acquisition thereof, (ii) such Lien
        attaches solely to the property so acquired in such transaction, and
        (iii) the principal amount of the Debt secured thereby does not exceed
        100% of the cost of such property;

               (h) Liens securing obligations in respect of Capital Leases
        attaching solely to the assets subject to such Capital Leases; provided
        that such Capital Leases are otherwise permitted hereunder;

               (i) Liens arising solely by virtue of any statutory or common law
        provision relating to banker's liens, rights of set-off or similar
        rights and remedies as to deposit accounts or other funds maintained
        with a creditor depository institution; provided that (i) such deposit
        account is not a dedicated cash collateral account and is not subject to
        restrictions against access by the Company or the applicable Subsidiary
        in excess of those set forth by regulations promulgated by the FRB and
        (ii) such deposit account is not intended by the Company or any
        Subsidiary to provide a collateral to the depository institution; and


                                        50
<PAGE>

                (j) other Liens securing obligations not at any time exceeding
        $2,500,000.

        10.9 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
to, be a party to any merger or consolidation, make any Acquisition, purchase or
otherwise acquire any partnership or joint venture interest in any other Person,
or sell, transfer, convey or lease all or any substantial part of its assets, or
sell or assign with or without recourse any receivables, except for:

               (a) any such merger or consolidation, sale, transfer,
        conveyance, lease or assignment of or by any wholly-owned Subsidiary
        into the Company or into, with or to any other wholly-owned Subsidiary;

               (b) any such purchase or other acquisition by the Company or any
        wholly- owned Subsidiary of the assets or stock of any wholly-owned
        Subsidiary;

               (c) Permitted Acquisitions;

               (d) the Leeson Acquisition;

               (e) sales and dispositions of assets (including the stock of
        Subsidiaries) made for fair market value so long as (i) no Event of
        Default or Unmatured Event of Default exists or would result therefrom;
        (ii) the purchase price therefor shall be paid in cash or by a
        promissory note in form and substance satisfactory to the Required Banks
        (and the aggregate outstanding principal amount of all such notes shall
        not at any time exceed $15,000,000), and (iii) the Net Cash Proceeds of
        such sales and dispositions are applied, to the extent applicable, to
        reduce the Commitment Amount pursuant to Section 6.1.2 and, if
        applicable, to make prepayments of Loans pursuant to Section 6.2.1.

        10.10 Use of Proceeds. Use the proceeds of the Loans solely (i) to fund
the cash portion of the purchase price for the Leeson Acquisition, (ii) to
refinance existing Debt, (iii) to pay fees and expenses incurred in connection
with the Leeson Acquisition, (iv) to finance repurchases of shares of the
Company's common stock, (v) to finance Permitted Acquisitions and (vi) for
capital expenditures, working capital and other general corporate purposes.

        10.11 Further Assurances. Cause each Significant Subsidiary (other than
any Foreign Subsidiary, but including any Significant Subsidiary created or
acquired, and any Subsidiary which becomes a Significant Subsidiary, after the
date hereof) to execute and deliver a counterpart of the Guaranty, and deliver,
or cause the applicable Guarantor to deliver, to the Administrative Agent such
documents as either Agent (or the Required Banks acting through the
Administrative Agent) may reasonably request (including opinions of counsel) to
confirm that the Guaranty is the legal, valid and binding obligation of each
Guarantor.

        10.12 Transactions with Affiliates. Not, and not permit any Subsidiary
to, enter into, or


                                        51
<PAGE>

cause, suffer or permit to exist any transaction, arrangement or contract with
any of its other Affiliates (other than the Company and its Subsidiaries) which
is on terms which are less favorable than are obtainable from any Person which
is not one of its Affiliates.

        10.13 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.

        10.14 Environmental Laws. Conduct, and cause each Subsidiary to conduct,
its operations and keep and maintain its property in material compliance with
all Environmental Laws (other than Immaterial Laws).

        10.15 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any material contract for the
purchase of materials, supplies or other property or services, if such contract
requires that payment be made by it regardless of whether or not delivery is
ever made of such materials, supplies or other property or services; provided
that the foregoing shall not prohibit the Company or any Subsidiary from
entering into options for the purchase of particular assets or businesses.

        10.16 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing, or the obtaining of any Letter of Credit, by the
Company hereunder or by the performance by the Company or any Subsidiary of any
of its obligations hereunder or under any other Loan Document or (b) would
prohibit the Company or any Subsidiary from granting to the Administrative
Agent, for the benefit of the Banks, a Lien on any of its assets.

        10.17 Business Activities. Not, and not permit any Subsidiary to, engage
in any line of business other than the same or similar lines of business engaged
in by the Company and its Subsidiaries as of the date hereof and reasonable
extensions thereof.

        10.18 Advances and Other Investments. Not, and not permit any Subsidiary
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:

               (a) bank deposits in the ordinary course of business;

               (b) extensions of credit in the nature of accounts receivable or
        notes receivable arising from the sale of goods or services in the
        ordinary course of business;

               (c) equity Investments existing on the Effective Date in
        wholly-owned Subsidiaries;

               (d) in the ordinary course of business, contributions by the
        Company to the capital of any Subsidiary, or by any Subsidiary to the
        capital of any of its Subsidiaries;


                                        52
<PAGE>

               (e) in the ordinary course of business, Investments by the
        Company in any Subsidiary or by any Subsidiary in the Company, by way of
        intercompany loans, advances or guaranties, all to the extent permitted
        by Section 10.7;

               (f) Suretyship Liabilities to the extent permitted by Section
        10.7;

               (g) Permitted Acquisitions (and good faith deposits made in
        connection with prospective Permitted Acquisitions);

               (h) travel and similar advances made to officers and employees
        in the ordinary course of business not at any time exceeding $1,000,000
        in the aggregate;

               (i) loans to officers and employees (in addition to advances
        described in clause (h) above) not at any time exceeding (i) $1,000,000
        in the aggregate to any single individual or (ii) $3,000,000 in the
        aggregate for all such individuals;

               (j) Cash Equivalent Investments;

               (k) the Guaranty; and

               (l) other Investments not at any time exceeding in the aggregate
        $25,000,000 (without taking account of any writedown in the value of any
        Investment);

provided that no Investment otherwise permitted by clause (d), (f), (g) or (i)
shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured Event of Default shall have occurred
and be continuing.

        10.19 Margin Stock. Not permit the amount of all Margin Stock owned by
the Company and its Subsidiaries to exceed 15% of the total consolidated assets
of the Company and its Subsidiaries.

        10.20 Leeson Acquisition Agreement. Not amend or otherwise modify the
Leeson Acquisition Agreement in any material respect.

        10.21 Non-Guarantor Subsidiaries. Not permit Subsidiaries which are not
Guarantors to have, in the aggregate, (a) assets with a value of more than 15%
of the total value of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, or (b) revenues in any Fiscal Quarter which
constitute more than 15% of the consolidated revenues of the Company and its
Subsidiaries, taken as a whole, for such Fiscal Quarter.

        SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.


                                        53
<PAGE>

        11.1 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date"), which date shall not occur later than September 30,
2000, on which (a) each of the conditions precedent specified in Section 11.2
shall have been satisfied and (b) the Administrative Agent shall have received
(i) all amounts which are then due and payable pursuant to Section 5 and (to the
extent billed) Section 14.6; (ii) evidence satisfactory to the Agents that all
Debt to be Repaid has been (or concurrently with the initial Credit Extension
will be) paid in full and all Liens securing Debt to be Repaid have been (or
concurrently with the initial Credit Extension will be) terminated; (iii)
evidence satisfactory to the Agents that the Leeson Acquisition has been (or
concurrently with the initial Credit Extension will be) completed in accordance
with the terms and provisions of the Leeson Acquisition Agreement, that the
purchase price to complete the Leeson Acquisition will not exceed $275,000,000
and that, after giving effect to the Leeson Acquisition, the payment of all Debt
to be Repaid and the other transactions contemplated on the Effective Date, the
Commitment Amount will be at least $40,000,000 greater than the Total
Outstandings; and (iv) all of the following, each duly executed and dated the
Effective Date (or such earlier date as shall be satisfactory to the Agents),
each in form and substance satisfactory to the Agents, and each (except for the
Notes, of which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Bank:

               11.1.1  Notes.  The Notes.

        11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the L/C
Applications; and certified copies of resolutions of the Board of Directors of
each Guarantor authorizing or ratifying the execution, delivery and performance
by such Guarantor of the Guaranty.

        11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Guarantor of the documents referred to in this Section 11 or for the
consummation of the Leeson Acquisition.

        11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company and each Guarantor as of the
Effective Date certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents to which such entity is a party, together
with a sample of the true signature of each such officer (it being understood
that the Agents and each Bank may conclusively rely on each such certificate
until formally advised by a like certificate of any changes therein).

        11.1.5 Guaranty. The Guaranty executed by each Significant Subsidiary
which is to be a Guarantor as of the Effective Date.

        11.1.6 Opinions of Counsel for the Company and the Guarantors. The
opinion of Foley


                                        54
<PAGE>

& Lardner, counsel to the Company and the Guarantors.

        11.1.7 Acquisition Opinions. Copies of all opinions delivered in
connection with the Leeson Acquisition (which opinions shall state, or be
accompanied by letters which state, that the Agents and the Banks may rely
thereon).

        11.1.8 Officer's Certificate. A certificate of an Executive Officer
attaching a true and correct copy of the Leeson Acquisition Agreement.

        11.1.9 Compliance Certificate. A compliance certificate showing pro
forma compliance with the financial covenants set forth in Section 10.6 after
giving effect to the Acquisition.

        11.1.10 Other. Such other documents as the either Agent or any Bank may
reasonably request.

               11.2 Conditions to All Credit Extensions of Credit. The
obligation of each Bank to make each Loan and of each Issuing Bank to issue each
Letter of Credit is subject to the condition that the Effective Date shall have
occurred and to the following further conditions precedent:

               11.2.1  Compliance with Warranties, No Default, etc.  Both before
and after giving effect to such Credit Extension:

                       (a) the representations and warranties of the Company set
        forth in this Agreement (excluding Sections 9.6, 9.8 and 9.17) shall be
        true and correct in all material respects with the same effect as if
        then made (except to the extent stated to relate to an earlier date, in
        which case such representations and warranties shall be true and correct
        in all material respects as of such earlier date);

                       (b) except as disclosed by the Company pursuant to
        Section 9.6,

                               (i) no litigation (including derivative
                       actions), arbitration proceeding, labor controversy or
                       governmental investigation or proceeding shall be
                       pending or, to the knowledge of the Company, threatened
                       against the Company or any of its Subsidiaries which
                       might reasonably be expected to have a Material Adverse
                       Effect or which purports to affect the legality,
                       validity or enforceability of this Agreement or any
                       other Loan Document; and

                              (ii) no development shall have occurred in any
                       litigation (including derivative actions), arbitration
                       proceeding, labor controversy or governmental
                       investigation or proceeding disclosed pursuant to Section
                       9.6 which might reasonably be expected to have a Material
                       Adverse Effect; and


                                        55
<PAGE>

                       (c) no Event of Default or Unmatured Event of Default
               shall have then occurred and be continuing, and neither the
               Company nor any of its Subsidiaries shall be in violation of any
               law or governmental regulation or court order or decree where
               such violation or violations singly or in the aggregate might
               reasonably be expected to have a Material Adverse Effect.

        11.3 Confirmatory Certificate. If requested by either Agent or any Bank
(acting through the Administrative Agent), the Administrative Agent shall have
received (in sufficient counterparts to provide one to each Bank) a certificate
dated the date of such requested Credit Extension and signed by a duly
authorized representative of the Company as to the matters set forth in Section
11.2.1 (it being understood that each request by the Company for a Credit
Extension shall be deemed to constitute a warranty by the Company that the
conditions precedent set forth in Section 11.2.1 will be satisfied at the time
of the making of such Credit Extension), together with such other documents as
either Agent or any Bank (acting through the Administrative Agent) may
reasonably request in support thereof.

        SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.

        12.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:

        12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan or any reimbursement obligation with respect to any
Letter of Credit; or default, and continuance thereof for five days, in the
payment when due of any interest, fee or other amount payable by the Company
hereunder or under any other Loan Document.

        12.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of the Company or any Subsidiary (other than Debt
hereunder) in an aggregate principal amount (for all such Debt so affected)
exceeding $10,000,000 and such default shall (a) consist of the failure to pay
such Debt when due (subject to any applicable grace period), whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to its expressed
maturity.

        12.1.3 Other Material Obligations. Default in the payment when due, or
in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults, would reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).

        12.1.4 Bankruptcy, Insolvency, etc. The Company or any Significant
Subsidiary


                                        56
<PAGE>

becomes insolvent or generally fails to pay, or admits in writing its general
inability or refusal to pay, debts as they become due; or the Company or any
Significant Subsidiary applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company or such
Significant Subsidiary or any substantial part of the property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for the Company or any Significant Subsidiary or for any substantial
part of the property thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of a Significant Subsidiary), is commenced in respect of the Company or any
Significant Subsidiary, and if such case or proceeding is not commenced by the
Company or such Significant Subsidiary, an order for relief is entered therein,
or such case or proceeding is consented to or acquiesced in by the Company or
such Significant Subsidiary or remains for 60 days undismissed; or the Company
or any Significant Subsidiary takes any corporate action to authorize, or in
furtherance of, any of the foregoing.

        12.1.5 Non-Compliance with Provisions of this Agreement. (a) Failure by
the Company to comply with or to perform any covenant set forth in Sections
10.1.5(a), 10.5 through 10.9, 10.12 or 10.19; (b) failure by the Company to
comply with or to perform any covenant set forth in Sections 10.10, 10.11 or
10.18 and continuance of such failure for ten days after an Executive Officer
obtains actual knowledge; or (c) failure by the Company to comply with or to
perform any other provision of this Agreement (and not constituting an Event of
Default under any of the other provisions of this Section 12) and continuance of
such failure for 30 days after notice thereof to the Company from either Agent
or any Bank (acting through the Administrative Agent).

        12.1.6 Representations and Warranties. Any representation or warranty
made by the Company herein is breached or is false or misleading in any material
respect, or any schedule, certificate, financial statement, report, notice or
other writing furnished by the Company to either Agent or any Bank in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.

        12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $1,000,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $1,000,000.


                                        57
<PAGE>


        12.1.8 Judgments. Final judgments which exceed an aggregate of
$10,000,000 shall be rendered against the Company, or any Subsidiary and shall
not have been paid, discharged or vacated or had execution thereof stayed
pending appeal within 30 days after entry or filing of such judgments.

        12.1.9 Invalidity of Guaranty. The Guaranty shall cease to be in full
force and effect, any Guarantor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision of the Guaranty,
or the Company or any Guarantor (or any Person by, through or on behalf of the
Company or any Guarantor) shall contest in any manner the validity, binding
nature or enforceability of the Guaranty with respect to any Guarantor.

        12.1.10 Change in Control. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 20% or more of the outstanding shares of common stock of the
Company; or (b) during any 12-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two- thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company.

        12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Administrative Agent cash collateral in
an amount equal to the outstanding face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind; and, if any other
Event of Default shall occur and be continuing, the Administrative Agent (upon
written request of the Required Banks) shall declare the Commitments (if they
have not theretofore terminated) to be terminated and/or declare all Loans and
all other obligations hereunder to be due and payable and/or demand that the
Company immediately deliver to the Administrative Agent cash collateral in
amount equal to the outstanding face amount of all Letters of Credit, whereupon
the Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Loans and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Administrative Agent cash collateral in an amount
equal to the face amount of all Letters of Credit, all without presentment,
demand, protest or notice of any kind. The Administrative Agent shall promptly
advise the Company of any such declaration, but failure to do so shall not
impair the effect of such declaration. Notwithstanding the foregoing, the effect
as an Event of Default of any event described in Section 12.1.1 or Section
12.1.4 may be waived by the written concurrence of all of the Banks, and the
effect as an Event of Default of any other event described in this Section 12
may be waived by the written concurrence of the Required Banks. Any cash
collateral delivered


                                        58
<PAGE>

hereunder shall be held by the Administrative Agent and applied to obligations
arising in connection with any drawing under a Letter of Credit. After the
expiration or termination of all Letters of Credit, such cash collateral shall
be applied by the Administrative Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may direct.

        SECTION 13  THE AGENTS.

        13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
(subject to Section 13.9) appoints, designates and authorizes each Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, neither Agent shall have any duties or
responsibilities except those expressly set forth herein, nor shall either Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against either Agent.

        (b) Each Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith. Each
Issuing Bank shall have all of the benefits and immunities (i) provided to the
Agents in this Section 13 with respect to any acts taken or omissions suffered
by such Issuing Bank in connection with Letters of Credit issued by it or
proposed to be issued by it and the L/C Applications pertaining to such Letters
of Credit as fully as if the term "Agent", as used in this Section 13, included
such Issuing Bank with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to the Issuing Banks.

        (c) The Swing Line Bank shall have all of the benefits and immunities
(i) provided to the Agents in this Section 13 with respect to any acts taken or
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this Section 13, included the Swing Line Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.

        13.2 Delegation of Duties. Either Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither Agent shall be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

        13.3 Liability of Agents. None of the Agent-Related Persons shall (i) be
liable for any


                                        59
<PAGE>

action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by the Company or any Subsidiary or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by either Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.

        13.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify such
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.

        13.5 Notice of Default. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default (except, in the case of the Administrative Agent, with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Banks), unless such Agent shall
have received written notice from a Bank, the other Agent or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Banks of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Event of
Default or Unmatured Event of Default as may be requested by the Required Banks
in accordance with Section 12; provided that unless and until the Administrative
Agent has received any such request, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default or Unmatured Event of Default as it shall deem
advisable or in the best interest of the Banks.


                                        60
<PAGE>

        13.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by any Agent-Related Person hereafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute a
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agents and the Lead Arranger that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Administrative
Agent, neither Agent shall have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any Agent-Related Person.

        13.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided that no Bank shall be liable for any
payment to any Agent-Related Person of any portion of the Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse each Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
reasonable fees of attorneys for such Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) incurred by
such Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that such
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, cancellation or expiration of the Letters of Credit, any
termination of this Agreement and the resignation or replacement of either
Agent.

        13.8 Agents in Individual Capacity. Bank of America, M&I and their
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from,


                                        61
<PAGE>

acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though Bank of America were not the Documentation
and Syndication Agent hereunder and M&I were not the Administrative Agent, the
Issuing Bank or the Swing Line Bank hereunder, and without notice to or consent
of the Banks. The Banks acknowledge that, pursuant to such activities, Bank of
America or M&I or their respective Affiliates may receive information regarding
the Company or its Subsidiaries (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that neither Agent shall be under any obligation to provide such
information to them. With respect to their Loans, Bank of America, M&I and their
respective Affiliates shall have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though they were not Agents (and
M&I were not the Issuing Bank and the Swing Line Bank), and the terms "Bank" and
"Banks" include Bank of America and M&I and, to the extent applicable, their
respective Affiliates in their individual capacities.

        13.9 Resignation or Removal of Agent. Either Agent may, and at the
request of the Required Banks shall, resign as an Agent upon 30 days' notice to
the Banks. If the Administrative Agent resigns, the Required Banks shall, with
(so long as no Event of Default exists) the consent of the Company (which shall
not be unreasonably withheld or delayed), appoint from among the Banks a
successor administrative agent for the Banks. If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Banks and the Company, a successor administrative agent from among the
Banks. Upon the acceptance of its appointment as successor administrative agent
hereunder, such successor administrative agent shall succeed to all the rights,
powers and duties of the resigning Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent, and the
resigning Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any Agent's resignation
hereunder as an Agent, the provisions of this Section 13 and Sections 14.6 and
14.11 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was an Agent under this Agreement. If the Administrative Agent
resigns or is removed and no successor administrative agent has accepted
appointment as Administrative Agent by the date which is 30 days following the
resigning Administrative Agent's notice of resignation, the resigning
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Banks appoint a successor
administrative agent as provided for above. Notwithstanding the foregoing, M&I
may not be required to resign as the Administrative Agent at the request of the
Required Banks unless M&I shall also simultaneously be replaced as an "Issuing
Bank" and the "Swing Line Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to M&I.

               13.10   Withholding Tax.

               (a) If any Bank is a "foreign corporation, partnership or trust"
        within the meaning of the Code and such Bank claims exemption from, or a
        reduction of, U.S.


                                        62
<PAGE>

        withholding tax under Sections 1441 or 1442 of the Code, such Bank
        agrees to deliver to the Administrative Agent:

                       (i) if such Bank claims an exemption from, or a reduction
               of, withholding tax under a United States tax treaty, properly
               completed Internal Revenue Service ("IRS") Form W-8BEN before the
               payment of any interest in the first calendar year and before the
               payment of any interest in each third succeeding calendar year
               during which interest may be paid under this Agreement;

                       (ii) if such Bank claims that interest paid under this
               Agreement is exempt from United States withholding tax because it
               is effectively connected with a United States trade or business
               of such Bank, two properly completed and executed copies of IRS
               Form W-8ECI before the payment of any interest is due in the
               first taxable year of such Bank and in each succeeding taxable
               year of such Bank during which interest may be paid under this
               Agreement, and IRS Form W-9; and

                       (iii) such other form or forms as may be required under
               the Code or other laws of the United States as a condition to
               exemption from, or reduction of, United States withholding tax.

        Such Bank agrees to promptly notify the Administrative Agent of any
        change in circumstances which would modify or render invalid any claimed
        exemption or reduction.

               (b) If any Bank claims exemption from, or reduction of,
        withholding tax under a United States tax treaty by providing IRS Form
        W-8BEN and such Bank sells, assigns, grants a participation in, or
        otherwise transfers all or part of the obligations of the Company to
        such Bank, such Bank agrees to notify the Administrative Agent of the
        percentage amount in which it is no longer the beneficial owner of such
        obligations of the Company hereunder. To the extent of such percentage
        amount, the Administrative Agent will treat such Bank's IRS Form W-8BEN
        as no longer valid.

               (c) If any Bank claiming exemption from United States withholding
        tax by filing IRS Form W-8EIC with the Administrative Agent sells,
        assigns, grants a participation in, or otherwise transfers all or part
        of the obligations of the Company to such Bank hereunder, such Bank
        agrees to undertake sole responsibility for complying with the
        withholding tax requirements imposed by Sections 1441 and 1442 of the
        Code.

               (d) If any Bank is entitled to a reduction in the applicable
        withholding


                                        63
<PAGE>

        tax, the Administrative Agent may withhold from any interest payment to
        such Bank an amount equivalent to the applicable withholding tax after
        taking into account such reduction. If the forms or other documentation
        required by subsection (a) of this Section are not delivered to the
        Administrative Agent, then the Administrative Agent may withhold from
        any interest payment to such Bank not providing such forms or other
        documentation an amount equivalent to the applicable withholding tax.

               (e) If the IRS or any other governmental authority of the United
        States or any other jurisdiction asserts a claim that the Administrative
        Agent did not properly withhold tax from amounts paid to or for the
        account of any Bank (because the appropriate form was not delivered or
        was not properly executed, or because such Bank failed to notify the
        Administrative Agent of a change in circumstances which rendered the
        exemption from, or reduction of, withholding tax ineffective, or for any
        other reason) such Bank shall indemnify the Administrative Agent fully
        for all amounts paid, directly or indirectly, by the Administrative
        Agent as tax or otherwise, including penalties and interest, and
        including any taxes imposed by any jurisdiction on the amounts payable
        to the Administrative Agent under this Section, together with all costs
        and expenses (including reasonable fees of attorneys for the
        Administrative Agent (including the allocable costs of internal legal
        services and all disbursements of internal counsel)). The obligation of
        the Banks under this subsection shall survive the repayment of the
        Loans, cancellation of the Notes, cancellation or expiration of the
        Letters of Credit, any termination of this Agreement and the resignation
        or replacement of the Administrative Agent.

        SECTION 14  GENERAL.

        14.1 Waiver; Amendments. No delay on the part of either Agent or any
Bank in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Notes shall be
effective unless the same shall be in writing and signed and delivered by the
Required Banks, and then any such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No amendment, modification, waiver or consent shall (i)
increase the Commitment of any Bank, (ii) extend any scheduled date for payment
of any principal of or interest on any Loan or any fees payable hereunder or
(iii) reduce the principal amount of any Loan, the rate of interest thereon or
any fees payable hereunder, without, in each case, the consent of each Bank
directly affected thereby; and no amendment, modification, waiver or consent
shall (x) release all or substantially all of the Subsidiaries party thereto
from the Guaranty or (y) reduce the aggregate Percentage required to


                                        64
<PAGE>

effect an amendment, modification, waiver or consent without, in each case, the
consent of all Banks. No provisions of Section 13 or other provision of this
Agreement affecting an Agent in its capacity as such shall be amended, modified
or waived without the consent of such Agent. No provision of this Agreement
relating to the rights or duties of an Issuing Bank in its capacity as such
shall be amended, modified or waived without the consent of such Issuing Bank.
No provision of this Agreement affecting the Swing Line Bank in its capacity as
such shall be amended, modified or waived without the written consent of the
Swing Line Bank.

        14.2 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.

        14.3 Notices. Except as otherwise provided in Sections 2.2 and 2.3, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent and receipt
of such facsimile is confirmed; notices sent by mail shall be deemed to have
been given three Business Days after the date when sent by registered or
certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes
of Sections 2.2 and 2.3, the Administrative Agent and the Swing Line Bank shall
be entitled to rely on telephonic instructions from any person that the
Administrative Agent or the Swing Line Bank in good faith believes is an
authorized officer or employee of the Company, and the Company shall hold the
Administrative Agent, the Swing Line Bank and each other Bank harmless from any
loss, cost or expense resulting from any such reliance.

        14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Administrative Agent that the Company wishes to amend any covenant
in Section 10 to eliminate or to take into account the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Company that the Required Banks wish to amend Section 10 for such purpose),
then the Company's compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Company and the Required Banks.

        14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or


                                        65
<PAGE>

maintenance by it of any credit provided for in this Agreement.

        14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agents and the Lead Arranger
(including the reasonable fees and charges of counsel for the Agents and the
Lead Arranger and of local counsel, if any, who may be retained by said counsel)
in connection with the preparation, execution, delivery and administration of
this Agreement, the other Loan Documents and all other documents provided for
herein or delivered or to be delivered hereunder or in connection herewith
(including any amendments, supplements or waivers to any Loan Documents), and
all reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees, court costs and other legal expenses and allocated costs of staff counsel)
incurred by either Agent and each Bank in connection with the enforcement of
this Agreement, the other Loan Documents or any such other documents. In
addition, the Company agrees to pay, and to save the Agents, the Lead Arranger
and the Banks harmless from all liability for, (a) any stamp or other taxes
(excluding income taxes and franchise taxes based on net income) which may be
payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors and, if an Event of Default or Unmatured Event of Default
exists, any costs and expenses of either Agent or any Bank in connection with
any reasonable exercise by either Agent or any Bank of its rights pursuant to
Section 10.2. All obligations provided for in this Section 14.6 shall survive
repayment of the Loans, cancellation of the Notes, cancellation or expiration of
the Letters of Credit and any termination of this Agreement.

        14.7 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.

        14.8 Successors and Assigns. This Agreement shall be binding upon the
Company, the Agents and the Banks and their respective successors and assigns,
and shall inure to the benefit of the Company, the Agents and the Banks and the
successors and assigns of the Agents and the Banks.

        14.9   Assignments; Participations.

        14.9.1 Assignments. Any Bank may, with the prior written consent of the
Agents and, so long as no Unmatured Event of Default or Event of Default has
occurred and is continuing, the Company (which consents shall not be
unreasonably delayed or withheld), at any time assign and delegate to one or
more commercial banks or other Persons (any Person to whom such an assignment
and delegation is to be made being herein called an "Assignee"), all or any
fraction of such Bank's Loans and Commitment (which assignment and delegation
shall be of a constant, and not a varying, percentage of all the assigning
Bank's Loans and Commitment) in a minimum aggregate amount equal to the lesser
of (i) the amount of the assigning Bank's remaining Commitment and (ii)
$5,000,000; provided that (a) no assignment and delegation may be made


                                        66
<PAGE>

to any Person if, at the time of such assignment and delegation, the Company
would be obligated to pay any greater amount under Section 7.7 or Section 8 to
the Assignee than the Company is then obligated to pay to the assigning Bank
under such Sections (and if any assignment is made in violation of the
foregoing, the Company will not be required to pay the incremental amounts) and
(b) the Company and the Agents shall be entitled to continue to deal solely and
directly with such Bank in connection with the interests so assigned and
delegated to an Assignee until the date when all of the following conditions
shall have been met:

               (x) five Business Days (or such lesser period of time as the
        Agents and the assigning Bank shall agree) shall have passed after
        written notice of such assignment and delegation, together with payment
        instructions, addresses and related information with respect to such
        Assignee, shall have been given to the Company and the Agents by such
        assigning Bank and the Assignee,

               (y) the assigning Bank and the Assignee shall have executed and
        delivered to the Company and the Agents an assignment agreement
        substantially in the form of Exhibit D (an "Assignment Agreement"),
        together with any documents required to be delivered hereunder, which
        Assignment Agreement shall have been accepted by the Agents, and

               (z) the assigning Bank or the Assignee shall have paid the
        Administrative Agent a processing fee of $3,500.

From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after the effectiveness of any assignment
and delegation to a Person that is not currently a Bank hereunder, the Company
shall execute and deliver to the Administrative Agent (for delivery to the
Assignee) a new Note dated the effective date of such assignment. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
be null and void.

        Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).

        14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or Swing Line
Loan or any other interest of such Bank hereunder (any Person


                                        67
<PAGE>

purchasing any such participating interest being herein called a "Participant").
In the event of a sale by a Bank of a participating interest to a Participant,
(x) such Bank shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Bank had not sold such participation and shall be paid
directly to such Bank. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any of the events described in the third
sentence of Section 14.1. Each Bank agrees to incorporate the requirements of
the preceding sentence into each participation agreement which such Bank enters
into with any Participant. The Company agrees that if amounts outstanding under
this Agreement and the Notes are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or such Note; provided that such
right of setoff shall be subject to the obligation of each Participant to share
with the Banks, and the Banks agree to share with each Participant, as provided
in Section 7.6. The Company also agrees that each Participant shall be entitled
to the benefits of Section 7.7 and Section 8 as if it were a Bank (provided that
no Participant shall receive any greater compensation pursuant to Section 7.7 or
Section 8 than would have been paid to the participating Bank if no
participation had been sold).

        14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by and construed and interpreted in accordance with, the
laws of the State of Illinois applicable to contracts made and to be performed
entirely within such State. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Company and rights of the Agents and the Banks expressed herein or in any other
Loan Document shall be in addition to and not in limitation of those provided by
applicable law.

        14.11 Indemnification by the Company. In consideration of the execution
and delivery of this Agreement by the Agents and the Banks and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agents, the Lead Arranger, each Bank and each
of their respective officers, directors, employees, Affiliates and agents (each
a "Bank Party") free and harmless from and against any and all actions, causes
of action, suits, losses, liabilities, damages and expenses, including
reasonable attorneys' fees and charges, settlement costs and, without
duplication, allocated costs of staff counsel (collectively, the "Indemnified
Liabilities"), incurred by the Bank Parties or any of them as a result of, or
arising out of, or relating to (i) any tender offer, merger, purchase of stock,
purchase of assets or other similar transaction financed or proposed to be
financed in whole or in part, directly or indirectly, with the proceeds of any
of the Loans, (ii) the use, handling, release,


                                        68
<PAGE>

emission, discharge, transportation, storage, treatment or disposal of any
Hazardous Substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Nothing set
forth above shall be construed to relieve any Bank Party from any obligation it
may have under this Agreement. All obligations provided for in this Section
14.11 shall survive repayment of the Loans, cancellation of the Notes,
cancellation or expiration of the Letters of Credit and any termination of this
Agreement.

        14.12 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID TO SUCH ADDRESS AS
DETERMINED PURSUANT TO SECTION 14.3, BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

        14.13 Waiver of Jury Trial. EACH OF THE COMPANY, EACH AGENT AND EACH
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH


                                        69
<PAGE>

ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.



                                        70
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                                       REGAL-BELOIT CORPORATION


                                       By
                                        Title


                                       M&I MARSHALL & ILSLEY BANK, as
                                       Administrative Agent, Issuing Bank,
                                       Swing Line Bank and as a Bank


                                       By
                                        Title


                                       BANK OF AMERICA, N.A., as Documentation
                                       and Syndication Agent and as a Bank


                                       By
                                        Title


                                       BANK ONE, NA (Main Office Chicago),
                                       as Managing Agent and as a Bank


                                       By
                                        Title


                                       FIRSTAR BANK, N.A., as Managing Agent
                                       and as a Bank


                                       By
                                        Title



                                        71
<PAGE>

                                       THE FUJI BANK, LIMITED, as Managing Agent
                                       and as a Bank


                                       By
                                        Title


                                       FLEET NATIONAL BANK, as Co-Agent
                                       and as a Bank


                                       By
                                        Title


                                       HARRIS TRUST AND SAVINGS BANK,
                                       as Co-Agent and as a Bank


                                       By
                                        Title


                                       U.S. BANK NATIONAL ASSOCIATION,
                                       as a Bank


                                       By
                                        Title


                                       THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                       Chicago Branch, as a Bank


                                       By
                                        Title



                                        72
<PAGE>


                                       LASALLE BANK NATIONAL ASSOCIATION,
                                       as a Bank


                                       By
                                        Title


                                       NORTHERN TRUST COMPANY, as a Bank


                                       By
                                        Title


                                       WACHOVIA BANK, N.A., as a Bank


                                       By
                                        Title


                                       THE GOVERNOR AND COMPANY OF THE
                                       BANK OF IRELAND, as a Bank


                                       By
                                        Title


                                       BANCA NAZIONALE DEL LAVORO, S.P.A., -
                                       New York Branch, as a Bank


                                       By
                                        Title


                                       THE INDUSTRIAL BANK OF JAPAN, LIMITED,
                                       as a Bank


                                       By
                                        Title



                                        73
<PAGE>

                                       MICHIGAN NATIONAL BANK, as a Bank


                                       By
                                        Title


                                       THE SAKURA BANK, LIMITED, as a Bank


                                       By
                                        Title


                                       BANK HAPOALIM B.M., as a Bank


                                       By
                                        Title


                                       NATIONAL CITY BANK OF MICHIGAN/
                                       ILLINOIS, as a Bank


                                       By
                                        Title


                                       ST. FRANCIS BANK, F.S.B., as a Bank


                                       By
                                        Title



                                        74

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>NEWS RELEASE
<TEXT>


                                                                 October 2, 2000
                                                               Kenneth F. Kaplan
                                         Vice President, Chief Financial Officer
                                                                    608/364-8800
Page 1 of 2




                            REGAL-BELOIT CORPORATION
                            COMPLETES ACQUISITION OF
                           LEESON ELECTRIC CORPORATION

October 2, 2000 (Beloit, WI): Regal-Beloit Corporation (AMEX:RBC), a leading
manufacturer of mechanical and electrical motion control and power generation
products with 1999 sales of $545 million, announced today that their previously
reported acquisition of privately-owned Leeson Electric Corporation was
completed on Friday, September 29, 2000. Lesson's sales for the 12 months ended
June 30, 2000 were $175 million.

Leeson Electric was acquired for approximately $260 million in cash. The
definitive agreement provides for treating the acquisition as a purchase of
assets for tax purposes, utilizing a 338(h)(10) election under the Internal
Revenue Code. This election will provide Regal-Beloit with a net present value
of future tax benefits of an estimated $47 million. When this tax benefit is
deducted from the $260 million purchase price, the result is a 7.6 times
purchase multiple on Leeson's adjusted EBITDA of approximately $28 million for
the 12 months ended June 30, 2000. The purchase multiple paid for the Company's
acquisition of Marathon Electric in March 1997 was 7.5 times trailing 12-month
EBITDA.

Leeson Electric is a full line North American electric motor manufacturer.
Leeson's products include AC motors, DC motors, sub-fractional horsepower motors
and gearmotors, mechanical gear drives, and AC and DC electronic drives.
Leeson's products are sold worldwide to original equipment manufacturers and
distributors by a network of independent manufacturers' representatives, sales
offices and international agent distributors.

Regal-Beloit obtained financing for the Leeson acquisition and existing debt
through a new $450 million, unsecured, 5.25 year revolving loan agreement with a
banking group led by Bank of America and M&I Marshall and Ilsley Bank. The
Facility can also be used to make future acquisitions, repurchase shares of the
Company's stock under the program announced in August 2000 and for general
corporate purposes.

James L. Packard, Chairman, President, and Chief Executive Officer of
Regal-Beloit Corporation commented, "Both Regal-Beloit and Leeson Electric have
high expectations for the benefits of this acquisition for our two companies. We
can envision significant synergies throughout our organization and particularly
with our existing Marathon Electric and Lincoln motors businesses. These are the
usual and obvious areas of savings in purchasing, manufacturing operations,
cross-selling and logistics, which, when fully implemented, should generate at
least $12 to $15 million in savings annually. There is always the ramp-up
period, but we should be achieving these additional profits by 2003. We expect
no material impact

<PAGE>

                                                                 October 2, 2000
                                                               Kenneth F. Kaplan
                                         Vice President, Chief Financial Officer
                                                                    608/364-8800
Page 2 of 2


on our earnings for 2000. However, we do expect immediate accretion in 2001 in
the area of 7%-12% of Regal-Beloit earnings per share. The bigger gain, and the
one that is the hardest to put believable numbers on, is the value of being the
fastest growing, most dynamic, most customer focused Company in our business.
The combination of our Mechanical and Electrical Group companies is a powerful
force in our markets and should clearly improve our growth potential."

Regal-Beloit will be holding a conference call regarding the Leeson Electric
acquisition at 10:15 AM CDT (11:15 AM EDT) on Wednesday, October 4, 2000.
Interested parties can listen to the conference call, through the Internet, at
www.vcall.com.  V-Call asks that you access the website at least 15 minutes
early to register, download and install any necessary audio software.  Replays
will be available for 30 days at the above address.

CAUTIONARY STATEMENT
The following is a cautionary statement made under the Private Securities
Litigation Reform Act of 1995: With the exception of historical facts, the
statements contained in this news release may be forward looking statements.
Actual results may differ materially from those contemplated. Forward looking
statements involve risks and uncertainties, including but not limited to, the
following risks: 1) cyclical downturns affecting the markets for capital goods,
2) substantial increases in interest rates that impact the cost of the Company's
outstanding debt, 3) the success of Management in increasing sales and
maintaining or improving the operating margins of its businesses, 4) the
availability of or material increases in the costs of select raw materials or
parts, and 5) actions taken by competitors. Investors are directed to the
Company's documents, such as its Annual Report on Form 10-K and Form 10-Q's
filed with the Securities and Exchange Commission.




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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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