Illinois Tool Works, Inc. & Subsidiaries - Page 5

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               Larry Becker (Becker), division counsel and secretary of               
          DeVilbiss at the time that the Lemelson lawsuit was filed, also             
          reviewed the Lemelson lawsuit.  Although Becker believed that the           
          Lemelson lawsuit was not worth anything, he and his staff                   
          determined that the range of exposure would be between $25,000              
          and $500,000.                                                               
               Prior to 1990, Eagle Industries, Inc. (Eagle), a company               
          unrelated to petitioner, purchased DeVilbiss from Champion and              
          subsequently incorporated DeVilbiss under the laws of the State             
          of Delaware as a wholly owned subsidiary of Eagle.  In 1990,                
          petitioner entered into a purchase agreement to acquire certain             
          assets relating to the industrial and commercial business                   
          operations of DeVilbiss.  Petitioner agreed to pay $126.5 million           
          for the assets and an additional $12.5 million for a covenant not           
          to compete.  The purchase agreement specified that, at closing,             
          the buyer assumed certain liabilities of the seller and, in part,           
               At the Closing, Buyer shall assume:                                    
                    (a) the Liabilities associated with the Companies                 
               whose Stock is being purchased hereunder;                              
                    (b) the Liabilities to the extent of the amounts                  
               actually reserved for or that are specifically noted on                
               the February 2, 1990 Balance Sheet and the supporting                  
               documentation thereto * * *                                            
                    (c) those Liabilities to the extent specifically                  
               provided for in this Agreement or to the extent                        

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