Gardner Denver Exhibit 10.1 to Form 8K





Exhibit 10.1
















ESCROW AND SECURITY
AGREEMENT 




between 




GARDNER DENVER, INC. 




and 




THE BANK OF NEW YORK
TRUST COMPANY, N.A., 




as Escrow Agent and
Trustee 




Dated as of May 4, 2005 




ACCOUNT NUMBER: 138885 




SHORT TITLE OF ACCOUNT
— Gardner Denver Escrow Account 







     










        ESCROW
AND SECURITY AGREEMENT made this 4th day of May, 2005, by and between THE BANK OF NEW
YORK TRUST COMPANY, N.A., a national banking association, in its capacities, as a
“securities intermediary” as defined in Section 8-102 of the UCC (as defined
herein), a “bank” as defined in Section 9-102 of the UCC and as escrow agent
(the “Escrow Agent”), and in its capacity as trustee under the Indenture
(the “Trustee”) and GARDNER DENVER, INC. (the “Grantor”
or the “Company”). All references to “UCC” shall mean the
Uniform Commercial Code as in effect in the State of New York. 



        This
Agreement is being entered into in connection with the Purchase Agreement (the
“Purchase Agreement”), dated as of April 28, 2005, among the Company, the
subsidiary guarantors named therein (the “Subsidiary Guarantors”), and
Bear, Stearns & Co. Inc. (“Bear Stearns”), J.P. Morgan Securities
Inc., Wachovia Capital Markets, LLC, Harris Nesbitt Corp., NatCity Investments, Inc.,
Mitsubishi Securities International plc, Piper Jaffray & Co. and Scotia Capital (USA)
Inc. (collectively, the “Initial Purchasers”), and the Indenture (the
“Indenture”), dated as of May 4, 2005, governing the Company’s 8%
Senior Subordinated Notes due 2013 (the “Notes”), among the Company, the
Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”). Capitalized terms, which are used but not defined herein,
have the respective meanings specified in the Indenture. Pursuant to the Purchase
Agreement and the Company’s Offering Memorandum, dated as of April 28, 2005 (the
“Offering Memorandum”), the Company is offering (the
“Offering”) $125,000,000 aggregate principal amount of the Notes. 



        Pursuant
to the “Use of Proceeds” section of the Offering Memorandum, the Grantor intends
to use the net proceeds from the Offering and other funds to pay the purchase price for
the Thomas Industries Acquisition. 



        The
Grantor, the Trustee and the Escrow Agent hereby agree that, in consideration of the
mutual promises and covenants contained herein, the Escrow Agent shall hold in escrow and
shall distribute Escrow Property (as defined herein) in accordance with and subject to the
following instructions and terms and conditions: 




1.        Escrow Property 



        The
property and/or funds deposited or to be deposited with the Escrow Agent by the Grantor
shall be as follows: 



     	 	        (a)    
          Concurrently with the execution and delivery hereof and the issuance of the
          Notes: 



          



     	 	        (i)    
          Bear Stearns will deposit with the Escrow Agent $125,000,000 by wire transfer in
          immediately available funds, which amount represents the gross proceeds from the
          Offering; and 



          



     		        (ii)    
          the Grantor will deposit with the Escrow Agent $6,638,888.89 by wire transfer in
          immediately available funds. 



          



        As
a result of the simultaneous deposits made pursuant to clauses (i) and (ii) above, the
aggregate amount deposited with the Escrow Agent on the date hereof will be
$131,638,888.89 (one hundred thirty-one million six hundred thirty-eight thousand eight
hundred eighty-eight and 89/100 dollars), which amount is sufficient to redeem in cash the
Notes, in whole and not in part, in an amount equal to 100% of the aggregate principal
amount of the Notes on May 4, 2005 (the “Issue Date”) plus accrued and
unpaid interest from the Issue Date to January 3, 2006 (the “Initial
Deposit”). 












–2–


        (b)    
          (i) The Escrow Agent shall accept the Initial Deposit and shall hold such funds
          and the proceeds thereof in a separate identifiable account (the “Escrow
          Account”) for disbursement in accordance with the provisions hereof.
          The Escrow Account shall be under the control (within the meaning of Section
          8-106, 9-106 and 9-104 of the UCC) of the Trustee and, notwithstanding any other
          provisions of this Agreement, the Escrow Agent shall comply with all entitlement
          orders and instructions given by the Trustee with respect to the Escrow Account
          or other Escrow Property (as defined herein) without further consent of the
          Grantors or any other person. The Trustee agrees not to deliver any entitlement
          orders or instructions except as permitted by Section 3 hereof; provided,
          however, that the Escrow Agent shall comply with all entitlement orders
          and instructions given by the Trustee. Notwithstanding anything to the contrary
          contained herein, if at any time the Escrow Agent receives conflicting orders or
          instructions from the Trustee or the Grantor, the Escrow Agent shall comply with
          such entitlement order or instruction of the Trustee without further consent by
          the Grantor or any other person. 


        (ii)       
               Each party hereto hereby confirms that the arrangements established under this
               Section 1(b) constitute “control” of the Escrow Account. The
               Escrow Agent and the Grantor have not and will not enter into any other
               agreement with respect to control of the Escrow Account or purporting to limit
               or condition the obligation of the Escrow Agent to comply with any orders or
               instructions with respect to any Escrow Account as set forth in this Section
               1(b). 


        (iii)       
               The Escrow Agent hereby agrees that any security interest in, lien on,
               encumbrance, claim or right of setoff against, the Escrow Account or any funds
               therein it now has or subsequently obtains shall be subordinate to the security
               interest of the Trustee in the Escrow Account and the funds therein or credited
               thereto. The Escrow Agent agrees not to exercise any present or future right of
               recoupment or set-off against the Escrow Account or to assert against the Escrow
               Account any present or future security interest, banker’s lien or any other
               lien or claim (including claim for penalties) that the Escrow Agent may at any
               time have against or in the Escrow Account or any funds therein. 


        (iv)       
               As security for the due and punctual payment of the Escrow Redemption Price (as
               defined in the Indenture) on the Escrow Redemption Date (as defined in the
               Indenture), the Grantor hereby pledges, assigns and grants to the Trustee, for
               the benefit of the holders of the Notes, a continuing security interest in, and
               a lien on, the Escrow Account and the Escrow Property credited thereto and all
               the proceeds thereof, whether now owned or existing or hereafter acquired or
               arising. The security interest of the Trustee shall at all times be valid,
               perfected and enforceable as a first-priority security interest by the Trustee
               against the Grantor and all third parties in accordance with the terms of this
               Agreement. 


        (v)       
               The Grantor agrees to take all steps necessary in connection with the perfection
               of the Trustee’s security interest in the Escrow Property and, without
               limiting the generality of the foregoing, the Grantor hereby authorizes the
               Trustee to file one or more UCC financing statements in such filing offices and
               containing such descriptions of collateral as are necessary or advisable in
               order to perfect the security interest granted herein. 


        (vi)       
               The Grantor represents and warrants that it was duly incorporated and is validly
               existing as a Delaware corporation and is not incorporated under the laws of any
               other jurisdiction, and during the term of this Agreement, the Grantor will not
               change its jurisdiction of organization without giving the Trustee 30 days’
               prior written notice. 














–3–


        (vii)       
               Upon the release of any Escrow Property pursuant to Section 3 hereof, the
               security interest of the Trustee for the benefit of the holders of the Notes
               shall automatically terminate without any further action and the Escrow Property
               shall be delivered to the recipient free and clear of any and all liens, claims
               or encumbrances of any person, including, without limitation, the Escrow Agent,
               the Trustee and the holders of the Notes. At such time, the Trustee shall
               execute such documents without recourse, representation or warranty of any kind
               as the Grantor shall reasonably request and provide to evidence or confirm the
               termination of such security interest. The Initial Deposit, Escrow Account and
               all funds, securities or other property now or hereafter credited to the Escrow
               Account, plus all interest, dividends and other distributions and payments on
               any of the foregoing (collectively, the “Distributions”)
               received by the Escrow Agent, less any property and/or funds distributed or paid
               in accordance with this Escrow Agreement, are collectively referred to herein as
               “Escrow Property.” 




2.         Investment of Escrow
Property 



        Upon
written directions from the Grantor, the Escrow Agent shall invest or reinvest the Escrow
Property, without distinction between principal and income, in securities issued or
directly and fully guaranteed or insured by the United States government or any agency or
instrumentality of the United States government (provided that the
full faith and credit of the United States is pledged in support of those securities)
having maturities of not more than one month from the date of acquisition, or in money
market funds at least 95% of the assets of which constitute Cash Equivalents of such
securities. 



        The
Escrow Agent shall credit all such investments to the Escrow Account and hereby agrees to
treat any such investment as a financial asset within the meaning of Section 8-102(a)(9)
of the New York Uniform Commercial Code. 



        The
Escrow Agent shall have no liability for any loss arising from or related to any such
investment other than in accordance with paragraph 4 of the Terms and Conditions below. 




3.         Distribution of
Escrow Property 



        The Escrow
Agent is directed to hold and distribute the Escrow Property in the following manner: 



     		        (a)    
          The Escrow Agent will only release the Escrow Property in the cases specifically
          provided for in this Section 3. 



          



     	 	        (b)    
          The Escrow Agent will promptly release the Escrow Property (less the Discount
          (as defined in Section 3(c) of the Purchase Agreement)) to the Grantor upon the
          satisfaction of the following conditions (which will be evidenced by an
          Officer’s Certificate (attached as Exhibit B) from the Grantor to
          the Trustee and the Escrow Agent confirming that these conditions have been
          met): 



          



          		        (1)       
               all conditions to closing of the Thomas Industries Acquisition have been
               satisfied or waived; 



               



          		        (2)       
               the Thomas Industries Acquisition will be consummated concurrently with the
               release of Escrow Property and on substantially the terms described in the
               Offering Memorandum; 



               














–4–



          		        (3)       
               the Escrow Property will be applied in the manner described under the caption
               “Use of Proceeds” in the Offering Memorandum; 



               



          		        (4)       
               Thomas Industries Inc. and each of its wholly-owned subsidiaries that are not
               Immaterial Subsidiaries (the “Thomas Guarantors”) shall
               concurrently with the consummation of the Thomas Industries Acquisition execute
               a supplemental indenture as set forth in the Indenture; 



               



          		        (5)       
               each of the Thomas Guarantors shall concurrently with the consummation of the
               Thomas Industries Acquisition execute a Joinder Agreement in the form attached
               hereto as Exhibit C; and 



               



          		        (6)       
               no Event of Default under the Indenture will have occurred and be continuing or
               result therefrom. 



               



        Simultaneously
with the release of the Escrow Property (less the Discount) pursuant to this Section 3(b),
the Escrow Agent shall release the Discount to Bear Stearns in accordance with wire
transfer instructions attached as Exhibit A hereto. 


        (c)    
          If the conditions contained in clause (b) have not been satisfied on or before
          December 31, 2005 (or such earlier date as the Grantor determines not to pursue
          the Thomas Industries Acquisition, as evidenced by a written notice to the
          Trustee and the Escrow Agent), the Escrow Agent will release the Escrow Property
          to the Paying Agent under the Indenture for payment to holders of the Notes in
          accordance with the escrow redemption provision contained in Section 3.10 of the
          Indenture. The Paying Agent shall pay to the Grantor, as directed in written
          instructions from the Grantor, any portion of such funds in excess of the amount
          required to make such redemption. 


        (d)    
          If, in accordance with Section 7.01(g) under the Indenture, the Escrow Agent
          receives a written notice from the Trustee that: 



     	 	        (i)    
          the principal amount of and accrued and unpaid interest on the Notes has become
          immediately due and payable pursuant to Article VI of the Indenture (an
          “Acceleration Event”), or 



          



     	 	        (ii)    
          the Grantor is redeeming or repurchasing all of the Notes pursuant to the terms
          of the Indenture (a “Redemption Event”), 



          



	  	
then
the Escrow Agent will liquidate all Escrow Property then held by it, and the Escrow Agent
will release to the Paying Agent for payment to the holders of the Notes the amount of
Escrow Property sufficient to pay such accelerated, redeemed or repurchased principal
amount, as applicable, and interest, if any, thereon (A) in the case of an Acceleration
Event, within one Business Day after receipt of such written notice from the Trustee or
(B) in the case of a Redemption Event, within five Business Days after receipt of such
written notice from the Trustee. In the event of a release under this clause (d) in the
case of an Acceleration Event, the Escrow Property will be applied, first, to amounts
owing to the Trustee in respect of fees and expenses of the Trustee, second, to the Paying
Agent for payment to the holders of the Notes to the full extent of all Obligations under
the Indenture and the Notes and, third, following such release to the Paying Agent, the
Escrow Agent will release all remaining Escrow Property, if any, as directed in written
instructions from the Grantor. 

















–5–



             (e)    
          If at any time the Escrow Property exceeds the Initial Deposit by an amount in
          excess of $25,000, upon written instructions from the Grantor, the Escrow Agent
          shall distribute such excess Escrow Property to the Grantor within five Business
          Days of receiving such instruction. 




4.         Addresses 



        Notices,
instructions and other communications shall be sent to the Escrow Agent and the Trustee, 2
North LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attn.: Corporate Trust
Administration and to Grantor as follows: 



	  	Gardner Denver, Inc.

                           1800 Gardner Expressway

                           Quincy, Illinois  62301

                           Attention:  Tracy Pagliara, Esq.

                           Vice President, Administration, General Counsel and Secretary

                           Telecopier:  217-228-8260








     	 	With a copy to:: 



          


	  	Bryan Cave LLP

                           211 North Broadway

                           St. Louis, Missouri  63102

                           Attention:  Denis P. McCusker, Esq.

                           Telecopier:  314-259-2020 





5.         Termination;
Distribution of Escrow Property 



        Upon
the release of all the Escrow Property in accordance with Section 3 hereof, this Agreement
will terminate. 



        Upon
the release of any Escrow Property to the Grantor pursuant to Section 3(b) hereof, such
Escrow Property will be delivered to the recipient, free and clear of any and all
interests of the Escrow Agent, the Trustee and the holders of the Notes. Upon any release
of any Escrow Property to the Paying Agent for distribution to the holders of the Notes
pursuant to Section 3(c) or (d), the Escrow Property so released will be delivered to the
recipients free and clear of any and all claim or interest of the Grantor. 



     6.        
          Compensation 



             (a)    
          The Grantor shall pay all activity charges as separately agreed between the
          Grantor and the Escrow Agent. 



             (b)    
          The Grantor shall be responsible for and shall reimburse the Escrow Agent upon
          demand for all expenses, disbursements and advances incurred or made by the
          Escrow Agent and its agents in connection with this Agreement. 



     7.        
          Terms and Conditions 



             (a)    
          The duties, responsibilities and obligations of the Escrow Agent shall be
          limited to those expressly set forth herein and no duties, responsibilities or
          obligations shall be inferred or implied. The Escrow Agent 















–6–



     shall not be subject
          to, nor required to comply with, any other agreement or to which the Grantor is
          a party, even though reference thereto may be made herein, or to comply with any
          direction or instruction (other than those contained herein or delivered in
          accordance with this Escrow Agreement) from Grantor or any entity acting on its
          behalf. The Escrow Agent shall not be required to, and shall not, expend or risk
          any of its own funds or otherwise incur any financial liability in the
          performance of any of its duties hereunder. 



             (b)    
          This Agreement is for the exclusive benefit of the parties hereto and their
          respective successors hereunder, and shall not be deemed to give, either express
          or implied, any legal or equitable right, remedy, or claim to any other entity
          or person whatsoever. 



             (c)    
          If at any time the Escrow Agent is served with any judicial or administrative
          order, judgment, decree, writ or other form of judicial or administrative
          process which in any way affects Escrow Property (including but not limited to
          orders of attachment or garnishment or other forms of levies or injunctions or
          stays relating to the transfer of Escrow Property), the Escrow Agent is
          authorized to comply therewith in any manner as it or its legal counsel of its
          own choosing deems appropriate; and if the Escrow Agent complies with any such
          judicial or administrative order, judgment, decree, writ or other form of
          judicial or administrative process, the Escrow Agent shall not be liable to any
          of the parties hereto or to any other person or entity even though such order,
          judgment, decree, writ or process may be subsequently modified or vacated or
          otherwise determined to have been without legal force or effect. 



             (d)    
          (i) The Escrow Agent shall not be liable for any action taken or omitted or for
          any loss or injury resulting from its actions or its performance or lack of
          performance of its duties hereunder in the absence of gross negligence or
          willful misconduct on its part. In no event shall the Escrow Agent be liable (A)
          for acting in accordance with or relying upon any instruction, notice, demand,
          certificate or document from the Grantor or any entity acting on behalf of the
          Grantor, (B) for any consequential, punitive or special damages, (C) for the
          acts or omissions of its nominees, correspondents, designees, subagents or
          subcustodians, so long as the same are selected with due care, or (D) for an
          amount in excess of the value of the Escrow Property. 



          		        (ii)       
               The Escrow Agent may consult with legal counsel at the expense of the Grantor as
               to any matter relating to this Escrow Agreement, and the Escrow Agent shall not
               incur any liability in acting in good faith in accordance with any advice from
               such counsel. 



               



          		        (iii)       
               The Escrow Agent shall not incur any liability for not performing any act or
               fulfilling any duty, obligation or responsibility hereunder by reason of any
               occurrence beyond the control of the Escrow Agent (including but not limited to
               any act or provision of any present or future law or regulation or governmental
               authority, any act of God or war, or the unavailability of the Federal Reserve
               Bank wire or telex or other wire or communication facility). 



               



              (e)    
          The Escrow Agent shall provide to the Grantor, on its request, statements
          identifying transactions, transfers or holdings of Escrow Property and each such
          statement shall be deemed to be correct and final, absent manifest error, upon
          receipt thereof by the Grantor unless the Escrow Agent is notified in writing to
          the contrary within thirty (30) business days of the date of such statement. 



             (f)    
          The Escrow Agent shall not be responsible in any respect for the form,
          execution, validity, value or genuineness of documents or securities deposited
          hereunder, or for any description therein, or for the identity, authority or
          rights of persons (other than the Escrow Agent) executing or delivering or
          purporting to execute or deliver any such document, security or endorsement. 














–7–



             (g)    
          Notices, instructions or other communications shall be in writing and shall be
          given to the address set forth in the “Addresses” provision herein (or
          to such other address as may be substituted therefor by written notification to
          the Escrow Agent or the Grantor). Notices to the Escrow Agent shall be deemed to
          be given when actually received by the Escrow Agent. The Escrow Agent is
          authorized to comply with and rely upon any notices, instructions or other
          communications believed by it to have been sent or given by the Grantor or by a
          person or persons authorized by the Grantor. Whenever under the terms hereof the
          time for giving a notice or performing an act falls upon a Saturday, Sunday, or
          banking holiday, such time shall be extended to the next day on which the Escrow
          Agent is open for business. Attached as Schedule A hereto is a list of those
          persons initially entitled to give notices, instructions and other
          communications to the Escrow Agent on behalf of the Grantor. Schedule A may be
          amended from time to time by written notice from the Grantor to the Escrow
          Agent. 



             (h)    
          The Grantor shall be liable for and shall reimburse and indemnify the Escrow
          Agent and hold the Escrow Agent harmless from and against any and all claims,
          losses, liabilities, costs, damages or expenses (including reasonable
          attorneys’ fees and expenses) (collectively, “Losses”)
          arising from or in connection with or related to this Escrow Agreement or being
          the Escrow Agent hereunder (including but not limited to Losses incurred by the
          Escrow Agent in connection with its successful defense of any claim of gross
          negligence or willful misconduct on its part), provided, however, that nothing
          contained herein shall require the Escrow Agent to be indemnified for Losses
          caused by its gross negligence, willful misconduct or bad faith. 



             (i)    
          (i) The Grantor may, with the consent of the Trustee, remove the Escrow Agent at
          any time by giving to the Escrow Agent thirty (30) calendar days’ prior
          notice in writing signed by the Grantor. The Escrow Agent may resign at any time
          by giving to the Grantor thirty (30) calendar days’ prior written notice
          thereof. Any such removal or resignation of the Escrow Agent shall not become
          effective until appointment of a successor Escrow Agent as provided below. 



          		        (ii)       
               Within ten (10) calendar days after giving the foregoing notice of removal to
               the Escrow Agent or receiving the foregoing notice of resignation from the
               Escrow Agent, the Grantor shall appoint a successor Escrow Agent acceptable to
               the Trustee. The Grantor shall cause any successor Escrow Agent to assume the
               obligations of the Escrow Agent hereunder or to enter into such other escrow
               agreement as may be acceptable to the Trustee in its sole discretion. If a
               successor Escrow Agent has not accepted such appointment by the end of such
               10-day period, the Escrow Agent may apply to a court of competent jurisdiction
               for the appointment of a successor Escrow Agent or for other appropriate relief.
               The costs and expenses (including reasonable attorneys’ fees and expenses)
               incurred by the Escrow Agent in connection with such proceeding shall be paid by
               the Grantor. 



               



          		        (iii)       
               Upon receipt of the identity of the successor Escrow Agent, the Escrow Agent
               shall deliver the Escrow Property then held hereunder to the successor Escrow
               Agent. 



               



          		        (iv)       
               Upon delivery of the Escrow Property to the successor Escrow Agent, the Escrow
               Agent shall have no further duties, responsibilities or obligations hereunder. 



               



             (j)    
          (i) In the event of any ambiguity or uncertainty hereunder or in any notice,
          instruction or other communication received by the Escrow Agent hereunder, the
          Escrow Agent may, in its sole discretion, refrain from taking any action other
          than retaining possession of the Escrow Property, unless the Escrow Agent
          receives written instructions, signed by the Grantor, which eliminates such
          ambiguity or uncertainty. 














–8–



          		        (ii)       
               Subject to the last sentence of Section 1(b), in the event of any dispute
               between or conflicting claims by or among the Grantor and/or any other person or
               entity (other than the Trustee) with respect to any Escrow Property, the Escrow
               Agent shall be entitled, in its sole discretion, to refuse to comply with any
               and all claims, demands or instructions with respect to such Escrow Property so
               long as such dispute or conflict shall continue, and the Escrow Agent shall not
               be or become liable in any way to the Grantor for failure or refusal to comply
               with such conflicting claims, demands or instructions. The Escrow Agent shall be
               entitled to refuse to act until, in its sole discretion, either (A) such
               conflicting or adverse claims or demands shall have been determined by a final
               order, judgment or decree of a court of competent jurisdiction, which order,
               judgment or decree is not subject to appeal, or settled by agreement between the
               conflicting parties as evidenced in a writing satisfactory to the Escrow Agent
               or (B) the Escrow Agent shall have received security or an indemnity
               satisfactory to it sufficient to hold it harmless from and against any and all
               Losses which it may incur by reason of so acting. The Escrow Agent may, in
               addition, elect, in its sole discretion, to commence an interpleader action or
               seek other judicial relief or orders as it may deem, in its sole discretion,
               necessary. The costs and expenses (including reasonable attorneys’ fees and
               expenses) incurred in connection with such proceeding shall be paid by the
               Grantor. 



               



             (k)    
          This Agreement shall be interpreted, construed, enforced and administered in
          accordance with the internal substantive laws (and not the choice of law rules)
          of the State of New York. The Escrow Agent’s jurisdiction for purposes of
          Section 8-110 and 9-304 of the New York Uniform Commercial Code shall be the
          State of New York. The Grantor hereby submits to the personal jurisdiction of,
          and agrees that all proceedings relating hereto shall be brought in, courts
          located within the City and State of New York. The Grantor hereby waives the
          right to trial by jury in any such proceedings. The Grantor waives personal
          service of process and consents to service of process by certified or registered
          mail, return receipt requested, directed to it at the address last specified for
          notices hereunder, and such service shall be deemed completed ten (10) calendar
          days after the same is so mailed. 



             (l)    
          Except as otherwise permitted herein, this Escrow Agreement may be modified only
          by a written amendment signed by all the parties hereto, and no waiver of any
          provision hereof shall be effective unless expressed in a writing signed by the
          party to be charged. The parties hereto acknowledge that the Trustee’s and
          the Grantor’s rights to amend this agreement are subject to the terms of
          the Indenture. 



             (m)    
          The rights and remedies conferred upon the parties hereto shall be cumulative,
          and the exercise or waiver of any such right or remedy shall not preclude or
          inhibit the exercise of any additional rights or remedies. The waiver of any
          right or remedy hereunder shall not preclude the subsequent exercise of such
          right or remedy. 



             (n)    
          The Grantor and the Escrow Agent each hereby represents and warrants (i) that
          this Escrow Agreement has been duly authorized, executed and delivered on its
          behalf and constitutes its legal, valid and binding obligation and (ii) that the
          execution, delivery and performance of this Escrow Agreement by it does not and
          will not violate any applicable law or regulation. 



             (o)    
          The invalidity, illegality or unenforceability of any provision of this
          Agreement shall in no way affect the validity, legality or enforceability of any
          other provision; and if any provision is held to be enforceable as a matter of
          law, the other provisions shall not be affected thereby and shall remain in full
          force and effect. 



             (p)    
          This Agreement shall constitute the entire agreement of the parties with respect
          to the subject matter and supersedes all prior oral or written agreements in
          regard thereto. In the event of any conflict between this Agreement and any
          other agreement with respect to the Escrow Account, the provisions of this
          Agreement shall control. 














–9–



             (q)    
          The provisions of these Terms and Conditions shall survive termination of this
          Escrow Agreement and/or the resignation or removal of the Escrow Agent. 



             (r)    
          No printed or other material in any language, including prospectuses, notices,
          reports, and promotional material which mentions “The Bank of New
          York” by name in its capacity as the Escrow Agent or the rights, powers, or
          duties of the Escrow Agent under this Agreement shall be issued by any other
          parties hereto, or on such party’s behalf, without the prior written
          consent of the Escrow Agent. The Escrow Agent consents to the use of its name in
          the Preliminary Offering Memorandum dated April 15, 2005, the Offering
          Memorandum, the Purchase Agreement and the Indenture, as the same may be amended
          from time to time. 



             (s)    
          The headings contained in this Agreement are for convenience of reference only
          and shall have no effect on the interpretation or operation hereof. 



             (t)    
          This Escrow Agreement may be executed by each of the parties hereto in any
          number of counterparts, each of which counterpart, when so executed and
          delivered, shall be deemed to be an original and all such counterparts shall
          together constitute one and the same agreement. 



             (u)    
          Except as otherwise set forth herein, the Escrow Agent does not have any
          interest in the Escrowed Property deposited hereunder but is serving as escrow
          holder only and having only possession thereof. The Grantor shall pay or
          reimburse the Escrow Agent upon request for any transfer taxes or other taxes
          relating to the Escrowed Property incurred in connection herewith and shall
          indemnify and hold harmless the Escrow Agent for any amounts that it is
          obligated to pay in the way of such taxes. Any payments of income from this
          Escrow Account shall be subject to withholding regulations then in force with
          respect to United States taxes. The other parties hereto will provide the Escrow
          Agent with appropriate W-9 forms for tax I.D., number certifications, or W-8
          forms for non-resident alien certifications, as requested. It is understood that
          the Escrow Agent shall be responsible for income reporting only with respect to
          income earned on investment of funds which are a part of the Escrowed Property
          and is not responsible for any other reporting. The Escrow Agent may act through
          its agents and shall not be responsible for the negligence or misconduct of any
          agent appointed with due care by it hereunder. This paragraph and paragraph (9)
          shall survive notwithstanding any termination of this Escrow Agreement or the
          resignation of the Escrow Agent. 










–10–




        IN
WITNESS WHEREOF, each of the parties has caused this Escrow and Security Agreement to be
executed by a duly authorized officer as of the day and year first written above. 


	  	GARDNER DENVER, INC.




	  	By:	 
 
	  		  Name:
  Title:





	  	THE BANK OF NEW YORK TRUST COMPANY, N.A.,
 as Escrow Agent




	  	By:	 
 
	  		  Name:
  Title:





	  	THE BANK OF NEW YORK TRUST COMPANY, N.A.,
 as Trustee




	  	By:	 
 
	  		  Name:
  Title:











SCHEDULE A 



        The
following persons are entitled to give notices, instructions and other communications to
the Escrow Agent on behalf of the Grantor: 


	  	Name 	Title 




	  	Ross J. Centanni  	Chairman, President and Chief Executive Officer 




	  	 Helen W. Cornell	Vice President, Finance and Chief Financial Officer 




	  	Tracy D. Pagliera	Vice President, Administration, General Counsel and Secretary 




	  	Michael Sommer	Treasurer












EXHIBIT A
WIRE INSTRUCTIONS 




Citibank

111 Wall Street, New York, NY

ABA #021-000089

For The Account of Bear Stearns

Account #09253186

For Further Credit To:

Account #014-95105-13

Attn: Jennie Supple

Syndicate Accounting

Reference: Gardner Denver 










EXHIBIT B 




[Form of Officer’s
Certificate] 




of 




Gardner Denver, Inc. 



        This
certificate is being delivered pursuant to Section 3(b) of the Escrow and Security
Agreement, dated as of May 4, 2005 (the “Escrow Agreement”), between
Gardner Denver, Inc., a Delaware corporation (the “Company”), and The
Bank of New York Trust Company, N.A., a national banking association, as Escrow Agent and
Trustee (the “Escrow Agent”). Capitalized terms used but not defined
herein have the respective meanings specified in the Escrow Agreement. The Company hereby
certifies through the undersigned officer that: 



          		        1.       
               All conditions to closing of the Thomas Industries Acquisition have been
               satisfied or waived. 



               



          		        2.       
               Concurrently with the delivery of this Certificate and the release of funds (the
               “Released Funds”) as directed by the Company pursuant to the
               provisions of the Escrow Agreement, the Thomas Industries Acquisition will be
               consummated. 



               



          		        3.       
               The Escrow Property will be applied in the manner described under the caption
               “Use of Proceeds” in the Offering Memorandum. 



               



          		        4.       
               Each of the Thomas Guarantors shall concurrently with the consummation of the
               Thomas Industries Acquisition execute a supplemental indenture as set forth in
               the Indenture. 



               



          		        5.       
               Each of the Thomas Guarantors shall concurrently with the consummation of the
               Thomas Industries Acquisition execute a Joinder Agreement. 



               



          		        6.       
               No Event of Default under the Indenture has occurred and is continuing or will
               result from the consummation of the Thomas Industries Acquisition. 



               



        IN
WITNESS WHEREOF, the Company, through the undersigned officer, has signed this Certificate
__ day of             , 2005. 


	  	GARDNER DENVER, INC.




	  	By:	 
 
	  		  Name:
  Title:













EXHIBIT C 




[FORM OF JOINDER
AGREEMENT] 



        WHEREAS,
Gardner Denver, Inc. (the “Company”), the subsidiaries of the Company
party thereto, (collectively, the “Guarantors”) and the Initial
Purchasers named therein (the “Initial Purchasers”) heretofore executed
and delivered a Purchase Agreement (“Purchase Agreement”), providing for
the issuance and sale by the Company of its 8% Senior Subordinated Notes due 2013 (the
“Notes”); and 



        WHEREAS,
the Company, each of the Guarantors and the Initial Purchasers heretofore executed and
delivered a Registration Rights Agreement (the “Registration Rights
Agreement”), providing for the registration under the Securities Act of 1933 of
the Notes; and 



        WHEREAS,
as a condition to the consummation of the offering of the Notes, the Company agreed that
upon consummation of the Acquisition (as defined in the Purchase Agreement), Thomas
Industries Inc. and certain of its subsidiaries would become party to the Purchase
Agreement and the Registration Rights Agreement as Guarantors upon the Release (as defined
in the Purchase Agreement). 



        NOW,
THEREFORE, each of the undersigned hereby agrees for the benefit of the Initial Purchasers
as follows: 



        Each
of the undersigned hereby acknowledges that it has received and reviewed a copy of the
Purchase Agreement, the Registration Rights Agreement and all other documents it deems fit
to enter into this Joinder Agreement (the “Joinder Agreement”), and
acknowledges and agrees to (i) join and become a party to the Purchase Agreement and the
Registration Rights Agreement as indicated by its signature below; (ii) be bound by all
covenants, agreements, representations, warranties and acknowledgments on the part of the
Guarantors in the Purchase Agreement and the Registration Rights Agreement as if made by,
and with respect to, each signatory hereto; and (iii) perform all obligations and duties
required of an indemnifying party pursuant to the Purchase Agreement and the Registration
Rights Agreement. 



        Each
of the undersigned hereby represents and warrants to and agrees with the Initial
Purchasers that it has all the requisite corporate or other power and authority to
execute, deliver and perform its obligations under this Joinder Agreement and that, when
this Joinder Agreement is executed and delivered, it will constitute a valid and legally
binding agreement enforceable against each of the undersigned in accordance with its
terms. 



        THE
VALIDITY AND INTERPRETATION OF THIS JOINDER AGREEMENT, AND THE TERMS AND CONDITIONS SET
FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN. 



        IN
WITNESS WHEREOF, the undersigned has executed this agreement this ___ day of ______, 2005. 


	  	[Thomas Guarantors]




	  	By:	 
 
	  		  Name:
  Title: