Document:

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                                                                   EXHIBIT 10.12

[Date]

[Name]
[Title]
[Address]

Dear __________:

Equifax PS, Inc. (the "Company") considers the establishment and maintenance of
a sound and vital management to be essential to protecting and enhancing the
best interests of the Company and its shareholders.  In this connection, the
Company recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control exists and that possibility, and the
uncertainty and questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its shareholders.  Accordingly, the Board of Directors of the Company has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company's management,
including yourself, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company.

In order to induce you to remain in its employ, the Company agrees to provide
you the payments and benefits described in this Letter (in lieu of any severance
payments and benefits you would otherwise receive in accordance with the
Company's severance pay practices) if your employment with the Company is
terminated subsequent to a "Change in Control" of the Company (as defined in
paragraph 3) under the circumstances described in paragraph 4.

1.  No Right to Continued Employment.  This Letter does not give you any right
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to continued employment by the Company or a Subsidiary, and it will not
interfere in any way with the right the Company or a Subsidiary otherwise may
have to terminate your employment at any time.

2.  Term of This Letter. The terms of this Letter will be effective as of
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__________, 2001, and, except as otherwise provided in this Letter, will
continue in effect until _____________, 2006; provided that commencing on
January 1, 2002 and each subsequent January 1, the terms of this Letter will be
extended
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automatically so as to remain in effect for five (5) years from that January 1
unless at least sixty (60) days prior to January 1 of a given year, the Company
notifies you that it does not wish to continue this Letter in effect beyond its
then current expiration date; and provided further that if a Change in Control
occurs prior to the expiration of this Letter, this Letter will continue in
effect for three (3) years from the Change in Control.

3.  Change In Control.  No benefits will be payable under this Letter unless
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there is a Change in Control and your employment by the Company is terminated
under the circumstances described in paragraph 4 entitling you to benefits.  For
purposes of this Letter, a Change in Control of the Company means the occurrence
of any of the following events during the period in which this Letter remains in
effect:

     3.1  Voting Stock Accumulations.  The accumulation by any Person of
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     Beneficial Ownership of twenty percent (20%) or more of the combined voting
     power of the Company's Voting Stock; provided that for purposes of this
     subparagraph 3.1, a Change in Control will not be deemed to have occurred
     if the accumulation of twenty percent (20%) or more of the voting power of
     the Company's Voting Stock results from any acquisition of Voting Stock (a)
     directly from the Company that is approved by the Incumbent Board, (b) by
     the Company, (c) by any employee benefit plan (or related trust) sponsored
     or maintained by the Company or any Subsidiary, or (d) by any Person
     pursuant to a Business Combination that complies with all of the provisions
     of clauses (a), (b) and (c) of subparagraph 3.2; or

     3.2  Business Combinations.  Consummation of a Business Combination,
          ---------------------
     unless, immediately following that Business Combination, (a) all or
     substantially all of the Persons who were the beneficial owners of Voting
     Stock of the Company immediately prior to that Business Combination
     beneficially own, directly or indirectly, more than sixty-six and two-
     thirds percent (66-2/3%) of the then outstanding shares of common stock and
     the combined voting power of the then outstanding voting securities
     entitled to vote generally in the election of Directors of the entity
     resulting from that Business Combination (including, without limitation, an
     entity that as a result of that transaction owns the Company or all or
     substantially all of the Company's assets either directly or through one or
     more subsidiaries) in substantially the same proportions relative to each
     other as their ownership, immediately prior to that Business Combination,
     of the Voting Stock of the Company, (b) no Person (other than the Company,
     that entity resulting from that Business Combination, or any employee
     benefit plan (or related trust)
<PAGE>

     sponsored or maintained by the Company, any Eighty Percent (80%) Subsidiary
     or that entity resulting from that Business Combination) beneficially owns,
     directly or indirectly, twenty percent (20%) or more of the then
     outstanding shares of common stock of the entity resulting from that
     Business Combination or the combined voting power of the then outstanding
     voting securities entitled to vote generally in the election of directors
     of that entity, and (c) at least a majority of the members of the Board of
     Directors of the entity resulting from that Business Combination were
     members of the Incumbent Board at the time of the execution of the initial
     agreement or of the action of the Board providing for that Business
     Combination; or

     3.3  Sale of Assets.  A sale or other disposition of all or substantially
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     all of the assets of the Company; or

     3.4  Liquidations or Dissolutions.  Approval by the shareholders of the
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     Company of a complete liquidation or dissolution of the Company, except
     pursuant to a Business Combination that complies with all of the provisions
     of clauses (a), (b) and (c) of subparagraph 3.2.

For purposes of this paragraph 3, the following definitions will apply:

     "Beneficial Ownership" means beneficial ownership as that term is used in
     Rule 13d-3 promulgated under the Exchange Act.

     "Business Combination" means a reorganization, merger or consolidation of
     the Company.

     "Eighty Percent (80%) Subsidiary" means an entity in which the Company
     directly or indirectly beneficially owns eighty percent (80%) or more of
     the outstanding Voting Stock.

     "Exchange Act" means the Securities Exchange Act of 1934, including
     amendments, or successor statutes of similar intent.

     "Incumbent Board" means a Board of Directors at least a majority of whom
     consist of individuals who either are (a) members of the Company's Board of
     Directors as of the date of this Letter or (b) members who become members
     of the Company's Board of Directors subsequent to the date of this Letter
     whose election, or nomination for election by the Company's shareholders,
     was approved by a vote of at least two-thirds (2/3) of the directors then
<PAGE>

     comprising the Incumbent Board (either by a specific vote or by approval of
     the proxy statement of the Company in which that person is named as a
     nominee for director, without objection to that nomination), but excluding,
     for that purpose, any individual whose initial assumption of office occurs
     as a result of an actual or threatened election contest (within the meaning
     of Rule 14a-11 of the Exchange Act) with respect to the election or removal
     of directors or other actual or threatened solicitation of proxies or
     consents by or on behalf of a Person other than the Board of Directors.

     "Person" means any individual, entity or group (within the meaning of
     Section 13(d)(3) or 14 (d)(2) of the Exchange Act).

     "Voting Stock" means the then outstanding securities of an entity entitled
     to vote generally in the election of members of that entity's Board of
     Directors.

4.  Termination Following Change in Control.  If any of the events described in
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paragraph 3 constituting a Change in Control occurs, you will be entitled to the
payments and benefits provided for in paragraph 5 if your employment is
terminated within six (6) months prior to the Change in Control in connection
with the Change in Control or your employment is terminated within three (3)
years from the date of the Change in Control, unless your termination is (a)
because of your death, (b) by the Company for Cause or Disability, or (c) by you
other than for Good Reason. The payments and benefits provided for in paragraph
5 will be in lieu of any severance payments you would otherwise receive in
accordance with the Company's severance pay practices, but will have no effect
on any of the Company's other employee benefit plans or practices, as amended
from time to time.

     4.1  Cause.  Termination by the Company of your employment for "Cause"
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     means termination by the Company of your employment upon (a) your willful
     and continued failure to substantially perform your duties with the Company
     (other than any failure resulting from your incapacity due to physical or
     mental illness), after a written demand for substantial performance is
     delivered to you by the Chief Executive Officer of the Company (or if you
     are the Chief Executive Officer, the Chairman of the Compensation Committee
     of the Board of Directors) that specifically identifies the manner in which
     the Chief Executive Officer believes that you have not substantially
     performed your duties, or (b) your willfully engaging in misconduct that is
     materially injurious to the Company, monetarily or otherwise.  For purposes
     of this subparagraph 4.1, no act, or failure to act, on your part will be
     considered "willful" unless done, or omitted to be done,
<PAGE>

     by you not in good faith and without reasonable belief that your action or
     omission was in the best interest of the Company. Notwithstanding the
     above, you will not be deemed to have been terminated for Cause unless and
     until you have been given a copy of a Notice of Termination from the Chief
     Executive Officer of the Company (or if you are the Chief Executive
     Officer, the Chairman of the Compensation Committee of the Board of
     Directors), after reasonable notice to you and an opportunity for you,
     together with your counsel, to be heard before (i) the Chief Executive
     Officer, or (ii) if you are an elected officer of the Company, the Board of
     Directors of the Company, finding that in the good faith opinion of the
     Chief Executive Officer, or, in the case of an elected officer, finding
     that in the good faith opinion of two-thirds of the Board of Directors, you
     committed the conduct set forth above in clauses (a) or (b) of this
     subparagraph 4.1, and specifying the particulars of that finding in detail.

     4.2  Disability.  Termination by the Company of your employment for
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     "Disability" means termination by the Company of your employment following
     and because of your failure to perform your duties as an employee for a
     period of at least one hundred eighty (180) consecutive calendar days as a
     result of total and permanent incapacity due to physical or mental illness
     or injury.  Your incapacity must be certified by a licensed medical doctor
     selected by you.  You will continue to receive your full base salary at the
     rate in effect and any bonus payments under the Plan payable during the one
     hundred eighty (180) day qualification period until termination of your
     employment for Disability.  After that termination, your benefits will be
     determined in accordance with the Company's long-term disability plan then
     in effect and any of the Company's other benefit plans and practices then
     in effect that apply to you.  The Company will have no further obligation
     to you under this Letter and all supplemental benefits will be terminated.
     If the Company disagrees with the certification of your incapacity, it may
     appoint another medical doctor to certify his opinion as to your
     incapacity, and if that doctor does not certify as to your incapacity, then
     the two doctors will appoint a third medical doctor to certify their
     opinion as to your incapacity, and the decision of a majority of the three
     doctors will prevail.  (The Company will bear the costs of the doctors
     opinions.)

     4.3  Good Reason.   Termination by you of your employment for "Good Reason"
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     means termination by you of your employment based on:

          (a) The assignment to you of duties inconsistent with your position
          and status with the Company as they existed immediately prior to the
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          Change in Control Date (as defined below), or a substantial change in
          your title, offices or authority, or in the nature of your
          responsibilities, as they existed immediately prior to the Change in
          Control Date (or if you receive a promotion or an increase in
          responsibilities or authority after the Change in Control Date, then a
          change with respect to your enhanced position, status,
          responsibilities or authority), except in connection with the
          termination of your employment for Cause or Disability or as a result
          of your death or by you other than for Good Reason;

          (b) A reduction by the Company in your base salary as in effect on the
          date of this Letter or as your salary may be increased from time to
          time;

          (c) A failure by the Company to continue the Company's incentive
          compensation plan(s) ("Incentive Plan"), as it may be modified from
          time to time, substantially in the form in effect immediately prior to
          the Change in Control Date, or a failure by the Company to continue
          you as a participant in the Incentive Plan on at least the basis of
          your participation immediately prior to the Change in Control Date or
          to pay you the amounts that you would be entitled to receive in
          accordance with the Incentive Plan;

          (d) The Company's requiring you to be based more than thirty-five (35)
          miles from the location where you are based immediately prior to the
          Change in Control Date, except for required travel on the Company's
          business to an extent substantially consistent with your business
          travel obligations prior to the Change in Control Date, or if you
          consent to that relocation, the failure by the Company to pay (or
          reimburse you for) all reasonable moving expenses incurred by you or
          to indemnify you against any loss realized in the sale of your
          principal residence in connection with that relocation;

          (e) The failure by the Company to continue in effect any retirement or
          compensation plan, supplemental retirement plan, performance share
          plan, stock option plan, life insurance plan, health and accident
          plan, disability plan or any other benefit plan in which you are
          participating immediately prior to the Change in Control Date (or
          provide plans providing you with substantially similar benefits), the
          taking of any action by the Company that would adversely affect your
          participation or materially reduce your benefits under any of those
<PAGE>

          plans or deprive you of any material fringe benefit enjoyed by you
          immediately prior to the Change in Control Date, or the failure by the
          Company to provide you with the number of paid vacation days to which
          you are then entitled in accordance with the Company's normal vacation
          practices in effect immediately prior to the Change in Control Date;

          (f) The failure by the Company to obtain the assumption of the
          agreement to perform this Letter by any successor, as contemplated in
          paragraph 6; or

          (g) Any purported termination of your employment that is not effected
          pursuant to a Notice of Termination satisfying the requirements of
          subparagraph 4.4 (and, if applicable, subparagraph 4.1).

     For purposes of this subparagraph 4.3, "Change in Control Date" means the
     date six months prior to the date of the Change in Control.

     4.4  Notice of Termination.  Any purported termination by the Company
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     pursuant to subparagraphs 4.1 or 4.2 or by you pursuant to subparagraph 4.3
     will be communicated by written Notice of Termination to the other party.
     For purposes of this Letter, a "Notice of Termination" means a notice that
     indicates the specific termination provision in this Letter relied upon and
     setting forth in reasonable detail the facts and circumstances claimed to
     provide a basis for termination of your employment under the provision so
     indicated.  Any purported termination not effected pursuant to a Notice of
     Termination meeting the requirements set forth in this Letter will not be
     effective.

     4.5  Date of Termination.  For purposes of this Letter, the date of the
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     termination of your employment ("Date of Termination") will be (a) if your
     employment is terminated by your death, the end of the month in which your
     death occurs, (b) if your employment is terminated for Disability, thirty
     (30) days after Notice of Termination is given, or (c) if your employment
     is terminated by you or the Company for any other reason, the date
     specified in the Notice of Termination, which will not be later than thirty
     (30) days after the date on which the Notice of Termination is given.

5.  Benefits upon Certain Terminations following a Change in Control.  If any of
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the events described in paragraph 3 constituting a Change in Control occurs and
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your employment is terminated under the circumstances described in paragraph 4
which entitle you to payments and benefits under this paragraph 5, then the
following provisions will apply:

     5.1  Compensation through Date of Termination.  The Company will pay you
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     (a) any unpaid amount of your base salary through the Date of Termination,
     (b) with respect to any year then completed, any unpaid amount accrued to
     you pursuant to the Incentive Plan, and (c) with respect to any year then
     partially completed, a pro rata portion through the Date of Termination of
     your target annual bonus under the Incentive Plan.  For purposes of item
     (c) above, your "target annual bonus under the Incentive Plan" will be your
     annual base salary as of the Date of Termination multiplied by the target
     percentage of your bonus under the Incentive Plan.

     5.2  Additional Severance.  In lieu of any further salary payments to you
          --------------------
     for periods subsequent to the Date of Termination, the Company will pay as
     severance pay to you on the fifth (5th) business day following the Date of
     Termination a lump sum equal to three (3) times the sum of (a) your annual
     base salary at the highest rate in effect during the twelve (12) months
     immediately preceding the Date of Termination plus (b) the higher of (i)
     the highest annual bonus paid to you or paid but deferred on your behalf
     under the Incentive Plan, (ii) any earned, but unpaid, bonus accrued for
     your benefit under the Incentive Plan, or (iii) your highest target annual
     bonus under the Incentive Plan, whether or not earned, in each case with
     respect to the three (3) calendar years immediately preceding the year in
     which the Date of Termination occurs and the partial calendar year ending
     on the Date of Termination.  For purposes of item (iii) above and
     subparagraph 5.3, the "highest target annual bonus under the Incentive
     Plan" for the partial calendar year ending on the Date of Termination will
     be your annual base salary as of the Date of Termination multiplied by the
     target percentage of your bonus under the Incentive Plan.

     5.3  Additional Retirement Benefit.  If you are a participant in the
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     Company's U.S. Retirement Income Plan (the "Retirement Plan"), the Company
     will pay you on the fifth (5th) business day following the Date of
     Termination a lump sum retirement benefit, in addition to the benefits to
     which you are or would be entitled under the Retirement Plan.  That benefit
     will be a lump sum amount that is the actuarial equivalent of your benefits
     calculated pursuant to the terms of the Retirement Plan with the following
     adjustments:  (a) regardless of your Years of Vesting Service under the
     Retirement Plan, you will be treated as if you were 100% vested under the
<PAGE>

     Retirement Plan, (b) the number of Years of Benefit Service used will be
     the actual number of Years of Benefit Service accumulated as of the Date of
     Termination plus an additional number of Years of Benefit Service (up to a
     maximum of five (5) additional years) equal to the number of additional
     Years of Benefit Service that you would have earned if you had remained an
     employee of the Company until attainment of age sixty-two (62), (c) the
     Final Average Earnings (for purposes of applying the benefit formula under
     the Retirement Plan) will be determined using (I) the highest monthly rate
     of Base Salary in effect during the twelve (12) months immediately
     preceding the Date of Termination, plus (II) the higher of (A) the highest
     annual bonus paid to you or paid but deferred on your behalf under the
     Plan, (B) any earned, but unpaid, bonus accrued for your benefit under the
     Plan, or (C) your highest target annual bonus under the Plan, whether or
     not earned, in each case with respect to the three (3) calendar years
     immediately preceding the Date of Termination and the partial calendar year
     ending on the Date of Termination, divided by twelve (12) (regardless of
     the earnings limitations under the Retirement Plan or governmental
     regulations applicable to those plans), and (d) the monthly retirement
     benefit so calculated will be reduced by an amount equal to the monthly
     retirement benefit payable to you under the Retirement Plan.  All
     capitalized terms used in this subparagraph, unless otherwise defined, will
     have the same meanings as those terms are defined in the Retirement Plan.
     The actuarial equivalent will be calculated based on the assumptions
     contained in the Retirement Plan on the Date of Termination; provided that
     the assumptions on which the actuarial equivalent will be calculated will
     be no less favorable to you than those assumptions contained in the
     Retirement Plan on the date of the Change in Control.

     5.4  Benefit Plans.
          -------------

          (a) Unless your employment is terminated for Cause, the Company will
          maintain in full force and effect, for your continued benefit for
          three (3) years after your Date of Termination, the group health,
          dental, vision, life insurance. disability and similar coverages in
          which you are entitled to participate immediately prior to the Date of
          Termination at the same level as for active employees and in the same
          manner as if your employment had not terminated.  Any additional
          coverages you had at termination, including dependent coverage, will
          also be continued for that period on the same terms, to the extent
          permitted by the applicable policies or contracts.  You will be
          responsible for paying any costs you were paying for those coverages
          at the time of termination by separate check payable to the Company
          each month in
<PAGE>

          advance. If the terms of any benefit plan referred to in this
          subparagraph 5.4(a), or the laws applicable to that plan do not permit
          your continued participation, then the Company will arrange for other
          coverages satisfactory to you at the Company's expense that provide
          substantially similar benefits, or the Company will pay you a lump sum
          amount equal to the costs you would have to pay to obtain those
          coverage(s) for the three-year period.

          (b) If you have satisfied the requirements for receiving the Company's
          retiree medical coverage on your Date of Termination or will satisfy
          those requirements prior to the last day of the three-year benefit
          continuation period provided in item (a) above, you (and your
          dependents) will be covered by, and receive benefits under, the
          Company's retiree medical coverage program for employees at your
          level.  Your retiree medical coverage will commence on the date your
          health care coverage terminates under item (a) above, and will
          continue for your life (i.e., the coverage will be vested and may not
          be terminated), subject only to those changes in the level of coverage
          that apply to employees at your level generally.

          (c) You will be entitled to continue to participate in the Company's
          401(k) Retirement and Savings Plan for the three-year period after
          your Date of Termination.  For purposes of the 401(k) Plan, you will
          receive an amount equal to the Company's contributions to the 401(k)
          Plan, assuming you had made contributions to the 401(k) Plan at the
          maximum permissible level.  If the Company cannot contribute those
          additional amounts to the 401(k) Plan on your behalf because of the
          terms of the 401(k) Plan or applicable law, the Company will pay to
          you within five (5) days of the Date of Termination a lump sum amount
          equal to the additional amounts the Company would have been required
          to contribute (based upon the terms of the 401(k) Plan as in effect on
          the Date of Termination).

     5.5  No Mitigation Required.  You will not be required to mitigate the
          ----------------------
     amount of any payment or benefits provided for in this paragraph 5 by
     seeking other employment or otherwise, nor will the amount of any payment
     or benefits provided for in this paragraph 5 be reduced by any compensation
     earned by you, or benefits provided to you, as the result of employment by
     another employer after the Date of Termination, or otherwise.
<PAGE>

     5.6  Tax Gross-Up Payment.  If any payments or benefits provided pursuant
          --------------------
     to this Letter or any other payments or benefits provided to you by the
     Company are subject to an excise tax on an "excess parachute payment" under
     Section 4999 of the Internal Revenue Code of 1986 (the "Code"), or any
     successor provision of the Code, or are subject to an excise or penalty tax
     under any similar provision of any other revenue system to which you may be
     subject, the Company will provide a gross-up payment to you in order to
     place you in the same after-tax position you would have been in had no
     excise or penalty tax become due and payable under Code Section 4999 (or
     any successor provision) or any similar provision of that other revenue
     system.  That gross-up payment will not apply to any excise or penalty tax
     attributable to any incentive stock option granted to you by the Company or
     Equifax Inc. prior to April 1, 1998.  Any gross-up payment to which you are
     entitled as a result of the applicability of an excise tax under Code
     Section 4999 or any successor provision of the Code, or as a result of any
     excise or penalty tax under any similar provision of any other revenue
     system to which you may be subject, will be determined in accordance with a
     "Policy with Respect to Tax Gross-up Payments" adopted, or which will be
     adopted, by the Board of Directors (or a Committee of the Board), and once
     that policy is adopted, no amendment of that policy that adversely affects
     you will be effective with respect to your rights under this Letter without
     your written consent.

6.  Successors: Binding Agreement.
    -----------------------------

     6.1  Assumption by Company's Successor.  The Company will require any
          ---------------------------------
     successor (whether direct or indirect, by purchase, merger, consolidation
     or otherwise) to all or substantially all of the business and/or assets of
     the Company, by agreement in form and substance reasonably satisfactory to
     you, to expressly assume and agree to perform this Letter.  Failure of the
     Company to obtain that agreement prior to the effectiveness of any
     succession will be a breach of this Letter and will entitle you to
     compensation from the Company in the same amount and on the same terms as
     you would be entitled under this Letter if you terminated your employment
     for Good Reason within three (3) years following a Change in Control,
     except that for purposes of implementing the foregoing, the date on which
     that succession becomes effective will be deemed the Date of Termination.
     As used in this Letter, "Company" means Equifax PS, Inc. and any successor
     to its business and/or assets that executes and delivers the agreement
     provided for in this subparagraph 6.1 or that otherwise becomes bound by
     all the terms and provisions of this Letter by operation of law.
<PAGE>

     6.2  Enforcement by Your Successor.  This Letter will inure to the benefit
          -----------------------------
     of and be enforceable by your personal or legal representatives, executors,
     administrators, successors, heirs, distributees, devisees and legatees.  If
     you die subsequent to the termination of your employment while any amount
     would still be payable to you pursuant to this Letter if you had continued
     to live, all those amounts, unless otherwise provided in this Letter, will
     be paid in accordance with the terms of this Letter to your devisee,
     legatee or other designee or, if there be no designee, to your estate; that
     payment to be made in a lump sum within sixty (60) days from the date of
     your death.

7.  Notice.  For purposes of this Letter, notices and all other communications
    ------
provided for in this Letter will be in writing and will be deemed to have been
duly given when delivered or mailed by United States registered mail, return
receipt requested, postage pre-paid, addressed to the respective addresses set
forth on the first page of this Letter, provided that all notices to the Company
will be directed to the attention of the Chief Executive Officer of the Company
(or if the notice is from the Chief Executive Officer, to the General Counsel of
the Company), or to that other address as either party may have furnished to the
other in writing in accordance with this paragraph 7, except that notice of
change of address will be effective only upon receipt.

8.  Modification and Waiver.  No provision of this Letter may be modified,
    -----------------------
waived or discharged unless that waiver, modification or discharge is agreed to
in writing by you and that officer as may be specifically designated by the
Board of Directors of the Company.  No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Letter to be performed by that other party will be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time.

9.  Construction.  This Letter supersedes (a) any oral agreement between you and
    ------------
the Company and any oral representation by the Company to you with respect to
the subject matter of this Letter, and (b) that letter agreement dated
__________, ____ between you and Equifax Inc. pertaining to change in control.
The validity, interpretation, construction and performance of this Letter will
be governed by the laws of the State of Georgia.

10.  Severability.   If any one or more of the provisions of this Letter or any
     ------------
word, phrase, clause, sentence or other portion of a provision is deemed illegal
or unenforceable for any reason, that provision or portion will be modified or
deleted in such a manner as to make this Letter as modified legal and
enforceable to the
<PAGE>

fullest extent permitted under applicable laws. The validity and enforceability
of the remaining provisions or portions of this Letter will remain in full force
and effect.

11.  Counterparts.  This Letter may be executed in two or more counterparts,
     ------------
each of which will take effect as an original and all of which will evidence one
and the same agreement.

12.  Legal Fees.  If the Company breaches this Letter or if, within three (3)
     ----------
years following a Change in Control,  your employment is terminated under
circumstances described in paragraph 4 that entitle you to payments and benefits
under paragraph 5, the Company will reimburse you for all legal fees and
expenses reasonably incurred by you as a result of that termination (including
all those fees and expenses, if any, incurred in contesting or disputing the
termination or in seeking to obtain or enforce any right or benefit provided by
this Letter).

Upon presentation to the Company of the invoice for those legal fees and
expenses, the Company will reimburse you monthly for those legal fees and
expenses.

13.  Indemnification.  After your termination, the Company will indemnify you
     ---------------
and hold you harmless from and against any claim relating to your performance as
an officer, director or employee of the Company or any of its subsidiaries or
other affiliates or in any other capacity, including any fiduciary capacity, in
which you served at the Company's request, in each case to the maximum extent
permitted by law and under the Company's Articles of Incorporation and Bylaws
(the "Governing Documents"), provided that under no circumstances will the
protection afforded to you under this paragraph be less than that afforded under
the Governing Documents as in effect on the date of this Agreement except for
changes mandated by law.  You will continue to receive the benefits of, and be
covered by, any policy of directors and officers liability insurance maintained
by the Company for the benefit of its directors, officers and employees.

14.  Employment by a Subsidiary.  Either the Company or a Subsidiary may be your
     --------------------------
legal employer.  For purposes of this Letter, any reference to your termination
of employment with the Company means termination of employment with the Company
and all Subsidiaries, and does not include a transfer of employment between any
of them.  The actions referred to under the definition of "Good Reason" in
subparagraph 4.3 include the actions of the Company or your employing
Subsidiary, as applicable.  The obligations created under this Letter are
obligations of the Company.  A change in control of a Subsidiary will not
constitute a Change in Control for purposes of this Letter unless there is also
a contemporaneous Change in Control of the Company.  For purposes of paragraph 1
<PAGE>

and this paragraph, a "Subsidiary" means an entity more than fifty percent (50%)
of whose equity interests are owned directly or indirectly by the Company.

If you accept the above terms, please sign and return to me the enclosed copy of
this Letter.

Sincerely,

Agreed to as of                 ,
                ---------------- -------
----------------------------------------
[Name]EMPLOYMENT AGREEMENT

THIS EMPLOYMENT  AGREEMENT (this "Agreement"),  made and entered into as of July
1, 2001, by and between Griffon Corporation,  a Delaware  corporation,  with its
principal office located at 100 Jericho Quadrangle, Jericho, New York 11753-2794
(together  with its  successors  and  assigns  permitted  under this  Agreement,
"Griffon") and Harvey R. Blau ("Blau"),  amends and restates in its entirety the
Employment Agreement made and entered into as of October 1, 1998 between Griffon
and Blau (the "Prior Agreement").

                                  WITNESSETH:

     WHEREAS, Griffon has determined that it is in the best interests of Griffon
and its  stockholders  to  continue  to  employ  Blau  and to set  forth in this
Agreement the obligations and duties of both Griffon and Blau; and

     WHEREAS,  Griffon  wishes to assure  itself of the services of Blau for the
period hereinafter  provided,  and Blau is willing to be employed by Griffon for
said period, upon the terms and conditions provided in this Agreement;

     NOW,  THEREFORE,  in  consideration  of the premises  and mutual  covenants
contained herein and for other good and valuable  consideration,  the receipt of
which is mutually  acknowledged,  Griffon and Blau  (individually  a "Party" and
together the "Parties" ) agree as follows:
<PAGE>

     1. DEFINITIONS.

     (a)  "Beneficiary"  shall mean the person or persons named by Blau pursuant
to Section 17 below or, in the event that no such  person is named who  survives
Blau, his estate.

     (b) "Board" shall mean the Board of Directors of Griffon.

     (c) "Cause" shall mean:

     (i) Blau's conviction of a felony involving an act or acts of dishonesty on
his part and resulting in gain or personal enrichment at the expense of Griffon;

     (ii) willful and continued failure of Blau to perform his obligations under
this Agreement, resulting in demonstrable material economic harm to Griffon, or

     (iii) a willful and material  breach by Blau of the  provisions of Sections
14 or 15 below to the demonstrable and material detriment of Griffon.

     Notwithstanding the foregoing,  in no event shall Blau's failure to perform
the  duties  associated  with his  position  caused by his  mental  or  physical
disability constitute Cause for his termination.

     For purposes of this Section  1(c), no act or failure to act on the part of
Blau shall be considered  "willful" unless it is done, or omitted to be done, by
him in bad faith or without reasonable belief that his action or omission was in
the best  interests of Griffon.  Any act or failure to act based upon  authority
given pursuant to a resolution  adopted by the Board or based upon the advice of
counsel for Griffon shall be conclusively  presumed to be done, or omitted to be
done, by Blau in good faith and in the best interests of Griffon.

                                       2
<PAGE>

     (d) "Change in Control"  shall mean the  occurrence of any of the following
events:

     (i) the acquisition by any individual,  entity or group (within the meaning
of Section  13(d)(3)  or  14(d)(2)  of the  Securities  Exchange  Act of 1934 as
amended (the "Exchange  Act") (a "Person") of beneficial  ownership  (within the
meaning of Rule 13d-3  promulgated  under the Exchange Act) of voting securities
of Griffon  when such  acquisition  causes  such Person to  beneficially  own 20
percent or more of the  combined  voting  power of the then  outstanding  voting
securities  of Griffon  entitled to vote  generally in the election of directors
(the  "Outstanding  Griffon Voting  Securities");  provided,  however,  that for
purposes of this subsection (i), the following  acquisitions shall not be deemed
to result in a Change of Control: (A) any acquisition directly from Griffon, (B)
any acquisition by Griffon, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Griffon or any corporation  controlled
by Griffon or (D) any acquisition  pursuant to a transaction  that complies with
clauses (A), (B) and (C) of subsection (iii) below; and provided,  further, that
if  any  Person's  beneficial   ownership  of  the  Outstanding  Griffon  Voting
Securities reaches or exceeds 20 percent as a result of a transaction  described
in clause (A) or (B) above,  and such Person  subsequently  acquires  beneficial
ownership  of  additional   voting   securities  of  Griffon,   such  subsequent
acquisition  shall be treated  as an  acquisition  that  causes  such  Person to
beneficially  own  20  percent  or  more  of  the  Outstanding   Griffon  Voting
Securities; or

     (ii)  individuals  who, as of the date  hereof,  constitute  the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided,  however, that any individual becoming a director subsequent to

                                       3
<PAGE>

the date  hereof  whose  election,  or  nomination  for  election  by  Griffon's
stockholders,  was  approved by a vote of at least a majority  of the  directors
then  comprising  the  Incumbent  Board  shall  be  considered  as  though  such
individual were a member of the Incumbent  Board, but excluding for this purpose
any such individual whose initial  assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened  solicitation  of proxies or consents by
or on behalf of a Person other than the Board; or

     (iii) consummation of a reorganization,  merger or consolidation or sale or
other  disposition  of all or  subsequently  all of the assets of Griffon or the
acquisition of assets of another  entity  ("Business  Combination");  excluding,
however,  such a Business Combination pursuant to which (A) all or substantially
all of the  individuals  and  entities  who were the  beneficial  owners  of the
Outstanding  Griffon  Voting  Securities  immediately  prior  to  such  Business
Combination  beneficially own, directly or indirectly,  more than 60 percent of,
respectively,  the then  outstanding  shares  of common  stock and the  combined
voting  power  of the  then  outstanding  voting  securities  entitled  to  vote
generally in the election of directors,  as the case may be, of the  corporation
resulting from such Business  Combination in substantially  the same proportions
as their  ownership,  immediately  prior  to such  Business  Combination  of the
Outstanding  Griffon Voting  Securities,  (B) no Person  (excluding any employee
benefit plan (or related  trust) of Griffon or such  corporation  resulting from
such Business Combination) beneficially owns, directly or indirectly, 20 percent
or more of,  respectively,  the then  outstanding  shares of common stock of the
corporation  resulting  from such Business  Combination  or the combined  voting
power of the then outstanding  voting  securities of such corporation  except to

                                       4
<PAGE>

the extent that such ownership existed prior to the Business Combination and (C)
at least a majority of the members of the board of directors of the  corporation
resulting  from such Business  Combination  (including,  without  limitation,  a
corporation  that  as a  result  of  such  transaction  owns  Griffon  or all or
substantially  all of Griffon's  assets  either  directly or through one or more
subsidiaries)  were members of the Incumbent  Board at the time of the execution
of the  initial  agreement,  or of the action of the Board,  providing  for such
Business Combination; or

     (iv) approval by the  stockholders of Griffon of a complete  liquidation or
dissolution of the Company.

     (e) "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time.

     (f) "Committee" shall mean the Compensation Committee of the Board.

     (g) "Consulting Period" shall mean the period specified in Section 13 below
during which Blau serves as a consultant to Griffon.

     (h)  "Disability"  shall  mean the  illness  or other  mental  or  physical
disability of Blau, as determined by a physician acceptable to Griffon and Blau,
resulting in his failure during the Employment Term or the Consulting Period, as
the case may be, (i) to perform  substantially  his applicable  material  duties
under this Agreement for a period of nine consecutive  months and (ii) to return
to the performance of his duties within 30 days after  receiving  written notice
of termination.

     (i)  "Employment  Term"  shall mean the period  specified  in Section  2(b)
below.

                                       5
<PAGE>

        (j) "Fiscal Year" shall mean the 12-month period beginning on October 1
and ending on the next subsequent September 30, or such other 12-month period as
may constitute Griffon's fiscal year at any time hereafter.

        (k) "Good Reason" shall mean, at any time during the Employment Term, in
each case (except for clause (vi) below) without Blau's prior written consent or
his acquiescence:

     (i) reduction in his then current Salary;

     (ii)  diminution,  reduction  or  other  adverse  change  in the  bonus  or
incentive  compensation  opportunities  available  to Blau (with  respect to the
level  of  bonus  or  incentive  compensation   opportunities,   the  applicable
performance  criteria and  otherwise  the manner in which  bonuses and incentive
compensation  are  determined) in the aggregate  from those  available as of the
date hereof in accordance with Section 4(a) below;

     (iii) Griffon's  failure to pay Blau any amounts  otherwise  vested and due
him hereunder or under any plan or policy of Griffon;

     (iv)    diminution   of   Blau's   titles,    position,    authorities   or
responsibilities, including not serving on the Board;

     (v)  assignment to Blau of duties  incompatible  with his position of Chief
Executive Officer;

     (vi)  termination  by Blau of his  employment  within one year  following a
Change  in  Control  other  than  (a) for  Cause  or (b) by  reason  of death or
Disability;

     (vii)  imposition of a requirement  that Blau report other than directly to
the full Board;

                                       6
<PAGE>

     (viii) a material  breach of the  Agreement  by  Griffon  that is not cured
within 10 business days after written notification by Blau of such breach; or

     (ix) relocation of Griffon's corporate headquarters to a location more than
35 miles from the location first above described.

     (l) "Retirement" shall mean termination of Blau's employment  subsequent to
the date hereof,  other than (i) due to death or  Disability,  (ii) for Cause or
Good Reason or (iii) without Cause,  with Blau's  entitlement to receive a fully
vested benefit under  Griffon's  Supplemental  Executive  Retirement  Plan as in
effect on the date hereof.

     (m) "Salary" shall mean the annual salary  provided for in Section 3 below,
as adjusted from time to time.

     (n) "Spouse"  shall mean,  during the Term of Employment and the Consulting
Period, the woman who as of any relevant date is legally married to Blau.

     (o) "Subsidiary" shall mean any corporation of which Griffon owns, directly
or indirectly, more than 50 percent of its voting stock.

     2. EMPLOYMENT TERM, POSITIONS AND DUTIES.

     (a) Employment of Blau.  Griffon hereby  continues to employ Blau, and Blau
hereby accepts continued  employment with Griffon, in the positions and with the
duties  and  responsibilities  set forth  below and upon  such  other  terms and
conditions  as are  hereinafter  stated.  Blau shall render  services to Griffon
principally at Griffon's corporate headquarters,  but he shall do such traveling

                                       7
<PAGE>

on  behalf of  Griffon  as shall be  reasonably  required  in the  course of the
performance of his duties hereunder.

     (b) Employment  Term. The Employment Term shall commence as of July 1, 2001
and shall terminate on December 1, 2006.

     (c) Titles and Duties.

     (i) Until the date of termination of his employment  hereunder,  Blau shall
be employed as Chief  Executive  Officer,  reporting  to the full Board.  In his
capacity  as Chief  Executive  Officer,  Blau shall have the  customary  powers,
responsibilities  and authorities of chief executive officers of corporations of
the size, type and nature of Griffon including,  without limitation,  authority,
in  conjunction  with the  Board as  appropriate,  to hire and  terminate  other
employees of Griffon.

     (ii) During the  Employment  Term,  Griffon  shall uses its best efforts to
secure the election of Blau to the Board and to the chairmanship thereof. During
the Employment Term, if the Board forms an executive or similar committee,  Blau
shall serve thereon.

     (d) Time and Effort.

     (i) Blau agrees to devote his best efforts and  abilities,  and such of his
business  time and  attention  as is  reasonably  necessary,  to the  affairs of
Griffon  in  order to carry  out his  duties  and  responsibilities  under  this
Agreement.  The Parties hereby acknowledge that Blau is chairman of the board of
Aeroflex Incorporated and senior partner of the law firm, Blau, Kramer,  Wactlar
& Lieberman,  P.C. and that during the Employment  Term he will be devoting time
and attention to those activities.

                                       8
<PAGE>

     (ii)  Notwithstanding  the foregoing,  nothing shall preclude Blau from (A)
serving on the boards of a reasonable number of trade  associations,  charitable
organizations and/or businesses not in competition with Griffon, (B) engaging in
charitable  activities  and  community  affairs and (C)  managing  his  personal
investments  and  affairs;  provided,  however,  that,  such  activities  do not
materially   interfere   with  the   proper   performance   of  his  duties  and
responsibilities specified in Section 2 (c) above.

     3. SALARY.

     (a) Initial  Salary.  Blau shall receive from Griffon a Salary,  payable in
accordance with the regular payroll practices of Griffon, in a minimum amount of
$775,000.

     (b) Cost-of-Living Increase. During the Employment Term Blau's Salary shall
be  increased  semiannually  by an amount  equal to the  increase in the cost of
living for the  immediately  preceding  calendar  half-year,  as reported in the
"Consumer  Price  Index,  New York and  Northeastern  New  Jersey,  All  Items,"
published by the United States  Department of Labor,  Bureau of Labor Statistics
(or, if such index is no longer published,  a successor or comparable index that
is published).  Such amount shall be calculated and paid to Blau in a single sum
on or before the first day of the second month following the applicable calendar
half year,  and  thereafter  his Salary shall be deemed to include the amount of
any such increase.  The first calculation and payment shall be made with respect
to the six month period from and after July 1, 2001. If Blau's  employment shall

                                       9
<PAGE>

terminate during any such six-month period, the cost-of-living increase provided
in this Section 3(b) shall be prorated  accordingly.

     (c) Salary  Increase.  Any amount to which Blau's Salary is  increased,  as
provided in Section 3(b) above or  otherwise,  shall not  thereafter  be reduced
without his consent, and the term "Salary" as used in this Agreement shall refer
to his Salary as thus increased.

     4. BONUSES.

     (a) Annual  Bonus.  Blau shall be eligible  to receive an annual  bonus for
each Fiscal Year or portion  thereof  during the  Employment  Term in accordance
with Griffon's Senior Management Incentive  Compensation Plan or another plan or
plans  providing  him annual award  opportunities  (with respect to their level,
applicable  performance criteria and the manner in which bonuses are determined)
that in the  aggregate  are not less than those in effect as of the date hereof.
Blau  shall be  entitled  to elect  to  defer,  under  the  terms of the  Senior
Management Incentive Compensation Plan or any successor plan, any portion of his
annual bonus that is not already subject to deferral thereunder.

     (b) Special  Bonus.  Blau shall be eligible to receive  additional  bonuses
during the Employment  Term. The Committee shall  determine,  in its discretion,
the occasion for payment, and the amount, of any such bonus.

                                      10
<PAGE>

     5. LONG-TERM INCENTIVE.

     During the Employment  Term,  Blau shall be eligible for an award under any
long-term incentive  compensation plan established by Griffon for the benefit of
Blau or, in the absence thereof, under any such plan established for the benefit
of members of the senior management of Griffon.

     6. EQUITY OPPORTUNITY.

     During the  Employment  Term,  Blau shall be eligible to receive  grants of
options to purchase  shares of Griffon's stock and awards of shares of Griffon's
stock,  either or both as determined by the  Committee,  under and in accordance
with the terms of  applicable  plans of  Griffon  and  related  option and award
agreements. It is the intention of Griffon to grant stock options to Blau during
the Employment  Term. Also, to the extent permitted by any such plan, Blau shall
be eligible during any Consulting Period to receive grants of options and awards
of shares of Griffon's stock in the same manner.

     7. EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.

     During  the  Employment  Term  and any  Consulting  Period,  Blau  shall be
entitled to prompt  reimbursement  by Griffon for all  reasonable  out-of-pocket
expenses incurred by him in performing  services under this Agreement,  upon his
submission  of such  accounts  and  records  as may be  reasonably  required  by
Griffon.  In  addition,  Blau  shall be  entitled  to  payment by Griffon of all

                                       11
<PAGE>

reasonable costs and expenses,  including  attorneys' and consultants'  fees and
disbursements, incurred by him in connection with adoption of this Agreement and
any  related  compensatory  arrangements  that  Griffon  adopts  solely  for his
benefit.

     8. PERQUISITES.

     During the Employment  Term and, and any Consulting  Period,  Griffon shall
provide Blau with the following perquisites:

     (a) an office of a size and with  furnishings and other  appointments,  and
exclusive  personal  secretarial  and other  assistance,  at least equal to that
provided to Blau by Griffon as of the date hereof; and

     (b)  payment  of club  dues and the use of an  automobile  and  payment  of
related  expenses  on the same terms as in effect on the date hereof or, if more
favorable to Blau, as made available  generally to other  executive  officers of
Griffon and its affiliates at any time thereafter.

     9. EMPLOYEE BENEFIT PLANS.

     (a)  General.  During  the  Employment  Term,  Blau  shall be  entitled  to
participate  in all  employee  benefit  plans and  programs  made  available  to
Griffon's  senior  executives  or to its employees  generally,  as such plans or
programs  may be in effect  from time to time,  including,  without  limitation,
pension and other retirement plans,  profit-sharing plans,  savings and  similar

                                       12
<PAGE>

plans,  group life  insurance,  accidental  death and  dismemberment  insurance,
travel accident insurance,  hospitalization insurance, surgical insurance, major
and excess major medical insurance,  dental insurance,  short-term and long-term
disability insurance,  sick leave (including salary continuation  arrangements),
holidays, vacation (not less than four weeks in any calendar year) and any other
employee benefit plans or programs that may be sponsored by Griffon from time to
time,  including plans that supplement the above-listed types of plans,  whether
funded or unfunded.

     (b) Medical Care  Reimbursement  and Insurance.  During the Employment Term
and  Consulting  Period,  Griffon  shall  reimburse  Blau for 100 percent of any
medical  expenses  incurred  by him for  himself  and his  Spouse  that  are not
reimbursed  by  insurance  or   otherwise,   offset  by  any  amounts  that  are
reimbursable  by  Medicare if Blau and his Spouse,  when  eligible,  elect to be
covered by  Medicare.  Griffon  shall  provide  Blau and his  Spouse  during his
lifetime with hospitalization  insurance,  surgical insurance,  major and excess
major  medical  insurance  and  dental  insurance  in  accordance  with the most
favorable   plans,   policies,   programs  and  practices  of  Griffon  and  its
Subsidiaries  made  available  generally to other senior  executive  officers of
Griffon and its Subsidiaries as in effect from time to time.

     (c) Life  Insurance  Benefit.  In  addition  to the  group  life  insurance
available to employees generally,  Griffon shall provide Blau with an individual
permanent  life  insurance  benefit  in an  initial  amount  of  not  less  than
approximately  $5 million,  the terms and  conditions of such benefit to be more
fully described in an insurance ownership agreement between Blau and Griffon.

                                       13
<PAGE>

     (d) Disability  Benefit. In consideration of the benefit payable to Blau in
the event of termination  of his  employment  due to Disability,  as provided in
Section 10(e) below,  or, if  applicable,  in the event of termination of Blau's
consulting  services due to Disability during the Consulting Period, as provided
in Section  13(d)  below,  Griffon  shall not be  obligated to provide Blau with
long-term  disability  insurance.  If Griffon  elects to provide  Blau with such
insurance,  he shall be the owner of any individual  policies obtained and shall
pay the premiums thereon;  provided,  however, that Griffon shall reimburse Blau
for any premiums that he pays.

     (e)  Retirement  Benefit.  Blau shall be entitled to the benefits  provided
under Griffon's Supplemental  Executive Retirement Plan (the "SERP");  provided,
however,  that if Griffon fails to maintain the SERP, Blau's retirement  benefit
shall be determined as if the SERP had remained in effect until  termination  of
his employment with Griffon by retirement. These benefits are in addition to the
benefits  provided  under this  Agreement,  and no  modification,  amendment  or
termination  of this  Agreement  shall affect Blau's rights under the SERP as in
effect on the date  hereof or, if more  favorable  to Blau,  as in effect at any
time thereafter.

     10. TERMINATION OF EMPLOYMENT.

     (a) Voluntary  Termination  and Termination by Mutual  Agreement.  Blau may
terminate  his  employment  voluntarily  at any time after  December 31, 2001 in
accordance  with the provisions of Section 10(h). If he does so, except for Good
Reason,  his  entitlement  shall be the same as if Griffon  had  terminated  his

                                       14
<PAGE>

employment  for Cause.  The  Parties  may  terminate  this  Agreement  by mutual
agreement  at any  time.  If they do so,  Blau's  entitlements  shall  be as the
Parties mutually agree.

     (b) General.  Notwithstanding anything to the contrary herein, in the event
of termination of Blau's employment under this Agreement, he or his Beneficiary,
as the case may be,  shall be entitled to receive (in  addition to payments  and
benefits under, and except as specifically  provided in, subsections (c) through
(i) below, as applicable):

     (i) his Salary through the date of termination;

     (ii) any unused vacation from prior years;

     (iii) any annual or special bonus awarded but not yet paid to him;

     (iv) any  deferred  compensation  under  the  Senior  Management  Incentive
Compensation Plan or any other deferred compensation plan of Griffon;

     (v) any  other  compensation  or  benefits,  including  without  limitation
long-term incentive  compensation  described in Section 5 above,  benefits under
equity  grants and awards  described  in Section 6 above and  employee  benefits
under plans  described in Section 9 above,  that have vested through the date of
termination  or to  which  he may  then  be  entitled  in  accordance  with  the
applicable terms and conditions of each grant, award or plan; and

     (vi)  reimbursement  in accordance  with Sections 9(a) and (b) above of any
business and medical  expenses  incurred by Blau or his Spouse,  as  applicable,
through the date of termination but not yet paid to him.

     (c) Termination due to Retirement.  In the event that Blau's  employment is
terminated  due to his  Retirement,  he shall be  entitled,  in  addition to the

                                       15
<PAGE>

compensation and benefits  specified in Section 10(b), to the benefits  provided
under the SERP, as provided in Section 9(e) above.

     (d)  Termination  due to Death.  In the event  that  Blau's  employment  is
terminated due to his death, his Beneficiary  shall be entitled,  in addition to
the compensation and benefits  specified in Section 10(b), to his Salary payable
for the  remainder  of the  Employment  Term at the rate in  effect  immediately
before such termination.

     (e) Termination due to Disability.  In the event of Disability,  Griffon or
Blau may terminate Blau's employment.  If Blau's employment is terminated due to
Disability,  he shall be entitled,  in addition to the compensation and benefits
specified  in Section  10(b),  to his Salary  payable for the  remainder  of the
Employment  Term at the rate in  effect  immediately  before  such  termination,
offset by any  long-term  disability  insurance  benefit  that  Griffon may have
elected to provide for him.

     (f)  Termination  by  Griffon  for  Cause.  Griffon  may  terminate  Blau's
employment hereunder for Cause only upon written notice to Blau not less than 30
days prior to any intended  termination,  which notice shall specify the grounds
for such termination in reasonable detail.  Cause shall in no event be deemed to
exist except upon a finding  reflected  in a  resolution  approved by a majority
(excluding  Blau) of the  members  of the  Board  (whose  findings  shall not be
binding  upon or entitled to any  deference  by any court,  arbitrator  or other
decision-maker  ruling on this  Agreement) at a meeting of which Blau shall have
been  given  proper  notice  and at which  Blau (and his  counsel)  shall have a

                                       16
<PAGE>

reasonable  opportunity to present his case. In the event that Blau's employment
is  terminated  for Cause,  he shall be entitled  only to the  compensation  and
benefits specified in Section 10(b).

     (g) Termination Without Cause or by Blau for Good Reason.

     (i) Termination  without Cause shall mean termination of Blau's  employment
by Griffon and shall exclude termination (A) due to death,  Disability or Cause,
(B) by Blau voluntarily or (C) by mutual written  agreement of Blau and Griffon.
Griffon shall provide Blau 15 days' prior written  notice of  termination  by it
without Cause,  and Blau shall provide  Griffon 15 days' prior written notice of
his termination for Good Reason.

     (ii) In the event of  termination by Griffon of Blau's  employment  without
Cause or of termination  by Blau of his employment for Good Reason,  he shall be
entitled,  in addition to the  compensation  and  benefits  specified in Section
10(b), to:

     (A) a lump-sum payment equal to the Salary payable to him for the remainder
of  the  Employment  Term  at  the  rate  in  effect   immediately  before  such
termination;

     (B) a lump sum payment equal to the annual bonuses for the remainder of the
Employment  Term  (including a prorated bonus for any partial Fiscal Year) equal
to the average of the three highest annual bonuses awarded to him during the ten
Fiscal Years preceding the Fiscal Year of termination;

     (C) continued  medical  reimbursement  for the remainder of the  Employment
Term and  thereafter  the lifetime  medical  benefits  described in Section 9(b)
above;

                                       17
<PAGE>

     (D) a lump-sum  payment equal to the then present  value of the excess,  if
any, of (x) the retirement  benefit to which Blau would have been entitled if he
had remained  employed under this Agreement until age 72 (calculated and payable
as provided in the SERP) over (y) the early retirement  benefit actually payable
to him; and

     (E)  continued  participation  in all  employee  benefit  plans or programs
available to Griffon employees  generally in which Blau was participating on the
date of  termination of his  employment  until the end of the  Employment  Term;
provided;   however,   that  (x)  if  Blau  is  precluded  from  continuing  his
participation in any employee benefit plan or program as provided in this clause
(E), he shall be entitled to the after-tax  economic  equivalent of the benefits
under the plan or program in which he is unable to participate  until the end of
the  Employment  Term, and (y) the economic  equivalent of any benefit  foregone
shall be deemed to be the lowest  cost that Blau would incur in  obtaining  such
benefit on an individual basis; and

     (F) other benefits in accordance with applicable  plans and programs of the
Company.

     (iii)  Prior  written  consent  by Blau to any of the events  described  in
Section 1(k) above shall be deemed a waiver by him of his right to terminate for
Good Reason under this Section 10(g) solely by reason of the events set forth in
such waiver.

     (h) Voluntary  Termination  by Blau.  At any time after  December 31, 2001,
Blau shall have the right,  upon 60 days' prior written  notice,  voluntarily to
terminate  his  employment  without Good Reason,  in which event his  employment
shall cease and the  Employment  Term shall  terminate  as of the date stated in
such  notice, and  the  Consulting Period  shall  begin on  the  next succeeding

                                       18
<PAGE>

business day, and he shall be entitled to receive  compensation  and benefits as
if Griffon  had  terminated  his  employment  for Cause,  as provided in Section
10(f).

     (i) Change in Control.  Notwithstanding  anything  to the  contrary in this
Section  10,  termination  of  Blau's  employment  within  the  one-year  period
following  a Change  in  Control  for any  reason  other  than  Cause,  death or
Disability,  shall  be  governed  by  Section  10(g).  In the  event of any such
termination,  Blau shall be entitled to compensation  and benefits in accordance
with the provisions of Section 10(g)(ii).

     11. NO DUTY TO MITIGATE.

     Blau shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise,  nor
will any payment  hereunder  be subject to offset in the event Blau does receive
compensation for services from any other source.

     12. PARACHUTES.

     (a)  Application.  If all, or any portion,  of the payments  provided under
this Agreement,  and/or any other payments and benefits that Blau receives or is
entitled to receive from Griffon,  a Subsidiary or any other person,  whether or
not under an existing  plan,  arrangement  or other  agreement,  constitutes  an
excess  "parachute  payment"  within the meaning of Section  280G(b) of the Code
(each such  parachute  payment,  a "Parachute  Payment")  and will result in the
imposition  on Blau of an excise tax under  Section 4999 of the Code,  then,  in

                                       19
<PAGE>

addition to any other benefits to which Blau is entitled  under this  Agreement,
Griffon  shall pay him an amount in cash  equal to the sum of the  excise  taxes
payable  by him by reason  of  receiving  Parachute  Payments,  plus the  amount
necessary to put him in the same after-tax position (taking into account any and
all  applicable  federal,  state and local excise,  income or other taxes at the
highest possible  applicable rates on such Parachute Payments (including without
limitation  any  payments  under this Section 12) as if no excise taxes had been
imposed with respect to Parachute Payments (the "Parachute Gross-up").

     (b)  Computation.  The amount of any payment under this Section 12 shall be
computed by a certified public accounting firm of national  reputation  selected
by Griffon and  acceptable to Blau. If Griffon or Blau disputes the  computation
rendered by such accounting firm, Griffon shall select an alternative  certified
public  accounting  firm  of  national  reputation  to  perform  the  applicable
computation.  If the two  accounting  firms cannot agree upon the  computations,
Blau and Griffon shall jointly appoint a third certified public  accounting firm
of  national  reputation  within 10  calendar  days  after  the two  conflicting
computations  have been rendered.  Such third  accounting firm shall be asked to
determine  within 30 calendar days the computation of the Parachute  Gross-up to
be paid to Blau, and payments shall be made accordingly.

     (c) Payment.  In any event,  Griffon shall pay to Blau or pay on his behalf
the Parachute  Gross-up as computed by the accounting firm initially selected by
Blau by the time any taxes payable by him as a result of the Parachute  Payments
become due,  with Blau agreeing to return the excess amount of such payment over
the final computation rendered from the process described in Section 12(b). Blau

                                       20
<PAGE>

and Griffon shall provide the accounting  firms with all information that any of
them reasonably deems necessary in order to compute the Parachute Gross-up.  The
cost  and  expenses  of  all  the  accounting  firms  retained  to  perform  the
computations described above shall be borne by Griffon.

     In the event that the Internal  Revenue  Service  ("IRS") or the accounting
firm  computing the Parachute  Gross-up  finally  determines  that the amount of
excise taxes thereon  initially paid was insufficient to discharge Blau's excise
tax liability, Griffon shall make additional payments to him as may be necessary
to reimburse him for discharging the full liability.

     Blau shall apply to the IRS for a refund of any excise taxes paid and remit
to  Griffon  the  amount of any such  refund  that he  receives.  Griffon  shall
reimburse  Blau for his expenses in seeking a refund of excise taxes and for any
interest and penalties imposed on excise taxes that he is required to pay.

     13. CONSULTING PERIOD.

     (a) General. Effective upon the end of the Employment Term (but only if the
Employment  Term  ends  by  reason  of  its  expiration  or,  if  earlier,  upon
termination of Blau's  employment (i)  voluntarily,  (ii) by mutual agreement or
(iii) by Retirement),  Blau shall become a consultant to Griffon, in recognition
of the  continued  value to Griffon of his extensive  knowledge  and  expertise.
Unless earlier  terminated,  as provided in Section 13(e), the Consulting Period
shall continue for five years.

                                       21
<PAGE>

     (b) Duties and Extent of Services.

     (i) During the Consulting  Period,  Blau shall consult with Griffon and its
senior executive  officers  regarding its respective  businesses and operations.
Such  consulting  services  shall not require  more than 50 days in any calendar
year,  nor more than one day in any week,  it being  understood  and agreed that
during the  Consulting  Period  Blau shall have the right,  consistent  with the
prohibitions  of Sections 14 and 15 below,  to engage in  full-time or part-time
employment with any business enterprise that is not a competitor of Griffon.

     (ii) Blau's  service as a  consultant  shall only be required at such times
and such  places  as shall  not  result in  unreasonable  inconvenience  to him,
recognizing his other business  commitments  that he may have to accord priority
over the performance of services for Griffon. In order to minimize  interference
with  Blau's  other  commitments,  his  consulting  services  may be rendered by
personal  consultation  at his residence or office  wherever  maintained,  or by
correspondence   through  mail,   telephone,   fax  or  other  similar  mode  of
communication at times, including weekends and evenings, most convenient to him.

     (iii) During the Consulting Period, Blau shall not be obligated to serve as
a member of the Board or to occupy any office on behalf of Griffon or any of its
Subsidiaries.

     (c)  Compensation.  During the Consulting  Period,  Blau shall receive from
Griffon each year an amount equivalent to two-thirds of his Salary at the end of
the  Employment  Term,  payable  and  subject to annual  increase as provided in
Section 3 above.

                                       22
<PAGE>

     (d) Disability.  In the event of Disability  during the Consulting  Period,
Griffon or Blau may terminate Blau's consulting  services.  If Blau's consulting
services are terminated due to Disability, he shall be entitled to compensation,
in accordance with Section 13(c), for the remainder of the Consulting Period.

     (e) Termination. The Consulting Period shall terminate after five years or,
if earlier, upon Blau's death or upon his failure to perform consulting services
as provided in Section 13(b),  pursuant to 30 days' written notice by Griffon to
Blau  of the  grounds  constituting  such  failure  and  reasonable  opportunity
afforded Blau to cure the alleged failure. Upon any such termination, payment of
consulting  fees and benefits (with the exception of lifetime  medical  benefits
under Section 9(b) above) shall cease.

     (f) Other.  During the Consulting Period, Blau shall be entitled to expense
reimbursement  (including  secretarial,  telephone and similar support services)
and perquisites and medical benefits, pursuant to the terms of Sections 7, 8 and
9(b), respectively.

     14. CONFIDENTIAL INFORMATION.

     (a) General.

     (i) Blau  understands  and  hereby  acknowledges  that as a  result  of his
employment with Griffon he will  necessarily  become informed of and have access
to certain  valuable  and  confidential  information  of Griffon  and any of its
Subsidiaries,  joint ventures and  affiliates,  including,  without  limitation,
inventions,   trade  secrets,  technical  information,   computer  software  and

                                       23
<PAGE>

programs,  know-how and plans  ("Confidential  Information"),  and that any such
Confidential Information,  even though it may be developed or otherwise acquired
by Blau, is the exclusive  property of Griffon to be held by him in trust solely
for Griffon's benefit.

     (ii)  Accordingly,  Blau hereby agrees that, during the Employment Term and
the Consulting  Period and subsequent to both, he shall not, and shall not cause
others to, use, reveal, report,  publish,  transfer or otherwise disclose to any
person,  corporation or other entity any Confidential  Information without prior
written consent of the Board,  except to (A) responsible  officers and employees
of Griffon or (B)  responsible  persons who are in a  contractual  or  fiduciary
relationship  with  Griffon or who need such  information  for  purposes  in the
interest of Griffon.  Notwithstanding,  the foregoing,  the prohibitions of this
clause  (ii) shall not apply to any  Confidential  Information  that  becomes of
general public  knowledge  other than from Blau or is required to be divulged by
court order or administrative process.

     (b) Return of Documents.  Upon  termination of his employment  with Griffon
for any reason or, if applicable, upon expiration of the Consulting Period, Blau
shall promptly deliver to Griffon all plans, drawings,  manuals, letters, notes,
notebooks,   reports,  computer  programs  and  copies  thereof  and  all  other
materials,  including  without  limitation  those  of a secret  or  confidential
nature,  relating  to  Griffon's  business  that are then in his  possession  or
control.

     (c)  Remedies  and  Sanctions.  In the  event  that  Blau is found to be in
violation of Section 14(a) or (b) above,  Griffon shall be entitled to relief as
provided in Section 16 below.

                                      24
<PAGE>

     15. NONCOMPETITION/NONSOLICITATION.

     (a)  Prohibitions.  During the  Employment  Term and,  if  applicable,  the
Consulting  Period,  Blau shall not, without prior written  authorization of the
Board, directly or indirectly, through any other individual or entity:

     (i) become on officer or employee  of, or render any service to, any direct
competitor of Griffon;

     (ii) solicit or induce any customer of Griffon to cease purchasing goods or
services from Griffon or to become a customer of any competitor of Griffon; or

     (iii)  solicit or induce any employee of Griffon to become  employed by any
competitor of Griffon.

     (b)  Remedies  and  Sanctions.  In the  event  that  Blau is found to be in
violation  of  Section  15(a)  above,  Griffon  shall be  entitled  to relief as
provided in Section 16 below.

     (c) Exceptions.  Notwithstanding  anything to the contrary in Section 15(a)
above, its provisions shall not:

     (i) apply if Griffon  terminates  Blau's  employment  without Cause or Blau
terminates  his  employment  for Good Reason,  each as provided in Section 10(g)
above;

     (ii) be  construed  as  preventing  Blau from  investing  his assets in any
business that is not a direct competitor of Griffon; or

     (iii) be construed as preventing  Blau from  maintaining  the same level of
involvement  in the affairs of Aeroflex  Corporation  that he has as of the date
thereof.

                                       25
<PAGE>

     16. REMEDIES/SANCTIONS.

     Blau  acknowledges  that the services he is to render under this  Agreement
are of a unique and  special  nature,  the loss of which  cannot  reasonably  or
adequately be compensated for in monetary damages,  and that irreparable  injury
and damage may result to Griffon in the event of any breach of this Agreement or
default by Blau.  Because of the unique nature of the  Confidential  Information
and the importance of the  prohibitions  against  competition and  solicitation,
Blau further  acknowledges and agrees that Griffon will suffer  irreparable harm
if he fails to comply with his  obligations  under Section 14(a) or (b) above or
Section 15(a) above and that monetary  damages would be inadequate to compensate
Griffon for any such breach.  Accordingly,  Blau agrees that, in addition to any
other remedies available to either Party at law, in equity or otherwise, Griffon
will be entitled to seek  injunctive  relief or specific  performance to enforce
the  terms,  or  prevent  or remedy the  violation,  of any  provisions  of this
Agreement.

     17. BENEFICIARIES/REFERENCES.

     Blau shall be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or  beneficiaries  to receive any compensation
or benefit  payable under this  Agreement  following his death by giving Griffon
written  notice  thereof.  In  the  event  of  Blau's  death,  or of a  judicial

                                       26
<PAGE>

determination of his incompetence,  reference in this Agreement to Blau shall be
deemed to refer,  as  appropriate,  to his  beneficiary,  estate or other  legal
representative.

     18. WITHHOLDING TAXES.

     All  payments  to Blau or his  Beneficiary  under this  Agreement  shall be
subject to withholding on account of federal,  state and local taxes as required
by law.

     19. INDEMNIFICATION AND LIABILITY INSURANCE.

     Nothing herein is intended to limit Griffon's  indemnification of Blau, and
Griffon shall  indemnify him to the fullest  extent  permitted by applicable law
consistent with Griffon's  Certificate of Incorporation and By-Laws as in effect
at the beginning of the Employment  Term,  with respect to any action or failure
to act on his part while he is an  officer,  director  or employee of Griffon or
any  Subsidiary.  Griffon  shall  cause  Blau  to be  covered  at all  times  by
directors' and officers' liability insurance on terms no less favorable than the
directors' and officers' liability insurance  maintained by Griffon in effect on
the date hereof in terms of coverage  and  amounts.  Griffon  shall  continue to
indemnify Blau as provided above and maintain such liability  insurance coverage
for him after the Employment Term and, if applicable,  the Consulting Period for
any  claims  that may be made  against  him with  respect  to his  service  as a
director or officer of Griffon or a consultant to Griffon.

                                       27
<PAGE>

     20. EFFECT OF AGREEMENT ON OTHER BENEFITS.

     The  existence  of this  Agreement  shall not  prohibit or restrict  Blau's
entitlement to participate  fully in  compensation,  employee  benefit and other
plans of Griffon in which senior executives are eligible to participate.

     21. ASSIGNABILITY; BINDING NATURE.

     This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
Parties  and  their  respective  successors,  heirs  (in the case of  Blau)  and
assigns.  No rights or  obligations  of  Griffon  under  this  Agreement  may be
assigned  or  transferred  by  Griffon  except  pursuant  to  (a)  a  merger  or
consolidation  in which  Griffon  is not the  continuing  entity  or (b) sale or
liquidation of all or substantially all of the assets of Griffon,  provided that
the  surviving  entity or  assignee or  transferee  is the  successor  to all or
substantially all of the assets of Griffon and such surviving entity or assignee
or transferee  assumes the liabilities,  obligations and duties of Griffon under
this Agreement, either contractually or as a matter of law.

     Griffon  further  agrees  that,  in  the  event  of a  sale  of  assets  or
liquidation  as  described  in the  preceding  sentence,  it shall  use its best
efforts  to have such  assignee  or  transferee  expressly  agree to assume  the
liabilities,  obligations and duties of Griffon  hereunder;  provided,  however,
that   notwithstanding   such  assumption,   Griffon  shall  remain  liable  and
responsible for  fulfillment of the terms and conditions of this Agreement;  and
provided, further, that in no event shall such assignment and assumption of this

                                       28
<PAGE>

Agreement adversely affect Blau's right upon a Change in Control, as provided in
Section 10(i) above.  No rights or  obligations of Blau under this Agreement may
be assigned or transferred by him.

     22. REPRESENTATIONS.

     The  Parties  respectively   represent  and  warrant  that  each  is  fully
authorized and empowered to enter into this  Agreement and that the  performance
of its or his  obligations,  as the case may be, under this  Agreement  will not
violate  any  agreement  between  such  Party  and  any  other  person,  firm or
organization.  Griffon represents and warrants that this Agreement has been duly
authorized  by  all  necessary  corporate  action  and  is  valid,  binding  and
enforceable in accordance with its terms.

     23. ENTIRE AGREEMENT.

     Except to the extent otherwise provided herein, this Agreement contains the
entire  understanding and agreement  between the Parties  concerning the subject
matter hereof and  supersedes  any prior  agreements,  whether  written or oral,
between the Parties  concerning  the subject matter  hereof,  including  without
limitation  the Prior  Agreement.  Payments  and  benefits  provided  under this
Agreement  are in lieu of any  payments or other  benefits  under any  severance
program or policy of Griffon to which Blau would otherwise be entitled.

                                       29
<PAGE>

     24. AMENDMENT OR WAIVER.

     No  provision in this  Agreement  may be amended  unless such  amendment is
agreed  to in  writing  and  signed by both Blau and an  authorized  officer  of
Griffon.  No  waiver  by either  Party of any  breach by the other  Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent  time.  Any waiver must be in writing and
signed by the Party to be charged  with the waiver.  No delay by either Party in
exercising  any right,  power or privilege  hereunder  shall operate as a waiver
thereof.

     25. SEVERABILITY.

     In the event  that any  provision  or portion  of this  Agreement  shall be
determined to be invalid or unenforceable  for any reason,  in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

     26. SURVIVAL.

     The respective  rights and  obligations of the Parties under this Agreement
shall survive any termination of Blau's employment with Griffon.

                                       30
<PAGE>

     27. GOVERNING LAW/JURISDICTION.

     This  Agreement  shall be  governed by and  construed  and  interpreted  in
accordance  with  the laws of New  York,  without  reference  to  principles  of
conflict of laws.

     28. COSTS OF DISPUTES.

     Griffon  shall pay, at least  monthly,  all costs and  expenses,  including
attorneys'  fees and  disbursements,  of Blau in connection with any proceeding,
whether or not instituted by Griffon or Blau,  relating to any provision of this
Agreement,  including  but not  limited to the  interpretation,  enforcement  or
reasonableness  thereof;  provided,   however,  that,  if  Blau  instituted  the
proceeding and the judge or other  decision-maker  presiding over the proceeding
affirmatively finds that his claims were frivolous or were made in bad faith, he
shall pay his own costs and  expenses  and,  if  applicable,  return any amounts
theretofore  paid to him or on his behalf  under this  Section  28.  Pending the
outcome of any proceeding, Griffon shall pay Blau all amounts due to him without
regard  to  the  dispute;  provided,  however,  that  if  Griffon  shall  be the
prevailing  party in such a proceeding,  Blau shall  promptly  repay all amounts
that he received during pendency of the proceeding  (other than amounts received
pursuant to this Section 28).

     29. NOTICES.

     Any notice given to either Party shall be in writing and shall be deemed to
have been given when delivered either personally,  by fax, by overnight delivery

                                       31
<PAGE>

service  (such as Federal  Express)  or sent by  certified  or  registered  mail
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the  address  indicated  below or to such  changed  address  as the Party may
subsequently give notice of.

If to Griffon or the Board:

        Griffon Corporation
        100 Jericho Quadrangle
        Jericho, NY  11753-2794
        Attention: Patrick Alesia

FAX:  (516) 938-5644

With a copy to:
 Blau, Kramer, Wactlar & Lieberman, P.C.
 100 Jericho Quadrangle
 Jericho, NY  11753

If to Blau:
 125 Wheatley Road
 Old Westbury, NY  11568

With a copy to:
 Harvey R. Blau
 c/o Griffon Corporation
 100 Jericho Quadrangle
 Jericho, NY  11753

     30. HEADINGS.

     The  headings  of  the  sections   contained  in  this  Agreement  are  for
convenience  only and shall not be deemed to control  or affect  the  meaning or
construction of any provision of this Agreement.

                                       32
<PAGE>

     31. COUNTERPARTS.

     This  Agreement  may be  executed  in  counterparts,  each of which when so
executed and delivered shall be an original,  but all such counterparts together
shall constitute one and the same instrument.

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of May
2, 2001.

                                                Griffon Corporation

         /s/ Dina Bottari                             /s/ Robert Balemian
Attest:  ___________________________            By: _________________________

        /s/ Frances L. Stelz                          /s/ Harvey R. Blau
Witness: ___________________________                _________________________
                                                          Harvey R. Blau

                                       33

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