10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June  30, 2015

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 000-08408
WOODWARD, INC.
(Exact name of registrant as specified in its charter)
Delaware	36-1984010
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1000 East Drake Road, Fort Collins, Colorado	80525
(Address of principal executive offices)	(Zip Code)
(970) 482-5811
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes☒No☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☒    Accelerated filer ☐    Non-accelerated filer ☐    Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐ No ☒

As of July17, 2015, 63,580,865 shares of the registrant’s common stock with a par value of $0.001455 per share were outstanding.

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Statements of Earnings	2
	Condensed Consolidated Statements of Comprehensive Earnings	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Forward Looking Statements	27
	Overview	30
	Results of Operations	31
	Liquidity and Capital Resources	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	38
	Signatures	38

1

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

WOODWARD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share amounts)

(Unaudited)

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net sales	$	494,810	$	524,284	$	1,475,678	$	1,435,793
Costs and expenses:
Cost of goods sold		351,421		372,571		1,050,783		1,028,065
Selling, general and administrative expenses		39,305		40,468		117,598		113,079
Research and development costs		33,555		34,990		97,912		100,219
Amortization of intangible assets		7,224		8,357		22,026		25,498
Interest expense		6,077		5,972		17,355		18,219
Interest income		(219)		(73)		(567)		(189)
Other (income) expense, net (Note 16)		(112)		(469)		(1,651)		(1,266)
Total costs and expenses		437,251		461,816		1,303,456		1,283,625
Earnings before income taxes		57,559		62,468		172,222		152,168
Income tax expense		13,806		16,467		40,830		37,986
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Earnings per share (Note 3):
Basic earnings per share	$	0.68	$	0.70	$	2.02	$	1.71
Diluted earnings per share	$	0.66	$	0.69	$	1.98	$	1.68
Weighted Average Common Shares Outstanding (Note 3):
Basic		64,781		65,845		65,088		66,736
Diluted		66,227		67,147		66,504		68,030
Cash dividends per share paid to Woodward common stockholders	$	0.10	$	0.08	$	0.28	$	0.24

See accompanying Notes to Condensed Consolidated Financial Statements

2

WOODWARD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

(Unaudited)

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Other comprehensive earnings:
Foreign currency translation adjustments		6,990		(72)		(27,955)		4,159
Taxes on changes in foreign currency translation adjustments		240		74		1,500		368
		7,230		2		(26,455)		4,527
Reclassification of net realized losses on derivatives to earnings		25		24		74		73
Taxes on changes in derivative transactions		(10)		(9)		(28)		(27)
		15		15		46		46
Minimum retirement benefit liability adjustments (Note 18)
Net gain (loss) arising during the period		-		1,193		-		1,193
Curtailment arising during the period		-		(915)		-		(915)
Amortization of:
Net prior service cost (benefit)		56		(22)		169		(66)
Net loss		128		199		385		588
Foreign currency exchange rate changes on minimum retirement benefit liabilities		(604)		(263)		454		(483)
Taxes on changes in minimum retirement liability adjustments, net of foreign currency exchange rate changes		141		31		(368)		(14)
		(279)		223		640		303
Total comprehensive earnings	$	50,719	$	46,241	$	105,623	$	119,058

See accompanying Notes to Condensed Consolidated Financial Statements

3

WOODWARD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

	June 30,		September 30,
	2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	87,384	$	115,287
Accounts receivable, less allowance for uncollectible amounts of $5,127 and $7,078, respectively		274,902		346,858
Inventories		485,903		451,944
Income taxes receivable		24,529		6,574
Deferred income tax assets		49,653		40,774
Other current assets		47,003		47,207
Total current assets		969,374		1,008,644
Property, plant and equipment, net		688,336		513,279
Goodwill		558,439		559,724
Intangible assets, net		232,617		254,772
Deferred income tax assets		10,306		6,292
Other assets		52,664		54,491
Total assets	$	2,511,736	$	2,397,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$	3,186	$	-
Accounts payable		188,280		160,683
Income taxes payable		8,483		6,130
Deferred income tax liabilities		428		472
Accrued liabilities		114,320		172,731
Total current liabilities		314,697		340,016
Long-term debt, less current portion		875,000		710,000
Deferred income tax liabilities		99,227		85,031
Other liabilities		95,541		101,211
Total liabilities		1,384,465		1,236,258
Commitments and contingencies (Note 20)
Stockholders' equity:
Preferred stock, par value $0.003 per share, 10,000 shares authorized, no shares issued		-		-
Common stock, par value $0.001455 per share, 150,000 shares authorized, 72,960 shares issued		106		106
Additional paid-in capital		127,737		112,491
Accumulated other comprehensive earnings (losses)		(29,302)		(3,533)
Deferred compensation		4,314		3,915
Retained earnings		1,451,575		1,338,468
		1,554,430		1,451,447
Treasury stock at cost, 9,380  shares and 7,397 shares, respectively		(422,845)		(286,588)
Treasury stock held for deferred compensation, at cost, 173 shares and 198 shares, respectively		(4,314)		(3,915)
Total stockholders' equity		1,127,271		1,160,944
Total liabilities and stockholders' equity	$	2,511,736	$	2,397,202

See accompanying Notes to Condensed Consolidated Financial Statements.

4

WOODWARD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine-Months Ended June 30,
	2015		2014
Cash flows from operating activities:
Net earnings	$	131,392	$	114,182
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		55,754		57,680
Net (gain) loss on sales of assets		(766)		116
Stock-based compensation		11,086		8,739
Excess tax benefits from stock-based compensation		(4,170)		(2,638)
Deferred income taxes		1,623		(5,749)
Loss on derivatives reclassified from accumulated comprehensive earnings into earnings		74		73
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable		65,345		57,151
Inventories		(44,630)		(38,860)
Accounts payable and accrued liabilities		(41,868)		(6,434)
Current income taxes		(10,897)		16,130
Retirement benefit obligations		(3,365)		(2,676)
Other		7,742		(13,824)
Net cash provided by operating activities		167,320		183,890
Cash flows from investing activities:
Payments for purchase of property, plant, and equipment		(190,865)		(104,530)
Proceeds from sale of assets		2,486		258
Net cash used in investing activities		(188,379)		(104,272)
Cash flows from financing activities:
Cash dividends paid		(18,285)		(16,021)
Proceeds from sales of treasury stock		7,936		8,380
Payments for repurchases of common stock		(157,118)		(141,488)
Excess tax benefits from stock compensation		4,170		2,638
Borrowings on revolving lines of credit and short-term borrowings		869,970		356,071
Payments on revolving lines of credit and short-term borrowings		(701,610)		(191,069)
Proceeds from issuance of long-term debt		-		250,000
Payments of long-term debt		-		(300,000)
Payments of debt financing costs		(2,359)		(1,297)
Net cash provided by (used in) financing activities		2,704		(32,786)
Effect of exchange rate changes on cash and cash equivalents		(9,548)		454
Net change in cash and cash equivalents		(27,903)		47,286
Cash and cash equivalents at beginning of period		115,287		48,556
Cash and cash equivalents at end of period	$	87,384	$	95,842

See accompanying Notes to Condensed Consolidated Financial Statements.

5

WOODWARD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Number of shares				Stockholders' equity
									Accumulated other comprehensive (loss) earnings
	Preferred stock	Common stock	Treasury stock	Treasury stock held for deferred compensation	Common stock		Additional paid-in capital		Foreign currency translation adjustments		Unrealized derivative gains (losses)		Minimum retirement benefit liability adjustments			Total accumulated other comprehensive (loss) earnings			Deferred compensation			Retained earnings			Treasury stock at cost			Treasury stock held for deferred compensation			Total stockholders' equity
Balances as of October 1, 2013	-	72,960	(4,883)	(232)	$	106	$	101,147	$	25,742	$	43	$	(10,670)	$		15,115	$		4,007	$		1,193,887	$		(167,710)	$		(4,007)	$		1,142,545
Net earnings	-	-	-	-		-		-		-		-		-			-			-			114,182			-			-			114,182
Other comprehensive income (loss), net of tax	-	-	-	-		-		-		4,527		46		303			4,876			-			-			-			-			4,876
Cash dividends paid	-	-	-	-		-		-		-		-		-			-			-			(16,021)			-			-			(16,021)
Purchases of treasury stock	-	-	(3,309)	-		-		-		-		-		-			-			-			-			(143,073)			-			(143,073)
Sales of treasury stock	-	-	455	-		-		(4,949)		-		-		-			-			-			-			14,042			-			9,093
Common shares issued from treasury stock for benefit plans	-	-	260	-		-		2,837		-		-		-			-			-			-			8,356			-			11,193
Tax benefit attributable to exercise of stock options	-	-	-	-		-		2,463		-		-		-			-			-			-			-			-			2,463
Stock-based compensation	-	-	-	-		-		8,739		-		-		-			-			-			-			-			-			8,739
Purchases of stock by deferred compensation plan	-	-	-	(7)		-		-		-		-		-			-			324			-			-			(324)			-
Distribution of stock from deferred compensation plan	-	-	-	41		-		-		-		-		-			-			(453)			-			-			453			-
Balances as of June 30, 2014	-	72,960	(7,477)	(198)	$	106	$	110,237	$	30,269	$	89	$	(10,367)	$		19,991	$		3,878	$		1,292,048	$		(288,385)	$		(3,878)	$		1,133,997
Balances as of October 1, 2014	-	72,960	(7,397)	(198)	$	106	$	112,491	$	10,819	$	105	$	(14,457)	$		(3,533)	$		3,915	$		1,338,468	$		(286,588)	$		(3,915)	$		1,160,944
Net earnings	-	-	-	-		-		-		-		-		-			-			-			131,392			-			-			131,392
Other comprehensive income (loss), net of tax	-	-	-	-		-		-		(26,455)		46		640			(25,769)			-			-			-			-			(25,769)
Cash dividends paid	-	-	-	-		-		-		-		-		-			-			-			(18,285)			-			-			(18,285)
Purchases of treasury stock	-	-	(2,670)	-		-		-		-		-		-			-			-			-			(157,118)			-			(157,118)
Sales of treasury stock	-	-	428	-		-		(4,841)		-		-		-			-			-			-			12,777			-			7,936
Common shares issued from treasury stock for benefit plans	-	-	259	-		-		4,490		-		-		-			-			-			-			8,084			-			12,574
Tax benefit attributable to exercise of stock options	-	-	-	-		-		4,511		-		-		-			-			-			-			-			-			4,511
Stock-based compensation	-	-	-	-		-		11,086		-		-		-			-			-			-			-			-			11,086
Purchases of stock by deferred compensation plan	-	-	-	(18)		-		-		-		-		-			-			876			-			-			(876)			-
Distribution of stock from deferred compensation plan	-	-	-	43		-		-		-		-		-			-			(477)			-			-			477			-
Balances as of June 30, 2015	-	72,960	(9,380)	(173)	$	106	$	127,737	$	(15,636)	$	151	$	(13,817)	$		(29,302)	$		4,314	$		1,451,575	$		(422,845)	$		(4,314)	$		1,127,271

See accompanying Notes to Condensed Consolidated Financial Statements

6

WOODWARD, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 1.  Basis of Presentation

The Condensed Consolidated Financial Statements of Woodward, Inc. (“Woodward” or the “Company”) as of June 30, 2015 and for the three and nine-months ended June 30, 2015 and June 30, 2014, included herein, have not been audited by an independent registered public accounting firm.  These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to present fairly Woodward’s financial position as of June 30, 2015, and the statements of earnings, comprehensive earnings, cash flows, and changes in stockholders’ equity for the periods presented herein.  The Condensed Consolidated Balance Sheet as of September 30, 2014 was derived from Woodward’s Annual Report on Form 10-K for the fiscal year then ended.  The results of operations for the three and nine-months ended June 30, 2015 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year.  Dollar and share amounts contained in these Condensed Consolidated Financial Statements are in thousands, except per share amounts.

The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in Woodward’s most recent Annual Report on Form 10-K filed with the SEC and other financial information filed with the SEC.

Management is required to use estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures, in the preparation of the Condensed Consolidated Financial Statements included herein.  Significant estimates in these Condensed Consolidated Financial Statements include allowances for uncollectible amounts, net realizable value of inventories, customer rebates earned, warranty reserves, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, valuation of identifiable intangible assets and goodwill, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees and board members, and contingencies.  Actual results could vary materially from Woodward’s estimates.

Note 2.  Recent accounting pronouncements

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements.  Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”).

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.”  Under ASU 2015-03 Woodward will present debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. Amortization of such costs will continue to be reported as interest expense. ASU 2015-03 is effective for fiscal years − and interim periods within those fiscal years − beginning after December 15, 2015 (fiscal year 2017 for Woodward), but early adoption is allowed. Woodward has not determined in which period it will adopt the new guidance. Retrospective adoption is required. Woodward had unamortized debt issuance costs of $5,834 as of June 30, 2015 and $4,276 as of September 30 2014.  These costs will be reclassified from other assets to long-term debt upon adoption.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.”  The purpose of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards.  The amendments (i) remove inconsistencies and weaknesses in revenue requirements, (ii) provide a more robust framework for addressing revenue issues, (iii) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, (iv) provide more useful information to users of financial statements through improved disclosure requirements, and (v) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer.  In July 2015, the FASB delayed the effective date for the adoption of ASU 2014-09 by one year, and as a result, ASU 2014-09 is effective for annual reporting

7

periods beginning after December 15, 2017 (fiscal year 2019 for Woodward), including interim periods within the reporting period.  Early adoption is not permitted.  An entity should adopt the amendments using one of the following methods: retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application.  Woodward has not determined what transition method it will use and is currently assessing the impact that this guidance may have on its Consolidated Financial Statements. 

Note 3.  Earnings per share

Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Diluted earnings per share reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options and restricted stock.

The following is a reconciliation of net earnings to basic earnings per share and diluted earnings per share:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Numerator:
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Denominator:
Basic shares outstanding		64,781		65,845		65,088		66,736
Dilutive effect of stock options and restricted stock		1,446		1,302		1,416		1,294
Diluted shares outstanding		66,227		67,147		66,504		68,030
Income per common share:
Basic earnings per share	$	0.68	$	0.70	$	2.02	$	1.71
Diluted earnings per share	$	0.66	$	0.69	$	1.98	$	1.68

On June 2, 2015, Woodward entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) under which Woodward repurchased shares of its common stock for an aggregate purchase price of $125,000. Upon execution of the ASR Agreement, Goldman initially delivered to Woodward 2,048 shares of common stock.  The number of shares of common stock to be ultimately repurchased by Woodward under the ASR program, which is expected to be completed before December 31, 2015, will be based generally on the average daily volume-weighted average price of Woodward stock during the term of the ASR Agreement.The 2,048 shares of common stock delivered by Goldman to Woodward upon execution of the ASR Agreement are reflected in the calculation of basic shares outstanding used in the calculation of earnings per share.

The following stock option grants were outstanding during the three and nine-months ended June 30, 2015 and 2014, but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Options		-		677		699		236
Weighted-average option price	$	n/a	$	40.99	$	46.55	$	41.05

8

The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Weighted-average treasury stock shares held for deferred compensation obligations		182		206		194		220

Note 4. Joint venture

On May 20, 2015, Woodward and General Electric Company (“GE”),acting through its GE Aviation business unit, entered into a binding agreement to form a strategic joint venture between Woodward and GE (the “JV”). The JV will design, develop, source, supply and service the fuel system (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust in excess of 50,000 pounds.

Upon formation of the JV, Woodward will assign certain contractual rights to the JV in exchange for a payment from GE of $250,000 (subject to certain normal and customary adjustments). In addition, GE will pay Woodward fifteen annual payments of approximately $4,900 each per year. Because the contractual rights have no cost basis in Woodward’s financial records, Woodward expects to account for the fair value of the proceeds received as a deferred gain that will be recognized over the economic lives of the assigned contractual rights. Closing is subject to obtaining regulatory approvals in various global jurisdictions.

Woodward will own 50% of the JV, which will be jointly managed by Woodward and GE, and any significant decisions and/or actions of the JV will require mutual consent of both Woodward and GE. Woodward expects to account for the JV using the equity method, as neither Woodward nor GE will exercise operating control over the JV.  

Note 5.  Financial instruments and fair value measurements

Financial assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date.  The inputs are unobservable in the market and significant to the valuation of the instruments.

The table below presents information about Woodward’s financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value.  Woodward had no financial liabilities required to be measured at fair value on a recurring basis as of June 30, 2015 or September 30, 2014.

	At June 30, 2015								At September 30, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Cash	$	77,855	$	-	$	-	$	77,855	$	92,590	$	-	$	-	$	92,590
Investments in money market funds		4,117		-		-		4,117		11,210		-		-		11,210
Investments in reverse repurchase agreements		5,412		-		-		5,412		11,487		-		-		11,487
Equity securities		10,399		-		-		10,399		9,645		-		-		9,645
Total financial assets	$	97,783	$	-	$	-	$	97,783	$	124,932	$	-	$	-	$	124,932

9

Investments in money market funds: Woodward sometimes invests excess cash in money market funds not insured by the Federal Depository Insurance Corporation (“FDIC”).  Woodward believes that the investments in money market funds are on deposit with creditworthy financial institutions and that the funds are highly liquid.  The investments in money market funds are reported at fair value, with realized gains from interest income realized in earnings and are included in “Cash and cash equivalents.”  The fair values of Woodward’s investments in money market funds are based on the quoted market prices for the net asset value of the various money market funds.

Investments in reverse repurchase agreements:  Woodward sometimes invests excess cash in reverse repurchase agreements.  Under the terms of Woodward’s reverse repurchase agreements, Woodward purchases an interest in a pool of securities and is granted a security interest in those securities by the counterparty to the reverse repurchase agreement.  At an agreed upon date, generally the next business day, the counterparty repurchases Woodward’s interest in the pool of securities at a price equal to what Woodward paid to the counterparty plus a rate of return determined daily per the terms of the reverse repurchase agreement.  Woodward believes that the investments in these reverse repurchase agreements are with creditworthy financial institutions and that the funds invested are highly liquid.  The investments in reverse repurchase agreements are reported at fair value, with realized gains from interest income realized in earnings, and are included in “Cash and cash equivalents.”  Since the investments are generally overnight, the carrying value is considered to be equal to the fair value as the amount is deemed to be a cash deposit with no risk of change in value as of the end of each fiscal quarter.

Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program.  Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities.  The trading securities are reported at fair value, with realized gains and losses recognized in “Other (income) expense, net.”  The trading securities are included in “Other assets.”  The fair values of Woodward’s trading securities are based on the quoted market prices for the net asset value of the various mutual funds.

Accounts receivable, accounts payable and short-term debt are not remeasured to fair value, as the carrying cost of each approximates its respective fair value.  The estimated fair values and carrying costs of other financial instruments that are not required to be remeasured at fair value in the Condensed Consolidated Balance Sheets were as follows:

		At June 30, 2015				At September 30, 2014
	Fair Value Hierarchy Level	Estimated Fair Value		Carrying Cost		Estimated Fair Value		Carrying Cost
Assets:
Notes receivable from municipalities	2		15,723		15,631		15,988		15,228
Liabilities:
Long-term debt, including current portion	2		(901,979)		(875,000)		(752,513)		(710,000)

In fiscal years 2014 and 2013, Woodward received long-term notes from a municipality within the state of Illinois in connection with certain economic incentives related to Woodward’s development of a second campus in the greater-Rockford, Illinois area for its Aerospace segment.  The fair value of the long-term notes was estimated based on a model that discounted future principal and interest payments received at an interest rate available to the Company at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy.  The interest rates used to estimate the fair value of the long-term notes were 3.3% at June 30, 2015 and 3.2% at September 30, 2014.  

In fiscal year 2013, Woodward received a long-term note from a municipality within the state of Colorado in connection with certain economic incentives related to Woodward’s development of a new campus at its corporate headquarters in Fort Collins, Colorado.  The fair value of the long-term note was estimated based on a model that discounted future principal and interest payments received at an interest rate available to the Company at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy.  The interest rates used to estimate the fair value of the long-term note were 3.3% at June 30, 2015 and 3.2% at September 30, 2014.

The fair value of long-term debt was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a level 2

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input as defined by the U.S. GAAP fair value hierarchy.  The weighted-average interest rates used to estimate the fair value of long-term debt were 2.6% atJune 30, 2015 and 2.4% at September 30, 2014.

Note 6.  Derivative instruments and hedging activities

Woodward is exposed to global market risks, including the effect of changes in interest rates, foreign currency exchange rates, changes in certain commodity prices and fluctuations in various producer indices.  From time to time, Woodward enters into derivative instruments for risk management purposes only, including derivatives designated as accounting hedges and/or those utilized as economic hedges.  Woodward uses interest rate related derivative instruments to manage its exposure to fluctuations of interest rates.  Woodward does not enter into or issue derivatives for trading or speculative purposes.

By using derivative and/or hedging instruments to manage its risk exposure, Woodward is subject, from time to time, to credit risk and market risk on those derivative instruments.  Credit risk arises from the potential failure of the counterparty to perform under the terms of the derivative and/or hedging instrument.  When the fair value of a derivative contract is positive, the counterparty owes Woodward, which creates credit risk for Woodward.  Woodward mitigates this credit risk by entering into transactions with only creditworthy counterparties.  Market risk arises from the potential adverse effects on the value of derivative and/or hedging instruments that result from a change in interest rates, commodity prices, or foreign currency exchange rates.  Woodward minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

In June 2015, Woodward designated an intercompany loan of 160,000 RMB between two wholly owned subsidiaries as a hedge of a foreign currency exposure of the net investment of the borrower in the lender. A foreign exchange gain on the loan of $11, net of taxes, is included in foreign currency translation adjustments within total comprehensive earnings for the three and nine-months ended June 30, 2015.

Woodward did not enter into any derivatives or hedging transactions during the three or nine-months ended June 30, 2014.

The remaining unrecognized gains and losses in Woodward’s Condensed Consolidated Balance Sheets associated with derivative instruments that were previously entered into by Woodward, which are classified in accumulated other comprehensive losses (“accumulated OCI”), were net gains of $244 as of June 30, 2015 and $170 as of September 30, 2014.

The following table discloses the impact of derivative instruments in cash flow hedging relationships on Woodward’s Condensed Consolidated Statements of Earnings, recognized in interest expense:

	Three-Months Ended June 30,				Nine-Months Ended June 30,
	2015		2014		2015		2014
Amount of (income) expense recognized in earnings on derivative	$	25	$	24	$	74	$	73
Amount of (gain) loss recognized in accumulated OCI on derivative		-		-		-		-
Amount of (gain) loss reclassified from accumulated OCI into earnings		25		24		74		73

Based on the carrying value of the realized but unrecognized gains and losses on terminated derivative instruments designated as cash flow hedges as of June 30, 2015, Woodward expects to reclassify $64 of net unrecognized losses on terminated derivative instruments from accumulated other comprehensive earnings to earnings during the next twelve months.

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Note 7.  Supplemental statement of cash flows information

	Nine-Months Ended June 30,
	2015		2014
Interest paid, net of amounts capitalized	$	30,090	$	26,619
Income taxes paid		48,801		36,345
Income tax refunds received		426		1,617
Non-cash activities:
Purchases of property, plant and equipment on account		39,122		19,193
Common shares issued from treasury for benefit plans (Note 18)		12,574		11,193
Notes receivable from municipalities for economic development incentives		-		6,596
Cashless exercise of stock options		-		715
Settlement of receivable through cashless acquisition of treasury shares in connection with the cashless exercise of stock options		-		871

Note 8.  Accounts receivable

Almost all of Woodward’s sales are made on credit and result in accounts receivable, which are recorded at the amount invoiced.  In the normal course of business, not all accounts receivable are collected and, therefore, an allowance for losses of accounts receivable is provided equal to the amount that Woodward believes ultimately will not be collected.  In establishing the amount of the allowance, customer-specific information is considered related to delinquent accounts, past loss experience, bankruptcy filings, deterioration in the customer’s operating results or financial position, and current economic conditions.  Accounts receivable losses are deducted from the allowance, and the related accounts receivable balances are written off when the receivables are deemed uncollectible.  Recoveries of accounts receivable previously written off are recognized when received.

Consistent with business practice common in China, Woodward’s Chinese subsidiary accepts from Chinese customers, in settlement of certain customer accounts receivable, bankers’ acceptance notes issued by creditworthy Chinese banks.  Bankers’ acceptance notes are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution.  Bankers’ acceptance notes represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers’ acceptance note as of the maturity date.  The maturity date of bankers’ acceptance notes varies, but it is Woodward’s policy to only accept bankers’ acceptance notes with maturity dates no more than 180 days from the date of Woodward’s receipt of such draft.  The issuing financial institution is the obligor, not Woodward’s customers.  Upon Woodward’s acceptance of a bankers’ acceptance note from a customer, such customer has no further obligation to pay Woodward for the related accounts receivable balance.  Woodward only accepts bankers’ acceptance notes issued by creditworthy banks as to which the credit risk associated with the bankers acceptance note is assessed to be minimal.

The composition of Woodward’s accounts receivable at June 30, 2015 and September 30, 2014 follows:

	June 30,		September 30,
	2015		2014
Accounts receivable from:
Customers	$	266,422	$	291,584
Other (Chinese financial institutions)		13,607		62,352
Allowance for uncollectible customer amounts		(5,127)		(7,078)
	$	274,902	$	346,858

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Note 9.  Inventories

	June 30,		September 30,
	2015		2014
Raw materials	$	70,878	$	60,442
Work in progress		99,493		93,836
Component parts (1)		263,410		247,299
Finished goods		52,122		50,367
	$	485,903	$	451,944

(1) Component parts include items that can be sold separately as finished goods or included in the manufacture of other products.

Note 10.  Property, plant, and equipment

	June 30,		September 30,
	2015		2014
Land and land improvements	$	63,626	$	66,303
Buildings and improvements		375,068		197,587
Leasehold improvements		17,696		20,026
Machinery and production equipment		338,531		326,403
Computer equipment and software		105,715		103,852
Office furniture and equipment		23,906		20,992
Other		18,466		18,839
Construction in progress		216,021		223,958
		1,159,029		977,960
Less accumulated depreciation		(470,693)		(464,681)
Property, plant and equipment, net	$	688,336	$	513,279

Included in “Land and land improvements” and “Buildings and improvements” are assets held for sale of $692 at June 30, 2015 and $2,465 at September 30, 2014.  During the quarter ended March 31, 2015, Woodward completed the sale of certain of the assets held for sale.

Woodward is developing a second campus in the greater-Rockford, Illinois area for its Aerospace segment in order to address the growth expected over the next ten years and beyond and to support a substantial number of recently awarded new system platforms, particularly on narrow-body aircraft.  Included in “Construction in progress” are costs of$27,633 at June 30, 2015 and $85,283 at September 30, 2014, associated with the construction of the second campus and new equipment purchases, including capitalized interest of $430 at June 30, 2015 and $2,963 at September 30, 2014.  Approximately $120,000 of assets were placed in service during the nine-months ended June 30, 2015, and were recorded to “Buildings and improvements.”

Woodward is also developing a new campus at its corporate headquarters in Fort Collins, Colorado to support the continued growth of its Energy segment by supplementing its existing Colorado manufacturing facilities and corporate headquarters.  Included in “Construction in progress” are costs of $117,882 at June 30, 2015 and $37,268 at September 30, 2014, associated with the construction of the new campus, including capitalized interest of $3,996 at June 30, 2015 and $2,392 at September 30, 2014.

In addition, in September 2013, Woodward invested in a building site in Niles, Illinois.  Woodward has completed a new facility on this site for its Aerospace segment and is relocating most of its operations formerly residing in nearby Skokie, Illinois to this new facility.  Included in “Construction in progress” are costs of $4,960 at June 30, 2015 and $55,629 at

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September 30, 2014,associated with the construction of the building in Niles and new equipment purchases.  Approximately $72,000 of assets were placed in service during the nine-months ended June 30, 2015, and were recorded to “Buildings and improvements” and “Office furniture and equipment.”

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward had depreciation expense of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	11,280	$	10,489	$	33,727	$	32,183

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward capitalized interest that would have otherwise been included in interest expense of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Capitalized interest	$	2,544	$	1,676	$	7,310	$	3,965

Note 11.  Goodwill

	September 30, 2014		Effects of Foreign Currency Translation		June 30, 2015
Aerospace	$	455,423	$	-	$	455,423
Energy		104,301		(1,285)		103,016
Consolidated	$	559,724	$	(1,285)	$	558,439

Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  Based on the relevant U.S. GAAP authoritative guidance, Woodward aggregates components of a single operating segment into a reporting unit, if appropriate.  The impairment tests consist of comparing the implied fair value of each reporting unit with its carrying amount including goodwill.  If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill.  If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value.

Woodward completed its annual goodwill impairment test as of July 31, 2014 during the quarter ended September 30, 2014.  At that date, Woodward determined it was appropriate to aggregate certain components of the same operating segment into a single aggregated reporting unit.  The fair value of each of Woodward’s reporting units was determined using a discounted cash flow method.  This method represents a Level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, earnings margins, future tax rates, and the present value, based on an estimated weighted-average cost of capital (or the discount rate) and terminal growth rate, of forecasted cash flows.  Management projects revenue growth rates, earnings margins and cash flows based on each reporting unit’s current operational results, expected performance and operational strategies over a five or ten-year period.  These projections are adjusted to reflect current economic conditions and demand for certain products, and require considerable management judgment.

Forecasted cash flows used in the July 31, 2014 impairment test were discounted using weighted-average cost of capital assumptions ranging from 8.93% to 11.04%.  The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after five or ten years of 4.20%.  These inputs, which are unobservable in the market, represent management’s best estimate of what market participants would use in determining the present value of the Company’s forecasted cash flows.  Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows.  Woodward evaluated the reasonableness of the reporting units’ resulting fair values utilizing a market multiple method.

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The results of Woodward’s goodwill impairment tests performed as of July 31, 2014 indicated the estimated fair value of each reporting unit was substantially in excess of its carrying value, and accordingly, no impairment existed.

During the three and nine-months ended June 30, 2015 there were no events or changes in operation that triggered a need to assess goodwill for possible impairment.  As part of the Company’s ongoing efforts to assess goodwill for possible indications of impairment, Woodward continues to consider a wide variety of factors, including but not limited to the global economic environment and its potential impact on Woodward’s business.

Note 12.  Intangible assets, net

	June 30, 2015						September 30, 2014
	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Customer relationships and contracts:
Aerospace	$	282,225	$	(111,495)	$	170,730	$	282,225	$	(97,281)	$	184,944
Energy		41,566		(32,697)		8,869		41,706		(32,032)		9,674
Total	$	323,791	$	(144,192)	$	179,599	$	323,931	$	(129,313)	$	194,618
Intellectual property:
Aerospace	$	-	$	-	$	-	$	-	$	-	$	-
Energy		19,473		(16,616)		2,857		19,954		(15,938)		4,016
Total	$	19,473	$	(16,616)	$	2,857	$	19,954	$	(15,938)	$	4,016
Process technology:
Aerospace	$	76,605	$	(35,989)	$	40,616	$	76,605	$	(31,719)	$	44,886
Energy		23,280		(14,412)		8,868		23,078		(13,141)		9,937
Total	$	99,885	$	(50,401)	$	49,484	$	99,683	$	(44,860)	$	54,823
Other intangibles:
Aerospace	$	9,100	$	(8,950)	$	150	$	9,100	$	(8,465)	$	635
Energy		1,360		(833)		527		1,519		(839)		680
Total	$	10,460	$	(9,783)	$	677	$	10,619	$	(9,304)	$	1,315
Total intangibles:
Aerospace	$	367,930	$	(156,434)	$	211,496	$	367,930	$	(137,465)	$	230,465
Energy		85,679		(64,558)		21,121		86,257		(61,950)		24,307
Consolidated Total	$	453,609	$	(220,992)	$	232,617	$	454,187	$	(199,415)	$	254,772

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward recorded amortization expense associated with intangibles of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense	$	7,224	$	8,357	$	22,026	$	25,498

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Future amortization expense associated with intangibles is expected to be:

Year Ending September 30:
2015 (remaining)	$	7,230
2016		27,568
2017		25,861
2018		25,037
2019		23,201
Thereafter		123,720
	$	232,617

Note 13.  Credit facilities, short-term borrowings and long-term debt

Short-term borrowings

A Chinese subsidiary of Woodward has a local credit facility with the Hong Kong and Shanghai Banking Company under which it has the ability to borrow up to either $22,700, or the local currency equivalent of $22,700.  Any cash borrowings under the local Chinese credit facility are secured by a parent guarantee from Woodward.  The Chinese subsidiary may utilize the local facility for cash borrowings to support its operating cash needs.  Local currency borrowings on the Chinese credit facility are charged interest at the prevailing interest rate offered by the People’s Bank of China on the date of borrowing, plus a margin equal to 25% of that prevailing rate.  U.S. dollar borrowings on the credit facility are charged interest at the lender’s cost of borrowing rate at the date of borrowing, plus 3%.  The Chinese subsidiary had no outstanding cash borrowings against the local credit facility at June 30, 2015 and September 30, 2014.

In the second quarter of fiscal year 2015, a Brazilian subsidiary of Woodward arranged a local uncommitted credit facility with the Banco J.P. Morgan S.A. under which it has the ability to borrow up to 26,000 Brazilian Real.  Any cash borrowings under the local Brazilian credit facility will be secured by a parent guarantee from Woodward.  The Brazilian subsidiary may utilize the local facility to support its operating cash needs.  Local currency borrowings on the Brazilian credit facility are charged interest at the lender’s cost of borrowing rate at the date of borrowing, plus 1.75%.  The Brazilian subsidiary had $3,186 outstanding cash borrowings against the local credit facility at June 30, 2015.

Woodward also has other foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions.  Pursuant to the terms of the related facility agreements, Woodward’s foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties.  There were no borrowings outstanding as of June 30, 2015 and September 30, 2014 on Woodward’s other foreign lines of credit and foreign overdraft facilities.

Long-term debt

	June 30,		September 30,
	2015		2014
Revolving credit facility - Floating rate (LIBOR plus 0.85% - 1.65%), due April 2020, unsecured		375,000		210,000
Series C notes – 5.92%, due October 2015; unsecured		50,000		50,000
Series D notes – 6.39%, due October 2018; unsecured		100,000		100,000
Series E notes – 7.81%, due April 2016; unsecured		57,000		57,000
Series F notes – 8.24%, due April 2019; unsecured		43,000		43,000
Series G notes – 3.42%, due November 2020; unsecured		50,000		50,000
Series H notes – 4.03%, due November 2023; unsecured		25,000		25,000
Series I notes – 4.18%, due November 2025; unsecured		25,000		25,000
Series J notes – Floating rate (LIBOR plus 1.25%), due November 2020; unsecured		50,000		50,000
Series K notes – 4.03%, due November 2023; unsecured		50,000		50,000
Series L notes – 4.18%, due November 2025; unsecured		50,000		50,000
Total long-term debt	$	875,000	$	710,000

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Revolving credit facility

Woodward maintains a revolving credit facility established under a revolving credit agreement between Woodward and a syndicate of lenders led by Wells Fargo Bank, National Association, as administrative agent (the “Revolving Credit Agreement”).  On April 28, 2015, Woodward amended the Revolving Credit Agreement to increase its borrowing capacity from $600,000 to $1,000,000 (the “Amended Revolving Credit Agreement”).  The terms and conditions of the Amended Revolving Credit Agreement are similar to the prior credit agreement.  The Amended Revolving Credit Agreement matures in April 2020.  The Amended Revolving Credit Agreement provides for the option to increase available borrowings to up to $1,200,000, subject to lenders’ participation.  Borrowings under the Amended Revolving Credit Agreement generally bear interest at LIBOR plus 0.85% to 1.65%.  Under the Amended Revolving Credit Agreement, there were $375,000 in principal amount of borrowings outstanding as of June 30, 2015, at an effective interest rate of 1.24%.  Under the prior Revolving Credit Agreement, there were$210,000 in principal amount of borrowings outstanding as of September 30, 2014, at an effective interest rate of 1.21%.  As of June 30, 2015 and September 30, 2014, the entire outstanding balance on both the Amended Revolving Credit Agreement and the prior Revolving Credit Agreement was classified as long-term debt.

The Amended Revolving Credit Agreement contains certain covenants customary with such agreements, which are generally consistent with the covenants applicable to Woodward’s long-term debt agreements, and contains customary events of default, including certain cross default provisions related to Woodward’s other outstanding debt arrangements in excess of $60,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder.  In addition, the Amended Revolving Credit Agreement includes the following financial covenants: (i) a maximum permitted leverage ratio of consolidated net debt to consolidated earnings before interest, taxes, depreciation, stock-based compensation, and amortization, plus any usual non-cash charges to the extent deducted in computing net income minus any usual non-cash gains to the extent added in computing net income (“Leverage Ratio”) for Woodward and its consolidated subsidiaries of 3.5 to 1.0, which ratio, subject to certain restrictions, may increase to 4.0 to 1.0 for the fiscal quarter (and the immediately following fiscal quarter) during which a permitted acquisition occurs and to 3.75 to 1.0 for the following two succeeding fiscal quarters, and (ii) a minimum consolidated net worth of $800,000 plus (a) 50% of Woodward’s positive net income for the prior fiscal year and (b) 50% of Woodward’s net cash proceeds resulting from certain issuances of stock, subject to certain adjustments.

Woodward’s obligations under the Amended Revolving Credit Agreement are guaranteed by Woodward FST, Inc., Woodward MPC, Inc., and Woodward HRT, Inc., each of which is a wholly owned subsidiary of Woodward. 

In connection with the Amended Revolving Credit Agreement, Woodward incurred $2,359 in financial costs, which are deferred and are being amortized using the straight-line method over the life of the agreement.  As of April 28, 2015, Woodward also had $2,014 remaining of deferred financing costs incurred in connection with the Revolving Credit Agreement, which have been combined with the financing costs associated with the Amended Revolving Credit Agreement and are being amortized using the straight-line method over the lift of the Amended Revolving Credit Agreement.

The Notes

In October 2008, Woodward entered into a note purchase agreement (the “2008 Note Purchase Agreement”) relating to the Series B, C, and D Notes (the “2008 Notes”).  In April 2009, Woodward entered into a note purchase agreement (the “2009 Note Purchase Agreement”) relating to the Series E and F Notes (the “2009 Notes”).

On October 1, 2013, Woodward entered into a note purchase agreement (the “2013 Note Purchase Agreement” and, together with the 2008 Note Purchase Agreement and the 2009 Note Purchase Agreement, the “Note Purchase Agreements”) relating to the sale by Woodward of an aggregate principal amount of $250,000 of its senior unsecured notes in a series of private placement transactions. 

Woodward issued the Series G, H and I Notes (the “First Closing Notes”) on October 1, 2013.  Woodward issued the Series J, K and L Notes (the “Second Closing Notes” and, together with the 2008 Notes, 2009 Notes and First Closing Notes, the “Notes”) on November 15, 2013.

Interest on the 2008 Notes, the First Closing Notes, and the Series K and L Notes is payable semi-annually on April 1 and October 1 of each year until all principal is paid.  Interest on the 2009 Notes is payable semi-annually on April 15 and October 15 of each year until all principal is paid.  Interest on the Series J Notes is payable quarterly on January 1, April 1, July 1 and October 1 of each year until all principal is paid.  As of June 30, 2015, the Series J Notes bore interest at an effective rate of 1.53%.

Principal payment of the Series C Notes is due on October 1, 2015.  This payment is classified as long-term based on Woodward’s intent and ability to refinance this debt for a longer term either through the issuance of new long-term debt or payment of the principal amount with its existing revolving line of credit, which does not mature until July 2020.

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In connection with the 2013 Note Purchase Agreement, in fiscal year 2014, Woodward incurred $1,297 in financing costs, which are deferred and will be amortized using the straight-line method over the life of the agreement.

Note 14.  Accrued liabilities

	June 30,		September 30,
	2015		2014
Salaries and other member benefits	$	56,609	$	95,031
Warranties		13,690		16,916
Interest payable		6,241		12,487
Current portion of acquired performance obligations and unfavorable contracts (1)		8,417		16,432
Accrued retirement benefits		2,261		2,286
Deferred revenues		10,040		6,108
Taxes, other than income		6,535		8,557
Other		10,527		14,914
	$	114,320	$	172,731

(1) In connection with Woodward’s acquisition of GE Aviation Systems LLC’s (the “Seller”) thrust reverse actuation systems business located in Duarte, California (the “Duarte Business”) in fiscal year 2013, Woodward assumed current and long-term performance obligations for contractual commitments that are expected to result in future economic losses.  In addition, Woodward assumed current and long-term performance obligations for services to be provided to the Seller, offset by current and long-term assets related to contractual payments due from the Seller.  The current portion of both obligations is included in Accrued liabilities.

Warranties

Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements.  Accruals are established for specifically identified warranty issues that are probable to result in future costs.  Warranty costs are accrued on a non-specific basis whenever past experience indicates a normal and predictable pattern exists.  Changes in accrued product warranties were as follows:

	Nine-Months Ended June 30,
		2015		2014
Warranties, beginning of period	$	16,916	$	15,224
Expense		6,651		7,006
Reductions for settling warranties		(9,245)		(5,552)
Foreign currency exchange rate changes		(632)		118
Warranties, end of period	$	13,690	$	16,796

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Note 15.  Other liabilities

	June 30,		September 30,
	2015		2014
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	38,039	$	38,850
Total unrecognized tax benefits, net of offsetting adjustments		16,013		14,707
Acquired performance obligations and unfavorable contracts (1)		4,712		12,792
Deferred economic incentives (2)		19,107		18,408
Other		17,670		16,454
	$	95,541	$	101,211

(1) In connection with Woodward’s acquisition of the Duarte Business in fiscal year 2013, Woodward assumed current and long-term performance obligations for contractual commitments that are expected to result in future economic losses.  In addition, Woodward assumed current and long-term performance obligations for services to be provided to the Seller, offset by current and long-term assets related to contractual payments due from the Seller.  The long-term portion of both obligations is included in “Other liabilities” as of September 30, 2014.  As of June 30, 2015, “Other liabilities” includes the long-term portion of the acquired unfavorable contracts as only a current portion of the acquired performance obligations remains.

(2) Woodward receives certain economic incentives from various state and local authorities related to capital expansion projects. Such amounts are initially recorded as deferred credits and will be recognized as a reduction to non-income tax expense over the economic lives of the related capital expansion projects.

Note 16.Other (income) expense, net 

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net (gain) loss on sales of assets	$	(48)	$	(20)	$	(766)	$	116
Rent income		(105)		(124)		(365)		(418)
Net gain on investments in deferred compensation program		10		(306)		(480)		(879)
Other		31		(19)		(40)		(85)
	$	(112)	$	(469)	$	(1,651)	$	(1,266)

Note 17.  Income taxes

U.S. GAAP requires that the interim period tax provision be determined as follows:  

· At the end of each quarter, Woodward estimates the tax that will be provided for the current fiscal year stated as a percentage of estimated “ordinary income.”  The term ordinary income refers to earnings from continuing operations before income taxes, excluding significant unusual or infrequently occurring items. 

The estimated annual effective rate is applied to the year-to-date ordinary income at the end of each quarter to compute the estimated year-to-date tax applicable to ordinary income.  The tax expense or benefit related to ordinary income in each quarter is the difference between the most recent year-to-date and the prior quarter year-to-date computations.

· The tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur.  The impact of changes in tax laws or rates on deferred tax amounts, the effects of changes in judgment about beginning of the year valuation allowances, and changes in tax reserves resulting from 19  

the finalization of tax audits or reviews are examples of significant unusual or infrequently occurring items that are recognized as discrete items in the interim period in which the event occurs.

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income of Woodward in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year.  In addition, as a global commercial enterprise, Woodward’s tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, changes in the estimate of the amount of undistributed foreign earnings that Woodward considers indefinitely reinvested, as well as other factors that cannot be predicted with certainty.  As such, there can be significant volatility in interim tax provisions.

The following table sets forth the tax expense and the effective tax rate for Woodward’s income from operations:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168
Income tax expense		13,806		16,467		40,830		37,986
Effective tax rate		24.0%		26.4%		23.7%		25.0%

The decrease in the year-over-year effective tax rate for the three-months ended June 30, 2015, is primarily attributable to a favorable net valuation increase in deferred tax assets in the current quarter that was partially offset by smaller net favorable resolutions of foreign tax matters in the current quarter compared to the prior year’s quarter.  The decrease in the effective tax rate for the nine-months ended June 30, 2015 included both the quarterly decrease and the retroactive extension of the U.S. research and experimentation tax credit for calendar year 2014, which was enacted in December 2014, and was partially offset by smaller net favorable resolutions of foreign tax matters in the current year compared to the prior year.  

Gross unrecognized tax benefits were $23,769 as of June 30, 2015 and $22,687as of September 30, 2014.  Included in the balance of unrecognized tax benefits were $14,249 as of June 30, 2015 and $12,807 as of September 30, 2014, of tax benefits that, if recognized, would affect the effective tax rate.  At this time, Woodward estimates that it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $3,105 in the next twelve months due to the completion of reviews by tax authorities and the expiration of certain statutes of limitations.  Woodward accrues for potential interest and penalties related to unrecognized tax benefits in tax expense.  Woodward had accrued gross interest and penalties of $1,468 as of June 30, 2015 and $1,158 as of September 30, 2014.

Woodward’s tax returns are subject to audits by U.S., state, and foreign tax authorities, and these audits are at various stages of completion at any given time.  Reviews of tax matters by authorities and lapses of the applicable statutes of limitations may result in changes to tax expense.  With a few exceptions, Woodward’s fiscal years remaining open to examination in the United States include fiscal years 2012 and thereafter, and fiscal years remaining open to examination in significant foreign jurisdictions include 2005 and thereafter.

Note 18.  Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits.  Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Most of the Company’s U.S. employees are eligible to participate in the U.S. defined contribution plan.  The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts.  The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes.  Certain foreign employees are also eligible to participate in foreign plans.

Most of Woodward’s U.S. employees with at least two years of service receive an annual contribution of Woodward stock, equal to 5% of their eligible prior year wages, to their personal Woodward Retirement Savings Plan accounts.  In the second quarter of fiscal years 2015 and 2014, Woodward fulfilled its annual Woodward stock contribution obligation using shares held in treasury stock by issuing 259 shares of common stock for a total value of $12,574 in fiscal year 2015, and 260 shares of common stock for a total value of $11,193in fiscal year 2014.

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The amount of expense associated with defined contribution plans was as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company costs	$	7,908	$	5,537	$	23,034	$	16,219

Defined benefit plans

Woodward has defined benefit plans that provide pension benefits for certain retired employees in the United States, the United Kingdom, and Japan.  During the third quarter of fiscal year 2014, Woodward terminated its defined benefit pension plan in Switzerland due to workforce reductions related to the closure of Woodward’s Swiss facility in connection with the realignment of the renewable power business that occurred in the third quarter of fiscal year 2013.  Woodward also provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits.  Postretirement medical benefits are provided to certain current and retired employees and their covered dependents and beneficiaries in the United States and the United Kingdom.  Lifeinsurance benefits are provided to certain retirees in the United States under frozen plans, which are no longer available to current employees.  A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension and other postretirement benefit plans.

U.S. GAAP requires that, for obligations outstanding as of September 30, 2014, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments.

Effective June 30, 2015, the Company terminated the defined benefit pension plan for employees at its Duarte, California manufacturing facility. The plan, which was established in fiscal year 2013 in connection with the December 2012 acquisition of the Duarte business, was amended in fiscal year 2014 to cease all future benefit accruals under the plan and was closed to new entrants. Cash payout of benefits will occur after regulatory approval of the plan termination.  In exchange for the freeze and termination of the plan, which were agreed upon through negotiations with the applicable employee union, the employees were provided replacement benefits through full participation in the Woodward U.S. defined contribution plan. Woodward does not expect future cash payouts to the beneficiaries of the terminated plan to be significantly different from the approximately $80 liability reflected in Woodward’s statement of financial position as of June 30, 2015.  

The components of the net periodic retirement pension costs recognized are as follows:

	Three-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	504	$	872	$	193	$	263	$	697	$	1,135
Interest cost		1,489		1,602		527		616		2,016		2,218
Expected return on plan assets		(2,662)		(2,432)		(751)		(781)		(3,413)		(3,213)
Amortization of:
Net actuarial (gain) loss		99		83		47		166		146		249
Prior service cost (benefit)		96		19		-		(1)		96		18
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(474)	$	144	$	16	$	(652)	$	(458)	$	(508)
Contributions paid	$	-	$	100	$	143	$	176	$	143	$	276

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	Nine-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	1,513	$	2,616	$	590	$	784	$	2,103	$	3,400
Interest cost		4,475		4,815		1,595		1,816		6,070		6,631
Expected return on plan assets		(7,994)		(7,299)		(2,274)		(2,308)		(10,268)		(9,607)
Amortization of:
Net actuarial (gain) loss		297		248		142		490		439		738
Prior service cost (benefit)		288		56		-		(3)		288		53
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(1,421)	$	436	$	53	$	(136)	$	(1,368)	$	300
Contributions paid	$	-	$	400	$	1,365	$	2,343	$	1,365	$	2,743

The components of the net periodic other postretirement benefit costs recognized are as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Service cost	$	7	$	11	$	22	$	35
Interest cost		308		358		925		1,074
Amortization of:
Net actuarial (gain) loss		(18)		(50)		(54)		(150)
Prior service cost (benefit)		(40)		(40)		(119)		(119)
Net periodic other postretirement (benefit) cost	$	257	$	279	$	774	$	840
Contributions paid	$	570	$	481	$	1,471	$	1,849

The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans.  As a result, the actual funding in fiscal year 2015 may differ from the current estimate.  Woodward estimates its remaining cash contributions in fiscal year 2015 will be as follows:

Retirement pension benefits:
United States	$	21
United Kingdom		274
Japan		-
Other postretirement benefits		2,307

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Multiemployer defined benefit plans

Woodward operates two multiemployer defined benefit plans for certain employees in the Netherlands and Japan.  The company has been notified by the Japanese plan administrator that the plan for employees in Japan is being reorganized. Woodward anticipates that assets of the Japanese plan will be converted into a similar plan and is currently evaluating the potential cost of such conversion. The amounts of contributions associated with the multiemployer plans were as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company contributions	$	142	$	180	$	452	$	555

Note 19.  Stock-based compensation

Stock options

Woodward’s 2006 Omnibus Incentive Plan (the “2006 Plan”), which has been approved by Woodward’s stockholders, provides for the grant of up to 7,410 stock options to its employees and directors.  Woodward believes that these stock options align the interests of its employees and directors with those of its stockholders.  Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date of grant, a  ten-year term, and generally a  four-year vesting schedule at a rate of 25% per year.

The fair value of options granted was estimated on the date of grant using the Black-Scholes-Merton option-valuation model using the assumptions in the following table.  Woodward calculates the expected term, which represents the period of time that stock options granted are expected to be outstanding, based upon historical experience of plan participants.  Expected volatility is based on historical volatility using daily stock price observations.  The estimated dividend yield is based upon Woodward’s historical dividend practice and the market value of its common stock.  The risk-free rate is based on the U.S. treasury yield curve, for periods within the contractual life of the stock option, at the time of grant.

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015				2014
Expected term (years)		n/a		n/a		6.2	-	8.8		5.8	-	8.6
Estimated volatility		n/a		n/a		36.5%				38.5%
Estimated dividend yield		n/a		n/a		0.7%				0.8%
Risk-free interest rate		n/a		n/a		2.0%	-	2.3%		1.7%	-	2.5%

The following is a summary of the activity for stock option awards during the three and six-months ended June 30, 2015:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		5,111	$	30.86		4,501	$	28.08
Options granted		-		n/a		751		46.55
Options exercised		(320)		17.19		(428)		18.55
Options forfeited		(7)		41.11		(40)		37.80
Options, ending balance		4,784		31.76		4,784		31.76

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Changes in non-vested stock options during the three and nine-months ended June 30, 2015 were as follows:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		1,747	$	40.50		1,679	$	34.83
Options granted		-		n/a		751		46.55
Options vested		(10)		34.04		(661)		33.06
Options forfeited		(7)		41.11		(39)		37.80
Options, ending balance		1,730		40.53		1,730		40.53

Information about stock options that have vested, or are expected to vest, and are exercisable at June 30, 2015 was as follows:

	Number		Weighted- Average Exercise Price		Weighted- Average Remaining Life in Years		Aggregate Intrinsic Value
Options outstanding		4,784	$	31.76		5.8	$	111,163
Options vested and exercisable		3,055		26.79		4.3		86,162
Options vested and expected to vest		4,682		31.50		5.7		109,961

Restricted Stock

In the first quarter of fiscal year 2014, Woodward granted an award of 24 shares of restricted stock to its Chief Executive Officer and President, Thomas A. Gendron.  Subject to Mr. Gendron’s continued employment by the Company, these shares of restricted stock will vest 100% following the end of the Company’s fiscal year 2017 if a specified cumulative earnings per share (“EPS”) target is met or exceeded for fiscal years 2014 through 2017.  If this EPS target is not met, all shares of restricted stock will be forfeited by Mr. Gendron.The shares of restricted stock were awarded to Mr. Gendron pursuant to a form restricted stock agreement approved by Woodward’s Compensation Committee.

Woodward recognizes stock compensation expense on a straight-line basis over the requisite service period.

A summary of the activity for restricted stock awards in the three and nine-months ended June 30, 2015 follows:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
		Number		Fair Value per Share		Number		Fair Value per Share
Beginning balance		24	$	39.43		24	$	39.43
Shares granted		-		n/a		-		n/a
Shares vested		-		n/a		-		n/a
Shares forfeited		-		n/a		-		n/a
Ending balance		24		39.43		24		39.43

At June 30, 2015, there was approximately $12,201 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, both stock options and restricted stock awards, granted under the 2002 Plan (for which no further grants will be made) and the 2006 Plan.  The pre-vesting forfeiture rates for purposes of determining stock-based compensation cost recognized were estimated to be 0% for members of Woodward’s board of directors and 9% for all others. 

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The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.5 years.

Note 20.  Commitments and contingencies

Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims and alleged violations of various laws and regulations.  Woodward accrues for known individual matters whereit believesthat it is probablethe matter will result in a loss when ultimately resolved using estimates of the most likely amount of loss. 

Legal costs are expensed as incurred and are classified in “Selling, general and administrative expenses” on the Condensed Consolidated Statements of Earnings.

Woodward is partially self-insured in the United States for healthcare and worker’s compensation up to predetermined amounts, above which third party insurance applies.  Management regularly reviews the probable outcome of these claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities.

While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may resultfrom these claims, proceedings and investigations will not have a material effect on Woodward's liquidity, financial condition, or results of operations.

In the event of a change in control of Woodward, as defined in change-in-control agreements with its current corporate officers, Woodward may be required to pay termination benefits to such officers.

Note 21.  Segment information

Woodward serves the aerospace market and the energy market through its two reportable segments - Aerospace and Energy.  Woodward’s reportable segments are aggregations of Woodward’s operating segments.  Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and decisions for the allocation of resources between segments.

The accounting policies of the reportable segments are the same as those of the Company.  Woodward evaluates segment profit or loss based on internal performance measures for each segment in a given period.  In connection with that assessment, Woodward excludes matters such as charges for restructuring costs, interest income and expense, and certain gains and losses from asset dispositions. 

A summary of consolidated net sales and earnings by segment follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Segment external net sales:
Aerospace	$	288,480	$	274,923	$	825,676	$	765,816
Energy		206,330		249,361		650,002		669,977
Total consolidated net sales	$	494,810	$	524,284	$	1,475,678	$	1,435,793
Segment earnings:
Aerospace	$	46,362	$	39,357	$	127,783	$	102,195
Energy		30,619		40,203		97,111		99,162
Total segment earnings		76,981		79,560		224,894		201,357
Nonsegment expenses		(13,564)		(11,193)		(35,884)		(31,159)
Interest expense, net		(5,858)		(5,899)		(16,788)		(18,030)
Consolidated earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168

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Segment assets consist of accounts receivable, inventories, property, plant, and equipment, net, goodwill, and other intangibles, net.  A summary of consolidated total assets by segment follows:

	June 30, 2015		September 30, 2014
Segment assets:
Aerospace	$	1,529,882	$	1,440,355
Energy		628,995		610,345
Total segment assets		2,158,877		2,050,700
Unallocated corporate property, plant and equipment, net		78,429		72,992
Other unallocated assets		274,430		273,510
Consolidated total assets	$	2,511,736	$	2,397,202

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in thousands, except per share amounts)

Forward Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are statements that are deemed forward-looking statements.  These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of management.  Words such as “anticipate,” “believe,” “estimate,” “seek,” “goal,” “expect,” “forecast,” “intend,” “continue,” “outlook,” “plan,” “project,” “target,” “strive,” “can,” “could,” “may,” “should,” “will,” “would,” variations of such words, and similar expressions are intended to identify such forward-looking statements.  In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characteristics of future events or circumstances are forward-looking statements.  Forward-looking statements may include, among others, statements relating to:

· future sales, earnings, cash flow, uses of cash, and other measures of financial performance;

· descriptions of our plans and expectations for future operations;

· investments in new campuses, business sites and related business developments;

· the effect of economic trends or growth;

· the effect of changes in the level of activity in particular industries or markets;

· the research, development, production, and support of new products and services;

· new business opportunities;

· restructuring and alignment costs and savings;

· our plans, objectives, expectations and intentions with respect to business opportunities that may be available to us;

· our liquidity, including our ability to meet capital spending requirements and operations;

· future repurchases of common stock; and

· future levels of indebtedness and capital spending.

Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including:

· a decline in business with, or financial distress of, our significant customers;

· global economic uncertainty and instability in the financial markets;

· our ability to manage product liability claims, product recalls or other liabilities associated with the products and services that we provide;

· our ability to obtain financing, on acceptable terms or at all, to implement our business plans, complete acquisitions, or otherwise take advantage of business opportunities or respond to business pressures;

· the long sales cycle, customer evaluation process, and implementation period of some of our products and services;

· our ability to implement and realize the intended effects of any restructuring and alignment efforts;

· our ability to successfully manage competitive factors, including prices, promotional incentives, competitor product development, industry consolidation, and commodity and other input cost increases;

· our ability to manage our expenses and product mix while responding to sales increases or decreases;

· the ability of our subcontractors to perform contractual obligations and our suppliers to provide us with materials of sufficient quality or quantity required to meet our production needs at favorable prices or at all;

· our ability to monitor our technological expertise and the success of, and/or costs associated with, our product development activities;

· our ability to integrate acquisitions and manage costs related thereto;

· our debt obligations, our debt service requirements, and our ability to operate our business, pursue business strategies and incur additional debt in light of covenants contained in our outstanding debt agreements;

· our ability to manage additional tax expense and exposures;

· risks related to our U.S. Government contracting activities, including liabilities resulting from legal and regulatory proceedings, inquiries, or investigations related to such activities;

· the potential of a significant reduction in defense sales due to decreases in the amount of U.S. Federal defense spending or other specific budget cuts impacting defense programs in which we participate;

· changes in government spending patterns, priorities, subsidy programs and/or regulatory requirements;

· future impairment charges resulting from changes in the estimates of fair value of reporting units or of long-lived assets;

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· future results of our subsidiaries;

· environmental liabilities related to manufacturing activities and/or real estate acquisitions;

· our continued access to a stable workforce and favorable labor relations with our employees;

· physical and other risks related to our operations and suppliers, including natural disasters, which could disrupt production;

· our ability to successfully manage regulatory, tax, and legal matters (including the adequacy of amounts accrued for contingencies, the U.S. Foreign Corrupt Practices Act, and product liability, patent, and intellectual property matters);

· risks related to our common stock, including changes in prices and trading volumes;

· risks from operating internationally, including the impact on reported earnings from fluctuations in foreign currency exchange rates, and compliance with and changes in the legal and regulatory environments of the United States and the countries in which we operate;

· fair value of defined benefit plan assets and assumptions used in determining our retirement pension and other postretirement benefit obligations and related expenses including, among others, discount rates and investment return on pension assets;

· industry risks, including increases in natural gas prices, unforeseen events that may reduce commercial aviation and increasing emissions standards;

· our operations may be adversely affected by information systems interruptions or intrusions; and

· certain provisions of our charter documents and Delaware law that could discourage or prevent others from acquiring our company.

These factors are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed or forecast in our forward-looking statements.  Other factors are discussed under the caption “Risk Factors” in Part I, Item 1A in our most recent Annual Report on Form 10-K filed with the SEC (our “Form 10-K”), as updated from time to time in our subsequent Securities and Exchange Commission (“SEC”) filings.  We undertake no obligation to revise or update any forward-looking statements for any reason.

Unless we have indicated otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to “Woodward,” “the Company,” “we,” “us,” and “our” refer to Woodward, Inc. and its consolidated subsidiaries. 

Except where we have otherwise indicated or the context otherwise requires, amounts presented in this Form 10-Q are in thousands, except per share amounts.

This discussion should be read together with Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recent Form 10-K and the Condensed Consolidated Financial Statements and Notes included therein and in this report.

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Non-U.S. GAAP Financial Measures

Earnings before interest and taxes (“EBIT”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), and free cash flow are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Earnings based non-U.S. GAAP financial measures

Management uses EBIT to evaluate Woodward’s performance without financing and tax related considerations, as these elements may not fluctuate with operating results.  Management uses EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios.  Securities analysts, investors and others frequently use EBIT and EBITDA in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets subject to amortization.

EBIT and EBITDA for the three and nine-months ended June 30, 2015 and June 30, 2014 were as follows:

	Three-Months Ended June 30,				Nine-Months Ended June 30,
	2015		2014		2015		2014
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Income taxes		13,806		16,467		40,830		37,986
Interest expense		6,077		5,972		17,355		18,219
Interest income		(219)		(73)		(567)		(189)
EBIT		63,417		68,367		189,010		170,198
Amortization of intangible assets		7,224		8,357		22,026		25,498
Depreciation expense		11,280		10,489		33,727		32,183
EBITDA	$	81,921	$	87,213	$	244,763	$	227,879

The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.  As EBIT and EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded.  Our calculations of EBIT and EBITDA may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.

Cash flow-based non-U.S. GAAP financial measures

Management uses free cash flow, which is defined as net cash flows provided by operating activities less payments for property, plant and equipment, in reviewing the financial performance of Woodward’s various business groups and evaluating cash levels.  Securities analysts, investors, and others frequently use free cash flow in their evaluation of companies.  The use of this non-U.S. GAAP financial measure is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.  Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs.  Our calculation of free cash flow may differ from similarly titled measures used by other companies, limiting its usefulness as a comparative measure.

Free cash flow for thenine-months ended June 30, 2015 and June 30, 2014 were as follows:

	Nine-Months Ended June 30,
	2015		2014
Net cash provided by operating activities	$	167,320	$	183,890
Payments for property, plant and equipment		(190,865)		(104,530)
Free cash flow (outflow)	$	(23,545)	$	79,360

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OVERVIEW

Joint Venture

On May 20, 2015, Woodward and General Electric Company (“GE”), acting through its GE Aviation business unit, entered into a binding agreement to form a strategic joint venture between Woodward and GE (the “JV”). The JV will design, develop, source, supply and service the fuel system (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust in excess of 50,000 pounds.

Upon formation of the JV, Woodward will assign certain contractual rights to the JV in exchange for a payment from GE of $250,000 (subject to certain normal and customary adjustments). In addition, GE will pay Woodward fifteen annual payments of approximately $4,900 each per year. Because the contractual rights have no cost basis in Woodward’s financial records, Woodward expects to account for the fair value of the proceeds received as a deferred gain that will be recognized over the economic lives of the assigned contractual rights. Closing is subject to obtaining regulatory approvals in various global jurisdictions.

Woodward will own 50% of the JV, which will be jointly managed by Woodward and GE, and any significant decisions and/or actions of the JV will require mutual consent of both Woodward and GE. Woodward expects to account for the JV using the equity method, as neither Woodward nor GE will exercise operating control over the JV.  

Operational Highlights

Third Quarter Highlights

Net sales for the third quarter of fiscal year 2015 were $494,810, a decrease of $29,474or 5.6%, compared to $524,284 for the third quarter of the prior fiscal year.  Net sales for the third quarter of fiscal year 2015 were negatively impacted by $19,372 related to unfavorable impacts of fluctuations in foreign currency exchange rates compared to the same period of fiscal year 2014.

Net earnings for the third quarter of fiscal year 2015 were $43,753, a decrease of $2,248, or 4.9%, compared to $46,001 for the third quarter of fiscal year 2014.  Net earnings per diluted share was $0.66 for the third quarter of fiscal year 2015, compared to $0.69 for the third quarter of fiscal year 2014. 

The effective tax rate in the third quarter of fiscal year 2015 was 24.0% compared to 26.4% for the third quarter of the prior fiscal year.

EBIT for the third quarter of fiscal year 2015 was $63,417,  down 7.2% from $68,367 for the third quarter of fiscal year 2014.  EBIT for the third quarter of fiscal year 2015 was negatively impacted by approximately $4,300 related to unfavorable changes in foreign currency exchange rates compared to the same period of fiscal year 2014.  EBITDA for the third quarter of fiscal year 2015 was $81,921,  a decrease of 6.1% from $87,213 for the third quarter of fiscal year 2014.

Year to Date Highlights

Net sales for the first nine months of fiscal year 2015 were $1,475,678, an increase of 2.8% from $1,435,793 for the first nine months of the prior fiscal year.  Net sales for the first nine months of fiscal year 2015 were negatively impacted by $46,293 related to unfavorable changes in foreign currency exchange rates compared to the same period of fiscal year 2014. 

Net earnings for the first nine months of fiscal year 2015 were $131,392, or $1.98 per diluted share, an increase of $17,210, or 15.1%, compared to $114,182, or $1.68 per diluted share, for the first nine months of fiscal year 2014. 

The effective tax rate in the first nine months of fiscal year 2015 was 23.7%, compared to 25.0% for the first nine months of the prior fiscal year.

EBIT for the first nine months of fiscal year 2015 was $189,010, up 11.1% from $170,198 in the same period of fiscal year 2014.  EBIT for the first nine months of fiscal year 2015 were negatively impacted by approximately $8,400 related to unfavorable changes in foreign currency exchange rates compared to the same period of fiscal year 2014.  EBITDA for the first nine months of fiscal year 2015 was $244,763, up 7.4% from $227,879 for the same period of fiscal year 2014. 

Liquidity Highlights

Net cash provided by operating activities for the first nine months of fiscal year 2015was $167,320, compared to $183,890for the same period of fiscal year 2014.

Free cash flow for the first nine months of fiscal year 2015was an outflow of 23,545, compared to an inflow of $79,360for the same period of fiscal year 2014,  primarily attributable to higher capital expenditures in the first nine months of fiscal year 2015 as compared to the same period of the prior year.

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On April 28, 2015, Woodward amended its revolving credit facility to increase its borrowing capacity from $600,000 to $1,000,000 (the “Amended Revolving Credit Agreement”).  The terms and conditions of the Amended Revolving Credit Agreement are similar to the prior credit agreement.  The Amended Revolving Credit Agreement matures in April 2020.  The Amended Revolving Credit Agreement provides for the option to increase available borrowings to up to $1,200,000, subject to lenders’ participation. 

At June 30, 2015, we held $87,384 in cash and cash equivalents, and had total outstanding debt of $878,186 with additional borrowing availability of $616,506, net of outstanding letters of credit, under our $1,000,000 revolving credit facility.  There was additional borrowing capacity of $32,680under various foreign lines of credit and foreign overdraft facilities.

RESULTS OF OPERATIONS

The following tablesset forth selected consolidated statements of earnings data as a percentage of net sales for each period indicated:

	Three-Months Ended								Nine-Months Ended
	June 30, 2015		% of Net Sales		June 30, 2014		% of Net Sales		June 30, 2015		% of Net Sales		June 30, 2014		% of Net Sales
Net sales	$	494,810	100	%	$	524,284	100	%	$	1,475,678	100	%	$	1,435,793	100	%
Costs and expenses:
Cost of goods sold		351,421	71.0			372,571	71.1			1,050,783	71.2			1,028,065	71.6
Selling, general, and administrative expenses		39,305	7.9			40,468	7.7			117,598	8.0			113,079	7.9
Research and development costs		33,555	6.8			34,990	6.7			97,912	6.6			100,219	7.0
Amortization of intangible assets		7,224	1.5			8,357	1.6			22,026	1.5			25,498	1.8
Interest expense		6,077	1.2			5,972	1.1			17,355	1.2			18,219	1.3
Interest income		(219)	(0.0)			(73)	(0.0)			(567)	(0.0)			(189)	(0.0)
Other (income) expense, net		(112)	(0.0)			(469)	(0.1)			(1,651)	(0.1)			(1,266)	(0.1)
Total costs and expenses		437,251	88.4			461,816	88.1			1,303,456	88.3			1,283,625	89.4
Earnings before income taxes		57,559	11.6			62,468	11.9			172,222	11.7			152,168	10.6
Income tax expense		13,806	2.8			16,467	3.1			40,830	2.8			37,986	2.6
Net earnings	$	43,753	8.8		$	46,001	8.8		$	131,392	8.9		$	114,182	8.0

Other select financial data:

	June 30,		September 30,
	2015		2014
Working capital	$	654,677	$	668,628
Short-term borrowings		3,186		-
Total debt		878,186		710,000
Total stockholders' equity		1,127,271		1,160,944

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Net Sales

Consolidated net sales for the third quarter of fiscal year 2015 decreased by $29,474, or 5.6%, compared to the same period of fiscal year 2014.  Consolidated net sales for the first nine months of fiscal year 2015 increased by $39,885, or 2.8%, compared to the same period of fiscal year 2014.  Details of the changes in consolidated net sales are as follows:

	Three-Month		Nine-Month
	Period		Period
Consolidated net sales for the period ended June 30, 2014	$	524,284	$	1,435,793
Aerospace volume		9,186		48,374
Energy volume		(23,627)		26,140
Price and sales mix		4,339		11,664
Effects of changes in foreign currency rates		(19,372)		(46,293)
Consolidated net sales for the period ended June 30, 2015	$	494,810	$	1,475,678

The decrease in net sales for the third quarter of fiscal year 2015 was primarily attributable to decreased sales in China of natural gas truck systems and the negative effect of foreign currency exchange rate changes, partially offset by increased sales volume of industrial gas turbine systems and increased sales across nearly all markets in Aerospace. 

The increase in net sales for the first nine months of fiscal year 2015 was primarily attributable to improvements in many of our markets in both the Aerospace and Energy segments.  In Aerospace, we saw improvements across all markets over the prior year.  In Energy, we saw increased sales volume of industrial gas turbine systems, partially offset by lower sales of natural gas truck systems in China.

Our net sales were negatively impacted by $19,372 during the third quarter and $46,293 during the first nine months of fiscal year 2015 due to unfavorable impacts of fluctuations in foreign currency exchange rates compared to the same periods of fiscal year 2014, driven primarily by changes in the European Monetary Unit (“EUR”).  Virtually all of the negative foreign currency impact to our net sales was realized through our Energy segment.

Our worldwide sales activities are primarily denominated in U.S. dollars (“USD”), EUR, Great Britain Pounds (“GBP”), Japanese Yen (“JPY”), Brazilian Real (“BRL”), and Chinese Renminbi (“RMB”).  As the USD, EUR, GBP, JPY, BRL and RMB fluctuate against each other and other currencies, we are exposed to gains or losses on sales transactions.  For additional information on foreign currency exchange rate risk, please refer to the risk factor titled “We derive a significant portion of our revenues from non-U.S. sales and are subject to the risks inherent in doing business in other countries” set forth under the caption “Risk Factors” in Part I, Item 1A of our most recent Form 10-K.

Costs and Expenses

Cost of goods solddecreased by $21,150to $351,421or 71.0% of net sales, for the third quarter of fiscal year 2015 from $372,571, or 71.1% of net sales, for the third quarter of fiscal year 2014.  The decrease in cost of goods sold for the third quarter is primarily attributable to lower sales and manufacturing expenses and the favorable cost impact of fluctuations in foreign currency exchange rates compared to the same periods of fiscal year 2014.  Cost of goods sold for the first nine months of fiscal year 2015 increased by $22,718 to $1,050,783, or 71.2% of net sales, from $1,028,065 or 71.6% of net sales for the first nine months of fiscal year 2014.  The increase in cost of goods sold for the nine-month period is primarily attributable to higher sales volumes, partially offset by the favorable cost impact of fluctuations in foreign currency exchange rates compared to the same period of fiscal year 2014. 

Gross margin (as measured by net sales less cost of goods sold, divided by net sales) was 29.0% for the third quarter of fiscal year 2015, comparable to 28.9% forthe same period of the prior fiscal year.  Gross margin was 28.8% for the first nine months of fiscal year 2015, compared to 28.4% for the same period of the prior fiscal year.  Gross margin for the first nine months of fiscal year 2015washigher compared to the same period of fiscal year 2014, primarily related to fixed cost leverage on increases in sales volume, partially offset by increased manufacturing costs as compared to the same periods of the prior year.

Selling, general, and administrative expensesdecreased by $1,163, or 2.9%, to $39,305 for the third quarter of fiscal year 2015 as compared to $40,468 for the same period of fiscal year 2014.  Selling, general, and administrative expenses increased as a percentage of net sales to 7.9% for the third quarter of fiscal year 2015 as compared to 7.7% for the same period of fiscal year 2014.  The decrease in selling, general and administrative expenses for the third quarter of fiscal year 2015 is primarily due to lower spending and the favorable cost impact of fluctuations in foreign currency exchange rates

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compared to the same periods of fiscal year 2014, partially offset by increased costs associated with the JV agreement between Woodward and GE.

Selling, general, and administrative expenses increased by $4,519,or 4.0%, to $117,598for the first nine months of fiscal year 2015as compared to $113,079 for the same period of fiscal year 2014.  Selling, general and administrative expenses as a percentage of net sales were 8.0% for the first nine months of fiscal year 2015 as compared to 7.9% for the same period of fiscal year 2014.The increase in selling, general and administrative expenses for the first nine months of fiscal year 2015 is primarily due to normal variability in costs as well as costs associated with the JV agreement between Woodward and GE, partially offset by the favorable cost impact of fluctuations in foreign currency exchange rates compared to the same periods of fiscal year 2014.

Research and development costsdecreased by $1,435, or 4.1%, to $33,555 for the third quarter of fiscal year 2015 as compared to $34,990 for the same period of fiscal year 2014.  Research and development costs decreased by $2,307, or 2.3%, to $97,912for the first nine months of fiscal year 2015 as compared to $100,219 for the same period of fiscal year 2014.  Research and development costs for the third quarter of fiscal year 2015 increased as a percentage of net sales to 6.8% as compared to 6.7% for the same period of fiscal year 2014.  Research and development costs for the first nine months of fiscal year 2015 decreased as a percentage of net sales to 6.6% as compared to 7.0% for the same period of fiscal year 2014.  The decrease in research and development costs for the third quarter and first nine months of 2015 as compared to the same periods in fiscal year 2014 is primarily due to the favorable cost impact of fluctuations in foreign currency exchange rates compared to the same period of fiscal year 2014 in addition to the variability in the timing of projects and related milestones.  Our research and development activities extend across most of our customer base, and we anticipate ongoing variability in research and development due to the timing of customer business needs on current and future programs.

Amortization of intangible assetsdecreased to $7,224 for the third quarter and $22,026 for first nine months of fiscal year 2015,  compared to $8,357 for the third quarter and $25,498 for thefirst nine months of fiscal year 2014.  As a percentage of net sales, amortization of intangible assets decreased to 1.5% for both the third quarter and first nine months of fiscal year 2015, as compared to 1.6% for the third quarter and 1.8% for the first nine months of fiscal year 2014.  The decrease in amortization expense is primarily related to some intangible assets becoming fully amortized during fiscal year 2014.

Interest expense decreased to $6,077 for the third quarter and $17,355 for the first nine months of fiscal year 2015, compared to $5,972 for the third quarter and $18,219 for the first nine months of fiscal year 2014.  As a percentage of net sales, interest expense was 1.2% for both the third quarter and first nine months of fiscal year 2015, as compared to 1.1% for the third quarter and 1.3% for the first nine months of fiscal year 2014.  The decrease in interest expense for third quarter and first nine months of fiscal year 2015 as compared to the same periods of the prior fiscal year is due to an increase in capitalized interest in the current fiscal year related primarily to interest capitalized to our three large facility expansion projects. 

Income taxes were provided at an effective rate on earnings before income taxes of 24.0% for the third quarter and 23.7% for the first nine months of fiscal year 2015, compared to 26.4% for the third quarter and 25.0% for the first nine months of fiscal year 2014.  The changes in components of our effective tax rate (as a percentage of earnings before income taxes) were attributable to the following:

	Three-Month		Nine-Month
	Period		Period
Effective tax rate for the period ended June 30, 2014	26.4	%	25.0	%
Research and experimentation credit	-		(3.0)
State and local taxes	(0.5)		(0.5)
Adjustment of prior period tax items	1.7		4.8
Taxes on international activities	(2.9)		(2.6)
Other	(0.7)		-
Effective tax rate for the period ended June 30, 2015	24.0	%	23.7	%

The decrease in the year-over-year effective tax rate for the three-months ended June 30, 2015, is primarily attributable to a favorable net valuation increase in deferred tax assets in the current quarter that was partially offset by smaller net favorable resolutions of foreign tax matters in the current quarter compared to the prior year’s quarter.  The decrease in the effective tax rate for the nine-months ended June 30, 2015 included both the quarterly decrease and the retroactive extension

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of the U.S. research and experimentation tax credit for calendar year 2014, which was enacted in December 2014, and was partially offset by smaller net favorable resolutions of foreign tax matters in the current year compared to the prior year.

Segment Results

The following table presents sales by segment:

	Three-Months Ended June 30,								Nine-Months Ended June 30,
	2015				2014				2015				2014
Net sales:
Aerospace	$	288,480	58.3	%	$	274,923	52.4	%	$	825,676	56.0	%	$	765,816	53.3	%
Energy		206,330	41.7			249,361	47.6			650,002	44.0			669,977	46.7
Consolidated net sales	$	494,810	100.0	%	$	524,284	100.0	%	$	1,475,678	100.0	%	$	1,435,793	100.0	%

The following table presents earnings by segment:

	Three-Months Ended June 30,				Nine-Months Ended June 30,
	2015		2014		2015		2014
Aerospace	$	46,362	$	39,357	$	127,783	$	102,195
Energy		30,619		40,203		97,111		99,162
Total segment earnings		76,981		79,560		224,894		201,357
Nonsegment expenses		(13,564)		(11,193)		(35,884)		(31,159)
Interest expense, net		(5,858)		(5,899)		(16,788)		(18,030)
Consolidated earnings before income taxes		57,559		62,468		172,222		152,168
Income tax expense		(13,806)		(16,467)		(40,830)		(37,986)
Consolidated net earnings	$	43,753	$	46,001	$	131,392	$	114,182

The following table presents earnings by segment as a percent of segment net sales:

	Three-Months Ended June 30,			Nine-Months Ended June 30,
		2015	2014		2015	2014
Aerospace		16.1%	14.3%		15.5%	13.3%
Energy		14.8%	16.1%		14.9%	14.8%

Aerospace

Aerospace segment net saleswere $288,480 for the third quarter of fiscal year 2015 up 4.9%, compared to $274,923 for the third quarter of fiscal year 2014.  Increases in the third quarter of fiscal year 2015 were driven primarily by increased commercial original equipment manufacturer (“OEM”) sales volumes in addition to continued increases in defense aftermarket sales volumes compared to the prior fiscal year, partially offset by lower commercial aftermarket sales volumes.  Segment net sales increased 7.8% to $825,676 for the first nine months of fiscal year 2015, compared to $765,816 for the first nine months of fiscal year 2014.  The increase in segment net sales for the first nine months of fiscal year 2015 as compared to the same period of fiscal year 2014 was driven primarily by increased sales volumes in most markets. 

Commercial OEM aircraft deliveries of narrow-body and wide-body aircraft have continued to increase based on improved airline demand and new product introduction.  The commercial aftermarket has shown some variability but is generally consistent for the third quarter and up for the nine-month periodwhen compared to the prior year, as global passenger traffic growth continues to drive aircraft utilization. 

Aerospace segment earningsincreasedby $7,005, or 17.8%, to $46,362 for the third quarter of fiscal year 2015, compared to $39,357 for the third quarter of fiscal year 2014.  Segment earnings increased by $25,588, or 25.0%, to

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$127,783 for the first nine months of fiscal year 2015, compared to $102,195 for the first nine months of fiscal year 2014.  The reasons for the net increases in Aerospace segment earnings for the third quarter and first nine months of fiscal year 2015 were as follows:

	Three-Month		Nine-Month
	Period		Period
Earnings for the period ended June 30, 2014	$	39,357	$	102,195
Sales volume		4,174		23,132
Price, sales mix and productivity		2,341		10,699
Increases in manufacturing expenses		(2,030)		(9,074)
Decreased research and development expenses		913		2,269
Decreased (increased) selling, general and administrative expenses		1,532		(1,181)
Other, net		75		(257)
Earnings for the period ended June 30, 2015	$	46,362	$	127,783

Aerospace segment earnings as a percentage of sales were 16.1% for the third quarter and 15.5% for the first nine months of fiscal year 2015, compared to 14.3% for the third quarter and 13.3% for the first nine months of fiscal year 2014.  The increase was primarily attributable to increased sales volume.

Energy

Energy segment net salesdecreased 17.3% to $206,330 for the third quarter of fiscal year 2015, compared to $249,361 for the third quarter of fiscal year 2014.  Segment net sales decreased 3.0% to $650,002 for the first nine months of fiscal year 2015, compared to $669,977 for the first nine months of fiscal year 2014.  The decrease in sales for the third quarter of fiscal year 2015 was primarily the result of lower of natural gas truck systems sales in China, partially offset by higher sales of industrial gas turbine systems and components, particularly sales to heavy frame turbine aftermarket.  The decrease in segment net sales for the third quarter of fiscal year 2015 as compared to the same period of fiscal year 2014 also reflected the unfavorable impact of changes in foreign currency exchange rates of approximately $19,100.

The decrease in segment net sales for the first nine months of fiscal year 2015 as compared to the same period of fiscal year 2014 was driven primarily by the unfavorable impact of changes in foreign currency exchange rates of approximately $44,700 and lower sales of natural gas truck systems in China, partially offset by increased sales volume of industrial gas turbine systems and components.  

Energy segment earningsdecreasedby $9,584, or 23.8%, to $30,619 for the third quarter of fiscal year 2015, compared to $40,203 for the third quarter of fiscal year 2014.  Segment earnings decreased by $2,051, or 2.1%, to $97,111 for the first nine months of fiscal year 2015, compared to $99,162 for the first nine months of fiscal year 2014.  The reasons for the net changes in Energy segment earnings for the third quarter and first nine months of fiscal year 2015 were as follows:

	Three-Month		Nine-Month
	Period		Period
Earnings for the period ended June 30, 2014	$	40,203	$	99,162
Sales volume		(10,777)		10,651
Price, sales mix and productivity		1,604		180
Decreased (increased) manufacturing expenses		1,238		(3,742)
Increased research and development expenses		(227)		(1,854)
Decreased selling, general and administrative expenses		1,193		635
Effects of changes in foreign currency rates		(3,825)		(9,828)
Other, net		1,210		1,907
Earnings for the period ended June 30, 2015	$	30,619	$	97,111

Energy segment earnings as a percentage of sales were 14.8% for the third quarter and 14.9% for the first nine months of fiscal year 2015, compared to 16.1% for the third quarter and 14.8% for the first nine months of fiscal year 2014.  The decrease in segment earnings for the third quarter of fiscal year 2015 as compared to the same period of the prior year was primarily attributable to decreased sales volume and the unfavorable impact of changes in foreign currency exchange rates,

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partially offset by lower operating costs.  The decrease in segment earnings for the first nine months of fiscal year 2015 as compared to the same period of the prior year was primarily attributable to the unfavorable impact of changes in foreign currency exchange rates, partially offset by the effects of increased sales volume. 

Nonsegment expenses

Nonsegment expenses increased to $13,564 for the third quarter and $35,884 first nine months of fiscal year2015,compared to $11,193 for the third quarter and $31,159 for the first nine months of fiscal year 2014.  As a percent of sales, nonsegment expenses increased to 2.7% of net sales for the third quarter and 2.4% of net sales first nine months of fiscal year 2015, compared to 2.1% of net sales for the third quarter and 2.2% of net sales for the first nine months of fiscal year 2014.  The increase in nonsegment expenses in the third quarter and first nine months of fiscal year 2015 is primarily due to costs associated with the JV agreement between Woodward and GE.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have been able to satisfy our working capital needs, as well as capital expenditures, product development and other liquidity requirements associated with our operations, with cash flow provided by operating activities and borrowings under our credit facilities.  We expect that cash generated from our operating activities, together with borrowings under our revolving credit facility, will be sufficient to fund our continuing operating needs, including capital expansion funding for the foreseeable future.

Our aggregate cash and cash equivalents were $87,384at June 30, 2015 and $115,287 at September 30, 2014, and our working capital was $654,677at June 30, 2015 and $668,628 at September 30, 2014.  Of the $87,384 of cash and cash equivalents held at June 30, 2015, $79,257 was held by our foreign locations.  We are not presently aware of any significant restrictions on the repatriation of these funds, although a portion is considered indefinitely reinvested in these foreign subsidiaries.  If these funds were needed to fund our operations or satisfy obligations in the United States, then they could be repatriated and their repatriation into the U.S.  may cause us to incur additional U.S. income taxes or foreign withholding taxes.  Any additional U.S. taxes could be offset, in part or in whole, by foreign tax credits.  The amount of such taxes and application of tax credits would be dependent on the income tax laws and other circumstances at the time these amounts are repatriated.  Based on these variables, it is impractical to determine the income tax liability that might be incurred if these funds were to be repatriated.

Consistent with business practice common in China, Woodward’s Chinese subsidiary acceptsbankers’ acceptance notes from Chinese customers, in settlement of certain customer accounts receivable.  Bankers’ acceptance notes are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution.  Bankers’ acceptance notes represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers’ acceptance note as of the maturity date.  The maturity date of bankers’ acceptance notes varies, but it is Woodward’s policy to only accept bankers’ acceptance notes with maturity dates no more than 180 days from the date of Woodward’s receipt of such draft.  The issuing financial institution is the obligor, not Woodward’s customers.  Upon Woodward’s acceptance of a bankers’ acceptance note from a customer, such customer has no further obligation to pay Woodward for the related accounts receivable balance.  Woodward had bankers’ acceptance notes of $13,607 at June 30, 2015and $62,352at September 30, 2014recorded as non-customer accounts receivable on its consolidated balance sheets.  The decrease in the amount of bankers’ acceptance notes is due to the lower sales of natural gas truck systems in China.  Woodward only accepts bankers’ acceptance notes issued by creditworthy banks as to which the credit risk associated with the bankers’ acceptance note is assessed to be low.

Our revolving credit facility, which we amended on April 28, 2015, matures in April 2020 and provides a borrowing capacity of up to $1,000,000 with the option to increase total available borrowings to up to $1,200,000, subject to lenders’ participation.  We can borrow against our $1,000,000 revolving credit facility as long as we are in compliance with all of our debt covenants.  Historically, we have used borrowings under our revolving credit facilities to meet certain short-term working capital needs, as well as for strategic uses, including repurchases of our stock, payments of dividends, acquisitions, and facilities expansions.  In addition, we have various foreign credit facilities, some of which are tied to net amounts on deposit at certain foreign financial institutions.  These foreign credit facilities are reviewed annually for renewal.  We use borrowings under these foreign credit facilities to finance certain local operations on a periodic basis.  For further discussion of our $1,000,000 revolving credit facility and our other credit facilities, see Note 13, Credit facilities, short-term borrowings and long-term debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item I of this Form 10-Q.

At June 30, 2015, we had total outstanding debt of $878,186, with additional borrowing availability of $616,506 under our revolving credit facility, net of outstanding letters of credit, and additional borrowing availability of $32,680 under various foreign credit facilities. 

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At June 30, 2015, we had $375,000 of borrowings outstanding under our revolving credit facility, which was classified as long-term, and $3,186 of borrowings outstanding under our Brazilian line of credit.Revolving credit facility and short-term borrowing activity during the nine-months ended June 30, 2015were as follows:

Maximum daily balance during the period	$	478,244
Average daily balance during the period	$	323,017
Weighted average interest rate on average daily balance		1.27%

We  believe we were in compliance with all our debt covenants at June 30, 2015.  See Note 13, Credit facilities, short-term borrowings and long-term debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item I of this Form 10-Q, and Note 12, Credit facilities, short-term borrowings and long-term debt in the Notes to the Consolidated Financial Statements in Part II, Item 8 of our most recent 10-K, for more information about our covenants.

In addition to utilizing our cash resources to fund the working capital needs of our business, we evaluate additional strategic uses of our funds, including the repurchase of our stock, payment of dividends, significant capital expenditures, consideration of strategic acquisitions and other potential uses of cash.

On May 20, 2015, we entered into a binding agreement with GE to form a strategic joint venture between us and GE (the “JV”). The JV will design, develop, source, supply and service the fuel system (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust in excess of 50,000 pounds.Upon formation of the JV, we will assign certain contractual rights to the JV in exchange for a payment from GE of $250,000 (subject to certain normal and customary adjustments). In addition, GE will pay us fifteen annual payments of approximately $4,900 each per year. Because the contractual rights have no cost basis in our financial records, we expect to account for the fair value of the proceeds received as a deferred gain that will be recognized over the economic lives of the assigned contractual rights. Closing is subject to obtaining regulatory approvals in various global jurisdictions.

In the second quarter of fiscal year 2015, our Board of Directors terminated our previous stock repurchase program and replaced it with a new program for the repurchase of up to $300,000 of our outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that will end in 2018 (the “2015 Authorization”). 

On June 2, 2015, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) under which we repurchased shares of our common stock for an aggregate purchase price of $125,000. Upon execution of the ASR Agreement, Goldman initially delivered to us 2,048 shares of common stock.  The number of shares of common stock to be ultimately repurchased by us under the ASR program, which is expected to be completed before December 31, 2015, will be based generally on the average daily volume-weighted average price of our stock during the term of the ASR Agreement.  

We are currently developing a second campus in the greater-Rockford, Illinois area for our Aerospace segment, and have begun occupying the new facility.  This campus is intended to support our expected growth over the next ten years and beyond stimulated by our being awarded a substantial number of new system platforms, particularly on narrow-body aircraft.  These investments are expected to result in future productivity gains for our existing and new business.  In addition, in September 2013, we invested in a building site in Niles, Illinois.  We have completed a new facility on this site for our Aerospace segment and have relocated most of our operations formerly residing in nearby Skokie, Illinois, to this new facility.  We are also developing a new campus at our corporate headquarters in Fort Collins, Colorado to support the continued growth of our Energy segment by supplementing our existing Colorado manufacturing facilities and corporate headquarters.  In total, we anticipate investing approximately $500,000 through fiscal year 2016 in land, buildings and equipment among our two Rockford, Illinois area campuses, the facility in Niles, Illinois, and a new campus at our corporate headquarters in Fort Collins, Colorado.  Of this $500,000 anticipated amount, we have spent approximately $375,000 to date related to these investments. 

We believe that cash flows from operations, along with our contractually committed borrowings and other borrowing capability, will continue to be sufficient to fund anticipated capital spending requirements and our operations for the foreseeable future.  However, we could be adversely affected if the financial institutions providing our capital requirements refuse to honor their contractual commitments, cease lending, or declare bankruptcy.  While we believe the lending institutions participating in our credit arrangements are financially stable, events in the global credit markets, including the failure, takeover or rescue by various government entities of major financial institutions, have created uncertainty with respect to credit availability.

Our ability to service our long-term debt, to remain in compliance with the various restrictions and covenants contained in our debt agreements, and to fund working capital, capital expenditures and product development efforts will depend on our ability to generate cash from operating activities, which in turn is subject to, among other things, future operating

37

performance as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control.

Cash Flows

	Nine-Months Ended
	June 30,
	2015		2014
Net cash provided by operating activities	$	167,320	$	183,890
Net cash used in investing activities		(188,379)		(104,272)
Net cash provided by (used in) financing activities		2,704		(32,786)
Effect of exchange rate changes on cash and cash equivalents		(9,548)		454
Net change in cash and cash equivalents		(27,903)		47,286
Cash and cash equivalents at beginning of period		115,287		48,556
Cash and cash equivalents at end of period	$	87,384	$	95,842

Net cash flows provided by operating activities for the first nine months of fiscal year 2015 was $167,320 compared to$183,890 for the same period of fiscal year 2014.  Higher earnings in the first nine months of fiscal year 2015 as compared to the first nine months of fiscal year 2014 were more than offset by higher income tax payments and the timing of other payments made in the first nine months of fiscal year 2015 as compared to the same period of the prior year. 

Net cash flows used in investing activities for the first nine months of fiscal year 2015 was $188,397 compared to $104,272for the same period of fiscal year 2014.  The increase in cash used in investing activities compared to the same period of the prior fiscal year is due toincreases in capital expenditures.  Payments for property, plant and equipment increased by $86,335 to $190,865 in the first nine months of fiscal year 2015 as compared to $104,530 in the same period of fiscal year 2014 related mainly to the development of a second campus in the greater-Rockford, Illinois area, a new facility in Niles, Illinois, and a new campus at our headquarters in Fort Collins, Colorado.

Net cash flows provided by financing activities for the first nine months of fiscal year 2015 was $2,704 compared to net cash flows used in financing activities of $32,786 for the same period of fiscal year 2014.  During the first nine months of fiscal year 2015, we had net debtborrowings of $168,360 compared to net debt borrowings of $115,002 in the same period of fiscal year 2014.  We utilized $157,118, including $125,000 under the ASR, to repurchase 2,670 shares of our common stock in the first nine months of fiscal year 2015 under our existing stock repurchase program, compared to $141,488 to repurchase 3,272 shares of our common stock in the same period of fiscal year 2014.

Contractual Obligations

We have various contractual obligations, including obligations related to long-term debt, operating leases, purchases, retirement pension benefit plans, and other postretirement benefit plans.  These contractual obligations are summarized and discussed more fully in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recent Form 10-K.  During the three-months ended June 30, 2015, we entered into the Amended Revolving Credit Agreement as discussed in Note 13, Credit facilities, short-term borrowings, and long-term debt, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.   Other than this agreement, there have been no material changes to our various contractual obligations during the first nine months of fiscal year 2015.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes.  Note 1, Operations and summary of significant accounting policies, to the Consolidated Financial Statements in our most recent Form 10-K describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements.  Our critical accounting estimates, identified in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recent Form 10-K include the discussion of estimates used for revenue recognition, purchase accounting, inventory valuation, postretirement benefit obligations, reviews for impairment of goodwill, and our provision for income taxes.  Such accounting policies and estimates

38

require significant judgments and assumptions to be used in the preparation of the Condensed Consolidated Financial Statements, and actual results could differ materially from the amounts reported. 

New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies issue new accounting pronouncements.  Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update.  Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption.

To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 2, Recent accounting pronouncements, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Off-Balance Sheet Arrangements

During the three-months endedJune 30, 2015,  we entered into a binding agreement with GE to form a strategic joint venture between us and GE as discussed in Note 4, Joint Venture.  As of June 30, 2015, we did not have any other off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) ofRegulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on ourfinancial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capitalexpenditures, or capital resources, that are material to investors.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we have exposures to interest rate risk from our long-term and short-term debt and our postretirement benefit plans, and foreign currency exchange rate risk related to our foreign operations and foreign currency transactions.  We are also exposed to various market risks that arise from transactions entered into in the normal course of business related to items such as the cost of raw materials and changes in inflation.  Certain contractual relationships with customers and vendors mitigate risks from changes in raw material costs and foreign currency exchange rate changes that arise from normal purchasing and normal sales activities.

These market risks are discussed more fully in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our most recent Form 10-K.  These market risks have not materially changed since the date our most recent Form 10-K was filed with the SEC.

Item 4.Controls and Procedures

We have established disclosure controls and procedures, which are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934 (the “Act”) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.  These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Act is accumulated and communicated to management, including our Principal Executive Officer (Thomas A. Gendron, Chairman of the Board, Chief Executive Officer and President) and Principal Financial and Accounting Officer (Robert F. Weber, Jr., Vice Chairman, Chief Financial Officer and Treasurer), as appropriate, to allow timely decisions regarding required disclosures.

Thomas A. Gendron and Robert F. Weber, Jr., evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q.  Based on their evaluations, they concluded that our disclosure controls and procedures were effective as of June 30, 2015.

Furthermore, there have been no changes in our internal control over financial reporting during the fiscal quarter covered by this Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.Legal Proceedings

Woodward is currently involved in claims, pending or threatened litigation, other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims and

39

alleged violations of various laws and regulations.  We accrue for known individual matters where we believe that it is probable the matter will result in a loss when ultimately resolved using estimates of the most likely amount of loss. 

While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material effect on Woodward's liquidity, financial condition, or results of operations.

Item 1A.Risk Factors

Investment in our securities involves risk.  An investor or potential investor should consider the risks summarized under the caption “Risk Factors” in Part I, Item 1A of our most recent Form 10-K when making investment decisions regarding our securities.  The risk factors that were disclosed in our most recent Form 10-K have not materially changed since the date our most recent Form 10-K was filed with the SEC.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities (In thousands, except for shares and per share amounts)	Total Number of Shares Purchased	Weighted Average Price Paid Per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs at Period End (1)
April 1, 2015 through April 30, 2015	-	$	-		-	$	300,000
May 1, 2015 through May 31, 2015	-		-		-		300,000
June 1, 2015 through June 30, 2015 (2), (3)	2,047,912		51.89	(2)	2,047,601		175,000

(1) In July 2013, our Board of Directors authorized a program for the repurchase of up to $200,000 of our outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that was to expire in July 2016 (the “2013 Authorization”).  In the second quarter of fiscal year 2015, our Board of Directors terminated the 2013 Authorization and replaced the 2013 Authorization with a new program for the repurchase of up to $300,000 of our outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that will end in 2018 (the “2015 Authorization”). 

(2) On June 2, 2015, Woodward entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) under which Woodward repurchased shares of its common stock for an aggregate purchase price of $125,000.  Upon execution of the ASR Agreement, Goldman delivered to Woodward 2,047,601 shares of common stock, which represented an initial delivery of 85% of the estimated shares to be purchased by Woodward, based on a reference price of $51.89, the closing price on June 2, 2015of Woodward stock listed on the NASDAQ Global Select Market.  The number of shares of common stock to be ultimately repurchased by Woodward under the ASR program, which is expected to be completed before December 31, 2015, will be based generally on the average daily volume-weighted average price of Woodward stock during the term of the ASR Agreement. 

(3) Under a trust established for the purposes of administering the Woodward Executive Benefit Plan, 311 shares of common stock were acquired on the open market related to the reinvestment of dividends for shares of treasury stock held for deferred compensation in June 2015.  Shares owned by the trust, which is a separate legal entity, are included in "Treasury stock held for deferred compensation" in the Condensed Consolidated Balance Sheets.

Item 6.Exhibits

Exhibits filed as Part of this Report are listed in the Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WOODWARD, INC.
Date:  July20, 2015	/s/ Thomas A. Gendron
	Thomas A. Gendron
	Chairman of the Board, Chief Executive Officer, and President (Principal Executive Officer)
Date:  July20, 2015	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

41

WOODWARD, INC.

EXHIBIT INDEX

	Exhibit Number		Description
*	10.1		Amendment No. 1 to Credit Agreement, dated April 28, 2015,  and the conformed Credit Agreement by and among the Company, certain foreign subsidiary borrowers of the Company from time to time parties thereto, the institutions from time to time parties thereto, as lenders, Wells Fargo Bank, National Association, as administrative agent.
*	10.2		Master Agreement by and between Woodward, Inc. and General Electric Company dated May 20, 2015.
*	10.3		Accelerated Share Repurchase (ASR) Mater Confirmation Agreement dated June 2, 2015
*	10.4		Accelerated Share Repurchase (ASR) Supplemental Confirmation Agreement dated June 2, 2015
*	31.1		Rule 13a-14(a)/15d-14(a) certification of Thomas A. Gendron
*	31.2		Rule 13a-14(a)/15d-14(a) certification of Robert F. Weber, Jr.
*	32.1		Section 1350 certifications
*	101.INS		XBRL Instance Document.
*	101.SCH		XBRL Taxonomy Extension Schema Document
*	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
*	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
*	101.LAB		XBRL Taxonomy Extension Label Linkbase Document
*	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
	Attached as Exhibit 101 to this report are the following materials from Woodward, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June  30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Earnings, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Stockholders’ Equity, and (vi) the Notes to the Condensed Consolidated Financial Statements.
*		Filed as an exhibit to this Report

42

EX-10.1

Exhibit 10.1

AMENDMENT NO. 1

TO

CREDIT AGREEMENT

This AMENDMENT NO. 1 to CREDIT AGREEMENT (the “Amendment”), dated as of April 28, 2015, is entered into by and among Woodward, Inc. (the “Company”), Woodward Aken GmbH (the “Foreign Subsidiary Borrower” and, together with the Company, the “Borrowers”), the Subsidiaries of the Company signatory hereto as “Domestic Subsidiary Guarantors” or “Foreign Subsidiary Guarantors” (collectively, the “Subsidiary Guarantors”), the financial institutions party to the below-defined Credit Agreement (the “Lenders”), and Wells Fargo Bank, National Association, as Administrative Agent (the “Agent”).  Each capitalized term used herein and not otherwise defined herein shall have the meaning given to it in the below-defined Credit Agreement.

WITNESSETH

WHEREAS, the Borrowers, the Lenders, and the Agent are parties to a Credit Agreement dated as of July 10, 2013 (as the same has been amended and modified and as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrowers have requested that the Lenders and the Agent amend the Credit Agreement in certain respects; and

WHEREAS, the Lenders and the Agent are willing to amend certain provisions of the Credit Agreement on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.  Amendments to Credit Agreement.  Effective as of the date first above written, and subject to the satisfaction of the conditions to effectiveness set forth in Section 2 below, the Credit Agreement is hereby amended as follows:

(a)The Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit Agreement attached as Annex A hereto.

(b)Exhibit A to the Credit Agreement is amended and restated in its entirety in the form attached as Annex B hereto.

(c)Exhibit H to the Credit Agreement is amended and restated in its entirety in the form attached as Annex C hereto.

(d)Schedules1.1.1,  1.1.2,  1.1.3, and 1.1.4 to the Credit Agreement are amended and restated in their entirety in the forms attached hereto as Annexes D-1,  D-2,  D-3 and D-4, respectively.

2.Conditions of Effectiveness.  This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if:

(a)the Agent shall have received  executed copies of this Amendment from the Borrowers, the Subsidiary Guarantors and all of the Lenders required to execute and deliver this Amendment pursuant to the terms of the Credit Agreement;

(b)the Agent shall have received those agreements, documents, instruments and other deliverables appearing in Annex E hereto; and

(c)the Company shall have paid all fees and expenses of the Agent (including, to the extent invoiced, attorneys’ fees and expenses) in connection with this Amendment and all fees payable on the date hereof pursuant to the Fee Letters (as defined in the Credit Agreement attached hereto as Annex A).

3.Representations and Warranties of the Borrowers. Each Borrower hereby represents and warrants as follows:

(a)The Credit Agreement as previously executed and as amended and modified hereby constitutes the legal, valid and binding obligation of such Borrower and is enforceable against such Borrower in accordance with its terms (except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles).

(b)Upon the effectiveness of this Amendment (i) no Default or Unmatured Default has occurred and is continuing under the terms of the Credit Agreement, (ii) such Borrower hereby reaffirms its obligations and liabilities under the Credit Agreement (as amended hereby) and the other Loan Documents and (iii) all representations and warranties of such Borrower in the Credit Agreement are true and correct in all material respects as of the date hereof, other than those which expressly speak to an earlier date (in which case, such Borrower represents and warrants that such representations and warranties were true and correct in all material respects as of such earlier date). 

4.Effect on the Credit Agreement.

(a)Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended and modified hereby.

2

(b)Except as specifically amended and modified above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect, and are hereby ratified and confirmed.

(c)The execution, delivery and effectiveness of this Amendment shall neither operate as a waiver of any right, power or remedy of the Lenders or the Agent, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5.Costs and Expenses.  The Company agrees to pay all reasonable and documented fees and out‑of‑pocket costs and expenses (including reasonable attorneys’ fees and expenses charged to the Agent) incurred by the Agent and required under the Credit Agreement to be paid by the Company in connection with the preparation, arrangement and execution of this Amendment and of the Agent and the Lenders in connection with the enforcement of this Amendment.

6.Governing Law.  This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York.

7.Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

8.Counterparts.  This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  A facsimile copy of any signature hereto shall have the same effect as the original of such signature.

9.No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Amendment.  In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Amendment.

10.Reaffirmation.  Each of the undersigned Subsidiary Guarantors hereby acknowledges receipt of a copy of this Amendment, and each of the Borrowers and each Subsidiary Guarantor affirms the terms and conditions of each Loan Document executed by it, including, without limitation, the Domestic Subsidiary Guaranty and the Foreign Subsidiary Guaranty, as applicable, and acknowledges and agrees that each such Loan Document executed by it in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.

11.Reallocation.  The Agent is hereby authorized to take such steps under the Credit Agreement as reasonably required to give effect to the adjusted Revolving Loan Commitments after giving effect to this Amendment, including, without limitation, reallocating outstanding Loans and L/C Obligations among the Lenders ratably based on their Revolving Loan Commitments. The Borrowers agree with and consent to the foregoing.

The remainder of this page is intentionally blank.

3

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day

and year first above written.

WOODWARD, INC., as the Company
By: /s/ Robert F. Weber, Jr.
	Name: Robert F. Weber, Jr.
	Title:   Vice Chairman, Chief Financial Officer
and Treasurer

Woodward Aken GmbH, as a Foreign Subsidiary Borrower
By: /s/ Wilhelm Boyemann
	Name: Wilhelm Boyemann
	Title:    Managing Director

Signature Page to

Amendment No. 1  to Credit Agreement

(Woodward)

Woodward FST, INC., as a Domestic Subsidiary Guarantor
By: /s/ Robert F. Weber, Jr.
	Name: Robert F. Weber, Jr.
	Title:   Secretary and Treasurer
MPC PRODUCTS CORPORATION, operating under the assumed corporate name of WOODWARD MPC, INC.,as a Domestic Subsidiary Guarantor
By: /s/ Robert F. Weber, Jr.
Name: Robert F. Weber, Jr.
Title:   Chief Financial Officer, Treasurer and Vice President
Woodward HRT, INC., as a Domestic Subsidiary Guarantor
By: /s/ Robert F. Weber, Jr.
Name: Robert F. Weber, Jr.
Title:   Treasurer and Vice President
Woodward KEMPEN GmbH, as a Foreign Subsidiary Guarantor
By: /s/ Christiaan Kochheim
Name: Christiaan Kochheim
Title:   Managing Director

Signature Page to

Amendment No. 1  to Credit Agreement

(Woodward)

wells fargo bank, national association,  as Administrative Agent, as Swing Line Lender, as an Issuing Bank and as a Lender
By: /s/ Peg Laughlin
	Name: Peg Laughlin
	Title:   SVP

JPMORGAN CHASE BANK, N.A., as Co- Syndication Agent, as an Issuing Bank and as a Lender
By: /s/ Krys Szremski
	Name: Kryz Szremski
	Title:   Vice President

U.S. BANK NATIONAL ASSOCIATION, as Co- Syndication Agent and as a Lender
By: /s/ Jeff Benedix
	Name: Jeff Benedix
	Title:   Vice President

BANK OF AMERICA, N.A., as Co-Syndication Agent and as a Lender
By: /s/ Michael Letsch
	Name: Michael T Letsch
	Title:   Senior Vice President

Signature Page to

Amendment No. 1  to Credit Agreement

(Woodward)

BRANCH BANKING AND TRUST COMPANY, as Documentation Agent and as a Lender
By: /s/ John K. Perez
	Name: John K. Perez
	Title:   Senior Vice President

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Documentation Agent and as a Lender
By: /s/ Thomas J. Sterr
	Name: Thomas J. Sterr
	Title:   Authorized Signatory

THE NORTHERN TRUST COMPANY, as a Lender
By: /s/ M. Scott Randall
	Name: M. Scott Randall
	Title:   Second Vice President

FIFTH THIRD BANK, as a Lender
By: /s/ Robert R. Mangers
	Name: Robert R. Mangers
	Title:   Vice President

BOKF, NA DBA COLORADO STATE BANK AND TRUST,  as a Lender
By: /s/ Matthew J. Mason
	Name: Matthew J. Mason
	Title:   Senior Vice President

Signature Page to

Amendment No. 1  to Credit Agreement

(Woodward)

HSBC BANK USA, N.A.,  as a Lender
By: /s/ Mire K. Levy
	Name: Mire K. Levy
	Title:   Senior Corporate Banking Manager

Signature Page to

Amendment No. 1  to Credit Agreement

(Woodward)

Annex A to

Amendment No. 1

Amended Credit Agreement

(Conformed Copy of Credit Agreement immediately follows this Amendment No. 1)

Annex B to

Amendment No. 1

Exhibit A

Revolving Loan Commitments

Lender	Revolving Loan Commitment
Wells Fargo Bank, National Association	$190,000,000
JPMorgan Chase Bank, N.A.	$160,000,000
U.S. Bank National Association	$160,000,000
Bank of America, N.A.	$160,000,000
Branch Banking and Trust Company	$100,000,000
The Bank of Tokyo-Mitsibushi UFJ, Ltd.	$100,000,000
The Northern Trust Company	$40,000,000
Fifth Third Bank	$40,000,000
BOKF, NA, dba Colorado State Bank and Trust	$35,000,000
HSBC Bank USA, N.A.	$15,000,000
Total	$1,000,000,000

Conformed to reflect changes effected pursuant to Amendment No. 1,

dated April 28, 2015

Deal CUSIP: 98075FAC4
Revolving Loan CUSIP: 98075FAD2

CREDIT AGREEMENT

Dated as of July 10, 2013,
and amended pursuant to Amendment No. 1 as of April 28, 2015

among

WOODWARD, INC.,
as the Company

The Foreign Subsidiary Borrowers from time to time Parties Hereto

THE INSTITUTIONS FROM TIME TO TIME PARTIES HERETO AS LENDERS

WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent

JPMORGAN CHASE BANK, N.A.,
U.S. BANK NATIONAL ASSOCIATION and
BANK OF AMERICA, N.A.
as Co-Syndication Agents

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and
BRANCH BANKING AND TRUST COMPANY,
as Documentation Agents

WELLS FARGO SECURITIES, LLC,
J.P. MORGAN SECURITIES LLC,
U.S. BANK NATIONAL ASSOCIATION, and
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED
as JointLead Arrangers and Book Runners

TABLE OF CONTENTS

Section			Page
ARTICLE I:  DEFINITIONS			1
	1.1.	Certain Defined Terms	1
	1.2.	References	32
	1.3.	Construction	32
ARTICLE II:  REVOLVING LOAN FACILITIES			32
	2.1.	Revolving Loans	32
	2.2.	Swing Line Loans	34
	2.3.	Rate Options for all Advances; Maximum Interest Periods	35
	2.4.	Optional Payments; Mandatory Prepayments	35
	2.5.	Reduction of Commitments	36
	2.6.	Method of Borrowing	36
	2.7.	Method of Selecting Types, Currency and Interest Periods for Advances	37
	2.8.	Minimum Amount of Each Advance	37
	2.9.	Method of Selecting Types, Currency and Interest Periods for Conversion and Continuation of Advances	37
	2.10.	Default Rate	38
	2.11.	Method of Payment	38
	2.12.	Evidence of Debt	39
	2.13.	Telephonic Notices	40
	2.14.	Promise to Pay; Interest and Facility Fees; Interest Payment Dates; Interest and Fee Basis; Taxes	40
	2.15.	Notification of Advances, Interest Rates, Prepayments and Aggregate Revolving Loan Commitment Reductions	48
	2.16.	Lending Installations	48
	2.17.	Non-Receipt of Funds by the Administrative Agent	48
	2.18.	Termination Date	49
	2.19.	Replacement of Certain Lenders	49
	2.20.	Judgment Currency	50
	2.21.	Market Disruption; Denomination of Amounts in Dollars; Dollar Equivalent of Reimbursement Obligations.	50
	2.22.	Increase of Aggregate Revolving Loan Commitment; Incremental Term Loans	51
	2.23.	Subsidiary Borrowers and Foreign Subsidiary Borrowers	53
	2.24.	Defaulting Lenders	54
ARTICLE III:  THE LETTER OF CREDIT FACILITY			56
	3.1.	Obligation to Issue Letters of Credit	56
	3.2.	Transitional Letters of Credit	56
	3.3.	Types and Amounts	56
	3.4.	Conditions	57

ii

	3.5.	Procedure for Issuance of Letters of Credit	57
	3.6.	Letter of Credit Participation	58
	3.7.	Reimbursement Obligation	58
	3.8.	Letter of Credit Fees	59
	3.9.	Issuing Bank Reporting Requirements	59
	3.10.	Indemnification; Exoneration	60
	3.11.	Cash Collateral	61
ARTICLE IV:  CHANGE IN CIRCUMSTANCES			61
	4.1.	Yield Protection	61
	4.2.	Changes in Capital Adequacy Regulations	62
	4.3.	Availability of Types of Advances	63
	4.4.	Funding Indemnification	63
	4.5.	Lender Statements; Survival of Indemnity	63
ARTICLE V:  CONDITIONS PRECEDENT			64
	5.1.	Initial Advances and Letters of Credit	64
	5.2.	Each Advance and Letter of Credit	65
	5.3.	Designation of a Foreign Subsidiary Borrower	66
ARTICLE VI:  REPRESENTATIONS AND WARRANTIES			66
	6.1.	Organization; Corporate Powers	66
	6.2.	Authority; Enforceability	67
	6.3.	No Conflict; Governmental Consents	67
	6.4.	Financial Statements	68
	6.5.	No Material Adverse Change	68
	6.6.	Taxes	68
	6.7.	Litigation; Loss Contingencies and Violations	68
	6.8.	Subsidiaries	68
	6.9.	ERISA	69
	6.10.	Accuracy of Information	69
	6.11.	Securities Activities	69
	6.12.	Material Agreements	69
	6.13.	Compliance with Laws	69
	6.14.	Assets and Properties	69
	6.15.	Statutory Indebtedness Restrictions	70
	6.16.	Labor Matters	70
	6.17.	Environmental Matters	70
	6.18.	Insurance	71
	6.19.	Solvency	71

iii

	6.20.	Anti-Corruption Laws and Sanctions	71
ARTICLE VII:  COVENANTS			71
	7.1.	Reporting	72
	7.2.	Affirmative Covenants	75
	7.3.	Negative Covenants	79
	7.4.	Financial Covenants	89
ARTICLE VIII:  DEFAULTS			90
	8.1.	Defaults	90
ARTICLE IX:  ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES			93
	9.1.	Termination of Revolving Loan Commitments; Acceleration	93
	9.2.	Preservation of Rights	93
	9.3.	Amendments	93
ARTICLE X:  GENERAL PROVISIONS			96
	10.1.	Survival of Representations	96
	10.2.	Governmental Regulation	96
	10.3.	Intentionally Omitted	96
	10.4.	Headings	96
	10.5.	Entire Agreement	96
	10.6.	Several Obligations; Benefits of this Agreement	96
	10.7.	Expenses; Indemnification	96
	10.8.	Numbers of Documents	98
	10.9.	Confidentiality	98
	10.10.	Severability of Provisions	98
	10.11.	Nonliability of Lenders	98
	10.12.	GOVERNING LAW	98
	10.13.	CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL	99
	10.14.	Subordination of Intercompany Indebtedness	101
	10.15.	USA PATRIOT Act	101
	10.16.	No Duties Imposed on Co-Syndication Agents, Documentation Agents or Arrangers	102
	10.17.	Accounting	102

iv

ARTICLE XI:  THE ADMINISTRATIVE AGENT			102
	11.1.	Appointment; Nature of Relationship	102
	11.2.	Powers	103
	11.3.	General Immunity	103
	11.4.	No Responsibility for Loans, Creditworthiness, Recitals, Etc.	103
	11.5.	Action on Instructions of Lenders	103
	11.6.	Employment of Administrative Agent and Counsel	104
	11.7.	Reliance on Documents; Counsel	104
	11.8.	The Administrative Agent’s Reimbursement and Indemnification	104
	11.9.	Rights as a Lender	104
	11.10.	Lender Credit Decision	105
	11.11.	Successor Administrative Agent	105
	11.12.	No Duties Imposed Upon Arrangers or Agents	105
	11.13.	Notice of Default	106
	11.14.	Delegation to Affiliates	106
	11.15.	Intercreditor Agreement and Subsidiary Guaranties	106
ARTICLE XII:  SETOFF; RATABLE PAYMENTS			106
	12.1.	Setoff	106
	12.2.	Ratable Payments; Failure to Fund	106
	12.3.	Application of Payments	107
	12.4.	Relations Among Lenders	108
	12.5.	Representations and Covenants Among Lenders	108
ARTICLE XIII:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS			108
	13.1.	Successors and Assigns; Designated Lenders	108
	13.2.	Participations	110
	13.3.	Assignments	111
	13.4.	Dissemination of Information	113
	13.5.	Tax Certifications	113
ARTICLE XIV:  NOTICES			113
	14.1.	Giving Notice	113
	14.2.	Change of Address	114
ARTICLE XV:  COUNTERPARTS			114
ARTICLE XVI:  COMPANY GUARANTEE			114

v

EXHIBITS AND SCHEDULES


Exhibits

EXHIBIT A	--	Revolving Loan Commitments
		(Definitions)
EXHIBIT A-1	--	Eurocurrency Payment Offices
		(Definitions)
EXHIBIT B	--	Form of Borrowing/Election Notice
		(Section 2.2, Section 2.7 and Section 2.9)
EXHIBIT C	--	Form of Request for Letter of Credit
		(Section 3.4)
EXHIBIT D	_	Form of Assignment Agreement
		(Definitions and Section 13.3)
EXHIBIT E	--	Form of Borrower’s Counsel’s Opinion
		(Section 5.1)
EXHIBIT F	--	List of Closing Documents
		(Section 5.1)
EXHIBIT G	--	Form of Officer’s Certificate
		(Sections 5.2 and 7.1(A)(iii))
EXHIBIT H	--	Form of Compliance Certificate
		(Sections 5.2 and 7.1(A)(iii))
EXHIBIT I-1	--	Domestic Subsidiary Guaranty
		(Definitions)
EXHIBIT I-2	--	Form of Foreign Subsidiary Guaranty
		(Definitions)
EXHIBIT I-3		Foreign Subsidiary Guaranty (Definitions)
EXHIBIT J	--	Form of Revolving Loan Note
		(If Requested) (Section 2.12(D))
EXHIBIT K	--	Intercreditor Agreement
		(Definitions)
EXHIBIT L	--	Form of Designation Agreement
		(Section 13.1(B))
EXHIBIT M-1	--	Form of Increasing Lender Supplement
		(Section 2.22)
EXHIBIT M-2	--	Form of Augmenting Lender Supplement
		(Section 2.22)
EXHIBIT N-1	--	Form of Borrowing Subsidiary Agreement
		(Section 2.23)
EXHIBIT N-2	--	Form of Borrowing Subsidiary Termination
		(Section 2.23)

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Schedules

Schedule 1.1.1	--	Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2	--	Permitted Existing Investments (Definitions)
Schedule 1.1.3	--	Permitted Existing Liens (Definitions)
Schedule 1.1.4	--	Permitted Existing Contingent Obligations (Definitions)
Schedule 1.1.5	--	Agreed Jurisdictions (Definitions)
Schedule 3.2	--	Transitional Letters of Credit (Section 3.2)
Schedule 6.3	--	Conflicts; Governmental Consents (Section 6.3)
Schedule 6.8	--	Subsidiaries, Significant Domestic Incorporated Subsidiaries and Significant Foreign Subsidiaries; Options and Warrants (Section 6.8)
Schedule 6.9	--	ERISA (Section 6.9)
Schedule 6.17	--	Environmental Matters (Section 6.17)

vii

CREDIT AGREEMENT

This CREDIT AGREEMENT, dated as of July 10, 2013, is entered into by and among Woodward, Inc., a Delaware corporation, as a Borrower, Woodward Aken GmbH, a limited liability company under the laws of the Federal Republic of Germany, as a Foreign Subsidiary Borrower, the other Foreign Subsidiary Borrowers from time to time parties hereto, the institutions from time to time parties hereto as Lenders, whether by execution of this Agreement or an Assignment Agreement pursuant to Section 13.3, and Wells Fargo Bank, National Association, as Administrative Agent for itself and the other Lenders. 

In consideration of the mutual covenants herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I:  DEFINITIONS

1.1.  Certain Defined Terms.  The following terms used in this Agreement shall have the following meanings, applicable both to the singular and the plural forms of the terms defined.

As used in this Agreement:

“2008 Note Agreement” means that certain Note Purchase Agreement, dated as of October 1, 2008, by and among the Company, as the issuer of the 2008 Senior Notes, and the 2008 Senior Noteholders, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“2008 Senior Noteholder” means a Person holding a 2008 Senior Note.

“2008 Senior Notes” means, collectively, (i) the Series B Senior Notes due October 1, 2013 in an aggregate initial principal amount of $100,000,000, (ii) the Series C Senior Notes due October 1, 2015 in an aggregate initial principal amount of $50,000,000 and (iii) the Series D Senior Notes due October 1, 2018 in an aggregate initial principal amount of $100,000,000, in each case as the same may be amended, restated, supplemented or otherwise modified from time to time, issued by the Company pursuant to the 2008 Note Agreement.

“2009 Note Agreement”means that certain Note Purchase Agreement, dated as of April 3, 2009, by and among the Company, as the issuer of the 2009 Senior Notes, and the 2009 Senior Noteholders, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“2009 Senior Noteholder” means a Person holding a 2009 Senior Note.

“2009 Senior Notes”means, collectively, (i) the Series E Senior Notes due April 3, 2016 in an aggregate initial principal amount of $57,000,000 and (ii) the Series F Senior Notes due April 3, 2019 in an aggregate initial principal amount of $43,000,000, in each case as the same may be amended, restated, supplemented or otherwise modified from time to time, issued by the Company pursuant to the 2009 Note Agreement.

“2013 Note Agreement”means that certain Note Purchase Agreement, anticipated to be entered into by and among the Company, as the issuer of the 2013 Senior Notes, and the 2013 Senior Noteholders, in connection with the issuance and sale of the 2013 Senior Notes anticipated to occur on or prior to October 1, 2013 (but in any event no later than November 1, 2013), as the same  may be amended, restated, supplemented, or otherwise modified from time to time.

“2013 Senior Noteholder” means a Person holding a 2013 Senior Note.

“2013 Senior Notes”means, collectively, (i) the Series G Senior Notes and (ii) the Series H Senior Notes, in an aggregate initial principal amount for all of the Series G Senior Notes and the Series H Senior Notes anticipated to be  not in excess of $150,000,000, as the same may be amended, restated, supplemented or otherwise modified from time to time, anticipated to be issued by the Company pursuant to the 2013 Note Agreement.

“Accounting Changes” is defined in Section 10.17 hereof.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries (other than transactions involving solely the Company and its Subsidiaries) (i) acquires all or substantially all of the assets of any firm, corporation or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding Equity Interests of another Person.

“Administrative Agent” means Wells Fargo, including its Affiliates and Subsidiaries, in its capacity as contractual representative for itself and the Lenders pursuant to Article XI hereof and any successor Administrative Agent appointed pursuant to and in accordance with Article XI hereof.

“Advance” means a borrowing hereunder consisting of the aggregate amount of the several Loans made by the Lenders to any Borrower of the same Type and, in the case of Eurocurrency Rate Advances, in the same currency and for the same Interest Period.

“Affected Lender” is defined in Section 2.19 hereof.

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person.  A Person shall be deemed to control another Person if the controlling Person is the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of greater than or equal to twenty percent (20%) or more of any class of voting securities (or other voting interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise.

“Aggregate Revolving Loan Commitment” means the aggregate of the Revolving Loan Commitments of all the Lenders, as may be increased or reduced from time to time pursuant to the

2

terms hereof.  The initial Aggregate Revolving Loan Commitment as of the First Amendment Effective Date is One Billion and 00/100 Dollars ($1,000,000,000.00).

“Agreed Currencies” means  (i) Dollars, and (ii) so long as such currency remains an Eligible Currency, British Pounds Sterling, Japanese Yen, Canadian Dollars, euro and Swiss Francs.

“Agreed Jurisdictions” means those jurisdictions set forth on Schedule 1.1.5 hereto, or otherwise approved by the Administrative Agent and 100% of the Lenders as jurisdictions in which Foreign Subsidiary Borrowers may be organized.

“Agreement” means this Credit Agreement, as it may be amended, restated or otherwise modified and in effect from time to time.

“Agreement Accounting Principles” means generally accepted accounting principles as in effect from time to time in the United States of America.

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus one-half of one percent (0.5%) per annum and (iii) the Eurocurrency Base Rate for a one-month Interest Period in Dollars on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that, for the avoidance of doubt, the Eurocurrency Base Rate for any day shall be based on the rate which would then be applicable for any Eurocurrency Rate Loan made on such date (if any such Loan would be made at all), subject to the interest rate floors set forth therein.    Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Eurocurrency Base Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate, or Eurocurrency Base Rate, respectively. 

“Alternative Rate” has the meaning assigned to such term in Section 4.3(a).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable Eurocurrency Margin” means, as at any date of determination, the rate per annum then applicable to Eurocurrency Rate Loans determined in accordance with the provisions of Section 2.14(D)(ii) hereof.

“Applicable Facility Fee Percentage” means, as at any date of determination, the rate per annum then applicable in the determination of the amount payable under Section 2.14(C)(i) hereof determined in accordance with the provisions of Section 2.14(D)(ii) hereof.

“Applicable Floating Rate Margin”means, as of any date of determination, the rate per annum then applicable to Floating Rate Loans determined in accordance with the provisions of Section 2.14(D)(ii) hereof.

3

“Applicable L/C Fee Percentage” means, as at any date of determination, a rate per annum used to calculate Letter of Credit fees equal to the Applicable Eurocurrency Margin then in effect.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arrangers” means, as of the First Amendment Effective Date, Wells Fargo Securities, LLC,  J.P. Morgan Securities LLC, U.S. Bank National Association and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, each in its capacity as a joint lead arranger and joint book runner for the loan transaction evidenced by this Agreement.

“Assignment Agreement” means an assignment and acceptance agreement entered into in connection with an assignment pursuant to Section 13.3 hereof in substantially the form of Exhibit D.

“Asset Sale” means, with respect to any Person, the sale, lease, conveyance, disposition or other transfer by such Person of any of its assets (including by way of a sale-leaseback transaction, and including the sale or other transfer of any of the Equity Interests of any Subsidiary of such Person) to any Person other than the Company or any of its Subsidiaries other than (i) the sale of inventory in the ordinary course of business, and (ii) the sale or other disposition of any obsolete, excess, damaged, redundant, unnecessary or worn-out equipment disposed of in the ordinary course of business.

“Augmenting Lender” is defined in Section 2.22 hereof.

“Authorized Officer” means any of the President, Chief Executive Officer, Chief Financial Officer or Treasurer of any Borrower, acting singly, or such other Person as is authorized or designated in writing to act on behalf of such Person.

“Authorized Signer” means any of the President, Chief Executive Officer, Chief Financial Officer, Treasurer, Director of Investor Relations and Treasury or Global Treasury Manager of any Borrower, acting singly, or such other Person as is authorized or designated in writing to act on behalf of such Person.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

4

“Benefit Plan” means a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Company or any other member of the Controlled Group is, or within the immediately preceding six (6) years was, an “employer” as defined in Section 3(5) of ERISA.

“Borrower” means the Company, Woodward Germany, any Foreign Subsidiary Borrower or any other Subsidiary Borrower made a party hereto in accordance with Section 2.23, in each case together with its successors and permitted assigns, including a debtor-in-possession on behalf of such Borrower.

“Borrowing Date” means a date on which an Advance or Swing Line Loan is made hereunder.

“Borrowing/Election Notice” is defined in Section 2.7 hereof.

“Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement substantially in the form of Exhibit N-1.

“Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination substantially in the form of Exhibit N-2.

“British Pounds Sterling” means the lawful currency of Great Britain.

“Business Day” means:

(a)  for the purpose of determining the Eurocurrency Base Rate, (i) if determined in accordance with clause (x) of the definition thereof, a day other than a Saturday or Sunday on which banks are open for the transaction of domestic and foreign exchange business in London, England, and (ii) if determined in accordance with clause (y) of the definition thereof, a day other than a Saturday or Sunday on which banks are open for the transaction of domestic and foreign exchange business in Toronto, Canada;

(b)  for the purpose of any payment to be made in Dollars, a day other than a Saturday or Sunday on which (i) banks are open in New York, New York for the conduct of substantially all of their commercial lending activities, including the transaction of domestic and foreign exchange business, (ii) interbank wire transfers can be made on the Fedwire system, and (iii) dealings in Dollars are carried on in the London interbank markets; and

(c)  for any other purpose, means a day (i) other than a Saturday or Sunday on which banks are open in London and New York, New York for the conduct of substantially all of their commercial lending activities, including the transaction of domestic and foreign exchange business, and interbank wire transfers can be made on the Fedwire system, and (ii) with respect to borrowings, payment or rate selection of Loans denominated in (A) euro, a day on which such clearing system as is determined by the Administrative Agent to be suitable for clearing or settlement of euro is open for business and (B) an Agreed Currency other than Dollars and euro, a day on which the applicable Eurocurrency Payment

5

Office related to such currency is open for the transaction of domestic and foreign exchange business.

“Canadian Dollars” means the lawful currency of Canada.

“Capital Stock” means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a limited liability company, membership interests, (iv) in the case of a partnership, partnership interests (whether general or limited) and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; provided,  however, that “Capital Stock” shall not include any debt securities convertible into equity securities prior to such conversion.

“Capitalized Lease” of a Person means any lease of property (real, personal or a combination thereof) by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.

“Cash Equivalents” means (i) marketable direct obligations issued or unconditionally guaranteed by the governments of the United States and backed by the full faith and credit of the United States government; (ii) domestic and Eurocurrency certificates of deposit and time deposits, bankers’ acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches or agencies, the long-term indebtedness of which institution at the time of acquisition is rated BBB (or better) by S&P or Fitch or Baa (or better) by Moody’s, and which certificates of deposit and time deposits are fully protected against currency fluctuations for any such deposits with a term of more than ninety (90) days; (iii) shares of money market, mutual or similar funds having assets in excess of $100,000,000 and the investments of which are limited to investment grade securities (i.e., securities rated BBB (or better) by S&P or Fitch or Baa (or better) by Moody’s; and (iv) commercial paper of United States and foreign banks and bank holding companies and their subsidiaries and United States and foreign finance, commercial industrial or utility companies which, at the time of acquisition, are rated A-2 (or better) by S&P, P-2 (or better) by Moody’s, or F-2 (or better) by Fitch; provided that the maturities of such Cash Equivalents (other than as described in clause (iii) above) shall not exceed three hundred sixty-five (365) days from the date of acquisition thereof.

“CDOR Rate” means for any Loans in Canadian Dollars, the CDOR Screen Rate or, if applicable pursuant to the terms of Section 4.3(a), the applicable Reference Bank Rate.

“CDOR Screen Rate” means, with respect to any Interest Period, the average rate as administered by the Investment Industry Regulatory Organization of Canada (or any other Person that takes over the administration of such rate) for banker’s acceptances with a tenor equal in length to such Interest Period as displayed on CDOR page of the Reuters screen or, in the event such rate

6

does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion.

 “Change” is defined in Section 4.2 hereof.

“Change in Law” means (a) the adoption of any law, rule, regulation or treaty (including any rules or regulations issued under or implementing any existing law) after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 4.2, by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case, including pursuant to Basel III, shall in each case be deemed to be a ”Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Change of Control” means an event or series of events by which:

(a)  any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, provided that a person shall be deemed to have “beneficial ownership” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of thirty percent (30%) or more of the combined voting power of the Company’s outstanding Capital Stock ordinarily having the right to vote at an election of directors; or

(b)  the majority of the board of directors of the Company fails to consist of Continuing Directors; or

(c)  the Company conveys, transfers or leases all or substantially all of its property to any Person (other than in a transaction in which the conditions set forth in clauses (a) and (b) would not be violated as they relate to the successor to the Company following such transaction, so long as the successor assumes all obligations and liabilities of the Company hereunder).

“Closing Date” means July 10, 2013.

“Co-Syndication Agents”  means each of JPMorgan Chase Bank, N.A., U.S. Bank National Association and Bank of America, N.A.

7

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

“Commission” means the Securities and Exchange Commission of the United States of America and any Person succeeding to the functions thereof.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Company” means Woodward, Inc., a Delaware corporation.

“Connection Income Tax”  means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise taxes.

“Consolidated Assets” means the total assets of the Company and its Subsidiaries on a consolidated basis (determined in accordance with Agreement Accounting Principles).

“Consolidated Net Worth” means, at a particular date, all amounts which would be included under shareholders’ equity (including capital stock, additional paid-in capital and retained earnings) on the consolidated balance sheet for the Company and its consolidated Subsidiaries determined in accordance with Agreement Accounting Principles.

“Consolidated Tangible Assets” means, at a particular date, Consolidated Assets, less the value (net of applicable reserves and accumulated amortization) of all goodwill, tradenames, trademarks, patents and other like intangible assets, all as determined in accordance with Agreement Accounting Principles.

“Contaminant” means any pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance, asbestos, polychlorinated biphenyls (“PCBs”), or any constituent of any such substance, and includes but is not limited to these terms as defined in Environmental, Health or Safety Requirements of Law.

“Contingent Obligation”, as applied to any Person, means any Contractual Obligation, contingent or otherwise, providing for the guarantee of, or having the same economic effect as providing a guarantee of, any Indebtedness of another or other obligation or liability of another, including, without limitation, any such Indebtedness, obligation or liability of another directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable, including Contractual Obligations (contingent or otherwise) arising through any agreement to purchase, repurchase, or otherwise acquire such Indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or discharge thereof (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, or other financial condition, or to make payment other than for value received.  The amount of any Contingent Obligation shall be equal to the present value of the portion of the obligation so guaranteed or otherwise supported, in the case of known recurring obligations, and the maximum reasonably anticipated liability in respect of the portion of the obligation so guaranteed or otherwise supported assuming such Person

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is required to perform thereunder, in all other cases; provided that Contingent Obligations shall not include endorsements for collection in the ordinary course of business.

“Continuing Director” means, with respect to any Person as of any date of determination, any member of the board of directors of such Person who (a) was a member of such board of directors on the date of this Agreement, or (b) was nominated for election or elected to such board of directors with the approval of the Continuing Directors who were members of such board at the time of such nomination or election.

“Contractual Obligation”, as applied to any Person, means any provision of any equity or debt securities issued by that Person or any indenture, mortgage, deed of trust, security agreement, pledge agreement, guaranty, contract, undertaking, agreement or instrument, in any case in writing, to which that Person is a party or by which it or any of its properties is bound, or to which it or any of its properties is subject.

“Controlled Group” means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“Credit Party” means the Administrative Agent, any Issuing Bank, the Swing Line Bank or any other Lender.

“Customary Permitted Liens”  means:

(i) Liens with respect to the payment of taxes, assessments or governmental charges in all cases (i) which are not yet due and payable or (ii) which are being, or will promptly be, contested in good faith by appropriate proceedings properly instituted and diligently conducted and with respect to which adequate reserves or other appropriate provisions are being maintained, which reserves and provisions shall be maintained in accordance with generally accepted accounting principles as in effect from time to time, if and to the extent that such generally accepted accounting principles so require;

(ii)  statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet overdue by more than thirty (30) days or which are being, or will promptly be, contested in good faith by appropriate proceedings properly instituted and diligently conducted and with respect to which adequate reserves or other appropriate provisions are being maintained, which reserves and provisions shall be maintained in accordance with generally accepted accounting principles as may be in effect from time to time, if and to the extent that such generally accepted accounting principles so require;

(iii)  Liens (other than Environmental Liens and Liens in favor of the IRS or the PBGC) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds;

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(iv)  Liens arising with respect to zoning restrictions, easements, encroachments, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar charges, restrictions or encumbrances on the use of real property which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary use or occupancy of the real property or with the ordinary conduct of the business of the Company or any of its Subsidiaries;

(v)  Liens of attachment or judgment with respect to judgments, writs or warrants of attachment, or similar process against the Company or any of its Subsidiaries, which do not constitute a Default under Section 8.1(H) hereof;

(vi)any interest or title of the lessor in the property subject to any operating lease entered into by the Company or any of its Subsidiaries in the ordinary course of business;

(vii)  Liens on deposits of cash and Cash Equivalents made to secure permitted Indebtedness in connection with Hedging Agreements permitted hereunder;

(viii)  Liens in favor of customs and revenues authorities which secure payment of customs duties in connection with the importation of goods; provided such Lien attaches solely to such goods being so imported and in respect of which such duties are owing;

(ix)  any interest, Lien or title of a licensor, sublicensor, lessor or sublessor under any license or lease agreement in the property being leased or licensed as permitted hereunder;

(x)  Liens which arise under Article 4 of the UCC on items in collection and documents and proceeds related thereto, as arising in the ordinary course of business;

(xi)  Liens arising under contracts to sell goods in the ordinary course of business, including pursuant to Article 2 of the UCC;

(xii)  rights of setoff or banker’s liens upon deposits of cash in favor of banks or other depository institutions, but not securing any Indebtedness for money borrowed; and

(xiii)  rights of third parties to receive assets to be transferred by the Company or any Subsidiary to such third parties pursuant to Asset Sales permitted under this Agreement.

“Default”  means an event described in Article VIII hereof.

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Revolving Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Line Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Company or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or

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expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit (except for any obligations under such other agreements subject to a good faith dispute), (c) has failed, within three Business Days after written request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Revolving Loans and participations in then outstanding Letters of Credit and Swing Line Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Designated Lender” means, with respect to each Designating Lender, each Eligible Designee designated by such Designating Lender pursuant to Section 13.1(B).

“Designating Lender” means, with respect to each Designated Lender, the Lender that designated such Designated Lender pursuant to Section 13.1(B).

“Designation Agreement” is defined in Section 13.1(B).

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is ninety-one (91) days after the Revolving Loan Termination Date.

“DOL” means the United States Department of Labor and any Person succeeding to the functions thereof.

“Dollar” and “$”  means dollars in the lawful currency of the United States of America.

“Dollar Amount” of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the Equivalent Amount of Dollars if such currency is any currency other than Dollars.

“Domestic Incorporated Subsidiary” means a Subsidiary of the Company organized under the laws of a jurisdiction located in the United States of America.

“Domestic Subsidiary Borrower” means a Subsidiary Borrower organized under the laws of a jurisdiction located in the United States of America.

“Domestic Subsidiary Guarantors” means (i) all of the Company’s Significant Domestic Incorporated Subsidiaries as of the Closing Date and (ii) all new Significant Domestic Incorporated Subsidiaries which become Domestic Subsidiary Guarantors in accordance with Section 7.2(K).

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“Domestic Subsidiary Guaranty” means that certain Subsidiary Guaranty, dated as of July 10, 2013, attached hereto as Exhibit I-1, executed by the Domestic Subsidiary Guarantors in favor of the Administrative Agent, for the ratable benefit of the Lenders, the Swing Line Bank and the Issuing Banks (as the same may be amended, restated, supplemented or otherwise modified (including to add new Domestic Subsidiary Guarantors) from time to time), unconditionally guaranteeing all of the indebtedness, obligations and liabilities of the Company and the Foreign Subsidiary Borrowers arising under or in connection with the Loan Documents.

“Drawn Foreign Amount” means on any date the aggregate principal amount of Obligations outstanding under the Agreement that are owed or guaranteed by the Foreign Subsidiaries and the aggregate stated face amount of Letters of Credit issued under the Agreement for the account of Foreign Subsidiaries.

“EBITDA” means, for any period, on a consolidated basis for the Company and its Subsidiaries, the sum of the amounts for such period, without duplication, of (i) Net Income, plus (ii) Interest Expense to the extent deducted in computing Net Income, plus (iii) charges against income for foreign, federal, state and local taxes to the extent deducted in computing Net Income, plus (iv) depreciation expense to the extent deducted in computing Net Income, plus (v) amortization expense, including, without limitation, amortization of goodwill and other intangible assets to the extent deducted in computing Net Income, plus (vi) any unusual non-cash charges to the extent deducted in computing Net Income, plus (vii) non-cash stock based compensation paid during such period to the extent deducted in computing Net Income, plus (viii) up to $5,000,000 per fiscal year in transaction fees, costs and expenses incurred in connection with the consummation of any acquisition permitted hereunder (or any such acquisition proposed and not consummated); provided, that any such fees, costs or expenses are paid within six (6) months of the date incurred, plus (ix) costs, charges, accruals, reserves or expenses attributable to the undertaking and/or implementation of cost savings initiatives or operating expense reductions and similar initiatives, integration, transition, and other restructuring costs, charges, accruals, reserves and expenses (including costs related to the closure or consolidation of facilities and curtailments, consulting and other professional fees, signing costs, retention or completion bonuses, executive recruiting costs, relocation expenses, severance payments and modifications to, or losses on settlement of, pension and post-retirement employee benefit plans); provided that the aggregate amount included in EBITDA pursuant to this clause (ix) of this definition of EBITDA for the cash portion of any such costs, charges, accruals, reserves or expenses during any period shall not exceed 10% of EBITDA in the aggregate for any fiscal year (calculated prior to giving effect to any adjustment pursuant to this clause (ix))minus (x) any unusual non-cash gains to the extent added in computing Net Income (provided,  further, clause (viii) and clause (ix) of this definition of “EBITDA” shall be effective only to the extent that the Administrative Agent shall have received evidence satisfactory to it that each such clause is included in the definition of “EBITDA” set forth in the 2008 Note Agreement, the 2009 Note Agreement and the 2013 Note Agreement).  EBITDA shall be calculated on a proforma basis giving effect to Permitted Acquisitions and Asset Sales on a last twelve (12) months’ basis using, for any such Permitted Acquisition, historical financial statements containing reasonable adjustments satisfactory to the Administrative Agent, broken down by fiscal quarter in the Company’s reasonable judgment.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules

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issued by the Commodity Futures Trading Commission and/or the United States Securities and Exchange Commission.

“Eligible Currency” means any currency other than Dollars with respect to which the Administrative Agent or any Borrower has not given notice in accordance with Section 2.21 and that is readily available, freely traded, in which deposits are customarily offered to banks in the London interbank market, convertible into Dollars in the international interbank market available to the Lenders in such market and as to which an Equivalent Amount may be readily calculated.  If, after the designation by the Lenders at the request of any Borrower of any currency as an Agreed Currency, currency control or other exchange regulations are imposed in the country in which such currency is issued with the result that different types of such currency are introduced, such country’s currency is, in the determination of the Administrative Agent, no longer readily available or freely traded or (ii) as to which, in the determination of the Administrative Agent, an Equivalent Amount is not readily calculable (each of clause (i) and (ii), a “Disqualifying Event”), then the Administrative Agent shall promptly notify the Lenders and the Borrowers, and such country’s currency shall no longer be an Agreed Currency until such time as the Disqualifying Event(s) no longer exist, but in any event within five (5) Business Days of receipt of such notice from the Administrative Agent, the Borrowers shall repay all Loans in such currency to which the Disqualifying Event applies or convert such Loan into Loans in Dollars or another Agreed Currency, subject to the other terms contained in Articles II and IV.

“Eligible Designee” means a special purpose corporation, partnership, trust, limited partnership or limited liability company that is administered by the respective Designating Lender or an Affiliate of such Designating Lender and (i) is organized under the laws of the United States of America or any state thereof, (ii) is engaged primarily in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and (iii) issues (or the parent of which issues) commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s.

“Environmental, Health or Safety Requirements of Law” means all Requirements of Law derived from or relating to foreign, federal, state and local laws or regulations relating to or addressing pollution or protection of the environment, or protection of worker health or safety, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 etseq., the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 etseq., and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 etseq., in each case including any amendments thereto, any successor statutes, and any regulations or guidance promulgated thereunder, and any state or local equivalent thereof.

“Environmental Lien” means a lien in favor of any Governmental Authority for (a) any liability under Environmental, Health or Safety Requirements of Law, or (b) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment.

“Environmental Property Transfer Act” means any applicable requirement of law that conditions, restricts, prohibits or requires any notification or disclosure triggered by the closure of any property or the transfer, sale or lease of any property or deed or title for any property for

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environmental reasons, including, but not limited to, any so-called “Industrial Site Recovery Act” or “Responsible Property Transfer Act.”

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equivalent Amount” of any currency at any date shall mean the equivalent in Dollars of such currency, calculated on the basis of the arithmetic mean of the buy and sell spot rates of exchange of the Administrative Agent or an Affiliate of the Administrative Agent in the London interbank market (or other market where the Administrative Agent’s foreign exchange operations in respect of such currency are then being conducted) for such other currency as reported by Reuters or any other generally recognized financial information service at or about 11:00 a.m. (local time applicable to the transaction in question) on the date on which such amount is to be determined, rounded up to the nearest amount of such currency as determined by the Administrative Agent from time to time; provided,  however, that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent or an Affiliate of the Administrative Agent may use any reasonable method it deems appropriate (after consultation with the Borrower) to determine such amount, and such determination shall be conclusive absent manifest error.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time including (unless the context otherwise requires) any rules or regulations promulgated thereunder.

“ERISA Event” means (a) a Reportable Event, (b) the failure with respect to any Plan to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Company or any other member of the Controlled Group of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Company or any other member of the Controlled Group from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Company or any other member of the Controlled Group of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by the Company or any other member of the Controlled Group of any notice, or the receipt by any Multiemployer Plan from the Company or any other member of the Controlled Group of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“euro” means the lawful currency of the member states of the European Union which adopted the Council Regulation E.C. No. 1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if different, the then lawful currency of the member states of the European Union that participate in the third stage of the Economic and Monetary Union.

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“Eurocurrency Base Rate” means, (x) with respect to a Eurocurrency Rate Loan in any LIBOR Quoted Currency for the relevant Interest Period, the LIBOR Screen Rate at the Specified Time on the Quotation Day for the applicable currency and Interest Period, as adjusted for Reserves, if applicable; provided that, if the LIBOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement, and (y) with respect to any Eurocurrency Rate Loan denominated in Canadian Dollars for the relevant Interest Period, the CDOR Screen Rate for Canadian Dollars as of the Specified Time and on the Quotation Day for Canadian Dollars and such Interest Period; provided that if the CDOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement; provided,  that, if a LIBOR Screen Rate or the CDOR Screen Rate, as applicable, shall not be available at the applicable time for the applicable Interest Period (the “Impacted Interest Period”), then the Eurocurrency Base Rate for such currency and Interest Period shall be the Interpolated Rate; provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. It is understood and agreed that all of the terms and conditions of this definition of “Eurocurrency Base Rate” shall be subject to Section 4.3.

“Eurocurrency Payment Office” of the Administrative Agent shall mean, for each of the Agreed Currencies, any agency, branch or Affiliate of the Administrative Agent, specified as the “Eurocurrency Payment Office” for such Agreed Currency on Exhibit A-1 hereto or such other agency, branch, Affiliate or correspondence bank of the Administrative Agent, as it may from time to time specify to the Borrowers and each Lender as its Eurocurrency Payment Office.

“Eurocurrency Rate” means, with respect to a Eurocurrency Rate Loan or Advance for the relevant Interest Period, the Eurocurrency Base Rate applicable to such Interest Period plus the Applicable Eurocurrency Margin then in effect.

“Eurocurrency Rate Advance”  means an Advance which bears interest at the Eurocurrency Rate.

“Eurocurrency Rate Loan” means a Loan made on a fully syndicated basis pursuant to Section 2.1, which bears interest at the Eurocurrency Rate.

“Excluded Hedging Obligation” means, with respect to any Subsidiary Guarantor or, with respect to the Company but only in its capacity as guarantor of any Hedging Obligations of its Subsidiaries pursuant to Article XVI hereof (each a “Guarantor”), any Hedging Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor of such Hedging Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an ECP at the time the guarantee of such Guarantor becomes effective with respect to such Hedging Obligation. If a Hedging Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedging Obligation that is attributable to swaps for which such guarantee is or becomes illegal.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Company or any Subsidiary hereunder, (a) income or franchise taxes, in each case (i)

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imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of any Non-U.S. Lender, any United States withholding tax that (i) is resulting from any law in effect on the date such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding tax pursuant to Section 2.14(E), or (ii) is attributable to such Non-U.S. Lender’s failure to comply with Section 2.14(E) and (d) any U.S. federal withholding taxes imposed under FATCA.

“Existing Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated as of January 4, 2012, by and among the Company, Woodward Germany, certain lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any date that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it; provided, that, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Fee Letters”means each of the following fee letters, each dated March 24, 2015, and as each may be amended, restated, supplemented or otherwise modified from time to time:  (i) Fee Letter among the Borrower, Wells Fargo and Wells Fargo Securities, LLC; (ii) Fee Letter among the Borrower, JPMorgan Chase Bank, N.A., and J.P. Morgan Securities LLC; (iii) Fee Letter between the Borrower and U.S. Bank National Association; and (iv) Fee Letter among the Borrower, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith, Incorporated.

“First Amendment” means that certain Amendment No. 1 to Credit Agreement, dated as of April 28, 2015, by and among the Company, the Foreign Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto, and the Administrative Agent.

“First Amendment Effective Date”  means April 28, 2015.

“Fitch” means Fitch Investors Service, L.P., together with its successors and assigns.

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“Fixed-Rate Loan”  means any Eurocurrency Rate Loan bearing a fixed rate of interest for the applicable Interest Period.

“Floating Rate” means, for any day for any Loan or Advance, a rate per annum equal to the Alternate Base Rate for such day, changing when and as the Alternate Base Rate changes, plus the Applicable Floating Rate Margin then in effect.

“Floating Rate Advance”  means an Advance which bears interest at the Floating Rate.

“Floating Rate Loan” means a Loan, or portion thereof, which bears interest at the Floating Rate.

“Foreign Guarantor” is defined in Section 7.3(D)(v).

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Incorporated Subsidiary.

“Foreign Subsidiary Borrower” means Woodward Germany and any Foreign Subsidiary that has been designated as a Foreign Subsidiary Borrower pursuant to Section 2.23 and that has not ceased to be a Foreign Subsidiary Borrower pursuant to such Section.

 “Foreign Subsidiary Guarantor” means, with respect to any Foreign Subsidiary Borrower, each of such Foreign Subsidiary Borrower’s Significant Foreign Subsidiaries to the extent that, in the reasonable judgment of the Company and the Administrative Agent, such guaranty would not result in any unreasonably adverse tax obligations as a result thereof, and to the extent such guaranty is not prohibited by applicable laws or regulations, and “Foreign Subsidiary Guarantors” means all such guarantors, collectively.

“Foreign Subsidiary Guaranty” means any of those certain Foreign Subsidiary Guaranties, in the form attached hereto as Exhibit I-2, executed by the Foreign Subsidiary Guarantors in favor of the Administrative Agent, for the ratable benefit of the Lenders, the Swing Line Bank and the Issuing Banks, including, without limitation, the Foreign Subsidiary Guaranty dated as of July 10, 2013 and attached hereto as Exhibit I-3 (as each of the same may be amended, restated, supplemented or otherwise modified) whereby Foreign Subsidiary Guarantors unconditionally guarantee all of the indebtedness, obligations and liabilities of their Foreign Subsidiary Borrower (parent corporation) arising under or in connection with the Loan Documents.

“Foreign Subsidiary Investment Limitation” means (i) at any time the Leverage Ratio is equal to or greater than 2.50 to 1.00 but less than 3.00 to 1.00, aggregate Investments by the Company and its Subsidiaries in Foreign Subsidiaries, measured by the cash value at the time of Investment, shall not exceed $400,000,000 plus the Drawn Foreign Amount, and (ii) at any time the Leverage Ratio is equal to or greater than 3.00 to 1.00, aggregate Investments by the Company and its Subsidiaries in Foreign Subsidiaries, measured by the cash value at the time of Investment, shall not exceed $200,000,000 plus the Drawn Foreign Amount; provided,  however, for any period during which at least 65% of the aggregate voting Equity Interests of a Foreign Subsidiary have been pledged (on a first priority basis and pursuant to agreements, documents and instruments reasonably acceptable to the Required Lenders and the other requisite creditors needed to approve amendments or modifications to the Intercreditor Agreement) to secure the Obligations and the

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obligations owing under and in connection with the financings subject to the Intercreditor Agreement, Investments in such Foreign Subsidiary shall not be included in any determination of compliance with the then applicable Foreign Subsidiary Investment Limitation; provided,  further that any amounts of cash or property distributed as a dividend or otherwise from any Foreign Subsidiary to the Company or any Significant Domestic Incorporated Subsidiary shall be deemed to reduce the aggregate Investments in Foreign Subsidiaries by such amount. In addition to the foregoing,  if, within sixty (60) days after any Investment is made in a Foreign Subsidiary and (i) a pledge as described in the first proviso of this definition is entered into with respect to the Equity Interests of the Foreign Subsidiary into which such Investment is made, (ii) the Foreign Subsidiary into which such Investment is made becomes a Foreign Guarantor, or (iii) the Company or any of its Subsidiaries issues additional Equity Interests, the proceeds of which are used to pay down outstanding Indebtedness in an amount sufficient to reduce the Leverage Ratio to a level that permits such Investment, then such Investment shall not be subject to this Foreign Subsidiary Investment Limitation.

 “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“Governmental Acts” is defined in Section 3.10(A) hereof.

“Governmental Authority” means any nation or government, any federal, state, local or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established to perform any of such functions.

“Hedging Agreements” is defined in Section 7.3(M) hereof.

“Hedging Arrangements” is defined in the definition of “Hedging Obligations” below.

“Hedging Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, commodity prices, exchange rates or forward rates applicable to such party’s assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants or any similar derivative transactions (“Hedging Arrangements”), and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing.

“Impacted Interest Period” has the meaning assigned to such term in the definition of Eurocurrency Base Rate.

“Increasing Lender” is defined in Section 2.22 hereof.

“Incremental Term Loan” is defined in Section 2.22 hereof.

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“Incremental Term Loan Amendment” is defined in Section 2.22 hereof.

 “Indebtedness” of a person means, without duplication, such Person’s (i) obligations for borrowed money, including, without limitation, subordinated indebtedness, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such person’s business payable on terms customary in the trade and other than earn-outs or other similar forms of contingent purchase prices), (iii) obligations, whether or not assumed, secured by Liens on or payable out of the proceeds or production from property or assets now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) Capitalized Lease Obligations, (vi) Contingent Obligations with respect to the Indebtedness of other Persons, (vii) obligations with respect to letters of credit, (viii) Off-Balance Sheet Liabilities, (ix) Receivables Facility Attributed Indebtedness, (x) Disqualified Stock, and (xi) net Hedging Obligations, calculated on a marked-to-market basis.  The amount of Indebtedness of any Person at any date shall be without duplication (i) the outstanding balance at such date of all unconditional obligations as described above and the maximum liability of any such Contingent Obligations at such date and (ii) in the case of Indebtedness of others secured by a Lien to which the property or assets owned or held by such Person is subject, the lesser of the fair market value at such date of any asset subject to a Lien securing the Indebtedness of others and the amount of the Indebtedness secured.

“Indemnified Matters”  isdefined in Section 10.7(B) hereof.

“Indemnitees” is defined in Section 10.7(B) hereof.

“Initial Obligor Group”  means each member of the Obligor Group as of the Closing Date.

“InsO” means the German Insolvency Act (Insolvenzordnung).

“Intercreditor Agreement” means the Second Amended and Restated Intercreditor Agreement, dated as of July 10, 2013 (the form of which is attached hereto as Exhibit K), by and among the Administrative Agent, the 2008 Senior Noteholders, the 2009 Senior Noteholders, and any other credit provider to the Company which may become party thereto from time to time (including the 2013 Senior Noteholders), as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Interest Expense” means, without duplication, for any period, the total interest expense of the Company and its consolidated Subsidiaries, whether paid or accrued (including the interest component of Capitalized Leases, commitment, facility and letter of credit fees, Off-Balance Sheet Liabilities and net payments or receipts (if any) pursuant to Hedging Arrangements relating to interest rate protection), all as determined in conformity with Agreement Accounting Principles.

“Interest Period” means, with respect to a Eurocurrency Rate Loan, a period of one (1), two (2), three (3), six (6), or, if requested by a Borrower and consented to by all Lenders, twelve (12) months, commencing on a Business Day selected by such Borrower on which a Eurocurrency Rate Advance is made to such Borrower pursuant to this Agreement.  Such Interest Period shall end on (but exclude) the day which corresponds numerically to such date one (1), two (2), three (3) or six (6) months (or, if applicable, twelve (12) months) thereafter; provided,  however, that if there is no such numerically corresponding day in such next, second, third or sixth (or, if

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applicable,  twelfth) succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth (or, if applicable, twelfth) succeeding month.  If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided,  however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Screen Rate (for the longest period for which the applicable Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period and (b) the applicable Screen Rate for the shortest period (for which such Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the relevant Screen Rate is available, the applicable Screen Rate for purposes of clause (a) above shall be deemed to be the overnight screen rate where "overnight screen rate" means, in relation to any currency, the overnight rate for such currency determined by the Administrative Agent from such service as the Administrative Agent may select.

 “Investment” means, with respect to any Person, (i) any purchase or other acquisition by that Person of any Indebtedness, Equity Interests or other securities, or of a beneficial interest in any Indebtedness, Equity Interests or other securities, issued by any other Person, (ii) any purchase by that Person of all or substantially all of the assets of a business (whether of a division, branch, unit operation, or otherwise) conducted by another Person, and (iii) any loan, advance (other than deposits with financial institutions, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business.

“IRS” means the Internal Revenue Service and any Person succeeding to the functions thereof.

“Issuing Banks” means each of Wells Fargo, JPMorgan Chase Bank, N.A. or, in each case, any of its Affiliates, or any other Lender in its separate capacity as an issuer of Letters of Credit pursuant to Section 3.1.  The designation of any Lender as an Issuing Bank after the date hereof shall be subject to the prior written consent of such Lender and of the Administrative Agent, which consent of the Administrative Agent shall not be unreasonably withheld or delayed.

“Japanese Yen”  means the lawful currency of Japan.

“Joint Venture”  means any Person in which the Company and its Subsidiaries, collectively, own up to (but not more than) 50% of the Capital Stock thereof.

“Last Twelve-Month Period” means, with respect to any fiscal quarter, the four-fiscal quarter period ending on the last day of such fiscal quarter.

“L/C Documents” is defined in Section 3.4hereof.

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“L/C Draft”  means a draft drawn on an Issuing Bank pursuant to a Letter of Credit.

“L/C Interest”  shall have the meaning ascribed to such term in Section 3.6 hereof.

“L/C Obligations” means, without duplication, an amount equal to the sum of (i) the aggregate of the Dollar Amount then available for drawing under each of the Letters of Credit and (ii) the aggregate outstanding Dollar Amount of all Reimbursement Obligations at such time.  The L/C Obligations of any Lender at any time shall be its Pro Rata Share of the total L/C Obligations at such time.

“Lenders” means the lending institutions listed on the signature pages of this Agreement or parties to Assignment Agreementsdelivered pursuant to Section 13.3, including the Issuing Banks, the Swing Line Banks and each of their respective successors and assigns.

“Lending Installation”  means, with respect to a Lender or the Administrative Agent, any office, branch, subsidiary or affiliate of such Lender or the Administrative Agent.

“Letter of Credit” means the standby letters of credit (i) to be issued by the Issuing Banks pursuant to Section 3.1 hereof or (ii) deemed issued by an Issuing Bank pursuant to Section 3.2 hereof.

“Leverage Ratio” is defined in Section 7.4(A)hereof.

“Leverage Ratio Increase Period”  means any period during which the maximum Leverage Ratio is increased pursuant to Section 7.4(A) upon satisfaction of the Leverage Ratio Increase Requirements.

“Leverage Ratio Increase Requirements” means, in connection with any request by the Company to increase the maximum Leverage Ratio permitted under Section 7.4(A) as described therein, the following:

(i) the Company delivers such request in writing to the Administrative Agent at least three (3) Business Days prior to the date on which such request is to be given effect;

(ii) such request is delivered in connection with a Permitted Acquisition that meets the following criteria: (1) such Permitted Acquisition is for net consideration of at least $50,000,000, and (2) the Leverage Ratio exceeds 3.00 to 1.00 after giving effect to such Permitted Acquisition (as demonstrated by the Company on a pro forma basis to the Administrative Agent’s satisfaction);

(iii) the maximum permitted leverage ratio under each of the 2008 Note Agreement, the 2009 Note Agreement and the 2013 Note Agreement is at least equal to the maximum Leverage Ratio as increased pursuant to the conditions set forth herein (and continues to be at least equal to such increased maximum Leverage Ratio for the duration of the increase); and

(iv) if the Leverage Ratio has previously been increased as permitted under Section 7.4(A), then immediately prior to such request to increase the maximum Leverage Ratio, the

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maximum Leverage Ratio in effect pursuant to Section 7.4(A) was not in excess of 3.50 to 1.00 for the two fiscal quarters most recently ended.

“LIBOR Quoted Currency”  means Dollars, euro, British Pounds Sterling, Japanese Yen and Swiss Francs.

“LIBOR Screen Rate” means, with respect to any Interest Period, the London interbank offered rate administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for such LIBOR Quoted Currency for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion.

 “Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).

“Loan(s)” means, with respect to a Lender, such Lender’s portion of any Advance made pursuant to Section 2.1 hereof, as applicable, and in the case of the Swing Line Bank, any Swing Line Loan made pursuant to Section 2.2 hereof, and collectively, all Revolving Loans and Swing Line Loans, whether made or continued as or converted to Floating Rate Loans or Fixed-Rate Loans.

“Loan Account” is defined in Section 2.12(A) hereof.

“Loan Documents” means this Agreement, any promissory notes executed pursuant to Section 2.12(D), the Domestic Subsidiary Guaranty, the Foreign Subsidiary Guaranty, the Intercreditor Agreement, and all other documents, instruments, notes and agreements executed in connection therewith or contemplated thereby, in each case, as the same may be amended, restated or otherwise modified and in effect from time to time.

“Margin Stock” shall have the meaning ascribed to such term in Regulation U.

“Material Adverse Effect” means a material adverse effect upon (a) the business, financial condition, operations, assets, or properties of the Company and its Subsidiaries, taken as a whole, (b) the ability of the Company or any of its Subsidiaries to perform its material obligations under the Loan Documents, or (c) the ability of the Lenders or the Administrative Agent to enforce the material Obligations.

“Moody’s” means Moody’s Investors Service, Inc., together with its successors and assigns.

 “Multiemployer Plan” means a “Multiemployer Plan” as defined in Section 4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years was, contributed to by either the Company or any member of the Controlled Group.

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“Net Domestic Indebtedness” means, as of any date of determination, the excess, if any, of (i) Indebtedness of the Company, its Domestic Incorporated Subsidiaries and its Foreign Subsidiaries that are not Foreign Subsidiary Borrowers as of such date over (ii) the Unrestricted Domestic Cash Amount as of such date.

“Net Foreign Subsidiary Borrower Indebtedness” means, as of any date of determination, the excess, if any, of (i) Indebtedness of the Foreign Subsidiary Borrowers as of such date over (ii) the Unrestricted Foreign Subsidiary Borrower Cash Amount as of such date.

“Net Income” means, for any period, the net income (or loss) after taxes of the Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with Agreement Accounting Principles; provided, that (i) no income (or loss) of any Joint Venture shall be included in Net Income other than cash dividends or other distributions actually paid to Company or any of its Subsidiaries by such Joint Venture during such period, and (ii) there shall be excluded from Net Income the income of any Subsidiary of the Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary.

“Net Indebtedness” means, as of any date of determination, the sum of Net Foreign Subsidiary Borrower Indebtedness and Net Domestic Indebtedness. 

“Non-Required Lender” is defined in the definition of “Required Lender”.

“Obligations” means all Loans, L/C Obligations, advances, debts, liabilities, obligations, covenants and duties owing by the Company or any of its Subsidiaries to the Administrative Agent, any Lender, the Swing Line Bank, the Arrangers, any Co-Syndication Agent, any Affiliate of the Administrative Agent or any Lender, the Issuing Bank, or any Indemnitee, of any kind or nature, present or future, arising under this Agreement, the L/C Documents, the Domestic Subsidiary Guaranty, the Foreign Subsidiary Guaranty, or any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired.  The term includes, without limitation, all Hedging Obligations owing under Hedging Agreements to any Lender or any Affiliate of any Lender, all interest, charges, expenses, fees, attorneys’ fees and disbursements, paralegals’ fees (in each case whether or not allowed), and any other sum chargeable to the Company or any of its Subsidiaries under this Agreement or any other Loan Document; provided,  however, that the definition of ‘Obligations’ shall not create any guarantee by the Company or any Subsidiary Guarantor of any Excluded Hedging Obligations of such party for purposes of determining any obligations of any such party.

“Obligor Group”  means (a) the Borrowers and (b) the Subsidiary Guarantors.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

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“Off-Balance Sheet Liabilities” of a person means (a) any Receivables Facility Attributed Indebtedness and repurchase obligations or liabilities of such Person or any of its Subsidiaries with respect to Receivables or notes receivable sold by such Person or any of its Subsidiaries, (b) any liabilities of such Person or any of its Subsidiaries under any sale and leaseback transactions which do not create  liabilities on the consolidated balance sheet of such Person, (c) any liabilities of such Person or any of its Subsidiaries under any financing lease or so-called “synthetic” lease transaction, or (d) any obligations of such Person or any of its Subsidiaries arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which, in the case of the foregoing clauses (a) through (d), does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries.

“Original Currency” is defined in Section 2.11(b) hereof.

“Other Connection Taxes” means, with respect to the Administrative Agent, any Lender, or any Issuing Bank, Taxes imposed as a result of a present or former connection between such Person and the jurisdiction imposing such Tax (other than connections arising from such Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” is defined in Section 2.14(E)(ii) hereof.

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a Subsidiary.

“Participants” is defined in Section 13.2(A) hereof.

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 25, 2001)), as in effect from time to time.

“Payment Date” means the last day of each March, June, September and December and the Termination Date; provided, that if any such date falls on a day other than a Business Day, the Payment Date shall be the immediately succeeding Business Day.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Permitted Acquisition” is defined in Section 7.3(G) hereof.

“Permitted Existing Contingent Obligations”  means the Contingent Obligations of the Company and its Subsidiaries identified as such on Schedule 1.1.4 to this Agreement.

“Permitted Existing Indebtedness” means the Indebtedness of the Company and its Subsidiaries identified as such on Schedule 1.1.1 to this Agreement.

“Permitted Existing Investments” means the Investments of the Company and its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.

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“Permitted Existing Liens” means the Liens on assets of the Company and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.

“Permitted Refinancing Indebtedness” means any replacement, renewal, refinancing or extension of any Indebtedness permitted by this Agreement that (i) does not exceed the aggregate maximum principal amount of and maximum unused commitments under (in each case, giving effect to any permitted increases expressly provided for therein), and accrued interest and any applicable premium and associated fees and expenses of, the Indebtedness being replaced, renewed, refinanced or extended, (ii) does not have a Weighted Average Life to Maturity at the time of such replacement, renewal, refinancing or extension that is less than the Weighted Average Life to Maturity of the Indebtedness being replaced, renewed, refinanced or extended, (iii) does not rank at the time of such replacement, renewal, refinancing or extension senior to the Indebtedness being replaced, renewed, refinanced or extended, and (iv) does not contain terms (including, without limitation, terms relating to security, covenants, subordination, event of default and remedies) materially less favorable to the Company than those applicable to the Indebtedness being replaced, renewed, refinanced or extended.

“Person” means any individual, corporation, firm, enterprise, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company or other entity of any kind, or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” means an employee benefit plan defined in Section 3(3) of ERISA in respect of which the Company or any member of the Controlled Group is, or within the immediately preceding six (6) years was, an “employer” as defined in Section 3(5) of ERISA (but excluding Multi-Employer Plans).

“Pricing Grid Leverage Ratio” means the Leverage Ratio; provided, that when determining the Unrestricted Domestic Cash Amount and Unrestricted Foreign Subsidiary Borrower Cash Amount components thereof, up to $100,000,000 in the aggregate may be deducted in the calculation of Net Domestic Indebtedness and Net Foreign Subsidiary Borrower Indebtedness (as opposed to the individual $20,000,000 limitations that are otherwise set forth in such definitions).

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Wells Fargo as its prime rate in effect at its principal office; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Pro Rata Share” means, with respect to any Lender, the percentage obtained by dividing (x) such Lender’s Revolving Loan Commitment at such time (in each case, as adjusted from time to time in accordance with the provisions of this Agreement) by (y) the Aggregate Revolving Loan Commitment at such time; provided,  however, if all of the Revolving Loan Commitments are terminated pursuant to the terms of this Agreement, then “Pro Rata Share” means the percentage obtained by dividing (x) the sum of (A) such Lender’s Revolving Loans, plus (B) such Lender’s share of the obligations to purchase participations in Swing Line Loans and Letters of Credit, by (y) the sum of (A) the aggregate outstanding amount of all Revolving Loans, plus (B) the aggregate outstanding amount of all Swing Line Loans and all Letters of Credit.  Notwithstanding the

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foregoing, in the case of Section 2.24, when a Defaulting Lender shall exist, each Defaulting Lender’s Revolving Loan Commitment, Revolving Loans and share of Swing Line Loans and Letters of Credit shall be disregarded as contemplated by Section 2.24 when determining “Pro Rata Share” hereunder.

“Purchasers” is defined in Section 13.3(A).

“Quotation Day” means, with respect to any Eurocurrency Rate Loan for any Interest Period, (i) if the currency is euro, the day that is two (2) TARGET2 Days before the first day of such Interest Period, and (ii) for any other currency, two (2) Business Days prior to the commencement of such Interest Period (unless, in each case, market practice differs in the relevant market where the Eurocurrency Base Rate for such currency is to be determined, in which case the Quotation Day will be determined by the Administrative Agent in accordance with market practice in such market (and if quotations would normally be given on more than one day, then the Quotation Day will be the last of those days)).

 “Rate Option”  means the Eurocurrency Rate or the Floating Rate, as applicable.

“Receivable(s)” means and includes all of the Company’s and each Subsidiary’s presently existing and hereafter arising or acquired accounts, accounts receivable, and all present and future rights of the Company or such Subsidiary to payment for goods sold or leased or for services rendered in the ordinary course of the Company’s or such Subsidiary’s business (except those evidenced by instruments or chattel paper), whether or not they have been earned by performance, and all rights in any merchandise or goods which any of the same may represent, and all rights, title, security and guarantees with respect to each of the foregoing, including, without limitation, any right of stoppage in transit.

“Receivables Facility Attributed Indebtedness” means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase.

“Reference Bank Rate” means the arithmetic mean of the rates supplied to the Administrative Agent at its request by the Reference Banks (as the case may be) as of the Specified Time on the Quotation Day for Loans in the applicable currency and the applicable Interest Period:

(a)  in relation to Loans in Canadian Dollars, as the rate at which the relevant Reference Bank is willing to extend credit by the purchase of banker’s acceptances which have been accepted by banks which are for the time being customarily regarded as being of appropriate credit standing for such purpose with a term to maturity equal to the relevant period;

(b)  in relation to Loans in any currency other than Canadian Dollars, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers in reasonable market size in that currency and for that period.

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“Reference Banks” means Wells Fargo Bank, National Association and such other banks as may be appointed by the Administrative Agent in consultation with the Company. No Lender shall be obligated to be a Reference Bank without its consent.

 “Register” is defined in Section 13.3(D) hereof.

“Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by and to brokers and dealers of securities for the purpose of purchasing or carrying margin stock (as defined therein).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks, non-banks and non-broker lenders for the purpose of purchasing or carrying Margin Stock applicable to member banks of the Federal Reserve System.

“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by foreign lenders for the purpose of purchasing or carrying margin stock (as defined therein).

“Reimbursement Obligation” is defined in Section 3.7 hereof.

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater.

“Replacement Lender” is defined in Section 2.19 hereof.

“Reportable Event”  means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days after such event occurs.

“Request for Letter of Credit” is defined in Section 3.4(A) hereof.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Revolving Credit Obligations and unused Revolving Loan Commitments representing more than 50% of the sum of the total Revolving Credit Obligations and unused Revolving Loan Commitments at such time.

“Requirements of Law” means, as to any Person, the charter and by-laws or other organizational or governing documents of such Person, and any law, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject including, without limitation, the Securities Act, the Securities Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker Adjustment and

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Retraining Notification Act, Americans with Disabilities Act of 1990, rules, regulations and executive orders administered and enforced by OFAC, and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or permit or environmental, labor, employment, occupational safety or health law, rule or regulation, including Environmental, Health or Safety Requirements of Law.

“Reserves” shall mean the maximum reserve requirement, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) with respect to “Eurocurrency liabilities” or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurocurrency Rate Loans is determined or category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to United States residents, or any similar reserves required by any other Governmental Authority including, without limitation, requirements imposed by the Bank of England, the Financial Services Authority or the European Central Bank.

“Restricted Payment” means (i) any dividend or other distribution, direct or indirect, on account of any Equity Interests of the Company now or hereafter outstanding, except a dividend payable solely in the Company’s Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase or other acquisition for value, direct or indirect, of any Equity Interests of the Company or any of its Subsidiaries now or hereafter outstanding, other than in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than Disqualified Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or other acquisition for value, direct or indirect, of any Indebtedness subordinated to the Obligations, (iv) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any Indebtedness (other than the Obligations) or any Equity Interests of the Company, or any of its Subsidiaries, or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission and (v) any transaction that has an effect substantially similar to the effect of any of the transactions described in the foregoing clauses (i) through (iv).

“Revolving Credit Availability” means, at any particular time, the amount by which (x) the Aggregate Revolving Loan Commitment at such time exceeds (y) the Dollar Amount of the Revolving Credit Obligations outstanding at such time.

“Revolving Credit Obligations” means, at any particular time, the sum of (i) the outstanding principal Dollar Amount of the Revolving Loans at such time, plus (ii) the outstanding principal amount of the Swing Line Loans at such time, plus (iii) the Dollar Amount of outstanding L/C Obligations at such time.

“Revolving Loan” is defined in Section 2.1hereof.

“Revolving Loan Commitment” means, for each Lender, the obligation of such Lender to make Revolving Loans and to purchase participations in Letters of Credit and to participate in Swing Line Loans in an aggregate amount not exceeding the amount set forth on Exhibit A to this Agreement opposite its name thereon under the heading “Revolving Loan Commitment” or the signature page of the Assignment Agreement by which it became a Lender, as such amount may

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be modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment Agreement.

“Revolving Loan Termination Date”  means April 28, 2020.

“S&P” means Standard and Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, together with its successors and assigns.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“Sanctions”  means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.

“Screen Rate” means the LIBOR Screen Rate and the CDOR Screen Rate collectively and individually as the context may require.

 “Securities Act”  means the Securities Act of 1933, as amended from time to time.

“Significant Domestic Incorporated Subsidiary” means any Domestic Incorporated Subsidiary whose assets or sales represent more than 10% of the Company’s and its Subsidiaries’ Consolidated Assets or consolidated sales, with any determination of Consolidated Assets and consolidated sales based upon amounts shown in the Company’s most recently delivered annual consolidated financial statements.

“Significant Foreign Subsidiary” means the Foreign Subsidiary Borrowers and any other Foreign Subsidiary of the Company whose assets represent more than 10% of the Company’s and its Subsidiaries’ Consolidated Assets, with such determination of such Foreign Subsidiary’s assets and the Consolidated Assets being based upon amounts shown in the Company’s most recently delivered annual consolidated financial statements; provided that (i) with respect to any such Foreign Subsidiary which as of the Closing Date had, and thereafter continues to have, assets representing more than 3% of the Company’s and its Subsidiaries’ Consolidated Assets, such Foreign Subsidiary shall be deemed a Significant Foreign Subsidiary and (ii) solely for purposes of determining those Foreign Subsidiaries of Foreign Subsidiary Borrowers that shall be required to become Foreign Subsidiary Guarantors in accordance with Section 5.3(E), “Significant Foreign Subsidiary” shall be deemed to mean those Foreign Subsidiaries of the Company whose assets represent more than 3% of the Company’s and its Subsidiaries’ Consolidated Assets (as determined as set forth above).

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“Significant Subsidiary” means either a Significant Domestic Incorporated Subsidiary or a Significant Foreign Subsidiary.

“Single Employer Plan”  means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group.

“Specified Time” means (i) in relation to a Loan in Canadian Dollars, as of 11:00 a.m., Toronto, Ontario time and (ii) in relation to a Loan in a LIBOR Quoted Currency, as of 11:00 a.m., London time.

“Stock Repurchase Plan” means a formalized share repurchase plan or program approved by the board of directors of the Company and providing for the repurchase of the Capital Stock of the Company from its shareholders (either directly or through open market purchases).

“Subsidiary” of a Person means (i) any corporation more than fifty percent (50%) of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than fifty percent (50%) of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.  Unless otherwise expressly provided, all references herein to a “Subsidiary” means a Subsidiary of the Company.

“Subsidiary Guarantors”  means the Domestic Subsidiary Guarantors and the Foreign Subsidiary Guarantors, together with their respective successors and assigns.

“Swing Line Bank” means Wells Fargo or any other Lender as a successor Swing Line Bank pursuant to the terms hereof.

“Swing Line Commitment” means the obligation of the Swing Line Bank to make Swing Line Loans to any Borrower up to a maximum principal amount of $50,000,000 at any one time outstanding.

“Swing Line Exposure”  means, at any time, the aggregate principal amount of all Swing Line Loans outstanding at such time.  The Swing Line Exposure of any Lender shall be its Pro Rata Share of the total Swing Line Exposure at such time.

“Swing Line Loan” means a Loan made available to a Borrower by the Swing Line Bank pursuant to Section 2.2 hereof.

“Swing Line Repayment Date” is defined in Section 2.2(D).

“Swiss Francs” means the lawful currency of Switzerland.

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET2) payment system (or, if such payment system ceases to be operative, such other payment system (if any) reasonably determined by the Administrative Agent to be a suitable replacement) for the settlement of payments in euro.

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“TARGET2 Day”  means a day that TARGET2 is open for the settlement of payments in euro.

 “Taxes” is defined in Section 2.14(E)(i) hereof.

“Termination Date” means the earlier of (a) the Revolving Loan Termination Date, and (b) the date of termination in whole of the Aggregate Revolving Loan Commitment pursuant to Section 2.5 hereof or the Revolving Loan Commitments pursuant to Section 9.1 hereof.

“Termination Event” means (i) a Reportable Event with respect to any Benefit Plan; (ii) the withdrawal of the Company or any member of the Controlled Group from a Benefit Plan during a plan year in which the Company or such Controlled Group member was a “substantial employer” as defined in Section 4001(a)(2) of ERISA with respect to such Plan; (iii) the imposition of an obligation under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate or appoint a trustee to administer a Benefit Plan; (v) any event or condition which would constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or complete withdrawal of the Company or any member of the Controlled Group from a Multiemployer Plan.

“Transferee” is defined in Section 13.4.

“Transitional Letter of Credit” is defined in Section 3.2.

 “Type” means, with respect to any Loan, its nature as a Floating Rate Loan or a Fixed-Rate Loan.

“Unfunded Liabilities” means (i) in the case of Single Employer Plans, the amount (if any) by which the present value of all vested nonforfeitable benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the withdrawal liability that would be incurred by the Controlled Group if all members of the Controlled Group completely withdrew from all Multiemployer Plans.

“Unmatured Default” means an event which, but for the lapse of time or the giving of notice, or both, would constitute a Default.

“Unrestricted Domestic Cash Amount” means, as of any date of determination, that portion of the Company’s and its consolidated Subsidiaries’ (other than Foreign Subsidiary Borrowers’) aggregate cash and Cash Equivalents in excess of $10,000,000 that is in the United States of America and that is not encumbered by or subject to any Lien (including, without limitation, any Lien permitted hereunder), setoff (other than ordinary course setoff rights of a depository bank arising under a bank depository agreement for customary fees, charges and other account-related expenses due to such depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any Person; provided,  however, that notwithstanding the actual amount of the Unrestricted Domestic Cash Amount, no more than $20,000,000 of the Unrestricted Domestic Cash Amount may be deducted in the calculation of Net Domestic Indebtedness.

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“Unrestricted Foreign Subsidiary Borrower Cash Amount” means, as of any date of determination, that portion of the Foreign Subsidiary Borrowers’ aggregate cash and Cash Equivalents in excess of $10,000,000 that is not encumbered by or subject to any Lien (including, without limitation, any Lien permitted hereunder), setoff (other than ordinary course setoff rights of a depository bank arising under a bank depository agreement for customary fees, charges and other account-related expenses due to such depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any Person; provided,  however, that notwithstanding the actual amount of the Unrestricted Foreign Subsidiary Borrower Cash Amount, no more than $20,000,000 of the Unrestricted Foreign Subsidiary Borrower Cash Amount may be deducted in the calculation of Net Foreign Subsidiary Borrower Indebtedness.

“Weighted Average Life to Maturity” means when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness.

“Wells Fargo” means Wells Fargo Bank, National Association, in its individual capacity, and its successors.

 “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Woodward Germany”  means Woodward Aken GmbH, a limited liability company under the laws of the Federal Republic of Germany, registered with the commercial register kept at the local court of Stendal under registration number HRB 10125.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.  Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given them in accordance with generally accepted accounting principles as in effect from time to time.

1.2.  References.  Any references to Subsidiaries of the Company set forth herein with respect to representations and warranties which deal with historical matters shall be deemed to include the Company and its Subsidiaries and shall not in any way be construed as consent by the Administrative Agent or any Lender to the establishment, maintenance or acquisition of any Subsidiary, except as may otherwise be permitted hereunder.

1.3.  Construction  This Agreement is made in English language. For the avoidance of doubt, the English language version shall prevail over any translation of this Agreement. However, where a German translation or word or phrase appears in the text of this Agreement, the German meaning and the underlying German concept shall prevail.

ARTICLE II:  REVOLVING LOAN FACILITIES

2.1.  Revolving Loans.

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(A)  Upon the satisfaction of the conditions precedent set forth in Sections 5.1 and 5.2, from and including the Closing Date and prior to the Termination Date, each Lender severally and not jointly agrees, on the terms and conditions set forth in this Agreement, to make revolving loans to the Borrowers from time to time, in Dollars or Eurocurrency Rate Loans in any Agreed Currency, in a Dollar Amount not to exceed such Lender’s Pro Rata Share of Revolving Credit Availability at such time (each individually, a “Revolving Loan” and, collectively, the “Revolving Loans”); provided,  however, that, after giving effect to any such Revolving Loan, (i) the Dollar Amount of the Revolving Credit Obligations shall not exceed the Aggregate Revolving Loan Commitment and (ii) the Dollar Amount of the aggregate outstanding principal amount of Revolving Loans made hereunder in a currency other than Dollars or made to the Foreign Subsidiary Borrowers shall not exceed $200,000,000.  Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow Revolving Loans at any time prior to the Termination Date.  At the relevant Borrower’s option (so long as such option is exercised in accordance with Sections 2.7 and 2.9 and the other terms and conditions of this Agreement), Revolving Loans shall be either Floating Rate Loans or Eurocurrency Rate Loans.  On the Termination Date, the Borrowers shall repay in full the outstanding principal balance of the Revolving Loans.  Each Advance under this Section 2.1 shall consist of Revolving Loans made by each Lender ratably in proportion to such Lender’s respective Pro Rata Share.

(B)  Borrowing/Election Notice.  In accordance with Section 2.13, the applicable Borrower (or the Company on behalf of the applicable Borrower) may telephonically request Advances hereunder, provided,  however, that (i) notices relating to Loans in an Agreed Currency other than Dollars may not be delivered telephonically and (ii) immediately following any telephonic request the applicable Borrower (or the Company on behalf of the applicable Borrower) shall deliver to the Administrative Agent a written confirmation of such telephonic request.  If a telephonic request is not made with respect to any Advance in accordance with Section 2.13, then the applicable Borrower (or the Company on behalf of the applicable Borrower) shall deliver to the Administrative Agent a Borrowing/Election Notice, signed by it, in accordance with the terms of Section 2.7, in order to request such Advance.  In either case, the Administrative Agent shall promptly notify each Lender of such request.

(C)  Making of Revolving Loans.  Promptly after receipt of the Borrowing/Election Notice under Section 2.7 in respect of Revolving Loans, the Administrative Agent shall notify each Lender by telex or telecopy, or other similar form of transmission, of the requested Revolving Loan.  Each Lender shall make available its Revolving Loan in accordance with the terms of Section 2.6.  The Administrative Agent will promptly make the funds so received from the Lenders available to the applicable Borrower at the Administrative Agent’s office in Charlotte, North Carolina or the Administrative Agent’s Eurocurrency Payment Office corresponding with the applicable Borrower on the applicable Borrowing Date and shall disburse such proceeds in accordance with such Borrower’s disbursement instructions set forth in such Borrowing/Election Notice.  The failure of any Lender to deposit the amount described above with the Administrative Agent on the applicable Borrowing Date shall not relieve any other Lender of its obligations hereunder to make its Revolving Loan on such Borrowing Date.

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2.2.  Swing Line Loans.

(A)  Amount of Swing Line Loans.  Upon the satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, from and including the Closing Date and prior to the Termination Date, the Swing Line Bank agrees, on the terms and conditions set forth in this Agreement, to make swing line loans to the Company from time to time, in Dollars, in an amount not to exceed the Swing Line Commitment (each, individually, a “Swing Line Loan” and collectively, the “Swing Line Loans”); provided,  however, at no time shall the Dollar Amount of the Revolving Credit Obligations exceed the Aggregate Revolving Loan Commitment; and provided,  further, that at no time shall the sum of (a) the Swing Line Lender’s Pro Rata Share of the Swing Line Loans, plus (b) the outstanding Dollar Amount of Revolving Loans made by the Swing Line Bank pursuant to Section 2.1, exceed the Swing Line Bank’s Revolving Loan Commitment at such time.  Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow Swing Line Loans at any time prior to the Termination Date.

(B)  Borrowing/Election Notice.  The Company shall deliver to the Administrative Agent and the Swing Line Bank a Borrowing/Election Notice, signed by it, not later than 1:00 p.m. (Chicago time) on the Borrowing Date of each Swing Line Loan, specifying (i) the applicable Borrowing Date (which date shall be a Business Day and which may be the same date as the date the Borrowing/Election Notice is given), and (ii) the aggregate amount of the requested Swing Line Loan which shall be an amount not less than $100,000. 

(C)  Making of Swing Line Loans.  Promptly after receipt of the Borrowing/Election Notice under Section 2.2(B) in respect of Swing Line Loans, the Administrative Agent shall notify each Lender by telex or telecopy, or other similar form of transmission, of the requested Swing Line Loan.  Not later than 2:00 p.m. (Chicago time) on the applicable Borrowing Date, the Swing Line Bank shall make available its Swing Line Loan, in funds immediately available in Chicago to the Administrative Agent at its address specified pursuant to Article XIV.  The Administrative Agent will promptly make the funds so received from the Swing Line Bank available to the Company on the Borrowing Date at the Administrative Agent’s aforesaid address.

(D)  Repayment of Swing Line Loans.  Each Swing Line Loan shall be paid in full by the applicable Borrower on or before the later to occur of (x) the fifth (5th) Business Day after the Borrowing Date for such Swing Line Loan and (y) such other Business Day as may be agreed to in writing by the Company and the Swing Line Lender (the “Swing Line Repayment Date”).  The Company may at any time pay, without penalty or premium, all outstanding Swing Line Loans or, in a minimum amount of $100,000 and increments of $100,000 in excess thereof, any portion of the outstanding Swing Line Loans, upon same-day notice to the Administrative Agent and the Swing Line Bank.  In addition, the Administrative Agent (i) may at any time in its sole discretion with respect to any outstanding Swing Line Loan, or (ii) shall on the Swing Line Repayment Date require each Lender (including the Swing Line Bank) to make a Revolving Loan in the amount of such Lender’s Pro Rata Share of such Swing Line Loan, for the purpose of repaying such Swing Line Loan.  No later than 2:00 p.m. (Chicago time) on the date of any notice received pursuant to this Section 2.2(D), each Lender shall make available its required Revolving Loan or Revolving Loans, in funds immediately available in Chicago to the Administrative Agent at its address specified pursuant to Article XIV.  Revolving Loans made pursuant to this Section 2.2(D) shall initially be Floating Rate Loans and thereafter may be continued as Floating Rate Loans or

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converted into Eurocurrency Rate Loans in the manner provided in Section 2.9 and subject to the other conditions and limitations therein set forth and set forth in this Article II.  Unless a Lender shall have notified the Swing Line Bank, prior to its making any Swing Line Loan, that any applicable condition precedent set forth in Sections 5.1 and 5.2 had not then been satisfied, such Lender’s obligation to make Revolving Loans pursuant to this Section 2.2(D) to repay Swing Line Loans shall be unconditional, continuing, irrevocable and absolute and shall not be affected by any circumstances, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Administrative Agent, the Swing Line Bank or any other Person, (b) the occurrence or continuance of a Default or Unmatured Default, (c) any adverse change in the condition (financial or otherwise) of the Company and/or its Subsidiaries, or (d) any other circumstances, happening or event whatsoever.  In the event that any Lender fails to make payment to the Administrative Agent of any amount due under this Section 2.2(D), the Administrative Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Administrative Agent receives such payment from such Lender or such obligation is otherwise fully satisfied.  In addition to the foregoing, if for any reason any Lender fails to make payment to the Administrative Agent of any amount due under this Section 2.2(D), such Lender shall be deemed, at the option of the Administrative Agent, to have unconditionally and irrevocably purchased from the Swing Line Bank, without recourse or warranty, an undivided interest and participation in the applicable Swing Line Loan in the amount of such Revolving Loan, and such interest and participation may be recovered from such Lender together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand and ending on the date such amount is received.  On the Termination Date, the Company shall repay in full the outstanding principal balance of the Swing Line Loans.

2.3.  Rate Options for all Advances; Maximum Interest Periods.  The Swing Line Loans shall be Floating Rate Advances or shall bear interest at such other rate as may be agreed to between the Company and the Swing Line Bank at the time of the making of any such Swing Line Loan.  The Revolving Loans may be Floating Rate Advances or Eurocurrency Rate Advances, or a combination thereof, selected by the applicable Borrower in accordance with Section 2.9; provided, however, that Revolving Loans denominated in any Agreed Currency other than Dollars may only be Eurocurrency Rate Advances.  The applicable Borrower may select, in accordance with Section 2.9, Rate Options and Interest Periods applicable to portions of the Revolving Loans; provided, that there shall be no more than eight (8)Interest Periods in effect with respect to all of the Loans at any time.

2.4.  Optional Payments; Mandatory Prepayments.

(A)  Optional Payments.  Each Borrower may from time to time and at any time upon at least one (1) Business Day’s prior written notice repay or prepay, without penalty or premium all or any part of its outstanding Floating Rate Advances in an aggregate minimum amount of $1,000,000 and in integral multiples of $100,000 in excess thereof; provided that Swingline Advances may be paid on same-day notice.  Eurocurrency Rate Advances may be voluntarily repaid or prepaid prior to the last day of the applicable Interest Period, subject to the indemnification provisions contained in Section 4.4 in an aggregate minimum amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof (or, if less, in the full amount of any Loan), provided, that a Borrower may not so prepay Eurocurrency Rate Advances unless it

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shall have provided at least three (3) Business Days’ prior written notice to the Administrative Agent of such prepayment if the Agreed Currency is Dollars and four (4) Business Days’ prior written notice to the Administrative Agent if the Agreed Currency is a Currency other than Dollars.

(B)  Mandatory Prepayments of Revolving Loans.

(i)  If at any time and for any reason (other than fluctuations in currency exchange rates) the Dollar Amount of the Revolving Credit Obligations are greater than the Aggregate Revolving Loan Commitment, the Borrowers shall immediately make a mandatory prepayment of the Obligations in an amount equal to such excess.

(ii)  If at any time:

(x)the Dollar Amount of the Revolving Credit Obligations exceeds one hundred five percent (105%) of the Aggregate Revolving Loan Commitment, whether as a result of fluctuations in currency exchange rates, or otherwise, the Borrowers for the ratable benefit of the Lenders shall immediately prepay Loans in an aggregate amount such that after giving effect thereto the Dollar Amount of the Revolving Credit Obligations is less than or equal to the Aggregate Revolving Loan Commitment; or

(y)the Dollar Amount of the aggregate outstanding principal amount of Revolving Loans made pursuant to Section 2.1(A) in a currency other than Dollars exceeds $200,000,000, whether as a result of fluctuations in currency exchange rates or otherwise, the Borrowers shall on such date prepay loans in an amount sufficient to eliminate such excess.

2.5.  Reduction of Commitments.  The Borrowers may permanently reduce the Aggregate Revolving Loan Commitment in whole, or in part ratably among the Lenders, in an aggregate minimum amount of $5,000,000 with respect thereto and integral multiples of $1,000,000 in excess of that amount with respect thereto (unless the Aggregate Revolving Loan Commitment is reduced in whole), upon at least three (3) Business Days’ prior written notice to the Administrative Agent (or at least four (4) Business Days if a concurrent prepayment in an Agreed Currency other than Dollars is requested), which notice shall specify the amount of any such reduction; provided,  however, that the amount of the Aggregate Revolving Loan Commitment may not be reduced below the aggregate principal Dollar Amount of the outstanding Revolving Credit Obligations.  All accrued facility fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Loans hereunder.

2.6.  Method of Borrowing.  Not later than 1:00 p.m. (Chicago time) on each Borrowing Date, each Lender shall make available its Revolving Loan in immediately available funds in the Agreed Currency to the Administrative Agent at its address specified pursuant to Article XIV, unless the Administrative Agent has notified the Lenders that such Loan is to be made available to the applicable Borrower at the Administrative Agent’s Eurocurrency Payment Office, in which case each Lender shall make available its Loan or Loans, in funds immediately available to theAdministrative Agent at its Eurocurrency Payment Office, not later than 1:00 p.m. (local time in

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the city of the Administrative Agent’s Eurocurrency Payment Office) (except for Loans denominated in Canadian Dollars, in which case such funds shall be made immediately available no later than 3:00 p.m. London time) in the Agreed Currency designated by the Administrative Agent.  The Administrative Agent will promptly make the funds so received from the Lenders available to the applicable Borrower at the Administrative Agent’s aforesaid address or, with respect to any Loan to a Foreign Subsidiary Borrower, into a designated account in such Foreign Subsidiary Borrower’s jurisdiction of organization, as applicable.

2.7.  Method of Selecting Types, Currency and Interest Periods for Advances.  The applicable Borrower (or the Company on the applicable Borrower’s behalf) shall select the Type of Advance and, in the case of each Eurocurrency Rate Advance,the Interest Period and Agreed Currency applicable to each Advance from time to time.  The applicable Borrower shall give the Administrative Agent irrevocable notice in substantially the form of Exhibit B hereto (a “Borrowing/Election Notice”) not later than 12:00 noon (Chicago time) (a) on the Borrowing Date of each Floating Rate Advance, and (b) three (3) Business Days before the Borrowing Date for each Eurocurrency Rate Advance to be made in Dollars, and (c) four (4) Business Days before the Borrowing Date for each Eurocurrency Rate Advance to be made in any Agreed Currency other than Dollars or each Eurocurrency Rate Advance to be made to a Foreign Subsidiary Borrower, specifying:  (i) the Borrowing Date (which shall be a Business Day) of such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of Advance selected; and (iv) in the case of each Eurocurrency Rate Advance, the Interest Period and Agreed Currency applicable thereto.  Each Floating Rate Advance and all Obligations other than Loans shall bear interest from and including the date of the making of such Advance, in the case of Loans, and the date such Obligation is due and owing in the case of such other Obligations, to (but not including) the date of repayment thereof at the Floating Rate changing when and as such Floating Rate changes.  Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Loan will take effect simultaneously with each change in the Alternate Base Rate.  Each Eurocurrency Rate Advance shall bear interest from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such Eurocurrency Rate Advance.

2.8.  Minimum Amount of Each Advance.  Each Advance (other than an Advance to repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum amount of $5,000,000 (or the approximate Equivalent Amount of any Agreed Currency other than Dollars) and in multiples of $1,000,000 (or the approximate Equivalent Amount of any Agreed Currency other than Dollars) if in excess thereof; provided,  however, that any Floating Rate Advance may be in the amount of the unused Aggregate Revolving Loan Commitment.

2.9.  Method of Selecting Types, Currency and Interest Periods for Conversion and Continuation of Advances.

(A)  Right to Convert.  Each Borrower may elect from time to time, subject to the provisions of Section 2.3 and this Section 2.9, to convert all or any part of a Loan of any Type into any other Type or Types of Loan; provided that any conversion of any Eurocurrency Rate Advance shall be made on, and only on, the last day of the Interest Period applicable thereto.

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(B)  Automatic Conversion and Continuation.  Floating Rate Loans shall continue as Floating Rate Loans unless and until such Floating Rate Loans are converted into Eurocurrency Rate Loans.  Eurocurrency Rate Loans in Dollars shall continue as Eurocurrency Rate Loans in Dollars until the end of the then applicable Interest Period therefor, at which time such Eurocurrency Rate Loans shall be automatically converted into Floating Rate Loans unless the applicable Borrower shall have given the Administrative Agent notice in accordance with Section 2.9(D) requesting that, at the end of such Interest Period, such Eurocurrency Rate Loans continue as a Eurocurrency Rate Loan.  Unless a Borrowing/Election Notice shall have timely been given in accordance with the terms of this Section 2.9, Eurocurrency Rate Advances in an Agreed Currency other than Dollars shall automatically continue as Eurocurrency Rate Advances in the same Agreed Currency with an Interest Period of one (1) month.

(C)  No Conversion Post-Default; Limited Conversion Post-Unmatured Default.  Notwithstanding anything to the contrary contained in Section 2.9(A) or Section 2.9(B), (x) no Loan may be converted into or continued as a Eurocurrency Rate Loan (except with the consent of the Required Lenders) when any Default has occurred and is continuing and (y) no Loan may be converted into or continued as a Eurocurrency Rate Loan with an Interest Period greater than one month (except with the consent of the Required Lenders) when any Unmatured Default has occurred and is continuing.

(D)  Borrowing/Election Notice.  Subject to clause (B) above, each Borrower shall give the Administrative Agent an irrevocable Borrowing/Election Notice of each conversion of a Floating Rate Loan into a Eurocurrency Rate Loan or continuation of a Eurocurrency Rate Loan not later than 12:00 noon (Chicago time) (x) three (3) Business Days prior to the date of the requested conversion or continuation, with respect to any Loan to be converted or continued as a Eurocurrency Rate Loan in Dollars, and (y) four (4) Business Days prior to the date of the requested conversion or continuation with respect to any Loan in an Agreed Currency other than Dollars to be converted or continued as a Eurocurrency Rate Loan or any Eurocurrency Rate Loan to be continued and made to a Foreign Subsidiary Borrower, specifying:  (i) the requested date (which shall be a Business Day) of such conversion or continuation; (ii) the amount and Type of the Loan to be converted or continued; and (iii) the amount of Eurocurrency Rate Loan(s) into which such Loan is to be converted or continued, the Agreed Currency, and the duration of the Interest Period applicable thereto.

2.10.  Default Rate.  Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by any Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section, (ii) in the case of any other amount, 2% plus the rate applicable to Floating Rate Loans as provided in paragraph (a) of this Section and (iii) in the case of the fee described in Section 3.8(A), 2% plus the then Applicable L/C Fee Percentage.

2.11.  Method of Payment.  (a) All payments of principal, interest, fees, commissions and L/C Obligations hereunder shall be made, without setoff, deduction or counterclaim (unless indicated otherwise in Section 2.14(E)), in immediately available funds to the Administrative Agent (i) at the Administrative Agent’s address specified pursuant to Article XIV with respect to

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Advances or other Obligations denominated in Dollars and (ii) at the Administrative Agent’s applicable Eurocurrency Payment Office with respect to any Advance or other Obligations denominated in an Agreed Currency other than Dollars or payments made by a Foreign Subsidiary Borrower, or at any other Lending Installation of theAdministrative Agent specified in writing by the Administrative Agent to the applicable Borrower, by 1:00p.m. (Chicago time) or, with respect to payments covered by clause (ii), 1:00 p.m. local time in the city of the applicable Eurocurrency Payment Office on the date when due and shall be made ratably among the Lenders (unless such amount is not to be shared ratably in accordance with the terms hereof).  Each Advance shall be repaid or prepaid in the Agreed Currency in which it was made in the amount borrowed and interest payable thereon shall also be paid in such currency.  Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in the same type of funds which the Administrative Agent received at its address specified pursuant to Article XIV or at any Lending Installation specifiedin a notice received by the Administrative Agent from such Lender.  Any payment owing by a Borrower to a Lender shall be deemed to have been paid to such Lender by such Borrower upon the Administrative Agent’s receipt of such payment from such Borrower.  Each Borrowerauthorizes the Administrative Agent to charge the account of such Borrower maintained with Wells Fargo for each payment of principal, interest, fees, commissions and L/C Obligations as it becomes duehereunder; provided, that the Administrative Agent promptly notifies the Borrower thereof.  Each reference to the Administrative Agent in this Section 2.11 shall also be deemed to refer, and shall apply equally, to each Issuing Bank, in the case of payments required to be made by a Borrower to any Issuing Bank pursuant to Article III.

(b)  Notwithstanding the foregoing provisions of this Section, if, after the making of any Advance in any currency other than Dollars, currency control or exchange regulations are imposed in the country which issues such Agreed Currency with the result that different types of such Agreed Currency (the “New Currency”) are introduced and the type of currency in which the Advance was made (the “Original Currency”) no longer exists or the applicable Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by such Borrower hereunder in such currency shall be made to the Administrative Agent in such amount and such type of the New Currency or Dollars as shall be equivalent to the amount of such payment otherwise due hereunder in the Original Currency.  In addition, notwithstanding the foregoing provisions of this Section, if, after the making of any Advance in any currency other than Dollars, the applicable Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in the type of currency in which such Advance was made because of the imposition of any such currency control or exchange regulation, then such Advance shall instead be repaid when due in Dollars in a principal amount equal to the Dollar Amount (as of the date of repayment) of such Advance.

2.12.  Evidence of Debt.

(A)  Loan Account.  Each Lender shall maintain in accordance with its usual practice an account or accounts (a “Loan Account”) evidencing the indebtedness of the Borrowers to such Lender owing to such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

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(B)  Register.  The Register maintained by the Administrative Agent pursuant to Section 13.3(D) shall include a control account, and a subsidiary account for each Lender, in which accounts (taken together) shall be recorded (i) the date and the amount of each Loan made hereunder, the Type thereof and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder, (iii) the effective date and amount of each Assignment Agreement delivered to and accepted by it and the parties thereto pursuant to Section 13.3, (iv) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof, and (v) all other appropriate debits and credits as provided in this Agreement, including, without limitation, all fees, charges, expenses and interest.

(C)  Entries in Loan Account and Register.  The entries made in the Loan Account, the Register and the other accounts maintained pursuant to subsections (A) or (B) of this Section shall be conclusive and binding for all purposes, absent manifest error, gross negligence or willful misconduct, unless the applicable Borrower objects to information contained in the Loan Accounts, the Register or the other accounts within forty-five (45) days of such Borrower’s receipt of such information; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

(D)  Notes Upon Request.  Any Lender may request that the Loans made by it each be evidenced by a promissory note in substantially the form of Exhibit J to evidence such Lender’s Revolving Loans.  In such event, the applicable Borrower shall prepare, execute and deliver to such Lender such a promissory note for such Loans payable to the order of such Lender.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 13.3) be represented by one or more promissory notes in such form payable to the order of the payee named therein.

2.13.  Telephonic Notices.  Each Borrower authorizes the Lenders and the Administrative Agent to extend Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Administrative Agent or any Lender in good faith believes to be acting on behalf of such Borrower.  Each Borrower agrees to deliver promptly to the Administrative Agent a written confirmation, signed by an Authorized Signer (or such other Person designated in writing to the Administrative Agent by an Authorized Signer so long as such other Person is also permitted to make such delivery under such Borrower’s organizational documents), of each telephonic notice.  If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent and the Lenders shall govern absent manifest error, gross negligence or willful misconduct.  In case of disagreement concerning such notices, if the Administrative Agent has recorded telephonic borrowing notices, such recordings will be made available to each Borrower upon such Borrower’s request therefor.

2.14.  Promise to Pay; Interest and Facility Fees; Interest Payment Dates; Interest and Fee Basis; Taxes.

(A)  Promise to Pay.  Each Borrower unconditionally promises to pay when due the principal amount of each Loan incurred by it and all other Obligations incurred by it, and to pay

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all unpaid interest accrued thereon, in accordance with the terms of this Agreement and the other Loan Documents.

(B)  Interest Payment Dates.  Interest accrued on each Floating Rate Loan shall be payable on each Payment Date, commencing with the first such date to occur after the date hereof, upon any prepayment whether by acceleration or otherwise, and at maturity (whether by acceleration or otherwise).  Interest accrued on each Fixed-Rate Loan shall be payable on the last day of its applicable Interest Period, on any date on which such Fixed-Rate Loan is prepaid, whether by acceleration or otherwise, and at maturity.  Interest accrued on each Fixed-Rate Loan having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period.  Interest accrued on the principal balance of all other Obligations shall be payable in arrears (i) on each Payment Date, commencing on the first such Payment Date following the incurrence of such Obligations, (ii) upon repayment thereof in full or in part, and (iii) if not theretofore paid in full, at the time such other Obligations become due and payable (whether by acceleration or otherwise).

(C)  Fees.

(i)  The Company shall pay to the Administrative Agent, for the account of the Lenders in accordance with their Pro Rata Shares, from and after the date of this Agreement until the date on which the Aggregate Revolving Loan Commitment shall be terminated in whole, a facility fee accruing at the rate of the then Applicable Facility Fee Percentage, on the amount of the Aggregate Revolving Loan Commitment in effect on the date of such payment.  All such facility fees payable under this clause (C)(i) shall be payable quarterly in arrears on each Payment Date occurring after the date of this Agreement (with the first such payment being calculated for the period from the Closing Date and ending on September 30, 2013, and, in addition, on the date on which the Aggregate Revolving Loan Commitment shall be terminated in whole.

(ii)  The Company agrees to pay the fees set forth in the Fee Letters at the times and in the amounts set forth therein.

(D)  Interest and Fee Basis; Applicable Eurocurrency Margin, Applicable Floating Rate Margin, Applicable L/C Fee Percentage and Applicable Facility Fee Percentage.

(i)  Interest on all Eurocurrency Rate Loans and on all fees shall be calculated for actual days elapsed on the basis of a 360-day year (except for Eurocurrency Rate Loans denominated in British Pounds Sterling or Canadian Dollars, which shall be calculated on the basis of a 365-, or when appropriate 366-, day year).  Interest on all Floating Rate Loans  shall be calculated for actual days elapsed on the basis of a 365-, or when appropriate 366-, day year.  Interest shall be payable for the day an Obligation is incurred but not for the day of any payment on the amount paid if payment is received prior to 2:00 p.m. (local time) at the place of payment.  If any payment of principal of or interest on a Loan or any payment of any other Obligations shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest, fees and commissions in connection with such payment.

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(ii)  The Applicable Eurocurrency Margin, Applicable Floating Rate Margin, Applicable L/C Fee Percentage and Applicable Facility Fee Percentage shall be determined on the basis of the then applicable Pricing Grid Leverage Ratio as described in this Section 2.14(D)(ii), from time to time by reference to the following table:

Applicable Margin	Level I Status (Pricing Grid Leverage Ratio is less than or equal to 1.25 to 1.0)	Level II Status (Pricing Grid Leverage Ratio is greater than 1.25 to 1.0 and less than or equal to 1.75 to 1.0)	Level III Status (Pricing Grid Leverage Ratio is greater than 1.75 to 1.0 and less than or equal to 2.25 to 1.0)	Level IV Status (Pricing Grid Leverage Ratio is greater than 2.25 to 1.0 and less than or equal to 2.75 to 1.0)	Level V Status (Pricing Grid Leverage Ratio is greater than 2.75 to 1.0 and less than or equal to 3.50 to 1.0)	Level VI Status (Pricing Grid Leverage Ratio is greater than 3.50 to 1.0)
Eurocurrency Margin and L/C Fee Percentage	0.85%	0.95%	1.05%	1.25%	1.45%	1.65%
Facility Fee Percentage	0.15%	0.175%	0.20%	0.25%	0.30%	0.35%
All-in Drawn Rate (inclusive of Facility Fee and based on Eurocurrency Margin)	1.00%	1.125%	1.25%	1.50%	1.75%	2.00%
Floating Rate Margin	0%	0%	0.05%	0.25%	0.45%	0.65%

Upon receipt of the financial statements delivered (or deemed delivered) pursuant to Sections 7.1(A)(i) and (ii), as applicable, the Applicable Eurocurrency Margin, the Applicable Floating Rate Margin, the Applicable L/C Fee Percentage and Applicable Facility Fee Percentage shall be adjusted, such adjustment being effective five (5) Business Days following the day such financial statements and compliance certificates are required to be delivered pursuant to Section 7.1(A);  provided, that if the Company shall not have timely delivered its financial statements and compliance certificates in accordance with the applicable provisions of Section 7.1(A), and such failure continues for five (5) days after notice from the Administrative Agent to the Company, then, at the discretion of the Required Lenders, commencing on the date upon which such financial statements and compliance certificates should have been delivered and continuing until five (5) days after such financial statements and compliance certificates are actually delivered (or deemed delivered), it shall be assumed for purposes of determining the Applicable Eurocurrency Margin, the Applicable Floating Rate Margin, Applicable L/C Fee Percentage and Applicable Facility Fee

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Percentage that the Leverage Ratio was greater than 3.50 to 1.0 and Level VI pricing shall be applicable.

(iii)  Notwithstanding anything herein to the contrary, from the First Amendment Effective Date through the fifth (5th) Business Day following the day financial statements are required to be delivered pursuant to Section 7.1(A) for the fiscal quarter ending March 31, 2015, the Applicable Eurocurrency Margin, the Applicable Floating Rate Margin, the Applicable L/C Percentage and the Applicable Facility Fee Percentage shall be determined based upon a Leverage Ratio equal to Level III.

(E)  Taxes.

(i)  Any and all payments by the Borrowers hereunder (whether in respect of principal, interest, fees or otherwise) shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings or any interest, penalties or liabilities with respect thereto imposed by any Governmental Authority including those arising after the date hereof as a result of the adoption of or any change in any law, treaty, rule, regulation, guideline or determination of a Governmental Authority or any change in the interpretation or application thereof by a Governmental Authority but excluding, in the case of each Lender and the Administrative Agent, Excluded Taxes (all such non-excluded taxes, levies, imposts, deductions, fees, assessments, duties, charges, withholdings, and liabilities which the Administrative Agent or a Lender determines to be applicable to this Agreement, the other Loan Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit being hereinafter referred to as “Taxes”).  If any Borrower or the Administrative Agent shall be required by law or requested by any Governmental Authority to deduct or withhold any Taxes from or in respect of any sum payable hereunder or under the other Loan Documents to any Lender or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional sums payable under this Section 2.14(E)) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) such Borrower shall make such deductions or withholdings, and (iii) such Borrower shall pay the full amount deducted or withheld to the relevant Governmental Authority or other authority in accordance with applicable law.  If any Tax, including, without limitation, any withholding tax, of the United States of America or any other Governmental Authority shall be or become applicable (y) after the date of this Agreement, to such payments by such Borrower made to the Lending Installation or any other office that a Lender may claim as its Lending Installation, or (z) after such Lender’s selection and designation of any other Lending Installation, to such payments made to such other Lending Installation, such Lender shall use reasonable efforts to make, fund and maintain its Loans through another Lending Installation of such Lender in another jurisdiction so as to reduce such Borrower’s liability hereunder, if the making, funding or maintenance of such Loans through such other Lending Installation of such Lender does not, in the reasonable judgment of such Lender, otherwise adversely and materially affect such Loans, or obligations under the Revolving Loan Commitments of such Lender.

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(ii)  In addition, the Company agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from any payment made hereunder, from the issuance of Letters of Credit hereunder, or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the other Loan Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit (other than Excluded Taxes, collectively, the “Other Taxes”).

(iii)  Each Borrower indemnifies each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any Governmental Authority on amounts payable under this Section 2.14(E)) paid by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within thirty (30) days after the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor.  A certificate as to any additional amount payable to any Lender or the Administrative Agent under this Section 2.14(E) submitted to the applicable Borrower and the Administrative Agent (if a Lender is so submitting) by such Lender or the Administrative Agent shall show in reasonable detail the amount payable and the calculations used to determine such amount and shall, absent manifest error, be final, conclusive and binding upon all parties hereto.  With respect to such deduction or withholding for or on account of any Taxes and to confirm that all such Taxes have been paid to the appropriate Governmental Authorities, the applicable Borrower shall promptly (and in any event not later than thirty (30) days after receipt) furnish to each Lender and the Administrative Agent such certificates, receipts and other documents as may reasonably be required (in the reasonable judgment of such Lender or the Administrative Agent) to establish any tax credit to which such Lender or the Administrative Agent may be entitled.  In the event such Lender or the Administrative Agent receives any such tax credit, such Lender or the Administrative Agent shall pay to the applicable Borrower such amount (if any) not exceeding the increased amount paid by such Borrower to, or on behalf of, such Lender or the Administrative Agent that is allocable to such increased amount.  Any of the Administrative Agent or any Lender requesting compensation under this Section 2.14(E) shall use its reasonable efforts to notify the applicable Borrower (with a copy to the Administrative Agent) in writing of the event giving rise to such demand for compensation not more than ninety (90) days following the date upon which the responsible account officer for the Administrative Agent or the applicable Lender knows of such event.  Such written demand shall be rebuttably presumed correct for all purposes.  If any Lender or the Administrative Agent demands compensation under this Section 2.14(E) more than ninety (90) days following the date upon which a responsible account officer for such Lender or the Administrative Agent knows that Taxes or Other Taxes have begun to accrue with respect to which such Lender or the Administrative Agent is entitled to compensation under this Section 2.14(E), then any Taxes or Other Taxes attributable to the period prior to the ninety (90) day period immediately preceding the date on which such Lender or the Administrative Agent provided such notice and demand for compensation shall be excluded from the indemnity obligations of the Borrowers under this Section 2.14(E).

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(iv)  Within thirty (30) days after the date of any payment of Taxes or Other Taxes by any Borrower, such Borrower shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof.

(v)  Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 2.14(E) shall survive the payment in full of all Obligations hereunder, the termination of the Letters of Credit and the termination of this Agreement for a period of one year.

(vi)  Each Lender (including any Replacement Lender or Purchaser) that is not created or organized under the laws of the United States of America or a political subdivision thereof (each a “Non-U.S. Lender”) shall deliver to the Borrowers and the Administrative Agent on or before the Closing Date, or, if later, the date on which such Lender becomes a Lender pursuant to Section 13.3 hereof (and from time to time thereafter upon the request of any Borrower or the Administrative Agent, but only for so long as such Non-U.S. Lender is legally entitled to do so), either (1) two (2) duly completed copies of either (A) IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to a tax treaty, or (B) IRS Form W-8ECI, or in either case an applicable successor form; or (2) in the case of a Non-U.S. Lender that is not legally entitled to deliver the forms listed in clause (vi)(1), (x) a certificate of a duly authorized officer of such Non-U.S. Lender to the effect that such Non-U.S. Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code (such certificate, an “Exemption Certificate”) and (y) two (2) duly completed copies of IRS Form W-8BEN or IRS Form W-8BEN-E or applicable successor form.  Each such Lender further agrees to deliver to the Borrowers and the Administrative Agent from time to time a true and accurate certificate executed in duplicate by a duly authorized officer of such Lender in a form satisfactory to the Borrowers and the Administrative Agent, before or promptly upon the occurrence of any event requiring a change in the most recent certificate previously delivered by it to the Borrowers and the Administrative Agent pursuant to this Section 2.14(E)(vi).  Further, each Lender which delivers a form or certificate pursuant to this clause (vi) covenants and agrees to deliver to the Borrowers and the Administrative Agent within fifteen (15) days prior to the expiration of such form, for so long as this Agreement is still in effect, another such certificate and/or two (2) accurate and complete original newly-signed copies of the applicable form (or any successor form or forms required under the Code or the applicable regulations promulgated thereunder).

If a payment made to a Lender under this Agreement would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Company and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by

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Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.14(E)(vi), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender shall promptly furnish to the Company and the Administrative Agent such additional documents as may be reasonably required by the Company or the Administrative Agent to establish any exemption from or reduction of any Taxes or Other Taxes required to be deducted or withheld.  Notwithstanding any other provision of this Section 2.14(E), the Borrowers shall not be obligated to gross up any payments to any Lender pursuant to Section 2.14(E)(i), or to indemnify any Lender pursuant to Section 2.14(E)(iii), in respect of United States federal withholding taxes to the extent imposed as a result of (x) the failure of such Lender to deliver to the Borrowers the form or forms and/or an Exemption Certificate, as applicable to such Lender, pursuant to Section 2.14(E)(vi), (y) such form or forms and/or Exemption Certificate not establishing a complete exemption from U.S. federal withholding tax or the information or certifications made therein by the Lender being untrue or inaccurate on the date delivered in any material respect, or (z) the Lender designating a successor Lending Installation at which it maintains its Loans which has the effect of causing such Lender to become obligated for tax payments in excess of those in effect immediately prior to such designation; provided,  however, that the Borrowers shall be obligated to gross up any payments to any such Lender pursuant to Section 2.14(E)(i), and to indemnify any such Lender pursuant to Section 2.14(E)(iii), in respect of United States federal withholding taxes if (x) any such failure to deliver a form or forms or an Exemption Certificate or the failure of such form or forms or exemption certificate to establish a complete exemption from U.S. federal withholding tax or inaccuracy or untruth contained therein resulted from a change in any applicable statute, treaty, regulation or other applicable law or any interpretation of any of the foregoing occurring after the date such Lender became a party hereto, which change rendered such Lender no longer legally entitled to deliver such form or forms or Exemption Certificate or otherwise ineligible for a complete exemption from U.S. federal withholding tax, or rendered the information or the certifications made in such form or forms or Exemption Certificate untrue or inaccurate in any material respect, (ii) the redesignation of the Lender’s Lending Installation was made at the request of the Company or (iii) the obligation to gross up payments to any such Lender pursuant to Section 2.14(E)(i), or to indemnify any such Lender pursuant to Section 2.14(E)(iii), is with respect to a Purchaser that becomes a Purchaser as a result of an assignment made at the request of the Company.

(vii)  Upon the request, and at the expense of the applicable Borrower, each Lender to which such Borrower is required to pay any additional amount pursuant to this Section 2.14(E), shall reasonably afford such Borrower the opportunity to contest, and shall reasonably cooperate with such Borrower in contesting, the imposition of any Tax giving rise to such payment; provided, that (i) such Lender shall not be required to afford such Borrower the opportunity to so contest unless such Borrower shall have confirmed in writing to such Lender its obligation to pay such amounts pursuant to this Agreement; and

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(ii) such Borrower shall reimburse such Lender for its attorneys’ and accountants’ fees and disbursements incurred in so cooperating with such Borrower in contesting the imposition of such Tax; provided,  however, that notwithstanding the foregoing, no Lender shall be required to afford such Borrower the opportunity to contest, or cooperate with such Borrower in contesting, the imposition of any Taxes, if such Lender in good faith determines that to do so would have an adverse effect on it.

(viii)  If the Administrative Agent or any Lender is entitled to an exemption from or reduction in the rate of the imposition, deduction or withholding of any Tax or Other Tax under the laws of the jurisdiction in which any Foreign Subsidiary Borrower is organized or engaged in business, or any treaty to which such jurisdiction is a party, with respect to payments by such Foreign Subsidiary Borrower under this Agreement or any other Loan Document, then the Administrative Agent or such Lender (as the case may be) shall, at the request of the Company, deliver to such Foreign Subsidiary Borrower or the relevant Governmental Authority, in the manner and at the time or times prescribed by applicable law or as reasonably requested by the Company (such request to be at least 60 days prior to the due date required for submission thereof), such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Company (and in form and substance reasonably acceptable to the Administrative Agent or such Lender (as applicable)) as will permit such payments to be made without the imposition, deduction or withholding of such Tax or Other Tax or at a reduced rate, provided that the Administrative Agent or such Lender is legally entitled to complete, execute and deliver such documentation and in its reasonable judgment such completion, execution or submission would not materially prejudice its commercial or legal position or require disclosure of information it considers confidential or proprietary.

(ix)  If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by any Borrower or with respect to which the Borrowers have paid additional amounts pursuant to this Section 2.14(E), it shall pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14(E) giving rise to such refund), net of all expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person.

(x)  Each Lender shall severally indemnify the Administrative Agent for any taxes, levies, imposts, deductions, fees, assessments, duties, charges, withholdings, and any interest, penalties or liabilities with respect thereto (but, in the case of any Taxes or Other Taxes, only to the extent that the Borrowers have not already indemnified the

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Administrative Agent for such Taxes or Other Taxes and without limiting the obligation of each Borrower to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with this Agreement and any reasonable expenses arising therefrom or with respect thereto, whether or not such amounts were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.14(E)(x) shall be paid within thirty (30) days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(xi)  For purposes of determining withholding taxes imposed under FATCA, from and after the First Amendment Effective Date the Borrowers and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

2.15.  Notification of Advances, Interest Rates, Prepayments and Aggregate Revolving Loan Commitment Reductions.  Promptly after receipt thereof, the Administrative Agent will notify each Lender of the contents of each Aggregate Revolving Loan Commitment reduction notice, Borrowing/Election Notice, and repayment notice received by it hereunder.  The Administrative Agent will notify each Lender of the interest rate and Agreed Currency applicable to each Eurocurrency Rate Loan promptly upon determination of such interest rateand Agreed Currency and will give each Lender prompt notice of each change in the Alternate Base Rate.

2.16.  Lending Installations.  Each Lender may book its Loans or Letters of Credit at any Lending Installation selected by such Lender and may change its Lending Installation from time to time upon reasonable written notice thereof to the Company.  All terms of this Agreement shall apply to any such Lending Installation.  Each Lender may, by written or facsimile notice to the Administrative Agent and the Company, designate a Lending Installation through which Loans will be made by it and for whose account Loan payments and/or payments of L/C Obligations are to be made.

2.17.  Non-Receipt of Funds by the Administrative Agent.  Unless a Borrower or a Lender, as the case may be, notifies the Administrative Agent prior to the date on which it is scheduled to make payment to the Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of a Borrower, a payment of principal, interest or fees tothe Administrative Agent for the account of the Lenders, that it does not intend to make such payment, the Administrative Agent may assume that such payment has been made.  TheAdministrative Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption.  If such Lender or Borrower, as the case may be, has not in fact made such payment to the Administrative Agent, the recipient of such payment shall, on demand by the Administrative Agent, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to (i) in the case of payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in the case of payment by a Borrower, the interest rate applicable to the relevant Loan.

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2.18.  Termination Date.  This Agreement shall be effective until the Termination Date.  Notwithstanding the termination of this Agreement, until (A) all of the Obligations (other than contingent indemnity obligations) shall have been fully paid and satisfied in cash, (B) all financing arrangements among the Borrowers and the Lenders shall have been terminated and (C) all of the Letters of Credit shall have expired, been canceled, terminated or cash collateralized in accordance with Section 3.3(B) or Section 3.11, as applicable, all of the rights and remedies under this Agreement and the other Loan Documents shall survive.

2.19.  Replacement of Certain Lenders.  In the event a Lender (“Affected Lender”) shall: (i) be a Defaulting Lender, (ii) have requested compensation from a Borrower under Sections 2.14(E),  4.1 or 4.2 to recover Taxes, Other Taxes or other additional costs incurred by such Lender which are not being requested generally by the other Lenders, (iii) have delivered a notice pursuant to Section 4.3 claiming that such Lender is unable to extend Eurocurrency Rate Loans to a Borrower for reasons not generally applicable to the other Lenders, (iv) have invoked Section 10.2, or (v) failed to consent to a waiver or amendment hereto which requires the consent of each Lender or each Lender affected thereby and that has otherwise been consented to by the Required Lenders, then, in any such case, the applicable Borrower (or the Company on behalf of any Borrower) or the Administrative Agent may make written demand on such Affected Lender (with a copy to the Administrative Agent in the case ofa demand by a Borrower and a copy to the applicable Borrower in the case of a demand by the Administrative Agent) for the Affected Lender to assign, and such Affected Lender shall use commercially reasonable efforts to assign pursuant to one or more duly executed Assignment Agreements five (5) Business Days after the date of such demand, to one or more financial institutions that comply with the provisions of Section 13.3(A) which the applicable Borrower or the Administrative Agent, as the case may be, shall have engaged for such purpose (“Replacement Lender”), all of such Affected Lender’s rights and obligations under this Agreement and the other Loan Documents (including, without limitation, its Revolving Loan Commitment, all Loans owing to it, all of its participation interests in existing Letters of Credit, and its obligation to participate in additional Letters of Credit and Swing Line Loans hereunder) in accordancewith Section 13.3.  The Administrative Agent agrees, upon the occurrence of such events with respect to an Affected Lender and upon the written request of the applicable Borrower (or the Company on behalf of any Borrower), to use its reasonable efforts to obtain the commitments from one or more financial institutions to act as a Replacement Lender.  The Administrative Agent is authorized to execute one or more of such assignmentagreements as attorney-in-fact for any Affected Lender failing to execute and deliver the same within five (5) Business Days after the date of such demand.  Further, with respect to suchassignment the Affected Lender shall have concurrently received, in cash, all amounts due and owing to the Affected Lender hereunder or under any other Loan Document, including, without limitation, the aggregate outstanding principal amount of the Loans owed to such Lender, together with accrued interest thereon through the date of such assignment, amounts payable under Sections 2.14(E),  4.1, and 4.2 with respect to such Affected Lender and compensation payable under Section 2.14(C) in the event of any replacement of any Affected Lender under clause (ii) or clause (iii) of this Section 2.19;  provided that upon such Affected Lender’s replacement, such Affected Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14(E),  4.1,  4.2,  4.4, and 10.7, as well as to any fees accrued for its account hereunder and not yet paid, and shall continue to be obligated under Section 11.8 for such amounts, obligations and liabilities as are due and payable up to and including (but not after) the date such Affected Lender is replaced pursuant hereto.  Upon the replacement of any Affected Lender pursuant to this Section 2.19, the provisions

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of Section 9.2 shall continue to apply with respect to Loans which are then outstanding with respect to which the Affected Lender failed to fund its Pro Rata Share and which failure has not been cured.

2.20.  Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due from any Borrower hereunder in the currency expressed to be payable herein (the “specified currency”) into another currency, the parties hereto agree, to thefullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agent’s main office in Charlotte, North Carolina on the Business Day preceding that on which the final, non-appealable judgment is given.  The obligations of each Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency.  If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in thespecified currency, each Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 12.2, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the applicable Borrower.

2.21.  Market Disruption; Denomination of Amounts in Dollars; Dollar Equivalent of Reimbursement Obligations.

(A)  Market Disruption.  Notwithstanding the satisfaction of all conditions referred to in this Article II with respect to any Advance in any Agreed Currency other than Dollars, if there shall occur on or prior to the date of  such Advance any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Company, the Administrative Agent or the Required Lenders make it impracticable for the Eurocurrency Rate Loans comprising such Advance to be denominated in the Agreed Currency, specified by the applicable Borrower, then the Administrative Agent shall forthwith give notice thereof to the applicable Borrower, and the Lenders, and such Eurocurrency Rate Loans shall not be denominated in such currency but shall be made on such Borrowing Date in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice, as Floating Rate Loans, unless the applicable Borrower notifies the Administrative Agent at least one (1) Business Day before such date that (i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different Agreed Currency, in which the denomination of such Loans would in the opinion of the Administrative Agent and the Required Lenders be practicable and in an

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aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice.

(B)  Calculation of Amounts.  Exceptas set forth below, all amounts referenced in this Article II shall be calculated using the Dollar Amount determined based upon the Equivalent Amount in effect as of the date of any determination thereof; provided, however, that to the extent the applicable Borrower shall be obligated hereunder to pay in Dollars any Advance denominated in a currency other than Dollars, such amount shall be paid in Dollars using the Dollar Amount of the Advance (calculated based upon the Equivalent Amount in effect on the date of payment thereof) and in the event that the applicable Borrower does not reimburse the Administrative Agent and the Lenders are required to fund a purchase of a participation in such Advance, such purchase shall be made in Dollars in an amount equal to the Dollar Amount of such Advance (calculated based upon the Equivalent Amount in effect on the date of payment thereof).  Notwithstanding anything herein to the contrary, the full risk of currency fluctuations shall be borne by the Borrowers and each Borrower agrees to indemnify and hold harmless each Issuing Bank, the Administrative Agent and the Lenders from and against any loss resulting from any borrowing denominated in a currency other than in Dollars and for which the Lenders are not reimbursed on the day of such borrowing as it relates to such Borrower’s respective obligations.

2.22.  Increase of Aggregate Revolving Loan Commitment; Incremental Term Loans.  The Company may from time to time elect to increase the Aggregate Revolving Loan Commitment and/or enter into one or more tranches of term loans (each an “Incremental Term Loan”), or any combination of such increases and Incremental Term Loans, in each case in a minimum aggregate amount of $25,000,000 and increments of $5,000,000 in excess thereof so long as, after giving effect thereto, (x) the aggregate amount of such increases and all such Incremental Term Loans does not exceed $200,000,000 and (y) the sum of the Aggregate Revolving Loan Commitment plus the amount of Incremental Term Loans does not exceed $1,200,000,000.  The Company may arrange for any such increase or tranche to be provided by one or more Lenders agreeing to an increase in its existing Revolving Loan Commitment or to participate in such Incremental Term Loans, as the case may be (each such Lender, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”) agreeing to extend Revolving Loan Commitments or to participate in such Incremental Term Loans, as the case may be; provided that (i) each Augmenting Lender shall be subject to the approval of the Company, the Administrative Agent, the Issuing Bank and the Swingline Lender, (ii) no Augmenting Lender shall be the Company or any Subsidiary or Affiliate of the Company and (iii) (x) in the case of an Increasing Lender, the Company and such Increasing Lender execute an agreement substantially in the form of Exhibit M-1 hereto, and (y) in the case of an Augmenting Lender, the Company and such Augmenting Lender execute an agreement substantially in the form of Exhibit M-2 hereto.  No consent of any Lender (other than the Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in Revolving Loan Commitments or Incremental Term Loan pursuant to this Section 2.22.  Increases and new Revolving Loan Commitments and Incremental Term Loans created pursuant to this Section 2.22 shall become effective on the date agreed by the Company, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in the Revolving Loan Commitments (or in the Revolving Loan Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless,

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(i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in paragraphs (A) and (B) of Section 5.2 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by an Authorized Signer of the Company and (B) the Company shall be in compliance on a pro forma basis with the covenants contained in Section 7.4 and (ii) the Administrative Agent shall have received documents consistent with those delivered on the Closing Date as to the organizational power and authority of the Borrowers to borrow hereunder after giving effect to such increase.  On the effective date of any Incremental Term Loans being made, each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent its Incremental Term Loan in immediately available funds and the Administrative Agent will promptly make the funds so received available to the Company.  On the effective date of any increase in the Revolving Loan Commitments (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Pro Rata Share of such outstanding Revolving Loans, and (ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Revolving Loan Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the applicable Borrower, or the Company on behalf of the applicable Borrower, in accordance with the requirements of Section 2.1(B)).  The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Fixed Rate Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 4.4 if the deemed payment occurs other than on the last day of the related Interest Periods.  The Incremental Term Loans (a) shall rank pari passu in right of payment with the Revolving Loans, (b) shall not mature earlier than the Revolving Loan Termination Date (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans; provided that (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the Revolving Loan Termination Date may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the Revolving Loan Termination Date and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans.  Incremental Term Loans may be made hereunder pursuant to an amendment or restatement (an “Incremental Term Loan Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, each Increasing Lender participating in such tranche, each Augmenting Lender participating in such tranche, if any, and the Administrative Agent.  The Incremental Term Loan Amendment may, without the consent of any other Lenders (except to the extent required pursuant to Section 9.3), effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.22.  Nothing contained in this Section 2.22 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Loan Commitment hereunder, or provide Incremental Term Loans, at any time.

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2.23.  Subsidiary Borrowers and Foreign Subsidiary Borrowers.So long as no Default or Unmatured Default has occurred and is continuing, the Company may from time to time add as a party to this Agreement (i) a wholly-owned Domestic Incorporated Subsidiary as a “Subsidiary Borrower” hereunder or (ii) a Foreign Subsidiary as a “Foreign Subsidiary Borrower” hereunder, each such joinder to be subject to (a) if such new Borrower is organized outside of an Agreed Jurisdiction, the prior written consent of the Administrative Agent and one hundred percent (100%) of the Lenders, (b) the receipt of evidence satisfactory to the Administrative Agent that such Domestic Incorporated Subsidiary or Foreign Subsidiary would not, in its capacity as a Subsidiary Borrower or Foreign Subsidiary Borrower hereunder, be required by law to withhold or deduct any Taxes from or in respect of any sum payable hereunder by such Domestic Incorporated Subsidiary or Foreign Subsidiary Borrower to the Administrative Agent or any Lender and that no other adverse tax, regulatory or other consequences would affect the Administrative Agent or any Lender as a result of such Domestic Incorporated Subsidiary’s or Foreign Subsidiary’s status as a Subsidiary Borrower or Foreign Subsidiary Borrower (and the Administrative Agent shall consider in making such determination any notice received from any Lender of any such adverse tax, regulatory or other consequences which would affect such Lender), (c) receipt by the Administrative Agent of a valid and enforceable amendment to this Credit Agreement to the extent the Administrative Agent deems such amendment necessary or advisable in connection with such joinder, (d) the execution and delivery to the Administrative Agent by such Domestic Incorporated Subsidiary or Foreign Subsidiary of duly completed documentation pursuant to which such Domestic Incorporated Subsidiary or Foreign Subsidiary shall agree to become a Subsidiary Borrower or Foreign Subsidiary Borrower hereunder and to perform, comply with and be bound by each of the provisions of this Agreement applicable to the Borrowers, with the written consent of the Company appearing thereon, which may be in the form of a Borrowing Subsidiary Agreement, and (e) the execution and delivery to the Administrative Agent of each other instrument, document and agreement as the Administrative Agent may reasonably request, including, without limitation, acceptable opinions of counsel.  Upon satisfaction of all such conditions, such Domestic Incorporated Subsidiary or Foreign Subsidiary shall for all purposes be a party hereto as a Subsidiary Borrower or Foreign Subsidiary Borrower as fully as if it had executed and delivered this Agreement.  Concurrent with the addition of any Domestic Incorporated Subsidiary or Foreign Subsidiary of the Company as a Subsidiary Borrower or Foreign Subsidiary Borrower, (i) the Company and each Domestic Subsidiary Borrower shall be jointly and severally liable for all of the Obligations of the Company, each Subsidiary Borrower and each Foreign Subsidiary Borrower under the Loan Documents, provided,  however, that the Foreign Subsidiary Borrowers (including those Foreign Subsidiary Borrowers party hereto as of the Closing Date) shall not be liable for any Obligations other than each such Foreign Subsidiary Borrower’s own Obligations, (ii) each Borrower shall be permitted to request Advances hereunder and (iii) all references herein to the “Borrower” shall be deemed to be references to the Borrower, each Subsidiary Borrower and each Foreign Subsidiary Borrower, individually and collectively. The joinder of any Foreign Subsidiary as a Foreign Subsidiary Borrower shall also be subject to satisfaction of the conditions precedent set forth in Section 5.3. No Lender will be required to hold any commitment or make any advance to an additional Foreign Subsidiary Borrower, including, without limitation, a Foreign Subsidiary Borrower organized in an Agreed Jurisdiction, if after the Closing Date the Lender has determined in good faith that such commitment or advance would violate Requirements of Law, and the Lender has notified the Administrative Agent and the Company of such determination prior to the joinder of the applicable

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Foreign Subsidiary Borrower. The parties hereto acknowledge and agree that to the extent any Lender requests additional documentation and information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act, no later than five (5) Business Days prior to the effective date of any new Foreign Subsidiary Borrower becoming party hereto (such date, the “Joinder Date”), the Company or such potential Foreign Subsidiary Borrower shall provide such additional documentation and information to such Lender no later than three (3) Business Days prior to the Joinder Date before such new Foreign Subsidiary Borrower shall be entitled to utilize the credit facilities provided for herein. 

Upon the delivery by the Company of a Borrowing Subsidiary Termination with respect to any Subsidiary, such Subsidiary shall cease to be a Subsidiary Borrower or Foreign Subsidiary Borrower, as applicable, and a party to this Agreement.  Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will become effective as to any Subsidiary Borrower or Foreign Subsidiary Borrower at a time when any principal of or interest on any Loan to such Borrower shall be outstanding hereunder, provided that such Borrowing Subsidiary Termination shall be effective to terminate the right of such Subsidiary Borrower or Foreign Subsidiary Borrower to make further Borrowings under this Agreement.  As soon as practicable upon receipt of a Borrowing Subsidiary Agreement, the Administrative Agent shall furnish a copy thereof to each Lender.

2.24.  Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(A)  fees shall cease to accrue on the Revolving Loan Commitment (whether used or unused) of such Defaulting Lender pursuant to Section 2.14(C);

(B)  the Revolving Loan Commitment and Revolving Credit Obligations of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including consent to any waiver, amendment or other modification pursuant to Section 9.3), provided, that this clause (B) shall not apply to the vote of a Defaulting Lender in the case of (i) any increase or extension of the Revolving Loan Commitment of such Defaulting Lender or (ii) any amendment, waiver or other modification requiring the consent of each Lender affected thereby pursuant to the first clause (ii) or (iii) of Section 9.3;

(C)  if any Swing Line Exposure or L/C Obligations exist at the time such Lender becomes a Defaulting Lender then:

(i)  all or any part of the Swing Line Exposure and L/C Obligations of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent the sum of all non-Defaulting Lenders’ Revolving Credit Obligations plus such Defaulting Lender’s Swing Line Exposure and L/C Obligations does not exceed the total of all non-Defaulting Lenders’ Revolving Loan Commitments; and

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(ii)  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the applicable Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swing Line Exposure and (y) second, cash collateralize, for the benefit of the Issuing Banks only, such Borrower’s obligations corresponding to such Defaulting Lender’s L/C Obligations (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 3.11 for so long as such L/C Obligations are outstanding;

(iii)  if the Company cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Company shall not be required to pay any fees to such Defaulting Lender pursuant to Section 3.8 with respect to such Defaulting Lender’s L/C Obligations during the period such Defaulting Lender’s L/C Obligations are cash collateralized;

(iv)  if the L/C Obligations of the non-Defaulting Lenders are reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 3.8 shall be adjusted in accordance with such non-Defaulting Lenders’ Pro Rata Shares; or

(v)  if all or any portion of such Defaulting Lender’s L/C Obligations are neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Bank or any Lender hereunder, all facility fees that would otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Revolving Loan Commitment that was utilized by such L/C Obligations) and letter of credit fees payable under Section 3.8 with respect to such Defaulting Lender’s L/C Obligations shall be payable to the Issuing Banks until and to the extent that such L/C Obligations are reallocated and/or cash collateralized;

(D)  so long as such Lender is a Defaulting Lender, the Swing Line Bank shall not be required to fund any Swing Line Loan, and no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender’s then outstanding L/C Obligations will be 100% covered by the Revolving Loan Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Company in accordance with Section 3.11, and participating interests in any such newly made Swing Line Loan or newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.24(C)(i) (and Defaulting Lenders shall not participate therein);

(E)  if (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swing Line Bank or an Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swing Line Bank shall not be required to fund any Swing Line Loan and no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless the Swing Line Lender or such Issuing Bank, as the case may be, shall have entered into arrangements with the Borrowers or such Lender, satisfactory to the Swing Line Lender or such Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder; and

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(F)  in the event that the Administrative Agent, the Company, the Issuing Banks and the Swing Line Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swing Line Exposure and L/C Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Loan Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Line Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Pro Rata Share.

ARTICLE III:  THE LETTER OF CREDIT FACILITY

3.1.  Obligation to Issue Letters of Credit.  Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and covenants of the Borrowers herein set forth, each Issuing Bank hereby agrees to issue for the account of the Borrowers through such Issuing Bank’s branches as it and the Borrower may jointly agree, one or more Letters of Credit denominated in Dollars or, so long as such currency remains an Agreed Currency, euro, British Pounds Sterling, Yen, Canadian Dollars and Swiss Francs, in accordance with this Article III, from time to time during the period commencing on the Closing Date and ending on the Business Day prior to the Termination Date.

3.2.  Transitional Letters of Credit.  Schedule 3.2 contains a schedule of certain letters of credit issued for the account of the Company prior to the Closing Date (the “Transitional Letters of Credit”).  Subject to the satisfaction of the conditions contained in Sections 5.1 and 5.2, from and after the Closing Date such letters of credit shall be deemed to be Letters of Credit issued pursuant to this Article III. 

3.3.  Types and Amounts.  No Issuing Bank shall have any obligation to and no Issuing Bank shall:

(A) issue (or amend) any Letter of Credit if on the date of issuance (or amendment), before or after giving effect to the Letter of Credit requested hereunder, (i) the Dollar Amount of the Revolving Credit Obligations at such time would exceed the Aggregate Revolving  Loan Commitment at such time, (ii) the aggregate outstanding Dollar Amount of the L/C Obligations would exceed $25,000,000, or (iii) the aggregate outstanding Dollar Amount of L/C Obligations relating to Letters of Credit having expiration dates more than two (2) years after the date of issuance thereof exceeds $5,000,000; or

(B) issue (or amend) any Letter of Credit which has an expiration date later than the date which is the earlier of (x) two (2) years after the date of issuance thereof (provided,  however, that an Issuing Bank may issue (or amend) a Letter of Credit with an expiration date up to five years after the date of issuance thereof if the requirements of Section 3.3(A)(iii) are met and such expiration date does not run beyond the date contemplated in the following clause (y)) or (y) subject to the following sentence, five (5) Business Days immediately preceding the Revolving Credit Termination Date; provided, that any Letter of Credit with a one-year term or a two-year term (or longer term as contemplated above), as applicable, may provide for the renewal thereof for additional one-year, two-year or longer periods (which in no event shall extend beyond the date referred to in clause (y) above).  Notwithstanding anything to the contrary set forth in this Agreement, a Letter of Credit may have an expiry date that occurs within five (5) Business Days

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before the Revolving Credit Termination Date or after the Revolving Credit Termination Date so long as, in each case, the Administrative Agent receives from the applicable Borrower, at least five (5) Business Days prior to the earlier of the applicable Letter of Credit’s expiry date and the Revolving Credit Termination Date, an amount in immediately available funds equal to at least one hundred two percent (102%) of the LC Obligations owing under or in connection with such Letter of Credit.  Any such collateral shall be held by the Administrative Agent in a separate account appropriately designated as a cash collateral account in relation to this Agreement and the Letters of Credit and retained by the Administrative Agent for the benefit of the Lenders and the Issuing Banks as collateral security for the Borrowers’ obligations in respect of this Agreement and such Letter of Credit.  Amounts remaining in any cash collateral account established pursuant to this Section 3.3 which are not applied to reimburse an Issuing Bank for amounts actually paid or to be paid by such Issuing Bank in respect of a Letter of Credit or otherwise applied to the Obligations shall be returned to the applicable Borrower within one (1) Business Day (after deduction of the Administrative Agent’s expenses incurred in connection with such cash collateral account).

3.4.  Conditions.  In addition to being subject to the satisfaction of the conditions contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank to issue any Letter of Credit is subject to the satisfaction in full of the following conditions:

(A)  the applicable Borrower shall have delivered to the applicable Issuing Bank (and, if the Issuing Bank is a Lender other than Wells Fargo, with a copy to the Administrative Agent) at such times and in such manner as such Issuing Bank may reasonably prescribe, a request for issuance of such Letter of Credit in substantially the form of Exhibit C hereto (each such request a “Request For Letter of Credit”), duly executed applications for such Letter of Credit, and such other documents, instructions and agreements as may be required pursuant to the terms thereof (all such applications, documents, instructions, and agreements being referred to herein as the “L/C Documents”), and the proposed Letter of Credit shall be reasonably satisfactory to such Issuing Bank as to form and content; it being agreed that any Letter of Credit application submitted by the Company through any Issuing Bank’s approved internet portal or approved electronic intake system shall be deemed to meet all of the requirements of this Section 3.4(A) with no further action being required by the applicable Borrower; and

(B)  as of the date of issuance no order, judgment or decree of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain the applicable Issuing Bank from issuing such Letter of Credit and no law, rule or regulation applicable to such Issuing Bank and no request or directive (whether or not having the force of law) from a Governmental Authority with jurisdiction over such Issuing Bank shall prohibit or request that such Issuing Bank refrain from the issuance of Letters of Credit generally or the issuance of that Letter of Credit.

(C)  In the event of any conflict between the terms of this Agreement and the terms of any application for a Letter of Credit, the terms of this Agreement shall control.

3.5.  Procedure for Issuance of Letters of Credit.

(A)  Subject to the terms and conditions of this Article III and provided that the applicable conditions set forth in Sections 5.1 and 5.2 hereof have been satisfied, the applicable Issuing Bank

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shall, on the requested date, issue a Letter of Credit on behalf of the applicable Borrower in accordance with such Issuing Bank’s usual and customary business practices and, in this connection, such Issuing Bank may assume that the applicable conditions set forth in Section 5.2 hereof have been satisfied unless it shall have received notice to the contrary from the Administrative Agent or a Lender or has knowledge that the applicable conditions have not been met.

(B)  The applicable Issuing Bank shall give the Administrative Agent written notice, or telephonic notice confirmed promptly thereafter in writing, of the issuance of a Letter of Credit; provided, however, that the failure to provide such notice shall not result in any liability on the part of such Issuing Bank.

(C)  No Issuing Bank shall extend or amend any Letter of Credit unless the requirements of this Section 3.5 are met as though a new Letter of Credit was being requested and issued.

3.6.  Letter of Credit Participation.  On the date of this Agreement with respect to the Letters of Credit identified on Schedule 3.2 and immediately upon the issuance of each Letter of Credit hereunder, each Lender with a Pro Rata Share shall be deemed to have automatically, irrevocably and unconditionally purchased and received from the applicable Issuing Bank an undivided interest and participation in and to such Letter of Credit, the obligations of the applicable Borrower in respect thereof, and the liability of such Issuing Bank thereunder (collectively, an“L/C Interest”) in an amount equal to the Dollar Amount available for drawing under such Letter of Credit multiplied by such Lender’s Pro Rata Share.  Each Issuing Bank will notify each Lender promptly upon presentation to it of an L/C Draft or upon any other draw under a Letter of Credit.  On or before the Business Day on which an Issuing Bank makes payment of each such L/C Draft or, in the case of any other draw on a Letter of Credit, on demand by the Administrative Agent or the applicable Issuing Bank, each Lender shall make payment to the Administrative Agent, for the account of the applicable Issuing Bank, in immediately available funds in the Agreed Currency in an amount equal to such Lender’s Pro Rata Share of the Dollar Amount of such payment or draw.  The obligation of each Lender to reimburse the Issuing Banks under this Section 3.6 shall be unconditional, continuing, irrevocable and absolute.  In the event that any Lender fails to make payment to the Administrative Agent of any amount due under thisSection 3.6, the Administrative Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Administrative Agent receives such payment from such Lender or such obligation is otherwisefully satisfied; provided,  however, that nothing contained in this sentence shall relieve such Lender of its obligation to reimburse the applicable Issuing Bank for such amount in accordance with this Section 3.6.

3.7.  Reimbursement Obligation.  Each Borrower agrees unconditionally, irrevocably and absolutely to pay immediately to the Administrative Agent, for the account of the Lenders, the amount of each advance drawn under or pursuant to any Letter of Credit or an L/C Draft related thereto and issued on its behalf (such obligation of each Borrower to reimburse the Administrative Agent for an advance made under any Letter of Credit or L/C Draft being hereinafter referred to as a “Reimbursement Obligation” with respect to such Letter of Credit or L/C Draft), each such reimbursement to be made by such Borrower no later than the Business Day on which the applicable Issuing Bank makes payment of each such L/C Draft or, if such Borrower shall have received notice of a Reimbursement Obligation later than 11:00 a.m. (Chicago time, or local time

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in the city of the applicable Eurocurrency Payment Office if such L/C is issued to the account of a Foreign Subsidiary Borrower), on any Business Day or on a day which is not a Business Day, no later than 11:00 a.m. (Chicago time, or local time in the city of the applicable Eurocurrency Payment Office if such L/C is issued to the account of a Foreign Subsidiary Borrower), on the immediately following Business Day or, in the case of any other draw on a Letter of Credit, the date specified in the demand of such Issuing Bank.  If any Borrower at any time fails to repay a Reimbursement Obligation pursuant to this Section 3.7, such Borrower shall be deemed to have elected to borrow Revolving Loans from the Lenders, as of the date of the advance giving rise to the Reimbursement Obligation, equal in amount to the Dollar Amount of the unpaid Reimbursement Obligation.  Such Revolving Loans shall be made as of the date of the payment giving rise to such Reimbursement Obligation, automatically, without notice and without any requirement to satisfy the conditions precedent otherwise applicable to an Advance of Revolving Loans.  Such Revolving Loans shall initially, until converted, constitute a Floating Rate Advance, the proceeds of which Advance shall be used to repay such Reimbursement Obligation.  If, for any reason, any Borrower fails to repaya  Reimbursement Obligation on the day such Reimbursement Obligation arises and, for any reason, the Lenders are unable to make or have no obligation to make Revolving Loans, thensuch Reimbursement Obligation shall bear interest from and after such day, until paid in full, at the interest rate otherwise applicable thereto plus two percent (2.0%) per annum.

3.8.  Letter of Credit Fees.  Each Borrower agrees to pay:

(A)  quarterly, in arrears, on each Payment Date occurring after the date of this Agreement (with the first such payment being calculated for the period from the Closing Date and ending on September 30, 2013, and, in addition, on the date on which the Aggregate Revolving Loan Commitment shall be terminated in whole), to the Administrative Agent for the ratable benefit of the Lenders a letter of credit fee at a rate per annum equal to the Applicable L/C Fee Percentage on the average daily outstanding Dollar Amount available for drawing under each standby Letter of Credit;

(B)  quarterly, in arrears, on each Payment Date occurring after the date of this Agreement (with the first such payment being calculated for the period from the Closing Date and ending on September 30, 2013, and, in addition, on the date on which the Aggregate Revolving Loan Commitment shall be terminated in whole), to the applicable Issuing Bank, a letter of credit fronting fee equal to 0.125% per annum on the average daily outstanding face amount available for drawing under each standby Letter of Credit issued by such Issuing Bank; and

(C)  to the applicable Issuing Bank, all customary fees and other issuance, amendment, cancellation, document examination, negotiation, transfer and presentment expenses and related charges in connection with the issuance, amendment, cancellation, presentation of L/C Drafts, negotiation, transfer and the like customarily charged by such Issuing Banks with respect to standby Letters of Credit, payable at the time of invoice of such amounts.

3.9.  Issuing Bank Reporting Requirements.  In addition to the notices required by Section 3.5(B), each Issuing Bank shall, no later than the tenth (10th) Business Day following the last day of each month, provide to the Administrative Agent, upon the Administrative Agent’s request, schedules, in form and substance reasonably satisfactory to the Administrative Agent, showing the

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date of issue, account party, Agreed Currency and amount in such AgreedCurrency, expiration date and the reference number of each Letter of Credit issued by it outstanding at any time during such month and the aggregate amount payable by the applicable Borrower during such month.  In addition, upon the request of the Administrative Agent, each Issuing Bank shall furnish to the Administrative Agent copies of any Letter of Credit and any application for or reimbursement agreement with respect to a Letter of Credit to which the Issuing Bank is party and such other documentation as may reasonably be requested by the Administrative Agent.  Upon the request of any Lender, the Administrative Agent will provide to such Lender information concerning such Letters of Credit.

3.10.  Indemnification; Exoneration.

(A)  In addition to amounts payable as elsewhere provided in this Article III, each Borrower hereby agrees to protect, indemnify, pay and save harmless the Administrative Agent, each Issuing Bank and each Lender from and against any and all liabilities and costs which the Administrative Agent, such Issuing Bank or such Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit other than, in the case of the applicable Issuing Bank, to the extent resulting from its gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called “Governmental Acts”).

(B)  As among the Borrowers, the Lenders, the Administrative Agent and the Issuing Banks, each Borrower assumes all risks of the acts and omissions of, or misuse of such Letter of Credit by, the beneficiary of any Letter of Credit.  In furtherance and not in limitation of the foregoing, subject to the provisions of the Letter of Credit applications and Letter of Credit reimbursement agreements executed by each Borrower at the time of request for any Letter of Credit, neither the Administrative Agent, any Issuing Bank nor any Lender shall be responsible (in the absence of gross negligence or willful misconduct in connection therewith, as determined by the final judgment of a court of competent jurisdiction):  (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, or other similar form of teletransmission or otherwise; (v) for errors in interpretation of technical trade terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of the Administrative Agent, the Issuing Banks and the Lenders, including, without limitation, any Governmental Acts.  None of the above shall affect, impair, or prevent the vesting of any Issuing Bank’s rights or powers under this Section 3.10.

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(C)  In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by any Issuing Bank under or in connection with the Letters of Credit or any related certificates shall not, in the absence of gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, put the applicable Issuing Bank, the Administrative Agent or any Lender under any resulting liability to the applicable Borrower or relieve the applicable Borrower of any of its obligations hereunder to any such Person.

(D)  Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 3.10 shall survive the payment in full of principal and interest hereunder, the termination of the Letters of Credit and the termination of this Agreement.

3.11.  Cash Collateral.  Notwithstanding anything to the contrary herein or in any application for a Letter of Credit, following the occurrence and during the continuance of a Default upon the request of the Required Lenders or upon payout or termination of this Agreement in full in cash, each Borrower shall, on the Business Day that it receives Administrative Agent’s demand or as required pursuant to  Section 9.1, deliver to the Administrative Agent for the benefit of the Lenders and the Issuing Banks, cash, or other collateral of a type satisfactory to the Required Lenders, having a value, as determined by such Lenders, equal toone hundred two percent (102%) of the aggregate Dollar Amount of its outstanding L/C Obligations.  Any such collateral shall be held by the Administrative Agent in a separate interest-bearing account appropriately designated as a cash collateral account in relation to this Agreement and the Lettersof Credit and retained by the Administrative Agent for the benefit of the Lenders and the Issuing Banks as collateral security for the applicable Borrower’s obligations in respect of this Agreement and each of the Letters of Credit.  Such amounts shall be applied to reimburse the Issuing Banks for drawings or payments under or pursuant to Letters of Credit, or if no such reimbursement is required, to payment of such of the other Obligations as the Administrative Agent shall determine.  Amounts remaining in any cash collateral account established pursuant to this Section 3.11 which are not applied to reimburse an IssuingBank for amounts actually paid or to be paid by such Issuing Bank in respect of a Letter of Credit shall be returned to the applicable Borrower within one (1) Business Day (after deduction of the Administrative Agent’s expenses incurred in connection with such cash collateral account).

ARTICLE IV:  CHANGE IN CIRCUMSTANCES

4.1.  Yield Protection.  If any Change in Law:

(A)  subjects the Administrative Agent, any Lender, any applicable Lending Installation or any Issuing Bank to any tax, levy, impost, deduction, fee, assessment, duty, charge or withholding, and any interest, penalties or liabilities with respect thereto, (excluding (1) Taxes, which are governed by Section 2.14(E), (2) amounts included in clauses (b) through (d) of the definition of Excluded Taxes, (3) Connection Income Taxes and (4) any other taxes for which such Lender has been reimbursed by such Borrower), on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or

(B)  imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or

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credit extended by, any Lender, any applicable Lending Installation or any Issuing Bank (other than reserves and assessments taken into account in determining the interest rate applicable to Eurocurrency Rate Loans) with respect to its Revolving Loan Commitment, Loans, L/C Interests or the Letters of Credit, or

(C)  imposes any other condition the result of which is to increase the cost to any Lender, any applicable Lending Installation or any Issuing Bank of making, funding or maintaining its Revolving Loan Commitment, the Loans, the L/C Interests or the Letters of Credit or reduces any amount receivable by any Lender, any applicable Lending Installation or any Issuing Bank in connection with Loans or Letters of Credit, or requires any Lender or any applicable Lending Installation or any Issuing Bank to make any payment calculated by reference to the amount of its Revolving Loan Commitment, Loans or the L/C Interests held or interest received by it or by reference to the Letters of Credit;

and the result of any of the foregoing is to increase the cost to that Lender or Issuing Bank of making, renewing or maintaining its Revolving Loan Commitment, Loans, L/C Interests, or Letters of Credit or to reduce any amount received under this Agreement, then, within fifteen (15) days after receipt by the Administrative Agent or the applicable Borrower of written demand by such Lender or Issuing Bank pursuant to Section 4.5, the applicable Borrower shall pay the Administrative Agent or such Lender or Issuing Bank that portion of such increased expense incurred or reduction in an amount received which the Administrative Agent or such Lender or Issuing Bank determines is attributable to making, funding and maintaining its Loans, L/C Interests, Letters of Credit and its Revolving Loan Commitment; provided,  however, that such Borrower shall not be required to pay any additional amounts pursuant to this Section 4.1 incurred more than 90 days prior to the date of the relevant Lender’s demand therefor.

4.2.  Changes in Capital Adequacy Regulations.  If any Lender or Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing by an amount deemed material by such Lender or Issuing Bank the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Loans or Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy or liquidity), then from time to time the applicable Borrower will pay to such Lender or Issuing Bank, as the case may be, within fifteen (15) days after receipt by the applicable Borrower of written demand by such Lender or Issuing Bank pursuant to Section 4.5, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.

Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 4.2shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided, that the applicable Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section for any such increased cost or reduction incurred more than 90 days prior to the date that such Lender or Issuing Bank demands, or notifies such Borrower of its intention to demand, compensation therefor, providedfurther that, if the Change

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in Law giving rise to such increased cost or reduction is retroactive, then such 90-day period referred to above shall be extended to include the period of retroactive effect thereof.

4.3.  Availability of Types of Advances. 

(a)  If at the time that the Administrative Agent shall seek to determine the relevant Screen Rate on the Quotation Day for any Interest Period for a Eurocurrency Rate Loan the applicable Screen Rate shall not be available for such Interest Period and/or for the applicable currency with respect to such Eurocurrency Rate Loan for any reason and the Administrative Agent shall determine that it is not possible to determine the Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error), then the applicable Reference Bank Rate shall be the Eurodollar Base Rate for such Interest Period for such Eurocurrency Rate Loan; provided that if any Reference Bank Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement; provided,  further,  however, that if less than two Reference Banks shall supply a rate to the Administrative Agent for purposes of determining the Eurodollar Base Rate for such Eurocurrency Rate Loan, (i) if such Loan shall be requested in Dollars, then such Loan shall be made as a Floating Rate Loan at the Floating Rate and (ii) if such Loan shall be requested in any non-Dollar currency, the Eurodollar Base Rate shall be equal to the rate determined by the Administrative Agent in its sole discretion after consultation with the Company and consented to in writing by the Required Lenders (the “Alternative Rate”); provided,  however, that until such time as the aforesaid rate shall be determined and so consented to by the Required Lenders, Loans shall not be available in such non-Dollar currency.

(b)  If prior to the commencement of any Interest Period for a Fixed Rate Loan (i) any Lender determines that maintenance of its Fixed-Rate Rate Loans at a suitable Lending Installation would violate any applicable law, rule, regulation or directive, whether or not having the force of law, or (ii) the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Eurocurrency Base Rate for a Loan in the applicable currency or for the applicable Interest Period, or (iii) the Administrative Agent is advised by the Required Lenders that the interest rate applicable to Fixed-Rate Loans does not adequately and fairly reflect the cost of making or maintaining such an Advance, then the Administrative Agent shall suspend the availability of the affected Type of Advance and, in the case of any occurrence setforth in clause (i), require any Advances of the affected Type to be repaid or converted into another Type.

4.4.  Funding Indemnification.  Subject to Section 2.4(B), if any payment of a Fixed-Rate Loan occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment, or otherwise, or a Fixed-Rate Loan is not made on the date specified by the applicable Borrower for any reason other than default by the Lenders, such Borrower shall indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain the Fixed-Rate Loan.

4.5.  Lender Statements; Survival of Indemnity.  If reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Fixed-Rate Loans to reduce any liability of any Borrower to such Lender under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of Advance under Section 4.3, so long as such designation is not materially

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disadvantageous, in the judgment of the Lender, to such Lender.  Any demand for compensation pursuant to Section 2.14(E) or this Article IV shall be in writing and shall state the amount due, if any, under Section 2.14(E),  4.1,  4.2, or 4.4 and shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive, andbinding on the Borrowers in the absence of manifest error.  Determination of amounts payable under such Sections in connection with a Fixed-Rate Loan shall be calculated as though eachLender funded its Fixed-Rate Loan through the purchase of a deposit of the type, currency and maturity corresponding to the deposit used as a reference in determining the Eurocurrency Rate applicable to such Loan, whether in fact that is the case or not.  The obligations of the Borrowers under Sections 2.14(E),  4.1,  4.2, or 4.4 shall survive payment of the Obligations and termination of this Agreement.

ARTICLE V:  CONDITIONS PRECEDENT

5.1.  Initial Advances and Letters of Credit.  The Lenders shall not be required to make the initial Loans or issue any Letters of Credit unless the Company has furnished to the Administrative Agent each of the following, with sufficient copies for the Lenders, all in form and substance reasonably satisfactory to the Administrative Agent and the Lenders:

(1)Copies of the Certificate of Incorporation (or other comparable constituent document) of each member of the Initial Obligor Group, together with all amendments and, where applicable, a certificate of good standing, both certified by the appropriate governmental officer in its jurisdiction of organization;

(2)Copies, certified by the Secretary, Assistant Secretary or other comparable officer of each member of the Initial Obligor Group, of its By-Laws (or other comparable governing document) and of its board of directors’ or, in the case of any Obligor organized as a German GmbH, shareholders’ resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for any Lender) authorizing the execution of the Loan Documents;

(3)An incumbency certificate, executed by the Secretary, Assistant Secretary or other comparable officer of each member of the Initial Obligor Group, which shall identify by name and title and bear the signature of the officers of the members of the Initial Obligor Group authorized to sign the Loan Documents (and, in the case of the Borrowers, to make borrowings hereunder), upon which certificate the Lenders shall be entitled to rely until informed of any change in writing by the Company;

(4)A certificate, in form and substance satisfactory to the Administrative Agent, signed by the chief financial officer of the Company, stating that on the date of this Agreement all the representations in this Agreement are true and correct in all material respects (unless such representation and warranty is made as of a specific date, in which case, such representation and warranty shall be true in all material respects as of such date) and no Default or Unmatured Default has occurred and is continuing;

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(5)Written money transfer instructions reasonably requested by the Administrative Agent, addressed to the Administrative Agent and signed by an Authorized Signer;

(6)Receipt in cash of the fees agreed to in the Fee Letters;

(7)The written opinions of the Borrowers’ and the Subsidiary Guarantors’ counsel in the forms of the opinions attached hereto as Exhibit E, addressed to the Administrative Agent, the Issuing Banks and the Lenders, in form and substance reasonably acceptable to the Administrative Agent and its counsel, with respect to (without limitation) the due authorization, execution and enforceability of this Agreement and the other Loan Documents;

(8)The Domestic Subsidiary Guaranty, in the form attached hereto as Exhibit I-1, executed by each Domestic Subsidiary Guarantor;

(9)The Foreign Subsidiary Guaranty, in the form attached hereto as Exhibit I-3, executed by each Foreign Subsidiary Guarantor;

(10)Evidence satisfactory to the Administrative Agent that the commitments under the Existing Credit Agreement have been terminated and cancelled and any and all indebtedness thereunder other than the Transitional Letters of Credit shall have been fully repaid (except to the extent being so repaid with the proceeds of the initial Revolving Loans); and

(11)Such other documents as the Administrative Agent or any Lender or its counsel may have reasonably requested, including, without limitation, each document reflected on the List of Closing Documents attached as Exhibit F to this Agreement.

5.2.  Each Advance and Letter of Credit.  The Lenders shall not be required to make any Advance, or issue, extend or increase any Letter of Credit, unless on the applicable Borrowing Date, or in the case of a Letter of Credit, the date on which the Letter of Credit is to be issued, extended or increased:

(A)  There exists no Default or Unmatured Default;

(B)  The representations and warranties contained in Article VI are true and correct in all material respects as of such Borrowing Date (unless such representation and warranty is made as of a specific date, in which case, such representation and warranty shall be true in all material respects as of such date); and

(C)  The Revolving Credit Obligations do not, and after making such proposed Advance or issuing such Letter of Credit would not, exceed the Aggregate Revolving Loan Commitment.

Each Borrowing/Election Notice with respect to each such Advance and the letter of credit application with respect to each Letter of Credit shall constitute a representation and warranty by the applicable Borrower that the conditions contained in Sections 5.2(A),  (B) and (C) have been

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satisfied.  For the avoidance of doubt, this Section 5.2 does not apply to the conversion or continuation of any existing Revolving Loan.

5.3.  Designation of a Foreign Subsidiary Borrower.  The designation of a Foreign Subsidiary Borrower pursuant to Section 2.23 is subject to the condition precedent that the Company or such proposed Foreign Subsidiary Borrower shall have furnished or caused to be furnished to the Administrative Agent:

(A)  Copies, certified by the Secretary or Assistant Secretary of such Subsidiary, of its board of directors’ (or equivalent governing body’s) resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Administrative Agent) approving the Borrowing Subsidiary Agreement and any other Loan Documents to which such Subsidiary is becoming a party;

(B)  An incumbency certificate, executed by the Secretary or Assistant Secretary of such Subsidiary, which shall identify by name and title and bear the signature of the officers of such Subsidiary authorized to request Borrowings hereunder and sign the Borrowing Subsidiary Agreement and the other Loan Documents to which such Subsidiary is becoming a party, upon which certificate the Administrative Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Company or such Subsidiary;

(C)  Opinions of counsel to such Subsidiary, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, with respect to the laws of its jurisdiction of organization and such other matters as are reasonably requested by counsel to the Administrative Agent and addressed to the Administrative Agent and the Lenders, including, without limitation, tax and regulatory opinions;

(D)  Any promissory notes requested by any Lender, and any other instruments and documents reasonably requested by the Administrative Agent, each in such form as the Administrative Agent may reasonably require; and

(E)  To the extent there are Foreign Subsidiary Borrowers having Significant Foreign Subsidiaries and such guaranty is required in accordance with the terms of the definition of Foreign Subsidiary Guarantor, a Foreign Subsidiary Guaranty, in the form attached hereto as Exhibit I-2, executed by each Foreign Subsidiary Guarantor.

ARTICLE VI:  REPRESENTATIONS AND WARRANTIES

In order to induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and the other financial accommodations to the Borrowers and to issue the Letters of Credit described herein, each Borrower represents and warrants as follows to each Lender and the Administrative Agent as of the Closing Date, giving effect to the consummation of the transactions contemplated by the Loan Documents on the Closing Date, and thereafter on each date as required by Section 5.2:

6.1.  Organization; Corporate Powers.  Each of such Borrowers and its Significant Subsidiaries (i) is a corporation, partnership or limited liability company duly organized, validly existing and, where applicable, in good standing under the laws of the jurisdiction of its

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organization, (ii) is duly qualified to do business as a foreign entity and is in good standing under the laws of each jurisdiction in which failure to be so qualified and in good standing would reasonably be expected to have a Material Adverse Effect, and (iii) has all requisite power and authority to own, operate and encumber its property and to conduct its business as presently conducted and as proposed to be conducted.

6.2.  Authority; Enforceability.

(A)  Each Borrower and each other member of the Obligor Group has the requisite power and authority to execute, deliver and perform each of the Loan Documents which have been executed by it as required by this Agreement and the other Loan Documents.

(B)  The execution, delivery, and performance, of each of the Loan Documents which have been executed as required by this Agreement, the other Loan Documents or otherwise  to which such Borrower or any other member of the Obligor Group is party, and the consummation of the transactions contemplated thereby, have been duly authorized by all requisite corporate, partnership or limited liability company acts (including any required shareholder or partner approval) of such Borrower and/or such other member of the Obligor Group.

(C)  Each of the Loan Documents to which such Borrower or any other member of the Obligor Group is a party has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles).

6.3.  No Conflict; Governmental Consents.  The execution, delivery and performance of each of the Loan Documents to which such Borrower or any other member of the Obligor Group is a party do not and will not (i) conflict with the certificate or articles of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization or formation, by-laws, operating agreement or other management agreement  (or other applicable constituent documents) of such Borrower or any other member of the Obligor Group, (ii) conflict with, result in a breach of or constitute (with or without notice or lapse of time or both) a default under any Requirement of Law (including, without limitation, any Environmental Property Transfer Act) or Contractual Obligation of such Borrower or any such other member of the Obligor Group, or require termination of any Contractual Obligation, except such breach, default or termination which individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, or (iii) result in or require the creation orimposition of any Lien whatsoever upon any of the property or assets of such Borrower or any other member of the Obligor Group, other than Liens permitted or created by the Loan Documents.  Except as set forth on Schedule 6.3 to this Agreement, the execution, delivery and performance of each of the Loan Documents to which such Borrower or any other member of the Obligor Group is a party do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by any Governmental Authority, including under any Environmental Property Transfer Act, except filings, consents or notices which have been made, obtained or given, or which, if not made, obtained or given, individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.

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6.4.  Financial Statements.  The consolidated financial statements of the Company and its Subsidiaries at and for the year ended September 30, 2012 heretofore delivered to the Administrative Agent and the Lenders were prepared in accordance with generally accepted accounting principles in effect on the date such statements were prepared and fairly present the consolidated financial condition and operation of the Company and its Subsidiaries at September 30, 2012 and the consolidated results of their operations for the period then ended.

6.5.  No Material Adverse Change.  Since September 30, 2014, except as disclosed (x) in any of the Company’s Form 10-Q, 10-K, or 8-K filings with the Commission subsequent to September 30, 2014 but prior to the First Amendment Effective Date, or (y) in any letter or confidential offering memorandum delivered by the Company to the Administrative Agent and the Lenders prior to the First Amendment Effective Date, there has occurred no change in the business, properties, financial condition, performance, or results of operations of the Company and its Subsidiaries taken as a whole, or any other event which has had or would reasonably be expected to have a Material Adverse Effect.

6.6.  Taxes.  Each of the Company and its Subsidiaries has filed or caused to be filed all federal and other material tax returns which are required to be filed by it and, except for taxes andassessments being, or which will promptly be, contested in good faith and reserved for in accordance with generally accepted accounting principles as in effect from time to time (if and to the extent so required), have paid or caused to be paid all taxes as shown on said returns or any assessment received by it, to the extent that such taxes have become due. 

6.7.  Litigation; Loss Contingencies and Violations.  There is no action, suit, proceeding, arbitration or, to any Borrower’s knowledge, investigation before or by any Governmental Authority or private arbitrator pending or, to any Borrower’s knowledge, threatened in writingagainst the Company, any of its Subsidiaries or any property of any of them which could reasonably be expected to have a Material Adverse Effect.

6.8.  Subsidiaries.  As of the Closing Date, Schedule 6.8 to this Agreement (i) contains a description of the corporate structure of the Company, its Subsidiaries and any other Person in which the Company or any of its Subsidiaries holds a material Equity Interest; and (ii) accurately sets forth (A) the correct legal name and the jurisdiction of organization, (B) a listing of all of the Company’s Significant Subsidiaries, (C) the issued and outstanding shares of each class of Capital Stock of each of the Company’s Subsidiaries and the owners of such shares, and (D) a summary of the direct and indirect partnership, joint venture, or other material Equity Interests, if any, which the Company and each Subsidiary of the Company holds in any Person that is not a corporation.  Except as disclosed on Schedule 6.8, as of the Closing Date, there are no warrants or options outstanding with respect to the issued and outstanding Capital Stock of the Company or any of the Company’s Subsidiaries. Except as disclosed on Schedule 6.8, as of the Closing Date, none of the issued and outstanding Capital Stock of the Company or any of the Company’s Subsidiaries is subject to any redemption right or repurchase agreement pursuant to which the Company or any Subsidiary is or may become obligated to redeem or repurchase its Capital Stock.  All outstanding Capital Stock of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and is not Margin Stock.

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6.9.  ERISA.  Except as disclosed on Schedule 6.9, no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect or a Default.  The minimum funding standards of ERISA and the Code with respect to each Plan have been satisfied, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect or a Default. Neither the Company nor any member of the Controlled Group has failed to make an installment or any other payment which could result in a lien under Section 430(k) of the Code.

6.10.  Accuracy of Information.  The information, exhibits and reports furnished by such Borrower and any of its Significant Subsidiaries, or by the Company on behalf of any of such Borrower or any of its Significant Subsidiaries, tothe Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents, the representations and warranties of the Company and its Subsidiaries contained in the Loan Documents, and all certificates and documents delivered to the Administrative Agent and the Lenders pursuant to the terms thereof (excluding any forecasts and projections of financial information and results submitted to any Lender as works in process or as materials not otherwise required to be submitted to the Commission), taken as a whole, do not contain as of the date thereof any untrue statement of a material fact or omit to state amaterial fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading in any material respect.

6.11.  Securities Activities.  Neither the Company nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

6.12.  Material Agreements. 

(a)Neither such Borrower nor any of such Borrower’s Subsidiaries is a party to or subject to any Contractual Obligation, which, as of such date, individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

(b)No member of the senior management of either such Borrower or any of its Subsidiaries has received written notice that (i) it is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Contractual Obligation to which it is a party, or (ii) any condition exists which, with the giving of notice or the lapse of time or both, would constitute a default with respect to any such Contractual Obligation, in each case, which default has, or if not remedied within any applicable grace period could reasonably be likely to have, a Material Adverse Effect.

6.13.  Compliance with Laws.  Such Borrower and its Subsidiaries are in compliance with all Requirements of Law applicable to them and their respective businesses, in each case where the failure to so comply individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.

6.14.  Assets and Properties.  Each of such Borrower and its Significant Subsidiaries has good and sufficient title to all of its material real and personal properties owned by it or a valid leasehold interest in all of its leased assets (except insofar as marketability may be limited by any

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laws or regulations of any Governmental Authority affecting such assets), and all such assets and property are free and clear of all Liens, except Liens permitted under Section 7.3(C), and except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.

6.15.  Statutory Indebtedness Restrictions.  Neither the Company nor any of its Subsidiaries is subject to regulation under theFederal Power Act, or the Investment Company Act of 1940, or any other foreign, federal orstate statute or regulation which limits its ability to incur indebtedness or its ability to consummate the transactions contemplated hereby.

6.16.  Labor Matters.  To the knowledge of any Borrower, no attempt to organize the employees of the Company or any of its Subsidiaries, and no labor disputes, strikes or walkouts affecting the operations of the Company or any of its Subsidiaries, is pending, or, to the Company’s or such Subsidiaries’ knowledge, threatened, planned or contemplated which would reasonably be expected to have a Material Adverse Effect.

6.17.  Environmental Matters.  Except as disclosed on Schedule 6.17 to this Agreement,

(A)  the operations of the Company and its Subsidiaries comply in all respects with all Environmental, Health or Safety Requirements of Law, except where such failure would not reasonably be expected to have a Material Adverse Effect;

(B)  the Company and its Subsidiaries have all permits, licenses or other authorizations required under all Environmental, Health or Safety Requirements of Law and are in compliance with such permits, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect;

(C)  neither the Company, any of its Subsidiaries nor any of their respective present property or operations, or, to the Company’s or any of its Subsidiaries’ knowledge, any of their respective past property or operations, are subject to or the subject of, any investigation known to the Company or any of its Subsidiaries, any judicial or administrative proceeding, order, judgment, decree, settlement or other agreement respecting:  (A) any violation of Environmental, Health or Safety Requirements of Law; (B) any remedial action; or (C) any claims or liabilities arising from the Release or threatened Release of a Contaminant into the environment, in each case, which would reasonably be expected to have a Material Adverse Effect;

(D)  there is not now, nor to the Company’s or any of its Subsidiaries’ knowledge has there ever been, on or in the property of the Company or any of its Subsidiaries any landfill, waste pile, underground storage tanks, aboveground storage tanks, surface impoundment or hazardous waste storage facility of any kind, any polychlorinated biphenyls (PCBs) used in hydraulic oils, electric transformers or other equipment, or any asbestos containing material, in each case, which would reasonably be expected to have a Material Adverse Effect; and

(E)  to the knowledge of the Company or any of its Subsidiaries, neither the Company nor any of its Subsidiaries has any Contingent Obligation in connection with any Release or threatened Release of a Contaminant into the environment which would reasonably be expected to have a Material Adverse Effect.

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6.18.  Insurance.  The Company maintains, and has caused each Significant Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all of its property insuch amounts, subject to deductibles and self-insurance retentions, and covering such properties and risks, as is consistent with sound business practices.

6.19.  Solvency.  As of the Closing Date and immediately after the making of the Loans, (i) the fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed their consolidated debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the consolidated properties of the Company and its Subsidiaries will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Company and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Company and its Subsidiaries will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted after the Closing Date.

6.20.  Anti-Corruption Laws and Sanctions.  The Company has implemented and maintains in effect policies and procedures designed to ensure material compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Company, its Subsidiaries and, to the knowledge of the Company, their respective officers,  employees, directors and agents, are in compliance withAnti-Corruption Laws and applicable Sanctions in all material respects and, in the case of any Foreign Subsidiary Borrower, is not knowingly engaged in any activity that could reasonably be expected to result in such Borrower being designated as a Sanctioned Person.  None of (a) the Company, any Subsidiary or to the knowledge of an Authorized Officer of the Company any of their respective directors, officers or employees, or (b) to the knowledge of an Authorized Officer of the Company, any agent of the Company or any Subsidiary that acts in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.  No Advance or Letter of Credit, use of proceeds or other transactions hereunder will violate any Anti-Corruption Law or applicable Sanctions. 

The representations in this Section 6.20 shall not be made or deemed to be made to or for the benefit of any Credit Party that qualifies as a resident party domiciled in Germany (Inländer) within the meaning of section 2 paragraph 15 of the German Foreign Trade Act (Außenwirtschaftsgesetz) or any director, officer or employee thereof to the extent that these representations would result in a violation of, or conflict with, section 7 German Foreign Trade Regulation (Außenwirtschaftsverordnung), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation on the part of that Credit Party or any director, officer or employee thereof (for the avoidance of doubt, without prejudice to the general applicability of Council Regulation (EC) 2271/96).

ARTICLE VII:  COVENANTS

The Company covenants and agrees that so long as any Revolving Loan Commitments are outstanding and thereafter until payment in full of all of the Obligations (other than contingent indemnity obligations) and termination of all Letters of Credit (or cash collateralization thereof in

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accordance with Section 3.11), unless the Required Lenders shall otherwise give prior written consent:

7.1.  Reporting.  The Company shall:

(A)  Financial Reporting.  Furnish to the Administrative Agent (with sufficient copies for each of the Lenders, which copies shall be distributed to the Lenders by the Administrative Agent):

(i)  Quarterly Reports.  As soon as practicable, and in any event no later than the earlier to occur of (x) the sixtieth (60th) day after the end of each of the first three fiscal quarters of each fiscal year of the Company, and (y) the tenth (10th) day after the date on which any of the following items are required to be delivered to the Commission, the consolidated balance sheet of the Company and its Subsidiaries as at the end of such period and the related statement of consolidated earnings of the Company and its Subsidiaries for such fiscal quarter and the related statements of consolidated earnings and consolidated cash flows of the Company and its Subsidiaries for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, certified by the chief financial officer of the Company on behalf of the Company as fairly presenting in all material respects the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flows for the periods indicated in accordance with generally accepted accounting principles as in effect from time to time, subject to normal year-end audit adjustments and the absence of footnotes.  With respect to any fiscal quarter, if all of the foregoing information is fairly, accurately and completely set forth in the Company’s Form 10-Q filing with the Commission for such fiscal quarter, such Form 10-Q filing with the Commission shall be deemed delivery to the Administrative Agent of the information required under this Section 7.1(A)(i);  provided,  however, that the Company must comply with the foregoing timing requirements for such delivery or deemed delivery whether constituting a Form 10-Q filing or another report and must deliver any corresponding compliance certificates hereunder when due.

(ii)  Annual Reports.  As soon as practicable, and in any event no later than the earlier to occur of (x) the one-hundredth (100th) day after the end of each fiscal year of the Company, and (y) the tenth (10th) day after the date on which any of the following items are required to be delivered to the Commission, (a) the consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related statements of consolidated earnings, consolidated shareholders’ equity and consolidated cash flows of the Company and its Subsidiaries for such fiscal year, and in comparative form the corresponding figures for the previous fiscal year in form and substance sufficient to calculate the financial covenants set forth in Section 7.4, and (b) an audit report on the items listed in clause (a) hereof of independent certified public accountants of recognized national standing, which audit report shall be unqualified and shall state that such financial statements fairly present the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flows for the periods indicated in conformity with generally accepted accounting principles as in effect from time to time and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards.  The deliveries made pursuant to this clause (ii) shall be

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accompanied by a certificate of such accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default under Section 7.4, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist under Section 7.4, stating the nature and status thereof.  With respect to any fiscal year, if all of the foregoing information is fairly, accurately and completely set forth in the Company’s Form 10-K filing with the Commission for such fiscal year, such Form 10-K filing  with the Commission shall be deemed delivery to the Administrative Agent of the information required under this Section 7.1(A)(ii);  provided,  however, that the Company must comply with the foregoing timing requirements for such delivery or deemed delivery whether constituting a Form 10-K filing or another report and must deliver any corresponding compliance certificates hereunder when due.

(iii)  Officer’s Certificate.  Together with each delivery of any financial statement (a) pursuant to clauses (i) and (ii) of this Section 7.1(A), an Officer’s Certificate of the Company, substantially in the form of Exhibit G attached hereto and made a part hereof, stating that as of the date of such Officer’s Certificate no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof and (b) pursuant to clauses (i) and (ii) of this Section 7.1(A), a compliance certificate, substantially in the form of Exhibit H attached hereto and made a part hereof, signed by the Company’s chief financial officer, (1) demonstrating compliance, when applicable, with the provisions of  Section 7.4, and (2) calculating the Leverage Ratio for purposes of determining the then Applicable Eurocurrency Margin, Applicable Floating Rate Margin, Applicable L/C Fee Percentage and Applicable Facility Fee Percentage.

(B)  Notice of Default.  Promptly upon any Authorized Officer of the Company obtaining knowledge (i) of any condition or event which constitutes a Default or Unmatured Default, or becoming aware that any Lender or Administrative Agent has given any written notice to any Authorized Officer with respect to a claimed Default or Unmatured Default under this Agreement, or (ii) that any Person has given any written notice to any Authorized Officer of the Company or taken any other action with respect to a claimed default or event or condition of the type referred to in Section 8.1(E), the Company shall deliver to the Administrative Agent and the Lenders an Officer’s Certificate specifying (a) the nature and period of existence of any such claimed default, Default, Unmatured Default, condition or event, (b) the notice given or action taken by such Person in connection therewith, and (c) what action the Company has taken, is taking and proposes to take with respect thereto.

(C)  Lawsuits.  (i)  Promptly upon any Authorized Officer obtaining knowledge of the institution of, or written threat of, any action, suit, proceeding, governmental investigation or arbitration, by or before any Governmental Authority, against or affecting the Company or any of its Subsidiaries or any property of the Company or any of its Subsidiaries not previously disclosed pursuant to Section 6.7, which action, suit, proceeding, governmental investigation or arbitration exposes, or in the case of multiple actions, suits, proceedings, governmental investigations or arbitrations arising out of the same general allegations or circumstances which expose, in the Company’s reasonable judgment, the Company or any of its Subsidiaries to liability in an amount aggregating $60,000,000 or more (exclusive of claims covered by insurance policies of the Company or any of its Subsidiaries unless the insurers of such claims have disclaimed coverage

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or reserved the right to disclaim coverage on such claims and exclusive of claims covered by the indemnity of a financially responsible indemnitor in favor of the Company or any of its Subsidiaries unless the indemnitor has disclaimed or reserved the right to disclaim coverage thereof), give written notice thereof to the Administrative Agent and the Lenders and provide such other information as may be reasonably available to enable each Lender to evaluate such matters; and (ii) in addition to the requirements set forth in clause (i) of this Section 7.1(C), upon request of the Administrative Agent or the Required Lenders, promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to clause (i) above and provide such other information as may be reasonably available to it that would not jeopardize any attorney-client privilege by disclosure to the Lenders to enable each Lender and the Administrative Agent and its counsel to evaluate such matters.

(D)  ERISA Notices.  Deliver or cause to be delivered to the Administrative Agent and the Lenders, at the Company’s expense, the following information and notices as soon as reasonably possible, and in any event:

(i)  within ten (10) Business Days after any member of the Controlled Group obtains knowledge that a Termination Event has occurred which could reasonably be expected to subject the Company or its Subsidiaries to liability individually or in the aggregate that could reasonably be expected to result in a Material Adverse Effect, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the member of the Controlled Group has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto;

(ii)  within ten (10) Business Days after the filing of any funding waiver request with the IRS, a copy of such funding waiver request and thereafter all communications received by the Company or a member of the Controlled Group with respect to such request within ten (10) Business Days such communication is received;

(iii)  within ten (10) Business Days after the Company or any member of the Controlled Group knows or has reason to know that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan, a notice describing such matter; and

(iv)  within ten (10) Business Days after the Company or any member of the Controlled Group fails to make a required installment or any other required payment to a Benefit Plan which could result in the imposition of a lien under Section 430(k) of the Code, a notice thereof.

For purposes of this Section 7.1(D), the Company and any member of the Controlled Group shall be deemed to know all facts known by the administrator of any Plan of which the Company or any member of the Controlled Group is the plan sponsor.

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(E)  Labor Matters.  Notify the Administrative Agent and the Lenders in writing, promptly upon an Authorized Officer of the Company learning of (i) any material labor dispute to which the Company or any of its Significant Subsidiaries may become a party, including, without limitation, any strikes, lockouts or other disputes relating to such Persons’ plants and other facilities, which dispute would reasonably be expected to have a Material Adverse Effect and (ii) any Worker Adjustment and Retraining Notification Act liability incurred with respect to the closing of any plant or other facility of the Company or any of its Significant Subsidiaries which would reasonably be expected to have a Material Adverse Effect.

(F)  Other Indebtedness.  Deliver to the Administrative Agent (i) a copy of each regular report, notice or written communication regarding potential or actual defaults (including any accompanying officer’s certificate) delivered by or on behalf of the Company to the holders of funded Indebtedness with an aggregate outstanding principal amount in excess of $60,000,000 pursuant to the terms of the agreements governing such Indebtedness, such delivery to be made at the same time and by the same means as such notice of default is delivered to such holders, and (ii) a copy of each written notice or other written communication received by the Company from the holders of funded Indebtedness with an aggregate outstanding principal amount in excess of $60,000,000 regarding potential or actual defaults pursuant to the terms of such Indebtedness, such delivery to be made promptly after such notice or other communication is received by the Company.

(G)  Other Reports.  Deliver or cause to be delivered to the Administrative Agent and the Lenders copies of (i) all financial statements, reports and material written notices, if any, sent by the Company to its securities holders or filed with the Commission by the Company, and (ii) all notifications received from the Commission by the Company or its Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules promulgated thereunder.  The Company shall include the Administrative Agent and the Lenders on its standard distribution lists for all press releases made available generally by the Company to the public concerning material developments in the business of the Company or any such Subsidiary.

(H)  Environmental Notices.  As soon as possible and in any event within twenty (20) days after receipt by the Company, a copy of (i) any notice or claim to the effect that the Company or any of its Significant Subsidiaries is or may be liable to any Person as a result of the Release by the Company, any of its Significant Subsidiaries, or any other Person of any Contaminant into the environment, and (ii) any notice alleging any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries if, in either case, such notice or claim relates to an event which could reasonably be expected to subject the Company or any of its Significant Subsidiaries to liability individually or in the aggregate  in excess of $60,000,000.

(I)  Other Information.  Promptly upon receiving a request therefor from the Administrative Agent, prepare and deliver to the Administrative Agent and the Lenders such other information with respect to the Company, any of its Subsidiaries, as from time to time may be reasonably requested by the Administrative Agent.

7.2.  Affirmative Covenants.

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(A)  Corporate Existence, Etc.  Except as permitted pursuant to Section 7.3(I), the Company shall, and shall cause each of its Significant Subsidiaries to, at all times maintain its valid existence and (to the extent such concept applies to such entity) in good standing as a corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and preserve and keep, or cause to be preserved and kept, in full force and effect its rights and franchises material to its businesses, unless, in the good faith judgment of the Company, the failure to preserve any such rights or franchises would not reasonably be expected to have a Material Adverse Effect. 

(B)  Corporate Powers; Conduct of Business.  The Company shall, and shall cause each of its Significant Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified and where the failure to be so qualified will have or would reasonably be expected to have a Material Adverse Effect.

(C)  Compliance with Laws, Etc.  The Company shall, and shall cause its Subsidiaries to, (a) comply with all Requirements of Law (including, without limitation, Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002) and all restrictive covenants affecting such Person or the business, properties, assets or operations of such Person, and (b) obtain as needed all permits necessary for its operations and maintain such permits in good standing unless failure to comply with such Requirements of Law or such covenants or to obtain or maintain such permits would not reasonably be expected to have a Material Adverse Effect. The Company will maintain in effect and enforce policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with  Anti-Corruption Laws and applicable Sanctions. This paragraph Section 7.2(C) shall not be made or deemed to be made to or for the benefit of any Credit Party that qualifies as a resident party domiciled in Germany (Inländer) within the meaning of section 2 paragraph 15 of the German Foreign Trade Act (Außenwirtschaftsgesetz) or any director, officer or employee thereof to the extent that it would result in a violation of, or conflict with, section 7 German Foreign Trade Regulation (Außenwirtschaftsverordnung), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation on the part of that Credit Party or any director, officer or employee thereof (for the avoidance of doubt, without prejudice to the general applicability of Council Regulation (EC) 2271/96).

(D)  Payment of Taxes and Claims; Tax Consolidation.  The Company shall pay, and cause each of its Subsidiaries to pay, (i) all material taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty accrues thereon, and (ii) all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien (other than a Lien permitted by Section 7.3(C)) upon any of the Company’s or such Subsidiary’s property or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such taxes, assessments and governmental charges referred to in clause (i) above or claims referred to in clause (ii) above (and interest, penalties or fines relating thereto) need be paid if (x) being, or will promptly be, contested in good faith by appropriate proceedings diligently instituted and conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with generally accepted accounting principles as in effect from time to time shall have been made

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therefor, or (y) the nonpayment of all such taxes, assessments and other governmental charges would not reasonably be expected to have a Material Adverse Effect.

(E)  Insurance.  The Company shall maintain for itself and its Significant Subsidiaries, or shall cause each of its Significant Subsidiaries to maintain in full force and effect, such insurance policies and programs  as reflect coverage that is reasonably consistent with prudent industry practice for companies operating in the same or similar locations.

(F)  Inspection of Property; Books and Records; Discussions.  The Company shall permit and cause each of the Company’s Significant Subsidiaries to permit, any authorized representative(s) designated by either the Administrative Agent or any Lender to visit and inspect any of the properties of the Company or any of its Significant Subsidiaries, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence and other data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability), and to discuss their affairs, finances and accounts with their officers, all upon reasonable notice and at such reasonable times during normal business hours, as often as may be reasonably requested.  The Company shall keep and maintain, in all material respects, proper books of record and account on a consolidated basis in which entries in material conformity with Agreement Accounting Principles shall be made of all dealings and transactions in relation to their respective businesses and activities.  The Company shall cause each of its Significant Subsidiaries to keep and maintain, in all material respects, proper books of record and account.  If a Default has occurred and is continuing, the Company, upon the Administrative Agent’s request, shall provide copies of such records to the Administrative Agent or its representatives.

(G)  ERISA Compliance.  The Company shall, and shall cause each of its Subsidiaries to,  maintain and operate all Plans to comply in all material respects with the provisions of ERISA and shall operate all Plans to comply in all material respects with the applicable provisions of the Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans, unless the failure to maintain, operate and comply with the foregoing, as applicable, would not reasonably be expected to have a Material Adverse Effect.

(H)  Maintenance of Property.  The Company shall cause all material property used in the conduct of its business or the business of any Significant Subsidiary to be maintained and kept in adequate condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly conducted at all times, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect; provided, however, that nothing in this Section 7.2(H) shall prevent the Company from discontinuing the operation or maintenance of any of such property if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary.

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(I)  Environmental Compliance.  The Company and its Significant Subsidiaries shall comply with all Environmental, Health or Safety Requirements of Law, except where noncompliance would not reasonably be expected to have a Material Adverse Effect.

(J)  Use of Proceeds. 

(i)  The Borrowers shall use the proceeds of the Revolving Loans for general corporate purposes and ongoing working capital needs of such Borrower and its Subsidiaries (including, without limitation, to consummate Permitted Acquisitions and to make capital expenditures).  The Borrowers will not, nor will any Borrower permit any Subsidiary to, use any of the proceeds of the Loans to purchase or carry any Margin Stock.

(ii)  No Borrower will request any Advance or Letter of Credit, and no Borrower shall use, and the Company shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Advance, Incremental Term Loan or Letter of Credit (x) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (y) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state or (z) in any manner that would result in the violation of  any Sanctions applicable to any party hereto. This Section 7.2(J)(ii) shall not apply for the benefit of any Credit Party that qualifies as a resident party domiciled in Germany (Inländer) within the meaning of section 2 paragraph 15 of the German Foreign Trade Act (Außenwirtschaftsgesetz) or any director, officer or employee thereof to the extent that it would result in a violation of, or conflict with, section 7 German Foreign Trade Regulation (Außenwirtschaftsverordnung), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation on the part of that Credit Party or any director, officer or employee thereof (for the avoidance of doubt, without prejudice to the general applicability of Council Regulation (EC) 2271/96).

(K)  Subsidiary Guarantees.  The Company will (a) cause (i) each Domestic Incorporated Subsidiary that becomes a Significant Domestic Incorporated Subsidiary after the Closing Date in connection with a Permitted Acquisition to execute and deliver to the Administrative Agent, as promptly as possible, but in any event not later than sixty (60) days after becoming a Significant Domestic Incorporated Subsidiary (or such later date as agreed to by the Administrative Agent in writing in its sole discretion), an executed Supplement to become a Domestic Subsidiary Guarantor under the Domestic Subsidiary Guaranty in the form of Annex I-1 to the Domestic Subsidiary Guaranty (whereupon such Subsidiary shall become a “Domestic Subsidiary Guarantor” under this Agreement), (ii)  each Domestic Incorporated Subsidiary becomes a Significant Domestic Incorporated Subsidiary after the Closing Date other than in connection with a Permitted Acquisition to execute and deliver to the Administrative Agent, as promptly as possible, but in any event not later than the later of (x) the date that is sixty (60) days after becoming a Significant Domestic Incorporated Subsidiary and (y) the date on which the first financial statements and compliance certificates after becoming a Significant Domestic Incorporated Subsidiary are required to be delivered pursuant to Section 7.1(A) are delivered (or such later date as agreed to

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by the Administrative Agent in writing in its sole discretion), an executed Supplement to become a Domestic Subsidiary Guarantor under the Domestic Subsidiary Guaranty in the form of Annex I-1 to the Domestic Subsidiary Guaranty (whereupon such Subsidiary shall become a “Domestic Subsidiary Guarantor” under this Agreement), (iii) each Foreign Subsidiary that becomes a Significant Foreign Subsidiary of a Foreign Subsidiary Borrower after the Closing Date  in connection with a Permitted Acquisition (subject to there being no unreasonable adverse tax impact thereof) to execute and deliver to the Administrative Agent, as promptly as possible, but in any event not later than sixty (60) days after becoming such a Significant Foreign Subsidiary (or such later date as agreed to by the Administrative Agent in writing in its sole discretion), an executed Supplement to become a Foreign Subsidiary Guarantor under the Foreign Subsidiary Guaranty in the form of Annex I-2 to the Foreign Subsidiary Guaranty (whereupon such Subsidiary shall become a “Foreign Subsidiary Guarantor” under this Agreement), and (iv) each Foreign Subsidiary that becomes a Significant Foreign Subsidiary of a Foreign Subsidiary Borrower after the Closing Date other than in connection with a Permitted Acquisition (subject to there being no unreasonable adverse tax impact thereof) to execute and deliver to the Administrative Agent, as promptly as possible, but in any event not later than the later of (x) the date that is sixty (60) days after becoming a Significant Foreign Subsidiary and (y) the date on which the first financial statements and compliance certificates after becoming a Significant Foreign Subsidiary are required to be delivered pursuant to Section 7.1(A) are delivered (or such later date as agreed to by the Administrative Agent in writing in its sole discretion), an executed Supplement to become a Foreign Subsidiary Guarantor under the Foreign Subsidiary Guaranty in the form of Annex I-2 to the Foreign Subsidiary Guaranty (whereupon such Subsidiary shall become a “Foreign Subsidiary Guarantor” under this Agreement), and (b) deliver and cause each such Domestic Incorporated Subsidiary or Foreign Subsidiary to deliver corporate resolutions, opinions of counsel, and such other corporate documentation as the Administrative Agent may reasonably request, all in form and substance reasonably satisfactory to the Administrative Agent.  Upon the Company’s written request of and certification to the Administrative Agent that (i) a Domestic Incorporated Subsidiary is no longer a Significant Domestic Incorporated Subsidiary or (ii) a Foreign Subsidiary is no longer a Significant Foreign Subsidiary, the Administrative Agent, as contemplated in the Domestic Subsidiary Guaranty or the Foreign Subsidiary Guaranty, as applicable, shall release such Domestic Incorporated Subsidiary or Foreign Subsidiary from its duties and obligations under the Domestic Subsidiary Guaranty or Foreign Subsidiary Guaranty, as applicable; provided, that if such Domestic Incorporated Subsidiary or Foreign Subsidiary subsequently qualifies as a Significant Domestic Incorporated Subsidiary or Significant Foreign Subsidiary, it shall be required to re-execute the Domestic Subsidiary Guaranty or Foreign Subsidiary Guaranty, as applicable.

7.3.  Negative Covenants.

(A)  Indebtedness.  Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

(i)  the Obligations;

(ii)  Permitted Existing Indebtedness and Permitted Refinancing Indebtedness;

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(iii)  Indebtedness in respect of obligations secured by Customary Permitted Liens;

(iv)  Indebtedness constituting Contingent Obligations permitted by Section 7.3(E);

(v)  Indebtedness arising from intercompany loans and advances; provided, that, except with respect to Indebtedness under a securitization transaction, the aggregate principal amount of intercompany loans and advances to Affiliates which are not members of the Obligor Group from Affiliates which are members of the Obligor Group (in each case, as determined at the time such intercompany loan is made) shall not exceed 10% of Consolidated Tangible Assets at any time outstanding; provided further, that such intercompany loans and advances shall be subject to the subordination provisions of Section 10.14 of this Agreement, Section 6 of the Domestic Subsidiary Guaranty and Section 6 of the Foreign Subsidiary Guaranty, in each case, to the extent applicable in such circumstance.

(vi)  Indebtedness in respect of Hedging Obligations permitted under Section 7.3(M);

(vii)  Guarantees of Indebtedness permitted hereunder;

(viii)  Indebtedness of any Person acquired pursuant to a Permitted Acquisition, so long as such Indebtedness was not incurred in contemplation of such acquisition;

(ix)  Indebtedness that is subordinated to the Obligations pursuant to an agreement reasonably acceptable to the Administrative Agent;

(x)  Indebtedness consisting of promissory notes issued to redeem Equity Interests of the Company permitted hereby;

(xi)  Indebtedness with respect to surety, appeal and performance bonds obtained by the Company or any of its Subsidiaries in the ordinary course of business;

(xii)  Indebtedness evidenced by the 2008 Senior Notes, the 2009 Senior Notes and the 2013 Senior Notes (including any Indebtedness of the Subsidiary Guarantors arising under a guaranty of the 2008 Senior Notes, the 2009 Senior Notes or the 2013 Senior Notes);

(xiii)  secured or unsecured purchase money Indebtedness (including Capitalized Leases) incurred by the Company or any of its Subsidiaries to finance the acquisition of assets used in its business, if (1) at the time of such incurrence no Default or Unmatured Default has occurred and is continuing or would result from such incurrence, (2) such Indebtedness does not exceed the lower of the fair market value or the cost of the applicable assets on the date acquired, (3) such Indebtedness does not exceed $80,000,000 in the aggregate outstanding at any time, and (4) any Lien securing such Indebtedness is permitted under Section 7.3(C);

(xiv)  Receivables Facility Attributed Indebtedness in an aggregate amount not to exceed $200,000,000 at any time;

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(xv)  other Indebtedness in addition to that referred to elsewhere in this Section 7.3(A) incurred and maintained by the Company and its Subsidiaries; provided that the incurrence of such additional Indebtedness does not result in a violation of the Leverage Ratio on a pro forma basis calculated hereunder for the fiscal quarter ending immediately prior to such incurrence; and providedfurther that no Default or Unmatured Default shall have occurred and be continuing at the date of such incurrence or would immediately result therefrom; and

(xvi)  Permitted Refinancing Indebtedness.

(B)  Sales of Assets.  Neither the Company nor any of its Significant Subsidiaries shall consummate any Asset Sale, except:

(i)  transfers of assets between the Company and any wholly-owned Subsidiary of the Company or between wholly-owned Subsidiaries of the Company not otherwise prohibited by this Agreement;

(ii)  sales of inventory in the ordinary course of business;

(iii)  the disposition in the ordinary course of business of equipment or property that is obsolete, excess, or no longer necessary, used or useful in the Company’s or any Subsidiary’s business or of any asset in exchange for, or the proceeds of which shall be used to acquire, any replacement asset necessary or useful in the business of the Company or any Subsidiary;

(iv)  sales, transfers or assignments of Receivables in connection with receivables purchase facilities;  provided, that the aggregate amount of Receivables Facility Attributed Indebtedness arising in connection therewith does not exceed amounts permitted under Section 7.3(A)(xiv);  

(v)  sales, transfers and other dispositions of accounts receivable in connection with the compromise, settlement or collection thereof consistent with past practice or other customary or reasonable business practices;

(vi)  sales, transfers, leases and other dispositions of property that are (x) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business, (y) investments of any Person existing at the time such Person becomes a Subsidiary or consolidates or merges with the Company or any Subsidiary (including in connection with an acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger or (z) another asset received as consideration for the disposition of any asset permitted by this Section (in each case, other than Equity Interests in a Subsidiary, unless all Equity Interests in such Subsidiary are sold);

(vii)  leases entered into in the ordinary course of business, and sale and leaseback transactions, in each case, to the extent that they do not materially interfere with the business of the Company and its Subsidiaries and the sale of such assets and the related

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Indebtedness under any resulting Capitalized Lease would otherwise be permitted hereunder;

(viii)  sales, transfers, licenses or sublicenses of intellectual property in the ordinary course of business, to the extent that they do not materially interfere with the business of the Company and its Subsidiaries;

(ix)  dispositions resulting from any casualty or other damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Company or any Subsidiary; and

(x)  contributions of assets constituting Investments in Joint Ventures that would otherwise be permitted under Section 7.3(D)(xi) and for which no cash proceeds are received; and

(xi)  sales, assignments, transfers, leases, conveyances or other dispositions of other assets if such transaction (a) is for not less than fair market value (as determined in good faith by the Company’s management or board of directors) and (b) when combined with all such other transactions pursuant to this Section 7.3(B)(xi) (each such transaction being valued at book value) during the then current fiscal year, represents the disposition of assets with an aggregate book value not greater than 15% of the aggregate book value of Consolidated Assets as of the end of the immediately preceding fiscal year.  If the proceeds resulting from an Asset Sale are used by the Company or the applicable Subsidiary within 180 days of the date on which such proceeds arose to acquire property useful in such Person’s business, then, only for purposes of determining compliance with this Section 7.3(B)(xi), such Asset Sale shall not be included in such determination.

(C)  Liens.  Neither the Company nor any of its Subsidiaries shall directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of their respective property or assets except:

(i)  Liens created by the Loan Documents or otherwise securing the Obligations;

(ii)  Permitted Existing Liens;

(iii)  Customary Permitted Liens;

(iv)  purchase money Liens (including the interest of a lessor under a Capitalized Lease and Liens to which any property is subject at the time of the Company’s acquisition thereof) securing Indebtedness permitted pursuant to Section 7.3(A)(viii) or (xiii);  provided that such Liens shall not apply to any property of the Company or its Subsidiaries other than that purchased or subject to such Capitalized Lease;

(v)  Liens with respect to property acquired by the Company or any of its Subsidiaries after the Closing Date (and not created in contemplation of such acquisition) pursuant to a Permitted Acquisition; provided, that such Liens shall extend only to the property so acquired;

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(vi)  Liens with respect to property of any Person the Capital Stock of which is acquired (directly or indirectly) by the Company or any of its Subsidiaries after the Closing Date (and not created in contemplation of such acquisition) pursuant to a Permitted Acquisition; provided, that (x) such Liens (other than Liens of the type described in clause (iv) above) shall extend only to the property of such Person, (y) such Liens shall secure Indebtedness permitted hereunder not in excess of $70,000,000 in the aggregate and (z) the Company or the applicable Subsidiary shall cause such Liens to be terminated within sixty (60) days of the date on which such Permitted  Acquisition is consummated;

(vii)  Liens arising under or in connection with the 2008 Senior Notes, the 2009 Senior Notes, the 2013 Senior Notes, the 2008 Note Agreement, the 2009 Note Agreement, the 2013 Note Agreement and any other senior (unsubordinated) credit, loan or borrowing facility or senior (unsubordinated) note purchase agreement similar in form and substance to any of the foregoing and in a principal amount equal to or greater than $50,000,000, so long as the creditors under such facility or note purchase agreement agree to be bound by the terms of the Intercreditor Agreement, the collateral securing the Liens of such creditors also secures the Obligations, and the Liens of such creditors are pari passu to the Liens securing the Obligations to the extent that the collateral securing such Liens also secures the Obligations;

(viii)  Liens securing Receivables Facility Attributed Indebtedness permitted under Section 7.3(A);  

(ix)  Liens securing Hedging Obligations pursuant to Hedging Arrangements entered into by the Company and its Subsidiaries in the ordinary course of business and permitted hereby; and

(x)  Liens with respect to property of any of Foreign Subsidiaries and securing Indebtedness of Foreign Subsidiaries; provided, that such Liens shall only secure Indebtedness permitted hereunder not in excess of $80,000,000 in the aggregate;

(xi)  other Liens in addition to those described in Sections 7.3(C)(i) through (x) securing Indebtedness not to exceed $40,000,000 in the aggregate.

In addition, other than such restrictions contained in agreements of the type set forth in clauses (i)-(x) of Section 7.3(L) below, neither the Company nor any of its Subsidiaries shall become a party to any agreement, note, indenture or other instrument, or take any other action, which would prohibit the creation of a Lien on any of its properties or other assets in favor of the Administrative Agent for the benefit of itself and the Lenders, as collateral for the Obligations.  Notwithstanding the foregoing, any such agreement, note, indenture or other instrument may prohibit the creation of a Lien in favor of the Administrative Agent for the benefit of itself and the Lenders, as collateral for the Obligations, so long as such prohibition does not apply if the 2008 Senior Noteholders, the 2009 Senior Noteholders, the 2013 Senior Noteholders and the lenders or creditors under any other senior (unsubordinated) credit, loan or borrowing facility or senior (unsubordinated) note purchase agreement similar in form and substance to any of the foregoing and in a principal amount equal to or greater than $50,000,000, so long as the creditors under such facility or note purchase agreement agree to be bound by the terms of the Intercreditor Agreement, shall be provided with

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a Lien that is equal and ratable with the Lien provided to the Administrative Agent for the benefit of itself and the Lenders.

(D)  Investments.  Except to the extent permitted pursuant to paragraph (G) below, neither the Company nor any of its Subsidiaries shall directly or indirectly make or own any Investment except:

(i)  Investments in cash and Cash Equivalents;

(ii)  Permitted Existing Investments in an amount not greater than the amount thereof on the First Amendment Effective Date;

(iii)  Investments in trade receivables or received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

(iv)  Investments consisting of deposit accounts maintained by the Company and its Subsidiaries;

(v)  Investments in (i) Domestic Incorporated Subsidiaries or (ii) Foreign Subsidiaries which provide a guarantee (including gross-up amounts for any withholding taxes or capital charges) of the Obligations (as distinguished from solely guaranteeing Drawn Foreign Amounts) (each such Foreign Subsidiary, a “Foreign Guarantor”), so long as any guarantee payments made in connection with such guarantee can be shared and applied in accordance with the requirements of the Intercreditor Agreement; provided,  however, that any Investment constituting a Permitted Acquisition shall be governed by clause (vii) below and not this clause (v);

(vi)  Investments in Foreign Subsidiaries which are not Foreign Guarantors, subject to the Foreign Subsidiary Investment Limitation, if applicable; provided, that (x) intercompany loans permitted pursuant to Section 7.3(A)(v) and assets of Foreign Subsidiaries (other than assets directly or indirectly contributed to such Foreign Subsidiaries by the Company and/or the Significant Domestic Incorporated Subsidiaries after the Closing Date) which are used to make Investments in other Foreign Subsidiaries shall not be included in determining compliance with this clause (vi), (y) prior to consummating any Investment in a Foreign Subsidiary in an amount in excess of $100,000,000, the Company shall demonstrate to the Administrative Agent’s satisfaction the Company’s and its Subsidiaries’ pro forma compliance or planned pro forma compliance with this clause (vi), and (z) any Investment constituting a Permitted Acquisition shall be governed by clause (vii) below and not this clause (vi);

(vii)  Investments constituting Permitted Acquisitions; provided, that the Leverage Ratio will not exceed 3.50 to 1.00 immediately after giving effect to (x) any Permitted Acquisition during the Leverage Ratio Increase Period (including the Permitted Acquisition which triggered the beginning of such Leverage Ratio Increase Period) where the net consideration therefor is $50,000,000 or more, or (y) any Permitted Acquisition in excess of $150,000,000 (as demonstrated by the Company on a pro forma basis to the Administrative Agent’s satisfaction for any such Permitted Acquisition in excess of

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$150,000,000, with no such demonstration of pro forma compliance being required pursuant to this Section 7.3(D)(vii) for any such Permitted Acquisition less than or equal to $150,000,000); provided,  further, that if a Foreign Subsidiary (the “Acquiring Foreign Subsidiary”) acquires another Person that becomes a Foreign Subsidiary (the “Target Sub”) as a result of such Acquisition, and the Equity Interests of the Target Sub are transferred in their entirety by the Acquiring Foreign Subsidiary to the Company or a Significant Domestic Incorporated Subsidiary within 60 days after the date on which the Target Sub is initially Acquired, then the Target Sub shall be deemed to have been owned at all times by the Company or the applicable Significant Domestic Incorporated Subsidiary, and, so long as the other conditions for a Permitted Acquisition have been satisfied and the Leverage Ratio test set forth above is met, then the Investment in the Target Sub shall be permitted under this clause (vii);

(viii)  Investments constituting Indebtedness permitted by Section 7.3(A), Contingent Obligations permitted by Section 7.3(E) or Restricted Payments permitted by Section 7.3(F);

(ix)  Investments consisting of any right of the Company or its wholly-owned Domestic Incorporated Subsidiaries to payment for goods sold or for services rendered, whether or not it has been earned by performance;

(x)  Investments comprised of capital contributions (whether in the form of cash, a note, or other assets) to a Subsidiary or other special purpose entity created solely to engage in transactions giving rise to Receivables Facility Attributed Indebtedness permitted hereunder or otherwise resulting from transfers of assets permitted hereunder to such a Subsidiary or special purpose entity;

(xi)  Investments in Joint Ventures in an aggregate amount not to exceed $200,000,000; and

(xii)  Investments in addition to those referred to elsewhere in this Section 7.3(D) in an aggregate amount not to exceed $100,000,000. 

(E)  Contingent Obligations.  Neither the Company nor any of its Subsidiaries shall directly or indirectly create or become or be liable with respect to any Contingent Obligation, except: (i) recourse obligations resulting from endorsement of negotiable instruments for collection in the ordinary course of business; (ii) Permitted Existing Contingent Obligations, together with replacement Contingent Obligations (on substantially similar terms as the Permitted Existing Contingent Obligations) to the extent of any Permitted Refinancing Indebtedness of the Indebtedness that was the subject of such Permitted Existing Contingent Obligations; (iii) obligations, warranties, guarantees and indemnities, not relating to Indebtedness of any Person, which have been or are undertaken or made in the ordinary course of business and not for the benefit of or in favor of an Affiliate of the Company or such Subsidiary; (iv) Contingent Obligations with respect to surety, appeal and performance bonds obtained by the Company or any Subsidiary in the ordinary course of business, (v) Contingent Obligations of the Subsidiary Guarantors under the Domestic Subsidiary Guaranty, the Foreign Subsidiary Guaranty or of a Foreign Guarantor under a guaranty of the Indebtedness under the agreements described in clause

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(vi) below, (vi) Contingent Obligations of the Subsidiary Guarantors or any of the Company’s other Subsidiaries under any guaranty of the Indebtedness arising under the 2008 Senior Notes, the 2009 Senior Notes, the 2013 Senior Notes, the 2008 Note Agreement, the 2009 Note Agreement, the 2013 Note Agreement or any other senior (unsubordinated) credit, loan or borrowing facility or senior (unsubordinated) note purchase agreement similar in form and substance to any of the foregoing and in a principal amount equal to or greater than $50,000,000, so long as the creditors under such facility or note purchase agreement agree to be bound by the terms of the Intercreditor Agreement, (vii) obligations arising under or related to the Loan Documents, (viii) Contingent Obligations arising in connection with Receivables Facility Attributed Indebtedness permitted under Section 7.3(A); (ix) Contingent Obligations of the Company or any Subsidiary arising from the guaranty of Indebtedness of the Company or any Subsidiary, as applicable, to the extent such Indebtedness was permitted pursuant to Section 7.3(A); (x) Contingent Obligations in respect of representations and warranties customarily given in respect of Asset Sales otherwise permitted hereunder; and (xi) Contingent Obligations, in an aggregate amount not to exceed $200,000,000 at any time outstanding, arising as a result of the guaranty of any Indebtedness not described in clauses (i) through (x) hereof and otherwise permitted under Section 7.3(A).

(F)  Restricted Payments.  The Company shall not, and shall not permit any of its Subsidiaries to, declare or make any Restricted Payment if either a Default or an Unmatured Default shall have occurred and be continuing at the date of declaration or payment thereof or would result therefrom; provided,  however, that the Company or any Subsidiary may make dividend payments to holders of its Equity Interests or stock repurchases or redemptions pursuant to any Stock Repurchase Plan subsequent to the occurrence of a Default or an Unmatured Default if the payment of such dividends or commitment to make such stock repurchase was publicly announced to such holders of Equity Interests prior to the occurrence of such Default or Unmatured Default.  In addition to the foregoing, the Company shall not permit any of its issued and outstanding Capital Stock or any of its Subsidiaries’ issued and outstanding Capital Stock to be subject to any redemption right or repurchase agreement pursuant to which the Company or any Subsidiary is or may become obligated to redeem or repurchase its Capital Stock, other than those agreements identified in Schedule 6.8.

(G)  Conduct of Business; Subsidiaries; Acquisitions.  Neither the Company nor any  of its Significant Subsidiaries shall engage in any business other than the businesses engaged in by the Company on the date hereof and any business or activities which are reasonably similar, related or incidental thereto or logical extensions thereof.  The Company shall not create, acquire or capitalize any Subsidiary after the date hereof unless (i) no Default or Unmatured Default which is not being cured shall have occurred and be continuing or would result therefrom; (ii) after such creation, acquisition or capitalization, all of the representations and warranties contained herein shall be true and correct in all material respects (unless such representation and warranty is made as of a specific date, in which case, such representation or warranty shall be true in all material respects as of such date); and (iii) after such creation, acquisition or capitalization the Company shall be in compliance with the terms of Section 7.2(K) and Section 7.3(L).  Neither the Company nor any Significant Domestic Subsidiary shall make any Acquisitions, other than Acquisitions meeting the following requirements or otherwise approved by the Required Lenders (each such Acquisition constituting a “Permitted Acquisition”):

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(i)  no Default or Unmatured Default shall have occurred and be continuing or would result from such Acquisition or the incurrence of any Indebtedness in connection therewith;

(ii)  the purchase is consummated pursuant to a negotiated acquisition agreement on a non-hostile basis;

(iii)  prior to each such Acquisition with a purchase price in excess of $150,000,000, the Company shall deliver to the Administrative Agent a certificate from one of the Authorized Signers, demonstrating to the reasonable satisfaction of the Administrative Agent that after giving effect to such Acquisition and the incurrence of any Indebtedness permitted by Section 7.3(A) in connection therewith, on a proforma basis using, for any Acquisition, historical financial statements containing reasonable adjustments satisfactory to the Administrative Agent, as if the Acquisition and such incurrence of Indebtedness had occurred on the first day of the twelve-month period ending on the last day of the Company’s most recently completed fiscal quarter, the Company would have been in compliance with the financial covenants in Section 7.4 and not otherwise in Default;

(iv)  the Leverage Ratio will not exceed 3.50 to 1.00 immediately after giving effect to (x) any Acquisition during the Leverage Ratio Increase Period (including the Acquisition which triggered the beginning of such Leverage Ratio Increase Period) where the net consideration therefor is $50,000,000 or more, or (y) any Acquisition in excess of $150,000,000 (as demonstrated by the Company on a pro forma basis to the Administrative Agent’s satisfaction for any such Acquisition in excess of $150,000,000, including for purposes of calculating such ratio, EBITDA of the Person which is the subject of such Acquisition for the preceding 12 month period, with no such demonstration of pro forma compliance being required pursuant to this Section 7.3(G)(iv) for any such Acquisition less than or equal to $150,000,000); and

(v)  the businesses being acquired shall be reasonably similar, related or incidental to, or a logical extension of, the businesses or activities engaged in by the Company on the Closing Date.

Notwithstanding the foregoing, it is acknowledged and agreed that following any Permitted Acquisition that is consummated in compliance with both this Section 7.3(G) and Section 7.3(D)(vii), the Leverage Ratio for the fiscal quarter during which such Permitted Acquisition was consummated and the next three fiscal quarters thereafter may exceed 3.50 to 1.00 pursuant to Section 7.4(A) if the Leverage Ratio Increase Requirements are satisfied.

(H)  Transactions with Affiliates.  Neither the Company nor any of its Subsidiaries shall directly or indirectly enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (other than a wholly-owned direct or indirect Subsidiary of the Company), on terms that are (a) not authorized by the board of directors (or equivalent governing body) of the Company or any of its Subsidiaries, as applicable, or (b) less favorable to the Company or any of its Subsidiaries, as applicable, than those that might be obtained in an arm’s length transaction at

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the time from Persons who are not such an Affiliate, except for (i) Restricted Payments permitted by Section 7.3(F), (ii) Investments permitted by Section 7.3(D), (iii) transactions in the ordinary course of business and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and (iv) loans and advances to employees in the ordinary course of business and in amounts consistent with practice in effect prior to the Closing Date.

(I)  Restriction on Fundamental Changes.  Neither the Company nor any of its Significant Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of the Company’s consolidated business or property, whether now or hereafter acquired, except (i) transactions permitted under Sections 7.3(B),  7.3(D) or 7.3(G) and, (ii) a Subsidiary of the Company may be merged into or consolidated with the Company (in which case the Company shall be the surviving corporation) or any wholly-owned Domestic Incorporated Subsidiary of the Company, (iii) a Foreign Subsidiary may be merged into or consolidated with any other wholly-owned Foreign Subsidiary (provided that if involving a Foreign Subsidiary Borrower, the Foreign Subsidiary Borrower shall be the surviving corporation), and (iv) any liquidation of any Subsidiary of the Company into the Company or another Subsidiary of the Company, as applicable.

(J)  Margin Regulations.  Neither the Company nor any of its Subsidiaries, shall use all or any portion of the proceeds of any credit extended under this Agreement to purchase or carry Margin Stock in such amounts as would cause this Agreement to be deemed a “purpose credit” for purposes of Regulation T.

(K)  [Reserved]

(L)  Subsidiary Covenants.  The Company will not, and will not permit any Significant Subsidiary to, create or otherwise cause to become effective any consensual encumbrance or restriction of any kind on the ability of any Significant Subsidiary  to pay dividends or make any other distribution on its stock, or make any other Restricted Payment, pay any Indebtedness or other Obligation owed to the Company or any other Subsidiary, make loans or advances or other Investments in the Company or any other Subsidiary, or sell, transfer or otherwise convey any of its property to the Company or any other Subsidiary other than pursuant to (i) applicable law, (ii) this Agreement or the other Loan Documents, (iii) the 2008 Senior Notes, the 2009 Senior Notes, the 2013 Senior Notes and any other senior (unsubordinated) credit, loan or borrowing facility or senior (unsubordinated) note purchase agreement similar in form and substance to any of the foregoing and in a principal amount equal to or greater than $50,000,000, so long as the creditors under such facility or note purchase agreement agree to be bound by the terms of the Intercreditor Agreement, (iv) restrictions imposed by the holder of a Lien permitted by Section 7.3(C), (v) restrictions and conditions on the foregoing existing as of the Closing Date, (vi) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or any assets pending such sale, provided that such restrictions and conditions apply only to the Subsidiary or assets that is or are to be sold and such sale is permitted hereunder, (vii)  restrictions or conditions imposed by any agreement relating to any securitization transaction permitted by this Agreement if such restrictions or conditions apply only to the assets and interests therein that are the subject of the securitization transaction or to any Subsidiary which is a special purpose entity party to and whose sole business relates to such securitization transaction, (viii)  restrictions or conditions

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imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (ix) customary provisions in leases and other contracts restricting the assignment thereof, (x) restrictions and conditions in any existing or future joint venture agreement that restricts the ability of any party to such agreement to create, incur or permit a Lien on the equity interests in the joint venture and (xi) restrictions and conditions in any existing or future license agreement with respect to intellectual property that restricts the ability of any party to such agreement to create, incur or permit a Lien on such intellectual property.

(M)  Hedging Obligations.  The Company shall not and shall not permit any of its Subsidiaries to enter into any interest rate, commodity or foreign currency exchange, swap, collar, cap or similar agreements evidencing Hedging Obligations, other than interest rate, foreign currency or commodity exchange, swap, collar, cap or similar agreements entered into by the Company or such Subsidiary pursuant to which the Company or such Subsidiary has hedged its reasonably estimated interest rate, foreign currency or commodity exposure, which are non-speculative in nature.  Such permitted hedging agreements entered into by the Company or any Subsidiary and any Lender or any affiliate of any Lender are sometimes referred to herein as “Hedging Agreements.”

(N)  Issuance of Disqualified Stock.  From and after the Closing Date, neither the Company, nor any of its Subsidiaries shall issue to any Person (other than the Company or a wholly-owned Subsidiary) any Disqualified Stock unless after giving effect to the next sentence, such Disqualified Stock and Indebtedness is issued in accordance with the terms of this Agreement.  All issued and outstanding Disqualified Stock issued to any Person (other than the Company or a wholly-owned Subsidiary)  shall be treated as Indebtedness for all purposes of this Agreement (and as funded Indebtedness for purposes of Section 7.1(F)), and the amount of such deemed Indebtedness shall be the aggregate amount of the liquidation preference of such Disqualified Stock.

7.4.  Financial Covenants.  The Company shall comply with the following:

(A)  Maximum Leverage Ratio. The Company and its consolidated Subsidiaries shall not permit the ratio (the “Leverage Ratio”) of (i) Net Indebtedness to (ii) EBITDA to be greater than 3.50 to 1.00 for each four (4) fiscal quarter period of the Company beginning with the fiscal quarter ending September 30, 2013 (or, so long as the Leverage Ratio Increase Requirements have been met, (x) 4.00 to 1.00 for the fiscal quarter during which any applicable Permitted Acquisition was consummated and the immediately following fiscal quarter, and (y) 3.75 to 1.00 for the next two succeeding fiscal quarters).

The Leverage Ratio shall be calculated, in each case, determined as of the last day of each fiscal quarter of the Company based upon (a) for Net Indebtedness, Net Indebtedness as of the last day of each such fiscal quarter; and (b) for EBITDA, the actual amount for the Last Twelve-Month Period, provided, that the Leverage Ratio shall be calculated, with respect to Permitted Acquisitions, on a proforma basis using historical financial statements and containing reasonable adjustments satisfactory to the Administrative Agent, broken down by fiscal quarter in the Company’s reasonable judgment.

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(B)  Minimum Consolidated Net Worth.  The Company shall not permit its Consolidated Net Worth at any time to be less than the sum of (x) solely to the extent that the Administrative Agent shall have received evidence satisfactory to it that each of the 2008 Note Agreement, the 2009 Note Agreement and the 2013 Note Agreement includes a minimum consolidated net worth requirement consistent with the following, (a)$875,000,000 (the applicable “Base Amount”) plus (b) on the last Business Day of each fiscal year, beginning with the fiscal year ending September 30, 2015, the sum of fifty percent (50%) of Net Income (if positive) for such fiscal year, plus (c) fifty percent (50%) of the net cash proceeds resulting from the issuance by the Company of any Capital Stock, other than shares of Capital Stock issued pursuant to employee stock option or ownership plans or (y) otherwise,(a)$800,000,000 (the applicable “Base Amount”) plus (b) on the last Business Day of each fiscal year, beginning with the fiscal year ending September 30, 2013, the sum of fifty percent (50%) of Net Income (if positive) for such fiscal year, plus (c) fifty percent (50%) of the net cash proceeds resulting from the issuance by the Company of any Capital Stock, other than shares of Capital Stock issued pursuant to employee stock option or ownership plans; provided, that the effect of adjustments (not in excess of the Maximum Adjustment Amount) in the accumulated other comprehensive earnings accounts of the Company and its Subsidiaries, shall in each case be excluded in calculating the Company’s Consolidated Net Worth.  For purposes of this Section 7.4(B), “Maximum Adjustment Amount” means 10% of the applicable Base Amount pursuant to either clause (x) or clause (y) of the foregoing sentence.  The Company’s compliance with this covenant shall be calculated and tested as of the end of each fiscal quarter.

ARTICLE VIII:  DEFAULTS

8.1.  Defaults.  Each of the following occurrences shall constitute a Default under this Agreement:

(A)  Failure to Make Payments When Due.  (i) The Company shall fail to pay when due any of the Obligations consisting of principal with respect to the Loans or Reimbursement Obligations or (ii) any member of the Obligor Group shall fail to pay within five (5) days of the date when due any of the other Obligations under this Agreement or the other Loan Documents.

(B)  Breach of Certain Covenants.  The Company shall fail duly and punctually to perform or observe any agreement, covenant or obligation binding on the Company under:

(i)  Section 7.1 and such failure shall continue unremedied for thirty (30) days;

(ii)  Section 7.2 (other than Section 7.2(J)(ii)) and such failure shall continue unremedied for thirty (30) days after notice thereof from the Agent or any Lender is delivered to the Company or an Authorized Officer of the Company otherwise becomes aware of such failure, or

(iii)  Sections 7.2(J)(ii), 7.3 or 7.4.

(C)  Breach of Representation or Warranty.  Any representation or warranty made or deemed made by the Company to the Administrative Agent or any Lender herein or by the Company or any of its Subsidiaries in any of the other Loan Documents or in any statement or

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certificate at any time given by any such Person pursuant to any of the Loan Documents shall be false or misleading in any material respect on the date as of which made (or deemed made).

(D)  Other Defaults.  The Company shall default in the performance of or compliance with any term contained in this Agreement (other than as covered by paragraphs (A) or (B) of this Section 8.1), or the Company or any of its Subsidiaries shall default in the performance of or compliance with any term contained in any of the other Loan Documents, and such default shall continue unremedied and unwaived for thirty (30) days after the occurrence thereof.

(E)  Default as to Other Indebtedness.  The Company or any of its Subsidiaries shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness (other than Indebtedness hereunder, but including, without limitation, Disqualified Stock issued to Persons other than the Company or any wholly-owned Subsidiary), beyond any period of grace provided with respect thereto, which individually or together with other such Indebtedness as to which any such failure exists has an aggregate outstanding principal amount in excess of $60,000,000; or any breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness having such aggregate outstanding principal amount, beyond any period of grace, if any, provided with respect thereto, if the effect thereof is to cause an acceleration, mandatory redemption, a requirement that the Company offer to purchase such Indebtedness or other required repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the maturity of any such Indebtedness, or require a redemption or other repurchase of such Indebtedness or any such Indebtedness shall be otherwise declared to be due and payable (by acceleration or otherwise) or required to be prepaid, redeemed or otherwise repurchased by the Company or any of its Subsidiaries (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof.

(F)  Involuntary Bankruptcy; Appointment of Receiver, Etc.

(i)  An involuntary case shall be commenced against the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries, or any of the Company’s Significant Foreign Subsidiaries and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days after commencement of the case; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries, or any of the Company’s Significant Foreign Subsidiaries in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect; or any other similar relief shall be granted under any applicable federal, state, local or foreign law.

(ii)  A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of the Company’s Significant Foreign Subsidiaries or over all or a substantial part of the property of the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of the Company’s Significant Foreign Subsidiaries shall be entered; or an interim receiver, trustee or other custodian of the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of

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the Company’s Significant Foreign Subsidiaries or of all or a substantial part of the property of the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of the Company’s Significant Foreign Subsidiaries shall be appointed or a warrant of attachment, execution or similar process against any substantial part of the property of the Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of the Company’s Significant Foreign Subsidiaries shall be issued and any such event shall not be stayed, dismissed, bonded or discharged within sixty (60) days after entry, appointment or issuance.

(iii)  Any member of the Obligor Group incorporated under the laws of the Federal Republic of Germany: (i) is over-indebted (überschuldet) within the meaning of section 19 InsO (as applicable from time to time) or unable to pay its debts as they fall due (zahlungsunfähig) within the meaning of section 17 InsO, suspends making payments on all or a material part of its debts or announces an intention to do so or (ii) commences negotiations with any one or more of its creditors (other than a Credit Party in its capacity as such) with a view to the general readjustment or rescheduling of its indebtedness or, for any of the reasons set out in sections 17 to 19 InsO or (iii) any such member of the Obligor Group files for insolvency (Antrag auf Eröffnung eines Insolvenzverfahrens) or the board of directors or management (Vorstand oder Geschäftsführung) of any such member of the Obligor Group is required by law to file for insolvency; or (iv) the competent court takes any of the actions set out in section 21 InsO or the competent court institutes or rejects (for reason of insufficiency of its funds to implement such proceedings) insolvency proceedings against any such member of the Obligor Group (Eröffnung des Insolvenzverfahrens).

(G)  Voluntary Bankruptcy; Appointment of Receiver, Etc.  The Company, any of the Company’s Significant Domestic Incorporated Subsidiaries or any of the Company’s Significant Foreign Subsidiaries shall (i) commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, (iii) consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, (iv) make any assignment for the benefit of creditors or (v) take any corporate action to authorize any of the foregoing.

(H)  Judgments and Attachments.  Any money judgment(s) (other than a money judgment covered by insurance reasonably satisfactory (including the amount thereof) to the Administrative Agent and as to which the applicable insurance company has not disclaimed or reserved the right to disclaim coverage or subject to indemnity), writ or warrant of attachment, or similar process against the Company or any of its Subsidiaries or any of their respective assets involving in any single case or in the aggregate an amount in excess of $60,000,000 is or are entered and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days.

(I)  Dissolution.  Any order, judgment or decree shall be entered against the Company decreeing its involuntary dissolution or split up from its Significant Subsidiaries and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days; or the Company shall otherwise dissolve or cease to exist except as specifically permitted by this Agreement.

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(J)  Loan Documents.  At any time, for any reason, any Loan Document that materially affects the ability of the Administrative Agent or any of the Lenders to enforce the Obligations ceases to be in full force and effect or the Company or any of the Company’s Significant Subsidiaries party thereto seek to repudiate their respective obligations thereunder.

(K)  ERISA Event. An ERISA Event shall have occurred that, in the opinion of the Required Lenders, individually or when taken together with all other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect.

(L)  Installment Payments.  The Company or any member of the Controlled Group has failed to make an installment or any other payment which could result in a lien under Section 430(k) of the Code with respect to a liability in excess of $60,000,000.

(M)  Change of Control.  A Change of Control shall occur.

(N)  Environmental Matters.  The Company or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to (i) the Release by the Company or any of its Subsidiaries of any Contaminant into the environment, (ii) the liability of the Company or any of its Subsidiaries arising from the Release by any other Person of any Contaminant into the environment, or (iii) any violation of any Environmental, Health or Safety Requirements of Law by the Company or any of its Subsidiaries, which, in any case, has or is reasonably likely to have a Material Adverse Effect.

(O)  Guarantor Revocation.  Except as permitted upon the termination of such Foreign Subsidiary Guarantor’s parent as a Foreign Subsidiary Borrower, any guarantor of the Obligations shall terminate or revoke any of its obligations under the Domestic Subsidiary Guaranty or the Foreign Subsidiary Guaranty (other than any termination or revocation after release in accordance with this Agreement or any other Loan Document).

(P)  Receivables Facility Attributed Indebtedness.  An event (such event, a “Receivables Facility Trigger Event”) shall occur which (i) permits the investors or purchasers in respect of Receivables Facility Attributed Indebtedness of the Company or any Affiliate of the Company to require the early amortization or liquidation of such Receivables Facility Attributed Indebtedness in an aggregate outstanding amount in excess of $60,000,000 and (x) such Receivables Facility Trigger Event shall not be remedied or waived within the later to occur of the tenth day after the occurrence thereof or the expiry date of any grace period related thereto under the agreement evidencing such Receivables Facility Attributed Indebtedness, or (y) such investors shall require the early amortization or liquidation of such Receivables Facility Attributed Indebtedness as a result of such Receivables Facility Trigger Event, (ii) results in the termination of reinvestments of collections or proceeds of receivables and related assets under the agreements evidencing such Receivables Facility Attributed Indebtedness, or (iii) causes or otherwise permits the replacement or substitution of the Company or any Affiliate thereof as the servicer under the agreements evidencing such Receivables Facility Attributed Indebtedness; provided, however, that this Section 8.1(P) shall not apply on any date with respect to any voluntary request by the Company or an Affiliate thereof for an above-described amortization, liquidation, or termination of reinvestments so long as the aforementioned investors or purchasers cannot independently require on such date such amortization, liquidation or termination of reinvestments.

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A Default shall be deemed “continuing” until cured or until waived in writing in accordance with Section 9.3.

ARTICLE IX:  ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES

9.1.  Termination of Revolving Loan Commitments; Acceleration.  If any Default described in Section 8.1(F) or 8.1(G) occurs with respect to any Borrower, the Termination Date shall be deemed to have occurred, all obligations of the Lenders to make Loans hereunder and the obligation of any Issuing Banks to issue Letters of Credit hereunder shall automatically terminate, the Obligations shall immediately becomedue and payable without any election or action on the part of the Administrative Agent or any Lender and the Borrowers shall be and become thereby unconditionally obligated, without any further notice, act or demand, to pay to the Administrative Agent the cash collateral required pursuant to Section 3.11.  If any other Default occurs, the Required Lenders may terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation of the Issuing Banks to issue Letters of Credit hereunder, or declare the Termination Date to have occurred and the Obligations to be due and payable, or both,whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrowers expressly waive.

9.2.  Preservation of Rights.  No delay or omission of the Lenders or the Administrative Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Loan or the issuance of a Letter of Credit notwithstanding the existence of a Default or the inability of the applicable Borrower to satisfy the conditions precedent to such Loan or issuance of such Letter of Credit shall not constitute any waiver or acquiescence.  Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 9.3, and then only to the extent in such writing specifically set forth.  All remedies contained inthe Loan Documents or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders until the Obligations have been paid in full in cash.

9.3.  Amendments.  Subject to the provisions of this Article IX and except as otherwise provided in Section 2.22 with respect to an Incremental Term Loan Amendment, the Required Lenders (or the Administrative Agent with the consent in writing of the Required Lenders) and the Borrowers  may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrowers hereunder or waiving any Default hereunder; provided,  however, that no such supplemental agreement shall, without the consent of each Lender (which is not a Defaulting Lender) affected thereby (provided, that a Defaulting Lender shall be permitted to consent to any increase or extension of its Revolving Loan Commitment or any amendment, waiver or modification which would otherwise require its consent pursuant to clauses (ii) and (iii) below):

(i)  Postpone or extend the Revolving Loan Termination Date or any other date fixed for any payment of principal of, or interest on, the Loans (other than prepayments thereunder), the Reimbursement Obligations or any fees or other amounts payable to such

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Lender or any modifications of the provisions relating to prepayments of Loans and other Obligations;

(ii)  Reduce the principal amount of any Loans or L/C Obligations, or reduce the rate or extend the time of payment of interest or fees thereon; provided,  however, that a waiver of the application of the default rate of interest pursuant to Section 2.10 hereof shall only require the approval of the Required Lenders; or

(iii)  Increase the amount of the Revolving Loan Commitment of any Lender hereunder, increase any Lender’s Pro Rata Share or increase the aggregate principal amount of such Lender’s Loans;

provided,  further,  however, that no such supplemental agreement shall, without the consent of each Lender (which is not a Defaulting Lender):

(i)  Reduce the percentage specified in the definition of Required Lenders or any other percentage of Lenders specified to be the applicable percentage in this Agreement to act on specified matters or amend the definitions of “Required Lenders” or “Pro Rata Share” (it being understood that,  solely with the consent of the parties prescribed by Section 2.22 to be parties to an Incremental Term Loan Amendment, Incremental Term Loans may be included in the determination of Required Lenders on substantially the same basis as the Revolving Loan Commitments and the Revolving Loans are included on the Closing Date);

(ii)  Permit any Borrower to assign its rights under this Agreement;

(iii)  Other than pursuant to a transaction permitted by the terms of this Agreement, release the Company or any guarantor from its obligations under Article XVI, the Domestic Subsidiary Guaranty or the Foreign Subsidiary Guaranty;

(iv)  Amend Section 12.2 or 12.3 in a manner that would alter the pro rata sharing of payments required thereby (it being acknowledged and agreed that any Lender’s decision to extend the maturity date for any of its Loans pursuant to an amend and extend transaction shall not require the consent of any other Lender); or

(v)  Amend the definition of “Agreed Currencies” or “Agreed Jurisdictions” or amend Section 2.23, this Section 9.3 or Section 12.3.

No amendment of any provision of this Agreement relating to (a) the Administrative Agent shall be effective without the written consent of the Administrative Agent, (b) Swing Line Loans shall be effective without the written consent of the Swing Line Bank, and (c) any Issuing Bank shall be effective without the written consent of such Issuing Bank.  The Administrative Agent may waive payment of the fee required under Section 13.3(C) without obtaining the consent of any of the Lenders. 

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ARTICLE X:  GENERAL PROVISIONS

10.1.  Survival of Representations.  All representations and warranties of the Borrowers contained in this Agreement shall survive delivery of this Agreement and the making of the Loans herein contemplated so long as any principal, accrued interest, fees, or any other amountdue and payable under any Loan Document is outstanding and unpaid (other than contingent reimbursement and indemnification obligations) and so long as the Revolving Loan Commitments have not been terminated.

10.2.  Governmental Regulation.  Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrowers in violation of any limitation or prohibition provided by any applicable statute or regulation.

10.3.  Intentionally Omitted.

10.4.  Headings.  Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents.

10.5.  Entire Agreement.  The Loan Documents embody the entire agreement and understanding among the Borrowers, the Administrative Agent, the Co-Syndication Agents and the Lenders and supersede all prior agreements and understandings among the Borrowers, the Administrative Agent and the Lenders relating to the subject matter thereof.

10.6.  Several Obligations; Benefits of this Agreement.  The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other Lender (except to the extent to which the Administrative Agent is authorized to act as such).  The failure of any Lender to perform any of its obligations hereunder shall not relieve anyother Lender from any of its obligations hereunder.  This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns.

10.7.  Expenses; Indemnification.

(A)  Expenses.  The Borrowers shall reimburse the Administrative Agent, the Arrangers and the Co-Syndication Agents  for any reasonable and documented costs and out-of-pocket expenses (including reasonable and documented fees, time charges and expenses of attorneys and paralegals for the Administrative Agent) paid or incurred by the Administrative Agent, the Arrangers or the Co-Syndication Agents in connection with the preparation, negotiation, execution, delivery, syndication, review, amendment, modification, and administration of the Loan Documents.  The Company also agrees to reimburse the Administrative Agent, the Arrangers, the Co-Syndication Agents and the Lenders for any reasonable and documented costs and out-of-pocket expenses (including reasonable and documented fees, time charges and expenses of attorneys and paralegals for the Administrative Agent, the Arrangers, the Co-Syndication Agents and the Lenders) paid or incurred by the Administrative Agent, the Arrangers, the Co-Syndication Agents or any Lender in connection with the collection of the Obligations and enforcement of the Loan Documents. 

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(B)  Indemnity.  The Borrowers further agree to defend, protect, indemnify, and hold harmless the Administrative Agent, each Arranger, each Co-Syndication Agent, and each and all of the Lenders and each of their respective Affiliates, and each of such Administrative Agent’s, Arranger’s, Co-Syndication Agent’s, Lender’s, or Affiliate’s respective officers, directors, trustees, investment advisors, employees, attorneys, advisors and agents (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth in Article V) (collectively, the “Indemnitees”), based upon its obligations, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, reasonable costs, reasonable expenses of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto), imposed on, incurred by, or asserted against such Indemnitees in any manner relating to or arising out of:

(i)  this Agreement or any of the other Loan Documents, or any act, event or transaction related or attendant thereto or to the making of the Loans, and the issuance of and participation in Letters of Credit hereunder, the management of such Loans or Letters of Credit, the use or intended use of the proceeds of the Loans or Letters of Credit hereunder, or any of the other transactions contemplated by the Loan Documents; or

(ii)  any liabilities, obligations, responsibilities, losses, damages, personal injury, death, economic damages, treble damages, intentional, willful or wanton injury, damage or threat to the environment, natural resources or public health or welfare, costs and expenses (including, without limitation, attorney, expert and consulting fees and costs of investigation, feasibility or remedial action studies), fines, penalties and monetary sanctions, interest, known or unknown, absolute or contingent, past, present or future relating to violation of any Environmental, Health or Safety Requirements of Law arising from or in connection with the past, present or future operations of the Company, its Subsidiaries or any of their respective predecessors in interest, or, the past, present or future environmental, health or safety condition of any respective property of the Company or its Subsidiaries, the presence of asbestos-containing materials at any respective property of the Company or its Subsidiaries or the Release or threatened Release of any Contaminant into the environment (collectively, the “Indemnified Matters”);

provided,  however, that the foregoing indemnity will not, as to any Indemnitee, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from (i) the willful misconduct, bad faith or gross negligence of, or intentional breach of its material duties and obligations under this Agreement or any of the other Loan Documents by, such Indemnitee (or any of its controlled Affiliates and their respective directors, officers, employees and partners, in each case to the extent involved in the transactions contemplated by this Agreement), in each case, as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii) any disputes solely among Indemnitees and not arising out of any act or omission of any Borrower or any of its Subsidiaries (other than any proceeding against the Administrative Agent solely in its capacity as such or in fulfilling its role as Administrative Agent, or against any Arranger solely in its capacity or in fulfilling its role as an Arranger).  If the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, each Borrower shall contribute the maximum portion which it is permitted to

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pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.

(C)  Waiver of Certain Claims.  The Borrowers further agree to assert no claim against any of the Indemnitees on any theory of liability seeking consequential, special, indirect, exemplary or punitive damages. 

(D)  Survival of Agreements.  The obligations and agreements of the Borrowers under this Section 10.7 shall survive the termination of this Agreement.

10.8.  Numbers of Documents.  All statements, notices, closing documents, and requests hereunder shall be furnished to the Administrative Agent with sufficient counterparts so that the Administrative Agent may furnish one to each of the Lenders.

10.9.  Confidentiality.  Each Lender agrees to hold any confidential information which it may receive from any member of the Obligor Group pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which such Lender is a party, (vi) to such Lender’s direct or indirect contractual counterparties in Hedging Agreements or to legal counsel, accountants and other professional advisors to such counterparties, (vii) permitted by Section 13.4, (viii) to rating agencies if requested or required by such agencies in connection with a rating relating to the Advances hereunder, (ix) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, and (x) in the event and to the extent such confidential information (A) becomes publicly available other than as a result of breach of this Section or (B) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

10.10.  Severability of Provisions.  Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

10.11.  Nonliability of Lenders.  The relationship among the Borrowers and the Lenders and the Administrative Agent shall be solely that of borrower and lender.  Neither the Administrative Agent nor any Lender shall have any fiduciary responsibilities to any Borrower.  Neither the Administrative Agent nor any Lender undertakes any responsibility to any Borrower to review or inform such Borrower of any matter in connection with any phase of such Borrower’s business or operations.

10.12.  GOVERNING LAW

ANY DISPUTE BETWEEN ANY BORROWER AND THE ADMINISTRATIVE AGENT OR ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO,

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OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE BORROWERS AND THE LENDERS IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BERESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

10.13.  CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

(A)  NON-EXCLUSIVE JURISDICTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ANY MEMBER OF THE OBLIGOR GROUP AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT (OTHER THAN COUNTERCLAIMS INITIATED IN THE SAME JURISDICTION AS THE CLAIM) SHALL BE BROUGHT TO THE EXTENT POSSIBLE ONLY IN A COURT IN NEW YORK CITY, NEW YORK.

(B)  SERVICE OF PROCESS.   EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY THE ADMINISTRATIVE AGENT OR THE LENDERS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY ADDRESSED AS PROVIDED HEREIN.  NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY OF THE PARTIES HERETO TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

(C)  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH.  EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT

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ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(D)  ADVICE OF COUNSEL.  EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.

(E)  SERVICE OF PROCESS TO FOREIGN SUBSIDIARY BORROWERS.Each Foreign Subsidiary Borrower irrevocably designates and appoints the Company, as its authorized agent, to accept and acknowledge on its behalf, service of any and all process which may be served in any suit, action or proceeding of the nature referred to in Section 10.13(A) in any federal or NEW YORK State court sitting in NEW YORK CITY, NEW YORK.  The Company hereby represents, warrants and confirms that the Company has agreed to accept such appointment (and any similar appointment by a Subsidiary Guarantor which is a Foreign Subsidiary).  Said designation and appointment shall be irrevocable by each such Foreign Subsidiary Borrower until all Loans, all reimbursement obligations, interest thereon and all other amounts payable by such Foreign Subsidiary Borrower hereunder and under the other Loan Documents shall have been paid in full in accordance with the provisions hereof and thereof and such Foreign Subsidiary Borrower shall have been terminated as a Borrower hereunder pursuant to Section 2.23.  Each Foreign Subsidiary Borrower hereby consents to process being served in any suit, action or proceeding of the nature referred to in Section 10.13(A) in any federal or NEW YORK STATE court sitting in NEW YORK CITY, NEW YORK by service of process upon the Company as provided in this Section 10.13(E); provided that, to the extent lawful and possible, notice of said service upon such agent shall be mailed by registered or certified air mail, postage prepaid, return receipt requested, to the Company and (if applicable to) such Foreign Subsidiary Borrower at its address set forth in the Borrowing Subsidiary Agreement to which it is a party or to any other address of which such Foreign Subsidiary Borrower shall have given written notice to the Administrative Agent (with a copy thereof to the Company).  Each Foreign Subsidiary Borrower irrevocably waives, to the fullest extent permitted by law, all claim of error by reason of any such service in such manner and agrees that such service shall be deemed in every respect effective service of process upon such Foreign Subsidiary Borrower in any such suit, action or proceeding and shall, to the

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fullest extent permitted by law, be taken and held to be valid and personal service upon and personal delivery to such Foreign Subsidiary Borrower.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

10.14.  Subordination of Intercompany Indebtedness.  Each Borrower agrees that any and all claims of such Borrower against any of its Affiliates that is a guarantor with respect to any indebtedness of any guarantor to such Borrower (“Intercompany Indebtedness”), any endorser, obligor or any other guarantor of all or any part of the Obligations, or against any of its properties, including, without limitation, claims arising from liens or security interests upon property, shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Obligations; provided that, and not in contravention of the foregoing, so long as no Default has occurred and is continuing each Borrower may make loans to and receive payments in the ordinary course with respect to such Intercompany Indebtedness from each such guarantor to the extent permitted by the terms of this Agreement and the other Loan Documents.  Should any payment, distribution, security or instrument or proceeds thereof be received by a Borrower upon or with respect to the Intercompany Indebtedness in contravention of this Agreement or the Loan Documents or after the occurrence of a Default, including, without limitation, an event described in Section 8.1(F) or (G), prior to the satisfaction of all of the Obligations (other than contingent indemnity obligations) and the termination of all financing arrangements pursuant to any Loan Document or Hedging Agreement among the Borrowers and the Lenders (and their Affiliates), each Borrower shall receive and hold the same in trust, as trustee, for the benefit of the holders of the Obligations and shall forthwith deliver the same to the Administrative Agent, for the benefit of such Persons, in precisely the form received (except for the endorsement or assignment of the applicable Borrower where necessary), for application to any of the Obligations, due or not due, and, until so delivered, the same shall be held in trust by the applicable Borrower as the property of the holders of the Obligations.  If the applicable Borrower fails to make any such endorsement or assignment to the Administrative Agent, the Administrative Agent or any of its officers or employees are irrevocably authorized to make the same.  Each Borrower agrees that until the Obligations (other than the contingent indemnity obligations) have been paid in full (in cash) andsatisfied and all financing arrangements pursuant to any Loan Document or Hedging Agreement among the Borrowers and the Lenders (and their Affiliates) have been terminated, such Borrower will not assign or transfer to any Person (other than the Administrative Agent) any claim such Borrower has or may have against any guarantor.

10.15.  USA PATRIOT Act.  Each Lender hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrowers in accordance with the Act.  Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

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10.16.  No Duties Imposed on Co-Syndication Agents, Documentation Agents or Arrangers. None of the Persons identified on the cover page to this Agreement, the signature pages to this Agreement or otherwise in this Agreement as a “Co-Syndication Agent,” “Documentation Agent” or “Arranger” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, if such Person is a Lender, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Persons identified on the cover page to this Agreement, the signature pages to this Agreement or otherwise in this Agreement as a “Co-Syndication Agent,” “Documentation Agent” or “Arranger” shall have or be deemed to have any fiduciary duty to or fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

10.17.  Accounting.  Except as provided to the contrary herein, all accounting terms and other applicable definitions, covenants and provisions herein shall be interpreted and all accounting determinations and other applicable calculations hereunder shall be made in accordance with Agreement Accounting Principles.  If any changes in generally accepted accounting principles are hereafter required or permitted and are adopted by the Company or any of its Subsidiaries with the agreement of its independent certified public accountants and such changes result in a change in the method of calculation of any of the financial covenants, tests, restrictions or standards herein or in the related definitions or terms used therein (“Accounting Changes”), the parties hereto agree, at the Company’s request, to enter into negotiations, in good faith, in order to amend such provisions in a credit neutral manner so as to reflect equitably such changes with the desired result that the criteria for evaluating the Company’s and its Subsidiaries’ financial condition shall be the same after such changes as if such changes had not been made; provided,  however, until such provisions are amended in a manner reasonably satisfactory to the Administrative Agent and the Required Lenders, no Accounting Change shall be given effect in such calculations and all financial reports (excluding in any event financial statements) required to be delivered hereunder shall be prepared in accordance with Agreement Accounting Principles without taking into account such Accounting Changes.  In the event such amendment is entered into, all references in this Agreement to Agreement Accounting Principles shall mean generally accepted accounting principles as of the date of such amendment.  Notwithstanding the foregoing or any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Company or any of its Subsidiaries at “fair value”, as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Staff Position APB 14-1 to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

ARTICLE XI:  THE ADMINISTRATIVE AGENT

11.1.  Appointment; Nature of Relationship.  Wells Fargo is appointed by the Lenders as the Administrative Agent hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the contractual representativeof such

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Lender with the rights and duties expressly set forth herein and in the other Loan Documents.  The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article XI.  Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agentshall not have any fiduciary responsibilities to any Lender by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents.  In its capacity as the Lenders’ contractual representative, the Administrative Agent (i) does not assume any fiduciary duties to any of the Lenders, (ii) is a “representative” of the Lenders within the meaning of Section 9-102 of the New York Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents.  Each of the Lenders, for itself and on behalf of itsaffiliates, agrees to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives.

11.2.  Powers.  The Administrative Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto.  The Administrative Agent shall have no implied duties or fiduciary duties to the Lenders, or any obligation to the Lenders to take any action hereunder or under any of the other Loan Documents except any action specifically provided by the Loan Documents required to be taken by the Administrative Agent.

11.3.  General Immunity.  Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrowers, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is found in a final judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of such Person.

11.4.  No Responsibility for Loans, Creditworthiness, Recitals, Etc.  Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document; (iii) the satisfaction of any condition specified in Article V, except receipt of items required to be delivered solely to the Administrative Agent; (iv) the existence or possibleexistence of any Default or (v) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith.  The Administrative Agentshall not be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Loan Documents for the execution, effectiveness, genuineness, validity, legality, enforceability, collectibility, or sufficiency of this Agreement or any of theother Loan Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its Subsidiaries.

11.5.  Action on Instructions of Lenders.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other LoanDocument in accordance with written instructions signed by the Required Lenders (or all of the

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Lenders in the event that and to the extent that this Agreement expressly requires such), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all owners of Loans.  Upon receipt of any such instructions from the RequiredLenders (or all of the Lenders in the event that and to the extent that this Agreement expressly requires such), the Administrative Agent shall be permitted to act on behalf of the full principal amount of the Obligations.  The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

11.6.  Employment of Administrative Agent and Counsel.  The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Loan Document by or through employees, agents, and attorney-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.  The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Lenders and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Loan Document.

11.7.  Reliance on Documents; Counsel.  The Administrative Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.

11.8.  The Administrative Agent’s Reimbursement and Indemnification.  The Lenders agree to reimburse and indemnify the Administrative Agent ratably in proportion to its respective Pro Rata Shares (i) for any amounts not reimbursed by the Borrowers for which the Administrative Agent is entitled to reimbursement by the Borrowers under the Loan Documents, (ii) for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or ofany such other documents, provided that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competentjurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.

11.9.  Rights as a Lender.  With respect to its Revolving Loan Commitment, Loans made by it, and Letters of Credit issued by it, the Administrative Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender or Issuing Bank and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders”, “Issuing Bank” or “Issuing Banks” shall, unless the context otherwise indicates,include the Administrative Agent in its individual capacity.  The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other

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transaction, in addition to those contemplated by this Agreement or any other LoanDocument, with the Company or any of its Subsidiaries in which such Person is not prohibited hereby from engaging with any other Person.

11.10.  Lender Credit Decision.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any Arranger, either Co-Syndication Agent or any other Lender and based on the financial statements prepared by the Company and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger, either Co-Syndication Agent or any other Lender based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking the action under this Agreement and the other Loan Documents.  Except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Subsidiaries that is communicated to or obtained by the Person serving as Administrative Agent for any of its Affiliates in any capacity.

11.11.  Successor Administrative Agent.  The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Company.  Upon any such resignation, the Required Lenders shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Administrative Agent’s giving notice of resignation, then the retiring Administrative Agent may appoint, on behalf of the Borrowers and the Lenders, a successor Administrative Agent.  Notwithstanding anything herein to the contrary, so long as no Default has occurred and is continuing, each such successor Administrative Agent shall be subject to approval by the Company, which approval shall not be unreasonably withheld.  Such successor Administrative Agent shall be a Lender and shall be a commercial bank having capital and retained earnings of at least $500,000,000.  Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article XI shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Loan Documents.  The Administrative Agent may not be removed without its prior written consent.

11.12.  No Duties Imposed Upon Arrangers or Agents.  No Person identified on the cover page to this Agreement, the signature pages to this Agreement or otherwise in this Agreement as an “Arranger”, a “Co-Syndication Agent” or a “Documentation Agent” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than if such Person is a Lender, those applicable to all Lenders as such.  Without limiting the foregoing, no Person identified on the cover page to this Agreement, thesignature pages to this Agreement or otherwise in this Agreement as an “Arranger”, a “Co-Syndication Agent” or a “Documentation Agent” shall have or be deemed to have any fiduciary duty to or fiduciary relationship with any Lender.  In

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addition to the agreement set forth in Section 11.10, each of the Lenders acknowledges that it has not relied, and will not rely, on any Person so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

11.13.  Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless theAdministrative Agent has received written notice from a Lender or the Company referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders.

11.14.  Delegation to Affiliates.  The Borrowers and the Lenders agree that the Administrative Agent may delegate any of its duties under this Agreement to any of its Affiliates.  Any such Affiliate (andsuch Affiliate’s directors, officers, agents, and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Administrative Agent is entitled under terms of this Agreement.

11.15.  Intercreditor Agreement and Subsidiary Guaranties.  Each Lender authorizes the Administrative Agent to enter into and remain subject to each of the Intercreditor Agreement, the Domestic Subsidiary Guaranty and the Foreign Subsidiary Guaranty on behalf and for the benefit of such Lender and to take all actions contemplated by such documents, including, without limitation, all enforcement actions.  Each Lender agrees to be bound by the terms and conditions of the Intercreditor Agreement.

ARTICLE XII:  SETOFF; RATABLE PAYMENTS

12.1.  Setoff.  In addition to, and without limitation of, any rights of the Lenders under applicable law, if any Default occurs and is continuing, any Indebtedness from any Lender to any Borrower (including all account balances, whether provisional or final and whether or not collected or available) may be offset and applied toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part hereof, shall then be due.

12.2.  Ratable Payments; Failure to Fund.  (A)  If any Lender, whether by setoff or otherwise, has payment made to it upon its Loans (other than payments received pursuant to Sections 2.14(E),  4.1,  4.2, or 4.4) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Loans held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of Loans.  If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them.  Incase any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.

(B)  If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.2(D),  2.17,  3.6,  3.7 or 11.8, then the Administrative Agent may, in its discretion and

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notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the Swing Line Bank or an Issuing Bank to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

12.3.  Application of Payments.  If any Borrower, prior to the occurrence of a Default, has remitted a payment to the Administrative Agent or any Lender without indicating the Obligation to be reduced thereby, or at any time after the occurrence of a Default, subject to the provisions of Section 9.2, the Administrative Agent shall, unless otherwise specified at the direction of the Required Lenders which direction shall be consistent with the last sentence of this Section 12.3, apply all payments and prepayments in respect of any Obligations in the following order:

(A)  first, to pay interest on and then principal of any portion of the Loans which the Administrative Agent may have advanced on behalf of any Lender for which the Administrative Agent has not then been reimbursed by such Lender or any Borrower;

(B)  second, to pay Obligations in respect of any fees, expenses, reimbursements or indemnities then due to the Administrative Agent;

(C)  third, to pay Obligations in respect of any fees, expenses, reimbursements or indemnities then due to the Lenders and the issuer(s) of Letters of Credit;

(D)  fourth, to pay interest due in respect of Swing Line Loans;

(E)  fifth, to pay interest due in respect of Loans (other than Swing Line Loans and L/C Obligations);

(F)  sixth, to the ratable payment or prepayment of principal outstanding on Swing Line Loans;

(G)  seventh, to the ratable payment or prepayment of principal outstanding on Loans (other than Swing Line Loans), Reimbursement Obligations and Hedging Obligations in such order as the Administrative Agent may determine in its sole discretion;

(H)  eighth, to provide required cash collateral, if required pursuant to Section 3.11; and

(I)  ninth, to the ratable payment of all other Obligations.

Unless otherwise designated (which designation shall only be applicable prior to the occurrence of a Default) by the applicable Borrower, all principal payments in respect of Loans (other than Swing Line Loans) shall be applied first, to repay outstanding Floating Rate Loans, and then to repay outstanding Eurocurrency Rate Loans with those Eurocurrency Rate Loans which have earlier expiring Interest Periods being repaid prior to those which have later expiring Interest Periods.  The order of priority set forth in this Section 12.3 and the related provisions of this Agreement are set forth solely to determine the rights and priorities of the Administrative Agent,

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the Lenders, the Swing Line Bank and the issuer(s) of Letters of Credit as among themselves.  Upon written notice to the Borrowers, the order of priority set forth in clauses (C) through (I) of this Section 12.3 may at any time and from time to time be changed by the Required Lenders without consent of or approval by the Company, or any other Person; provided, that the order of priority of payments in respect of Swing Line Loans may be changed only with the prior written consent of the Swing Line Bank.  The order of priority set forth in clauses (A) and (B) of this Section 12.3 may be changed only with the prior written consent of the Administrative Agent.

12.4.  Relations Among Lenders.

(A)  Except with respect to the exercise of set-off rights of any Lender in accordance with Section 12.1, the proceeds of which are applied in accordance with this Agreement, and except as set forth in the following sentence, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Company or any other obligor hereunder or with respect to any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, at the direction of the Administrative Agent.

(B)  The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.  The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

12.5.  Representations and Covenants Among Lenders.  Each Lender represents and covenants for the benefit of all other Lenders and the Administrative Agent that such Lender is not satisfying and shall not satisfy any of its obligations pursuant to this Agreement with any assets considered for any purposes of ERISA or Section 4975 of the Code to be assets of or on behalf of any “plan” as defined in section 3(3) of ERISA or section 4975 of the Code, regardless of whether subject to ERISA or Section 4975 of the Code.

ARTICLE XIII:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

13.1.  Successors and Assigns; Designated Lenders.

(A)  Successors and Assigns.  The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrowers, the Administrative Agent and the Lenders and their respective successors and assigns permitted hereby, except that (i) none of the Borrowers shall have the right to assign its rights or obligations under the Loan Documents without the prior written consent of each Lender, (ii) any assignment by any Lender must be made in compliance with Section 13.3, and (iii) any transfer by Participants must be made in compliance with Section 13.2.  Any attempted assignment or transfer by any party not made in compliance with this Section 13.1 or Section 13.3 shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with Section 13.2.  The parties to this Agreement acknowledge that clause (ii) of this Section 13.1 relates only to absolute assignments and this Section 13.1 does not prohibit assignments creating security interests, including, without limitation, (x) any pledge

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or assignment by any Lender of all or any portion of its rights under this Agreement and any promissory note issued hereunder to a Federal Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any promissory note issued hereunder to its trustee in support of its obligations to its trustee or (z) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any promissory note issued hereunder to direct or indirect contractual counterparties in interest rate swap agreements relating to the Loans, but in all cases excluding credit default swaps; provided,  however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of Section 13.3.  The Administrative Agent may treat the Person which made any Revolving Loan or which holds any promissory note issued hereunder as the owner thereof for all purposes hereof unless and until such Person complies with Section 13.3;  provided,  however, that the Administrative Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Revolving Loan or which holds any promissory note issued hereunder to direct payments relating to such Revolving Loan or promissory note issued hereunder to another Person.  Any assignee of the rights to any Revolving Loan or any promissory note issued hereunder agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents.  Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a promissory note has been issued hereunder in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan.

(B)  Designated Lenders.

(i)  Subject to the terms and conditions set forth in this Section 13.1(B), any Lender may from time to time elect to designate an Eligible Designee to provide all or any part of the Loans to be made by such Lender pursuant to this Agreement; provided that the designation of an Eligible Designee by any Lender for purposes of this Section 13.1(B) shall be subject to the approval of the Administrative Agent (which consent shall not be unreasonably withheld or delayed).  Upon the execution by the parties to each such designation of an agreement in the form of Exhibit L hereto (a “Designation Agreement”) and the acceptance thereof by the Administrative Agent, the Eligible Designee shall become a Designated Lender for purposes of this Agreement.  The Designating Lender shall thereafter have the right to permit the Designated Lender to provide all or a portion of the Loans to be made by the Designating Lender pursuant to the terms of this Agreement and the making of the Loans or portion thereof shall satisfy the obligations of the Designating Lender to the same extent, and as if, such Loan was made by the Designating Lender.  As to any Loan made by it, each Designated Lender shall have all the rights a Lender making such Loan would have under this Agreement and otherwise; provided, (x) that all voting rights under this Agreement shall be exercised solely by the Designating Lender, (y) each Designating Lender shall remain solely responsible to the other parties hereto for its obligations under this Agreement, including the obligations of a Lender in respect of Loans made by its Designated Lender and (z) no Designated Lender shall be entitled to reimbursement under Article IV hereof for any amount which would exceed the amount that would have been payable by the applicable Borrower to the Lender from which the Designated Lender obtained any interests hereunder.  No additional promissory notes shall be required to be issued hereunder with respect to Loans provided by a Designated

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Lender; provided,  however, to the extent any Designated Lender shall advance funds, the Designating Lender shall be deemed to hold the promissory notes issued hereunder in its possession as an administrative agent for such Designated Lender to the extent of the Loan funded by such Designated Lender.  Such Designating Lender shall act as an administrative agent for its Designated Lender and give and receive notices and communications hereunder.  Any payments for the account of any Designated Lender shall be paid to its Designating Lender as administrative agent for such Designated Lender and neither the Borrowers nor the Administrative Agent shall be responsible for any Designating Lender’s application of such payments.  In addition, any Designated Lender may (1) with notice to, but without the consent of the Borrowers or the Administrative Agent, assign all or portions of its interests in any Loans to its Designating Lender or to any financial institution consented to by the Administrative Agent providing liquidity and/or credit facilities to or for the account of such Designated Lender and (2) subject to advising any such Person that such information is to be treated as confidential in accordance with Section 13.4, disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any guarantee, surety or credit or liquidity enhancement to such Designated Lender.

(ii)  Each party to this Agreement hereby agrees that it shall not institute against, or join any other Person in instituting against, any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other proceedings under any federal or state bankruptcy or similar law for one year and a day after the payment in full of all outstanding senior indebtedness of any Designated Lender; provided that the Designating Lender for each Designated Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage and expense arising out of its inability to institute any such proceeding against such Designated Lender.  This Section 13.1(B) shall survive the termination of this Agreement.

13.2.  Participations.

(A)  Permitted Participants; Effect.  Any Lender may at any time sell to one or more banks or other entities (“Participants”) participating interests in any Revolving Credit Obligations of such Lender, any promissory note issued hereunder held by such Lender, any Revolving Loan Commitment of such Lender or any other interest of such Lender under the Loan Documents.  In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Revolving Credit Obligations and the holder of any promissory note issued to it hereunder in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrowers under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents.

(B)  Voting Rights.  Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan or

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Revolving Loan Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 9.3.

(C)  Benefit of Certain Provisions.  Each Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 12.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 12.1 with respect to the amount of participating interests sold to each Participant.  The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 12.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 12.2 as if each Participant were a Lender.  Each Borrower further agrees that each Participant shall be entitled to the benefits of Article IV to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 13.3,  provided that (i) a Participant shall not be entitled to receive any greater payment under Article IV than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the applicable Borrower, and (ii) any Participant not incorporated under the laws of the United States of America or any State thereof agrees to comply with the provisions of Article IV to the same extent as if it were a Lender.

13.3.  Assignments.

(A)  Permitted Assignments.  Any Lender may at any time assign to one or more banks or other entities (but not natural persons or the Company or any Affiliate of the Company) (“Purchasers”) all or any part of its rights and obligations under the Loan Documents.  Such assignment shall be evidenced by an agreement substantially in the form of Exhibit D or in such other form as may be agreed to by the parties thereto (each such agreement, an “Assignment Agreement”).  Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall, unless otherwise consented to in writing by the applicable Borrower and the Administrative Agent, either be in an amount equal to the entire applicable Revolving Credit Obligations of the assigning Lender or (unless each of the applicable Borrower and the Administrative Agent otherwise consents) be in an aggregate amount not less than $5,000,000. The amount of the assignment shall be based on the Revolving Credit Obligations subject to the assignment, determined as of the date of such assignment or as of the “Trade Date,” if the “Trade Date” is specified in the Assignment Agreement.

(B)  Consents.  The consent of the applicable Borrower shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund; provided that the consent of the applicable Borrower shall not be required if a Default has occurred and is continuing; providedfurther, that the Borrowers shall be deemed to have consented to any such assignment unless they shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received written notice thereof.  The consent of each Issuing Bank shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund.  The consent of the Administrative Agent shall be required prior to an assignment becoming effective.  Any consent required under this Section 13.3(B) shall not be unreasonably withheld or delayed.

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(C)  Effect; Effective Date.  Upon (i) delivery to the Administrative Agent of an Assignment Agreement, together with any consents required by Sections 13.3(A) and 13.3(B), and (ii) payment of a $3,500 fee to the Administrative Agent for processing such assignment (unless such fee is waived by the Administrative Agent or unless such assignment is made to such assigning Lender’s Affiliate), such assignment shall become effective on the effective date specified in such assignment.  The Assignment Agreement shall contain a representation and warranty by the Purchaser to the effect that none of the funds, money, assets or other consideration used to make the purchase and assumption of the Revolving Loan Commitment and Revolving Credit Obligations under the applicable Assignment Agreement constitutes “plan assets” as defined under ERISA and that the rights, benefits and interests of the Purchaser in and under the Loan Documents will not be “plan assets” under ERISA.  On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights, benefits and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Revolving Credit Obligations assigned to such Purchaser without any further consent or action by the Borrowers, the Lenders or the Administrative Agent.  In the case of an assignment covering all of the assigning Lender’s rights, benefits and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the Loan Documents.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 13.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 13.2.  Upon the consummation of any assignment to a Purchaser pursuant to this Section 13.3(C), the transferor Lender, the Administrative Agent and the applicable Borrower shall, at no additional cost to the applicable Borrower, and, if the transferor Lender or the Purchaser desires that its Loans be evidenced by promissory notes, make appropriate arrangements so that, upon cancellation and surrender to the applicable Borrower of the previously issued promissory notes (if any) held by the transferor Lender, new promissory notes issued hereunder or, as appropriate, replacement promissory notes are issued to such transferor Lender, if applicable, and new promissory notes or, as appropriate, replacement promissory notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Revolving Loan Commitments (or, if the Revolving Loan Termination Date has occurred, their respective Revolving Credit Obligations), as adjusted pursuant to such assignment.

(D)  The Register.  The Administrative Agent, acting solely for this purpose as an Administrative Agent of each Borrower (and each Borrower hereby designates the Administrative Agent to act in such capacity), shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, and the Revolving Loan Commitments of, and principal amounts of and interest on the Loans owing to, each Lender pursuant to the terms hereof from time to time and whether such Lender is an original Lender or assignee of another Lender pursuant to an assignment under this Section 13.3.  The entries in the Register shall be conclusive, and Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by any

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Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

13.4.  Dissemination of Information.  Each Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents byoperation of law (each a “Transferee”) and any prospective Transferee any and all informationin such Lender’s possession concerning the creditworthiness of such Borrower and its Subsidiaries; provided, that each Transferee and prospective Transferee agrees to be bound by Section 10.9 of this Agreement.

13.5.  Tax Certifications.  If any interest in any Loan Document is transferred to any Transferee which is not incorporated under the laws of the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 2.14(E).

ARTICLE XIV:  NOTICES

14.1.  Giving Notice.  Except as otherwise permitted by Section 2.13 with respect to Borrowing/Election Notices, all notices and other communications provided to any party hereto under this Agreement or any other Loan Documents shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:

(i)  if to any Borrower or any Subsidiary Guarantor, at the Company’s address or telecopier number set forth on the signature page hereof;

(ii)  if to the Administrative Agent, at its address or telecopier number set forth on the signature page hereof, provided,  however, that all notices relating to Loans (but not any notices relating to Letters of Credit) shall also be delivered to:

Wells Fargo Bank, N.A.
1525 West W.T. Harris Blvd
Charlotte, NC  28262
Attn:  Agency Services
Agencyservices.requests@wellsfargo.com

(iii) if to an Issuing Bank, at its address or telecopier number set forth on the signature page hereof; and

(iv)  if to a Lender, to it at its address (or telecopier number) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).

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14.2.  Change of Address.  Each of the Company and the Administrative Agent may change the address for service of notice upon it by a notice in writing to the other parties hereto, including, without limitation, each Lender.  Each Lender may change the address for service of notice upon it by a notice in writing to the Company and the Administrative Agent.

ARTICLE XV:  COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.  This Agreement shall be effective when it has been executed by each Borrower, the Administrative Agent and the Lenders and each party has notified the Administrative Agent by telex or telephone, that it has taken such action.

ARTICLE XVI:  COMPANY GUARANTEE

In order to induce the Lenders to extend credit to the other Borrowers hereunder, the Company hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment when and as due of the Obligations of such other Borrowers.  The Company further agrees that the due and punctual payment of such Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Obligation.

The Company waives presentment to, demand of payment from and protest to any Borrower of any of the Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment.  The obligations of the Company hereunder shall not be affected by: (a) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any right or remedy against any Borrower under the provisions of this Agreement, any other Loan Document or otherwise; (b) any extension or renewal of any of the Obligations; (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Agreement, or any other Loan Document or agreement; (d) any default, failure or delay, willful or otherwise, in the performance of any of the Obligations; (e) the failure of the Administrative Agent to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Obligations, if any; (f) any change in the corporate, partnership or other existence, structure or ownership of any Borrower or any other guarantor of any of the Obligations; (g) the enforceability or validity of the Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Obligations or any part thereof, or any other invalidity or unenforceability relating to or against any Borrower or any other guarantor of any of the Obligations, for any reason related to this Agreement, any Swap Agreement, any other Loan Document, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by such Borrower or any other guarantor of the Obligations, of any of the Obligations or otherwise affecting any term of any of the Obligations; or (h) any other act, omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Company or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would impair or eliminate any right of the Company to subrogation.

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The Company further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by the Administrative Agent, the Issuing Bank or any Lender to any balance of any deposit account or credit on the books of the Administrative Agent, the Issuing Bank or any Lender in favor of any Borrower or any other Person.

The obligations of the Company hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Obligations, any impossibility in the performance of any of the Obligations or otherwise.

The Company further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent, the Issuing Bank or any Lender upon the bankruptcy or reorganization of any Borrower or otherwise.

In furtherance of the foregoing and not in limitation of any other right which the Administrative Agent, the Issuing Bank or any Lender may have at law or in equity against the Company by virtue hereof, upon the failure of any other Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Company hereby promises to and will, upon receipt of written demand by the Administrative Agent, the Issuing Bank or any Lender, forthwith pay, or cause to be paid, to the Administrative Agent, the Issuing Bank or any Lender in cash an amount equal to the unpaid principal amount of such Obligations then due, together with accrued and unpaid interest thereon.  The Company further agrees that if payment in respect of any Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York, Chicago or any other Eurocurrency Payment Office and if, by reason of any Change in Law, disruption of currency or foreign exchange markets, war or civil disturbance or other event, payment of such Obligation in such currency or at such place of payment shall be impossible or, in the reasonable judgment of the Administrative Agent, the Issuing Bank or any Lender, disadvantageous to the Administrative Agent, the Issuing Bank or any Lender in any material respect, then, at the election of the Administrative Agent, the Company shall make payment of such Obligation in Dollars (based upon the applicable Equivalent Amount in effect on the date of payment) and/or in New York, Chicago or such other Eurocurrency Payment Office as is designated by the Administrative Agent and, as a separate and independent obligation, shall indemnify the Administrative Agent, the Issuing Bank and any Lender against any losses or reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.

Upon payment by the Company of any sums as provided above, all rights of the Company against any Borrower arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full in cash of all the Obligations owed by such Borrower to the Administrative Agent, the Issuing Bank and the Lenders.

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Nothing shall discharge or satisfy the liability of the Company hereunder except the full performance and payment of the Obligations.

The remainder of this page is intentionally blank.

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IN WITNESS WHEREOF, the Borrowers, the Lenders and the Administrative Agent have executed this Agreement as of the date first above written.

WOODWARD, INC., as a Borrower
By:________________________________
	Name:
	Title:
Address: 1000 East Drake Road
Fort Collins, Colorado 80525
Attention:  Robert F. Weber, Jr.  Chief Financial Officer and Treasurer
Telephone No.:  970-498-3112
Facsimile No.:  970-498-3921

Woodward Aken GmbH, as a Foreign Subsidiary Borrower
By:________________________________
	Name:
	Title:
Address: [____________]
[____________]
Telephone No.:  [___________]
Facsimile No.:  [__________]

SIGNATURE PAGE TO

WOODWARD CREDIT AGREEMENT (2013)

Wells Fargo Bank, National Association,  as Administrative Agent, as Swing Line Lender, as an Issuing Bank and as a Lender
By:________________________________
	Name:
	Title:
Address:
Attention:  __________________
Telephone No.:  ______________
Facsimile No.:  _______________

SIGNATURE PAGE TO

WOODWARD CREDIT AGREEMENT (2013)

[OTHER LENDERS TO COME]

SIGNATURE PAGE TO

WOODWARD CREDIT AGREEMENT (2013)

Exhibits A, A-1, B, C, D, E, F, G, H, I-1, I-2, I-3, J, K, L, M-1, M-2, N-1 and N-2

(to Credit Agreement)

[Intentionally Removed]

Schedules 1.1.1, 1.1.2, 1.1.3, 1.1.4, 1.1.5, 3.2, 6.3, 6.8, 6.9 and 6.17

(to Credit Agreement)

[Intentionally Removed]

EX-10.2

Exhibit 10.2

MASTER AGREEMENT

BY AND BETWEEN

WOODWARD, INC.

AND

GENERAL ELECTRIC COMPANY

MAY 20, 2015

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

TABLE OF CONTENTS

Page

Article I DEFINITIONS		2
1.1	Definitions	2
1.2	Interpretation	2
Article II SCOPE		3
2.1	Scope	3
Article III AGREEMENTS		3
3.1	Sale and Purchase of Membership Interest	3
3.2	Operating Agreement	3
3.3	Closing	3
3.4	Deliveries on the Closing Date	4
Article IV REPRESENTATIONS AND WARRANTIES		4
4.1	Woodward Representations	4
4.2	GE Representations	5
Article V COVENANTS		7
5.1	Further Actions; Antitrust Laws	7
5.2	Press Releases; Public Announcements	8
5.3	Certain Deliveries and Notices	9
5.4	Notices of Certain Woodward Events	9
5.5	Notices of Certain GE Events	10
5.6	JV Formation and Preparation	10
5.7	Further Assurances	12
5.8	Tax Treatment	12
5.9	Additional Transaction Documents	13
5.10	Failure to Agree Upon Terms of Subject Ancillary Documents	13
5.11	Conduct of Fuel Systems Business	13
5.12	JV Facilities and Location of Secondees	13
5.13	Omnibus Confidentiality Agreement	14
5.14	JV Accounts Receivable and Accounts Payable	14
Article VI CONDITIONS TO CLOSING		14
6.1	Conditions to Obligations of the Parties	14
6.2	Conditions to Obligations of Woodward	14
6.3	Conditions to Obligations of GE	15

i

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Article VII TERMINATION		16
7.1	Grounds for Termination	16
7.2	Effect of Termination	16
7.3	Termination of Representations and Warranties and Covenants upon the Closing	16
7.4	No Post-Closing Remedy for Breaches of Representations and Warranties	16
Article VIII MISCELLANEOUS		17
8.1	Notices	17
8.2	Amendments; Waivers	18
8.3	Expenses	18
8.4	Successors and Assigns	18
8.5	Governing Law	18
8.6	Counterparts; Effectiveness	18
8.7	Entire Agreement	19
8.8	Captions	19
8.9	Severability	19
8.10	Dispute Resolution	19
8.11	Consent to Jurisdiction	20
8.12	Waiver of Jury Trial	20
8.13	Third Party Beneficiaries	20
8.14	Specific Performance	21
8.15	No Presumption against Drafting Party	21

EXHIBITS

Exhibit A	Form of Woodward Contribution Agreement
Exhibit B	Form of Initial LLC Agreement
Exhibit C	Form of GE Contribution Agreement
Exhibit D	Form of Purchase and Sale Agreement
Exhibit E	Form of Operating Agreement

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

MASTER AGREEMENT

THIS MASTER AGREEMENT, dated as of May 20, 2015 (this “Agreement”), is entered into by and between Woodward, Inc., a Delaware corporation (“Woodward”), and General Electric Company, a New York corporation (“GE”) (with GE acting by and through its GE Aviation business unit).  Woodward and GE are sometimes referred to herein as the “Parties” and each individually as a “Party”.

WHEREAS, GE and Woodward have a long history providing fuel system programs and together have achieved industry-leading reliability and performance in controls and externals;

WHEREAS, GE and Woodward have decided to enter into a joint venture (the “JV”) to strengthen their relationship and better enhance innovation, performance and reliability in fuel systems for commercial aerospace applications within the Company Scope (as defined in the Operating Agreement);

WHEREAS, the JV’s goals would be to, among other things:  (a) provide GE with the world’s best and most competitive fuel systems available, today and in the future, for GE’s commercial aircraft engines within the Company Scope, (b) enable rapid control system optimization through joint system expertise at a reduced cost by leveraging the resources of both GE and Woodward and (c) provide financial benefits to both GE and Woodward by expanding the content per fuel system application and sharing in the OEM and aftermarket revenue streams associated with the fuel system line replaceable units for GE’s commercial aircraft engines within the Company Scope;

WHEREAS, no later than the first Business Day after the date on which Woodward makes its Specified Filing, Woodward will cause to be executed and delivered, and filed with the Secretary of State of the State of Delaware, a certificate of formation of the JV, which will be a Delaware limited liability company (the date of the certificate of formation is filed, the “Formation Date”);

WHEREAS, pursuant to the terms of that certain Contribution Agreement, by and between Woodward and the JV, substantially in the form attached hereto as Exhibit A (the “Woodward Contribution Agreement”), on the Formation Date, (i) Woodward will contribute the Contributed Assets (as defined in the Woodward Contribution Agreement) to the JV, (ii) the JV will accept the Contributed Assets and assume certain liabilities associated with the Contributed Assets, and (iii) as consideration for the Contributed Assets, the JV will issue Woodward 100% of its Membership Interests, all upon the terms and conditions set forth therein;

WHEREAS, on the Formation Date and following the issuance by the JV to Woodward of 100% of its Membership Interests, (i) Woodward will contribute 10% of the Membership Interests to a Delaware limited liability company that is wholly owned by Woodward (the “Woodward Affiliate” and, together with Woodward, the “Woodward Members”), (ii) as consideration for the contributed 10% of the Membership Interests, Woodward Affiliate will issue Woodward 100% of the equity interests in Woodward Affiliate and (iii) Woodward and the Woodward Affiliate will enter into the limited liability company agreement of the JV, in the form attached hereto as Exhibit B (the “Initial LLC Agreement”);

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

WHEREAS, at all times following the contribution described in the preceding recital, it is intended that the JV will be treated as a partnership for U.S. federal income tax purposes in accordance with Treasury Regulations Sections 301.7701-3(b)(i) and (ii);

WHEREAS, pursuant to the terms of that certain Contribution Agreement, by and between GE and the JV, substantially in the form attached hereto as Exhibit C (the “GE Contribution Agreement”), on the Closing Date, (i) GE will contribute the Contributed Assets (as defined in the GE Contribution Agreement) to the JV and (ii) the JV will accept the Contributed Assets and assume certain liabilities associated therewith, all upon the terms and conditions set forth therein;

WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement, by and between GE and Woodward, substantially in the form attached hereto as Exhibit D (the “Purchase and Sale Agreement”), on the Closing Date, GE shall purchase and acquire from Woodward the Membership Interest set forth in the Purchase and Sale Agreement (the “Purchased Membership Interest”), and Woodward shall sell and transfer to GE the Purchased Membership Interest;

WHEREAS, on the Closing Date, Woodward and GE shall amend and restate the Initial LLC Agreement, substantially in the form attached hereto as Exhibit E (the “Operating Agreement”); and

WHEREAS, on the Closing Date, the JV and the Parties, as applicable, will enter into each of the Closing Date Ancillary Documents.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows.

ARTICLE  I

DEFINITIONS

1.1Definitions.  Capitalized terms used in this Agreement shall have the respective meanings ascribed to such terms in Appendix A to this Agreement.

1.2Interpretation.  The definitions set forth in Appendix A or otherwise referred to in this Agreement shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The words “herein”, “hereof”, “hereby”, “hereto” and “hereunder” refer to this Agreement as a whole.  All references herein to Articles, Sections, Exhibits and Schedules shall be deemed to be references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.  Unless the context shall otherwise require, any reference to any contract, instrument, statute, rule or regulation is a reference to it as amended and supplemented from time to time (and, in the case of a statute, rule or regulation, to any successor provision).  Any reference in this Agreement to a

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“day” or a number of “days” (without the explicit qualification of “Business”) shall be interpreted as a reference to a calendar day or number of calendar days.

ARTICLE II

SCOPE

2.1Scope.  The scope of the JV shall be as set forth in Section 3.01 of the Operating Agreement.

ARTICLE III

AGREEMENTS

3.1Sale and Purchase of Membership Interest.  Upon the terms and subject to the conditions set forth herein, at the Closing, Woodward hereby agrees to sell to GE, free and clear of all Encumbrances, and GE hereby agrees to purchase from Woodward, the Purchased Membership Interests (the “GE Purchase”) pursuant to, and subject to the terms and conditions of, the Purchase and Sale Agreement. 

3.2Operating Agreement.  Simultaneously with the foregoing GE Purchase, the Parties shall, together with Woodward Affiliate, enter into the Operating Agreement (with such changes as to which GE and Woodward may agree after the Signing Date) to give effect to such GE Purchase and to amend and restate the Initial LLC Agreement.

3.3Closing.  The consummation of the GE Purchase as contemplated under this Agreement and the Purchase and Sale Agreement (the “Closing”) shall take place at the offices of Sidley Austin LLP, Chicago, Illinois at 10:00 a.m. (Central time) on a date to be specified by GE and Woodward, which date shall be the first Business Day of the month following the Business Day on which satisfaction or (to the extent permitted by Law) waiver of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time) first occurs, but no earlier than October 1, 2015 or at such other place (including remotely by electronic transmission), date and/or time as may be agreed to in writing by GE and Woodward; provided,  that, notwithstanding anything herein to the contrary, if (but for this proviso) the Closing Date would have occurred prior to January 4, 2016, GE may, in its sole discretion, elect that the Closing will occur on January 4, 2016 by providing written notice of such election (the “Closing Date Extension Option”) to Woodward prior to the earlier of (a) the date that is five (5) Business Days after the satisfaction of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing) and (b) 10:00 a.m. (Central time) on the date on which the Closing would have otherwise occurred (but for this proviso).  In the event that GE exercises the Closing Date Extension Option, the Woodward Aggregate Cash (as such term is defined in the Purchase and Sale Agreement) shall be increased above $250,000,000, if applicable, pursuant to Section 1.2 of the Purchase and Sale Agreement to reflect the date on which the Closing would have occurred but for the exercise by GE of the Closing Date Extension Option (if the Closing would have occurred prior to October 1, 2015), but shall not be decreased below $250,000,000 pursuant to Section 1.2 of the Purchase and Sale Agreement (if the Closing

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would have occurred after October 1, 2015).  The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date”.

3.4Deliveries on the Closing Date. 

(a)At the Closing, Woodward shall deliver or cause to be delivered, as applicable, to GE, each of the Woodward Ancillary Documents, duly executed by Woodward, Woodward Affiliate and/or the JV, as applicable.

(b)At the Closing, GE shall deliver to Woodward each of the GE Ancillary Documents, duly executed by GE.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1Woodward Representations.  Woodward hereby represents and warrants to GE as follows:

(a)Existence and Good Standing.  Woodward is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Woodward Affiliate will upon formation be a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware.  Woodward has, and Woodward Affiliate will upon its formation have, all requisite corporate or limited liability company power and authority, as the case may be, to execute and deliver the Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby (as applicable) and thereby.  All corporate acts and other proceedings required to be taken by each of the Woodward Members to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby (as applicable) and thereby have been or will be duly and properly taken.

(b)Execution and Delivery; Enforceability.  This Agreement has been duly executed and delivered by Woodward and, at or prior to Closing, each of the Woodward Members will have duly executed and delivered each Woodward Ancillary Document to which it is, or is specified to be, a party.  Assuming that this Agreement has been duly authorized, executed and delivered by GE, this Agreement constitutes, and, upon the due authorization, execution and delivery by GE of each Woodward Ancillary Document to which it is, or is specified to be, a party, such Woodward Ancillary Document will constitute, a legal, valid and binding obligation of each of the applicable Woodward Members, enforceable against such Woodward Member in accordance with its terms (subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally, general principles of equity and the discretion of courts in granting equitable remedies (the “Bankruptcy and Equity Exception”)).

(c)Consents.  Except for compliance with the applicable requirements of the HSR Act or other applicable Antitrust Laws, no Consent of, or Filing with, any Governmental

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Authority or other Person is required to be obtained or made by or with respect to any of the Woodward Members in connection with the execution and delivery of this Agreement or the Woodward Ancillary Documents, the consummation of the transactions contemplated hereby or thereby or the compliance by the Woodward Members, as applicable, with the terms and conditions hereof and thereof, except with respect to Consents or Filings with Persons other than Governmental Authorities the failure of which to obtain or make would not reasonably be expected to prevent or materially impede or delay the consummation of the transactions contemplated hereby.

(d)No-Conflicts.  The execution and delivery of this Agreement by Woodward does not, the execution and delivery by each of the Woodward Members of each Woodward Ancillary Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance by the Woodward Members with the terms and conditions hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or give rise to any obligation of any Person to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Encumbrance upon any of the assets of either Woodward Member or the JV under, any provision of (i) the certificate of incorporation, certificate of formation, limited liability company agreement, operating agreement or by-laws (or the comparable governing instruments) of either of the Woodward Members, (ii) any Contract to which either Woodward Member or the JV is a party or by which any of its respective properties or assets are bound or (iii) any Law applicable to the operations or the assets of either Woodward Member or the JV, other than in the case of clause (ii), any such violation, default, termination, cancellation, acceleration, loss or Encumbrance that would not reasonably be expected to prevent or materially impede or delay the consummation of the transactions contemplated hereby.

(e)Litigation.  As of the Signing Date, there is no Proceeding pending or, to the Knowledge of Woodward, threatened, and, to the Knowledge of Woodward, there is no investigation pending or threatened, in each case, by or against Woodward or any of Woodward’s Subsidiaries seeking to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or any of the other Transaction Documents.

(f)Brokerage.  Except fees that are the responsibility of Woodward, if any, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon any arrangements made by or on behalf of Woodward or any of its Affiliates or, prior to the Closing, the JV.   

4.2GE Representations.  GE represents and warrants to Woodward as follows:

(a)Existence and Good Standing.  GE is a corporation duly organized, validly existing and in good standing under the laws of the State of New York.  GE has all requisite corporate power and authority to execute and deliver the Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and

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thereby.  All corporate acts and other proceedings required to be taken by GE to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which GE is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby have been or will be duly and properly taken.

(b)Execution and Delivery; Enforceability.  This Agreement has been duly executed and delivered by GE and, at or prior to Closing, GE will have duly executed and delivered each GE Ancillary Document to which it is, or is specified to be, a party.  Assuming that this Agreement has been duly authorized, executed and delivered by Woodward, this Agreement constitutes, and, upon the due authorization, execution and delivery of the GE Ancillary Documents by each of the Woodward Members of each GE Ancillary Document to which GE is, or is specified to be, a party, such GE Ancillary Document will constitute, a legal, valid and binding obligation of GE, enforceable against GE in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(c)Consents.  Except for compliance with the applicable requirements of the HSR Act or other applicable Antitrust Laws, no Consent of, or Filing with, any Governmental Authority or other Person is required to be obtained or made by or with respect to GE in connection with the execution and delivery of this Agreement or the GE Ancillary Documents, the consummation of the transactions contemplated hereby or thereby or the compliance by GE with the terms and conditions hereof and thereof, except with respect to Consents or Filings with Persons other than Governmental Authorities the failure of which to obtain or make would not reasonably be expected to prevent or materially impede or delay the consummation of the transactions contemplated hereby.

(d)No Conflicts.  The execution and delivery of this Agreement by GE does not, the execution and delivery by GE of each GE Ancillary Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance by GE with the terms and conditions hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or give rise to any obligation of any Person to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Encumbrance upon any of the assets of GE under, any provision of (i) the certificate of incorporation or by-laws of GE, (ii) any Contract to which GE is a party or by which any of its respective properties or assets are bound or (iii) any Law applicable to the operations or the assets of GE, other than in the case of clause (ii), any such violation, default, termination, cancellation, acceleration, loss or Encumbrance that would not reasonably be expected to prevent or materially impede or delay the consummation of the transactions contemplated hereby.

(e)Litigation.  As of the Signing Date, there is no Proceeding pending or, to the Knowledge of GE, threatened, and, to the Knowledge of GE, there is no investigation pending or threatened, in each case, by or against GE or any of GE’s Subsidiaries seeking to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or any of the other Transaction Documents.

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(f)Brokerage.  Except fees that are the responsibility of GE, if any, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon any arrangements made by or on behalf of GE or any of its Affiliates.

ARTICLE  V

COVENANTS

5.1Further Actions; Antitrust Laws.  

(a)Each of the Parties shall use their reasonable best efforts to take, or cause to be taken, as promptly as reasonably practicable, all actions and to do or cause to be done, as promptly as reasonably practicable, all things reasonably necessary, proper or advisable in order to causethe conditions to Closing of the other Party to be satisfied, subject to Section 5.1(b), as promptly as reasonably practicable and to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including (i) obtaining, at the earliest reasonably practicable date all Consents and Permits from, and making all Filings with, all Governmental Authorities which are required to consummate the transactions contemplated by this Agreement; and (ii) obtaining the execution of documents, instruments or conveyances of any kind that may be reasonably necessary or advisable to carry out any of the transactions contemplated by this Agreement.  Each of the Parties agrees not to take any action with the intent of, and which has the effect of, adversely affecting the ability of itself or the other Party to consummate the transactions contemplated by this Agreement.

(b)Without limiting the foregoing, the Parties shall (i) make all filings required of each of them or any of their respective Affiliates under Antitrust Laws with respect to the transactions contemplated by this Agreement as promptly as practicable; provided, that, notwithstanding anything in this Agreement to the contrary, the Parties shall make all filings required of each of them or any of their respective Affiliates under the HSR Act (the “Specified Filing”) with respect to the transactions contemplated by this Agreement as promptly as practicable, and in any event within four (4) Business Days, after the date on which Woodward informs GE in writing that it is prepared to make the Specified Filing (it being understood and agreed that the Parties will make the Specified Filings by no later than August 14, 2015), (ii) comply at the earliest practicable date with any request under the HSR Act or other Antitrust Laws for additional information, documents, or other materials received by each of them or any of their respective Subsidiaries or Affiliates, including responding to any second request, from the U.S. Federal Trade Commission (the “FTC”), the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) or any other Governmental Authority in respect of such filings or such transactions contemplated by this Agreement, and (iii) cooperate with each other in connection with any such filing (including, to the extent permitted by applicable Law, providing copies of all such documents to the non-filing Parties prior to filing and considering all reasonable additions, deletions or changes suggested in connection therewith) and in connection with resolving any investigation or other inquiry of any of the FTC, the Antitrust Division or other Governmental Authority under any Antitrust Laws with respect to any such filing or any such transactions contemplated by this Agreement.  Notwithstanding anything herein to the contrary, the Parties agree that they shall not seek early termination of any applicable waiting

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periods under the HSR Act.  Each such Party shall use reasonable best efforts to furnish to the other Party all information required for any application or other filing to be made pursuant to any applicable Law in connection with the transactions contemplated by this Agreement.  Subject to applicable Law, each such Party shall promptly inform the other Party of any oral communication with, and provide copies of written communications with, any Governmental Authority regarding any such filings or any such transactions contemplated by this Agreement and permit the other Party to review in advance any proposed communication by such Party to any Governmental Authority.  Neither Party shall independently participate in any formal meeting with any Governmental Authority in respect of any such filings, investigation, or other inquiry without giving the other Party prior notice of the meeting and, to the extent permitted by such Governmental Authority, the opportunity to attend and/or participate.  Subject to applicable Law, the Parties shall consult and cooperate with one another in connection with the matters described in this Section 5.1, including in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any Party hereto relating to Proceedings under the HSR Act or other Antitrust Laws.

(c)Each of the Parties shall use reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Authority with respect to the transactions contemplated by this Agreement under any Law, including the HSR Act and any other Antitrust Laws.  Each of the Parties shall use reasonable best efforts to take such action as may be required to cause the expiration of the notice periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as reasonably practicable after the execution of this Agreement, subject to Section 5.1(b).  Notwithstanding anything to the contrary in this Agreement, none of GE, Woodward or any of their respective Affiliates (which for purposes of this sentence shall include the JV) shall be required, in connection with the matters covered by this Section 5.1, (i) to pay any amounts (other than the payment of filing fees and expenses and fees of counsel), (ii) to commence or defend any litigation, (iii) to hold separate (including by trust or otherwise) or divest any of their respective businesses, product lines or assets, (iv) to agree to any limitation on the operation or conduct of their or the JV’s or any of the Subsidiaries’ respective businesses or (v) to waive any of the conditions set forth in Article VI.

5.2Press Releases; Public Announcements. 

(a)Except as provided in Section 5.2(b), no press release or other public statement or announcement with respect to this Agreement or the Transaction Documents or the terms hereof or thereof or the transactions contemplated by this Agreement shall be issued by either Party, any of its Affiliates, or any officers, directors, managers, employees, agents or representatives of it or its Affiliates (the “Representatives”) and (except as may be required by applicable Laws or applicable stock exchange regulation) none of them shall disclose this Agreement or any of the other Transaction Documents or the terms hereof or thereof or the transactions contemplated hereby or thereby to any Person (other than their Representatives; provided that the disclosing Person shall be responsible for compliance by such Representatives with the terms of this provision), in each case without the prior written consent of the other Party, and the Parties shall cooperate as to the timing and contents of any such press release, public announcement or disclosure.  The foregoing shall not prohibit any press release or other public statement or announcement (or any other disclosure) of information that was (or was in

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substance) previously disclosed in a previously agreed upon public statement or announcement or is otherwise in the public domain other than as a result of a breach of this provision by a disclosing Party or any of its Representatives and shall not preclude any Party or its Representatives from disclosing this Agreement or any of the other Transaction Documents or the terms hereof or thereof or the transactions contemplated hereby or thereby to appropriate Governmental Authorities to the extent required by applicable Laws or applicable stock exchange regulation; provided that, except as provided in Section 5.2(b), the Parties shall cooperate as to the timing and contents of any such disclosure and the disclosing Party shall exercise its reasonable efforts to preserve the confidentiality of the information included in such disclosure as reasonably requested by the other Party, including seeking confidential treatment of such information. 

(b)The Parties hereby acknowledge and agree that Woodward may disclose the entry into, and a summary description of, this Agreement and one or more of the other Transaction Documents on a Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”) after the date this Agreement or such other Transaction Documents, as the case may be, are executed and delivered by the Parties, and to file this Agreement or such other Transaction Documents, as the case may be, with the SEC as an exhibit to the Form 8-K or a subsequently filed periodic report, subject to Woodward’s agreement to cooperate as to the timing and contents of such disclosure set forth in Section 5.2(a).  In addition, the Parties hereby acknowledge and agree that Woodward and GE may from time to time disclose in their respective filings with the SEC information regarding the financial condition and results of operations of the JV, including information regarding the profits and losses of the JV attributable to, distributions received by, and tax impact on, the Parties, as the case may be, arising out of their respective interests in the JV, as well as the impact of the JV’s business on their respective businesses, financial condition and results of operations, in which case no prior notice to, or consent of, GE (in the case of disclosure by Woodward) or Woodward (in the case of disclosure by GE) will be required, provided that any disclosure of material terms of this Agreement or any other Transaction Document that was not (or was not in substance) previously disclosed shall be subject to the Party’s agreement to cooperate as to the timing and contents of such disclosure set forth in Section 5.2(a).

5.3Certain Deliveries and Notices.  From the Signing Date through the earlier to occur of the Closing Date and the date this Agreement is terminated in accordance with its terms (such period, the “Interim Period”), each Party shall promptly inform in writing the other Party of any event or matter of which such Party has Knowledge that would reasonably be expected to cause a condition to the other Party’s obligation to consummate the Closing contained in Article VI to not be satisfied.

5.4Notices of Certain Woodward Events.  During the Interim Period, and subject to applicable Law, Woodward shall promptly notify GE of:

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(a)any notice or other communication from any Person alleging the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(b)any notice or other communication from any Governmental Authority regarding any material Governmental Approval required to be obtained in connection with the transactions contemplated by this Agreement;

(c)any Claims, investigations or Proceedings commenced or, to Woodward’s Knowledge, threatened against, relating to or involving or otherwise affecting Woodward that challenge or in any manner seek to prevent, enjoin, alter or delay the consummation of the transactions contemplated hereby; and

(d)any damage, destruction or other casualty loss that is material to the Contributed Assets (as defined in the Woodward Contribution Agreement) or other assets or properties of Woodward used in connection with the Transaction Documents, taken as a whole; 

provided, however, that the delivery of any notice pursuant to this Section 5.4 shall not limit or otherwise affect the remedies available to GE under this Agreement or to the JV under the Woodward Contribution Agreement.

5.5Notices of Certain GE Events.  During the Interim Period, and subject to applicable Law, GE shall promptly notify Woodward of:

(a)any notice or other communication from any Person alleging the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(b)any notice or other communication from any Governmental Authority regarding any material Governmental Approval required to be obtained in connection with the transactions contemplated by this Agreement;

(c)any Claims, investigations or Proceedings commenced or, to GE’s Knowledge, threatened against, relating to or involving or otherwise affecting GE that challenge or in any manner seek to prevent, enjoin, alter or delay the consummation of the transactions contemplated hereby; and

(d)any damage, destruction or other casualty loss that is material to the GE Transferred Assets or other assets or properties of GE used in connection with the Transaction Documents, taken as a whole;

provided, however, that the delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise affect the remedies available to Woodward under this Agreement or to the JV under the GE Contribution Agreement.

5.6JV Formation and Preparation. 

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(a)On the Formation Date, Woodward agrees to take such steps as are reasonably necessary and appropriate to form the JV and the Woodward Affiliate as Delaware limited liability companies, including filing certificates of formation, in forms reasonably acceptable to GE, for each such company with the Secretary of State of the State of Delaware.

(b)On the Formation Date, Woodward will cause the following to occur, all of which will be deemed to occur simultaneously:

(i)pursuant to the terms and conditions of the Woodward Contribution Agreement, (A) Woodward will contribute the Contributed Assets (as defined in the Woodward Contribution Agreement) to the JV (which contribution is hereby consented to by GE, by and on behalf of GE and its Affiliates, if and to the extent any such consent would be required to effect the contribution), (B) the JV will accept the Contributed Assets and assume certain liabilities associated therewith, and (C) as consideration for the Contributed Assets, the JV will issue Woodward 100% of its Membership Interests; and

(ii)immediately following the issuance by the JV to Woodward of 100% of its Membership Interests as contemplated by Section 5.6(b)(ii), (A) Woodward will contribute 10% of the Membership Interests to the Woodward Affiliate, (B) as consideration for the contribution of 10% of the Membership Interests, Woodward Affiliate will issue Woodward 100% of the equity interests in Woodward Affiliate and (C) Woodward and the Woodward Affiliate will enter into the Initial LLC Agreement.

(c)At all times from and after the Formation Date and until the Closing, Woodward and an Affiliate of Woodward (or such other Person(s) as may be mutually agreed in writing by the Parties) shall be the sole members of, and Woodward shall be the sole manager (the “Initial Manager”) of, the JV.  At all times from and after the Formation Date and until the Closing, (i) the Initial Manager and the members of the JV shall use their reasonable best efforts to cause the JV to perform and fulfill (or to perform and fulfill (or cause to be performed or fulfilled) on the JV’s behalf) its obligations under the Contributed Assets (as defined in the Woodward Contribution Agreement) in the ordinary course of business, and (ii) except as explicitly set forth in the preceding clause (i) and as reasonably necessary to effectuate the Closing and the consummation of the transactions contemplated hereby and by the other Transaction Documents (including the matters set in Section 5.6(d)), (A) neither the Initial Manager nor any member of the JV shall, solely in its capacity as the manager or member of the JV, take any action or execute any agreement or document on behalf of the JV unless GE shall consent thereto in writing (which consent shall not be unreasonably withheld, conditioned or delayed), and (B) unless GE shall consent thereto in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Initial Manager shall, in its capacity as the manager of the JV, not take any action or execute any agreement or document solely in its capacity as manager of the JV that would result in the JV conducting operations or engaging in the conduct of any activities prior to the Closing (other than the operations and activities contemplated by this Agreement and the Contributed Assets (as defined in the Woodward Contribution Agreement) or operations reasonably necessary to effectuate the Closing and the

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consummation of the transactions contemplated hereby and by the other Transaction Documents (including the matters set in Section 5.6(d)).

(d)From and after the Formation Date and until the Closing, the Initial Manager shall (i) cause the JV to take (A) all actions required by this Agreement to be taken by the JV prior to the Closing and (B) such other actions as are reasonably necessary to consummate the transactions contemplated by this Agreement and the other Transaction Documents; (ii) adopt any resolution required or necessary to be adopted by the JV to effect the Closing, to the extent required by Law; (iii) cause the JV to form such Subsidiaries as may be mutually agreed by the Parties; (iv) cause the JV to open such bank accounts as may be mutually agreed by the Parties; (v) cause the JV to execute each Transaction Document to which the JV is to become a party as well as any other instruments, certificates, authorizations and other documents or papers required to be executed and delivered by the JV on or before the Closing; (vi) cause the JV to execute any waivers or consents, including in connection with the waiver of closing conditions as set forth in the Transaction Documents, (A) with respect to any obligation or duty of GE, if Woodward consents in writing to the JV granting such waiver or consent and (B) with respect to any obligation or duty of Woodward, if GE consents in writing to the JV granting such waiver or consent; provided, further, that the JV shall refrain from executing or otherwise granting any waiver or consent without the prior written consent of the applicable Party as set forth in the preceding clause, which consent shall not be unreasonably withheld, conditioned or delayed; and (vii) cause such filings to be made with the Secretary of State of the State of Delaware and with such other Governmental Authorities and shall cause such documents to be amended, in each case, as are necessary to change the name of the JV to such name(s) as may be mutually agreed by the Parties; provided that, the Parties shall use reasonable best efforts to prevent the JV and its Subsidiaries from taking any actions not set forth above without the prior consent of each of the Parties.

(e)As soon as reasonably practicable after the date hereof, each Party will notify the other Party of (i) its designees as the initial two members of the Engineering Committee, (ii) in the case of Woodward, its designee as the initial General Manager, and (iii) in the case of GE, its designee as the initial Finance Manager.  If any of the designees of either Party under clauses (i) through (iii) of the preceding sentence are not reasonably acceptable to the other Party, the other Party will promptly notify the first Party, and the first Party will designate another person to serve in such position that is reasonably acceptable to the other Party.  As soon as reasonably practicable after the date hereof, Woodward and GE will agree upon the initial Technology Manager.  

5.7Further Assurances.  Each Party shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated by this Agreement.

5.8Tax Treatment.  The Parties intend that the JV be treated as a partnership for U.S. federal income tax purposes in accordance with Treasury Regulation Sections 301.7701-3(b)(i) and (ii), respectively, and no election to the contrary shall be made without the advance written consent of Woodward and GE.

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5.9Additional Transaction Documents.  Prior to the Closing, the Parties shall use their reasonable best efforts to, in good faith, negotiate and agree upon final versions of each of the Subject Ancillary Documents, the terms and conditions of which shall be reasonably acceptable to the Parties and consistent with the terms and conditions for each such Subject Ancillary Document set forth in the Ancillary Document Agreement, which the Parties agree contain all of the terms and conditions deemed material by the Parties to each such Subject Ancillary Document.  Prior to the Closing, the Parties shall use their reasonable best efforts to, in good faith, negotiate and agree upon final versions, to the extent not already agreed prior to the date hereof, of each annex, exhibit, schedule, addendum or similar attachment to each of the Subject Ancillary Documents and the other Ancillary Documents.

5.10Failure to Agree Upon Terms of Subject Ancillary Documents.  In the event any of the Subject Ancillary Documents are not finalized prior to August 31, 2015, the Parties shall promptly submit all open issues relating thereto for resolution in accordance with Section 8.10.  To the extent that any of the Subject Ancillary Documents are not finalized and executed and delivered by the Parties thereto in accordance with Section 8.10 at the Closing, the Parties and the JV shall perform the terms set forth in, and operate the JV in accordance with, this Agreement, the terms of the agreed-to Ancillary Documents, and, to the extent any Subject Ancillary Document has not been agreed to, the terms and conditions of such Subject Ancillary Document as set forth in the Ancillary Document Agreement.  For the avoidance of doubt, neither the failure by the Parties to negotiate and agree upon final versions of each of the Subject Ancillary Documents nor any failure of the Parties to resolve any open issues related thereto shall constitute a breach of this Agreement or give rise to a right of any Party to terminate this Agreement.

5.11Conduct of Fuel Systems Business. 

(a)From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by GE (which consent shall not be unreasonably withheld, conditioned or delayed), Woodward shall, and shall cause its Affiliates to, (i) conduct its fuel systems business in the ordinary course of business consistent with past practice; and (ii) use reasonable best efforts to preserve the rights, goodwill and relationships of its employees, suppliers, regulators and others having business relationships with its fuel systems business.

(b)From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Woodward (which consent shall not be unreasonably withheld, conditioned or delayed), GE shall, and shall cause its Affiliates to, conduct its sourcing activities with respect to its fuel systems business in the ordinary course of business consistent with past practice.

5.12JV Facilities and Location of Secondees.  As promptly as reasonably practicable after the date hereof, GE and Woodward will determine the specific location of the Secondees and the applicable access and use rights for each facility as well as access and use rights to any other engineering, manufacturing, or service locations of each of Woodward and GE.

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5.13Omnibus Confidentiality Agreement.  The Parties shall use reasonable best efforts to negotiate and enter into an omnibus confidentiality agreement regarding confidential information of GE, Woodward and the JV and, if such an agreement is finalized prior to the Closing, GE and Woodward shall agree to amend the Operating Agreement and the other Transaction Documents to the extent necessary to reflect the entry into such omnibus confidentiality agreement.

5.14JV Accounts Receivable and Accounts Payable.  Immediately prior to the Closing, (a) GE will pay to the JV all amounts invoiced by the JV to GE (whether or not otherwise then due and owing) for products and services delivered by the JV to GE prior to the Closing, (b) Woodward will pay to the JV all amounts, if any, invoiced by the JV to Woodward (whether or not otherwise then due and owing) for products and services delivered by the JV to Woodward prior to the Closing, if any, (c) the JV will pay to Woodward all amounts invoiced by Woodward to the JV (whether or not otherwise then due and owing) for products and services delivered by Woodward to the JV prior to the Closing, and (d) subject to any mandatory provisions of applicable Law, the JV will distribute all of its then available cash to Woodward and Woodward Affiliate on a pro rata basis based on their then respective ownership interests in the JV.

ARTICLE VI

CONDITIONS TO CLOSING

6.1Conditions to Obligations of the Parties.  The respective obligations of each of the Parties under this Agreement to consummate the transactions contemplated hereby will be subject to the satisfaction, at or prior to the Closing, of the following conditions:

(a)No Violation.  At the Closing there shall be no (i) Law in effect restraining or prohibiting the consummation of the transactions contemplated by this Agreement or making the consummation of the transactions contemplated by this Agreement illegal, or (ii) investigation, Claim or litigation instituted, commenced, pending or threatened by any Governmental Authority that seeks to prohibit the transactions contemplated by this Agreement.

(b)Governmental Approvals.  The waiting period under the HSR Act shall have expired and the Woodward Members, GE or the JV, as applicable, shall have obtained or made any other consent, approval, order or authorization of, or registration, declaration or Filing with, any Governmental Authority under any applicable Antitrust Laws required to be obtained or made by it in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

6.2Conditions to Obligations of Woodward.  The obligations of Woodward to consummate the Closing are subject to the satisfaction or waiver of each of the following conditions:

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(a)the representations and warranties of GE contained in Section 4.2 shall be true and correct in all material respects as of the date hereof and as of the Closing Date with the same effect as if made on and as of the Closing Date;

(b)GE shall have performed and complied in all material respects with all agreements and covenants contained in this Agreement required to be performed or complied with by it prior to or at the Closing Date;

(c)Woodward shall have received a certificate signed by a duly authorized officer of GE to the foregoing effect; and

(d)GE shall have duly executed a counterpart to:

(i)the GE Contribution Agreement;

(ii)the Purchase and Sale Agreement;

(iii)the Operating Agreement; and

(iv)each of the Closing Date Ancillary Documents to which GE is to be party.

6.3Conditions to Obligations of GE.  The obligations of GE to consummate the Closing are subject to the satisfaction or waiver of each of the following conditions:

(a)the representations and warranties of the Woodward Members contained in Section 4.1 shall be true and correct in all material respects as of the date hereof and as of the Closing Date with the same effect as if made on and as of the Closing Date;

(b)the Woodward Members and their respective Affiliates (including the JV) shall have performed and complied in all material respects with all agreements and covenants contained in this Agreement required to be performed or complied with by it prior to or at the Closing Date;

(c)GE shall have received a certificate signed by a duly authorized executive officer of Woodward to the foregoing effect; and

(d)the applicable Woodward Member and/or the JV, as applicable, shall have duly executed a counterpart to:

(i)the GE Contribution Agreement;

(ii)the Purchase and Sale Agreement;

(iii)the Operating Agreement;

(iv)the Woodward Contribution Agreement; and

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(v)each of the Closing Date Ancillary Documents to which the applicable Woodward Member and/or the JV is to be party.

ARTICLE VII

TERMINATION

7.1Grounds for Termination.  This Agreement may be terminated at any time prior to the Closing:

(a)by mutual written agreement of the Parties;

(b)by written notice from any Party to the other Party if:

(i)the Closing has not been effected on or prior to the close of business on the Termination Date; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be available to any Party whose failure to fulfill any of its obligations contained in this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to have occurred on or prior to such date; or

(ii)any Law or other legal restraint or prohibition preventing the Closing shall be in effect and shall have become final and nonappealable.

7.2Effect of Termination.  In the event of the termination of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become void and be of no effect, without any Liability on the part of either Party or its Affiliates; provided, that the provisions contained in Section 5.2, this Article VII and Article VIII shall survive and remain in full force and effect; and provided,  further, that any such termination shall not relieve any Party of any liability for any willful breach of this Agreement arising prior to such termination.

7.3Termination of Representations and Warranties and Covenants upon the Closing.  The representations and warranties of the Parties contained in Article IV and the covenants contained in Article V (other than Section 5.2) shall terminate and be of no further force or effect upon the consummation of the Closing; provided, however, that, for the avoidance of doubt, the representations and warranties set forth in the Woodward Contribution Agreement or the GE Contribution Agreement, as applicable, shall survive for the periods set forth therein.

7.4No Post-Closing Remedy for Breaches of Representations and Warranties.  The Parties hereby acknowledge and agree that, following the Closing, no Person shall have any rights with respect to any breach of any of the representations or warranties contained in Article IV.

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ARTICLE VIII

MISCELLANEOUS

8.1Notices.  All notices and other communications pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by U.S. registered or certified mail (return receipt requested), postage prepaid, to the Parties at the addresses set forth below or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice or communication shall be deemed to have been delivered and received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of telecopier delivery, on the date sent if confirmation of receipt is received and such notice is also promptly mailed by registered or certified mail (return receipt requested), (c) in the case of a nationally-recognized overnight courier in circumstances under which such courier guarantees next Business Day delivery, on the next Business Day after the date when sent and (d) in the case of mailing, on the fifth Business Day following that on which the piece of mail containing such communication is posted to the address provided herein or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.  Notices to Parties pursuant to this Agreement shall be given to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 8.1):

(a)to Woodward:

Woodward, Inc.

1000 East Drake Road

Fort Collins, Colorado 80525

[***]

with a copy to (which shall not constitute notice to Woodward):

WilsonSonsiniGoodrich&Rosati,ProfessionalCorporation

650 Page Mill Road

Palo Alto, California 94304

Attention:Bradley L. Finkelstein
Michael S. Russell

Facsimile:(650) 493-6811

(b)to GE:

General Electric Corporation

c/o GE Aviation

One Neumann Way

Cincinnati, Ohio 45215

[***]

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with a copy to (which shall not constitute notice to GE):

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois  60603

Attention:    Brian J. Fahrney

Facsimile:    (312) 853-7036

8.2Amendments; Waivers.

(a)Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed in the case of an amendment, by all Parties to such agreement, or in the case of a waiver, by the Party against whom the waiver is to be effective.

(b)No waiver by a Party of any default, misrepresentation or breach of a warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of a warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence.  No failure or delay by a Party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided under Law.

8.3Expenses.  Except as otherwise expressly provided in this Agreement or in any other Transaction Document, all costs and expenses incurred in connection with this Agreement and the other Transaction Documents and in closing and carrying out the transactions contemplated hereby and thereby shall be paid by the Party incurring such cost or expense.

8.4Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs, personal representatives and permitted assigns.  No Party hereto may transfer or assign either this Agreement or any of its rights, interests or obligations hereunder, whether directly or indirectly, by operation of law, merger or otherwise, without the prior written approval of the other Party.  No such transfer or assignment shall relieve the transferring or assigning Party of its obligations hereunder if such transferee or assignee does not perform such obligations.

8.5Governing Law.  This Agreement shall be construed in accordance with and this Agreement and any disputes or controversies related hereto shall be governed by the internal laws of the State of Delaware without giving effect to any conflicts of laws principles thereof that would apply the laws of any other jurisdiction.

8.6Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts and the signatures delivered by telecopy or email attachment, each of which shall be an original, with the same effect as if the signatures were upon the same instrument and

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delivered in person.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Party.

8.7Entire Agreement.  This Agreement (including the schedules and exhibits referred to herein), the other Transaction Documents (including the schedules and exhibits referred to therein) and the Confidentiality Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, express or implied, between and among the Parties with respect to the subject matter of this Agreement.  No representation, warranty, promise, inducement or statement of intention has been made by either Party that is not embodied in this Agreement or such other documents, and neither Party shall be bound by, or liable for, any alleged representation, warranty, promise, inducement or statement of intention not embodied herein or therein.

8.8Captions.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. 

8.9Severability.  If any provision of this Agreement, or the application thereof to any Person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other Persons, places and circumstances shall remain in full force and effect so long as, after excluding the portion deemed to be unenforceable, the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, unenforceable or void, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated to the greatest extent practicable in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended.

8.10Dispute Resolution.  Prior to the Parties exercising any rights pursuant to Section 8.11, any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by either Party hereto, or its breach, termination or invalidity (each, a “Dispute”) will be resolved in accordance with the procedures specified in this Section 8.10.  Each Party hereto wishing to initiate the dispute resolution procedures set forth in this Section 8.10 shall give written notice of the Dispute to the other Party hereto (“Dispute Notice”).  If a Party has given a Dispute Notice under the preceding subsection, the Vice President, Commercial Engines Operation of GE and the Chief Executive Officer of Woodward (or, in either case, a designee satisfactory to the other Party) will attempt in good faith to resolve the Dispute within forty-five (45) days of the issuance of the Dispute Notice.  The Parties agree and acknowledge that such individuals shall be executives who have authority to settle the Dispute on behalf of their respective organizations.  Within fifteen (15) days after delivery of the Dispute Notice, the receiving Party will submit to the other a written response.  The response will include a statement of that Party’s position and a summary of arguments supporting that position.  Within forty-five (45) days after delivery of the Dispute Notice, the executives of GE and

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Woodward and any individual(s) accompanying them will meet at a mutually acceptable time and place, and thereafter, as often as they reasonably deem necessary, to attempt to resolve the Dispute.  If a Party gives another Party a Dispute Notice within the applicable statute of limitation or the applicable survival period, the statute of limitation or the survival period relating to that particular Dispute shall be tolled, provided that the Party pursues dispute resolution in accordance with the time frame specified in this Section 8.10.  The Parties will take any further action required to effectuate that tolling.  Each Party is required to continue to perform its obligations under this Agreement pending final resolution of any Dispute, unless to do so would be impossible or impracticable under the circumstances.  Except as required by Law, none of GE, Woodward nor any of their respective Representatives may disclose the existence, content, or results of any dispute resolution procedure hereunder without the prior written consent of each of GE and Woodward.

8.11Consent to Jurisdiction.  Any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by either Party hereto, or its breach, termination or invalidity, shall be subject to the exclusive jurisdiction of the courts of the State of Delaware sitting in the City of Wilmington or of the Federal courts sitting therein.  Each of the Parties hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such Proceeding in any such court or that any such Proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such Proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court.

8.12Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.  

8.13Third Party Beneficiaries.  No provision of this Agreement shall create any third party beneficiary rights in any other Person, including any employee or former employee of Woodward or GE or any of their respective Affiliates (including any beneficiary or dependent thereof).

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8.14Specific Performance.  The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement and, in any action for specific performance, each Party waives the defense of adequacy of a remedy at law and waives any requirement for the securing or posting of any bond in connection with such remedy, this being in addition to any other remedy to which they are entitled at law or in equity (subject to the limitations set forth in this Agreement).  The Parties hereto further agree that (i) by seeking the remedies provided for in this Section 8.14, a Party shall not in any respect waive its right to seek any other form of relief that may be available to a Party under this Agreement (including monetary damages) for breach of any of the provisions of this Agreement, and (ii) nothing set forth in this Section 8.14 shall require any Party hereto to institute any Proceeding for (or limit any Party’s right to institute any Proceeding for) specific performance under this Section 8.14 prior or as a condition to exercising any termination right under Article VII (and pursuing damages after such termination), nor shall the commencement of any Proceeding pursuant to this Section 8.14 or anything set forth in this Section 8.14 restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Article VII or pursue any other remedies under this Agreement that may be available at any time.

8.15No Presumption against Drafting Party.  Woodward and GE acknowledge that each of the Parties hereto has been represented by counsel in connection with the negotiation and execution of this Agreement and the other Transaction Documents.  Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting Party has no application and is expressly waived.

* * * *

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first above written.

WOODWARD, INC.
By:
	Name:
	Title:
GENERAL ELECTRIC COMPANY
By:
	Name:
	Title:

[Signature page to Master Agreement]

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APPENDIX A

TO MASTER AGREEMENT

“Affiliate”, with respect to any Person, means any other Person directly or indirectly controlling, controlled by or under common control with, such Person; provided, however, that (i) with respect to the JV and its Subsidiaries, “Affiliates” shall be deemed to expressly exclude GE and Woodward and each of their Affiliates, (ii) with respect to Woodward and its Subsidiaries, “Affiliates” shall be deemed to expressly exclude the JV and its Subsidiaries, and (iii) with respect to GE and its Subsidiaries, “Affiliates” shall be deemed to expressly exclude the JV and its Subsidiaries.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” or “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“Agreement” has the meaning set forth in the introduction to this Agreement.

“Ancillary Document Agreement” means that certain Ancillary Document Agreement of even date herewith, including the exhibits and schedules thereto, by and between GE and Woodward, as the same may be amended from time to time.

“Ancillary Documents” means the GE Ancillary Documents and the Woodward Ancillary Documents.

“Antitrust Division” has the meaning set forth in Section 5.1(b) of this Agreement.

“Antitrust Law” means the Sherman Antitrust Act of 1890, the Clayton Act of 1914, the HSR Act, the Federal Trade Commission Act, and all other domestic or foreign Laws passed by a domestic or foreign Governmental Authority that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

“Bankruptcy and Equity Exception” has the meaning set forth in Section 4.1(b) of this Agreement.

“Business Day” means each day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.

“Claims” means all rights to causes of action, claims, demands, rights and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate. 

“Closing” has the meaning set forth in Section 3.4 of this Agreement.

“Closing Date” means the date of the Closing, as further described in Section 3.4 of this Agreement.

A-1

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“Closing Date Ancillary Documents” has the meaning ascribed to such term in the Ancillary Document Agreement.

“Closing Date Extension Option” has the meaning set forth in Section 3.3 of this Agreement.

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of October 28, 2014, by and between GE and Woodward.

“Consent” means an authorization, consent, approval, permit or license issued by, or waiver from, any Governmental Authority or other Person.

“Contract” means each legally-binding contract, agreement, option, lease, license, cross-license, sale and purchase order, commitment and other instrument of any kind, whether written or oral.

“Director” has the meaning ascribed to such term in the Operating Agreement.

“Dispute” has the meaning set forth in Section 8.10 of this Agreement.

“Dispute Notice” has the meaning set forth in Section 8.10 of this Agreement.

“Encumbrance” means, with respect to any asset, any lien, mortgage, pledge, hypothecation, right of others, Claim, security interest, encumbrance, lease, sublease, license, interest, option, charge or other restriction or limitation of any nature whatsoever in respect of such asset.

“Engineering Committee” has the meaning ascribed to such term in the Operating Agreement.

“Filing” means a registration or filing with, or notice to, any Governmental Authority or other Person.

“Finance Manager” has the meaning ascribed to such term in the Operating Agreement.

“Formation Date” has the meaning set forth in the recitals to this Agreement.

“FTC” has the meaning set forth in Section 5.1(b) of this Agreement.

“GE” has the meaning set forth in the introduction to this Agreement. 

“GE Ancillary Documents” has the meaning ascribed to such term in the Ancillary Document Agreement. 

“GE Contribution Agreement” has the meaning set forth in the recitals to this Agreement.

“GE Purchase” has the meaning set forth in Section 3.1 of this Agreement.

A-2

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“GE Transferred Assets” has the meaning set forth in the GE Asset Contribution Agreement.

“General Manager” has the meaning ascribed to such term in the Operating Agreement.

“Governmental Approval” means an authorization, consent, approval, permit or license issued by, or a registration or filing with, or notice to, or waiver from, any Governmental Authority.

“Governmental Authority” means any United States or non-United States federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Initial LLC Agreement” has the meaning set forth in the recitals to this Agreement.

“Initial Manager” has the meaning set forth in Section 5.6(a) of this Agreement.

“Interim Period” has the meaning set forth in Section 5.3 of this Agreement.

“JV” has the meaning set forth in the recitals to this Agreement.

“Knowledge” means, (i) with respect to Woodward, the actual knowledge, after reasonable inquiry, of [***] and (ii) with respect to GE, the actual knowledge, after reasonable inquiry, of [***]. 

“Law” means, with respect to any Person, any federal, state, local or foreign statute, law, ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority applicable to such Person or any of its Affiliates or any of their respective properties, assets, officers, directors, managers (in the case of a limited liability company), employees, consultants or agents.

“Liability” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, absolute, contingent, executory, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person.

“Membership Interest” has the meaning set forth in the Operating Agreement.

“Operating Agreement” has the meaning set forth in the recitals to this Agreement.

A-3

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“Parties” has the meaning set forth in the introduction to this Agreement.

“Permits” means all permits, licenses, franchises, approvals, certificates, certifications, clearances, consents, waivers, concessions, exemptions, orders, registrations, notices or other authorizations of any Governmental Authority.

“Person” means an individual, corporation, partnership, association, limited liability company, trust, estate or other similar business entity or organization, including a Governmental Authority and any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the United States Securities Exchange Act of 1934, as amended.

“Proceeding” means any action, suit, Claim, charge, hearing, arbitration, audit, or proceeding (public or private).

“Purchase and Sale Agreement” has the meaning set forth in the recitals to this Agreement.

“Purchased Membership Interests” has the meaning set forth in the recitals to this Agreement.

“Representatives” has the meaning set forth in Section 5.2 of this Agreement.

“Secondee” has the meaning set forth in the Operating Agreement.

“Signing Date” means the date of this Agreement.

“Specified Filings” has the meaning set forth in Section 5.1(b) of this Agreement.

“Subject Ancillary Documents” has the meaning ascribed to such term in the Ancillary Document Agreement.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company or other similar entity as to which more than 50% of the outstanding capital stock or other securities having voting rights or power is owned or controlled, directly or indirectly, by such Person and/or by one or more of such Person’s direct or indirect subsidiaries.

“Technology Manager” has the meaning ascribed to such term in the Operating Agreement.

“Termination Date” means June 30, 2016.

“Transaction Documents” means this Agreement, the Ancillary Document Agreement and the Ancillary Documents.

“Woodward” has the meaning set forth in the introduction to this Agreement. 

“Woodward Affiliate” has the meaning set forth in the introduction to this Agreement. 

A-4

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“Woodward Ancillary Documents” has the meaning ascribed to such term in the Ancillary Document Agreement.

“Woodward Contribution Agreement” has the meaning set forth in the recitals to this Agreement.

“Woodward Members” has the meaning set forth in the introduction to this Agreement.

* * * *

A-5

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit A

Form of Woodward Contribution Agreement

See attached

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit B

Form of Initial LLC Agreement

See attached

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit C

Form of GE Contribution Agreement

See attached

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit D

Form of Purchase and Sale Agreement

See attached

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit E

Form of Operating Agreement

See attached

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit A

CONTRIBUTION AGREEMENT

CONTRIBUTION AGREEMENT (this “Agreement”) dated as of [●] (the “Effective Date”), between Woodward, Inc., a Delaware corporation (“Woodward”), and [Company], a Delaware limited liability company (the “Company”).

WHEREAS Woodward desires to assign to the Company all of Woodward’s rights and certain of Woodward’s obligations under each of the contracts listed on Schedule I to this Agreement (the “Contributed Assets”) and the Company desires to assume all of such rights and obligations of Woodward under the Contributed Assets.

WHEREAS, in exchange for the assignment by Woodward of the Contributed Assets, the Company desires to issue to Woodward 100% of the equity interests in the Company (such equity interests, the “Company Equity Interests”).

NOW, THEREFORE, in consideration of the mutual covenants of this Agreement and for other good and valuable consideration the adequacy and receipt of which the parties to this Agreement hereby acknowledge, the parties agree as follows:

1.Assignment and Assumption.  Effective as of the Effective Date, (a) Woodward assigns to the Company all of Woodward’s rights and obligations with respect to each of the Contributed Assets and (b) the Company assumes all of the rights and obligations of Woodward with respect to each of the Contributed Assets, in each case, other than to the extent such obligations, but for a breach or default by Woodward, would have been paid, performed or otherwise discharged on or prior to the Effective Date or arise out of any such breach or default.

2.Issuance.  Effective of the Effective Date and in exchange for the contribution of the Contributed Assets by Woodward, the Company hereby issues to Woodward the Company Equity Interests.

3.Representations and Warranties of the Company.  The Company represents and warrants to Woodward as follows:

(a)Authority.  The Company has the requisite limited liability company power and authority to enter into and deliver this Agreement, perform its obligations set forth in this Agreement, and consummate the transactions contemplated by this Agreement.  The Company has duly executed and delivered this Agreement.  This Agreement is a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or equity).

(b)Non-Contravention.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement do not and will not (i) contravene or conflict with the certificate of formation of the Company or the operating agreement of the Company; (ii) assuming the truthfulness of the representations of all other parties to this Agreement, contravene or conflict with or constitute a violation of any provision of any law binding upon or applicable to the Company or by which any of its assets or properties is bound or affected; or

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(iii) constitute a default under (or an event that, with or without notice or lapse of time or both, could reasonably be expected to become a default or an event of default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, franchise, permit or other similar authorization or other instrument binding upon the Company.

(c)Equity Duly Authorized.  The Company Equity Interests, when issued and delivered in accordance with the terms of this Agreement, will be duly authorized and validly issued and shall be free and clear of any security interest, pledge, mortgage, lien, charge, adverse claim of ownership or use, restriction on transfer (such as a right of first refusal or other similar rights), defect of title, or other encumbrance of any kind or character (“Liens”), other than Liens (if any) created (i) by or through Woodward or Woodward’s representatives; (ii) under or pursuant to applicable federal or state securities laws; or (iii) under the terms of this Agreement.

4.Representations and Warranties of Woodward.  Woodward represents and warrants to the Company as follows:

(a)Authority.  Woodward has the requisite corporate power and authority to enter into and deliver this Agreement, perform its obligations set forth in this Agreement, and consummate the transactions contemplated by this Agreement.  Woodward has duly executed and delivered this Agreement.  This Agreement is a valid, legal and binding obligation of Woodward, enforceable against Woodward in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or equity).

(b)Non-Contravention.  The execution, delivery and performance by Woodward of this Agreement and the consummation by Woodward of the transactions contemplated by this Agreement do not and will not (i) contravene or conflict with the certificate of incorporation of Woodward or the bylaws of Woodward; (ii) assuming the truthfulness of the representations of all other parties to this Agreement, contravene or conflict with or constitute a violation of any provision of any law binding upon or applicable to Woodward or by which any of its assets or properties is bound or affected; or (iii) constitute a default under (or an event that, with or without notice or lapse of time or both, could reasonably be expected to become a default or an event of default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, franchise, permit or other similar authorization or other instrument binding upon Woodward.

(c)Limitations on Disposition and Resale.  Woodward understands and acknowledges that the Company Equity Interests have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or any foreign jurisdiction and, unless such Company Equity Interests are so registered, that they may not be offered, sold, transferred or otherwise disposed of except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable securities laws of any state or foreign jurisdiction.  Woodward understands that Woodward may not be able to liquidate its investment in the Company Equity Interests and agrees not to sell, transfer or otherwise dispose of the Company Equity Interests (or any portion thereof), unless such Company Equity Interests have been so registered or an exemption from the

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requirement of registration is available under the Securities Act and any applicable state or foreign securities laws.

5.Miscellaneous.

(a)Amendments and Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed in the case of an amendment, by all parties to such agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.  No waiver by a party of any default, misrepresentation or breach of a warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of a warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence.  No failure or delay by a party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided under law.

(b)Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, heirs, personal representatives and permitted assigns.  No party hereto may transfer or assign either this Agreement or any of its rights, interests or obligations hereunder, whether directly or indirectly, by operation of law, merger or otherwise, without the prior written approval of the other party.  No such transfer or assignment shall relieve the transferring or assigning party of its obligations hereunder if such transferee or assignee does not perform such obligations.

(c)Governing Law.  This Agreement shall be construed in accordance with and this Agreement and any disputes or controversies related hereto shall be governed by the internal laws of the State of Delaware without giving effect to any conflicts of laws principles thereof that would apply the laws of any other jurisdiction.

(d)Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts and the signatures delivered by telecopy or email attachment, each of which shall be an original, with the same effect as if the signatures were upon the same instrument and delivered in person.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party.

(e)Entire Agreement.  This Agreement (including the schedules and exhibits referred to herein) constitutes the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, express or implied, between and among the parties with respect to the subject matter of this Agreement.  No representation, warranty, promise, inducement or statement of intention has been made by either party that is not embodied in this Agreement or such other documents, and neither party shall be bound by, or liable for, any alleged representation, warranty, promise, inducement or statement of intention not embodied herein or therein.

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[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(f)Severability.  If any provision of this Agreement, or the application thereof to any person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other persons, places and circumstances shall remain in full force and effect so long as, after excluding the portion deemed to be unenforceable, the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, unenforceable or void, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated to the greatest extent practicable in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended.

(g)Consent to Jurisdiction.  Any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by either party hereto, or its breach, termination or invalidity, shall be subject to the exclusive jurisdiction of the courts of the State of Delaware sitting in the City of Wilmington or of the federal courts sitting therein. Each of the parties hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(h)Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(h).  

(i)Third Party Beneficiaries.  No provision of this Agreement shall create any third party beneficiary rights in any other person.

(j)Further Assurances.  Each of the parties hereto will cooperate with the others and execute and deliver to the others such other instruments and documents and take such other actions as may be reasonably requested from time to time by any party hereto as necessary to carry out, evidence and confirm the intended purposes of this Agreement.

[Remainder of page intentionally blank]

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[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

WOODWARD, INC.
By:
	Name:
	Title:
[Company]
By:  Woodward, Inc., its managing member
By:
	Name:
	Title:

Signature Page to Woodward to Company Contribution Agreement

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule I

Contributed Assets

[***]

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT B

LIMITED LIABLITY COMPANY AGREEMENT

OF

[JV] LLC

This Limited Liability Company Agreement (this “Agreement”) of [JV] LLC, a Delaware limited liability company (the “Company”), is entered into as of [●] and shall constitute the “limited liability company agreement” of the Company within the meaning of Section 18-101(7) of the Delaware Limited Liability Company Act, Title 6, Delaware Corporations Code, Section 18-101 et seq., as amended (the “Act”).

WHEREAS, pursuant to a Contribution Agreement dated [●], between Woodward and the Company, Woodward contributed certain assets to the Company in exchange for 100% of the equity interests in the Company.

WHEREAS, pursuant to a Contribution Agreement dated [●], between Woodward and Woodward Affiliate, Woodward contributed 10% of the equity interests in the Company to Woodward Affiliate in exchange for 100% of the equity interests in Woodward Affiliate.

NOW, THEREFORE, in consideration of the mutual covenants of this Agreement and for other good and valuable consideration the adequacy and receipt of which the members hereby acknowledge, the Members agree as follows:

1.Except as otherwise provided in this Agreement, the default provisions of the Act shall apply to the Company.

2.The name of the Company shall be “[JV] LLC”.

3.Woodward, Inc. (“Woodward”) and [●] (“Woodward Affiliate” and together with Woodward, the “Members”) are the sole “members” of the Company within the meaning of Section 18-101(11) of the Act.

4.The Company shall maintain a Delaware registered office and agent for the service of process as required by the Act.  In the event the registered agent ceases to act as such for any reason or the registered office shall change, Woodward shall promptly designate a replacement registered agent or file a notice of change of address, as the case may be.

5.The purpose and scope of the Company shall be to engage in such lawful activities as shall be determined by Woodward in its sole and absolute discretion.

6.The term of the Company began as of the date of filing of the certificate of formation for the Company in accordance with Section 18-201 of the Act and, unless otherwise specified in a certificate of cancellation filed by the Members in respect of the Company pursuant to Section 18-203 of the Act, such term shall continue in perpetuity.

7.Title to all Company property shall be held in the name of the Company; provided,  however, that the Company shall make such distributions of cash and/or property to the Members as Woodward shall from time to time determine in its sole and absolute discretion.

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

8.Except as otherwise required by applicable law, the Members shall have no personal liability for the debts and obligations of the Company.

9.A separate capital account shall be maintained for each Member in a manner that complies with the Regulations (“Treasury Regulations”) promulgated under section 704 of the Internal Revenue Code of 1986, as amended.  Without limiting the generality of the foregoing, such capital accounts shall be (a) increased for all capital contributions (i.e., the amount of cash and fair market value of any contributed property) and allocations of  items of income and gain and (b) decreased by all distributions (i.e., the amount of cash and fair market value of any distributed property) and allocations of items of  loss and expense. Schedule A to this Agreement sets forth the percentage interest for each Member and the initial balance of their capital account.

10.Unless otherwise required by the Treasury Regulations, all items of income, gain, loss, deduction and credit shall be allocated among the Members in accordance with their percentage interests.

11.The Members shall have no obligation to make any contributions to the capital of the Company and shall make only such contributions as Woodward shall from time to time determine in its sole and absolute discretion.

12.The Members shall have no obligation to provide any services to the Company and shall provide only such services as Woodward shall from time to time determine in its sole and absolute discretion.

13.The Company shall indemnify the Members for and against any loss, damage, claim or expense (including attorneys' fees) whatsoever incurred by the Members relating to or arising out of any act or omission or alleged acts or omissions performed or omitted by the Members on behalf of the Company, to the fullest extent permitted by law.

14.Woodward shall control the management and operation of the Company in such manner as it shall determine in its sole and absolute discretion.  Woodward may appoint, remove and replace managers, officers and employees of the Company from time to time in its sole and absolute discretion.  Notwithstanding any provision of this Agreement to the contrary, any contract, agreement, deed, lease, note or other document or instrument executed on behalf of the Company by Woodward shall be deemed to have been duly executed by the Company and third parties shall be entitled to rely upon Woodward's power to bind the Company without otherwise ascertaining that the requirements of this Agreement have been satisfied. 

15.To the maximum extent permitted by the Act and other applicable law, the Members: (a) shall not be subject to any fiduciary or other duties to the Company; and (b) shall not be liable to the Company for any action or omission concerning the Company or otherwise.

16.The Members may transfer all or any portion of their respective interest in the Company with the consent of Woodward.  In the event of any such transfer, this Agreement shall be amended to reflect the respective rights and obligations of the Members and the transferee or transferees.  No person shall be admitted to the Company as an additional member without the written consent of Woodward, which consent may be withheld in Woodward’s sole and absolute discretion.

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17.It is the intention of the Members that the Company be treated as a partnership for federal, state and local income tax purposes.  The Members agree not to take any action or fail to take any action (including by amendment of this Agreement) which action or inaction would be inconsistent with such treatment.

18.The interpretation and enforceability of this Agreement and the rights and liabilities of the Members as such shall be governed by the laws of the State of Delaware as such laws are applied in connection with limited liability company operating agreements entered into and wholly performed upon in Delaware by residents of Delaware.  To the extent permitted by the Act and other applicable law, the provisions of this Agreement shall supersede any contrary provisions of the Act or other applicable law.

19.In the event any provision of this Agreement is determined to be invalid or unenforceable, such provision shall be deemed severed from the remainder of this Agreement and replaced with a valid and enforceable provision as similar in intent as reasonably possible to the provision so severed, and shall not cause the invalidity or unenforceability of the remainder of this Agreement.

20.This Agreement may be amended, in whole or in part, only through a written amendment executed by the Members.

21.This Agreement contains the entire understanding and intent of the Members regarding the Company and supersedes any prior written or oral agreement respecting the Company.  There are no representations, agreements, arrangements, or understandings, oral or written, of the Members relating to the Company which are not fully expressed in this Agreement.

[Signature page follows]

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[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the Member has executed this Agreement as of the date first above written.

WOODWARD, INC.
By:
	Name:
	Title:
[WOODWARDAFFILIATE]
By:
	Name:
	Title:AuthorizedPerson

Signature Page to [JV] LLC Limited Liability Company Agreement

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule A

Member	Initial Capital Account	Percentage Interest
Woodward, Inc.	$[●]	90%
[Woodward Affiliate]	$[●]	10%

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT C

CONTRIBUTION AGREEMENT

CONTRIBUTION AGREEMENT (this “Agreement”) dated as of [●] (the “Effective Date”), between General Electric Company, a New York corporation (acting through its GE Aviation business unit (“GE”), and [Company], a Delaware limited liability company (the “Company”).

WHEREAS GE desires to assign to the Company all of GE’s rights and certain of GE’s obligations under each of the contracts listed on Schedule I to this Agreement (the “Contributed Assets”) and the Company desires to assume all of such rights and obligations of GE under the Contributed Assets.

NOW, THEREFORE, in consideration of the mutual covenants of this Agreement and for other good and valuable consideration the adequacy and receipt of which the parties to this Agreement hereby acknowledge, the parties agree as follows:

1.Assignment and Assumption.  Effective as of the Effective Date, (a) GE assigns to the Company all of GE’s rights and obligations with respect to each of the Contributed Assets and (b) the Company assumes all of the rights and obligations of GE with respect to each of the Contributed Assets, in each case, other than to the extent such obligations, but for a breach or default by GE, would have been paid, performed or otherwise discharged on or prior to the Effective Date or arise out of any such breach or default.

2.Representations and Warranties of the Company.  The Company represents and warrants to GE as follows:

(a)Authority.  The Company has the requisite limited liability company power and authority to enter into and deliver this Agreement, perform its obligations set forth in this Agreement, and consummate the transactions contemplated by this Agreement.  The Company has duly executed and delivered this Agreement.  This Agreement is a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or equity).

(b)Non-Contravention.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement do not and will not (i) contravene or conflict with the certificate of formation of the Company or the operating agreement of the Company; (ii) assuming the truthfulness of the representations of all other parties to this Agreement, contravene or conflict with or constitute a violation of any provision of any law binding upon or applicable to the Company or by which any of its assets or properties is bound or affected; or (iii) constitute a default under (or an event that, with or without notice or lapse of time or both, could reasonably be expected to become a default or an event of default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, franchise, permit or other similar authorization or other instrument binding upon the Company.

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

3.Representations and Warranties of GE.  GE represents and warrants to the Company as follows:

(a)Authority.  GE has the requisite corporate power and authority to enter into and deliver this Agreement, perform its obligations set forth in this Agreement, and consummate the transactions contemplated by this Agreement.  GE has duly executed and delivered this Agreement.  This Agreement is a valid, legal and binding obligation of GE, enforceable against GE in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or equity).

(b)Non-Contravention.  The execution, delivery and performance by GE of this Agreement and the consummation by GE of the transactions contemplated by this Agreement do not and will not (i) contravene or conflict with the certificate of incorporation of GE or the bylaws of GE; (ii) assuming the truthfulness of the representations of all other parties to this Agreement, contravene or conflict with or constitute a violation of any provision of any law binding upon or applicable to GE or by which any of its assets or properties is bound or affected; or (iii) constitute a default under (or an event that, with or without notice or lapse of time or both, could reasonably be expected to become a default or an event of default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any agreement, contract, note, bond, mortgage, indenture, lease, franchise, permit or other similar authorization or other instrument binding upon GE.

4.Miscellaneous.

(a)Amendments and Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed in the case of an amendment, by all parties to such agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.  No waiver by a party of any default, misrepresentation or breach of a warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of a warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence.  No failure or delay by a party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided under law.

(b)Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, heirs, personal representatives and permitted assigns.  No party hereto may transfer or assign either this Agreement or any of its rights, interests or obligations hereunder, whether directly or indirectly, by operation of law, merger or otherwise, without the prior written approval of the other party.  No such transfer or assignment shall relieve the transferring or assigning party of its obligations hereunder if such transferee or assignee does not perform such obligations.

(c)Governing Law.  This Agreement shall be construed in accordance with and this Agreement and any disputes or controversies related hereto shall be governed by the internal laws of the State of Delaware without giving effect to any conflicts of laws principles thereof that would apply the laws of any other jurisdiction.

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[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(d)Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts and the signatures delivered by telecopy or email attachment, each of which shall be an original, with the same effect as if the signatures were upon the same instrument and delivered in person.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party.

(e)Entire Agreement.  This Agreement (including the schedules and exhibits referred to herein) constitutes the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, express or implied, between and among the parties with respect to the subject matter of this Agreement.  No representation, warranty, promise, inducement or statement of intention has been made by either party that is not embodied in this Agreement or such other documents, and neither party shall be bound by, or liable for, any alleged representation, warranty, promise, inducement or statement of intention not embodied herein or therein.

(f)Severability.  If any provision of this Agreement, or the application thereof to any person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other persons, places and circumstances shall remain in full force and effect so long as, after excluding the portion deemed to be unenforceable, the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, unenforceable or void, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated to the greatest extent practicable in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended.

(g)Consent to Jurisdiction.  Any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by either party hereto, or its breach, termination or invalidity, shall be subject to the exclusive jurisdiction of the courts of the State of Delaware sitting in the City of Wilmington or of the federal courts sitting therein. Each of the parties hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

(h)Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF

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LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 4(h).  

(i)Third Party Beneficiaries.  No provision of this Agreement shall create any third party beneficiary rights in any other person.

(j)Further Assurances.  Each of the parties hereto will cooperate with the others and execute and deliver to the others such other instruments and documents and take such other actions as may be reasonably requested from time to time by any party hereto as necessary to carry out, evidence and confirm the intended purposes of this Agreement.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

GENERAL ELECTRIC COMPANY
By:
	Name:
	Title:
[Company]
By:  Woodward, Inc., its managing member
By:
	Name:
	Title:

Signature Page to GE to Company Contribution Agreement

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Schedule I

Contributed Assets

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EXHIBIT D

PURCHASE AND SALE AGREEMENT

by and among

WOODWARD, INC.,

[WOODWARD AFFILIATE]

and

GENERAL ELECTRIC COMPANY
(acting by and through its GE Aviation business unit)

dated as of [__________]

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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS		2
Section 1.1	Incorporation of Definitions	2
Section 1.2	Certain Definitions	2
Section 1.3	Terms Defined in Other Sections	4
Section 1.4	Other Definitional Provisions	5
ARTICLE II SALE AND PURCHASE OF MEMBERSHIP INTEREST; PURCHASE PRICE; CLOSING		6
Section 2.1	Sale and Purchase of Membership Interest	6
Section 2.2	Purchase Price	6
Section 2.3	Payments	6
Section 2.4	Closing	6
Section 2.5	Withholdings	7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE WOODWARD MEMBERS		7
Section 3.1	Organization, Standing and Authority; Execution and Delivery; Enforceability	7
Section 3.2	Consents; Conflicts	7
Section 3.3	Membership Interests	8
Section 3.4	Subsidiaries	9
Section 3.5	Operations	9
Section 3.6	Financial Information	9
Section 3.7	Taxes	9
Section 3.8	Contracts	11
Section 3.9	Claims	11
Section 3.10	Compliance with Applicable Laws	12
Section 3.11	Sufficiency of Assets	12
Section 3.12	Books and Records	12
Section 3.13	Brokerage	12

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF GE		13
Section 4.1	Organization, Standing and Authority; Execution and Delivery; Enforceability	13
Section 4.2	Consents; Conflicts	13
Section 4.3	Contracts	13
Section 4.4	Claims	14
Section 4.5	Compliance with Applicable Laws	14
Section 4.6	Sufficiency of Assets	14
Section 4.7	Brokerage	15
ARTICLE V TAX MATTERS		15
Section 5.1	Tax Covenants	15
Section 5.2	Transfer Taxes	16
Section 5.3	Allocation of Basis Adjustment	16
ARTICLE VI INDEMNIFICATION		17
Section 6.1	Survival	17
Section 6.2	Indemnification	17
Section 6.3	Indemnification Procedures	19
Section 6.4	Tax Indemnification	21
Section 6.5	Calculation of Damages; Right to Setoff; Tax Treatment of Indemnification Payments	23
ARTICLE VII MISCELLANEOUS		23
Section 7.1	Notices	23
Section 7.2	Amendments; Waivers	25
Section 7.3	Expenses	25
Section 7.4	Successors and Assigns	25
Section 7.5	Governing Law	25
Section 7.6	Counterparts; Effectiveness	25
Section 7.7	Entire Agreement	25
Section 7.8	Captions	26
Section 7.9	Severability	26
Section 7.10	Consent to Jurisdiction	26
Section 7.11	Waiver of Jury Trial	26
Section 7.12	Third Party Beneficiaries	27
Section 7.13	Specific Performance	27

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Section 7.14	No Presumption Against Drafting Party	27
Section 7.15	Further Assurances	27

ANNEXES

Annex A	Purchased Membership Interest and Percentage Interests
Annex B	Financial Information

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”) is entered into as of [●], by and among Woodward, Inc., a Delaware corporation (“Woodward”), [Woodward Affiliate], a Delaware limited liability company and wholly-owned subsidiary of Woodward (“Woodward Affiliate”), and General Electric Company, a New York corporation, acting by and through its GE Aviation business unit (“GE”).  Woodward, Woodward Affiliate and GE are sometimes referred to herein collectively as the “Parties” and each individually as a “Party.”

W I T N E S S E T H

WHEREAS, pursuant to the Master Agreement, dated as of May [●], 2015, by and between Woodward and GE (the “Master Agreement”), Woodward and GE are forming a joint venture to strengthen their relationship and better enhance innovation, performance and reliability in fuel systems for commercial aerospace applications;

WHEREAS, on [●], Woodward caused to be executed and delivered, and filed with the Secretary of State of the State of Delaware, the Certificate of Formation of [●] (the “Company”)

WHEREAS, pursuant to the Contribution Agreement, dated as of [●], by and between Woodward and the Company (the “Woodward Contribution Agreement”), effective on [●], (a) Woodward contributed the Woodward Contributed Assets (as defined in the Woodward Contribution Agreement) to the Company and (b) the Company accepted the Woodward Contributed Assets all upon the terms and conditions set forth therein;

WHEREAS, on [●], (a) Woodward contributed a 10% Membership Interest (as defined in the Operating Agreement) to Woodward Affiliate and (b) Woodward and Woodward Affiliate entered into the Limited Liability Company Agreement of the Company, dated as of [●] (the “Initial Operating Agreement”);

WHEREAS, pursuant to the Contribution Agreement, dated as of the Closing Date, by and between GE and the Company (the “GE Contribution Agreement”), concurrently herewith, (a) GE is contributing the GE Contributed Assets (as defined in the GE Contribution Agreement) to the Company and (b) the Company is accepting the GE Contributed Assets, all upon the terms and conditions set forth therein;

WHEREAS, pursuant to this Agreement, at the Closing, GE shall purchase and acquire from Woodward, and Woodward shall sell and transfer to GE, the Membership Interest set forth opposite GE’s name in Annex A (the “Purchased Membership Interest”), all upon the terms and conditions set forth herein; and

WHEREAS, concurrently herewith, Woodward, Woodward Affiliate and GE are entering into the Amended and Restated Limited Liability Company Agreement of the Company (the “Operating Agreement”), pursuant to which the Initial Operating Agreement will be amended and restated and, immediately following the Closing, the business and operations of the

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Company will be conducted in accordance with the Initial Business Plan (as defined in the Operating Agreement) (the “Business”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1     Incorporation of Definitions.  Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to the Master Agreement. 

Section 1.2     Certain Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

“Anti-Bribery Laws” means the Foreign Corrupt Practices Act and all other anti-corruption Laws.

“Code” means the Internal Revenue Code of 1986.  To the extent that reference is made to any particular section of the Code, such reference shall be to any corresponding provisions of any successor Law.

“Damages” means any losses, liabilities, diminution in value, claims, damages, fines, penalties, assessments by public agencies, settlements, costs or expenses (including reasonable costs of investigation and defense and reasonable attorneys’ fees).

“Financial Information” means the historical financial information of the Company set forth in Annex B.

“GAAP” means generally accepted accounting principles in the United States.

“GE Specified Representations” means the representations and warranties set forth in Section 4.1,  Section 4.2,  Section 4.6 and Section 4.7

 “Order” means any execution, judgment, order, award, ruling, decision, verdict, subpoena, injunction or settlement.

“Permitted Encumbrances” means (a) the Encumbrances set forth in Schedule 1.1; (b) Encumbrances for Taxes not yet due and payable and (c) with respect to a Person, any mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances arising or incurred in the ordinary course of business consistent with past practice that are not resulting from a breach, default or violation by such Person or its Affiliates and that are not, individually or in the aggregate, material to the Business taken as a whole.

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“Pre-Closing Period” means any taxable year or period (or a portion thereof) ending on or prior to the Closing Date.

“Proceeding” means any action, suit, Claim, charge, hearing, arbitration, audit, or proceeding (public or private).

“Post-Closing Period” means any taxable period other than a Pre-Closing Period.

“Straddle Period” means any taxable year or period that begins before and ends after the Closing Date.  For purposes of this Agreement, in the case of any Taxes that are payable for any Straddle Period, the portion of such Tax that relates to Pre-Closing Period will (i) in the case of any real and personal property Taxes and other Taxes imposed on a periodic basis, be deemed to be the amount of such Tax for the entire taxable period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period)  multiplied by a fraction, the numerator of which is the number of days in the taxable period ending at the end of the Closing Date and the denominator of which is the number of days in the entire relevant Straddle Period, and (ii) in the case of any other Tax, be deemed equal to the amount which would be payable if the relevant taxable period ended at the end of the Closing Date, except that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions), other than with respect to property placed in service after the Closing, shall be allocated on a daily basis.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company or other similar entity as to which more than fifty percent (50%) of the outstanding capital stock or other securities having voting rights or power is owned or controlled, directly or indirectly, by such Person and/or by one or more of such Person’s direct or indirect subsidiaries; provided,  however, that, except as otherwise expressly provided herein, (a) with respect to the Woodward Members and their Affiliates, “Subsidiaries” shall be deemed to expressly exclude the Company and its Subsidiaries, and (b) with respect to GE and its Affiliates, “Subsidiaries” shall be deemed to expressly exclude the Company and its Subsidiaries.

“Tax” (including, with correlative meaning, the term “Taxes”) means: (a) any federal, state, local or foreign net income, gross income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding on amounts paid to or by any Person, alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or environmental tax (including taxes under Code Section 59A), or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Authority; and (b) any liability for the payment of amounts determined by reference to amounts described in clause (a) as a result of being or having been a member of any group that files, will file, or has filed Tax Returns on a combined, consolidated or unitary basis, as a result of any obligation under any agreement or arrangement (including any Tax sharing arrangement), as a result of being a transferee or successor, or by contract or otherwise.

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“Tax Return” means any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including any information return, claim for refund, amended return or declaration of estimated Tax.

“Taxing Authority” means the U.S. Internal Revenue Service and any other Governmental Authority responsible for the administration of any Tax.

“Transaction Documents” means this Agreement, the Master Agreement, the Woodward Ancillary Documents, and the GE Ancillary Documents.

“Transfer Tax”  means any sales Tax, use Tax, direct or indirect real property transfer or gains Tax, documentary stamp Tax, value-added Tax or similar Tax and related fees.

“Woodward Aggregate Cash” means $[250,000,000].  1

“Woodward Annual Payment Amount” means an amount, rounded to the nearest dollar, equal to the product of the Woodward Aggregate Cash and 0.01957672 (for example, solely for illustrative purposes, if the Woodward Aggregate Cash is equal to $250,000,000, the Woodward Annual Payment Amount would be equal to $4,894,180).

“Woodward Members” means, collectively, Woodward and Woodward Affiliate.

“Woodward Specified Representations” means the representations and warranties set forth in Section 3.1,  Section 3.2,  Section 3.3,  Section 3.11 and Section 3.13.  

Section 1.3     Terms Defined in Other Sections.  The following terms are defined in the following Sections:

________________________

1Note to Draft: The Woodward Aggregate Cash was calculated assuming a Closing Date of October 1, 2015. If the Closing Date occurs prior to October 1, 2015, the Woodward Aggregate Cash payable by GE to Woodward will be increased to reflect the additional value GE will receive as a result of its participation in the cash flows of the Company as of the earlier Closing Date. If the Closing Date occurs after October 1, 2015, the Woodward Aggregate Cash payable by GE to Woodward will be decreased to reflect the reduction in value GE will receive as a result of the delay in its participation in the cash flows of the Company until such later Closing Date. The actual adjustment to the Woodward Aggregate Cash, if any, will be based on a calculation of Company profits for the period between October 1, 2015 and the actual Closing Date, where the Company profits for purposes of this calculation will equal the excess of the amount of sales covered by the Company scope and to be included in the Company financial results for the period over the amount of costs of sales covered by the Company scope and to be included in the Company financial results for the period, both determined in a manner consistent with the supply agreement pricing provisions of the Transaction Documents. For the avoidance of doubt, the NRE funded by the parties separately during the Pre-JV Period pursuant to the GE9X side letter shall not be included in the calculation of the Company’s profits for purposes of the adjustment to the Woodward Aggregate Cash.  Notwithstanding anything herein to the contrary, in the event that GE exercises the Closing Date Extension Option (pursuant to and as defined in the Master Agreement), the Woodward Aggregate Cash shall be increased above $250,000,000, if applicable, in accordance with the foregoing to reflect the date on which the Closing would have occurred but for the exercise by GE of the Closing Date Extension Option (if the Closing would have occurred prior to October 1, 2015), but shall not be decreased below $250,000,000 in accordance with the foregoing (if the Closing would have occurred after October 1, 2015). 

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Term	Section
Agreement	Preamble
Assumed Deductions	5.3(b)
Bankruptcy and Equity Exception	3.1(b)
Basis Adjustment Statement	5.3
Business	Recitals
Cap	6.2(a)
Closing	2.4
Closing Date	2.4
Company	Recitals
Company Contract	3.8(a)
[***]	6.2(a)
Deduction Shortfall Amount	6.4(b)
Defending Party	6.3(b)(ii)
GE	Preamble
GE After-Tax Return	6.4(b)
GE Contributed Contract	4.3(a)
GE Contribution Agreement	Recitals
GE Indemnified Persons	6.2(a)
GE Purchase	2.1
Indemnified Party	6.3(a)
Indemnifying Party	6.3(a)
Initial Basis Adjustment Statement	5.3(a)
Initial Operating Agreement	Recitals
Master Agreement	Recitals
Operating Agreement	Recitals
Original Deduction Shortfall Payment	6.4(d)
Parties	Preamble
Pre-Closing Income Tax Return	5.1(e)
Proposed Basis Adjustment Statement	5.3(a)
Purchase Price	2.2
Purchased Membership Interest	Recitals
Revised Basis Adjustment Statements	5.3(a)
Revised Deduction Shortfall Payment	6.4(d)
Survival Period	6.1
Third Party Claim	6.3(b)
Voting Debt	3.3
Woodward	Preamble
Woodward Affiliate	Preamble
Woodward After-Tax Return	6.4(b)
Woodward Contribution Agreement	Recitals
Woodward Indemnified Persons	6.2(b)

Section 1.4     Other Definitional Provisions.  The definitions in Section 1.2 and referenced in Section 1.3 shall apply equally to both the singular and plural forms of the terms

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defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  All references herein to Articles, Sections and Annexes shall be deemed to be references to Articles and Sections of, and Annexes to, this Agreement unless the context shall otherwise require.  All Annexes and Schedules attached hereto shall be deemed incorporated herein as if set forth in full herein.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  Except as otherwise indicated, the word “or” shall not be exclusive and shall mean “and/or.”  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”  References to a Person are also to its permitted successors and permitted assigns.  Unless otherwise expressly provided herein, all references to “dollars” or “$” shall mean United States Dollars.  Unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.

ARTICLE II

SALE AND PURCHASE OF MEMBERSHIP INTEREST;
PURCHASE PRICE; CLOSING

Section 2.1     Sale and Purchase of Membership Interest.  Upon the terms and subject to the conditions set forth herein, simultaneously with the execution and delivery of this Agreement at the Closing, Woodward is hereby selling to GE, free and clear of all Encumbrances, and GE is hereby purchasing from Woodward, the Purchased Membership Interest (the “GE Purchase”).  The Parties agree to treat the GE Purchase as a sale of interests in the Company pursuant to Section 741 of the Code.

Section 2.2     Purchase Price.  The aggregate consideration for the Purchased Membership Interest shall be an amount equal to (a) the Woodward Aggregate Cash, plus (b) subject to Section 2.3, the aggregate amount payable of the Woodward Annual Payment Amounts (the “Purchase Price”).

Section 2.3     Payments.  GE shall (i) at the Closing, pay, or cause to be paid, by wire transfer of immediately available funds to an account designated by Woodward to Woodward the Woodward Aggregate Cash and (ii) on each anniversary of the Closing Date for each of the fifteen (15) years following the Closing Date, pay, or cause to be paid, by wire transfer of immediately available funds to an account designated by Woodward not less than three (3) Business Days prior to such anniversary of the Closing Date, to Woodward the Woodward Annual Payment Amount.

Section 2.4     Closing.  The consummation of the GE Purchase and the other transactions contemplated under this Agreement (the “Closing”) shall take place at the offices of Sidley

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Austin LLP, Chicago, Illinois at the same time as the closing of the transactions contemplated by the Master Agreement (Central time) on the date of this Agreement.  The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”

Section 2.5     Withholdings.  GE shall be entitled to deduct and withhold from payments otherwise payable under this Agreement to Woodward such amounts as are required with respect to the making of such payments under the Code or under any provision of state, local or foreign Tax Law.  Any amount deducted or withheld pursuant to this Section 2.5 and timely paid over to the applicable Taxing Authority shall be treated for all purposes of this Agreement as having been paid to Woodward in respect of which such deduction or withholding was made.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE WOODWARD MEMBERS

Except as set forth in the Schedules, the Woodward Members hereby jointly and severally represent and warrant to GE as follows:

Section 3.1     Organization, Standing and Authority; Execution and Delivery; Enforceability.

(a)Woodward is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Woodward Affiliate is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  Each of the Woodward Members has all requisite corporate or limited liability company power and authority, as the case may be, to execute and deliver this Agreement and to consummate the transactions contemplated hereby, as applicable.  All corporate acts and other proceedings required to be taken by each of the Woodward Members to authorize the execution, delivery and performance of this Agreement and to consummate the transactions contemplated hereby, as applicable, have been duly and properly taken.

(b)     This Agreement has been duly executed and delivered by each of the Woodward Members.  Assuming that this Agreement has been duly authorized, executed and delivered by GE, this Agreement constitutes a legal, valid and binding obligation of each of the Woodward Members, enforceable against the Woodward Members, as applicable, in accordance with its terms (subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally, general principles of equity and the discretion of courts in granting equitable remedies (the “Bankruptcy and Equity Exception”)).

Section 3.2     Consents; Conflicts.

(a)No Consent of, or Filing with, any Governmental Authority or other Person is required to be obtained or made by or with respect to any of the Woodward Members in connection with the execution and delivery of this Agreement, the consummation of the

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transactions contemplated hereby or the compliance by the Woodward Members, as applicable, with the terms and conditions hereof.

(b)The execution and delivery of this Agreement by the Woodward Members and the consummation of the transactions contemplated hereby and compliance by the Woodward Members with the terms and conditions hereof do not conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or give rise to any obligation of any Person to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Encumbrance upon any of the assets of either Woodward Member or the Company under, any provision of (i) the certificate of incorporation, certificate of formation, limited liability company agreement, operating agreement or by-laws (or the comparable governing instruments) of either of the Woodward Members, (ii) any Contract to which either Woodward Member or the Company is a party or by which any of its respective properties or assets are bound or (iii) any Law applicable to the operations or the assets of either Woodward Member or the Company, other than in the case of clause (ii), any such violation, default, termination, cancellation, acceleration, loss or Encumbrance that would not reasonably be expected to prevent or materially impede or delay the ability of the Woodward Members to perform their obligations under this Agreement.

Section 3.3     Membership Interests.  The Woodward Members have good and valid title to all of the Membership Interests, free and clear of any Encumbrances, and are the record and beneficial owner thereof.  At the Closing, good and valid title to the Purchased Membership Interest will pass to GE free and clear of any Encumbrances, other than those arising from acts of GE or its Affiliates and arising under, once executed, the Operating Agreement.  Except for the Membership Interests, as of the Closing, there are no voting securities of, or other equity interests in, the Company, reserved for issuance or outstanding.  The Membership Interests have been duly authorized and validly issued.  The Membership Interests have not been issued in violation of, and are not subject to, any preemptive, subscription or similar rights under any provision of applicable Law, the Initial Operating Agreement (or comparable governing instrument of the Company) or any Contract to which the Company or any Woodward Member is subject, bound or a party.  As of the Closing, there are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or that are convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which holders of the Membership Interests may vote (“Voting Debt”).  As of the Closing, there are no outstanding warrants, options, rights, “phantom” stock rights, stock appreciation rights, stock based performance units, convertible or exchangeable securities or other commitments or undertakings (other than this Agreement) (a) pursuant to which either of the Woodward Members or any of their Affiliates are or may become obligated to issue, deliver or sell (i) any other voting securities of, or equity interests in, the Company, (ii) any security convertible into, or exchangeable for, voting securities of, or equity interests in, the Company or (iii) any Voting Debt, (b) pursuant to which any of the Company, the Woodward Members or any of their Affiliates are or may become obligated to issue, grant, extend or enter into any such warrant, option, right, unit, security, commitment or undertaking relating to the Company or (c) that give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing

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to the holders of Membership Interests.  Other than this Agreement, the Woodward Ancillary Documents and the Initial Operating Agreement, as of the Closing, the Membership Interests are not subject to any voting trust agreement or other Contract, including any such Contract restricting or otherwise relating to the voting, dividend rights or disposition of the Membership Interests.

Section 3.4     Subsidiaries.  The Company does not own any direct or indirect interest in any other Person.

Section 3.5     Operations.  Except in connection with (a) the formation of the Company, (b) the preparation, execution and performance of the Transaction Documents, (c) the performance of the Company Contracts (and the preparation and execution of any amendments, modifications or supplements thereto) and (d) the transactions contemplated by the Master Agreement and the other Transaction Documents, the Company has not conducted any material operations or engaged in any material business activity or acquired any assets or assumed any Liabilities.

Section 3.6     Financial Information.  The Financial Information (a) is complete and correct in all material respects with respect to the period(s) covered thereby, and (b) has been prepared in accordance with GAAP and the accounting policies of the Company consistently applied throughout the period(s) covered thereby, to the extent applicable.

Section 3.7     Taxes.

(a)(i) The Company’s tax basis in each of the Woodward Contributed Assets immediately prior to the transactions contemplated by this Agreement is no greater than the basis such asset had in the hands of Woodward prior to the transactions described in the Woodward Contribution Agreement and (ii) none of such assets was acquired by Woodward directly or indirectly from an Affiliate in a transaction that caused Woodward to have a federal income tax basis therein different from such Affiliate’s federal income tax basis.

(b)Woodward has been treated as a corporation for U.S. federal (and all applicable state and local) income tax purposes at all times since the day prior to the formation of the Company, and Woodward Affiliate has a valid and timely election in place to be properly treated as an association taxable as a corporation, effective from and after its formation, pursuant to Treasury Regulations Section 301.7701-3(c) for U.S. federal (and all applicable state and local) income tax purposes.  The transactions described in the third and fourth recital to this Agreement occurred no later than the first Business Day after the date on which Woodward made its Specified Filing (as defined in the Master Agreement).

(c)(i) All income and other material Tax Returns required to be filed by or on behalf of Woodward or any of its Affiliates relating to the Woodward Contributed Assets, the Business or the Company have been duly and timely filed with the appropriate Taxing Authority in all jurisdictions in which such Tax Returns are required to be filed, and all such Tax Returns are true, complete and correct in all material respects; and (ii) all Taxes relating to the

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Woodward Contributed Assets, the Business or the Company required to have been paid by the Company have been fully and timely paid.

(d)All deficiencies asserted or assessments made as a result of any examinations by any Taxing Authority of the Tax Returns relating to the Woodward Contributed Assets, the Business or the Company have been fully paid, and there are no other audits or investigations by any Taxing Authority in progress, nor has Woodward or any of its Affiliates received any notice from any Taxing Authority that it intends to conduct such an audit or investigation relating to the Woodward Contributed Assets, the Business or the Company.

(e)There is no Tax allocation, Tax sharing or similar agreement that will apply to any of the Woodward Contributed Assets after the Closing Date.

(f)There are no powers of attorney that are currently in force with respect to any Tax matter involving the Woodward Contributed Assets that will be binding on or enforceable by the Company after the Closing.

(g)Woodward and its Affiliates have each complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes relating to the Woodward Contributed Assets, the Business or the Company and have duly and timely withheld and paid over to the appropriate Taxing Authorities all amounts required to be so withheld and paid over under all applicable Laws.

(h)No written claim has been made by a Taxing Authority in a jurisdiction in which Woodward or any of its Affiliates does not currently file a Tax Return relating to the Woodward Contributed Assets, the Business or the Company that Woodward or its Affiliates is or may be required to file a Tax Return in such jurisdiction.

(i)No Woodward Contributed Asset is a contract, agreement, plan or arrangement covering any Person that, individually or collectively, could give rise to the payment of any amount that would not be deductible by the Company or any of its Affiliates by reason of section 280G of the Code or be subject to section 4999 of the Code.

(j)There are no Encumbrances for Taxes upon the Woodward Contributed Assets or the Purchased Membership Interest other than Permitted Encumbrances.

(k)No issue has been raised by written inquiry of any Governmental Authority to Woodward or its Affiliates, which would reasonably be expected to affect the Tax treatment of the Woodward Contributed Assets, the Business or the Company or its owners in a Post-Closing Period.

(l)None of the Woodward Members, the Company or any of their respective Affiliates have executed or entered into any agreement with, or obtained any consents or clearances from, any Taxing Authority, or have been subject to any ruling guidance specific to any of the Parties, that would be binding on the Company for any taxable period (or portion thereof) ending after the Closing Date.

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(m)The Woodward Members have each owned at least ten percent (10%) of the Membership Interests at all times since the formation of the Company.

(n)The Company has a zero tax basis in any of the Woodward Contributed Assets that is a section 197 intangible.

(o)All of the liabilities of the Company arose after the transactions contemplated by the Woodward Contribution Agreement.

(p)Woodward has owned and will continue to own one hundred percent (100%) of the equity interests of Woodward Affiliate immediately before and after the Closing.  Woodward does not have any plan or intention to sell, exchange or otherwise dispose of any of the equity interests of Woodward Affiliate.

(q)The Company has made no elections for federal income tax purposes other than those set forth in Schedule 3.7.

Section 3.8     Contracts.

(a)Set forth in Schedule 3.8 is a complete and correct list, as of the date hereof, of each Contract to which the Company is a party (each, a “Company Contract”).

(b)Each Company Contract is valid, binding and in full force and effect and enforceable by the Company in accordance with its terms (subject to the Bankruptcy and Equity Exception).  The Company is not in breach or default in any material respect of any Company Contract.  No written notice has been received by the Company or any of the Woodward Members of their respective Affiliates alleging that it is in breach or default in any material respect under any Company Contract.  To the Knowledge of Woodward, no party to any Company Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default thereunder or has exercised any termination rights with respect thereto.  The Woodward Members and their Affiliates, including the Company, have delivered or made available to GE (to the extent permitted by applicable Law) true, correct and complete copies of all of the Company Contracts, including all amendments, modifications or supplements thereto.

Section 3.9     Claims.  There is no actual or, to the Knowledge of Woodward, threatened Claim against the Company arising out of the operation of the Business or ownership of any assets of the Company that:  (a) involves a claim of, or an unspecified amount which would reasonably be expected to result in a Liability of, more than [***]; (b) seeks any injunctive relief or the imposition of any restriction on the ability of the Business to compete in any business or with any Person in (or otherwise conduct business in) any geographic area; (c) involves criminal proceedings or a material investigation by a Governmental Authority; or (d) individually or in the aggregate, would be reasonably likely to be material to the Company.  There is no actual or, to the Knowledge of Woodward, threatened Claim against any of the Woodward Members or any of their Affiliates, including the Company, that seeks any legal restraint or prohibition against the transactions contemplated by this Agreement.  None of the Woodward Members or any of their Affiliates, including the Company, is a party or subject to or in default under any

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Order of any Governmental Authority or arbitration tribunal applicable to the operation of the Business or any asset of the Company, including any Woodward Contributed Asset.

Section 3.10     Compliance with Applicable Laws.  Except as set forth in Schedule 3.10: 

(a)None of the Woodward Members or any of their Affiliates, including the Company, (by virtue of any past or present action, omission to act, Contract to which it is a party or any occurrence or state of facts) has, since January 1, 2012, failed to comply or is failing to comply with any Law, including any Anti-Bribery Law or any Law relating to worker health, industrial hygiene or safety (including product safety, product responsibility, product liability or defective products), or Order of any Governmental Authority in connection with its operation of the Business, except for any such failure to comply that was not, or is not reasonably likely to be, material to the Business or the Woodward Members.  None of the Woodward Members or any of their Affiliates, including the Company, has, since January 1, 2012, in connection with its operation of the Business received any written or, to the Knowledge of Woodward, other notice of, been charged with, or received any inquiry concerning, the failure to comply in any material respect with or the potential failure to comply with any applicable Law, including any Anti-Bribery Law.  Since January 1, 2012, none of the Woodward Members or any of their Affiliates, including the Company, has made, or been ordered to make, any material payment in respect of any damages, fines, penalties, assessments or settlements to any Governmental Authority related to the Business.

(b)There is no investigation or Claim by a Governmental Authority pending or, to the Knowledge of Woodward, threatened against any of the Woodward Members or any of their Affiliates, including the Company (or any of their respective officers, directors and employees), in connection with the Business with respect to matters described this Section 3.10.

Section 3.11     Sufficiency of Assets.  Assuming the accuracy of the representations and warranties of GE set forth in Section 4.6, the Woodward Contributed Assets, and the services provided to the Company pursuant to the Transaction Documents by Woodward and its Affiliates (when combined with the GE Contributed Assets and the services provided to the Company pursuant to the Transaction Documents by GE and its Affiliates) comprise all the properties, personnel (whether employees or secondees), assets and rights necessary for the Company to conduct its business and operations in accordance with the Initial Business Plan.

Section 3.12     Books and Records.  The books of account, minute books and equity interest record books (or their equivalents) of the Company are complete and correct in all material respects.

Section 3.13     Brokerage.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon any arrangements made by or on behalf of any of the Woodward Members or any of their Affiliates, including the Company.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF GE

GE represents and warrants to the Woodward Members that:

Section 4.1     Organization, Standing and Authority; Execution and Delivery; Enforceability.

(a)GE is a corporation duly organized, validly existing and in good standing under the laws of the State of New York.  GE has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  All corporate acts and other proceedings required to be taken by GE to authorize the execution, delivery and performance by GE of this Agreement and for GE to consummate the transactions contemplated hereby have been duly and properly taken.

(b)     This Agreement has been duly executed and delivered by GE.  Assuming that this Agreement has been duly authorized, executed and delivered by each of the Woodward Members, this Agreement constitutes a legal, valid and binding obligation of GE, enforceable against GE in accordance with its terms, subject to the Bankruptcy and Equity Exception.

Section 4.2     Consents; Conflicts.

(a)No Consent of, or Filing with, any Governmental Authority is required to be obtained or made by GE in connection with the execution and delivery by GE of this Agreement, the consummation by GE of the transactions contemplated hereby or the compliance by GE with the terms and conditions hereof.

(b)The execution and delivery of this Agreement by GE does not and the consummation by GE of the transactions contemplated hereby and compliance by GE with the terms and conditions hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, or result in the creation of any Encumbrances upon any of the properties or assets of GE under, any provision of (a) the certificate of incorporation or by-laws (or the comparable governing instruments) of GE or (b) any Contract to which GE is a party or by which any of its respective properties or assets are bound or (c) any Law applicable to GE or any of its respective properties or assets, other than in the case of clause (b), any such violation, default, termination, cancellation, acceleration, loss or Encumbrance that would not reasonably be expected to prevent or materially impede or delay the ability of GE to perform its obligations under this Agreement.

Section 4.3     Contracts.

(a)Set forth in Schedule 4.3 is a complete and correct list of each Contract included in the GE Contributed Assets (each, a “GE Contributed Contract”).

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(b)Each GE Contributed Contract is valid, binding and in full force and effect and enforceable by GE or its Affiliates in accordance with its terms (subject to the Bankruptcy and Equity Exception).  GE and its Affiliates are not in breach or default in any material respect of any GE Contributed Contract.  No written notice has been received by GE or any of its Affiliates alleging that it is in breach or default in any material respect under any GE Contributed Contract.  To the Knowledge of GE, no party to any GE Contributed Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default thereunder or has exercised any termination rights with respect thereto.  GE and its Affiliates have delivered or made available to the Woodward Members (to the extent permitted by applicable Law) true, correct and complete copies of all of the GE Contributed Contract, including all amendments, modifications or supplements thereto.

Section 4.4     Claims.  There is no actual or, to the Knowledge of GE, threatened Claim against GE or any of its Affiliates that seeks any legal restraint or prohibition against the transactions contemplated by this Agreement.  Neither GE nor any of its Affiliates is a party or subject to or in default under any Order of any Governmental Authority or arbitration tribunal applicable to GE’s or any of its Affiliates’ performance under the GE Contributed Contracts.

Section 4.5     Compliance with Applicable Laws.  Except as set forth in Schedule 4.5:

(a)Neither GE nor any of its Affiliates (by virtue of any past or present action, omission to act, Contract to which it is a party or any occurrence or state of facts) has, since January 1, 2012, failed to comply or is failing to comply with any Law, including any Anti-Bribery Law or any Law relating to worker health, industrial hygiene or safety (including product safety, product responsibility, product liability or defective products), or Order of any Governmental Authority in connection with its performance under the GE Contributed Contracts, except for any such failure to comply that was not, or is not reasonably likely to be, material to the operation of the Business or GE.  Neither GE nor any of its Affiliates has, since January 1, 2012, in connection with its performance under the GE Contributed Contracts received any written or, to the Knowledge of GE, other notice of, been charged with, or received any inquiry concerning, the failure to comply in any material respect with or the potential failure to comply with any applicable Law, including any Anti-Bribery Law.  Since January 1, 2012, neither GE nor any of its Affiliates has made, or been ordered to make, any material payment in respect of any damages, fines, penalties, assessments or settlements to any Governmental Authority related to its performance under the GE Contributed Contracts.

(b)There is no investigation or Claim by a Governmental Authority pending or, to the Knowledge of GE, threatened against GE or any of its Affiliates (or any of their respective officers, directors and employees) in connection with GE’s or any of its Affiliates’ performance under the GE Contributed Contracts with respect to matters described this Section 4.5.

Section 4.6     Sufficiency of Assets.  Assuming the accuracy of the representations and warranties of Woodward and Woodward Affiliate set forth in Section 3.11, the GE Contributed Assets, and the services provided to the Company pursuant to the Transaction Documents by GE and its Affiliates (when combined with the Woodward Contributed Assets and the services provided to the Company pursuant to the Transaction Documents by Woodward and its

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Affiliates) comprise all the properties, personnel (whether employees or secondees), assets and rights necessary for the Company to conduct its business and operations in accordance with the Initial Business Plan.

Section 4.7     Brokerage.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon any arrangements made by or on behalf of GE or any of its Affiliates.

ARTICLE V

TAX MATTERS

Section 5.1     Tax Covenants.

(a)The Company shall have a valid election in effect under Section 754 of the Code for the taxable year in which the Closing Date occurs.

(b)None of Woodward, Woodward Affiliate or any of their Affiliates will take a position inconsistent with any of the Tax representations or covenants in this Agreement (which treatment GE and the Woodward Members acknowledge is consistent with current Tax provisions of applicable Law) in respect of the transactions contemplated by this Agreement unless the parties are otherwise required to take such a position as a result of a change in the Tax provisions of applicable Law or any court or regulatory interpretation thereof binding on the parties.

(c)Unless GE grants its prior written consent, which consent shall not be unreasonably withheld, Woodward and Woodward Affiliate will each continue to own at least ten percent (10%) of the Membership Interests at all times that GE or any of its Affiliates holds any Membership Interests in the Company.

(d)Unless GE grants its prior written consent, which consent shall not be unreasonably withheld, (i) Woodward will properly be treated as a corporation for U.S. federal (an all applicable state and local) income tax purposes and (ii) Woodward Affiliate will continue to have a valid and timely election in place to be properly treated as an association taxable as a corporation pursuant to Treasury Regulations Section 301.7701-3(c) for U.S. federal (and all applicable state and local) income tax purposes.

(e)Woodward and its Affiliates shall, at their own expense, prepare or cause to be prepared and file or cause to be filed, all income Tax Returns required to be filed with respect to the Company for all Pre-Closing Periods (“Pre-Closing Income Tax Returns”).  All such Tax Returns shall be prepared in accordance with the past practice of the Company unless otherwise required by applicable Law. If GE, its Affiliates or the Company would reasonably be expected to be affected in any Post-Closing Period by the positions taken on such Pre-Closing Income Tax Return, Woodward and its Affiliates shall permit GE to review and comment on such Pre-

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Closing Income Tax Return described in this sentence prior to the filing thereof and shall consider in good faith GE’s timely comments.

(f)The Company shall prepare and file all Tax Returns of the Company other than Pre-Closing Income Tax Returns. All such Tax Returns relating to any Pre-Closing Period (including Tax Returns with respect to a Straddle Period) shall be prepared in accordance with the past practice of the Company unless otherwise required by applicable Law. 

(g)Without the prior written consent of Woodward, which consent will not be unreasonably withheld, conditioned or delayed, the Company shall not, and shall not permit any of its Affiliates to, amend any previously-filed Tax Return of the Company, file any Tax Return for a Pre-Closing Period in a jurisdiction in which the Company has not previously filed Tax Returns, enter into any voluntary compliance or disclosure agreement or arrangement relating to Taxes, or make any other similar voluntary contact with a Taxing Authority with respect to any Pre-Closing Period.

(h)Provided that the related Taxes either (i) have been paid by the Company, Woodward or its Affiliates on or prior to the Closing Date or (ii) have resulted in a claim for indemnification pursuant to ARTICLE VI, any refunds of Taxes or credits for overpayment of Taxes that are realized by GE, its Affiliates, or Company, net of any reasonable cost attributable to the obtaining and receipt of such refund or credit, shall be for the account of Woodward, and GE, its Affiliates, or Company, as the case may be, will deliver and pay over to Woodward any such refund or the amount of any such credit within ten (10) business days after receipt.

Section 5.2     Transfer Taxes.  All Transfer Taxes arising by reason of the transactions contemplated by the GE Contribution Agreement shall be borne one hundred percent (100%) by GE. All Transfer Taxes arising by reason of the transactions contemplated by the Woodward Contribution Agreement and the contribution of the 10% Membership Interest to Woodward Affiliate shall be borne one hundred percent (100%) by the Woodward Members. All Transfer Taxes arising as a result of the transactions contemplated by this Agreement shall be borne fifty percent (50%) by the Woodward Members and fifty percent (50%) by GE, regardless of which Party is responsible for the payment of such Transfer Taxes.  Any necessary Tax Return filings with respect to Transfer Taxes shall be the obligation and responsibility of the Party required by applicable Law to file such Tax Returns, provided that the other Parties shall cooperate in the filing of any such Tax Returns and shall reimburse the filing Party of its share of Transfer Taxes pursuant to this Section 5.2.

Section 5.3     Allocation of Basis Adjustment. 

(a)Any adjustment to be made to the tax basis of the assets of the Company pursuant to Section 743 of the Code shall be allocated among such assets in accordance with Section 755 of the Code and the Treasury Regulations promulgated thereunder.  Not later than ninety (90) days following the Closing Date, GE and the Woodward Members shall cause the Company to prepare and deliver to GE and Woodward a schedule (the “Proposed Basis Adjustment Statement”) setting forth the computation of the aggregate amount of such adjustment and the allocation of such adjustment among the Company’s assets for GE and

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Woodward’s review and approval.  If, within ten (10) days following delivery of the Proposed Basis Adjustment Statement, GE or Woodward notifies the Company in writing of its disagreement with the Proposed Basis Adjustment Statement, GE and Woodward shall endeavor to resolve such disagreement, and if they are unable to do so such disagreement shall be submitted for resolution to an independent appraiser selected by GE and reasonably acceptable to Woodward.  The decision of such independent appraiser shall be final and binding on the Parties and its fees shall be split evenly between GE and Woodward.  If neither GE nor Woodward notify the Company in writing of their disagreement with the Proposed Basis Adjustment Statement within ten (10) days following the delivery of the Proposed Basis Adjustment Statement, the Proposed Basis Adjustment Statement shall be final.  The Proposed Basis Adjustment Statement, as finalized in accordance with the foregoing, shall constitute the “Initial Basis Adjustment Statement.”  GE and the Woodward Members shall cause the Company to prepare and deliver to GE and Woodward from time to time revised copies of the Initial Basis Adjustment Statement (the “Revised Basis Adjustment Statements”) to reflect any subsequent adjustments to the Purchase Price in a manner that is consistent with Section 755 of the Code and the Treasury Regulations promulgated thereunder in accordance with the foregoing procedures.  GE and the Woodward Members shall each file all Tax Returns consistent with the Initial Basis Adjustment Statement and any Revised Basis Adjustment Statements.

(b)Within ten (10) days following the finalization of the Initial Basis Adjustment Statement, GE and the Woodward Members shall cause the Company to prepare and deliver to GE and Woodward a schedule setting forth the projected imputed interest deductions available to GE from the Woodward Annual Payments and the amortization deductions attributable to the amounts allocated to the Section 197 intangible assets (the “Assumed Deductions”) on the Initial Basis Adjustment Statement.  The Assumed Deductions shall be determined in accordance with Sections 483, 743 and 197 of the Code and the Treasury Regulations promulgated thereunder and shall assume that any amounts allocated to the Section 197 intangible assets are fully amortizable over fifteen (15) years.

ARTICLE VI

INDEMNIFICATION

Section 6.1     Survival.  The representations and warranties set forth in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing until the date that is [***] from the Closing Date, [***] (the applicable period with respect to each representation and warranty set forth in this Agreement, the “Survival Period”).  No action may be brought or claim may be made with respect to any breach or inaccuracy of any representation or warranty pursuant to this Agreement unless a notice that complies with Section 7.1 has been delivered pursuant to such Section 7.1 prior to the expiration of the applicable Survival Period; provided,  however, that upon the giving of such notice, notwithstanding any other provision of this Agreement, the applicable Survival Period shall continue beyond the time at which it would otherwise terminate until such action is resolved.

Section 6.2     Indemnification. 

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(a)Subject to the other provisions of this ARTICLE VI, the Woodward Members hereby agree, to the fullest extent permitted by applicable Law, jointly and severally to indemnify, defend and hold harmless GE, its Affiliates and their respective officers, directors and employees (collectively, the “GE Indemnified Persons”) from, against and in respect of any Damages incurred or suffered by the GE Indemnified Persons arising out of, in connection with or relating to:

(i)any breach or inaccuracy of any of the representations and warranties of the Woodward Members contained in ARTICLE III; or

(ii)any failure of the Woodward Members to perform any of their covenants or obligations contained in this Agreement;

provided,  however, that (A) the Woodward Members’ indemnification obligations contained in clause (i) above shall not apply to any claim for Damages until the aggregate amount of all claims for Damages under clause (i) above exceeds [***], (B) the Woodward Members’ indemnification obligations contained in clause (i) above shall not apply to any portion of a claim for Damages to the extent the aggregate amount of all claims for Damages under clause (i) above exceeds $[***] (the “Cap”), [***] and (C) the Woodward Members’ indemnification obligations contained in clause (i) above as they relate to the Woodward Specified Representations or a representation or warranty contained in Section 3.7 and the Woodward Members’ indemnification obligations under Section 6.4(a)(i), (ii), (iii) and (v) shall not apply to any portion of a claim for Damages to the extent the aggregate amount of all claims for Damages with respect to such representations and warranties and items set forth in Section 6.4(a)(i), (ii), (iii) and (v)  exceeds [***].

(b)Subject to the other provisions of this ARTICLE IV, GE hereby agrees, to the fullest extent permitted by applicable Law, to indemnify defend and hold harmless the Woodward Members, their Affiliates (other than the Company and its Affiliates) and their respective officers, directors and employees (the “Woodward Indemnified Persons”) from, against and in respect of any Damages incurred or suffered by the Woodward Indemnified Persons arising out of, in connection with or relating to:

(i)any breach or inaccuracy of any of the representations and warranties of GE contained in ARTICLE IV; or

(ii)any failure of GE to perform any of its covenants or obligations contained in this Agreement;

provided,  however, that (A) GE’s indemnification obligations contained in clause (i) above shall not apply to any claim for Damages until the aggregate amount of all claims for Damages under clause (i) above exceeds [***] , (B) GE’s indemnification obligations contained in clause (i) above shall not apply to any portion of a claim for Damages to the extent the aggregate amount of all claims for Damages under clause (i) above exceeds the Cap, [***] and (C) GE’s indemnification obligations contained in clause (i) as they relate to the GE Specified

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Representations shall not apply to any portion of a claim for Damages to the extent the aggregate amount of all claims for Damages with respect to such representations and warranties [***].

(c)For purposes of Section 6.2(a) and Section 6.2(b), a breach or inaccuracy of a representation or warranty contained in this Agreement shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or, if such representation or warranty would have been breached or been inaccurate if such representation or warranty had not contained any limitation or qualification as to materiality, it being the intention of the Parties that the GE Indemnified Persons shall, subject to the terms and conditions hereof, be indemnified and held harmless from and against any and all Damages suffered or incurred by any of them arising out of, based upon or relating to the breach or inaccuracy of any such representation or warranty, determined in each case without regard to any qualification as to materiality set forth with respect thereto.

(d)The provisions of this ARTICLE VI shall constitute the sole and exclusive remedy following the Closing of the Parties for Damages relating to breaches of the representations, warranties, covenants or obligations contained in this Agreement; provided,  however, this exclusive remedy for Damages does not preclude a Party from bringing an action for specific performance pursuant to Section 7.13.

Section 6.3     Indemnification Procedures.

(a)Any Person against whom indemnification is sought pursuant to the provisions of Section 6.2 shall be referred to as an “Indemnifying Party,” and any Person seeking to be indemnified pursuant to the provisions of Section 6.2 shall be referred to as an “Indemnified Party.”

(b)If an Indemnified Party is notified of a Claim of a third party (each such Claim, a “Third Party Claim”) which may give rise to a claim for indemnification against an Indemnifying Party under Section 6.2, then:

(i)The Indemnified Party shall promptly notify such Indemnifying Party thereof in writing, which notice shall describe in reasonable detail the nature of the Third Party Claim, an estimate of the amount of Damages attributable to the Third Party Claim to the extent feasible and the basis of the Indemnified Party’s request for indemnification under Section 6.2;  provided,  however, that any failure to give such prompt notice shall not relieve an Indemnifying Party of any of its obligations under Section 6.2, except to the extent that such failure prejudices or impairs, in any material respect, any of the rights of such Indemnifying Party.

(ii)Subject to the provisions of this Section 6.3, the Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the Indemnified Party, and to act as the Person that defends against, negotiates, settles or otherwise deals with any Third Party Claim which relates to any Damages indemnified against by it under Section 6.2 (each Person, the “Defending Party”); provided,  however, that the Indemnifying Party shall not have the right to be the

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Defending Party with respect to: (A) any Third Party Claim that seeks an order, injunction or other equitable relief against any Indemnified Party or any of its Affiliates; (B) any Third Party Claim in which the Indemnified Party reasonably determines with advice of counsel that there may be one or more material legal defenses available to it that are different from or additional to those available to the Indemnifying Party or that a conflict of interest between the Indemnifying Party and the Indemnified Party may exist in respect of such Third Party Claim; and (C) any Third Party Claim which involves a Claim by a Governmental Authority, would reasonably be expected to result in material reputational harm to, or impose criminal liability on, any Indemnified Party or its Affiliates or would reasonably be expected to have any material continuing effect on any Indemnified Party, its Affiliates or their respective businesses or assets.  If the Indemnifying Party elects to act as the Defending Party, it shall within thirty (30) days of the Indemnified Party’s written notice of the assertion of the Third Party Claim (or sooner, if the nature of the Third Party Claim so requires) notify the Indemnified Party of its intent to do so; provided that the Indemnifying Party must conduct its defense of the Third Party Claim actively and diligently to preserve its right to act as the Defending Party.  If the Indemnifying Party elects not to or does not have the right to act as the Defending Party, fails to notify the Indemnified Party of its election as herein provided or contests its obligation to indemnify the Indemnified Party for such Damages under Section 6.2, the Indemnified Party may act as the Defending Party.  If the Indemnified Party acts as the Defending Party with respect to a given Third Party Claim, then the Indemnifying Party shall reimburse the Indemnified Party for the reasonable out-of-pocket expenses of defending such Third Party Claim upon submission of copies of the invoices therefor.  If the Indemnifying Party acts as the Defending Party with respect to a given Third Party Claim, the Indemnified Party may participate, at its own expense, in the defense of such Third Party Claim.  The Parties agree to reasonably cooperate with each other and to provide reasonable access to each other Party to such documents and information as may be reasonably requested and subject to attorney-client privilege, attorney work product, third party confidentiality and similar obligations in connection with the defense, negotiation or settlement of any such Third Party Claim.

(iii)The Defending Party will not admit any Liability with respect to, or settle, compromise or discharge, any Third Party Claim for which indemnity is sought hereunder without the prior written consent of the other Parties (such consent not to be unreasonably withheld or delayed); provided that if the Indemnifying Party is the Defending Party and a settlement offer solely for money damages is made by the applicable third party claimant, and the Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying Party’s willingness to accept the settlement offer and, subject to the applicable limitations under Section 6.2, pay the amount called for by such settlement offer, and the Indemnified Party declines to accept such settlement offer, the Indemnified Party may continue to contest such Third Party Claim at its sole cost and expense, free of any participation by the Indemnifying Party, and the amount of any ultimate liability with respect to such Third Party Claim that the Indemnifying Party shall be obligated to pay under Section 6.2 shall be limited to the lesser of (A) the amount of the settlement offer that the Indemnified Party declined to accept plus the Damages incurred by the Indemnified Party relating to such Third Party Claim through the date of its rejection of the settlement offer and (B) the aggregate Damages of the Indemnified Party with respect to such Third Party Claim.

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(c)Notwithstanding anything in this Section 6.3 to the contrary, none of the Woodward Members, their Affiliates or the Company shall have the right to defend, negotiate, settle or compromise any Third Party Claim to the extent that such Third Party Claim is a claim by a taxing authority in respect of a Tax of GE or its Affiliates.  GE shall keep the Woodward Members reasonably informed of the status of any such Third Party Claim and GE shall not settle any such Third Party Claim without the prior written consent of Woodward, such consent not to be unreasonably withheld, conditioned or delayed.  For the avoidance of doubt, the Woodward Members and their Affiliates shall have the right to defend, negotiate, settle or compromise any Third Party Claim that is a claim by a Taxing Authority in respect of a Tax of the Woodward Members or their Affiliates

(d)After any final decision, judgment or award shall have been rendered by a Governmental Authority of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the Indemnified Party and the Indemnifying Party shall have arrived at a mutually binding agreement, in each case with respect to any Third Party Claim hereunder, the Indemnified Party shall forward to the Indemnifying Party notice of any sums due and owing by the Indemnifying Party pursuant to this Agreement with respect to such matter and the Indemnifying Party shall pay all of such sums to the Indemnified Party by wire transfer of immediately available funds within five (5) Business Days after the date of such notice.

Section 6.4     Tax Indemnification. 

(a)In addition to the indemnification provided for in Section 6.2, but without duplication for any Damages claimed thereunder, from and after the Closing Date, the Woodward Members hereby agree, to the fullest extent permitted by applicable Law, jointly and severally to indemnify, defend and hold harmless the GE Indemnified Persons from, against and in respect of any Damages incurred or suffered by the GE Indemnified Persons arising out of, in connection with or relating to (i) Taxes of Woodward, any Woodward Member or any of their Affiliates, to the extent unrelated to the Woodward Contributed Assets, the Business or the Company, (ii) any Taxes of or relating to the Business, the Company or any of the Woodward Contributed Assets arising on or prior to the Closing Date (except to the extent such Taxes result from or arise out of actions taken on the Closing Date after the Closing outside the ordinary course of business) or attributable to the Pre-Closing Period portion of any Straddle Period, (iii) any failure of the Woodward Members to pay their share of Transfer Taxes pursuant to Section 5.1, (iv) the Deduction Shortfall Amount, and (v) Taxes attributable to taxable income, if any, resulting from any indemnification payments made by the Woodward Members to the GE Indemnified Party pursuant to this ARTICLE VI.

(b)The “Deduction Shortfall Amount” means an amount to be paid by the Woodward Members to GE in an amount necessary to enable the GE After-Tax Return to equal the Woodward After-Tax Return.  For these purposes:

(i)The “GE After-Tax Return” means the aggregate amount of (A) 37% of the cumulative imputed interest deductions allowed or projected to be allowed to GE from the Woodward Annual Payments, plus (B) 37% of the actual amortization deductions allowed or

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projected to be allowed to GE attributable to its payment of the Purchase Price and the Woodward Annual Payments (after taking into account any adjustments to amortizable basis attributable to audits or payments of the Deduction Shortfall Amount), plus (C) the cumulative amount of Deduction Shortfall Amounts received or projected to be received by GE, minus (D) the cumulative amount of the Woodward Annual Payments.

(ii)The “Woodward After-Tax Return” means 63% of the aggregate amount of (A) the cumulative amount of the Woodward Annual Payments, minus (B) the cumulative amount of Deduction Shortfall Amounts paid or projected to be paid to GE. 

(iii)Any reduction of basis arising (A) because such basis was used to determine gain or loss in a sale or disposition of the Section 197 intangibles held by the Company (B) from a subsequent sale or transfer of the Purchased Membership Interests or (C) as a result of the purchase of Membership Interests by GE pursuant to the Woodward Sale Call Option or Termination Event Call Option (as such terms are defined in the Initial Operating Agreement) shall be ignored as if such reduction of basis had not occurred for purposes of determining the Deduction Shortfall Amount, including the GE After-Tax Return and the Woodward After-Tax Return.

(iv)The Woodward After-Tax Return and GE After-Tax Return shall take into account (A) any actual inability of the Woodward Members to utilize a capital loss generated by any payment made pursuant to Section 6.4(a)(iv) for income Tax purposes (after taking into account any applicable mitigating provisions such as Section 1341 of the Code), assuming, for these purposes, that the Woodward Members have not elected out of installment sale treatment and (B) any actual requirement that any payment pursuant to Section 6.4(a)(iv) be included in income instead of treated as an adjustment to the Purchase Price as contemplated by Section 6.5(c).

(c)It is expected that the Deduction Shortfall Amount will be calculated using principles set forth in Section 6.4(b).  Any amounts payable pursuant to Section 6.4(a)(iv), shall be paid not later than 10 days after the date on which the Company issues GE a Schedule K-1 reflecting the amortization used to calculate the Deduction Shortfall Amount for such year, or, if the Deduction Shortfall Amount is with respect to a disallowance of amortization for a prior taxable year, no later than 10 days following the date on which disallowance of the amortization for such prior taxable year becomes final.  The Deduction Shortfall Amount payable under Section 6.4(a)(iv) shall in no event exceed the aggregate amount of Woodward Annual Payments.  Furthermore, any interest and/or penalties imposed by a Taxing Authority related to any disallowance or reduction of the Assumed Deductions shall be shared fifty percent (50%) by Woodward, which amount may be in excess of the total Woodward Annual Payments. 

(d)Notwithstanding anything to the contrary in this Agreement (including, but not limited to, Section 6.2), Section 6.4(a)(iv) shall be the sole and exclusive remedy following the Closing of the GE Indemnified Persons for Damages resulting from or related to differences (if any) between the Assumed Deductions and the actual amortization and interest deductions allowed to GE attributable to payment of the Purchase Price, the Woodward Annual Payments and any payment by the Woodward Members pursuant to Section 6.4(a)(iv), it being understood

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that “Damages” for which the GE Indemnified Persons are indemnified pursuant to Section 6.4(a)(iv) shall not include any costs or other expenses incurred by the GE Indemnified Persons (other than, for the avoidance of doubt, the portion of certain interest and penalties described in Section 6.4(c)) provided, however, that the limitations of this Section 6.4(d) shall not apply to the extent Damages arise from a breach of Section 3.7(a), (b), (m), or (p) or Section 5.1.

(e)If there has been any payment by the Woodward Members to GE pursuant to Section 6.4(a)(iv) for any taxable year (the amount of such payment, the “Original Deduction Shortfall Payment”) and, with respect to such taxable year it is later determined that the actual amortization deductions allocable to GE would result in a revised Deduction Shortfall Amount (which may be zero) for such taxable year (a “Revised Deduction Shortfall Payment”) that is less than the Original Deduction Shortfall Payment for such taxable year, then GE shall promptly pay to Woodward a payment necessary to enable the Woodward After-Tax Return to equal the GE After-Tax Return.

Section 6.5     Calculation of Damages; Right to Setoff; Tax Treatment of Indemnification Payments.

(a)The amount of any Damages for which indemnification is provided under this ARTICLE VI shall be net of any amounts actually recovered by the Indemnified Party under insurance policies with respect to such Damages (net of expenses incurred in connection with such recovery).

(b)Notwithstanding anything to the contrary contained herein, GE, at its election and in its sole discretion, shall have the right to withhold, setoff against or reduce any amounts payable to any Woodward Member under this Agreement, including any Woodward Annual Payment Amount payable under Section 2.3, by the amount of any claim for indemnification or payment of damages or any other amount to which any GE Indemnified Person may be entitled under this Agreement.

(c)The Parties agree to treat any indemnification payments made pursuant to this ARTICLE VI as adjustments to the Purchase Price (which treatment GE and the Woodward Members acknowledge is consistent with current Tax provisions of applicable Law) unless the Parties are required to treat such payments otherwise as a result of a change in the Tax provisions of applicable Law or any court or regulatory interpretation thereof binding on the Parties.

ARTICLE VII

MISCELLANEOUS

Section 7.1     Notices.  All notices and other communications pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by U.S. registered or certified mail (return receipt requested), postage prepaid, to the Parties at the addresses set forth below or to such other address as the Party to whom notice is to be given may have furnished to the other Parties in writing in accordance herewith.  Any such notice or communication shall be deemed to have

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been delivered and received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of telecopier delivery, on the date sent if confirmation of receipt is received and such notice is also promptly mailed by registered or certified mail (return receipt requested), (c) in the case of a nationally-recognized overnight courier in circumstances under which such courier guarantees next Business Day delivery, on the next Business Day after the date when sent and (d) in the case of mailing, on the fifth Business Day following that on which the piece of mail containing such communication is posted to the address provided herein or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.  Notices to Parties pursuant to this Agreement shall be given to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 7.1):

(a)to Woodward or Woodward Affiliate:

Woodward, Inc.
1000 East Drake Road
Fort Collins, Colorado 80525
Attention:  President, Aircraft Turbine Systems

General Counsel

with a copy to (which shall not constitute notice to Woodward or Woodward Affiliate):

Wilson Sonsini Goodrich & Rosati, Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
Attention:  Bradley L. Finkelstein

Michael S. Russell

Facsimile:  (650) 493-6811

(b)to GE:

General Electric Corporation

c/o GE Aviation

One Neumann Way

Cincinnati, Ohio 45215

[***]

with a copy to (which shall not constitute notice to GE):

Sidley Austin LLP
One South Dearborn Street
Chicago, Illinois  60603
Attention:  Brian J. Fahrney
Facsimile:  (312) 853-7036

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Section 7.2     Amendments; Waivers.

(a)Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed in the case of an amendment, by all Parties to such agreement, or in the case of a waiver, by the Party or Parties against whom the waiver is to be effective.

(b)No waiver by a Party of any default, misrepresentation or breach of a warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of a warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence.  No failure or delay by a Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided under Law.

Section 7.3     Expenses.  Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and in closing and carrying out the transactions contemplated hereby and thereby shall be paid by the Party incurring such cost or expense.

Section 7.4     Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs, personal representatives and permitted assigns.  No Party may transfer or assign either this Agreement or any of its rights, interests or obligations hereunder, whether directly or indirectly, by operation of law, merger or otherwise, without the prior written approval of the other Parties.  No such transfer or assignment shall relieve the transferring or assigning Party of its obligations hereunder if such transferee or assignee does not perform such obligations.

Section 7.5     Governing Law.  This Agreement shall be construed in accordance with and this Agreement and any disputes or controversies related hereto shall be governed by the internal laws of the State of Delaware without giving effect to any conflicts of laws principles thereof that would apply the laws of any other jurisdiction.

Section 7.6     Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts and the signatures delivered by telecopy or email attachment, each of which shall be an original, with the same effect as if the signatures were upon the same instrument and delivered in person.  This Agreement shall become effective when each Party shall have received a counterpart hereof signed by the other Parties.

Section 7.7     Entire Agreement.  This Agreement (including the Schedules and Annexes referred to herein), the other Transaction Documents and the Confidentiality Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, express or implied, between and among the Parties with respect to the subject matter of this Agreement.  No representation, warranty, promise, inducement or statement of intention has

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been made by any Party that is not embodied in this Agreement or such other documents, and no Party shall be bound by, or liable for, any alleged representation, warranty, promise, inducement or statement of intention not embodied herein or therein.

Section 7.8     Captions.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 7.9     Severability.  If any provision of this Agreement, or the application thereof to any Person, place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other Persons, places and circumstances shall remain in full force and effect so long as, after excluding the portion deemed to be unenforceable, the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, unenforceable or void, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated to the greatest extent practicable in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended.

Section 7.10     Consent to Jurisdiction.  Any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by any Party, or its breach, termination or invalidity, shall be subject to the exclusive jurisdiction of the courts of the State of Delaware sitting in the City of Wilmington or of the Federal courts sitting therein.  Each of the Parties hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such Proceeding in any such court or that any such Proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such Proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court.

Section 7.11     Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH SUCH

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PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.11.

Section 7.12Third Party Beneficiaries.  Except as otherwise expressly provided in this Agreement, no provision of this Agreement shall create any third party beneficiary rights in any other Person, including any employee or former employee of Woodward or GE or any of their respective Affiliates (including any beneficiary or dependent thereof).

Section 7.13Specific Performance.  The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement and, in any action for specific performance, each Party waives the defense of adequacy of a remedy at law and waives any requirement for the securing or posting of any bond in connection with such remedy, this being in addition to any other remedy to which they are entitled at law or in equity (subject to the limitations set forth in this Agreement).  The Parties further agree that by seeking the remedies provided for in this Section 7.13, a Party shall not in any respect waive its right to seek any other form of relief that may be available to a Party under this Agreement (including monetary damages) for breach of any of the provisions of this Agreement.

Section 7.14No Presumption Against Drafting Party.  The Parties acknowledge that each of the Parties has been represented by counsel in connection with the negotiation and execution of this Agreement.  Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting Party has no application and is expressly waived.

Section 7.15Further Assurances.  Each Party shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated hereby.

[The remainder of this page is left blank intentionally.]

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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first above written.

WOODWARD, INC.
By:
	Name:
	Title:

[WOODWARD AFFILIATE]
By:
	Name:
	Title:

GENERALELECTRIC COMPANY,
acting by and through its GE Aviation business unit
By:
	Name:
	Title:

[Signature Page to Purchase and Sale Agreement]

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ANNEX A

PURCHASED MEMBERSHIP INTEREST AND PERCENTAGE INTERESTS

Member	Pre-Closing Percentage Interest	Percentage Interest of Purchased Membership Interest	Post-Closing Percentage Interest
Woodward, Inc.	90%	50%	40%
[WOODWARD AFFILIATE]	10%	–	10%
General Electric Company, acting by and through its GE Aviation business unit	–	–	50%
Total:	100%	50%	100%

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ANNEX B

FINANCIAL INFORMATION

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EXHIBIT E

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

[________________________]

by and among

WOODWARD, INC.,

[WOODWARD AFFILIATE]

and

GENERAL ELECTRIC COMPANY

dated as of [__________]

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TABLE OF CONTENTS

Page

Article I DEFINITIONS AND USAGE		2
Section 1.01.	Definitions	2
Section 1.02.	Terms and Usage Generally	2
Article II ORGANIZATIONAL AND OTHER MATTERS		3
Section 2.01.	Formation; Qualification; Members	3
Section 2.02.	Name	3
Section 2.03.	Effectiveness of this Agreement	3
Section 2.04.	Term	3
Article III PURPOSE AND POWERS		4
Section 3.01.	Purpose of the Company; Scope	4
Section 3.02.	Powers of the Company	5
Section 3.03.	Company Responsibility for Obligations	5
Section 3.04.	Rights of Members	5
Article IV CAPITAL CONTRIBUTIONS; ALLOCATIONS		5
Section 4.01.	Initial Capital Contributions	5
Section 4.02.	Additional Capital Contributions and Other Fundings	5
Section 4.03.	Reduction of Additional Commitments	6
Section 4.04.	Contribution or Funding Drawdown	6
Section 4.05.	Additional Funding Default	6
Section 4.06.	Capital Accounts	7
Section 4.07.	No Interest	7
Section 4.08.	No Withdrawal	7
Article V MANAGEMENT OF THE COMPANY		8
Section 5.01.	Management by the Board	8
Section 5.02.	Officers and Employees	8
Section 5.03.	Composition of the Board; Appointments; Removals	10
Section 5.04.	Subsidiary Boards	10
Section 5.05.	Board Meetings; Notice	11
Section 5.06.	Board Committees	12
Section 5.07.	Unanimous Member Approval	12
Section 5.08.	Unanimous Board Approval	13
Section 5.09.	Failure to Obtain Unanimous Approvals	13
Section 5.10.	Initial and Annual Business Plans	14
Section 5.11.	Failure to Achieve Operational Metrics Targets	15
Section 5.12.	Engineering Committee and Engineering Scope	16
Section 5.13.	General Manager and Finance Manager Unanimous Approval	17

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Article VI FIDUCIARY DUTIES AND CORPORATE OPPORTUNITY; NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS		17
Section 6.01.	Fiduciary Duties	17
Section 6.02.	Corporate Opportunity	18
Section 6.03.	Duties and Liabilities of Members and Directors	18
Section 6.04.	Non-Competition and Non-Solicitation Obligations	18
Article VII RELATED PARTY TRANSACTIONS; EXERCISE OF CERTAIN RIGHTS		21
Section 7.01.	Related Party Transactions	21
Section 7.02.	Exercise of Certain Rights	22
Article VIII DISPUTE AND DEADLOCK RESOLUTION; ENFORCEMENT		22
Section 8.01.	Resolution	22
Article IX INSURANCE		23
Section 9.01.	Minimum Insurance Coverage	23
Article X EXCULPATION AND INDEMNIFICATION		24
Section 10.01.	Exculpation	24
Section 10.02.	Duties and Liabilities	24
Section 10.03.	Indemnification	24
Section 10.04.	Exclusion from Exculpation and Indemnification	25
Section 10.05.	Advanced Expenses	25
Section 10.06.	Reliance	25
Section 10.07.	Survival	25
Section 10.08.	Insurance	25
Section 10.09.	Non-Exclusive Remedy	25
Article XI DISTRIBUTIONS		26
Section 11.01.	Distributions	26
Section 11.02.	Distribution in Kind	26
Section 11.03.	Restrictions on Distributions	26
Section 11.04.	Withholding Tax Payments and Obligations	26
Article XII BOOKS, RECORDS, AUDIT, ACCOUNTING AND OTHER INFORMATION		27
Section 12.01.	Books and Records	27
Section 12.02.	Auditing	28
Section 12.03.	Provision of Financial and Operating Reports and Other Information	28
Section 12.04.	Accounting Matters	29
Section 12.05.	Tax Matters	29

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Article XIII BOOK ALLOCATIONS		30
Section 13.01.	General Application	30
Section 13.02.	General Allocations	30
Section 13.03.	Special Allocations	31
Section 13.04.	Allocation of Nonrecourse Deductions	32
Section 13.05.	Tax Allocations	32
Section 13.06.	Transfer of Interest	33
Section 13.07.	Covenants	34
Article XIV TRANSFER AND CHANGE OF OWNERSHIP RESTRICTIONS		35
Section 14.01.	Limitation on Members	35
Section 14.02.	Admission of Additional or Substitute Members	36
Section 14.03.	Compliance with this Agreement and Securities Laws	36
Article XV WITHDRAWAL OF MEMBERS		37
Section 15.01.	Withdrawal of Member	37
Article XVI TERMINATION EVENTS AND LIQUIDATION		37
Section 16.01.	Termination by Agreement	37
Section 16.02.	Termination Events	37
Section 16.03.	Consequences of Termination Event	38
Section 16.04.	Continued Payment Obligations	39
Section 16.05.	Intellectual Property Treatment upon a Termination Event Call Option	39
Section 16.06.	Liquidation	40
Section 16.07.	Liquidation Procedure	41
Section 16.08.	Limitations on Payments Made in Connection with Liquidation	41
Section 16.09.	Waiver of Partition	41
Section 16.10.	No Obligation to Restore Capital Accounts	42
Article XVII WOODWARD WHOLE BUSINESS SALE		42
Section 17.01.	Prior Notice to GE of Woodward Whole Business Sale	42
Section 17.02.	Woodward Sale Call Option	42
Section 17.03.	Required Actions for Woodward Sale Call Option	44
Section 17.04.	Supply Assurances	45
Section 17.05.	Waiver of Non-Solicit	45
Section 17.06.	Intellectual Property Treatment upon a Woodward Sale Call Option	45
Section 17.07.	Continued Payment Obligations	46
Section 17.08.	Determination of Fair Market Value	46
Section 17.09.	General	47
Article XVIII CONFIDENTIALITY, PUBLICITY AND OWNERSHIP OF INFORMATION		47
Section 18.01.	Confidentiality	47

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Section 18.02.	Press Releases; Public Announcements	48
Article XIX COMPLIANCE		49
Section 19.01.	Company Code of Conduct	49
Section 19.02.	Notice of Compliance Events	50
Section 19.03.	No Forced Labor	50
Section 19.04.	Technology and IP Protections	51
Article XX GENERAL PROVISIONS		51
Section 20.01.	Damages	51
Section 20.02.	Successors and Assigns; Third Party Beneficiaries	51
Section 20.03.	Complete Agreement	51
Section 20.04.	Amendments and Modifications	51
Section 20.05.	Conflict between Transaction Documents	51
Section 20.06.	No Waiver	52
Section 20.07.	Severability	52
Section 20.08.	GOVERNING LAW	52
Section 20.09.	Consent to Jurisdiction	52
Section 20.10.	Fees and Expenses	52
Section 20.11.	Notices	53
Section 20.12.	Counterparts	53
Section 20.13.	WAIVER OF JURY TRIAL	53
Section 20.14.	No Strict Construction	53
Section 20.15.	Headings	53
Section 20.16.	No Recourse	53
Section 20.17.	Specific Performance	53

Annexes
A	Definitions
B	Members, Addresses and Contact Information
C	Scope
D	Members’ Percentage Interests and Initial Capital Account Balances
E	Initial Directors, General Manager, Finance Manager and Technology Manager
F	Insurance
G	Initial Business Plan
H	Additional Employees
I	Engineering Scope
J	Compliance Policy
K	Technology and IP Protections

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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
[_________________________]

This Amended and Restated Limited Liability Company Agreement (as amended, modified, supplemented or restated from time to time and including the Annexes and Schedules hereto, this “Agreement”) of [____________] (the “Company”) is entered into as of [____________] (the “Closing Date”) by and among Woodward, Inc., a Delaware corporation (“Woodward”), [Woodward Affiliate], a Delaware limited liability company and wholly-owned subsidiary of Woodward (“Woodward Affiliate”), and General Electric Company, a New York corporation (“GE”) (with GE acting by and through GE Aviation).

RECITALS

WHEREAS, GE and Woodward have a long history providing fuel system programs and together have achieved industry-leading reliability and performance in controls and externals;

WHEREAS, GE and Woodward have decided to enter into a joint venture to strengthen their relationship and better enhance innovation, performance and reliability in fuel systems for commercial aerospace applications within the Company Scope;

WHEREAS, the Members are entering into this Agreement with the intent that the Company shall have goals to, among other things, (a) provide GE with the world’s best and most competitive fuel systems available, today and in the future, for GE’s commercial aircraft engines within the Company Scope, (b) enable rapid control system optimization through joint system expertise at a reduced cost by leveraging the resources of both GE and Woodward and (c) provide financial benefits to both GE and Woodward by expanding the content per fuel system application and sharing in the OEM and aftermarket revenue streams associated with the fuel system line replaceable units for GE’s commercial aircraft engines within the Company Scope;

WHEREAS, on [●], 2015, Woodward caused to be executed and delivered, and filed with the Secretary of State of the State of Delaware, the certificate of formation of the Company (the “Certificate of Formation”);

WHEREAS, pursuant to the Contribution Agreement, dated as of [●], 2015, by and between Woodward and the Company (the “Woodward Contribution Agreement”), effective on [●], 2015 (the “Woodward Contribution Date”), Woodward contributed the Woodward Contributed Assets (as defined in the Woodward Contribution Agreement) to the Company;

WHEREAS, on [●], 2015 (a) Woodward contributed ten percent (10%) of its Membership Interest to Woodward Affiliate; and (b) Woodward and Woodward Affiliate entered into the Limited Liability Company Agreement of the Company, dated as of [●], 2015 (the “Initial LLC Agreement”);

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WHEREAS, pursuant to the Purchase and Sale Agreement, dated as of the Closing Date, by and between GE and Woodward (the “Purchase and Sale Agreement”), concurrently herewith, GE purchased and acquired from Woodward a fifty percent (50%) Membership Interest, and Woodward sold and transferred to GE such Membership Interest, all upon the terms and conditions set forth in the Purchase and Sale Agreement (“GE’s Purchase”);

WHEREAS, pursuant to the Contribution Agreement, dated as of the Closing Date, by and between GE and the Company (the “GE Contribution Agreement”), on the Closing Date, GE is contributing the GE Contributed Assets (as defined in the GE Contribution Agreement) to the Company;

WHEREAS, the Company will have a valid election in effect under Section 754 of the Code for the Taxable Year in which the consummation of the transactions contemplated by the Purchase and Sale Agreement occurs; and

WHEREAS, GE, Woodward and Woodward Affiliate now desire to enter into this Agreement to amend and restate the Initial LLC Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS AND USAGE

Section 1.01.Definitions.  Capitalized terms used in this Agreement shall have the meanings ascribed to them in Annex A.

Section 1.02.Terms and Usage Generally. 

(a)The definitions in Annex A shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  All references herein to Articles, Sections, Annexes and Schedules shall be deemed to be references to Articles and Sections of, and Annexes and Schedules to, this Agreement unless the context shall otherwise require.  All Annexes and Schedules attached hereto shall be deemed incorporated herein as if set forth in full herein.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  Except as otherwise indicated, the word “or” shall not be exclusive and shall mean “and/or.”  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”  References to a Person are also to its permitted successors and permitted assigns.  Unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented,

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including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.

(b)As used in this Agreement, unless otherwise expressly specified herein, any allocation or distribution to be made among Membership Interests or Members “on a pro rata basis” or “ratably” shall be made in proportion to the relative Percentage Interests attributable to the Membership Interests of such Members, in each case determined immediately prior to the transaction with respect to which such allocation is being made.

ARTICLE II
ORGANIZATIONAL AND OTHER MATTERS

Section 2.01.     Formation; Qualification; Members

(a)     The Company was formed as a limited liability company on [●], by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware pursuant to Section 18-201 of the Delaware Limited Liability Company Act, 6 Del. C. §§18-101 et seq. (the “Act”) (which filing is hereby approved and ratified in all respects).  The Company shall file and record any amendments or restatements to the Certificate of Formation of the Company and all other documents as may be required or appropriate under the Laws of the State of Delaware and of any other jurisdiction in which the Company may conduct business.  The Company shall, upon request, provide any Member with copies of each such document as filed and recorded.

(b)Subject to Section 5.07, each Officer of the Company appointed by the Board pursuant to Section 5.02 is hereby designated as an “authorized person,” within the meaning of Section 18-201 of the Act, to execute, deliver and file, or cause the execution, delivery and filing of, all certificates, notices or other instruments (and any amendments or restatements thereof) required or permitted by the Act to be filed in the office of the Secretary of State of the State of Delaware in connection with the formation of the Company and any other certificate, notice or other instrument (and any amendment or restatement thereof) that is necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business and where such qualification is required.

(c)The Members, listed in Annex B, shall have the rights and liabilities as provided in the Act, except as is otherwise expressly provided herein.  GE is admitted as a Member of the Company on the date hereof.

Section 2.02.Name.  The name of the Company is “[●].”

Section 2.03.Effectiveness of this Agreement.  This Agreement constitutes the limited liability company agreement (as defined in the Act) of the Company and is effective as of the date hereof.

Section 2.04.Term.  The Company commenced its existence on the date that the Certificate of Formation of the Company was filed with the Secretary of State of the State of

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Delaware, and shall continue in existence in perpetuity until the dissolution of the Company in accordance with the provisions of Article XVI.  The existence of the Company as a separate legal entity shall continue until a certificate of cancellation of the Certificate of Formation of the Company referred to in Section 2.01(a) is filed, as provided in the Act.

ARTICLE III
PURPOSE AND POWERS

Section 3.01.Purpose of the Company; Scope.

(a)Company Purpose.  Subject to Section 5.07(g), the purpose of the Company shall be to engage in the businesses with respect to the matters set forth in the third Recital to this Agreement and in such other lawful business or activity that is incidental or necessary to accomplish such purpose or that is otherwise permitted by Law (the “Company Purpose”). 

(b)Company Scope.  The Company will, directly or through the Members pursuant to the Transaction Documents, provide the development, certification, production (subject to Section 3.01(d)), and aftermarket support (subject to Section 3.01(d)), for the Fuel System requirements on GE’s GE90, GEnx and GE9X engines and GE’s future commercial aircraft engines that produce thrust in excess of 50,000 pounds (the “Company Scope”).  Without limiting the foregoing, the Company Scope is further described in Annex C. The Company Scope shall be automatically amended to include any Fuel System program(s) approved for inclusion within the Company Scope by the Members pursuant to Section 5.07(g)(ii).

(c)Additional Company Scope.  While initially a joint venture with respect to GE’s commercial aircraft engines that produce thrust in excess of 50,000 pounds, the Members will consider including within the Company Scope any Fuel System program(s) for other future GE commercial aircraft engines (i.e., that are not then within the Company Scope) based on numerous factors, including the Company’s capability, performance and the economic impact to each Member.

(d)General. 

(i)Except as expressly mutually agreed to by the Members, or, in the case of clause (B), as otherwise expressly set forth in the Transaction Documents, the Company shall not be entitled to, and shall not, (A) perform any manufacturing or (B) provide any MRO Sales with respect to any Company Scope Program.

(ii)GE shall (and GE shall cause its Subsidiaries and Controlled Affiliates to) award all of the Fuel System requirements on any Company Scope Program to the Company, subject to GE’s rights pursuant to [appropriate cross reference to be inserted at closing] as it pertains to Future LRUs.  [***].

(iii)[***]

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(iv)[***] 

Section 3.02.Powers of the Company.  The Company shall have the power to do any and all acts reasonably necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the Company Purpose and the Company Scope and for the protection of the Company. 

Section 3.03.     Company Responsibility for Obligations.  Except as otherwise required by the Act, all debts, obligations, and liabilities of the Company of any kind, nature or description whatsoever, whether arising in contract, tort, or otherwise, shall be solely the debts, obligations, and liabilities of the Company; and none of the Members (or any of their respective employees, agents, attorneys, Affiliates, partners, shareholders, officers, managers, directors, successors or assigns), or any Director or any Officer, shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of acting in such capacity.

Section 3.04.Rights of Members.  The Members shall not participate in the management of the Company, other than through the appointment of their respective Directors to the Board and as otherwise expressly provided herein.

ARTICLE IV
CAPITAL CONTRIBUTIONS; ALLOCATIONS

Section 4.01.Initial Capital Contributions.

(a)The initial Capital Contributions of Woodward made on the Woodward Contribution Date (the “Initial Woodward Contributions”) are as set forth on Schedule A to the Initial LLC Agreement.

(b)The initial Capital Contributions of GE made on the Closing Date (such Capital Contribution, together with the Initial Woodward Contributions, the “Initial Capital Contributions”) are as set forth in Annex D of this Agreement.

Section 4.02.Additional Capital Contributions and Other Fundings.

(a)Except as otherwise expressly provided in Section 4.02(b),  Section 4.05,  Section 8.01(f) and Section 17.03(c), no Member shall have the right or obligation to make any additional Capital Contribution to the Company in excess of its Initial Capital Contributions.

(b)In the event that GE and Woodward mutually agree in writing to fund the Company through additional Capital Contributions or other fundings by the Members, including in the Initial Business Plan and any Annual Business Plans (to enable, for example, the Company to pay its ongoing operating expenses and expenditures contemplated by the Initial Business Plan and any Annual Business Plans, to fund the Company’s other working capital needs or to fund additional infrastructure for manufacturing capacity or product development investments) (each, an “Additional Funding” and collectively, “Additional Fundings”), each Member shall make Additional Fundings in such amounts and pursuant to such terms, in each

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case, as shall be mutually agreed in writing by both of GE and Woodward.  From time to time, upon the request of either GE or Woodward, the Members will consider and discuss whether there is a need for Additional Fundings to the Company and, if mutually agreed, the extent and nature of Additional Fundings (if any) to be committed to be made available to the Company by the Members (it being understood that no Additional Fundings shall be required from any Member unless each of GE and Woodward, acting in their respective sole discretion, mutually agree in writing).  Any such Additional Fundings shall be made in such form (whether debt, equity or otherwise) as both GE and Woodward shall mutually agree in writing, taking into account tax, accounting and other considerations.

(c)It is understood that, unless otherwise agreed in writing by both GE and Woodward at such time, each Member shall fund its respective Percentage Interest of all Additional Fundings (whether such Additional Fundings are in the form of debt, equity or otherwise) to the Company. 

(d)Any additional non-cash Capital Contribution shall be valued at the Asset Fair Market Value thereof.

Section 4.03.Reduction of Additional Commitments.  At any time and from time to time, GE and Woodward may mutually determine to make an irrevocable election to reduce, on a pro rata basis, each Member’s commitment to make any Additional Funding (in each case to the extent not previously funded).  Any such reduction shall not change any Member’s Percentage Interest.

Section 4.04.Contribution or Funding Drawdown.  All Additional Fundings in cash shall be paid in United States dollars by 11:00 a.m., Eastern Time, on the dates they are due (each, a “Drawdown Time”) by wire transfer of immediately available funds to an account specified by the Company not less than five (5) Business Days prior to the date such Additional Funding is due.

Section 4.05.Additional Funding Default.

(a)In the event that a Member fails to fund all or part of its portion of Additional Funding to the Company as determined pursuant to Section 4.02(c) by the applicable Drawdown Time, such failure shall constitute a default under this Agreement by the Member and, in the case of Woodward or Woodward Affiliate, the Woodward Group (the “Defaulting Member or Member Group”).  In such circumstances, GE, in the case that it is not the Defaulting Member or Member Group and is not in material breach or default under any Transaction Document, or Woodward or Woodward Affiliate, in the case that neither is or belongs to the Defaulting Member or Member Group and is not in material breach or default under any Transaction Document (the “Paying Member or Member Group”), may (but shall have no obligation to), if such default shall not be cured within ninety (90) calendar days after the applicable Drawdown Time and in addition to any other remedies in damages available for breach of contract as a result of such default, either (i) fund (in lieu of the Defaulting Member or Member Group) such defaulted Additional Funding to the Company, in which event the amount so funded shall constitute a loan from the Paying Member or Member Group to the Defaulting

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Member or Member Group (a “Capital Loan”) or (ii) receive from the Company a refund of the Additional Funding funded by such Paying Member or Member Group.

(b)For the avoidance of doubt, the funding by the Paying Member or Member Group of any defaulted Additional Funding described in Section 4.05(a) shall not constitute a waiver by the Paying Member or Member Group of any breach of or default under this Agreement.

(c)Each Capital Loan shall have the following terms:  (i) the principal balance of such Capital Loan and all accrued unpaid interest thereon shall be due and payable, in whole, on the earlier of (A) thirty (30) calendar days after written demand therefor has been given to the Defaulting Member or Member Group by the Paying Member or Member Group or (B) the second anniversary of the date of such Capital Loan; (ii) such Capital Loan shall bear interest at an annual rate equal to the LIBOR Rate [***] from the date that the Capital Loan was funded pursuant to Section 4.05(a) until the date that such Capital Loan, together with all interest accrued thereon, is repaid in full to the Paying Member or Member Group; (iii) all proceeds derived from the Membership Interests of the related Defaulting Member or Member Group (including any distributions thereon) that would otherwise be paid to the Defaulting Member or Member Group (whether before or in connection with Liquidation of the Company) shall be assigned by the Defaulting Member or Member Group to the Paying Member or Member Group for application to such Capital Loan until the Capital Loan and all interest thereon have been repaid in full to the Paying Member or Member Group (with all such payments being applied first to interest earned and unpaid and then to principal); and (iv) each Paying Member or Member Group shall have the right, in addition to the other rights and remedies granted to it pursuant to this Agreement or available to it at law or in equity, to take such action as the Paying Member or Member Group deems appropriate to obtain payment by the Defaulting Member or Member Group of the principal balance of such Capital Loan and all accrued and unpaid interest thereon, at the cost and expense of the Defaulting Member or Member Group.  Any Capital Loan shall be prepayable (without premium or penalty) at the option of the Defaulting Member or Member Group.  Upon payment of all amounts outstanding under such Capital Loan, such Member or Member Group shall no longer be a Defaulting Member or Member Group.  The Defaulting Member or Member Group shall execute such documents as reasonably appropriate or required to effectuate the foregoing.

Section 4.06.Capital Accounts.  A separate Capital Account shall be maintained for each Member on the books of the Company.  The Members agree that their Capital Account balances, as of the date hereof immediately after GE’s Purchase and the Initial Capital Contributions, are as set forth in Annex D.

Section 4.07.No Interest.  No interest shall be paid by the Company on Capital Contributions, balances in a Member’s Capital Account or any other funds contributed to the Company or distributed or distributable by the Company under this Agreement. 

Section 4.08.No Withdrawal.  No Member shall have the right to withdraw any portion of such Member’s Capital Account without the prior written consent of the Other Member or Member Group.  In accordance with the Act, a Member, under certain circumstances,

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may be required to return to the Company, for the benefit of the Company or the Company’s creditors, amounts previously wrongfully distributed to such Member out of such Member’s Capital Account. 

ARTICLE V
MANAGEMENT OF THE COMPANY

Section 5.01.Management by the Board.  The business and affairs of the Company shall be managed and controlled by a board of directors (the “Board” and each member of the Board, a “Director”), and the Board shall, subject to provisions of this Agreement (including Section 5.07 and Section 5.13) and except for matters or decisions requiring Member approval under the Act, have full and complete discretion and authority to manage and control (and, as provided in this Agreement, delegate the management or control of) the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as it deems necessary or appropriate to accomplish the Company Scope, taking into consideration in its deliberations, among other things, the Company Purpose.  The Board, acting as a body pursuant to this Agreement, shall constitute a “manager” for purposes of the Act, and the actions of the Board taken in accordance with the provisions of this Agreement shall bind the Company.  No Director and no Member of the Company shall have any authority or right to bind the Company, unless otherwise expressly provided herein or unless specifically authorized by the Board pursuant to a resolution expressly authorizing such action which resolution is duly adopted by the Board.

Section 5.02.Officers and Employees.

(a)Subject to obtaining Unanimous Member Approval pursuant to Section 5.07(n), and in addition to any power and authority delegated by the express terms hereof, the Board may delegate any of its power and authority to any officer of the Company (an “Officer”).  Any two (2) or more offices may be held by the same person, other than the offices of General Manager, Finance Manager and Technology Manager. 

(b)Except as set forth in this Section 5.02(b), the Board shall nominate and appoint the Officers of the Company. 

(i)Woodward shall nominate and appoint the general manager of the Company (the “General Manager”), provided that such General Manager (including any successor or replacement General Manager appointed by Woodward) is reasonably acceptable to GE.  The initial General Manager, who is listed in Annex E, and any replacements or successors thereof, shall serve subject to his or her removal (with or without cause) by Woodward or the Board, termination (with or without cause) by Woodward or the Board, resignation, death, retirement or disability.  In the event of any vacancies in the General Manager position, Woodward shall nominate and appoint replacements, provided that each such replacement is reasonably acceptable to GE.  Subject to Section 5.01,  Section 5.07,  Section 5.08 and Section 5.10, the General Manager shall have responsibility for managing the Company’s execution of the Initial Business Plan and the Annual Business Plans (which shall include pursuing the achievement of any applicable operational metric targets), shall have such powers

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and perform such duties as usually pertains to his or her office, shall possess authority on technical, commercial and program issues, shall have shared responsibility with the Finance Manager for the profits and losses of the Company, and shall have such other powers and duties as from time to time may be assigned to him or her by the Board. 

(ii)GE shall nominate and appoint the finance manager of the Company (the “Finance Manager”), provided that such Finance Manager (including any successor or replacement Finance Manager appointed by GE) is reasonably acceptable to Woodward.  The initial Finance Manager, who is listed in Annex E, and any replacements or successors thereof, shall serve subject to his or her removal (with or without cause) by GE or the Board, termination (with or without cause) by GE or the Board, resignation, death, retirement or disability.  In the event of any vacancies in the Finance Manager position, GE shall nominate and appoint replacements, provided that each such replacement is reasonably acceptable to Woodward.  Subject to Section 5.01,  Section 5.07,  Section 5.08 and Section 5.10, the Finance Manager shall assist in the execution of the Initial Business Plan and Annual Business Plans (which shall include pursuing achievement of the applicable operational metric targets) and shall have such powers and perform such duties as usually pertains to his or her office, including possessing accountability over financial reporting, shall have shared responsibility with the General Manager for the profits and losses of the Company, and shall have such other powers and duties as from time to time may be assigned to him or her by the Board (including as set forth in Section 19.01(b)). 

(iii)GE and Woodward shall jointly nominate and appoint the technology manager of the Company (the “Technology Manager”).  The initial Technology Manager, who is listed in Annex E, and any replacements or successors thereof, shall serve subject to his or her removal (with or without cause) by GE and Woodward, jointly, or the Board, termination (with or without cause) by GE and Woodward, jointly, or the Board, resignation, death, retirement or disability.  In the event of any vacancies in the Technology Manager position, GE and Woodward shall jointly nominate and appoint replacements.  Subject to Section 5.01,  Section 5.07 and Section 5.08, the Technology Manager shall have responsibility for ensuring technical execution of new product introduction and production support programs and identifying and allocating associated technical resources and shall have such other powers and duties as from time to time may be assigned to him or her by the Board. 

(c)Subject to Section 5.02(b), the Officers shall serve at the pleasure of the Board and the Board may remove (with or without cause) any Person as an Officer or appoint additional Persons as Officers as the Board deems necessary or desirable.  Subject to Section 5.02(b), the Board shall have the sole and exclusive power and authority to determine the compensation of the Officers payable by the Company.

(d)The General Manager, in consultation with the Finance Manager and the Technology Manager, shall nominate and appoint then-existing Secondees (other than the General Manager, Finance Manager and Technology Manager) to certain key roles and functions in the Company; such appointments shall consist of approximately an equal number of Secondees from each of GE and Woodward.  It is contemplated that such roles and functions shall initially include those set forth on Annex H.

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(e)[***]

Section 5.03.Composition of the Board; Appointments; Removals.

(a)The Board shall be comprised of four (4) Directors, with each of GE and Woodward having the right to appoint two (2) Directors in its sole discretion, subject to Section 5.03(b) and Section 5.03(c), as applicable.  Each Director shall, to the maximum extent permitted by Law, be entitled to represent solely the interests of the Member or Members that appointed such Director; provided,  however, that in its deliberations, the Board shall take into consideration, among other things, the Company Purpose and the Company Scope.  Subject to Section 5.03(b) and Section 5.03(c), each Director shall hold office until his or her earlier removal, resignation, death, retirement or disability.

(b)Each of the Directors appointed by GE (the “GE Directors”) shall be reasonably acceptable to Woodward.  The initial GE Directors are set forth on Annex E.  Each initial GE Director shall serve, at least, until the earlier of (i) the one (1) year anniversary of the Closing Date and (ii) the resignation, death, retirement or disability of such GE Director or the material modification of the duties of such GE Director. 

(c)Each of the Directors appointed by Woodward (the “Woodward Directors”) shall be reasonably acceptable to GE.  The initial Woodward Directors are set forth on Annex E.  Each initial Woodward Director shall serve, at least, until the earlier of (i) the one (1) year anniversary of the Closing Date and (ii) the resignation, death, retirement or disability of such Woodward Director or the material modification of the duties of such Woodward Director. 

(d)Subject to Section 5.03(b), GE shall have the exclusive right to remove (with or without cause and with or without prior notice) any of the GE Directors at any time and appoint an individual to fill any vacancy created by reason of the removal, resignation, death, retirement or disability of any of the GE Directors.  Subject to Section 5.03(c), Woodward shall have the exclusive right to remove (with or without cause and with or without prior notice) any of the Woodward Directors at any time and appoint an individual to fill any vacancy created by reason of the removal, resignation, death, retirement or disability of any of the Woodward Directors.  Appointments and removals of Directors made pursuant to this Section 5.03 shall be evidenced by an instrument in writing signed by a duly authorized representative of GE or Woodward, as applicable, and delivered to the Other Member or Member Group, the other Directors and the General Manager and the Finance Manager. 

(e)Except as otherwise provided in Article X, no Director shall be entitled to any form of remuneration or reimbursement of expenses from the Company, and no former Director or the family members or dependents thereof shall have any right to receive benefits from the Company, in each case in such Person’s capacity as Director or former Director.  Nothing contained in this Agreement shall be construed to preclude any Director from serving the Company in any other capacity and receiving compensation for such service.

Section 5.04.Subsidiary Boards.  In the event that the Company shall form or acquire any Subsidiary, the composition of the board of directors or other similar governing body (or any

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committee thereof) of such Subsidiary (“Subsidiary Board”) shall be identical to the composition of the Board, and the corporate governance provisions, standards and requirements governing such Subsidiary Board shall be equivalent to those of the Board, in each case except as the Members otherwise mutually agree in writing.  Each of the Members shall take all necessary action to effectuate the foregoing or to cause the foregoing to be effectuated.

Section 5.05.Board Meetings; Notice.

(a)The Board shall meet quarterly (on a date to be determined by the Board), or more frequently if a meeting is called at the direction of any Member or Director upon at least seven (7) Business Days’ prior written notice to all Directors by express mail or Courier, by personal delivery or by facsimile (with confirmation of facsimile transmission).  Any such notice shall specify (i) the time, date, place and agenda for such meeting and (ii) the purpose of the meeting to be so held.  No actions other than those specified in the notice may be considered at any meeting unless approved by all of the Directors.  Any Board meeting may be adjourned from time to time, to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken.  At the adjourned meeting the Board may transact any business which might have been transacted at the original meeting.  If the adjournment is for more than thirty (30) calendar days, a notice pursuant to the first two sentences of this Section 5.05(a) of the adjourned meeting shall be given to each Director.

(b)Notice of any Board meeting may be waived, or notice period shortened, by any Director before or after such meeting.  The presence of a Director at a meeting shall constitute a waiver by such Director of notice of such meeting, except in each case when such Director attends such meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business thereat because the meeting is not properly called or convened.  Meetings of the Board shall be conducted in person but Directors shall be entitled to participate by conference telephone or electronic facilities by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at a meeting.  At all meetings of the Board or any adjournments thereof, the continuous presence of all of the Directors shall be required to, and shall, constitute a quorum for the transaction of business, including deliberations regarding prospective decisions of the Board.  Each of GE and Woodward shall use commercially reasonable efforts to ensure that all of the Directors appointed by it to the Board attend all duly convened meetings of the Board.  If a quorum shall not be present at any meeting of the Board, the Directors present thereat shall adjourn the meeting in accordance with Section 5.05(a), until a quorum shall be present.  If, at two (2) consecutive duly called meetings of the Board at which a particular matter is scheduled (in advance) to be voted upon, a quorum shall not be present as a result of the same Member or Members’ appointed Director’s or Directors’ failure to attend, then either the GE Directors or the Woodward Directors may declare a Board Deadlock with respect to such matter and such Board Deadlock shall be subject to the provisions of Section 8.01.

(c)Meetings of the Board may be held inside or outside of the State of Delaware as determined by the Board.

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Section 5.06.Board Committees.  The Board may establish one or more committees.  Each such committee shall contain such number of Directors or other individuals as shall be designated by the Board in resolutions establishing such committee.  Subject to Section 5.07(n), any such committee shall have such powers and authority as the Board may provide or delegate by resolution, subject to the provisions of this Agreement.  Unless provided otherwise by Unanimous Member Approval, any action of such committee shall require the unanimous affirmative vote of all of the members of the committee.

Section 5.07.Unanimous Member Approval.  Neither the Company nor any Subsidiary of the Company shall engage in, consent to, authorize or effect any of the following actions without the unanimous affirmative written approval of both GE and Woodward (“Unanimous Member Approval”):

(a)the amendment, modification or termination of (or waiver of significant rights under) any Transaction Document to which the Company or any Subsidiary of the Company is a party;

(b)the entry into any contract involving amounts in excess of [***] per year or capital expenditures not expressly included in the Initial Business Plan or the Annual Business Plan then in effect in excess of [***] in any twelve (12) month period;

(c)the admission of any new Member;

(d)the termination or Liquidation of the Company (subject to Article XVI);

(e)any capital calls by or Capital Contributions to the Company (subject to Section 4.02,  Section 4.05,  Section 8.01(f) and Section 17.03(c) and except as expressly set forth in the Initial Business Plan or any Annual Business Plans);

(f)the declaration of dividends or distributions not in accordance with Article XI,  Section 16.05,Section 16.07 or Section 17.06;

(g)(i) the making of a material change to the Company Scope or the Company Purpose or (ii) the inclusion within the Company Scope of any Fuel System program that is not then within the Company Scope;

(h)any merger or the consolidation of, or sale, acquisition or disposition of any material assets by, the Company or any Subsidiary of the Company;

(i)the adoption, repeal, material amendment or modification to or material deviation from the Initial Business Plan or any Annual Business Plan, as applicable (subject to Section 5.10);

(j)the making of material changes to accounting systems, policies or procedures applied by the Company or any Subsidiary of the Company in relation to its and its Subsidiaries’ accounts;

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(k)the approval of the provision of services under the ESA, the Woodward ASA or the GE ASA in excess of [***] (other than services and associated costs of such services to the extent such services and costs are expressly set forth in the ESA, the Woodward ASA or the GE ASA, as applicable) (subject to Article VII);

(l)the entry into any contract or arrangement with any Member or an Affiliate of any Member involving amounts (i) in excess of [***] if such contract or arrangement is on an arm’s length basis or (ii) in excess of [***] if such contract or arrangement is not on an arm’s length basis (subject to Article VII);

(m)the incurrence, issuance, assumption, guarantee or refinancing of any indebtedness of the Company or any Subsidiary of the Company (or any amendment of any material term of any indebtedness of the Company or any Subsidiary of the Company) or the provision of a security interest to any third party or creation of any other Encumbrance over any assets or undertaking of the Company or any Subsidiary of the Company;

(n)the delegation of any authority of the Board to any Person or committee or any amendment to the terms of such delegation;

(o)the commencement, settlement or approval of any strategy relating to any Proceeding by or against the Company or any Subsidiary of the Company:  (i) where the aggregate amount in dispute exceeds [***]; (ii) in which injunctive or equitable relief is sought against or by the Company or any Subsidiary of the Company or a Claim is made against any Member, Director or Officer or director, manager or officer of any Subsidiary of the Company; or (iii) that otherwise could reasonably be expected to be material to the Company or its business;

(p)the adoption or amendment of internal control or compliance policies or procedures of the Company or any Subsidiary of the Company (subject to Article XIX);

(q)the acceptance of a qualified audit opinion with respect to the annual audit of the Company; or

(r)the entry into any contract, agreement, arrangement or understanding with respect to any of the matters listed in this Section 5.07.

Section 5.08.     Unanimous Board Approval.  Any decision, approval or action required or permitted under this Agreement, any Transaction Document or pursuant to applicable Law to be taken or given by the Board shall at all times require the unanimous affirmative vote of all four of the Directors (“Unanimous Board Approval”).  Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all four of the Directors consent thereto in writing.

Section 5.09.Failure to Obtain Unanimous Approvals. 

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(a)Following any disagreement between the GE Directors, on the one hand, and the Woodward Directors, on the other hand, as to any particular material matter voted upon (or sought to be voted upon) at a meeting of the Board, the Directors shall immediately schedule another meeting of the Board to be held within ten (10) calendar days thereafter (each, a “Second Board Meeting”).  At the Second Board Meeting, the Directors shall meet and attempt to reach Unanimous Board Approval on the matter at issue.  If the disagreement persists after the Second Board Meeting, either the GE Directors or the Woodward Directors may declare a deadlock of the Board (a “Board Deadlock”).  Any Board Deadlock shall be subject to the provisions of Section 8.01.

(b)Following any disagreement between the Members as to any particular material matter for which Unanimous Member Approval is required (or required to be sought), the Members shall immediately schedule another discussion of the matter to be held within ten (10) calendar days thereafter (each, a “Second Member Discussion”).  At the Second Member Discussion, the Members shall attempt to reach Unanimous Member Approval on the matter at issue.  If the disagreement persists after the Second Member Discussion, either Member may declare a deadlock of the Members (a “Member Deadlock”).  Any Member Deadlock shall be subject to the provisions of Section 8.01.

Section 5.10.Initial and Annual Business Plans.

(a)During the effective period of the Initial Business Plan or any Annual Business Plan, the Company shall be managed and operated in accordance with the Initial Business Plan or Annual Business Plan then in effect.  Any repeal of, material amendment or modification to or deviation from the Initial Business Plan or Annual Business Plan then in effect shall require both Unanimous Member Approval and Unanimous Board Approval.  The Company shall direct that in the event that any Director or Officer detects any actual or likely material deviation from the Initial Business Plan or Annual Business Plan then in effect, he or she shall promptly report such matter to the Board for consideration. 

(b)Each of the Members acknowledges and agrees that the Initial Business Plan has been agreed upon and is deemed approved by the Board and the Members for all purposes.  Unless otherwise modified or repealed in accordance with Section 5.10(a), the Initial Business Plan shall remain in effect until the adoption of the succeeding Annual Business Plan.

(c)With respect to each Fiscal Year following the Closing Date, the General Manager and the Finance Manager shall jointly cause to be prepared and submitted to the Board for its approval, not less than one hundred twenty (120) calendar days prior to the end of the then-current Fiscal Year, a rolling five year business plan (the “Annual Business Plan”) covering the next Fiscal Year and four succeeding Fiscal Years, which shall include the Budget, specify the timing and amount of anticipated Capital Contributions, if any, specify key operational metrics and targets for the Company so the Company is competitive on productivity, quality, technology, qualification cost, pricing, delivery timing, delinquency rate and safety.  In connection with the review of the Annual Business Plan, GE, Woodward, the Officers and the Company’s sourcing board shall present to the Board regarding any project that reduces costs as

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set forth in [insert appropriate cross-reference at closing], including projects based on engineering changes, manufacturing changes, or otherwise, the status of achieving any current productivity targets and any existing productivity projects and cost reductions achieved to date. 

(d)The Board and the Members shall negotiate the Annual Business Plan in good faith, including attempting to resolve any Deadlocks in a mutually agreeable manner, and shall seek approval of the Annual Business Plan by both Unanimous Member Approval and Unanimous Board Approval prior to the first calendar day of the next Fiscal Year.  Subject to Section 5.07(i) and this Section 5.10(d), an Annual Business Plan with respect to a Fiscal Year shall remain in effect for such Fiscal Year.  In the event an Annual Business Plan for any Fiscal Year is not approved by both Unanimous Member Approval and Unanimous Board Approval prior to the first calendar day of such Fiscal Year (the “Relevant Year”),

(i)the operating budget contained in the Annual Business Plan  for the previous Fiscal Year (or the Initial Business Plan, if applicable) (annualized, if such previous year’s operating budget is in respect of a period less than one year) shall be the operating budget for the Relevant Year, and

(ii)the Company shall not distribute to the Members any as yet undistributed cash distributions related to operations of the Company in the Relevant Year or any prior Fiscal Year,

in each case of (i) and (ii) unless and until an Annual Business Plan (including the Budget) for the Relevant Year shall be approved by both Unanimous Member Approval and Unanimous Board Approval (in which case such Annual Business Plan (including the Budget) shall have retroactive effect to the beginning of the Relevant Year).

(e)Any Member may at any time propose to the other Members that the Company make additional material investments in furtherance of the Company Scope (e.g., in an engine program, to increase capacity, on capital expenditures, etc.) (a “Material Investment”).  Any such proposing Member(s) shall submit a plan, including its reasonable projections for expenditures by the Company and the Capital Contributions to be made by each of the Members, in connection with such Material Investment.  If the Material Investment is approved by Unanimous Member Approval, the Initial Business Plan or applicable Annual Business Plan shall be amended to reflect such Material Investment, and, any funding in connection with such Material Investment shall be governed by Section 4.02(b),  Section 4.02(c),  Section 4.02(d),  Section 4.03,  Section 4.04 and Section 4.05.  Any disagreement between the Members regarding any Material Investment, or any failure of a Material Investment to receive Unanimous Member Approval, shall be subject to the provisions of Section 5.09(b) and the provisions of Section 8.01.  It is understood and agreed that no Member shall be required to make any expenditures in connection with any such Material Investment without its consent.

Section 5.11.Failure to Achieve Operational Metrics Targets.  In connection with preparing the Annual Business Plan for each succeeding Fiscal Year, the General Manager and the Finance Manager will develop a report measuring the Company’s performance relative to the then-current operational metrics targets for the then-current Fiscal Year based on then-available

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actual and estimated forecast data.  If such report indicates that the Company is reasonably expected to fail to achieve any of the operational metrics targets in respect of the then-current Fiscal Year, the Board, in consultation with the Officers, will develop and adopt a recovery plan to help enable the Company to achieve or exceed such metrics (other than to the extent the Board has determined by Unanimous Board Approval that such metrics are not feasible) in the next Fiscal Year, which recovery plan will be incorporated into the Annual Business Plan for such Fiscal Year.

Section 5.12.Engineering Committee and Engineering Scope.

(a)The Members shall establish an engineering committee (the “Engineering Committee”) for the Company, consisting of four (4) members (each of whom shall be technical leaders but who may, but need not, be Directors).  Each of GE and Woodward shall be entitled to appoint two (2) members of the Engineering Committee, provided that such appointments are reasonably satisfactory to the Other Member or Member Group.

(b)The responsibilities of the Engineering Committee will be to:  (i) provide guidance for the Company’s new product introduction and production support programs to meet budget and performance objectives; (ii) guide development and execution of [***]; (iii) participate, as needed, on one or more change review boards, as contemplated by the Transaction Documents; (iv) guide new product introduction and technical problem resolution; and (v) champion and advocate for the Company throughout the Members’ respective organizations.

(c)The Engineering Committee shall initially meet as required to set up teams and establish new product introduction and production support program plans, as well as [***].  Following development of the [***], the Engineering Committee shall meet periodically to [***].  The Engineering Committee shall meet as necessary throughout each year to provide guidance to and facilitate the Company in achieving progress and budget objectives of new product introduction and production support programs.  The site of Engineering Committee meetings shall alternate between the Company’s and the Members’ respective facilities as appropriate.  Except as may otherwise be provided for in the GE Secondment Agreement or the Woodward Secondment Agreement, [***] in connection with such Engineering Committee meetings.

(d)The Officers (or their designees) will report out to the Engineering Committee at each meeting of the Engineering Committee on, among other topics as may be requested by the Engineering Committee, [***].  Subject to approval of the Board, the Company will take any additional steps and implement any projects recommended by the Engineering Committee to improve the performance and cost specifications of the Company’s products and services.

(e)The Engineering Committee shall report out to the Board annually or more frequently as requested by the Board. 

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(f)The Company will follow mutually agreed systems engineering processes throughout all phases of the Fuel System life cycle.  Annex I provides guidance regarding the responsibilities of the Company and each of GE and Woodward for the products in the Company throughout such products’ life cycle.

Section 5.13.General Manager and Finance Manager Unanimous Approval.  The following matters will require the unanimous approval of the General Manager and the Finance Manager:

(a)approval of the provision of services under the ESA, the Woodward ASA or the GE ASA of up to [***] (other than services and associated costs of such services to the extent such services and costs are expressly set forth  in the ESA, the Woodward ASA or the GE ASA, as applicable) (subject to Article VII); and

(b)the entry into any contract or arrangement with any Member or an Affiliate of any Member (i) in excess of [***] but less than [***] if such contract or arrangement is on an arm’s length basis or (ii) of up to[***] if such contract or arrangement is not on an arm’s length basis (subject to Article VII).

ARTICLE VI
FIDUCIARY DUTIES AND CORPORATE OPPORTUNITY;
NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS

Section 6.01.Fiduciary Duties.  The Members acknowledge and agree that (a) the Directors are designees of the Member or Members that appoint them, and are acting as proxies for such Member or Members with respect to the management of the Company, and (b) the Members and the Directors do not have any duties (including fiduciary duties) to any other Member or the Company, and that any duties or implied duties (including fiduciary duties) of a Member or Director to the Company or to any other Member that would otherwise apply at law or in equity are hereby eliminated to the maximum extent permitted under the Act and any other applicable Law, and each Member hereby waives all rights to, and releases each other Member and Director  from, any such duties; provided,  however, that (i) the foregoing shall not eliminate the obligation of the Members to act in compliance with the express terms of this Agreement, any other Transaction Document or any other agreement between or among any of the Members (and/or the Company) and (ii) the foregoing shall not be deemed to eliminate the implied contractual covenant of good faith and fair dealing of the Members.  Notwithstanding anything to the contrary contained in this Agreement, each Member hereby acknowledges and agrees that each Member or Director, in determining whether or not to vote in support of or against any particular decision for which Member or Board consent, respectively, is required, may act in and consider the best interest of the Member or Members that appointed such Director, respectively, whether or not the same shall be in the best interests of the Company or the other Members; provided,  however, that such Member or Director shall take into consideration, among other things, the Company Purpose and the Company Scope.  Nothing contained in this Agreement shall be deemed to appoint or designate any Director or Member an agent or legal representative of the Other Member or Member Group or to create any fiduciary relationship for any purpose whatsoever.  Except as otherwise expressly provided in this Agreement, no Member shall have

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any authority to act for, or to assume any obligation or responsibility on behalf of, the Other Member or Member Group or the Company.

Section 6.02.Corporate Opportunity.  Without in any way limiting, and in all cases subject to, a Member’s express obligations under the other provisions of this Agreement (including Article III,  Section 6.04(a) and Section 6.04(b)) and under the other Transaction Documents,  to the maximum extent permitted by the Act and any other applicable Law, the doctrine of corporate opportunity or any analogous doctrine shall not apply with respect to any Member or Director or any of its respective Affiliates, and no Member or Director, or any of its respective Affiliates, shall be obligated to communicate or present to the Company or its Subsidiaries any particular investment or business opportunity or prospective economic advantage (other than those that are within the Company Scope or as otherwise expressly provided in this Agreement or any other Transaction Document), regardless of whether such investment or opportunity is of a character that the Company could take advantage of if it were presented to the Company, but instead such Member or Director, or its respective Affiliate, shall have the right to pursue such opportunity independently and for its own account, and neither the Company nor any other Member shall have, by virtue of this Agreement, any rights or interests in or to such opportunity or the revenue derived therefrom (which purported rights or interest, for the avoidance of doubt, the Company hereby renounces).  Except as otherwise expressly provided in this Agreement (including Article III,  Section 6.04(a) and Section 6.04(b)) or the other Transaction Documents, no Member or its Affiliates has any obligation to refrain from any activities that are the same as or similar to those conducted by the Company or from developing or exploiting any products or services that are or may be competitive with those of the Company or investing or otherwise having an interest in any other entity engaged in such activities.

Section 6.03.Duties and Liabilities of Members and Directors.  The provisions of this Agreement which restrict the duties and liabilities of the Members and the Directors otherwise existing at law or in equity are agreed by the Members to replace such other duties and liabilities of the Members and the Directors, respectively.

Section 6.04.Non-Competition and Non-Solicitation Obligations.

(a)Non-Competition Obligation of GE.

(i)Except as expressly permitted by this Section 6.04(a) or expressly contemplated by any other provision of this Agreement or any other Transaction Document (during the term of such Transaction Document) or as agreed by Woodward in writing, during the Non-Compete Term GE shall not (and GE shall cause its Subsidiaries or Controlled Affiliates not to) engage in, own directly or indirectly any Equity Interests in any Person engaged in, or license, transfer or otherwise convey any Intellectual Property or other assets, whether tangible or intangible, to any Person with respect to, any Restricted Activity anywhere in the world.

(ii)Notwithstanding the provisions of Section 6.04(a)(i), and without implicitly agreeing that the following activities would be subject to the provisions of Section 6.04(a)(i), nothing in this Agreement (other than compliance with Article XVIII) shall

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preclude, prohibit or restrict GE or any of its Subsidiaries or Controlled Affiliates from engaging or continuing to engage in any manner in any (A) Financial Services Business conducted by GE (but not through or relating to GE Aviation or any of GE’s Subsidiaries or Controlled Affiliates within GE Aviation), (B) Existing Business Activities (so long as GE, such Subsidiaries or such Controlled Affiliates do not use any proprietary or confidential information of the Company or Woodward (and their respective Subsidiaries and Affiliates) in connection with such Existing Business Activities); provided that [***], (C) De Minimis Investments of GE or (D) business activity that would otherwise violate Section 6.04(a)(i) that is acquired from any third party (a “GE After-Acquired Business”) or is carried on by any third party that is acquired by or combined with GE or any of its Affiliates in each case after the date hereof (a “GE After-Acquired Company”); provided, that with respect to clause (D), so long as (1) within ten (10) days following the consummation of the purchase or other acquisition of the GE After-Acquired Business or the GE After-Acquired Company, GE shall notify Woodward in writing regarding such purchase or other acquisition, whereupon GE and Woodward shall engage in discussions and negotiations regarding the entry into an agreement pursuant to which such Restricted Activity would be sold to the Company (or such other mutually agreeable arrangement in which such Restricted Activity is, or the benefits or profits derived therefrom are, contributed to the Company) upon mutually agreed terms and conditions (it being understood and agreed that GE and Woodward shall use commercially reasonable efforts to enter into any such agreement or arrangement within a [***] period following the closing of such other purchase or acquisition) and (2) if no such agreement or arrangement has been entered into within such [***] period, GE, such Subsidiary or such Controlled Affiliate shall, within [***]thereafter, sign an agreement to dispose of, and subsequently dispose of, the relevant portion of the GE After-Acquired Business or the GE After-Acquired Company unless, at the expiration of such [***] period, the business of the GE After-Acquired Business or the GE After-Acquired Company complies with this Section 6.04(a).  Any agreement or arrangement entered into among GE, Woodward and/or the Company, as applicable, pursuant to clause (1) of the proviso of this Section 6.04(a)(ii) shall be structured to not result in any change to the Percentage Interests of the Members.

(b)Non-Competition Obligation of the Woodward Group.

(i)Except as expressly permitted by this Section 6.04(b) or expressly contemplated by any other provision of this Agreement or any other Transaction Document (during the term of such Transaction Document) or as agreed by GE in writing, during the Non-Compete Term, the Members belonging to the Woodward Group shall not (and shall cause their Subsidiaries and Controlled Affiliates not to) engage in, own directly or indirectly any Equity Interests in any Person engaged in, or license, transfer or otherwise convey any Intellectual Property or other assets, whether tangible or intangible, to any Person with respect to, any Restricted Activity anywhere in the world; it being understood and agreed that nothing in this Section 6.04(b) shall prohibit or restrict in any way a Woodward Sale. 

(ii)Notwithstanding the provisions of Section 6.04(b)(i), and without implicitly agreeing that the following activities would be subject to the provisions of Section 6.04(b)(i), nothing in this Agreement (other than compliance with Article XVIII) shall preclude, prohibit or restrict any Member belonging to the Woodward Group or any of its

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respective Subsidiaries or Controlled Affiliates from engaging or continuing to engage in any manner in any (A) De Minimis Investments of any Member belonging to the Woodward Group or (B) business activity that would otherwise violate Section 6.04(b)(i) that is acquired from any third party (a “Woodward Group After-Acquired Business”) or is carried on by any third party that is acquired by or combined with a Member belonging to the Woodward Group or any of its respective Affiliates in each case after the date hereof (a “Woodward Group After-Acquired Company”); provided, that with respect to clause (B), so long as (1) within ten (10) days following the consummation of the purchase or other acquisition of the Woodward Group After-Acquired Business or the Woodward Group After-Acquired Company, Woodward shall notify GE in writing regarding such purchase or other acquisition, whereupon GE and Woodward shall engage in discussions and negotiations regarding the entry into an agreement pursuant to which such Restricted Activity would be sold to the Company (or such other mutually agreeable arrangement in which such Restricted Activity is, or the benefits or profits derived therefrom are, contributed to the Company) upon mutually agreed terms and conditions (it being understood and agreed that GE and Woodward shall use commercially reasonable efforts to enter into any such agreement or arrangement within a [***] period following the closing of such other purchase or acquisition) and (2) if no such agreement or arrangement has been entered into within such [***] period, Woodward, such Subsidiary or such Controlled Affiliate shall, within [***] thereafter, sign an agreement to dispose of, and subsequently dispose of, the relevant portion of the Woodward Group After-Acquired Business or the Woodward Group After-Acquired Company unless, at the expiration of such [***] period, the business of the Woodward Group After-Acquired Business or the Woodward Group After-Acquired Company complies with this Section 6.04(b).  Any agreement or arrangement entered into among GE, Woodward and/or the Company, as applicable, pursuant to clause (1) of the proviso of this Section 6.04(b)(ii) shall be structured to not result in any change to the Percentage Interests of the Members.

(c)Notification Regarding Provision of Restricted Activities.  If any of the Member Representatives of GE (other than the Company and its Subsidiaries) or any of the Member Representatives of any Member of the Woodward Group (other than the Company and its Subsidiaries) shall receive any bona fide proposal, order or request (whether or not in writing) from a third party (other than the Company and its Subsidiaries) to provide Restricted Activities where the provision of which would be restricted by this Section 6.04, such Member Representative shall promptly notify the Other Member or Member Group thereof and shall work with such Other Member or Member Group to cause such Restricted Activities to instead be provided by or on behalf of the Company, subject to the prohibitions set forth in Section 3.01(d)(i).

(d)Non-Solicitation.  During the Non-Compete Term, subject to waiver pursuant to Section 16.03(e) or Section 17.05, no Member shall, and no Member shall permit its respective Subsidiaries to, directly or indirectly, for itself or its respective Subsidiaries and Controlled Affiliates, solicit for employment or offer to employ (i) any employee of the Company, (ii) any Secondee of the Other Member or Member Group (or any Subsidiary or Controlled Affiliate thereof) or (iii) any engineer employed by the Other Member or Member Group (or any Subsidiary or Controlled Affiliate thereof) who is not a Secondee and who provides services to or in respect of the Company under the ESA or otherwise (any such Person

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listed in clauses (i), (ii) and (iii), a “Restricted Employee”); provided, that the foregoing shall not prevent any of the Members or any of their respective Subsidiaries and Controlled Affiliates from soliciting or offering to employ any Restricted Employee (A) from and after [***] of the termination of employment of such Restricted Employee, but only if such Member or such Subsidiary or Controlled Affiliate has not previously solicited or offered such Restricted Employee for employment in violation of the provisions of this Section 6.04(d) or (B) whose employment was terminated involuntarily by the Company or such Other Member or Member Group; provided,  further, that the phrase “solicit for employment” shall not include general solicitations of or searches for employment not specifically directed towards any Restricted Employee, including through the use of (x) advertisement in any medium (including websites, journals, industry publications, or newspapers or other publications of general circulation), (y) electronic listings or (z) third party recruiting or search firms, in each case, not specifically directed towards any Restricted Employee.

(e)Enforcement.

(i)Each Member acknowledges and agrees that (A) the covenants and agreements set forth in this Section 6.04 (including with respect to subject matter, time period and geographical area) are reasonable and proper and are necessary to protect the Members’ interest in, and value of, the business of the Company (including the goodwill inherent therein) and (B) the Members would not have consummated the transactions contemplated by this Agreement and the Transaction Documents without the restrictions contained in this Section 6.04.

(ii)The Members desire that the provisions of this Section 6.04 shall be enforced to the fullest extent permissible in each jurisdiction in which enforcement is sought.  Accordingly, the Members agree that if any Governmental Authority deems the covenants and agreements set forth in this Section 6.04 invalid or unenforceable in any jurisdiction, that Governmental Authority may reduce the scope or otherwise amend or reform the portion thus adjudicated to be invalid or unenforceable, such reduction, amendment or reformation to apply only with respect to the particular jurisdiction in which such adjudication is made.  That Governmental Authority may also replace any invalid or unenforceable provision with a provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable provision.  If a Governmental Authority modifies the scope of this Section 6.04, it shall be enforceable as so modified in accordance with its terms unless thereafter overturned by subsequent action of a Governmental Authority.

ARTICLE VII
RELATED PARTY TRANSACTIONS; EXERCISE OF CERTAIN RIGHTS

Section 7.01.Related Party Transactions.  Negotiations with respect to the terms of, entry into, execution, amendment, modification or termination of, or waiver under, any Related Party Transaction with any Related Counterparty shall be conducted on behalf of the Company solely by the Officers and the Directors appointed by the Other Member or Member Group (with the participation of employees of the Other Member or Member Group).  For the avoidance of

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doubt, the Members agree that the Transaction Documents to which the Company is a party and the transactions contemplated thereby constitute Related Party Transactions.

Section 7.02.Exercise of Certain Rights.  Notwithstanding anything to the contrary contained in any Transaction Document:  (a) if the Company shall have any claim, right or remedy of whatever nature against any Related Counterparty arising under or relating to a Related Party Transaction, the Other Member or Member Group shall have the right (at its election) to exercise or enforce any such claim, right or remedy on behalf of the Company and at the Company’s reasonable cost and expense; and (b) if the Company becomes involved in any Proceeding against any Related Counterparty or becomes a defendant in any Proceeding brought by or on behalf of any Related Counterparty based upon or relating to any Related Party Transaction, the Other Member or Member Group shall have the right (at its election) to control the commencement, defense, management and disposition of such Proceeding on behalf of the Company, and shall be reimbursed by the Company for its reasonable costs and expenses incurred in connection therewith.

ARTICLE VIII
DISPUTE AND DEADLOCK RESOLUTION; ENFORCEMENT

Section 8.01.Resolution.

(a)The Members shall make every effort to settle amicably any and all disputes, controversies, conflicts and claims among the Members arising out of or relating to or in connection with this Agreement or any transactions contemplated hereby, the performance, non-performance or timely performance of the obligations set forth herein or asserted breach hereof (including any questions regarding the existence, validity, interpretation, enforceability or termination of this Agreement as well as any tort claims arising out of this Agreement) (each such claim (a “Dispute”).

(b)(i) Any Dispute unresolved after thirty (30) calendar days, (ii) any Board Deadlock or (iii) any Member Deadlock (each instance referenced in clauses (ii) or (iii), a “Deadlock”) shall, upon the election of either GE or Woodward, be referred to (A) either the General Manager of Sourcing, the General Manager of Spare Parts or the General Manager of the applicable engine program of GE, in each case as reasonably deemed appropriate by Woodward taking into account the subject matter of such Dispute or Deadlock (such Person acting as the authorized representative for GE) and (B) the President, Aircraft Turbine Systems of Woodward (such Person acting as the authorized representative for the Woodward Group) (the “First Escalation”).

(c)In the event that any Dispute or Deadlock remains unresolved after thirty (30) calendar days after either GE or Woodward made the election for the First Escalation, the Dispute or Deadlock shall, upon the election of either GE or Woodward, be referred to (i) the Vice President, Commercial Engines Operation of GE or a designee reasonably acceptable to Woodward (such Person acting as the authorized representative for GE) and (ii) the Chief Executive Officer of Woodward or a designee reasonably acceptable to GE (such Person acting as the authorized representative for the Woodward Group) (the “Second Escalation”). 

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(d)For the avoidance of doubt, in the event that any Dispute remains unresolved after sixty (60) calendar days after either GE or Woodward made the election for the Second Escalation, the Dispute shall, upon the election of either GE or Woodward, be judicially resolved in accordance with Section 20.09.

(e)Any resolution of the Dispute or Deadlock agreed to by the authorized representatives of each of GE and Woodward during the First Escalation or the Second Escalation shall be deemed as final and binding on the Members and GE and Woodward shall, or shall cause their nominated Directors, to the extent necessary, to, vote in accordance with such resolution at the following meeting of the Board or the Members, as applicable (or consent in writing thereto).  Other than a Deadlock relating to a Specified Material Investment (a “Funding Deadlock”), which may be resolved solely pursuant to Section 8.01(f) after the First Escalation and the Second Escalation, the First Escalation and the Second Escalation shall be the sole recourse for any Deadlock.  A “Specified Material Investment” means any proposed Material Investment other than an investment with respect to any activities of the Company prohibited by Section 3.01(d)(i).

(f)Notwithstanding anything herein to the contrary, in the event of any Funding Deadlock, any Member desiring to fund expenditures relating to a Specified Material Investment shall be permitted to fund such expenditures (it being understood and agreed no Member shall be required to make any expenditures in connection with any such Specified Material Investment without its consent) and solely to the extent such profits and losses are reasonably determinable, the Members will work to determine a mutually agreeable approach to enable the Member funding such expenditures to receive a separate and distinct interest in the profits and losses to the extent derived directly from such investment; provided,  however, that in no event shall such approach create a variable interest entity or otherwise change the manner in which the Members consolidate their respective financial statements in connection with the Company based on GAAP.  This Section 8.01(f) shall be the sole recourse for any Funding Deadlock.

(g)During the course of the Dispute and Deadlock resolution process set forth in this Article VIII, all provisions of this Agreement and the Transaction Documents shall, to the extent feasible and practicable, continue to be implemented by the Company, the Members or the Directors, as appropriate.

(h)Notwithstanding the provisions of Section 8.01, but only for the purpose of seeking relief under Section 20.17, each Member shall be entitled to seek to enforce the terms of this Agreement by decree of specific performance or to obtain injunctive relief against any breach or threatened breach of this Agreement in accordance with Section 20.17. 

ARTICLE IX
INSURANCE

Section 9.01.Minimum Insurance Coverage.  It is the intent of the Members that [***] shall procure and at all times maintain for the benefit of the Company and the Members the insurance coverage specified on Annex F from insurance carriers or reinsurers with a minimum

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A.M. Best’s financial strength rating of A-: VII, or S&P A or better and licensed to provide insurance in the jurisdictions in which work is to be performed; provided that any such insurance is obtainable on commercially reasonable terms and costs.  The cost of any such insurance shall be allocated between [***].  It is the intent of the Members that all insurance required to be maintained by [***] in compliance with this Section 9.01 will be primary to any other insurance owned, secured or in place by the Members.  [***] shall secure endorsements to this effect from all insurers of such policies. 

ARTICLE X
EXCULPATION AND INDEMNIFICATION

Section 10.01.Exculpation.  To the maximum extent permitted by applicable Law (including Section 18-1101 of the Act) and without limiting Article VI, but subject to Section 10.04, no Member or former Member, Director or former Director, or Affiliate of a Member or former Member or Director or former Director, of the Company or any Subsidiary of the Company (each, a “Covered Person” and collectively, “Covered Persons”) shall be liable or otherwise responsible or accountable to the Company, the Members (in their capacities as members of the Company) or any Affiliates of the Company or the Members, including for any monetary Damages, for any actual or alleged breach of duty, for any acts performed or for any failure to act, as a member of the Company or a Director of the Company or any Subsidiary of the Company.

Section 10.02.Duties and Liabilities.  Without limiting Article VI, Officers and employees of the Company shall, in their capacities as such, be expected to perform their duties and make decisions in furtherance of the best interests of the Company, regardless of whether such Officers or employees are designated or seconded by a particular Member or Director or any Affiliates thereof.  Without limiting Article VI, such Officers and employees shall, in their capacities as such, be subject to (a) the same fiduciary duty of loyalty as are employees and officers of corporations under the Law of the State of Delaware and (b) liability for Damages in the performance of such duty (in addition to any liabilities arising from their intentional fraud, bad faith failure to act in the best interests of the Company (taking into account the Company Purpose and the Company Scope) or knowing willful misconduct).

Section 10.03.Indemnification.  To the maximum extent permitted by applicable Law, but subject to Section 10.04, the Company shall indemnify, defend and hold harmless the Covered Persons and the Officers and may indemnify, defend and hold harmless employees, Secondees, consultants and other agents of the Company or any of its Subsidiaries (each, an “Indemnified Person”) from and against any Damages incurred by such Indemnified Person by reason of any act performed or omitted to be performed by that Indemnified Person in connection with the business of the Company and its Subsidiaries and from and against all liabilities and obligations of the Company and its Subsidiaries imposed on such Indemnified Person in connection with any threatened, pending or completed Proceeding by virtue of such Indemnified Person’s position with the Company or any of its Subsidiaries, including reasonable attorneys’ fees and costs and any amounts expended in the settlement of any such Proceedings for Damages.  Indemnification under this Section 10.03 will be recoverable only from the assets of the Company and not from any assets of the Members.  To the extent any Indemnified Person

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is entitled to indemnification, advancement of expenses or insurance provided by any Member or any Affiliate, the Company is the indemnitor of first resort under this Agreement and any rights of recovery of such Indemnified Person pursuant to any indemnification, advancement of expenses or insurance provided by any Member or any Affiliate is secondary to the primary obligation of the Company as provided herein.

Section 10.04.Exclusion from Exculpation and Indemnification.  Exculpation under Section 10.01 and indemnification under Section 10.03 will be unavailable to an Indemnified Person if (and only if) and to the extent that the act giving rise to the claim for Damages is finally judicially determined to have resulted from the Indemnified Person’s fraud, bad faith or willful misconduct.

Section 10.05.Advanced Expenses.  To the maximum extent permitted by applicable Law, expenses (including reasonable legal fees) incurred by an Indemnified Person in defending any Proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such Proceeding upon receipt by the Company of a written undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be ultimately determined that the Indemnified Person is not entitled to be indemnified pursuant to this Article X.

Section 10.06.Reliance.  An Indemnified Person shall be fully protected in relying in good faith upon the records of the Company and its Subsidiaries and upon such information, opinions, reports or statements presented to the Company, the Board or the Officers by any Person as to matters the Indemnified Person reasonably believes are within such Person’s professional or expert competence.

Section 10.07.Survival.  The foregoing provisions of this Article X shall survive any termination of this Agreement and will continue as to an Indemnified Person who has ceased to be a Member, Director, Officer or employee of the Company or any of its Subsidiaries, as the case may be, and will inure to the benefit of the heirs, executors and administrators of the Indemnified Person.

Section 10.08.Insurance.  The Company will have authority to purchase and maintain insurance on behalf of any Indemnified Person or any Person who is or was serving at the request of a Member or the Company as a director, manager, officer, employee or agent of any other Person against any Liabilities asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the Company would have the power to indemnify him or her against such Liabilities under the provisions of the Act. 

Section 10.09.Non-Exclusive Remedy.  The indemnification and advancement of expenses provided by or granted pursuant to this Article X shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any other agreement.

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ARTICLE XI
DISTRIBUTIONS

Section 11.01.Distributions.  Subject to Section 4.05(c) and Section 5.10(d), (a) on the last Business Day of each fiscal quarter, the Company shall distribute to the Members the Net Available Cash as of the last day of the second calendar month of such quarter, and (b) subject to Section 5.07(f), any distribution to the Members in accordance with the terms of this Agreement shall be made to each of the Members in accordance with the respective Percentage Interests of the Members on the date of such distribution. 

Section 11.02.Distribution in Kind.  In the event that the Company makes a distribution to the Members of property other than cash, any such distributions shall be made as nearly as practicable in accordance with the respective Percentage Interests of the Members on the date of such distribution as agreed by the Members and based on the Asset Fair Market Value of such property.

Section 11.03.Restrictions on Distributions.  The foregoing provisions of this Article XI to the contrary notwithstanding, no distribution may be made if such distribution would violate any contract or agreement to which the Company is then a party, the Act or any other Law then applicable to the Company.

Section 11.04.Withholding Tax Payments and Obligations.  If withholding taxes are paid or required to be paid in respect of payments made to or by the Company, such payments or obligations shall be treated as follows:

(a)Payments to the Company.  If the Company receives proceeds in respect of which a tax has been withheld, the Company shall be treated as having received cash in an amount equal to the amount of such withheld tax, and, for all purposes of this Agreement, subject to Section 11.04(d), each Member shall be treated as having received a distribution pursuant to this Article XI equal to the portion of the withholding tax allocable to such Member and, for the avoidance of doubt, such Member shall be allocated any expense item arising from such withheld taxes.  In the event that the Company receives a refund of taxes previously withheld by a third party from one (1) or more payments to the Company, the economic benefit of such refund shall be apportioned among the Members in a manner that offsets the prior operation of this Section 11.04(a) in respect of such withheld taxes.

(b)Payments by the Company.  The Company is authorized to withhold from any payment made to, or any distributive share of, a Member any taxes required by law to be withheld.  If, and to the extent, the Company is required to make any such tax payments with respect to any distribution to a Member, either (i) such Member’s proportionate share of such distribution shall be reduced by the amount of such tax payments (which tax payments, subject to Section 11.04(d), shall be treated as a distribution to such Member pursuant to this Article XI), or (ii) such Member shall pay to the Company prior to such distribution an amount of cash equal to such tax payments (which payment of cash shall not be deemed a Capital Contribution for purposes hereof).  In the event a portion of a distribution in kind is retained by the Company pursuant to clause (i) above, such retained property may, in the discretion of the Board, either

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(A) be distributed in accordance with this Article XI, or (B) be sold by the Company to generate the cash necessary to satisfy such tax payments.  If property is sold pursuant to the preceding sentence, the Company and the relevant Member shall treat the sale as if such property is distributed to such Member in kind and sold by such Member and not by the Company. 

(c)Overwithholding.  Neither the Company, the Tax Matters Partner, nor the Board shall be liable for any excess taxes withheld in respect of any Member’s Membership Interest, and, in the event of overwithholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Governmental Authority.  The Company will notify a Member if it becomes aware that amounts were erroneously withheld and assist such Member in recovering such amounts.

(d)Certain Withheld Taxes Treated as Demand Loans.  Any taxes withheld pursuant to Section 11.04(a) or Section 11.04(b) shall be treated as if distributed to the relevant Member to the extent an amount equal to such withheld taxes would then be distributable to such Member, and, to the extent in excess of such distributable amounts, as a demand loan payable by the Member to the Company with interest at the LIBOR Rate in effect from time to time [***].  The Board may, in its discretion, either demand payment of the principal and accrued interest on such demand loan at any time, and enforce payment thereof by legal process, or may withhold from one (1) or more distributions to a Member amounts sufficient to satisfy such Member’s obligations under any such demand loan.

ARTICLE XII
BOOKS, RECORDS, AUDIT, ACCOUNTING AND OTHER INFORMATION

Section 12.01.Books and Records.  Appropriate books and records in accordance with and as required by the Act or any other applicable Law shall be kept by the Company.  Such books and records shall include separate books of account for each Member that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the business of the Company consistent with the Company Accounting Methodology.  In addition, such books and records shall at all times be kept at [_______________]or such other locations as approved by the Board.  Each Member and its representatives shall, to the extent requested of the Company and for any purpose reasonably related to such Member’s interests in its capacity as a Member, have reasonable access (i) to discuss the Company’s operations and business with Secondees, employees, agents, service providers or other representatives of the Company (provided that reasonable notice shall have been given) and (ii) to inspect or make copies of all books, records, financial results, data, procedures and other information maintained by the Company that relates to the operations and business of the Company in each case at the expense of such Member or such representatives; provided that each Member shall maintain the confidentiality of such information in accordance with the provisions of Article XVIII;  provided,  further, that such action shall be conducted at such times and in such a manner as not to unreasonably interfere with the business of the Company; provided that before any such access or inspection, the requesting Member shall provide the Other Member or Member Group with a list of “clean team” individuals who will be the only individuals who will be provided with such information,

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which individuals shall be reasonably acceptable to such Other Member or Member Group taking into consideration the purpose of such access or inspection. 

Section 12.02.Auditing.  An annual audit of the Company shall be conducted by the then-current independent outside auditor used by Woodward to audit its financial statements (the “Company Auditor”).  Audit reports prepared by the Company Auditor shall be submitted to the Board and the Members.  In the event that any issue(s) arises during the course of the annual audit that would preclude the issuance of an unqualified audit opinion, the Company will make all reasonable efforts to remedy such situation with the objective of receiving an unqualified audit opinion. In no event will the Company accept a qualified audit opinion without Unanimous Member Approval.

Section 12.03.Provision of Financial and Operating Reports and Other Information.

(a)The Board shall, and shall cause the Company to, prepare and furnish to each Member, in each case consistent with the Company Accounting Methodology: 

(i)as soon as available and in any event within ninety (90) calendar days after the end of each Fiscal Year, annual financial statements of the Company, which statements shall include the balance sheet as of the end of such Fiscal Year, profit and loss statements and cash flow statements for such Fiscal Year, shall show the comparable figures for the prior Fiscal Year and any other information required by applicable Laws and shall have been audited by the Company Auditor, at the Company’s cost;

(ii)as soon as available and in any event within five (5) calendar days after finalizing IRS Form 1065 in accordance with Section 12.03(c), a statement indicating each Member’s share of each item of income, gain, loss, deduction or credit for such Taxable Year for income tax purposes, to the extent applicable;

(iii)as soon as available and in any event within thirty (30) calendar days after the end of each of the first three fiscal quarters of each Fiscal Year, unaudited quarterly financial statements of the Company (without footnotes), which statements shall include balance sheets as of the end of the prior Fiscal Year and as of the end of such fiscal quarter, quarterly and year-to-date profit and loss statements and cash flow statements for and through such fiscal quarter and the comparable period for the prior Fiscal Year and any other information required by applicable Laws; and

(iv)as soon as practicable and in any event within fourteen (14) calendar days after the end of each calendar month, unaudited monthly and year-to-date operating reports consistent with the then-current Woodward monthly reporting package, which reports shall include a balance sheet as of the end of such month and year-to-date profit and loss statements and cash flow statements for and through such month.

(b)The Board shall, and shall cause the Company to, prepare and furnish to the Members and their respective Affiliates:

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(i)other information as may be reasonably requested by any of the Members for such Member to be able to timely comply with all tax and accounting rules and regulations applicable to, and the reasonable requirements of the auditors and tax professionals of, the Members and their respective Affiliates; and

(ii)within thirty (30) calendar days following the end of each calendar quarter (other than the last calendar quarter of any Taxable Year), such financial information as may be reasonably requested by the Members for the preparation of the Members’ federal, state or local income tax returns together with such other information reasonably requested by any of the Members for such purposes.

(c)The Board shall, and shall cause the Company to, prepare and furnish to the Members, within forty-five (45) days prior to the final due date (taking applicable extensions into account) for the filing of any U.S. federal income tax return on IRS Form 1065 with respect to the Company, a proposed final draft of an IRS Form 1065 for the Company for the Members’ review and approval.  If so requested by a Member, the Company shall arrange for the individuals who had primary responsibility for preparing the proposed final draft of the IRS Form 1065 to meet (in person or by telephone as requested by the Member) representatives of the Member (at a place and a time, within thirty (30) days after the draft is furnished to the Member, as are reasonably satisfactory to the Company) for the purpose of discussing the positions taken on such tax returns. 

Section 12.04.Accounting Matters.  The Company’s books and records shall be kept in accordance with the accrual method of accounting for income tax, consistent with the Company Accounting Methodology for other reporting purposes, except, in each case as may otherwise be required by applicable Law.

Section 12.05.Tax Matters.

(a)Woodward is hereby designated, and agrees to act, at the direction of the Board, as the “tax matters partner” (as defined in Section 6231 of the Code) (the “Tax Matters Partner”) for the Company.  In carrying out its duties as Tax Matters Partner, Woodward agrees: (i) to not take any material action in its capacity as Tax Matters Partner on behalf of the Company without prior Unanimous Member Approval; and (ii) to deliver to GE in a timely manner, but no later than seven (7) Business Days following receipt of any material notices, documents or correspondence, copies of any and all material notices, material documents or other material correspondence addressed to the Company that Woodward receives in its capacity as Tax Matters Partner, or to the Tax Matters Partner on the Company’s behalf, from any taxing jurisdiction.  Notwithstanding the foregoing, the extension of any statute of limitations, the making of any material tax election or the filing or settlement of any material action or material suit shall require the prior written consent of all of the Members.  In its capacity as Tax Matters Partner, Woodward shall (A) have only the duties applicable to tax matters partners specified in the Code, (B) not be held liable for Liabilities for any actions or omissions other than for Liabilities arising out of its actions or omissions that constitute fraud or willful disregard of the provisions of the Code applicable to tax matters partners, and (C) be indemnified and held harmless by the Company for any Liabilities reasonably incurred by it in

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connection with its actions, omissions, and status as Tax Matters Partner so long as such Liability is not attributable to its fraud or willful disregard of the provisions of the Code applicable to tax matters partners.  The reasonable costs and expenses incurred by Woodward as a Tax Matters Partner shall be borne by the Company.

(b)The Members agree to cooperate with the Company and with each other in connection with the examination of the Company’s returns pertaining to sales and use taxes, property taxes and all other taxes, including any resulting administrative and judicial Proceedings.  With respect to any issues that arise in connection with the examination of the Company’s returns pertaining to sales and use taxes, property taxes and all other taxes neither the Company nor any Member shall take any action relating to such taxes without prior Unanimous Member Approval.  The reasonable costs and expenses of any such administrative and judicial Proceedings, including the cost of any representative or counsel, shall, in all events, be borne by the Company.

(c)The Board, after Unanimous Member Approval, shall designate a national or regional accounting firm (the “Designated Return Preparer”) to prepare the United States federal, state, local and foreign tax returns for the Company.  The Designated Return Preparer shall not be the principal auditor of any Member.  Any payment required to be made to the Designated Return Preparer shall be at the full cost and expense of the Company.

(d)Election into TEFRA.  The Members intend that the Company be subject to the consolidated audit rules of Sections 6221 through 6234 of the Code during each Taxable Year.  Accordingly, each Person who was a Member at any time during the Company’s first Taxable Year hereby agrees to sign an election pursuant to Section 6231(a)(1)(B)(ii) of the Code and Treasury Regulations Section 301.6231(a)(1)-1(b)(2) to be filed with the Company’s federal income tax return for such Taxable Year to have such consolidated audit rules apply to the Company.

ARTICLE XIII
BOOK ALLOCATIONS

Section 13.01.General Application.  The rules set forth in this Article XIII shall apply for the purposes of determining each Member’s general allocable share of the items of income, gain, loss and deduction of the Company comprising Net Income or Net Loss of the Company for each Taxable Year, determining special allocations of other items of income, gain, loss and deduction, and adjusting the balance of each Member’s Capital Account pursuant to the definition of Capital Account to reflect the aforementioned general and special allocations.  For each Taxable Year, the special allocations in Section 13.03 shall be made immediately prior to the general allocations of Section 13.02.

Section 13.02.General Allocations.

(a)Hypothetical Liquidation.  The items of income, expense, gain and loss of the Company comprising Net Income or Net Loss for a Taxable Year shall be allocated among the persons who were Members during such Taxable Year in a manner that shall, as

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nearly as possible, cause the Capital Account balance of each Member at the end of such Taxable Year to equal the excess (which may be negative) of:

(i)the amount of the hypothetical distribution (if any) that such Member would receive if, on the last day of the Taxable Year, (A) all Company assets were sold for cash equal to their Gross Asset Values, taking into account any adjustments thereto for such Taxable Year, (B) all Company liabilities were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability or any Member Nonrecourse Debt in respect of such Member, to the Gross Asset Values of the assets securing such liability), and (C) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to Article XIover;

(ii)the sum of (A) the amount, if any, without duplication, that such Member would be obligated to contribute to the capital of the Company, (B) such Member’s share of Company Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(g), and (C) such Member’s share of Member Nonrecourse Debt Minimum Gain determined pursuant to Treasury Regulations Section 1.704 2(i)(5), all computed as of the hypothetical sale described in Section 13.02(a)(i);  

(b)Loss Limitation.  Notwithstanding anything to the contrary contained in this Section 13.02, the amount of items of Company expense and loss allocated pursuant to this Section 13.02 to any Member shall not exceed the maximum amount of such items that can be so allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of any Taxable Year.  All such items in excess of the limitation set forth in this Section 13.02(b) shall be allocated first to Members who would not have an Adjusted Capital Account Deficit, pro rata, in proportion to their Capital Accounts, adjusted as provided in clauses (a) and (b) of the definition of “Adjusted Capital Account Deficit,” until no Member would be entitled to any further allocation, and thereafter to the Members in accordance with their interest in the Company as determined by the Board. 

(c)No Deficit Restoration Obligation.  Except as otherwise expressly provided in this Agreement, at no time during the term of the Company or upon Liquidation thereof shall a Member with a negative balance in its Capital Account have any obligation to the Company or the other Members to restore such negative balance, except as may be required by law or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this Agreement.

Section 13.03.     Special Allocations.  The following special allocations shall be made in the following order:

(a)Minimum Gain Chargeback.  If there is a net decrease during a Taxable Year in either Company Minimum Gain or Member Nonrecourse Debt Minimum Gain, then notwithstanding any other provision of this Article XIII, each Member shall receive such special allocations of items of Company income and gain as are required in order to conform to Treasury Regulations Section 1.704-2.

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(b)Qualified Income Offset.  Subject to Section 13.03(a), but notwithstanding any other provision of this Article XIII, items of income and gain shall be specially allocated to the Members in a manner that complies with the “qualified income offset” requirement of Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(3).

(c)Deficit Capital Accounts Generally.  If a Member has a deficit Capital Account balance at the end of any Taxable Year which is in excess of the sum of (i) the amount such Member is then obligated to restore pursuant to this Agreement, and (ii) the amount such Member is then deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), respectively, such Member shall be specially allocated items of Company income and gain (consisting of a pro rata portion of each item of income and gain of the Company for such Taxable Year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible, provided, that any allocation under this Section 13.03(c) shall be made only if and to the extent that a Member would have a deficit Capital Account balance in excess of such sum after all allocations provided for in this Article XIII have been tentatively made as if this Section 13.03(c) were not in this Agreement.

(d)     Deductions Attributable to Member Nonrecourse Debt.  Member Nonrecourse Deductions shall be specially allocated to the Members in the manner in which they share the economic risk of loss (as defined in Treasury Regulations Section 1.752 2) for such Member Nonrecourse Debt.

Section 13.04.Allocation of Nonrecourse Deductions.  Nonrecourse Deductions for any taxable year shall be specially allocated to the Members in accordance with their respective Percentage Interests.

Section 13.05.Tax Allocations. 

(a)Section 704(b) Allocations.  Subject to Section 13.05(b), each item of income, gain, loss, or deduction for federal income tax purposes that corresponds to an item of income, gain, loss or expense that is either taken into account in computing Net Income or Net Loss or is specially allocated pursuant to Section 13.03 (a “Book Item”) shall be allocated among the Members in the same proportion as the corresponding Book Item is allocated among them pursuant to Section 13.02,  Section 13.03 or Section 13.04.

(i)If the Company recognizes Depreciation Recapture in respect of the sale of any Company asset,

(A)the portion of the gain on such sale which is allocated to a Member pursuant to Section 13.02 or Section 13.03 shall be treated as consisting of a portion of the Company’s Depreciation Recapture on the sale and a portion of the balance of the Company’s remaining gain on such sale under principles consistent with Treasury Regulations Section 1.1245-1, and

(B)if, for federal income tax purposes, the Company recognizes both “unrecaptured Section 1250 gain” (as defined in Code Section 1(h)) and gain

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treated as ordinary income under Code Section 1250(a) in respect of such sale, the amount treated as Depreciation Recapture under Section 13.05(a)(i) shall be comprised of a proportionate share of both such types of gain.

(ii)For purposes of this Section 13.05(a), “Depreciation Recapture” means the portion of any gain from the disposition of an asset of the Company which, for federal income tax purposes, (a) is treated as ordinary income under Code Section 1245, (b) is treated as ordinary income under Code Section 1250, or (c) is “unrecaptured Section 1250 gain” as such term is defined in Code Section 1(h).

(b)Section 704(c) Allocations.  In the event any property of the Company is credited to the Capital Account of a Member at a value other than its tax basis (whether as a result of a contribution of such property or a revaluation of such property pursuant to clause (b) of the definition of “Gross Asset Value”), then allocations of taxable income, gain, loss and deductions with respect to such property shall be made in a manner which will comply with Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.  The Company shall elect to use the “traditional method” under Treasury Regulations Section 1.704-3(b) unless all Members agree pursuant to Unanimous Member Approval to make, “curative” or “remedial” allocations (within the meaning of the Treasury Regulations under Code Section 704(c)) including:

(i)“curative” allocations which offset the effect of the “ceiling rule” for a prior Taxable Year (within the meaning of Treasury Regulations Section 1.704‑3(c)(3)(ii)); and

(ii)“curative” allocations from dispositions of contributed property (within the meaning of Treasury Regulations Section 1.704-3(c)(3)(iii)(B)).

(c)Certain Adjustments.  If by reason of Section 482 of the Code both the Company and a Member are required to recognize tax items (the “Adjustment”), the items so recognized by the Company shall be specially allocated to such Member (and such Member’s Capital Account shall be adjusted as necessary to properly reflect both aspects of the Adjustment) so that (i) the amounts of net taxable income (or loss) recognized by each Member (attributable to the Member’s distributive share of the Company’s taxable income (or loss) and any portion of the Adjustment made to the Member’s taxable income (or loss)) and (ii) the Capital Account balances of each Member are, to the maximum extent possible, the same as would have been the case if the Adjustment had not been made.

(d)Credits.  All tax credits shall be allocated among the Members as determined by the Board, consistent with applicable Law.

(e)Except as otherwise provided in Section 13.05(c), the tax allocations made pursuant to this Section 13.05 shall be solely for tax purposes and shall not affect any Member’s Capital Account or share of non-tax allocations or distributions under this Agreement.

Section 13.06.Transfer of Interest.  In the event of a Transfer of all or any portion of a Membership Interest (in accordance with the provisions of this Agreement) at any time other

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than the end of a Taxable Year, the shares of items of Company Net Income or Net Loss and specially allocated items allocable to the interest Transferred shall be allocated between the transferor and the transferee under an interim closing of the Company’s books in a manner consistent with the applicable provisions of the Code.

Section 13.07.Covenants.

(a)It is the intention of the Members that the Company be treated as a partnership for Federal, state and local income tax purposes.  Without prior Unanimous Member Approval, the Members agree not to take any action or fail to take any action (including by amendment of this Agreement) which action or inaction would be inconsistent with such treatment.

(b)In addition, notwithstanding anything to the contrary in this Agreement:

(i)Neither the Company nor any Member will cause or permit any Membership Interest to be included on (nor will such persons recognize any purchases or sales of any Membership Interest through) (a) any national, non-United States, regional, local or other securities exchange, or (b) any over-the-counter market (including an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise).

(ii)The Company will not participate in any manner in the establishment of, for any interest in the Company (including through the repurchase or redemption of any interest in the Company), or the inclusion of any interest in the Company on, an established securities market or a secondary market or the substantial equivalent thereof (within the meaning of the Treasury Regulations under Section 7704 of the Code), and will not recognize any Transfers of any interest in the Company made on such a market by (i) redeeming the interest in the Company of a transferor (in the case of a redemption or repurchase by the Company), or (ii) admitting the transferee as a Member, or otherwise recognizing any rights of the transferee such as a right of the transferee to receive Company distributions (directly or indirectly) or to acquire an interest in the capital or profits of the Company.

(iii)The Company will not at any time have more than 100 Members (or persons treated as partners) within the meaning of Treasury Regulations Section 1.7704-1(h).

(iv)For purposes of this Section 13.07, the term “interest in the Company” shall include any financial instrument or contract, the value of which is determined in whole or in part by reference to the Company.

(v)Neither the Company nor any Member, with respect to the Company, shall file any election pursuant to Treasury Regulations Section 301.7701-3(c) to treat the Company as an entity other than a partnership and the Company shall not elect, pursuant to Section 761(a) of the Code, to be excluded from the provisions of subchapter K of the Code, without prior Unanimous Member Approval.

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(vi)The Company shall at all times have a valid election in effect under Section 754 of the Code, unless otherwise agreed to by Unanimous Member Approval.

(c)In the event a Member intends to Transfer all or any portion of a Membership Interest to either a Permitted GE Transferee or a Permitted Woodward Transferee pursuant to Section 14.01, the Member shall use reasonable efforts to coordinate the timing of such Transfer with the Company and the Other Member or Member Group so that no termination of the Company occurs under Section 708(b)(1)(B) of the Code as a result of such Transfer.

(d)Woodward Affiliate is a limited liability company classified as a domestic corporation for United States federal income tax purposes and intends to continue to be classified as a domestic corporation for United States federal income tax purposes at all times during which it owns a Membership Interest.  Woodward Affiliate made, at the time of formation, all filings necessary, including a valid election on Form 8832, to be treated as a domestic corporation for United States federal income tax purposes and shall (i) unless consented to in writing by GE (which consent shall not unreasonably withheld, conditioned or delayed), continue in existence owning not less than a ten percent (10%) Membership Interest for so long as GE is a Member and (ii) timely cause all filings necessary to continue its status as a corporation for United States federal income tax purposes to be made and to remain in full force and effect.

(e)GE is a domestic corporation for United States federal income tax purposes and shall, for so long as it is a Member, continue its status as a domestic corporation for United States federal income tax purposes.

ARTICLE XIV
TRANSFER AND CHANGE OF OWNERSHIP RESTRICTIONS

Section 14.01.Limitation on Members. 

(a)Except as provided in the next sentence, no Member may Transfer all or any portion of its Membership Interest without the prior written consent of the Other Member or Member Group.  Subject to Section 14.01(b), consent of the Other Member or Member Group shall not be required with respect to the Transfer (i) by GE of any of its Membership Interest to any direct or indirect wholly-owned Subsidiary of GE (collectively, a “Permitted GE Transferee”), (ii) by Woodward or Woodward Affiliate of any of its Membership Interest to Woodward or any direct or indirect wholly-owned Subsidiary of Woodward (collectively, a “Permitted Woodward Transferee”) or (iii) by a Member as a result of a Whole Business Sale of such Member; provided, that (in the case of a Transfer of Woodward Affiliate’s Membership Interests to a Permitted Woodward Transferee) (A) such Permitted Woodward Transferee is not a disregarded entity owned by Woodward for United States federal income tax purposes, and (B) Woodward and such Permitted Woodward Transferee shall each continue to own, after giving effect to any such Transfer, not less than ten percent (10%) of the Membership Interests; provided,  further, that no Transfer to a Permitted GE Transferee under clause (i) or to a Permitted Woodward Transferee under clause (ii) shall relieve the transferring Member of its

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obligations under this Agreement; providedfurther, that, with respect to a Transfer by Woodward and Woodward Affiliate as a result of a Woodward Sale, Woodward shall comply with Article XVII.

(b)Absent Unanimous Member Approval, it shall be a condition to any Transfer referred to in Section 14.01(a) that the transferring Member first deliver to the Company and the Other Member or Member Group written advice of nationally-recognized tax counsel, in a form reasonably satisfactory to the Other Member or Member Group, to the effect that such Transfer will not cause the Company to be treated as a “publicly traded partnership” as such term is defined in Section 7704(b) of the Code; provided,  however, that within ninety (90) days after the Closing Date, (i) GE may Transfer all or any portion of its Membership Interest to a Permitted GE Transferee and (ii) Woodward or Woodward Affiliate may Transfer all or any portion of their respective Membership Interests to a Permitted Woodward Transferee, in each case without Unanimous Member Approval and without providing an opinion of counsel pursuant to this Section 14.01(b).

Section 14.02.Admission of Additional or Substitute Members.  The transferee of any Membership Interest shall acquire an economic interest in the rights attributable to a Membership Interest and shall not be admitted as a substitute or additional Member unless either (a) such Transfer shall be permitted under Section 14.01 and (b) such transferee shall acquire all (and not less than all) of the transferring Member’s Membership Interest (in which event such transferee shall be admitted as a substitute Member) or the Other Member or Member Group consents to the admission of such transferee as a substitute or additional Member and, in each case, the transferee shall agree in writing to be bound by the terms of this Agreement and the other Transaction Documents to the same extent as the transferor, except as otherwise agreed in writing by the substitute or additional Member and the Other Member or Member Group.  Any Member which has transferred its entire economic interest attributable to its Membership Interest shall cease to be a Member for all purposes hereof whether or not its transferee is admitted as a substitute or additional Member.  Each then remaining Member shall amend this Agreement accordingly.

Section 14.03.Compliance with this Agreement and Securities Laws.

(a)To the maximum extent permitted by applicable Law, any Transfer (whether voluntary, involuntary or by operation of law) of any Membership Interest or portion thereof in violation of any of the provisions of this Article XIV shall be null and void, and the purported transferee shall not be entitled to (i) receive any distributions or profits in respect thereof, (ii) participate in any solicitation for, or otherwise participate in, any vote, consent or approval of any of the Members or (iii) become a substitute or additional Member of the Company.

(b)Each Member hereby agrees that any Transfer of all or any portion of a Membership Interest by such Member that is otherwise in accordance with this Article XIV shall be effected in compliance with all applicable federal and state securities Laws and each transferee will acknowledge that (i) its Membership Interest is being acquired for investment purposes only and for its sole account and not with a view to the distribution thereof in violation

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of the Securities Act and the rules and regulations promulgated thereunder, and (ii) its Membership Interest has not been registered under the Securities Act or applicable state securities Laws, and that it is being offered and sold under an exemption from registration provided by such Laws and the rules and regulations thereunder, and that the Company is under no obligation to register the Membership Interest or to comply with any applicable exemption under any applicable securities Laws with respect to the Membership Interest.

ARTICLE XV
WITHDRAWAL OF MEMBERS

Section 15.01.Withdrawal of Member.  No Member shall have the right to withdraw from the Company without the consent of the Other Member or Member Group (which may be given or withheld in the Other Member or Member Group’s sole and absolute discretion) except as otherwise contemplated by Article XIV.

ARTICLE XVI
TERMINATION EVENTS AND LIQUIDATION

Section 16.01.Termination by Agreement.  This Agreement may be terminated by written agreement of all of the Members.  This Agreement shall also terminate automatically upon (a) the consummation of the Termination Event Call Option or the Woodward Sale Call Option (provided that Section 6.04(a),  Section 6.04(b),  Section 6.04(d),  Article X, the last two sentences of Section 12.05(a),  Section 16.04,  Section 16.05,  Section 17.02(c),  Section 17.02(d),Section 17.03,  Section 17.04,  Section 17.06,  Section 17.07 and Article XVIIIand the related definitions used therein shall survive any such termination) and (b) the completion of a Liquidation of the Company as detailed in Section 16.07(c)  (provided that Article X, the last two sentences of Section 12.05(a),  Section 17.07 and Article XVIIIand the related definitions used therein shall survive any such termination).  Notwithstanding the foregoing, any liability of any Member with respect to any breach of this Agreement by such Member or any obligations incurred by such Member prior to such termination shall survive the termination of this Agreement.

Section 16.02.Termination Events.  Each of the following shall constitute a “Termination Event” and the subject Other Member or Member Group is referred to as the “Termination Triggering Member or Member Group”: 

(a)the commencement of a bankruptcy or similar Proceeding against the Other Member or Member Group (or an entity that Controls the Other Member or Member Group) (provided that with respect to an involuntary bankruptcy or similar Proceeding, the associated Termination Event shall be deemed to cease and to have not occurred if such bankruptcy or similar Proceeding is dismissed by a court of competent jurisdiction within ninety (90) days after commencement); or

(b)the occurrence of a breach by the Other Member or Member Group under one of the Transaction Documents that (i) has a material adverse long-term impact on the Company or the non-breaching Member or Member Group and (ii) remains uncured after notice

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by the non-breaching Member or Member Group and a cure period to be the longest of (A) 180 days, (B) the cure period in the applicable Transaction Document, if any and (C) such other period as the Members mutually agree.

Section 16.03.Consequences of Termination Event

(a)Within the Termination Event Call Option Period, the non-Termination Triggering Member or Member Group may (but shall not be required to), in its sole discretion, elect to exercise a call option with respect to all, but not less than all, of the Membership Interests of the Termination Triggering Member or Member Group (a “Termination Event Call Option”) for a purchase price equal to the Termination Event Purchase Price.  To exercise the Termination Event Call Option, the non-Termination Triggering Member or Member Group must deliver a notice of exercise (a “Termination Event Call Option Request”) to the Company and the Termination Triggering Member or Member Group on or before the end of the Termination Event Call Option Period.  If the non-Termination Triggering Member or Member Group delivers a timely Termination Event Call Option Request, the Members will determine, or cause to be determined, the FMV in accordance with Section 17.08.  If the non-Termination Triggering Member or Member Group fails to deliver a Termination Event Call Option Request on or prior to the end of the Termination Event Call Option Period, the right to exercise the Termination Event Call Option will expire.  The exercise of a Termination Event Call Option shall be in addition to any damages available at law or in equity.

(b)In the event of a timely exercise of the Termination Event Call Option, the closing of the purchase of the Called Interests pursuant to a Termination Event Call Option (the “Termination Event Call Option Closing”) shall occur within ninety (90) days after the determination of the FMV in accordance with Section 17.08 (unless a later date shall be required under applicable Laws), at which time the non-Termination Triggering Member or Member Group will deliver, by wire transfer of immediately available funds to an account designated by the Termination Triggering Member or Member Group, the Termination Event Purchase Price, and the Termination Triggering Member or Member Group shall deliver (and absent such delivery shall be deemed hereby to have delivered) to the non-Termination Triggering Member or Member Group an assignment of all its or their right, title and interest in or to the Called Interests.  Notwithstanding any other provision herein to the contrary, no Termination Event Call Option Closing will occur (i) unless such Termination Event Call Option Closing is permitted under applicable Law and (ii) unless and until any and all necessary approvals, authorizations or clearances from governmental entities and unaffiliated Persons have been obtained, including any required clearances under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any required approvals from any other competition authority.  The Members agree to cooperate, and to cause their Affiliates to cooperate, in the preparation and filing of any and all reports or other submissions required in connection with obtaining such approvals. 

(c)The purchase and sale of any Called Interests pursuant to the Termination Event Call Option shall be effected pursuant to an agreement which shall not include any warranty or representation, except that the Termination Triggering Member or Member Group shall represent (or hereby be deemed to represent) to the non-Termination

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Triggering Member or Member Group that it is (or they are) the owner of all the Called Interests and that such Called Interests are free and clear of all liens and encumbrances. 

(d)Following any exercise of a Termination Event Call Option pursuant to this Section 16.03, the Termination Triggering Member or Member Group will provide reasonable transition support (which, for the avoidance of doubt, shall not include the establishment or funding of manufacturing or maintenance, repair and overhaul capabilities) to the non-Termination Triggering Member or Member Group, and the Transaction Documents (other than this Agreement) will survive the consummation of the Termination Event Call Option;provided that, except as otherwise provided herein, the non-Termination Triggering Member or Member Group may, at its election, terminate any Transaction Document (other than the Purchase and Sale Agreement, the Royalty Agreement and the IP Rights Agreement).

(e)GE and Woodward shall waive compliance by Woodward and GE, respectively, of the non-solicit obligations of Woodward and GE, respectively, in Section 6.04(d), with such waiver to be effective from and after the consummation of the Termination Event Call Option.

Section 16.04.Continued Payment Obligations.  Neither the exercise or consummation of a Termination Event Call Option, nor any Liquidation of the Company following a Termination Event Call Option Closing, nor the termination of any Transaction Document pursuant to Section 16.03 shall affect Woodward’s rights to receive (a) the Woodward Annual Payment Amount pursuant to the Purchase and Sale Agreement, and (b) any Royalty pursuant to the Royalty Agreement.  The termination of this Agreement and/or any other Transaction Documents pursuant to Section 16.03 shall not relieve any Member of any obligations arising under this Agreement prior to any such termination or any party to any other Transaction Document of any obligations arising thereunder prior to any such termination. 

Section16.05.     Intellectual Property Treatment upon a Termination Event Call Option.

(a)Notwithstanding the Termination Event Call Option Closing, (i) if Woodward is the Termination Triggering Member or Member Group, the Woodward Background IP License Agreement shall continue in effect in accordance with its terms, including Section 8.06 (Assignment) thereof which, upon the Termination Event Call Option Closing, governs any changes to the license granted thereunder; and (ii) if GE is the Termination Triggering Member or Member Group, the GE Background IP License Agreement shall continue in effect in accordance with its terms, including Section 8.06 (Assignment) thereof which, upon the Termination Event Call Option Closing, governs any changes to the license granted thereunder.

(b)If Woodward is the Termination Triggering Member or Member Group , then, with respect to any Intellectual Property of the Company that is licensed to Woodward (but not GE) pursuant to the JV Improvement IP Chart set forth in[appropriate cross reference to be inserted at closing], after the Termination Event Call Option Closing, such Intellectual Property shall be jointly owned, without the duty to account, by Woodward and the Company (it being understood that the Company may freely assign its joint ownership rights to

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GE) (each of Woodward and the Company (or GE in the case of an assignment to GE) for purposes of this Section 16.05(b), a “joint owner”); provided,  however, that neither joint owner shall be entitled to license to any third party such Intellectual Property without the prior written consent of the other joint owner (such consent not to be unreasonably withheld, conditioned or delayed).  In addition and subject to the foregoing, the joint owners shall cooperate in good faith regarding all matters relating to the prosecution, maintenance, defense and enforcement of such jointly owned Intellectual Property.

(c)With respect to any Intellectual Property of the Company that is licensed to Woodward (other than Intellectual Property of the Company described in Section 16.05(b)), after a Termination Event Call Option Closing where Woodward is the Termination Triggering Member or Member Group  the licenses with respect to such Intellectual Property shall survive without any change to their respective terms and in accordance with the terms and conditions set forth in the agreement(s) pursuant to which Woodward is granted such license(s).

(d)If GE is the Termination Triggering Member or Member Group , then, with respect to any Intellectual Property of the Company that is licensed to GE (but not Woodward) pursuant to the JV Improvement IP Chart set forth in [appropriate cross reference to be inserted at closing], after the Termination Event Call Option Closing, such Intellectual Property shall be jointly owned, without the duty to account, by GE and the Company (it being understood that the Company may freely assign its joint ownership rights to Woodward) (each of GE and the Company (or Woodward in the case of an assignment to Woodward) for purposes of this Section 16.05(d), a “joint owner”); provided,  however, that neither joint owner shall be entitled to license to any third party such Intellectual Property without the prior written consent of the other joint owner (such consent not to be unreasonably withheld, conditioned or delayed).  In addition and subject to the foregoing, the joint owners shall cooperate in good faith regarding all matters relating to the prosecution, maintenance, defense and enforcement of such jointly owned Intellectual Property.

(e)With respect to any Intellectual Property of the Company that is licensed to GE (other than Intellectual Property of the Company described in Section 16.05(d)), after a Termination Event Call Option Closing where GE is the Termination Triggering Member or Member Group  the licenses with respect to such Intellectual Property shall survive without any change to their respective terms and in accordance with the terms and conditions set forth in the agreement(s) pursuant to which GE is granted such license(s).

Section 16.06.Liquidation. 

(a)The Company shall Liquidate upon the Unanimous Member Approval of a Liquidation.

(b)The Company shall not be Liquidated except in accordance with this Article XVI.  To the maximum extent permitted under applicable Law, each Member hereby waives its right to seek (i) judicial dissolution of the Company pursuant to Section 18-802 of the Act or (ii) any other dissolution of the Company under the Act.  Except as otherwise set forth in

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this Article XVI, the bankruptcy (as defined in Section 18-101(1) or 18-304 of the Act) of a Member shall not cause such Member to cease to be a member of the Company or result in the Liquidation of the Company.

Section 16.07.Liquidation Procedure.

(a)The liquidating trustee shall be appointed by the Board and shall be responsible for overseeing the Liquidation in accordance with this Agreement and the requirements of the Act, including taking full account of the liabilities of the Company and its assets, determining which of the Company’s assets shall be distributed in kind and which assets shall be sold, and if sold, shall cause the Company’s assets to be sold and cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided in Section 16.07(b).  The liquidating trustee shall be entitled to reasonable compensation for such services which shall be paid by the Company.  Neither (i) any purchase by a Member belonging to the Woodward Group of the Membership Interest owned by GE nor (ii) any purchase by GE of the Membership Interests owned by the Woodward Group shall (in either case) in and of itself be deemed a Liquidation under this Article XVI.

(b)As soon as practicable following the effective date of dissolution, all proceeds from the Liquidation shall be distributed in the following order of priority unless otherwise required by applicable Law:

(i)first, to the creditors of the Company, including Members who are creditors, to the extent permitted by Law, in satisfaction of the liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) including the establishment of reasonable reserves for any contingent, conditional or unmatured liabilities of the Company; and

(ii)second, to the Members in accordance with Article XI.

(c)The winding up of the Company shall be completed when all debts, liabilities and obligations of the Company have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the Company have been distributed to the Members.  Upon the completion of the winding up of the Company, a certificate of cancellation of the Certificate of Formation of the Company shall be filed in the Office of the Secretary of the State of the State of Delaware.  The certificate of cancellation shall set forth the information required by the Act. 

Section 16.08.Limitations on Payments Made in Connection with Liquidation.  Except as otherwise provided under applicable Law, each Member shall be entitled to look solely to the assets of the Company for distributions and shall have no recourse for any Capital Contribution or share of any income or profits of the Company (upon Liquidation or otherwise) against any other Member.

Section 16.09.Waiver of Partition.  Each Member hereby waives any rights to partition of Company property.  No Member has any interest in specific Company property, except as expressly set forth in this Agreement or in any of the other Transaction Documents.

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Section 16.10.No Obligation to Restore Capital Accounts.  Except as required by applicable Law, no Member whose Capital Account balance has a negative or deficit amount (either during the existence of the Company or upon Liquidation) shall have any obligation to return any amounts previously distributed to such Member or to contribute cash or other assets to the Company to restore or make up the negative amount of, or deficit in, such Member’s Capital Account.

ARTICLE XVII
WOODWARD WHOLE BUSINESS SALE

Section 17.01.Prior Notice to GE of Woodward Whole Business Sale.  At least ten (10) Business Days prior to entering into a definitive agreement relating to a Woodward Sale, Woodward shall have provided to GE in writing (a) the identity of the potential acquirer, and (b) the material terms and conditions of such Woodward Sale (it being understood that each successive material amendment to the overall terms of such Woodward Sale shall trigger a new ten (10) Business Day period for Woodward to provide advance notice to GE under this clause (b)); provided,  however, that if GE or any of its Subsidiaries or Controlled Affiliates participates as a potential purchaser in any process involving or contemplating a Woodward Sale, Woodward’s obligations pursuant to item (b) of this Section 17.01 shall automatically terminate as it pertains to such process.

Section 17.02.Woodward Sale Call Option. 

(a)Within twelve (12) months following the consummation of the Woodward Sale (the “Woodward Sale Closing”), GE may (but shall not be required to), in its sole discretion, elect to exercise a call option with respect to all, but not less than all, of the Membership Interests of the Members belonging to the Woodward Group (a “Woodward Sale Call Option”) for a purchase price equal to the Woodward Sale Call Option Purchase Price and cause the Members and the Company to take the actions set forth in Section 17.03(a) and Section 17.03(b).  To exercise the Woodward Sale Call Option, GE must deliver a notice of exercise (a “Woodward Sale Call Option Request”) to the Company and Woodward on or before the end of the Woodward Sale Call Option Period.  If GE delivers a timely Woodward Sale Call Option Request, the Members will determine, or cause to be determined, the FMV in accordance with Section 17.08.  If GE fails to deliver a Woodward Sale Call Option Request on or prior to the end of the Woodward Sale Call Option Period, the right to exercise the Woodward Sale Call Option will expire. 

(b)In the event of a timely exercise of the Woodward Sale Call Option, the closing ofthe purchase of the Called Interests (the “Woodward Sale Call Option Closing”) shall occur within ninety (90) days after the determination of the FMV in accordance with Section 17.08 (unless a later date shall be required under applicable Laws), at which time GE will deliver, by wire transfer of immediately available funds to an account designated by Woodward, the Woodward Sale Call Option Purchase Price, and the applicable Woodward Group Member shall deliver (and absent such delivery shall be deemed hereby to have delivered) to GE an assignment of all its right, title and interest in or to the Called Interests.  Notwithstanding any other provision herein to the contrary, no Woodward Sale Call Option

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Closing will occur (i) unless such Woodward Sale Call Option Closing is permitted under applicable Law and (ii) unless and until any and all necessary approvals, authorizations or clearances from governmental entities and unaffiliated Persons have been obtained, including any required clearances under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any required approvals from any other competition authority.  The Members agree to cooperate, and to cause their Affiliates to cooperate, in the preparation and filing of any and all reports or other submissions required in connection with obtaining such approvals.

(c)The purchase and sale of any Called Interests pursuant to the Woodward Sale Call Option shall be effected pursuant to an agreement which (i) shall not include any warranty or representation, except that the applicable Woodward Group Member shall represent (or hereby be deemed to represent) to GE that it is the owner of all the Called Interests and that such Called Interests are free and clear of all liens and encumbrances, (ii) shall, subject to Section 17.02(d), permit GE to place a portion of the Woodward Sale Call Option Purchase Price into escrow, subject to a customary escrow agreement, and permit GE, as GE incurs reasonable and substantiated Transition Costs after the Woodward Sale Call Option Closing, to draw 50% of such incurred Transition Costs from such escrowed amount and (iii) shall provide that Woodward shall reimburse GE for 50% of the amount of any such Transition Costs not otherwise paid to GE out of such escrowed amount. 

(d)The amount of the Woodward Sale Call Option Purchase Price that GE shall be entitled to place into escrow shall be [***] of the estimated Transition Costs [***]to be incurred by GE after the Woodward Sale Call Option Closing, as reasonably estimated by GE and Woodward prior to the Woodward Sale Call Option Closing and provided for in a mutually agreed transition plan (the “Transition Plan”).  Such escrowed amount shall be held in escrow for the period of time specified in the Transition Plan (the “Escrow Period”), which period of time will be the period that GE and Woodward reasonably agree will be required for the transition to GE to occur.  GE and Woodward shall (i) review from time to time after the Woodward Sale Call Option Closing (but at least on an annual basis) the anticipated remaining Transition Costs to be incurred by GE and (ii) cause a portion of such escrowed amount to be released to Woodward to reflect any reductions to such anticipated Transition Costs reasonably agreed to by GE and Woodward. At the earlier of (A) the end of the Escrow Period and (B) the completion of the transition to GE in accordance with the Transition Plan, any remaining escrowed amounts shall be distributed to Woodward; provided that the portion of such escrowed amounts related to the contingent cost overages shall be released to Woodward on the [***] if and to the extent [***].  In the event that GE and Woodward do not agree on the estimate of Transition Costs, GE and Woodward shall mutually select an independent third party investment bank of national recognition and direct such investment bank to determine the Transition Costs within sixty (60) days of engagement of such investment bank.  GE and Woodward shall equally share the costs and expenses of such investment bank.  The determination of such investment bank shall be final and binding on GE and Woodward.  In the event that GE and Woodward do not agree on the Transition Plan or the release of any escrowed amount to Woodward in accordance with this Section 17.02(d), GE and Woodward shall engage a mutually agreeable third party with relevant industry experience to adjudicate such disagreement.  GE and Woodward shall equally share the costs and expenses of third party in connection with such adjudication. 

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Section 17.03.Required Actions for Woodward Sale Call Option.

(a)Transition Support.  As soon as practical after receipt by the Company and Woodward of a Woodward Sale Call Option Request, GE, Woodward and the Company shall, to the extent necessary, except as otherwise provided herein, terminate and/or amend each Transaction Document (other than the Purchase and Sale Agreement, the Royalty Agreement and the IP Rights Agreement and with respect to this Agreement, subject to Section 16.01) or enter into new agreements, as applicable, effective as of the Woodward Sale Call Option Closing, pursuant to which:

(i)Woodward shall continue to manufacture, supply and provide products and services to GE on the same terms as it provided such products and services to the Company pursuant to the Transaction Documents, until GE is able to establish an alternate provider or provide such products and services independently;

(ii)Woodward shall provide other reasonable support as reasonably requested by GE to support to transition such products and services to GE; and

(iii)appropriate protections and contractual arrangements will be established by Woodward and GE to ensure continued protection of any Intellectual Property or confidential information. 

(b)Manufacturing Transition Support.  As soon as practical after receipt by the Company and Woodward of a Woodward Sale Call Option Request, Woodward and GE will support, on an equal cost and expense basis, the establishment, in one location, of manufacturing capabilities to the extent necessary for the transition of the Company’s operations to GE with respect to the production of the then material Woodward LRUs, including incurring reasonable costs (as determined by GE and Woodward) related to property, plant, equipment and certification, in each case to the extent necessary for the transition of the production operations to GE with respect to the then material Woodward LRUs within the Company Scope and to the extent of Woodward’s then-current production volume with respect to such Woodward LRUs (such costs, collectively, the “Manufacturing Transition Costs”).  For the avoidance of doubt, Manufacturing Transition Costs include only those costs associated with enabling transition of capabilities to GE and do not include expenses by or on behalf of GE in connection with ongoing business operations, even if concurrent with any transition period. 

(c)Transition Costs.  Transition Costs will be borne equally by Woodward and GE, subject to Section 17.02(c) and Section 17.02(d), except to the extent the Members otherwise agree in writing that specified Transition Costs may be borne by the Company.  If any Transition Costs are to be paid by the Company, each of GE and Woodward shall make Capital Contributions necessary to enable the Company to pay for the establishment of manufacturing capabilities as described in this Section 17.03(b) and any assets purchased by the Company with such Capital Contributions shall be transferred to GE, with such transfer to be effective as of the Woodward Sale Call Option Closing.

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Section 17.04.Supply Assurances.  In furtherance of Section 17.03(a), after a Woodward Sale Closing, [***] shall be deemed to have been amended to include the supply assurances set forth in Section 17.04(a) through Section 17.04(f) (collectively, the “Supply Assurances”).  These provisions will apply to any Affiliates of Woodward, including any ultimate parent of an acquiring entity of Woodward.  For purposes of this Agreement, the parts manufactured under the [***] are referred to as the “GE Parts”.  The Supply Assurances will commence upon the Woodward Sale Closing, and will apply only with respect to products shipped or activities occurring after the date of Woodward Sale Closing.  The Supply Assurances with respect to [***] will survive for a period ending on the date that is [***] following the Woodward Sale Closing.  The Supply Assurances with respect to the [***]will survive for a period ending on the earlier of (1) the date that is [***] following the Woodward Sale Closing and (2) if GE exercises the Woodward Sale Call Option, [***]. 

(a)[***]

(b)[***]

(c)Staffing.  Woodward shall maintain staffing related to the GE Parts materially consistent with the staffing levels and practices prior to the date of the Woodward Sale Closing, taking into consideration demand requirements and positive effects of labor initiatives. 

(d)Performance during Dispute.  If there is a dispute between the parties to any Supply Agreement, Woodward and the Company, as applicable, shall continue to perform its obligations under such Supply Agreement during such dispute.

(e)Confidential Information.  Woodward will establish any additional security controls as reasonably necessary to protect any confidential, technical, proprietary or other information of GE and the Company, as specified by GE.  [***]

(f)Capacity and Investment.  For so long as Woodward remains obligated to supply GE Parts to GE, Woodward shall maintain at least as much production capacity for the GE Parts as it had immediately prior to the [***].

Section 17.05.Waiver of Non-Solicit.  After a Woodward Sale Call Option Closing, Woodward shall be deemed to have waived compliance by GE of the non-solicit obligations of GE in Section 6.04(d), with such waiver to be effective from and after the Woodward Sale Call Option Closing.

Section 17.06.Intellectual Property Treatment upon a Woodward Sale Call Option.

(a)Notwithstanding the Woodward Sale Call Option Closing, the Woodward Background IP License Agreement shall continue in effect in accordance with its terms, including Section 8.06 (Assignment) thereof which, upon the Woodward Sale Call Option Closing, governs any changes to the license granted thereunder and provides for GE (as opposed to the Company) to become the licensee.

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(b)With respect to any Intellectual Property of the Company that is licensed to Woodward (but not GE) pursuant to the JV Improvement IP Chart set forth in [appropriate cross reference to be inserted at closing], after a Woodward Sale Call Option Closing, such Intellectual Property shall be jointly owned, without the duty to account, by Woodward and the Company (it being understood that the Company may freely assign its joint ownership rights to GE) (each of Woodward and the Company (or GE in the case of an assignment to GE) for purposes of this Section 17.06(b), a “joint owner”); provided,  however, that neither joint owner shall be entitled to license to any third party such Intellectual Property without the prior written consent of the other joint owner (such consent not to be unreasonably withheld, conditioned or delayed).  In addition and subject to the foregoing, the joint owners shall cooperate in good faith regarding all matters relating to the prosecution, maintenance, defense and enforcement of such jointly owned Intellectual Property.

(c)With respect to any Intellectual Property of the Company that is licensed to Woodward (other than Intellectual Property of the Company described in Section 17.06(b)), after a Woodward Sale Call Option Closing the licenses with respect to such Intellectual Property shall survive without any change to their respective terms and in accordance with the terms and conditions set forth in the agreement(s) pursuant to which Woodward is granted such license(s).

Section 17.07.Continued Payment Obligations.  Neither the exercise or consummation of a Woodward Sale Call Option, nor any Liquidation of the Company following a Woodward Sale Call Option Closing, nor the termination of any Transaction Document pursuant to Section 17.03(a) shall affect Woodward’s rights to receive (a) the Woodward Annual Payment Amount pursuant to the Purchase and Sale Agreement, and (b) any Royalty pursuant to the Royalty Agreement.  The termination of this Agreement and/or any other Transaction Documents pursuant to Section 17.03(a) shall not relieve any Member of any obligations arising under this Agreement prior to any such termination or any party to any other Transaction Document of any obligations arising thereunder prior to any such termination.

Section 17.08.Determination of Fair Market Value.  Whenever FMV is required to be determined pursuant to this Agreement, the following process shall apply:

(a)Within ten (10) Business Days after receipt of the Woodward Sale Call Option Request, GE and Woodward shall mutually select an independent third party investment bank of national recognition (the “Initial Appraiser”) and direct the Initial Appraiser to determine the FMV within sixty (60) days of engagement of the Initial Appraiser (such determination, the “Initial Appraisal”).  GE and Woodward shall equally share the costs and expenses of the Initial Appraiser.  After receipt of the Initial Appraisal, in the event GE and Woodward, each in their sole discretion, accept in writing the Initial Appraisal, the Initial Appraisal shall be the FMV.

(b)If within ten (10) Business Days after receipt of the Initial Appraisal, either GE or Woodward has not accepted the Initial Appraisal as contemplated by Section 17.08(a), then (i) GE shall select a third party investment bank of national recognition (other than the Initial Appraiser and the Woodward Appraiser) (the “GE Appraiser”) and direct

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the GE Appraiser to determine the FMV within thirty (30) days after such ten (10) Business Day period (such determination, the “GE Appraisal”) and (ii) Woodward shall select a third party investment bank of national recognition (other than the Initial Appraiser and the GE Appraiser) (the “Woodward Appraiser”) and direct the Woodward Appraiser to determine the FMV within thirty (30) days after such ten (10) Business Day period (such determination, the “Woodward Appraisal”).  GE shall pay the costs and expenses of the GE Appraiser and Woodward shall pay the costs and expenses of the Woodward Appraiser.  If the GE Appraisal and the Woodward Appraisal are within ten percent (10%) of one another, the FMV shall be the average of the GE Appraisal and the Woodward Appraisal. 

(c)If the GE Appraisal and the Woodward Appraisal differ by more than ten percent (10%), within ten (10) Business Days after receipt of the GE Appraisal and the Woodward Appraisal, the GE Appraiser and the Woodward Appraiser shall mutually select an independent third party investment bank of national recognition (other than the Initial Appraiser, the GE Appraiser and the Woodward Appraiser) (the “Final Appraiser”) and direct the Final Appraiser to determine the FMV within sixty (60) days after such ten (10) Business Day period (such determination, the “Final Appraisal” and together with the Initial Appraisal, the GE Appraisal and the Woodward Appraisal, the “Appraisals”).  GE and Woodward shall equally share the costs and expenses of the Final Appraiser.  After receipt of the Final Appraisal, in the event GE and Woodward, each in their sole discretion, accept in writing the Final Appraisal, the Final Appraisal shall be the FMV.

(d)If within ten (10) Business Days after receipt of the Final Appraisal, either GE or Woodward has not accepted the Final Appraisal as contemplated by Section 17.08(c), the lowest and the highest of the Appraisals shall be disregarded and the FMV shall be the average of the remaining two Appraisals.

Section 17.09.General.  For purposes of this Article XVII, all references to “Woodward” shall be deemed references to (a) the acquirer of Woodward (or Woodward’s Aircraft Turbine Systems business unit or aerospace fuel systems business) in a Woodward Sale or (b) the successor-in-interest to Woodward (including, in the case of a merger or consolidation, the Surviving Entity) in a Woodward Sale.

ARTICLE XVIII
CONFIDENTIALITY, PUBLICITY AND OWNERSHIP OF INFORMATION

Section 18.01.Confidentiality. 

(a)Each Member shall, and shall cause its Affiliates and any officers, directors, managers, employees, agents and representatives of it or its Affiliates (“Member Representatives”) to, keep confidential and not to reveal, to any other Person (other than on a “need to know” basis, to the Company or its directors, managers, officers and employees, to any of its Member Representatives (each of whom shall be subject to the confidentiality obligations set forth herein), or to the other Members or such other Members’ Affiliates), any confidential or proprietary documents or other confidential or proprietary information of the Company provided pursuant to or in connection with any of the Transaction Documents or that comes to the

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knowledge of such Member or its Member Representatives by reason of the relationship of such Member or Member Representative with the Company (“Confidential Information”).

(b)Notwithstanding the foregoing, the obligations set forth in Section 18.01(a) shall not apply to Confidential Information that such Person (i) is required to disclose under any applicable Laws (provided that in the event disclosure is required by applicable Laws, such Person shall, to the extent reasonably possible, (A) provide the Member from whom or from whose Affiliates such information is obtained with prompt notice of such requirement prior to making any disclosure so that such other Member or any of its Affiliates may seek an appropriate protective order and (B) provide the minimum disclosure of such Confidential Information as is practicable under the circumstances and seek to obtain confidential treatment of such disclosed information) or (ii) uses for purposes of enforcing any rights under this Agreement or under any other Transaction Document. 

(c)“Confidential Information” does not include, and there shall be no obligations hereunder with respect to, information that (a) at the time of disclosure is generally available to the public (other than as a result of a disclosure by such Member or its Member Representatives in breach of this Section 18.01) or (b) was, is or becomes available to such Person on a non-confidential basis from a source that is not prohibited from disclosing such Confidential Information to such Person.  Nothing in this Section 18.01 shall preclude any Member or its Affiliates from disclosing Confidential Information to appropriate Governmental Authorities to the extent required by applicable Laws or applicable stock exchange regulations; provided, that the Members shall cooperate as to the timing and contents of any such disclosure and the disclosing Member shall exercise its reasonable efforts to preserve the confidentiality of the information included in such disclosure as reasonably requested by the other Members, including seeking confidential treatment of such information. 

(d)Notwithstanding anything to the contrary herein, each Member agrees that such Member and its Member Representatives shall not use any of the Confidential Information for any reason or purpose other than (i) in connection with the business of the Company or as contemplated by any of the Transaction Documents or performing obligations or enforcing rights hereunder or thereunder or (ii) in any manner reasonably connected to its investment in the Company.

Section 18.02.Press Releases; Public Announcements. 

(a)Except as provided in Section 18.02(b), no press release or other public statement or announcement with respect to this Agreement or any of the other Transaction Documents or the terms hereof or thereof or the transactions contemplated hereby or thereby shall be issued by any Member or any of its Member Representatives and (except as may be required by applicable Laws or applicable stock exchange regulation) none of them shall disclose this Agreement or any of the other Transaction Documents or the terms hereof or thereof or the transactions contemplated hereby or thereby to any Person (other than their Member Representatives; provided that the disclosing Person shall be responsible for compliance by such Member Representatives with the terms of this provision), in each case without the prior written consent of Woodward, in the case of GE, and GE, in the case of a Member belonging to the

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Woodward Group, and the Members shall cooperate as to the timing and contents of any such press release, public announcement or disclosure.  The foregoing shall not prohibit any press release or other public statement or announcement (or any other disclosure) of information that was (or was in substance) previously disclosed in a previously agreed upon public statement or announcement or is otherwise in the public domain other than as a result of a breach of this provision by a disclosing Member or any of its Affiliates and shall not preclude any Member or its Member Representatives from disclosing this Agreement or any of the other Transaction Documents or the terms hereof or thereof or the transactions contemplated hereby or thereby to appropriate Governmental Authorities to the extent required by applicable Laws or applicable stock exchange regulation; provided that, except as provided in Section 18.02(b), the Members shall cooperate as to the timing and contents of any such disclosure and the disclosing Member shall exercise its reasonable efforts to preserve the confidentiality of the information included in such disclosure as reasonably requested by the other Member, including seeking confidential treatment of such information. 

(b)The Members hereby acknowledge and agree that Woodward may disclose the entry into, and a summary description of, this Agreement and one or more of the other Transaction Documents on a Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”) after the date this Agreement or such other Transaction Documents, as the case may be, are executed and delivered by the Members, and to file this Agreement or such other Transaction Documents, as the case may be, with the SEC as an exhibit to the Form 8-K or a subsequently filed periodic report, subject to the Member’s agreement to cooperate as to the timing and contents of such disclosure set forth in Section 18.02(a).  In addition, the Members hereby acknowledge and agree that Woodward and GE may from time to time disclose in their respective filings with the SEC information regarding the financial condition and results of operations of the Company, including information regarding the profits and losses of the Company attributable to, distributions received by, and tax impact on, the Woodward Members or GE, as the case may be, arising out of their respective interests in the Company, as well as the impact of the Company’s business on their respective businesses, financial condition and results of operations, in which case no prior notice to, or consent of, GE (in the case of disclosure by Woodward) or Woodward (in the case of disclosure by GE) will be required, provided that any disclosure of material terms of this Agreement or any other Transaction Document that was not (or was not in substance) previously disclosed shall be subject to the Member’s agreement to cooperate as to the timing and contents of such disclosure set forth in Section 18.02(a).

(c)Notwithstanding anything to the contrary, if at any time this Agreement has not been publicly made available, Woodward shall be entitled to provide any potential acquiror of Woodward (or any assets of Woodward) with the terms set forth in Article XVII provided that such potential acquiror signs a customary confidentiality agreement prior to receiving such copy.

ARTICLE XIX
COMPLIANCE

Section 19.01.Company Code of Conduct.

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(a)Annex J sets forth the internal control policies and procedures to maintain, monitor and enforce the Company’s compliance with all applicable Laws and to manage the significant risks to which the Company is exposed (the “Company Code of Conduct”). 

(b)The Members will initially designate the Finance Manager as chief compliance officer responsible, with support from the Board, for overseeing the Company’s implementation of the Company Code of Conduct, including provisions of this Article XIX (the “Chief Compliance Officer”).  The Chief Compliance Officer shall not be required to be a separate position or a Secondee, and may be an employee of GE or of a Member belonging to the Woodward Group.  The initial Chief Compliance Officer and any replacements or successors thereof shall serve subject to his or her removal (with or without cause) by the Board, termination (with or without cause) by the Board, resignation, death, retirement or disability.  In the event of any vacancies in the Chief Compliance Officer position, the Board shall nominate and appoint replacements.  The Chief Compliance Officer shall report directly to the Board on all matters related to compliance.  The Chief Compliance Officer shall report to the Board on the state of the Company Code of Conduct quarterly (or at such other times as determined by the Board).

(c)The Company Code of Conduct shall include the following elements:  (i) an internal audit and review function which shall review and audit the Company’s compliance with the Company Code of Conduct and applicable Laws on an annual basis; (ii) a system for allowing for the Secondees, Directors and third parties to raise concerns regarding the Company’s compliance with applicable Laws or the Company Code of Conduct which shall include a means for the Secondees to report compliance concerns either to an ombudsman, to the Chief Compliance Officer or directly to the Board and to report anonymously on such matters; (iii) an annual risk assessment process for assessing the effectiveness of the Company Code of Conduct, identifying significant compliance risks to the Company, and establishing abatement plans with respect thereto; (iv) regular training for all of the Secondees, Directors and Officers regarding compliance with the Company Code of Conduct; (v) regular communications from the Board, the Chief Compliance Officer and other Officers to Secondees regarding the Company Code of Conduct and the Company’s compliance with applicable Laws; and (vi) applicable policies and procedures of the Company in addition to the Company’s Code of Conduct.

Section 19.02.Notice of Compliance Events.  The Company shall provide prompt written notice to each of the Members of any compliance event reasonably likely to materially adversely impact the Company’s operations, including:  (a) notices of violations of Law or the Company Code of Conduct; (b) fines or assessments; (c) citations; (d) Proceedings; (e) written complaints or administrative actions alleging violations of Law; (f) serious personal injury or property damage; or (g) conditions which may cause the Company to operate in non-compliance with the Company Code of Conduct or applicable Law.

Section 19.03.No Forced Labor.  The Company shall not, and shall use commercially reasonable efforts to ensure that its suppliers and its subcontractors shall not, use child or prison labor in connection with their operations.

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Section 19.04.Technology and IP Protections.  Each of the Members and the Company shall comply with the principles with respect to technology and Intellectual Property set forth on Annex K, and, to the extent necessary, implement policies and procedures in connection therewith.

ARTICLE XX
GENERAL PROVISIONS

Section 20.01.Damages.  Except as set forth herein, in no event shall the Company or any Member in its capacity as a Member be liable for any indirect, incidental, consequential, exemplary, special or punitive damages, losses or expenses, including lost or anticipated revenues or profits, business interruption, diminution in value or injury to goodwill or reputation arising out of or relating to this Agreement, whether such liability is asserted on the basis of contract (including any breach or termination of this Agreement), tort (including negligence or strict liability), or otherwise, even if the Company, the Members or any or all of them have been warned of the possibility of any such damages, losses or expenses in advance, other than any such damages required to be paid by the Company, a Member or an Affiliate of any of them to any third party arising out of a Proceeding by such third party with respect to this Agreement or the transactions contemplated hereby.

Section 20.02.Successors and Assigns; Third Party Beneficiaries.  This Agreement shall be binding on and shall inure to the benefit of the Members and their respective successors and permitted assigns.  Except as otherwise provided in Article XIV, (a) none of the Members may assign, transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties hereunder without the prior written consent of the Other Member or Member Group or in connection with a Transfer of Membership Interests in compliance with Article XIV and (b) any such purported assignment, transfer, hypothecation or other conveyance by any party hereto without the prior written consent of the Other Member or Member Group shall be void.  The terms and provisions of this Agreement are for the purpose of defining the relative rights and obligations of the Members with respect to the transactions contemplated hereby and no Person shall be a third party beneficiary of any of the terms and provisions of this Agreement.

Section 20.03.Complete Agreement.  This Agreement (including the Annexes and Schedules hereto) and the other Transaction Documents constitute the complete agreement among the Members with respect to the subject matter hereof and thereof.

Section 20.04.Amendments and Modifications.  No amendment, modification or variation of any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed by each of the Members.

Section 20.05.Conflict between Transaction Documents.  If there is any express conflict between the terms and conditions of this Agreement and the terms and conditions of any other Transaction Document, the terms and conditions of such other Transaction Document shall govern to the extent of such conflict.

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Section 20.06.No Waiver.  The failure of any party hereto, at any time or times, to require strict performance by the other party hereto of any provision of this Agreement shall not waive, affect or diminish any right of such party thereafter to demand strict compliance and performance herewith.  Any suspension or waiver of any provision of this Agreement shall not suspend, waive or affect any other provision of this Agreement whether the same is prior or subsequent thereto.  None of the undertakings, agreements and covenants of any party hereto contained in or contemplated by any other provision of this Agreement shall be deemed to have been suspended or waived by any other party hereto, unless such waiver or suspension is by an instrument in writing signed by an officer of or other authorized employee of such party and directed to any other party hereto specifying such suspension or waiver.

Section 20.07.Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable Law, but if any provision of this Agreement shall be prohibited by or invalid under applicable Law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 20.08.GOVERNING LAW.  IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. 

Section 20.09.Consent to Jurisdiction.  Any dispute, controversy or claim (whether sounding in contract, tort or otherwise) arising out of or relating to this Agreement, including the meaning of its provisions, or the proper performance of any of its terms by any Member, or its breach, termination or invalidity, shall be subject to the exclusive jurisdiction of the courts of the State of Delaware sitting in the City of Wilmington or of the Federal courts sitting therein.  Each of the Members hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any Member anywhere in the world, whether within or without the jurisdiction of any such court.

Section 20.10.Fees and Expenses.  Unless otherwise expressly provided herein, each Member shall bear its own fees and expenses incurred in connection with the matters described herein, including fees and expenses of financial, legal and accounting advisors and other outside consultants, except as may otherwise be agreed by the Members in the case of expenses that would otherwise be properly allocated to the Company.  All third-party expenses of the Company, including with respect to its formation and all ongoing fees and expenses, shall be paid by the Company.

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Section 20.11.Notices.  Whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any party hereto by any other party hereto, or whenever any of the Members desires to give or serve upon any other party hereto any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and five (5) Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) two (2) Business Days after deposit with a Courier with all charges prepaid or (c) when delivered, if hand-delivered by messenger, or (d) on the date sent by facsimile (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient, all of which shall be addressed to the party to be notified and sent to the address set forth in Annex B or to such other address as may be substituted by notice given as herein provided. 

Section 20.12.Counterparts.  This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement.  Delivery of such an executed counterpart electronically (including by email or facsimile) shall be an original, with the same effect as delivery of such an executed counterpart in person.

Section 20.13.WAIVER OF JURY TRIAL.  THE MEMBERS WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN ANY MEMBERS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THIS AGREEMENT.

Section 20.14.No Strict Construction.  The Members have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Members and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.

Section 20.15.Headings.  The descriptive headings of the several Articles and Sections and the Table of Contents contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement among the Members.

Section 20.16.No Recourse.  Each of the Members agree that the duties, obligations and liabilities of each Member arising under or related to this Agreement shall solely be the duties, obligations and liabilities of such Member, and no past, present or future Affiliate, member, stockholder, partner, manager, director, officer, employee, representative or agent shall have any liability for any obligations or liabilities of the Members under this Agreement of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby. 

Section 20.17.Specific Performance.  Each Member acknowledges and agrees that a breach of this Agreement (including a breach of Section 6.04) may give rise to irreparable harm

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for which monetary damages would not be an adequate remedy.  Each Member accordingly agrees that, notwithstanding the provisions of Section 8.01, only for the purpose of seeking relief under this Section 20.17 and without waiving any remedy under this Agreement or any other Transaction Document, each Member shall be entitled to seek to enforce the terms of this Agreement by decree of specific performance to obtain injunctive relief against any breach or threatened breach of this Agreement (“Injunctive Relief”).  The Members further consent to the giving of any interim and conservatory relief by a court of competent jurisdiction pursuant to Section 20.09 (including any temporary or permanent Injunctive Relief), including the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order, award or judgment which may be made or given in any such Proceeding.  Each Member waives any objection that it may have to any such courts on the grounds of inconvenient forum.  The Members agree to abide by and perform any order, award or judgment with respect to Injunctive Relief issued in any Proceeding pursuant to this Section 20.17. 

[The remainder of this page is left blank intentionally.]

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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first above written.

MEMBERS:
WOODWARD, INC.
By:
	Name:
	Title:

[WOODWARD AFFILIATE]
	[WOODWARD AFFILIATE]
	By:   Woodward, Inc., its managing member
	By:
		Name:
		Title:

GENERAL ELECTRIC COMPANY
acting by and through GE Aviation
By:
	Name:
	Title:

[Signature Page to Amended and Restated Limited Liability Company Agreement
of [Joint Venture Company]]

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ANNEX A

Definitions

For the purposes of this Agreement, the following terms shall have the following meanings:

“Act” has the meaning set forth in Section 2.01(a).

“Additional Fundings” has the meaning set forth in Section 4.02(b).

“Adjusted Capital Account Deficit” means, with respect to any Member, a deficit balance in such Member’s Capital Account as of the end of the relevant Taxable Year, after giving effect to the following adjustments:

(a)Credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1) and 1.704 2(i)(5); and

(b)Debit from such Capital Account the items described in Treasury Regulations Sections 1.704-l(b)(2)(ii)(d)(4), 1.704 1(b)(2)(ii)(d)(5) and 1.704 1(b)(2)(ii)(d)(6).

The foregoing definition of “Adjusted Capital Account Deficit” is intended to comply with the provisions of Treasury Regulations Section 1.704 1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Adjustment” has the meaning set forth in Section 13.05(c).

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with, such Person; provided,  however, that (a) with respect to the Company and its Subsidiaries, “Affiliates” shall be deemed to expressly exclude GE, Woodward and Woodward Affiliate and each of their Affiliates, (b) with respect to Woodward and Woodward Affiliate and their respective Subsidiaries, “Affiliates” shall be deemed to expressly exclude the Company and its Subsidiaries, and (c) with respect to GE and its Subsidiaries, “Affiliates” shall be deemed to expressly exclude the Company and its Subsidiaries.

“Agreement” has the meaning set forth in the Preamble.

“Ancillary Documents Agreement” means the Ancillary Documents Agreement, dated as May 20, 2015, by and between GE and Woodward.

“Annual Business Plan” for any Fiscal Year means the business plan of the Company for such Fiscal Year and the following four (4) Fiscal Years approved in accordance with the provisions of Section 5.07(i) and Section 5.10, which business plan shall include a Budget, the timing and amounts of any contemplated Additional Fundings and target metrics for the

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Company so that the Company is competitive with respect to productivity, quality, technology, qualification cost, pricing, delivery timing, delinquency rate and safety.

“Appraisals” has the meaning set forth in Section 17.08(c).  

“Asset Fair Market Value” means, with respect to any asset, the cash price that would be paid in an arm’s length sale by a willing buyer, under no compulsion to buy, to a willing seller, under no compulsion to sell, unreduced by any liabilities secured by such asset or assumed by any party in connection therewith, as determined by Unanimous Board Approval.

“Board” has the meaning set forth in Section 5.01.

“Board Deadlock” has the meaning set forth in Section 5.09(a).

“Book Item” has the meaning set forth in Section 13.05(a).

“Budget” for any Fiscal Year, means an operating budget of the Company for such Fiscal Year setting forth the budgeted revenues, costs and expenses, including capital expenditures, of the Company for such Fiscal Year.

“Business Day” means each day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to close.

“Business Unit Sale” shall mean: (a) with respect to GE, a sale or transfer by GE of all or substantially all of GE Aviation, whether structured as an asset sale, stock sale, merger or otherwise and (b) with respect to Woodward, a sale or transfer of all or substantially all of its Aircraft Turbine Systems business unit or its aerospace fuel systems business, whether structured as an asset sale, stock sale, merger or otherwise; providedthat a “Business Unit Sale” shall not be deemed to have occurred if such a sale or transfer results directly or indirectly from a merger or consolidation that would constitute a “Change of Control” but for the proviso of the definition of “Change of Control”. 

“Called Interests” means any Membership Interests that are subject to an exercise of a Termination Event Call Option or a Woodward Sale Call Option.

“Capital Account” means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions:

(a)To each Member’s Capital Account, there shall be credited such Member’s Capital Contributions, such Member’s distributive share of Net Income (or items of income or gain) allocated pursuant to Section 13.02 or any item in the nature of income or gain which is specially allocated pursuant to Sections 13.03 and 13.04 and the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member;

(b)From each Member’s Capital Account, there shall be debited the amount of cash and the Gross Asset Value of any property distributed to such Member pursuant to any

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provision of this Agreement, such Member’s distributive share of Net Loss (or items of expense or loss) allocated pursuant to Section 13.02 or any item in the nature of expense or loss which is specially allocated pursuant to Sections 13.03 and 13.04 and the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company;

(c)If all or a portion of a Membership Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent that it relates to the transferred Membership Interest; and

(d)In determining the amount of any liability for purposes of subparagraphs (a) and (b), there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and the Treasury Regulations.

Notwithstanding anything in the foregoing to the contrary, each Member’s Capital Account (as of the Closing Date and after giving effect to all of the transactions contemplated by this Agreement, the Woodward Contribution Agreement, the GE Contribution Agreement, the Purchase and Sale Agreement and the Master Agreement) shall be the amounts set forth in Annex D.  The foregoing provision and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704 1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

“Capital Contribution” means any cash (other than a Capital Loan), property, services rendered or other obligation to contribute cash or property or to perform services contributed to the Company by any Member (or its predecessor in interest) as provided in Article IV.

“Capital Loan” has the meaning set forth in Section 4.05(a).

“Capital Markets Activity” means any activity undertaken in connection with efforts by any Person to raise for or on behalf of any Person capital from any public or private source.

“Certificate of Formation” has the meaning set forth in the Recitals.

“Change of Control” shall mean, with respect to any Person:  (a) any transaction or series of transactions, that would result in, directly or indirectly (i) the acquisition of de facto control of that Person by a third Person or group (as defined in Section 13(d) of the Securities Exchange Act of 1934), including the power to direct or cause the direction of the management or policies of such Person, or the exercise of negative control through the right to approve or reject decisions on material items, whether direct or indirect and whether through the ownership of securities or ownership interest or by contract, trust or otherwise, or (ii) any third Person (or group of Persons) owning or holding all or substantially all of the assets of such Person determined on a fair market value basis of the assets of such Person; or (b) a merger, consolidation, recapitalization or sale of equity interests of such Person by such Person or the holders of its equity interests to a third Person (or group of Persons), or similar transaction or series of transactions, in each case that results in any third Person (or group of Persons) owning, directly or indirectly, (i) more than 50% of any class of securities of such Person (or the

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surviving or resulting entity of such merger or consolidation or, if such Person or surviving or resulting entity is a direct or indirect wholly owned Subsidiary of an ultimate parent entity, such ultimate parent entity) (the “Surviving Entity”) or (ii) more than 40% of any class of securities of the Surviving Entity, together with the right to elect or appoint 33% or more of the board of directors or similar governing body of the Surviving Entity (such board or similar governing body, the “Surviving Board”); providedthat a “Change of Control” shall not be deemed to have occurred under clauses (a) or (b) above with respect to any merger or consolidation in which (A) all or a subset of the directors (or similar Persons) of such Person immediately prior to the consummation of such merger or consolidation constitute at least two-thirds of the Surviving Board immediately after such merger or consolidation, (B) all or a subset of the executive officers of such Person, including the Chief Executive Officer, immediately prior to the consummation of such merger or consolidation constitute at least two-thirds of the executive officers of the Surviving Entity immediately after such merger or consolidation, (C) immediately after such merger or consolidation no third Person or group (as defined in Section 13(d) of the Securities Exchange Act of 1934) holds, directly or indirectly, voting securities of the Surviving Entity representing a majority of the voting power of the Surviving Entity and (D) the holders of voting securities of such Person (or, if such Person is a direct or indirect wholly owned Subsidiary of an ultimate parent entity, the ultimate parent entity of such Person) immediately prior to the merger or consolidation represent more than 33% of the voting power of the Surviving Entity immediately after such merger or consolidation.

“Chief Compliance Officer” has the meaning set forth in Section 19.01(a).

“Claim” means all rights to causes of action, claims, demands, rights and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate.

“Closing Date” has the meaning set forth in the Preamble.

“Code” means the Internal Revenue Code of 1986.  To the extent that reference is made to any particular section of the Code, such reference shall be to any corresponding provisions of any successor statute or Law.

“Company” has the meaning set forth in the Preamble.

“Company Accounting Methodology” means GAAP and the selection of policy alternatives under GAAP of Woodward and the related accounting practices of Woodward.

“Company Auditor” has the meaning set forth in Section 12.02.

“Company Code of Conduct” has the meaning set forth in Section 19.01(a).

“Company Minimum Gain” has the same meaning as the term “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

“Company Purpose” has the meaning set forth in Section 3.01(a).

“Company Scope” has the meaning set forth in Section 3.01(b).

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“Company Scope Program” means all of the engines programs of GE (and GE’s Subsidiaries and Controlled Affiliates) that are within the Company Scope, including, for the avoidance of doubt, any Future Programs, and, excluding, for the avoidance of doubt, all non-aviation engines (for example, industrial derivatives of aviation engines).

“Company Supply Agreement” means the Supply Agreement, dated as of the Closing Date, by and between GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Confidential Information” has the meaning set forth in Section 18.01(a) and Section 18.01(c).

“Confidentiality Agreement” means the Confidentiality Agreement, dated as of October 28, 2015, by and between GE and Woodward, as the same has been and may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Control” (including, with correlative meanings, the terms “Controlling,” “Controlled by” or “under common Control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“Courier” means a nationally recognized overnight courier.

“Covered Person” has the meaning set forth in Section 10.01.

“Damages” means any losses, liabilities, claims, damages, fines, penalties, assessments by public agencies, settlements, costs or expenses (including reasonable costs of investigation and defense and reasonable attorneys’ fees).

“Default Recovery Activities” means the exercise of any rights or remedies in connection with any Capital Markets Activity, Financing Activity, Insurance, Leasing Activity, Other Financial Services Activity or Securities Activity (whether such rights or remedies arise under any agreement relating to such activity, under applicable Law or otherwise), including any foreclosure, realization or repossession or ownership of any collateral, business, assets or other security for any Financing Activity (including the equity in any entity or business), Insurance or Other Financial Services Activity or any property subject to Leasing Activity.

“De Minimis Investment” means, with respect to a Person, any minority equity investment of such Person or any of its Affiliates in any other Person (a) in which the investing Person and its Affiliates collectively hold not more than [***] of the outstanding voting securities or similar equity interests, to the extent such equity interests do not give the investing Person and its Affiliates the right to designate a majority, or such higher amount constituting a Controlling number, of the members of the board of directors (or similar governing body) of such entity, and (b) in which the aggregate annual revenue from the competing portion of the business of the Person in which the minority equity is held is less than [***], in each case where

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the investing Person and its Affiliates do not have an active role in the management of the day-to-day operations of the business conducted by such entity.

“Deadlock” has the meaning set forth in Section 8.01(b).

“Defaulting Memberor Member Group” has the meaning set forth in Section 4.05(a).

“Depreciation” means, for each Taxable Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Taxable Year, except that (a) with respect to any asset the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes at the beginning of such Taxable Year and which difference is being eliminated by use of the “remedial allocation method” as defined by Section 1.704-3(d) of the Treasury Regulations, Depreciation for such Taxable Year shall be the amount of book basis recovered for such Taxable Year under the rules prescribed by Section 1.704-3(d)(2) of the Treasury Regulations, and (b) with respect to any other asset the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes at the beginning of such Taxable Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Taxable Year bears to such beginning adjusted tax basis; provided,  however, that in the case of clause (b) above, if the adjusted tax basis for federal income tax purposes of an asset at the beginning of such Taxable Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board.

“Depreciation Recapture” has the meaning set forth in Section 13.05(a)(i)(B).

“Designated Return Preparer” has the meaning set forth in Section 12.05(c).

“Director” has the meaning set forth in Section 5.01.

“Dispute” has the meaning set forth in Section 8.01(a). 

“Drawdown Time” has the meaning set forth in Section 4.04.

“Encumbrance” means, with respect to any asset, any lien, mortgage, pledge, hypothecation, right of others, Claim, security interest, encumbrance, lease, sublease, license, interest, option, charge or other restriction or limitation of any nature whatsoever in respect of such asset.

“Engineering Committee” has the meaning set forth in Section 5.12(a).

“Equity Interest” means all shares, options, warrants, general or limited partnership interests, membership interests, or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11 1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

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“ESA” means the Engineering Services Agreement, dated as of the Closing Date, by and among Woodward, GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Escrow Period” has the meaning set forth in Section 17.02(d).

“Exchange Act” means the Securities Exchange Act of 1934.

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“Existing Business Activities” means any of the following activities: [***].

“Final Appraisal” has the meaning set forth in Section 17.08(c).

“Final Appraiser” has the meaning set forth in Section 17.08(c).

“Finance Manager” has the meaning set forth in Section 5.02(b)(ii).

“Financial Services Business” means any activities undertaken principally in connection with or principally in furtherance of any (a) Capital Markets Activity, (b) Financing Activity, (c) Leasing Activity, (d) Default Recovery Activities and Remarketing Activities, (e) Other Financial Services Activities, (f) any Securities Activity or (g) sale of Insurance, conduct of any Insurance brokerage activities or services or provision of Insurance advisory services, business processes or software.  Financial Services Business also includes any investment or ownership interest in a Person through an employee benefit or pension plan. 

“Financing Activity” means the making, entering into, purchase of, or participation in (including syndication or servicing activities) (a) secured or unsecured loans, conditional sales agreements, debt instruments or transactions of a similar nature or for similar purposes, (b) non-voting preferred equity investments and (c) investments as a limited partner in a partnership or as a member of a limited liability company provided such partnership or limited liability company is Controlled by a Person(s) other than GE or any Affiliate of GE.

“First Escalation” has the meaning set forth in Section 8.01(b).

“Fiscal Year” means each consecutive twelve (12) month period ending on September 30th of any year.

“FMV” means, with respect to the Company and as of any date, the fair market value of the Company on a going concern basis (i.e., without regard to any potential future Liquidation of the Company after such date), taking into consideration, without duplication, the economic value of all tangible and intangible assets, arrangements and rights of the Company (including contractual and Intellectual Property rights) and other customary factors; provided,  however, that FMV (a) shall not take into consideration the value of any assets purchased by any Person in connection with any Transition Costs; and (b) shall assume, notwithstanding the foregoing, that the Company has full and free access to any such assets purchased in connection with any

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Transition Costs in connection with its operation as a going concern, whether or not such assets are owned by the Company.

“Fuel System” has the meaning set forth in Annex C.

“Funding Deadlock” has the meaning set forth in Section 8.01(c). 

“Future LRU” has the meaning set forth in the Company Supply Agreement.

“Future Program” means any future engine program included after the Closing Date in the Company Scope (including any such program approved by the Members for inclusion in the Company Scope pursuant to Section 5.07(g)(ii)).

“GAAP” means generally accepted accounting principles in the United States.

“GE” has the meaning set forth in the Preamble.

“GE Appraisal” has the meaning set forth in Section 17.08(b).  

“GE Appraiser” has the meaning set forth in Section 17.08(b).  

“GE ASA” means the Administrative Services Agreement, dated as of the Closing Date, by and between GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“GE After-Acquired Business” has the meaning set forth in Section 6.04(a)(ii).

“GE After-Acquired Company” has the meaning set forth in Section 6.04(a)(ii).

“GE Aviation” means the GE Aviation business unit of GE.

“GE Background IP License Agreement” means the Intellectual Property License Agreement, dated as of the Closing Date, by and among GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“GE Contribution Agreement” has the meaning set forth in the Recitals.

“GE Directors” has the meaning set forth in Section 5.03(b).

“GE Parts” has the meaning set forth in Section 17.04.  

“GE Secondment Agreement” means the Secondment Agreement, dated as of the Closing Date, by and among GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“GE’s Purchase” has the meaning set forth in the Recitals.

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“General Manager” has the meaning set forth in Section 5.02(b)(i).

“Governmental Authority” means any United States or non-United States federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

“Gross Asset Value” means, with respect to any asset, such asset’s adjusted basis for federal income tax purposes, except as follows:  (a) the Gross Asset Value of any asset contributed by a Member to the Company is the gross Asset Fair Market Value of such asset as determined by the Board at the time of contribution; (b) the Gross Asset Value of all Company assets shall be adjusted to equal their respective gross Asset Fair Market Values, as determined by the Board, as of the following times: (i) the acquisition of any additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution or the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a Member capacity or by a new Member acting in a Member capacity or in anticipation of becoming a Member; (ii) the distribution by the Company to the Member of more than a de minimis amount of property as consideration for an interest in the Company; and (iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704‑1(b)(2)(ii)(g); provided,  however, that the adjustments pursuant to clauses (a) and (b) of this paragraph (b) shall be made unless the Members determine by Unanimous Member Approval that such adjustments are not necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (c) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross Asset Fair Market Value of such asset on the date of distribution as determined by the Board.  If the Gross Asset Value of a Company asset has been determined or adjusted pursuant to clause (a) or (b) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income or Net Loss.

“Indemnified Person” has the meaning set forth in Section 10.03.

“Initial Appraisal” has the meaning set forth in Section 17.08(a).  

“Initial Appraiser” has the meaning set forth in Section 17.08(a).  

“Initial Business Plan” means the business plan of the Company for the first ten (10) complete Fiscal Years following the date hereof, which business plan includes a Budget, the timing and amounts of any contemplated Additional Fundings, terms upon which Woodward will provide specified services to the Company, an initial employee organizational chart and operational metrics targets for the Company so that the Company is competitive with respect to productivity, quality, technology, qualification cost, pricing, delivery timing, delinquency rate and safety.  The Initial Business Plan of the Company is set forth in Annex G and is deemed approved by the Board and Members for all purposes.

“Initial Capital Contributions” has the meaning set forth in Section 4.01(b).

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“Initial LLC Agreement” has the meaning set forth in the Recitals.

“Initial Woodward Contributions” has the meaning set forth in Section 4.01(a).

“Injunctive Relief” has the meaning set forth in Section 20.17.

“Insurance” means any product or service determined to constitute insurance, assurance or reinsurance by the Laws in effect in any jurisdiction in which the restriction set forth in Section 6.04(a) applies.

“Intellectual Property” has the meaning set forth in the Woodward Background IP License Agreement.

“IP Rights Agreement” means the IP Rights Agreement, dated as of the Closing Date, by and between Woodward, GE and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Law” means, with respect to any Person, any federal, state, local or foreign statute, law, ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority applicable to such Person or any of its Affiliates or any of their respective properties, assets, officers, directors, managers (in the case of a limited liability company), employees, consultants or agents.

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“Leasing Activity” means the rental, leasing, or financing under operating leases, finance leases or hire purchase or rental agreements, of property, whether real, personal, tangible or intangible.

“Liability” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, absolute, contingent, executory, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person.

“LIBOR Rate” means the London interbank offered rate administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for a period equal to three months as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate.

“Liquidation” means the dissolution and winding up of the Company, or of such of the Company’s Subsidiaries the assets of which constitute all or substantially all the assets of the business of the Company and its Subsidiaries taken as a whole.  The term “Liquidate” shall have an analogous meaning.

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“LRU Configuration” shall mean the configuration of the LRU, but not the location and configuration of the LRU within the engine. 

“LRUs” means (a) the line replaceable units that are part of the Fuel System, (b) such other line replaceable units expressly included in Company Scope, including, for the avoidance of doubt, under any Future Programs, and (c) any additional line replaceable units as otherwise expressly agreed by the Members. 

“Manufacturing Transition Costs” has the meaning set forth in Section 17.03(b). 

“Master Agreement” means the Master Agreement, dated as of May 20, 2015, by and between Woodward and GE, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Material Investment” has the meaning set forth in Section 5.10(e). 

“Member Deadlock” has the meaning set forth in Section 5.09(b).

“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i)(3).

“Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and 1.704‑2(i)(2). 

“Member Representatives” has the meaning set forth in Section 18.01(a).

“Members” means the Persons listed in Annex B and any additional Person that is admitted to the Company as a member of the Company after the date hereof in accordance with this Agreement and is listed as a Member from time to time in the books and records of the Company.

“Membership Interest” means the entire limited liability company interest (within the meaning of Section 18-701 of the Act) in the Company of a Member at any particular time, and shall include the rights of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement and the Act, including such Member’s share of the profits and losses of the Company, the right to receive distributions from the Company and, subject to the terms of this Agreement, the right to vote and participate in the management of the Company, together with the obligations of such Member to comply with all of the terms and provisions of this Agreement.

[***]

A-11

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

[***]

[***]

“MRO Sales” means the sale or provision of (a) any parts identified in a LRU bill of materials (“Spare Parts”), (b) LRUs intended to be used as replacement LRUs for installation on an engine that is in service or for the support of an engine that is in service, (c) maintenance cost per hour or other engine and/or LRU MRO Services priced on a dollar per hour utilization basis, and/or (d) services provided for refurbishment and restoration of an LRU or Spare Part to a serviceable condition and/or refurbishment and restoration of an LRU to near factory new performance.

“Net Available Cash” means, at any time, all cash of the Company, subject to (a) any mandatory provisions of applicable Law, (b) restrictions or payment requirements set forth in any agreement referenced in any credit or other agreement that is binding on the Company, (c) amounts owed by the Company to the Members for products and services provided by such Members to the Company, which amounts must be paid in full prior to any distributions to the Members, and (d) a reasonable reserve requirement (as determined by Unanimous Board Approval) for, among other things, the timely payment of previously incurred and estimated operating expenses of the Company, expenditures contemplated in the Initial Business Plan or the Annual Business Plan then in effect.

“Net Income” and “Net Loss” means, for each Taxable Year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss) with the following adjustments:  (a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this paragraph, shall be added to such income or loss; (b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704‑1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this paragraph, shall be subtracted from such taxable income or loss; (c) in the event that the Gross Asset Value of any Company asset is adjusted pursuant to paragraphs (b) or (c) of the definition of “Gross Asset Value” hereof, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss; (d) gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; and (e) in lieu of depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Taxable Year, computed in accordance with the definition of “Depreciation.”  Notwithstanding any other provision of this definition of Net Income and Net Loss, any items which are specially allocated pursuant to Section 13.03 shall not be taken into account in computing Net Income or Net Loss.  The amounts of the items of Company income, gain, loss or deduction available to be specially

A-12

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

allocated pursuant to Section 13.03 shall be determined by applying rules analogous to those set forth in paragraphs  (a) through (e) above.

“Non-Compete Term” means, with respect to any Member, the period commencing on the date hereof and ending on the date of the Liquidation of the Company; provided,  however, that if the Termination Event Call Option or the Woodward Sale Call Option has been exercised and consummated, the Non-Compete Term as it applies to Woodward will continue indefinitely or such shorter period to comply with applicable Law. 

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.752‑1(a)(2). 

“Officer” has the meaning set forth in Section 5.02(a).

“Other Financial Services Activities” means the offering, sale, distribution or provision, directly or through any distribution system or channel, of any financial products, financial services, asset management services, including investments on behalf of GE’s financial services affiliates purely for financial investment purposes, investments for the benefit of third party and client accounts, credit card products or services, vendor financing and trade payables services, back-office billing, processing, collection and administrative services or products or services related or ancillary to any of the foregoing.

“Other Member or Member Group” means (a) with respect to GE, the Woodward Group and (b) with respect to the Woodward Group or any Member belonging to the Woodward Group, GE.

“Paying Memberor Member Group” has the meaning set forth in Section 4.05(a).

“Percentage Interest” of a Member means the percentage set forth opposite such Member’s name in Annex D, as it may be amended from time to time.  The sum of the Members’ Percentage Interests shall at all times be one hundred percent (100%).  The Percentage Interests of the Members shall be adjusted by or at the direction of the Board upon any permitted Transfer of all or any portion of a Membership Interest in accordance with Article XIV.

“Permitted GE Transferee” has the meaning set forth in Section 14.01(a).

“Permitted Woodward Transferee” has the meaning set forth in Section 14.01(a).

“Person” means an individual, corporation, partnership, association, limited liability company, trust, estate or other similar business entity or organization, including a Governmental Authority and any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

A-13

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“Proceeding” means any action, suit, Claim, charge, hearing, arbitration, audit, or proceeding (public or private).

“Purchase and Sale Agreement” has the meaning set forth in the Recitals.

“Related Counterparty” means (a) any Member, (b) any of the respective Affiliates of a Member, (c) directors, managers, officers or employees of any Member, any of the respective Affiliates of a Member, the Company or any Subsidiary of the Company, (d) shareholders holding or having the ability to exercise control over more than five percent (5%) of any class of securities of any Member, their respective Affiliates or the Company or any Subsidiary of the Company or (e) any other Person Controlled by the aforementioned Persons.

“Related Party Transaction” means any agreement, arrangement or understanding (including any purchase, sale, lease, investment, loan, service or management agreement or other transaction) of the Company or any Subsidiary of the Company, whether oral or written, directly or indirectly, with any Related Counterparty.

“Relevant Year” has the meaning set forth in Section 5.10(d).

“Remarketing Activities” means the remarketing (including any possession, ownership, insurance, maintenance, transportation, shipment, storage, refurbishment, repair, sale, offer to sale, auction, consignment, liquidation, disposal, scrapping or other remarketing activities) of any collateral, business assets or other security currently or previously subject to any Financing Activity (including the equity in any entity or business), Insurance or Other Financial Services Activity or any property currently or formerly subject to Leasing Activity.

“Restricted Activity” means designing, developing, certifying, manufacturing, producing, selling, sourcing, servicing and supporting the Fuel System requirements on any Company Scope Program.

“Restricted Employee” has the meaning set forth in Section 6.04(d).

“Royalty” has the meaning set forth in the Royalty Agreement.

“Royalty Agreement” means the Royalty Agreement, dated as of the Closing Date, by and among Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“SEC” has the meaning set forth in Section 18.02.  

“Second Board Meeting” has the meaning set forth in Section 5.09(a).

“Second Escalation” has the meaning set forth in Section 8.01(c).

“Second Member Discussion” has the meaning set forth in Section 5.09(b).

A-14

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“Secondee” means any employee (including any Officer) seconded to the Company by the Members pursuant to GE Secondment Agreement and pursuant to the Woodward Secondment Agreement.

“Securities Act” means the Securities Act of 1933.

“Securities Activity” means any activity, function or service (without regard to where such activity, function or service actually occurs) which, if undertaken or performed (a) in the United States would be subject to the United States federal securities Laws or the securities Laws of any state of the United States or (ii) outside of the United States within any other jurisdiction in which the restrictions set forth in Section 6.4(a)(b) apply, would be subject to any Law in any such jurisdiction governing, regulating or pertaining to the sale, distribution or underwriting of securities or the provision of investment management, financial advisory or similar services.

“Specified Material Investment” has the meaning set forth in Section 8.01(f).

“Subsidiary” means, with respect to any Person, any corporation, limited liability company or other similar entity as to which more than fifty percent (50%) of the outstanding capital stock or other securities having voting rights or power is owned or controlled, directly or indirectly, by such Person and/or by one or more of such Person’s direct or indirect subsidiaries; provided,  however, that (a) with respect to Woodward and Woodward Affiliate and their respective Affiliates, “Subsidiaries” shall be deemed to expressly exclude the Company and its Subsidiaries, and (c) with respect to GE and its Affiliates, “Subsidiaries” shall be deemed to expressly exclude the Company and its Subsidiaries.

“Subsidiary Board” has the meaning set forth in Section 5.04.

[***]

“Supply Assurances” has the meaning set forth in Section 17.04. 

“Tax Matters Partner” has the meaning set forth in Section 12.05(a).

“Taxable Year” means the Fiscal Year, except that if the Company is required by the Code to use a taxable year other than the Fiscal Year, then Taxable Year shall mean such taxable year.

“Technology Manager” has the meaning set forth in Section 5.02(b)(iii).

“Termination Event” has the meaning set forth in Section 16.02.

“Termination Event Call Option” has the meaning set forth in Section 16.03(a).

“Termination Event Call Option Period” means, with respect to any Termination Event, the period beginning on the Termination Event Date and ending on the one-year anniversary of the Termination Event Date; provided that, in the event of a Termination Event described in Section 16.02(b), if the breach that gave rise to the Termination Event is cured prior to the one-

A-15

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

year anniversary of the applicable Termination Event Date, the Termination Event Call Option Period for such Termination Event shall end one Business Day prior to the date of such cure. 

“Termination Event Date” means, (a) in the case of a Termination Event described in Section 16.02(a), the date of commencement of the applicable Proceeding, or with respect to an involuntary bankruptcy or similar Proceeding that has not been dismissed within ninety (90) days after commencement , the ninety-first (91st) day after commencement, and (b) in the case of a Termination Event described in Section 16.02(b), the first Business Day following the expiration of the applicable cure period with respect to the underlying breach. 

“Termination EventPurchase Price” means (a) the FMV determined in accordance with Section 17.08 in connection with the Termination Event Call Option multipliedby (b) the Percentage Interest represented by the Called Interest as of immediately prior to the Termination Event Call Option Closing.  For the avoidance of doubt, the Termination Event Purchase Price shall be adjusted as necessary to reflect any Specified Material Investment made prior to the Termination Event Call Option Closing for which a Member receives a separate and distinct interest in the profits and losses for such Specified Material Investment pursuant to Section 8.01(f).

“Termination Triggering Member or Member Group” has the meaning set forth in Section 16.02.

“Transaction Documents” means this Agreement, the Master Agreement, the Woodward Contribution Agreement, the Purchase and Sale Agreement, the GE Contribution Agreement, the Company Supply Agreement, the GE Background IP License Agreement, the IP Rights Agreement, the Royalty Agreement, the Woodward Background IP License Agreement, the Woodward OEM Supply Agreement, the Woodward MRO Services Agreement, the Woodward ASA, the GE ASA, the ESA, the GE Secondment Agreement, the Woodward Secondment Agreement and the Confidentiality Agreement.

[***]

“Transfer” means any direct or indirect sale, transfer, assignment, Encumbrance or other disposition of any kind, including the creation or existence of any security interest or lien, in each case, whether voluntary or involuntary.

“Transition Costs” means, without duplication, (a) Manufacturing Transition Costs and (b) other reasonable costs (as determined by Woodward and GE) necessary to reasonably enable GE's transition in acquiring the ability to independently operate the Company’s business following a Woodward Sale Call Option Request, including reasonable costs related to property, plant, equipment, certification, and other costs related to the establishment, either in the same location described in Section 17.03(b) or in one other existing location of GE, of maintenance, repair and overhaul capability, in each case to the extent necessary for the transition of the Company’s operations to GE at Woodward’s then current maintenance, repair and overhaul service volumes with respect to MRO Sales by Woodward to the Company or to third parties on behalf of the Company within the Company Scope.  For the avoidance of doubt, Transition Costs include only those costs associated with enabling transition of the capabilities described in the

A-16

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

definition of Manufacturing Transition Costs and in clause (b) of the Transition Costs definition to GE and do not include expenses by or on behalf of GE in connection with ongoing business operations, even if concurrent with any transition period.

“Transition Plan” has the meaning set forth in Section 17.02(d).

“Treasury Regulations” means the regulations promulgated by the United States Treasury Department under the Code.

“Unanimous Board Approval” has the meaning set forth in Section 5.08.

“Unanimous Member Approval” has the meaning set forth in Section 5.07.

“Whole Business Sale” means, with respect to GE or Woodward, (a) a Business Unit Sale with respect to GE or Woodward, respectively or (b) a Change of Control of GE or Woodward, respectively.

“Woodward” has the meaning set forth in the Preamble.

“Woodward Affiliate” has the meaning set forth in the Preamble.

“Woodward Annual Payment Amount” has the meaning set forth in the Purchase and Sale Agreement.

“Woodward Appraisal” has the meaning set forth in Section 17.08(b).  

“Woodward Appraiser” has the meaning set forth in Section 17.08(b).  

“Woodward ASA” means the Administrative Services Agreement, dated as of the Closing Date, by and between Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Woodward Background IP License Agreement” means the Intellectual Property License Agreement, dated as of the Closing Date, by and among Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Woodward Contribution Agreement” has the meaning set forth in the Recitals.

“Woodward Contribution Date” has the meaning set forth in the Recitals.

“Woodward Directors” has the meaning set forth in Section 5.03(c).

“Woodward Group” means, collectively, Woodward, Woodward Affiliate and any Affiliates of Woodward that become Members of the Company from time to time in accordance with this Agreement.

A-17

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“Woodward Group After-Acquired Business” has the meaning set forth Section 6.04(b)(i).

“Woodward Group After-Acquired Company” has the meaning set forth in Section 6.04(b)(i).

“Woodward LRU” has the meaning set forth in the [Company Supply Agreement].

“Woodward MRO Services Agreement” means the MRO Services Agreement, dated as of the Closing Date, by and between Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Woodward OEM Supply Agreement” means the OEM Supply Agreement, dated as of the Closing Date, by and between Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Woodward Sale” means a Whole Business Sale of, or with respect to, Woodward.

“Woodward Sale Call Option” has the meaning set forth in Section 17.02(a).

“Woodward Sale Call Option Closing” has the meaning set forth in Section 17.02(b).

“Woodward Sale Call Option Request” has the meaning set forth in Section 17.02(a).

“Woodward Sale Call Option Period” means the twelve (12) month period immediately following the Woodward Sale Closing.

“Woodward Sale Call Option Purchase Price” means (a) the FMV determined in accordance with Section 17.08 in connection with the Woodward Sale Call Option multipliedby (b) the Percentage Interest represented by the Called Interest as of immediately prior to the Woodward Sale Call Option Closing.  For the avoidance of doubt, the Woodward Sale Call Option Purchase Price shall be adjusted as necessary to reflect any Specified Material Investment made prior to the Woodward Sale Call Option Closing for which a Member receives a separate and distinct interest in the profits and losses for such Specified Material Investment pursuant to Section 8.01(f).

“Woodward Sale Closing” has the meaning set forth in Section 17.02(a).

“Woodward Secondment Agreement” means the Secondment Agreement, dated as of the Closing Date, by and among Woodward and the Company, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

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[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX B

Members, Addresses and Contact Information

Member	Address and Contact Information for Notices
Woodward and Woodward Affiliate	Woodward, Inc. 1000 East Drake Road Fort Collins, Colorado 80525 Attention:  President, Aircraft Turbine Systems General Counsel with a copy to (which shall not constitute notice to Woodward or Woodward Affiliate): Wilson Sonsini Goodrich & Rosati, Professional Corporation 650 Page Mill Road Palo Alto, California 94304 Attention:  Bradley L. Finkelstein Michael S. Russell Facsimile:  (650) 493-6811
GE	General Electric Corporation c/o GE Aviation One Neumann Way Cincinnati, Ohio 45215 [***] with a copy to (which shall not constitute notice to GE): Sidley Austin LLP One South Dearborn Street Chicago, Illinois  60603 Attention:  Brian J. Fahrney Facsimile:  (312) 853-7036

B-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX C

Scope

As illustrated in Exhibit A and Exhibit B to this Annex C, “Fuel System” means LRUs in the control system that control or interact with fuel from the engine inlet to the combustor, including those that use fuel as the actuation fluid or heat exchange medium.  The LRUs provided by the Company will include, as applicable (and for Future Programs shall include) [***].  The Members recognize that the LRUs or other items included in any Fuel System may be amended based on the needs of each program.  For the avoidance of doubt, the Company Scope does not include fuel nozzles.

[***]

The Company shall be responsible for defining the Fuel System architecture and LRU Configuration, which support the dynamic, thermal, weight, accuracy, reliability, safety and cost objectives of the engine (the “Engine Objectives”).

The Company shall support Fuel System design activity and provide design input to elements extending beyond the scope of supply which may include [***]. 

To define, refine and validate the Fuel System dynamics, the Company shall include key analytical parameters [***] of product in the Fuel System extending beyond the scope of supply[***].

C-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

[***]

C-2

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

[***]

C-3

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX D

Members’ Percentage Interests and Initial Capital Account Balances

Member	Percentage Interest	Initial Capital Account
Woodward	40%	$[________]
Woodward Affiliate	10%	$[________]
GE	50%	$[________]

D-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX E

Initial Directors, General Manager, Finance Manager and Technology Manager

GE Directors	Addresses for Service of Notices
[***]	[_________]
[***]	[_________]
Woodward Directors	Addresses for Service of Notices
[***]	[_________]
[***]	[_________]

Certain Initial Officers:

[_________], General Manager
[_________], Finance Manager
[_________], Technology Manager

E-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX F

Insurance

F-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX G

Initial Business Plan

G-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX H

Additional Employee

[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]

H-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX I

Engineering Scope

[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

I-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX J

Compliance Policy

J-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Annex K

Technology and IP Protections

Each of GE and Woodward and the Company shall follow an industry standard security framework that requires logical or physical security controls to protect the confidential, technical, proprietary or other information as specified by the Members and the Company from time to time, including the following:

1.Only individuals approved in writing by GE and Woodward shall have access to such information (“Approved Individuals”).  Each Approved Individual will use a computer supplied by Woodward or GE, as applicable, to access such information, with each such Approved Individual’s level of access being determined based upon such Approved Individual’s role.

2.Termination of a Company employee should be communicated to Company partner within 24 hours.  Company partners shall perform a periodic access review of Company users in their respective systems.

3.Seconded Company employees shall be trained in the proper approach of storing and securing electronic paper files with controls satisfactory to Woodward and GE.

4.Any facilities of the Company, and any facilities of Woodward or GE dedicated to the business of the Company, shall be ring-fenced with separate access points and controls satisfactory to Woodward and GE.

5.Each Approved Individual shall sign a customary non-disclosure agreement in favor of Woodward, the Company and GE, which shall include an acknowledgement of the obligations set forth in this section. 

6.Woodward or GE, as applicable, will be responsible for any breach or violation of such non-disclosure agreement by their respective employees, agents, affiliates or other similar representatives.

7.The Company will keep all tangible and intangible firewalled information physically or logically separate from any information that employees of GE and Woodward may access.

8.The Company, GE and Woodward will implement technology controls that prevent unauthorized access to confidential information by anyone other than an Approved Individual. Any breach of confidential information related to the Company or that could potentially impact the Company shall be communicated to the Members and the Company as promptly as practicable, and in any event within 72 hours of identification of breach.

9.The Company, Woodward and GE will implement any other policies, procedures or controls related to the technology, Intellectual Property and other confidential information of the Company, GE or Woodward, as reasonably requested by either GE or Woodward. Company employees shall sign and abide by an “Acceptable Use” policy of each of Woodward and GE.

10.The Company, GE and Woodward will conduct an annual audit to confirm compliance with these provisions, and each shall certify that it is in full compliance with these provisions.  Additional audits will be conducted as reasonably requested by either GE or Woodward.

11.GE will have customary and mutually agreed access rights, in its capacity as a customer to the Company, to access information of the Company in connection with the Company’s performance of obligations of the Company Supply Agreement, as set forth in the Company Supply Agreement.

12.The Members and the Company will collectively implement a written strategy and process to protect IP across the boundaries of the Company, including individual confidentiality agreements with each of the individuals working with the Company, periodic and documented training sessions on processes of the Company for employees of each of GE and Woodward who have substantive interaction with the

K-1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Company, the implementation of security framework as appropriate (either logical or physical), periodic audits, etc.

13.GE and Woodward shall implement mutually acceptable procedures and controls relating to commingled data, including as necessary for each of the Company, Woodward and GE to comply with any applicable contractual obligations.

K-2

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EX-10.3

Exhibit 10.3

GOLDMAN, SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL:  212-902-1000

Opening Transaction

To:	Woodward, Inc. 1000 East Drake Road Fort Collins, Colorado 80525
A/C:	051046720
From:	Goldman, Sachs & Co.
Re:	Accelerated Stock Buyback
Ref. No:	As provided in the Supplemental Confirmation
Date:	June 2, 2015

This master confirmation (this “Master Confirmation”), dated as of June 2, 2015 is intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”) and Woodward, Inc. (“Counterparty”).  This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction.  The additional terms of any particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation evidence a complete binding agreement between Counterparty and GS&Co. as to the subject matter and terms of each Transaction to which this Master Confirmation and such Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and are subject to an agreement in the form of the 2002 ISDA Master Agreement (Multicurrency-Cross Border) (the “Agreement”) as if GS&Co. and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i)  US Dollars (“USD”) as the Termination Currency, (ii) the election that Multiple Transaction Payment Netting will not apply to the Transactions and (iii)  the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to GS&Co. and Counterparty, with a “Threshold Amount” of 3% of The Goldman Sachs Group, Inc. (“GS Group”) shareholders’ equity for GS&Co. and a “Threshold Amount” of USD 50 million for Counterparty (provided that (A) the phrase “or becoming capable at such time of being declared” shall be deleted from clause (1) of such Section 5(a)(vi) of the Agreement and (B) the following sentence shall be added to the end thereof:  “Notwithstanding the foregoing, a default hereunder shall not constitute an Event of Default if (i) the default was caused solely by error or omission of an administrative or operational nature; (ii) funds were available to enable the party to make the payment when due; and (iii) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay);”.

The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master Agreement between GS&Co. and Counterparty or any confirmation or other agreement between GS&Co. and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between GS&Co. and Counterparty,

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which GS&Co. and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in the related Supplemental Confirmation. 

If, in relation to any Transaction to which this Master Confirmation and a Supplemental Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation, any Supplemental Confirmation, and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.

1.Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions.  Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern such Transaction.

General Terms:
Trade Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Buyer:	Counterparty.
Seller:	GS&Co.
Shares:	Common stock, par value $0.001455 per share, of Counterparty (Ticker:  WWD)
Exchange:	Nasdaq Global Select Market.
RelatedExchange(s):	All Exchanges; provided that Section 1.26 of the Equity Definitions shall be amended to add the words “United States” before the word “exchange” in the tenth line of that Section.
Prepayment\Variable
Obligation:	Applicable.
Prepayment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
Prepayment Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation:
VWAP Price:	For any Exchange Business Day, as determined by the Calculation Agent based on the NASDAQ 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “WWD.Q <Equity> AQR_SEC” (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s reasonable discretion, erroneous, such VWAP Price shall be determined by the Calculation Agent in good faith and in a commercially reasonable manner using a volume weighted

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	average price methodology.  For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible transactions”).
ForwardPrice:	The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below
ForwardPrice
AdjustmentAmount:	For each Transaction, as set forth in the related Supplemental Confirmation.
CalculationPeriod:	The period from and including the Calculation Period Start Date to and including the Termination Date.
CalculationPeriodStartDate:	For each Transaction, as set forth in the related Supplemental Confirmation.
Termination Date:	The Scheduled Termination Date; provided that in no event shall the Scheduled Termination Date be postponed to a date later than the Final Termination Date, except for any postponement or suspension relating to events or circumstances described in Section 4(g) or Section 8 hereof; provided further that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “Accelerated Termination Date”) with respect to the entire Transaction by delivering notice to Counterparty of any such designation prior to 8:00 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date.
Scheduled Termination Date:	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below; provided that in no event shall the Scheduled Termination Date be postponed to a date later than the Final Termination Date, except for any postponement or suspension relating to events or circumstances described in Section 4(g) or Section 8 hereof.
FinalTerminationDate:	For each Transaction, as set forth in the related Supplemental Confirmation.
FirstAccelerationDate:	For each Transaction, as set forth in the related Supplemental Confirmation.
ValuationDisruption:	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
	Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date (provided that in no event shall the Scheduled

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	Termination Date be postponed to a date later than the Final Termination Date,  except for any postponement or suspension relating to events or circumstances described in Section 4(g) or Section 8 hereof), or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period.  If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature and duration of the relevant Market Disruption Event, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares.  Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a closure of the Exchange prior to its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in full.
	If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares.
SettlementTerms:
SettlementProcedures:	If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction arising as a result of the Counterparty being the issuer of the Shares.  If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply.
Number of Shares
to be Delivered:	A number of Shares equal to (x)(a) the Prepayment Amount divided by (b) the Divisor Amount minus (y) the number of Initial Shares.
DivisorAmount:	The greater of (i) the Forward Price minus the Forward Price Adjustment Amount and (ii) $1.00.
ExcessDividendAmount:	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

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SettlementDate:	If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date.
SettlementCurrency:	USD
InitialShareDelivery:	GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.
InitialShareDeliveryDate:	For each Transaction, as set forth in the related Supplemental Confirmation.
Initial Shares:	For each Transaction, as set forth in the related Supplemental Confirmation.
ShareAdjustments:
PotentialAdjustmentEvent:	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, neither of the following shall constitute Potential Adjustment Events hereunder: (i) an Extraordinary Dividend or (ii) the repurchase of Shares pursuant to a Transaction hereunder.
	It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent may, in its commercially reasonable discretion, adjust any relevant terms of any such Transaction as appropriate to account for the economic effect on the Transaction of such postponement.
ExtraordinaryDividend:	For any calendar quarter, any cash dividend or cash distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions and excluding, for the avoidance of doubt, any dividend of any rights pursuant to the adoption by the Counterparty of a stockholder rights plan during the term of any Transaction) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent in good faith and in a commercially reasonable manner), when aggregated with the amount or value (as determined by the Calculation Agent in good faith and in a commercially reasonable manner) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.  Any non-cash dividend or non-cash distribution that, but for the instances of the word “cash” in the first line of the immediately preceding sentence, would have been an Extraordinary Dividend, shall, in each case, constitute an additional Potential Adjustment Event.
OrdinaryDividendAmount:	For each Transaction, as set forth in the related Supplemental Confirmation.
MethodofAdjustment:	Calculation Agent Adjustment
EarlyOrdinaryDividend

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Payment:	If an ex-dividend date for any Dividend that is not an Extraordinary Dividend occurs during any calendar quarter occurring (in whole or in part) during the Relevant Dividend Period (as defined below) and is prior to the Scheduled Ex-Dividend Date for such calendar quarter, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of the relevant Transaction as the Calculation Agent determines appropriate to account for the economic effect on the Transaction of such event.
ScheduledEx‑Dividend
Dates:	For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation.
ExtraordinaryEvents:
Consequencesof
Merger Events:
(a)  Share-for-Share:	Modified Calculation Agent Adjustment
(b)  Share-for-Other:	Cancellation and Payment
(c)  Share‑for‑Combined:	Component Adjustment
Tender Offer:	Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date”; provided further that the definition of “Tender Offer” in Section 12.1 of the Equity Definitions will be amended by replacing the phrase “greater than 10% and less than 100% of the outstanding voting shares of the Issuer” in the third and fourth line thereof with “(a) greater than 10% and less than 100% of the outstanding Shares of the Issuer or any subsidiary thereof or (b) greater than 15% and less than 100% of the outstanding Shares of the Issuer in the event that such Tender Offer is being made by entity or person other than the Issuer or any subsidiary thereof.”
Consequences of
Tender Offers:
(a)  Share-for-Share:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
(b)  Share-for-Other:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
(c)  Share‑for‑Combined:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
LimitationsastoCertain
Adjustments:	For the avoidance of doubt, any adjustments to the terms of any Transaction and any determination of any amounts due upon termination of any Transaction hereunder (including, without limitation, as a result of a Merger Event, Tender

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	Offer, Acquisition Transaction or Merger Transaction, or any announcement with respect to any of the foregoing) shall be made without duplication in respect of any prior adjustment hereunder (including, without limitation, any prior adjustment pursuant to Sections 8 and 9 below).
Nationalization,
Insolvency or Delisting:	Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, NYSE MKT, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
AdditionalDisruptionEvents:
(a)Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.
(b)  Failure to Deliver:	Applicable
(c)Insolvency Filing:	Applicable
(d)Hedging Disruption:	Applicable
(e)  IncreasedCostof Hedging:	Not Applicable

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(f)  Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	[***] basis points per annum
Hedging Party:	GS&Co.
(g)  Increased Cost of Stock Borrow:	Applicable
InitialStockLoanRate:	[***] basis points per annum
Hedging Party:	GS&Co.
Determining Party:	GS&Co.
Hedging Adjustments:	For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Master Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent shall make such adjustment by reference to the effect of such event on GS&Co. assuming that GS&Co. maintains a commercially reasonable Hedge Position.
AdditionalTerminationEvent(s):	Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s).
	The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions.
Relevant Dividend Period:	The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.
Relevant Dividend Period
End Date:	If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.
Non-Reliance/Agreements and
Acknowledgements Regarding
Hedging Activities/Additional
Acknowledgements:	Applicable.
Transfer:	Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set (“Transfer”) over all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by GS Group without the consent of Counterparty; provided that the GS&Co. provides written notice of such Transfer to Counterparty.

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GS&Co.PaymentInstructions:	Chase Manhattan Bank New York
	For A/C Goldman, Sachs & Co.
Counterparty’s Contact Details
for Purpose of Giving Notice:	To be provided by Counterparty.
GS&Co.’s Contact Details for
Purpose of Giving Notice:	Goldman, Sachs & Co.
	200 West Street
	New York, NY 10282-2198
	With a copy to:
	Attention: Daniel Josephs, Equity Capital Markets
	And email notification to the following address:
	Eq-derivs-notifications@am.ibd.gs.com
2.        Calculation Agent.	GS&Co.; provided that following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which GS&Co. is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Company of such failure, Company shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as the Calculation Agent.
	All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.  Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will provide to Counterparty by email to the email address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation; provided, however, that in no event will GS&Co. be obligated to share with Counterparty any proprietary or confidential data or information, any proprietary or confidential models used by it, or any data or information subject to contractual, legal or regulatory obligations to not disclose.

3.Additional Mutual Representations, Warranties and Covenants of Each Party.  In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party that:

(a)Eligible Contract Participant.  It is an “eligible contract participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b)Accredited Investor.  Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by

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virtue of Section 4(a)(2) thereof.  Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.

(c)Guarantee of The Goldman Sachs Group, Inc.  The obligations of GS&Co. in respect of each Transaction hereunder will be guaranteed by GS Group pursuant to (i) the General Guarantee Agreement, dated January 30, 2006, made by The Goldman Sachs Group, Inc. relating to certain obligations of GS&Co. (available as Exhibit 10.45 to The Goldman Sachs Group, Inc. Annual Report on Form 10-K for the fiscal year ended November 25, 2005), or (ii) any replacement or successor guarantee, which may be in the form of a general guarantee or a guarantee that specifically references the Transactions.  The parties agree and acknowledge that neither the General Guarantee Agreement nor any such replacement or successor guarantee shall be a Credit Support Document hereunder, and that GS Group shall not be a Credit Support Provider hereunder.

4.Additional Representations, Warranties and Covenants of Counterparty.  In addition to the representations, warranties and covenants in the Agreement, Counterparty represents, warrants and covenants to GS&Co. that:

(a)The purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(b)It is not entering into any Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).

(c)Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program.

(d)Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither GS&Co. nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of any Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity.

(e)As of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder, Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f)Counterparty shall report each Transaction as required under the Exchange Act and the rules and regulations thereunder.

(g)The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) (other than securities or activities excepted from Regulation M by reasons of Rule 102(b), (c) and (d) under the Exchange Act) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to GS&Co. of such restricted period not later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, (i) the Relevant Period (as defined below) and (ii) the Settlement Valuation Period, if any, for such Transaction. “Relevant

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Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as specified in the related Supplemental Confirmation) for such Transaction, or such earlier day as elected by GS&Co. and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below).

(h)As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the Settlement Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

(i)Counterparty is not and, after giving effect to any Transaction, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(j)Counterparty has not and will not enter into agreements similar to the Transactions described herein where any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if applicable, any Settlement Valuation Period under this Master Confirmation.  In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Master Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap. 

5.Regulatory Disruption.  In the event that GS&Co. in good faith determines, based on the advice of legal counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (provided that such requirements, policies and procedures relate to legal or regulatory issues and are generally applicable in similar situations and applied in a consistent manner in similar transactions) (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by GS&Co.), for it to refrain from or decrease any market activity on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, GS&Co. may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days. GS&Co. shall use good faith efforts to notify Counterparty within one Trading Day that a Regulatory Disruption has occurred and the Scheduled Trading Days affected by it.

6.10b5-1 Plan.  Counterparty represents, warrants and covenants to GS&Co. that:

(a)Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c).

(b)Counterparty will not seek to control or influence GS&Co.’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, GS&Co.’s decision to enter into any hedging transactions.  Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1.

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(c)Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or the relevant Supplemental Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

7.Counterparty Purchases.  Counterparty (or any “affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the prior written consent of GS&Co., directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period, except through GS&Co.; provided that this Section 7 shall not (i) limit the Counterparty’s ability, pursuant to its employee incentive plan or dividend reinvestment program, to re-acquire Shares in connection with the related equity transactions, (ii) limit Counterparty’s ability to withhold shares to cover tax liabilities associated with such equity transactions or (iii) limit Counterparty’s ability to grant stock and options to “affiliated purchasers” (as defined in Rule 10b-18) or the ability of such affiliated purchasers to acquire such stock or options, in connection with the Counterparty’s compensation policies for directors, officers and employees or any agreements with respect to the compensation of directors, officers or employees of any entities that are the acquisition targets of Counterparty, and in connection with any such purchase Counterparty will be deemed to represent to GS&Co. that such purchase does not constitute a “Rule 10b-18 purchase” (as defined in Rule 10b-18).

7A. GS&Co. Purchases. With respect to purchases of Shares by GS&Co. in connection with any Transaction during the Calculation Period for such Transaction (other than any purchases made by GS&Co. in connection with dynamic hedge adjustments of GS&Co.’s exposure to any Transaction as a result of any equity optionality contained in such Transaction), GS&Co. will use good faith, commercially reasonable efforts to effect such purchases in a manner so that, if such purchases were made by Counterparty, they would meet the requirements of Rule 10b-18(b)(2) and (3), and effect calculations in respect thereof, taking into account any applicable Securities and Exchange Commission no-action letters as appropriate and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond GS&Co.’s control. Notwithstanding the foregoing, GS&Co. shall not be responsible for any failure to comply with paragraph (b)(3) of Rule 10b-18 that would not have resulted if (i) a bid that was actually entered or deemed to be entered by or on behalf of Counterparty had instead been an “independent bid” for purposes of paragraph (b)(3) of Rule 10b-18, or (ii) a transaction that was actually executed or deemed to be executed by or on behalf of Counterparty had instead been an “independent transaction” within the meaning of paragraph (b)(3) of Rule 10b-18.

8.Special Provisions for Merger Transactions.  Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a)Counterparty agrees that it:

(i)will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make, or, to the extent it is within its reasonable control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction (a “Public Announcement”) unless such Public Announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;

(ii)shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify GS&Co. following any such Public Announcement that such Public Announcement has been made; and

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(iii)shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide GS&Co. with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through GS&Co. or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date of such Public Announcement.  Such written notice shall be deemed to be a certification by Counterparty to GS&Co. that such information is true and correct.  In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of the relevant Merger Transaction and the completion of the vote by target shareholders. 

(b)Counterparty acknowledges that a Public Announcement may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that in making any Public Announcement, it must comply with the standards set forth in Section 6 above.

(c)Upon the occurrence of any Public Announcement (whether made by Counterparty or a third party) GS&Co. in its sole discretion may (i) make adjustments to the terms of any Transaction, including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii) treat the occurrence of such Public Announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act, other than a transaction in which the consideration is solely cash and there is no valuation period.

9.Special Provisions for Acquisition Transaction Announcements.  (a) If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Calculation Agent shall make such adjustments to the Forward Price Adjustment Amount as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on such Transaction of such Transaction Announcement (including adjustments to account for changes in volatility, expected dividends, stock loan rate, the value of maintaining or establishing any commercially reasonable Hedge Positions in connection with the Transaction and liquidity relevant to the Shares or to such Transaction).  If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction Announcement.

(b)“Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement by the Counterparty or any of its subsidiaries of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction  or (v) any announcement of any change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced Acquisition Transaction, agreement, letter of intent, understanding or intention). For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.

(c)“Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “20%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction (excluding, for the avoidance of doubt, any dividend of any rights pursuant to the adoption by the Counterparty of a

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stockholder rights plan during the term of any Transaction), (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 15% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

10.Acknowledgments.  (a) The parties hereto intend for:

(i)each Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

(ii)the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;

(iii)a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); and

(iv)all payments for, under or in connection with each Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).

(b)Counterparty acknowledges that:

(i)during the term of any Transaction, GS&Co. and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;

(ii)GS&Co. and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to any Transaction, including acting as agent or as principal and for its own account or on behalf of customers;

(iii)GS&Co. shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;

(iv)any market activities of GS&Co. and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and

(v)each Transaction is a derivatives transaction in which it has granted GS&Co. an option;  GS&Co. may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction.

(c)Counterparty:

(i)is an “institutional account” as defined in FINRA Rule 4512(c);

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(ii)is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and will exercise independent judgment in evaluating the recommendations of GS&Co. or its associated persons, unless it has otherwise notified GS&Co. in writing; and

(iii)will notify GS&Co. if any of the statements contained in clause (i) or (ii) of this Section 10(c) ceases to be true.

11.Credit Support Documents.  The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement.

12.Set-off.  Obligations under any Transaction shall not be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under the Agreement, this Master Confirmation or any Supplemental Confirmation, or under any other agreement between the parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against obligations under any Transaction, whether arising under the Agreement, this Master Confirmation or any Supplemental Confirmation, or under any other agreement between the parties hereto, by operation of law or otherwise, and each party hereby waives any right of setoff, netting or recoupment.

13.Delivery of Shares.  Notwithstanding anything to the contrary herein, GS&Co. may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

14.Early Termination.  In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for GS&Co. to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an “Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is made by GS&Co., the prices at which GS&Co. purchases Shares or Alternative Delivery Property to fulfill its delivery obligations under this Section 14); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash; and provided further that Counterparty may make such election only if Counterparty represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of such election that, as of such date, Counterparty is not aware of any material non-public information concerning the Shares and is making such election in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

15.Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that in calculating Close-out Amount pursuant to Section 6 of the Agreement GS&Co. may (but need not) determine losses without reference to actual losses incurred but based on expected losses assuming a commercially reasonable

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(including without limitation with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss to avoid awaiting the delay associated with closing out any hedge or related trading position in a commercially reasonable manner prior to or sooner following the designation of an Early Termination Date.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery Property in accordance with Section 14, such Shares or Alternative Delivery Property shall be delivered on a date selected by GS&Co. as promptly as practicable.

16.Automatic Termination Provisions.  Notwithstanding anything to the contrary in Section 6 of the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to which such Supplemental Confirmation relates as the Affected Transaction will automatically occur without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange at any time falls below such Termination Price, and the Exchange Business Day that the price of the Shares on the Exchange at any time falls below the Termination Price will be the “Early Termination Date” for purposes of the Agreement. 

17.Delivery of Cash.  For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions).

18.Claim in Bankruptcy.  GS&Co. acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transactions that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.

19.[Reserved.]

20.Governing Law.  The Agreement, this Master Confirmation, each Supplemental Confirmation and all matters arising in connection with the Agreement, this Master Confirmation and each Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).

21.Illegality.  The parties agree that, for the avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and the consequences specified in the Agreement, including without limitation, the consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.

22.Offices.

(a)The Office of GS&Co. for each Transaction is:  200 West Street, New York, New York 10282-2198.

(b)The Office of Counterparty for each Transaction is: 1000 East Drake Road, Fort Collins, Colorado 80525.

23.Arbitration.  The Agreement, this Master Confirmation and each Supplemental Confirmation are subject to the following arbitration provisions:

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(a)All parties to this Master Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)The arbitrators do not have to explain the reason(s) for their award.

(e)The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Master Confirmation.

Counterparty agrees that any and all controversies that may arise between Counterparty and GS&Co., including, but not limited to, those arising out of or relating to the Agreement or any Transaction hereunder, shall be determined by arbitration conducted before the FINRA Dispute Resolution (“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Master Confirmation except to the extent stated herein.

24.Counterparts.  This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

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Exhibit 10.3

Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

Yours faithfully,
GOLDMAN, SACHS & CO.
By:	/s/ Eugene Parloff
	Eugene Parloff
	Vice President

Agreed and Accepted By:
Woodward, Inc.
By:	/s/ Robert F. Weber, Jr.
	Name: Robert F. Weber, Jr.
	Title: Vice Chairman, CFO & Treasurer

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SCHEDULE A

SUPPLEMENTAL CONFIRMATION

To:	Woodward, Inc. 1000 East Drake Road Fort Collins, Colorado 80525
From:	Goldman, Sachs & Co.
Subject:	Accelerated Stock Buyback
Ref. No:	[Insert Reference No.]
Date:	[Insert Date]

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Woodward, Inc.(“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 2, 2015 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	[               ]
Forward Price Adjustment Amount:	USD [   ]
Calculation Period Start Date:	[               ]
Scheduled Termination Date:	[               ]
Final Termination Date:	[               ]
First Acceleration Date:	[               ]
Prepayment Amount:	USD [               ]
Prepayment Date:	[               ]
Initial Shares:	[               ] Shares;  provided that if, in connection with the Transaction, GS&Co. is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire.
Initial Share Delivery Date:	[               ]

A-1

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Ordinary Dividend Amount:	For any calendar quarter, USD [    ]
Scheduled Ex-Dividend Dates:	[         ]
Termination Price:	USD [    ] per Share
Additional Relevant Days:	The [    ] Exchange Business Days immediately following the Calculation Period.

3.Counterparty represents and warrants to GS&Co. that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4.This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

A-2

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Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

Yours sincerely,
GOLDMAN, SACHS & CO.
By:
	Authorized Signatory

Agreed and Accepted By:
Woodward, Inc.
By:
	Name:
	Title:

A-3

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ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1.The following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation:

Settlement Currency:	USD
Settlement Method Election:	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
Electing Party:	Counterparty
Settlement Method
Election Date:	The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be.
Default Settlement Method:	Cash Settlement
Forward Cash Settlement
Amount:	The Number of Shares to be Delivered multiplied by the Settlement Price
Settlement Price:	The average of the VWAP Prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation.
Settlement Valuation Period:	A number of Scheduled Trading Days selected by GS&Co. in its reasonable discretion, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date
Cash Settlement:	If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
Cash Settlement

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Payment Date:	The date one Settlement Cycle following the last day of the Settlement Valuation Period.
Net Share Settlement
Procedures:	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2.Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to GS&Co. (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent.

3.Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)a registration statement covering public resale of the Registered Settlement Shares by GS&Co. (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to GS&Co., in such quantities as GS&Co. shall reasonably have requested, on or prior to the date of delivery;

(b)the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be reasonably satisfactory to GS&Co.;

(c)as of or prior to the date of delivery, GS&Co. and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to GS&Co., in its good faith discretion; and

(d)as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with GS&Co. in connection with the public resale of the Registered Settlement Shares by GS&Co. substantially similar to underwriting agreements customary for underwritten offerings of equity securities for companies of a similar size in a similar industry, in form and substance satisfactory to GS&Co., which Underwriting Agreement shall include, without limitation, provisions substantially similar in all material respects to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4.If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a)all Unregistered Settlement Shares shall be delivered to GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof;

(b)as of or prior to the date of delivery, GS&Co. and any potential purchaser of any such shares from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) identified by GS&Co. shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty

2

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

customary in scope for private placements of equity securities for companies of a similar size in a similar industry (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them, subject to GS&Co. and its agents entering into customary confidentiality agreements for transactions of this type);

(c)as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to GS&Co., which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all reasonable fees and expenses in connection with such resale specified in writing by GS&Co., including all reasonable fees and expenses of counsel for GS&Co. (other than any non-transaction related expenses solely related to GS&Co.’s status as a regulated entity), and shall contain customary representations, warranties, covenants and agreements of Counterparty for transactions of this type reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d)in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), Counterparty shall, if so requested by GS&Co., prepare, in cooperation with GS&Co., a private placement memorandum in form and substance reasonably satisfactory to GS&Co.

5.GS&Co., itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by GS&Co., is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (other than any non-transaction related expenses solely related to GS&Co.’s status as a regulated entity) (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, GS&Co. will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, GS&Co. shall return to Counterparty on that date such unsold Shares. 

6.If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Exchange Business Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to GS&Co., through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty elects to deliver to GS&Co. additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day

3

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be sold by GS&Co. in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to GS&Co. further Makewhole Shares until such Shortfall has been reduced to zero.

7.Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

Where	A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and
	B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” means initially, 4,820,000 Shares.  The Reserved Shares may be increased or decreased in a Supplemental Confirmation.

4

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EX-10.4

Exhibit 10.4

SUPPLEMENTAL CONFIRMATION

To:	Woodward, Inc. 1000 East Drake Road Fort Collins, Colorado 80525
From:	Goldman, Sachs & Co.
Subject:	Accelerated Stock Buyback
Ref. No:	SDB2502712937
Date:	June 2, 2015

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Woodward, Inc.(“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 2, 2015 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	June 2, 2015
Forward Price Adjustment Amount:	USD [***]
Calculation Period Start Date:	June 3, 2015
Scheduled Termination Date:	[***]
Final Termination Date:	[***]
First Acceleration Date:	[***]
Prepayment Amount:	USD 125,000,000.00
Prepayment Date:	June 5, 2015
Initial Shares:	2,047,601 Shares;  provided that if, in connection with the Transaction, GS&Co. is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire.
Initial Share Delivery Date:	June 5, 2015
Ordinary Dividend Amount:	For any calendar quarter, USD 0.10.

1

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Scheduled Ex-Dividend Dates:	August 13, 2015 and November 12, 2015.
Termination Price:	USD [***] per Share
Additional Relevant Days:	The five Exchange Business Days immediately following the Calculation Period.

3.Counterparty represents and warrants to GS&Co. that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4.This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

2

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

Yours sincerely,
GOLDMAN, SACHS & CO.
By:	/s/EugeneParloff
	EugeneParloff
	Vice President

Agreed and Accepted By:
Woodward, Inc.
By:	/s/ Robert F. Weber, Jr.
	Name: Robert F. Weber, Jr.
	Title: CFO & Treasurer

[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EX-31.1

Exhibit 31.1

Woodward, Inc.

Rule 13a-14(a)/15d-14(a) certifications

CERTIFICATION

I, Thomas A. Gendron, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June  30, 2015, of Woodward, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  July20, 2015	/s/ Thomas A. Gendron
	Thomas A. Gendron
	Chairman of the Board, Chief Executive Officer, and President (Principal Executive Officer)

A signed original of this written statement required by Rule 13a-14(a)/15d-14(a), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Rule 13a-14(a)/15d-14(a), has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

Woodward, Inc.

Rule 13a-14(a)/15d-14(a) certifications

CERTIFICATION

I, Robert F. Weber, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June  30, 2015, of Woodward, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  July20, 2015	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer, and Treasurer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Rule 13a-14(a)/15d-14(a), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Rule 13a-14(a)/15d-14(a), has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

Woodward, Inc.

Section 1350 certifications

We hereby certify, pursuant to 18 U.S.C. Section 1350, that the accompanying Quarterly Report on Form 10-Q for the period ended June  30, 2015 (the “Quarterly Report”), of Woodward, Inc., fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Woodward, Inc.

Date:	July20, 2015	/s/ Thomas A. Gendron Thomas A. Gendron Chairman of the Board, Chief Executive Officer,  and President
Date:	July20, 2015	/s/ Robert F. Weber, Jr. Robert F. Weber, Jr. Vice Chairman, Chief Financial Officer,  and Treasurer

A signed original of this written statement required by Rule 13a-14(b)/15d-14(b) and 18 U.S.C. Section 1350, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement, has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Accrued Liabilities (Tables)

9 Months Ended

Jun. 30, 2015

Accrued Liabilities

Accrued Liabilities

	June 30,		September 30,
	2015		2014
Salaries and other member benefits	$	56,609	$	95,031
Warranties		13,690		16,916
Interest payable		6,241		12,487
Current portion of acquired performance obligations and unfavorable contracts (1)		8,417		16,432
Accrued retirement benefits		2,261		2,286
Deferred revenues		10,040		6,108
Taxes, other than income		6,535		8,557
Other		10,527		14,914
	$	114,320	$	172,731

Warranties

	Nine-Months Ended June 30,
		2015		2014
Warranties, beginning of period	$	16,916	$	15,224
Expense		6,651		7,006
Reductions for settling warranties		(9,245)		(5,552)
Foreign currency exchange rate changes		(632)		118
Warranties, end of period	$	13,690	$	16,796

XML

Financial Instruments and Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Notes receivable from municipalities, Carrying Cost	$ 15,631	$ 15,228
Short-term borrowings, Carrying Cost	(3,186)	0
Long-term debt, including current portion, Carrying Cost	(875,000)	(710,000)
Fair Value, Inputs, Level 2 [Member]
Notes receivable from municipalities, Estimated Fair Value	15,723	15,988
Long-term debt, including current portion, Estimated Fair Value	$ (901,979)	$ (752,513)

XML

Earnings Per Share (Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share
Net earnings	$ 43,753	$ 46,001	$ 131,392	$ 114,182
Basic shares outstanding	64,781	65,845	65,088	66,736
Dilutive effect of stock options and restricted stock	1,446	1,302	1,416	1,294
Diluted shares outstanding	66,227	67,147	66,504	68,030
Basic earnings per share	$ 0.68	$ 0.70	$ 2.02	$ 1.71
Diluted earnings per share	$ 0.66	$ 0.69	$ 1.98	$ 1.68

XML

Accrued Liabilities (Warranties) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Accrued Liabilities
Warranties, beginning of period	$ 16,916	$ 15,224
Warranty Expense	6,651	7,006
Reductions for settling warranties	(9,245)	(5,552)
Foreign currency exchange rate changes	(632)	118
Warranties, end of period	$ 13,690	$ 16,796

XML

Derivative Instruments and Hedging Activities (Narrative) (Details) ¥ in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 CNY (¥)	Jun. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Net unrecognized losses on terminated derivative instruments expected to be reclassified to earnings			$ 64
Term of gain or loss recognition in interest expense on terminated derivatives recorded in OCI			12 months
Description of Net Investment Hedge Activity			In June 2015, Woodward designated an intercompany loan of 160,000 RMB between two wholly owned subsidiaries as a hedge of a foreign currency exposure of the net investment of the borrower in the lender. A foreign exchange gain on the loan of $11, net of taxes, is included in foreign currency translation adjustments within total comprehensive earnings for the three and nine-months ended June 30, 2015.
Intercompany Loan [Member]
Foreign exchange gain/loss on loan to hedge foreign currency exposure	$ 11
Value of Net Investment Hedging Instruments Used | ¥					¥ 160,000
Interest Expense [Member] | Derivatives in Cash Flow Hedging Relationships [Member]
Amount of Gain/Loss Recognized in Accumulated OCI on Derivative	$ 0	$ 0	$ 0	$ 0
Total Accumulated Other Comprehensive (Loss) Earnings [Member]
Unrecognized gains (loss)						$ 244	$ 170

XML

Retirement Benefits (Schedule of estimated remaining cash contributions) (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2015 USD ($)
United States Pension Plans of US Entity, Defined Benefit [Member]
Estimated future employer contributions in the currect fiscal year	$ 21
United Kingdom Plan, Defined Benefit [Member]
Estimated future employer contributions in the currect fiscal year	274
Japan Plan, Defined Benefit [Member]
Estimated future employer contributions in the currect fiscal year	0
Other Postretirement Benefit Plans, Defined Benefit [Member]
Estimated future employer contributions in the currect fiscal year	$ 2,307

XML

Recent Accounting Pronouncements (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Recent Accounting Pronouncements
Balance of unamortized debt issuance costs	$ 5,834	$ 4,276

XML

Accounts Receivable (Tables)

9 Months Ended

Jun. 30, 2015

Accounts Receivable Disclosure

Schedule of Accounts Receivable

	June 30,		September 30,
	2015		2014
Accounts receivable from:
Customers	$	266,422	$	291,584
Other (Chinese financial institutions)		13,607		62,352
Allowance for uncollectible customer amounts		(5,127)		(7,078)
	$	274,902	$	346,858

XML

Stock-Based Compensation (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Dec. 31, 2013	Jun. 30, 2015
Number of stock shares authorized for grants	7,410		7,410
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements	$ 12,201		$ 12,201
Unrecognized compensation cost is expected to be recognized over a weighted-average period			1 year 6 months
Forfeiture rate, Board of Directors	0.00%		0.00%
Forfeiture rate, non-Board of Directors	9.00%		9.00%
Stock Options [Member]
Vesting period, in years			4 years
Vesting rate			25.00%
Vested contractual term, in years			10 years
Restricted Stock Award [Member]
Vesting period, in years			4 years
Shares granted, Number of Shares	0	24	0
Service period for restricted stock award			4 years

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Income Taxes
Estimated decrease in liability for unrecognized tax benefits	$ 3,105
Unrecognized tax benefits that, if recognized, would affect the effective tax rate	14,249	$ 12,807
Accrued interest and penalties	1,468	1,158
Unrecognized Tax Benefits	$ 23,769	$ 22,687

XML

Supplemental Statements of Cash Flows Information (Schedule of Cash Flow Supplemental Disclosures) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Supplemental Statements of Cash Flows Information
Interest paid, net of amounts capitalized	$ 30,090	$ 26,619
Income taxes paid	48,801	36,345
Income tax refunds received	426	1,617
Purchases of property, plant and equipment on account	39,122	19,193
Common shares issued from treasury for benefit plans (Note 18)	12,574	11,193
Notes receivable from municipalities for economic development incentives	0	6,596
Cashless exercise of stock options	0	715
Settlement of receivable through cashless acquisition of treasury shares in connection with the cashless exercise of stock options	$ 0	$ 871

XML

Retirement Benefits (Schedule of Costs of Retirement Plans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Multiemployer Plan [Member]
Company Contributions	$ 142	$ 180	$ 452	$ 555
Defined Contribution Plan [Member]
Company Costs	$ 7,908	$ 5,537	$ 23,034	$ 16,219

XML

Segment Information (Consolidated Total Assets by Segment) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Assets	$ 2,511,736	$ 2,397,202
Property, plant and equipment, net	688,336	513,279
Aerospace [Member]
Assets	1,529,882	1,440,355
Energy [Member]
Assets	628,995	610,345
Unallocated Corporate [Member]
Assets	274,430	273,510
Property, plant and equipment, net	78,429	72,992
Total of Reporting Segments [Member]
Assets	$ 2,158,877	$ 2,050,700

XML

Stock-Based Compensation (Activity for Stock Option Awards) (Details) - Jun. 30, 2015 - $ / shares shares in Thousands	Total	Total
Stock-Based Compensation
Number of options, beginning balance	5,111	4,501
Weighted Average Exercise Price Per Share, beginning balance	$ 30.86	$ 28.08
Options granted, Number of options	0	751
Options granted, Weighted Average Exercise Price Per Share		$ 46.55
Options exercised, Number of options	(320)	(428)
Options exercised, Weighted Average Exercise Price Per Share	$ 17.19	$ 18.55
Options forfeited, Number of options	(7)	(40)
Options forfeited, Weighted Average Exercise Price Per Share	$ 41.11	$ 37.80
Number of options, ending balance	4,784	4,784
Weighted Average Exercise Price Per Share, ending balance	$ 31.76	$ 31.76

XML

Retirement Benefits (Schedule of Net Perioodic Benefit Costs) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Pension Plans, Defined Benefit [Member]
Service cost	$ 697	$ 1,135	$ 2,103	$ 3,400
Interest cost	2,016	2,218	6,070	6,631
Expected return on plan assets	(3,413)	(3,213)	(10,268)	(9,607)
Amortization of: Net actuarial (gain) loss	146	249	439	738
Amortization of: Prior service (benefit) cost	96	18	288	53
Curtailment (gain) loss	0	(915)	0	(915)
Net periodic retirement pension (beneift) cost	(458)	(508)	(1,368)	300
Contributions paid	143	276	1,365	2,743
United States Pension Plans of US Entity, Defined Benefit [Member]
Service cost	504	872	1,513	2,616
Interest cost	1,489	1,602	4,475	4,815
Expected return on plan assets	(2,662)	(2,432)	(7,994)	(7,299)
Amortization of: Net actuarial (gain) loss	99	83	297	248
Amortization of: Prior service (benefit) cost	96	19	288	56
Curtailment (gain) loss	0	0	0	0
Net periodic retirement pension (beneift) cost	(474)	144	(1,421)	436
Contributions paid	0	100	0	400
Foreign Pension Plans, Defined Benefit [Member]
Service cost	193	263	590	784
Interest cost	527	616	1,595	1,816
Expected return on plan assets	(751)	(781)	(2,274)	(2,308)
Amortization of: Net actuarial (gain) loss	47	166	142	490
Amortization of: Prior service (benefit) cost	0	(1)	0	(3)
Curtailment (gain) loss	0	(915)	0	(915)
Net periodic retirement pension (beneift) cost	16	(652)	53	(136)
Contributions paid	143	176	1,365	2,343
Other Postretirement Benefit Plans, Defined Benefit [Member]
Service cost	7	11	22	35
Interest cost	308	358	925	1,074
Amortization of: Net actuarial (gain) loss	(18)	(50)	(54)	(150)
Amortization of: Prior service (benefit) cost	(40)	(40)	(119)	(119)
Net periodic retirement pension (beneift) cost	257	279	774	840
Contributions paid	$ 570	$ 481	$ 1,471	$ 1,849

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Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Other Liabilities
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$ 38,039	$ 38,850
Total unrecognized tax benefits, net of offsetting adjustments	16,013	14,707
Acquired performance obligations and unfavorable contracts	4,712	12,792
Deferred economic incentives	19,107	18,408
Other	17,670	16,454
Other liabilities	$ 95,541	$ 101,211

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Retirement Benefits

9 Months Ended

Jun. 30, 2015

Retirement Benefits - General

Retirement Benefits

Note 18.  Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits.  Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Most of the Company’s U.S. employees are eligible to participate in the U.S. defined contribution plan.  The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts.  The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes.  Certain foreign employees are also eligible to participate in foreign plans.

Most of Woodward’s U.S. employees with at least two years of service receive an annual contribution of Woodward stock, equal to 5% of their eligible prior year wages, to their personal Woodward Retirement Savings Plan accounts.  In the second quarter of fiscal years 2015 and 2014, Woodward fulfilled its annual Woodward stock contribution obligation using shares held in treasury stock by issuing 259 shares of common stock for a total value of $12,574 in fiscal year 2015, and 260 shares of common stock for a total value of $11,193in fiscal year 2014.

The amount of expense associated with defined contribution plans was as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company costs	$	7,908	$	5,537	$	23,034	$	16,219

Defined benefit plans

Woodward has defined benefit plans that provide pension benefits for certain retired employees in the United States, the United Kingdom, and Japan.  During the third quarter of fiscal year 2014, Woodward terminated its defined benefit pension plan in Switzerland due to workforce reductions related to the closure of Woodward’s Swiss facility in connection with the realignment of the renewable power business that occurred in the third quarter of fiscal year 2013.  Woodward also provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits.  Postretirement medical benefits are provided to certain current and retired employees and their covered dependents and beneficiaries in the United States and the United Kingdom.  Lifeinsurance benefits are provided to certain retirees in the United States under frozen plans, which are no longer available to current employees.  A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension and other postretirement benefit plans.

U.S. GAAP requires that, for obligations outstanding as of September 30, 2014, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments.

Effective June 30, 2015, the Company terminated the defined benefit pension plan for employees at its Duarte, California manufacturing facility. The plan, which was established in fiscal year 2013 in connection with the December 2012 acquisition of the Duarte business, was amended in fiscal year 2014 to cease all future benefit accruals under the plan and was closed to new entrants. Cash payout of benefits will occur after regulatory approval of the plan termination.  In exchange for the freeze and termination of the plan, which were agreed upon through negotiations with the applicable employee union, the employees were provided replacement benefits through full participation in the Woodward U.S. defined contribution plan. Woodward does not expect future cash payouts to the beneficiaries of the terminated plan to be significantly different from the approximately $80 liability reflected in Woodward’s statement of financial position as of June 30, 2015.  

The components of the net periodic retirement pension costs recognized are as follows:

	Three-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	504	$	872	$	193	$	263	$	697	$	1,135
Interest cost		1,489		1,602		527		616		2,016		2,218
Expected return on plan assets		(2,662)		(2,432)		(751)		(781)		(3,413)		(3,213)
Amortization of:
Net actuarial (gain) loss		99		83		47		166		146		249
Prior service cost (benefit)		96		19		-		(1)		96		18
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(474)	$	144	$	16	$	(652)	$	(458)	$	(508)
Contributions paid	$	-	$	100	$	143	$	176	$	143	$	276
	Nine-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	1,513	$	2,616	$	590	$	784	$	2,103	$	3,400
Interest cost		4,475		4,815		1,595		1,816		6,070		6,631
Expected return on plan assets		(7,994)		(7,299)		(2,274)		(2,308)		(10,268)		(9,607)
Amortization of:
Net actuarial (gain) loss		297		248		142		490		439		738
Prior service cost (benefit)		288		56		-		(3)		288		53
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(1,421)	$	436	$	53	$	(136)	$	(1,368)	$	300
Contributions paid	$	-	$	400	$	1,365	$	2,343	$	1,365	$	2,743

The components of the net periodic other postretirement benefit costs recognized are as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Service cost	$	7	$	11	$	22	$	35
Interest cost		308		358		925		1,074
Amortization of:
Net actuarial (gain) loss		(18)		(50)		(54)		(150)
Prior service cost (benefit)		(40)		(40)		(119)		(119)
Net periodic other postretirement (benefit) cost	$	257	$	279	$	774	$	840
Contributions paid	$	570	$	481	$	1,471	$	1,849

The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans.  As a result, the actual funding in fiscal year 2015 may differ from the current estimate.  Woodward estimates its remaining cash contributions in fiscal year 2015 will be as follows:

Retirement pension benefits:
United States	$	21
United Kingdom		274
Japan		-
Other postretirement benefits		2,307

Multiemployer defined benefit plans

Woodward operates two multiemployer defined benefit plans for certain employees in the Netherlands and Japan.  The company has been notified by the Japanese plan administrator that the plan for employees in Japan is being reorganized. Woodward anticipates that assets of the Japanese plan will be converted into a similar plan and is currently evaluating the potential cost of such conversion. The amounts of contributions associated with the multiemployer plans were as follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company contributions	$	142	$	180	$	452	$	555

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Earnings Per Share (Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share
Weighted-average treasury stock shares held for deferred compensation obligations	182	206	194	220

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Income Taxes (Tables)

9 Months Ended

Jun. 30, 2015

Income Taxes

Tax Expense and Effective Tax Rate

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168
Income tax expense		13,806		16,467		40,830		37,986
Effective tax rate		24.0%		26.4%		23.7%		25.0%

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Retirement Benefits (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2015	Jun. 30, 2014
Value of Company Stock Contributed to Defined Contribution Benefit Plans	$ 12,574	$ 11,193	$ 12,574	$ 11,193
Treasury Stock Issued During Period, Shares, Employee Benefit Plans	259	260
Business Acquisition, Acquiree - Duarte Business [Member]
Pension and Other Postretirement Defined Benefit Plans Liabilities			80
Treasury Stock at Cost [Member]
Value of Company Stock Contributed to Defined Contribution Benefit Plans			$ 8,084	$ 8,356
Treasury Stock Issued During Period, Shares, Employee Benefit Plans			259	260

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Intangible Assets, Net (Tables)

9 Months Ended

Jun. 30, 2015

Intangible Assets, Net

Schedule of Finite-Lived Intangible Assets by Major Class

	June 30, 2015						September 30, 2014
	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Customer relationships and contracts:
Aerospace	$	282,225	$	(111,495)	$	170,730	$	282,225	$	(97,281)	$	184,944
Energy		41,566		(32,697)		8,869		41,706		(32,032)		9,674
Total	$	323,791	$	(144,192)	$	179,599	$	323,931	$	(129,313)	$	194,618
Intellectual property:
Aerospace	$	-	$	-	$	-	$	-	$	-	$	-
Energy		19,473		(16,616)		2,857		19,954		(15,938)		4,016
Total	$	19,473	$	(16,616)	$	2,857	$	19,954	$	(15,938)	$	4,016
Process technology:
Aerospace	$	76,605	$	(35,989)	$	40,616	$	76,605	$	(31,719)	$	44,886
Energy		23,280		(14,412)		8,868		23,078		(13,141)		9,937
Total	$	99,885	$	(50,401)	$	49,484	$	99,683	$	(44,860)	$	54,823
Other intangibles:
Aerospace	$	9,100	$	(8,950)	$	150	$	9,100	$	(8,465)	$	635
Energy		1,360		(833)		527		1,519		(839)		680
Total	$	10,460	$	(9,783)	$	677	$	10,619	$	(9,304)	$	1,315
Total intangibles:
Aerospace	$	367,930	$	(156,434)	$	211,496	$	367,930	$	(137,465)	$	230,465
Energy		85,679		(64,558)		21,121		86,257		(61,950)		24,307
Consolidated Total	$	453,609	$	(220,992)	$	232,617	$	454,187	$	(199,415)	$	254,772

Schedule of Finite-Lived Intangible Assets Amortization Expense

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense	$	7,224	$	8,357	$	22,026	$	25,498

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Year Ending September 30:
2015 (remaining)	$	7,230
2016		27,568
2017		25,861
2018		25,037
2019		23,201
Thereafter		123,720
	$	232,617

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Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Financial liability on recurring basis	$ 0	$ 0
Long Term Note Receivable From Municipality Within The State Of Illinois [Member]
Interest rate used to estimate fair value	3.30%	3.20%
Long Term Note Receivable From Municipality Within The State Of Colorado [Member]
Interest rate used to estimate fair value	3.30%	3.20%
Borrowings [Member]
Interest rate used to estimate fair value	2.60%	2.40%

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Long-term Debt (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Dec. 31, 2013	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015	Sep. 30, 2014
Debt financing costs			$ 2,359	$ 1,297
Balance of unamortized debt issuance costs	$ 5,834		$ 5,834			$ 4,276
2008 Note Purchase Agreement [Member]
Issuance Date			Oct. 01, 2008
2009 Note Purchase Agreement [Member]
Issuance Date			Apr. 01, 2009
2013 Note Purchase Agreement [Member]
Issuance Date			Oct. 01, 2013
Face Amount	$ 250,000		$ 250,000
Debt financing costs		$ 1,297
Series J Notes [Member]
Variable Rate Basis			LIBOR
Basis Spread On Variable Rate			1.25%
Variable interest rate	1.53%		1.53%
First Closing Notes [Member]
Issuance Date			Oct. 01, 2013
Second Closing Notes [Member]
Issuance Date			Nov. 15, 2013
Foreign Lines of Credit And Overdraft Facilities [Member]
Outstanding borrowings	$ 0		$ 0
Revolving Credit Facility [Member]
Variable Rate Basis			LIBOR
Revolving Credit Facility [Member] | Minimum [Member]
Basis Spread On Variable Rate			0.85%
Revolving Credit Facility [Member] | Maximum [Member]
Basis Spread On Variable Rate			1.65%
Chinese Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	22,700		$ 22,700			22,700
Outstanding borrowings	$ 0		$ 0
Chinese Credit Facility, RMB Denominated Loan [Member]
Variable Rate Basis			interest at the prevailing interest rate offered by the People's Bank of China on the date of borrowing, plus a margin equal to 25% of that prevailing rate
Chinese Credit Facility, USD Denominated Loan [Member]
Variable Rate Basis			interest at the lender's cost of borrowing rate at the date of borrowing, plus 3%
Revolving Credit Agreement [Member]
Line of Credit Facility, Maximum Borrowing Capacity					$ 600,000
Outstanding borrowings						$ 210,000
Credit facility effective interest rate on outstanding borrowing						1.21%
Amended Revolving Credit Agreement [Member]
Variable interest rate	1.24%		1.24%
Debt Covenant, Leverage Ratio, Maximum
Debt Covenant, Minimum Consolidated Net Worth Calculation, Base Value	$ 800,000		$ 800,000
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Income	50.00%		50.00%
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Proceeds of Issuance of Capital Stock	50.00%		50.00%
Debt Covenant, Leverage Ratio During Material Acquisition Period, Maximum
Line of Credit Facility, Initiation Date	Apr. 28, 2015
Line of Credit Facility, Expiration Date			Apr. 28, 2020
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000		$ 1,000,000
Outstanding borrowings	$ 375,000		$ 375,000
Credit facility effective interest rate on outstanding borrowing	1.24%		1.24%
Amended Revolving Credit Agreement [Member] | Minimum [Member]
Basis Spread On Variable Rate			0.85%
Amended Revolving Credit Agreement [Member] | Maximum [Member]
Basis Spread On Variable Rate			1.65%

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Property, Plant, and Equipment, Net (Property, Plant, and Equipment - Net) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Property, Plant, and Equipment, Net
Land and Land Improvements	$ 63,626		$ 63,626		$ 66,303
Buildings and improvements	375,068		375,068		197,587
Leasehold improvements	17,696		17,696		20,026
Machinery and production equipment	338,531		338,531		326,403
Computer equipment and software	105,715		105,715		103,852
Office furniture and equipment	23,906		23,906		20,992
Other	18,466		18,466		18,839
Construction in progress	216,021		216,021		223,958
Property, Plant and Equipment, Gross, Total	1,159,029		1,159,029		977,960
Less accumulated depreciation	(470,693)		(470,693)		(464,681)
Property, Plant and Equipment, Net, Total	688,336		688,336		$ 513,279
Depreciation expense	11,280	$ 10,489	33,727	$ 32,183
Capitalized interest	$ 2,544	$ 1,676	$ 7,310	$ 3,965

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Earnings Per Share (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014
Payments for Repurchase of Common Stock		$ 157,118	$ 141,488
Goldman Sachs Accelerated Share Repurchase Program [Member]
Accelerated Share Repurchase Program, Execution Date	Jun. 02, 2015
Payments for Repurchase of Common Stock	$ 125,000
Purchases of treasury stock, shares	2,048
Stock Repurchase Program Expiration Date	Dec. 31, 2015
Dilutive effect of Accelerated Stock Repurchase shares	2,048

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Recent Accounting Pronouncements

9 Months Ended

Jun. 30, 2015

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Note 2.  Recent accounting pronouncements

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements.  Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”).

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.”  Under ASU 2015-03 Woodward will present debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. Amortization of such costs will continue to be reported as interest expense. ASU 2015-03 is effective for fiscal years − and interim periods within those fiscal years − beginning after December 15, 2015 (fiscal year 2017 for Woodward), but early adoption is allowed. Woodward has not determined in which period it will adopt the new guidance. Retrospective adoption is required. Woodward had unamortized debt issuance costs of $5,834 as of June 30, 2015 and $4,276 as of September 30 2014.  These costs will be reclassified from other assets to long-term debt upon adoption.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.”  The purpose of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards.  The amendments (i) remove inconsistencies and weaknesses in revenue requirements, (ii) provide a more robust framework for addressing revenue issues, (iii) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, (iv) provide more useful information to users of financial statements through improved disclosure requirements, and (v) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer.  In July 2015, the FASB delayed the effective date for the adoption of ASU 2014-09 by one year, and as a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 (fiscal year 2019 for Woodward), including interim periods within the reporting period.  Early adoption is not permitted.  An entity should adopt the amendments using one of the following methods: retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application.  Woodward has not determined what transition method it will use and is currently assessing the impact that this guidance may have on its Consolidated Financial Statements. 

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Goodwill (Narrative) (Details) - 3 months ended Sep. 30, 2014 - USD ($)	Total
Impairment	$ 0
Assumed annual compound growth rate after five or ten years	4.20%
Minimum [Member]
Weighted average cost of capital assumption	8.93%
Maximum [Member]
Weighted average cost of capital assumption	11.04%

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Retirement Benefits (Tables)

9 Months Ended

Jun. 30, 2015

Schedule of Estimated Remaining Cash Contributions

Retirement pension benefits:
United States	$	21
United Kingdom		274
Japan		-
Other postretirement benefits		2,307

Pension Plans, Defined Benefit [Member]

Schedule of Net Periodic Benefit Costs

	Three-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	504	$	872	$	193	$	263	$	697	$	1,135
Interest cost		1,489		1,602		527		616		2,016		2,218
Expected return on plan assets		(2,662)		(2,432)		(751)		(781)		(3,413)		(3,213)
Amortization of:
Net actuarial (gain) loss		99		83		47		166		146		249
Prior service cost (benefit)		96		19		-		(1)		96		18
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(474)	$	144	$	16	$	(652)	$	(458)	$	(508)
Contributions paid	$	-	$	100	$	143	$	176	$	143	$	276
	Nine-Months Ended June 30,
	United States				Other Countries				Total
	2015		2014		2015		2014		2015		2014
Service cost	$	1,513	$	2,616	$	590	$	784	$	2,103	$	3,400
Interest cost		4,475		4,815		1,595		1,816		6,070		6,631
Expected return on plan assets		(7,994)		(7,299)		(2,274)		(2,308)		(10,268)		(9,607)
Amortization of:
Net actuarial (gain) loss		297		248		142		490		439		738
Prior service cost (benefit)		288		56		-		(3)		288		53
Curtailment (gain) loss		-		-		-		(915)		-		(915)
Net periodic retirement pension (benefit) cost	$	(1,421)	$	436	$	53	$	(136)	$	(1,368)	$	300
Contributions paid	$	-	$	400	$	1,365	$	2,343	$	1,365	$	2,743

Multiemployer Plan [Member]

Schedule of Costs of Retirement Plans

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company contributions	$	142	$	180	$	452	$	555

Defined Contribution Plan [Member]

Schedule of Costs of Retirement Plans

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Company costs	$	7,908	$	5,537	$	23,034	$	16,219

Other Postretirement Benefit Plans, Defined Benefit [Member]

Schedule of Net Periodic Benefit Costs

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Service cost	$	7	$	11	$	22	$	35
Interest cost		308		358		925		1,074
Amortization of:
Net actuarial (gain) loss		(18)		(50)		(54)		(150)
Prior service cost (benefit)		(40)		(40)		(119)		(119)
Net periodic other postretirement (benefit) cost	$	257	$	279	$	774	$	840
Contributions paid	$	570	$	481	$	1,471	$	1,849

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Earnings Per Share (Tables)

9 Months Ended

Jun. 30, 2015

Earnings Per Share

Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Numerator:
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Denominator:
Basic shares outstanding		64,781		65,845		65,088		66,736
Dilutive effect of stock options and restricted stock		1,446		1,302		1,416		1,294
Diluted shares outstanding		66,227		67,147		66,504		68,030
Income per common share:
Basic earnings per share	$	0.68	$	0.70	$	2.02	$	1.71
Diluted earnings per share	$	0.66	$	0.69	$	1.98	$	1.68

Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Options		-		677		699		236
Weighted-average option price	$	n/a	$	40.99	$	46.55	$	41.05

Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Weighted-average treasury stock shares held for deferred compensation obligations		182		206		194		220

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Segment Information

9 Months Ended

Jun. 30, 2015

Segment Information

Segment Information

Note 21.  Segment information

Woodward serves the aerospace market and the energy market through its two reportable segments - Aerospace and Energy.  Woodward’s reportable segments are aggregations of Woodward’s operating segments.  Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and decisions for the allocation of resources between segments.

The accounting policies of the reportable segments are the same as those of the Company.  Woodward evaluates segment profit or loss based on internal performance measures for each segment in a given period.  In connection with that assessment, Woodward excludes matters such as charges for restructuring costs, interest income and expense, and certain gains and losses from asset dispositions. 

A summary of consolidated net sales and earnings by segment follows:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Segment external net sales:
Aerospace	$	288,480	$	274,923	$	825,676	$	765,816
Energy		206,330		249,361		650,002		669,977
Total consolidated net sales	$	494,810	$	524,284	$	1,475,678	$	1,435,793
Segment earnings:
Aerospace	$	46,362	$	39,357	$	127,783	$	102,195
Energy		30,619		40,203		97,111		99,162
Total segment earnings		76,981		79,560		224,894		201,357
Nonsegment expenses		(13,564)		(11,193)		(35,884)		(31,159)
Interest expense, net		(5,858)		(5,899)		(16,788)		(18,030)
Consolidated earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168

Segment assets consist of accounts receivable, inventories, property, plant, and equipment, net, goodwill, and other intangibles, net.  A summary of consolidated total assets by segment follows:

	June 30, 2015		September 30, 2014
Segment assets:
Aerospace	$	1,529,882	$	1,440,355
Energy		628,995		610,345
Total segment assets		2,158,877		2,050,700
Unallocated corporate property, plant and equipment, net		78,429		72,992
Other unallocated assets		274,430		273,510
Consolidated total assets	$	2,511,736	$	2,397,202

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Derivative Instruments and Hedging Activities (Impact of Derivative Instruments on Earnings) (Details) - Interest Expense [Member] - Derivatives in Cash Flow Hedging Relationships [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Amount of (Income) Expense Recognized in Earnings on Derivative	$ 25	$ 24	$ 74	$ 73
Amount of Gain/Loss Recognized in Accumulated OCI on Derivative	0	0	0	0
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings	$ 25	$ 24	$ 74	$ 73

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Stock-Based Compensation (Tables)

9 Months Ended

Jun. 30, 2015

Stock-Based Compensation

Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015				2014
Expected term (years)		n/a		n/a		6.2	-	8.8		5.8	-	8.6
Estimated volatility		n/a		n/a		36.5%				38.5%
Estimated dividend yield		n/a		n/a		0.7%				0.8%
Risk-free interest rate		n/a		n/a		2.0%	-	2.3%		1.7%	-	2.5%

Activity for Stock Option Awards

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		5,111	$	30.86		4,501	$	28.08
Options granted		-		n/a		751		46.55
Options exercised		(320)		17.19		(428)		18.55
Options forfeited		(7)		41.11		(40)		37.80
Options, ending balance		4,784		31.76		4,784		31.76

Changes in Nonvested Stock Options

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		1,747	$	40.50		1,679	$	34.83
Options granted		-		n/a		751		46.55
Options vested		(10)		34.04		(661)		33.06
Options forfeited		(7)		41.11		(39)		37.80
Options, ending balance		1,730		40.53		1,730		40.53

Stock Options Vested, Or Expected to Vest and Are Exercisable

	Number		Weighted- Average Exercise Price		Weighted- Average Remaining Life in Years		Aggregate Intrinsic Value
Options outstanding		4,784	$	31.76		5.8	$	111,163
Options vested and exercisable		3,055		26.79		4.3		86,162
Options vested and expected to vest		4,682		31.50		5.7		109,961

Changes in Restricted Stock Awards

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
		Number		Fair Value per Share		Number		Fair Value per Share
Beginning balance		24	$	39.43		24	$	39.43
Shares granted		-		n/a		-		n/a
Shares vested		-		n/a		-		n/a
Shares forfeited		-		n/a		-		n/a
Ending balance		24		39.43		24		39.43

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Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2015

Financial Instruments and Fair Value Measurments

Financial Assets that are Measured at Fair Value on a Recurring Basis

	At June 30, 2015								At September 30, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Cash	$	77,855	$	-	$	-	$	77,855	$	92,590	$	-	$	-	$	92,590
Investments in money market funds		4,117		-		-		4,117		11,210		-		-		11,210
Investments in reverse repurchase agreements		5,412		-		-		5,412		11,487		-		-		11,487
Equity securities		10,399		-		-		10,399		9,645		-		-		9,645
Total financial assets	$	97,783	$	-	$	-	$	97,783	$	124,932	$	-	$	-	$	124,932

Estimated Fair Values of Financial Instruments

		At June 30, 2015				At September 30, 2014
	Fair Value Hierarchy Level	Estimated Fair Value		Carrying Cost		Estimated Fair Value		Carrying Cost
Assets:
Notes receivable from municipalities	2		15,723		15,631		15,988		15,228
Liabilities:
Long-term debt, including current portion	2		(901,979)		(875,000)		(752,513)		(710,000)

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities

Impact of Derivative Instruments on Earnings

	Three-Months Ended June 30,				Nine-Months Ended June 30,
	2015		2014		2015		2014
Amount of (income) expense recognized in earnings on derivative	$	25	$	24	$	74	$	73
Amount of (gain) loss recognized in accumulated OCI on derivative		-		-		-		-
Amount of (gain) loss reclassified from accumulated OCI into earnings		25		24		74		73

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Basis of Presentation

9 Months Ended

Jun. 30, 2015

Basis of Presentation

Basis of Presentation

WOODWARD, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 1.  Basis of Presentation

The Condensed Consolidated Financial Statements of Woodward, Inc. (“Woodward” or the “Company”) as of June 30, 2015 and for the three and nine-months ended June 30, 2015 and June 30, 2014, included herein, have not been audited by an independent registered public accounting firm.  These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to present fairly Woodward’s financial position as of June 30, 2015, and the statements of earnings, comprehensive earnings, cash flows, and changes in stockholders’ equity for the periods presented herein.  The Condensed Consolidated Balance Sheet as of September 30, 2014 was derived from Woodward’s Annual Report on Form 10-K for the fiscal year then ended.  The results of operations for the three and nine-months ended June 30, 2015 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year.  Dollar and share amounts contained in these Condensed Consolidated Financial Statements are in thousands, except per share amounts.

The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in Woodward’s most recent Annual Report on Form 10-K filed with the SEC and other financial information filed with the SEC.

Management is required to use estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures, in the preparation of the Condensed Consolidated Financial Statements included herein.  Significant estimates in these Condensed Consolidated Financial Statements include allowances for uncollectible amounts, net realizable value of inventories, customer rebates earned, warranty reserves, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, valuation of identifiable intangible assets and goodwill, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees and board members, and contingencies.  Actual results could vary materially from Woodward’s estimates.

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Supplemental Statements of Cash Flows Information (Tables)

9 Months Ended

Jun. 30, 2015

Supplemental Statements of Cash Flows Information

Schedule of Cash Flow Supplemental Disclosures

	Nine-Months Ended June 30,
	2015		2014
Interest paid, net of amounts capitalized	$	30,090	$	26,619
Income taxes paid		48,801		36,345
Income tax refunds received		426		1,617
Non-cash activities:
Purchases of property, plant and equipment on account		39,122		19,193
Common shares issued from treasury for benefit plans (Note 18)		12,574		11,193
Notes receivable from municipalities for economic development incentives		-		6,596
Cashless exercise of stock options		-		715
Settlement of receivable through cashless acquisition of treasury shares in connection with the cashless exercise of stock options		-		871

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Stock-Based Compensation (Stock Options Vested, Or Expected to Vest and Are Exercisable) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2014
Stock-Based Compensation
Options outstanding, Number of options	4,784	5,111	4,501
Options outstanding, Weighted-Average Exercise Price	$ 31.76	$ 30.86	$ 28.08
Options outstanding, Weighted-Average Remaining Life in Years	5 years 9 months 18 days
Options outstanding, Aggregate Intrinsic Value	$ 111,163
Options vested and exercisable, Number of options	3,055
Options vested and exercisable, Weighted-Average Exercise Price Per Share	$ 26.79
Options vested and exercisable, Weighted-Average Remaining Life in Years	4 years 3 months 18 days
Options vested and exercisable, Aggregate Intrinsic Value	$ 86,162
Options vested and expected to vest, Number of options	4,682
Options vested and expected to vest, Weighted-Average Exercise Price Per Share	$ 31.50
Options vested and to expected vest, Weighted-Average Remaining Life in Years	5 years 8 months 12 days
Options vested and expected to vest, Aggregate Intrinsic Value	$ 109,961

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Other Liabilities (Tables)

9 Months Ended

Jun. 30, 2015

Other Liabilities

Schedule of Other Liabilities

	June 30,		September 30,
	2015		2014
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	38,039	$	38,850
Total unrecognized tax benefits, net of offsetting adjustments		16,013		14,707
Acquired performance obligations and unfavorable contracts (1)		4,712		12,792
Deferred economic incentives (2)		19,107		18,408
Other		17,670		16,454
	$	95,541	$	101,211

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Financial Instruments and Fair Value Measurements (Financial Assets that are Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Equity securities	$ 10,399	$ 9,645
Total financial assets	97,783	124,932
Fair Value, Inputs, Level 1 [Member]
Equity securities	10,399	9,645
Total financial assets	97,783	124,932
Fair Value, Inputs, Level 2 [Member]
Equity securities	0	0
Total financial assets	0	0
Fair Value, Inputs, Level 3 [Member]
Equity securities	0	0
Total financial assets	0	0
Cash [Member]
Cash and cash equivalents	77,855	92,590
Cash [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	77,855	92,590
Cash [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	0	0
Cash [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents	0	0
Investments in Money Market Funds [Member]
Cash and cash equivalents	4,117	11,210
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	4,117	11,210
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	0	0
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents	0	0
Investments in Reverse Repurchase Agreements [Member]
Cash and cash equivalents	5,412	11,487
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	5,412	11,487
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	0	0
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents	$ 0	$ 0

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Other (Income) Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Other (Income) Expense, Net
Net (gain) loss on sales of assets	$ (48)	$ (20)	$ (766)	$ 116
Rent income	(105)	(124)	(365)	(418)
Net gain on investments in deferred compensation program	10	(306)	(480)	(879)
Other	31	(19)	(40)	(85)
Other (income) expense, net	$ (112)	$ (469)	$ (1,651)	$ (1,266)

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Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Consolidated Statements of Earnings
Net sales	$ 494,810	$ 524,284	$ 1,475,678	$ 1,435,793
Costs and expenses:
Cost of goods sold	351,421	372,571	1,050,783	1,028,065
Selling, general and administrative expenses	39,305	40,468	117,598	113,079
Research and development costs	33,555	34,990	97,912	100,219
Amortization of intangible assets	7,224	8,357	22,026	25,498
Interest expense	6,077	5,972	17,355	18,219
Interest income	(219)	(73)	(567)	(189)
Other (income) expense, net (Note 16)	(112)	(469)	(1,651)	(1,266)
Total costs and expenses	437,251	461,816	1,303,456	1,283,625
Earnings before income taxes	57,559	62,468	172,222	152,168
Income tax expense	13,806	16,467	40,830	37,986
Net earnings	$ 43,753	$ 46,001	$ 131,392	$ 114,182
Earnings per share (Note 3):
Basic earnings per share	$ 0.68	$ 0.70	$ 2.02	$ 1.71
Diluted earnings per share	$ 0.66	$ 0.69	$ 1.98	$ 1.68
Weighted Average Common Shares Outstanding (Note 3):
Basic	64,781	65,845	65,088	66,736
Diluted	66,227	67,147	66,504	68,030
Cash dividends per share paid to Woodward common stockholders	$ 0.10	$ 0.08	$ 0.28	$ 0.24

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Segment Information (Tables)

9 Months Ended

Jun. 30, 2015

Segment Information

Consolidated Net Sales and Earnings by Segment

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Segment external net sales:
Aerospace	$	288,480	$	274,923	$	825,676	$	765,816
Energy		206,330		249,361		650,002		669,977
Total consolidated net sales	$	494,810	$	524,284	$	1,475,678	$	1,435,793
Segment earnings:
Aerospace	$	46,362	$	39,357	$	127,783	$	102,195
Energy		30,619		40,203		97,111		99,162
Total segment earnings		76,981		79,560		224,894		201,357
Nonsegment expenses		(13,564)		(11,193)		(35,884)		(31,159)
Interest expense, net		(5,858)		(5,899)		(16,788)		(18,030)
Consolidated earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168

Consolidated Total Assets by Segment

	June 30, 2015		September 30, 2014
Segment assets:
Aerospace	$	1,529,882	$	1,440,355
Energy		628,995		610,345
Total segment assets		2,158,877		2,050,700
Unallocated corporate property, plant and equipment, net		78,429		72,992
Other unallocated assets		274,430		273,510
Consolidated total assets	$	2,511,736	$	2,397,202

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net earnings	$ 131,392	$ 114,182
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	55,754	57,680
Net (gain) loss on sales of assets	(766)	116
Stock-based compensation	11,086	8,739
Excess tax benefits from stock-based compensation	(4,170)	(2,638)
Deferred income taxes	1,623	(5,749)
Loss on derivatives reclassified from accumulated comprehensive earnings into earnings	74	73
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	65,345	57,151
Inventories	(44,630)	(38,860)
Accounts payable and accrued liabilities	(41,868)	(6,434)
Current income taxes	(10,897)	16,130
Retirement benefit obligations	(3,365)	(2,676)
Other	7,742	(13,824)
Net cash provided by operating activities	167,320	183,890
Cash flows from investing activities:
Payments for purchase of property, plant and equipment	(190,865)	(104,530)
Proceeds from sale of assets	2,486	258
Net cash used in investing activities	(188,379)	(104,272)
Cash flows from financing activities:
Cash dividends paid	(18,285)	(16,021)
Proceeds from sales of treasury stock	7,936	8,380
Payments for repurchases of common stock	(157,118)	(141,488)
Excess tax benefits from stock compensation	4,170	2,638
Borrowings on revolving lines of credit and short-term borrowings	869,970	356,071
Payments on revolving lines of credit and short-term borrowings	(701,610)	(191,069)
Proceeds from issuance of long-term debt	0	250,000
Payments of long-term debt	0	(300,000)
Payments of debt financing costs	(2,359)	(1,297)
Net cash provided by (used in) financing activities	2,704	(32,786)
Effect of exchange rate changes on cash and cash equivalents	(9,548)	454
Net change in cash and cash equivalents	(27,903)	47,286
Cash and cash equivalents at beginning of period	115,287	48,556
Cash and cash equivalents at end of period	$ 87,384	$ 95,842

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Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Inventories
Raw Materials	$ 70,878	$ 60,442
Work in progress	99,493	93,836
Component Parts	263,410	247,299
Finished Goods	52,122	50,367
Inventory, net	$ 485,903	$ 451,944

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Property, Plant, and Equipment, Net (Tables)

9 Months Ended

Jun. 30, 2015

Property, Plant, and Equipment, Net

Schedule of Property Plant and Equipment, Net

	June 30,		September 30,
	2015		2014
Land and land improvements	$	63,626	$	66,303
Buildings and improvements		375,068		197,587
Leasehold improvements		17,696		20,026
Machinery and production equipment		338,531		326,403
Computer equipment and software		105,715		103,852
Office furniture and equipment		23,906		20,992
Other		18,466		18,839
Construction in progress		216,021		223,958
		1,159,029		977,960
Less accumulated depreciation		(470,693)		(464,681)
Property, plant and equipment, net	$	688,336	$	513,279

Schedule of Depreciation Expense

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	11,280	$	10,489	$	33,727	$	32,183

Schedule of Capitalized Interest

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Capitalized interest	$	2,544	$	1,676	$	7,310	$	3,965

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Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Intangible Assets, Net
2015 (remaining)	$ 7,230
2016	27,568
2017	25,861
2018	25,037
2019	23,201
Thereafter	123,720
Finite-Lived Intangible Assets, Net, Total	$ 232,617	$ 254,772

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Other Liabilities

9 Months Ended

Jun. 30, 2015

Other Liabilities

Other Liabilities

Note 15.  Other liabilities

	June 30,		September 30,
	2015		2014
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	38,039	$	38,850
Total unrecognized tax benefits, net of offsetting adjustments		16,013		14,707
Acquired performance obligations and unfavorable contracts (1)		4,712		12,792
Deferred economic incentives (2)		19,107		18,408
Other		17,670		16,454
	$	95,541	$	101,211

(1) In connection with Woodward’s acquisition of the Duarte Business in fiscal year 2013, Woodward assumed current and long-term performance obligations for contractual commitments that are expected to result in future economic losses.  In addition, Woodward assumed current and long-term performance obligations for services to be provided to the Seller, offset by current and long-term assets related to contractual payments due from the Seller.  The long-term portion of both obligations is included in “Other liabilities” as of September 30, 2014.  As of June 30, 2015, “Other liabilities” includes the long-term portion of the acquired unfavorable contracts as only a current portion of the acquired performance obligations remains.

(2) Woodward receives certain economic incentives from various state and local authorities related to capital expansion projects. Such amounts are initially recorded as deferred credits and will be recognized as a reduction to non-income tax expense over the economic lives of the related capital expansion projects.

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Goodwill (Tables)

9 Months Ended

Jun. 30, 2015

Goodwill Disclosure

Schedule of Goodwill

	September 30, 2014		Effects of Foreign Currency Translation		June 30, 2015
Aerospace	$	455,423	$	-	$	455,423
Energy		104,301		(1,285)		103,016
Consolidated	$	559,724	$	(1,285)	$	558,439

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Income Taxes

9 Months Ended

Jun. 30, 2015

Income Taxes

Income Taxes

Note 17.  Income taxes

U.S. GAAP requires that the interim period tax provision be determined as follows:  

· At the end of each quarter, Woodward estimates the tax that will be provided for the current fiscal year stated as a percentage of estimated “ordinary income.”  The term ordinary income refers to earnings from continuing operations before income taxes, excluding significant unusual or infrequently occurring items. 

The estimated annual effective rate is applied to the year-to-date ordinary income at the end of each quarter to compute the estimated year-to-date tax applicable to ordinary income.  The tax expense or benefit related to ordinary income in each quarter is the difference between the most recent year-to-date and the prior quarter year-to-date computations.

· The tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur.  The impact of changes in tax laws or rates on deferred tax amounts, the effects of changes in judgment about beginning of the year valuation allowances, and changes in tax reserves resulting from the finalization of tax audits or reviews are examples of significant unusual or infrequently occurring items that are recognized as discrete items in the interim period in which the event occurs.

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income of Woodward in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year.  In addition, as a global commercial enterprise, Woodward’s tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, changes in the estimate of the amount of undistributed foreign earnings that Woodward considers indefinitely reinvested, as well as other factors that cannot be predicted with certainty.  As such, there can be significant volatility in interim tax provisions.

The following table sets forth the tax expense and the effective tax rate for Woodward’s income from operations:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Earnings before income taxes	$	57,559	$	62,468	$	172,222	$	152,168
Income tax expense		13,806		16,467		40,830		37,986
Effective tax rate		24.0%		26.4%		23.7%		25.0%

The decrease in the year-over-year effective tax rate for the three-months ended June 30, 2015, is primarily attributable to a favorable net valuation increase in deferred tax assets in the current quarter that was partially offset by smaller net favorable resolutions of foreign tax matters in the current quarter compared to the prior year’s quarter.  The decrease in the effective tax rate for the nine-months ended June 30, 2015 included both the quarterly decrease and the retroactive extension of the U.S. research and experimentation tax credit for calendar year 2014, which was enacted in December 2014, and was partially offset by smaller net favorable resolutions of foreign tax matters in the current year compared to the prior year.  

Gross unrecognized tax benefits were $23,769 as of June 30, 2015 and $22,687as of September 30, 2014.  Included in the balance of unrecognized tax benefits were $14,249 as of June 30, 2015 and $12,807 as of September 30, 2014, of tax benefits that, if recognized, would affect the effective tax rate.  At this time, Woodward estimates that it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $3,105 in the next twelve months due to the completion of reviews by tax authorities and the expiration of certain statutes of limitations.  Woodward accrues for potential interest and penalties related to unrecognized tax benefits in tax expense.  Woodward had accrued gross interest and penalties of $1,468 as of June 30, 2015 and $1,158 as of September 30, 2014.

Woodward’s tax returns are subject to audits by U.S., state, and foreign tax authorities, and these audits are at various stages of completion at any given time.  Reviews of tax matters by authorities and lapses of the applicable statutes of limitations may result in changes to tax expense.  With a few exceptions, Woodward’s fiscal years remaining open to examination in the United States include fiscal years 2012 and thereafter, and fiscal years remaining open to examination in significant foreign jurisdictions include 2005 and thereafter.

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Long-term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Long-term debt balance	$ 875,000	$ 710,000
Short-term Debt	3,186	0
Series C Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 50,000	$ 50,000
Interest rate	5.92%	5.92%
Maturity date	Oct. 01, 2015	Oct. 01, 2015
Series D Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 100,000	$ 100,000
Interest rate	6.39%	6.39%
Maturity date	Oct. 01, 2018	Oct. 01, 2018
Series E Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 57,000	$ 57,000
Interest rate	7.81%	7.81%
Maturity date	Apr. 03, 2016	Apr. 03, 2016
Series F Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 43,000	$ 43,000
Interest rate	8.24%	8.24%
Maturity date	Apr. 03, 2019	Apr. 03, 2019
Series J Notes [Member]
Variable interest rate	1.53%
Variable Rate Basis	LIBOR
Basis Spread On Variable Rate	1.25%
Series J Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 50,000	$ 50,000
Basis Spread On Variable Rate	1.25%	1.25%
Maturity date	Nov. 15, 2020	Nov. 15, 2020
Series G Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 50,000	$ 50,000
Interest rate	3.42%	3.42%
Maturity date	Nov. 15, 2020	Nov. 15, 2020
Series H Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 25,000	$ 25,000
Interest rate	4.03%	4.03%
Maturity date	Nov. 15, 2023	Nov. 15, 2023
Series I Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 25,000	$ 25,000
Interest rate	4.18%	4.18%
Maturity date	Nov. 15, 2025	Nov. 15, 2025
Series K Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 50,000	$ 50,000
Interest rate	4.03%	4.03%
Maturity date	Nov. 15, 2023	Nov. 15, 2023
Series L Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	$ 50,000	$ 50,000
Interest rate	4.18%	4.18%
Maturity date	Nov. 15, 2025	Nov. 15, 2025
Revolving Credit Facility [Member]
Long-term debt balance	$ 375,000	$ 210,000
Variable Rate Basis	LIBOR
Revolving Credit Facility [Member] | Minimum [Member]
Basis Spread On Variable Rate	0.85%
Revolving Credit Facility [Member] | Maximum [Member]
Basis Spread On Variable Rate	1.65%
Revolving Credit Agreement [Member]
Credit facility effective interest rate on outstanding borrowing		1.21%
Amended Revolving Credit Agreement [Member]
Variable interest rate	1.24%
Credit facility effective interest rate on outstanding borrowing	1.24%
Maturity date	Apr. 01, 2020
Amended Revolving Credit Agreement [Member] | Minimum [Member]
Basis Spread On Variable Rate	0.85%
Amended Revolving Credit Agreement [Member] | Maximum [Member]
Basis Spread On Variable Rate	1.65%
Chinese Credit Facility, RMB Denominated Loan [Member]
Variable Rate Basis	interest at the prevailing interest rate offered by the People's Bank of China on the date of borrowing, plus a margin equal to 25% of that prevailing rate
Chinese Credit Facility, USD Denominated Loan [Member]
Variable Rate Basis	interest at the lender's cost of borrowing rate at the date of borrowing, plus 3%

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Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Total Accumulated Other Comprehensive (Loss) Earnings [Member]	Foreign Currency Translation Adjustments [Member]	Unrealized Derivative Gains (Losses) [Member]	Minimum Retirement Benefit Liability Adjustments [Member]	Deferred Compensation in Equity [Member]	Retained Earnings [Member]	Treasury Stock at Cost [Member]	Treasury Stock Held for Deferred Compensaton [Member]	Total
Balances at Sep. 30, 2013	$ 106	$ 101,147	$ 15,115	$ 25,742	$ 43	$ (10,670)	$ 4,007	$ 1,193,887	$ (167,710)	$ (4,007)	$ 1,142,545
Balance, Common Stock, shares at Sep. 30, 2013	72,960,000
Balance, Treasury Stock, shares at Sep. 30, 2013									(4,883,000)
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2013										(232,000)
Net earnings								114,182			114,182
Other Comprehensive Income (Loss), Net of Tax			4,876	4,527	46	303					4,876
Cash dividends paid								(16,021)			(16,021)
Purchases of treasury stock									$ (143,073)		(143,073)
Purchases of treasury stock, shares									(3,309,000)
Sales of treasury stock		(4,949)							$ 14,042		9,093
Sales of treasury stock, shares									455,000
Common shares issued from treasury stock for benefit plans		2,837							$ 8,356		11,193
Common shares issued from treasury stock for benefit plans, shares									260,000
Tax benefit attributable to exercise of stock options		2,463									2,463
Stock-based compensation		8,739									8,739
Purchases of stock by deferred compensation plan							324			$ (324)
Purchases of stock by deferred compensation plan, shares										(7,000)
Distribution of stock from deferred compensation plan							(453)			$ 453
Distribution of stock from deferred compensation plan, shares										41,000
Balances at Jun. 30, 2014	$ 106	110,237	19,991	30,269	89	(10,367)	3,878	1,292,048	$ (288,385)	$ (3,878)	1,133,997
Balance, Common Stock, shares at Jun. 30, 2014	72,960,000
Balance, Treasury Stock, shares at Jun. 30, 2014									(7,477,000)
Balance, Treasury stock held for deferred compensation, Shares at Jun. 30, 2014										(198,000)
Balances at Sep. 30, 2014	$ 106	112,491	(3,533)	10,819	105	(14,457)	3,915	1,338,468	$ (286,588)	$ (3,915)	$ 1,160,944
Balance, Preferred Stock, shares at Sep. 30, 2014											0
Balance, Common Stock, shares at Sep. 30, 2014	72,960,000										72,960,000
Balance, Treasury Stock, shares at Sep. 30, 2014									(7,397,000)		(7,397,000)
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2014										(198,000)	(198,000)
Net earnings								131,392			$ 131,392
Other Comprehensive Income (Loss), Net of Tax			(25,769)	(26,455)	46	640					(25,769)
Cash dividends paid								(18,285)			(18,285)
Purchases of treasury stock									$ (157,118)		(157,118)
Purchases of treasury stock, shares									(2,670,000)
Sales of treasury stock		(4,841)							$ 12,777		7,936
Sales of treasury stock, shares									428,000
Common shares issued from treasury stock for benefit plans		4,490							$ 8,084		12,574
Common shares issued from treasury stock for benefit plans, shares									259,000
Tax benefit attributable to exercise of stock options		4,511									4,511
Stock-based compensation		11,086									11,086
Purchases of stock by deferred compensation plan							876			$ (876)
Purchases of stock by deferred compensation plan, shares										(18,000)
Distribution of stock from deferred compensation plan							(477)			$ 477
Distribution of stock from deferred compensation plan, shares										43,000
Balances at Jun. 30, 2015	$ 106	$ 127,737	$ (29,302)	$ (15,636)	$ 151	$ (13,817)	$ 4,314	$ 1,451,575	$ (422,845)	$ (4,314)	$ 1,127,271
Balance, Preferred Stock, shares at Jun. 30, 2015											0
Balance, Common Stock, shares at Jun. 30, 2015	72,960,000										72,960,000
Balance, Treasury Stock, shares at Jun. 30, 2015									(9,380,000)		(9,380,000)
Balance, Treasury stock held for deferred compensation, Shares at Jun. 30, 2015										(173,000)	(173,000)

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Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Comprehensive earnings
Net earnings	$ 43,753	$ 46,001	$ 131,392	$ 114,182
Other comprehensive earnings:
Foreign currency translation adjustments	6,990	(72)	(27,955)	4,159
Taxes on changes on foreign currency translation adjustments	240	74	1,500	368
Foreign currency translation adjustments, net of tax	7,230	2	(26,455)	4,527
Reclassification of net realized losses on derivatives to earnings	25	24	74	73
Taxes on changes on derivative transactions	(10)	(9)	(28)	(27)
Derivative adjustments, net of tax	15	15	46	46
Minimum retirement benefit liability adjustments (Note 18):
Net gain (loss) arising during the period	0	1,193	0	1,193
Curtailment arising during the period	0	(915)	0	(915)
Amortization of prior service cost (benefit)	56	(22)	169	(66)
Amortization of net loss	128	199	385	588
Foreign currency exchange rate changes on minimum retirement benefit liabilities	(604)	(263)	454	(483)
Taxes on changes on minimum retirement benefit liability adjustments, net of foreign currency exchange rate changes	141	31	(368)	(14)
Minimum retirement benefit liability adjustments, net of tax	(279)	223	640	303
Total comprehensive earnings	$ 50,719	$ 46,241	$ 105,623	$ 119,058

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Property, Plant, and Equipment, Net

9 Months Ended

Jun. 30, 2015

Property, Plant, and Equipment, Net

Property, Plant and Equipment, Net

Note 10.  Property, plant, and equipment

	June 30,		September 30,
	2015		2014
Land and land improvements	$	63,626	$	66,303
Buildings and improvements		375,068		197,587
Leasehold improvements		17,696		20,026
Machinery and production equipment		338,531		326,403
Computer equipment and software		105,715		103,852
Office furniture and equipment		23,906		20,992
Other		18,466		18,839
Construction in progress		216,021		223,958
		1,159,029		977,960
Less accumulated depreciation		(470,693)		(464,681)
Property, plant and equipment, net	$	688,336	$	513,279

Included in “Land and land improvements” and “Buildings and improvements” are assets held for sale of $692 at June 30, 2015 and $2,465 at September 30, 2014.  During the quarter ended March 31, 2015, Woodward completed the sale of certain of the assets held for sale.

Woodward is developing a second campus in the greater-Rockford, Illinois area for its Aerospace segment in order to address the growth expected over the next ten years and beyond and to support a substantial number of recently awarded new system platforms, particularly on narrow-body aircraft.  Included in “Construction in progress” are costs of$27,633 at June 30, 2015 and $85,283 at September 30, 2014, associated with the construction of the second campus and new equipment purchases, including capitalized interest of $430 at June 30, 2015 and $2,963 at September 30, 2014.  Approximately $120,000 of assets were placed in service during the nine-months ended June 30, 2015, and were recorded to “Buildings and improvements.”

Woodward is also developing a new campus at its corporate headquarters in Fort Collins, Colorado to support the continued growth of its Energy segment by supplementing its existing Colorado manufacturing facilities and corporate headquarters.  Included in “Construction in progress” are costs of $117,882 at June 30, 2015 and $37,268 at September 30, 2014, associated with the construction of the new campus, including capitalized interest of $3,996 at June 30, 2015 and $2,392 at September 30, 2014.

In addition, in September 2013, Woodward invested in a building site in Niles, Illinois.  Woodward has completed a new facility on this site for its Aerospace segment and is relocating most of its operations formerly residing in nearby Skokie, Illinois to this new facility.  Included in “Construction in progress” are costs of $4,960 at June 30, 2015 and $55,629 at September 30, 2014,  associated with the construction of the building in Niles and new equipment purchases.  Approximately $72,000 of assets were placed in service during the nine-months ended June 30, 2015, and were recorded to “Buildings and improvements” and “Office furniture and equipment.”

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward had depreciation expense of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	11,280	$	10,489	$	33,727	$	32,183

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward capitalized interest that would have otherwise been included in interest expense of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Capitalized interest	$	2,544	$	1,676	$	7,310	$	3,965

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Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Jul. 17, 2015
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Registrant Name	WOODWARD, INC.
Entity Central Index Key	0000108312
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		63,580,865

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Goodwill

9 Months Ended

Jun. 30, 2015

Goodwill Disclosure

Goodwill

Note 11.  Goodwill

	September 30, 2014		Effects of Foreign Currency Translation		June 30, 2015
Aerospace	$	455,423	$	-	$	455,423
Energy		104,301		(1,285)		103,016
Consolidated	$	559,724	$	(1,285)	$	558,439

Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  Based on the relevant U.S. GAAP authoritative guidance, Woodward aggregates components of a single operating segment into a reporting unit, if appropriate.  The impairment tests consist of comparing the implied fair value of each reporting unit with its carrying amount including goodwill.  If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill.  If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value.

Woodward completed its annual goodwill impairment test as of July 31, 2014 during the quarter ended September 30, 2014.  At that date, Woodward determined it was appropriate to aggregate certain components of the same operating segment into a single aggregated reporting unit.  The fair value of each of Woodward’s reporting units was determined using a discounted cash flow method.  This method represents a Level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, earnings margins, future tax rates, and the present value, based on an estimated weighted-average cost of capital (or the discount rate) and terminal growth rate, of forecasted cash flows.  Management projects revenue growth rates, earnings margins and cash flows based on each reporting unit’s current operational results, expected performance and operational strategies over a five or ten-year period.  These projections are adjusted to reflect current economic conditions and demand for certain products, and require considerable management judgment.

Forecasted cash flows used in the July 31, 2014 impairment test were discounted using weighted-average cost of capital assumptions ranging from 8.93% to 11.04%.  The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after five or ten years of 4.20%.  These inputs, which are unobservable in the market, represent management’s best estimate of what market participants would use in determining the present value of the Company’s forecasted cash flows.  Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows.  Woodward evaluated the reasonableness of the reporting units’ resulting fair values utilizing a market multiple method.

The results of Woodward’s goodwill impairment tests performed as of July 31, 2014 indicated the estimated fair value of each reporting unit was substantially in excess of its carrying value, and accordingly, no impairment existed.

During the three and nine-months ended June 30, 2015 there were no events or changes in operation that triggered a need to assess goodwill for possible impairment.  As part of the Company’s ongoing efforts to assess goodwill for possible indications of impairment, Woodward continues to consider a wide variety of factors, including but not limited to the global economic environment and its potential impact on Woodward’s business.

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Stock-Based Compensation (Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards) (Details)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Estimated volatility	36.50%	38.50%
Estimated dividend yield	0.70%	0.80%
Minimum [Member]
Expected term	6 years 2 months 12 days	5 years 9 months 18 days
Risk-free interest rate	2.00%	1.70%
Maximum [Member]
Expected term	8 years 9 months 18 days	8 years 7 months 6 days
Risk-free interest rate	2.30%	2.50%

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Cash and cash equivalents	$ 87,384	$ 115,287
Accounts receivable, less allowance for uncollectible amounts of $5,127 and $7,078, respectively	274,902	346,858
Inventories	485,903	451,944
Income taxes receivable	24,529	6,574
Deferred income tax assets	49,653	40,774
Other current assets	47,003	47,207
Total current assets	969,374	1,008,644
Property, plant and equipment, net	688,336	513,279
Goodwill	558,439	559,724
Intangible assets, net	232,617	254,772
Deferred income tax assets	10,306	6,292
Other assets	52,664	54,491
Total assets	2,511,736	2,397,202
Current liabilities:
Short-term borrowings	3,186	0
Accounts payable	188,280	160,683
Income taxes payable	8,483	6,130
Deferred income tax liabilities	428	472
Accrued liabilities	114,320	172,731
Total current liabilities	314,697	340,016
Long-term debt, less current portion	875,000	710,000
Deferred income tax liabilities	99,227	85,031
Other liabilities	95,541	101,211
Total liabilities	$ 1,384,465	$ 1,236,258
Commitments and contingencies (Note 20)
Stockholders' equity:
Preferred stock, par value $0.003 per share, 10,000 shares authorized, no shares issued	$ 0	$ 0
Common stock, par value $0.001455 per share, 150,000 shares authorized, 72,960 shares issued	106	106
Additional paid-in capital	127,737	112,491
Accumulated other comprehensive earnings (losses)	(29,302)	(3,533)
Deferred compensation	4,314	3,915
Retained earnings	1,451,575	1,338,468
Stockholders' equity excluding treasury stock	1,554,430	1,451,447
Treasury stock at cost, 9,380 shares and 7,397 shares, respectively	(422,845)	(286,588)
Treasury stock held for deferred compensation, at cost, 173 shares and 198 shares, respectively	(4,314)	(3,915)
Total stockholders' equity	1,127,271	1,160,944
Total liabilities and stockholders' equity	$ 2,511,736	$ 2,397,202

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Financial Instruments and Fair Value Measurements

9 Months Ended

Jun. 30, 2015

Financial Instruments and Fair Value Measurments

Financial Instruments and Fair Value Measurements

Note 5.  Financial instruments and fair value measurements

Financial assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date.  The inputs are unobservable in the market and significant to the valuation of the instruments.

The table below presents information about Woodward’s financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value.  Woodward had no financial liabilities required to be measured at fair value on a recurring basis as of June 30, 2015 or September 30, 2014.

	At June 30, 2015								At September 30, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Cash	$	77,855	$	-	$	-	$	77,855	$	92,590	$	-	$	-	$	92,590
Investments in money market funds		4,117		-		-		4,117		11,210		-		-		11,210
Investments in reverse repurchase agreements		5,412		-		-		5,412		11,487		-		-		11,487
Equity securities		10,399		-		-		10,399		9,645		-		-		9,645
Total financial assets	$	97,783	$	-	$	-	$	97,783	$	124,932	$	-	$	-	$	124,932

Investments in money market funds: Woodward sometimes invests excess cash in money market funds not insured by the Federal Depository Insurance Corporation (“FDIC”).  Woodward believes that the investments in money market funds are on deposit with creditworthy financial institutions and that the funds are highly liquid.  The investments in money market funds are reported at fair value, with realized gains from interest income realized in earnings and are included in “Cash and cash equivalents.”  The fair values of Woodward’s investments in money market funds are based on the quoted market prices for the net asset value of the various money market funds.

Investments in reverse repurchase agreements:  Woodward sometimes invests excess cash in reverse repurchase agreements.  Under the terms of Woodward’s reverse repurchase agreements, Woodward purchases an interest in a pool of securities and is granted a security interest in those securities by the counterparty to the reverse repurchase agreement.  At an agreed upon date, generally the next business day, the counterparty repurchases Woodward’s interest in the pool of securities at a price equal to what Woodward paid to the counterparty plus a rate of return determined daily per the terms of the reverse repurchase agreement.  Woodward believes that the investments in these reverse repurchase agreements are with creditworthy financial institutions and that the funds invested are highly liquid.  The investments in reverse repurchase agreements are reported at fair value, with realized gains from interest income realized in earnings, and are included in “Cash and cash equivalents.”  Since the investments are generally overnight, the carrying value is considered to be equal to the fair value as the amount is deemed to be a cash deposit with no risk of change in value as of the end of each fiscal quarter.

Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program.  Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities.  The trading securities are reported at fair value, with realized gains and losses recognized in “Other (income) expense, net.”  The trading securities are included in “Other assets.”  The fair values of Woodward’s trading securities are based on the quoted market prices for the net asset value of the various mutual funds.

Accounts receivable, accounts payable and short-term debt are not remeasured to fair value, as the carrying cost of each approximates its respective fair value.  The estimated fair values and carrying costs of other financial instruments that are not required to be remeasured at fair value in the Condensed Consolidated Balance Sheets were as follows:

		At June 30, 2015				At September 30, 2014
	Fair Value Hierarchy Level	Estimated Fair Value		Carrying Cost		Estimated Fair Value		Carrying Cost
Assets:
Notes receivable from municipalities	2		15,723		15,631		15,988		15,228
Liabilities:
Long-term debt, including current portion	2		(901,979)		(875,000)		(752,513)		(710,000)

In fiscal years 2014 and 2013, Woodward received long-term notes from a municipality within the state of Illinois in connection with certain economic incentives related to Woodward’s development of a second campus in the greater-Rockford, Illinois area for its Aerospace segment.  The fair value of the long-term notes was estimated based on a model that discounted future principal and interest payments received at an interest rate available to the Company at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy.  The interest rates used to estimate the fair value of the long-term notes were 3.3% at June 30, 2015 and 3.2% at September 30, 2014.  

In fiscal year 2013, Woodward received a long-term note from a municipality within the state of Colorado in connection with certain economic incentives related to Woodward’s development of a new campus at its corporate headquarters in Fort Collins, Colorado.  The fair value of the long-term note was estimated based on a model that discounted future principal and interest payments received at an interest rate available to the Company at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy.  The interest rates used to estimate the fair value of the long-term note were 3.3% at June 30, 2015 and 3.2% at September 30, 2014.

The fair value of long-term debt was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy.  The weighted-average interest rates used to estimate the fair value of long-term debt were 2.6% atJune 30, 2015 and 2.4% at September 30, 2014.

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Joint Venture

9 Months Ended

Jun. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

Joint Venture

Note 4. Joint venture

On May 20, 2015, Woodward and General Electric Company (“GE”), acting through its GE Aviation business unit, entered into a binding agreement to form a strategic joint venture between Woodward and GE (the “JV”). The JV will design, develop, source, supply and service the fuel system (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust in excess of 50,000 pounds.

Upon formation of the JV, Woodward will assign certain contractual rights to the JV in exchange for a payment from GE of $250,000 (subject to certain normal and customary adjustments). In addition, GE will pay Woodward fifteen annual payments of approximately $4,900 each per year. Because the contractual rights have no cost basis in Woodward’s financial records, Woodward expects to account for the fair value of the proceeds received as a deferred gain that will be recognized over the economic lives of the assigned contractual rights. Closing is subject to obtaining regulatory approvals in various global jurisdictions.

Woodward will own 50% of the JV, which will be jointly managed by Woodward and GE, and any significant decisions and/or actions of the JV will require mutual consent of both Woodward and GE. Woodward expects to account for the JV using the equity method, as neither Woodward nor GE will exercise operating control over the JV.  

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Other (Income) Expense, Net

9 Months Ended

Jun. 30, 2015

Other (Income) Expense, Net

Other (Income) Expense, Net

Note 16.Other (income) expense, net 

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net (gain) loss on sales of assets	$	(48)	$	(20)	$	(766)	$	116
Rent income		(105)		(124)		(365)		(418)
Net gain on investments in deferred compensation program		10		(306)		(480)		(879)
Other		31		(19)		(40)		(85)
	$	(112)	$	(469)	$	(1,651)	$	(1,266)

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Intangible Assets, Net

9 Months Ended

Jun. 30, 2015

Intangible Assets, Net

Intangible Assets, Net

Note 12.  Intangible assets, net

	June 30, 2015						September 30, 2014
	Gross Carrying Value		Accumulated Amortization		Net Carrying Amount		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Customer relationships and contracts:
Aerospace	$	282,225	$	(111,495)	$	170,730	$	282,225	$	(97,281)	$	184,944
Energy		41,566		(32,697)		8,869		41,706		(32,032)		9,674
Total	$	323,791	$	(144,192)	$	179,599	$	323,931	$	(129,313)	$	194,618
Intellectual property:
Aerospace	$	-	$	-	$	-	$	-	$	-	$	-
Energy		19,473		(16,616)		2,857		19,954		(15,938)		4,016
Total	$	19,473	$	(16,616)	$	2,857	$	19,954	$	(15,938)	$	4,016
Process technology:
Aerospace	$	76,605	$	(35,989)	$	40,616	$	76,605	$	(31,719)	$	44,886
Energy		23,280		(14,412)		8,868		23,078		(13,141)		9,937
Total	$	99,885	$	(50,401)	$	49,484	$	99,683	$	(44,860)	$	54,823
Other intangibles:
Aerospace	$	9,100	$	(8,950)	$	150	$	9,100	$	(8,465)	$	635
Energy		1,360		(833)		527		1,519		(839)		680
Total	$	10,460	$	(9,783)	$	677	$	10,619	$	(9,304)	$	1,315
Total intangibles:
Aerospace	$	367,930	$	(156,434)	$	211,496	$	367,930	$	(137,465)	$	230,465
Energy		85,679		(64,558)		21,121		86,257		(61,950)		24,307
Consolidated Total	$	453,609	$	(220,992)	$	232,617	$	454,187	$	(199,415)	$	254,772

For the three and nine-months ended June 30, 2015 and June 30, 2014, Woodward recorded amortization expense associated with intangibles of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense	$	7,224	$	8,357	$	22,026	$	25,498

Future amortization expense associated with intangibles is expected to be:

Year Ending September 30:
2015 (remaining)	$	7,230
2016		27,568
2017		25,861
2018		25,037
2019		23,201
Thereafter		123,720
	$	232,617

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Stock-Based Compensation (Changes in Restricted Stock Awards) (Details) - Restricted Stock Award [Member] - $ / shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Dec. 31, 2013	Jun. 30, 2015
Number of shares, beginning balance	24		24
Weighted-Average Grant Date Fair Value Per Share, beginning balance	$ 39.43		$ 39.43
Shares granted, Number of Shares	0	24	0
Shares vested, Number of Shares	0		0
Shares forfeited, Number of Shares	0		0
Number of shares, ending balance	24		24
Weighted-Average Grant Date Fair Value Per Share, ending balance	$ 39.43		$ 39.43

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Accounts Receivable

9 Months Ended

Jun. 30, 2015

Accounts Receivable Disclosure

Accounts Receivable

Note 8.  Accounts receivable

Almost all of Woodward’s sales are made on credit and result in accounts receivable, which are recorded at the amount invoiced.  In the normal course of business, not all accounts receivable are collected and, therefore, an allowance for losses of accounts receivable is provided equal to the amount that Woodward believes ultimately will not be collected.  In establishing the amount of the allowance, customer-specific information is considered related to delinquent accounts, past loss experience, bankruptcy filings, deterioration in the customer’s operating results or financial position, and current economic conditions.  Accounts receivable losses are deducted from the allowance, and the related accounts receivable balances are written off when the receivables are deemed uncollectible.  Recoveries of accounts receivable previously written off are recognized when received.

Consistent with business practice common in China, Woodward’s Chinese subsidiary accepts from Chinese customers, in settlement of certain customer accounts receivable, bankers’ acceptance notes issued by creditworthy Chinese banks.  Bankers’ acceptance notes are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution.  Bankers’ acceptance notes represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers’ acceptance note as of the maturity date.  The maturity date of bankers’ acceptance notes varies, but it is Woodward’s policy to only accept bankers’ acceptance notes with maturity dates no more than 180 days from the date of Woodward’s receipt of such draft.  The issuing financial institution is the obligor, not Woodward’s customers.  Upon Woodward’s acceptance of a bankers’ acceptance note from a customer, such customer has no further obligation to pay Woodward for the related accounts receivable balance.  Woodward only accepts bankers’ acceptance notes issued by creditworthy banks as to which the credit risk associated with the bankers acceptance note is assessed to be minimal.

The composition of Woodward’s accounts receivable at June 30, 2015 and September 30, 2014 follows:

	June 30,		September 30,
	2015		2014
Accounts receivable from:
Customers	$	266,422	$	291,584
Other (Chinese financial institutions)		13,607		62,352
Allowance for uncollectible customer amounts		(5,127)		(7,078)
	$	274,902	$	346,858

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Property, Plant, and Equipment, Net (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Construction in progress	$ 216,021	$ 223,958
Property, Plant and Equipment, Net	688,336	513,279
Second Campus Rockford Illinois [Member]
Construction in progress	27,633	85,283
Capitalized interest	430	2,963
New Campus Fort Collins Colorado [Member]
Construction in progress	117,882	37,268
Capitalized interest	3,996	2,392
Building Site Niles Illinois [Member]
Construction in progress	4,960	55,629
Building and Building Improvements [Member] | Second Campus Rockford Illinois [Member]
Contruction in progress placed into service	120,000
Buildings and improvements and Office furniture and equipment [Member] | Building Site Niles Illinois [Member]
Contruction in progress placed into service	72,000
Assets Held-for-sale [Member] | Land and Building [Member]
Property, Plant and Equipment, Net	$ 692	$ 2,465

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Derivative Instruments and Hedging Activities

9 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Note 6.  Derivative instruments and hedging activities

Woodward is exposed to global market risks, including the effect of changes in interest rates, foreign currency exchange rates, changes in certain commodity prices and fluctuations in various producer indices.  From time to time, Woodward enters into derivative instruments for risk management purposes only, including derivatives designated as accounting hedges and/or those utilized as economic hedges.  Woodward uses interest rate related derivative instruments to manage its exposure to fluctuations of interest rates.  Woodward does not enter into or issue derivatives for trading or speculative purposes.

By using derivative and/or hedging instruments to manage its risk exposure, Woodward is subject, from time to time, to credit risk and market risk on those derivative instruments.  Credit risk arises from the potential failure of the counterparty to perform under the terms of the derivative and/or hedging instrument.  When the fair value of a derivative contract is positive, the counterparty owes Woodward, which creates credit risk for Woodward.  Woodward mitigates this credit risk by entering into transactions with only creditworthy counterparties.  Market risk arises from the potential adverse effects on the value of derivative and/or hedging instruments that result from a change in interest rates, commodity prices, or foreign currency exchange rates.  Woodward minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

In June 2015, Woodward designated an intercompany loan of 160,000 RMB between two wholly owned subsidiaries as a hedge of a foreign currency exposure of the net investment of the borrower in the lender. A foreign exchange gain on the loan of $11, net of taxes, is included in foreign currency translation adjustments within total comprehensive earnings for the three and nine-months ended June 30, 2015.

Woodward did not enter into any derivatives or hedging transactions during the three or nine-months ended June 30, 2014.

The remaining unrecognized gains and losses in Woodward’s Condensed Consolidated Balance Sheets associated with derivative instruments that were previously entered into by Woodward, which are classified in accumulated other comprehensive losses (“accumulated OCI”), were net gains of $244 as of June 30, 2015 and $170 as of September 30, 2014.

The following table discloses the impact of derivative instruments in cash flow hedging relationships on Woodward’s Condensed Consolidated Statements of Earnings, recognized in interest expense:

	Three-Months Ended June 30,				Nine-Months Ended June 30,
	2015		2014		2015		2014
Amount of (income) expense recognized in earnings on derivative	$	25	$	24	$	74	$	73
Amount of (gain) loss recognized in accumulated OCI on derivative		-		-		-		-
Amount of (gain) loss reclassified from accumulated OCI into earnings		25		24		74		73

Based on the carrying value of the realized but unrecognized gains and losses on terminated derivative instruments designated as cash flow hedges as of June 30, 2015, Woodward expects to reclassify  $64of net unrecognized losses on terminated derivative instruments from accumulated other comprehensive earnings to earnings during the next twelve months.

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Supplemental Statements of Cash Flows Information

9 Months Ended

Jun. 30, 2015

Supplemental Statements of Cash Flows Information

Supplemental Statements of Cash Flows Information

Note 7.  Supplemental statement of cash flows information

	Nine-Months Ended June 30,
	2015		2014
Interest paid, net of amounts capitalized	$	30,090	$	26,619
Income taxes paid		48,801		36,345
Income tax refunds received		426		1,617
Non-cash activities:
Purchases of property, plant and equipment on account		39,122		19,193
Common shares issued from treasury for benefit plans (Note 18)		12,574		11,193
Notes receivable from municipalities for economic development incentives		-		6,596
Cashless exercise of stock options		-		715
Settlement of receivable through cashless acquisition of treasury shares in connection with the cashless exercise of stock options		-		871

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Inventories

9 Months Ended

Jun. 30, 2015

Inventories

Inventories

Note 9.  Inventories

	June 30,		September 30,
	2015		2014
Raw materials	$	70,878	$	60,442
Work in progress		99,493		93,836
Component parts (1)		263,410		247,299
Finished goods		52,122		50,367
	$	485,903	$	451,944

(1) Component parts include items that can be sold separately as finished goods or included in the manufacture of other products.

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Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets by Major Class) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Gross Carrying Value	$ 453,609		$ 453,609		$ 454,187
Accumulated Amortization	(220,992)		(220,992)		(199,415)
Net Carrying Amount	232,617		232,617		254,772
Amortization expense	7,224	$ 8,357	22,026	$ 25,498
Process Technology [Member]
Gross Carrying Value	99,885		99,885		99,683
Accumulated Amortization	(50,401)		(50,401)		(44,860)
Net Carrying Amount	49,484		49,484		54,823
Customer Relationships [Member]
Gross Carrying Value	323,791		323,791		323,931
Accumulated Amortization	(144,192)		(144,192)		(129,313)
Net Carrying Amount	179,599		179,599		194,618
Intellectual Property [Member]
Gross Carrying Value	19,473		19,473		19,954
Accumulated Amortization	(16,616)		(16,616)		(15,938)
Net Carrying Amount	2,857		2,857		4,016
Other Intangibles [Member]
Gross Carrying Value	10,460		10,460		10,619
Accumulated Amortization	(9,783)		(9,783)		(9,304)
Net Carrying Amount	677		677		1,315
Aerospace [Member]
Gross Carrying Value	367,930		367,930		367,930
Accumulated Amortization	(156,434)		(156,434)		(137,465)
Net Carrying Amount	211,496		211,496		230,465
Aerospace [Member] | Process Technology [Member]
Gross Carrying Value	76,605		76,605		76,605
Accumulated Amortization	(35,989)		(35,989)		(31,719)
Net Carrying Amount	40,616		40,616		44,886
Aerospace [Member] | Customer Relationships [Member]
Gross Carrying Value	282,225		282,225		282,225
Accumulated Amortization	(111,495)		(111,495)		(97,281)
Net Carrying Amount	170,730		170,730		184,944
Aerospace [Member] | Intellectual Property [Member]
Gross Carrying Value	0		0		0
Accumulated Amortization	0		0		0
Net Carrying Amount	0		0		0
Aerospace [Member] | Other Intangibles [Member]
Gross Carrying Value	9,100		9,100		9,100
Accumulated Amortization	(8,950)		(8,950)		(8,465)
Net Carrying Amount	150		150		635
Energy [Member]
Gross Carrying Value	85,679		85,679		86,257
Accumulated Amortization	(64,558)		(64,558)		(61,950)
Net Carrying Amount	21,121		21,121		24,307
Energy [Member] | Process Technology [Member]
Gross Carrying Value	23,280		23,280		23,078
Accumulated Amortization	(14,412)		(14,412)		(13,141)
Net Carrying Amount	8,868		8,868		9,937
Energy [Member] | Customer Relationships [Member]
Gross Carrying Value	41,566		41,566		41,706
Accumulated Amortization	(32,697)		(32,697)		(32,032)
Net Carrying Amount	8,869		8,869		9,674
Energy [Member] | Intellectual Property [Member]
Gross Carrying Value	19,473		19,473		19,954
Accumulated Amortization	(16,616)		(16,616)		(15,938)
Net Carrying Amount	2,857		2,857		4,016
Energy [Member] | Other Intangibles [Member]
Gross Carrying Value	1,360		1,360		1,519
Accumulated Amortization	(833)		(833)		(839)
Net Carrying Amount	$ 527		$ 527		$ 680

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Segment Information (Consolidated Net Sales and Earnings by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net sales	$ 494,810	$ 524,284	$ 1,475,678	$ 1,435,793
Interest expense, net	(5,858)	(5,899)	(16,788)	(18,030)
Consolidated earnings before income taxes	57,559	62,468	172,222	152,168
Total of Reporting Segments [Member]
Net sales	494,810	524,284	1,475,678	1,435,793
Segment earnings (loss)	76,981	79,560	224,894	201,357
Aerospace [Member]
Net sales	288,480	274,923	825,676	765,816
Segment earnings (loss)	46,362	39,357	127,783	102,195
Energy [Member]
Net sales	206,330	249,361	650,002	669,977
Segment earnings (loss)	30,619	40,203	97,111	99,162
Unallocated Corporate [Member]
Segment earnings (loss)	$ (13,564)	$ (11,193)	$ (35,884)	$ (31,159)

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Credit Facilities, Short-term Borrowings (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Short-term borrowings	$ 3,186	$ 0
Foreign Lines of Credit And Overdraft Facilities [Member]
Outstanding borrowings	$ 0
Revolving Credit Facility [Member]
Variable Rate Basis	LIBOR
Revolving Credit Facility [Member] | Minimum [Member]
Basis Spread On Variable Rate	0.85%
Revolving Credit Facility [Member] | Maximum [Member]
Basis Spread On Variable Rate	1.65%
Amended Revolving Credit Agreement [Member]
Variable Rate Basis	LIBOR

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Goodwill (Goodwill) (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2015 USD ($)
Goodwill, Beginning Balance	$ 559,724
Effects of Currency Translation	(1,285)
Goodwill, Ending Balance	558,439
Aerospace [Member]
Goodwill, Beginning Balance	455,423
Effects of Currency Translation	0
Goodwill, Ending Balance	455,423
Energy [Member]
Goodwill, Beginning Balance	104,301
Effects of Currency Translation	(1,285)
Goodwill, Ending Balance	$ 103,016

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Inventories (Tables)

9 Months Ended

Jun. 30, 2015

Inventories

Schedule of Inventories

	June 30,		September 30,
	2015		2014
Raw materials	$	70,878	$	60,442
Work in progress		99,493		93,836
Component parts (1)		263,410		247,299
Finished goods		52,122		50,367
	$	485,903	$	451,944

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Joint Venture (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014
Proceeds from Sale of Productive Assets		$ 2,486	$ 258
Woodward and General Electric Joint Venture [Member]
Agreement to Form Joint Venture, Execution Date	May 20, 2015
Woodward and General Electric Joint Venture [Member] | Scenario, Forecast [Member]
Proceeds from Sale of Productive Assets	$ 250,000
Proceeds from Sale of Productive Assets, Annual Payments	$ 4,900
Equity Method Investment, Ownership Percentage	50.00%	50.00%

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Accrued Liabilities

9 Months Ended

Jun. 30, 2015

Accrued Liabilities

Accrued Liabilities

Note 14.  Accrued liabilities

	June 30,		September 30,
	2015		2014
Salaries and other member benefits	$	56,609	$	95,031
Warranties		13,690		16,916
Interest payable		6,241		12,487
Current portion of acquired performance obligations and unfavorable contracts (1)		8,417		16,432
Accrued retirement benefits		2,261		2,286
Deferred revenues		10,040		6,108
Taxes, other than income		6,535		8,557
Other		10,527		14,914
	$	114,320	$	172,731

(1) In connection with Woodward’s acquisition of GE Aviation Systems LLC’s (the “Seller”) thrust reverse actuation systems business located in Duarte, California (the “Duarte Business”) in fiscal year 2013, Woodward assumed current and long-term performance obligations for contractual commitments that are expected to result in future economic losses.  In addition, Woodward assumed current and long-term performance obligations for services to be provided to the Seller, offset by current and long-term assets related to contractual payments due from the Seller.  The current portion of both obligations is included in Accrued liabilities.

Warranties

Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements.  Accruals are established for specifically identified warranty issues that are probable to result in future costs.  Warranty costs are accrued on a non-specific basis whenever past experience indicates a normal and predictable pattern exists.  Changes in accrued product warranties were as follows:

	Nine-Months Ended June 30,
		2015		2014
Warranties, beginning of period	$	16,916	$	15,224
Expense		6,651		7,006
Reductions for settling warranties		(9,245)		(5,552)
Foreign currency exchange rate changes		(632)		118
Warranties, end of period	$	13,690	$	16,796

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Stock-Based Compensation

9 Months Ended

Jun. 30, 2015

Stock-Based Compensation

Stock-Based Compensation

Note 19.  Stock-based compensation

Stock options

Woodward’s 2006 Omnibus Incentive Plan (the “2006 Plan”), which has been approved by Woodward’s stockholders, provides for the grant of up to 7,410 stock options to its employees and directors.  Woodward believes that these stock options align the interests of its employees and directors with those of its stockholders.  Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date of grant, a  ten-year term, and generally a  four-year vesting schedule at a rate of 25% per year.

The fair value of options granted was estimated on the date of grant using the Black-Scholes-Merton option-valuation model using the assumptions in the following table.  Woodward calculates the expected term, which represents the period of time that stock options granted are expected to be outstanding, based upon historical experience of plan participants.  Expected volatility is based on historical volatility using daily stock price observations.  The estimated dividend yield is based upon Woodward’s historical dividend practice and the market value of its common stock.  The risk-free rate is based on the U.S. treasury yield curve, for periods within the contractual life of the stock option, at the time of grant.

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015				2014
Expected term (years)		n/a		n/a		6.2	-	8.8		5.8	-	8.6
Estimated volatility		n/a		n/a		36.5%				38.5%
Estimated dividend yield		n/a		n/a		0.7%				0.8%
Risk-free interest rate		n/a		n/a		2.0%	-	2.3%		1.7%	-	2.5%

The following is a summary of the activity for stock option awards during the three and six-months ended June 30, 2015:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		5,111	$	30.86		4,501	$	28.08
Options granted		-		n/a		751		46.55
Options exercised		(320)		17.19		(428)		18.55
Options forfeited		(7)		41.11		(40)		37.80
Options, ending balance		4,784		31.76		4,784		31.76

Changes in non-vested stock options during the three and nine-months ended June 30, 2015 were as follows:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
	Number of options		Weighted-Average Exercise Price per Share		Number of options		Weighted-Average Exercise Price per Share
Options, beginning balance		1,747	$	40.50		1,679	$	34.83
Options granted		-		n/a		751		46.55
Options vested		(10)		34.04		(661)		33.06
Options forfeited		(7)		41.11		(39)		37.80
Options, ending balance		1,730		40.53		1,730		40.53

Information about stock options that have vested, or are expected to vest, and are exercisable at June 30, 2015 was as follows:

	Number		Weighted- Average Exercise Price		Weighted- Average Remaining Life in Years		Aggregate Intrinsic Value
Options outstanding		4,784	$	31.76		5.8	$	111,163
Options vested and exercisable		3,055		26.79		4.3		86,162
Options vested and expected to vest		4,682		31.50		5.7		109,961

Restricted Stock

In the first quarter of fiscal year 2014, Woodward granted an award of 24 shares of restricted stock to its Chief Executive Officer and President, Thomas A. Gendron.  Subject to Mr. Gendron’s continued employment by the Company, these shares of restricted stock will vest 100% following the end of the Company’s fiscal year 2017 if a specified cumulative earnings per share (“EPS”) target is met or exceeded for fiscal years 2014 through 2017.  If this EPS target is not met, all shares of restricted stock will be forfeited by Mr. Gendron.The shares of restricted stock were awarded to Mr. Gendron pursuant to a form restricted stock agreement approved by Woodward’s Compensation Committee.

Woodward recognizes stock compensation expense on a straight-line basis over the requisite service period.

A summary of the activity for restricted stock awards in the three and nine-months ended June 30, 2015 follows:

	Three-Months Ended				Nine-Months Ended
	June 30, 2015				June 30, 2015
		Number		Fair Value per Share		Number		Fair Value per Share
Beginning balance		24	$	39.43		24	$	39.43
Shares granted		-		n/a		-		n/a
Shares vested		-		n/a		-		n/a
Shares forfeited		-		n/a		-		n/a
Ending balance		24		39.43		24		39.43

At June 30, 2015, there was approximately $12,201 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, both stock options and restricted stock awards, granted under the 2002 Plan (for which no further grants will be made) and the 2006 Plan.  The pre-vesting forfeiture rates for purposes of determining stock-based compensation cost recognized were estimated to be 0% for members of Woodward’s board of directors and 9% for all others.  The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.5 years.

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Earnings Per Share (Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share) (Details) - $ / shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share
Options	0	677	699	236
Weighted-average option price		$ 40.99	$ 46.55	$ 41.05

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Other (Income) Expense, Net (Tables)

9 Months Ended

Jun. 30, 2015

Other (Income) Expense, Net

Schedule of Other (Income) Expense, Net

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net (gain) loss on sales of assets	$	(48)	$	(20)	$	(766)	$	116
Rent income		(105)		(124)		(365)		(418)
Net gain on investments in deferred compensation program		10		(306)		(480)		(879)
Other		31		(19)		(40)		(85)
	$	(112)	$	(469)	$	(1,651)	$	(1,266)

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Allowance, accounts receivable	$ 5,127	$ 7,078
Stockholders' equity:
Preferred stock, par value	$ 0.003	$ 0.003
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001455	$ 0.001455
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	72,960,000	72,960,000
Treasury stock, shares	9,380,000	7,397,000
Treasury stock held for deferred compensation, shares	173,000	198,000

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Earnings Per Share

9 Months Ended

Jun. 30, 2015

Earnings Per Share

Earnings Per Share

Note 3.  Earnings per share

Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Diluted earnings per share reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options and restricted stock.

The following is a reconciliation of net earnings to basic earnings per share and diluted earnings per share:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Numerator:
Net earnings	$	43,753	$	46,001	$	131,392	$	114,182
Denominator:
Basic shares outstanding		64,781		65,845		65,088		66,736
Dilutive effect of stock options and restricted stock		1,446		1,302		1,416		1,294
Diluted shares outstanding		66,227		67,147		66,504		68,030
Income per common share:
Basic earnings per share	$	0.68	$	0.70	$	2.02	$	1.71
Diluted earnings per share	$	0.66	$	0.69	$	1.98	$	1.68

On June 2, 2015, Woodward entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) under which Woodward repurchased shares of its common stock for an aggregate purchase price of $125,000.  Upon execution of the ASR Agreement, Goldman initially delivered to Woodward 2,048 shares of common stock.  The number of shares of common stock to be ultimately repurchased by Woodward under the ASR program, which is expected to be completed before December 31, 2015, will be based generally on the average daily volume-weighted average price of Woodward stock during the term of the ASR Agreement.The 2,048 shares of common stock delivered by Goldman to Woodward upon execution of the ASR Agreement are reflected in the calculation of basic shares outstanding used in the calculation of earnings per share.

The following stock option grants were outstanding during the three and nine-months ended June 30, 2015 and 2014, but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Options		-		677		699		236
Weighted-average option price	$	n/a	$	40.99	$	46.55	$	41.05

The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following:

	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Weighted-average treasury stock shares held for deferred compensation obligations		182		206		194		220

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Accounts Receivable (Schedule of Accounts Receivable) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Accounts receivable	$ 274,902	$ 346,858
Allowance for uncollectible customer amounts	(5,127)	(7,078)
Trade Accounts Receivable [Member]
Accounts Receivable, Gross	266,422	291,584
Accounts Receivable from Chinese Financial Institution [Member]
Accounts Receivable, Gross	$ 13,607	$ 62,352

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Stock-Based Compensation (Changes in Nonvested Stock Options) (Details) - Jun. 30, 2015 - $ / shares shares in Thousands	Total	Total
Stock-Based Compensation
Number of Options, beginning balance	1,747	1,679
Weighted-Average Exercise Price Per Share, beginning balance	$ 40.50	$ 34.83
Options granted, Number of options	0	751
Options granted, Weighted-Average Exercise Price Per Share		$ 46.55
Options vested, Number of options	(10)	(661)
Options vested, Weighted-Average Exercise Price Per Share	$ 34.04	$ 33.06
Options forfeited, Number of options	(7)	(39)
Options forfeited, Weighted-Average Exercise Price Per Share	$ 41.11	$ 37.80
Number of Options, ending balance	1,730	1,730
Weighted-Average Exercise Price Per Share, ending balance	$ 40.53	$ 40.53

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Accrued Liabilities (Accrued Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2013
Accrued Liabilities
Salaries and other member benefits	$ 56,609	$ 95,031
Warranties	13,690	16,916	$ 16,796	$ 15,224
Interest payable	6,241	12,487
Current portion of acquired performance obligations and unfavorable contracts	8,417	16,432
Accrued retirement benefits	2,261	2,286
Deferred revenues	10,040	6,108
Taxes, other than income	6,535	8,557
Other	10,527	14,914
Accrued liabilities	$ 114,320	$ 172,731

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Commitments and Contingencies

9 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure

Commitments and Contingencies

Note 20.  Commitments and contingencies

Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims and alleged violations of various laws and regulations.  Woodward accrues for known individual matters whereit believesthat it is probablethe matter will result in a loss when ultimately resolved using estimates of the most likely amount of loss. 

Legal costs are expensed as incurred and are classified in “Selling, general and administrative expenses” on the Condensed Consolidated Statements of Earnings.

Woodward is partially self-insured in the United States for healthcare and worker’s compensation up to predetermined amounts, above which third party insurance applies.  Management regularly reviews the probable outcome of these claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities.

While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may resultfrom these claims, proceedings and investigations will not have a material effect on Woodward's liquidity, financial condition, or results of operations.

In the event of a change in control of Woodward, as defined in change-in-control agreements with its current corporate officers, Woodward may be required to pay termination benefits to such officers.

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Income Taxes (Tax Expense and Effective Tax Rate) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Taxes
Earnings before income taxes	$ 57,559	$ 62,468	$ 172,222	$ 152,168
Income tax expense	$ 13,806	$ 16,467	$ 40,830	$ 37,986
Effective tax rate	24.00%	26.40%	23.70%	25.00%

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Label	Element	Value
Amended Revolving Credit Agreement [Member]
Line of Credit Facility, Option To Increase Maximum Borrowing Capacity	wwd_LineOfCreditFacilityOptionToIncreaseMaximumBorrowingCapacity	$ 1,200,000
Debt Covenant, Leverage Ratio Next Two Succeeding Fiscal Quarters Following Material Acquisition, Maximum	wwd_DebtCovenantRatioOfConsolidatedNetDebtToDebtCovenantEbitdaNextTwoSucceedingFiscalQuartersFollowingMaterialAcquisitionMaximum	3.75 to 1.0
Deferred Finance Costs, Gross	us-gaap_DeferredFinanceCostsGross	$ 2,359
Line of Credit Facility, Covenant Terms, Cross Default Provision	wwd_LineOfCreditFacilityCovenantTermsCrossDefaultProvision	$ 60,000
Brazil Credit Facility Brl Denominated Loan [Member]
Line of Credit Facility, Maximum Borrowing Capacity	us-gaap_LineOfCreditFacilityMaximumBorrowingCapacity	$ 26,000
Outstanding borrowings	us-gaap_LineOfCreditFacilityFairValueOfAmountOutstanding	$ 3,186
Debt Instrument, Description of Variable Rate Basis	us-gaap_DebtInstrumentDescriptionOfVariableRateBasis	interest at the lender's cost of borrowing rate at the date of borrowing, plus 1.75%
Revolving Credit Agreement [Member]
Deferred Finance Costs, Gross	us-gaap_DeferredFinanceCostsGross	$ 2,014

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Credit Facilities, Short-term Borrowings and Long-term Debt (Tables)

9 Months Ended

Jun. 30, 2015

Debt Disclosure

Schedule of Long-term Debt Instruments [Table Text Block]

	June 30,		September 30,
	2015		2014
Revolving credit facility - Floating rate (LIBOR plus 0.85% - 1.65%), due April 2020, unsecured		375,000		210,000
Series C notes – 5.92%, due October 2015; unsecured		50,000		50,000
Series D notes – 6.39%, due October 2018; unsecured		100,000		100,000
Series E notes – 7.81%, due April 2016; unsecured		57,000		57,000
Series F notes – 8.24%, due April 2019; unsecured		43,000		43,000
Series G notes – 3.42%, due November 2020; unsecured		50,000		50,000
Series H notes – 4.03%, due November 2023; unsecured		25,000		25,000
Series I notes – 4.18%, due November 2025; unsecured		25,000		25,000
Series J notes – Floating rate (LIBOR plus 1.25%), due November 2020; unsecured		50,000		50,000
Series K notes – 4.03%, due November 2023; unsecured		50,000		50,000
Series L notes – 4.18%, due November 2025; unsecured		50,000		50,000
Total long-term debt	$	875,000	$	710,000

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Credit Facilities, Short-term Borrowings and Long-term Debt

9 Months Ended

Jun. 30, 2015

Debt Disclosure

Credit Facilities, Short-term Borrowings and Long-term Debt

Note 13.  Credit facilities, short-term borrowings and long-term debt

Short-term borrowings

A Chinese subsidiary of Woodward has a local credit facility with the Hong Kong and Shanghai Banking Company under which it has the ability to borrow up to either $22,700, or the local currency equivalent of $22,700.  Any cash borrowings under the local Chinese credit facility are secured by a parent guarantee from Woodward.  The Chinese subsidiary may utilize the local facility for cash borrowings to support its operating cash needs.  Local currency borrowings on the Chinese credit facility are charged interest at the prevailing interest rate offered by the People’s Bank of China on the date of borrowing, plus a margin equal to 25% of that prevailing rate.  U.S. dollar borrowings on the credit facility are charged interest at the lender’s cost of borrowing rate at the date of borrowing, plus 3%.  The Chinese subsidiary had no outstanding cash borrowings against the local credit facility at June 30, 2015 and September 30, 2014.

In the second quarter of fiscal year 2015, a Brazilian subsidiary of Woodward arranged a local uncommitted credit facility with the Banco J.P. Morgan S.A. under which it has the ability to borrow up to 26,000 Brazilian Real.  Any cash borrowings under the local Brazilian credit facility will be secured by a parent guarantee from Woodward.  The Brazilian subsidiary may utilize the local facility to support its operating cash needs.  Local currency borrowings on the Brazilian credit facility are charged interest at the lender’s cost of borrowing rate at the date of borrowing, plus 1.75%.  The Brazilian subsidiary had $3,186 outstanding cash borrowings against the local credit facility at June 30, 2015.

Woodward also has other foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions.  Pursuant to the terms of the related facility agreements, Woodward’s foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties.  There were no borrowings outstanding as of June 30, 2015 and September 30, 2014 on Woodward’s other foreign lines of credit and foreign overdraft facilities.

Long-term debt

	June 30,		September 30,
	2015		2014
Revolving credit facility - Floating rate (LIBOR plus 0.85% - 1.65%), due April 2020, unsecured		375,000		210,000
Series C notes – 5.92%, due October 2015; unsecured		50,000		50,000
Series D notes – 6.39%, due October 2018; unsecured		100,000		100,000
Series E notes – 7.81%, due April 2016; unsecured		57,000		57,000
Series F notes – 8.24%, due April 2019; unsecured		43,000		43,000
Series G notes – 3.42%, due November 2020; unsecured		50,000		50,000
Series H notes – 4.03%, due November 2023; unsecured		25,000		25,000
Series I notes – 4.18%, due November 2025; unsecured		25,000		25,000
Series J notes – Floating rate (LIBOR plus 1.25%), due November 2020; unsecured		50,000		50,000
Series K notes – 4.03%, due November 2023; unsecured		50,000		50,000
Series L notes – 4.18%, due November 2025; unsecured		50,000		50,000
Total long-term debt	$	875,000	$	710,000

Revolving credit facility

Woodward maintains a revolving credit facility established under a revolving credit agreement between Woodward and a syndicate of lenders led by Wells Fargo Bank, National Association, as administrative agent (the “Revolving Credit Agreement”).  On April 28, 2015, Woodward amended the Revolving Credit Agreement to increase its borrowing capacity from $600,000 to $1,000,000 (the “Amended Revolving Credit Agreement”).  The terms and conditions of the Amended Revolving Credit Agreement are similar to the prior credit agreement.  The Amended Revolving Credit Agreement matures in April 2020.  The Amended Revolving Credit Agreement provides for the option to increase available borrowings to up to $1,200,000, subject to lenders’ participation.  Borrowings under the Amended Revolving Credit Agreement generally bear interest at LIBOR plus 0.85% to 1.65%.  Under the Amended Revolving Credit Agreement, there were $375,000 in principal amount of borrowings outstanding as of June 30, 2015, at an effective interest rate of 1.24%.  Under the prior Revolving Credit Agreement, there were$210,000 in principal amount of borrowings outstanding as of September 30, 2014, at an effective interest rate of 1.21%.  As of June 30, 2015 and September 30, 2014, the entire outstanding balance on both the Amended Revolving Credit Agreement and the prior Revolving Credit Agreement was classified as long-term debt.

The Amended Revolving Credit Agreement contains certain covenants customary with such agreements, which are generally consistent with the covenants applicable to Woodward’s long-term debt agreements, and contains customary events of default, including certain cross default provisions related to Woodward’s other outstanding debt arrangements in excess of $60,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder.  In addition, the Amended Revolving Credit Agreement includes the following financial covenants: (i) a maximum permitted leverage ratio of consolidated net debt to consolidated earnings before interest, taxes, depreciation, stock-based compensation, and amortization, plus any usual non-cash charges to the extent deducted in computing net income minus any usual non-cash gains to the extent added in computing net income (“Leverage Ratio”) for Woodward and its consolidated subsidiaries of 3.5 to 1.0, which ratio, subject to certain restrictions, may increase to 4.0 to 1.0 for the fiscal quarter (and the immediately following fiscal quarter) during which a permitted acquisition occurs and to 3.75 to 1.0 for the following two succeeding fiscal quarters, and (ii) a minimum consolidated net worth of $800,000 plus (a) 50% of Woodward’s positive net income for the prior fiscal year and (b) 50% of Woodward’s net cash proceeds resulting from certain issuances of stock, subject to certain adjustments.

Woodward’s obligations under the Amended Revolving Credit Agreement are guaranteed by Woodward FST, Inc., Woodward MPC, Inc., and Woodward HRT, Inc., each of which is a wholly owned subsidiary of Woodward. 

In connection with the Amended Revolving Credit Agreement, Woodward incurred $2,359 in financial costs, which are deferred and are being amortized using the straight-line method over the life of the agreement.  As of April 28, 2015, Woodward also had $2,014 remaining of deferred financing costs incurred in connection with the Revolving Credit Agreement, which have been combined with the financing costs associated with the Amended Revolving Credit Agreement and are being amortized using the straight-line method over the lift of the Amended Revolving Credit Agreement.

The Notes

In October 2008, Woodward entered into a note purchase agreement (the “2008 Note Purchase Agreement”) relating to the Series B, C, and D Notes (the “2008 Notes”).  In April 2009, Woodward entered into a note purchase agreement (the “2009 Note Purchase Agreement”) relating to the Series E and F Notes (the “2009 Notes”).

On October 1, 2013, Woodward entered into a note purchase agreement (the “2013 Note Purchase Agreement” and, together with the 2008 Note Purchase Agreement and the 2009 Note Purchase Agreement, the “Note Purchase Agreements”) relating to the sale by Woodward of an aggregate principal amount of $250,000 of its senior unsecured notes in a series of private placement transactions. 

Woodward issued the Series G, H and I Notes (the “First Closing Notes”) on October 1, 2013.  Woodward issued the Series J, K and L Notes (the “Second Closing Notes” and, together with the 2008 Notes, 2009 Notes and First Closing Notes, the “Notes”) on November 15, 2013.

Interest on the 2008 Notes, the First Closing Notes, and the Series K and L Notes is payable semi-annually on April 1 and October 1 of each year until all principal is paid.  Interest on the 2009 Notes is payable semi-annually on April 15 and October 15 of each year until all principal is paid.  Interest on the Series J Notes is payable quarterly on January 1, April 1, July 1 and October 1 of each year until all principal is paid.  As of June 30, 2015, the Series J Notes bore interest at an effective rate of 1.53%.

Principal payment of the Series C Notes is due on October 1, 2015.  This payment is classified as long-term based on Woodward’s intent and ability to refinance this debt for a longer term either through the issuance of new long-term debt or payment of the principal amount with its existing revolving line of credit, which does not mature until July 2020.

In connection with the 2013 Note Purchase Agreement, in fiscal year 2014, Woodward incurred $1,297 in financing costs, which are deferred and will be amortized using the straight-line method over the life of the agreement.