Document:

Commitment Letter, among Fifth Third Bank, Addus HealthCare, Inc. and others

 Exhibit 10.21 
 

 
 October 13, 2009 
 Mr. Frank Leonard 
 Chief Financial Officer 
 And 
 Mr. David Stasiewicz 
 Vice President – Finance 
 Addus Healthcare,
Inc. 
 2401 S. Plum Grove Rd. 
 Palatine, Illinois 60067 
  

	 	Re:	  $50,000,000 Revolving Credit Facility 

	 	 	  Addus Healthcare, Inc. et al. 

 Dear Mr. Leonard: 
 We are pleased to advise you that Fifth Third Bank, an Ohio banking corporation (the
“Lender”) commits, subject to the terms and conditions contained herein and in the term sheet attached hereto as Exhibit A (the “Term Sheet”; the Term Sheet and this commitment letter are collectively
referred to herein as the “Commitment”) to provide the above referenced credit facility (the “Facility”) to ADDUS HEALTHCARE, INC., an Illinois corporation, ADDUS HEALTHCARE (IDAHO), INC., a Delaware corporation,
ADDUS HEALTHCARE (INDIANA), INC., a Delaware corporation, ADDUS HEALTHCARE (NEVADA), INC., a Delaware corporation, ADDUS HEALTHCARE (NEW JERSEY), INC., a Delaware corporation, ADDUS HEALTHCARE (NORTH CAROLINA), INC., a Delaware corporation, BENEFITS
ASSURANCE CO., INC., a Delaware corporation, FORT SMITH HOME HEALTH AGENCY, INC., an Arkansas corporation, LITTLE ROCK HOME HEALTH AGENCY, INC., an Arkansas corporation, LOWELL HOME HEALTH AGENCY, INC., an Arkansas corporation, PHC ACQUISITION
CORPORATION, a California corporation, PROFESSIONAL RELIABLE NURSING SERVICE, INC., a California corporation, as Borrowers (individually and collectively, “Borrower”), and ADDUS HOMECARE CORPORATION, a Delaware corporation
(“Holdings”), as Guarantor. Lender anticipates that 

			
	     Addus Healthcare, Inc.
	  	Page 2        

 each entity constituting Borrower will be co-borrowers under and jointly and severally liable for the
Facility and that Holdings will be a guarantor of the Facility (such co-borrowers and guarantor are collectively referred to as the “Credit Parties”). 
 This Commitment is being delivered in reliance that all Information provided to Lender will be accurate and complete in all material respects. Accordingly, Borrower hereby represents and covenants that
all written information (other than projections, forward looking statements or information of a general economic nature) prepared by or on behalf of Borrower, concerning Borrower, any other Credit Party or the transactions contemplated hereby (the
“Information”) which is made available in writing to Lender by Borrower or any authorized representative of Borrower in connection with the transactions contemplated hereby (as subsequently updated), will be complete and correct in
all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein in the aggregate, in light of the circumstances under which such statements were
made, not misleading. 
 Please note that any closing of the Facility is subject to the satisfactory completion by Lender of all
legal due diligence, the legal and regulatory conditions by which Lender is bound, the customary funding conditions of Lender, and the conditions precedent set forth in the Term Sheet below the caption “Other Terms and Conditions
Precedent”. In addition to the loan documents described in this Commitment, Lender reserves the right to require additional loan documents that are customary for this type of transaction. 
 In consideration of the execution and delivery of this Commitment by Lender, Borrowers and Holdings each hereby agree, jointly and
severally, to indemnify, exonerate and hold Lender and its officers, directors, employees, affiliates, attorneys and agents (each an “Indemnified Party”) free and harmless from and against any and all actions, causes of action,
suits, losses, liabilities, damages and reasonable expenses, including reasonable attorneys’ fees and expenses (collectively, the “Indemnified Liabilities”), incurred by the Indemnified Parties or any of them as a result of, or
arising out of, or relating to the proposed Facility or other similar transactions financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds of the Facility, or the execution, delivery, performance or
enforcement of this Commitment or loan documentation relating to the Facility, by any of the Indemnified Parties, or the collateral for the Facility, except for any such Indemnified Liabilities arising on account of the applicable Indemnified
Party’s gross negligence or willful misconduct. Borrower’s obligations under this paragraph shall survive until the parties have entered into a Loan and Security Agreement with respect to the Facility. 
 Immediately upon written request by Lender, Borrower agrees to reimburse Lender for all its reasonable out-of-pocket costs and expenses
associated with due diligence, underwriting and documenting the Facility, including, without limitation, reasonable attorneys fees and costs, tax, lien and judgment search fees and costs, and auditing, appraisal and reference check fees and costs,
regardless of whether the Facility closes (collectively, “Expenses”). Borrower’s obligations under this paragraph shall survive the termination of this Commitment. 

			
	     Addus Healthcare Inc.
	  	Page 3        

 This Commitment shall automatically expire on the date and time set forth below
unless Lender has received by that date and time the countersigned copy of this letter and payment of a Commitment Fee in the amount set forth on Borrower’s signature page hereto (the “Commitment Fee”). Borrower acknowledges
that the entire Commitment Fee has been fully earned by Lender as of the date hereof in consideration of Lender committing, subject to the terms and conditions set forth in this Commitment, to make funds available to Borrower, and that Lender will
not be required to refund any portion of the Commitment Fee to Borrower, provided that the Commitment Fee shall be applied to any closing fee payable on the closing date of the Facility. 
 This Commitment is being furnished to Borrower on the basis that neither its contents nor the fact that Borrower, any other Credit Parties
and Lender are having any discussions related to the Facility, including the status thereof, termination thereof, any decision on Borrower’s, any other Credit Party’s or Lender’s part to no longer consider the Facility or any terms,
conditions, or other facts in respect thereof, will be shared with any third-party including, without limitation, any financial institution or intermediary without Lender’s prior written consent, except that any of Borrower and any other Credit
Party may share the contents of this Commitment with its advisors, management, and regulatory bodies on a need-to-know basis. Any person who is informed of the contents of this Commitment must be informed that such contents are confidential and may
not be disclosed without Lender’s prior written consent provided that the Credit Parties may describe the contents of this Commitment in the registration statement on Form S-1 filed with the Securities and Exchange Commission (and
any amendments thereto) and otherwise as required in connection with the IPO. 
 Neither this Commitment nor the proceeds of the
Facility shall be assignable by Borrower or any other Credit Party to anyone without Lender’s prior written consent, which shall be at the sole and absolute discretion of Lender. No party other than Borrower shall be entitled to rely on this
Commitment. Notwithstanding anything to the contrary herein or in any other written or oral communication by Lender, Borrower acknowledges that neither Borrower nor any other Credit Party shall be entitled to obtain the original or any copies of any
reports received or generated by Lender during the course of its credit review and/or due diligence, even if such Borrower or other Credit Party has directly paid for such reports or reimbursed such Lender for its payment(s) for such reports.

 This Commitment represents the entire agreement between the parties with respect to the proposed transaction and supersedes
all other prior oral and written agreements or understandings. Delivery of an executed counterpart of this letter by telefacsimile shall be equally effective as delivery of a manually executed counterpart of this Commitment. Any party delivering an
executed counterpart of this Commitment by telefacsimile shall also deliver a manually executed counterpart of this Commitment, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding
effect of this Commitment. 
 This Commitment and any loan documents, shall be governed by and construed under the internal laws
of the State of Illinois, without regard to its conflicts of laws principles. Each of Lender and Borrower hereby (i) consents to the jurisdiction of the state and federal courts located in the State of Illinois, (ii) waives objection to
the venue of an action heard in a court located in the City of Chicago, State of Illinois, (iii) waives any and all rights to trial by jury in any action or proceeding relating to this Commitment and agrees that any such action or proceeding
shall be heard before a court and not before a jury. Under no circumstances shall Lender or its affiliates 

			
	     Addus Healthcare, Inc.
	  	Page 4        

 be liable to Borrower, any other Credit Party or any other person for any punitive, exemplary,
consequential or indirect damages which may be alleged in any way related this Commitment, the Facility, the loan documentation, or the collateral for the Facility, regardless of whether the Facility closes. 
 We welcome this opportunity to be of service to Borrower by offering this financing and look forward to working with Borrower on this
transaction. Please indicate acceptance by Borrower of the terms of this Commitment by signing where indicated below. This Commitment will expire and be of no force or effect if not executed and delivered together with the aforementioned Commitment
Fee to Lender by October 22, 2009, by 5:00 pm CST. 
  

			
	Very Truly Yours,
	
	Fifth Third Bank
	Structured Finance Group
		
	By:	 	 /s/    Gregory H. Bork

		 	Gregory H. Bork
		 	Vice President

			
	    Addus Healthcare, Inc.	  	Page 5        

 SIGNATURE PAGE TO 
 FIFTH THIRD BANK COMMITMENT LETTER 
 The foregoing is accepted and
agreed to: 
  

							
	Borrowers:	 		  	Guarantor:
			
	ADDUS HEALTHCARE, INC., an Illinois corporation	 		  	 ADDUS HOMECARE CORPORATION, a
 Delaware Corporation

				
	 ADDUS HEALTHCARE (IDAHO), INC., a
 Delaware corporation
	 		  	By:	 	 /s/    Mark S. Heaney

	 		  	Name:	 	 Mark S. Heaney

		 		  	Title:	 	 President and Chief Executive Officer

	 ADDUS HEALTHCARE (INDIANA), INC., a
 Delaware corporation
  
 ADDUS HEALTHCARE (NEVADA), INC., a
 Delaware corporation
  
 ADDUS HEALTHCARE (NEW JERSEY), INC., a
 Delaware corporation
  
 ADDUS HEALTHCARE (NORTH CAROLINA), INC., a
 Delaware corporation
  
 BENEFITS ASSURANCE CO., INC., a
 Delaware corporation
  
 FORTH SMITH HOME HEALTH AGENCY, INC.,
 an Arkansas corporation
  
 LITTLE ROCK HOME HEALTH AGENCY, INC.,
 an Arkansas corporation
  
 LOWELL HOME HEALTH AGENCY, INC.,
 an Arkansas corporation
  
 PHC ACQUISITION CORPORATION,
 a California corporation
  
 PROFESSIONAL RELIABLE NURSING SERVICE, INC.,
 a California corporation

 Intending to bind each of the above entities
	  		 	

  

			
	By:	 	 /s/    Mark S. Heaney

	Name:	 	 Mark S. Heaney

	Title:	 	 President

 SUMMARY OF TERMS AND CONDITIONS 
  

			
	Borrowers:	  	Addus Healthcare, Inc.,
		  	Addus Healthcare (Idaho), Inc.,
		  	Addus Healthcare (Indiana), Inc.,
		  	Addus Healthcare (Nevada), Inc.,
		  	Addus Healthcare (New Jersey), Inc.,
		  	Addus Healthcare (North Carolina), Inc.,
		  	Benefits Assurance Co., Inc.,
		  	Fort Smith Home Health Agency, Inc.,
		  	Little Rock Home Health Agency, Inc.,
		  	Lowell Home Health Agency, Inc.,
		  	PHC Acquisition Corporation, and
		  	Professional Reliable Nursing Service, Inc.
		  	(Hereinafter collectively “Companies”, or “Borrowers”)
		
	Guarantor:	  	Addus Homecare Corporation (“Holdings” as a guarantor, the “Guarantor”; Borrowers and the Guarantor are collectively referred to herein
as “Credit Parties” and each a “Credit Party”)
		
	Agent:	  	Fifth Third Bank (“Bank” or “FTB”), as agent (the “Agent”) for the lenders party thereto from time to time (the
“Lenders”)
		
	Facility:	  	$50,000,000 revolving credit facility. Availability of funds shall be based upon the advance rates outlined below.
		
	Term:	  	Five (5) Years from the closing date
		
	Purpose:	  	Proceeds under the Facility are to be used to: (i) fund working capital needs and general corporate purposes of the Borrowers, (ii) fund the Borrowers’ permitted
acquisitions, (iii) refinance existing senior debt and (iv) pay for fees, costs and expenses incurred in connection with this Facility and the IPO.

  

 Exhibit A – Page 1 

			
	Security:	  	The Facility shall be secured by a valid, perfected, first and only priority security interest in all of Borrowers’ now owned or hereafter acquired tangible and intangible
assets, including, but not limited to (the “Collateral”): accounts receivable, contract rights, documents, instruments, trade names and general intangibles; provided that, to the extent any such collateral (including the creation or
perfection of any security interest therein) is not or cannot be provided on the Closing Date (other than the grant and perfection of security interests in assets located in any state of the United States, Puerto Rico or the District of Columbia
with respect to which a lien may be perfected solely by the filing of a financing statement under the Uniform Commercial Code or the delivery of a stock certificate) after Borrowers’ use of commercially reasonable efforts to do so or without
undue burden or expense, then the provision of any such collateral shall not constitute a condition precedent to the Closing Date, but may instead be provided after the Closing Date pursuant to arrangements to be mutually agreed. All obligations
under the Facility, real or contingent, shall be cross-collateralized and cross-defaulted.
		
	Closing Date:	  	The closing date for the Facility (the “Closing Date”) will, subject to the satisfaction of the conditions precedent described herein, be the date of the Closing
of the Initial Public Offering contemplated by Addus HomeCare Corporation (the “IPO”). The Closing Date will be subject to completion of satisfactory legal documentation.
		
	Advance Rates:	  	The product of the (i) Advance Multiple (up to 2.75) and (ii) Adjusted EBITDA for the most recent period of twelve months for which financial statements have been delivered
pursuant to the Reporting Requirements.
		
	Minimum Availability:	  	On the Closing Date the Borrower will be required to have minimum Excess Availability of $4,000,000 immediately after the closing of the transaction described herein.
“Excess Availability” shall mean, as of any date of determination, the lesser of (i) the Maximum Revolving Loan Limit less the sum of the outstanding Revolving Loans and Letter of Credit Obligations and (ii) the Borrowing Base less
the sum of the outstanding Revolving Loans and Letter of Credit Obligations, in each case as of the close of business on such date.
		
	Letter of Credit Sublimit:	  	The aggregate amount of Stand-by Letter of Credit Obligations outstanding at any time shall not exceed $15,000,000.

  

 Exhibit A – Page 2 

			
	Pricing & Fees:	  	
		
	 Stand-by Letters of
 Credit
	  	Issued Stand-by Letters of Credit will be charged at a rate of 2% per annum payable monthly on the first business day of the month. The Bank’s standard issuance, amendment,
cable charges in effect at the time of the issuance will also be charged at the time the expense is incurred or at issuance.
		
	Interest Rate:	  	Direct borrowings under the Facilities shall bear interest floating at either (a) the 30 day London InterBank Offering Rate (LIBOR) plus the Margin defined below (the
“Floating Rate”) or (b) LIBOR rate for any interest period plus the Margin defined below based on the Term period (the “LIBOR Rate”). Interest shall be calculated for each day at 1/360th of the applicable per annum
rate.

  

			
	Margin Pricing & Fee Structure	  	 
	 Term
(yrs)  5

	 Margin
	  	460
	 Unused Fee
	  	50

  

			
		  	 Interest will be computed on the basis of a 360-day year and actual days elapsed, in arrears, and shall fluctuate concurrently with,
and in an amount equal to each increase or decrease in the LIBOR rate.
  
 With respect to the LIBOR Rate, Borrower may select LIBOR Rate interest periods up to six months. The Borrower may have in addition to the Floating Rate up to four separate contracts excluding the floating portion with minimum amounts of
$5,000,000 and integral multiples of $1,000,000 in excess of such amounts.
  
 Interest will be paid monthly or at the end of the relevant Interest Period.

		
	Unused Line Fee	  	The unused Fee as identified above will be calculated on the average daily-unused portion of the Facility, payable quarterly in arrears.
		
	 Closing and
 Commitment Fees:
	  	 Borrower shall pay FTB the following Closing and Commitment Fees:
  
 Commitment Fee - $125,000
 Closing Fee - $125,000
 Total = 1/2 of 1% or $250,000
  
 The Commitment
Fee shall be fully earned and payable to FTB upon issuance of the Commitment Letter; and the Closing Fee shall be fully earned and payable to FTB on the Closing Date.

  

 Exhibit A – Page 3 

			
	Other Fees and Expenses:	  	Borrower shall reimburse the Bank for all out-of-pocket expenses incurred associated with the closing and ongoing maintenance of this transaction.
		
	Covenants & Other Provisions:	  	
		
	Financial Covenants:	  	 The facility will include the following financial covenants on terms (including, without limitation, related definitions) acceptable
to Agent and Borrower:
  
 Minimum Fixed Charge Coverage
Ratio
  
 Minimum Net Worth
  
 Maximum Senior Leverage Ratio
  
 Maximum Capital Expenditures

		
	Other Covenants:	  	Restrictions on the following: guaranties; indebtedness; liens; mergers, sales, acquisitions, subsidiaries (with exceptions for “permitted acquisitions”, as further
provided and as defined in the definitive loan documentation); dividends and distributions; investments and loans; fundamental changes and line of business; equipment; affiliate transactions; and other agreements.
		
	Reporting Requirements:	  	 At a minimum, the Borrowers shall be required to provide the following information to Agent:
  
 •        Annual audited consolidated financial statements within one hundred twenty (120) days of fiscal year end by an accounting firm acceptable to Agent.
  
 •        Monthly company-prepared financial statements within forty-five (45) days of month-end.
  
 •        Quarterly management report providing a summary of the
operations of the business and key operating metrics.
  
 •        Annual Business Plan including monthly projections submitted no later than the last day of the prior FYE.
  
 •        Quarterly Compliance Certificate signed by the Chief Financial Officer or Vice President of Finance on behalf of the Companies indicating compliance with all of the financial covenants
and calculating the Advance Rates satisfactory to Agent.

		
	Depository Accounts:	  	Borrowers shall continue to maintain their demand deposit accounts with FTB, subject to customary exceptions. FTB will continue to be the principal deposit and disbursement bank
for Borrowers.

  

 Exhibit A – Page 4 

			
	Events of Default:	  	Usual and customary for transactions of this nature, including, but not limited to, failure to pay principal, interest, fees or any other amounts when due, failure to meet any
covenant or agreement, inaccurate or false representation or warranties, cross default, change of control, insolvency, bankruptcy, and judgment defaults.
		
	Participations:	  	FTB retains the right to sell participations in the Facilities pre and post the Closing Date.
		
	 Other Terms &
 Conditions
 Precedent:
	  	 On or before the Closing Date of the secured financing transactions being provided by Agent and the Lenders on the terms set forth in
this letter, the following conditions precedent will have to have been satisfied in a manner satisfactory to Agent.
  
 (a)     Leasehold and Similar Agreements. The Agent shall have received landlord,
mortgagee, warehouseman, consignment, processing or similar agreements satisfactory to the Agent in its sole discretion exercised in a good faith and commercially reasonable manner with respect to the Credit Parties’ principal
office;
  
 (b)     Subordinated Loan Documentation. Agent shall have received final executed copies, certified as true and complete, of (i) all Subordinated Debt Documents as in effect on the Closing Date; and (ii) the
Subordination Agreements with respect to any Subordinated Debt;
  
 (c)     Pledge Agreements. Agent shall have received Pledge Agreements (i) of Holdings pledging all of the issued and outstanding capital stock of Addus Healthcare, Inc.,
(ii) of Addus Healthcare, Inc. pledging all of the issued and outstanding capital stock of each of its Subsidiaries, in each case together with all original certificates evidencing such equity interests, and accompanying equity powers;
  
 (d)     Intellectual Property Security Agreements. Agent shall have received a security and pledge agreement with respect to intellectual property Collateral and any related documents with respect to
intellectual property Collateral, in form and substance satisfactory to Agent in its sole discretion;
  
 (e)     Closing Document List. Agent shall have received the customary closing
documents, such as opinions, officers’ certificates, resolutions and organizational documents, set forth on the closing document list) in each case in form and substance satisfactory to Agent (with such number of originals or copies as required
by Agent) executed by the Credit Parties and other required Persons, as applicable;

  

 Exhibit A – Page 5 

			
		 	 (f)      Other Items.

		
		 	 (i)      Agent shall have received such financial statements, reports, certifications, and other
operational information required to be delivered under the definitive loan documentation or otherwise required by Agent, including without limitation an initial Notice of Borrowing calculating the Advance Rates;

		
		 	 (ii)     All of the obligations of Credit Parties to Freeport Financial LLC (the “Prior
Lender”) as in effect immediately prior to the Closing Date will be performed and paid in full from the proceeds of the initial advances under the initial Loans on the Closing Date and all liens or security interests of any such Prior
Lender on any property of any Credit Party in respect thereof will be terminated immediately upon such payment; and

		
		 	 (iii)   Agent shall have received evidence satisfactory to it that the Credit Parties have appropriate insurance
coverage and policies in place in form and substance reasonably satisfactory to Agent that are in full force and effect, together with written evidence showing lender’s loss payable or additional insured clauses or endorsements in favor of
Agent as required by Agent;

		
		 	 (g)     Material Adverse Effect. Since December 31, 2008, no event shall have occurred which
has had or could reasonably be expected to have a material adverse effect on the business, property, assets, operations or financial condition, of the Credit Parties and their subsidiaries, taken as a whole (“Material Adverse
Effect”);

		
		 	 (h)     Litigation. There exists no pending or threatened civil, equitable or criminal
proceeding, litigation, action, suit, claim, investigation (governmental or judicial or otherwise), dispute, indictment or prosecution, pleading, demand or the imposition of any fine or penalty or similar matter against any Credit Party or any of
their respective Affiliates or respective assets in any court or administrative forum that (i) is not covered by insurance and (ii) if determined adversely, could reasonably be expected to have a Material Adverse Effect on the Credit
Parties and their Subsidiaries taken as a whole;

  

 Exhibit A – Page 6 

			
		 	 (i)      Filings, Registrations and Recordings. Subject to the proviso contained in the
provisions above set forth opposite the caption “Security” Agent shall have received each document (including any UCC-1 financing statements) required by the definitive loan documentation or under law or reasonably requested by the Agent
to be filed, registered or recorded in order to create in favor of the Agent, for its benefit and the benefit of the other Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than
permitted liens to be agreed upon in the definitive loan documentation), which shall be in proper form for filing, registration or recordation;

		
		 	 (j)      Capitalization. There shall have been no material change to (i) the form of
Amended and Restated Certificate of Incorporation of Holdings (assuming the same provides for 50,000,000 authorized shares, consisting of 40,000,000 shares of common stock and 10,000,000 shares of preferred stock) or the Amended and Restated By-laws
of Holdings attached as exhibits to the Registration Statement on Form S-1 of Holdings on file immediately prior to the date hereof (the “Registration Statement”); (ii) the capitalization table set forth in the Registration Statement
(other than any changes that result from a change in the $12 offering price per share contemplated by the Registration Statement); and (iii) the draft form of Dividend Notes made by Holdings in favor of Eos Capital Partners III, L.P. and Eos
Partners SBIC III, L.P. presented to Agent immediately prior to the date hereof in each case without the prior consent of the Agent. In addition, Holdings and the Borrowers shall be in pro forma compliance with the Minimum Net Worth covenant (on the
terms set forth in the definitive Loan and Security Agreement) after giving effect to the IPO as of the Closing Date.

		
		 	 (k)     Other Due Diligence. Agent shall have received from the Credit Parties any other
information or materials available as reasonably requested by Agent;

		
		 	 (l)      Fees and Expenses. Agent shall have received payment in full of all fees and
expenses payable to it by Borrowers in connection herewith, on or before disbursement of the initial Loans under the Facility;

  

 Exhibit A – Page 7 

			
		  	 (m)    Excess Availability. Agent shall have determined that immediately after giving effect to (A)
the making of the initial Loans, including without limitation the Revolving Loans requested to be made on the Closing Date, (B) the issuance of the initial Letter of Credit, if any, requested to be made on such date, (C) the payment of all fees due
upon such date and (D) the payment or reimbursement by Borrowers of Agent for all closing costs and expenses incurred in connection with the transactions contemplated hereby, Borrowers have Excess Availability of not less than Four Million Dollars
($4,000,000.00); and

		
		  	 (n)     Other Agreements. The Credit Parties shall have executed and delivered to Agent all
such other documents; instruments and agreements which Agent determines are reasonably necessary to consummate the transactions contemplated by the definitive loan documentation and the proposed IPO transaction.

		
	Indemnification:	  	Agent will be indemnified against all losses, liabilities, claims, damages, or expenses relating to the Borrowers’ use of loan proceeds or the commitments or environmental
problems including but not limited to reasonable attorney’s fees and settlement costs.
		
	Agent’s Legal Counsel:	  	 Agent anticipates engaging Vedder Price P.C. to represent it in the
 negotiations and legal documentation of the Facility.

		
	Governing Law:	  	Subject to the laws of the State of Illinois.

  

 Exhibit A – Page 8Employment Separation and General Release Agreement

 Exhibit 10.1 
 EMPLOYMENT SEPARATION AND GENERAL RELEASE AGREEMENT 
 This Employment Separation and General Release Agreement (this “Separation Agreement”) is entered into as of the 11th day of September 2009 (the “Separation Date”), by and between Robert A. Hitt, an individual
(“Executive”), Rexnord LLC, a Delaware limited liability company (“Rexnord”), RBS Global, Inc., a Delaware corporation and the parent company of Rexnord (“RBS Global”), and Rexnord Holdings, Inc., a
Delaware corporation and the parent company of RBS Global (“Holdings”, and together with Rexnord and RBS Global, the “Companies” and each, a “Company”). 
 WHEREAS, Executive has been employed as the Chief Executive Officer and President of Rexnord pursuant to that certain Employment
Agreement by and between Executive and Rexnord, dated as of July 21, 2006 (the “Employment Agreement”), and has served as a member of the Board of Directors of Rexnord; 
 WHEREAS, Executive has also been employed as the Chief Executive Officer and President and has served as a member of the Board of
Directors of each of RBS Global and Holdings; and 
 WHEREAS, Executive desires to resign from employment with, as an
officer and member of the board of directors of, and in any and all other capacities with the Companies and each of their respective subsidiaries and affiliates, effective as of the Separation Date upon the terms set forth herein. 
 NOW, THEREFORE, in consideration of the covenants undertaken and the releases contained in this Separation Agreement, Executive and
the Companies agree as follows: 
 I. Resignation. Executive hereby irrevocably resigns as an officer, director,
employee, member, manager and in any and all other capacities with the Companies and each of their respective subsidiaries and affiliates, effective as of the Separation Date. In connection and concurrently with the execution of this Separation
Agreement, Executive shall execute and deliver to the Companies the letter attached as Exhibit A hereto. The Companies and each of their respective subsidiaries and affiliates hereby accept such resignation, effective as of the Separation
Date. Executive acknowledges and agrees that any and all amounts and benefits due to Executive from the Companies and each of their respective subsidiaries and affiliates after the Separation Date shall be determined under this Separation Agreement.

 II. Consulting Services. For ninety (90) days following the Separation Date, Executive will be available
to Rexnord to perform consulting, transition and advisory services as reasonably requested by Rexnord. Executive shall provide the services contemplated by this Section II after the Separation Date in a consulting capacity, shall not be an employee
of Rexnord or any of its affiliates during any such period, and shall perform such services for no additional consideration beyond that expressly provided in this Separation Agreement. Executive shall perform any such services requested of him in a
prompt, diligent and faithful manner and shall devote such time to such services as may reasonably be required in order to timely complete such services. 
  

 1 

 III. Severance; Stock Options.  
 A. Rexnord shall pay Executive any base salary that had accrued but had not been paid (including accrued but unpaid vacation time) on
and before the Separation Date on the same date Rexnord makes its payroll payments generally for the pay period in which the Separation Date occurred and shall pay any reimbursement due to Executive pursuant to Section 3(f) of the Employment
Agreement. Executive agrees to promptly provide any and all documentation reasonably required by Rexnord to support any such reimbursement due to Executive. The parties agree that Executive’s accrued but unpaid vacation time as of the
Separation Date is not in excess of 1 day. Executive acknowledges and agrees that upon payment of the amounts contemplated by this Section III(A), Executive shall have received all amounts owed for his regular and usual salary (including, but not
limited to, any severance (other than the Severance Benefits expressly provided for in, and subject to the terms of, this Separation Agreement), overtime, bonus, accrued vacation, commissions or other wages), reimbursement of expenses, and usual
benefits from the Companies and each of their respective subsidiaries and affiliates. 
 B. Subject to Section III(C) and
Section VIII below, Executive is also entitled to the following benefits (collectively, the “Severance Benefits”): 
 (i) Rexnord shall pay Executive the amount of Forty Nine Thousand Eight Hundred Thirty Three Dollars and Thirty Three Cents ($49,833.33) per month, subject to tax withholding, for a period of eighteen (18) consecutive months, with the
first payment being made in October 2009 and a payment being made in each of the seventeen (17) months thereafter. 
 (ii)
Rexnord shall provide continued participation in Rexnord’s group health benefit plans (including the health, dental and vision plans) and in Rexnord’s Exec-U-Care plan for Executive and his dependents at Rexnord’s expense until the
earlier of (i) the expiration of eighteen (18) months from the Separation Date or (ii) Executive’s eligibility for participation in the substantially comparable group health plan of a subsequent employer or entity (the
“Benefits Continuation Period”). For the avoidance of doubt, in the event that Executive shall become eligible to participate in a subsequent employer’s or entity’s substantially comparable benefits plan(s) offering one or
more, but not all, of the benefits herein described (for example, group medical, but not vision and dental), Executive shall be entitled to continue to receive from Rexnord the benefits that are not offered, and/or for which he is not eligible,
under the subsequent employer’s or entity’s benefits plan(s) until the earliest of the expiration of eighteen (18) months from the Separation Date or he becomes so eligible (if at all). In the event that the Benefits Continuation
Period terminates at the end of the 18-month period pursuant to clause (i) of this Section III(B)(ii) (and not upon Executive’s eligibility to participate in a subsequent employer’s group health plans pursuant to clause (ii)), Rexnord
shall reimburse Executive for the cost of the premiums incurred by Executive for medical insurance coverage for himself and his dependents during the eighteen (18) month period following the last day of the Benefits Continuation Period, payable
monthly in arrears upon Rexnord’s receipt of satisfactory invoices; provided, however, that in no event shall the maximum aggregate amount of such reimbursement exceed $50,000. 
  

 2 

 (iii) Executive currently owns 60,208 shares of common stock, par value $0.01 per share
(the “Common Stock”) of Holdings (the “Shares”), which Executive acquired upon the exercise of vested stock options granted under the Rexnord Holdings, Inc. 2006 Stock Option Plan (the “2006 Plan”).
Notwithstanding Section 4 of the Stockholders’ Agreement dated as of July 21, 2006 among Holdings, Rexnord Acquisition Holdings I, LLC, Rexnord Acquisition Holdings II, LLC and certain other stockholders of Holdings parties thereto
(the “Stockholders’ Agreement”) or Section 5 of the stock option agreements evidencing the stock option awards under the 2006 Plan (the “Option Agreements”), Holdings agrees that it shall not exercise its
right to repurchase the Shares following the Separation Date pursuant to Section 4 of the Stockholders’ Agreement or Section 5 of the Option Agreements. 
 (iv) Rexnord shall reimburse Executive’s costs for outplacement services approved in advance by Rexnord during the twelve (12) month period following the Separation Date, payable quarterly in
arrears upon Rexnord’s receipt of satisfactory invoices. 
 C. This Section III(C) shall apply notwithstanding
anything else contained in this Separation Agreement to the contrary. As a condition precedent to Rexnord’s obligation to pay or provide the Severance Benefits (or continue to pay or provide such benefits, as the case may be),
(i) Executive shall have complied with the restrictive covenants set forth in Section VIII below and (ii) Executive shall have fulfilled his obligations described in Section II above. Further, Rexnord shall have no obligation to pay or
provide the Severance Benefits to Executive unless and until Executive’s release set forth in Section IV becomes irrevocable by Executive under the ADEA. 
 D. Executive agrees that the payments and benefits contemplated by Section III(B) shall constitute the exclusive and sole remedy for the termination of his employment, and Executive covenants not
to assert or pursue any other remedies against anyone, at law or in equity, with respect to any termination of employment. 
 E. To the extent that the benefits under Section III(B)(ii) or (iv) are taxable to Executive, any reimbursement payment due to Executive pursuant to such provision shall be paid to Executive on or before the last day of
Executive’s taxable year following the taxable year in which the related expense was incurred. To facilitate timely payment, Executive agrees to promptly provide any and all documentation reasonably required by the Company to support any such
payment due to Executive. The benefits in Section III(B)(ii) and (iv) are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Executive receives in one taxable year shall not affect
the amount of such benefits or reimbursements that Executive receives in any other taxable year. 
 F. Executive
currently holds the following outstanding options to acquire shares of Common Stock, of Holdings: (i) a stock option grant covering 115,791 shares of Common Stock granted under the RBS Global Inc. Option Plan (the “Rollover
Options”), which is currently outstanding and has not been exercised as to any portion thereof, (ii) a stock option grant covering 230,706 shares of Common Stock granted under the 2006 Plan, a portion of which is currently outstanding
and has not been exercised as to 184,565 shares of Common Stock (the “July 2006 Options”), and (iii) a stock option grant covering 140,677 shares of Common Stock granted under the 2006 Plan, a portion of which is currently
outstanding and has

  

 3 

 
not been exercised as to 126,610 shares of Common Stock (the “April 2007 Options”). As of the Separation Date, the Rollover Options are fully vested, the July 2006 Options are
vested as to 92,283 shares of Common Stock and the April 2007 Options are vested as to 42,204 shares of Common Stock. Notwithstanding any provision of any stock option agreement or other document to the contrary, on the Separation Date, the Rollover
Options shall be, and they hereby are, cancelled and Rexnord shall pay to Executive, in consideration thereof, an amount equal to One Million Four Hundred Ninety Thousand Two Hundred Thirty Dollars and Seventeen Cents ($1,490,230.17), subject to tax
withholding. Rexnord shall pay such amount to Executive in a single cash lump sum not later than three (3) business days after Executive’s release pursuant to Section IV becomes irrevocable by Executive under the Age Discrimination in
Employment Act of 1967 (the “ADEA”). 
 G. On the Separation Date, the July 2006 Options and the April
2007 Options (including both vested and unvested portions) shall be, and they hereby are, terminated and Executive shall have no further right with respect thereto or in respect thereof. 
 IV. Release. Executive, on behalf of himself, his descendants, dependents, heirs, executors, administrators, assigns, and
successors, and each of them, hereby covenants not to sue and fully releases and discharges the Companies and each of their respective parents, subsidiaries and affiliates, past and present, as well as its and their trustees, directors, officers,
members, managers, partners, agents, attorneys, insurers, employees, stockholders, representatives, assigns, and successors, past and present, and each of them (hereinafter together and collectively referred to as the “Releasees”)
with respect to and from any and all claims, wages, demands, rights, liens, agreements or contracts (written or oral), covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders
and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden (each, a “Claim”), which he now owns or holds or he has at any
time heretofore owned or held or may in the future own or hold as against any of said Releasees (including, without limitation, any Claim arising out of or in any way connected with Executive’s service as an officer, director, employee, member
or manager of any Releasee, Executive’s separation from his position as an officer, director, employee, manager and/or member, as applicable, of any Releasee, or any other transactions, occurrences, acts or omissions or any loss, damage or
injury whatever), resulting from any act or omission by or on the part of said Releasees, or any of them, committed or omitted prior to the date of this Agreement including, without limiting the generality of the foregoing, any Claim under Title VII
of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, or any other federal, state or local law, regulation, or ordinance, or any Claim for severance pay, bonus, sick leave, holiday pay,
vacation pay, life insurance, health or medical insurance or any other fringe benefit, workers’ compensation or disability (the “Release”); provided, however, that the foregoing release does not apply to any obligation
of the Companies to Executive pursuant to any of the following: (1) any obligation created by or arising out of this Separation Agreement; (2) any right to indemnification that Executive may have pursuant to the Bylaws of any of the
Companies, any of their respective Certificates of Incorporation or under any written indemnification agreement with any of the Companies (or any corresponding provision of any subsidiary or affiliate of any of the Companies) or under applicable
state law with respect to any loss, damages or expenses (including but not limited to attorneys’ fees to the extent otherwise provided) that Executive may in the future incur with respect to his service as

  

 4 

 
an employee, officer or director of the Companies or any of their respective subsidiaries or affiliates; (3) any rights that Executive may have to insurance coverage for such losses, damages
or expenses under any directors and officers liability insurance policy of any of the Companies or any of their respective subsidiaries or affiliates; (4) any rights to payment of benefits that Executive may have under the Rexnord Special
Signing Bonus Plan and the Rexnord Supplemental Executive Retirement Plan (Executive’s benefit under the Rexnord Special Signing Bonus Plan is $825,594 and his benefit under the Rexnord Supplemental Executive Retirement Plan is approximately
$642,311, each to be finally determined and paid in accordance with and subject to the terms and conditions of the applicable plan); (5) the continued medical or dental coverage that Executive may have under the Consolidated Omnibus Budget
Reconciliation Act; or (6) any rights to payment of benefits that Executive may have under a retirement plan or plans intended to qualify under Section 401(a) of the Code. In addition, this Release does not cover any Claim that cannot be
so released as a matter of applicable law. Executive acknowledges and agrees that he has received any and all leave and other benefits that he has been and is entitled to pursuant to the Family and Medical Leave Act of 1993. 
 V. Unknown Claims. It is the intention of Executive in executing this Separation Agreement that the same shall be effective as
a bar to each and every Claim hereinabove specified. Executive acknowledges that he may hereafter discover Claims or facts in addition to or different from those which Executive now knows or believes to exist with respect to the subject matter of
this Separation Agreement and which, if known or suspected at the time of executing this Separation Agreement, may have materially affected this settlement. Nevertheless, Executive hereby waives any right, Claim or cause of action that might arise
as a result of such different or additional Claims or facts. 
 VI. ADEA Waiver. Executive expressly acknowledges
and agrees that by entering into this Separation Agreement, he is waiving any and all rights or claims that he may have arising under the ADEA, which have arisen on or before the date of execution of this Separation Agreement. Executive further
expressly acknowledges and agrees that: 
 (a) In return for this Separation Agreement, he will receive consideration beyond
that which he was already entitled to receive before entering into this Separation Agreement; 
 (b) He is hereby advised in
writing by this Separation Agreement to consult with an attorney before signing this Separation Agreement; 
 (c) He was given a
copy of this Separation Agreement on September 11, 2009 and informed that he had twenty-one (21) days within which to consider the Separation Agreement and that if he wished to execute this Separation Agreement prior to expiration of such
21-day period, he should execute the Acknowledgement and Waiver attached hereto as Exhibit B; 
 (d) Nothing in this
Separation Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless
specifically authorized by federal law; and 
  

 5 

 (e) He was informed that he has seven (7) days following the date of execution of this
Separation Agreement in which to revoke this Separation Agreement, and this Separation Agreement will become null and void if Executive elects revocation during that time. Any revocation must be in writing and must be received by the Companies
during the seven-day revocation period. In the event that Executive exercises his right of revocation, neither the Companies nor Executive will have any obligations under this Separation Agreement. 
 VII. No Transferred Claims. Executive warrants and represents that Executive has not heretofore assigned or transferred to any
person not a party to this Separation Agreement any released matter or any part or portion thereof and he shall defend, indemnify and hold the Companies and each of their respective affiliates harmless from and against any claim (including the
payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer made, purported or claimed. 
 VIII. Restrictive Covenants. 
 A. Non-Competition. Executive hereby acknowledges and agrees in consideration for the payments and other benefits set forth in this Separation Agreement, for the period commencing on the
date hereof and ending on the third anniversary of the Separation Date, Executive shall not, at any time, directly or indirectly engage in, have any equity interest in, or manage or operate any person, firm, corporation, partnership or business
(whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any business of the Companies or any of their respective subsidiaries or affiliates
anywhere in the world to the extent that the Companies or any of their respective subsidiaries or affiliates were involved in such business or pursued involvement in such business at any time during Executive’s employment with the Companies;
provided, however, that the Executive shall be permitted to acquire a passive stock or equity interest in such a business provided the stock or other equity interest acquired is not more than five percent (5%) of the outstanding interest
in such business. 
 B. Non-Solicitation of Customers and Employees. Executive promises and agrees that he
will not, and shall not, for the period commencing on the date hereof and ending on the third anniversary of the Separation Date, permit any of his affiliates to, directly or indirectly, (i) recruit or otherwise solicit or induce (or attempt to
recruit or otherwise solicit or induce) any employee of any of the Companies or any of their respective subsidiaries or affiliates to leave the employ of such person or entity, or in any way interfere with the relationship between the Companies or
any of their respective subsidiaries or affiliates, on the one hand, and any employee thereof, on the other hand, (ii) hire any person or entity who is or any time was an employee of any of the Companies or any of their respective subsidiaries
or affiliates until six (6) months after such individual’s employment relationship with such person or entity has ended, or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of any of the
Companies or any of their respective subsidiaries or affiliates to cease doing business with the Companies or any of their respective subsidiaries or affiliates, or in any way interfere with the relationship between any such customer, supplier,
licensee or business relation, on the one hand, and any of the Companies or any of their respective subsidiaries or affiliates, on the other hand. 
  

 6 

 C. Non-Disparagement. Executive promises and agrees that he will not at any
time following the Separation Date, directly or indirectly, make or ratify any statement, public or private, oral or written may be critical or disparaging of the Companies or any of their respective subsidiaries or affiliates, or any of their
respective products, services, officers, directors or employees. Each of the Companies promises and agrees that neither it nor any of its respective officers will at any time following the Separation Date, directly or indirectly, make or ratify any
statement, public or private, oral or written that may be critical or disparaging of Executive. However, nothing in this paragraph shall affect the ability or obligation of any such person or entity (including, without limitation, Executive,
Rexnord, RBS Global and Holdings) to provide complete and truthful testimony or other information in connection with any (i) governmental and/or regulatory investigation or proceeding, (ii) required public, governmental or regulatory
disclosure or fling, or (iii) pleadings, discovery and/or trial in litigation. 
 D. Confidentiality; Return
of Property. Executive represents, promises and agrees that he has not in the past and that he will not at any time in the future, unless compelled by lawful process, disclose or use for his own benefit or purposes or the benefit or
purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise (other than each of the Companies and any affiliate thereof), any trade secrets, or other confidential data
or information relating to customers, design programs, costs, marketing, sales activities, promotion, credit and financial data, financing methods, or plans of the Companies, or any of their respective subsidiaries or affiliates; provided that the
foregoing shall not apply to information which is not unique to the Companies (or their respective affiliates, as applicable) or which is generally known to the industry or the public other than as a result of Executive’s breach of this
covenant. Executive agrees that, to the extent he has not already done so, he will return to Rexnord immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to
the business of the Companies or any of their respective subsidiaries or affiliates, whether such information is in tangible or electronic form. Executive further agrees that he shall have until September 25, 2009 to return to Rexnord all other
property of the Companies in his possession, including, but not limited to, all office equipment, computer equipment, mobile phone, credit cards, vehicles and keys. Executive further agrees that he has not retained and will not retain or use for his
account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Companies or any of their respective subsidiaries or affiliates; provided, however, that Executive
may retain his rolodex, address books, information relating to his compensation or relating to reimbursement of expenses, documents relating to his participation in employee benefit plans or programs of the Companies or any of their respective
affiliates, any agreement between Executive and any of the Companies or any affiliate thereof relating to his employment with the Companies or any affiliate thereof, and other personal property provided that such items do not contain any
confidential information of the Companies. Executive shall have until October 11, 2009 to vacate the premises of his Company-provided temporary housing. 
 E. Inventions. Executive acknowledges and agrees that all rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the
business of the Companies or any of their respective subsidiaries or affiliates, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that the Executive discovered, invented or originated during the term of
his employment

  

 7 

 
with the Companies, and or Executive discovers, invents or originates for a period of 12 months thereafter, either alone or with others and whether or not during working hours or by the use of
the facilities of the Companies (“Inventions”), shall be the exclusive property of the Companies. Executive acknowledges and agrees that he shall promptly disclose all Inventions to the Companies, shall execute at the request of the
Companies any assignments or other documents the Companies may deem necessary to protect or perfect their rights therein, and shall assist the Companies, at the Companies’ expense, in obtaining, defending and enforcing the Companies’
rights therein. Executive hereby appoints each Company as his attorney-in-fact to execute on his behalf any assignments or other documents deemed necessary by the applicable Company to protect or perfect such Company’s rights to any Inventions.

 F. Understanding of Covenants. Executive represents and agrees that he (i) is familiar with and
carefully considered the foregoing covenants set forth in this Section VIII (together, the “Restrictive Covenants”), (ii) is fully aware of his obligations hereunder, (iii) agrees to the reasonableness of the length of
time, scope and geographic coverage, as applicable, of the Restrictive Covenants, (iv) agrees that the Restrictive Covenants are necessary to protect the Companies’ and their respective affiliates’ confidential and proprietary
information, good will, stable workforce and customer relations, and (v) agrees that the Restrictive Covenants will continue in effect for the applicable periods set forth above in this Section VIII regardless of whether Executive is then
entitled to receive severance pay or benefits from Rexnord. Executive understands that the Restrictive Covenants may limit his ability to earn a livelihood in a business similar to the business of Rexnord and any of its affiliates, but he
nevertheless believes that he has received and will receive sufficient consideration and other benefits provided hereunder to clearly justify such restrictions which, in any event (given his education, skills and ability), Executive does not believe
would prevent him from otherwise earning a living. Executive agrees that the Restrictive Covenants do not confer a benefit upon the Companies disproportionate to the detriment of the Executive. 
 G. Construction. In the event terms of this Section VIII shall be determined by any court of competent jurisdiction to
be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for
which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 
 H. Injunctive Relief. Executive expressly agrees that the Companies will or would suffer irreparable injury if
he were to breach any of the provisions of this Section VIII and that each of the Companies would by reason of such conduct be entitled, in addition to any other remedies, to injunctive relief. Executive consents and stipulates to the entry of such
injunctive relief prohibiting him from engaging in conduct which violates any of the provisions of this Section VIII. Furthermore, in the event Executive breaches any of the provisions of this Section VIII while he is receiving amounts or is
entitled to Severance Benefits under Section III(B), Executive shall not be entitled to receive any future amounts or be entitled to any future Severance Benefits pursuant to Section III(B). 
  

 8 

 IX. Cooperation. Executive agrees to cooperate in any of the following
types of activities related to any events or actions that occurred during or prior to the term of Executive’s employment with the Companies: (i) any internal investigations by any of the Companies; (ii) the defense of the Companies
and each of their respective subsidiaries and affiliates against any threatened or pending litigation; and (iii) any investigation or proceeding by any governmental agency or body. Furthermore, Executive agrees to cooperate in the prosecution
of any claims and lawsuits brought by the Companies or any of their respective subsidiaries or affiliates that are currently outstanding or that may in the future be brought relating to matters which occurred during or prior to the term of
Executive’s employment with the Companies. From and after the Separation Date, except as requested by the Companies or as required by law, Executive shall not comment upon any (1) threatened or pending claim or litigation (including
investigations or arbitrations) involving the Companies or any of their respective subsidiaries or affiliates or (2) threatened or pending government investigation involving the Companies or any of their respective subsidiaries or affiliates.

 X. Miscellaneous 
 A. Successors. 
 (i) This Separation Agreement is personal to
Executive and shall not, without the prior written consent of the Companies, be assignable by Executive. 
 (ii) This Separation
Agreement shall inure to the benefit of and be binding upon the Companies and their respective successors and assigns and any such successor or assignee shall be deemed substituted for the applicable Company under the terms of this Separation
Agreement for all purposes. As used herein, “successor” and “assignee” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger, acquisition of assets, or otherwise,
directly or indirectly acquires the ownership of the applicable Company or all or substantially all of such Company’s assets or to which such Company assigns this Separation Agreement by operation of law or otherwise. 
 B. Waiver. No waiver of any breach of any term or provision of this Separation Agreement shall be construed to be, nor shall
be, a waiver of any other breach of this Separation Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach. 
 C. Modification. This Separation Agreement shall not be modified by any oral agreement, either express or implied, and all modifications hereof shall be in writing and signed by the parties
hereto. 
 D. Complete Agreement. This Separation Agreement embodies the entire agreement of the parties hereto
respecting the matters within its scope. This Separation Agreement supersedes all prior agreements of the parties hereto on the subject matter hereof (including, without limitation, the Employment Agreement and the Stockholders’ Agreement). Any
prior negotiations, correspondence, agreements, proposals, or understandings relating to the subject matter hereof shall be deemed to be merged into this Separation Agreement and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or

  

 9 

 
understandings shall be deemed to be of no force or effect. There are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject
matter hereof, except as expressly set forth herein. Notwithstanding the foregoing, the Companies’ (and their respective affiliates’) rights under any confidentiality, trade secret, proprietary information, inventions or similar agreement
to which Executive was a party or otherwise bound are not integrated into this Agreement and such rights of the Companies (or their respective affiliates, as the case may be) shall continue in effect. 
 E. Severability. In the event that a court of competent jurisdiction determines that any portion of this Separation Agreement
is in violation of any statute or public policy, then only the portions of this Separation Agreement which violate such statute or public policy shall be stricken, and all portions of this Separation Agreement which do not violate any statute or
public policy shall continue in full force and effect. Furthermore, any court order striking any portion of this Separation Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the
parties under this Separation Agreement. 
 F. Governing Law. This Separation Agreement and the legal relations
hereby created between the parties hereto shall be governed by and construed under and in accordance with the internal laws of the State of Wisconsin, without regard to conflicts of laws principles thereof; provided, however, that all issues
and questions concerning the construction, validity, enforcement and interpretation of Article VIII shall be governed by, and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws principles thereof.
Executive submits to the jurisdiction of the courts located in the State of Wisconsin in the event of any proceedings in connection with this Agreement. 
 G. Legal Counsel. Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to consult with legal counsel of their choice.
Each party has cooperated in the negotiation and preparation of this Separation Agreement. Accordingly, any rule of law or legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted
it has no application and is expressly waived. Executive agrees and acknowledges that he has read and understands this Separation Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this
Separation Agreement and has had ample opportunity to do so. 
  

 10 

 H. Notices. All notices under this Separation Agreement shall be
in writing and shall be either personally delivered or mailed postage prepaid, by certified mail, return receipt requested: 
  

	 	(a)	if to any or all of the Companies: 

 Rexnord LLC and/or 
 RBS Global, Inc. and/or 
 Rexnord Holdings, Inc. 
 4701 Greenfield Avenue 
 Milwaukee, WI 53214 
 Attention: General Counsel 
 with copies to: 
 Rexnord Holdings, Inc. 
 c/o Apollo Management, L.P. 
 10250 Constellation Blvd, Suite 2900 
 Los Angeles, CA 90067 
 Fax: (310) 843-1933 
 Attention: Larry Berg 
 and 
 Rexnord LLC 
 c/o Apollo Management, L.P. 
 9 West 57th Street, 43rd Floor 
 New York, NY 10019 
 Fax: (212) 515-3288 
 Attention: Steven Martinez 
 and 
 O’Melveny & Myers LLP 
 Times Square Tower 
 7 Times Square 
 New York, New York 10036 
 Fax: (212) 326-2061 
 Attention: Douglas Ryder, Esq. 
  

	 	(b)	if to Executive: 

 At the
address on file with Rexnord 
 Notice shall be effective when personally delivered, or five (5) business days after being so mailed. Any
party may change its address for purposes of giving future notices pursuant to this Agreement by notifying the other party in writing of such change in address, such notice to be delivered or mailed in accordance with the foregoing. 
  

 11 

 I. Counterparts. This Separation Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 
 J. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL, INCLUDING TRIAL BY JURY, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
 K. Number and Gender. Where the context requires, the singular shall include the plural, the plural shall include the
singular, and any gender shall include all other genders. 
 L. Headings. The section headings in this Separation
Agreement are for the purpose of convenience only and shall not limit or otherwise affect any of the terms hereof. 
 M.
Taxes. The Companies have the right to withhold from any payment hereunder or under any other agreement between the Companies and Executive the amount required by law to be withheld with respect to such payment or other benefits provided
to Executive. Other than as to such withholding right, Executive shall be solely responsible for any taxes due as a result of the payments and benefits received by Executive contemplated by this Separation Agreement. 
 [Remainder of page intentionally left blank] 
  

 12 

 I have read the foregoing Separation Agreement and I accept and agree to the provisions it contains and
hereby execute it voluntarily with full understanding of its consequences. 
 EXECUTED this 14th day of October 2009, at
Milwaukee County, WI. 
  

	
	“Executive”
	
	 /s/ Robert A. Hitt

	Robert A. Hitt

 EXECUTED this 14th day of October 2009, at Milwaukee County, WI. 
  

			
	“Company”
	
	 Rexnord LLC
 a
Delaware limited liability company.

	
	 /s/ Patricia Whaley

	By:	 	Patricia Whaley
	Its:	 	Vice President and General Counsel
	
	“RBS Global”
	
	 RBS Global, Inc,
 a
Delaware corporation.

	
	 /s/ Patricia Whaley

	By:	 	Patricia Whaley
	Its:	 	Vice President and General Counsel
	
	“Holdings”
	
	 Rexnord Holdings, Inc,
 a Delaware corporation.

	
	 /s/ Patricia Whaley

	By:	 	Patricia Whaley
	Its:	 	Vice President and General Counsel

  

 13 

 EXHIBIT A 
 RESIGNATION LETTER 
 Date: September 11, 2009 
  

			
	To:	  	 The Board of Directors of Rexnord LLC
 The Board of Directors of RBS Global, Inc.
 The Board of Directors of Rexnord Holdings, Inc.

 From: Robert A. Hitt 
 I hereby resign as an employee, officer, director, member, manager and in any other capacity with Rexnord LLC, RBS Global, Inc., Rexnord Holdings, Inc. and each of their respective subsidiaries and
affiliates, effective as of the date set forth above. 
  

	
	 /s/ Robert A. Hitt

	Robert A. Hitt

  

 A-1 

 EXHIBIT B 
 ACKNOWLEDGEMENT AND WAIVER 
 I, Robert A. Hitt, hereby
acknowledge that I was given 21 days to consider the foregoing Employment Separation and General Release Agreement and voluntarily chose to sign the Employment Separation and General Release Agreement prior to the expiration of the 21-day period.

 I declare under penalty of perjury under the laws of the State of Wisconsin, that the foregoing is true and correct.

 EXECUTED this      day of
                     2009, at
                         County,
                        . 
  

	
	  

	Robert A. Hitt

  

 B-1

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