Document:

THIS FIRST SUPPLEMENTAL INDENTURE AND WAIVER (this "Supplemental
Indenture") is dated as of August 11, 2004, among Panavision Inc., a Delaware
corporation (the "Issuer"), the Subsidiary Guarantors, Wilmington Trust Company,
as trustee (the "Trustee") and Wilmington Trust Company, as collateral trustee
(the "Collateral Trustee"). Capitalized terms used herein and not otherwise
defined shall have the respective meaning ascribed to such terms in the
Indenture (as defined below).

         WHEREAS, the Issuer, the Subsidiary Guarantors, the Trustee and the
Collateral Trustee entered into an Indenture (the "Indenture") dated as of
January 16, 2004, to provide for the issuance of the Issuer's 12.50% Senior
Secured Notes due January 2009;

         WHEREAS, the Issuer, the Subsidiary Guarantors and the Collateral
Trustee are party to the Collateral Agreement;

         WHEREAS, the Issuer has requested, and the Subsidiary Guarantors, the
Trustee and the Collateral Trustee have agreed, that certain provisions of the
Indenture and the Collateral Agreement be amended and/or waived in the manner
provided herein;

         WHEREAS, Section 10.2 of the Indenture generally permits the Indenture
and the Collateral Agreement to be amended or supplemented with the written
consent of the Majority Holders;

         WHEREAS, the Issuer has received the written consent of the Majority
Holders as of August 11, 2004 to the amendments and waivers contemplated by this
Supplemental Indenture; and

         WHEREAS, the Issuer, the Subsidiary Guarantors, the Trustee and the
Collateral Trustee are authorized to enter into this Supplemental Indenture;

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained in this Supplemental Indenture and for other good and
valuable consideration, the receipt and sufficiency of which are herein
acknowledged, the Issuer, the Subsidiary Guarantors, the Trustee and the
Collateral Trustee hereby agree for the equal and the ratable benefit of all
Holders of the Notes as follows:

                                  ARTICLE ONE

                  1.1 Amendments. (a) Section 1.01 of the Indenture is hereby
         amended by inserting the following new definitions in the appropriate
         alphabetic order:

                      "Alga" means Panavision Alga Paris SARL, a company
organized under the laws of France.

                                                                               2

                      "Canadian Acquisition" means the purchase by Panavision
Canada Corp of substantially all of the camera assets of the Canadian company
heretofore identified to the Trustee.

                      "Canadian Seller Note" means a promissory note payable by
Panavision Canada Corp to the seller in the Canadian Acquisition in an aggregate
principal amount of not more than CDN$11,000,000.

                      "Capital Expenditures" means for any period, all amounts
(whether paid in cash or accrued as liabilities), that would in accordance with
GAAP, be set forth as "capital expenditures" on the consolidated statement of
cash flows of the Borrower and its Subsidiaries for such period. It is hereby
understood and agreed that principal payments under the Canadian Seller Note
shall not constitute Capital Expenditures.

                      "CDN$" means freely transferable lawful currency of Canada
(expressed in dollars).

                      "(euro)" means the single currency of participating member
states of the European Union.

                      "First Supplemental Indenture" means the First
Supplemental Indenture and Waiver, dated as of August 11, 2004, among the
Issuer, the Subsidiary Guarantors, Wilmington Trust Company, as indenture
trustee and as collateral trustee.

                      "Panavision Canada Corp" means Panavision Canada Corp., a
Canadian Corporation.

                      "Panavision Canada Sale" means the sale by Panavision
Canada Corp of its lighting assets for total consideration of approximately
$3,750,000.

                      "Technovision" means Technovision, France S.A.S., a
corporation organized under the laws of France.

                      "Technovision Acquisition" means the purchase by Alga of
100% of the Capital Stock of Technovision.

                  (b) The definition of "Non-Core Assets" is hereby amended and
         restated in its entirety to read as follows: "Non-Core Assets" means
         the member interest in, or any assets of, EFILM."

                  (c) The definition of "Permitted Investment" is hereby amended
         by (i)deleting the term "and" at the end of subsection (xi) thereof and
         (ii)inserting the following subsection at the end of subsection (xii)
         thereof:

                  "(xiii) Investments by the Issuer and the Restricted
                  Subsidiaries in Alga in an amount not to exceed
                  (euro)3,300,000; provided, that such Investments in Alga are
                  (i) made solely from the proceeds of the sale of Non-Core
                  Assets and (ii) used by Alga to consummate the

                                                                               3

                  Technovision Acquisition (including the payment of any
                  transaction costs); and (xiv) Investments by the Issuer and
                  the Restricted Subsidiaries in Panavision Canada Corp in an
                  amount not to exceed the difference between (x) CDN$22,000,000
                  and (y) the sum of (1) the principal amount of the Canadian
                  Seller Note and (2) any Indebtedness assumed in connection
                  with the Canadian Acquisition; provided, that such Investments
                  in Panavision Canada Corp are (i) made solely from the
                  proceeds of the sale of Non-Core Assets and (ii) used by
                  Panavision Canada Corp to consummate the Canadian Acquisition
                  (including the payment of transaction costs and the assumption
                  of Capital Lease Obligations)".

                  (d) The definition of "Permitted Liens" is hereby amended by
         (i) deleting the term "and" at the end of subsection (w) thereof, (ii)
         deleting the "." at the end of subsection (x) thereof and substituting
         in lieu thereof an ";" and (iii) inserting the following subsection at
         the end thereof:

                  "and (y) Liens on the assets purchased in the Canadian
                  Acquisition to secure Indebtedness of Panavision Canada Corp
                  permitted by Section 5.17(q)."

                  (e) The definition of "Specified Disposition" is hereby
         amended and restated in its entirety to read as follows:

                  "Specified Disposition" means any sale of Non-Core Assets,
                  which meets the following conditions:

                  (a) the Issuer has delivered to the Trustee a written notice
                  executed by an Officer stating that no Event of Default has
                  occurred and is continuing and that the Issuer (directly or
                  indirectly through a Subsidiary) intends and expects to use
                  all or a specified portion of the Net Cash Proceeds from the
                  sale of Non-Core Assets to manufacture, repair or acquire Core
                  Assets (defined below) or repay the PANY Loan Agreement in
                  full,

                  (b) at least 80% of the consideration received is in the form
                  of cash or Temporary Cash Investments,

                  (c) the Net Cash Proceeds of such sale (if not used
                  substantially contemporaneously with the sale to manufacture,
                  repair or acquire Core Assets (as defined below), repay in
                  full the PANY Loan Agreement or permanently retire principal
                  outstanding under the Senior Credit Facility) are placed into
                  a cash collateral account in which the Collateral Trustee has
                  a perfected security interest, prior to all Liens other than
                  the Lien pursuant to the Senior Credit Facility, and

                  (d) (i) (A) the Issuer or a Restricted Subsidiary uses such
                  Net Cash Proceeds within 360 days of such sale for any one or
                  more of the following: (I) to acquire 100% of the Capital
                  Stock of one or more entities engaged in the business of
                  manufacturing, designing, renting and/or

                                                                               4

                  selling cameras, lenses, lighting, lighting grips, power
                  distribution, generation and related transportation equipment
                  and/or cranes and remote camera heads or components of or
                  equipment related to any of the foregoing, or to manufacture,
                  repair or acquire any such business or assets (including
                  through Capital Expenditure), whether or not such business or
                  assets are located within the United States (collectively,
                  together with any capital stock or assets acquired in the
                  Canadian Acquisition or the Technovision Acquisition, the
                  "Core Assets"), (II) to consummate the Canadian Acquisition
                  for a total purchase price not to exceed CDN$22,000,000
                  (including the payment of transaction costs, the assumption of
                  Capital Lease Obligations, the principal amount of the
                  Canadian Seller Note and any Indebtedness assumed in
                  connection with the Canadian Acquisition), (III) to consummate
                  the Technovision Acquisition for a total purchase price not to
                  exceed (euro)5,000,000 (including the payment of transaction
                  costs and any payments in respect of any existing Technovision
                  Indebtedness) or (IV) to repay the PANY Loan Agreement in
                  full, (B) the Person that owns such Core Assets shall have
                  become a "Restricted Subsidiary" hereunder, shall have become
                  a "Subsidiary Guarantor" hereunder and shall have taken all
                  action set forth in Section 11.6 with respect to future
                  Subsidiary Guarantors (provided, that this clause (B) shall
                  not apply in the case of the Canadian Acquisition or the
                  Technovision Acquisition), and (C) the Issuer or Restricted
                  Subsidiary that owns the Capital Stock issued by the Person
                  that owns such Core Assets shall have pledged the Capital
                  Stock held by the Issuer or Restricted Subsidiary, as
                  applicable (provided, that this clause (C) shall not apply in
                  the case of the Canadian Acquisition or the Technovision
                  Acquisition), or (ii) to the extent that such Net Cash
                  Proceeds are not used as described in clause (i) above by the
                  360th day of receipt or the Issuer shall have determined not
                  to acquire such Core Assets, such Net Cash Proceeds not so
                  used shall constitute "Excess Proceeds" and be used as set
                  forth in Section 5.19.

                  (f) The definition of "Transaction Charges" is hereby amended
         by (i) deleting the term "and" immediately preceding subsection (c)
         thereof and substituting in lieu thereof an "," and (ii) inserting the
         following at the end thereof:

                  "and (d) nonrecurring charges related to or arising out of
                  fees and expenses incurred in connection with the First
                  Supplemental Indenture and an amendment of even date therewith
                  to the Senior Credit Agreement, and the execution and delivery
                  of the foregoing."

                  (g) Section 5.17 is hereby amended by

                  (i) restating in its entirety subsection (k) thereof as
                  follows: "Capital Lease Obligations and Purchase Money

                                                                               5

                  Indebtedness in an aggregate principal amount at any time
                  outstanding (A) not to exceed $12,000,000 or (B) if, for the
                  year ended December 31, 2004, the EBITDA of the Issuer and its
                  Subsidiaries shall exceed the value set forth on Schedule I
                  hereto, $14,000,000; provided, the maximum amount of
                  Indebtedness that may be created, incurred, assumed or
                  suffered to exist pursuant to this Section 5.17(k) will not be
                  deemed to be exceeded, with respect to any such outstanding
                  Indebtedness, due solely to the result of fluctuations in the
                  exchange rates of currencies; provided, further for the
                  purposes of determining compliance with this Section 5.17(k),
                  the U.S. dollar equivalent principal amount of any such
                  Indebtedness denominated in a foreign currency shall be
                  calculated based on the relevant currency exchange rate in
                  effect on the date such Indebtedness was created, incurred,
                  assumed or suffered to exist;" and

                   (ii) (A) deleting the term "and" at the end of subsection (n)
                  thereof, (B) deleting the "." at the end of subsection (o)
                  thereof and substituting in lieu thereof an ";" and (C)
                  inserting the following subsections at the end thereof:

                  "(p) Indebtedness of Panavision Canada Corp under the Canadian
                  Seller Note in an aggregate principal amount not to exceed
                  CDN$11,000,000 and unsecured Guarantees of the Borrower in
                  respect thereof; and

                  (q) Indebtedness of Alga or Panavision Canada Corp that is
                  owed to and held by the Issuer or a Restricted Subsidiary in
                  respect of any Investment by the Issuer or such Restricted
                  Subsidiary permitted by subsection (xiii) or (xiv), as
                  applicable, of the definition of Permitted Investments".

                  1.2 The Panavision Canada Sale. The Net Cash Proceeds received
         from the Panavision Canada Sale shall be deemed to constitute Excess
         Proceeds.

                  1.3 Waiver of Section 5.6 of the Collateral Agreement. The
         Collateral Trustee hereby waives noncompliance of Las Palmas (and any
         Default or Event of Default that may have resulted therefrom) with the
         30-day written notice requirement set forth in Section 5.6 of the
         Collateral Agreement in connection with Las Palmas' undertaking to
         change its legal name from "Las Palmas Productions, Inc." to "LPPI,
         LLC" and to convert from a California corporation to a California
         limited liability company; provided, that the Collateral Trustee shall
         have received written notice promptly (and, in any event within three
         Business Days) after the consummation of such changes.

                                                                               6

                  1.4 Amendment to Schedule 4 to the Collateral Agreement.
         Schedule 4 of the Collateral Agreement is hereby amended by deleting
         such schedule in its entirety and substituting in lieu thereof the
         schedule set forth in Annex A hereto.

                  1.5 Amendment to Deposit Account Control Agreement. The
         Collateral Trustee is hereby authorized to enter into an amendment to
         the Deposit Account Control Agreement, dated as of January 16, 2004,
         among the Borrower, the Collateral Trustee and the other parties
         thereto, to delete Exhibit C thereto in its entirety and substitute in
         lieu thereof the Exhibit C as set forth in Annex B hereto.

                                  ARTICLE TWO

                                 Miscellaneous

                  2.1 Effect of the Supplemental Indenture. This Supplemental
         Indenture supplements the Indenture and shall be a part and subject to
         all the terms thereof. Except as supplemented hereby, the Indenture and
         the Notes issued thereunder shall continue in full force and effect.

                  2.2 Effectiveness. This Supplemental Indenture shall become
         effective as of the date hereof.

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

         2.4 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

                  2.5 Recitals. The Trustee shall not be responsible for any
         recital herein (other than the last recital as it applies to the
         Trustee) as such recitals shall be taken as statements of the Issuer,
         or the validity of the execution by the Issuer of this Supplemental
         Indenture. The Trustee makes no representations as to the validity or
         sufficiency of this Supplemental Indenture.

                  [Remainder of page intentionally left blank.]

                                                                               7

         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed on this 11th day of August, 2004.

                                      PANAVISION INC.

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      PANAPAGE ONE LLC, as a Subsidiary
                                      Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      PANAPAGE TWO LLC, as a Subsidiary
                                      Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      PANAPAGE CO. LLC, as a Subsidiary
                                      Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                                                               8

                                      PANAVISION U.K. HOLDINGS, INC., as a
                                      Subsidiary Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      PANAVISION REMOTE SYSTEMS, LLC, as a
                                      Subsidiary Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      LPPI, LLC, as a Subsidiary Guarantor

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                      PANAVISION INTERNATIONAL, L.P., as a
                                      Subsidiary Guarantor
                                      By: Panapage Two LLC, as General Partner

                                      By: /s/ Eric W. Golden
                                         ---------------------------------------
                                         Name:  Eric W. Golden
                                         Title: Executive Vice President,
                                                General Counsel and Secretary

                                                                               9

                                     WILMINGTON TRUST COMPANY, as Trustee

                                     By: /s/ Michael G. Oiler, Jr.
                                        ---------------------------------------
                                        Name:  Michael G. Oiler, Jr.
                                        Title: Senior Financial Services Officer

                                     WILMINGTON TRUST COMPANY, as Collateral
                                     Trustee

                                     By: /s/ Michael G. Oiler, Jr.
                                        ---------------------------------------
                                        Name:  Michael G. Oiler, Jr.
                                        Title: Senior Financial Services Officer

                                     Annex A

Schedule 4 to Collateral Agreement

                             LOCATION OF OFFICES AND
                   JURISDICTIONS OF INCORPORATION OR FORMATION

         Attached hereto as Exhibit A is a listing of the locations at which
inventory of the Grantors is located.

----------------------------------------------------------------------------------------------------------------------
                                                          FEDERAL     LOCATION         LOCATION OF
                                                         TAXPAYER     OF CHIEF          BOOKS AND           TRADE OR
                      TYPE OF       ORGANIZATIONAL ID       ID       EXECUTIVE          RECORD OF          FICTITIOUS
NAME OF GRANTOR        ENTITY            NUMBER           NUMBER       OFFICE          COLLATERAL             NAME
----------------------------------------------------------------------------------------------------------------------

Panavision Inc.     Delaware       2247211             13-3593063    6219 De       6219 De Soto Avenue   N/A
                    corporation                                      Soto Avenue   Woodland Hills, CA
                                                                     Woodland      91367-2602
                                                                     Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------
Panavision Remote   California     200314 210071       95-4299623    6219 De       6219 De Soto Avenue   N/A
Systems LLC         limited                                          Soto Avenue   Woodland Hills, CA
                    liability                                        Woodland      91367-2602
                    company                                          Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------
Panapage Co. LLC    Delaware       3142740             91-2020052    6219 De       6219 De Soto Avenue   Panavision
                    limited                                          Soto Avenue   Woodland Hills, CA
                    liability                                        Woodland      91367-2602
                    company                                          Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------
Panavision U.K.     Delaware       2750335             95-4640522    6219 De       6219 De Soto Avenue   N/A
Holdings, Inc.      corporation                                      Soto Avenue   Woodland Hills, CA
                                                                     Woodland      91367-2602
                                                                     Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------
Panapage One LLC    Delaware       3142737             N/A           6219 De       6219 De Soto Avenue   N/A
                    limited                                          Soto Avenue   Woodland Hills, CA
                    liability                                        Woodland      91367-2602
                    company                                          Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------
                                                          FEDERAL     LOCATION         LOCATION OF
                                                         TAXPAYER     OF CHIEF          BOOKS AND           TRADE OR
                      TYPE OF       ORGANIZATIONAL ID       ID       EXECUTIVE          RECORD OF          FICTITIOUS
NAME OF GRANTOR        ENTITY            NUMBER           NUMBER       OFFICE          COLLATERAL             NAME
----------------------------------------------------------------------------------------------------------------------

Panapage Two LLC    Delaware       3142739             N/A           6219 De       6219 DE SOTO AVENUE   N/A
                    limited                                          Soto Avenue   WOODLAND HILLS, CA
                    liability                                        Woodland      91367-2602
                    company                                          Hills, CA
                                                                     91367-2602
----------------------------------------------------------------------------------------------------------------------
Panavision          Delaware       2247567             13-3593064    6219 De       6219 DE SOTO AVENUE   Panavision
International,      limited                                          Soto Avenue   WOODLAND HILLS, CA
L.P.                partnership                                      Woodland      91367-2602            Panavision
                                                                     Hills, CA                           Hollywood
                                                                     91367-2602    6735 SELMA AVENUE
                                                                                   HOLLYWOOD, CA 90028
                                                                                                         Panavision
                                                                                   2000 UNIVERSAL        Florida
                                                                                   STUDIOS PLAZA
                                                                                   SUITE 900             Panavision
                                                                                   ORLANDO, FL           Wilmington
                                                                                   32819-7606
                                                                                                         Lee Filters
                                                                                   1223 NORTH 23RD
                                                                                   STREET                Panavision
                                                                                   WILMINGTON, NC        Dallas
                                                                                   28405

                                                                                   8000 JETSTAR DRIVE
                                                                                   IRVING, TX  75063

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

----------------------------------------------------------------------------------------------------------------------
                                                          FEDERAL     LOCATION         LOCATION OF
                                                         TAXPAYER     OF CHIEF          BOOKS AND           TRADE OR
                      TYPE OF       ORGANIZATIONAL ID       ID       EXECUTIVE          RECORD OF          FICTITIOUS
NAME OF GRANTOR        ENTITY            NUMBER           NUMBER       OFFICE          COLLATERAL             NAME
----------------------------------------------------------------------------------------------------------------------

LPPI, LLC           California     C1070439            95-3724181    6219 De       1146 North Las        Las Palmas
                    limited                                          Soto Avenue   Palmas Avenue         Productions,
                    liability                                        Woodland      Los Angeles, CA       Inc.
                    company                                          Hills, CA     90038
                                                                     91367-2602    (323) 463-7041
----------------------------------------------------------------------------------------------------------------------

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

                                                                       EXHIBIT A

PANAVISION INTERNATIONAL, L.P.

6219 DE SOTO AVENUE
WOODLAND HILLS, CA  91367-2602

6735 SELMA AVENUE
HOLLYWOOD, CA 90028

2000 UNIVERSAL STUDIOS PLAZA
SUITE 900
ORLANDO, FL  32819-7606

1223 NORTH 23RD STREET
WILMINGTON, NC  28405

8000 JETSTAR DRIVE
IRVING, TX  75063

540 West 36th Street
NEW YORK, NY 10018

                                     Annex B

                                                                       Exhibit C

                             [Letterhead of Company]

                                     [Date]

[Name and Address of Bank]

Attention:

                         Re: Withdrawal Request

Ladies and Gentlemen:

         Pursuant to Section 7(e) of the Deposit Account Control Agreement,
dated as of January 16, 2004 (the "Agreement", a copy of which is attached
hereto) between Panavision Inc., Wilmington Trust Company as collateral trustee
(the "Collateral Trustee"), JPMorgan Chase Bank, as administrative agent (the
"Administrative Agent") and you, we hereby give you notice of our request to
withdraw $[_________] from the Deposit Account on ______ __, 200_. Terms used
herein but not defined herein shall have the meanings assigned to such term in
the Credit Agreement referred to in the Agreement.

         We hereby represent and warrant that, as of the date hereof, (i) no
Default or Event of Default has occurred and is continuing and (ii) we have
delivered a Reinvestment Notice to the Administrative Agent and, pursuant to
such Reinvestment Notice, intend to use these funds within the next ten Business
Days to fund (or, in the case of Capital Expenditures incurred on or after
August 11, 2004, to reimburse the Company for prior fundings of) the
reinvestment described in such Reinvestment Notice.

                                                  Very truly yours,
                                                  PANAVISION INC.
                                                  By:
                                                     ------------------------
                                                  Title:

cc:  JPMorgan Chase Bank, as administrative agent
     Wilmington Trust Company, as collateral trustee

                                                                      SCHEDULE I

         EBITDA of the Issuer and its Subsidiaries: $61,600,000.EXHIBIT 10.1

                                    AMENDMENT

     This amendment dated as of October 22, 2004 (the "Amendment") is to the
Employment Agreement dated as of January 16, 2004, between Fansteel Inc., a
Delaware corporation (the "Company") and Gary L. Tessitore (the "Executive").

     WHEREAS, Company and the Executive entered into an Employment Agreement
(the "Agreement") dated as of January 16, 2004 and effective as of January 23,
2004 (the "Effective Date") (capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement);

     WHEREAS, Section 6.4 of the Agreement provides that the Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms and
conditions thereof may be waived, only by a written instrument signed by the
parties;

     WHEREAS, Section 2 of the Agreement provides that notice of non-renewal of
the Term must be provided within ninety (90) days of the applicable anniversary
of the Effective Date;

     WHEREAS, the Company and the Executive desire to amend Section 2 to change
the notice provision from ninety (90) days to no earlier than the July 1st or
later than the August 15th after the applicable anniversary of the Effective
Date so that if notice is given, the Agreement would terminate on the next
January 23rd; and

     WHEREAS, the Company and the Executive desire to amend Section 4.6 to
correct the section reference to Section 2 of the Agreement.

     NOW, THEREFORE, it is hereby agreed that:

     A. SECTION 2 OF THE AGREEMENT IS HEREBY AMENDED IN ITS ENTIRETY, EFFECTIVE
AS OF THE DATE HEREOF, AS FOLLOWS:

                           2. Duration of Employment.

          Subject to Section 4 of this Agreement, this Agreement and the
          employment relationship hereunder will continue in effect for two (2)
          years from the Effective Date (the "Initial Term") and shall be
          automatically extended for additional one (1) year periods on each
          anniversary of the Effective Date (the "Extended Term") so that two
          (2) years always remain in the term, unless and until either party
          provides a notice of non-renewal NO EARLIER THAN THE JULY 1ST OR LATER
          THAN THE AUGUST 15TH AFTER the first anniversary of the Effective Date
          or applicable anniversary of the Effective Date thereafter and
          termination of the Agreement will be effective AS OF THE NEXT JANUARY
          23RD AFTER THE NOTICE IS GIVEN, AND unless sooner terminated during
          such time in accordance with Section 4 hereof. FOR EXAMPLE PURPOSES
          ONLY, IN THE EVENT NOTICE OF NON-RENEWAL IS GIVEN BETWEEN JULY 1, 2005
          AND AUGUST 15, 2005, TERMINATION OF THE AGREEMENT WILL BE EFFECTIVE ON
          JANUARY 23, 2006. The Initial Term and the Extended Term are sometimes
          referred to in

          this Agreement as the "Term." In the event of the Executive's
          termination of employment during the Term, the Company's obligation to
          continue to pay all base salary, as adjusted, bonus and other benefits
          then accrued shall terminate except as may be provided for in Section
          4 of this Agreement.

     B. SECTION 4.6 OF THE AGREEMENT IS HEREBY AMENDED IN ITS ENTIRETY,
EFFECTIVE AS OF THE DATE HEREOF, AS FOLLOWS:

          Expiration of Term. Upon the expiration of the Term specified in
          Section 2 without an earlier termination pursuant to this Section 4,
          this Agreement shall terminate without further action by the Executive
          or the Company. Upon such expiration, the Executive shall receive (i)
          any unpaid Base Salary to the date of expiration, (ii) a payment for
          accrued, but unused, vacation time and (iii) expenses under Section
          3.6 incurred to the date of expiration but not yet reimbursed to the
          Executive.

          Except as otherwise set forth herein, the Agreement shall remain in
          full force and effect and the parties hereby reconfirm and ratify
          same.*

     IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as of
October 22, 2004.

                                       EXECUTIVE

                                       /s/ Gary L. Tessitore
                                       ----------------------------------------
                                       Gary L. Tessitore

                                       FANSTEEL INC.

                                       /s/R. Michael McEntee
                                       ----------------------------------------
                                       By: R. Michael McEntee
                                       Title: Secretary

----------
*  Upper case language in A and B indicates the amended provisions.

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT ("Agreement") dated as of _1-16__, _04_ between
Fansteel Inc., a Delaware corporation (the "Company") and Gary L. Tessitore (the
"Executive").

     WHEREAS, the Company has filed for chapter 11 of title 11 of the United
States Code, 11 U.S.C. ss.ss. 101 et seq. (the "Bankruptcy Code") and has filed
with the bankruptcy court its proposed Plan of Reorganization and Disclosure
Statement (the "Plan of Reorganization"), which includes, among other
provisions, the identification of the Executive as the President and Chief
Executive Officer of the Company after the confirmation of the Plan of
Reorganization; and

     WHEREAS, the parties wish to establish the terms of Executive's future
employment with the Company.

     Accordingly, the parties agree as follows:

                  ARTICLE I Employment, Duties and Acceptance.

     Section 1.01 Employment by the Company. The Company shall employ the
Executive effective as of the effective date of the Plan of Reorganization (the
"Effective Date") to render exclusive, subject to the last sentence of this
Section 1.1, and full-time services to the Company. The Executive will serve in
the capacity of President and Chief Executive Officer of the Company and shall
report to the Board of Directors of the Company (the "Board"). The Executive
will perform such lawful duties related to the business of the Company as are
customarily performed by one holding such positions in the same or similar
businesses or enterprises as those of the Company. The Executive will perform
such other lawful duties related to the business of the Company as may be
assigned to him from time to time by the Board. The Executive will devote all
his full working-time and attention to the performance of such duties and to the
promotion of the business and interests of the Company. This provision, however,
will not prevent the Executive from investing his funds or assets in any form or
manner, or from acting as an advisor to or a member of, the board of directors
of any companies, businesses, or charitable organizations, so long as such
actions do not violate the provisions of Section 5 of this Agreement or
interfere with the Executive's performance of his duties hereunder.

     Section 1.02 Acceptance of Employment by the Executive. The Executive
accepts such employment and shall render the services described above.

                       ARTICLE II Duration of Employment.

     Subject to Section 4 of this Agreement, this Agreement and the employment
relationship hereunder will continue in effect for two (2) years from the
Effective Date (the "Initial Term") and shall be automatically extended for
additional one (1) year periods on each anniversary of the Effective Date (the
"Extended Term") so that two (2) years always remain in the term, unless and
until either party provides a notice of non-renewal within ninety (90) days of
the first anniversary of the Effective Date or applicable anniversary of the
Effective Date thereafter and termination of the Agreement will be effective as
of the end of the then applicable

Extended Term, unless sooner terminated during such time in accordance with
Section 4 hereof. The Initial Term and the Extended Term are sometimes referred
to in this Agreement as the "Term." In the event of the Executive's termination
of employment during the Term, the Company's obligation to continue to pay all
base salary, as adjusted, bonus and other benefits then accrued shall terminate
except as may be provided for in Section 4 of this Agreement.

                    ARTICLE III Compensation by the Company.

     Section 3.01 Base Salary. As compensation for all services rendered
pursuant to this Agreement, the Company will pay to the Executive an annual base
salary of Four Hundred Thousand Dollars ($400,000), subject to an upward
adjustment by the Board of the Company, in its sole discretion, and payable in
accordance with the payroll practices of the Company ("Base Salary"). The Base
Salary may not be reduced during the Term.

     Section 3.02 Bonuses. Within six (6) months of the Effective Date, (i) the
Board shall determine and inform the Executive of the methodology to be used to
calculate the annual cash bonus to be provided to the Executive during the Term
and (ii) the Board shall determine and inform the Executive of the actual cash
bonus amount the Executive would receive for the first year of the Term under
the methodology determined by the Board.

     Section 3.03 Participation in Employee Benefit Plans. The Executive shall
be permitted, during the Term, if and to the extent eligible, to participate in
any group life, hospitalization or disability insurance plan, health program,
pension plan or similar benefit plan of the Company, which may be available to
other executives of the Company generally, on the same terms as such other
executives.

     Section 3.04 Car Allowance. The Executive shall be entitled to a monthly
car allowance equal to Seven Hundred Forty-Five Dollars ($745).

     Section 3.05 Vacation. The Executive shall be entitled to twenty (20) days
of vacation per year. The carry-over of vacation days shall be in accordance
with Company policy.

     Section 3.06 Expense Reimbursement. During the Term, the Executive shall be
entitled to receive prompt reimbursement of all reasonable out-of-pocket
expenses properly incurred by him in connection with his duties under this
Agreement, including reasonable expenses of entertainment and travel, provided
that such expenses are documented and reported in accordance with the policies
and procedures of the Company or the Board, as applicable, at the time the
expenses are incurred.

     Section 3.07 Stock Options. The Executive shall be eligible to participate
in any applicable stock option plan of the Company made available to other
executives of the Company. All terms and conditions applicable to such stock
options, including, but not limited to, the decision to grant options to the
Executive, shall be governed by the provisions of the applicable stock option
plan and any stock option agreements thereunder.

                             ARTICLE IV Termination.

     Section 4.01 Termination Upon Death. If the Executive dies during the Term,
the Executive's legal representatives shall be entitled to receive (i) the
Executive's accrued but

unpaid Base Salary, (ii) accrued but unpaid bonus up to the date of death, (iii)
a payment for accrued, but unused, vacation time and (iv) expenses under Section
3.6 incurred but not yet reimbursed to the Executive.

     Section 4.02 Termination Upon Disability. If during the Term the
Executive's employment with the Company is terminated as a result of a
"Disability" (as defined herein), the Executive (or his legal representatives)
shall be entitled to receive (i) the Executive's accrued but unpaid Base Salary,
(ii) accrued but unpaid bonus to the date of termination, (iii) a payment for
accrued, but unused, vacation time and (iv) expenses under Section 3.6 incurred
but not yet reimbursed to the Executive. For the purposes of this Agreement,
"Disability" means a determination by the Company in accordance with applicable
law that as a result of a physical or mental injury of illness, the Executive is
unable to perform the essential function of his duties with or without
reasonable accommodation.

     Section 4.03 Termination for Cause. Upon delivery of written notice of
termination for "Cause" (as defined below) from the Company to the Executive at
any time, the Agreement and the Executive's employment shall terminate
immediately. For the purposes of this Agreement, "Cause" means (i) commission of
a felony by the Executive, (ii) acts of intentional dishonesty by the Executive
resulting or intending to result in personal gain or enrichment at the expense
of the Company or any of its affiliates or subsidiaries, (iii) the Executive's
material breach of this Agreement, (iv) the Executive's contravention of
specific written lawful directions from the Board, (v) willful conduct by the
Executive in connection with his duties hereunder that is fraudulent, unlawful,
or grossly negligent, or (vi) willful misconduct by the Executive which
seriously discredits or damages the Company or any of its affiliates or
subsidiaries. If the Executive is terminated for Cause during the Term, the
Executive shall receive (i) any accrued but unpaid Base Salary to the date of
termination, (ii) a payment for accrued, but unused, vacation time and (iii)
expenses under Section 3.6 incurred to the date of termination, but not yet
reimbursed to the Executive

     Section 4.04 Voluntary Termination without Good Reason. The Executive may
upon at least sixty (60) but not more than ninety (90) days prior written notice
to the Company terminate employment hereunder without Good Reason, as defined in
Section 4.5. Upon a voluntary termination without Good Reason, the Executive
shall be entitled to receive (i) the Executive's Base Salary through the date of
termination, (ii) a payment for accrued, but unused, vacation time and (iii)
expenses under Section 3.6 incurred but not yet reimbursed to the Executive;
provided, however, that if the Company shall waive part or all of such sixty
(60) but not more than ninety (90) day notice period, the Executive shall only
receive Base Salary to the date of termination specified in such waiver.

     Section 4.05 Termination Without Cause or for Good Reason. The Company may
terminate Executive's employment without Cause at any time without notice and
the Executive may terminate his employment with Good Reason upon thirty (30)
days prior written notice to the Company. If, during the Term, the Company
terminates the Executive without Cause or the Executive terminates his
employment with Good Reason, the Executive shall receive (i) monthly
installments of Base Salary for twelve (12) months from the date of termination
(subject to compliance with the provisions of Section 5 hereof), (ii) a pro rata
portion of the bonus set forth in Section 3.2 for the year of termination based
on the period of the fiscal year in which the Executive was employed prior to
termination (such bonus, if any, shall be paid to the Executive within thirty
(30) days after the determination of the bonus by the Board), (iii)

continuation of all benefits under Section 3.3 hereof that the Executive was
receiving immediately prior to the date of termination, unless prohibited by
applicable law, which shall be paid by the Company, for a period of twelve (12)
months from the date of termination, (iv) a payment for accrued, but unused,
vacation time and (v) expenses under Section 3.6 incurred to the date of
termination but not yet reimbursed to the Executive.

     For the purposes of this Agreement, "Good Reason" means the occurrence of
any of the following without the Executive's written consent: (i) action by the
Company that results in a material diminution in the Executive's position,
authority, duties or responsibilities; (ii) the Company's failure to make any
payment or provide any award or benefit to the Executive under this Agreement
pursuant to the terms hereof; (iii) the Company's breach of any material term of
this Agreement or (iv) the Company's requirement that the Executive be based at
a location in excess of thirty-five (35) miles from North Chicago, Illinois,
except for required travel on Company business; provided that the Company, in
all cases, shall have fifteen (15) business days after receipt of notice from
the Executive in writing specifying the deficiency to cure the deficiency that
would result in "Good Reason."

     Section 4.06 Expiration of Term. Upon the expiration of the Term specified
in Section 1 without an earlier termination pursuant to this Section 4, this
Agreement shall terminate without further action by the Executive or the
Company. Upon such expiration, the Executive shall receive (i) any unpaid Base
Salary to the date of expiration, (ii) a payment for accrued, but unused,
vacation time and (iii) expenses under Section 3.6 incurred to the date of
expiration but not yet reimbursed to the Executive.

     Section 4.07 Removal from any Boards and Positions. If the Executive's
employment is terminated for any reason under this Agreement, he shall be deemed
to resign (i) if a member, from the Board or board of directors of any
subsidiary of the Company or any other board to which he has been appointed or
nominated by or on behalf of the Company and (ii) from any position with the
Company or any subsidiary of the Company, including, but not limited to, as an
officer of the Company or any of its subsidiaries.

            ARTICLE V Restrictions and Obligations of the Executive.

     Section 5.01 Confidentiality. (a) During the course of the Executive's
employment by the Company (prior to and during the Term), the Executive will
have access to certain trade secrets and confidential information relating to
the Company which is not readily available from sources outside the Company. The
confidential and proprietary information and, in any material respect, trade
secrets of the Company are among its most valuable assets, including but not
limited to, its customer and vendor lists, database, engineering, computer
programs, frameworks, models, its marketing programs, its sales, financial,
marketing, training and technical information, and any other information,
whether communicated orally, electronically, in writing or in other tangible
forms concerning how the Company creates, develops, acquires or maintains its
products and marketing plans, targets its potential customers and operates its
retail and other businesses. The Company invested, and continues to invest,
considerable amounts of time and money in its process, technology, know-how,
obtaining and developing the goodwill of its customers, its other external
relationships, its data systems and data bases, and all the information
described above (hereinafter collectively referred to as "Confidential
Information"), and any misappropriation or unauthorized disclosure of
Confidential Information in any form would irreparably harm the Company. The
Executive

acknowledges that such Confidential Information constitutes valuable, highly
confidential, special and unique property of the Company. The Executive shall
hold in a fiduciary capacity for the benefit of the Company all Confidential
Information relating to the Company and its business, which shall have been
obtained by the Executive during the Executive's employment by the Company or
predecessor of the Company and which shall not be or become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). Except as required by law or an order of a court
or governmental agency with jurisdiction, the Executive shall not, during the
period the Executive is employed by the Company or at any time thereafter,
disclose any Confidential Information, directly or indirectly, to any person or
entity for any reason or purpose whatsoever, nor shall the Executive use it in
any way, except in the course of the Executive's employment with, and for the
benefit of, the Company or to enforce any rights or defend any claims hereunder
or under any other agreement to which the Executive is a party, provided that
such disclosure is relevant to the enforcement of such rights or defense of such
claims and is only disclosed in the formal proceedings related thereto. The
Executive shall take all reasonable steps to safeguard the Confidential
Information and to protect it against disclosure, misuse, espionage, loss and
theft. The Executive understands and agrees that the Executive shall acquire no
rights to any such Confidential Information.

     (b) All files, records, documents, drawings, specifications, data, computer
programs, evaluation mechanisms and analytics and similar items relating thereto
or to the Business (for the purposes of this Agreement, "Business" shall be as
defined in Section 5.3 hereof), as well as all customer lists, specific customer
information, compilations of product research and marketing techniques of the
Company, whether prepared by the Executive or otherwise coming into the
Executive's possession, shall remain the exclusive property of the Company, and
the Executive shall not remove any such items from the premises of the Company,
except in furtherance of the Executive's duties under any employment agreement.

     (c) It is understood that while employed by the Company the Executive will
promptly disclose to it, and assign to it the Executive's interest in any
invention, improvement or discovery made or conceived by the Executive, either
alone or jointly with others, which arises out of the Executive's employment. At
the Company's request and expense, the Executive will assist the Company during
the period of the Executive's employment by the Company and thereafter in
connection with any controversy or legal proceeding relating to such invention,
improvement or discovery and in obtaining domestic and foreign patent or other
protection covering the same.

     (d) As requested by the Company and at the Company's expense, from time to
time and upon the termination of the Executive's employment with the Company for
any reason, the Executive will promptly deliver to the Company all copies and
embodiments, in whatever form, of all Confidential Information in the
Executive's possession or within his control (including, but not limited to,
memoranda, records, notes, plans, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information)
irrespective of the location or form of such material. If requested by the
Company, the Executive will provide the Company with written confirmation that
all such materials have been delivered to the Company as provided herein.

     Section 5.02 Non-Solicitation or Hire. During the Term and for a period
equal to twelve (12) months following the termination of the Executive's
employment for any reason

(the "Restricted Period"), the Executive shall not, (a) solicit any party who is
a customer of the Company or its subsidiaries, or who was a customer of the
Company or its subsidiaries at any time during the twelve (12) month period
immediately prior to the relevant date, for the purpose of marketing, selling or
providing to any such party any services or products offered by or available
from the Company or its subsidiaries and relating to the Business (provided that
if the Executive intends to solicit any such party for any other purpose, he
shall notify the Company of such intention) or (b) employ or solicit for
employment any person who is an employee of the Company or any of its
subsidiaries at the time of termination.

     Section 5.03 Non-Competition. During the Restricted Period, the Executive
shall not, whether individually, as a director, manager, member, stockholder,
partner, owner, employee, consultant or agent of any business, or in any other
capacity, other than on behalf of the Company or an affiliate or successor of
the Company, organize, establish, own, operate, manage, control, engage in,
participate in, invest in, permit his name to be used by, act as a consultant or
advisor to, render services for (alone or in association with any person, firm,
corporation or business organization), or otherwise assist any person or entity
that engages in or owns, invests in, operates, manages or controls any venture
or enterprise which engages or proposes to engage in any line of business
conducted by the Company or actively pursued by the Company on the date of the
Executive's termination of employment (the "Business"); provided, however, that
the foregoing shall not preclude the Executive from being employed or retained
by a Person (as defined below), which, among its activities, engages in
activities that compete directly with the Business as so long as the Executive
does not provide as part of his principal management responsibilities, any
services to such Person's subsidiaries or divisions that compete directly with
the Business and the Executive does not disclose or make use of Confidential
Information relating to the Company. Notwithstanding the foregoing, nothing in
this Agreement shall prevent the Executive from owning for passive investment
purposes not intended to circumvent this Agreement, less than five percent (5%)
of the publicly traded equity securities of any competing enterprise (so long as
the Executive has no power to manage, operate, advise, consult with or control
the competing enterprise and no power, alone or in conjunction with other
affiliated parties, to select a director, manager, general partner, or similar
governing official of the competing enterprise other than in connection with the
normal and customary voting powers afforded the Executive in connection with any
permissible equity ownership).

          "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, or
any successor thereto ("the Exchange Act") and used in Sections 13(d) and 14(d)
thereof, including a "group" as described in Section 13(d) thereof. "Beneficial
Owner" shall have the meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act.

     Section 5.04 Reputation. The Executive agrees not to engage in any act that
is intended, or may reasonably be expected to materially harm the reputation,
business, prospects or operations of the Company or any member of its Board,
unless as required by law or an order of a court or governmental agency with
jurisdiction

     Section 5.05 Property. The Executive acknowledges that all originals and
copies of materials, records and documents generated by him or coming into his
possession during his employment by the Company are the sole property of the
Company ("Company Property"). During the Term, and at all times thereafter, the
Executive shall not remove, or cause to be removed, from the premises of the
Company, copies of any record, file,

memorandum, document, computer related information or equipment, or any other
item relating to the business of the Company, or any affiliate, except in
furtherance of his duties under the Agreement. When the Executive terminates his
employment with the Company, or upon request of the Company at any time, the
Executive shall promptly deliver to the Company all copies of Company Property
in his possession or control.

     Section 5.06 Work Product. The Executive agrees that all inventions,
discoveries, systems, interfaces, protocols, concepts, formats, creations,
developments, designs, programs, products, processes, investment strategies,
materials, computer programs or software, data bases, improvements, or other
properties related to the business of the Company or any of its affiliates,
conceived, made or developed during the term of his employment with the Company,
whether conceived by the Executive alone or working with others, and whether
patentable or not (the "Work Product"), shall be owned by and belong exclusively
to the Company. The Executive hereby assigns to the Company his entire rights to
the Work Product and agrees to execute any documents and take any action
reasonably requested by the Company (at the Company's sole cost and expense) to
protect the rights of the Company in any Work Product. The Executive
acknowledges that any copyrightable subject matter created by the Executive
within the scope of his employment, whether containing or involving Confidential
Information or not, is deemed a work-made-for-hire under Chapter 17 of the
United States Code, entitled "Copyrights," as amended, and the Company shall be
deemed the sole author and owner thereof for any purposes whatsoever. In the
event of any unauthorized publication of any Confidential Information, the
Company shall automatically own the copyright in such publication. Further, the
Company shall automatically hold all patents and/or trademarks, if any, with
respect to any Work Product.

                          ARTICLE VI Other Provisions.

     Section 6.01 Notices. Any notice or other communication required or which
may be given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid, and shall be deemed given when so
delivered personally, telegraphed, telexed, or sent by facsimile transmission
or, if mailed, four (4) days after the date of mailing, as follows:

          (a) If the Company, to:

     Fansteel Inc.
     Number One Tantalum Place
     North Chicago, Illinois  60064

     Attention:  Board of Directors
     Telephone:
     Fax:

     With a copy to:

     Schulte Roth & Zabel LLP
     919 Third Avenue
     New York, NY  10022

     Attention:        Jeffrey S. Sabin, Esq.
                       Andre Weiss, Esq.
     Telephone:        (212) 756-2000
     Fax:              (212) 593-5955

          (b) If the Executive, to his home address set forth in the records of
the Company.

     Section 6.02 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.

     Section 6.03 Representations and Warranties by Executive. The Executive
represents and warrants that he is not a party to or subject to any restrictive
covenants, legal restrictions or other agreements in favor of any entity or
person which would in any way preclude, inhibit, impair or limit the Executive's
ability to perform his obligations under this Agreement, including, but not
limited to, non-competition agreements, non-solicitation agreements or
confidentiality agreements.

     Section 6.04 Waiver and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
right, power or privilege hereunder, nor any single or partial exercise of any
right, power or privilege hereunder, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.

     Section 6.05 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of [Illinois] applicable to agreements
made and to be performed entirely within such state, without regard to conflicts
of laws principles.

     Section 6.06 Assignability. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company shall
assign this Agreement and its rights, together with its obligations, to any
other entity which will substantially carry on the business of the Company and
such entity shall expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company is required to perform
hereunder. Failure of the Company to obtain such assumption and agreement before
the effectiveness of any such agreement to carry on the business of the Company
shall be a breach of this Agreement and shall entitle the Executive to the
payments and benefits set forth in Section 4.5 herein.

     Section 6.07 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.

     Section 6.08 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning of terms
contained herein.

     Section 6.09 Remedies; Specific Performance. The parties hereto hereby
acknowledge that the provisions of Section 5 are reasonable and necessary for
the protection of the Company. In addition, the Executive further acknowledges
that the Company will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive is aware that the Company will
be entitled to seek and obtain injunctive relief (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining the
Executive from any actual or threatened breach of such covenants. In addition,
without limiting the Company's remedies for any breach of any restriction on the
Executive set forth in Section 5, in the event of such breach, the Company will
have no obligation to pay any of the amounts that remain payable by the Company
under Section 4.

     Section 6.10 Severability. If any term, provision, covenant or restriction
of this Agreement, or any part thereof, is held by a court of competent
jurisdiction of any foreign, federal, state, county or local government or any
other governmental, regulatory or administrative agency or authority to be
invalid, void, unenforceable or against public policy for any reason, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected or
impaired or invalidated. The Executive acknowledges that the restrictive
covenants contained in Section 5 are a condition of this Agreement and are
reasonable and valid in geographical and temporal scope and in all other
respects.

     Section 6.11 Judicial Modification. If any court or arbitrator determines
that any of the covenants in Section 5, or any part of any of them, is invalid
or unenforceable, the remainder of such covenants and parts thereof shall not
thereby be affected and shall be given full effect, without regard to the
invalid portion. If any court or arbitrator determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, such court or arbitrator shall
reduce such scope to the minimum extent necessary to make such covenants valid
and enforceable.

     Section 6.12 Tax Withholding. The Company or other payor is authorized to
withhold, from any benefit provided or payment due hereunder, the amount of
withholding taxes due any federal, state or local authority in respect of such
benefit or payment and to take such other action as may be necessary in the
opinion of the Board to satisfy all obligations for the payment of such
withholding taxes.

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the day and year first above
mentioned.

                                 EXECUTIVE

                                  /s/ Gary L. Tessitore
                                 -------------------------
                                 Gary L. Tessitore
                                 President and Chief Executive Officer

                                 FANSTEEL INC.

                                 By: /s/ R. Michael McEntee
                                     ------------------------------------
                                     R. Michael McEntee
                                     Vice President and Chief Financial Officer

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