Document:

Exhibit  10.1

Exhibit 10.1
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “First Amendment”) is made as of May 31, 2013 (the “First Amendment Effective Date”), by and among FLOW INTERNATIONAL CORPORATION, a Washington corporation (“Borrower”), BANK OF AMERICA, N.A., as Lender, and BANK OF AMERICA, N.A., as Agent, Swing Line Lender and L/C Issuer.
RECITALS
A.Borrower, Lender, and Bank of America, as Agent, Swing Line Lender and L/C Issuer entered into that certain Third Amended and Restated Credit Agreement dated as of March 2, 2011 (as amended, restated or modified from time to time, the “Credit Agreement”).
B.Borrower, Lender, Agent, Swing Line Lender and L/C Issuer wish to amend the Credit Agreement further as set forth in this First Amendment.

NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1.Definitions; Interpretation.  Capitalized terms not otherwise defined in this First Amendment shall have the meanings given in the Credit Agreement, as amended by this First Amendment.  The rules of construction and interpretation specified in Sections 1.02 through 1.05 of the Credit Agreement shall also apply to this First Amendment and are incorporated herein by this reference.
2.Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows, effective as of the First Amendment Effective Date:
(a)Amendment to Definitions.  In Section 1.01, the following definitions are amended and restated to read as follows: 
“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Consolidated Senior Leverage Ratio as set forth in the most recent Compliance Certificate received by Agent pursuant to Section 6.02(b):

	
						
	Pricing Level
	Consolidated  Senior Leverage Ratio
	Commitment Fee
	Eurodollar Rate +
	Base Rate 
+
	Letters of Credit

	1
	≥ 2.50
	0.4%
	2.25%
	0.25%
	2.25%

	2
	≥ 2.00 but < 2.50
	0.4%
	2%
	—%
	2%

	3
	≥ 1.50 but < 2.00
	0.35%
	1.75%
	—%
	1.75%

	4
	≥1.00 but < 1.50
	0.35%
	1.5%
	—%
	1.5%

	5
	< 1.00
	0.3%
	1.25%
	—%
	1.25%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Senior Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is required to be delivered pursuant to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then, at the request of Required Lenders, Pricing Level 1 shall apply as of the first Business Day of the month following the date such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered.  The Applicable Rate in effect as of the Closing Date shall be determined based on the Consolidated Senior Leverage Ratio in the certificate required under Section 4.01(a)(vii) as a condition precedent to the initial Credit Extension.  Such Applicable Rate shall remain in effect until the first Business Day immediately following the delivery of the first Compliance Certificate required under Section 6.02(a).  Thereafter, the Applicable Rate shall be increased or decreased as set forth above based on the successive Compliance Certificates or, as applicable, the Compliance Certificate due dates.  

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).
“Maturity Date” means May 31, 2017; provided, however, that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
(b)    New Definitions.  The following are added as new defined terms to Section 1.01 of the Credit Agreement:
“First Amendment” means that certain First Amendment to Third Amended and Restated Credit Agreement dated as of May 31, 2013 among Borrower, Lender, Agent, Swing Line Lender and L/C Issuer.
“First Amendment Effective Date” has the meaning given in the First Amendment.
(c)    Amendment to Schedule 2.01.  Schedule 2.01 attached to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached to this First Amendment.        
3.Conditions to Effectiveness.  This First Amendment shall become effective upon fulfillment, to Agent's satisfaction, of each the following conditions (unless waived in writing by Agent):
(a)Documents.  Borrower shall have delivered to Agent the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the First Amendment Effective Date (or, in the case of certificates of governmental officials, a recent date before the First Amendment Effective Date) and each in form and substance satisfactory to Agent and each of the Lenders:
		
	(i)
	this First Amendment;

		
	(ii)
	if requested by Lender, a Note substantially in the form of Exhibit A to this First Amendment;

		
	(iii)
	such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

		
	(iv)
	such documents and certifications as Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

		
	(v)
	a favorable opinion of counsel to the Loan Parties, acceptable to Agent, addressed to Agent and each Lender, as to the matters set forth concerning the Loan Parties and the Loan Documents in form and substance satisfactory to Agent;

		
	(vi)
	a certificate signed by a Responsible Officer of Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied; and (B) that there has been no event or circumstance, since the date of the most recent financial statements of the Borrower and its Subsidiaries filed with the SEC, that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and (C) that Borrower has no Subsidiary that constitutes a Domestic Material Subsidiary;

		
	(vii)
	such other assurances, certificates, documents, consents or opinions as Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.

(b)    Legal Fees.    Unless waived by Agent, Borrower shall have paid all fees, charges and disbursements of counsel to Agent (directly to such counsel if requested by Agent) to the extent invoiced prior to or on the First Amendment Effective Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between Borrower and Agent). 
(c)    Reimbursement for Expenses.  The Borrower shall have reimbursed the Agent for all documented expenses actually incurred by the Agent in connection with the preparation of this First Amendment and the other Loan Documents and shall have paid all other amounts due and owing under the Loan Documents;
(d)    Representations True; No Default.  After giving effect to this First Amendment and the transactions contemplated hereby, (i) the representations and warranties of the Borrower and the other Loan Parties contained in Article V of the Credit Agreement or any other Loan Documents, or which are contained in any documents furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of this First Amendment, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement, and (ii) no Default and no Event of Default exists or will occur as a result of the execution of this First Amendment; and
(e)    Other Documents.  The Agent and each Required Lender shall have received such other documents, instruments, and undertakings as the Agent and such Lender may reasonably request.
Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Agent shall have received notice from such Lender prior to the proposed First Amendment Effective Date specifying its objection thereto.
4.Agent Authorizations.  The Lender, the L/C Issuer and the Swing Line Lender hereby authorize and instruct the Agent to execute and deliver this First Amendment.  
5.No Further Amendment.  Except as expressly modified by this First Amendment, the Credit Agreement and the other Loan Documents shall remain unmodified and in full force and effect and the parties hereby ratify their respective obligations thereunder.  References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby.
6.Reservation of Rights.  The Borrower acknowledges and agrees that the execution and delivery by the Lender, the Agent, the L/C Issuer and the Swing Line Lender of this First Amendment shall not be deemed to create a course of dealing or otherwise obligate the Lender, the Agent, the L/C Issuer or the Swing Line Lender to forbear or execute similar amendments under the same or similar circumstances in the future.
7.Miscellaneous.
(a)Integration.  This First Amendment, together with the other Loan Documents, comprise the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersede all prior agreements, written or oral, on such subject matter.
(b)Severability.  Any provision of this First Amendment 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 thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(c)Counterparts.  This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(d)Governing Law.  This First Amendment shall be governed by and construed in accordance with the laws of the State of Washington.
(e)Release of Certain Collateral.  Agent hereby releases the portions of the Collateral that are set forth below in this Section 7(e): 
		
	(i)
	Agent terminates, and releases the lien and security interest granted by, the Indiana Mortgage; 

		
	(ii)
	Agent terminates, and releases the Security Interest granted by, the Borrower Pledge Agreement;

		
	(iii)
	Agent terminates, and releases the Security Interest granted by, the Guarantor Pledge Agreement;

		
	(iv)
	Agent releases its Security Interest in all Collateral (as defined in the Borrower Security Agreement)(“Borrower Collateral”) except that Agent retains, and Borrower hereby reaffirms, Agent's Security Interest in the following Borrower Collateral (collectively, “Retained Borrower Collateral”):  

		
	(A)
	Rights to Payment (as defined in the Borrower Security Agreement); 

		
	(B)
	Inventory (as defined in the Borrower Security Agreement);

		
	(C)
	Proceeds and Products (as defined in the Borrower Security Agreement), in whatever form, of Rights to Payment and Inventory; and 

		
	(D)
	Borrower Supporting Collateral (as defined below).

As used in this First Amendment, “Borrower Supporting Collateral” means Borrower Collateral: 
		
	(aa)
	whose sale, lease, license or other disposition gives rise to Retained Borrower Collateral (or which the Retained Borrower Collateral is otherwise Proceeds or Products of); and 

		
	(bb)
	whose release would impair Agent's Security Interest in the Borrower Retained Collateral or the perfection, priority, enforceability and non-avoidability of such retained Security Interest.  

		
	(E)
	Effective as of the First Amendment Effective Date: 

		
	(aa)
	the term “Collateral” as defined in the Borrower Security Agreement shall, as used therein, mean the Borrower Retained Collateral (as defined above); and 

		
	(bb)
	the covenants and undertakings in the Borrower Security Agreement regarding to any Borrower Collateral shall continue to apply only to the extent such Borrower Collateral is Retained Borrower Collateral.

		
	(v)
	Agent releases its Security Interest in all Collateral (as defined in the Guarantor Security Agreement)(“Guarantor Collateral”) except that Agent retains, and Borrower reaffirms and shall cause any future Guarantor to reaffirm, Agent's Security Interest in the following Guarantor Collateral (collectively, “Retained Guarantor Collateral”):  

		
	(A)
	Rights to Payment (as defined in the Guarantor Security Agreement); 

		
	(B)
	Inventory (as defined in the Guarantor Security Agreement);

		
	(C)
	Proceeds and Products (as defined in the Guarantor Security Agreement), in whatever form, of Rights to Payment and Inventory; and 

		
	(D)
	Guarantor Supporting Collateral (as defined below).

As used in this First Amendment, “Guarantor Supporting Collateral” means Guarantor Collateral: 

		
	(aa)
	whose sale, lease, license or other disposition gives rise to Retained Guarantor Collateral (or which the Retained Guarantor Collateral is otherwise Proceeds or Products of); and 

		
	(bb)
	whose release would impair Agent's Security Interest in the Guarantor Retained Collateral or the perfection, priority, enforceability and non-avoidability of such retained Security Interest.  

		
	(E)
	Effective as of the First Amendment Effective Date: 

		
	(aa)
	the term “Collateral” as defined in the Guarantor Security Agreement shall, as used therein, mean the Guarantor Retained Collateral (as defined above); and 

		
	(bb)
	the covenants and undertakings in the Guarantor Security Agreement regarding to any Guarantor Collateral shall continue to apply only to the extent such Guarantor Collateral is Retained Guarantor Collateral.

		
	(vi)
	For avoidance of doubt, the foregoing termination of the Indiana Mortgage, the Borrower Pledge Agreement and the Guarantor Pledge Agreement will terminate any grants of liens or Security Interests and any contractual obligations that would otherwise occur or arise after the First Amendment Effective Date; provided, however, that such termination will not affect: 

		
	(aa)
	any liabilities of Borrower or Guarantor related to actions or events that occurred prior to the First Amendment Effective Date; or

		
	(bb)
	any obligations or liabilities that arise under any agreements among any of the parties hereto (including, without limitation, any Loan Documents) other than the Indiana Mortgage, the Borrower Pledge Agreement and the Guarantor Pledge Agreement.

		
	(vii)
	For the further avoidance of doubt, Agent hereby releases all Security Interests previously granted: (aa) by Borrower in all Intellectual Property (as defined in the Borrower Security Agreement) or (bb) by Guarantor in all Intellectual Property (as defined in the Guarantor Security Agreement).  Agent acknowledges that Borrower Supporting Collateral (as defined above) and Guarantor Supporting Collateral (as defined above) shall not include any such released Intellectual Property.

(f)Reaffirmation of Loan Documents.  In addition to the Loan Documents executed and delivered as of the First Amendment Effective Date, without implying that such reaffirmation is required, the Borrower hereby reaffirms and shall cause any future Guarantor to reaffirm that: 
		
	(i)
	all other Loan Documents (including, without limitation, the Guaranty, Collateral Documents, the Environmental Indemnity and the Subordination Agreement) are in full force and effect, including all of the Borrower's and Guarantor's obligations and liabilities thereunder; 

		
	(ii)
	references therein to the “Credit Agreement” shall mean the Credit Agreement this Agreement as amended, modified or supplemented by this First Amendment and from time to time hereafter; and 

		
	(iii)
	any amounts or other obligations now or hereafter guaranties, secured or otherwise supported by such reaffirmed Loan Documents with include amounts owing under the Credit Agreement as so amended.

(g)Documents Implementing Collateral Release and Reaffirmation. Agent, Lender and Borrower agree to cooperate with each other in good faith to file or record in the applicable public records such releases or modifications as may be required to implement and give public record notice Sections 7(e) and 7(f) above. 
(h)Oral Agreements Not Enforceable.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first above written.
FLOW INTERNATIONAL CORPORATION
By:     /s/ Allen Hsieh
Name:     Allen Hsieh
Title:     CFO
BANK OF AMERICA, N.A., as Agent
By:     /s/ Gordon H. Gray
Name:     Gordon H. Gray
Title:     Senior Vice President
BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender
By:     /s/ Gordon H. Gray
Name:     Gordon H. Gray
Title:     Senior Vice President

SCHEDULE 2.01
COMMITMENTS 
AND APPLICABLE PERCENTAGES

	
			
	 

	Lender
	Commitment
	Applicable Percentage

	Bank of America, N.A.
	$40,000,000.00
	100%

EXHIBIT A
FORM OF REVOLVING NOTE
$40,000,000.00                                        May 31, 2013
FOR VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to Bank of America, N.A. or registered assigns (“Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Revolving Loan from time to time made by the Lender to Borrower under that certain Third Amended and Restated Credit Agreement, dated as of March 2, 2011 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Agent, L/C Issuer and Swing Line Lender.  The Note amends and restates that certain Revolving Note dated as of March 2, 2011 made by Borrower payable to Lender in connection with the Third Amended and Restated Credit Agreement, dated as of March 2, 2011.
Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement.  Except as otherwise provided in Section 2.04(f) of the Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to Agent for the account of the Lender in Dollars in immediately available funds at the Agent's Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid and reborrowed in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Guaranties and is secured by the Collateral.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Revolving Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Revolving Loans and payments with respect thereto.
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON.
[Signature Page Follows]

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
FLOW INTERNATIONAL CORPORATION
By:     
Name:     
Title:BRC-2013.4.30-EX10.1

EXHIBIT 10.1

BRADY CORPORATION
CHANGE OF CONTROL AGREEMENT

AGREEMENT, made as of February 28, 2013, between Brady Corporation, a Wisconsin corporation, (“Corporation”) and Louis T. Bolognini.
WHEREAS, the Executive is now serving as an executive of the Corporation in a position of importance and responsibility; and
WHEREAS, the Executive possesses intimate knowledge of the business and affairs of the Corporation and its policies, markets and financial and human resources, and the Executive has acquired certain confidential information and data with respect to the Corporation; and
WHEREAS, the Corporation wishes to continue to receive the benefit of the Executive's knowledge and experience and, as an inducement for continued service, is willing to offer the Executive certain payments due to severance as a result of change of control as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Executive and Corporation agree as follows:
SECTION 1.DEFINITIONS.

(a)Change of Control.  For purposes of this Agreement, a “Change of Control” shall occur if and when any person or group of persons (as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934) other than the members of the family of William H. Brady, Jr. and their descendants, or trusts for their benefit, and the William H. Brady, Jr. Family Trust, collectively, directly or indirectly controls in excess of 50% of the voting common stock of the Corporation.

(b)Termination Due to Change of Control.  A “Termination Due to Change of Control” shall occur if within the 24 month period beginning with the date a Change of Control occurs (i) the Executive's employment with the Corporation is involuntarily terminated (other than by reason of death, disability or Cause) or (ii) the Executive's employment with the Corporation is voluntarily terminated by the Executive subsequent to (A) any reduction in the total of the Executive's annual base salary (exclusive of fringe benefits) and the Executive's target bonus in comparison with the Executive's annual base salary and target bonus immediately prior to the date the Change of Control occurs, (B) a significant diminution in the responsibilities or authority of the Executive in comparison with the Executive's responsibility and authority immediately prior to the date the Change of Control occurs or (C) the imposition of a requirement by the Corporation that the Executive relocate to a principal work location more than 50 miles from the Executive's principal work location immediately prior to the date the Change of Control occurs.

(c)“Cause” means (i) the Executive's willful and continued failure to substantially perform the Executive's duties with the Corporation (other than any such failure resulting from physical or mental incapacity) after written demand for performance is given to the Executive by the Corporation which specifically identifies the manner in which the Corporation believes the Executive has not substantially performed and a reasonable time to cure has transpired, (ii) the Executive's conviction of (or plea of nolo contendere for the commission of) a felony, or (iii) the Executive's commission of an act of dishonesty or of any willful act of misconduct which results in or could reasonably be expected to result in significant injury (monetarily or otherwise) to the Corporation, as determined in good faith by the Board of Directors of the Corporation.

(d)“Beneficiary” means any one or more primary or secondary beneficiaries designated in writing by the Executive on a form provided by the Corporation to receive any benefits which may become payable under this Agreement on or after the Executive's death.  The Executive shall have the right to name, change or revoke the Executive's designation of a Beneficiary on a form provided by the Corporation.  The designation on file with the Corporation at the time of the Executive's death shall be controlling.  Should the Executive fail to make a valid Beneficiary designation or leave no named Beneficiary surviving, any benefits due shall be paid to the Executive's spouse, if living; or if not living, then to the Executive's estate.

(e)“Code” means the Internal Revenue Code of 1986, as amended.

SECTION 2.PAYMENTS UPON TERMINATION DUE TO CHANGE OF CONTROL.

(a)Following Termination Due to Change of Control, the Executive shall be paid an amount equal to two times the annual base salary paid the Executive by the Corporation in effect immediately prior to the date the Change of Control occurs, and two times the average bonus payment received in the three years immediately prior to the date the Change of Control occurs.  Such amount shall be paid in 24 monthly installments beginning on the 15th day of the month following the month in which the Executive's employment with the Corporation terminates.

(b)If the scheduled payments under paragraph (a) above would result in disallowance of any portion of the Corporation's deduction therefore under Section 162(m) of the Code, the payments called for under paragraph (a) shall be limited to the amount which is deductible, with the balance to be paid during the first taxable year in which the Corporation reasonably anticipates that the deduction of such payment is not barred by Section 162(m).  However, in such event, the Corporation shall pay the Executive on a quarterly basis an amount of interest based on the prime rate recomputed each quarter on the unpaid scheduled payments.

(c)It is intended that (A) each payment or installment of payments provided under this Section 2 is a separate “payment” for purposes of Code Section 409A and (B) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A, including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).  Notwithstanding anything to the contrary in this Agreement, if the Corporation determines that on the Termination Due to Change of Control the Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Corporation and that any payments to be provided to Executive are or may become subject to the additional tax under Code Section 409A(a)(1)(B) or any other taxes or penalties imposed under Code Section 409A (“Section 409A Taxes”), then such payments shall be delayed until the date that is six (6) months after the Termination Due to Change of Control.  Any delayed payments shall be made in a lump sum on the first day of the seventh month following the Termination Due to Change of Control, or such earlier date that, as determined by the Corporation, is sufficient to avoid the imposition of any Section 409A Taxes on Executive.

SECTION 3.EXCISE TAX, ATTORNEY FEES.

(a)If the payments under Section 2 in combination with any other payments which the Executive has the right to receive from the Corporation (the “Total Payments”) would result in the Executive incurring an excise tax as a result of Section 280(G) of the Code, the Executive will be solely responsible for such excise tax.

(b)If the Executive is required to file a lawsuit to enforce the Executive's rights under this Agreement and the Executive prevails in such lawsuit, the Corporation will reimburse the Executive for attorney fees incurred up to a maximum of $25,000.00.

SECTION 4.DEATH AFTER THE EXECUTIVE HAS BEGUN RECEIVING PAYMENTS.

Should the Executive die after Termination Due to Change of Control, but before receiving all payments due the Executive hereunder, any remaining payments due shall be made to the Executive's Beneficiary.
SECTION 5.    CONFIDENTIAL INFORMATION AGREEMENT.
The Executive has obligations under the separate Confidential Information Agreement between the Executive and the Corporation which continue beyond the Executive's termination of employment.  The payments to be made hereunder are conditioned upon the Executive's compliance with the terms of the Confidential Information Agreement.  The payments made hereunder shall be reduced by any payments the Corporation makes to the Executive under Section 3 of the Confidential Information Agreement.  In the event the Executive violates the provisions of the Confidential Information Agreement, no further payments shall be due hereunder and the Executive shall be obligated to repay all previous payments received hereunder in the same manner as provided in Section 4 of the Confidential Information Agreement.
SECTION 6.    MISCELLANEOUS.

(a)Non-Assignability.  This Agreement is personal to the Executive and, without the prior written consent of the Corporation, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors and assigns and shall also be enforceable by the Executive's legal representatives.

(b)Successors.  The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would have been required to perform it if no such succession had taken place.  As used in this Agreement, “Corporation” shall mean both the Corporation as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise.

(c)Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Wisconsin, without reference to principles of conflict of laws, to the extent not preempted by federal law.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

(d)Notices.  All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:        Louis T. Bolognini        

If to the Corporation:        Brady Corporation
6555 West Good Hope Road
Milwaukee, Wisconsin  53223
Attention:  CFO
or to such other address as either party furnishes to the other in writing in accordance with this paragraph.  Notices and communications shall be effective when actually received by the addressee.
(e)    Construction.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.  If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law.
(f)    No Guarantee of Employment.  Nothing contained in this Agreement shall give the Executive the right to be retained in the employment of the Corporation or affect the right of the Corporation to dismiss the Executive.
(g)    Amendment; Entire Agreement.  This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives.  This Agreement contains the entire agreement between the parties on the subjects covered and replaces all prior writings, proposals, specifications or other oral or written materials relating thereto.
(h)    Impact on Other Plans.  No amounts paid to the Executive under this Agreement will be taken into account as “wages”, “salary”, “base pay” or any other type of compensation when determining the amount of any payment or allocation, or for any other purpose, under any other qualified or nonqualified plan or agreement of the Corporation, except as otherwise may be specifically provided by such plan or agreement.

(i)    Other Agreements.  This Agreement supersedes any other severance arrangement or Change of Control Agreement between the Corporation and the Executive.  This Agreement does not confer any payments or benefits other than the payments described in Sections 2 and 3 hereof.

(j)    Withholding.  To the extent required by law, the Corporation shall withhold any taxes required to be withheld with respect to this Agreement by the federal, state or local government from payments made hereunder or from other amounts paid to the Executive by the Corporation.

(k)    Facility of Payment.  If the Executive or, if applicable, the Executive's Beneficiary, is under legal disability, the Corporation may direct that payments be made to a relative of such person for the benefit of such person, without the intervention of any legal guardian or conservator, or to any legal guardian or conservator of such person.  Any such distribution shall constitute a full discharge with respect to the Corporation and the Corporation shall not be required to see to the application of any distribution so made.

SECTION 7.     CLAIMS PROCEDURE.

(e)Claim Review.  If the Executive or the Executive's Beneficiary (a “Claimant”) believes that he or she has been denied all or a portion of a benefit under this Agreement, he or she may file a written claim for benefits with the Corporation.  The Corporation shall review the claim and notify the Claimant of the Corporation's decision within 60 days of receipt of such claim, unless the Claimant receives written notice prior to the end of the 60 day period stating that special circumstances require an extension of the time for decision.  The Corporation's decision shall be in writing, sent by mail to the Claimant's last known address, and if a denial of the claim, must contain the specific reasons for the denial, reference to pertinent provisions of this Agreement on which the denial is based, a designation of any additional material necessary to perfect the claim, and an explanation of the claim review procedure.

(f)Appeal Procedure to the Board.  A Claimant is entitled to request a review of any denial by the full Board by written request to the Chair of the Board within 60 days of receipt of the denial.  Absent a request for review within the 60-day period, the claim will be deemed to be conclusively denied.  The Board shall afford the Claimant the opportunity to review all pertinent documents and submit issues and comments in writing and shall render a review decision in writing, all within 60 days after receipt of a request for review (provided that, in special circumstances the Board may extend the time for decision by not more than 60 days upon written notice to the Claimant.)  The Board's review decision shall contain specific reasons for the decision and reference to the pertinent provisions of this Agreement.

IN WITNESS WHEREOF, the Executive has signed this Agreement and, pursuant to the authorization of the Board, the Corporation has caused this Agreement to be signed, all as of the date first set forth above.
	
		
	 
	 

	 
	/s/ LOUIS T. BOLOGNINI

	 
	Executive - Louis T. Bolognini

	 
	Senior Vice President, General Counsel & Secretary

	 
	 

	 
	Brady Corporation

	 
	 

	By:
	/s/ THOMAS J. FELMER

	 
	Thomas J. Felmer

	 
	Senior Vice President and Chief Financial Officer

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