Exhibit 10.1

 

 

 

AZZ INCORPORATED

$100,000,000 6.24% Senior Notes

due March 31, 2018

 

 

NOTE PURCHASE AGREEMENT

 

 

DATED AS OF MARCH 31, 2008

 

 

 

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TABLE OF CONTENTS

 

SECTION    HEADING    PAGE SECTION 1.    AUTHORIZATION OF NOTES    1  
Section 1.1.    Description of Notes    1   Section 1.2.    Interest Rate    1
SECTION 2.    SALE AND PURCHASE OF NOTES    1   Section 2.1.    Notes    1  
Section 2.2.    Subsidiary Guaranty    2 SECTION 3.    CLOSING    2 SECTION 4.
   CONDITIONS TO CLOSING    3   Section 4.1.    Representations and Warranties
   3   Section 4.2.    Performance; No Default    3   Section 4.3.    Compliance
Certificates    3   Section 4.4.    Opinions of Counsel    4   Section 4.5.   
Purchase Permitted By Applicable Law, Etc    4   Section 4.6.    Sale of Other
Notes    4   Section 4.7.    Payment of Special Counsel Fees    4   Section 4.8.
   Private Placement Number    4   Section 4.9.    Changes in Corporate
Structure    4   Section 4.10.    Subsidiary Guaranty    4   Section 4.11.   
Funding Instructions    5   Section 4.12.    Proceedings and Documents    5
SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY    5   Section 5.1.
   Organization; Power and Authority    5   Section 5.2.    Authorization, Etc
   5   Section 5.3.    Disclosure    5   Section 5.4.    Organization and
Ownership of Shares of Subsidiaries; Affiliates    6   Section 5.5.    Financial
Statements; Material Liabilities    6   Section 5.6.    Compliance with Laws,
Other Instruments, Etc    7   Section 5.7.    Governmental Authorizations, Etc
   7   Section 5.8.    Litigation; Observance of Agreements, Statutes and Orders
   7   Section 5.9.    Taxes    7   Section 5.10.    Title to Property; Leases
   8   Section 5.11.    Licenses, Permits, Etc    8   Section 5.12.   
Compliance with ERISA    8   Section 5.13.    Private Offering by the Company   
9

 

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  Section 5.14.    Use of Proceeds; Margin Regulations    9   Section 5.15.   
Existing Indebtedness; Future Liens    9   Section 5.16.    Foreign Assets
Control Regulations, Etc    10   Section 5.17.    Status under Certain Statutes
   10   Section 5.18.    Environmental Matters    11   Section 5.19.    Notes
Rank Pari Passu    11 SECTION 6.    REPRESENTATIONS OF THE PURCHASER    11  
Section 6.1.    Purchase for Investment    11   Section 6.2.    Source of Funds
   11   Section 6.3.    Accredited Investor    13 SECTION 7.    INFORMATION AS
TO COMPANY    13   Section 7.1.    Financial and Business Information    13  
Section 7.2.    Officer’s Certificate    16   Section 7.3.    Visitation    17
SECTION 8.    PAYMENT OF THE NOTES    17   Section 8.1.    Required Prepayments
   17   Section 8.2.    Optional Prepayments with Make-Whole Amount    18  
Section 8.3.    Allocation of Partial Prepayments    18   Section 8.4.   
Maturity; Surrender, Etc.    18   Section 8.5.    Purchase of Notes    18  
Section 8.6.    Make-Whole Amount for the Notes    18   Section 8.7.    Change
in Control    20 SECTION 9.    AFFIRMATIVE COVENANTS    22   Section 9.1.   
Compliance with Law    22   Section 9.2.    Insurance    22   Section 9.3.   
Maintenance of Properties    23   Section 9.4.    Payment of Taxes and Claims   
23   Section 9.5.    Corporate Existence, Etc    23   Section 9.6.    Notes to
Rank Pari Passu    23   Section 9.7.    Additional Subsidiary Guarantors    23  
Section 9.8.    Books and Records    24   Section 9.9.    Subsidiary
Qualification    24 SECTION 10.    NEGATIVE COVENANTS    24   Section 10.1.   
Consolidated Net Worth    24   Section 10.2.    Consolidated Indebtedness to
Consolidated EBITDA    24   Section 10.3.    Fixed Charges Coverage Ratio    25
  Section 10.4.    Priority Indebtedness    25   Section 10.5.    Limitation on
Liens    25   Section 10.6.    Sales of Asset    27

 

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  Section 10.7.    Merger and Consolidation    28   Section 10.8.    Line of
Business    28   Section 10.9.    Transactions with Affiliates    29  
Section 10.10.    Terrorism Sanctions Regulations    29 SECTION 11.    EVENTS OF
DEFAULT    29 SECTION 12.    REMEDIES ON DEFAULT, ETC    31   Section 12.1.   
Acceleration    31   Section 12.2.    Other Remedies    32   Section 12.3.   
Rescission    32   Section 12.4.    No Waivers or Election of Remedies,
Expenses, Etc    32 SECTION 13.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
   33   Section 13.1.    Registration of Notes    33   Section 13.2.    Transfer
and Exchange of Notes    33   Section 13.3.    Replacement of Notes    33
SECTION 14.    PAYMENTS ON NOTES    34   Section 14.1.    Place of Payment    34
  Section 14.2.    Home Office Payment    34 SECTION 15.    EXPENSES, ETC    35
  Section 15.1.    Transaction Expenses    35   Section 15.2.    Survival    35
SECTION 16.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT   
35 SECTION 17.    AMENDMENT AND WAIVER    35   Section 17.1.    Requirements   
35   Section 17.2.    Solicitation of Holders of Notes    36   Section 17.3.   
Binding Effect, Etc    36   Section 17.4.    Notes Held by Company, Etc    36
SECTION 18.    NOTICES    37 SECTION 19.    REPRODUCTION OF DOCUMENTS    37
SECTION 20.    CONFIDENTIAL INFORMATION    37 SECTION 21.    SUBSTITUTION OF
PURCHASER    38

 

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SECTION 22.    MISCELLANEOUS    39   Section 22.1.    Successors and Assigns   
39   Section 22.2.    Payments Due on Non-Business Days    39   Section 22.3.   
Accounting Terms    39   Section 22.4.    Severability    39   Section 22.5.   
Construction    39   Section 22.6.    Counterparts    40   Section 22.7.   
Governing Law    40   Section 22.8.    Jurisdiction and Process; Waiver of Jury
Trial    40

 

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SCHEDULE A    —      INFORMATION RELATING TO PURCHASERS SCHEDULE B    —     
DEFINED TERMS SCHEDULE 4.9    —      Changes in Corporate Structure SCHEDULE 5.4
   —      Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates
SCHEDULE 5.5    —      Financial Statements SCHEDULE 5.11    —      Licenses,
Permits, Etc. SCHEDULE 5.15    —      Existing Indebtedness SCHEDULE 10.5    —  
   Existing Liens EXHIBIT 1    —      Form of 6.24% Senior Notes due March 31,
2018 EXHIBIT 2.2    —      Form of Subsidiary Guaranty EXHIBIT 4.4(a)    —     
Form of Opinion of Special Counsel to the Company EXHIBIT 4.4(b)    —      Form
of Opinion of Special Counsel to the Purchasers

 

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AZZ INCORPORATED

1300 SOUTH UNIVERSITY DRIVE, SUITE 200

FORT WORTH, TEXAS 76107

$100,000,000 6.24% Senior Notes

DUE MARCH 31, 2018

Dated as of

March 31, 2008

TO THE PURCHASERS LISTED IN

THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

AZZ INCORPORATED, a Texas corporation (the “Company”), agrees with the
Purchasers listed in the attached Schedule A (the “Purchasers”) to this Note
Purchase Agreement (this “Agreement”) as follows:

 

SECTION 1. AUTHORIZATION OF NOTES.

Section 1.1. Description of Notes. The Company will authorize the issue and sale
of $100,000,000 aggregate principal amount of its 6.24% Senior Notes due
March 31, 2018 (the “Notes”, such term to include any such notes issued in
substitution therefor pursuant to Section 13). The Notes shall be substantially
in the form set out in Exhibit 1. Certain capitalized and other terms used in
this Agreement are defined in Schedule B; and references to a “Schedule” or an
“Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement.

Section 1.2. Interest Rate. The Notes shall bear interest (computed on the basis
of a 360-day year of twelve 30-day months) on the unpaid principal thereof from
the date of issuance at their stated rate of interest payable semi-annually in
arrears on the last day of March and September in each year and at maturity
commencing on September 30, 2008, until such principal sum shall have become due
and payable (whether at maturity, upon notice of prepayment or otherwise) and
interest (so computed) on any overdue principal, interest or Make-Whole Amount
from the due date thereof (whether by acceleration or otherwise) and, during the
continuance of an Event of Default, on the unpaid balance hereof, at the Default
Rate until paid.

 

SECTION 2. SALE AND PURCHASE OF NOTES.

Section 2.1. Notes. Subject to the terms and conditions of this Agreement, the
Company will issue and sell to each Purchaser and each Purchaser will purchase
from the Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite such Purchaser’s name in Schedule A at the
purchase price of 100% of the principal amount thereof.

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The Purchasers’ obligations hereunder are several and not joint obligations and
no Purchaser shall have any liability to any Person for the performance or
non-performance of any obligation by any other Purchaser hereunder.

Section 2.2. Subsidiary Guaranty. (a) The payment by the Company of all amounts
due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be absolutely and unconditionally
guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty
Agreement dated as of even date herewith, which shall be substantially in the
form of Exhibit 2.2 attached hereto, and otherwise in accordance with the
provisions of Section 9.7 hereof (the “Subsidiary Guaranty”).

(b) The holders of the Notes agree to discharge and release any Subsidiary
Guarantor from the Subsidiary Guaranty upon the written request of the Company,
provided that (i) such Subsidiary Guarantor has been released and discharged (or
will be released and discharged concurrently with the release of such Subsidiary
Guarantor under the Subsidiary Guaranty) as an obligor and guarantor under and
in respect of the Bank Credit Agreement and the Company so certifies to the
holders of the Notes in a certificate of a Responsible Officer, (ii) at the time
of such release and discharge, the Company shall deliver a certificate of a
Responsible Officer to the holders of the Notes stating that no Default or Event
of Default exists, and (iii) if any fee or other form of consideration is given
to any holder of Indebtedness of the Company for the purpose of such release,
holders of the Notes shall receive equivalent consideration (a “Collateral
Release”).

 

SECTION 3. CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Chapman and Cutler, LLP, 111 West Monroe Street, Chicago,
Illinois 60603 at 10:00 a.m. Central time, at a closing (the “Closing”) on
March 31, 2008 or on such other Business Day thereafter on or prior to April 15,
2008 as may be agreed upon by the Company and the Purchasers. On the Closing
Date, the Company will deliver to each Purchaser the Notes to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing Date and registered in such Purchaser’s name (or in the name of
such Purchaser’s nominee), against delivery by such Purchaser to the Company or
its order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Company to Account Number 0026051-00154, at Bank of America, Dallas, Texas, ABA
Number 0260-0959-3, in the Account Name of “AZZ incorporated” If, on the Closing
Date, the Company shall fail to tender such Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall,
at such Purchaser’s election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

 

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SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1. Representations and Warranties.

(a) Representations and Warranties of the Company. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.

(b) Representations and Warranties of the Subsidiary Guarantors. The
representations and warranties of the Subsidiary Guarantors in the Subsidiary
Guaranty shall be correct when made and at the time of the Closing.

Section 4.2. Performance; No Default. The Company and each Subsidiary Guarantor
shall have performed and complied with all agreements and conditions contained
in this Agreement and the Subsidiary Guaranty required to be performed or
complied with by the Company and each such Subsidiary Guarantor prior to or at
the Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14), no Default
or Event of Default shall have occurred and be continuing. Neither the Company
nor any Subsidiary shall have entered into any transaction since November 30,
2007 that would have been prohibited by Section 10 hereof had such Sections
applied since such date.

Section 4.3. Compliance Certificates.

(a) Officer’s Certificate of the Company. The Company shall have delivered to
such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

(b) Secretary’s Certificate of the Company. The Company shall have delivered to
such Purchaser a certificate of its Secretary or Assistant Secretary, dated the
date of Closing, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and this Agreement.

(c) Officer’s Certificate of the Subsidiary Guarantors. Each Subsidiary
Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated
the Closing Date, certifying that the conditions specified in Sections 4.1(b),
4.2 and 4.9 have been fulfilled.

(d) Secretary’s Certificate of the Subsidiary Guarantors. Each Subsidiary
Guarantor shall have delivered to such Purchaser a certificate of its Secretary
or Assistant Secretary, dated the date of Closing, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Subsidiary Guaranty.

 

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Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in
form and substance satisfactory to such Purchaser, dated the Closing Date
(a) from Kelly Hart & Hallman LLP, special counsel for the Company, covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers), and (b) from Chapman and Cutler, LLP, the
Purchasers’ special counsel in connection with such transactions, substantially
in the form set forth in Exhibit 4.4(b) and covering such other matters incident
to such transactions as such Purchaser may reasonably request.

Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by such Purchaser, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.

Section 4.6. Sale of Other Notes. Contemporaneously with the Closing the Company
shall sell to each other Purchaser and each other Purchaser shall purchase the
Notes to be purchased by it at the Closing as specified in Schedule A.

Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of
Section 15.1, the Company shall have paid on or before the Closing Date, the
reasonable fees, reasonable charges and reasonable disbursements of the
Purchasers’ special counsel referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day
prior to the Closing Date.

Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.

Section 4.9. Changes in Corporate Structure. Neither the Company nor any
Subsidiary Guarantor shall have changed its jurisdiction of organization or,
except as reflected in Schedule 4.9, been a party to any merger or
consolidation, or shall have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been duly
authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor and such Purchaser shall have received a true, correct and
complete copy thereof.

 

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Section 4.11. Funding Instructions. At least three Business Days prior to the
date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company confirming the
information specified in Section 3 including (i) the name and address of the
transferee bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Notes is to be deposited.

Section 4.12. Proceedings and Documents. All corporate and other organizational
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and its special counsel, and such Purchaser and
its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as such Purchaser or such special
counsel may reasonably request.

 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

Section 5.1. Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has the
corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3. Disclosure. The documents filed by the Company with the Securities
and Exchange Commission (the “Public Filings”) fairly describe, in all material
respects, the general nature of the business and principal properties of the
Company and its Subsidiaries. This Agreement, the Public Filings, the documents,
certificates or other writings delivered to the Purchasers by or on behalf of
the Company in connection with the transactions contemplated hereby and the
financial statements referred to in Section 5.5, in each case, delivered (or
deemed to be delivered by reference to the Public Filings) to the Purchasers
prior to March 14, 2008 being referred to, collectively, as the “Disclosure
Documents”), taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which they were made.

 

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Except as disclosed in the Disclosure Documents, since February 28, 2007, there
has been no change in the financial condition, operations, business, properties
or prospects of the Company or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Disclosure Documents.

Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists
(i) of the Company’s Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the percentage of shares
of each class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary, (ii) of the Company’s Affiliates,
other than Subsidiaries, and (iii) of the Company’s directors and senior
officers.

(b) All of the outstanding shares of capital stock or similar equity interests
of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by the Company or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule 5.4).

(c) Each Subsidiary identified in Schedule 5.4 (other than Electrical Power
Systems, Inc., a Missouri corporation (“Electrical Power Systems”)) is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.

(d) No Subsidiary is a party to, or otherwise subject to any legal, regulatory,
contractual or other restriction (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law or
similar statutes) restricting the ability of such Subsidiary to pay dividends
out of profits or make any other similar distributions of profits to the Company
or any of its Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.

Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal

 

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year-end adjustments). The Company and its Subsidiaries do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.

Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.

Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b) Neither the Company nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal,

 

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state or other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been finally determined
(whether by reason of completed audits or the statute of limitations having run)
for all fiscal years up to and including the fiscal year ended February 28,
2003.

Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have
good and sufficient title to their respective properties that individually or in
the aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement. All leases that individually or
in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.

Section 5.11. Licenses, Permits, Etc. (a) The Company and its Subsidiaries own
or possess all licenses, permits, franchises, authorizations, patents,
copyrights, proprietary software, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others.

(b) To the best knowledge of the Company, no product of the Company or any of
its Subsidiaries infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person.

(c) To the best knowledge of the Company, there is no Material violation by any
Person of any right of the Company or any of its Subsidiaries with respect to
any patent, copyright, proprietary software, service mark, trademark, trade name
or other right owned or used by the Company or any of its Subsidiaries.

Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA, other than
such liabilities or Liens as would not be individually or in the aggregate
Material.

(b) The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term “benefit liabilities” has the
meaning specified in section 4001 of ERISA and the terms “current value” and
“present value” have the meaning specified in section 3 of ERISA.

 

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(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

(d) The expected postretirement benefit obligation (determined as of the last
day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.

(e) The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company to each Purchaser in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by such Purchaser.

Section 5.13. Private Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Notes or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any person other than the Purchasers and
not more than 30 other Institutional Investors, each of which has been offered
the Notes at a private sale for investment. Neither the Company nor anyone
acting on its behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of Section 5 of
the Securities Act or to the registration requirements of any securities or blue
sky laws of any applicable jurisdiction.

Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Notes to finance an acquisition and for general
corporate purposes. No part of the proceeds from the sale of the Notes hereunder
will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 5% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 5% of the value of such
assets. As used in this Section, the terms “margin stock” and “purpose of buying
or carrying” shall have the meanings assigned to them in said Regulation U.

Section 5.15. Existing Indebtedness; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of February 29, 2008
(including a description of the obligors

 

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and obligees, principal amount outstanding and collateral therefor, if any, and
Guarantee thereof, if any), since which date there has been no Material change
in the amounts, interest rates, sinking funds, installment payments or
maturities of the Indebtedness of the Company or its Subsidiaries. Neither the
Company nor any Subsidiary is in default and no waiver of default is currently
in effect, in the payment of any principal or interest on any Indebtedness of
the Company or such Subsidiary and no event or condition exists with respect to
any Indebtedness of the Company or any Subsidiary that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to
cause such Indebtedness to become due and payable before its stated maturity or
before its regularly scheduled dates of payment.

(b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary
has agreed or consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.5.

(c) Neither the Company nor any Subsidiary is a party to, or otherwise subject
to any provision contained in, any instrument evidencing Indebtedness of the
Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of the Company, except as specifically indicated in
Schedule 5.15.

Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

(b) Neither the Company nor any Subsidiary (i) is a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of the
Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(ii) engages in any dealings or transactions with any such Person. The Company
and its Subsidiaries are in compliance, in all material respects, with the USA
Patriot Act.

(c) No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the Company.

Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 2005, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.

 

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Section 5.18. Environmental Matters. (a) Neither the Company nor any Subsidiary
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.

(b) Neither the Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

(c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on
real properties now or formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and

(d) All buildings on all real properties now owned, leased or operated by the
Company or any Subsidiary are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a
Material Adverse Effect.

Section 5.19. Notes Rank Pari Passu. The obligations of the Company under this
Agreement and the Notes rank pari passu in right of payment with all other
senior unsecured Indebtedness (actual or contingent) of the Company, including,
without limitation, all senior unsecured Indebtedness of the Company described
in Schedule 5.15 hereto.

 

SECTION 6. REPRESENTATIONS OF THE PURCHASER.

Section 6.1. Purchase for Investment. Each Purchaser severally represents that
it is purchasing the Notes for its own account or for one or more separate
accounts maintained by it or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser’s or such pension or trust funds’ property shall
at all times be within such Purchaser’s or such pension or trust funds’ control.
Each Purchaser understands that the Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes.

Section 6.2. Source of Funds. Each Purchaser severally represents that at least
one of the following statements is an accurate representation as to each source
of funds (a “Source”) to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by such Purchaser hereunder:

(a) the Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction Exemption

 

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(“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the “NAIC Annual Statement”)) for the
general account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans maintained
by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of separate account
liabilities) plus surplus as set forth in the NAIC Annual Statement filed with
such Purchaser’s state of domicile; or

(b) the Source is a separate account that is maintained solely in connection
with such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate account (or to any participant or beneficiary
of such plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

(d) the Source constitutes assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional
asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan’s assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, as of the last day of its most recent calendar quarter, the QPAM
does not own a 10% or more interest in the Company and no person controlling or
controlled by the QPAM (applying the definition of “control” in Section V(e) of
the QPAM Exemption) owns a 20% or more interest in the Company (or less than 20%
but greater than 10%, if such person exercises control over the management or
policies of the Company by reason of its ownership interest) and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (d); or

(e) the Source constitutes assets of a “plan(s)” (within the meaning of Section
IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager”
or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions

 

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of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the
INHAM nor a person controlling or controlled by the INHAM (applying the
definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5% or
more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or

(h) the Source does not include assets of any employee benefit plan, other than
a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

Section 6.3. Accredited Investor. Each Purchaser represents that it is an
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act acting for its own account (and not for
the account of others) or as a fiduciary or agent for others (which others are
also “accredited investors”). Each Purchaser further represents that such
Purchaser has had the opportunity to ask questions of the Company and received
answers concerning the terms and conditions of the sale of the Notes.

 

SECTION 7. INFORMATION AS TO COMPANY.

Section 7.1. Financial and Business Information. The Company shall deliver to
each holder of Notes that is an Institutional Investor:

(a) Quarterly Statements — within 60 days (or such shorter period as is 15 days
greater than the period applicable to the filing of the Company’s Quarterly
Report on Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether the
Company is subject to the filing requirements thereof) after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with
such quarter,

 

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setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company’s Form 10-Q prepared in compliance with the requirements
therefor and filed with the SEC shall be deemed to satisfy the requirements of
this Section 7.1(a), provided, further, that the Company shall be deemed to have
made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q
available on “EDGAR” and on its home page on the worldwide web (at the date of
this Agreement located at: http//www.azz.com) and shall have given each
Purchaser prior notice of such availability on EDGAR and on its home page in
connection with each delivery (such availability and notice thereof being
referred to as “Electronic Delivery”);

(b) Annual Statements — within 105 days (or such shorter period as is 15 days
greater than the period applicable to the filing of the Company’s Annual Report
on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the Company is
subject to the filing requirements thereof) after the end of each fiscal year of
the Company, duplicate copies of

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

(ii) consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by

(A) an opinion thereon of independent public accountants of recognized national
standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been
prepared in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and

(B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood
that such accountants shall not be liable, directly or indirectly, for any

 

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failure to obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did not make such an
audit),

provided that the delivery within the time period specified above of the
Company’s Form 10-K for such fiscal year (together with the Company’s annual
report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and filed
with the SEC, together with the accountant’s certificate described in clause (B)
above (the “Accountants’ Certificate”), shall be deemed to satisfy the
requirements of this Section 7.1(b), provided, further, that the Company shall
be deemed to have made such delivery of such Form 10-K if it shall have timely
made Electronic Delivery thereof, in which event the Company shall separately
deliver, concurrently with such Electronic Delivery, the Accountants’
Certificate;

(c) SEC and Other Reports — promptly upon their becoming available, one copy of
(i) each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to its principal lending banks as a whole (excluding
information sent to such banks in the ordinary course of administration of a
bank facility, such as information relating to pricing and borrowing
availability) or to its public securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except
as expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the SEC and of all press
releases and other statements made available generally by the Company or any
Subsidiary to the public concerning developments that are Material;

(d) Notice of Default or Event of Default — promptly, and in any event within
five days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes to take
with respect thereto;

(e) ERISA Matters — promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:

(i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or

 

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(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multi-employer
Plan that such action has been taken by the PBGC with respect to such
Multi-employer Plan; or

(iii) any event, transaction or condition that could result in the incurrence of
any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;

(f) Notices from Governmental Authority — promptly, and in any event within 30
days of receipt thereof, copies of any notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect; and

(g) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries (including, but
without limitation, actual copies of the Company’s Form 10-Q and Form 10-K) or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes.

Section 7.2. Officer’s Certificate. Each set of financial statements delivered
to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a certificate of a Senior Financial Officer setting forth (which,
in the case of Electronic Delivery of any such financial statements, shall be by
separate concurrent delivery of such certificate to each holder of Notes):

(a) Covenant Compliance — the information (including detailed calculations where
applicable) required in order to establish whether the Company was in compliance
with the requirements of Section 10.1 through Section 10.7, inclusive, during
the quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and

(b) Event of Default — a statement that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made, under his
or her

 

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supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.

Section 7.3. Visitation. The Company shall permit the representatives of each
holder of Notes that is an Institutional Investor:

(a) No Default — if no Default or Event of Default then exists, at the expense
of such holder and upon reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the Company’s officers, and
(with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and

(b) Default — if a Default or Event of Default then exists, at the expense of
the Company to visit and inspect any of the offices or properties of the Company
or any Subsidiary, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be requested.

 

SECTION 8. PAYMENT OF THE NOTES.

Section 8.1. Required Prepayments. (a) On March 31, 2012 and on each March 31
thereafter to and including March 31, 2017, the Company will prepay $14,285,714
principal amount (or such lesser principal amount as shall then be outstanding)
of the Notes at par and without payment of the Make-Whole Amount or any premium.
The entire unpaid principal amount of the Notes shall become due and payable on
March 31, 2018.

(b) Upon any partial prepayment of the Notes pursuant to Section 8.2 or
Section 8.7, the principal amount of each required prepayment of the Notes
becoming due under this Section 8.1 on and after the date of such prepayment or
purchase shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such prepayment or
purchase.

 

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Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at
its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, the Notes, in an amount not less than 10% of the aggregate
principal amount of the Notes then outstanding in the case of a partial
prepayment (or such lesser amount as shall be required to effect a partial
prepayment resulting from an offer of prepayment pursuant to Section 10.6), at
100% of the principal amount so prepaid, together with interest accrued thereon
to the date of such prepayment, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date (which shall
be a Business Day), the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.

Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes, the principal amount of the Notes to be prepaid shall
be allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.

Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes
pursuant to this Section 8, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such prepayment
(which shall be a Business Day), together with interest on such principal amount
accrued to such date and the applicable Make-Whole Amount. From and after such
date, unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5. Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment or prepayment of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

Section 8.6. Make-Whole Amount for the Notes. The term “Make-Whole Amount” means
with respect to any Note an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note, minus the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings with respect to the Called Principal of such Note:

 

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“Called Principal” means, the principal of any Note that is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, the amount obtained by discounting all Remaining
Scheduled Payments from their respective scheduled due dates to the Settlement
Date with respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on the same periodic basis
as that on which interest on such Note is payable) equal to the Reinvestment
Yield.

“Reinvestment Yield” means, 0.50% plus the yield to maturity calculated by using
(i) the yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date on screen “PX-1” on the Bloomberg
Financial Market Service (or such other information service as may replace
Bloomberg) for actively traded U.S. Treasury securities having a maturity equal
to the Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant Maturity
Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
In either case, the yield will be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly on a straight line
basis between (1) the actively traded U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.

“Remaining Average Life” means, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date and the
scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date if no payment of
such Called Principal were made prior to its scheduled due date, provided that
if such Settlement Date is not a date on which interest payments are due to be
made under the terms of such Note, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date pursuant to
Section 8.2 or 12.1.

 

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“Settlement Date” means, the date on which such Called Principal is to be
prepaid pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.

Section 8.7. Change in Control. (a) Notice of Change in Control or Control
Event. The Company will, within 15 Business Days after any Responsible Officer
has knowledge of the occurrence of any Change in Control or Control Event, give
written notice of such Change in Control or Control Event to each holder of
Notes unless notice in respect of such Change in Control (or the Change in
Control contemplated by such Control Event) shall have been given pursuant to
subparagraph (b) of this Section 8.7. If a Change in Control has occurred, such
notice shall contain and constitute an offer to prepay Notes as described in
subparagraph (c) of this Section 8.7 and shall be accompanied by the certificate
described in subparagraph (g) of this Section 8.7.

(b) Condition to Company Action. The Company will not take any action that
consummates or finalizes a Change in Control unless (i) at least 15 Business
Days prior to such action it shall have given to each holder of Notes written
notice containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section 8.7, accompanied by the certificate described
in subparagraph (g) of this Section 8.7, and (ii) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
Section 8.7.

(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.7 shall be an offer to prepay, in
accordance with and subject to this Section 8.7, all, but not less than all, the
Notes held by each holder (in this case only, “holder” in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the “Proposed
Prepayment Date”). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.7, such date shall be
not less than 20 days and not more than 30 days after the date of such offer (if
the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 20th day after the date of such offer).

(d) Acceptance; Rejection. A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.7 by causing a notice of such acceptance or rejection
to be delivered to the Company at least 5 Business Days prior to the Proposed
Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay
made pursuant to this Section 8.7 shall be deemed to constitute a rejection of
such offer by such holder.

(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Prepayment Date except as provided in subparagraph
(f) of this Section 8.7.

(f) Deferral Pending Change in Control. The obligation of the Company to prepay
Notes pursuant to the offers required by subparagraph (b) and accepted in
accordance with subparagraph (d) of this Section 8.7 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such

 

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Change in Control does not occur on the Proposed Prepayment Date in respect
thereof, the prepayment shall be deferred until and shall be made on the date on
which such Change in Control occurs. The Company shall keep each holder of Notes
reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the prepayment are
expected to occur, and (iii) any determination by the Company that efforts to
effect such Change in Control have ceased or been abandoned (in which case the
offers and acceptances made pursuant to this Section 8.7 in respect of such
Change in Control shall be deemed rescinded).

(g) Officer’s Certificate. Each offer to prepay the Notes pursuant to this
Section 8.7 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.7; (iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be prepaid, accrued
to the Proposed Prepayment Date; (v) that the conditions of this Section 8.7
have been fulfilled; and (vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.

(h) Effect on Required Payments. The amount of each payment of the principal of
the Notes made pursuant to this Section 8.7 shall be applied against and reduce
each of the then remaining principal payments due pursuant to Section 8.7 by a
percentage equal to the aggregate principal amount of the Notes so paid divided
by the aggregate principal amount of the Notes outstanding immediately prior to
such payment.

(i) “Change in Control” Defined. “Change in Control” means, with respect to any
Person, an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of 35% or more of
the equity securities of such Person entitled to vote for members of the board
of directors or equivalent governing body of such Person on a fully-diluted
basis (and taking into account all such securities that such person or group has
the right to acquire pursuant to any option right); or

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of such Person cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other

 

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equivalent governing body was approved by individuals referred to in clauses
(i) and (ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of
proxies or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors).

(j) “Control Event” Defined. “Control Event” means:

(i) the execution by the Company or any of its Subsidiaries or Affiliates of any
agreement or letter of intent with respect to any proposed transaction or event
or series of transactions or events which, individually or in the aggregate, may
reasonably be expected to result in a Change in Control,

(ii) the execution of any written agreement which, when fully performed by the
parties thereto, would result in a Change in Control, or

(iii) the making of any written offer by any person (as such term is used in
section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date of the Closing) to
the holders of the common stock of the Company, which offer, if accepted by the
requisite number of holders, would result in a Change in Control.

 

SECTION 9. AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 9.1. Compliance with Law. Without limiting Section 10.10, the Company
will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.

 

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Section 9.3. Maintenance of Properties. The Company will, and will cause each of
its Subsidiaries to, maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times, provided that this Section
shall not prevent the Company or any Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each
of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent the same have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have
or might become a Lien on properties or assets of the Company or any Subsidiary,
provided that neither the Company nor any Subsidiary need pay any such tax,
assessment, charge, levy or claim if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such taxes,
assessments, charges, levies and claims in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

Section 9.5. Corporate Existence, Etc. Subject to Section 10.6, the Company will
at all times preserve and keep in full force and effect its corporate existence.
Subject to Sections 10.6 and 10.7, the Company will at all times preserve and
keep in full force and effect the corporate existence of each of its
Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.

Section 9.6. Notes to Rank Pari Passu. The Notes and all other obligations under
this Agreement of the Company are and at all times shall remain direct and
unsecured obligations of the Company ranking pari passu with all Indebtedness
outstanding under the Bank Credit Agreement and all other present and future
unsecured Indebtedness (actual or contingent) of the Company which is not
expressed to be subordinate or junior in rank to any other unsecured
Indebtedness of the Company.

Section 9.7. Additional Subsidiary Guarantors. The Company will cause any
Subsidiary which is required by the terms of the Bank Credit Agreement to become
a party to, or otherwise guarantee, Indebtedness in respect of the Bank Credit
Agreement, to enter into the Subsidiary Guaranty and deliver to each of the
holders of the Notes (concurrently with the incurrence of any such obligation
pursuant to the Bank Credit Agreement) the following items:

(a) a joinder agreement in respect of the Subsidiary Guaranty;

 

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(b) a certificate signed by an authorized Responsible Officer of the Company
making representations and warranties to the effect of those contained in
Sections 5.4, 5.6 and 5.7, with respect to such Subsidiary and the Subsidiary
Guaranty, as applicable; and

(c) an opinion of counsel (who may be in-house counsel for the Company)
addressed to each of the holders of the Notes satisfactory to the Required
Holders, to the effect that the Subsidiary Guaranty by such Person has been duly
authorized, executed and delivered and that the Subsidiary Guaranty constitutes
the legal, valid and binding contract and agreement of such Person enforceable
in accordance with its terms, except as an enforcement of such terms may be
limited by bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles.

Section 9.8. Books and Records. The Company will, and will cause each of its
Subsidiaries to, maintain proper books of record and account in conformity with
GAAP and all applicable requirements of any Governmental Authority having legal
or regulatory jurisdiction over the Company or such Subsidiary, as the case may
be.

Section 9.9. Subsidiary Qualification. The Company will cause Electrical Power
Systems to have its charter reinstated in the State of Missouri and be in good
standing in the States of Missouri and Oklahoma within 120 days after the date
hereof. The Company shall provide evidence satisfactory to Chapman and Cutler
LLP as counsel to the Purchasers of the foregoing.

 

SECTION 10. NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 10.1. Consolidated Net Worth. The Company will not at any time permit
Consolidated Net Worth to be less than the sum of (a) $116,926,600, plus (b) 50%
of Consolidated Net Income (but only if a positive number) for each fiscal
quarter beginning with the fiscal quarter ending after February 29, 2008, plus
(c) the net proceeds from the issuance by the Company or any Subsidiary of
Equity Interests after February 29, 2008.

Section 10.2. Consolidated Indebtedness to Consolidated EBITDA. The Company will
not permit, at the end of any fiscal quarter, the ratio of Consolidated
Indebtedness to Consolidated EBITDA (Consolidated EBITDA to be calculated as at
the end of each fiscal quarter for each Rolling Period then ended) to exceed
3.25 to 1.00.

 

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Section 10.3. Fixed Charges Coverage Ratio. The Company will not permit the
ratio of Consolidated EBITDAR to Consolidated Fixed Charges for each Rolling
Period (calculated as at the end of each fiscal quarter for the Rolling Period
then ended) to be less than 2.00 to 1.00.

Section 10.4. Priority Indebtedness. The Company will not at any time permit the
aggregate amount of all Priority Indebtedness to exceed 10% of Consolidated Net
Worth (Consolidated Net Worth to be determined as of the end of the then most
recently ended fiscal quarter of the Company).

Section 10.5. Limitation on Liens. The Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or permit
to exist (upon the happening of a contingency or otherwise) any Lien on or with
respect to any property or asset (including, without limitation, any document or
instrument in respect of goods or accounts receivable) of the Company or any
such Subsidiary, whether now owned or held or hereafter acquired, or any income
or profits therefrom, or assign or otherwise convey any right to receive income
or profits (unless it makes, or causes to be made, effective provision whereby
the Notes will be equally and ratably secured with any and all other obligations
thereby secured, such security to be pursuant to an agreement reasonably
satisfactory to the Required Holders and, in any such case, the Notes shall have
the benefit, to the fullest extent that, and with such priority as, the holders
of the Notes may be entitled under applicable law, of an equitable Lien on such
property), except:

(a) Liens for taxes, assessments or other governmental charges that are not yet
due and payable or the payment of which is not at the time required by
Section 9.4;

(b) any attachment or judgment Lien, unless the judgment it secures shall not,
within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days
after the expiration of any such stay;

(c) Liens incidental to the conduct of business or the ownership of properties
and assets (including landlords’, carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar Liens for sums not yet due and payable) and
Liens to secure the performance of bids, tenders, leases, or trade contracts, or
to secure statutory obligations (including obligations under workers
compensation, unemployment insurance and other social security legislation),
surety or appeal bonds or other Liens incurred in the ordinary course of
business and not in connection with the borrowing of money;

(d) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to the ownership of property or assets or the ordinary conduct of the business
of the Company or any of its Subsidiaries, or Liens incidental to minor survey
exceptions and the like, provided that such Liens do not, in the aggregate,
materially detract from the value of such property;

(e) Liens securing Indebtedness of a Subsidiary to the Company or to a
Subsidiary;

 

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(f) Liens existing as of the Closing Date and reflected in Schedule 10.5;

(g) Liens incurred after the Closing Date given to secure the payment of the
purchase price incurred in connection with the acquisition, construction or
improvement of property (other than accounts receivable or inventory) useful and
intended to be used in carrying on the business of the Company or a Subsidiary,
including Liens existing on such property at the time of acquisition or
construction thereof or Liens incurred within 365 days of such acquisition or
completion of such construction or improvement, provided that (i) the Lien shall
attach solely to the property acquired, purchased, constructed or improved;
(ii) at the time of acquisition, construction or improvement of such property
(or, in the case of any Lien incurred within three hundred sixty-five (365) days
of such acquisition or completion of such construction or improvement, at the
time of the incurrence of the Indebtedness secured by such Lien), the aggregate
amount remaining unpaid on all Indebtedness secured by Liens on such property,
whether or not assumed by the Company or a Subsidiary, shall not exceed the
lesser of (y) the cost of such acquisition, construction or improvement or
(z) the Fair Market Value of such property (as determined in good faith by one
or more officers of the Company to whom authority to enter into the transaction
has been delegated by the board of directors of the Company); and (iii) at the
time of such incurrence and after giving effect thereto, no Default or Event of
Default would exist;

(h) any Lien existing on property of a Person immediately prior to its being
consolidated with or merged into the Company or a Subsidiary or its becoming a
Subsidiary, or any Lien existing on any property acquired by the Company or any
Subsidiary at the time such property is so acquired (whether or not the
Indebtedness secured thereby shall have been assumed), provided that (i) no such
Lien shall have been created or assumed in contemplation of such consolidation
or merger or such Person’s becoming a Subsidiary or such acquisition of
property, (ii) each such Lien shall extend solely to the item or items of
property so acquired and, if required by the terms of the instrument originally
creating such Lien, other property which is an improvement to or is acquired for
specific use in connection with such acquired property, and (iii) at the time of
such incurrence and after giving effect thereto, no Default or Event of Default
would exist;

(i) any extensions, renewals or replacements of any Lien permitted by the
preceding subparagraphs (f), (g) and (h) of this Section 10.5, provided that
(i) no additional property shall be encumbered by such Liens, (ii) the unpaid
principal amount of the Indebtedness or other obligations secured thereby shall
not be increased on or after the date of any extension, renewal or replacement,
and (iii) at such time and immediately after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing; and

(j) Liens securing Priority Indebtedness of the Company or any Subsidiary,
provided that the aggregate principal amount of any such Priority Indebtedness
shall be permitted by Section 10.4, and, provided further that, no such Liens
may secure any obligations under the Bank Credit Agreement.

 

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Section 10.6. Sales of Assets. The Company will not, and will not permit any
Subsidiary to, sell, lease or otherwise dispose of any substantial part (as
defined below) of the assets of the Company and its Subsidiaries; provided,
however, that the Company or any Subsidiary may sell, lease or otherwise dispose
of assets constituting a substantial part of the assets of the Company and its
Subsidiaries if such assets are sold in an arms length transaction and, at such
time and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing and an amount equal to the net proceeds received from
such sale, lease or other disposition (but only with respect to that portion of
such assets that exceeds the definition of “substantial part” set forth below)
shall be used within 365 days of such sale, lease or disposition, in any
combination:

(1) to acquire productive assets used or useful in carrying on the business of
the Company and its Subsidiaries and having a value at least equal to the value
of such assets sold, leased or otherwise disposed of; and/or

(2) to prepay or retire Senior Indebtedness of the Company and/or its
Subsidiaries, provided that (i) the Company shall offer to prepay each
outstanding Note in a principal amount which equals the Ratable Portion for such
Note, and (ii) any such prepayment of the Notes shall be made at par, together
with accrued interest thereon to the date of such prepayment, but without the
payment of the Make-Whole Amount. Any offer of prepayment of the Notes pursuant
to this Section 10.6 shall be given to each holder of the Notes by written
notice that shall be delivered not less than fifteen (15) days and not more than
sixty (60) days prior to the proposed prepayment date. Each such notice shall
state that it is given pursuant to this Section and that the offer set forth in
such notice must be accepted by such holder in writing and shall also set forth
(i) the prepayment date, (ii) a description of the circumstances which give rise
to the proposed prepayment and (iii) a calculation of the Ratable Portion for
such holder’s Notes. Each holder of the Notes which desires to have its Notes
prepaid shall notify the Company in writing delivered not less than five
(5) Business Days prior to the proposed prepayment date of its acceptance of
such offer of prepayment. Prepayment of Notes pursuant to this Section 10.6
shall be made in accordance with Section 8.2 (but without payment of the
Make-Whole Amount).

As used in this Section 10.6, a sale, lease or other disposition of assets shall
be deemed to be a “substantial part” of the assets of the Company and its
Subsidiaries if the book value of such assets, when added to the book value of
all other assets sold, leased or otherwise disposed of by the Company and its
Subsidiaries during the period of 12 consecutive months ending on the date of
such sale, lease or other disposition, exceeds 10% of the book value of
Consolidated Total Assets, determined as of the end of the fiscal quarter
immediately preceding such sale, lease or other disposition; provided that there
shall be excluded from any determination of a “substantial part” any (i) sale or
disposition of assets in the ordinary course of business of the Company and its
Subsidiaries, (ii) any transfer of assets from the Company to any Wholly-Owned
Subsidiary or from any Subsidiary to the Company or a Wholly-Owned Subsidiary
and (iii) any sale or transfer of property acquired by the Company or any
Subsidiary after the date of this Agreement to any Person within 365 days
following the acquisition or construction of such property by the Company or any
Subsidiary if the Company or a Subsidiary shall concurrently with such sale or
transfer, lease such property, as lessee.

 

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Section 10.7. Merger and Consolidation. The Company will not, and will not
permit any of its Subsidiaries to, consolidate with or merge with any other
Person or convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to any Person; provided that:

(1) any Subsidiary of the Company may (x) consolidate with or merge with, or
convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to, (i) the Company or a Subsidiary so
long as in any merger or consolidation involving the Company, the Company shall
be the surviving or continuing corporation or (ii) any other Person so long as
the survivor is the Subsidiary, or (y) convey, transfer or lease all of its
assets in compliance with the provisions of Section 10.6; and

(2) the foregoing restriction does not apply to the consolidation or merger of
the Company with, or the conveyance, transfer or lease of substantially all of
the assets of the Company in a single transaction or series of transactions to,
any Person so long as:

(a) the successor formed by such consolidation or the survivor of such merger or
the Person that acquires by conveyance, transfer or lease substantially all of
the assets of the Company as an entirety, as the case may be (the “Successor
Corporation”), shall be a solvent entity organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia;

(b) if the Company is not the Successor Corporation, such Successor Corporation
shall have executed and delivered to each holder of Notes its assumption of the
due and punctual performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and instruments as
shall be reasonably satisfactory to the Required Holders), and the Successor
Corporation shall have caused to be delivered to each holder of Notes (A) an
opinion of independent counsel reasonable satisfactory to the Required Holders,
to the effect that all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and (B) an acknowledgment from each
Subsidiary Guarantor that the Subsidiary Guaranty continues in full force and
effect; and

(c) at such time and immediately after giving effect to such transaction, no
Default or Event of Default would exist (it being agreed that for purposes of
determining compliance with Section 10.2, such transaction shall be treated on a
pro forma basis for the relevant period as having been consummated as of the
last day of the immediately preceding fiscal quarter).

Section 10.8. Line of Business. The Company will not and will not permit any
Subsidiary to engage in any business if, as a result, the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, would then
be engaged would be substantially changed from the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement as described in the Public Filings.

 

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Section 10.9. Transactions with Affiliates. The Company will not and will not
permit any Subsidiary to enter into directly or indirectly any Material
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except in the ordinary course and upon fair and reasonable
terms that are not materially less favorable to the Company or such Subsidiary,
taken as a whole, than would be obtainable in a comparable arm’s-length
transaction with a Person not an Affiliate.

Section 10.10. Terrorism Sanctions Regulations. The Company will not and will
not permit any Subsidiary to (a) become a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage in any
dealings or transactions with any such Person.

 

SECTION 11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

(a) the Company defaults in the payment of any principal or Make-Whole Amount,
if any, on any Note when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise; or

(b) the Company defaults in the payment of any interest on any Note for more
than five Business Days after the same becomes due and payable; or

(c) the Company defaults in the performance of or compliance with any term
contained in Section 7.1(d), Section 10 or any Subsidiary Guarantor defaults in
the performance of or compliance with any term of the Subsidiary Guaranty beyond
any period of grace or cure period provided with respect thereto; or

(d) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such default
or (ii) the Company receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a “notice of default” and to
refer specifically to this paragraph (d) of Section 11); or

(e) any Subsidiary Guaranty ceases to be a legally valid, binding and
enforceable obligation or contract of a Subsidiary Guarantor (other than upon a
release of any Subsidiary Guarantor from a Subsidiary Guaranty in accordance
with the terms of Section 2.2(b) hereof), or any Subsidiary Guarantor or any
party by, through or on account of any such Person, challenges the validity,
binding nature or enforceability of any such Subsidiary Guaranty; or

 

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(f) any representation or warranty made in writing by or on behalf of the
Company or Subsidiary Guarantor in this Agreement or any Subsidiary Guaranty or
by any officer of the Company or any Subsidiary Guarantor in any writing
furnished in connection with the transactions contemplated hereby or by any
Subsidiary Guaranty proves to have been false or incorrect in any material
respect on the date as of which made; or

(g) (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $2,500,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least $2,500,000
or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (x) the Company or any Subsidiary has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $2,500,000, or (y) one or more Persons have the
right to require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or

(h) the Company or any Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or

(i) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Subsidiaries, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, any of its Subsidiaries or any
Subsidiary Guarantor, or any such petition shall be filed against the Company,
any of its Subsidiaries or any Subsidiary Guarantor and such petition shall not
be dismissed within 60 days; or

 

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(j) a final judgment or judgments for the payment of money aggregating in excess
of $2,500,000 are rendered against one or more of the Company and its
Subsidiaries and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or

(k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under Section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under Section 4042 of ERISA to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of
Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $2,500,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that could increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect.

As used in Section 11(k), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

 

SECTION 12. REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration . (a) If an Event of Default with respect to the
Company described in paragraph (h) or (i) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (h) or described in clause (vi) of
paragraph (h) by virtue of the fact that such clause encompasses clause (i) of
paragraph (h)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, any holder or
holders of more than 50% in aggregate principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.

 

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(c) If any Event of Default described in paragraph (a) or (b) of Section 11 has
occurred and is continuing with respect to any Notes, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at any time,
at its or their option, by notice or notices to the Company, declare all the
Notes held by such holder or holders to be immediately due and payable.

Upon any Note’s becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred
and is continuing, and irrespective of whether any Notes have become or have
been declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights of
such holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.

Section 12.3. Rescission. At any time after the Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the holders of not less
than 51% in aggregate principal amount of the Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) neither the Company nor any other Person shall have paid any amounts
which have become due solely by reason of such declaration, (c) all Events of
Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (d) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to any Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No

 

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right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.

 

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 13.1. Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the
Company at the address and to the attention of the designated officer (all as
specified in Section 18(iii)), for registration of transfer or exchange (and in
the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of the Note originally
issued hereunder. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2, provided, that in lieu thereof such holder may (in reliance upon
information provided by the Company, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by any holder of any Note
will not constitute a non-exempt prohibited transaction under section 406(a) of
ERISA.

Section 13.3. Replacement of Notes. Upon receipt by the Company at the address
and to the attention of the designated officer (all as specified in
Section 18(iv)) of evidence reasonably

 

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satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and

(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver not more than five
Business Days following satisfaction of such conditions, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.

 

SECTION 14. PAYMENTS ON NOTES.

Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal,
Make-Whole Amount and interest becoming due and payable on the Notes shall be
made in New York, New York at the principal office of Banc of America, N.A. in
such jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of payment
shall be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

Section 14.2. Home Office Payment. So long as any Purchaser or such Purchaser’s
nominee shall be the holder of any Note, and notwithstanding anything contained
in Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount and interest by the
method and at the address specified for such purpose for such Purchaser on
Schedule A hereto or by such other method or at such other address as such
Purchaser shall have from time to time specified to the Company in writing for
such purpose, without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note or such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal
executive office or at the place of payment most recently designated by the
Company pursuant to Section 14.1. Prior to any sale or other disposition of any
Note held by any Purchaser or such Person’s nominee, such Person will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note.

 

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SECTION 15. EXPENSES, ETC.

Section 15.1. Transaction Expenses. Whether or not the transactions contemplated
hereby are consummated, the Company will pay all costs and expenses (including
reasonable attorneys’ fees of a special counsel and, if reasonably required by
the Required Holders, local or other counsel) incurred by the Purchasers and
each other holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’ fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes and (c) the costs and expenses incurred in connection
with the initial filing of this Agreement and all related documents and
financial information with the SVO provided, that such costs and expenses under
this clause (c) shall not exceed $3,500. The Company will pay, and will save
each Purchaser and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses, if any, of brokers and finders (other
than those, if any, retained by a Purchaser or other holder in connection with
its purchase of the Notes).

Section 15.2. Survival. The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.

 

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any such Note or portion thereof or interest therein and the
payment of any Note may be relied upon by any subsequent holder of any such
Note, regardless of any investigation made at any time by or on behalf of any
Purchaser or any other holder of any such Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between the
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.

 

SECTION 17. AMENDMENT AND WAIVER.

Section 17.1. Requirements. This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser

 

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unless consented to by such Purchaser in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

Section 17.2. Solicitation of Holders of Notes.

(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.

(b) Payment. The Company will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security or provide other credit support, to any holder
of Notes as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof unless such remuneration is concurrently paid, or security is
concurrently granted or other credit support is concurrently provided, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.

Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining
whether the holders of the requisite percentage of the aggregate principal
amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.

 

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SECTION 18. NOTICES.

All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule A, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,

(ii) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Company in writing, or

(iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Dana L. Perry, or at such other address as
the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

 

SECTION 19. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

 

SECTION 20. CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with

 

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the transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by such Purchaser as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such
Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Purchaser or any Person acting
on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other
than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser under Section 7.1 that are
otherwise publicly available. Each Purchaser will maintain the confidentiality
of such Confidential Information in accordance with procedures adopted by such
Purchaser in good faith to protect confidential information of third parties
delivered to such Purchaser, provided that such Purchaser may deliver or
disclose Confidential Information to (i) such Purchaser’s directors, trustees,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Purchaser’s Notes), (ii) such Purchaser’s financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which
such Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this
Section 20), (v) any Person from which such Purchaser offers to purchase any
security of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 20), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser’s investment portfolio, or
(viii) any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser’s Notes, the Subsidiary Guaranty and
this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

 

SECTION 21. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates as
the purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such

 

-38-

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

notice, any reference to such Purchaser in this Agreement (other than in this
Section 21), shall be deemed to refer to such Affiliate in lieu of such original
Purchaser. In the event that such Affiliate is so substituted as a Purchaser
hereunder and such Affiliate thereafter transfers to such original Purchaser all
of the Notes then held by such Affiliate, upon receipt by the Company of notice
of such transfer, any reference to such Affiliate as a “Purchaser” in this
Agreement (other than in this Section 21), shall no longer be deemed to refer to
such Affiliate, but shall refer to such original Purchaser, and such original
Purchaser shall again have all the rights of an original holder of the Notes
under this Agreement.

 

SECTION 22. MISCELLANEOUS.

Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding (but without limiting the requirement
in Section 8.4 that the notice of any optional prepayment specify a Business Day
as the date fixed for such prepayment), any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; provided that if the maturity date of any Note is
a date other than a Business Day, the payment otherwise due on such maturity
date shall be made on the next succeeding Business Day and shall include the
additional days elapsed in the computation of interest payable on such next
succeeding Business Day.

Section 22.3. Accounting Terms. All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to them
in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP.

Section 22.4. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.5. Construction. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.

 

-39-

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

For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.

Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

Section 22.7. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.

Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company
irrevocably submits to the non-exclusive jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan, The City of New York, over
any suit, action or proceeding arising out of or relating to this Agreement or
the Notes. To the fullest extent permitted by applicable law, the Company
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

(b) The Company consents to process being served by or on behalf of any holder
of Notes in any suit, action or proceeding of the nature referred to in
Section 22.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(c) Nothing in this Section 22.8 shall affect the right of any holder of a Note
to serve process in any manner permitted by law, or limit any right that the
holders of any of the Notes may have to bring proceedings against the Company in
the courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.

(d) THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.

*     *     *     *     *

 

-40-

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The execution hereof by the Purchasers shall constitute a contract among the
Company and the Purchasers for the uses and purposes hereinabove set forth. This
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

 

Very truly yours, AZZ INCORPORATED By  

 

Name:   Dana Perry Title:   Senior Vice President

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

Accepted as of the date first written above.

 

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

By  

 

Name:   Ellen I. Whittaker Title:   Senior Director, Private Placements

 

AZZ incorporated-NPA

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

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By  

 

  Vice President

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

By:   Prudential Investment Management, Inc., as   investment manager

  By  

 

    Vice President

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY By  

 

  Vice President PHYSICIANS MUTUAL INSURANCE COMPANY By:   Prudential Private
Placement Investors, L.P.   (as Investment Advisor) By:  

Prudential Private Placement Investors, Inc.

(as its General Partner)

  By  

 

    Vice President

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

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By:   Babson Capital Management LLC
as Investment Adviser

  By  

 

  Name:   Elisabeth A. Perenick   Title:   Managing Director

C.M. LIFE INSURANCE COMPANY By:   Babson Capital Management LLC as Investment
Sub-Adviser

  By  

 

  Name:   Elisabeth A. Perenick   Title:   Managing Director

HAKONE FUND II LLC By:   Babson Capital Management LLC as Investment Adviser

  By  

 

  Name:   Elisabeth A. Perenick   Title:   Managing Director

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

CANADA LIFE INSURANCE COMPANY OF AMERICA By:  

 

Name:   Eve Hampton Title:   Vice President, Investments By:  

 

Name:   Tad Anderson Title:   Assistant Vice President, Investments THE CANADA
LIFE ASSURANCE COMPANY By:  

 

Name:   Eve Hampton Title:   Vice President, Investments By:  

 

Name:   Tad Anderson Title:   Assistant Vice President, Investments LONDON LIFE
AND GENERAL REINSURANCE COMPANY LIMITED By:   Great-West Life & Annuity
Insurance Company, as Investment Adviser

  By:  

 

  Name:   Eve Hampton   Title:   Vice President, Investments   By:  

 

  Name:   Tad Anderson   Title:   Assistant Vice President, Investments

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

UNITED OF OMAHA LIFE INSURANCE COMPANY By:  

 

Name:   Curtis R. Caldwell Title:   Vice President MUTUAL OF OMAHA INSURANCE
COMPANY By:  

 

Name:   Curtis R. Caldwell Title:   Vice President COMPANION LIFE INSURANCE
COMPANY By:  

 

Name:   Curtis R. Caldwell Title:   Vice President

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

AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY By:  

 

Name:   Rachel Stauffer Title:   Vice President – Investments

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

c/o Berkshire Life Insurance Company of America

700 South Street

Pittsfield, Massachusetts 01201-8285

Attention: Ellen Whittaker

Facsimile No.: (413) 442-9763

   $20,000,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

JP Morgan Chase

FED ABA #021000021

Chase/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C #G05978, Guardian Life, PPN 002474 A*5

Notices

All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 13-5123390

SCHEDULE A

(to Note Purchase Agreement)

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas 75201

Attn: Managing Director

   $8,700,000

Payments

(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank

New York, NY

ABA No.: 021-000-021

Account Name: The Prudential - Privest Portfolio

Account No.: P86189 (please do not include spaces)

Each such wire transfer shall set forth the name of the Company, a reference to
AZZ incorporated, 6.24% Senior Notes due March 31, 2018, INV10999, PPN 002474
A*5” and the application (as among principal, interest and Make-Whole Amount) of
the payment being made.

 

(2) Address for all notices relating to payments:

The Prudential Insurance Company of America

c/o Investment Operations Group

Gateway Center Two, 10th Floor

100 Mulberry Street

Newark, NJ 07102-4077

Attention: Manager, Billings and Collections

(3) All other notices and communications to be addressed as first provided
above:

(4) Recipient of telephonic prepayment notices:

Manager, Trade Management Group

Telephone: (973) 367-3141

Facsimile: (888) 889-3832

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 22-1211670

 

A-2

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas 75201

Attention: Managing Director

   $5,900,000

Payments

(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank

New York, New York

ABA No.: 021000021

Account Name: PRIAC

Account No.: P86329 (please do not include spaces)

Each such wire transfer shall set forth the name of the Company, a reference to
“AZZ incorporated, 6.24% Senior Notes due March 31, 2018, INV10999, PPN 002474
A*5” and the application (as among principal, interest and Make-Whole Amount) of
the payment being made.

(2) Address for all notices relating to payments:

Prudential Retirement Insurance and Annuity Company

c/o Prudential Investment Management, Inc.

Private Placement Trade Management

PRIAC Administration

Gateway Center Four, 7th Floor

100 Mulberry Street

Newark, New Jersey 07102

Telephone: (973) 802-8107

Facsimile: (888) 889-3832

(3) All other notices and communications to be addressed as first provided
above:

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 06-1050034

 

A-3

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas 75201

Attention: Managing Director

   $4,100,000

(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank

New York, NY

ABA #021-000-021

Account No. P86202 (please do not include spaces)

Account Name: Pruco Life of New Jersey Private Placement

Each such wire transfer shall set forth the name of the Company, a reference to
“AZZ incorporated, 6.24% Senior Notes due March 31, 2018, INV10999, PPN 002474
A*5” and the application (as among principal, interest and Make-Whole Amount) of
the payment being made.

(2) Address for all notices relating to payments:

Pruco Life Insurance Company of New Jersey

c/o The Prudential Insurance Company of America

c/o Investment Operations Group

Gateway Center Two, 10th Floor

100 Mulberry Street

Newark, New Jersey 07102

Attention: Manager, Billings and Collections

(3) All other notices and communications to be addressed as first provided
above:

(4) Recipient of telephonic prepayment notices:

Manager, Trade Management Group

Telephone: (973) 367-3141

Facsimile: (888) 889-3832

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 22-2426091

 

A-4

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

PHYSICIANS MUTUAL INSURANCE COMPANY

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas 75201

Attention: Managing Director

   $1,300,000

Payments

(1) All payments on account of Notes held by such purchaser shall be made by
wire transfer of immediately available funds for credit to:

The Northern Trust Company

Chicago, Illinois

ABA No.: 071000152

Account Name: Physicians Mutual Insurance Company

Account No.: 26-27099

Each such wire transfer shall set forth the name of the Company, a reference to
“AZZ incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5” and
the application (as among principal, interest and Make-Whole Amount) of the
payment being made.

(2) Address for all notices relating to payments:

Physicians Mutual Insurance Company

2600 Dodge Street

Omaha, Nebraska 68131

Attention: Jerry Coon

Facsimile: (402) 633-1096

(3) All other notices and communications to be addressed as first provided
above:

Name of Nominee in which Notes are to be issued: How & Co.

Taxpayer I.D. Number: 47-0270450

 

A-5

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $5,850,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For MassMutual Unified Traditional

Account Name: MassMutual BA 033 TRAD Private ELBX

Account Number 30566056

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

 

A-6

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $3,850,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For MassMutual Pension Management

Account Number 30510538

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1803 or (413) 226-1889.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

 

A-7

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $2,850,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For MassMutual Spot Priced Contract

Account Number 30510597

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1819 or (413) 226-1889.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

 

A-8

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $2,100,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For MassMutual IFM Non-Traditional

Account Number 30510589

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

 

A-9

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

HAKONE FUND II LLC

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attn: Securities Investment Division

   $1,450,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Gerlach & Co.

c/o Citibank, N.A

New York, New York

ABA #021000089

Concentration Account 36112805

FFC: Account #851549

Account Name: Hakone II

Ref: PPN Number, Name of Security

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1857 or (413) 226-1803.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: Gerlach & Co.

Taxpayer I.D. Number: 43-2108439

 

A-10

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

C.M. LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $1,200,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For CM Life Segment 43-Universal Life

Account Number 30510546

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1819 or (413) 226-1803.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 06-1041383

 

A-11

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o Babson Capital Management LLC

1500 Main Street, Suite 2200

P.O. Box 15189

Springfield, Massachusetts 01115-5189

Attention: Securities Investment Division

   $700,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Citibank, N.A

New York, New York

ABA #021000089

For MassMutual BA 0038 DI Private ELBX

Account Number 30566064

Re: Description of security, cusip, principal and interest split

With telephone advice of payment to the Securities Custody and Collection
Department of Babson Capital Management LLC at (413) 226-1889 or (413) 226-1803.

Notices

All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 200, Attention:
Securities Custody and Collection Department.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 04-1590850

 

A-12

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

CANADA LIFE INSURANCE COMPANY OF AMERICA

3rd Floor, Tower 2

8515 East Orchard Road

Greenwood Village, CO 80111-5002

Attention: Investments Division

Telecopier: (303) 737-6193

   $7,500,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

The Bank of New York

ABA No.: 021-000-018

BNF Account No.: IOC566

Further Credit to: Canada Life A/C #235206

Reference:    1. security description    2. allocation of payment between
principal and interest, and    3. confirmation of principal balance.

Notices

Notices with respect to payments and written confirmation of each such payment,
to be addressed:

The Bank of New York

Institutional Custody Department, 14th Floor

One Wall Street

New York, NY 10286

Telecopier: (212) 635-8844

All other notices and communications (including financial statements) to be
addressed as first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 38-2816473

 

A-13

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

NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

THE CANADA LIFE ASSURANCE COMPANY

3rd Floor, Tower 2

8515 East Orchard Road

Greenwood Village, CO 80111-5002

Attention: Investments Division

Telecopier: (303) 737-6193

   $4,500,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

The Bank of New York

ABA No.: 021-000-018

BNF Account No.: IOC566

Further Credit to: Canada Life A/C #114706

Reference:    1. security description    2. allocation of payment between
principal and interest, and    3. confirmation of principal balance.

Notices

Notices with respect to payments and written confirmation of each such payment,
to be addressed:

The Bank of New York

Institutional Custody Department, 14th Floor

One Wall Street

New York, NY 10286

Telecopier: (212) 635-8844

All other notices and communications (including financial statements) to be
addressed as first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 38-0397420

 

A-14

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NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

LONDON LIFE AND GENERAL REINSURANCE COMPANY LIMITED

c/o Great-West Life & Annuity Insurance Company

8515 East Orchard Road, 3T2

Greenwood Village, CO 80111-5002

Attention: Investments Division

Telecopier: (303) 737-6193

   $3,000,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”) to:

Comerica Bank

ABA #072000096

Account No.: 21585-98546

FBO LLGRC C&S/Acct. No. 1085004328

Reference:    1. security description    2. allocation of payment between
principal and interest, and    3. confirmation of principal balance.

Notices

Notices with respect to payments and written confirmation of each such payment,
to be addressed:

Comerica Bank

P.O. Box 75000

Detroit, MI 48275-3462

Attention: Genevieve Cobbs

Private Placements Income

Telephone: (313) 222-4736

Facsimile: (313) 222-7041

All other notices and communications (including financial statements) to be
addressed as first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 98-0356779

 

A-15

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NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

UNITED OF OMAHA LIFE INSURANCE COMPANY

Mutual of Omaha Plaza

Omaha, Nebraska 68175-1011

Attention: 4-Investment Loan Administration

   $8,000,000

Payments

All principal and interest payments on or in respect of the Notes shall be made
by wire transfer of immediately available funds to:

JPMorgan Chase Bank

ABA #021000021

Private Income Processing

for credit to: United of Omaha Life Insurance Company

Account Number 900-9000200

a/c G07097

PPN 002474 A*5

Interest Amount:

Principal Amount:

Notices

All notices of payments of principal and interest, on or in respect of the Notes
and written confirmation of each such payment, corporate actions and
reorganization notifications to:

JPMorgan Chase Bank

14201 Dallas Parkway, 13th Floor

Dallas, Texas 75254-2917

Attention: Income Processing - G. Ruiz

a/c: G07097

All other notices and communications (i.e., quarterly/annual reports, tax
filings, modifications, waivers regarding the indenture) to be addressed as
first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 47-0322111

 

A-16

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NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

MUTUAL OF OMAHA INSURANCE COMPANY

Mutual of Omaha Plaza

Omaha, Nebraska 68175-1011

Attention: 4-Investment Loan Administration

   $6,000,000

Payments

All principal and interest payments on or in respect of the Notes shall be made
by wire transfer of immediately available funds to:

JPMorgan Chase Bank

ABA #021000021

Private Income Processing

for credit to: Mutual of Omaha Insurance Company

Account Number 900-9000200

a/c G07096

PPN 002474 A*5

Interest Amount:

Principal Amount:

Notices

All notices of payments of principal and interest, on or in respect of the Notes
and written confirmation of each such payment, corporate actions and
reorganization notifications to:

JPMorgan Chase Bank

14201 Dallas Parkway, 13th Floor

Dallas, Texas 75254-2917

Attention: Income Processing - G. Ruiz

a/c: G07096

All other notices and communications (i.e., quarterly/annual reports, tax
filings, modifications, waivers regarding the indenture) to be addressed as
first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 47-0246511

 

A-17

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NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

COMPANION LIFE INSURANCE COMPANY

c/o Mutual of Omaha Insurance Company

Mutual of Omaha Plaza

Omaha, Nebraska 68175-1011

Attention: 4 – Investment Loan Administration

   $1,000,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:

Chase Manhattan Bank

ABA #021000021

Private Income Processing

for credit to: Companion Life Insurance Company

Account Number 900-9000200

a/c G07903

PPN 002474 A*5

Interest Amount:

Principal Amount:

Notices

All notices of payments, on or in respect of the Notes and written confirmation
of each such payment, corporate actions and reorganization notifications to:

JPMorgan Chase Bank

14201 Dallas Parkway, 13th Floor

Dallas, Texas 75254-2917

Attention: Income Processing - G. Ruiz

a/c: G07903

All other notices and communications (i.e., quarterly/annual reports, tax
filings, modifications, waivers regarding the indenture) to be addressed as
first provided above.

Name of Nominee in which Notes are to be issued: None

Taxpayer I.D. Number: 13-1595128

 

A-18

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NAME OF PURCHASER    PRINCIPAL AMOUNT OF THE NOTES
TO BE PURCHASED

AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Attention: Investment Department - Private Placements

Telephone: (888) 221-1234

Facsimile: (515) 221-0329

   $12,000,000

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as “AZZ
incorporated, 6.24% Senior Notes due March 31, 2018, PPN 002474 A*5, principal,
premium or interest”, principal, premium or interest”) to:

State Street Bank & Trust Company

ABA #011000028

Account No.: 00076026, Income Collection

Attention: Michael Rodelle

Reference: (PPN listed on security, Nominee, Security Description, P&I
breakdown)

Notices

All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above with a duplicate copy to:

American Equity Investment Life Insurance Company

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Attention: Asset Administration

Facsimile: (515) 221-0329

Name of Nominee in which Notes are to be issued: CHIMEFISH & CO

Taxpayer I.D. Number: 65-1186810

 

A-19

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DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

“Administrative Agent” means Bank of America, N.A. in its capacity as
administrative agent under the Bank Credit Agreement, together with its
successors and assigns in such capacity.

“Affiliate” means, at any time, and with respect to any Person, (a) any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any Person of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an “Affiliate”
is a reference to an Affiliate of the Company.

“Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001,
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

“Bank Credit Agreement” means the Credit Agreement dated as of May 25, 2006 by
and among the Company, certain Subsidiaries of the Company named therein, Bank
of America, N.A., as administrative agent, and the other financial institutions
party thereto, as amended, restated, joined, supplemented, increased or
otherwise modified from time to time, and any renewals, extensions, increases or
replacements thereof, which constitute the primary bank credit facility of the
Company and its Subsidiaries.

“Bank Lenders” means the banks and financial institutions party to the Bank
Credit Agreement.

“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York, New York are required or authorized to be closed.

“Capital Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

“Capital Lease Obligation” means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.

SCHEDULE B

(to Note Purchase Agreement)

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

“Closing” is defined in Section 3.

“Closing Date” means the date of the Closing.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Company” means AZZ incorporated, a Texas corporation.

“Confidential Information” is defined in Section 20.

“Consolidated EBITDA” means, for any Rolling Period, the sum of (a) Consolidated
Net Income for such Rolling Period, plus (b) the sum of all amounts deducted
therefrom in respect of such Rolling Period, in conformity with GAAP, for
interest, taxes, depreciation and amortization. For purposes of calculating
Consolidated EBITDA for any Rolling Period, if during such period the Company or
any Subsidiary shall have acquired or disposed of any Person or acquired or
disposed of all or substantially all of the operating assets of any Person,
Consolidated EBITDA for such period shall be calculated after giving pro forma
effect thereto as if such transaction occurred on the first day of such period.

“Consolidated EBITDAR” means, for any Rolling Period, an amount equal to the sum
of (a) Consolidated EBITDA for such Rolling Period plus (b) Rental Expense for
such Rolling Period.

“Consolidated Fixed Charges” means, with respect to any period, the sum of
(i) Consolidated Interest Expense for such period plus (ii) Rental Expense for
such period, determined on a consolidated basis for the Company and its
Subsidiaries.

“Consolidated Indebtedness” means, all Indebtedness of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, for any period of calculation thereof for
the Company and its Subsidiaries on a consolidated basis, the aggregate amount
of all interest (including commitment fees) on all Indebtedness of the Company
and its Subsidiaries, whether paid in cash or accrued as a liability and payable
in cash during such period (including, without limitation, imputed interest on
Capital Lease Obligations; the amortization of any original issue discount on
any Indebtedness; the interest portion of any deferred payment obligation; all
commissions, discounts, and other fees and charges owed with respect to letters
of credit or bankers’ acceptance financing; net costs associated with Swap
Contracts; the interest component of any Indebtedness that is guaranteed or
secured by such Person), and all cash premiums or penalties for the repayment,
redemption, or repurchase of Indebtedness.

“Consolidated Net Income” means, for any period, as applied to Company and its
Subsidiaries (including any Subsidiaries acquired during such period and such
consolidated net income (or net loss) is supported by an audit or is otherwise
acceptable to the Required Holders), the consolidated net income (or net loss)
of the Company and its Subsidiaries after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including, without
limitation, reserves for deferred taxes); provided, however, that such sum shall
exclude:

(i) any net gains or losses on the sale or the other disposition, not in the
ordinary course of business, of investments and other capital assets, provided
that there shall also be excluded any related charges for taxes thereon;

 

B-2

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(ii) any net gain arising from the collection of the proceeds of any insurance
policy (other than any business interruption insurance policy);

(iii) any write-up or write-down of any asset; and

(iv) any other extraordinary item, as defined by GAAP.

“Consolidated Net Worth” shall mean the consolidated stockholder’s equity of the
Company and its Subsidiaries, as defined according to GAAP.

“Consolidated Total Assets” means, as of any date of determination, the total
amount of all assets of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

“Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

“Default Rate” means that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (ii) 2% over the rate of interest publicly announced by Bank of
America, N.A. as its “base” or “prime” rate.

“Disclosure Documents” is defined in Section 5.3.

“Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

 

B-3

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.

“Event of Default” is defined in Section 11.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, at any time and with respect to any property, the
sale value of such property that would be realized in an arm’s-length sale at
such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell), as reasonably
determined in the good faith opinion of the Company’s board of directors.

“Form 10-K” is defined in Section 7.1(b).

“Form 10-Q” is defined in Section 7.1(a).

“GAAP” means those generally accepted accounting principles as in effect from
time to time in the United States of America.

“Governmental Authority” means

(a) the government of

(i) the United States of America or any state or other political subdivision
thereof, or

(ii) any jurisdiction in which the Company or any Subsidiary conducts all or any
part of its business, or which has jurisdiction over any properties of the
Company or any Subsidiary, or

(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or

 

B-4

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cash flow of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any Lien
on any assets of such Person securing any Indebtedness or other obligation of
any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.

“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or
other substances that might pose a hazard to health and safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

“holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct obligations of such Person for amounts drawn under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

B-5

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(f) Capital Leases, Synthetic Lease Obligations and other obligations that are
considered borrowed money obligations for tax purposes but operating leases in
accordance with GAAP;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any Capital Lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of attributable
Indebtedness in respect thereof as of such date.

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a
Note holding (together with one or more of its affiliates) more than $1,000,000
of the aggregate principal amount of the Notes then outstanding, (c) any bank,
trust company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note.

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge,
security interest or other encumbrance, or any interest or title of any vendor,
lessor, lender or other secured party to or of such Person under any conditional
sale or other title retention agreement (other than an operating lease) or
Capital Lease, upon or with respect to any property or asset of such Person
(including, in the case of stock, shareholder agreements, voting trust
agreements and all similar arrangements).

“Make-Whole Amount” shall have the meaning set forth in Section 8.6 with respect
to any Note.

“Material” means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, affairs, financial condition, assets or properties of the Company
and its Subsidiaries taken as a whole, or (b) the ability of the Company to
perform its obligations under this Agreement and the Notes, (c) the ability of
any Subsidiary Guarantor to perform its obligations under the Subsidiary
Guaranty or (d) the validity or enforceability of this Agreement, the Notes or
the Subsidiary Guaranty.

 

B-6

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“Material Subsidiary” means, at any time, any Subsidiary of the Company which,
together with all other Subsidiaries of such Subsidiary, accounts for more than
(i) 5% of the consolidated assets of the Company and its Subsidiaries or (ii) 5%
of consolidated revenue of the Company and its Subsidiaries.

“Moody’s” shall mean Moody Investors Service, Inc.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term
is defined in Section 4001(a)(3) of ERISA).

“Notes” is defined in Section 1.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

“Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA)
that is or, within the preceding five years, has been established or maintained,
or to which contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.

“Priority Indebtedness” means (without duplication), as of the date of any
determination thereof, the sum of (i) all unsecured Indebtedness of Subsidiaries
(including all Guarantees of Indebtedness of the Company but excluding
(x) Indebtedness owing to the Company or any other Subsidiary, (y) Indebtedness
outstanding at the time such Person became a Subsidiary, provided that such
Indebtedness shall have not been incurred in contemplation of such person
becoming a Subsidiary, and (z) all Subsidiary Guarantees and all Guarantees of
Indebtedness of the Company by any Subsidiary which has also guaranteed the
Notes) and (ii) all Indebtedness of the Company and its Subsidiaries secured by
Liens other than Indebtedness secured by Liens permitted by subparagraphs (a)
through (i), inclusive, of Section 10.5.

“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.

“Public Filings” is defined in Section 5.3.

 

B-7

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“Purchasers” means the purchasers of the Notes named in Schedule A hereto.

“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by
the United States Department of Labor.

“Qualified Institutional Buyer” means any Person who is a qualified
institutional buyer within the meaning of such term as set forth in Rule
144(a)(1) under the Securities Act.

“Ratable Portion” means, with respect to any Note, an amount equal to the
product of (x) the amount equal to the net proceeds being so applied to the
prepayment of Senior Indebtedness in accordance with Section 10.6(2), multiplied
by (y) a fraction the numerator of which is the outstanding principal amount of
such Note and the denominator of which is the aggregate principal amount of
Senior Indebtedness of the Company and its Subsidiaries being prepaid pursuant
to Section 10.6(2).

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in Securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

“Rental Expense” means, for any Rolling Period, all fees, costs and expenses
(including any penalties and interest thereon) of the Company and its
Subsidiaries in connection with the use, occupancy or possession by Company and
its Subsidiaries of any real or personal, or mixed, property, but excluding all
payments pursuant to all Capital Leases.

“Required Holders” means, at any time, the holders of more than 50% in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
the Company or any of its Affiliates).

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the relevant
portion of this Agreement.

“Rolling Period” means, on any date of determination, the most recent four
fiscal quarters of the Company and its Subsidiaries ended on
May 31, August 31, November 30 or February 28 or 29 (as the case may be).

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Senior Indebtedness” means, as of the date of any determination thereof, all
Consolidated Indebtedness, other than Subordinated Indebtedness.

“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

 

B-8

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“Subordinated Indebtedness” means all unsecured Indebtedness of the Company that
shall contain or have applicable thereto subordination provisions providing for
the subordination thereof to other Indebtedness of the Company (including,
without limitation, the obligations of the Company under this Agreement or the
Notes).

“Subsidiary” means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.

“Subsidiary Guarantor” means each Subsidiary which is party to the Subsidiary
Guaranty.

“Subsidiary Guaranty” is defined in Section 2.2 of this Agreement.

“SVO” means the Securities Valuation Office of the NAIC or any successor to such
Office.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts.

 

B-9

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

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent
of all of the equity interests (except directors’ qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company’s
other Wholly-Owned Subsidiaries at such time.

 

B-10

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Schedule 4.9

CHANGES IN CORPORATE STRUCTURE

None

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Schedule 5.4

SUBSIDIARIES OF THE COMPANY, OWNERSHIP OF SUBSIDIARY

STOCK AND AFFILIATES

 

I. List of the Company’s Subsidiaries—Name, Jurisdiction, Ownership Percentages

 

    

Name

  

Jurisdiction

  

Ownership Percentage

1.   AAA Galvanizing –Chelsea, Inc.    Delaware    100% of shares owned by
Arbor-Crowley, Inc. 2.   AAA Galvanizing – Dixon, Inc.    Delaware    100% of
shares owned by Arbor-Crowley, Inc. 3.   AAA Galvanizing – Hamilton, Inc.   
Delaware    100% of shares owned by Arbor-Crowley, Inc. 4.   AAA Galvanizing –
Joliet, Inc.    Delaware    100% of shares owned by Arbor-Crowley, Inc. 5.   AAA
Galvanizing – Peoria, Inc.    Delaware    100% of shares owned by Arbor-Crowley,
Inc. 6.   AAA Galvanizing – Winsted, Inc.    Delaware    100% of shares owned by
Arbor-Crowley, Inc. 7.   Arbor-Crowley, Inc.    Delaware    100% of shares owned
by the Company 8.   Arizona Galvanizing, Inc.    Arizona    100% of shares owned
by Arbor-Crowley, Inc. 9.   Arkgalv, Inc.    Arkansas    100% of shares owned by
the Company 10.   Atkinson Industries, Inc.    Kansas    100% of shares owned by
the Company 11.   Automatic Processing Incorporated    Mississippi    100% of
shares owned by Aztec Industries, Inc. – Moss Point 12.   Aztec Industries, Inc.
   Mississippi    100% of shares owned by the Company 13.  
Aztec Industries, Inc. –Moss Point    Mississippi    100% of shares owned by
Aztec Industries, Inc. 14.   Aztec Manufacturing Partnership, Ltd.    Texas   
100% of partnership interests ultimately beneficially owned by the Company 15.  
Aztec Manufacturing – Waskom Partnership, Ltd.    Texas    100% of partnership
interests ultimately beneficially owned by the Company 16.   AZZ GP, LLC   
Delaware    100% of interests owned by Arbor-Crowley, Inc.

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

17.   AZZ Group, LP    Delaware    1% General Partner interest held by AZZ GP,
LLC; 99% Limited Partner interest held by AZZ LP, LLC 18.   AZZ Holdings, Inc.
   Delaware    100% of shares owned by Arbor-Crowley, Inc. 19.   AZZ LP, LLC   
Delaware    100% of interests owned by Arbor-Crowley, Inc. 20.   Carter and
Crawley, Inc.    Delaware    100% of shares owned by Arbor-Crowley, Inc. 21.  
Central Electric Company    Missouri    100% of shares owned by Arbor-Crowley,
Inc. 22.   Central Electric Manufacturing Company    Missouri    100% of shares
owned by Central Electric Company 23.   CGIT Systems, Inc.    Delaware    100%
of shares owned by Arbor-Crowley, Inc. 24.   Drilling Rig Electrical Systems Co.
Partnership, Ltd.    Texas    100% of partnership interests ultimately
beneficially owned by the Company 25.   Electrical Power Systems, Inc.
(administratively dissolved as of 2004; attempting to reactivate)    Missouri   
100% of shares owned by Central Electric Company 26.   Gulf Coast Galvanizing,
Inc    Alabama    100% of shares owned by the Company 27.   Hobson Galvanizing,
Inc.    Louisiana    100% of shares owned by Arbor-Crowley, Inc. 28.  
International Galvanizers Partnership, Ltd.    Texas    100% of partnership
interests ultimately beneficially owned by the Company 29.   Rig-A-Lite
Partnership, Ltd.    Texas    100% of partnership interests ultimately
beneficially owned by the Company 30.   The Calvert Company, Inc.    Mississippi
   100% of shares owned by the Company 31.   Westside Galvanizing Services, Inc.
   Delaware    100% of shares owned by Arbor-Crowley, Inc. 32.   Witt
Galvanizing – Cincinnati, Inc.    Delaware    100% of shares owned by
Arbor-Crowley, Inc. 33.   Witt Galvanizing – Muncie, Inc.    Delaware    100% of
shares owned by Arbor-Crowley, Inc. 34.   Witt Galvanizing – Plymouth, Inc.   
Delaware    100% of shares owned by Arbor-Crowley, Inc.

 

5.4-13

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

II. List of the Company’s Affiliates (other than Subsidiaries): None

 

III. List of the Company’s Directors and Senior Officers

 

Directors:   H. Kirk Downey, Daniel R. Feehan, Peter A. Hegedus, David H.
Dingus, Dana L. Perry, Daniel E. Berce, Martin C. Bowen, Sam Rosen and Kevern R.
Joyce. Senior Officers:   David H. Dingus (President and CEO); Dana L. Perry
(Senior VP of Finance, CFO and Secretary); and John V. Petro (Senior VP of
Operations/Electrical & Industrial Products) Tim Pendley (VP – Galvanizing
Services)

 

5.4-14

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

Schedule 5.5

FINANCIAL STATEMENTS

 

1. AZZ incorporated Form 10-Q, filed January 8, 2008, for period ending
November 30, 2007.

 

2. AZZ incorporated Form 10-K, filed May 27, 2003, for the period ending
February 28, 2003.

 

3. AZZ incorporated Form 10-K, filed May 26, 2004, for the period ending
February 28, 2004.

 

4. AZZ incorporated Form 10-K, filed May 27, 2005, for the period ending
February 28, 2005.

 

5. AZZ incorporated Form 10-K, filed May 12, 2006, for the period ending
February 28, 2006.

 

6. AZZ incorporated Form 10-K/A filed July 10, 2007, for the period ending
February 28, 2007.

 

7. Power Point Presentation – AZZ incorporated, February 26, 2008.

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

Schedule 5.11

LICENSES, PERMITS, ETC.

None

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

Schedule 5.15

EXISTING INDEBTEDNESS

Indebtedness arising under Second Amended and Restated Credit Agreement, dated
May 25, 2006 among AZZ incorporated, as borrower, Bank of America, as
Administrative Agent, Swing Line Lender and L/c Issuer, and the other Lenders
party thereto, as amended by First Amendment to Second Amended and Restated
Credit Agreement, dated February 28, 2007, as further amended by Second
Amendment and Consent to Second Amended and Restated Credit Agreement, dated
March 31, 2008. The Indebtedness under this Credit Agreement is unsecured and is
guaranteed by the Company’s subsidiaries. Section 7.03 of the Credit Agreement,
as amended by the Second Amendment and Consent, contains restrictions on the
ability of the Company and its subsidiaries to incur Indebtedness.

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

Schedule 10.5

EXISTING LIENS

None

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

[FORM OF SENIOR NOTE]

AZZ INCORPORATED

6.24% SENIOR NOTES DUE MARCH 31, 2018

 

No. [            ]    [Date] $[                 ]    PPN 002474 A*5

FOR VALUE RECEIVED, the undersigned, AZZ INCORPORATED (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Texas, hereby promises to pay to [                                ] or
registered assigns, the principal sum of [                    ] DOLLARS (or so
much thereof as shall not have been prepaid) on March 31, 2018 with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 6.24% per annum from the date hereof,
payable semi-annually, on the last day of March and September in each year and
at maturity, commencing on September 30, 2008, until the principal hereof shall
have become due and payable, and (b) to the extent permitted by law, on any
overdue payment of interest and, during the continuance of an Event of Default,
on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a
rate per annum from time to time equal to the greater of (i) 8.24%, or (ii) 2%
over the rate of interest publicly announced by Bank of America, N.A. from time
to time in New York, New York as its “base” or “prime” rate, payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at the
principal office of Bank of America, N.A. in New York, New York or at such other
place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes”) issued
pursuant to the Note Purchase Agreement, dated as of March 31, 2008 (as from
time to time amended, supplemented or modified, the “Note Purchase Agreement”),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Section 6.2 of the Note Purchase Agreement,
provided, that in lieu thereof such holder may (in reliance upon information
provided by the Company, which shall not be unreasonably withheld) make a
representation to the effect that the purchase by any holder of any Note will
not constitute a non-exempt prohibited transaction under section 406(a) of
ERISA. Unless otherwise indicated, capitalized terms used in this Note shall
have the respective meanings ascribed to such terms in the Note Purchase
Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney

 

EXHIBIT 1

(to Note Purchase Agreement)

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

duly authorized in writing, a new Note for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.

The Company will make required prepayments of principal on the date and in the
amounts specified in the Note Purchase Agreement. This Note is subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.

Pursuant to the Subsidiary Guaranty Agreement dated as of March 31, 2008 (as
amended, restated or otherwise modified from time to time, the “Subsidiary
Guaranty”), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.

If an Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of
the issuer and holder hereof shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

 

AZZ INCORPORATED By  

 

Name:  

 

Title:  

 

 

E-1-2

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

FORM OF SUBSIDIARY GUARANTY

EXHIBIT 4.4(a)

(to Note Purchase Agreement)

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

FORM OF OPINION OF SPECIAL COUNSEL

TO THE COMPANY

The closing opinion of Kelly Hart & Hallman LLP, special counsel to the Company,
which is called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the date of Closing and addressed to the Purchasers, shall be satisfactory
in scope and form to each Purchaser and shall be to the effect that:

1. The Company is a corporation, duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to execute and perform the Note Purchase Agreement
and to issue the Notes. The Company has the full corporate power and the
corporate authority to conduct the activities in which it is now engaged and is
duly licensed or qualified and is in good standing as a foreign corporation in
each jurisdiction in which the character of the properties owned or leased by it
or the nature of the business transacted by it makes such licensing or
qualification necessary except in jurisdictions where the failure to be so
qualified or licensed would not have a material adverse effect on the business
of the Company.

2. Each Subsidiary is a corporation or similar legal entity, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly licensed or qualified and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
the nature of the business transacted by it makes such licensing or
qualification necessary except in jurisdictions where the failure to be so
qualified or licensed would not have a material adverse effect on the business
of such Subsidiary. All of the issued and outstanding shares of capital stock or
similar equity interests of each such Subsidiary have been duly issued, are
fully paid and non-assessable and are owned by the Company, by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.

3. The issuance and sale of the Notes, the execution, delivery and performance
by the Company of the Note Purchase Agreement, and the execution, delivery and
performance by each Subsidiary Guarantor of the Subsidiary Guaranty do not
violate any provision of any law or other rule or regulation of any Governmental
Authority applicable to the Company or any such Subsidiary Guarantor or conflict
with or result in any breach of any of the provisions of or constitute a default
under or result in the creation or imposition of any Lien upon any property of
the Company or any such Subsidiary Guarantor pursuant to the provisions of the
Articles or Certificate of Incorporation or By-laws, or such similar
organizational or governing instrument, as the case may be, of the Company or
such Subsidiary Guarantor or any agreement or other instrument known to such
counsel to which the Company or any such Subsidiary Guarantor is a party or by
which the Company or any such Subsidiary Guarantor may be bound.

4. There are no actions, suits or proceedings pending or, to the knowledge of
such counsel after due inquiry, threatened against or affecting the Company or
any Subsidiary in any court or before any governmental authority or arbitration
board or tribunal which, if adversely determined, would have a materially
adverse effect on the properties, business, profits or condition, (financial or
otherwise) of the Company and its Subsidiaries or the ability of the Company to
perform its obligations under the Note Purchase Agreement and the Notes or on
the

 

EXHIBIT 4.4(b)

(to Note Purchase Agreement)

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

legality, validity or enforceability of the Company’s obligations under the Note
Purchase Agreement and the Notes. To the knowledge of such counsel, neither the
Company nor any Subsidiary is in default with respect to any court or
governmental authority, or arbitration board or tribunal.

5. The Note Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding contract
of the Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors’ rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

6. The Notes have been duly authorized by all necessary corporate action on the
part of the Company, have been duly executed and delivered by the Company and
constitute the legal, valid and binding contract of the Company enforceable
against the Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors’ rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).

7. The Subsidiary Guaranty has been duly authorized by all necessary corporate
or other organizational action on the part of each Subsidiary Guarantor, has
been duly executed and delivered by each Subsidiary Guarantor and constitutes
the legal, valid and binding contract of each such Subsidiary Guarantor
enforceable against such Subsidiary Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors’ rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

8. No approval, consent or withholding of objection on the part of, or filing,
registration or qualification with, any governmental body, Federal or state, is
necessary in connection with the execution and delivery of the Note Purchase
Agreement, the Notes or the Subsidiary Guaranty.

9. The issuance, sale and delivery of the Notes and the execution and delivery
of the Subsidiary Guaranty by the Subsidiary Guarantors under the circumstances
contemplated by the Note Purchase Agreement and the Subsidiary Guaranty do not,
under existing law, require the registration of the Notes or the Subsidiary
Guaranty under the Securities Act of 1933, as amended, or the qualification of
an indenture under the Trust Indenture Act of 1939, as amended.

10. Neither the issuance of the Notes nor the application of the proceeds of the
sale of the Notes will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulation issued pursuant
thereto, including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System.

 

E-4.4(b)-2

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

11. The Company is not an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

The opinion of Kelly Hart & Hallman LLP, shall cover such other matters relating
to the sale of the Notes as each Purchaser may reasonably request and successors
and assigns of the Purchasers shall be entitled to rely on such opinion. With
respect to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and other
officers of the Company and its Subsidiaries.

 

E-4.4(b)-2

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

FORM OF OPINION OF SPECIAL COUNSEL

TO THE PURCHASERS

The closing opinion of Chapman and Cutler, LLP, special counsel to the
Purchasers, called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the date of Closing and addressed to each Purchaser, shall be satisfactory
in form and substance to each Purchaser and shall be to the effect that:

1. The Company is a corporation, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and the
corporate authority to execute and deliver the Note Purchase Agreement and to
issue the Notes.

2. The Note Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding contract
of the Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors’ rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law).

3. The Notes have been duly authorized by all necessary corporate action on the
part of the Company, and the Notes being delivered on the date hereof have been
duly executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors’ rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

4. The issuance, sale and delivery of the Notes and the execution and delivery
of the Subsidiary Guaranty under the circumstances contemplated by the Note
Purchase Agreement and the Subsidiary Guaranty do not, under existing law,
require the registration of the Notes or the Subsidiary Guaranty under the
Securities Act of 1933, as amended, or the qualification of an indenture under
the Trust Indenture Act of 1939, as amended.

EXHIBIT 4.4(c)

(to Note Purchase Agreement)

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

With respect to matters of fact upon which such opinion is based, Chapman and
Cutler, LLP, may rely on appropriate certificates of public officials and
officers of the Company and upon representations of the Company and the
Purchasers delivered in connection with the issuance and sale of the Notes.

In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler,
LLP, may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of Texas.
The opinion of Chapman and Cutler, LLP, is limited to the laws of the State of
New York and the Federal laws of the United States.

 

E-4.4(c)-2