Document:

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                                LADISH CO., INC.

                                   $30,000,000

                 7.19% Senior Notes, Series A, due July 20, 2008

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                             NOTE PURCHASE AGREEMENT

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                               Dated July 20, 2001

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                                TABLE OF CONTENTS

                          (Not A Part Of The Agreement)
                                                                            Page

SECTION 1.  AUTHORIZATION OF NOTES............................................1

SECTION 2.  SALE AND PURCHASE OF NOTES........................................1

SECTION 3.  CLOSING...........................................................1

SECTION 4.  CONDITIONS TO CLOSING.............................................2

     Section 4.1    Representations and Warranties............................2

     Section 4.2    Performance; No Default...................................2

     Section 4.3    Compliance Certificates...................................2

     Section 4.4    Opinions of Counsel.......................................2

     Section 4.5    Purchase Permitted By Applicable Law, etc.................3

     Section 4.6    Sale of Other Notes.......................................3

     Section 4.7    Payment of Special Counsel Fees...........................3

     Section 4.8    Private Placement Number..................................3

     Section 4.9    Changes in Corporate Structure............................3

     Section 4.10   Proceedings and Documents.................................3

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................3

     Section 5.1    Organization; Power and Authority.........................3

     Section 5.2    Authorization, etc........................................4

     Section 5.3    Disclosure................................................4

     Section 5.4    Organization and Ownership of Shares of Subsidiaries;
                         Affiliates...........................................4

     Section 5.5    Financial Statements......................................5

     Section 5.6    Compliance with Laws, Other Instruments, etc..............5

     Section 5.7    Governmental Authorizations, etc..........................6

     Section 5.8    Litigation; Observance of Agreements, Statutes
                        and Orders............................................6

     Section 5.9    Taxes.....................................................6

     Section 5.10   Title to Property; Leases.................................6

     Section 5.11   Licenses, Permits, etc.  Except as disclosed
                        in Schedule 5.11......................................7

     Section 5.12   Compliance with ERISA.....................................7

     Section 5.13   Private Offering by the Company...........................8

                                      -i-
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                                TABLE OF CONTENTS
                                   (continued)
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     Section 5.14   Use of Proceeds; Margin Regulations.......................8

     Section 5.15   Existing Indebtedness; Future Liens.......................8

     Section 5.16   Foreign Assets Control Regulations, etc...................9

     Section 5.17   Status under Certain Statutes.............................9

     Section 5.18   Environmental Matters.....................................9

     Section 5.19   Notes Rank Pari Passu....................................10

SECTION 6. REPRESENTATIONS OF THE PURCHASER..................................10

     Section 6.1    Purchase for Investment..................................10

     Section 6.2    Source of Funds..........................................10

SECTION 7. INFORMATION AS TO COMPANY.........................................11

     Section 7.1    Financial and Business Information.......................11

     Section 7.2    Officer's Certificate....................................14

     Section 7.3    Inspection...............................................14

SECTION 8. PREPAYMENT OF THE NOTES...........................................15

     Section 8.1    Required Prepayments.....................................15

     Section 8.2    Optional Prepayments with Make-Whole Amount..............15

     Section 8.3    Allocation of Partial Prepayments........................15

     Section 8.4    Maturity; Surrender, etc.................................15

     Section 8.5    Purchase of Notes........................................15

     Section 8.6    Make-Whole Amount........................................16

SECTION 9. AFFIRMATIVE COVENANTS.............................................17

     Section 9.1    Compliance with Law......................................17

     Section 9.2    Insurance................................................17

     Section 9.3    Maintenance of Properties................................17

     Section 9.4    Payment of Taxes and Claims..............................18

     Section 9.5    Corporate Existence, etc.................................18

     Section 9.6    Notes Rank Pari Passu....................................18

SECTION 10. NEGATIVE COVENANTS...............................................18

     Section 10.1   Transactions with Affiliates.............................18

                                      -ii-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page

     Section 10.2   Merger, Consolidation, etc...............................18

     Section 10.3   Liens....................................................19

     Section 10.4   Incurrence of Certain Additional Debt....................21

     Section 10.5   Consolidated Adjusted Net Worth..........................21

     Section 10.6   Fixed Charges Coverage Ratio.............................22

     Section 10.7   Sale of Assets, Etc......................................22

     Section 10.8   Line of Business.........................................23

SECTION 11. EVENTS OF DEFAULT................................................23

SECTION 12. REMEDIES ON DEFAULT, ETC.........................................25

     Section 12.1   Acceleration.............................................25

     Section 12.2   Other Remedies...........................................25

     Section 12.3   Rescission...............................................26

     Section 12.4   No Waivers or Election of Remedies, Expenses, etc........26

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES....................26

     Section 13.1   Registration of Notes....................................26

     Section 13.2   Transfer and Exchange of Notes...........................26

     Section 13.3   Replacement of Notes.....................................27

     Section 13.4   Additional Series of Notes...............................27

SECTION 14. PAYMENTS ON NOTES................................................28

     Section 14.1   Place of Payment.........................................28

     Section 14.2   Home Office Payment......................................28

SECTION 15. EXPENSES, ETC....................................................28

     Section 15.1   Transaction Expenses.....................................28

     Section 15.2   Survival.................................................29

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.....29

SECTION 17. AMENDMENT AND WAIVER.............................................29

     Section 17.1   Requirements.............................................29

     Section 17.2   Solicitation of Holders of Notes.........................30

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<PAGE>
                                TABLE OF CONTENTS
                                   (continued)
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     Section 17.3   Binding Effect, etc......................................30

     Section 17.4   Notes Held by Company, etc...............................30

SECTION 18. NOTICES..........................................................30

SECTION 19. REPRODUCTION OF DOCUMENTS........................................31

SECTION 20. CONFIDENTIAL INFORMATION.........................................31

SECTION 21. SUBSTITUTION OF PURCHASER........................................32

SECTION 22. MISCELLANEOUS....................................................32

     Section 22.1   Successors and Assigns...................................32

     Section 22.2   Payments Due on Non-Business Days........................33

     Section 22.3   Severability.............................................33

     Section 22.4   Construction.............................................33

     Section 22.5   Counterparts.............................................33

     Section 22.6   Governing Law............................................33

SCHEDULE A        INFORMATION RELATING TO PURCHASERS

SCHEDULE B        DEFINED TERMS

SCHEDULE 4.9      Changes in Corporate Structure

SCHEDULE 5.3      Disclosure Materials

SCHEDULE 5.4      Subsidiaries of the Company and Ownership of Subsidiary Stock

SCHEDULE 5.5      Financial Statements

SCHEDULE 5.8      Certain Litigation

SCHEDULE 5.11     Licenses, Permits, etc.

SCHEDULE 5.14     Use of Proceeds

SCHEDULE 5.15     Existing Indebtedness

SCHEDULE 5.18     Environmental Matters

SCHEDULE 11(j)    ERISA Matters

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                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page

EXHIBIT 1         Form of 7.19% Series A, Senior Note

EXHIBIT 4.4(a)    Form of Opinion of Special Counsel for the Company

EXHIBIT 4.4(b)    Form of Opinion of Special Counsel for the Purchasers

EXHIBIT 13.4      Form of Subsequent Series Certificate

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                                LADISH CO., INC.
                            5481 South Packard Avenue
                             Cudahy, Wisconsin 53110

                 7.19% Senior Notes, Series A, due July 20, 2008

                                                                   July 20, 2001

TO EACH OF THE PURCHASERS LISTED IN
  THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

     Ladish Co., Inc., a Wisconsin corporation (the "Company"), agrees with you
as follows:

SECTION 1.    AUTHORIZATION OF NOTES.

     The Company will authorize the issue and sale of $30,000,000 aggregate
principal amount of its 7.19% Senior Notes, Series A, due July 20, 2008 (the
"Series A Notes"; the Series A Notes, any such notes issued in substitution
therefor pursuant to Section 13.2 or 13.3 of this Agreement or the Other
Agreements (as hereinafter defined), together with any additional series of
promissory notes issued pursuant to Section 13.4, hereinafter collectively
referred to as the "Notes"). The Notes shall be substantially in the form set
out in Exhibit 1, with such changes therefrom, if any, as may be approved by you
and the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.

SECTION 2.    SALE AND PURCHASE OF NOTES.

     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount specified opposite your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other Agreements")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "Other Purchasers"), providing for the sale at such Closing to
each of the Other Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder, and the obligations of the
Other Purchasers under the Other Agreements, are several and not joint
obligations, and you shall have no obligation under any Other Agreement and no
liability to any Person for the performance or nonperformance by any Other
Purchaser thereunder.

SECTION 3.    CLOSING.

     The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Day, Berry & Howard LLP, 260 Franklin
Street, Boston, Massachusetts

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02110, at 10:00 a.m., Boston time, at a closing (the "Closing") on July 20, 2001
or on such other Business Day thereafter on or prior to July 20, 2001 as may be
agreed upon by the Company and you and the Other Purchasers. At the Closing the
Company will deliver to you the Notes to be purchased by you in the form of a
single Note (or such greater number of Notes in denominations of at least
$100,000 as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to account number 020717166 at Bank One Milwaukee, 111
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, ABA Number 075000019. If at
the Closing the Company shall fail to tender such Notes to you as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.

SECTION 4.    CONDITIONS TO CLOSING.

     Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:

     Section 4.1 Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.

     Section 4.2 Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing and after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections 10.1 through 10.7 hereof
had such Sections applied since such date.

     Section 4.3 Compliance Certificates.

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

          (b) Secretary's Certificate. The Company shall have delivered to you a
     certificate certifying as to the resolutions attached thereto and other
     corporate proceedings relating to the authorization, execution and delivery
     of the Notes and the Agreements.

     Section 4.4 Opinions of Counsel. You shall have received opinions in form
and substance satisfactory to you, dated the date of the Closing (a) from Foley
& Lardner, counsel for the Company, covering the matters set forth in Exhibit
4.4(a) and covering such other matters incident to the transactions contemplated
hereby as you or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you) and (b) from Day,

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Berry & Howard LLP, your special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as you may reasonably request.

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

     Section 4.6 Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.

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

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

     Section 4.9 Changes in Corporate Structure. Except as specified in Schedule
4.9, the Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation and shall not have succeeded to all
or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.

     Section 4.10 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
you and your special counsel, and you and your special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     The Company represents and warrants to you that:

     Section 5.1 Organization; Power and Authority. The Company is a corporation
duly organized and validly existing under the laws of its jurisdiction of
incorporation, has, during its

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most recently completed report year, December 31, 2000, filed with the Wisconsin
Department of Financial Institutions the required annual report, and has not
filed articles of dissolution. The Company is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.

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

     Section 5.3 Disclosure. The Company, through its agent, SPP Capital
Partners, LLC has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum dated May 2001 (together with all appendices thereto, the
"Memorandum"), relating to the transactions contemplated hereby. The Memorandum
fairly describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. Except as
disclosed in Schedule 5.3, this Agreement, the Memorandum, the documents,
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a Material fact or omit to state any Material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as expressly
described in Schedule 5.3, or in one of the documents, certificates or other
writings identified therein, or in the financial statements listed in Schedule
5.5, since December 31, 2000, there has been no change in the financial
condition, operations, business or properties of the Company or any Subsidiary
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to you by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.

     Section 5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates.

          (a) Schedule 5.4 contains (except as noted therein) complete and
     correct lists (i) of the Company's Subsidiaries, showing, as to each
     Subsidiary, the correct name thereof, the jurisdiction of its organization,
     and the percentage of shares of each class of its capital stock or similar
     equity interests outstanding owned by the Company and each other

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     Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and
     (iii) of the Company's directors and senior officers.

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

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

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

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

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

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

     Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.

          (a) Except as disclosed in Schedule 5.8, there are no actions, suits
     or proceedings pending or, to the knowledge of the Company, threatened
     against or affecting the Company or any Subsidiary or any property of the
     Company or any Subsidiary in any court or before any arbitrator of any kind
     or before or by any Governmental Authority that, individually or in the
     aggregate, could reasonably be expected to have a Material Adverse Effect.

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

     Section 5.9 Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been paid for
all fiscal years up to and including the fiscal year ended December 31, 1999.

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

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<PAGE>
     Section 5.11 Licenses, Permits, etc. Except as disclosed in Schedule 5.11

          (a) the Company and its Subsidiaries own or possess all licenses,
     permits, franchises, authorizations, patents, copyrights, service marks,
     trademarks and trade names, or rights thereto, that individually or in the
     aggregate are Material, without known conflict with the rights of others;

          (b) to the best knowledge of the Company, no product of the Company
     infringes in any Material respect any license, permit, franchise,
     authorization, patent, copyright, service mark, trademark, trade name or
     other right owned by any other Person; and

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

     Section 5.12 Compliance with ERISA.

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

          (b) The present value of the aggregate benefit liabilities under each
     of the Plans (other than Multiemployer Plans), determined as of the end of
     such Plan's most recently ended plan year on the basis of the actuarial
     assumptions specified for funding purposes in such Plan's most recent
     actuarial valuation report, did not exceed the aggregate current value of
     the assets of such Plan allocable to such benefit liabilities by more than
     $12,000,000 in the case of any single underfunded Plan and by more than
     $20,000,000 in the aggregate for all underfunded Plans, provided however,
     that in all Plans (other than Multiemployer Plans) as of December 31, 2000
     have a surplus of approximately $50,000,000. The term "benefit liabilities"
     has the meaning specified in section 4001 of ERISA and the terms "current
     value" and "present value" have the meaning specified in section 3 of
     ERISA.

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

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<PAGE>
          (d) The expected post-retirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities attributable to continuation coverage mandated by section
     4980B of the Code) of the Company and its Subsidiaries will not have a
     Material Adverse Effect.

          (e) The execution and delivery of this Agreement and the issuance and
     sale of the Notes hereunder will not involve any transaction that is
     subject to the prohibitions of section 406 of ERISA or in connection with
     which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
     Code. The representation by the Company in the first sentence of this
     Section 5.12(e) is made in reliance upon and subject to (i) the accuracy of
     your representation in Section 6.2 as to the sources of the funds used to
     pay the purchase price of the Notes to be purchased by you and (ii) the
     assumption, made solely for the purpose of making such representation, that
     Department of Labor Interpretive Bulletin 75-2 with respect to prohibited
     transactions remains valid in the circumstances of the transactions
     contemplated herein.

     Section 5.13 Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than you, the
Other Purchasers and not more than 65 other Institutional Investors, each of
which has been offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Notes to the registration requirements
of Section 5 of the Securities Act.

     Section 5.14 Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.

     Section 5.15 Existing Indebtedness; Future Liens.

          (a) Except as described therein, Schedule 5.15 sets forth a complete
     and correct list of all outstanding Indebtedness of the Company and its
     Subsidiaries as of March 31, 2001, since which date there has been no
     Material change in the amounts, interest rates, sinking funds, installment
     payments or maturities of the Indebtedness of the Company or its
     Subsidiaries. Neither the Company nor any Subsidiary is in default and no
     waiver of default is currently in effect, in the payment of any principal
     or interest on any

                                       8
<PAGE>
     Indebtedness of the Company or such Subsidiary and no event or condition
     exists with respect to any Indebtedness of the Company or any Subsidiary
     that would permit (or that with notice or the lapse of time, or both, would
     permit) one or more Persons to cause such Indebtedness to become due and
     payable before its stated maturity or before its regularly scheduled dates
     of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any
     Subsidiary has agreed or consented to cause or permit in the future (upon
     the happening of a contingency or otherwise) any of its property, whether
     now owned or hereafter acquired, to be subject to a Lien not permitted by
     Section 10.3.

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

     Section 5.17 Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered or
subject to regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce
Act, as amended, or the Federal Power Act, as amended.

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

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

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

          (c) all buildings on all real properties now owned, leased or operated
     by the Company or any of its Subsidiaries are in compliance with applicable
     Environmental

                                       9
<PAGE>
     Laws, except where failure to comply could not reasonably be expected to
     result in a Material Adverse Effect.

     Section 5.19 Notes Rank Pari Passu. The Notes are direct and unsecured
obligations of the Company and ranking pari passu with all other present and
future unsecured Indebtedness (actual or contingent) of the Company which is not
expressed to be subordinate or junior in rank to any other unsecured and
unsubordinated Indebtedness of the Company, except for those obligations that
are mandatorily preferred by law.

SECTION 6.    REPRESENTATIONS OF THE PURCHASER.

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

     Section 6.2 Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:

          (a) if you are an insurance company, and either (i) the Source does
     not include assets allocated to any separate account maintained by you in
     which any employee benefit plan (or its related trust) has any interest,
     other than a separate account that is maintained solely in connection with
     your fixed contractual obligations under which the amounts payable, or
     credited, to such plan and to any participant or beneficiary of such plan
     (including any annuitant) are not affected in any manner by the investment
     performance of the separate account, or (ii) the Source is an "insurance
     company general account" within the meaning of Department of Labor
     Prohibited Transaction Exemption ("PTE") 95-60, and the conditions of PTE
     95-60 are, and so long as you hold the Note, will be, satisfied, with
     respect to your purchase and holding of the Note; or

          (b) the Source is either (i) an insurance company pooled separate
     account, within the meaning of Prohibited Transaction Exemption ("PTE")
     90-1 (issued January 29, 1990), or (ii) a bank collective investment fund,
     within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as
     you have disclosed to the Company in writing pursuant to this paragraph
     (b), no employee benefit plan or group of plans maintained by the same
     employer or employee organization beneficially owns more than 10% of all
     assets allocated to such pooled separate account or collective investment
     fund; or

          (c) the Source constitutes assets of an "investment fund" (within the
     meaning of Part V of the QPAM Exemption) managed by a "qualified
     professional asset manager" or "QPAM" (within the meaning of Part V of the
     QPAM Exemption), no employee benefit plan's assets that are included in
     such investment fund, when combined with the assets of

                                       10
<PAGE>
     all other employee benefit plans established or maintained by the same
     employer or by an affiliate (within the meaning of Section V(c)(1) of the
     QPAM Exemption) of such employer or by the same employee organization and
     managed by such QPAM, exceed 20% of the total client assets managed by such
     QPAM, the conditions of Part l(c) and (g) of the QPAM Exemption are
     satisfied, neither the QPAM nor a person controlling or controlled by the
     QPAM (applying the definition of "control" in Section V(e) of the QPAM
     Exemption) owns a 5% or more interest in the Company and (i) the identity
     of such QPAM and (ii) the names of all employee benefit plans whose assets
     are included in such investment fund have been disclosed to the Company in
     writing pursuant to this paragraph (c); or

          (d) the Source is a governmental plan; or

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

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

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

SECTION 7.    INFORMATION AS TO COMPANY.

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

          (a) Quarterly Statements -- within 45 days after the end of each
     quarterly fiscal period in each fiscal year of the Company (other than the
     last quarterly fiscal period of each such fiscal year), duplicate copies
     of:

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

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

setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements

                                       11
<PAGE>
therefor and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of this Section 7.1(a);

          (b) Annual Statements-- within 90 days after the end of each fiscal
     year of the Company, duplicate copies of,

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

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

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

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

                    (B) a certificate of such accountants stating that they have
               reviewed this Agreement and stating further whether, in making
               their audit, they have become aware of any condition or event
               that then constitutes a Default or an Event of Default, and, if
               they are aware that any such condition or event then exists,
               specifying the nature and period of the existence thereof (it
               being understood that such accountants shall not be liable,
               directly or indirectly, for any failure to obtain knowledge of
               any Default or Event of Default unless such accountants should
               have obtained knowledge thereof in making an audit in accordance
               with generally accepted auditing standards or did not make such
               an audit),

provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act) prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission, together with the
accountant's certificate described in clause (B) above, shall be deemed to
satisfy the requirements of this Section 7.1(b);

          (c) SEC and Other Reports -- promptly upon their becoming available,
     one copy of (i) each financial statement, report, notice or proxy statement
     sent by the Company or any Subsidiary to public securities holders
     generally, and (ii) each regular or periodic report, each registration
     statement (without exhibits except as expressly requested by such holder),
     and each prospectus and all amendments thereto filed by the Company or

                                       12
<PAGE>
     any Subsidiary with the Securities and Exchange Commission and of all press
     releases and other statements made available generally by the Company or
     any Subsidiary to the public concerning developments that are Material;

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

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

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

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

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

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

          (g) Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company or any of its
     Subsidiaries or relating to the ability of the Company to perform its
     obligations hereunder and under the Notes as from time to time may be
     reasonably requested by any such holder of Notes.

                                       13
<PAGE>
     Section 7.2 Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:

          (a) Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Section 10.3 through Section 10.7
     hereof, inclusive, during the quarterly or annual period covered by the
     statements then being furnished (including with respect to each such
     Section, where applicable, the calculations of the maximum or minimum
     amount, ratio or percentage, as the case may be, permissible under the
     terms of such Sections, and the calculation of the amount, ratio or
     percentage then in existence); and

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

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

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

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

                                       14
<PAGE>
SECTION 8.    PREPAYMENT OF THE NOTES.

     Section 8.1 Required Prepayments. On July 20, 2004 and on each July 20
thereafter to and including July 20, 2008 the Company will prepay $6,000,000
principal amount (or such lesser principal amount as shall then be outstanding)
of the Notes at par and without payment of the Make-Whole Amount or any premium,
provided that upon any partial prepayment of the Notes pursuant to Section 8.2
or purchase of the Notes permitted by Section 8.5 the principal amount of each
required prepayment of the Notes becoming due under this Section 8.1 on and
after the date of such prepayment or purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment or purchase.

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

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

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

     Section 8.5 Purchase of Notes. The Company will not and will not permit any
Affiliate defined in clause (a) of the definition thereof to purchase, redeem,
prepay or otherwise

                                       15
<PAGE>
acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all Notes acquired by
it or any Affiliate defined in clause (a) in the definition thereof pursuant to
any payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

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

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

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

          "Reinvestment Yield" means, with respect to the Called Principal of
     any Note, .50% over the yield to maturity implied by (i) the yields
     reported, as of 10:00 A.M. (New York City time) on the second Business Day
     preceding the Settlement Date with respect to such Called Principal, on the
     display designated as "Page 678" on the Telerate Access Service (or such
     other display as may replace Page 678 on Telerate Access Service) for
     actively traded U.S. Treasury securities having a maturity equal to the
     Remaining Average Life of such Called Principal as of such Settlement Date,
     or (ii) if such yields are not reported as of such time or the yields
     reported as of such time are not ascertainable, the Treasury Constant
     Maturity Series Yields reported, for the latest day for which such yields
     have been so reported as of the second Business Day preceding the
     Settlement Date with respect to such Called Principal, in Federal Reserve
     Statistical Release H.15 (519) (or any comparable successor publication)
     for actively traded U.S. Treasury securities having a constant maturity
     equal to the Remaining Average Life of such Called Principal as of such
     Settlement Date. Such implied yield will be determined, if necessary, by
     (a) converting U.S. Treasury bill quotations to bond-equivalent yields in
     accordance with accepted financial practice and (b) interpolating linearly
     between (1) the actively traded U.S. Treasury security with the duration
     closest to and greater than the Remaining Average Life and (2) the actively
     traded U.S. Treasury security with the duration closest to and less than
     the Remaining Average Life.

          "Remaining Average Life" means, with respect to any Called Principal,
     the number of years (calculated to the nearest one-twelfth year) obtained
     by dividing (i) such

                                       16
<PAGE>
     Called Principal into (ii) the sum of the products obtained by multiplying
     (a) the principal component of each Remaining Scheduled Payment with
     respect to such Called Principal by (b) the number of years (calculated to
     the nearest one-twelfth year) that will elapse between the Settlement Date
     with respect to such Called Principal and the scheduled due date of such
     Remaining Scheduled Payment.

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

          "Settlement Date" means, with respect to the Called Principal of any
     Note, the date on which such Called Principal is to be prepaid pursuant to
     Section 8.2 or has become or is declared to be immediately due and payable
     pursuant to Section 12.1, as the context requires.

SECTION 9.    AFFIRMATIVE COVENANTS.

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

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

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

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

                                       17
<PAGE>
its business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

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

     Section 9.5 Corporate Existence, etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.2 and 10.7, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries (unless
merged into the Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.

     Section 9.6 Notes Rank Pari Passu. The Notes are and at all times shall
remain direct and unsecured obligations of the Company ranking pari passu with
all other present and future unsecured Indebtedness (actual or contingent) of
the Company which is not expressed to be subordinate or junior in rank to any
other unsecured and unsubordinated Indebtedness of the Company, except for those
obligations that are mandatorily preferred by law.

SECTION 10.   NEGATIVE COVENANTS.

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

     Section 10.1 Transactions with Affiliates. The Company will not and will
not permit any Subsidiary to enter into directly or indirectly any transaction
or Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Subsidiary),
except in the ordinary course and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.

     Section 10.2 Merger, Consolidation, etc. The Company will not, and will not
permit any of its Subsidiaries to, consolidate with or merge with any other
corporation or convey,

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<PAGE>
transfer or lease substantially all of its assets in a single transaction or
series of transactions to any Person (except that a Subsidiary of the Company
may consolidate with or merge with, or convey, transfer or lease substantially
all of its assets in a single transaction or a series of transactions to, the
Company or Wholly-Owned Subsidiary of the Company) unless:

          (a) the successor formed by such consolidation or the survivor of such
     merger or the Person that acquires by conveyance, transfer or lease
     substantially all of the assets of the Company as an entirety, as the case
     may be (the "Successor Corporation"), shall be a solvent corporation
     organized and existing under the laws of the United States or any State
     thereof (including the District of Columbia), and, if the Company is not
     such corporation, such Successor Corporation shall have executed and
     delivered to each holder of any Notes its assumption of the due and
     punctual performance and observance of each covenant and condition of all
     of this Agreement, the Other Agreements and the Notes;

          (b) immediately after giving effect to such transaction, no Default or
     Event of Default shall have occurred and be continuing; and

          (c) immediately after giving effect to such transaction the Successor
     Corporation would be permitted by the provisions of Section 10.4 hereof to
     incur at least $1.00 of additional Funded Debt owing to a Person other than
     a Subsidiary of the Successor Corporation.

No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.

     Section 10.3 Liens. The Company will not and will not permit any of its
Subsidiaries to, directly or indirectly create, assume, incur or suffer to be
created, assumed or incurred (upon the happening of a contingency or otherwise)
any Lien in respect of any property or assets (including, without limitation,
any document or instrument in respect of goods or accounts receivable) of the
Company or any such Subsidiary, whether now and/or hereafter acquired, or any
income or profits therefrom, or assign or otherwise convey any right to receive
income or profits (unless the Notes will be equally and ratably secured with any
and all other obligations thereby secured , such security to be pursuant to an
agreement reasonably satisfactory to the Required Holders and , in any case, the
Notes shall have the benefit, to the fullest extent that, and with such priority
as, the holders of the Notes may be entitled under applicable law, of the
equitable Lien on such property), except for:

          (a) Liens existing on the date of this Agreement securing the
     Indebtedness of the Company and its Subsidiaries set forth on Schedule
     5.15;

          (b) statutory Liens of Landlords and Liens of carriers, warehousemen,
     mechanics, materialmen and other similar Liens, incurred in the ordinary
     course of business for sums not yet due and payable or the payment of which
     is not at the time required by Section 9.4;

                                       19
<PAGE>
          (c) leases or subleases granted to others, easements, rights-of-way,
     restrictions and other similar charges or encumbrances, in each case
     incidental to, and not interfering with, the ordinary conduct of the
     business of the Company or any of its Subsidiaries, provided that such
     Liens do not, in the aggregate, materially detract from the value of such
     property;

          (d) Liens (other than any Lien imposed by ERISA) incurred or deposits
     made in the ordinary course of business (i) in connection with workers'
     compensation, unemployment insurance and other types of social security or
     retirement benefits, or (ii) to secure (or to obtain letters of credit that
     secure) the performance of tenders, statutory obligations, surety bonds,
     appeal bonds, bids, leases (other than Capital Leases), performance bonds,
     purchase, construction or sales contracts and other similar obligations, in
     each case not incurred or made in connection with the borrowing of money,
     the obtaining of advances or credit or the payment of the deferred purchase
     price of property; and any Lien arising in the ordinary course of business
     which does not in the aggregate materially detract from the value of the
     assets of the Company and its Subsidiaries (taken as a whole) or materially
     impair the use thereof in the operation of their business;

          (e) Liens, placed in effect prior to, at the time of or within 365
     days of completion of, construction of new assets or facilities (or any
     improvements to existing facilities) to secure Indebtedness incurred to
     provide funds for the cost of construction (or improvement) of such assets
     or facilities (provided such Liens are limited to the property or portion
     thereof upon which the construction being so financed occurred and to the
     improvements the cost of construction of which is being so financed), or
     any Lien existing in the property of a company at the time such company is
     merged into or consolidated with the Company or a Subsidiary or at the time
     of sale, lease or other disposition of the properties of a company or firm
     as an entirety or substantially as an entirety or to the Company or a
     Subsidiary. All of such Liens shall not exceed 100% of the fair market
     value on the related property and such Lien shall attach solely to such
     assets or facilities;

          (f) Liens for taxes, assessments or other governmental charges or
     levies, either not yet due or payable or the payment of which is not at the
     time required by Section 9.4;

          (g) Liens created by or resulting from any litigation or legal
     proceeding which are currently being contested in good faith and by
     appropriate proceeding provided that the Company shall have established
     appropriate reserves;

          (h) any Lien renewing, extending or refunding any Lien permitted by
     (a) through (e) of this Section 10.3, provided that (i) the principal
     amount of Indebtedness secured by such Lien immediately prior to such
     extension, renewal or refunding is not increased or the maturity thereof
     reduced, (ii) such Lien is not extended to any other property, and (iii)
     immediately after such extension, renewal or refunding no Default or Event
     of Default would exist;

                                       20
<PAGE>
          (i) Liens on property or assets of the Company or any of its
     Subsidiaries securing Indebtedness owing to the Company or to another
     Subsidiary; and

          (j) Other Liens not otherwise permitted by paragraphs (a) through (i),
     provided that the aggregate amount of all Priority Debt secured by Liens
     incurred within the limitations of this Section 10.3(j) shall not exceed
     20% of Consolidated Adjusted Net Worth.

     Section 10.4 Incurrence of Certain Additional Debt.

          (a) Limitation on Funded Debt. The Company will not, and will not
     permit any Subsidiary to, directly or indirectly, create, incur, assume,
     guarantee, or otherwise become directly or indirectly liable with respect
     to, any Funded Debt, other than:

               (i) the Notes;

               (ii) Funded Debt of the Company and its Subsidiaries outstanding
          as of March 31, 2001 and described on Schedule 5.15 together with
          renewals, extensions and refundings thereof without increase in
          principal amount; and

               (iii) additional Funded Debt of the Company and its Subsidiaries
          provided that, on the date the Company or such Subsidiary becomes
          liable with respect to any such Funded Debt and immediately after
          giving effect thereto and the concurrent retirement of any other
          Indebtedness, (x) no Default or Event of Default exists, (y)
          Consolidated Funded Debt does not exceed 60% of Consolidated Total
          Capitalization and (z) any such additional Funded Debt constituting
          Priority Debt is permitted by Section 10.4(b).

          (b) Limitation on Priority Debt. The Company will not, and will not
     permit any Subsidiary to, directly or indirectly, create, incur, assume,
     guarantee, or otherwise become directly or indirectly liable with respect
     to, any Priority Debt, unless on the date the Company or such Subsidiary
     becomes liable with respect to any such Priority Debt and immediately after
     giving effect thereto and the concurrent retirement of any other
     Indebtedness of the Company or any such Subsidiary, Priority Debt would not
     exceed 20% of Consolidated Adjusted Net Worth.

          (c) Time of Incurrence of Indebtedness. For the purposes of this
     Section 10.4, any Person becoming a Subsidiary after the date hereof shall
     be deemed, at the time it becomes a Subsidiary, to have incurred all of its
     then outstanding Indebtedness, and any Person extending, renewing or
     refunding any Indebtedness shall be deemed to have incurred such
     Indebtedness at the time of such extension, renewal or refunding.

     Section 10.5 Consolidated Adjusted Net Worth. The Company will not, at any
time, permit Consolidated Adjusted Net Worth to be less than the sum of (a)
$80,000,000, plus (b) an aggregate amount equal to 25% of its aggregate
Consolidated Net Income (but, in each case, only if a positive number) for each
completed fiscal year beginning with the fiscal year ended December 31, 2001.

                                       21
<PAGE>
     Section 10.6 Fixed Charges Coverage Ratio. The Company will not, at any
time, permit the Fixed Charge Coverage Ratio to be less than 2.00 to 1.00.

     Section 10.7 Sale of Assets, Etc. Except as permitted by Section 10.2, the
Company will not, and will not permit any of its Subsidiaries to, sell, lease,
transfer, abandon or otherwise dispose of all or a Substantial Part of its
assets; provided that the foregoing restrictions do not apply to:

          (a) the sale, lease, transfer or other disposition of assets of a
     Subsidiary to the Company or any Wholly-Owned Subsidiary;

          (b) the sale, lease, transfer or other disposition of assets in the
     ordinary course of business;

          (c) the sale, transfer or other disposition of assets for cash or
     other property to a Person or Persons if the proceeds of such sale,
     transfer or other disposition of such assets were or are applied within 3
     months of the date of sale, lease or other disposition of such assets to
     (x) the acquisition of assets useful and intended to be used in the
     operation of the business of the Company and its Subsidiaries as described
     in Section 10.8 and having a fair market value at least equal to that of
     the assets so disposed of and/or (y) the prepayment with any applicable
     prepayment premium of Indebtedness of the Company pari passu with the Notes
     (including, without limitation, the Notes) on a pro-rata basis (it being
     understood and agreed that the proceeds from the disposition of any assets
     to be applied pursuant to this clause (y) to the prepayment of any
     Indebtedness of the Company other than the Notes, may be applied in amounts
     and to holders of such Indebtedness of the Company as the Company may
     determine in its sole and absolute discretion). Without limiting the
     foregoing, the Company agrees that :

               (i) the timing and manner of any offer of prepayment to the
          holders of the Notes shall be in the manner contemplated by Section
          8.2; provided that any such prepayment of the Notes pursuant to this
          Section 10.7 shall be with a Make Whole Amount ,

               (ii) any holder of the Notes may decline any offer of prepayment
          pursuant to this clause (ii),

               (iii) the failure of any such holder to accept or decline such
          offer of prepayment shall be deemed to an election by such holder to
          accept such prepayment and

               (iv) if such offer is so accepted, the proceeds so offered
          towards the prepayment of the Notes and accepted shall be prepaid and
          applied in the manner provided in Section 8.2.

          To the extent that any holder of the Notes declines or is deemed to
          have declined such offer of prepayment, the Company may use the
          remaining amount of such prepayment so declined for general corporate
          purposes.

                                       22
<PAGE>
     Section 10.8 Line of Business. The Company will not, nor will it permit any
Subsidiary, to engage to any substantial extent in any business if, as a result,
the general nature of the business, taken on a consolidated basis, which would
then be engaged in by the Company and its Subsidiaries would be Materially
changed from the general nature of the business engaged in by the Company and
its Subsidiaries as described in the Memorandum and businesses substantially
similar or reasonably related thereto or in furtherance thereof.

SECTION 11.   EVENTS OF DEFAULT.

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

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

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

          (c) the Company defaults in the performance of or compliance with any
     term contained in Sections 10.2 through 10.8; or

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

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

          (f) (i) the Company or any Material Subsidiary is in default (as
     principal or as guarantor or other surety) in the payment of any principal
     of or premium or make-whole amount or interest on any Indebtedness that is
     outstanding in an aggregate principal amount of at least $5,000,000 beyond
     any period of grace provided with respect thereto, or (ii) the Company or
     any Material Subsidiary is in default in the performance of or compliance
     with any term of any evidence of any Indebtedness in an aggregate
     outstanding principal amount of at least $5,000,000 or of any mortgage,
     indenture or other agreement relating thereto or any other condition
     exists, and as a consequence of such default or condition such Indebtedness
     has become, or has been declared (or one or more Persons are entitled to
     declare such Indebtedness to be), due and payable before its stated
     maturity or before its regularly scheduled dates of payment, or (iii) as a
     consequence of the occurrence or continuation of any event or condition
     (other than the

                                       23
<PAGE>
     passage of time or the right of the holder of Indebtedness to convert such
     Indebtedness into equity interests), (x) the Company or any Material
     Subsidiary has become obligated to purchase or repay Indebtedness before
     its regular maturity or before its regularly scheduled dates of payment in
     an aggregate outstanding principal amount of at least $5,000,000, or (y)
     one or more Persons have the right to require the Company or any Material
     Subsidiary so to purchase or repay such Indebtedness; or

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

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

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of $5,000,000 are rendered against one or more of the Company and
     its Subsidiaries and which judgments are not, within 60 days after entry
     thereof, bonded, discharged or stayed pending appeal, or are not discharged
     within 60 days after the expiration of such stay; or

          (j) if (i) any Plan shall fail to satisfy the minimum funding
     standards of ERISA or the Code for any plan year or part thereof or a
     waiver of such standards or extension of any amortization period is sought
     or granted under section 412 of the Code, (ii) a notice of intent to
     terminate any Plan shall have been or is reasonably expected to be filed
     with the PBGC or the PBGC shall have instituted proceedings under ERISA
     section 4042 to terminate or appoint a trustee to administer any Plan or
     the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
     may become a subject of any such proceedings, (iii) the aggregate "amount
     of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
     of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
     shall exceed $20,000,000 (iv) except as disclosed on Schedule 11(j), the
     Company or any ERISA Affiliate shall have incurred or is reasonably
     expected to incur any liability pursuant to Title I or IV of ERISA or the
     penalty or excise tax provisions of the Code relating to employee benefit
     plans, or (v) the Company or any

                                       24
<PAGE>
     ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company
     or any Subsidiary establishes or amends any employee welfare benefit plan
     that provides post-employment welfare benefits in a manner that would
     increase the liability of the Company or any Subsidiary thereunder; and any
     such event or events described in clauses (i) through (vi) above, either
     individually or together with any other such event or events, could
     reasonably be expected to have a Material Adverse Effect.

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

SECTION 12.   REMEDIES ON DEFAULT, ETC.

     Section 12.1 Acceleration.

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

          (b) If any other Event of Default has occurred and is continuing, any
     holder or holders of more than 51% in principal amount of any Series of
     Notes at the time outstanding may at any time at its or their option, by
     notice or notices to the Company, declare all the Notes of such Series then
     outstanding to be immediately due and payable.

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

     Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

     Section 12.2 Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained

                                       25
<PAGE>
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

     Section 12.3 Rescission. At any time after any Notes have been declared due
and payable pursuant to clause (b) or (c) of Section 12.1, the holders of not
less than 50% in principal amount of each Series of Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences with respect to such Series if (a) the Company has paid all
overdue interest on such Notes, all principal of and Make-Whole Amount, if any,
on any such Notes that are due and payable and are unpaid other than by reason
of such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 with respect to any Series of Notes will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon or extend to or affect any Notes of any other Series.

     Section 12.4 No Waivers or Election of Remedies, Expenses, etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.

SECTION 13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

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

     Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note

                                       26
<PAGE>
or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes of the same Series (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.

     Section 13.3 Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if the holder of such Note is, or is a
     nominee for, an original Purchaser or another holder of a Note with a
     minimum net worth of at least $5,000,000, such Person's own unsecured
     agreement of indemnity shall be deemed to be satisfactory), or

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

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same Series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

     Section 13.4 Additional Series of Notes.

          (a) The Company may, from time to time, issue and sell additional
     Series of its unsecured promissory notes (each additional Series being
     designated by the next succeeding letter of the alphabet following
     designation of the immediately preceding series) to one or more additional
     purchasers (which may include one or more of the Purchasers if such
     Purchaser or Purchasers shall in its or their sole discretion consent
     thereto) which are Institutional Investors and may, in connection with the
     documentation of such additional Series, incorporate by reference all of
     the provisions of this Agreement; provided, however, that such
     incorporation by reference shall not dilute or otherwise affect the
     relative priority or other rights of the Purchasers of the Notes hereunder
     or any subsequent Series of Notes including, without limitation, the
     percentages of the Notes, with respect to such Series, required to approve
     an amendment to this Agreement or to effect a waiver pursuant to Section 17
     hereof or the percentages of the Notes required to accelerate the maturity
     of such Notes or to rescind such an acceleration of the maturity of the
     Notes pursuant to Section 12 hereof. This Section 13.4

                                       27
<PAGE>
     does not in any manner obligate any of the Purchasers or the holders of the
     Notes to purchase or agree to purchase additional Series of the Company's
     unsecured promissory notes now or any time in the future.

          (b) The issuance of each such additional Series of Notes shall occur
     upon the execution by the Company and each of the Purchasers of a terms
     agreement substantially in the form of Exhibit 13.4 attached hereto,
     appropriately completed, and upon satisfaction by the Company of all of the
     closing conditions which were applicable to the issuance of the Series A
     Notes, and with such changes as shall be appropriate to such additional
     Series of Notes.

SECTION 14.   PAYMENTS ON NOTES.

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

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

SECTION 15.   EXPENSES, ETC.

     Section 15.1 Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including,

                                       28
<PAGE>
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those retained by you).

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

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

     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the issuance of an
additional Series of Notes pursuant to Section 13.4, the purchase or transfer by
you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.

SECTION 17.   AMENDMENT AND WAIVER.

     Section 17.1 Requirements. This Agreement as it applies to any Series of
Notes and any Series of Notes may be amended, and the observance of any term
hereof or of any Series of Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
holders of at least 51% in principal amount of such Series of Notes at the time
outstanding (exclusive of Notes then owned by the Company or any Affiliates),
except that (a) no amendment or waiver of any of the provisions of Section 1, 2,
3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be
effective as to you unless consented to by you in writing, and (b) no such
amendment or waiver may, without the written consent of the holder of each
Series of Notes at the time outstanding affected thereby, (i) subject to the
provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Series of Notes the holders of which are required to consent to
any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b),
12, 17 or 20.

                                       29
<PAGE>
     Section 17.2 Solicitation of Holders of Notes.

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

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

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

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

SECTION 18.   NOTICES.

     All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a

                                       30
<PAGE>
recognized overnight delivery service (charges prepaid), or (b) by registered or
certified mail with return receipt requested (postage prepaid), or (c) by a
recognized overnight delivery service (with charges prepaid). Any such notice
must be sent:

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

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

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

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

SECTION 19.   REPRODUCTION OF DOCUMENTS.

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

SECTION 20.   CONFIDENTIAL INFORMATION.

     For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that

                                       31
<PAGE>
you may deliver or disclose Confidential Information to (i) your directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.

SECTION 21.   SUBSTITUTION OF PURCHASER.

     You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.

SECTION 22.   MISCELLANEOUS.

     Section 22.1 Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their

                                       32
<PAGE>
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

     Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.

     Section 22.3 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.4 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person. Absent express provision to the contrary, any
reference to "including", shall mean "including, without limitation".

     Section 22.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

     Section 22.6 Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of Wisconsin excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                          *    *    *    *    *

                                       33
<PAGE>
     If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                       Very truly yours,

                                       LADISH CO., INC.

                                       By: /s/  Wayne E. Larsen
                                           -------------------------------------
                                            Wayne E. Larsen
                                            Vice President

The foregoing is hereby agreed
to as of the date thereof.
                                       MASSACHUSETTS MUTUAL LIFE
                                       INSURANCE COMPANY
                                       By:  David L. Babson & Company, Inc.,
                                            its Investment Adviser

                                       By: /s/  Mark A. Ahmed
                                          --------------------------------------
                                           Mark A. Ahmed
                                           Managing Director

                                       NATIONWIDE LIFE AND ANNUITY
                                       INSURANCE COMPANY

                                       By: /s/  Mark W. Poeppelman
                                          --------------------------------------
                                           Mark W. Poeppelman
                                           Associate Vice President

                                       NATIONWIDE LIFE INSURANCE
                                       COMPANY

                                       By: /s/  Mark W. Poeppelman
                                          --------------------------------------
                                           Mark Poeppelman
                                           Associate Vice President

                                       THE CANADA LIFE ASSURANCE
                                       COMPANY

                                       By: /s/  C. Paul English
                                          --------------------------------------
                                           C. Paul English
                                           Associate Treasurer
<PAGE>
                                       CANADA LIFE INSURANCE COMPANY
                                       OF AMERICA

                                       By: /s/  C. Paul English
                                          --------------------------------------
                                           C. Paul English
                                           Associate Treasurer

                                       C.M. LIFE INSURANCE COMPANY
                                       By: David L. Babson & Company, Inc.,
                                           its Investment Sub-Adviser

                                       By: /s/  Mark A. Ahmed
                                          --------------------------------------
                                           Mark A. Ahmed
                                           Managing Director

                                       MASSMUTUAL ASIA LIMITED
                                       By: David L. Babson & Company, Inc.,
                                           its Investment Adviser

                                       By: /s/  Mark A. Ahmed
                                          --------------------------------------
                                           Mark A. Ahmed
                                           Managing Director

                                      -2-EX - 10.1.1

                           AMENDMENT TO AGREEMENT AND

                             PLAN OF REORGANIZATION

     This Amendment to that certain AGREEMENT AND PLAN OF REORGANIZATION, made
and entered into on this ___ day of July, 2001, in accordance with the terms of
Section 7.11 of said Agreement. The Sections to be amended are substituted in
their entirety by the designated Section(s) set forth herein.

First Amended Section:

     "Section 1.2 Capitalization. The authorized capitalization of QMT consists
of 15,000,000 Common Shares, par value $0.001 per share and 1,000,000 Preferred
Shares, par value $0.001 per share. As of the Closing Date hereof, QMT will have
no more than ten million. two hundred sixty thousand (10,260,000) Common Shares
issued and outstanding. All issued and outstanding shares are legally issued,
fully paid and nonassessable and are not issued in violation of the preemptive
or other rights of any person. QMT has no other securities, warrants or options
authorized or issued."

Second Amended Section:

     "Section 3.2 Issuance of AAI Common Shares. In exchange for all of the QMT
Common Shares tendered pursuant to Section 3.1, AAI shall issue an aggregate of
10,260,000 "restricted"AAI Common Shares to the QMT shareholders on a
share-for-share basis to their existing ownership in QMT."

Third Amended Section:

     "Section 3.3 Events Prior to Closing.

     (a) Upon execution hereof or as soon thereafter as practical, management of
AAI and QMT shall execute, acknowledge and deliver (or shall cause to be
executed, acknowledged and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby, subject only to the conditions to Closing referenced
hereinbelow."

Forth Amended Section:

     "Section 3.4 Closing.

     (a) The closing of the transaction contemplated by this Agreement shall be
as of the date in which (i) each party hereto has executed this Agreement; and
(ii) all of the shareholders of QMT and AAI have approved the terms of this
Agreement; and (iii) all conditions to Closing referenced hereinabove, as well
as in Articles V and VI below, have been satisfied or waived by the appropriate
party and all documentation referenced herein is delivered to the respective
party

<PAGE>

herein, unless a different date is mutually agreed to in writing by the parties
hereto (the "Closing Date").

     (b) Upon execution hereof or as soon thereafter as practical, all the
current shareholders of AAI, representing 500,000 shares, shall tender their
share certificates, along with a duly executed stock power, for consideration of
$0.05 per share . Upon receipt, such shares shall be cancelled on the stock
record."

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
AGREEMENT AND PLAN OF REORGANIZATION to be executed by their respective
officers, hereunto duly authorized, and entered into as of the date first above
written.

ABOVE AVERAGE INVESTMENTS, LTD.                 QUICK-MED TECHNOLOGIES, INC.

By: /s/ Devinder Randhawa                       By: /s/ David S. Lerner
   ----------------------                          ---------------------
   Devinder Randhawa                               David S. Lerner
Its:  President                                 Its: President

                                       2

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