10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2009
OR
o	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: 001-33209

ALTRA HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	61-1478870 (I.R.S. Employer Identification No.)
300 Granite Street, Suite 201 Braintree, MA (Address of principal executive offices)	02184 (Zip Code)

Registrant’s telephone number, including area code:

(781) 917-0600

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes þ     No o

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 þ     No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant based on the closing price (as reported by NASDAQ) of such common stock on the last business day of the registrant’s most recently completed second fiscal quarter (June 27, 2009) was approximately $109.1 million.

As of March 1, 2010, there were 26,825,601 shares of Common Stock, $.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the following document are incorporated herein by reference into the Part of the Form 10-K indicated.

	Part of Form 10-K into
Document	which Incorporated
Altra Holdings, Inc. Proxy Statement for the 2010 Annual Meeting of Stockholders	Part III

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business		3
Item 1A.	Risk Factors		16
Item 1B.	Unresolved Staff Comments		25
Item 2.	Properties		26
Item 3.	Legal Proceedings		27
Item 4.	Removed and Reserved		27
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		27
Item 6.	Selected Financial Data		30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		49
Item 8.	Financial Statements and Supplementary Data		51
Item 9A.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		93
Item 9A.	Controls and Procedures		93
Item 9B.	Other Information		93
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		95
Item 11.	Executive Compensation		95
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		95
Item 13.	Certain Relationships and Related Transactions, and Director Independence		95
Item 14.	Principal Accounting Fees and Services		95
PART IV
Item 15.	Exhibits, Financial Statement Schedules		95
EX-10.13
EX-10.14
EX-10.15
EX-10.16
EX-10.17
EX-10.18
EX-10.19
EX-10.20
EX-21.1
EX-23.1
EX-23.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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Item 1.   Business

Our Company

Altra Holdings, Inc. is the parent company of Altra Industrial Motion, Inc., (“Altra Industrial”), and owns 100% of Altra Industrial’s outstanding capital stock. Altra Industrial, directly or indirectly, owns 100% of the capital stock of its 48 subsidiaries. The following chart illustrates a summary of our corporate structure:

We are a leading global designer, producer and marketer of a wide range of mechanical power transmission, or MPT, and motion control products serving customers in a diverse group of industries, including energy, general industrial, material handling, mining, transportation, and turf and garden. Our product portfolio includes industrial clutches and brakes, enclosed gear drives, open gearing, belted drives, couplings, engineered bearing assemblies, linear components, electronic drives and other related products. Our products are used in a wide variety of high-volume manufacturing processes, where the reliability and accuracy of our products are critical in both avoiding costly down time and enhancing the overall efficiency of manufacturing operations. Our products are also used in non-manufacturing applications where product quality and reliability are especially critical, such as clutches and brakes for elevators and residential and commercial lawnmowers. For the year ended December 31, 2009, we had net sales of $452.8 million and a net loss of $2.3 million.

We market our products under well recognized and established brands, many of which have been in existence for over 50 years. We believe many of our brands, when taken together with our brands in the same product category have achieved the number one or number two position in terms of consolidated market share and brand awareness in their respective product categories. Our products are either incorporated into products sold by original equipment manufacturers, or OEMs, sold to end users directly or sold through industrial distributors.

We are led by a highly experienced management team that has established a proven track record of execution, successfully completing and integrating major strategic acquisitions and delivering significant growth in both revenue and profits. We employ a comprehensive business process called the Altra Business System, or ABS, which focuses on eliminating inefficiencies from every business process to improve quality, delivery and cost.

Unless the context requires otherwise, in this Annual Report on Form 10-K, the terms “Altra Holdings,” “the Company,” “we,” “us” and “our” refer to Altra Holdings, Inc. and its subsidiaries, except where the context otherwise requires or indicates.

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We file reports and other documents with the Securities and Exchange Commission. You may read and copy documents we file at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more information on the public reference room. Our SEC Filings are also available to you on the SEC’s internet site at http://www.sec.gov.

Our internet address is www.altramotion.com. By following the link “Investor Relations” and then “SEC filings” on our Internet website, we make available, free of charge, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “ExchangeAct”) as soon as reasonably practicable after such forms are filed with or furnished to the SEC. We are not including information contained on or available through our website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

History and Acquisitions

Although we were incorporated in Delaware in 2004, much of our current business has its roots with the prior acquisition by Colfax Corporation, or Colfax, of the MPT group of Zurn Technologies, Inc. in December 1996. Colfax subsequently acquired Industrial Clutch Corp. in May 1997, Nuttall Gear Corp. in July 1997 and the Boston Gear and Delroyd Worm Gear brands in August 1997 as part of Colfax’s acquisition of Imo Industries, Inc. In February 2000, Colfax acquired Warner Electric, Inc., which sold products under the Warner Electric, Formsprag Clutch, Stieber and Wichita Clutch brands. Colfax formed Power Transmission Holding, LLC or “PTH” in June 2004 to serve as a holding company for all of these power transmission businesses. Boston Gear was established in 1877, Warner Electric, Inc. in 1927, and Wichita Clutch in 1949.

On November 30, 2004, we acquired our original core business through the acquisition of PTH from Colfax. We refer to this transaction as the PTH Acquisition.

On October 22, 2004, The Kilian Company, or Kilian, a company formed at the direction of Genstar Capital, the largest stockholder of Altra Holdings, acquired Kilian Manufacturing Corporation from Timken U.S. Corporation. At the completion of the PTH Acquisition, (i) all of the outstanding shares of Kilian capital stock were exchanged for shares of our capital stock and Kilian and its subsidiaries were transferred to Altra Industrial.

On February 10, 2006, we purchased all of the outstanding share capital of Hay Hall Ltd, or Hay Hall. Hay Hall was a UK-based holding company established in 1996 that was focused primarily on the manufacture of couplings and clutch brakes. Hay Hall consisted of five main businesses that were niche focused and had strong brand names and established reputations within their primary markets.

Through Hay Hall, we acquired 15 strong brands in complementary product lines, improved customer leverage and expanded geographic presence in over 11 countries. Hay Hall’s product offerings diversified our revenue base and strengthened our key product areas, such as electric clutches, brakes and couplings. Matrix International, Inertia Dynamics and Twiflex, three Hay Hall businesses, combined with Warner Electric, Wichita Clutch, Formsprag Clutch and Stieber, make the consolidated company one of the largest individual manufacturers of industrial clutches and brakes in the world.

On May 18, 2006, we acquired substantially all of the assets of Bear Linear Inc, or Warner Linear. Warner Linear manufactures high value-added linear actuators which are electromechanical power transmission devices designed to move and position loads linearly for mobile off-highway and industrial applications. Warner Linear’s product design and engineering expertise, coupled with our sourcing alliance with a low cost country manufacturer, were critical components in our strategic expansion into the motion control market.

On April 5, 2007, the Company acquired all of the outstanding shares of TB Wood’s Corporation, or TB Wood’s. TB Wood’s is an established designer, manufacturer and marketer of mechanical and electronic industrial power transmission products.

On October 5, 2007, we acquired substantially all of the assets of All Power Transmission Manufacturing, Inc., or All Power.

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Divestitures

On December 31, 2007, we sold the TB Wood’s adjustable speed drives business or Electronics Division to Vacon, Inc. for $29.0 million. We sold the Electronics Division in order to continue our strategic focus on our core electro-mechanical power transmission business.

Initial Public Offering

In December 2006, the Company completed an initial public offering. The Company offered 3,333,334 of its own shares of common stock, $0.001 par value per share. In addition selling stockholders offered 6,666,666 shares of common stock. Proceeds to the Company after the underwriting discount were $41.9 million.

Secondary Public Offering

In June 2007, we completed a secondary public offering of 12,650,000 shares of our common stock, which included 1,650,000 sold as a result of the underwriters’ exercise of their overallotment option in full at closing. We received proceeds of $48.9 million, net of issuance costs. In the offering, we sold 3,178,494 shares of common stock and certain selling stockholders sold 9,471,506 shares of common stock.

Our Industry

Based on industry data supplied by Penton Information Services, we estimate that industrial power transmission products generated sales in the United States of approximately $27 billion in 2009. These products are used to generate, transmit, control and transform mechanical energy. The industrial power transmission industry can be divided into three areas: mechanical power transmission, or MPT products; motors and generators; and adjustable speed drives. We compete primarily in the MPT area which, based on industry data, we estimate was a $12.8 billion market in the United States in 2009.

The global MPT market is highly fragmented, with over 1,000 small manufacturers. While smaller companies tend to focus on regional niche markets with narrow product lines, larger companies that generate annual sales of over $100 million generally offer a much broader range of products and have global capabilities. The industry’s customer base is broadly diversified across many sectors of the economy and typically places a premium on factors such as quality, reliability, availability and design and application engineering support. We believe the most successful industry participants are those that leverage their distribution network, their products’ reputations for quality and reliability and their service and technical support capabilities to maintain attractive margins on products and gain market share.

Our Strengths

Leading Market Shares and Brand Names.  We believe we hold the number one or number two market position in key products across many of our core platforms. We believe that over 50% of our sales from continuing operations are derived from products where we hold the number one or number two share and brand recognition, on a consolidated basis with our brands in the same product category, in the markets we serve. In addition, we have recently captured additional market share in several product lines due to our innovative product development efforts and exceptional customer service.

Customized, Engineered Products Serving Niche Markets.  We employ approximately 150 non-manufacturing engineers involved with product design, research and development, testing and technical customer support, and we often participate in lengthy design and qualification processes with our customers. Many of our product lines involve a large number of unique parts, are delivered in small order quantities with short lead times, and require varying levels of technical support and responsive customer service. As a result of these characteristics, as well as the essential nature of our products to the efficient operations of our customers, we generate a significant amount of recurring sales with repeat customers.

Significant Operating Leverage Driven by Disciplined Cost Reductions.  We have implemented a successful strategy to manage cost through the cycle with demonstrable results. Our disciplined cost saving

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initiatives have included workforce and payroll reductions, facility consolidations, and procurement savings. We estimate that we have realized net savings of approximately $59.0 million through December 2009. We estimate that, once volume returns to prior year levels, between $10.0 and $12.0 million of these savings will be permanent in nature, creating significant operating leverage and improving our cost position.

Aftermarket Sales Supported by Large Installed Base.  With a history dating back to 1857 with the formation of TB Wood’s, we believe we benefit from one of the largest installed customer bases in the industry. The moving, wearing nature of our products necessitates regular replacement and our large installed base of products generates significant aftermarket replacement demand. This has created a recurring revenue stream from a diversified group of end-user customers. For 2009, we estimate that approximately 41% of our revenues were derived from aftermarket sales.

Diversified End Markets.  Our revenue base has a balanced exposure across a diverse mix of end-user industries, including energy, food processing, general industrial, material handling, mining, transportation, and turf and garden. We believe our diversified end markets insulate us from volatility in any single industry or type of end-user. In 2009, no single industry represented more than 9% of our total sales. In addition, we are geographically diversified with approximately 31% of our sales coming from outside North America during 2009.

Strong Relationships with Distributors and OEMs.  We have over 1,000 direct OEM customers and enjoy established, long-term relationships with the leading industrial MPT distributors, critical factors that contribute to our high base of recurring aftermarket revenues. We sell our products through more than 3,000 distributor outlets worldwide. We believe our scale, expansive product lines and end-user preference for our products make our product portfolio attractive to both large and multi-branch distributors, as well as regional and independent distributors in our industry.

Experienced, High-Caliber Management Team.  We are led by a highly experienced management team with over 250 years of cumulative industrial business experience and an average of 13 years with our companies. Our CEO, Carl Christenson, has over 28 years of experience in the MPT industry, while our CFO, Christian Storch, has approximately 22 years of experience. Our management team has established a proven track record of execution, successfully completing and integrating major strategic acquisitions and delivering significant growth and profitability.

The Altra Business System.  We benefit from an established culture of lean management emphasizing quality, delivery and cost through the ABS. ABS is at the core of our performance-driven culture and drives both our strategic development and operational improvements. We continually evaluate every aspect of our business to identify productivity improvements and cost savings.

Our Business Strategy

Our long-term strategy is to increase our sales through organic growth, expand our geographic reach and product offerings through strategic acquisitions and improve our profitability through cost reduction initiatives. In the near term, we are focused on cost reduction measures and working capital improvements. We seek to achieve these objectives through the following strategies:

Leverage Our Sales and Distribution Network.  We intend to continue to leverage our established, long-term relationships with the industry’s leading national and regional distributors to help maintain and grow our revenues. We seek to capitalize on customer brand preferences for our products to generate pull-through aftermarket demand from our distribution channel. We believe this strategy also allows our distributors to achieve higher profit margins, further enhancing our preferred position with them.

Focus our Strategic Marketing on New Growth Opportunities.  We intend to expand our emphasis on strategic marketing to focus on new growth opportunities in key end-user and OEM markets. Through a systematic process that leverages our core brands and products, we seek to identify attractive markets and product niches, collect customer and market data, identify market drivers, tailor product and service solutions to specific market and customer requirements, and deploy resources to gain market share and drive future sales growth.

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Accelerate New Product and Technology Development.  We focus on aggressively developing new products across our business in response to customer needs in various markets. Our extensive application-engineering know-how drives both new and repeat sales and we have an established history of innovation with over 250 granted patents and pending patent applications worldwide. In total, new products developed by us during the past three years generated approximately $58 million in revenues during 2009.

Capitalize on Growth and Sourcing Opportunities in the Asia-Pacific Market.  We intend to leverage our established sales offices in the Asia Pacific region and expand into regions where we currently do not have sales representation. We also intend to expand our manufacturing presence in Asia beyond our current plant in Shenzhen, China. During 2009, we sourced approximately 25% of our purchases from low-cost countries, resulting in average cost reductions of approximately 38% for these products. Within the next five years, we intend to utilize our sourcing office in Shanghai to significantly increase our current level of low-cost country sourced purchases. We may also consider additional opportunities to outsource some of our production from North American and Western European locations to Asia or lower cost regions.

Continue to Improve Operational and Manufacturing Efficiencies through ABS.  We believe we can continue to improve profitability through cost control, overhead rationalization, global process optimization, continued implementation of lean manufacturing techniques and strategic pricing initiatives. Our operating plan, based on manufacturing centers of excellence, provides additional opportunities to consolidate purchasing processes and reduce costs by sharing best practices across geographies and business lines.

Continue to Focus on Cost-Reduction Initiatives.  We intend to generate significant operating leverage by continuing to manage our business through the economic cycle. We continue to effect measures to reduce costs, including the timely implementation of workforce reduction and payroll savings initiatives, engaging the entire organization in pursuing procurement savings and other cost initiatives, and executing as many as six plant consolidations through mid-2010. As a result of these initiatives, at current volume levels, we have generated an estimated net annualized savings of approximately $76.5 million, $10.0 to $12.0 million of which we expect to be permanent in nature once volume returns to prior year levels. We expect these cost reductions will provide a competitive advantage as the industry rebounds.

Selectively Pursue Strategic Acquisitions that Complement Our Strong Platform.  While we have a successful track record of identifying, acquiring and integrating acquisitions, our current focus remains centered on cash generation and preservation. However, we believe that in the future there may be a number of attractive potential acquisition candidates, in part due to the fragmented nature of the industry. We plan to continue our disciplined pursuit of strategic acquisitions to strengthen our product portfolio, enhance our industry leadership, leverage fixed costs, expand our global footprint, and create value in products and markets that we know and understand.

Products

We produce and market a wide variety of mechanical power transmission, or MPT products. Our product portfolio includes industrial clutches and brakes, open and enclosed gearing, couplings, engineered belted drives, engineered bearing assemblies and other related power transmission components which are sold across a wide variety of industries. Our products benefit from our industry leading brand names including Warner Electric, Boston Gear, TB Wood’s, Kilian, Nuttall Gear, Ameridrives, Wichita Clutch, Formsprag Clutch, Bibby Transmissions, Stieber, Matrix, Inertia Dynamics, Twiflex, Industrial Clutch, Huco Dynatork, Marland Clutch, Delroyd, and Warner Linear. Our products serve a wide variety of end markets including aerospace, energy, food processing, general industrial, material handling, mining, petrochemical, transportation and turf and garden. We primarily sell our products to OEMs and through long-standing relationships with the industry’s leading industrial distributors such as Motion Industries, Applied Industrial Technologies, Kaman Industrial Technologies and W.W. Grainger. The following discussion of our products does not include detailed product category revenue because such information is not individually tracked by our financial reporting system and is not separately reported by our general purpose financial statements. Conducting a detailed product revenue internal assessment and audit would involve unreasonable effort and expense as revenue

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information by product line is not available. We maintain sales information by operating facility, but do not maintain any accounting sales data by product line.

Our products, principal brands and markets and sample applications are set forth below:

Products	Principal Brands	Principal Markets	Sample Applications
Clutches and Brakes	Warner Electric, Wichita Clutch, Formsprag Clutch, Stieber Clutch, Matrix, Inertia Dynamics, Twiflex, Industrial Clutch, Marland Clutch	Aerospace, energy, material handling, metals, turf and garden, mining	Elevators, forklifts, lawn mowers, oil well draw works, punch presses, conveyors
Gearing	Boston Gear, Nuttall Gear, Delroyd	Food processing, material handling, metals, transportation	Conveyors, ethanol mixers, packaging machinery, metal processing equipment
Engineered Couplings	Ameridrives, Bibby Transmissions, TB Wood’s	Energy, metals, plastics, chemical	Extruders, turbines, steel strip mills, pumps
Engineered Bearing Assemblies	Kilian	Aerospace, material handling, transportation	Cargo rollers, seat storage systems, conveyors
Power Transmission Components	Warner Electric, Boston Gear, Huco Dynatork, Warner Linear, Matrix, Saftek, TB Wood’s	Material handling, metals, turf and garden	Conveyors, lawn mowers, machine tools
Engineered Belted Drives	TB Wood’s	Aggregate, HVAC, material handling	Pumps, sand and gravel conveyors, industrial fans

Our products are used in a wide variety of high-volume manufacturing processes, where the reliability and accuracy of our products are critical in both avoiding costly down time and enhancing the overall efficiency of manufacturing operations. Our products are also used in non-manufacturing applications where product quality and reliability are especially critical, such as clutches and brakes for elevators and residential and commercial lawnmowers.

Clutches and Brakes.  Clutches are devices which use mechanical, magnetic, hydraulic, pneumatic, or friction type connections to facilitate engaging or disengaging two rotating members. Brakes are combinations of interacting parts that work to slow or stop machinery. We manufacture a variety of clutches and brakes in three main product categories: electromagnetic, overrunning and heavy duty. Our core clutch and brake manufacturing facilities are located in Connecticut, Indiana, Illinois, Michigan, Texas, the United Kingdom, Germany, France and China.

•       Electromagnetic Clutches and Brakes.  Our industrial products include clutches and brakes with specially designed controls for material handling, forklift, elevator, medical mobility, mobile off-highway, baggage handling and plant productivity applications. We also offer a line of clutch and brake products for walk-behind mowers, residential lawn tractors and commercial mowers. While industrial applications are predominant, we also manufacture several vehicular niche applications including on-road refrigeration compressor clutches and agricultural equipment clutches. We market our electromagnetic products under the Warner Electric, Inertia Dynamics and Matrix brand names.

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•       Overrunning Clutches.  Specific product lines include indexing and backstopping clutches. Primary industrial applications include conveyors, gear reducers, hoists and cranes, mining machinery, machine tools, paper machinery, packaging machinery, pumping equipment and other specialty machinery. We market and sell these products under the Formsprag, Marland and Stieber brand names.

•       Heavy Duty Clutches and Brakes.  Our heavy duty clutch and brake product lines serve various markets including metal forming, off-shore and land-based oil and gas drilling platforms, mining, material handling, marine applications and various off-highway and construction equipment segments. Our line of heavy duty pneumatic, hydraulic and caliper clutches and brakes are marketed under the Wichita Clutch and Twiflex brand names.

Gearing.  Gears reduce the output speed and increase the torque of an electric motor or engine to the level required to drive a particular piece of equipment. These products are used in various industrial, material handling, mixing, transportation and food processing applications. Specific product lines include vertical and horizontal gear drives, speed reducers and increasers, high-speed compressor drives, enclosed custom gear drives, various enclosed gear drive configurations and open gearing products such as spur, helical, worm and miter/bevel gears. We design and manufacture a broad range of gearing products under the Boston Gear, Nuttall Gear and Delroyd brand names. We manufacture our gearing products at our facilities in New York and North Carolina and sell to a variety of end markets.

Engineered Couplings.  Couplings are the interface between two shafts, which enable power to be transmitted from one shaft to the other. Because shafts are often misaligned, we designed our couplings with a measure of flexibility that accommodates various degrees of misalignment. Our coupling product line includes gear couplings, high-speed disc and diaphragm couplings, elastomeric couplings, grid couplings, universal joints, jaw couplings and spindles. Our coupling products are used in a wide range of markets including power generation, steel and custom machinery industries. We manufacture a broad range of coupling products under the Ameridrives, Bibby and TB Wood’s brand names. Our engineered couplings are manufactured in our facilities in Mexico, Michigan, Pennsylvania, Texas, the United Kingdom and Wisconsin.

Engineered Bearing Assemblies.  Bearings are components that support, guide and reduce friction of motion between fixed and moving machine parts. Our engineered bearing assembly product line includes ball bearings, roller bearings, thrust bearings, track rollers, stainless steel bearings, polymer assemblies, housed units and custom assemblies. We manufacture a broad range of engineered bearing products under the Kilian brand name. We sell bearing products to a wide range of end markets, including the general industrial and automotive markets, with a particularly strong OEM customer focus. We manufacture our bearing products at our facilities in New York, Canada and China.

Engineered Belted Drives.  Belted drives incorporate both a rubber-based belt and at least two sheaves or sprockets. Belted drives typically change the speed of an electric motor or engine to the level required for a particular piece of equipment. Our belted drive line includes three types of v-belts, three types of synchronous belts, standard and made-to-order sheaves and sprockets, and split taper bushings. We sell belted drives to a wide range of end markets, including aggregate, energy, chemical and material handling. Our engineered belted drives are primarily manufactured under the TB Wood’s brand in our facilities in Pennsylvania and Mexico.

Power Transmission Components.  Power transmission components are used in a number of industries to generate, transfer or control motion from a power source to an application requiring rotary or linear motion. Power transmission products are applicable in most industrial markets, including, but not limited to metals processing, turf and garden and material handling applications. Specific product lines include linear actuators, miniature and small precision couplings, air motors, friction materials, hydrostatic drives and other various items. We manufacture or market a broad array of power transmission components under several businesses including Warner Linear, Huco Dynatork, Boston Gear, Warner Electric, TB Wood’s and Matrix. Our core power transmission component manufacturing facilities are located in Illinois, Michigan, North Carolina, the United Kingdom and China.

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•       Warner Linear.  Warner Linear is a designer and manufacturer of rugged service electromechanical linear actuators for off-highway vehicles, agriculture, turf care, special vehicles, medical equipment, industrial and marine applications.

•       Huco Dynatork.  Huco Dynatork is a leading manufacturer and supplier of a complete range of precision couplings, universal joints, rod ends and linkages.

•       Other Accessories.  Our Boston Gear, Warner Electric, Matrix and TB Wood’s businesses make or market several other accessories such as sensors, sleeve bearings, AC/DC motors, shaft accessories, face tooth couplings, mechanical variable speed drives, and fluid power components that are used in numerous end markets.

Research and Development and Product Engineering

We closely integrate new product development with marketing, manufacturing and product engineering in meeting the needs of our customers. We have product engineering teams that work to enhance our existing products and develop new product applications for our growing base of customers that require custom solutions. We believe these capabilities provide a significant competitive advantage in the development of high quality industrial power transmission products. Our product engineering teams focus on:

•       lowering the cost of manufacturing our existing products;

•       redesigning existing product lines to increase their efficiency or enhance their performance; and

•       developing new product applications.

Our continued investment in new product development is intended to help drive customer growth as we address key customer needs.

Sales and Marketing

We sell our products in over 70 countries to over 1,000 direct OEM customers and over 3,000 distributor outlets. We offer our products through our direct sales force comprised of 100 company-employed sales associates as well as independent sales representatives. Our worldwide sales and distribution presence enables us to provide timely and responsive support and service to our customers, many of which operate globally, and to capitalize on growth opportunities in both developed and emerging markets around the world.

We employ an integrated sales and marketing strategy concentrated on both key industries and individual product lines. We believe this dual vertical market and horizontal product approach distinguishes us in the marketplace allowing us to quickly identify trends and customer growth opportunities and deploy resources accordingly. Within our key industries, we market to OEMs, encouraging them to incorporate our products into their equipment designs, to distributors and to end-users, helping to foster brand preference. With this strategy, we are able to leverage our industry experience and product breadth to sell MPT and motion control solutions for a host of industrial applications.

Distribution

Our MPT components are either incorporated into end products sold by OEMs or sold through industrial distributors as aftermarket products to end users and smaller OEMs. We operate a geographically diversified business. For the year ended December 31, 2009, we derived approximately 69% of our net sales from customers in North America, 22% from customers in Europe and 9% from customers in Asia and the rest of the world. Our global customer base is served by an extensive global sales network comprised of our sales staff as well as our network of over 3,000 distributor outlets.

Rather than serving as passive conduits for delivery of product, our industrial distributors are active participants in influencing product purchasing decisions in the MPT industry. In addition, distributors play a critical role through stocking inventory of our products, which affects the accessibility of our products to

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aftermarket buyers. It is for this reason that distributor partner relationships are so critical to the success of the business. We enjoy strong established relationships with the leading distributors as well as a broad, diversified base of specialty and regional distributors.

Competition

We operate in highly fragmented and very competitive markets within the MPT market. Some of our competitors have achieved substantially more market penetration in certain of the markets in which we operate, such as helical gear drives and some of our competitors are larger than us and have greater financial and other resources. In particular, we compete with Emerson Power Transmission Manufacturing LP, Rexnord LLC., Regal-Beloit Corporation and Baldor Electric, Inc.. In addition, with respect to certain of our products, we compete with divisions of our OEM customers. Competition in our business lines is based on a number of considerations including quality, reliability, pricing, availability and design and application engineering support. Our customers increasingly demand a broad product range and we must continue to develop our expertise in order to manufacture and market these products successfully. To remain competitive, regular investment in manufacturing, customer service and support, marketing, sales, research and development and intellectual property protection is required. We may have to adjust the prices of some of our products to stay competitive. In addition, some of our larger, more sophisticated customers are attempting to reduce the number of vendors from which they purchase in order to increase their efficiency. There is substantial and continuing pressure on major OEMs and larger distributors to reduce costs, including the cost of products purchased from outside suppliers such as us. As a result of cost pressures from our customers, our ability to compete depends in part on our ability to generate production cost savings and, in turn, find reliable, cost-effective outside component suppliers or manufacturers for our products. See “Risk Factors — Risks Related to our Business — We operate in the highly competitive mechanical power transmission industry and if we are not able to compete successfully our business may be significantly harmed.”

Intellectual Property

We rely on a combination of patents, trademarks, copyright, and trade secret laws in the United States and other jurisdictions, as well as employee and third-party non-disclosure agreements, license arrangements, and domain name registrations to protect our intellectual property. We sell our products under a number of registered and unregistered trademarks, which we believe are widely recognized in the MPT industry. With the exception of Boston Gear, Warner Electric and TB Wood’s, we do not believe any single patent, trademark or trade name is material to our business as a whole. Any issued patents that cover our proprietary technology and any of our other intellectual property rights may not provide us with adequate protection or be commercially beneficial to us and, patents applied for, may not be issued. The issuance of a patent is not conclusive as to its validity or its enforceability. Competitors may also be able to design around our patents. If we are unable to protect our patented technologies, our competitors could commercialize technologies or products which are substantially similar to ours.

With respect to proprietary know-how, we rely on trade secret laws in the United States and other jurisdictions and on confidentiality agreements. Monitoring the unauthorized use of our technology is difficult and the steps we have taken may not prevent unauthorized use of our technology. The disclosure or misappropriation of our intellectual property could harm our ability to protect our rights and our competitive position.

Some of our registered and unregistered trademarks include: Warner Electric, Boston Gear, TB Wood’s, Kilian, Nuttall Gear, Ameridrives, Wichita Clutch, Formsprag, Bibby Transmissions, Stieber, Matrix, Inertia Dynamics, Twiflex, Industrial Clutch, Huco Dynatork, Marland, Delroyd, Warner Linear and Saftek.

Employees

As of December 31, 2009, we had 2,613 full-time employees, of whom approximately 63% were located in North America, 22% in Europe, and 15% in Asia. 11% of our full-time factory North American employees are represented by labor unions. In addition, approximately 37 employees or 57% of our employees

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in our facility in Scotland are represented by a labor union. Additionally, approximately 49 employees in the TB Wood’s production facilities in Mexico are unionized under collective bargaining agreements that are subject to annual renewals. We are a party to four U.S. collective bargaining agreements. Three of the agreements will expire on August 2010, June 2011, and September 2011, respectively. With respect to the fourth collective bargaining agreement, we have entered into a plant closing agreement with labor union employees at our South Beloit Manufacturing facility. We expect the facility to close in the first quarter of 2010.

One of the four U.S. collective bargaining agreements contains provisions for additional, potentially significant, lump-sum severance payments to all employees covered by that agreement who are terminated as the result of a plant closing and one of our collective bargaining agreements contains provisions restricting our ability to terminate or relocate operations. See “Risk Factors — Risks Related to Our Business — We may be subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, which could seriously impact our operations and the profitability of our business.”

Our European facilities have employees who are generally represented by local and national social works councils which are common in Europe. Social works councils meet with employer industry associations every two to three years to discuss employee wages and working conditions. Our facilities in France and Germany often participate in such discussions and adhere to any agreements reached.

Suppliers and Raw Materials

We obtain raw materials, component parts and supplies from a variety of sources, generally from more than one supplier. Our suppliers and sources of raw materials are based in both the United States and other countries and we believe that our sources of raw materials are adequate for our needs for the foreseeable future. We do not believe the loss of any one supplier would have a material adverse effect on our business or results of operations. Our principal raw materials are steel, castings and copper. We generally purchase our materials on the open market, where certain commodities such as steel and copper have fluctuated in price significantly in recent years. We have not experienced any significant shortage of our key materials and have not historically engaged in hedging transactions for commodity suppliers.

Seasonality

We experience seasonality in our turf and garden business, which in recent years has represented approximately 10% of our net sales. As our large OEM customers prepare for the spring season, our shipments generally start increasing in December, peak in February and March, and begin to decline in April and May. This allows our customers to have inventory in place for the peak consumer purchasing periods for turf and garden products. The June-through-November period is typically the low season for us and our customers in the turf and garden market. Seasonality is also affected by weather and the level of housing starts.

Regulation

We are subject to a variety of government laws and regulations that apply to companies engaged in international operations. These include compliance with the Foreign Corrupt Practices Act, U.S. Department of Commerce export controls, local government regulations and procurement policies and practices (including regulations relating to import-export control, investments, exchange controls and repatriation of earnings). We maintain controls and procedures to comply with laws and regulations associated with our international operations. In the event we are unable to remain compliant with such laws and regulations, our business may be adversely affected.

Environmental and Health and Safety Matters

We are subject to a variety of federal, state, local, foreign and provincial environmental laws and regulations, including those governing health and safety requirements, the discharge of pollutants into the air or water, the management and disposal of hazardous substances and wastes and the responsibility to investigate and cleanup contaminated sites that are or were owned, leased, operated or used by us or our predecessors.

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Some of these laws and regulations require us to obtain permits, which contain terms and conditions that impose limitations on our ability to emit and discharge hazardous materials into the environment and periodically may be subject to modification, renewal and revocation by issuing authorities. Fines and penalties may be imposed for non-compliance with applicable environmental laws and regulations and the failure to have or to comply with the terms and conditions of required permits. From time to time, our operations may not be in full compliance with the terms and conditions of our permits. We periodically review our procedures and policies for compliance with environmental laws and requirements. We believe that our operations generally are in material compliance with applicable environmental laws and requirements and that any non-compliance would not be expected to result in us incurring material liability or cost to achieve compliance. Historically, the costs of achieving and maintaining compliance with environmental laws and requirements have not been material.

Certain environmental laws in the United States, such as the federal Superfund law and similar state laws, impose liability for the cost of investigation or remediation of contaminated sites upon the current or, in some cases, the former site owners or operators and upon parties who arranged for the disposal of wastes or transported or sent those wastes to an off-site facility for treatment or disposal, regardless of when the release of hazardous substances occurred or the lawfulness of the activities giving rise to the release. Such liability can be imposed without regard to fault and, under certain circumstances, can be joint and several, resulting in one party being held responsible for the entire obligation. As a practical matter, however, the costs of investigation and remediation generally are allocated among the viable responsible parties on some form of equitable basis. Liability also may include damages to natural resources. We have not been notified that we are a potentially responsible party in connection with any sites we currently or formerly owned or operated or for liability at any off-site waste disposal facility.

However, there is contamination at some of our current facilities, primarily related to historical operations at those sites, for which we could be liable for the investigation and remediation under certain environmental laws. The potential for contamination also exists at other of our current or former sites, based on historical uses of those sites. We currently are not undertaking any remediation or investigations and our costs or liability in connection with potential contamination conditions at our facilities cannot be predicted at this time because the potential existence of contamination has not been investigated or not enough is known about the environmental conditions or likely remedial requirements. Currently, other parties with contractual liability are addressing or have plans or obligations to address those contamination conditions that may pose a material risk to human health, safety or the environment. In addition, while we attempt to evaluate the risk of liability associated with our facilities at the time we acquire them, there may be environmental conditions currently unknown to us relating to our prior, existing or future sites or operations or those of predecessor companies whose liabilities we may have assumed or acquired which could have a material adverse effect on our business.

We are being indemnified, or expect to be indemnified by third parties subject to certain caps or limitations on the indemnification, for certain environmental costs and liabilities associated with certain owned or operated sites. Accordingly, based on the indemnification and the experience with similar sites of the environmental consultants who we have hired, we do not expect such costs and liabilities to have a material adverse effect on our business, operations or earnings. We cannot assure you, however, that those third parties will in fact satisfy their indemnification obligations. If those third parties become unable to, or otherwise do not, comply with their respective indemnity obligations, or if certain contamination or other liability for which we are obligated is not subject to these indemnities, we could become subject to significant liabilities.

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Executive Officers of Registrant

The following sets forth certain information with regard to our executive officers as of March 4, 2010 (ages are as of December 31, 2009):

Michael L. Hurt (age 64), P.E. has been our Executive Chairman since January 2009, Prior to his current position, Mr. Hurt served as Chief Executive Officer and a director since our formation in 2004. In November 2006, Mr. Hurt was elected as chairman of our board. During 2004, prior to our formation, Mr. Hurt provided consulting services to Genstar Capital and was appointed Chairman and Chief Executive Officer of Kilian in October 2004. From January 1991 to November 2003, Mr. Hurt was the President and Chief Executive Officer of TB Wood’s Incorporated, a manufacturer of industrial power transmission products. Prior to TB Wood’s, Mr. Hurt spent 23 years in a variety of management positions at the Torrington Company, a major manufacturer of bearings and a subsidiary of Ingersoll Rand. Mr. Hurt holds a B.S. degree in Mechanical Engineering from Clemson University and an M.B.A. from Clemson-Furman University.

Carl R. Christenson (age 50) has been our Chief Executive Officer since January 2009. Prior to his current position, Mr. Christenson served as our President and Chief Operating Officer from January 2005 to December 2008. From 2001 to 2005, Mr. Christenson was the President of Kaydon Bearings, a manufacturer of custom-engineered bearings and a division of Kaydon Corporation. Prior to joining Kaydon, Mr. Christenson held a number of management positions at TB Wood’s Incorporated and several positions at the Torrington Company. Mr. Christenson holds a M.S. and B.S. degree in Mechanical Engineering from the University of Massachusetts and an M.B.A. from Rensselaer Polytechnic.

Christian Storch (age 50) has been our Chief Financial Officer since December 2007. From 2001 to 2007, Mr. Storch was the Vice President and Chief Financial Officer at Standex International Corporation. Mr. Storch also served on the Board of Directors of Standex International from October 2004 to December 2007. Mr. Storch also served as Standex International’s Treasurer from 2003 to April 2006 and Manager of Corporate Audit and Assurance Services from July 1999 to 2003. Prior to Standex International, Mr. Storch was a Divisional Financial Director and Corporate Controller at Vossloh AG, a publicly held German transport technology company. Mr. Storch has also previously served as an Audit Manager with Deloitte & Touche, LLP. Mr. Storch holds a degree in business administration from the University of Passau, Germany.

Glenn Deegan (age 43) has been our Vice President, Legal and Human Resources, General Counsel and Secretary since June 2009. Prior to his current position, Mr. Deegan served as our General Counsel and Secretary since September 2008. From March 2007 to August 2008, Mr. Deegan served as Vice President, General Counsel and Secretary of Averion International Corp., a publicly held global provider of clinical research services. Prior to Averion, from June 2001 to March 2007, Mr. Deegan served as Director of Legal Affairs and then as Vice President, General Counsel and Secretary of MacroChem Corporation, a publicly held specialty pharmaceutical company. From 1999 to 2001, Mr. Deegan served as Assistant General Counsel of Summit Technology, Inc., a publicly held manufacturer of ophthalmic laser systems. Mr. Deegan previously spent over six years engaged in the private practice of law and also served as law clerk to the Honorable Francis J. Boyle in the United States District Court for the District of Rhode Island. Mr. Deegan holds a B.S. from Providence College and a J.D. from Boston College.

Gerald Ferris (age 60) has been our Vice President of Global Sales since May 2007 and held the same position with Power Transmission Holdings, LLC, our Predecessor, since March 2002. He is responsible for the worldwide sales of our broad product platform. Mr. Ferris joined our Predecessor in 1978 and since joining has held various positions. He became the Vice President of Sales for Boston Gear in 1991. Mr. Ferris holds a B.A. degree in Political Science from Stonehill College.

Todd B. Patriacca (age 40) has been our Vice President of Finance, Corporate Controller and Treasurer since February 2010. Prior to his current position, Mr. Patriacca served as our Vice

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President of Finance, Corporate Controller and Assistant Treasurer since October 2008 and previous to that, as Vice President of Finance and Corporate Controller since May 2007 and as Corporate Controller since May 2005. Prior to joining us, Mr. Patriacca was Corporate Finance Manager at MKS Instrument Inc., a semi-conductor equipment manufacturer since March 2002. Prior to MKS, Mr. Patriacca spent over ten years at Arthur Andersen LLP in the Assurance Advisory practice. Mr. Patriacca is a Certified Public Accountant and holds a B.A. in History from Colby College and an M.B.A. and an M.S. in Accounting from Northeastern University.

Craig Schuele (age 46) has been our Vice President of Marketing and Business Development since May 2007 and held the same position with our Predecessor since July 2004. Prior to his current position, Mr. Schuele has been Vice President of Marketing since March 2002, and previous to that he was a Director of Marketing. Mr. Schuele joined our Predecessor in 1986 and holds a B.S. degree in Management from Rhode Island College.

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Item 1A.   Risk Factors

Risks Related to Our Business

We operate in the highly competitive mechanical power transmission industry and if we are not able to compete successfully our business may be significantly harmed.

We operate in highly fragmented and very competitive markets in the MPT industry. Some of our competitors have achieved substantially more market penetration in certain of the markets in which we operate, such as helical gear drives, and some of our competitors are larger than us and have greater financial and other resources. With respect to certain of our products, we compete with divisions of our OEM customers. Competition in our business lines is based on a number of considerations, including quality, reliability, pricing, availability, and design and application engineering support. Our customers increasingly demand a broad product range and we must continue to develop our expertise in order to manufacture and market these products successfully. To remain competitive, regular investment in manufacturing, customer service and support, marketing, sales, research and development and intellectual property protection is required. In the future we may not have sufficient resources to continue to make such investments and may not be able to maintain our competitive position within each of the markets we serve. We may have to adjust the prices of some of our products to stay competitive.

Additionally, some of our larger, more sophisticated customers are attempting to reduce the number of vendors from which they purchase in order to increase their efficiency. If we are not selected to become one of these preferred providers, we may lose market share in some of the markets in which we compete.

There is substantial and continuing pressure on major OEMs and larger distributors to reduce costs, including the cost of products purchased from outside suppliers. As a result of cost pressures from our customers, our ability to compete depends in part on our ability to generate production cost savings and, in turn, find reliable, cost effective outside suppliers to source components or manufacture our products. If we are unable to generate sufficient cost savings in the future to offset price reductions, then our gross margin could be materially adversely affected.

Changes in or the cyclical nature of our markets could harm our operations and financial performance.

Our financial performance depends, in large part, on conditions in the markets that we serve and on the U.S. and global economies in general. Some of the markets we serve are highly cyclical, such as the metals, mining, industrial equipment and energy markets. In addition, these markets may experience cyclical downturns. The present uncertain economic environment may have a significant adverse affect on business cycles in industries we serve as our customers may face significantly decreased sales and an inability to predict future demand. In such an adverse environment, expected cyclical activity or sales may not occur or may be delayed and may result in significant quarter-to-quarter variability in our performance. Any sustained weakness in demand, downturn or uncertainty in cyclical markets may reduce our sales and profitability.

We rely on independent distributors and the loss of these distributors could adversely affect our business.

In addition to our direct sales force and manufacturer sales representatives, we depend on the services of independent distributors to sell our products and provide service and aftermarket support to our customers. We support an extensive distribution network, with over 3,000 distributor locations worldwide. Rather than serving as passive conduits for delivery of product, our independent distributors are active participants in the overall competitive dynamics in the MPT industry. During the year ended December 31, 2009, approximately 33% of our net sales from continuing operations were generated through independent distributors. In particular, sales through our largest distributor accounted for approximately 7% of our net sales for the year ended December 31, 2009. Almost all of the distributors with whom we transact business offer competitive products and services to our customers. In addition, the distribution agreements we have are typically non-exclusive and cancelable by the distributor after a short notice period. The loss of any major distributor or a substantial number of smaller distributors or an increase in the distributors’ sales of our competitors’ products to our customers could materially reduce our sales and profits.

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We must continue to invest in new technologies and manufacturing techniques; however, our ability to develop or adapt to changing technology and manufacturing techniques is uncertain and our failure to do so could place us at a competitive disadvantage.

The successful implementation of our business strategy requires us to continuously invest in new technologies and manufacturing techniques to evolve our existing products and introduce new products to meet our customers’ needs in the industries we serve and want to serve. For example, motion control products offer more precise positioning and control compared to industrial clutches and brakes. If manufacturing processes are developed to make motion control products more price competitive and less complicated to operate, our customers may decrease their purchases of MPT products.

Our products are characterized by performance and specification requirements that mandate a high degree of manufacturing and engineering expertise. We believe that our customers rigorously evaluate their suppliers on the basis of a number of factors, including:

•       product quality and availability;

•       price competitiveness;

•       technical expertise and development capability;

•       reliability and timeliness of delivery;

•       product design capability;

•       manufacturing expertise; and

•       sales support and customer service.

Our success depends on our ability to invest in new technologies and manufacturing techniques to continue to meet our customers’ changing demands with respect to the above factors. We may not be able to make required capital expenditures and, even if we do so, we may be unsuccessful in addressing technological advances or introducing new products necessary to remain competitive within our markets. Furthermore, our own technological developments may not be able to produce a sustainable competitive advantage. If we fail to successfully invest in improvements to our technology and manufacturing techniques, our business may be materially adversely affected.

Our operations are subject to international risks that could affect our operating results.

Our net sales outside North America represented approximately 31% of our total net sales for the year ended December 31, 2009. In addition, we sell products to domestic customers for use in their products sold overseas. We also source a significant portion of our products and materials from overseas, a practice which is increasing. Our business is subject to risks associated with doing business internationally, and our future results could be materially adversely affected by a variety of factors, including:

•       fluctuations in currency exchange rates;

•       exchange rate controls;

•       tariffs or other trade protection measures and import or export licensing requirements;

•       potentially negative consequences from changes in tax laws;

•       interest rates;

•       unexpected changes in regulatory requirements;

•       changes in foreign intellectual property law;

•       differing labor regulations;

•       requirements relating to withholding taxes on remittances and other payments by subsidiaries;

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•       restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in various jurisdictions;

•       potential political instability and the actions of foreign governments; and

•       restrictions on our ability to repatriate dividends from our subsidiaries.

As we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international operations. However, any of these factors could materially adversely affect our international operations and, consequently, our operating results.

Our operations depend on production facilities throughout the world, many of which are located outside the United States and are subject to increased risks of disrupted production causing delays in shipments and loss of customers and revenue.

We operate businesses with manufacturing facilities worldwide, many of which are located outside the United States including in Canada, China, France, Germany, Mexico and the United Kingdom. Serving a global customer base requires that we place more production in emerging markets to capitalize on market opportunities and cost efficiencies. Our international production facilities and operations could be disrupted by a natural disaster, labor strike, war, political unrest, terrorist activity or public health concerns, particularly in emerging countries that are not well-equipped to handle such occurrences. Any production disruptions could materially adversely affect our business.

We rely on estimated forecasts of our OEM customers’ needs, and inaccuracies in such forecasts could materially adversely affect our business.

We generally sell our products pursuant to individual purchase orders instead of under long-term purchase commitments. Therefore, we rely on estimated demand forecasts, based upon input from our customers, to determine how much material to purchase and product to manufacture. Because our sales are based on purchase orders, our customers may cancel, delay or otherwise modify their purchase commitments with little or no consequence to them and with little or no notice to us. For these reasons, we generally have limited visibility regarding our customers’ actual product needs. The quantities or timing required by our customers for our products could vary significantly. Whether in response to changes affecting the industry or a customer’s specific business pressures, any cancellation, delay or other modification in our customers’ orders could significantly reduce our revenue, impact our working capital, cause our operating results to fluctuate from period to period and make it more difficult for us to predict our revenue. In the event of a cancellation or reduction of an order, we may not have enough time to reduce operating expenses to minimize the effect of the lost revenue on our business and we may purchase too much inventory and spend more capital than expected, which may materially adversely affect our business.

As a result of slowing global economic growth, the credit market crisis, declining consumer and business confidence, reduced levels of capital expenditures and other challenges currently affecting the global economy, our customers may experience deterioration of their businesses. In addition, due to an inability to predict the duration and severity of the current economic crisis, our customers may not be able to accurately estimate demand forecasts and may scale back orders in an abundance of caution. As a result, existing or potential customers may delay or cancel plans to purchase our products and may not be able to fulfill their obligations to us in a timely fashion. Such cancellations, reductions or inability to fulfill obligations could significantly reduce our revenue, impact our working capital, cause our operating results to fluctuate adversely from period to period and make it more difficult for us to predict our revenue.

The materials used to produce our products are subject to price fluctuations that could increase costs of production and adversely affect our profitability.

The materials used to produce our products, especially copper and steel, are sourced on a global or regional basis and the prices of those materials are susceptible to price fluctuations due to supply and demand

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trends, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic climate and other unforeseen circumstances. From the first quarter of 2004 to the fourth quarter of 2009, the average price of copper and steel has increased approximately 141% and 27%, respectively. If we are unable to continue to pass a substantial portion of such price increases on to our customers on a timely basis, our future profitability may be materially adversely affected. In addition, passing through these costs to our customers may also limit our ability to increase our prices in the future.

We face potential product liability claims relating to products we manufacture or distribute, which could result in our having to expend significant time and expense to defend these claims and to pay material damages or settlement amounts.

We face a business risk of exposure to product liability claims in the event that the use of our products is alleged to have resulted in injury or other adverse effects. We currently have several product liability claims against us with respect to our products. Although we currently maintain product liability insurance coverage, we may not be able to obtain such insurance on acceptable terms in the future, if at all, or obtain insurance that will provide adequate coverage against potential claims. Product liability claims can be expensive to defend and can divert the attention of management and other personnel for long periods of time, regardless of the ultimate outcome. An unsuccessful product liability defense could have a material adverse effect on our business, financial condition, results of operations or our ability to make payments under our debt obligations when due. In addition, we believe our business depends on the strong brand reputation we have developed. In the event that our reputation is damaged, we may face difficulty in maintaining our pricing positions with respect to some of our products, which would reduce our sales and profitability.

We may be subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, which could seriously impact our operations and the profitability of our business.

As of December 31, 2009, we had approximately 2,613 full time employees, of whom approximately 44% were employed outside the United States. Approximately 214 of our North American employees and 37 of our employees in Scotland are represented by labor unions. In addition, our employees in Europe are generally represented by local and national social works councils that hold discussions with employer industry associations regarding wage and work issues every two to three years. Our European facilities, particularly those in France and Germany, may participate in such discussions and be subject to any agreements reached with employees. Additionally, approximately 49 employees in the TB Wood’s production facilities in Mexico are unionized under collective bargaining agreements that are subject to annual renewals.

We are a party to four U.S. collective bargaining agreements. Three of the agreements will expire on August 2010, June 2011 and September 2011, respectively. We have entered into a plant closing agreement with labor union employees at our South Beloit manufacturing facility. We expect the facility to close in the first quarter of 2010. We may be unable to renew these agreements on terms that are satisfactory to us, if at all. In addition, one of our four U.S. collective bargaining agreements contains provisions for additional, potentially significant, lump-sum severance payments to all employees covered by the agreements who are terminated as the result of a plant closing and one of our collective bargaining agreements contains provisions restricting our ability to terminate or relocate operations.

If our unionized workers or those represented by a works council were to engage in a strike, work stoppage or other slowdown in the future, we could experience a significant disruption of our operations. Such disruption could interfere with our ability to deliver products on a timely basis and could have other negative effects, including decreased productivity and increased labor costs. In addition, if a greater percentage of our work force becomes unionized, our business and financial results could be materially adversely affected. Many of our direct and indirect customers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these customers or their suppliers could result in slowdowns or closures of assembly plants where our products are used and could cause cancellation of purchase orders with us or otherwise result in reduced revenues from these customers.

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Changes in employment laws could increase our costs and may adversely affect our business.

Various federal, state and international labor laws govern our relationship with employees and affect operating costs. These laws include minimum wage requirements, overtime, unemployment tax rates, workers’ compensation rates paid, leaves of absence, mandated health and other benefits, and citizenship requirements. Significant additional government-imposed increases or new requirements in these areas could materially affect our business, financial condition, operating results or cash flow.

In the event our employee-related costs rise significantly, we may have to curtail the number of our employees or shut down certain manufacturing facilities. Any such actions would not only be costly but could also materially adversely affect our business.

We depend on the services of key executives, the loss of whom could materially harm our business.

Our senior executives are important to our success because they are instrumental in setting our strategic direction, operating our business, maintaining and expanding relationships with distributors, identifying, recruiting and training key personnel, identifying expansion opportunities and arranging necessary financing. Losing the services of any of these individuals could adversely affect our business until a suitable replacement could be found. We believe that our senior executives could not easily be replaced with executives of equal experience and capabilities. Although we have entered into employment agreements with certain of our key domestic executives, we cannot prevent our key executives from terminating their employment with us. We do not maintain key person life insurance policies on any of our executives.

If we lose certain of our key sales, marketing or engineering personnel, our business may be adversely affected.

Our success depends on our ability to recruit, retain and motivate highly skilled sales, marketing and engineering personnel. Competition for these persons in our industry is intense and we may not be able to successfully recruit, train or retain qualified personnel. If we fail to retain and recruit the necessary personnel, our business and our ability to obtain new customers, develop new products and provide acceptable levels of customer service could suffer. If certain of these key personnel were to terminate their employment with us, we may experience difficulty replacing them, and our business could be harmed.

We are subject to environmental laws that could impose significant costs on us and the failure to comply with such laws could subject us to sanctions and material fines and expenses.

We are subject to a variety of federal, state, local, foreign and provincial environmental laws and regulations, including those governing the discharge of pollutants into the air or water, the management and disposal of hazardous substances and wastes and the responsibility to investigate and cleanup contaminated sites that are or were owned, leased, operated or used by us or our predecessors. Some of these laws and regulations require us to obtain permits, which contain terms and conditions that impose limitations on our ability to emit and discharge hazardous materials into the environment and periodically may be subject to modification, renewal and revocation by issuing authorities. Fines and penalties may be imposed for non-compliance with applicable environmental laws and regulations and the failure to have or to comply with the terms and conditions of required permits. From time to time, our operations may not be in full compliance with the terms and conditions of our permits. We periodically review our procedures and policies for compliance with environmental laws and requirements. We believe that our operations generally are in material compliance with applicable environmental laws, requirements and permits and that any lapses in compliance would not be expected to result in us incurring material liability or cost to achieve compliance. Historically, the costs of achieving and maintaining compliance with environmental laws, and requirements and permits have not been material; however, the operation of manufacturing plants entails risks in these areas, and a failure by us to comply with applicable environmental laws, regulations, or permits could result in civil or criminal fines, penalties, enforcement actions, third party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup, or regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures, including the installation of pollution control

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equipment or remedial actions. Moreover, if applicable environmental laws and regulations, or the interpretation or enforcement thereof, become more stringent in the future, we could incur capital or operating costs beyond those currently anticipated.

Certain environmental laws in the United States, such as the federal Superfund law and similar state laws, impose liability for the cost of investigation or remediation of contaminated sites upon the current or, in some cases, the former site owners or operators and upon parties who arranged for the disposal of wastes or transported or sent those wastes to an off-site facility for treatment or disposal, regardless of when the release of hazardous substances occurred or the lawfulness of the activities giving rise to the release. Such liability can be imposed without regard to fault and, under certain circumstances, can be joint and several, resulting in one party being held responsible for the entire obligation. As a practical matter, however, the costs of investigation and remediation generally are allocated among the viable responsible parties on some form of equitable basis. Liability also may include damages to natural resources. We have not been notified that we are a potentially responsible party in connection with any sites we currently or formerly owned or operated any liabilities relating to any off-site waste disposal facility.

However, there is contamination at some of our current facilities, primarily related to historical operations at those sites, for which we could be liable for the investigation and remediation under certain environmental laws. The potential for contamination also exists at other of our current or former sites, based on historical uses of those sites. We currently are not undertaking any remediation or investigations and our costs or liability in connection with potential contamination conditions at our facilities cannot be predicted at this time because the potential existence of contamination has not been investigated or not enough is known about the environmental conditions or likely remedial requirements. Currently, other parties with contractual liability are addressing or have plans or obligations to address those contamination conditions that may pose a material risk to human health, safety or the environment. In addition, while we attempt to evaluate the risk of liability associated with our facilities at the time we acquire them, there may be environmental conditions currently unknown to us relating to our prior, existing or future sites or operations or those of predecessor companies whose liabilities we may have assumed or acquired which could have a material adverse effect on our business.

We are being indemnified, or expect to be indemnified by third parties subject to certain caps or limitations on the indemnification, for certain environmental costs and liabilities associated with certain owned or operated sites. Accordingly, based on the indemnification and the experience with similar sites of the environmental consultants who we have hired, we do not expect such costs and liabilities to have a material adverse effect on our business, operations or earnings. We cannot assure you, however, that those third parties will in fact satisfy their indemnification obligations. If those third parties become unable to, or otherwise do not, comply with their respective indemnity obligations, or if certain contamination or other liability for which we are obligated is not subject to these indemnities, we could become subject to significant liabilities.

We may face additional costs associated with our post-retirement and post-employment obligations to employees which could have an adverse effect on our financial condition.

As part of the acquisition of our original core business through the acquisition of PTH from Colfax Corporation, the PTH Acquisition, we agreed to assume pension plan liabilities for active U.S. employees under the Retirement Plan for Power Transmission Employees of Colfax and the Ameridrives International Pension Fund for Hourly Employees Represented by United Steelworkers of America, Local 3199-10, collectively referred to as the Prior Plans. We have established a defined benefit plan, the Altra Industrial Motion, Inc. Retirement Plan or New Plan, mirroring the benefits provided under the Prior Plans. The New Plan accepted a spin-off of assets and liabilities from the Prior Plans, in accordance with Section 414(l) of the Internal Revenue Code, or the Code, with such assets and liabilities relating to active U.S. employees as of the closing of the PTH Acquisition. Given the funded status of the Prior Plans and the asset allocation requirements of Code Section 414(l), liabilities under the New Plan greatly exceed the assets that were transferred from the Prior Plans. The accumulated benefit obligation (not including accumulated benefit obligations of non-U.S. pension plans in the amount of $3.3 million) was approximately $22.3 million as of December 31, 2009 while the fair value of plan assets was approximately $15.7 million as of December 31, 2009. As the New Plan has a considerable funding deficit, the cash funding requirements are expected to be

21

substantial over the next several years, and could have a material adverse effect on our financial condition. As of December 31, 2009, minimum funding requirements are estimated to be zero in 2010, $1.2 million in 2011, $1.2 million in 2012, $0.6 million in 2013, and $1.2 million in 2014. These amounts are based on actuarial assumptions and actual amounts could be materially different.

Additionally, as part of the PTH Acquisition, we agreed to assume all pension plan liabilities related to non-U.S. employees. The accumulated benefit obligations of non-U.S. pension plans were approximately $3.3 million as of December 31, 2009. There are no assets associated with these plans.

Finally, as part of the PTH Acquisition, we also agreed to assume all post-employment and post-retirement welfare benefit obligations with respect to active U.S. employees. The benefit obligation for post-retirement benefits, which are not funded, was approximately $0.5 million as of December 31, 2009.

For a description of the post-retirement and post-employment costs, see Note 9 to our audited financial statements included elsewhere in this Form 10-K.

Our future success depends on our ability to integrate acquired companies and manage our growth effectively.

Our growth through acquisitions has placed, and will continue to place, significant demands on our management, operational and financial resources. Realization of the benefits of acquisitions often requires integration of some or all of the acquired companies’ sales and marketing, distribution, manufacturing, engineering, finance and administrative organizations. Integration of companies demands substantial attention from senior management and the management of the acquired companies. In addition, we will continue to pursue new acquisitions, some of which could be material to our business if completed. We may not be able to integrate successfully our recent acquisitions, or any future acquisitions, operate these acquired companies profitably, or realize the potential benefits from these acquisitions.

We may not be able to protect our intellectual property rights, brands or technology effectively, which could allow competitors to duplicate or replicate our technology and could adversely affect our ability to compete.

We rely on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions, as well as on license, non-disclosure, employee and consultant assignment and other agreements and domain names registrations in order to protect our proprietary technology and rights. Applications for protection of our intellectual property rights may not be allowed, and the rights, if granted, may not be maintained. In addition, third parties may infringe or challenge our intellectual property rights. In some cases, we rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. In addition, in the ordinary course of our operations, we pursue potential claims from time to time relating to the protection of certain products and intellectual property rights, including with respect to some of our more profitable products. Such claims could be time consuming, expensive and divert resources. If we are unable to maintain the proprietary nature of our technologies or proprietary protection of our brands, our ability to market or be competitive with respect to some or all of our products may be affected, which could reduce our sales and profitability.

Goodwill and indefinite-lived intangibles comprises a significant portion of our total assets, and if we determine that goodwill has become impaired in the future, net income in such years may be materially and adversely affected.

Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Due to the acquisitions we have completed historically, goodwill comprises a significant portion of our total assets. We review goodwill and indefinite-lived intangibles annually for impairment and any excess in carrying value over the estimated fair value is charged to the results of operations. Our prior review of goodwill and indefinite-lived intangibles in December 2008 resulted in a $31.8 million reduction to the value of such assets in our financial statements. Future reviews of goodwill and indefinite-lived intangibles could result in further reductions. Any reduction in net income resulting from the write down or impairment of

22

goodwill and indefinite-lived intangibles could adversely affect our financial results. If economic conditions deteriorate we may be required to impair goodwill and indefinite-lived intangibles in future periods.

Unplanned repairs or equipment outages could interrupt production and reduce income or cash flow.

Unplanned repairs or equipment outages, including those due to natural disasters, could result in the disruption of our manufacturing processes. Any interruption in our manufacturing processes would interrupt our production of products, reduce our income and cash flow and could result in a material adverse effect on our business and financial condition.

Our operations are highly dependent on information technology infrastructure and failures could significantly affect our business.

We depend heavily on our information technology, or IT, infrastructure in order to achieve our business objectives. If we experience a problem that impairs this infrastructure, such as a computer virus, a problem with the functioning of an important IT application, or an intentional disruption of our IT systems by a third party, the resulting disruptions could impede our ability to record or process orders, manufacture and ship in a timely manner, or otherwise carry on our business in the ordinary course. Any such events could cause us to lose customers or revenue and could require us to incur significant expense to eliminate these problems and address related security concerns.

Our leverage could adversely affect our financial health and make us vulnerable to adverse economic and industry conditions.

We have incurred indebtedness that is substantial relative to our stockholders’ investment. As of December 31, 2009, we had approximately $220.3 million of indebtedness outstanding and $39.6 million available under lines of credit. Our indebtedness has important consequences; for example, it could:

•       make it more challenging for us to obtain additional financing to fund our business strategy and acquisitions, debt service requirements, capital expenditures and working capital;

•       increase our vulnerability to interest rate changes and general adverse economic and industry conditions;

•       require us to dedicate a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the availability of our cash flow to finance acquisitions and to fund working capital, capital expenditures, research and development efforts and other general corporate activities;

•       make it difficult for us to fulfill our obligations under our credit and other debt agreements;

•       limit our flexibility in planning for, or reacting to, changes in our business and our markets; and

•       place us at a competitive disadvantage relative to our competitors that have less debt.

Substantially all of our assets have been pledged as collateral against any outstanding borrowings under the credit agreement governing Altra Industrial’s Senior Revolving Credit Facility. In addition, the Credit Agreement requires us to maintain specified financial ratios and satisfy certain financial condition tests, which may require that we take action to reduce our debt or to act in a manner contrary to our business objectives. If an event of default were to occur under the Credit Agreements, then the lenders could declare all amounts outstanding under the senior revolving credit facility with accrued interest, to be immediately due and payable. In addition, our senior revolving credit facility and the indentures governing the 81/8% senior secured notes (the “Senior Secured Notes”) have cross-default provisions such that a default under either one would constitute an event of default on the other.

The current economic conditions and severe tightening of credit markets may limit our access to additional capital. In particular, the cost of raising money in the credit markets has increased substantially while the availability of funds from those markets has diminished significantly. While currently these conditions have not impaired our ability to access capital under our credit facility and to finance our operations, there can be no

23

assurance that there will not be a further deterioration in the credit markets, a deterioration in the financial condition of our lenders or their ability to fund their commitments or, if necessary, that we will be able to find replacement financing on similar or acceptable terms. An inability to access sufficient capital could have an adverse impact on our operations and thus on our operating results and financial position.

Our Senior Secured Notes impose significant operating and financial restrictions, which may prevent us from pursuing our business strategies or favorable business opportunities

Subject to a number of important exceptions, the indenture governing our Senior Secured Notes and Altra Industrial’s new senior secured credit facility may limit our and Altra Industrial’s ability to:

•       incur more debt;

•       pay dividends or make other distributions;

•       redeem stock;

•       issue stock of subsidiaries;

•       make certain investments;

•       create liens;

•       reorganize our corporate structure;

•       enter into transactions with affiliates;

•       merge or consolidate; and

•       transfer or sell assets.

The restrictions contained in the indenture governing the Senior Secured Notes and Altra Industrial’s new senior secured credit facility may prevent us from taking actions that we believe would be in the best interest of our business, and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. A breach of any of these covenants or the inability to comply with the required financial ratios could result in a default under the Senior Secured Notes, Altra Industrial’s new senior secured credit facility, or the indenture governing the Senior Secured Notes, as applicable. If any such default occurs, the lenders under Altra Industrial’s senior secured credit facility and the holders of our Senior Secured Notes may elect to declare all of their respective outstanding debt, together with accrued interest and other amounts payable thereunder, to be immediately due and payable. The lenders under Altra Industrial’s new senior secured credit facility also have the right in these circumstances to terminate any commitments they have to provide further borrowings. In addition, following an event of default under Altra Industrial’s new senior secured credit facility, the lenders under the facility will have the right to proceed against the collateral granted to them to secure the debt. If the debt under Altra Industrial’s new senior secured credit facility or the Senior Secured Notes were to be accelerated, our assets may not be sufficient to repay in full the Senior Secured Notes and all of our other debt.

We are subject to tax laws and regulations in many jurisdictions and the inability to successfully defend claims from taxing authorities related to our current or acquired businesses could adversely affect our operating results and financial position.

We conduct business in many countries, which requires us to interpret the income tax laws and rulings in each of those taxing jurisdictions. Due to the subjectivity of tax laws between those jurisdictions as well as the subjectivity of factual interpretations, our estimates of income tax liabilities may differ from actual payments or assessments. Claims from taxing authorities related to these differences could have an adverse impact on our operating results and financial position.

Continued extreme volatility and disruption in global financial markets could significantly impact our customers, weaken the markets we serve and harm our operations and financial performance.

Our financial performance depends, in large part, on conditions in the markets that we serve and on the U.S. and global economies in general. As widely reported, U.S. and global financial markets have been experiencing extreme disruption recently, including, among other things, concerns regarding the stability and

24

viability of major financial institutions, the declining state of the housing markets, a severe tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in credit and equity markets. Given the significance and widespread nature of these nearly unprecedented circumstances, the U.S. and global economies could remain significantly challenged in a recessionary state for an indeterminate period of time. While currently these conditions have not impaired our ability to access credit markets and finance our operations, there can be no assurance that there will not be a further deterioration in financial markets and confidence in major economies. In addition, the current tightening of credit in financial markets may adversely affect the ability of our customers to obtain financing for significant purchases and operations and could result in a decrease in or cancellation of orders for our products and services as well as impact the ability of our customers to make payments. Similarly, this tightening of credit may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy. These conditions would harm our business by adversely affecting our sales, results of operations, profitability, cash flows, financial condition and long-term anticipated growth rate.

We have taken, and continue to take, cost-reduction actions. Our ability to complete these actions and the impact of such actions on our business may be limited by a variety of factors. The cost-reduction actions, in turn, may expose us to additional production risk and have an adverse effect on our sales, profitability and ability to attract and retain employees.

We have been reducing our employee population, changing our compensation and benefit programs, and working to reduce our procurement costs. In addition, we also expect to consolidate certain of our manufacturing operations. The impact of these cost-reduction actions on our sales and profitability may be influenced by many factors including, but not limited to: (i) our ability to successfully complete these ongoing efforts; (ii) our ability to generate the level of cost savings we expect or that are necessary to enable us to effectively compete; (iii) delays in implementation of anticipated workforce reductions in highly-regulated locations outside the United States, particularly in Europe; (iv) decline in employee morale and the potential inability to meet operational targets due to the loss of employees; (v) our ability to retain or recruit key employees; and (vi) the adequacy of our manufacturing capacity. While we have business continuity and risk mitigation plans in place in case capacity is significantly reduced or eliminated at a given facility, the reduced number of alternative facilities could cause the duration of any manufacturing disruption to be longer. As a result, we could have difficulties fulfilling our orders and our sales and profits could decline.

If we are unable to successfully implement our new ERP system across the company or such implementation is delayed, our operations may be disrupted or become less efficient.

We have began the implementation for our operations worldwide of a new Enterprise Resource Planning system entitled “SAP,” with the aim of enabling management to achieve better control over the Company through: improved quality, reliability and timeliness of information; improved integration and visibility of information stemming from different management functions and countries; and optimization and global management of corporate processes The adoption of the new SAP system, which will replace the existing accounting and management systems, poses several challenges relating to, among other things, training of personnel, communication of new rules and procedures, changes in corporate culture, migration of data, and the potential instability of the new system. In order to mitigate the impact of such critical issues, the Company decided to implement the new SAP system on a step-by-step basis, both geographically and in terms of processes. As a result, we expect the system implementation process to continue for the next 2 to 2.5 years. However, there can be no assurance that the new SAP system will be successfully implemented and failure to do so could have a material adverse effect on our operations. Further, if implementation of the SAP system is delayed, we would continue to use our current system which may not be sufficient to support our planned operations and significant upgrades to the current system may be warranted or required to meet our business needs pending SAP implementation. However, there can be no assurance that the new SAP system will be successfully implemented and failure to do so could have a material adverse effect on the Company’s operations.

Item 1B.   Unresolved Staff Comments

None.

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Item 2.   Properties

In addition to our leased headquarters in Braintree, Massachusetts, we maintain 25 production facilities, thirteen of which are located in the United States, one in Canada, nine in Europe and one each in China and Mexico. The following table lists all of our facilities, other than sales offices and distribution centers, as of December 31, 2009, indicating the location, principal use and whether the facilities are owned or leased.

					Type of
Location	Brand	Major Products	Sq. Ft.		Possession	Expiration
United States
Chambersburg,
Pennsylvania	TB Wood’s	Belted Drives, Couplings, Castings		440,000	Owned	N/A
South Beloit, Illinois	Warner Electric	Electromagnetic Clutches & Brakes		104,288	Owned	N/A
Syracuse, New York	Kilian	Engineered Bearing Assemblies		97,000	Owned	N/A
Wichita Falls, Texas	Wichita Clutch	Heavy Duty Clutches and Brakes		90,400	Owned	N/A
Warren, Michigan	Formsprag	Overrunning Clutches		79,000	Owned	N/A
Erie, Pennsylvania	Ameridrives	Engineered Couplings		76,200	Owned	N/A
Chattanooga, Tennessee	TB Wood’s	Space is leased to a third party		60,000	Owned	N/A
Scotland, Pennsylvania	TB Wood’s	Space is leased to a third party		51,300	Owned	N/A
San Marcos, Texas	TB Wood’s	Engineered Couplings		51,000	Owned	N/A
Mt. Pleasant, Michigan	TB Wood’s	Space is leased to a third party		30,000	Owned	N/A
Columbia City, Indiana	Warner Electric	Electromagnetic Clutches & Brakes & Coils		51,699	Leased	November 30, 2013
Charlotte, North Carolina	Boston Gear	Gearing & Power Transmission Components		193,000	Leased	February 28, 2013
Niagara Falls, New York	Nuttall Gear	Gearing		155,509	Leased	March 31, 2013
New Hartford, Connecticut	Inertia Dynamics	Electromagnetic Clutches & Brakes		73,206	Leased	July 30, 2019
Braintree, Massachusetts(1)	Altra	—		13,804	Leased	November 30, 2016
Belvidere, Illinois	Warner Linear	Linear Actuators		21,000	Leased	June 30, 2012
New Braunsfels, Texas(3)	Ameridrives	Vacant		16,200	Leased	December 31, 2009
Green Bay, Wisconsin	Ameridrives	Engineered Couplings		85,250	Leased	March 31, 2011
International
Heidelberg, Germany	Stieber	Overrunning Clutches		57,609	Owned	N/A
Saint Barthelemy, France	Warner Electric	Electromagnetic Clutches & Brakes		50,129	Owned	N/A
Bedford, England	Wichita Clutch	Heavy Duty Clutches and Brakes		49,000	Owned	N/A
Allones, France	Warner Electric	Electromagnetic Clutches & Brakes		38,751	Owned	N/A
Toronto, Canada	Kilian	Engineered Bearing Assemblies		29,000	Owned	N/A
Dewsbury, England	Bibby Transmissions	Engineered Couplings Power Transmission Components		26,100	Owned	N/A
Stratford, Canada	TB Wood’s	Vacant		46,000	Owned	N/A
Shenzhen, China	Warner Electric	Electromagnetic Clutches & Brakes Precision Components		72,000	Leased	April 30, 2014
San Luis Potosi, Mexico	TB Wood’s	Couplings and Belted Drives		71,800	Leased	June 8, 2014
Brechin, Scotland	Matrix	Clutch Brakes, Couplings		52,500	Leased	February 28, 2011
Garching, Germany	Stieber	Overrunning Clutches		32,292	Leased	(2)
Twickenham, England	Twiflex	Heavy Duty Clutches and Brakes		27,500	Leased	December 24, 2010
Hertford, England	Huco Dynatork	Couplings, Power Transmission Components		13,565	Leased	July 30, 2012

(1)	Corporate headquarters and selective customer service functions.
(2)	Must give the lessor twelve months notice for termination.
(3)	Building was vacated on January 1, 2010.

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Item 3.   Legal Proceedings

We are, from time to time, party to various legal proceedings arising out of our business. These proceedings primarily involve commercial claims, product liability claims, intellectual property claims, environmental claims, personal injury claims and workers’ compensation claims. We cannot predict the outcome of these lawsuits, legal proceedings and claims with certainty. Nevertheless, we believe that the outcome of any currently existing proceedings should not have a material adverse effect on our business, financial condition and results of operations.

Item 4.   Removed and Reserved

PART II

Item 5.   Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock trades on the NASDAQ Global Market under the symbol “AIMC”. As of March 1, 2010, the number of holders of record of our common stock was approximately 36.

The following table sets forth, for the periods indicated, the high and low sales price for our common stock as reported on The NASDAQ Global Market. Our common stock commenced trading on the NASDAQ Global Market on December 15, 2006.

	High		Low
Fiscal 2008:
First Quarter	$	16.42	$	11.44
Second Quarter	$	17.79	$	13.32
Third Quarter	$	18.55	$	14.35
Fourth Quarter	$	13.98	$	5.46
Fiscal 2009:
First Quarter	$	9.05	$	3.35
Second Quarter	$	8.40	$	4.16
Third Quarter	$	11.45	$	7.57
Fourth Quarter	$	12.68	$	8.77

Dividends

We have never declared or paid any cash dividends on our common stock. We currently intend to retain any earnings for use in the operation and expansion of our business and, therefore do not anticipate paying any cash dividends in the foreseeable future. In addition, the Credit Agreement governing the senior revolving credit facility and the indentures governing the Senior Secured Notes limit our ability to pay dividends or other distributions on our common stock. See Note 10 to the consolidated financial statements below.

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Securities Authorized for Issuance Under Equity Compensation Plans

The following table presents information concerning our equity compensation plans:

			Number of Securities
			Remaining Available for
			Future Issuance Under
	Number of Securities to	Weighted-Average	Equity Compensation
	be Issued Upon Exercise of	Exercise Price of	Plans (Excluding
	Outstanding Options,	Outstanding Options,	Securities Reflected
Plan Category	Warrants and Rights(a)	Warrants and Rights(b)	in Column (a))(c)
Equity compensation plans approved by security holders(1)	—	$-	614,535
Equity compensation plans not approved by security holders	n/a	n/a	n/a
Total	—	$-	614,535

(1) The equity compensation plans were approved by the Company’s shareholders prior to the initial public offering.

Issuer Repurchases of Equity Securities

None

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Performance Graph

The following graph compares the cumulative total stockholder return on our common stock since the time of our initial public offering, December 15, 2006, through December 31, 2009, with the cumulative total return on shares of companies comprising the S&P Small Cap 600 index and a special Peer Group Index, in each case assuming an initial investment of $100, assuming dividend reinvestment.

	12/31/2006			3/31/2007			6/30/2007			9/28/2007			12/31/2007			3/31/2008			6/30/2008			9/30/2008			12/31/2008			3/31/2009			6/30/2009			9/30/2009			12/31/2009
Altra Holdings, Inc.		4.07	%		1.56	%		28.00	%		23.48	%		23.19	%		(0.59	)%		23.04	%		12.37	%		(41.41	)%		(71.26	)%		(44.52	)%		(17.11	)%		(8.52	)%
S&P Small Cap 600		(0.76	)%		2.20	%		7.25	%		5.05	%		(1.97	)%		(10.20	)%		(8.58	)%		(7.33	)%		(33.33	)%		(44.81	)%		(33.66	)%		(22.21	)%		(17.48	)%
Peer Group		0.62	%		1.28	%		17.45	%		7.73	%		3.29	%		(15.01	)%		(1.53	)%		(2.24	)%		(33.36	)%		(46.93	)%		(29.59	)%		(21.85	)%		(16.05	)%

The Peer Group Index consists of the following publicly traded companies: Franklin Electric Co. Inc., RBC Bearings, Inc., Regal Beloit Corp., Baldor Electric Co., and Kaydon Bearings Corp.

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Item 6.   Selected Financial Data

The following table contains our selected historical financial data for the years ended December 31, 2009, 2008, 2007, 2006, and 2005. The following should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes included elsewhere in this Form 10-K.

	Altra Holdings, Inc.
	Amounts in thousands, except per share data
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2009			2008			2007			2006			2005
Net sales	$	452,846		$	635,336		$	584,376		$	462,285		$	363,465
Cost of sales		329,825			449,244			419,109			336,836			271,952
Gross profit		123,021			186,092			165,267			125,449			91,513
Operating expenses:
Selling, general and administrative expenses		81,117			99,185			93,211			83,276			61,579
Research and development expenses		6,261			6,589			6,077			4,938			4,683
Goodwill impairment		—			31,810			—			—			—
Restructuring costs		7,286			2,310			2,399			—			—
Loss (gain) on curtailment of post-retirement benefit plan		(1,467	)		(925	)		2,745			(3,838	)		—
Loss (gain) on disposal of assets		545			1,584			—			—			(99	)
		93,742			140,553			104,432			84,376			66,163
Income from operations		29,279			45,539			60,835			41,073			25,350
Other non-operating income and expense:
Interest expense, net		32,976			28,339			38,554			25,479			19,514
Other non-operating expense (income), net		981			(6,249	)		612			856			(17	)
		33,957			22,090			39,166			26,335			19,497
Income (loss) from continuing operations before income taxes		(4,678	)		23,449			21,669			14,738			5,853
Provision (benefit) for income taxes		(2,364	)		16,731			8,208			5,797			3,349
Income (loss) from continuing operations		(2,314	)		6,718			13,461			8,941			2,504
Loss from discontinued operations, net of income taxes of $43 in 2008 and $583 in 2007		—			(224	)		(2,001	)		—			—
Net income (loss)	$	(2,314	)	$	6,494		$	11,460		$	8,941		$	2,504
Other Financial Data:
Depreciation and amortization	$	22,072		$	21,068		$	21,939		$	14,611		$	11,533
Purchases of fixed assets		9,194			19,289			11,633			9,408			6,199
Cash flow provided by (used in):
Operating activities		59,388			45,114			41,808			11,128			12,023
Investing activities		(9,194	)		(3,687	)		(124,672	)		(63,163	)		(5,197	)
Financing activities		(54,016	)		(31,760	)		84,537			83,837			(971	)
Weighted average shares, basic		25,945			25,496			23,579			1,183			9
Weighted average shares, diluted		25,945			26,095			24,630			19,525			18,969
Basic earnings per share:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.57		$	7.56		$	278.22
Net loss from discontinued operations		—			(0.01	)		(0.08	)		—			—
Net income (loss)	$	(0.09	)	$	0.25		$	0.49		$	7.56		$	278.22
Diluted earnings per share:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.55		$	0.46		$	0.13
Net loss from discontinued operations		—			(0.01	)		(0.08	)		—			—
Net income (loss)	$	(0.09	)	$	0.25		$	0.47		$	0.46		$	0.13

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	December 31,		December 31,		December 31,		December 31,		December 31,
	2009		2008		2007		2006		2005
Balance Sheet Data:
Cash and cash equivalents	$	51,497	$	52,073	$	45,807	$	42,527	$	10,060
Total assets		465,199		513,584		580,525		409,368		297,691
Total debt		217,549		261,523		294,066		229,128		173,760
Long-term liabilities, excluding long-term debt		41,907		46,870		51,310		29,471		79,168

Comparability of the information included in the selected financial data has been impacted by the acquisitions of Hay Hall and Warner Linear in 2006 and TB Wood’s and All Power in 2007.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company’s current estimates, expectations and projections about the Company’s future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning the Company’s possible future results of operations including revenue, costs of goods sold, and gross margin, business and growth strategies, financing plans, the Company’s competitive position and the effects of competition, the projected growth of the industries in which we operate, and the Company’s ability to consummate strategic acquisitions and other transactions. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “plan,” “may,” “should,” “will,” “would,” “project,” and similar expressions. These forward-looking statements are based upon information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Important factors that could cause the Corporation’s actual results to differ materially from the results referred to in the forward-looking statements the Corporation makes in this report include:

•      the Company’s access to capital, credit ratings, indebtedness, and ability to raise additional financings and operate under the terms of the Company’s debt obligations;

•      the risks associated with our debt leverage;

•      the effects of intense competition in the markets in which we operate;

•      the Company’s ability to successfully execute, manage and integrate key acquisitions and mergers;

•      the Company’s ability to obtain or protect intellectual property rights;

•      the Company’s ability to retain existing customers and our ability to attract new customers for growth of our business;

•      the effects of the loss or bankruptcy of or default by any significant customer, suppliers, or other entity relevant to the Company’s operations;

•      the Company’s ability to successfully pursue the Company’s development activities and successfully integrate new operations and systems, including the realization of revenues, economies of scale, cost savings, and productivity gains associated with such operations;

•      the Company’s ability to complete cost reduction actions and risks associated with such actions;

•      the Company’s ability to control costs;

•      failure of the Company’s operating equipment or information technology infrastructure;

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•      the Company’s ability to achieve its business plans, including with respect to an uncertain economic environment;

•      changes in employment, environmental, tax and other laws and changes in the enforcement of laws;

•      the accuracy of estimated forecasts of OEM customers and the impact of the current global economic environment on our customers;

•      fluctuations in the costs of raw materials used in our products;

•      the Company’s ability to attract and retain key executives and other personnel;

•      work stoppages and other labor issues;

•      changes in the Company’s pension and retirement liabilities;

•      the Company’s risk of loss not covered by insurance;

•      the outcome of litigation to which the Company is a party from time to time, including product liability claims;

•      changes in accounting rules and standards, audits, compliance with the Sarbanes-Oxley Act, and regulatory investigations;

•      changes in market conditions that would result in the impairment of goodwill or other assets of the Company;

•      changes in market conditions in which we operate that would influence the value of the Company’s stock;

•      the effects of changes to critical accounting estimates; changes in volatility of the Company’s stock price and the risk of litigation following a decline in the price of the Company’s stock price;

•      the cyclical nature of the markets in which we operate;

•      the risks associated with the global recession and volatility and disruption in the global financial markets;

•      political and economic conditions nationally, regionally, and in the markets in which we operate;

•      natural disasters, war, civil unrest, terrorism, fire, floods, tornadoes, earthquakes, hurricanes, or other matters beyond the Company’s control;

•      the risks associated with international operations, including currency risks; and

•      other factors, risks, and uncertainties referenced in the Company’s filings with the Securities and Exchange Commission, including the “Risk Factors” set forth in this document

YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, ALL OF WHICH SPEAK ONLY AS OF THE DATE OF THIS REPORT. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT ANY EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS REPORT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR ANY PERSON ACTING ON THE COMPANY’S BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED OR REFERRED TO IN THIS SECTION AND IN OUR RISK FACTORS SET FORTH IN PART I, ITEM 1A OF THIS FORM 10-K AND IN OTHER REPORTS FILED WITH THE SEC BY THE COMPANY.

The following discussion of the financial condition and results of income(loss) of Altra Holdings, Inc. and its subsidiaries should be read together with the Selected Historical Financial Data, and the consolidated financial statements of Altra Holdings, Inc. and its subsidiaries and related notes included elsewhere in this

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Form 10-K. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ materially from the results referred to in the forward-looking statements, see “Forward-Looking Statements” and “Risk Factors”. Unless the context requires otherwise, the terms “Altra Holdings,” “the Company,” “we,” “us” and “our” refer to Altra Holdings, Inc. and its subsidiaries, except where the context otherwise requires or indicates.

General

We are a leading global designer, producer and marketer of a wide range of MPT and motion control products with a presence in over 70 countries. Our global sales and marketing network includes over 1,000 direct OEM customers and over 3,000 distributor outlets. Our product portfolio includes industrial clutches and brakes, enclosed gear drives, open gearing, couplings, engineered bearing assemblies, linear components and other related products. Our products serve a wide variety of end markets including energy, general industrial, material handling, mining, transportation and turf and garden. We primarily sell our products to a wide range of OEMs and through long-standing relationships with industrial distributors such as Motion Industries, Applied Industrial Technologies, Kaman Industrial Technologies and W.W. Grainger.

While the power transmission industry has undergone some consolidation, we estimate that in 2009 the top five broad-based MPT companies represented approximately 21% of the U.S. power transmission market. The remainder of the power transmission industry remains fragmented with many small and family-owned companies that cater to a specific market niche often due to their narrow product offerings. We believe that consolidation in our industry will continue because of the increasing demand for global distribution channels, broader product mixes and better brand recognition to compete in this industry.

Business Outlook

Our future financial performance depends, in large part, on conditions in the markets that we serve and on the U.S. and global economies in general. During November and December 2008, we saw a significant change in economic conditions both in North America and internationally as most of our end markets experienced dramatic downturns. During the fourth quarter of 2008, we began to see several of our distributors and OEM customers implement inventory reduction programs which continued throughout the first two quarters of 2009. By the end of 2009, it appeared that inventory reduction efforts by our customers began to come to an end as sales to our largest distribution customers improved during the later part of the year.

In response to the continued challenging economic conditions of 2009, we took swift and aggressive actions to reduce our expenses and maximize near-term profitability. Our cost-reduction initiatives are centered on three areas: workforce cutbacks, plant consolidations and procurement and other cost reductions. During 2009, we implemented a temporary suspension of our Company contributions to our 401(k) plan, a general hiring freeze, a freeze of all non-union employee salaries and reduced work schedules. During 2009, we incurred $7.3 million of restructuring expense including a $2.5 million non-cash charge primarily related to impairment charges at the Mount Pleasant facility, that closed in 2009 and the South Beloit facility which is expected to have completed the transfer of its manufacturing operations in the first quarter of 2010. The remaining expense relates mainly to severance and moving and relocation costs. We expect to incur between an additional $2.0 and $3.0 million of expenses associated with workforce reduction and consolidation of facilities in 2010. Beginning in 2010, we expect to see annualized savings from our procurement savings, the headcount reductions and consolidation of facilities of approximately $76.5 million. Savings in 2009 were approximately $59.0 million related to these efforts. We estimate that once volume returns to prior year levels, between $10.0 and $12.0 million of these savings will be permanent in nature. In 2010, we expect to return to growth activities but will continue to focus on generating cash flow, executing on plant consolidations, and maintaining a reduced cost base.

Critical Accounting Policies

The methods, estimates and judgments we use in applying our critical accounting policies have a significant impact on the results we report in our financial statements. We evaluate our estimates and judgments on an on-going basis. Our estimates are based upon historical experience and assumptions that we believe are reasonable under the circumstances. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

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Actual results may vary from what our management anticipates and different assumptions or estimates about the future could change our reported results.

We believe the following accounting policies are the most critical in that they are important to the financial statements and they require the most difficult, subjective or complex judgments in the preparation of the financial statements.

Revenue Recognition.  Product revenues are recognized, net of sales tax collected, at the time title and risk of loss pass to the customer, which generally occurs upon shipment to the customer. Amounts billed for shipping and handling are recorded as revenue. Product return reserves are accrued at the time of sale based on the historical relationship between shipments and returns, and are recorded as a reduction of net sales. Certain large distribution customers receive quantity discounts which are recognized net at the time the sale is recorded.

Inventory.  Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) method for all of our subsidiaries except TB Wood’s. TB Wood’s inventory is stated at the lower of current cost or market, principally using the last-in, first-out (LIFO) method. Inventory stated using the LIFO method approximates 13% of total inventory. We state inventories acquired by us through acquisitions at their fair values at the date of acquisition as determined by us based on the replacement cost of raw materials, the sales price of the finished goods less an appropriate amount representing the expected profitability from selling efforts, and for work-in-process the sales price of the finished goods less an appropriate amount representing the expected profitability from selling efforts and costs to complete.

We periodically review our quantities of inventories on hand and compare these amounts to the historical and expected usage of each particular product or product line. We record as a charge to cost of sales any amounts required to reduce the carrying value of inventories to net realizable value.

Retirement Benefits.  Obligations for pension obligations and other post retirement benefits are actuarially determined and are affected by several assumptions, including the discount rate, assumed annual rates of return on plan assets, mortality rates and per capita cost of covered health care benefits. Changes to the discount rate and mortality rate judgments could affect the estimated fair value of the projected benefit obligation. A decrease of 50 basis points in our discount rate assumption would result in an increase of $1.2 million in our projected benefit obligation. An average increase in the average life expectancy assumption of two years would result in an increase of $0.8 million in the pension projected benefit obligation.

Goodwill, Intangibles and other long-lived assets.  In connection with our acquisitions, goodwill and intangible assets were identified and recorded at their fair value. We recorded intangible assets for customer relationships, trade names and trademarks, product technology, patents and goodwill. In valuing the customer relationships, trade names, and trademarks, we utilized variations of the income approach. The income approach was considered the most appropriate valuation technique because the inherent value of these assets is their ability to generate current and future income. The income approach relies on historical financial and qualitative information, as well as assumptions and estimates for projected financial information. Projected financial information is subject to risk if our estimates are incorrect. The most significant estimate relates to our projected revenues and profitability. If we do not meet the projected revenues and profitability used in the valuation calculations then the intangible assets could be impaired. In determining the value of customer relationships, we reviewed historical customer attrition rates which were determined to be approximately 5% per year. Most of our customers tend to be long-term customers with very little turnover. While we do not typically have long-term contracts with customers, we have established long-term relationships with customers which make it difficult for competitors to displace us. Additionally, we assessed historical revenue growth within our industry and customers’ industries in determining the value of customer relationships. The value of our customer relationships intangible asset could become impaired if future results differ significantly from any of the underlying assumptions. This could include a higher customer attrition rate or a change in industry trends such as the use of long-term contracts which we may not be able to obtain successfully. Customer relationships and product technology and patents are considered finite-lived assets, with estimated lives ranging from 8 years to 16 years. The estimated lives were determined by calculating the number of years necessary to obtain 95% of the value of the discounted cash flows of the respective intangible asset. Goodwill and trade names and trademarks are considered indefinite lived assets. Trade names and trademarks were determined to

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be indefinite lived assets. Other intangible assets include trade names and trademarks that identify us and differentiate us from competitors, and therefore competition does not limit the useful life of these assets. Additionally, we believe that our trade names and trademarks will continue to generate product sales for an indefinite period.

As of December 31, 2008, goodwill was allocated to each of the twenty reporting units we had identified at that time. We conducted an annual impairment review of goodwill and indefinite lived intangible assets as of December 31, 2008 at each of these reporting units.

The breakdown of reporting units identified as of December 31, 2008 by acquisition and acquisition dates are as follows:

Colfax acquisition — November 30, 2004	12 reporting units
Hay Hall acquisition — February 10, 2006	5 reporting units (including Huco)
Warner Linear acquisition — May 18, 2006	1 reporting unit
TB Wood’s acquisition — April 5, 2007	1 reporting unit
All Power Transmission — October 5, 2007	1 reporting unit

Beginning in the fourth quarter of 2008, almost all of our reporting units were impacted by the general economic decline. The decline in our weekly order rates was significant and almost immediate. Continuation of the significant decrease in order rates in the final weeks of 2008 and into 2009 was a key assumption when developing our long-term revenue and profitability plan for our goodwill impairment analysis as of December 31, 2009. All of our reporting units assumed significantly lower sales and lower profitability for 2009 in their long-term growth plan when compared to the forecast used in the goodwill impairment analysis as of December 31, 2008. The discount rate was not changed significantly from the December 31, 2008 goodwill impairment analysis.

As a result of the December 31, 2008 goodwill impairment analysis, we recorded a goodwill impairment charge of $31.8 million at the TB Wood’s, Huco and Warner Linear reporting units. The goodwill remaining at these reporting units, after the adjustment for goodwill impairments, was $23.3 million at TB Wood’s and there was no goodwill remaining at either Warner Linear or Huco. Due to prevailing market conditions at the time of the acquisitions of these three reporting units, the purchase price paid as consideration for these three acquisitions required a higher premium when compared to the prior 2004 Colfax acquisition and therefore created higher goodwill at these reporting units.

During 2009, the Company appointed a new Chief Operating Decision Maker (“CODM”) and went through an extensive restructuring plan. As a result of the change in the CODM and our restructuring activities, we re-evaluated our operating segments and reporting unit structure. We identified five operating segments and concluded that the five operating segments can be aggregated into one reportable segment. We also identified twenty-one reporting units. Our reporting units have common manufacturing and production processes. Each unit includes a machine shop which uses similar equipment and manufacturing techniques. Each of our segments uses common raw materials, such as aluminum, steel and copper. The materials are purchased and procurement contracts are negotiated by one global purchasing function. Based on similar long-term average gross profit margins and the fact that all of our products are sold by one global sales force and are marketed by one global marketing function, we haveconcluded that the reporting units could be aggregated into five reporting units when performing the goodwill impairment analysis.

In both 2008 and 2009, as part of the annual goodwill impairment assessment we estimated the fair value of each of our reporting units using an income approach. We forecasted future cash flows by reporting unit for each of the next five years and applied a long term growth rate to the final year of forecasted cash flows. The cash flows were then discounted using our estimated discount rate. The forecasts of revenue and profitability growth for use in the long-range plan and the discount rate were the key assumptions in our intangible fair value analysis. The following are the assumptions used in 2008 in the calculation of estimated fair value for the reporting units that recorded a goodwill impairment as of December 31, 2008 (Huco, Warner Linear and TB Wood’s).

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	December 31, 2008
Assumption	Huco	Warner Linear	TB Wood’s
Revenue growth (1st year)	(26.2%) decrease	(10.3%) decrease	(18%) decrease
Average revenue growth (2nd — 5th year)	5.8% increase	5.8% increase	5.8% increase
Profitability growth rate EBITDA as a percent of sales (1st year)	(4%) decrease	6% increase	(1%) decrease
Average profitability growth rate per year (EBITDA as a percent of sales) (2nd — 5th year)	1% increase	0.5% increase	1% increase
Discount Rate	13%	13%	13%

We review the difference between the estimated fair value and net book value of each reporting unit. If the difference is less than $1.0 million, the reporting unit could be required to perform an interim goodwill impairment assessment in future periods if the estimated profitability decreased 10% when compared to our forecasts. As of December 31, 2009, each of our reporting units had estimated fair values that were at least $1.0 million greater than the net book value.

We considered whether the sum of the fair value of all of our reporting units was reasonable when compared to our market capitalization on the date of the goodwill impairment analysis. As of December 31, 2009 and 2008, our estimated enterprise fair value was $413.6 million and $274.2 million, respectively. As of December 31, 2009 and 2008, our market capitalization was $328.8 million and $208.7 million, respectively. The difference between the fair value of the enterprise and our market capitalization represented a control market premium of between 25% and 35%. We determined that a control market premium of between 25% and 35% was appropriate based on historical experience with purchase and sales transactions, the historical market trends based on our industry and the control market premium paid in relation to these transactions.

Management believes the preparation of revenue and profitability growth rates for use in the long-range plan and the discount rate requires significant use of judgment. If any of our aggregated reporting units do not meet our current year forecasted revenue and/or profitability estimates, we could be required to perform an interim goodwill impairment analysis in future periods. In addition, if our discount rate increases, we could be required to perform an interim goodwill impairment analysis. We performed a sensitivity analysis on the estimated fair value of our reporting units by decreasing profitability by 5%, 10% and 15% leaving all other assumptions constant and increasing the discount rate by 5% and 10% leaving all other assumptions constant. We did not identify any reporting units that would be required to perform an interim goodwill impairment analysis.

For our indefinite lived intangible assets, mainly trademarks, we estimated the fair value first by estimating the total revenue attributable to the trademarks for each of the reporting units. Second, we estimated an appropriate royalty rate using the return on assets method by estimating the required financial return on our assets, excluding trademarks, less the overall return generated by our total asset base. The return as a percentage of revenue provides an indication of our royalty rate (between 1.5% and 2%). We compared the estimated fair value of our trademarks with the carrying value of the trademarks and did not identify any impairment.

Long-lived assets, including definite-lived intangible assets, are reviewed for impairment when events or circumstances indicate that the carrying amount of a long-lived asset may not be recovered. Long-lived assets are considered to be impaired if the carrying amount of the asset exceeds the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment is measured by the amount by which the carrying amount of the asset exceeds its fair value, and is charged to results of operations at that time. We did not identify any events or circumstances that would indicate the carrying amount of a long-lived asset may not be recovered.

In 2008, a goodwill impairment was identified and recorded at three reporting units which, in turn, triggered an impairment analysis with respect to long-lived assets at those reporting units. For our definite

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lived intangible assets, mainly customer relationships, we estimated the future cash flows using the excess earnings method, a derivation of the discounted cash flow method. We estimated total revenue attributable to existing customer relationships and projected customer revenue growth for the remainder of the projection period. Existing customer revenue was then multiplied by an attrition curve based on our historical attrition rates percent (approximately 4%) for each reporting unit. We estimated profitability for the customer relationship based on the overall reporting unit’s profitability. We compared the estimated future undiscounted cash flows to the carrying value of the customer relationship for each reporting unit and did not identify any impairment.

In 2009, the Company did not identify any impairments related to goodwill, definite lived intangible assets or indefinite lived intangible assets.

Income Taxes.  We record income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. We evaluate the realizability of our net deferred tax assets and assess the need for a valuation allowance on a quarterly basis. The future benefit to be derived from our deferred tax assets is dependent upon our ability to generate sufficient future taxable income to realize the assets. We record a valuation allowance to reduce our net deferred tax assets to the amount that may be more likely than not to be realized. To the extent we establish a valuation allowance, an expense will be recorded within the provision for income taxes line on the statement of operations. In periods subsequent to establishing a valuation allowance, if we were to determine that we would be able to realize our net deferred tax assets in excess of our net recorded amount, an adjustment to the valuation allowance would be recorded as a reduction to income tax expense in the period such determination was made.

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Results of Operations

	Amounts in thousands
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2009			2008			2007
Net sales	$	452,846		$	635,336		$	584,376
Cost of sales		329,825			449,244			419,109
Gross profit		123,021			186,092			165,267
Gross profit percentage		27.17	%		29.29	%		28.28	%
Selling, general and administrative expenses		81,117			99,185			93,211
Research and development expenses		6,261			6,589			6,077
Goodwill impairment		—			31,810			—
Loss (gain) on curtailment of post-retirement benefit plan		(1,467	)		(925	)		2,745
Restructuring costs		7,286			2,310			2,399
Loss on sale/disposal of assets		545			1,584			—
Income from operations		29,279			45,539			60,835
Interest expense, net		32,976			28,339			38,554
Other non-operating (income) expense, net		981			(6,249	)		612
Income (loss) from continuing operations before income taxes		(4,678	)		23,449			21,669
Provision (benefit) for income taxes		(2,364	)		16,731			8,208
Income (loss) from continuing operations		(2,314	)		6,718			13,461
Loss from discontinued operations, net of income taxes of $43 in 2008 and $583 in 2007		—			(224	)		(2,001	)
Net income (loss)	$	(2,314	)	$	6,494		$	11,460

Year Ended December 31, 2009 Compared with Year Ended December 31, 2008

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2009		2008		Change			%
Net sales	$	452,846	$	635,336	$	(182,490	)		(28.7	)%

Net sales The decrease in sales was almost exclusively due to overall economic decline which has impacted all of our end markets and industries. All of our operating segments saw double digit decreases in sales during 2009. During the fourth quarter of 2009, we began to see modest increases in our order rates, mainly related to our distribution customers, but until worldwide economic conditions improve, we expect continued weakness in our order rates. If the 2009 foreign exchange rates had remained constant when compared to 2008, sales would have decreased $163.6 million or 25.8%.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,			December 31,
	2009			2008			Change			%
Gross Profit	$	123,021		$	186,092		$	(63,071	)		(33.9	)%
Gross Profit as a percent of sales		27.2	%		29.3	%

Gross profit.  The decrease in gross profit was due to the significant decrease in sales. We have taken aggressive actions, including workforce and payroll reductions, facility consolidations and procurement savings to reduce our expenses and maximize near-term profitability. If our sales volume improves in 2010, we expect

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to see an improvement in our gross profit in 2010. If the 2009 foreign exchange rates had remained constant when compared to 2008, gross profit would have decreased $56.2 million or 30.2%. Our Gearings and Belted Drives operating segment’s gross profit as a percentage of sales decreased 5.3% in 2009 when compared to 2008. Gearings and Belted Drives sells into early cycle markets and began to see a large decrease in sales in November 2008. The decrease in sales volume impacted the Gearings and Belted Drives operating segment for almost all of 2009 and impacted that operating segment’s profitability. Our two operating segments that sell into late cycle markets, Global Couplings and Heavy Duty Clutch Brake, did not see a decrease in gross profit percentages in 2009 when compared to 2008. These two operating segments were not impacted by the global economic downturn until the middle of 2009. We expect the Global Couplings and Heavy Duty Clutch Brake operating segments to see decreased profit margins in 2010 when compared to 2009.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,			December 31,
	2009			2008			Change			%
Selling, general and administrative expense (“SG&A”)	$	81,117		$	99,185		$	(18,068	)		(18.2	)%
SG&A as a percent of sales		17.9	%		15.6	%

Selling, general and administrative expenses.  The decrease in SG&A was due to our cost reduction efforts which began in the fourth quarter of 2008. Our cost reduction efforts were focused on headcount reductions and the elimination of non-critical expenses which decreased our overall SG&A costs. As a result of decreased sales volume, we have seen a reduction in outside sales representative commission costs. In addition, during the year, we required certain U.S. personnel to take furloughs. Also, we suspended the Company’s 401(k) match and Company contributions and also temporarily reduced wages for the executive management team and fees for the Board of Directors. However, due to the significant decrease in sales, SG&A as a percent of sales increased despite our cost reduction efforts.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2009		2008		Change			%
Research and development expenses (“R&D”)	$	6,261	$	6,589	$	(328	)		(5.0	)%

Research and development expenses  R&D expenses represented approximately 1% of sales in both periods. We do not expect significant variances in future periods.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2009		2008			Change		%
Other non-operating (income) expense, net	$	981	$	(6,249	)	$	7,230		(116.0	)%

Other non-operating (income) expense.  The $1.0 million of other expense in 2009 is primarily related to $1.1 million of foreign exchange losses recorded during 2009, mainly due to the U.S. Dollar weakening when compared to the British Pound Sterling and Euro. In 2008, the Company recorded $5.0 million of foreign exchange gains due to the significant strengthening of the U.S. Dollar when compared to the British Pound Sterling, Euro and Canadian Dollar. During 2008, we recorded rental income of $0.6 million for facility rentals under lease agreements which were part of the sale of TB Wood’s Electronics Division and have a term of two years, with annual extensions thereafter at the lessee’s, or the Company’s option. In addition, we received $0.3 million in securities as part of a bankruptcy settlement

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2009		2008		Change		%
Interest Expense, net	$	32,976	$	28,339	$	4,637		16.4	%

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Interest expense.  Net interest expense increased primarily due to the redemption of our 9% Senior Secured Notes for which we incurred a $5.3 million prepayment premium compared to $1.1 million in 2008. In addition, we wrote off all unamortized deferred financing costs and original issue discount of $5.8 million in 2009 compared to $2.8 million in 2008. These amounts were offset by lower interest expense due to lower average outstanding borrowings in 2009 as compared to previous periods For a more detailed description of the redemption of the 9% Senior Secured Notes and the pay down of the 11.25% Senior Notes, please see Note 11 to our Consolidated Financial Statements in this Form 10-K.

Goodwill impairment.  In 2008, we performed our annual impairment review of goodwill and identified a goodwill impairment of $31.8 million. We did not identify a goodwill impairment during our annual impairment review in 2009. If market conditions deteriorate in 2010, we may be required to take impairment charges in future periods.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2009		2008		Change		%
Restructuring Expense	$	7,286	$	2,310	$	4,976		215.4	%

Restructuring.  During 2007, we adopted two restructuring programs. The first was intended to improve operational efficiency by reducing headcount, consolidating our operating facilities and relocating manufacturing to lower cost areas (the “Altra Plan”). The second was related to the acquisition of TB Wood’s and was intended to reduce duplicative staffing and consolidate facilities (the “TB Wood’s Plan”). We recorded approximately $2.3 million of restructuring expenses in 2008 for moving and relocation, severance and non-cash asset impairment. There were no costs related to the Altra Plan or the TB Wood’s Plan incurred in 2009.

In March 2009, we adopted a new restructuring plan (the “2009 Altra Plan”) to improve the utilization of our manufacturing infrastructure and to realign our business with the current economic conditions. The 2009 Altra Plan was intended to improve operational efficiency by reducing headcount and consolidating certain facilities. During 2009, we recorded $7.3 million of restructuring expenses, of which $4.2 million was related to severance, $0.6 million was related to other restructuring charges (primarily moving and relocation costs), and $2.5 million was non-cash impairment charges. We expect to incur between an additional $2.0 and $3.0 million of expenses associated with workforce reduction and consolidation of facilities in 2010. Beginning in 2010, we expect to see annualized savings from the headcount reductions and consolidation of facilities of approximately $52 million.

Other post employment benefit plan settlement gain.  In March 2009, we reached a new collective bargaining agreement with the union at our Erie, Pennsylvania facility. One of the provisions of the new agreement eliminated the benefits that employees were entitled to receive through the existing other post employment benefit plan (“OPEB”). OPEB benefits will no longer be available for retired and active employees. This resulted in a non-cash OPEB settlement gain of $1.5 million in 2009.

Loss on disposal of assets.  During 2009, we entered into a lease agreement at a new facility in China. As of December 31, 2009, we have exited our previous facility and moved into the new location. We recorded a loss of $0.3 million to dispose of the leasehold improvements associated with the old location.

	Amounts in thousands, except percentage data
	Year Ended
	December 31,			December 31,
	2009			2008			Change			%
Provision (benefit) for income taxes, continuing operations	$	(2,364	)	$	16,731		$	(19,095	)		(114.1	)%
Provision (benefit) for income taxes as a % of income before taxes		(50.5	)%		71.4	%

Provision for income taxes.  The 2009 benefit for income taxes was primarily due to our loss before income taxes. Additionally, the benefit further increased as a result of changing certain tax elections during 2009 and amending certain prior year returns to reflect those election changes. This benefit was partially offset by the establishment of reserves for uncertain tax positions and interest expense on previously reserved

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amounts. In 2008, we recorded additional tax expense due to the non-tax deductible portion of our goodwill impairment charge. For further discussion, refer to Note 8 in our consolidated financial statements.

Year Ended December 31, 2008 Compared with Year Ended December 31, 2007

	Amounts in thousands, except percentage data
	Year Ended
	December 31,		December 31,
	2008		2007		Change		%
Net sales	$	635,336	$	584,376	$	50,960		8.7	%

Net sales.  For the year ended December 31, 2008, net sales increased $51.0 million compared to 2007. The increase is primarily due to the 2007 acquisitions of TB Wood’s and All Power, which contributed $31.7 million, price increases which contributed $13.0 million, strong after market sales, market share gains, the strength of several key markets, including energy and primary metals. During 2008, the price increases resulting from material cost increases (primarily copper and steel) were across all product lines and impacted all markets served. If the 2008 foreign exchange rates had remained constant when compared to 2007, sales would have increased $50.4 million. During the first nine months of 2008, sales would have increased $57.0 million or if the 2008 foreign exchange rates had remained constant when compared to 2007. If the 2008 foreign exchange rates had remained constant when compared to 2007, sales would have increased $0.1 million in the fourth quarter of 2008. During November and December of 2008, we saw a significant change in economic conditions both in North America and internationally as most of our end markets experienced dramatic downturns, as a result, our fourth quarter sales would have been relatively flat compared to the fourth quarter of 2007, if the 2008 foreign exchange rates had remained constant when compared to 2007.

.

	Amounts in thousands, except percentage data
	Year To Date Ended
	December 31,			December 31,
	2008			2007			Change		%
Gross Profit	$	186,092		$	165,267		$	20,825		12.6	%
Gross Profit as a percent of sales		29.29	%		28.28	%

Gross profit.  In 2008 gross profit increased $20.8 million compared to 2007. The increase is primarily related to the 2007 acquisitions of TB Wood’s and All Power, which added incremental gross profit of $8.2 million in 2008. Gross profit of other operations also increased due to price increases which contributed $13.0 million, an increase in low cost country material sourcing and manufacturing which contributed $5.3 million and further manufacturing efficiencies as a result of continued application of the Altra Business System. If the 2008 foreign exchange rates remained constant when compared to 2007, gross profit would have increased $20.6 million. During the first nine months of 2008, gross profit increased $21.2 million or $18.8 million if the 2008 foreign exchange rates remained constant when compared to 2007. During the fourth quarter of 2008 gross profit would have decreased $0.3 million compared to the prior year period. If the 2008 foreign exchange rates remained constant when compared to 2007, gross profit increased $1.8 million in the fourth quarter of 2008. The global economic slowdown experienced during 2008 and particularly during the fourth quarter of 2008 affected our markets and customers. As a result, our sales and therefore gross profit in the fourth quarter would have been flat when compared to the fourth quarter of 2007 if the 2008 foreign exchange rates remained constant compared to 2007.

Cost of sales benefited from warehousing fees of $0.3 million billed as a part of a transition services agreement which was entered into in connection with the sale of TB Wood’s Electronics Division. These warehousing services terminated in 2008.

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	Amounts in thousands, except percentage data
	Year To Date Ended
	December 31,			December 31,
	2008			2007			Change		%
Selling, general and administrative expense (“SG&A”)	$	99,185		$	93,211		$	5,974		6.4	%
SG&A as a percent of sales		15.6	%		16.0	%

Selling, general and administrative expenses.  The SG&A increase in 2008 was due primarily to the inclusion of TB Wood’s and All Power for the full year which added $4.8 million. The remaining increase resulted from additional amortization of intangible assets associated with the TB Wood’s acquisition, and wage and benefits increases, including healthcare costs and increased professional fees.

SG&A was net of a credit $1.1 million in income for billing related to our transition services agreement with Vacon for sales commissions, information technology, accounts payable and payroll services.

	Amounts in thousands, except percentage data
	Year To Date Ended
	December 31,		December 31,
	2008		2007		Change		%
Research and development expenses (“R&D”)	$	6,589	$	6,077	$	512		8.4	%

Research and development expenses.  R&D increased primarily due to the inclusion of TB Wood’s for a full year ending December 31, 2008, which amounted to $0.4 million incrementally.

	Amounts in thousands, except percentage data
	Year To Date Ended
	December 31,			December 31,
	2008			2007		Change			%
Other non-operating (income) expense, net	$	(6,249	)	$	612	$	(6,861	)		(1121.0	)%

Other non-operating (income) expense.  The $6.2 million of other income in 2008 is primarily related to $5.0 million of foreign exchange gains recorded mainly in the fourth quarter of 2008. During the fourth quarter, the U.S. Dollar strengthened significantly versus the British Pound Sterling and Canadian Dollar. In addition, the Euro strengthened significantly versus the British Pound Sterling. During 2008 we recorded rental income of $0.6 million for facility rentals under lease agreements which were part of the sale of TB Wood’s Electronics Division and have a term of two years, with annual extensions thereafter at the lessee’s, or the Company’s option. In addition, we received $0.3 million in securities as part of a bankruptcy settlement.

	Amounts in thousands, except percentage data
	Year To Date Ended
	December 31,		December 31,
	2008		2007		Change			%
Interest Expense, net	$	28,339	$	38,554	$	(10,215	)		(26.5	)%

Interest expense.  Net interest expense decreased due to the lower average outstanding balance of 11.25% Senior Notes during 2008, which resulted in lower interest of $2.9 million compared to the prior year. In addition, in 2007, we incurred an additional $7.1 million of prepayment premiums associated with the pay down of the 11.25% Senior Notes as compared to the prepayment premiums on the pay-down of the 9% Senior Secured Notes in 2008. In addition, in 2007 we recorded $2.0 million related to the write-off of deferred financing fees and $0.5 million related to a bridge fee. This was offset by $1.4 million of additional interest expense in 2008 associated with the additional 9% Senior Secured Notes that were issued in the second quarter of 2007.

Goodwill impairment.  We performed our annual impairment review of goodwill during the fourth quarter of 2008. As a result of the annual goodwill impairment review, we determined that the goodwill associated with three reporting units was impaired, and therefore recorded a charge of $31.8 million. We

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believe that the global economic crisis and economic conditions within our industry end-markets during 2008 were the primary factors that led to the impairment of goodwill.

Restructuring.  During 2007, we adopted two restructuring programs, the Altra Plan and the TB Wood’s Plan. The total restructuring charge for the years ended December 31, 2008 and 2007 was $2.3 million and $2.4 million, respectively. In 2008, the restructuring expense is comprised of $0.2 million of non-cash asset impairment on fixed assets, $0.7 million of moving and relocation expenses and $1.4 million of severance expenses. In addition, in 2008, as part of the Altra Plan, the manufacturing plant in Erie, Pennsylvania was originally scheduled to close. As part of the plan and the plant closure agreement, employees were offered severance for continued service through their termination date. We were accruing the severance ratably from the communication date through the date of termination. In September 2008, we announced that the plant would not be closing and one manufacturing line would remain in operation at the facility. In connection with the announcement, we reversed $0.5 million of severance through the restructuring line in the income statement, that was no longer due to the employees. In 2007, the restructuring expense was comprised of $0.2 million of non cash fixed asset impairment, $1.3 million of moving and relocation expenses, $0.7 million of severance and $0.2 million of other expenses.

Curtailment.  One of our four U.S. collective bargaining agreements expired in September 2007. The negotiations originally resulted in a provision to close the Erie, Pennsylvania plant by December 2008 through the transfer of manufacturing equipment to other existing facilities and a ratable reduction in headcount. The plant closure triggered a special retirement pension feature and plan curtailment.

Under the special retirement pension feature, plan participants become eligible for pension benefits at an age earlier than the normal retirement feature would otherwise allow provided that service is broken by permanent shutdown, layoff or disability. The pension benefit is increased by a special supplemental benefit payment on a monthly basis and a special one time payment at the time of retirement. The curtailment and special termination benefits were approximately $2.9 million for the year ended December 31, 2007.

In August 2008, an announcement was made that we would no longer be closing the plant in Erie, Pennsylvania and that the Company would continue to employ those employees that had not previously been terminated. As a result of this announcement, the remaining employees are no longer eligible for the special retirement pension feature under the pension plan. An adjustment to the minimum pension liability was recorded in accumulated other comprehensive income, and will be amortized over the average expected remaining life expectancy of the participants of the plan.

In connection with the change at the Erie, Pennsylvania plant, as employees were terminated, we recorded a post-retirement benefit plan curtailment gain of $0.3 million and $0.2 million in 2008 and 2007, respectively.

During 2008, we entered into a new collective bargaining agreement at one of our plants in Warren, Michigan. The new collective bargaining agreement eliminated post retirement benefits to all employees who were previously eligible. This resulted in a plan curtailment and in the fourth quarter of 2008, we recorded a curtailment gain of $0.6 million.

Loss on disposal of assets.  We recognized losses on sale and abandonment of fixed assets at various locations during 2008 totaling $1.6 million.

	Year To Date Ended
	December 31,			December 31,
	2008			2007			Change		%
Provision for income taxes, continuing operations	$	16,731		$	8,208		$	8,523		103.8	%
Provision for income taxes as a % of income before taxes		71.4	%		37.9	%

Provision for income taxes.  The provision for income taxes was $16.7 million, or 71.4% of income before taxes for 2008, versus a provision of $8.2 million, or 37.9% of income before taxes for 2007. The 2008 provision for income taxes was higher than the 2007 provision for income taxes primarily due to the non-tax deductible portion of the goodwill impairment charge.

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Discontinued Operations.  Loss from discontinued operations in the year to date period ended December 31, 2008, was comprised of a purchase price working capital adjustment, an adjustment to deferred taxes and an adjustment to the tax provision. The tax provision is comprised of taxes on the working capital adjustment and a revision of tax estimates made during 2007 based on the actual amounts filed on the Company’s tax return in 2008.

Liquidity and Capital Resources

Overview

We finance our capital and working capital requirements through a combination of cash flows from operating activities and borrowings under our senior secured revolving credit facility. We expect that our primary ongoing requirements for cash will be for working capital, debt service, capital expenditures, expenditures in connection with restructuring activities and pension plan funding. In the event additional funds are needed, we could borrow additional funds under our senior secured revolving credit facility, attempt to refinance our 81/8% Senior Notes (the “Senior Secured Notes”), or attempt to raise capital in equity markets. Presently, we have capacity under our senior secured revolving credit facility to borrow $50.0 million. Of this total capacity, we can borrow up to $27.1 million without being required to comply with any financial covenants under the agreement. In order to refinance the existing 81/8% Senior Secured Notes, we would incur a pre-payment premium. There can be no assurance however that additional debt financing will be available on commercially acceptable terms, if at all. Similarly, there can be no assurance that equity financing will be available on commercially acceptable terms, if at all.

During 2009, Altra Industrial retired the remaining principal balance of the 111/4% Senior Notes (the “Old Senior Notes”), of £3.3 million or $5.0 million of principal amount, plus accrued and unpaid interest. In connection with the redemption, Altra Industrial incurred $0.2 million of pre-payment premium and wrote-off the entire remaining balance of $0.2 million of deferred financing fees, which is recorded as interest expense in the Consolidated Statement of Income (loss).

Senior Secured Notes

In 2009, we issued $210 million of Senior Secured Notes due December 1, 2016. The Senior Secured Notes are guaranteed by the Company’s U.S. domestic subsidiaries and are secured by a second priority lien, subject to first priority liens securing our senior secured revolving credit facility, on substantially all of our assets and those of our domestic subsidiaries. Interest on the Senior Secured Notes is payable in arrears, semiannually on June 1 and December 1 of each year, commencing on June 1, 2010. The indenture governing the Senior Secured Notes contains covenants which restrict our subsidiaries. These restrictions limit or prohibit, among other things, their ability to incur additional indebtedness; repay subordinated indebtedness prior to stated maturities; pay dividends on or redeem or repurchase stock or make other distributions; make investments or acquisitions; sell certain assets or merge with or into other companies; sell stock in our subsidiaries; and create liens on their assets. We were in compliance with all covenants of the indenture governing the Senior Secured Notes at December 31, 2009

Tender Offer

We used the proceeds of the offering of the Senior Secured Notes to repurchase or redeem Altra Industrial’s 9% Old Senior Secured Notes. On November 10, 2009, Altra Industrial commenced a cash tender offer to repurchase any and all of the outstanding Old Senior Secured Notes as of the date thereof at a price equal to $1,000.00 per $1,000 principal amount of notes tendered, plus an early tender premium of $25.00 per $1,000 principal amount of notes tendered, payable on notes tendered before the early tender deadline. Holders who tendered their Old Senior Secured Notes also agreed to waive any rights to written notice of redemption. With respect to any Old Senior Secured Notes that were not tendered, we redeemed all Old Senior Secured Notes that remained outstanding after the expiration of the tender offer by issuing a notice of redemption on the early tender deadline. On the early tender deadline, we satisfied and discharged all of our obligations under the indenture governing the Old Senior Secured Notes by depositing funds with the depositary in an amount sufficient to pay and discharge any remaining indebtedness on the Old Senior Secured Notes upon the consummation of the tender offer.

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Borrowings

	Amounts in millions
	December 31,		December 31,
	2009		2008
Debt:
Revolving Credit Agreement	$	—	$	—
Old Revolving Credit Agreement		—		—
Old TB Wood’s Revolving Credit Agreement		—		6.0
Overdraft agreements		—		—
Senior Secured Notes		210.0		—
Old Senior Secured Notes		—		242.5
Old Senior Notes		—		4.7
Variable rate demand revenue bonds		5.3		5.3
Mortgages		3.1		2.3
Capital leases		1.8		2.6
Total Debt	$	220.2	$	263.4

Senior Secured Credit Facility

Concurrently with the closing of the offering of the Old Senior Secured Notes, Altra Industrial entered into a new Senior Secured Credit Facility (the “Revolving Credit Agreement”), that provides for borrowing capacity in an initial amount of up to $50.0 million (subject to adjustment pursuant to a borrowing base and subject to increase from time to time in accordance with the terms of the credit facility). The Revolving Credit Agreement replaced Altra Industrial’s then existing senior secured credit facility (the “Old Revolving Credit Agreement”), and the TB Wood’s existing credit facility (the“Old TB Wood’s Revolving Credit Agreement”).

Altra Industrial and all of its domestic subsidiaries are borrowers, or “Borrowers”, under the Revolving Credit Agreement. Certain of our existing and subsequently acquired or organized domestic subsidiaries which are not Borrowers do and will guarantee (on a senior secured basis) the Revolving Credit Agreement. Obligations of the other Borrowers under the Revolving Credit Agreement and the guarantees are secured by substantially all of Borrowers’ assets and the assets of each of our existing and subsequently acquired or organized domestic subsidiaries that is a guarantor of our obligations under the Revolving Credit Agreement (with such subsidiaries being referred to as the “U.S. subsidiary guarantors”), including but not limited to: (a) a first-priority pledge of all the capital stock of subsidiaries held by Borrowers or any U.S. subsidiary guarantor (which pledge, in the case of any foreign subsidiary, will be limited to 100% of any non-voting stock and 65% of the voting stock of such foreign subsidiary) and (b) perfected first-priority security interests in and mortgages on substantially all tangible and intangible assets of each Borrower and U.S. subsidiary guarantor, including accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, certain real property, cash and proceeds of the foregoing (in each case subject to materiality thresholds and other exceptions).

An event of default under the Revolving Credit Agreement would occur in connection with a change of control, among other things, if: (i) Altra Industrial ceases to own or control 100% of each of its borrower subsidiaries, or (ii) a change of control occurs under the Senior Secured Notes, or any other subordinated indebtedness.

An event of default under the Revolving Credit Agreement would also occur if an event of default occurs under the indentures governing the Senior Secured Notes or if there is a default under any other indebtedness of any borrower may have involving an aggregate amount of $10 million or more and such default: (i) occurs at final maturity of such debt, (ii) allows the lender there under to accelerate such debt or (iii) causes such debt to be required to be repaid prior to its stated maturity. An event of default would also occur under the Revolving Credit Agreement if any of the indebtedness under the Revolving Credit Agreement ceases with limited exception to be secured by a full lien of the assets of Borrowers and guarantors.

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As of December 31, 2009, we were in compliance with all covenant requirements associated with all of our borrowings. As of December 31, 2009, we had no borrowing and $10.4 million in letters of credit outstanding under the Revolving Credit Agreement.

Old TB Wood’s Revolving Credit Agreement

As part of the TB Wood’s acquisition in 2007, the Company refinanced $13.0 million of debt associated with TB Wood’s line of credit. As of December 31, 2008, there was $6.0 million of debt outstanding under the Old TB Wood’s Revolving Credit Agreement. As of December 31, 2008 there was $6.0 million of outstanding letters of credit. In connection with the Revolving Credit Agreement described above, the Old TB Wood’s Revolving Credit Agreement was paid in full.

Old Revolving Credit Agreement

In connection with the PTH Acquisition, we incurred substantial indebtedness. To partially fund the PTH acquisition, Altra Industrial issued $165.0 million of Old Senior Secured Notes and Altra Industrial entered into a $30.0 million senior revolving credit facility, (the “Old Revolving Credit Agreement”). The Old Revolving Credit Agreement provided for senior secured financing of up to $30.0 million, including $10.0 million available for letters of credit. As of the date of refinancing, we were in compliance with all covenant requirements associated with all of our borrowings. The Old Revolving Credit Agreement was terminated in connection with the entering into of the Revolving Credit Agreement.

In connection with our acquisition of Hay Hall in February 2006, Altra Industrial issued £33.0 million of Old Senior Notes. Based on an exchange rate of 1.7462 U.S. Dollars to U.K. pounds sterling (as of February 8, 2006), the proceeds from these notes were approximately $57.6 million. The notes were unsecured and were due in 2013. Interest on the Old Senior Notes was payable in U.K. pounds sterling semiannually in arrears on February 15 and August 15 of each year, commencing August 15, 2006. In connection with our acquisition of TB Wood’s in April 2007, Altra Industrial issued an additional $105.0 million of its Old Senior Secured Notes. During 2009, the outstanding Old Senior Notes were redeemed.

Net Cash

	December 31,		December 31,
	2009		2008
	(In thousands)
Cash and cash equivalents	$	51,497	$	52,073

Highlights:

•      In 2009, we generated significant cash through the reduction of inventory of $28.2 million related to a reduction in purchasing as a result of the economic downturn and we also reduced Accounts Receivable by $19.3 million.

•      In 2009, we issued $210 million of 81/8% Senior Secured Notes due December 2016. We used the proceeds of the offering of the 81/8% Senior Secured Notes to repurchase or redeem $205.3 million of Altra Industrial’s 9% Old Senior Secured Notes and to pay related fees, expenses and other costs of $7.6 million.

•      In 2009, the $6.0 million of debt under the Old TB Wood’s Revolving Credit Agreement was paid in full.

•      During 2009, we retired the remaining principal balance of the 111/4% Old Senior Notes of £3.3 million ($5.0 million) of principal amount, plus accrued and unpaid interest. In connection with the redemption, we incurred $0.2 million of pre-payment premium and wrote-off the entire remaining balance of $0.2 million of deferred financing fees

We intend to use our remaining existing cash and cash equivalents and cash flow from operations to provide for our working capital needs and to fund potential future acquisitions, debt services, capital expenditures, and pension funding. We believe our future operating cash flows will be sufficient to meet our future operating and investing cash needs. Furthermore, the existing cash balances and the availability of additional borrowings under our Revolving Credit Agreement provide additional potential sources of liquidity should they be required.

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Cash Flows for 2009

The primary source of funds for our fiscal year 2009 was cash provided by operating activities of $59.4 million. Net cash used in investing activities of $9.2 million for purchases of property, plant and equipment primarily for investment in manufacturing equipment. Net cash used in financing activities of $54.0 million for 2009 consisted primarily of $242.5 million of payments on the 9% Old Senior Secured Notes, and $5.0 million of payments on the 111/4% Old Senior Notes, offset by $207.3 million of proceeds from the issuance of the 81/8% Senior Secured Notes.

Cash Flows for 2008

Net cash provided by operating activities for 2008 of $45.1 million, resulted mainly from net income of $6.5 million, non-cash depreciation, amortization of intangibles and deferred financing costs, accretion of debt discount, goodwill impairment charges, loss on the sale of the TB Wood’s Electronics Division, loss on disposal of fixed assets, non-cash stock compensation expense and the provision for deferred taxes of $61.1 million. This was offset by a non-cash gain on foreign exchange, OPEB curtailment gain and a net change in working capital of $22.5 million.

Capital Expenditures

We made capital expenditures of approximately $9.2 million and $19.3 million in the years ended December 31, 2009 and December 31, 2008, respectively. These capital expenditures will support on-going business needs. In 2010, we expect capital expenditures to be approximately $12.0 million.

Pension Plans

As of December 31, 2009, we had minimum cash funding requirements associated with our pension plan which we estimated to be zero in 2010, $1.2 million in 2011, $1.2 million in 2012 and $0.6 million in 2013 and $1.2 million in 2014. These amounts represent minimum funding requirements for the previous pension benefits we provided our employees. In addition to the minimum funding requirements, we may choose to make additional supplemental payments to the plan.

One of the Company’s four U.S. collective bargaining agreements expired in September 2007. In October 2007, negotiations with the union covered by that agreement resulted in a provision to close the Erie, Pennsylvania plant by December 2008 through the transfer of manufacturing equipment to other existing facilities and a ratable reduction in headcount. The plant closure triggered a special retirement pension feature and plan curtailment.

Under the special retirement pension feature, plan participants became eligible for pension benefits at an age earlier than the normal retirement feature would allow, provided that service is broken by permanent shutdown, layoff or disability. The pension benefit was increased by a special supplemental benefit payment on a monthly basis and a special one time payment at the time of retirement. The curtailment and special termination benefits were approximately $2.9 million for the year ended December 31, 2007.

In August 2008, an announcement was made that we would no longer close the plant in Erie, Pennsylvania, and would continue to employ those employees that had not previously been terminated and begin to negotiate a new collective bargaining agreement for the remaining employees. As a result of this announcement, the remaining employees are no longer eligible for the special retirement pension feature under the pension plan. An adjustment to the minimum pension liability was recorded in accumulated other comprehensive income, and will be amortized over the average expected remaining life expectancy of the participants of the plan.

In March 2009, the Company reached a new collective bargaining agreement with the union at its Erie, Pennsylvania facility. One of the provisions of the new agreement eliminates benefits that employees were entitled to receive through the applicable other post employment benefit plan (“OPEB”). OPEB benefits will no longer be available to retired or active employees. This resulted in a non-cash OPEB settlement gain of $1.5 million in 2009. In addition, no additional years of credited service will be accrued on the defined benefit pension plan effective February 28, 2009. There was no curtailment gain or loss as a result of the change in the pension plan, the plan had no unrecognized prior service cost and there was no change in the projected benefit obligation.

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Also, in connection with the union renegotiation, the post retirement benefit plan for employees at that location have been terminated for all eligible employees who had not retired, or given notice to retire in 2007. As employees terminated their employment, we recognized a non-cash gain of $0.3 million and $0.2 million in the year ended 2008 and 2007, respectively.

In September 2008, we reached a new collective bargaining agreement with the labor union at the manufacturing facility in Warren, Michigan. The new collective bargaining agreement eliminated post-retirement healthcare benefits for all employees and retirees. This resulted in a settlement gain of $0.6 million in the year ended 2008.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that provide liquidity, capital resources, market or credit risk support that expose us to any liability that is not reflected in our consolidated financial statements.

Contractual Obligations

The following table is a summary of our contractual cash obligations as of December 31, 2009 (in millions):

	Payments Due by Period
	2010		2011		2012		2013		2014		Thereafter		Total
Senior Secured Notes(1)	$	—	$	—	$	—	$	—	$	—	$	210.0	$	210.0
Operating leases		2.6		4.1		3.7		2.2		1.6		2.6		16.8
Capital leases		0.9		0.8		0.3		—		—		—		2.0
Mortgage(2)		0.3		0.3		1.5		0.4		0.4		0.2		3.1
Variable Rate Demand Revenue Bonds(3)		—		—		—		—		—		5.3		5.3
Revolving Credit Agreement(4)		—		—		—		—		—		—		—
Total contractual cash obligations	$	3.8	$	5.2	$	5.5	$	2.6	$	2.0	$	218.1	$	237.2

(1)	We have semi-annual cash interest requirements due on the Senior Secured Notes with $17.1 million payable in 2010 through 2015, and $15.6 million due in 2016.
(2)	In June, 2006, our German subsidiary entered into a mortgage on its building in Heidelberg, Germany, with a local bank. The mortgage has a principal of €2.2 million as of December 31, 2009, an interest rate of 3.5% and is payable in monthly installments over the next 6 years.
(3)	In April 2007, as part of the TB Wood’s acquisition, we assumed obligation for payment of interest and principal on the Variable Rate Demand Revenue Bonds. These bonds bear variable interest rates and mature in April 2022 and April 2024.
(4)	We have up to $50.0 million of borrowing capacity, through November 2012, under our Revolving Credit Agreement (including $30 million available for use for letters of credit). As of December 31, 2009, there were no outstanding borrowings and $10.4 million of outstanding letters of credit under our Revolving Credit Agreement.

We have cash funding requirements associated with our pension plan. As of December 31, 2009, these requirements were estimated to be zero for 2010, $1.2 million for 2011, $1.2 million for 2012, $0.6 million for 2013 and $1.2 million for 2014.

We may be required to make cash outlays related to our unrecognized tax benefits. However, due to the uncertainty of the timing of future cash flows associated with our unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, unrecognized tax benefits of $9.7 million as of December 31, 2009, have been excluded from the contractual obligations table above. For further information on unrecognized tax benefits, see Note 8 to the consolidated financial statements.

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Stock-based Compensation

In January 2005, we established the 2004 Equity Incentive Plan that provides for various forms of stock based compensation to our officers and senior level employees.

As of December 31, 2009, there were 560,081 shares of unvested restricted stock outstanding under the plan. The remaining compensation cost to be recognized through 2012 is $2.2 million. Based on the stock price at December 31, 2009, of $12.35 per share, the intrinsic value of these awards as of December 31, 2009, was $6.9 million.

Income Taxes

We are subject to taxation in multiple jurisdictions throughout the world. Our effective tax rate and tax liability will be affected by a number of factors, such as the amount of taxable income in particular jurisdictions, the tax rates in such jurisdictions, tax treaties between jurisdictions, the extent to which we transfer funds between jurisdictions and repatriate income, and changes in law. Generally, the tax liability for each legal entity is determined either (a) on a non-consolidated and non-combined basis or (b) on a consolidated and combined basis only with other eligible entities subject to tax in the same jurisdiction, in either case without regard to the taxable losses of non-consolidated and non-combined affiliated entities. As a result, we may pay income taxes to some jurisdictions even though on an overall basis we incur a net loss for the period.

Seasonality

We experience seasonality in our turf and garden business, which in recent years has represented approximately 10% of our net sales. As our large OEM customers prepare for the spring season, our shipments generally start increasing in December, peak in February and March, and begin to decline in April and May. This allows our customers to have inventory in place for the peak consumer purchasing periods for turf and garden products. The June-through-November period is typically the low season for us and our customers in the turf and garden market. Seasonality is also affected by weather and the level of housing starts.

Inflation

Inflation can affect the costs of goods and services we use. The majority of the countries that are of significance to us, from either a manufacturing or sales viewpoint, have in recent years enjoyed relatively low inflation. The competitive environment in which we operate inevitably creates pressure on us to provide our customers with cost-effective products and services.

Recent Accounting Pronouncements

In December 2008, the Financial Accounting Standards Boards (“FASB”) issued enhanced disclosure requirements for defined benefit pension and other postretirement benefit plan assets. The additional disclosures are intended to provide users of financial statements with an enhanced understanding of (a) how investment allocation decisions are made, (b) the major categories of plan assets, (c) the inputs and valuation techniques used to measure the fair value of plan assets, (d) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and (e) significant concentrations of risk within plan assets. See Note 9 to consolidated financial statements for our enhanced disclosure.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risk factors such as fluctuating interest rates, changes in foreign currency rates and changes in commodity prices. At present, we do not utilize derivative instruments to manage these risks.

Currency translation.  The results of operations of our foreign subsidiaries are translated into U.S. Dollars at the average exchange rates for each period concerned. The balance sheets of foreign subsidiaries are translated into U.S. Dollars at the exchange rates in effect at the end of each period. Any adjustments resulting from the translation are recorded as other comprehensive income. As of December 31, 2009 and 2008, the aggregate total assets (based on book value) of foreign subsidiaries were $76.8 million and $73.5 million, respectively, representing approximately 55.3% and 57.0%, respectively, of our total assets

49

(based on book value). Our foreign currency exchange rate exposure is primarily with respect to the Euro and British Pound Sterling. The approximate exchange rates in effect at December 31, 2009 and 2008, were $1.43 and $1.41, respectively to the Euro. The approximate exchange rates in effect at December 31, 2009 and 2008 were $1.59 and $1.45, respectively to the British Pound Sterling.

Currency transaction exposure.  Currency transaction exposure arises where actual sales, purchases and financing transactions are made by a business or company in a currency other than its own functional currency. Any transactional differences at an international location are recorded in net income on a monthly basis.

Interest rate risk.  The majority of our debt is fixed rate debt, however we are subject to market exposure to changes in interest rates on some of our financing activities. This exposure relates to borrowings under our Revolving Credit Agreement, and our Variable Rate Demand Revenue Bonds. Our Revolving Credit Agreement is payable at prime rate plus 0.25% in the case of prime rate loans, or LIBOR rate plus an applicable spread of 2.75% to 3.25%, in the case of LIBOR rate loans. The applicable spread varies depending on the average amount that is unavailable under the Revolving Credit Agreement during the most recent quarter. As of December 31, 2009, we had no borrowings under our Revolving Credit Agreement and $10.4 million of outstanding letters of credit under our Revolving Credit Agreement. The Variable Rate Demand Revenue Bonds have a variable interest rate that was less than 1% as of December 31, 2009. Due to the minimal amounts of outstanding debt a hypothetical change in interest rates of 1% would not have a material effect on our near-term financial condition or results of operations.

Commodity Price Exposure.  We have exposure to changes in commodity prices principally related to metals including steel, copper and aluminum. We primarily mange our risk associated with such increases through the use of surcharges or general pricing increases for the related products. We do not engage in the use of financial instruments to hedge our commodities price exposure.

50

Item 8.   Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Altra Holdings, Inc.

Braintree, Massachusetts

We have audited the accompanying consolidated balance sheet of Altra Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2009 and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended. Our audit also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2009, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 9, 2010 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/  Deloitte & Touche LLP

Boston, Massachusetts

March 9, 2010

51

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of Altra Holdings, Inc.

We have audited the accompanying consolidated balance sheet of Altra Holdings, Inc. as of December 31, 2008, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2008. Our audits also included the consolidated financial statement schedule listed in the index at Item 15(a)(2) for each of the two years in the period ended December 31, 2008. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Altra Holdings, Inc. at December 31, 2008, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related consolidated financial statement schedule for each of the two years in the period ended December 31, 2008, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 8 to the consolidated financial statements, the Company changed its method of accounting for income tax uncertainties with the adoption of the guidance originally issued in Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (codified in FASB ASC Topic 740, Income Taxes) effective January 1, 2007.

/s/  Ernst & Young LLP

Boston, Massachusetts

March 6, 2009, except for Note 17,

as to which the date is November 4, 2009

52

ALTRA HOLDINGS, INC.

Consolidated Balance Sheets
Amounts in thousands, except share amounts

	December 31,			December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	51,497		$	52,073
Trade receivable, less allowance for doubtful accounts of $1,434 and $1,277 at December 31, 2009 and 2008, respectively		52,855			68,803
Inventories		71,853			98,410
Deferred income taxes		9,265			8,032
Assets held for sale (See Note 5)		—			4,676
Income tax receivable		4,754			2,581
Prepaid expenses and other current assets		3,647			3,933
Total current assets		193,871			238,508
Property, plant and equipment, net		105,603			110,220
Intangible assets, net		74,905			79,339
Goodwill		78,832			77,497
Deferred income taxes		679			495
Other non-current assets		11,309			7,525
Total assets	$	465,199		$	513,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	27,421		$	33,890
Accrued payroll		12,133			16,775
Accruals and other current liabilities		19,971			18,755
Deferred income taxes		7,275			6,906
Current portion of long-term debt		1,059			3,391
Total current liabilities		67,859			79,717
Long-term debt — less current portion and net of unaccreted discount and premium		216,490			258,132
Deferred income taxes		21,051			23,336
Pension liabilities		9,862			11,854
Other post retirement benefits		405			2,270
Long-term taxes payable		9,661			7,976
Other long-term liabilities		928			1,434
Commitments and contingencies (See Note 15)		—			—
Stockholders’ equity:
Preferred stock ($0.001 par value, 10,000,000 shares authorized, none issued or outstanding at December 31, 2009 and 2008, respectively)		—			—
Common stock ($0.001 par value, 90,000,000 shares authorized, 26,057,993 and 25,582,543 issued and outstanding at December 31, 2009 and 2008, respectively)		26			26
Additional paid-in capital		132,552			129,604
Retained earnings		21,011			23,325
Accumulated other comprehensive income		(14,646	)		(24,090	)
Total stockholders’ equity		138,943			128,865
Total liabilities and stockholders’ equity	$	465,199		$	513,584

The accompanying notes are an integral part of these consolidated financial statements.

53

ALTRA HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

Amounts in thousands, except per share data

	Year Ended December 31,
	2009			2008			2007
Net sales	$	452,846		$	635,336		$	584,376
Cost of sales		329,825			449,244			419,109
Gross profit		123,021			186,092			165,267
Operating expenses:
Selling, general and administrative expenses		81,117			99,185			93,211
Research and development expenses		6,261			6,589			6,077
Goodwill impairment		—			31,810			—
(Gain) loss from settlement/curtailment of post employment benefit and pension plans		(1,467	)		(925	)		2,745
Restructuring costs		7,286			2,310			2,399
Loss on disposal of assets		545			1,584			—
		93,742			140,553			104,432
Income from operations		29,279			45,539			60,835
Other non-operating income and expense:
Interest expense, net		32,976			28,339			38,554
Other non-operating (income) expense, net		981			(6,249	)		612
		33,957			22,090			39,166
Income (loss) from continuing operations before income taxes		(4,678	)		23,449			21,669
(Benefit) provision for income taxes		(2,364	)		16,731			8,208
Net income (loss) from continuing operations		(2,314	)		6,718			13,461
Net loss from discontinued operations, net of income taxes of $43 in 2008 and $583 in 2007		—			(224	)		(2,001	)
Net income (loss)	$	(2,314	)	$	6,494		$	11,460
Consolidated Statement of Comprehensive Income (Loss)
Pension liability adjustment		514			(2,038	)		482
Foreign currency translation adjustment		8,930			(23,975	)		4,505
Comprehensive income (loss)	$	7,130		$	(19,519	)	$	16,447
Weighted average shares, basic		25,945			25,496			23,579
Weighted average shares, diluted		25,945			26,095			24,630
Basic earnings per share:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.57
Net loss from discontinued operations		—			(0.01	)		(0.08	)
Net income (loss)	$	(0.09	)	$	0.25		$	0.49
Diluted earnings per share:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.55
Net loss from discontinued operations		—			(0.01	)		(0.08	)
Net income (loss)	$	(0.09	)	$	0.25		$	0.47

The accompanying notes are an integral part of these consolidated financial statements.

54

ALTRA HOLDINGS, INC.

Consolidated Statements of Stockholders’ Equity
Amounts in thousands

										Accumulated Other
	Common				Additional Paid		Retained			Comprehensive
	Stock		Shares		in Capital		Earnings			Income (Loss)			Total
Balance at December 31, 2006	$	21		21,468	$	76,907	$	5,552		$	(3,064	)	$	79,416
Issurance of common stock, net of offering costs		3		3,178		48,708		—			—			48,711
Stock based compensation and vesting of restricted stock		1		483		2,038		—			—			2,039
Net income		—		—		—		11,460			—			11,460
Adoption of ASC 740		—		—		—		(181	)		—			(181	)
Cumulative foreign currency translation adjustment, net of $1,873 tax expense		—		—		—		—			4,505			4,505
Minimum pension liability adjustment, net of $28 tax expense		—		—		—		—			482			482
Balance at December 31, 2007	$	25		25,129	$	127,653	$	16,831		$	1,923		$	146,432
Stock based compensation and vesting of restricted stock		1		454		1,951		—			—			1,952
Net income								6,494						6,494
Cumulative foreign currency translation adjustment, net of $1,594 of tax expense		—		—		—		—			(23,975	)		(23,975	)
Minimum pension liability adjustment, net of $1,044 tax benefit		—		—		—		—			(2,038	)		(2,038	)
Balance at December 31, 2008	$	26		25,583	$	129,604	$	23,325		$	(24,090	)	$	128,865
Stock based compensation and vesting of restricted stock		—		475		2,948		—			—			2,948
Net loss								(2,314	)		—			(2,314	)
Cumulative foreign currency translation adjustment, net of $478 of tax expense		—		—		—		—			8,930			8,930
Minimum pension liability adjustment, net of $316 tax expense		—		—		—		—			514			514
Balance at December 31, 2009	$	26		26,058	$	132,552	$	21,011		$	(14,646	)	$	138,943

The accompanying notes are an integral part of these consolidated financial statements.

55

ALTRA HOLDINGS, INC.

Consolidated Statements of Cash Flows
Amounts in thousands

	Year Ended December 31,
	2009			2008			2007
Cash flows from operating activities
Net income (loss)	$	(2,314	)	$	6,494		$	11,460
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation		16,534			15,379			16,447
Amortization of intangible assets		5,538			5,689			5,492
Amortization and write-offs of deferred loan costs		4,062			2,133			3,448
(Gain) loss on foreign currency, net		1,104			(5,049	)		732
Accretion and write-off of debt discount and premium		1,912			898			774
Goodwill impairment charges		—			31,810			—
Amortization of inventory fair value adjustment		—			—			926
Gain (loss) on sale of Electronics Division		—			224			(2,927	)
Loss on disposal/impairment of fixed assets		2,891			1,584			313
(Gain) loss on settlement/curtailment of other post retirement benefit and pension plans		(1,467	)		(925	)		2,745
Stock based compensation		3,267			1,951			2,038
Provision for deferred taxes		(1,804	)		1,401			5,455
Changes in assets and liabilities:
Trade receivables		19,267			(933	)		4,318
Inventories		28,180			(2,074	)		(2,277	)
Accounts payable and accrued liabilities		(17,924	)		(13,268	)		(10,690	)
Other current assets and liabilities		376			1,269			3,735
Other operating assets and liabilities		(234	)		(1,469	)		(181	)
Net cash provided by operating activities		59,388			45,114			41,808
Cash flows from investing activities
Purchase of property, plant and equipment		(9,194	)		(19,289	)		(11,633	)
Proceeds from sale of Electronics Division, net of cash of $1,072		—			17,310			10,828
Payments for prior year acquisitions		—			(1,708	)		—
Acquisitions, net of $5,222 of cash acquired in 2007		—			—			(123,867	)
Net cash used in investing activities		(9,194	)		(3,687	)		(124,672	)
Cash flows from financing activities
Proceeds from issuance of 9% Old Senior Secured Notes		—			—			106,050
Payments on 9% Old Senior Secured Notes		(242,500	)		(27,500	)		—
Payment of debt issuance costs		(7,561	)		—			(4,235	)
Payments on 111/4% Old Senior Notes		(4,950	)		(1,346	)		(58,428	)
Borrowings under revolving credit agreements		—			—			8,315
Payments on revolving credit agreements		(6,000	)		(1,723	)		(13,520	)
Payment on mortgages		(584	)		(266	)		(126	)
Proceeds from secondary public offering		—			—			49,592
Proceeds from additional borrowings under an existing mortgage		1,467			—			—
Proceeds from issuance of 81/8% Senior Secured Notes		207,251			—			—
Shares repurchased for tax withholding		(319	)		—			—
Payment of public offering costs		—			—			(2,180	)
Payment on capital leases		(820	)		(925	)		(931	)
Net cash (used in) provided by financing activities		(54,016	)		(31,760	)		84,537
Effect of exchange rate changes on cash and cash equivalents		3,246			(3,401	)		1,607
Net change in cash and cash equivalents		(576	)		6,266			3,280
Cash and cash equivalents at beginning of year		52,073			45,807			42,527
Cash and cash equivalents at end of period	$	51,497		$	52,073		$	45,807
Cash paid during the period for:
Interest	$	27,887		$	27,253		$	36,961
Income taxes	$	3,686		$	17,277		$	13,277
Non-cash Financing:
Acquisition of capital equipment under capital lease	$	—		$	352		$	2,364

The accompanying notes are an integral part of these consolidated financial statements.

56

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements

Amounts in thousands (unless otherwise noted)

1.   Description of Business and Summary of Significant Accounting Policies

Basis of Preparation and Description of Business

Headquartered in Braintree, Massachusetts, Altra Holdings, Inc. (“the Company”), through its wholly-owned subsidiary Altra Industrial Motion, Inc. (“Altra Industrial”) is a leading multi-national designer, producer and marketer of a wide range of mechanical power transmission products. The Company brings together strong brands covering over 40 product lines with production facilities in eight countries and sales coverage in over 70 countries. The Company’s leading brands include Boston Gear, Warner Electric, TB Wood’s, Formsprag Clutch, Ameridrives Couplings, Industrial Clutch, Kilian Manufacturing, Marland Clutch, Nuttall Gear, Stieber Clutch, Wichita Clutch, Twiflex Limited, Bibby Transmissions, Matrix International, Inertia Dynamics, Huco Dynatork and Warner Linear.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Net Income Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding, and diluted earnings per share is based on the weighted average number of common shares outstanding and all dilutive potential common equivalent shares outstanding. Common equivalent shares are included in the per share calculations when the effect of their inclusion would be dilutive.

The following is a reconciliation of basic to diluted net income (loss) per share:

	Year Ended December 31,
	2009			2008			2007
Net income (loss) from continuing operations	$	(2,314	)	$	6,718		$	13,461
Net loss from discontinued operations		—			(224	)		(2,001	)
Net income (loss)	$	(2,314	)	$	6,494		$	11,460
Shares used in net income per common share — basic		25,945			25,496			23,579
Incremental shares of unvested restricted common stock		—			599			1,051
Shares used in net income per common share — diluted		25,945			26,095			24,630
Earnings per share — Basic:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.57
Net loss from discontinued operations	$	—		$	(0.01	)	$	(0.08	)
Net income (loss)	$	(0.09	)	$	0.25		$	0.49
Earnings per share — Diluted:
Net income (loss) from continuing operations	$	(0.09	)	$	0.26		$	0.55
Net loss from discontinued operations	$	—		$	(0.01	)	$	(0.08	)
Net income (loss)	$	(0.09	)	$	0.25		$	0.47

Fair Value of Financial Instruments

The carrying values of financial instruments, including accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The carrying amount of the 81/8% Senior Secured Notes (“Senior Secured Notes”) was $210.0 million as December 31, 2009. The carrying amount of the 9% Senior Secured Notes (“Old Senior Secured Notes”) was $242.5 million December 31, 2008. The carrying amount of the 11.25% Senior Notes (“Old Senior Notes”) was $4.7 million at December 31, 2008. The estimated fair value of the Senior Secured Notes at December 31, 2009 was

57

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

$215.5 million. The estimated fair value of the Old Senior Secured Notes at December 31, 2008 was $232.8 million based on quoted market prices for such notes. The estimated fair value of the Old Senior Notes was approximately £3.3 million ($4.7 million) as of December 31, 2008.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the financial statements. Actual results could differ from those estimates.

Foreign currency translation

Assets and liabilities of subsidiaries operating outside of the United States with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using exchange rates at the end of the respective period. Revenues and expenses are translated at average exchange rates effective during the respective period.

Foreign currency translation adjustments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Net foreign currency transaction gains and losses are included in the results of operations in the period incurred and included in other non-operating expense (income), net in the accompanying statement of operations and comprehensive income (loss).

Cash and Cash Equivalents

Cash and cash equivalents include all financial instruments purchased with an initial maturity of three months or less. Cash equivalents are stated at cost, which approximates fair value.

Trade Receivables

An allowance for doubtful accounts is recorded for estimated collection losses that will be incurred in the collection of receivables. Estimated losses are based on historical collection experience, as well as a review by management of the status of all receivables. Collection losses have been within the Company’s expectations.

Inventories

Inventories are stated at the lower of cost or market using the first-in, first-out (“FIFO”) method for all entities excluding one of the Company’s subsidiaries, TB Wood’s. TB Wood’s inventory is stated at the lower of cost or market, principally using the last-in, first-out (“LIFO”) method. Inventory stated using the LIFO method approximates 13% of total inventory. The cost of inventories acquired by the Company in its acquisitions reflect their fair values at the date of acquisition as determined by the Company based on the replacement cost of raw materials, the sales price of the finished goods less an appropriate amount representing the expected profitability from selling efforts, and for work-in-process the sales price of the finished goods less an appropriate amount representing the expected profitability from selling efforts and costs to complete.

The Company periodically reviews its quantities of inventories on hand and compares these amounts to the expected usage of each particular product or product line. The Company records a charge to cost of sales for any amounts required to reduce the carrying value of inventories to its estimated net realizable value.

Property, Plant and Equipment

Property, plant, and equipment are stated at cost, net of accumulated depreciation.

Depreciation of property, plant, and equipment, including capital leases is provided using the straight-line method over the estimated useful life of the asset, as follows:

Buildings and improvements	15 to 45 years
Machinery and equipment	2 to 15 years
Capital lease	Life of lease

58

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Improvements and replacements are capitalized to the extent that they increase the useful economic life or increase the expected economic benefit of the underlying asset. Repairs and maintenance expenditures are charged to expense as incurred.

Intangible Assets

Intangibles represent product technology, patents, tradenames, trademarks and customer relationships. Product technology, patents and customer relationships are amortized on a straight-line basis over 8 to 16 years, which approximates the period of economic benefit. The tradenames and trademarks are considered indefinite-lived assets and are not being amortized. Intangibles are stated at fair value on the date of acquisition. At December 31, 2009 and 2008, intangibles are stated net of accumulated amortization incurred since the date of acquisition and any impairment charges.

Goodwill

Goodwill represents the excess of the purchase price paid by the Company for Power Transmission Holding, Inc. (“PTH”), The Kilian Company (“Kilian”), Hay Hall Ltd. (“Hay Hall”), Bear Linear Inc. (“Warner Linear”), TB Wood’s, Corporation. (“TB Wood’s”), and All Power Transmission Manufacturing, Inc. (“All Power”) over the fair value of the net assets acquired in each of the acquisitions. Goodwill can be attributed to the value placed on the Company being an industry leader with a market leading position in the Power Transmission industry. The Company’s leadership position in the market was achieved by developing and manufacturing innovative products and management anticipates that its leadership position and profitability will continue to expand, enhanced by cost improvement programs associated with ongoing consolidation and centralization of its operations.

The Company evaluates goodwill for impairment at the reporting unit level. The Company establishes its reporting units based on an analysis of the components that comprise each of our operating segments. Components of an operating segment are aggregated to form one reporting unit if the components have similar economic characteristics. Goodwill is assigned to reporting units as of the date of the related acquisition. To the extent assets and liabilities relate to multiple reporting units, they are allocated to the reporting units based on the relative fair value of each reporting unit. This requires significant use of judgment and estimates.

During 2009, the Company appointed a new Chief Operating Decision Maker (“CODM”) and went through an extensive restructuring plan. As a result of the change in the CODM and our restructuring activities, we re-evaluated our operating segments and reporting unit structure. We identified five operating segments and concluded that the five operating segments can be aggregated into one reportable segment. We also identified twenty-one reporting units and concluded that the reporting units could be aggregated into five reporting units when performing the goodwill impairment analysis.

Impairment of Goodwill and Indefinite-Lived Intangible Assets

The Company conducts an annual impairment review of goodwill and indefinite lived intangible assets in December of each year, unless events occur which trigger the need for an interim impairment review. In connection with the Company’s annual impairment review, goodwill and indefinite lived intangible assets are assessed for impairment by comparing the fair value of the reporting unit to the carrying value using a two step approach. In the first step, the Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate. If the carrying amount of the reporting unit exceeds the estimated fair value, impairment may be present, the Company would then be required to perform a second step in its impairment analysis. In the second step, the Company would evaluate impairment losses based upon the fair value of the underlying assets and liabilities of the reporting unit, including any unrecognized intangible assets, and estimate the implied fair value of the goodwill. An impairment loss is recognized to the extent that a reporting unit’s recorded value of the goodwill asset exceeded its calculated fair

59

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

value. In addition, to the extent the implied fair value of any indefinite-lived intangible asset is less than the assets carrying value, an impairment loss is recognized on those assets.

As a result of the annual goodwill impairment review in the fourth quarter of 2008, the Company determined that goodwill was impaired at three of its reporting units and therefore recorded a pre-tax charge of $31.8 million in the consolidated statement of operations. Significant declines in macroeconomic market conditions, substantial declines in global equity valuations and the Company’s market capitalization were the main causes of the goodwill impairment.

The Company did not identify any impairment of goodwill in 2009.

Preparation of forecasts of revenue and profitability growth for use in the long-range plan and the discount rate require significant use of judgment. Changes to the discount rate and the forecasted profitability could affect the estimated fair value of one or more of the Company’s reporting units and could result in a goodwill impairment charge in a future period.

Impairment of Long-Lived Assets Other Than Goodwill and Indefinite-Lived Intangible Assets

Long-lived assets, including definite-lived intangible assets, are reviewed for impairment when events or circumstances indicate that the carrying amount of a long-lived asset may not be recovered. Long-lived assets are considered to be impaired if the carrying amount of the asset exceeds the undiscounted future cash flows expected to be generated by the asset over its remaining useful life. If an asset is considered to be impaired, the impairment is measured by the amount by which the carrying amount of the asset exceeds its fair value, and is charged to results of operations at that time.

During the fourth quarter of 2008, a goodwill impairment was identified and recorded at three of our reporting units. This indicated that there could be an impairment of long-lived assets at those reporting units. The Company performed an impairment analysis of our long-lived assets at the three reporting units that recorded a goodwill impairment charge. The undiscounted cash flows relating to the definite-lived assets exceeded the carrying value of those assets and therefore no impairment charge was recorded.

Determining fair values based on discounted cash flows requires management to make significant estimates and assumptions, including forecasting of revenue and profitability growth for use in the long-range plan and estimating appropriate discount rates.

Debt Issuance Costs

Costs directly related to the issuance of debt are capitalized, included in other long-term assets and amortized using the effective interest method over the term of the related debt obligation. The net carrying value of debt issuance costs was approximately $7.6 million and $4.0 million at December 31, 2009 and 2008, respectively.

Revenue Recognition

Product revenues are recognized, net of sales tax collected, at the time title and risk of loss pass to the customer, which generally occurs upon shipment to the customer. Product return reserves are accrued at the time of sale based on the historical relationship between shipments and returns, and are recorded as a reduction of net sales.

Certain large distribution customers receive quantity discounts which are recognized net at the time the sale is recorded.

Shipping and Handling Costs

Shipping and handling costs associated with sales are classified as a component of cost of sales.

60

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Warranty Costs

Estimated expenses related to product warranties are accrued at the time products are sold to customers. Estimates are established using historical information as to the nature, frequency, and average costs of warranty claims. See Note 7 to the consolidated financial statements.

Self-Insurance

Certain exposures are self-insured up to pre-determined amounts, above which third-party insurance applies, for medical claims, workers’ compensation, vehicle insurance, product liability costs and general liability exposure. The accompanying balance sheets include reserves for the estimated costs associated with these self-insured risks, based on historic experience factors and management’s estimates for known and anticipated claims. A portion of medical insurance costs are offset by charging employees a premium equivalent to group insurance rates.

Research and Development

Research and development costs are expensed as incurred.

Advertising

Advertising costs are charged to selling, general, and administrative expenses as incurred and amounted to approximately $1.3 million, $2.3 million and $2.4 million, for the years ended December 31, 2009, 2008, and 2007, respectively.

Stock-Based Compensation

The Company established the 2004 Equity Incentive Plan, as amended that provides for various forms of stock based compensation to officers, directors key employees and others who make significant contributions to the success of the Company. Expense associated with equity awards is recognized on a straight-line basis over the requisite service period which typically coincides with the vesting period of the grant.

Income Taxes

The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company evaluates the realizability of its net deferred tax assets and assesses the need for a valuation allowance on a quarterly basis. The future benefit to be derived from its deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income to realize the assets. The Company records a valuation allowance to reduce its net deferred tax assets to the amount that may be more likely than not to be realized.

To the extent the Company establishes a valuation allowance on net deferred tax assets generated from operations, an expense will be recorded within the provision for income taxes. In periods subsequent to establishing a valuation allowance on net deferred assets from operations, if the Company were to determine that it would be able to realize its net deferred tax assets in excess of their net recorded amount, an adjustment to the valuation allowance would be recorded as a reduction to income tax expense in the period such determination was made.

We assess our income tax positions and record tax benefits for all years subject to examination, based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, we record the amount that has a greater than 50% likelihood of being realized upon settlement with the taxing authority that has full

61

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

knowledge of all relevant information. Interest and penalties are accrued, where applicable. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit is recognized.

Accumulated Other Comprehensive Income (Loss)

The Company’s total accumulated other comprehensive income (loss) is comprised of the following:

			Cumulative			Accumulated
	Minimum		Foreign Currency			Other
	Pension		Translation			Comprehensive
	Asset/(liability)		Adjustment			Income (Loss)
Balance at December 31, 2008	$	554	$	(24,644	)	$	(24,090	)
Balance at December 31, 2009	$	1,068	$	(15,714	)	$	(14,646	)

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to the current period presentation. In the 2008 Consolidated Balance Sheet, the income tax receivable balance has been presented in a separate line in the balance sheet to conform with 2009 presentation.

2.   Recent Accounting Pronouncements

In December 2008, the Financial Accounting Standards Boards (“FASB”) issued enhanced disclosure requirements for defined benefit pension and other postretirement benefit plan assets. The additional disclosures are intended to provide users of financial statements with an enhanced understanding of (a) how investment allocation decisions are made, (b) the major categories of plan assets, (c) the inputs and valuation techniques used to measure the fair value of plan assets, (d) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and (e) significant concentrations of risk within plan assets. See Note 9 to consolidated financial statements for the Company’s enhanced disclosure.

3.   Discontinued Operations

On December 31, 2007, the Company completed the divestiture of its TB Wood’s adjustable speed drives business (“Electronics Division”) to Finland-based Vacon for $29.0 million. The decision to sell the Electronics Division was made to allow the Company to continue its strategic focus on its core electro-mechanical power transmission business.

As of December 31, 2007, $11.9 million of cash had been received from Vacon for the purchase of the Electronics Division. The remaining $17.1 million was recorded as a receivable for the sale of Electronics Division on the December 31, 2007 consolidated balance sheet. The Company collected the receivable in January 2008. The Company determined that the Electronics Division became a discontinued operation in the fourth quarter of 2007. Accordingly, the operating results of the Electronics Division were segregated from the continuing operations in the consolidated statements of operations and comprehensive income (loss) for the periods subsequent to the acquisition of TB Wood’s (April 5, 2007) through December 31, 2007.

62

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

The following table summarizes the results from discontinued operations for the periods indicated:

	April 5 to
	December 31,
	2007
Sales	$	28,715
Cost of sales		19,120
Gross Profit		9,595
Selling, general and administrative expenses		5,334
Research and development		1,825
Operating income from continuing operations		2,436
Interest income, net		(76	)
Other non-operating income		(83	)
Gain on the sale of the Electronics Division		1,513
Total income from discontinued operations before income taxes		4,108
Income taxes		6,109
Total net loss from discontinued operations	$	(2,001	)

In connection with the acquisition of TB Wood’s stock, all of the assets acquired and liabilities assumed were recorded at fair value on the date of acquisition. Because the transaction was an acquisition of stock, the historical tax basis in the stock acquired was carried over and became the tax basis for the Company resulting in significant book-tax differences. The deferred tax liabilities were not recorded in connection with the non-deductible goodwill resulting from the acquisition. In addition, there were significant differences between the outside and inside basis in the foreign subsidiaries’ stock that was sold as part of the disposal. As a result of these book-tax differences, we realized a significant gain on the sale of the Electronics Division for tax purposes but a much smaller gain for book purposes. As a result, the tax expense on the gain on the discontinued operations was significantly larger than one might expect when compared to the income from discontinued operations before taxes.

The Company entered into a transition services agreement to provide services such as sales support, warehousing, accounting and IT services to Vacon. The Company has recorded the income received as an offset to the related expense of providing the service. During 2008, the Company recorded $0.3 million against cost of sales, $1.1 million against SG&A and $0.6 million in other income related to lease payments for the rental of buildings. During 2009, the Company recorded $0.6 million in other income related to lease payments for the rental of buildings.

Loss from discontinued operations in the year ended December 31, 2008, was comprised of a purchase price working capital adjustment, net of tax and a revision of tax estimates made in 2007 based on the actual amounts filed on the Company’s tax return in 2008.

4.   Inventories

Inventories located at certain subsidiaries acquired in connection with the TB Wood’s acquisition are stated at the lower of current cost or market, principally using the last-in, first-out (LIFO) method. All of the Company’s remaining subsidiaries are stated at the lower of cost or market, using the first-in, first-out (FIFO)

63

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

method. The cost of inventory includes direct materials, direct labor and production overhead. Market is defined as net realizable value. Inventories at December 31, 2009 and 2008 consisted of the following:

	December 31,		December 31,
	2009		2008
Raw Materials	$	28,539	$	31,925
Work in process		13,711		21,310
Finished goods		29,603		45,175
Inventories, net	$	71,853	$	98,410

Approximately 13% of total inventories at December 31, 2009, were valued using the LIFO method. The Company recorded as a component of cost of sales, a $0.1 million benefit and a provision of $1.1 million in the year ended December 31, 2009 and 2008, respectively. If the LIFO inventory was accounted for using the FIFO method, the inventory balance at December 31, 2009 and 2008, would be $0.4 million and $0.3 million lower, respectively.

5.   Property, Plant and Equipment

Property, plant and equipment at December 31, 2009 and 2008, consisted of the following:

	2009			2008
Land	$	13,363		$	12,923
Buildings and improvements		35,030			31,597
Machinery and equipment		118,804			110,178
		167,197			154,698
Less-Accumulated depreciation		(61,594	)		(44,478	)
	$	105,603		$	110,220

During the fourth quarter of 2007, management entered into a plan to exit the building located in Stratford, Canada. The operations of the facility, which was acquired as part of the TB Wood’s acquisition, were integrated into certain of the Company’s other existing facilities in 2008. In the second quarter of 2009, due to real estate market conditions in Stratford, Canada, the Company reevaluated the classification of this building as an asset held for sale and reclassified the building, with a net book value of $1.2 million, to held and used. As a result of the change in classification, the Company recorded a catch-up depreciation adjustment of $0.1 million in the year ended December 31, 2009.

As of December 31, 2008, management planned to exit two buildings, one in Scotland, Pennsylvania and one in Chattanooga, Tennessee. The two buildings were previously the operating facilities for the Electronics Division which was divested on December 31, 2007. The Company leases the space to Vacon. In the first quarter of 2009, due to real estate market conditions in Scotland, Pennsylvania and Chattanooga, Tennessee, the Company reevaluated the classification of these buildings as assets held for sale and reclassified the buildings, with a net book value of $3.5 million, to held and used. As a result of the change in classification, the Company recorded a catch-up depreciation adjustment of $0.2 million in 2009.

64

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

6.   Goodwill and Intangible Assets

Changes in goodwill during the year ended December 31, 2009 and 2008, were as follows:

	2009			2008
Gross goodwill balance as of January 1	$	109,307		$	114,979
Adjustments to acquisition related tax contingencies		—			(1,461	)
Impact of changes in foreign currency		1,335			(4,211	)
Gross goodwill balance as of December 31		110,642			109,307
Accumulated impairment, January 1		(31,810	)		—
Impairment charge during period		—			(31,810	)
Accumulated impairment, December 31		(31,810	)		(31,810	)
Net goodwill balance December 31, 2009	$	78,832		$	77,497

Other intangibles and related accumulated amortization consisted of the following:

	December 31, 2009				December 31, 2008
			Accumulated					Accumulated
	Cost		Amortization		Cost			Amortization
Other Intangible Assets
Intangible assets not subject to amortization:
Tradenames and trademarks	$	30,730	$	—	$	30,730		$	—
Intangible assets subject to amortization:
Customer relationships		62,038		19,655		62,038			15,065
Product technology and patents		5,435		4,059		5,435			3,111
Impact of changes in foreign currency		416		—		(688	)		—
Total intangible assets	$	98,619	$	23,714	$	97,515		$	18,176

The Company recorded $5.5 million, $5.7 million and $5.5 million of amortization for the years ended December 31, 2009, 2008 and 2007, respectively.

Customer relationships, product technology and patents are amortized over their useful lives ranging from 8 to 16 years. The weighted average estimated useful life of intangible assets subject to amortization is approximately 11 years.

The estimated amortization expense for intangible assets is approximately $5.5 million in each of the next five years and then $16.3 million thereafter.

In 2008 and 2009, as part of the annual goodwill impairment assessment, the Company estimated the fair value of each of the Company’s reporting units using an income approach. The Company forecasted future cash flows by reporting unit for each of the next five years and applied a long-term growth rate to the final year of forecasted cash flows.

As a result of the December 31, 2008 goodwill impairment analysis, the Company recorded a goodwill impairment charge of $31.8 million at the TB Wood’s, Huco and Warner Linear reporting units. Due to prevailing market conditions at the time of the acquisitions of these three reporting units, the purchase price paid as consideration for these three acquisitions required a higher premium when compared to the prior 2004 Colfax acquisition and therefore created higher goodwill at these reporting units.

The Company did not identify a goodwill impairment in 2009.

65

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

7.   Warranty Costs

The wholly-owned subsidiaries of Altra Industrial Motion manufacture various products. The contractual warranty period generally ranges from three months to thirty-six months based on the product and application of the product. Estimated expenses related to product warranties are accrued at the time products are sold to customers. Estimates are established using historical information as to the nature, frequency and average costs of warranty claims. Changes in the carrying amount of accrued product warranty costs for the year ended December 31, 2009 and 2008 are as follows:

	December 31,			December 31,			December 31,
	2009			2008			2007
Balance at beginning of period	$	4,254		$	4,098		$	2,083
Accrued current period warranty costs		1,894			2,919			2,310
Payments and adjustments		(2,101	)		(2,763	)		(295	)
Balance at end of period	$	4,047		$	4,254		$	4,098

8.   Income Taxes

Income (loss) from continuing operations before taxes by domestic and foreign locations consists of the following:

	December 31,			December 31,		December 31,
	2009			2008		2007
Domestic	$	(5,711	)	$	2,324	$	10,190
Non-U.S.		1,033			21,125		11,479
Total	$	(4,678	)	$	23,449	$	21,669

The components of the provision for income taxes consist of the following:

	December 31,			December 31,		December 31,
	2009			2008		2007
Current:
Federal	$	(2,182	)	$	8,511	$	781
State		314			212		(230	)
Non-U.S.		1,308			6,607		2,202
	$	(560	)	$	15,330	$	2,753
Deferred:
Federal	$	(1,279	)	$	128	$	4,988
State		(528	)		200		456
Non-U.S.		3			1,073		11
		(1,804	)		1,401		5,455
Provision for income taxes	$	(2,364	)	$	16,731	$	8,208

66

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

A reconciliation from the federal statutory rate to the Company’s effective tax rate for income taxes from continuing operations is as follows:

	December 31,			December 31,			December 31,
	2009			2008			2007
Tax at U.S. federal income tax rate	$	(1,637	)	$	8,209		$	7,584
State taxes, net of federal income tax effect		(617	)		486			306
Change in tax rate		(19	)		9			(750	)
Foreign taxes		975			1,091			1,761
Adjustments to accrued income tax liabilities and uncertain tax positions		(1,487	)		505			397
Valuation allowances		1,726			316
Interest		(1,434	)		(1,831	)		(1,365	)
Goodwill impairment					8,061			—
Other		129			(115	)		275
Provision for income taxes	$	(2,364	)	$	16,731		$	8,208

The Company adopted the provisions of ASC 740-25, formerly known as FASB interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB 109” (“FIN 48”), at the beginning of fiscal 2007, which resulted in a decrease of approximately $0.2 million to the December 31, 2006 retained earning balance. FIN 48 provides a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

A reconciliation of the gross amount of unrecognized tax benefits excluding accrued interest and penalties is as follows:

	December 31,			December 31,			December 31,
	2009			2008			2007
Balance at beginning of period	$	6,213		$	5,583		$	922
Increases related to prior year tax positions		1,767			2,134			1,916
Increases related to acquisitions		—			—			3,581
Decreases related to prior year tax positions		—			(46	)		(1,970	)
Increases related to current year tax positions		87			72			1,785
Settlements		(33	)		(398	)		—
Lapse of statute of limitations		(658	)		(1,132	)		(651	)
Balance at end of period	$	7,376		$	6,213		$	5,583

At December 31, 2009, the Company had unrecognized tax benefits of $9.7 million. If recognized, $9.2 million would reduce the Company’s effective tax rate and $0.5 million would reduce deferred tax assets resulting in no impact to our effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense in the consolidated statement of operations. The Company accrued interest and penalties of $0.4 million, $1.4 million and $1.7 million during the years ended December 31, 2009, 2008 and 2007, respectively. The total amount of interest and penalties related to uncertain tax positions at December 31, 2009, 2008 and 2007 was $3.5 million, $3.1 million and $1.7 million, respectively. We do not expect the amount of unrecognized tax benefit disclosed above to change significantly over the next 12 months.

67

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

The Company and its subsidiaries file a consolidated federal income tax return in the United States as well as consolidated and separate income tax returns in various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in all of these jurisdictions. With the exception of certain state and non U.S. jurisdictions, the Company is no longer subject to income tax examinations for the tax years prior to 2005 in these major jurisdictions. Additionally, the Company has indemnification agreements with the sellers of the Colfax PTH, Kilian and Hay Hall entities, which provides for reimbursement to the Company for payments made in satisfaction of tax liabilities relating to pre-acquisition periods.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities as of December 31, 2009 and 2008 were as follows:

	2009			2008
Deferred tax assets:
Post-retirement obligations	$	2,502		$	4,538
Goodwill		3,550			5,112
Tax credits		2,781
Expenses not currently deductible		3,585			3,464
Net operating loss carry forward		11,369			5,424
Other		1,034			186
Total deferred tax assets		24,821			18,724
Valuation allowance for deferred tax assets		(8,692	)		(5,610	)
Net deferred tax assets		16,129			13,114
Deferred tax liabilities:
Property, plant and equipment		16,257			15,279
Intangible assets		16,927			18,035
Other		1,327			1,515
Total deferred tax liabilities		34,511			34,829
Net deferred tax liabilities	$	18,382		$	21,715

At December 31, 2009, the Company had federal net operating loss (NOL) carryforwards of $12.4 million, which expire in 2029, state NOL carryforwards of $33.8 million, which expire between 2014 and 2029, and non U.S. NOL carryforwards of $17.9 million, of which $17.5 million have an unlimited carryforward period and the remaining $0.4 million expire between 2019 and 2027. The NOL carryforwards available are subject to limitations on their annual usage. The Company also has federal and state tax credits of $2.8 million available to reduce future income taxes that expire between 2013 and 2029.

Valuation allowances are established for deferred tax assets that management believes may not be realized. The Company continually reviews the adequacy of the valuation allowance and recognizes tax benefits only as reassessments indicate that it is more likely than not the benefits will be realized. A valuation allowance of $8.7 million and $0.8 million as of December 31, 2009 and 2008, respectively, have been established due to the uncertainty of realizing the benefits of these NOL carryforwards and tax credits.

A provision has not been made for U.S. or additional non-U.S. taxes on $13.5 million of undistributed earnings of international subsidiaries that could be subject to taxation if remitted to the U.S. because the

68

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Company plans to keep these amounts permanently reinvested outside the U.S. except for instances where the Company can remit such earnings to the U.S. without an associated net tax cost.

9.   Pension and Other Employee Benefits

Defined Benefit (Pension) and Postretirement Benefit Plans

The Company sponsors various defined benefit (pension) and postretirement (medical and life insurance coverage) plans for certain, primarily unionized, active employees (those in the employment of the Company at or hired since November 30, 2004).

The following tables represent the reconciliation of the benefit obligation, fair value of plan assets and funded status of the respective defined benefit (pension) and postretirement benefit plans as of December 31, 2009 and 2008:

	Pension Benefits						Other Benefits
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2009			2008			2009			2008
Change in benefit obligation:
Obligation at beginning of period	$	26,676		$	28,011		$	2,583		$	3,482
Service cost		111			239			39			58
Interest cost		1,418			1,561			118			213
Curtailments, settlements and special termination benefits		—			—			(1,467	)		(1,029	)
Actuarial (gains) losses		(1,681	)		(2,240	)		(623	)		224
Foreign exchange effect		66			(133	)		—			—
Benefits paid		(1,027	)		(762	)		(137	)		(365	)
Obligation at end of period	$	25,563		$	26,676		$	513		$	2,583
Change in plan assets:
Fair value of plan assets, beginning of period	$	14,822		$	14,580		$	—		$	—
Actual return on plan assets		785			(2,943	)		—			—
Employer contributions		1,121			3,947			137			365
Benefits paid		(1,027	)		(762	)		(137	)		(365	)
Fair value of plan assets, end of period	$	15,701		$	14,822		$	—		$	—
Funded status	$	(9,862	)	$	(11,854	)	$	(513	)	$	(2,583	)
Amounts Recognized in the balance sheet consist of:
Non current assets	$	—		$	—					$	—
Current liabilities		—			—			(108	)		(313	)
Non-current liabilities		(9,862	)		(11,854	)		(405	)		(2,270	)
Total	$	(9,862	)	$	(11,854	)	$	(513	)	$	(2,583	)

69

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

For all pension plans presented above, the accumulated and projected benefit obligations exceed the fair value of plan assets. The accumulated benefit obligation at December 31, 2009 and 2008 was $25.6 million and $26.7 million, respectively. Non-U.S. pension liabilities recognized in the amounts presented above are $3.3 million and $2.9 million at December 31, 2009 and 2008, respectively.

Included in accumulated other comprehensive loss at December 31, 2009 and 2008, is $0.5 million (net of $0.3 million in taxes) and $2.0 million (net of $1.2 million in taxes), respectively, of unrecognized actuarial losses that have not yet been recognized in net periodic pension cost.

The weighted average discount rate used in the computation of the respective benefit obligations at December 31, 2009 and 2008, presented above are as follows:

	2009			2008
Pension benefits		5.75	%		6.25	%
Other postretirement benefits		5.75	%		6.25	%

The following table represents the components of the net periodic benefit cost associated with the respective plans:

	Pension Benefits									Other Benefits
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2009			2008			2007			2009			2008			2007
Service cost	$	111		$	239		$	325		$	39		$	58		$	72
Interest cost		1,418			1,561			1,452			118			213			175
Recognized net actuarial loss		—			—			—			(80	)		(25	)		—
Expected return on plan assets		(1,254	)		(1,374	)		(1,066	)		—			—			—
Settlement/Curtailment/ Special Termination Benefit		—			—			2,899			(1,467	)		(924	)		(154	)
Amortization		(22	)		(35	)		(4	)		(939	)		(975	)		(1,022	)
Net periodic benefit (income) cost	$	253		$	391		$	3,606		$	(2,329	)	$	(1,653	)	$	(929	)

The key economic assumptions used in the computation of the respective net periodic benefit cost for the periods presented above are as follows:

	Pension Benefits									Postretirement Benefits
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2009			2008			2007			2009			2008			2007
Discount rate		6.25	%		6.25	%		5.75	%		6.25	%		6.25	%		5.75	%
Expected return on plan assets		8.5	%		8.5	%		8.5	%		N/A			N/A			N/A
Compensation rate increase		N/A			N/A			N/A			N/A			N/A			N/A

The expected long-term rate of return on assets assumption is 8.5%. The assumption represents the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the benefit obligation. The assumption reflects expectations regarding future rates of return for the

70

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

investment portfolio, with consideration given to the distribution of investments by asset class and historical rates of return for each individual asset class.

Fair Value of Plan Assets

The fair value of the Company’s pension plan assets at December 31, 2009 by asset category is as follows:

	2009
	Quoted Prices in
	Active Markets
	for Identical
	Assets (Level 1)
Asset Category
Equity
U.S. companies	$	2,749
International companies		397
Total equity		3,146
Fixed income
U.S. government		570
Corporate bonds
Investment grade		8,182
High yield		1,121
Other credit		2,114
Total fixed income		11,987
Cash and cash equivalents		568
Total assets at fair value	$	15,701

The asset allocations for the Company’s funded retirement plan at December 31, 2009 and 2008, respectively, and the target allocation for 2009, by asset category, are as follows:

	Allocation Percentage of
	Plan Assets at Year-End
	2009			2009			2008
	Actual			Target			Actual
Asset Category
Equity securities		20	%		25	%		8	%
Fixed income securities		76	%		73	%		76	%
Cash and cash equivalents		4	%		2	%		16	%

The investment strategy is to achieve a rate of return on the plan’s assets that, over the long-term, will fund the plan’s benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plan’s return is the asset allocation policy. The plan’s asset mix will be reviewed by the Company periodically, but at least quarterly, to rebalance within the target guidelines. The Company will also periodically review investment managers to determine if the respective manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices.

For measurement of the postretirement benefit obligations and net periodic benefit costs, an annual rate of increase in the per capita cost of covered health care benefits of approximately 9.5% was assumed. This rate was assumed to decrease gradually to 5%. The assumed health care trends are a significant

71

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

component of the postretirement benefit costs. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	1-Percentage-		1-Percentage-
	Point		Point
	Increase		Decrease
Effect on the December 31, 2009 service and interest cost components	$	30	$	(24	)
Effect on the December 31, 2009 post-retirement benefit obligation	$	5	$	(5	)

Expected cash flows

The following table provides the amounts of expected benefit payments, which are made from the plans’ assets and includes the participants’ share of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company’s best estimate given its current knowledge; actual amounts could be materially different.

	Pension		Postretirement
	Benefits		Benefits
Expected benefit payments (from plan assets)
2010	$	939	$	107
2011		1,175		111
2012		1,278		74
2013		1,354		27
2014		1,529		7
Thereafter		8,455		53

The Company contributed $0.9 million to its pension plan in 2009. The Company has minimum cash funding requirements associated with its pension plan which are estimated to be zero in 2010, $1.2 million in 2011, $1.2 million in 2012, $0.6 million in 2013 and $1.2 million in 2014.

One of the Company’s four U.S. collective bargaining agreements expired in September 2007. In October 2007, negotiations with the union covered by that agreement resulted in a provision to close the Erie, Pennsylvania plant by December 2008 through the transfer of manufacturing equipment to other existing facilities and a ratable reduction in headcount. The plant closure triggered a special retirement pension feature and plan curtailment.

Under the special retirement pension feature, plan participants became eligible for pension benefits at an age earlier than the normal retirement feature would allow, provided that service is broken by permanent shutdown, layoff or disability. The pension benefit was increased by a special supplemental benefit payment on a monthly basis and a special one time payment at the time of retirement. The curtailment and special termination benefits were approximately $2.9 million for the year ended December 31, 2007.

In August 2008, an announcement was made that the Company would no longer close the plant in Erie, Pennsylvania, and would continue to employ those employees that had not previously been terminated and begin to negotiate a new collective bargaining agreement for the remaining employees. As a result of this announcement, the remaining employees were no longer eligible for the special retirement pension feature under the pension plan. An adjustment to the minimum pension liability was recorded in accumulated other comprehensive income, and will be amortized over the average expected remaining life expectancy of the participants of the plan.

Also, in connection with the union renegotiation, the post retirement benefit plan for employees at that location have been terminated for all eligible employees who had not retired, or given notice to retire in

72

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

2007. As employees terminated their employment, the Company recognized a non-cash gain of $0.3 million and $0.2 million in the year ended 2008 and 2007, respectively.

In September 2008, the Company reached a new collective bargaining agreement with the labor union at the manufacturing facility in Warren, Michigan. The new collective bargaining agreement eliminated post-retirement healthcare benefits for all employees and retirees. This resulted in a settlement gain of $0.6 million in the year ended 2008.

In March 2009, the Company reached a new collective bargaining agreement with the union at its Erie, Pennsylvania facility. One of the provisions of the new agreement eliminates benefits that employees were entitled to receive through the applicable other post employment benefit plan (“OPEB”). OPEB benefits will no longer be available to retired or active employees. This resulted in an OPEB settlement gain of $1.5 million in the year ended December 31, 2009. In addition, no additional years of credited service will be accrued on the defined benefit pension plan effective February 28, 2009. There was no curtailment gain or loss as a result of the change in the pension plan.

Defined Contribution Plans

At November 30, 2004, the Company established a defined contribution plan for substantially all full-time U.S.-based employees.

Under the terms of the Company’s plan, eligible employees may contribute from one to fifty percent of their compensation to the plan on a pre-tax basis. During 2009, the Company made matching contributions equal to half of the first six percent of salary contributed by each employee and makes a unilateral contribution of three percent of all employees’ salary (including non-contributing employees). Effective February 2009, the Company’s matching contribution was temporarily suspended and effective July 2009, the Company’s unilateral contribution was suspended. The Company’s expense associated with the defined contribution plan was $1.0 million and $1.8 million during the years ended December 31, 2009 and 2008, respectively.

10.   Long-Term Debt

	December 31,			December 31,
	2009			2008
Debt:
Revolving Credit Agreement	$	—		$	—
Old Revolving Credit Agreement		—			—
Old TB Wood’s revolving credit agreement		—			6,000
Overdraft agreements		—			—
Senior Secured Notes		210,000			—
Old Senior Secured Notes		—			242,500
Old Senior Notes		—			4,706
Variable rate demand revenue bonds		5,300			5,300
Mortgages		3,144			2,257
Capital leases		1,821			2,672
Less: debt discount and premium, net of accretion		(2,716	)		(1,912	)
Total long-term debt	$	217,549		$	261,523

73

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Senior Secured Notes

In 2009, the Company issued 81/8% Senior Secured Notes (the “Senior Secured Notes”) with a face value of $210 million. Interest on the Senior Secured Notes is payable semiannually in arrears, on June 1 and December 1 of each year, commencing on June 1, 2010 at an annual rate of 81/8%. The effective interest rate of the Senior Secured Notes was approximately 8.75% after consideration of the $6.5 million of deferred financing costs (included in other assets). The principal balance of the Senior Secured Notes matures on December 1, 2016.

The Senior Secured Notes are guaranteed by the Company’s U.S. domestic subsidiaries and are secured by a second priority lien, subject to first priority liens securing the Revolving Credit Agreement, on substantially all of the Company’s assets and those of its domestic subsidiaries. The indenture governing the Senior Secured Notes contains covenants which restrict our subsidiaries. These restrictions limit or prohibit, among other things, their ability to incur additional indebtedness; repay subordinated indebtedness prior to stated maturities; pay dividends on or redeem or repurchase stock or make other distributions; make investments or acquisitions; sell certain assets or merge with or into other companies; sell stock in our subsidiaries; and create liens on their assets.

Tender Offer

The Company used the proceeds of the offering of the Senior Secured Notes to repurchase or redeem the Old Senior Secured Notes. On November 10, 2009, Altra Industrial commenced a cash tender offer to repurchase any and all of its outstanding 9% Senior Secured Notes (the “Old Senior Secured Notes”) as of the date thereof at a price equal to $1,000.00 per $1,000 principal amount of notes tendered, plus an early tender premium of $25.00 per $1,000 principal amount of notes tendered, payable on notes tendered before the early tender deadline. Holders who tendered their Old Senior Secured Notes also agreed to waive any rights to written notice of redemption. With respect to any Old Senior Secured Notes that were not tendered, Altra Holdings redeemed all Old Senior Secured Notes that remained outstanding after the expiration of the tender offer by issuing a notice of redemption on the early tender deadline. On the early tender deadline, Altra Holdings satisfied and discharged all of its obligations under the indenture governing the Old Senior Secured Notes by depositing funds with the depositary in an amount sufficient to pay and discharge any remaining indebtedness on the Old Senior Secured Notes upon the consummation of the tender offer.

Revolving Credit Agreement

Concurrently with the closing of the offering of the Senior Secured Notes, Altra Industrial entered into a new senior secured credit facility, (the “Revolving Credit Agreement”), that provides for borrowing capacity in an initial amount of up to $50.0 million (subject to adjustment pursuant to a borrowing base and subject to increase from time to time in accordance with the terms of the credit facility). The Revolving Credit Agreement replaced Altra Industrial’s then existing senior secured credit facility, (the “Old Revolving Credit Agreement”), and the TB Wood’s existing credit facility, “Old TB Wood’s Revolving Credit Agreement”. The Company may use up to $30.0 million of its availability under the Revolving Credit Agreement for standby letters of credit issued on its behalf, the issuance of which will reduce the amount of borrowings that would otherwise be available to the Company. The Company may re-borrow any amounts paid to reduce the amount of outstanding borrowings; however, all borrowings under the Revolving Credit Agreement must be repaid in full as of November 25, 2012.

There were no borrowings under the Revolving Credit Agreement at December 31, 2009, however, the lender had issued $10.4 million of outstanding letters of credit on behalf of the Company.

Altra Industrial and all of its domestic subsidiaries are borrowers, or “Borrowers”, under the Revolving Credit Agreement. Obligations of the other Borrowers under the Revolving Credit Agreement and the guarantees are secured by substantially all of Borrowers’ assets and the assets of each of our existing and

74

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

subsequently acquired or organized domestic subsidiaries that is a guarantor of our obligations under the Revolving Credit Agreement (with such subsidiaries being referred to as the “U.S. subsidiary guarantors”), including but not limited to: (a) a first-priority pledge of all the capital stock of subsidiaries held by Borrowers or any U.S. subsidiary guarantor (which pledge, in the case of any foreign subsidiary, will be limited to 100% of any non-voting stock and 65% of the voting stock of such foreign subsidiary) and (b) perfected first-priority security interests in and mortgages on substantially all tangible and intangible assets of each Borrower and U.S. subsidiary guarantor, including accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, certain real property, and cash and proceeds of the foregoing (in each case subject to materiality thresholds and other exceptions).

An event of default under the Revolving Credit Agreement would occur in connection with a change of control, among other things, if: (i) Altra Industrial ceases to own or control 100% of each of its borrower subsidiaries, or (ii) a change of control occurs under the Senior Secured Notes, or any other subordinated indebtedness.

An event of default under the Revolving Credit Agreement would also occur if an event of default occurs under the indentures governing the Senior Secured Notes or if there is a default under any other indebtedness of any borrower may have involving an aggregate amount of $10 million or more and such default: (i) occurs at final maturity of such debt, (ii) allows the lender there under to accelerate such debt or (iii) causes such debt to be required to be repaid prior to its stated maturity. An event of default would also occur under the Revolving Credit Agreement if any of the indebtedness under the Revolving Credit Agreement ceases with limited exception to be secured by a full lien on the assets of Borrowers and guarantors.

Old Revolving Credit Agreement

Prior to entering into the Revolving Credit Agreement, the Company maintained a $30 million revolving borrowings facility with a commercial bank (the “Old Revolving Credit Agreement”) through its wholly owned subsidiary Altra Industrial. The Old Revolving Credit Agreement was subject to certain limitations resulting from the requirement of Altra Industrial to maintain certain levels of collateralized assets, as defined in the Old Revolving Credit Agreement. Altra Industrial was in compliance with all covenant requirements associated with the Old Revolving Credit Agreement as of the date of refinancing.

Old TB Wood’s Revolving Credit Agreement

As part of the TB Wood’s acquisition in 2007, the Company refinanced $13.0 million of debt associated with TB Wood’s line of credit. As of December 31, 2008, there was $6.0 million of debt outstanding under the TB Wood’s Old Credit Agreement. As of December 31, 2008 there was $6.0 million of outstanding letters of credit. In connection with the refinancing transaction described above, the Old TB Wood’s Revolving Credit Agreement was paid in full.

Overdraft Agreements

Certain of our foreign subsidiaries maintain overdraft agreements with financial institutions. There were no borrowings as of December 31, 2009 or 2008 under any of the overdraft agreements.

Old Senior Secured Notes

On November 30, 2004, Altra Industrial issued the Old Senior Secured Notes, with a face value of $165.0 million. Interest on the Old Senior Secured Notes is payable semiannually, in arrears, on June 1 and December 1 of each year, beginning June 1, 2005, at an annual rate of 9%.

In connection with the acquisition of TB Wood’s on April 5, 2007, Altra Industrial completed a follow-on offering issuing an additional $105.0 million of the Old Senior Secured Notes. The additional $105.0 million had the same terms and conditions as the previously issued Old Senior Secured Notes. The

75

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

effective interest rate on the Old Senior Secured Notes, after the follow-on offering was approximately 9.6% after consideration of the amortization of $5.6 million net discount and $6.5 million of deferred financing costs.

During 2008, the Company retired $27.5 million aggregate principal amount of the outstanding Old Senior Secured Notes at redemption prices between 102.0% and 104.4% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest. In connection with the redemption, the Company incurred $0.8 million of pre-payment premium. In addition, the Company wrote-off $0.4 million of deferred financing costs and $0.3 million of discount/premium.

During 2009, Altra Industrial retired all of the outstanding Old Senior Secured Notes. In connection with the pay-down, Altra Industrial incurred $5.1 million of pre-payment premiums and wrote-off $3.2 million of deferred financing costs, and $1.9 million of discount/premium which was recorded as a component of interest expense.

The Old Senior Secured Notes were guaranteed by Altra Industrial’s U.S. domestic subsidiaries and were secured by a second priority lien, subject to first priority liens securing the Old Revolving Credit Agreement, on substantially all of Altra Industrial’s assets. The Old Senior Secured Notes contained numerous terms, covenants and conditions, which imposed substantial limitations on Altra Industrial.

Old Senior Notes

On February 8, 2006, Altra Industrial issued the Old Senior Notes, with a face value of £33 million. Interest on the Old Senior Notes was payable semiannually, in arrears, on August 15 and February 15 of each year, beginning August 15, 2006, at an annual rate of 11.25%. The effective interest rate on the Old Senior Notes was approximately 12.7%, after consideration of the $0.7 million of deferred financing costs (included in other assets). The Old Senior Notes mature on February 13, 2013.

During 2008, Altra Industrial retired £0.7 million, or $1.3 million, aggregate principal amount of the outstanding Old Senior Notes at a redemption price of 106.0% of the principal amount of the Old Senior Notes, plus accrued and unpaid interest. In connection with the redemption, Altra Industrial incurred $0.1 million of pre-payment premium and wrote-off $0.1 million of deferred financing costs.

During 2009, Altra Industrial retired the remaining principal balance of the Old Senior Notes, of £3.3 million or $5.0 million of principal amount, plus accrued and unpaid interest. In connection with the redemption, Altra Industrial incurred $0.2 million of pre-payment premium and wrote-off the entire remaining balance of $0.2 million of deferred financing fees, which is recorded as interest expense in the condensed consolidated statement of income (loss).The Old Senior Notes were guaranteed on a senior unsecured basis by Altra Industrial’s U.S. domestic subsidiaries. The Old Senior Notes contained numerous terms, covenants and conditions, which imposed substantial limitations on the Company.

Variable Rate Demand Revenue Bonds

In connection with the acquisition of TB Wood’s, the Company assumed obligations for certain Variable Rate Demand Revenue Bonds outstanding as of the acquisition date. TB Wood’s had assumed obligations for approximately $3.0 million and $2.3 million of Variable Rate Demand Revenue Bonds issued under the authority of the industrial development corporations of the City of San Marcos, Texas and City of Chattanooga, Tennessee, respectively. These bonds bear variable interest rates (less than 1% as of December 31, 2009) and mature in April 2024 and April 2022, respectively. The bonds were issued to finance production facilities for TB Wood’s manufacturing operations in those cities, and are secured by letters of credit issued under the terms of the Revolving Credit Agreement. The Company currently is leasing the facility in Chattanooga, Tennessee to Vacon, the purchaser of the Electronics Division.

76

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Mortgage

In June 2006, the Company entered into a mortgage on its building in Heidelberg, Germany with a local bank. In 2009, the Company re-financed the mortgage. The Company borrowed an additional €1.0 million. The new mortgage has an interest rate of 3.5% and is payable in monthly installments over the next six years years. As of December 31, 2009 and 2008, the mortgage has a remaining principal of €2.2 million or $3.1 million, and €1.6 million or $2.3 million, respectively.

Capital Leases

The Company leases certain equipment under capital lease arrangements, whose obligations are included in both short-term and long-term debt. Capital lease obligations amounted to approximately $1.8 million and $2.7 million at December 31, 2009 and 2008, respectively. Assets under capital leases are included in property, plant and equipment with the related amortization recorded as depreciation expense.

11.   Stockholders’ Equity

Common Stock

In December 2006, the Company completed its initial public offering. The Company offered 3,333,334 shares of its common stock, $0.001 par value per share and selling stockholders offered 6,666,666 shares of common stock. Proceeds to the Company after the underwriting discount and issuance cost were $39.3 million.

In June 2007, the Company closed its secondary public offering of 12,650,000 shares of its common stock, which included 1,650,000 shares sold as a result of the underwriters’ exercise of their overallotment option in full at closing. The Company received proceeds of $48.7 million, net of issuance costs. In the offering the Company sold 3,178,494 shares and certain selling stockholders, including Genstar Capital, the Company’s largest stockholder, sold an aggregate of 9,471,506 shares.

As of December 31, 2009, there were 90,000,000 shares of common stock authorized and 26,057,993 outstanding.

Preferred Stock

On December 20, 2006, the Company amended and restated its certificate of incorporation authorizing 10,000,000 shares of undesignated Preferred Stock (“Preferred Stock”). The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations and powers, preferences, and rights, and qualifications, limitations and restrictions as determined by the Company’s Board of Directors. There was no Preferred Stock issued or outstanding at December 31, 2009 or 2008.

Restricted Common Stock

The Company’s Board of Directors established the 2004 Equity Incentive Plan (as amended, the “Plan”) that provides for various forms of stock based compensation to independent directors, officers and senior-level employees of the Company. The restricted shares issued pursuant to the plan generally vest ratably over a period ranging from immediately to five years from the date of grant, provided, that the vesting of the restricted shares may accelerate upon the occurrence of certain liquidity events, if approved by the Board of Directors in connection with the transactions. Common stock awarded under the Plan is generally subject to restrictions on transfer, repurchase rights, and other limitations and rights as set forth in the applicable award agreements. The shares are valued based on the share price on the date of grant.

The Plan permits the Company to grant restricted stock to key employees and other persons who make significant contributions to the success of the Company. The restrictions and vesting schedule for restricted stock granted under the Plan are determined by the Personnel and Compensation Committee of the

77

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Board of Directors. Compensation expense recorded (in selling, general, and administrative expense) during the year ended December 31, 2009, 2008 and 2007 was $3.2 million ($2.2 million, net of tax), $2.0 million ($1.3 million, net of tax) and $2.0 million ($1.5 million, net of tax), respectively. Compensation expense is recognized on a straight-line basis over the service period.

The following table sets forth the activity of the Company’s restricted stock grants to date:

				Weighted-average
				grant date fair
	Shares			value
Restricted shares unvested January 1, 2009		797,714		$	5.53
Shares granted		284,941		$	6.96
Shares forfeited		(13,649	)	$	7.34
Shares for which restrictions lapsed		(508,925	)	$	5.15
Restricted shares unvested December 31, 2009		560,081		$	6.55

Total remaining unrecognized compensation cost is approximately $2.3 million as of December 31, 2009, and will be recognized over a weighted average remaining period of two years. The fair market value of the shares in which the restrictions have lapsed during 2009 was $4.6 million.

Related-Party Transactions

Joy Global Sales

One of the Company’s directors had been an executive of Joy Global, Inc. until his resignation from the executive position on March 3, 2008. The Company sold approximately $5.4 million to divisions of Joy Global, Inc. for the year ended December 31, 2007. Other than his former position as an executive of Joy Global, Inc., the Company’s director has no interest in sales transactions between the Company and Joy Global, Inc.

13.   Concentrations of Credit, Segment Data and Workforce

Financial instruments, which are potentially subject to counter party performance and concentrations of credit risk, consist primarily of trade accounts receivable. The Company manages these risks by conducting credit evaluations of customers prior to delivery or commencement of services. When the Company enters into a sales contract, collateral is normally not required from the customer. Payments are typically due within thirty days of billing. An allowance for potential credit losses is maintained, and losses have historically been within management’s expectations. No customer represented greater than 10% of total sales for the year ended December 31, 2009, 2008 and 2007.

The Company is also subject to counter party performance risk of loss in the event of non-performance by counterparties to financial instruments, such as cash and investments. Cash and investments are held by international and well established financial institutions.

The Company has five operating segments that are regularly reviewed by our chief operating decision maker. Each of these operating segments represents a unit that produces mechanical power transmission products. The Company aggregates all of the operating segments into one reportable segment. The five operating segments have similar long-term average gross profit margins. All of our products are sold by one global sales force and we have one global marketing function. Strategic markets and industries are determined for the entire company and then targeted by the brands. All of our operating segments have common manufacturing and production processes. Each segment includes a machine shop which uses similar equipment and manufacturing techniques. Each of our segments uses common raw materials, such as aluminum, steel and copper. The materials are purchased and procurement contracts are negotiated by one global purchasing function.

78

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

We serve the general industrial market by selling to original equipment manufacturers (“OEM”) and distributors. Our OEM and distributor customers serve the general industrial market. Resource allocation decisions such as capital expenditure requirements and headcount requirements are made at a consolidated level and allocated to the individual operating segments.

Discrete financial information is not available by product line at the level necessary for management to assess performance or make resource allocation decisions.

Net sales to third parties and property, plant and equipment by geographic region are as follows:

	Net Sales
	Year Ended						Property, Plant and Equipment
	December 31,		December 31,		December 31,		December 31,		December 31,
	2009		2008		2007		2009		2008
North America (primarily U.S.)	$	326,872	$	451,235	$	424,031	$	79,816	$	82,577
Europe		100,345		154,463		137,908		22,904		24,552
Asia and other		25,629		29,638		22,437		2,883		3,091
Total	$	452,846	$	635,336	$	584,376	$	105,603	$	110,220

Net sales to third parties are attributed to the geographic regions based on the country in which the shipment originates. Amounts attributed to the geographic regions for property, plant and equipment are based on the location of the entity, which holds such assets. The net assets of our foreign subsidiaries at December 31, 2009 and 2008 were $76.8 million and $73.5 million, respectively.

The Company has not provided specific product line sales as our general purpose financial statements do not allow us to readily determine groups of similar product sales.

Approximately 17.1% of the Company’s labor force (11.1% and 40.8% in the United States and Europe, respectively) is represented by collective bargaining agreements.

14.   Restructuring, Asset Impairment and Transition Expenses

In 2009, the Company adopted a new restructuring plan (“2009 Altra Plan”) to improve the utilization of the manufacturing infrastructure and to realign the business with the current economic conditions. The 2009 Altra Plan is intended to improve operational efficiency by reducing headcount and consolidating facilities.

During 2007, the Company adopted two restructuring programs. The first was intended to improve operational efficiency by reducing headcount, consolidating its operating facilities and relocating manufacturing to lower cost areas (the “Altra Plan”). The second was related to the acquisition of TB Wood’s and was intended to reduce duplicate staffing and consolidate facilities (the “TB Wood’s Plan”). The TB Wood’s Plan was initially formulated at the time of the TB Wood’s acquisition and therefore an accrual was recorded as part of purchase price accounting. The total restructuring charges for the year ended December 31, 2008 were $2.3 million, primarily comprised of costs associated with the termination of certain individuals whose positions with the Company were determined to be redundant. In 2007, the total restructuring charges of $2.4 million were primarily comprised of costs associated with the relocation of certain manufacturing operations, including third party costs for transporting manufacturing equipment related to the consolidation of facilities and relocating personnel. These moving and relocation costs are recognized in the period in which the liability is incurred. There were no costs incurred in 2009 under the Altra Plan or the TB Wood’s Plan.

79

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

The Company’s total restructuring expense, by major component for the years ended December 31, 2009 and December 31, 2008, were as follows:

	Year Ended		Year Ended						Year Ended
	December 31, 2009		December 31, 2008						December 31, 2007
	2009				TB						TB
	Altra		Altra		Wood’s				Altra		Wood’s
	Plan		Plan		Plan		Total		Plan		Plan		Total
Expenses
Moving and relocation	$	332	$	563	$	89	$	652	$	1,055	$	267	$	1,322
Severance		4,213		1,471		—		1,471		718		—		718
Other		232								144		—		144
Total cash expenses		4,777		2,034		89		2,123		1,917		267		2,040
Loss on disposal of fixed assets		2,509		187		—		187		215		—		215
Total restructuring expenses	$	7,286	$	2,221	$	89	$	2,310	$	2,132	$	267	$	2,399

	All Plans
Balance at December 31, 2007	$	1,478
Restructuring expense incurred		2,310
Cash payments		(2,280	)
Non-cash loss on impairment of fixed assets		(187	)
Balance at December 31, 2008	$	1,321
Restructuring expense incurred		7,286
Cash payments		(5,183	)
Non-cash loss on impairment of fixed assets		(2,509	)
Balance at December 31, 2009	$	915

On April 7, 2009, the Company announced that it would be closing its facility in Mt. Pleasant, Michigan and relocating the manufacturing to certain of the Company’s other facilities. In connection with this decision, the Company completed an impairment analysis. The facility which had a carrying value of $1.4 million was written down to the fair value of $0.7 million, resulting in an impairment charge of $0.7 million. The Company estimated the fair value using observable inputs (level 2) by reviewing sale prices of comparable buildings in the Mt. Pleasant, Michigan area. The relocation is expected to be completed by the end of 2009.

On July 7, 2009, the Company announced that it would be closing its manufacturing facility in South Beloit, Illinois and relocating the manufacturing operations to certain of the Company’s other facilities. In connection with this decision, the Company completed an impairment analysis. The facility which had a carrying value of $2.1 million was written down to the fair value of $1.5 million, resulting in an impairment charge of $0.6 million. The Company estimated the fair value using observable inputs (level 2). The Company reviewed sale prices of comparable buildings in the South Beloit, Illinois area. The relocation is expected to be completed by the first quarter of 2010. In September 2009, the Company negotiated a plant closing agreement with the local union at the South Beloit facility. The Company has agreed to pay approximately $0.7 million in severance and performance bonuses to those employees who remain employed through their termination date. The Company expects to pay these amounts in the fourth quarter of 2009 through the first quarter of 2010.

80

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

The Company expects to incur between an additional $2.0 million and $3.0 million in total restructuring costs, of which severance will account for approximately $1.5 million and the remainder will relate to moving and relocation costs.

15.   Commitments and Contingencies

Minimum Lease Obligations

The Company leases certain offices, warehouses, manufacturing facilities, automobiles and equipment with various terms that range from a month to month basis to ten year terms and which, generally, include renewal provisions. Future minimum rent obligations under non-cancelable operating and capital leases are as follows:

Year ending December 31:	Operating Leases		Capital Leases
2010	$	2,635	$	882
2011		4,086		770
2012		3,667		317
2013		2,227		—
2014		1,635		—
Thereafter		2,596		—
Total lease obligations	$	16,846	$	1,969
Less amounts representing interest				(148	)
Present value of minimum capital lease obligations			$	1,821

Net rent expense under operating leases for the years ended December 31, 2009, 2008 and 2007 was approximately $4.8 million, $5.5 million and $6.8 million, respectively.

General Litigation

The Company is involved in various pending legal proceedings arising out of the ordinary course of business. None of these legal proceedings are expected to have a material adverse effect on the results of operations, cash flows, or financial condition of the Company. With respect to these proceedings, management believes that it will prevail, has adequate insurance coverage or has established appropriate reserves to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adversely to the Company, there could be a material adverse effect on the results of operations, cash flows, or financial condition of the Company. As of December 31, 2009 and 2008, there were no product liability claims for which management believed a loss was probable. As a result, no amounts were accrued in the accompanying consolidated balance sheets for product liability losses at those dates.

Although the Company is indemnified under the terms of certain acquisition agreements for pre-existing matters up to agreed upon limits, there can be no assurance that the counter-party to such agreements will agree or be able to make payments in the event of future indemnity claims.

81

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

16.   Unaudited Quarterly Results of Operations:

Year ending December 31, 2009

	Fourth			Third		Second			First
	Quarter			Quarter		Quarter			Quarter
Net Sales	$	111,663		$	104,766	$	111,877		$	124,540
Gross Profit		32,788			28,572		29,458			32,203
Net income (loss) from continuing operations		(2,614	)		648		(1,766	)		1,418
Net income (loss)		(2,614	)		648		(1,766	)		1,418
Earnings per share — Basic
Net income (loss) from continuing operations	$	(0.10	)	$	0.02	$	(0.07	)	$	0.05
Net income (loss)	$	(0.10	)	$	0.02	$	(0.07	)	$	0.05
Earnings per share — Diluted
Net income (loss) from continuing operations	$	(0.10	)	$	0.02	$	(0.07	)	$	0.05
Net income (loss)	$	(0.10	)	$	0.02	$	(0.07	)	$	0.05

Year ending December 31, 2008

During the fourth quarter of 2008, the Company recorded a $31.8 million goodwill impairment ($28.4, net of tax).

	Fourth			Third		Second		First
	Quarter			Quarter		Quarter		Quarter
Net Sales	$	144,813		$	159,448	$	167,893	$	163,182
Gross Profit		42,086			45,821		50,387		47,798
Net income (loss) from continuing operations		(20,743	)		8,635		9,869		8,957
Net income (loss) from discontinued operations		—			173		—		(397	)
Net income (loss)		(20,743	)		8,808		9,869		8,560
Earnings per share — Basic
Net income (loss) from continuing operations	$	(0.81	)	$	0.34	$	0.39	$	0.35
Net income (loss) from discontinued operations	$	—		$	0.01	$	—	$	(0.1	)
Net income (loss)	$	(0.81	)	$	0.35	$	0.39	$	0.34
Earnings per share — Diluted
Net income (loss) from continuing operations	$	(0.81	)	$	0.33	$	0.38	$	0.35
Net income (loss) from discontinued operations	$	—		$	0.01	$	—	$	(0.1	)
Net income (loss)	$	(0.81	)	$	0.34	$	0.38	$	0.34

82

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

17.   Guarantor Subsidiaries

All of the Company’s direct or indirect 100% owned U.S. domestic subsidiaries are guarantors of the Company’s Senior Secured Notes. The following condensed consolidating financial statements present separately the financial position, results of operations, and cash flows for (a) the Company, as parent, (b) the guarantor subsidiaries of the Company consisting of all of the, directly or indirectly, 100% owned U.S. domestic subsidiaries of the Company, (c) the non-guarantor subsidiaries of the Company consisting of all non-domestic subsidiaries of the Company, and (d) eliminations necessary to arrive at the Company’s information on a consolidated basis. These statements are presented in accordance with the disclosure requirements under the Securities and Exchange Commission’s Regulation S-X, Rule 3-10. Separate financial statements of the Guarantor Subsidiaries are not presented because their guarantees are full and unconditional and joint and several.

83

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Balance Sheet

December 31, 2009

			Guarantor		Non Guarantor
	Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1	$	19,744	$	31,752	$	—		$	51,497
Trade receivables, less allowance for doubtful accounts		—		33,966		18,889		—			52,855
Loans receivable from related parties		214,583		—		—		(214,583	)		—
Inventories		—		50,931		20,922		—			71,853
Deferred income taxes		—		9,087		178		—			9,265
Assets held for sale		—		—		—		—			—
Income tax receivable		1,192		3,308		254		—			4,754
Prepaid expenses and other current assets		—		2,309		1,338		—			3,647
Total current assets		215,776		119,345		73,333		(214,583	)		193,871
											—
Property, plant and equipment, net		—		74,559		31,044		—			105,603
Intangible assets, net		—		58,392		16,513		—			74,905
Goodwill		—		58,015		20,817		—			78,832
Deferred income taxes		—		—		679		—			679
Investment in subs		125,792		—		—		(125,792	)		—
Other non-current assets		6,394		4,816		99		—			11,309
Total assets	$	347,962	$	315,127	$	142,485	$	(340,375	)	$	465,199
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	76	$	18,156	$	9,189	$	—		$	27,421
Accrued payroll		—		7,415		4,718		—			12,133
Accruals and other current liabilities		1,659		10,711		7,601		—			19,971
Deferred income taxes		—		—		7,275		—			7,275
Current portion of long-term debt		—		650		409		—			1,059
Loans payable to related parties		—		187,611		26,972		(214,583	)		—
Total current liabilities		1,735		224,543		56,164		(214,583	)		67,859
Long-term debt — less current portion and net of unaccreted discount		207,284		6,267		2,939		—			216,490
Deferred income taxes		—		17,876		3,175		—			21,051
Pension liabilities		—		6,633		3,229		—			9,862
Other post retirement benefits		—		405		—		—			405
Long-term taxes payables		—		9,661		—		—			9,661
Other long-term liabilities		—		772		156		—			928
Total stockholders’ equity		138,943		48,970		76,822		(125,792	)		138,943
Total liabilities and stockholders’ equity	$	347,962	$	315,127	$	142,485	$	(340,375	)	$	465,199

84

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Balance Sheet

December 31, 2008

			Guarantor		Non Guarantor
	Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1	$	24,432	$	27,640		$	—		$	52,073
Trade receivables, less allowance for doubtful accounts		—		41,051		27,752			—			68,803
Loans receivable from related parties		—		37,649		—			(37,649	)		—
Inventories		—		71,304		27,106			—			98,410
Deferred income taxes		—		7,923		109			—			8,032
Assets held for sale		—		3,515		1,161			—			4,676
Income tax receivable		1,192		3,688		(2,299	)		—			2,581
Prepaid expenses and other current assets		—		2,476		1,457			—			3,933
Total current assets		1,193		192,038		82,926			(37,649	)		238,508
Property, plant and equipment, net		—		77,424		32,796			—			110,220
Intangible assets, net		—		62,481		16,858			—			79,339
Goodwill		—		58,016		19,481			—			77,497
Deferred income taxes		—		—		495			—			495
Investment in subs		127,672		—		—			(127,672	)		—
Other non-current assets		—		7,489		36			—			7,525
Total assets	$	128,865	$	397,448	$	152,592		$	(165,321	)	$	513,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	22,105	$	11,785		$	—		$	33,890
Accrued payroll		—		9,610		7,165			—			16,775
Accruals and other current liabilities		—		12,478		6,277			—			18,755
Deferred income taxes		—		—		6,906			—			6,906
Current portion of long-term debt		—		2,925		466			—			3,391
Loans payable to related parties		—		—		37,649			(37,649	)		—
Total current liabilities		—		47,118		70,248			(37,649	)		79,717
Long-term debt — less current portion and net of unaccreted discount and premium		—		255,933		2,199			—			258,132
Deferred income taxes		—		20,822		2,514			—			23,336
Pension liabilities		—		8,922		2,932			—			11,854
Other post retirement benefits		—		2,270		—			—			2,270
Long-term taxes payables		—		7,976		—			—			7,976
Other long-term liabilities		—		241		1,193			—			1,434
Total stockholders’ equity		128,865		54,166		73,506			(127,672	)		128,865
Total liabilities and stockholders’ equity	$	128,865	$	397,448	$	152,592		$	(165,321	)	$	513,584

85

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Statement of Income

	Year Ended December 31, 2009
				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	332,311		$	150,146	$	(29,611	)	$	452,846
Cost of sales		—			250,857			108,579		(29,611	)		329,825
Gross profit		—			81,454			41,567		—			123,021
Selling, general and administrative expenses		17			50,999			30,101		—			81,117
Research and development expenses		—			3,950			2,311		—			6,261
Other post employment benefit plan settlement gain		—			(1,467	)		—		—			(1,467	)
Loss on sale/disposal of assets		—			142			403		—			545
Restructuring costs		—			4,359			2,927		—			7,286
Income (loss) from operations		(17	)		23,471			5,825		—			29,279
Interest expense, net		1,769			31,109			98		—			32,976
Other non-operating (income) expense, net		—			356			625		—			981
Equity in earnings of subsidiaries		(1,880	)		—			—		1,880			—
Income (loss) from continuing operations before income taxes		(3,666	)		(7,994	)		5,102		1,880			(4,678	)
Provision (benefit) for income taxes		(1,352	)		(2,798	)		1,786		—			(2,364	)
Income (loss) from continuing operations		(2,314	)		(5,198	)		3,316		1,880			(2,314	)
Net loss from discountinued operations		—			—			—		—			—
Net income (loss)	$	(2,314	)	$	(5,198	)	$	3,316		1,880		$	(2,314	)

86

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

	Year Ended December 31, 2008
			Guarantor			Non-Guarantor
	Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—	$	462,427		$	222,441		$	(49,532	)	$	635,336
Cost of sales		—		343,380			155,396			(49,532	)		449,244
Gross profit		—		119,047			67,045			—			186,092
Selling, general and administrative expenses		—		63,055			36,130			—			99,185
Research and development expenses		—		4,024			2,565			—			6,589
Other post employment benefit plan settlement gain		—		(925	)		—			—			(925	)
Goodwill impairment		—		29,913			1,897			—			31,810
Loss on sale/disposal of assets		—		790			794			—			1,584
Restructuring costs		—		978			1,332			—			2,310
Income (loss) from operations		—		21,212			24,327			—			45,539
Interest expense, net		—		28,303			36			—			28,339
Other non-operating (income) expense, net		—		(3,405	)		(2,844	)		—			(6,249	)
Equity in earnings of subsidiaries		6,494		—			—			(6,494	)		—
Income (loss) from continuing operations before income taxes		6,494		(3,686	)		27,135			(6,494	)		23,449
Provision (benefit) for income taxes		—		7,505			9,226			—			16,731
Income (loss) from continuing operations		6,494		(11,191	)		17,909			(6,494	)		6,718
Net loss from discountinued operations		—		(224	)		—			—			(224	)
Net income (loss)	$	6,494	$	(11,415	)	$	17,909		$	(6,494	)	$	6,494

87

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Statement of Income

	Year Ended December 31, 2007
						Non-
				Guarantor		Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	430,168	$	204,181		$	(49,973	)	$	584,376
Cost of sales		—			319,322		149,760			(49,973	)		419,109
Gross profit		—			110,846		54,421			—			165,267
Selling, general and administrative expenses		51			57,783		35,377			—			93,211
Research and development expenses		—			3,562		2,515			—			6,077
Restructuring costs		—			1,776		623			—			2,399
Other post employment benefit plan settlement loss		—			2,745		—			—			2,745
Loss on sale/disposal of assets		—			—		—			—			—
Income (loss) from operations		(51	)		44,980		15,906			—			60,835
Interest expense, net		—			38,374		180			—			38,554
Other non-operating (income) expense, net		—			3,098		(2,486	)		—			612
Equity in earnings of subsidiaries		11,511			—		—			(11,511	)		—
Income (loss) before income taxes		11,460			3,508		18,212			(11,511	)		21,669
Provision for income taxes		—			935		7,273			—			8,208
Net income (loss) from continuing operations		11,460			2,573		10,939			(11,511	)		13,461
Net income (loss) from discontinued operations					130		(2,131	)					(2,001	)
Net income (loss)	$	11,460		$	2,703	$	8,808		$	(11,511	)	$	11,460

88

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2009
							Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net income (loss)	$	(2,314	)	$	(5,196	)	$	3,316		$	1,880		$	(2,314	)
Undistributed equity in earnings of subsidiaries		1,880			—			—			(1,880	)		—
Adjustments to reconcile net income to net cash flows:
Depreciation		—			12,032			4,502			—			16,534
Amortization of intangible assets		—			4,129			1,409			—			5,538
Amortization and write-offs of deferred loan costs		77			3,985						—			4,062
Gain on foreign currency, net		—			270			834			—			1,104
Accretion of debt discount and premium, net		33			1,879			—			—			1,912
Fixed asset impairment		—			2,023			868			—			2,891
Deferred income tax					(1,778	)		(26	)		—			(1,804	)
Other post employment benefit plan settlement gain		—			(1,467	)		—			—			(1,467	)
Stock based compensation		—			3,267			—			—			3,267
Changes in assets and liabilities:
Trade receivables		—			9,210			10,057			—			19,267
Inventories		—			20,708			7,472			—			28,180
Accounts payable and accrued liabilities		1,735			(11,168	)		(8,491	)		—			(17,924	)
Other current assets and liabilities		—			167			209			—			376
Other operating assets and liabilities		—			(158	)		(76	)		—			(234	)
Net cash provided by operating activities		1,411			37,903			20,074			—			59,388
Cash flows from investing activities
Purchase of fixed assets		—			(8,166	)		(1,028	)		—			(9,194	)
Net cash used in investing activities		—			(8,166	)		(1,028	)		—			(9,194	)
Cash flows from financing activities
Payments on the 111/4% Senior Notes		—			(4,950	)		—			—			(4,950	)
Payments on 9% Senior Secured Notes		—			(242,500	)		—			—			(242,500	)
Proceeds from 81/8% Senior Secured Notes, net of discount		207,251			—			—			—			207,251
Proceeds from mortgage		—			—			1,467			—			1,467
Shares repurchased		(319	)		—			—			—			(319	)
Payments on revolving credit agreement		—			(6,000	)		—			—			(6,000	)
Payments of note issuance costs		(6,472	)		(1,089	)		—			—			(7,561	)
Payments on mortgages		—			—			(584	)		—			(584	)
Change in affiliate debt		(201,871	)		220,754			(18,883	)		—			—
Payment on capital leases		—			(640	)		(180	)		—			(820	)
Net cash (used in) provided by financing activities		(1,411	)		(34,425	)		(18,180	)		—			(54,016	)
Effect of exchange rate changes on cash and cash equivalents		—			—			3,246			—			3,246
Net change in cash and cash equivalents		—			(4,688	)		4,112			—			(576	)
Cash and cash equivalents at beginning of year		1			24,432			27,640			—			52,073
Cash and cash equivalents at end of period	$	1		$	19,744		$	31,752		$	—		$	51,497

89

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2008
							Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net income (loss)	$	6,494		$	(11,415	)	$	17,909		$	(6,494	)	$	6,494
Undistributed equity in earnings of subsidiaries		(6,494	)		—			—			6,494			—
Adjustments to reconcile net income to net cash flows:
Depreciation		—			11,071			4,308			—			15,379
Amortization of intangible assets		—			4,120			1,569			—			5,689
Amortization and write-offs of deferred loan costs		—			2,133			—			—			2,133
Gain on foreign currency, net		—			(2,470	)		(2,579	)		—			(5,049	)
Accretion of debt discount and premium, net		—			898			—			—			898
Loss on sale of Electronics Division		—			224			—			—			224
Loss on sale of fixed assets		—			790			794			—			1,584
Goodwill impairment		—			29,912			1,898			—			31,810
Other post employment benefit plan settlement gain		—			(925	)		—			—			(925	)
Deferred income tax provision		—			92			1,309			—			1,401
Stock based compensation		—			1,951			—			—			1,951
Changes in assets and liabilities:
Trade receivables		—			4,887			(5,820	)		—			(933	)
Inventories		—			(1,584	)		(490	)		—			(2,074	)
Accounts payable and accrued liabilities		—			(14,618	)		1,350			—			(13,268	)
Other current assets and liabilities		—			(1,979	)		3,248			—			1,269
Other operating assets and liabilities		—			(43	)		(1,426	)		—			(1,469	)
Net cash (used in) provided by operating activities		—			23,044			22,070			—			45,114
Cash flows from investing activities
Purchase of fixed assets		—			(13,537	)		(5,752	)		—			(19,289	)
Proceeds from the sale of Electronics		—			17,310			—			—			17,310
Payments for prior year acquisitions		—			(1,708	)		—			—			(1,708	)
Net cash (used in) provided by investing activities		—			2,065			(5,752	)		—			(3,687	)
Cash flows from financing activities
Payments on the 111/4% Senior Notes		—			(1,346	)		—			—			(1,346	)
Payments on the 9% Senior Secured Notes		—			(27,500	)		—			—			(27,500	)
Payments on revolving credit agreement		—			(1,723	)		—			—			(1,723	)
Payments received to Parent Company		—			11,900			—			(11,900	)		—
Payments on mortgages		—			—			(266	)		—			(266	)
Change in affiliate debt		(11,900	)		14,509			(14,509	)		11,900			—
Payment on capital leases		—			(596	)		(329	)		—			(925	)
Net cash (used in) provided by financing activities		(11,900	)		(4,756	)		(15,104	)		—			(31,760	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(3,401	)		—			(3,401	)
Net change in cash and cash equivalents		(11,900	)		20,353			(2,187	)		—			6,266
Cash and cash equivalents at beginning of year		11,901			4,079			29,827			—			45,807
Cash and cash equivalents at end of period	$	1		$	24,432		$	27,640		$	—		$	52,073

90

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2007
							Non-
				Guarantor			Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities
Net income (loss)	$	11,460		$	2,703		$	8,808		$	(11,511	)	$	11,460
Undistributed equity in earnings of subsidiaries		(11,511	)		—			—			11,511			—
Adjustments to reconcile net income to net cash flows:
Depreciation		—			10,835			5,612			—			16,447
Amortization of intangible assets		—			3,920			1,572			—			5,492
Amortization and write-offs of deferred loan costs		—			3,448			—			—			3,448
Loss on foreign currency, net		—			586			146			—			732
Accretion of debt discount and premium, net		—			774			—			—			774
Inventory step-up		—			275			651			—			926
Loss on sale of fixed assets		—			313			—			—			313
Other post employment benefit plan settlement gain		—			2,745			—			—			2,745
Loss on sale of Electronics Division		—			(2,927	)		—			—			(2,927	)
Deferred income tax provision		—			5,455									5,455
Stock based compensation		—			2,038			—			—			2,038
Changes in assets and liabilities:
Trade receivables		—			6,453			(2,135	)		—			4,318
Inventories		—			2,807			(5,084	)		—			(2,277	)
Accounts payable and accrued liabilities		9			(12,384	)		1,685			—			(10,690	)
Other current assets and liabilities		—			3,991			(256	)		—			3,735
Other operating assets and liabilities		—			429			(610	)		—			(181	)
Net cash (used in) provided by operating activities		(42	)		31,461			10,389			—			41,808
Cash flows from investing activities
Purchase of fixed assets		—			(7,959	)		(3,674	)		—			(11,633	)
Acquisitions, net of cash acquired		—			(123,867	)		—			—			(123,867	)
Proceeds from the sale of Electronics		10,828			—			—			—			10,828
Net cash (used in) provided by investing activities		10,828			(131,826	)		(3,674	)		—			(124,672	)
Cash flows from financing activities
Payments on the 111/4% Senior Notes		—			(58,428	)		—			—			(58,428	)
Proceeds from the 9% Senior Secured Notes		—			106,050			—			—			106,050
Capital Contribution from Parent		—			49,015			—			(49,015	)		—
Proceeds from secondary public offering		49,592			—			—			—			49,592
Payment of debt issuance costs		—			(4,235	)		—			—			(4,235	)
Initial public offering costs		(2,180	)		—			—			—			(2,180	)
Payments on the 9% Senior Secured Notes		—			—			—			—			—
Borrowings on revolver		—			8,315			—			—			8,315
Payments on revolving credit agreement		—			(13,520	)		—			—			(13,520	)
Payments received from Parent Company		—			(13,554	)		—			13,554			—
Payments on mortgages		—			—			(126	)		—			(126	)
Change in affiliate debt		(46,297	)		(4,263	)		15,099			35,461			—
Payment on capital leases		—			(464	)		(467	)		—			(931	)
Net cash provided by financing activities		1,115			68,916			14,506			—			84,537
Effect of exchange rate changes on cash and cash equivalents		—			—			1,607			—			1,607
Net change in cash and cash equivalents		11,901			(31,449	)		22,828			—			3,280
Cash and cash equivalents at beginning of year		—			35,528			6,999			—			42,527
Cash and cash equivalents at end of period	$	11,901		$	4,079		$	29,827		$	—		$	45,807

91

ALTRA HOLDINGS, INC.

Notes to Consolidated Financial Statements — (Continued)

Amounts in thousands (unless otherwise noted)

18.   Subsequent Events

In February 2010, the Company’s Board of Directors approved the grant of 207,554 shares of restricted common stock under the Amended 2004 Equity Incentive Plan, as amended, to certain members of management and independent directors of the Company.

The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated subsequent events through the date the financial statements were issued.

92

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

1.   Disclosure Controls and Procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended or the Exchange Act. These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act, such as this Form 10-K, is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to management, including the principal executive and principal financial officers as appropriate to allow timely decisions regarding required disclosures. As of December 31, 2009, or the Evaluation Date, our management, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective at the reasonable assurance level.

2.   Internal Control over Financial Reporting

(a)   Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our chief executive officer and chief financial officer, and implemented by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:

•       pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;

•       provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

•       provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2009 based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management has concluded that our internal control over financial reporting was effective as of December 31, 2009.

The effectiveness of our internal control over financial reporting as of December 31, 2009 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report on Form 10-K.

93

(b)   Report of the Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Altra Holdings, Inc.

Braintree, Massachusetts

We have audited the internal control over financial reporting of Altra Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule listed in the Index at Item 15, as of and for the year ended December 31, 2009 of the Company and our report dated March 9, 2010 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/  Deloitte & Touche LLP

Boston, Massachusetts

March 9, 2010

94

(c)   Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting as defined in Rules 13a-15(f) and 15d — 15(f) under the Exchange Act occurred during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information

None

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to our definitive Proxy Statement to be filed no later than 120 days after December 31, 2009.

Item 11.   Executive Compensation

The information required by this item is incorporated by reference to our definitive Proxy Statement to be filed no later than 120 days after December 31, 2009.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to our definitive Proxy Statement to be filed no later than 120 days after December 31, 2009.

Item 13.   Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to our definitive Proxy Statement to be filed no later than 120 days after December 31, 2009.

Item 14.   Principal Accounting Fees and Services

The information required by this item is incorporated by reference to our definitive Proxy Statement to be filed no later than 120 days after December 31, 2009.

PART IV

Item 15.   Exhibits, Financial Statement Schedules

(a) List of documents filed as part of this report:

(1) Financial Statements

See Part II Item 8 of this Form 10-K.

(2) Financial Statement Schedules

i. Schedule II — Valuation and Qualifying Accounts

95

(3) Exhibits

Number			Description
	2	.1(1)	LLC Purchase Agreement, dated as of October 25, 2004, among Warner Electric Holding, Inc., Colfax Corporation and Altra Holdings, Inc.
	2	.2(1)	Assignment and Assumption Agreement, dated as of November 21, 2004, between Altra Holdings, Inc. and Altra Industrial Motion, Inc.
	2	.3(2)	Share Purchase Agreement, dated as of November 7, 2005, among Altra Industrial Motion, Inc. and the stockholders of Hay Hall Holdings Limited listed therein
	2	.4(3)	Asset Purchase Agreement, dated May 18, 2006, among Warner Electric LLC, Bear Linear LLC and the other guarantors listed therein
	2	.5(5)	Agreement and Plan of Merger, dated February 17, 2007, among Altra Holdings, Inc., Forest Acquisition Corp. and TB Wood’s Corp.
	3	.1(4)	Second Amended and Restated Certificate of Incorporation of Altra Holdings, Inc.
	3	.2(8)	Amended and Restated Bylaws of Altra Holdings, Inc.
	4	.1(4)	Form of Common Stock Certificate
	4	.2(11)	Form of 81/8% Senior Secured Notes due 2016
	4	.3(11)	Indenture, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.
	4	.4(11)	Registration Rights Agreement, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and the Initial Purchasers party thereto
	10	.1(3)	Subscription Agreement, dated November 30, 2004, among Altra Holdings, Inc., the preferred purchasers and the common purchasers as listed therein
	10	.2(6)	Employment Agreement, dated as of December 14, 2007, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Christian Storch†
	10	.3(7)	Amended and Restated Employment Agreement, dated as of September 25, 2008, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Michael L. Hurt†
	10	.4(9)	Amended and Restated Employment Agreement, dated as of January 1, 2009, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Carl Christenson†
	10	.5(8)	Form of Indemnification Agreement entered into between Altra Holdings, Inc. and the Directors and certain officers†
	10	.6(8)	Form of Change of Control Agreement entered into among Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain officers†
	10	.7(1)	Altra Holdings, Inc. 2004 Equity Incentive Plan†
	10	.8(3)	Amendment to Altra Holdings, Inc. 2004 Equity Incentive Plan†
	10	.9(4)	Second Amendment to Altra Holdings, Inc. 2004 Equity Incentive Plan†
	10	.10(1)	Form of Altra Holdings, Inc. Restricted Stock Award Agreement†
	10	.11(4)	Form of Amendment to Restricted Stock Agreements with Michael Hurt†
	10	.12(11)	Purchase Agreement, dated November 16, 2009 among Altra Holdings, Inc., the Guarantors party thereto and the Initial Purchasers party thereto
	10	.13	Pledge and Security Agreement, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.#
	10	.14	Patent Security Agreement, dated December 24, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.#
	10	.15	Trademark Security Agreement, dated December 24, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.
	10	.16	Credit Agreement, dated as of November 25, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, as Borrowers, Altra Holdings, Inc., as Guarantor, the lenders listed therein, J.P. Morgan Securities, Inc., as sole lead arranger and sole book runner, and JPMorgan Chase Bank, N.A., as Administrative Agent#

96

Number			Description
	10	.17	Pledge and Security Agreement, dated November 25, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.#
	10	.18	Patent Security Agreement, dated December 24, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.#
	10	.19	Trademark Security Agreement, dated December 24, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.
	10	.20	Intercreditor and Lien Subordination Agreement among Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain of their subsidiaries, JPMorgan Chase Bank, N.A., and The Bank of New York Mellon Trust Company, N.A.
	21	.1	Subsidiaries of Altra Holdings, Inc.
	23	.1	Consent of Ernst & Young LLP, independent registered public accounting firm
	23	.2	Consent of Deloitte & Touche LLP, independent registered public accounting firm
	31	.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to Altra Industrial Motion, Inc.’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on May 16, 2005.
(2)	Incorporated by reference to Altra Industrial Motion, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2006.
(3)	Incorporated by reference to Altra Holdings, Inc.’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 29, 2006.
(4)	Incorporated by reference to Altra Holdings, Inc.’s Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on December 4, 2006.
(5)	Incorporated by reference to Altra Holdings, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 20, 2007.
(6)	Incorporated by reference to Altra Holdings, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2007.
(7)	Incorporated by reference to Altra Industrial Motion, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 26, 2008.
(8)	Incorporated by reference to Altra Holdings, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 27, 2008.
(9)	Incorporated by reference to Altra Holdings, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2008.
(10)	Incorporated by reference to Altra Holdings, Inc.’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2009.
(11)	Incorporated by reference to Altra Holdings, Inc.’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on February 2, 2010.
†	Management contract or compensatory plan or arrangement.
#	Application has been made to the Securities and Exchange Commission to seek confidential treatment of certain provisions. Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission.

97

Item 15(a)(2)

ALTRA HOLDINGS, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

	Balance at
	Beginning of							Balance at
Reserve for Uncollectible Accounts:	Period		Additions		Deductions			End of Period
For the year ended December 31, 2007	$	2,017	$	682	$	(1,151	)	$	1,548
For the year ended December 31, 2008	$	1,548	$	935	$	(1,206	)	$	1,277
For the year ended December 31, 2009	$	1,277	$	572	$	(415	)	$	1,434

98

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	ALTRA HOLDINGS, INC.
March 8, 2010	By: /s/  Carl R. Christenson Name:     Carl R. Christenson Title: Chief Executive Officer & Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

March 9, 2010	By: /s/  Carl R. Christenson Name:     Carl R. Christenson Title: Chief Executive Officer & Director
March 9, 2010	By: /s/  Christian Storch Name:     Christian Storch Title: Chief Financial Officer
March 9, 2010	By: /s/  Todd B. Patriacca Name:     Todd B. Patriacca Title: Chief Accounting Officer
March 9, 2010	By: /s/  Michael L. Hurt Name:     Michael L. Hurt Title: Executive Chairman & Director
March 9, 2010	By: /s/  Edmund M. Carpenter Name:     Edmund M. Carpenter Title: Director
March 9, 2010	By: /s/  Lyle G. Ganske Name:     Lyle G. Ganske Title: Director
March 9, 2010	By: /s/  Michael S. Lipscomb Name:     Michael S. Lipscomb Title: Director
March 9, 2010	By: /s/  Larry P. McPherson Name:     Larry P. McPherson Title: Director
March 9, 2010	By: /s/  James H. Woodward, Jr. Name:     James H. Woodward, Jr. Title: Director

99

Exhibit Index

Number			Description
	10	.13	Pledge and Security Agreement, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.#
	10	.14	Patent Security Agreement, dated December 24, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.#
	10	.15	Trademark Security Agreement, dated December 24, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.
	10	.16	Credit Agreement, dated as of November 25, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, as Borrowers, Altra Holdings, Inc., as Guarantor, the lenders listed therein, J.P. Morgan Securities, Inc., as sole lead arranger and sole book runner, and JPMorgan Chase Bank, N.A., as Administrative Agent#
	10	.17	Pledge and Security Agreement, dated November 25, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.#
	10	.18	Patent Security Agreement, dated December 24, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.#
	10	.19	Trademark Security Agreement, dated December 24, 2009, among Altra Industrial Motion, Inc. and certain of its subsidiaries, Altra Holdings, Inc., and JPMorgan Chase Bank, N.A.
	10	.20	Intercreditor and Lien Subordination Agreement among Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain of their subsidiaries, JPMorgan Chase Bank, N.A., and The Bank of New York Mellon Trust Company, N.A.
	21	.1	Subsidiaries of Altra Holdings, Inc.
	23	.1	Consent of Ernst & Young LLP, independent registered public accounting firm
	23	.2	Consent of Delloite & Touche LLP, independent registered public accounting firm
	31	.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†	Management contract or compensatory plan or arrangement.
#	Application has been made to the Securities and Exchange Commission to seek confidential treatment of certain provisions. Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission.

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EX-10.13

Exhibit 10.13

[*] THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the “Security Agreement”) is entered into as of November 25, 2009 by and between ALTRA HOLDINGS, INC., a Delaware corporation (“Holdings”), ALTRA INDUSTRIAL MOTION, INC., a Delaware corporation, the other Subsidiaries of Holdings named on the signature pages hereto (each a “Grantor”, and collectively, the “Grantors”), and The Bank of New York Mellon Trust Company, N.A., in its capacity as collateral agent (the “Collateral Agent”) for the benefit of itself and the Holders.

PRELIMINARY STATEMENT

     The Grantors, The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, and the Holders are entering into an Indenture dated as of the date hereof (as it may be amended or modified from time to time, the “Indenture”). Each Grantor is entering into this Security Agreement in order to induce the Holders to purchase the Notes under the Indenture and to secure the Secured Obligations that such Grantor has agreed to guarantee pursuant to Article 11 of the Indenture.

     ACCORDINGLY, the Grantors and the Collateral Agent, on behalf of the Holders, hereby agree as follows:

ARTICLE I
DEFINITIONS

     1.1. Terms Defined in Indenture. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Indenture.

     1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein as defined in the UCC.

     1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings:

     “Account Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to our on account of an account.

     “Accounts” shall have the meaning set forth in Article 9 of the UCC.

     “Administrative Agent” shall mean JPMorgan Chase Bank, N.A., or such successor administrative agent of which the Collateral Agent may receive notice from time to time in accordance with the Intercreditor Agreement.

     “Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

     “Assigned Contracts” means, with respect to any Grantor, collectively, all of such Grantors’ rights and remedies under, and all moneys and claims for money due or to become due to such Grantor under those contracts and other agreements between such Grantor and any party other than the Collateral Agent, and any other material contracts, and any and all amendments, supplements, extensions, and renewals thereof, including all rights and claims of such Grantor now or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder.

     “Cash Management Bank” means (a) as of the Closing Date, JPMorgan Chase Bank, N.A., in its capacity as the principal depositary bank for the Grantors, and (b) at any time after the Closing Date, any one or more Lenders (as defined in the Credit Agreement) selected by the Grantors, with the prior written consent of the Administrative Agent, to become the successor principal depository bank for the Grantors; provided, that, unless the Administrative Agent otherwise consents in writing, no Person shall become the successor “Cash Management Bank” unless and until such Person shall have entered into a Control Agreement with the Grantors and the Administrative Agent in form and substance reasonably acceptable to the Administrative Agent.

     “Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

     “Closing Date” means the date of the Indenture.

     “Collateral” shall have the meaning set forth in Article II.

     “Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the Collateral Agent, between the Collateral Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Grantor for any real property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time.

     “Collateral Report” means any certificate, report or other document delivered by any Grantor to the Collateral Agent with respect to the Collateral pursuant to any Second Priority Document.

     “Collection Account” means the account at JPMorgan Chase Bank, N.A., so designated by the Administrative Agent, in a written notice delivered to the Grantors, to be the “Collection Account”, to which funds on deposit in Deposit Accounts, Securities Accounts and Lock Boxes (other than Excluded Accounts (as defined in the Credit Agreement)) and all payments received in respect of Accounts shall be remitted at all times during an Availability Trigger Period (as defined in the Credit Agreement).

     “Commercial Tort Claims” means “commercial tort claims” as set forth in Article 9 of the UCC and shall include, without limitation, the existing commercial tort claims of the Grantors set forth in Exhibit C-2 attached hereto.

     “Company” means Altra Industrial Motion, Inc., a Delaware corporation.

     “Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

     “Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Collateral Agent, among (a) the applicable Grantor, (b) a banking institution, securities broker or securities intermediary at which such Grantor maintains a Deposit Account or a Securities Account, and (c) the Collateral Agent, providing for the Collateral Agent to have control over the funds or securities and other financial assets held in such Deposit Account or Securities Account.

     “Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

     “Credit Agreement” means that certain Credit Agreement, to be entered into as of the date hereof, by and among the Administrative Agent, the Grantors and the Lenders.

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     “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

     “Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

     “Discharge of First Priority Credit Agreement Secured Obligations” shall have the meaning assigned to such term in the Intercreditor Agreement.

     “dispose” shall mean, with respect to any property, any conveyance, sale, lease, sublease, assignment, transfer or other disposition of such property (including (i) by way of merger or consolidation, (ii) any sale and leaseback transaction and (iii) any synthetic lease).

     “Documents” shall have the meaning set forth in Article 9 of the UCC.

     “Equipment” shall have the meaning set forth in Article 9 of the UCC.

     “Event of Default” means an event described in Section 5.1.

     “Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

     “Fixtures” shall have the meaning set forth in Article 9 of the UCC.

     “General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

     “Goods” shall have the meaning set forth in Article 9 of the UCC.

     “Indenture” shall have the meaning assigned to such term in the first recital.

     “Instruments” shall have the meaning set forth in Article 9 of the UCC.

     “Intercreditor Agreement” means that certain Intercreditor and Subordination Agreement, dated as of the date hereof, by and among the Administrative Agent, the Collateral Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee under the Indenture, Holdings, Company, those certain subsidiaries of Company identified as Borrowers on the signature pages thereto and those certain subsidiaries of Company identified as Guarantors on the signature pages thereto.

     “Inventory” shall have the meaning set forth in Article 9 of the UCC.

     “Investment Property” shall have the meaning set forth in Article 9 of the UCC.

     “Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

     “Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

     “Lock Boxes” means any postal lock boxes established by the Grantors with any banking institution, securities broker, securities intermediary or other financial institution.

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     “Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

     “Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Collateral Agent pursuant to this Security Agreement; provided, however, Pledged Collateral shall not include more than 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) owned by each Grantor in each Foreign Subsidiary.

     “Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

     “Required Holders” means, at any time, Holders of a majority in aggregate principal amount of the Notes then outstanding.

     “Section” means a numbered section of this Security Agreement, unless another document is specifically referenced.

     “Secured Obligations” means all obligations of the Grantors with respect to the Notes pursuant to the Indenture.

     “Securities Account” has the meaning assigned to such term in Article 8 of the UCC.

     “Security” has the meaning set forth in Article 8 of the UCC.

     “Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between the Grantor and the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and any other pledge or security agreement entered into, after the date hereof by any Grantor, or any other Person, as the same may be amended, restated or otherwise modified from time to time.

     “Stock Rights” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest.

     “Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.

     “Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

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     “UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Holder’s Lien on any Collateral.

     The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II
GRANT OF SECURITY INTEREST

     To secure the prompt and complete payment and performance of the Secured Obligations, each Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf of and for the ratable benefit of the Holders, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

(i)	all Accounts;
(ii)	all Chattel Paper;
(iii)	all Copyrights, Patents and Trademarks;
(iv)	all Documents;
(v)	all Equipment;
(vi)	all Fixtures;
(vii)	all General Intangibles;
(viii)	all Goods;
(ix)	all Instruments;
(x)	all Inventory;
(xi)	all Investment Property;
(xii)	all cash or cash equivalents;
(xiii)	all letters of credit, Letter-of-Credit Rights and Supporting Obligations;
(xiv)	all Deposit Accounts with any bank or other financial institution;
(xv)	all Securities Accounts with any bank or other financial institution;
(xvi)	all Commercial Tort Claims;
(xvii)	all Assigned Contracts; and
(xviii)	all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing.

     Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, the following: (i) any of such Grantor’s rights or interests in or under, any lease, license, contract or agreement to which such Grantor is a party to the extent, but only to the extent that such a grant would, under the terms of such lease, license, contract or agreement constitute or result in (a) the abandonment, invalidation or unenforceability of any right, title or interest of such Grantor

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therein or (b) a breach or termination pursuant to the terms of, or a default under such lease, license, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including any bankruptcy or insolvency laws) or principles of equity), provided, that (x) immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect and (y) to the extent that any such lease, license, contract or agreement would otherwise constitute Collateral (but for the provisions of this paragraph), all proceeds resulting from the sale or disposition by any Grantor of any rights of such Grantor under such lease, license, contract or agreement shall constitute Collateral, (ii) any equipment or other fixed or capital assets owned by a Grantor acquired after the date hereof that is subject to a Lien securing a purchase money financing, project financing or capital or finance lease obligation permitted to be incurred pursuant to the Indenture if the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money, project financing or capital or finance lease obligation) prohibits the creation of any other Lien on such property, provided, that immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (iii) more than 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary, and (iv) any Trademark applications filed in the U.S. Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such trademark, unless and until acceptable evidence of use of the trademark has been filed with and accepted by the U.S. Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a lien in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

     Each Grantor represents and warrants to the Collateral Agent and the Holders that:

     3.1. Title, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit F, the Collateral Agent will have a fully perfected second priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).

     3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

     3.3. Principal Location. Such Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A.

     3.4. Collateral Locations. All of such Grantor’s locations where Collateral is located are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A.

     3.5. Deposit Accounts; Securities Accounts; Lock Boxes. All of such Grantor’s Deposit Accounts, Securities Accounts and Lock Boxes are listed on Exhibit B.

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     3.6. Exact Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

     3.7. Letter-of-Credit Rights; Chattel Paper; Commercial Tort Claims. Exhibit C-1 lists all Letter-of-Credit Rights and Chattel Paper of such Grantor having a value in excess of $500,000, individually. Set forth on Exhibit C-2 is a description of each Commercial Tort Claim of such Grantor having a value in excess of $500,000, individually (including a listing of the parties, description of the dispute, and, if available, case number). All action by the Grantor necessary or desirable to protect and perfect the Collateral Agent’s Lien on each item listed on Exhibits C-1 and C-2 (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Collateral Agent will have a fully perfected second priority security interest in the Collateral listed on Exhibits C-1 and C-2, subject only to Liens permitted under Section 4.1(e).

     3.8. Accounts and Chattel Paper.

          (a) The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be correctly stated in all records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Collateral Agent by such Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

          (b) With respect to its Accounts, except as specifically disclosed on the most recent Collateral Report, (i) all Accounts represent bona fide sales of Inventory or rendering of services to Account Debtors in the ordinary course of such Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper; (ii) there are no setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has not made any agreement with any Account Debtor for any extension of time for the payment thereof, any compromise or settlement for less than the full amount thereof, any release of any Account Debtor from liability therefor, or any deduction therefrom except a discount or allowance allowed by such Grantor in the ordinary course of its business for prompt payment and disclosed to the Collateral Agent; (iii) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (iv) such Grantor has not received any notice of proceedings or actions which are threatened or pending against any Account Debtor which might result in any adverse change in such Account Debtor’s financial condition; and (v) such Grantor has no knowledge that any Account Debtor is unable generally to pay its debts as they become due.

          (c) In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; and (ii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.

     3.9. Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and Holders, and except for Permitted Liens, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is of good and merchantable quality, free from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties

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which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been substantially produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Collateral Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

     3.10. Intellectual Property. Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in Exhibit D, which exhibit shall be delivered to the Collateral Agent not later than thirty (30) days after the Closing Date pursuant to Section 4.7(f). This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit F and this Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, fully perfected second priority security interests in favor of the Collateral Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Collateral Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.

     3.11. Filing Requirements. None of its Equipment is covered by any certificate of title, except for motor vehicles having an aggregate value not in excess of $2,500,000. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) motor vehicles and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D.

     3.12. No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Collateral Agent on behalf of the Holders as the secured party and (b) in connection with Liens permitted by Section 4.1(e).

     3.13. Pledged Collateral.

          (a) Exhibit E sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit E as being owned by it, free and clear of any Liens, except for Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Collateral Agent representing an Equity Interest (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent), either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Collateral Agent and the Grantor has taken steps to perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a Control Agreement among such Grantor, the securities intermediary and the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) pursuant to which the Administrative Agent or Collateral Agent, as the case may be, has Control and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

          (b) In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Equity Interest

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included in the Pledged Collateral to issue additional Equity Interests, and (iii) except as otherwise provided in the Intercreditor Agreement prior to the Discharge of First Priority Credit Agreement Secured Obligations, no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Collateral Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

          (c) Except as set forth in Exhibit E, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture.

ARTICLE IV
COVENANTS

     From the date of this Security Agreement, and thereafter until this Security Agreement is terminated, each Grantor agrees that:

     4.1. General.

          (a) Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral, and furnish to the Collateral Agent updates with respect to Exhibits A, B, C-1, C-2, D, E, F and G hereto in accordance with Section 4.1(c) and such reports relating to such Collateral as the Collateral Agent shall from time to time request.

          (b) Authorization to File Financing Statements; Ratification. In accordance with and subject to the Intercreditor Agreement, such Grantor hereby agrees to file and deliver to the Collateral Agent all financing statements and other documents and take such other actions as may from time to time be necessary in order to maintain, subject to Permitted Liens, a second perfected security interest in and, if applicable, Control of, the Collateral owned by such Grantor.

          (c) Further Assurances. Such Grantor will, if so requested by the Collateral Agent, furnish to the Collateral Agent, as often as the Collateral Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Collateral Agent may reasonably request, all in such detail as the Collateral Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Collateral Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder. For purposes of this Security Agreement, all references to Exhibits A, B, C-1, C-2, D, E, F and G hereto shall be deemed to refer to each such exhibit as updated from time to time pursuant to supplements and amendments delivered by the Grantor to the Collateral Agent.

          (d) Disposition of Collateral. Such Grantor will not consummate an Asset Sale, except for dispositions specifically permitted pursuant to Section 4.10 of the Indenture.

          (e) Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except Permitted Liens.

          (f) Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except in connection with a Lien permitted by Section 4.1(e). Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement, except as permitted by the Indenture (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations,

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the Administrative Agent in accordance with the Intercreditor Agreement), subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

          (g) Locations. Such Grantor will not (i) maintain any Collateral owned by it at any location other than those locations listed on Exhibit A, (ii) otherwise change, or add to, such except as permitted by the Indenture, or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, to the extent prohibited under the Indenture.

          (h) Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

     4.2. Receivables.

          (a) Collection of Receivables. Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it.

          (b) Electronic Chattel Paper. Such Grantor shall take all steps necessary to grant the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) Control of all electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

     4.3. Inventory and Equipment.

          (a) Maintenance of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory and the Equipment in good repair and working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

          (b) Inventory Count; Perpetual Inventory System. Such Grantor will conduct a physical count of its Inventory at least once per fiscal year, and after and during the continuation of an Event of Default, at such other times as the Collateral Agent requests. Such Grantor, at its own expense upon request of the Collateral Agent, shall deliver to the Collateral Agent the results of each physical verification, which such Grantor has made, or has caused any other Person to make on its behalf, of all or any portion of its Inventory. Such Grantor will maintain a perpetual inventory reporting system at all times.

          (c) Equipment. Such Grantor will not (unless permitted by the Indenture) alter or remove any identifying symbol or number on any of such Grantor’s Equipment constituting Collateral.

     4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) deliver to the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) promptly following the execution of this Security Agreement the originals of (x) all Chattel Paper having a value in excess of $500,000 and (y) all Securities and Instruments, in each case constituting Collateral owned by it (if any then exist), (b) hold in trust for the Collateral Agent or the Administrative Agent, as the case may be, upon receipt and immediately thereafter deliver to the Collateral Agent or the Administrative Agent, as the case may be, any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Collateral Agent’s request (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, at the request of the Administrative Agent in accordance with the Intercreditor Agreement), deliver to the Administrative Agent or Collateral Agent, as the case may be, (and thereafter hold in trust for the Collateral Agent or the Administrative Agent, as the case may be, upon receipt and immediately deliver to the Collateral Agent or the Administrative Agent, as the case may be) any Document evidencing or constituting Collateral and (d) upon the Collateral Agent’s request, deliver to the Collateral Agent a duly executed amendment to this Security Agreement, in the

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form of Exhibit G hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral. Such Grantor hereby authorizes the Collateral Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral. Notwithstanding anything to the contrary contained in this Security Agreement or any other Collateral Document, not later than thirty (30) days after the Closing Date, such Grantor shall deliver to the Collateral Agent (or, prior to the Discharge of the First Lien Credit Agreement Secured Obligations, the Administrative Agent) the original certificates representing the Equity Interests of Foreign Subsidiaries which constitute Pledged Collateral owned by such Grantor as of the Closing Date, together with executed undated powers for each such certificate.

     4.5. Uncertificated Pledged Collateral.

          (a) Subject to the provisions of the Intercreditor Agreement, such Grantor will cause the issuers of Equity Interests which constitute Pledged Collateral owned by such Grantor to comply with any and all instructions originated by the Collateral Agent regarding such Equity Interests, notwithstanding anything to the contrary in any other agreement between such Grantor and such issuers. Such Grantor further agrees that it shall cause the issuers of Equity Interests which constitute Pledged Collateral owned by such Grantor not to certificate such Equity Interests or register any party other than such Grantor, another Grantor or the Collateral Agent or the Collateral Agent’s designee as the registered owner of any portion of such Equity Interests, or allow any party other than the Collateral Agent or its designee to become the holder of any such Equity Interests or an entitlement thereto, in each case without the prior written consent of the Collateral Agent.

          (b) Subject to the provisions of the Intercreditor Agreement, such Grantor will permit the Collateral Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Collateral Agent granted pursuant to this Security Agreement. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a Control Agreement with the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement), in form and substance satisfactory to the Collateral Agent or the Administrative Agent, as the case may be, and giving the Collateral Agent or the Administrative Agent, as the case may be, Control.

          (c) Subject to the provisions of the Intercreditor Agreement, each Grantor that is an issuer of uncertificated securities which constitute Pledged Collateral hereby acknowledges and agrees that (i) if the Collateral Agent shall be deemed to have “control” over such uncertificated securities within the meaning of Section 8-106 of the UCC, (ii) such Grantor shall comply with all instructions originated by the Collateral Agent regarding such unceritificated securities, (iii) such Grantor shall market its books and records to reflect the Lien of the Collateral Agent in such uncertificated securities, and (iv) such Grantor shall not register any transfer of any portion of such uncertificated securities to any Person other than to another Grantor or to the Collateral Agent or the Collateral Agent’s designee.

          (d) Subject to the provisions of the Intercreditor Agreement, each of the parties hereto acknowledges and agrees that this Security Agreement evidences the Collateral Agent’s “control” over all “uncertificated securities” and “investment property” constituting Pledged Collateral in accordance with the applicable provisions of, and as such terms are defined in, Articles 8 and 9 of the UCC.

     4.6. Pledged Collateral.

          (a) Changes in Capital Structure of Issuers. If prohibited by the Indenture, such Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing

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ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Liens and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any such Pledged Collateral in favor of any of the foregoing.

          (b) Issuance of Additional Securities. Such Grantor will not permit or suffer the issuer of an Equity Interest constituting Pledged Collateral owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings, except to such Grantor or another Grantor or another Grantor.

          (c) Registration of Pledged Collateral. Such Grantor will permit any registrable Pledged Collateral owned by it to be registered in the name of the Collateral Agent or its nominee (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent or its nominee) in accordance with the Intercreditor Agreement) at any time at the option of the Required Holders.

          (d) Exercise of Rights in Pledged Collateral.

          (i) Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Indenture or any other Second Priority Document; provided, however, that except as requested by the Administrative Agent pursuant to the Intercreditor Agreement, no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Collateral Agent in respect of such Pledged Collateral.

          (ii) Such Grantor will permit the Collateral Agent or its nominee (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent or its nominee in accordance with the Intercreditor Agreement) at any time after the occurrence and during the continuance of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

          (iii) Such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Indenture; and

          (iv) All cash dividends and interest paid in respect of the Pledged Collateral owned by Grantor shall, if and for so long as the Administrative Agent elects Full Cash Dominion (as defined in the Credit Agreement) in accordance with the terms of the Credit Agreement, be delivered to the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) to hold as Pledged Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement), be segregated from the other property or funds of such Grantor, and be forthwith delivered to the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) as Pledged Collateral in the same form as so received (with any necessary endorsement).

     4.7. Intellectual Property.

          (a) Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) of any License held by such Grantor and to enforce the security interests granted hereunder; provided, however, that the foregoing shall not apply to any License for the use of intellectual property where such License is for the use of intellectual property that is commercially available.

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          (b) Such Grantor shall notify the Collateral Agent immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

          (c) In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving the Collateral Agent prior written notice thereof, and such Grantor shall execute and deliver any and all security agreements necessary to evidence the Collateral Agent’s second priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.

          (d) Such Grantor shall take all actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, except if such Patent, Trademark or Copyright is not material to the conduct of such Grantor’s business.

          (e) Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

          (f) Notwithstanding anything to the contrary contained in this Security Agreement or any other Second Priority Document, not later than thirty (30) days after the Effective Date, such Grantor shall (i) deliver to the Collateral Agent the results of patent and trademark searches of the U.S. Patent and Trademark Office databases, evidencing ownership of all Patents and Trademarks held by such Grantor, together with a true, correct and complete listing of all Patents and Trademarks (including any licenses of the foregoing) in which such Grantor has an ownership interest, which listing shall be attached to this Security Agreement as Exhibit D, and (ii) execute and deliver in favor of the Collateral Agent (x) a patent security agreement and (y) a trademark security agreement, in each case in forms attached hereto as Exhibits I and J, respectively.

     4.8. Commercial Tort Claims. Such Grantor shall promptly, and in any event within fifteen (15) Business Days after the same is acquired by it, notify the Collateral Agent of any Commercial Tort Claim acquired by it having a value in excess of $500,000 and such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit G hereto, granting to Collateral Agent a first priority security interest (subject to the Intercreditor Agreement) in such commercial tort claim.

     4.9. Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit having a value in excess of $500,000, it shall promptly, and in any event within two Business Days after becoming a beneficiary, notify the Collateral Agent thereof and cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) and (ii) agree to direct all payments thereunder to a Deposit Account at the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement), all in form and substance reasonably satisfactory to the

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Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement).

     4.10. Federal, State or Municipal Claims. Such Grantor will promptly notify the Collateral Agent of any Collateral which constitutes a claim against the United States government or any state or local government or any instrumentality or agency thereof having a value in excess of $1,000,000, the assignment of which claim is restricted by federal, state or municipal law.

     4.11. No Interference. Such Grantor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies.

     4.12. Insurance.

          (a) In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on any real property leased by such Grantor within a “Special Flood Hazard Area”). The amount of flood insurance required by this Section shall be in an amount equal to the lesser of the total amount of the Notes or the total replacement cost value of the improvements.

          (b) All insurance policies required hereunder shall name the Collateral Agent (for the benefit of the Collateral Agent and the Holders) (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent and the Lenders in accordance with the Intercreditor Agreement) as an additional insured or as loss payee, as applicable, and shall contain loss payable clauses or mortgagee clauses, through customary endorsements which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the Collateral Agent (or, prior to the of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) to be held, remitted to the Grantors or applied against the Secured Obligations as provided in the Indenture or the Credit Agreement, as the case may be; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days prior written notice given to the Collateral Agent or the Administrative Agent, as the case may be.

          (c) All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Collateral Agent. If such Grantor fails to obtain any insurance as required by this Section, the Collateral Agent may obtain such insurance at the Grantor’s expense. By purchasing such insurance, the Collateral Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor.

     4.13. Collateral Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain, within 120 days following the Closing Date, a Collateral Access Agreement, from (x) the lessor of each leased property and (y) from any bailee or consignee with respect to any warehouse, processor or converter facility or other location, in each case where inventory having a fair market value in excess of $500,000 is stored or located or where machinery or equipment having a fair market value in excess of $500,000 is stored or located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, bailee or consignee may assert against the Collateral at that location; provided, however, to the extent the Collateral Access Agreement relates to any Lease entered into after the date of the Indenture, such Grantor shall use commercially reasonable efforts to obtain such Collateral Access Agreement within 90 days following the Closing Date. After the Closing Date, no real property or warehouse space shall be leased by such Grantor and no Inventory shall be shipped to a processor or converter under arrangements established after the Closing Date, unless and until a satisfactory Collateral Access Agreement shall first have been obtained with respect to such location (unless the fair market value of the inventory at such location, or the

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fair market value of the machinery and equipment at such location, is less than $500,000). Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may be located.

     4.14. Control Agreements. As soon as practicable but in no event later than March 25, 2010, unless waived by the Administrative Agent, which waiver shall be evidenced by the delivery of a written notice to the Collateral Agent with respect to this Section 4.14, the Grantors shall cause each depository bank or other institution where the Grantors continue to maintain any Deposit Accounts or Securities Accounts (other than Excluded Accounts) to enter into a Control Agreement with respect to such Deposit Account or Securities Account; provided, that, in the event the Grantors are not able to obtain a Control Agreement with respect to any Deposit Account or Securities Account (other than Excluded Accounts) as of March 25, 2010, then the Grantors shall close each such Deposit Account or Securities Account (other than an Excluded Account) for which a Control Agreement was not obtained, and shall transfer all cash or securities (or proceeds thereof) maintained in such accounts to new Deposit Accounts or Securities Accounts maintained with a depository bank, securities broker, securities intermediary or other financial institution that is a party to a Control Agreement. The Grantors will (i) provide prompt written notice to the Collateral Agent of the establishment of any Deposit Account or Securities Account after the Closing Date and (ii) contemporaneous with the establishment of such Deposit Account or Securities Account (other than an Excluded Account), obtain a Control Agreement with respect to such Deposit Account or Securities Account. For the avoidance of doubt, the Grantors shall enter into a Control Agreement with respect to the Collection Account and any other Accounts (other than Excluded Accounts) established by the Grantors

     4.15. Change of Name or Location; Change of Fiscal Year. Such Grantor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or locations at which Collateral is held or stored, or the location of its records concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Collateral Agent shall have received at least twenty (20) days prior written notice of such change and such Grantor shall have acknowledged in writing that such change will not adversely affect the validity, perfection or priority of the Collateral Agent’s security interest in the Collateral; provided, that any new location shall be in the continental U.S. Such Grantor shall not change its fiscal year which currently ends on December 31.

     4.16. Assigned Contracts. Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) of any Assigned Contract held by such Grantor and to enforce the security interests granted hereunder, except where the failure to obtain such consent or approval could not reasonably be expected to result in a Material Adverse Effect. Such Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided, however, that such Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract unless the Grantor shall have reasonably determined that the termination of such Assigned Contract would not have a Material Adverse Effect. Without limiting the generality of the foregoing, such Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. Such Grantor shall notify the Collateral Agent in writing, promptly after such Grantor becomes aware thereof, of any event or fact which could give rise to a claim by it for indemnification in an amount in excess of $500,000 under any of its Assigned Contracts, and shall diligently pursue such right to recover such claim and report to the Collateral Agent on all further developments with respect thereto. If Full Cash Dominion shall be in effect, such Grantor shall deposit into a Deposit Account at the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) or subject to a Control Agreement for application to the Secured Obligations all amounts received

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by such Grantor as indemnification or otherwise pursuant to its Assigned Contracts. Subject to the Discharge of the First Priority Credit Agreement Secured Obligations, if such Grantor shall fail after the Collateral Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Collateral Agent may, and at the direction of the Required Holders shall, directly enforce such right in its own or such Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Collateral Agent or the Required Holders, as applicable, shall determine. In any suit, proceeding or action brought by the Collateral Agent for the benefit of the Holders under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, such Grantor shall indemnify and hold the Collateral Agent and Holders harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from such Grantor to or in favor of such obligor or its successors. All such obligations of such Grantor shall be and remain enforceable only against such Grantor and shall not be enforceable against the Collateral Agent or the Holders. Notwithstanding any provision hereof to the contrary, such Grantor shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned Contracts, and the Collateral Agent’s or any Holder’s exercise of any of their respective rights with respect to the Collateral shall not release such Grantor from any of such duties and obligations. Neither the Collateral Agent nor any Holder shall be obligated to perform or fulfill any of such Grantor’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.

ARTICLE V
EVENTS OF DEFAULT AND REMEDIES

     5.1. Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

          (a) Any representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially false as of the date on which made.

          (b) The breach by any Grantor of any of the terms or provisions of Article IV or Article VII.

          (c) The breach by any Grantor (other than a breach which constitutes an Event of Default under any other Section of this Article V) of any of the terms or provisions of this Security Agreement which is not remedied within twenty (20) days of receipt of notice by such Grantor of written notice from either the Required Holders or the Collateral Agent of such breach.

          (d) The occurrence of any “Event of Default” under, and as defined in, the Indenture.

          (e) Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent) and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) either the Collateral Agent or the Administrative Agent has entered into a Control Agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

     5.2. Remedies.

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          (a) Subject to the Intercreditor Agreement, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may exercise any or all of the following rights and remedies:

          (i) those rights and remedies provided in this Security Agreement, the Indenture, or any other Second Priority Document; provided, that this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Holders prior to an Event of Default;

          (ii) those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

          (iii) after the Discharge of First Priority Credit Agreement Secured Obligations, give notice of sole control or any other instruction under any Control Agreement or any other control agreement with any securities intermediary and take any action therein with respect to such Collateral;

          (iv) after the Discharge of First Priority Credit Agreement Secured Obligations, without notice (except as specifically provided in Section 8.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable; and

          (v) after the Discharge of First Priority Credit Agreement Secured Obligations, concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Collateral Agent were the outright owner thereof.

          (b) The Collateral Agent, on behalf of the Holders, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

          (c) After the Discharge of First Priority Credit Agreement Secured Obligations, the Collateral Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Collateral Agent and the Holders, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

          (d) After the Discharge of First Priority Credit Agreement Secured Obligations, until the Collateral Agent is able to effect a sale, lease, or other disposition of Collateral, the Collateral Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent. The Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Collateral Agent’s remedies (for the benefit of the Collateral Agent and Holders), with respect to such appointment without prior notice or hearing as to such appointment.

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          (e) Notwithstanding the foregoing, neither the Collateral Agent nor the Holders shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

          (f) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

     5.3. Grantor’s Obligations Upon Default. Subject to the Intercreditor Agreement, upon the request of the Collateral Agent after the occurrence and during the continuance of an Event of Default, each Grantor will:

          (a) assemble and make available to the Collateral Agent the Collateral and all books and records relating thereto at any place or places specified by the Collateral Agent, whether at a Grantor’s premises or elsewhere;

          (b) after the Discharge of First Priority Credit Agreement Secured Obligations, permit the Collateral Agent, by the Collateral Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

          (c) after the Discharge of First Priority Credit Agreement Secured Obligations, prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as necessary, and furnish to the Collateral Agent or cause an issuer of Pledged Collateral to furnish to the Collateral Agent any information regarding the Pledged Collateral in such detail as the Collateral Agent may specify;

          (d) take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Collateral Agent to consummate a public sale or other disposition of the Pledged Collateral; and

          (e) at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Collateral Agent the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

     5.4. Grant of Intellectual Property License. For the purpose of enabling the Collateral Agent to exercise the rights and remedies under this Article V following the occurrence and during the continuance of an Event of Default, each Grantor hereby (a) grants to the Collateral Agent, for the benefit of the Collateral Agent and the Holders, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or

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hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Collateral Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Collateral Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Collateral Agent may finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

     6.1. Account Verification. Subject to the Intercreditor Agreement and after the occurrence and the continuance of an Event of Default, the Collateral Agent may at any time, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables; provided, that unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall notify the Grantors prior to contacting Account Debtors.

     6.2. Authorization for Secured Party to Take Certain Action.

          (a) Subject to the Intercreditor Agreement, each Grantor irrevocably authorizes the Collateral Agent at any time and from time to time in the sole discretion of the Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Collateral Agent to the Secured Obligations as provided in Section 7.4, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Collateral Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Collateral Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent in

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connection with any of the foregoing; provided, that this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Indenture.

          Notwithstanding the foregoing authorization, in no event shall the Collateral Agent be obligated to prepare or file any financing statements whatsoever, or to maintain the perfection of the security interest granted hereunder.

          (b) All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Collateral Agent, for the benefit of the Collateral Agent and Holders, under this Section 6.2 are solely to protect the Collateral Agent’s interests in the Collateral and shall not impose any duty upon the Collateral Agent or any Holder to exercise any such powers. The Collateral Agent agrees that, except for the powers granted in Section 6.2(a)(i), (iii) and (iv) and Section 6.2(a)(xvi), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

     6.3. Proxy. SUBJECT TO AND IN ACCORDANCE WITH THE INTERCREDITOR AGREEMENT, EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT.

     6.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY HOLDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED, THAT IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VII
DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS, LOCK BOXES;
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS

     7.1. Perfected Security Interests in Accounts. After the Discharge of First Priority Credit Agreement Secured Obligations, the Collateral Agent will have a valid, enforceable, perfected first priority security interest (subject to Permitted Liens) in all Accounts (including the Collection Account), the Deposit Accounts, the Securities Accounts and Lock Boxes by Control. No Grantor has granted or shall grant Control of any Account (including the Collection Account), the Deposit Accounts, the Securities Accounts or the Lock Boxes (in each case, including an Excluded Account) to any person other than the Collateral Agent or the Administrative Agent

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to secure the Secured Obligations (as defined herein, with respect to the Collateral Agent, and as defined in the Credit Agreement, with respect to the Administrative Agent).

     7.2. Covenant Regarding New Deposit Accounts, Securities Accounts and Lock Boxes. Before opening or replacing any Deposit Account or Securities Account, or establishing a new Lock Box, each Grantor shall (a) ensure that such action complies with the Indenture (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, shall obtain in writing the consent of the Administrative Agent in accordance with the Intercreditor Agreement) to the opening of such Deposit Account, Securities Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open a Deposit Account, Securities Account or Lock Box (in each case, other than an Excluded Account) to enter into a Control Agreement with the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) in order to give the Administrative Agent or Collateral Agent, as the case may be, dominion and control over such Deposit Account, Securities Account or Lock Box.

     7.3. Application of Proceeds; Deficiency. Subject to the Intercreditor Agreement, in the case of any sale or other disposition of Collateral by the Collateral Agent in the exercise of its remedies provided herein or in any other Collateral Document, the proceeds of such sale shall be applied (and allocated) by the Collateral Agent in accordance with Section 4.10 of the Indenture. In the event that the proceeds from any sale or other disposition of Collateral are insufficient to pay all Secured Obligations in full, the Grantors shall remain liable for any deficiency, including any attorneys’ fees and other expenses incurred by the Collateral Agents or any Holder to collect such deficiency.

ARTICLE VIII
GENERAL PROVISIONS

     8.1. Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Collateral Agent or any Holder arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Collateral Agent or such Holder as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Holder, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

     8.2. Limitation on Collateral Agent’s and Holders’ Duty with Respect to the Collateral. The Collateral Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Collateral Agent shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Collateral Agent nor any Holder shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or such Holder, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition

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of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2.

     Anything herein contained to the contrary notwithstanding, (a) each Grantor shall remain liable under this Security Agreement and under each of the underlying contracts to which such Grantor is a party described herein to perform all of its duties and obligations thereunder to the same extent as if this Security Agreement had not been executed, (b) the exercise by the Collateral Agent or the Noteholders of any of their rights, remedies or powers hereunder shall not release any Grantor from any of its duties or obligations under this Security Agreement or such underlying contracts described herein and (c) neither the Noteholders nor the Trustee shall have any obligation or liability under such underlying contracts by reason of or arising out of this Security Agreement, nor shall the Noteholders or the Trustee be obligated to perform any of the obligations or duties of any of the Grantors hereunder or any of the contracts described herein.

     Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property. The Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Agent. Nor shall the Collateral Agent be responsible for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Grantors to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.

     The Collateral Agent shall be under no obligation to exercise any of its rights or powers vested in it by this Security Agreement, at the request, order or direction of any Required Holders, pursuant to the provisions of this Security Agreement, unless such Required Holders shall have offered to the Collateral Agent reasonable

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security or indemnity satisfactory to it against the costs, expenses and liabilities (including, without limitation, attorneys’ fees) which might be incurred therein or thereby.

     In the event that the Collateral Agent is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any duty for the benefit of another, which in the Collateral Agent’s sole discretion may cause it to be considered an “owner or operator” under the provisions of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601, et seq., or otherwise cause it to incur liability under CERCLA or any other federal, state or local law, the Collateral Agent reserves the right, instead of taking such action, to either resign as or arrange for the transfer of the title or control of the asset to a court-appointed receiver. The Collateral Agent shall not be liable to any Person for any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Collateral Agent’s actions and conduct as authorized, empowered and directed hereunder or relating to the discharge, release or threatened release of hazardous materials into the environment. If at any time it is necessary or advisable for any real property to be possessed, owned, operated or managed by any Person (including the Collateral Agent, the Required Holders shall direct the Collateral Agent to appoint an appropriately qualified Person (excluding the Collateral Agent who such Required Holders shall designate to possess, own, operate or manage, as the case may be, such real property.

     8.3. Compromises and Collection of Collateral. The Grantors and the Collateral Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Collateral Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Collateral Agent shall be commercially reasonable so long as the Collateral Agent acts in good faith based on information known to it at the time it takes any such action.

     8.4. Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Collateral Agent (or, prior to the Discharge of First Priority Credit Agreement Secured Obligations, the Administrative Agent in accordance with the Intercreditor Agreement) may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Collateral Agent for any amounts paid by the Collateral Agent pursuant to this Section 8.4. The Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

     8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable injury to the Collateral Agent and the Holders, that the Collateral Agent and Holders have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Collateral Agent or the Holders to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 8.5 shall be specifically enforceable against the Grantors.

     8.6. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Collateral Agent or other conduct of the Collateral Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon the Collateral Agent unless such authorization is in writing signed by the Collateral Agent with the consent or at the direction of the Required Holders.

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     8.7. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Collateral Agent or any Holder to exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent with the concurrence or at the direction of the Holders required under Section 9.02 of the Indenture, and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Holders until the Secured Obligations have been paid in full.

     8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Security Agreement 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 this Security Agreement are declared to be severable.

     8.9. Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

     8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Holders and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Collateral Agent (except in connection with a Change of Control). No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and the Holders, hereunder.

     8.11. Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.

     8.12. Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Collateral Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Collateral Agent) paid or incurred by the Collateral Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.

24

     8.13. Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.

     8.14. Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until (i) the Indenture has terminated pursuant to its express terms and (ii) all of the Secured Obligations have been indefeasibly paid and performed in full.

     8.15. Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors and the Collateral Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Collateral Agent relating to the Collateral.

     8.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     8.17. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER SECOND PRIORITY DOCUMENT AND EACH GRANTOR 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 COLLATERAL AGENT OR ANY HOLDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE COLLATERAL AGENT OR ANY HOLDER OR ANY AFFILIATE OF THE AGENT OR ANY HOLDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER SECOND PRIORITY DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.

     8.18. WAIVER OF JURY TRIAL. EACH GRANTOR, THE COLLATERAL AGENT AND EACH HOLDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER SECOND PRIORITY DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

     8.19. Indemnity. Each Grantor hereby agrees to indemnify the Collateral Agent and the Holders, and their respective successors, assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the Collateral Agent or any Holder is a party thereto) imposed on, incurred by or asserted against the Collateral Agent or the Holders, or their respective successors, assigns, agents and employees, in any way relating to or arising out of the execution and delivery of this Security Agreement or any actions taken or omitted to be taken by the Collateral Agent or the Holders in accordance with the terms of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not discoverable by the Collateral Agent or the Holders or any Grantor, and any claim for Patent, Trademark or Copyright infringement).

25

     8.20. Counterparts. This Security 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 Security Agreement by signing any such counterpart.

     8.21. Post-Closing Matters. Each of the Parties hereto acknowledges and consents that the documents and deliverables set forth in Exhibit H will be provided by the party responsible therefor in the manner set forth in such Exhibit on or prior to the due date specified in such Exhibit.

ARTICLE IX
NOTICES

     9.1. Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent by United States mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if sent by telecopier (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), in each case addressed to the Grantors at the notice address set forth on Exhibit A, and to the Collateral Agent and the Holders at the addresses set forth in accordance with Section 13.02 of the Indenture. In addition to the foregoing, the Collateral Agent shall have the benefits accorded to the Trustee in the Notice provision under the Indenture.

     9.2. Change in Address for Notices. Each of the Grantors, the Collateral Agent and the Holders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE X
THE COLLATERAL AGENT

     The Bank of New York Mellon Trust Company, N.A. has been appointed Collateral Agent for the Holders hereunder pursuant to Article 10 of the Indenture. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Holders to the Collateral Agent pursuant to the Indenture, and that the Collateral Agent has agreed to act (and any successor Collateral Agent shall act) as such hereunder only on the express conditions contained in such Article 10. In acting under and by virtue of this Security Agreement, the Collateral Agent shall have all of the rights, protections and immunities granted to the Collateral Agent and the Trustee under the Indenture, and all such rights, protections and immunities are incorporated by reference herein, mutatis mutandis. Any successor Collateral Agent shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder. No Holder or Holders shall have the right to initiate any legal action on its or their own behalf under this Security Agreement unless permitted to do so under the terms of the Indenture.

ARTICLE XI
SUBORDINATION

     The lien and security interest evidenced by this Security Agreement and the exercise of any right or remedy by the Collateral Agent in respect thereof is junior and subordinate to the interest of JPMorgan Chase Bank, N.A., individually and as Administrative Agent and is subject to the provisions of the Intercreditor Agreement.

[Signature Page Follows]

26

EXECUTION COPY

     IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Security Agreement as of the date first above written.

GRANTORS:
ALTRA HOLDINGS, INC.
ALTRA INDUSTRIAL MOTION, INC.
By	/s/ Glenn E. Deegan
Name: Glenn E. Deegan
Title:   Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDING, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES, INC.
INERTIA DYNAMICS, LLC
By	/s/ Glenn E. Deegan
Name: Glenn E. Deegan
Title:   Secretary

COLLATERAL AGENT
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
By	/s/ Raymond Torres
Name: Raymond Torres
Title: Senior Associate

PLEDGE AND SECURITY AGREEMENT

EXHIBITS

EXHIBIT A
(See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security Agreement)

NOTICE ADDRESS FOR ALL GRANTORS

c/o Altra Holdings, Inc.
300 Granite St., Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile: (781) 843-0709

INFORMATION AND COLLATERAL LOCATIONS OF GRANTORS

I. General Information

Name of Grantor	State	Entity Type	Org. No	Tax No.
Altra Holdings, Inc.	DE	C Corp.	3870357	61-1478870
Altra Industrial Motion, Inc.	DE	C Corp.	3878606	30-0283143
American Enterprises MPT Corp.	DE	C Corp.	2673186	52-2005169
American Enterprises MPT Holdings, LLC	DE	LLC	2686543	52-2005171
Ameridrives International, LLC	DE	LLC	2673483	54-1826102
Boston Gear LLC	DE	LLC	3822981	11-3723980
Formsprag LLC	DE	LLC	3534967	01-0712538
Inertia Dynamics, LLC	DE	LLC	4046002	20-4221420
Kilian Manufacturing Corporation	DE	C Corp.	0817664	06-0933715
Nuttall Gear LLC	DE	LLC	2765519	54-1856788
TB Wood’s Corporation	DE	C Corp.	2531112	25-1771145
TB Wood’s Enterprises, Inc.	DE	C Corp.	3102375	51-0393505
TB Wood’s Incorporated	PA	C Corp.	394660	23-1232420
Warner Electric International Holding, Inc.	DE	C Corp.	3142042	54-1967086
Warner Electric LLC	DE	LLC	3142038	54-1967089
Warner Electric Technology LLC	DE	LLC	3142046	54-1967084

II.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) and Mailing Address:
	Chief Executive Office/Mailing Address of Each Grantor:

c/o Altra Holdings, Inc.
300 Granite St., Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile: (781) 843-0709

III. Locations of Collateral:

(a) Properties Owned by the Grantors:

Grantor/Owner	Street	City	State	Country	ZIP
Warner Electric LLC	449 Gardner Street	South Beloit	IL	USA	61080
Warner Electric, LLC	802 E. Short Street	Columbia City	IN	USA	46725
TB Wood’s Corporation	801 East Industrial Avenue	Mt. Pleasant	MI	USA	48858
Formsprag LLC	23601 Hoover Road	Warren	MI	USA	48089

Grantor/Owner	Street	City	State	Country	ZIP
Kilian Manufacturing Corporation	1728-36 Burnet Avenue	Syracuse	NY	USA	13206
TB Wood’s Corporation	440 North Fifth Avenue	Chambersburg	PA	USA	17201
TB Wood’s Corporation	3181 Black Gap Road	Scotland	PA	USA	18407
Ameridrives International LLC	1802 Pittsburgh Avenue	Erie	PA	USA	16502
TB Wood’s Corporation	33 Houser Rd.	Fayetteville	PA	USA	17222
TB Wood’s Corporation	521 Airport Road	Chattanooga	TN	USA	37421
Warner Electric LLC	2800 Fisher Road	Wichita Falls	TX	USA	76302
TB Wood’s Corporation	2000 Clovis Barker Road	San Marcos	TX	USA	78666

Vehicle	Location	VIN
2006 CHEVROLET SILVERADO	Chambersburg, PA	3GCEK14T06G152780
1990 INTERNATIONAL BOX TRUCK	Chambersburg, PA	1HTSCNDM4LH287202
1985 FORD 4-WHEEL TRUCK	Chambersburg, PA	1FTEF26Y4FNA71159
1991 GMC SIERRA PICKUP	Chambersburg, PA	1GTDC14H7ME546656
2001 CHEVROLET IMPALA	Chambersburg, PA	2G1WF55EX19244569
1998 CHEVROLET PICKUP	Chambersburg, PA	1GCGK24R4WZ191682
2002 FORD TAURUS	Chambersburg, PA	1FAFP53U92A150581
1972 CHEVROLET DUMP TRUCK	Chambersburg, PA	CCE532V120791
2003 CHEVROLET SUBURBAN	Chambersburg, PA	3GNGK26G13G277286
2001 CHEVROLET IMPALA	San Marcos, TX	2G1WF52EX19197905
2000 FORD F350 TRUCK	San Marcos, TX	1FDWF36F2YED44039
2008 CHEVY PICKUP	Wichita Falls, TX	1GBJK39678E198702
2007 CHEVY PICKUP	Wichita Falls, TX	1GBJK39D87E120975
1995 DODGE PICKUP	Wichita Falls, TX	1B7KC26Z2SS315830
1999 FORD PICKUP	Warren, MI	1FTN20L4XEE76081
1993 FORD FF-350 PICKUP	New Hartford, CT	1FTHF36H1PNA98551
2002 INTERNATIONAL BOX TRUCK	New Hartford, CT	1HTMMAAM12H513455
1994 FORD F-350XL	South Beloit, IL	2FDKF37HXRCA58476
1998 DODGE DAKOTA PICKUP	South Beloit, IL	1B7FL26X4WS7649201
2002 PONTIAC MONTANA VAN	Syracuse, NY	1GMDV03E22D237445
2001 DODGE GRAND CARAVAN	Syracuse, NY	2B8GT54L81R105539
2000 GMC SIERRA PICKUP	Syracuse, NY	1GTGK24U8YE121391
1996 DODGE CARAVAN	Syracuse, NY	1B4GP44R6TB397360
2007 HYUNDAI ENTOURAGE	Syracuse, NY	KNDMC233376036654
2006 CHRYSLER PACIFICA	Syracuse, NY	2A4GM6836R606334
2000 DODGE DURANGO	Green Bay, WI	1B4HS28N7YF147026
1999 CHEVY C3500	Green Bay, WI	1GBJC34FOXF086353
1994 CHEVY PICKUP	Niagara Falls, NY	1GCCS1442R8231748
2004 FORD S350	San Marcos, TX	FDWF36P34EC00390
1996 FORD 250	Charlotte, NC	1FTHF25H8TLB93819

(b) Properties Leased by the Grantors (Include Landlord’s Name):

Grantor/Lessee	Landlord	Street	City	State	Country	ZIP
Inertia Dynamics, LLC	Hitchcock Properties, LLC	31 Industrial Park Road	New Hartford	CT	USA		06057

Grantor/Lessee	Landlord	Street	City	State	Country	ZIP
Warner Electric LLC	Hendricks Development Group	420 Pershing Street	South Beloit	IL	USA		61080
Warner Electric LLC	Long Family Properties, LLC	960 Gardner Street	South Beloit	IL	USA		61080
Formsprag LLC	Nicholas Batistich	485 S. Frontage Road, Suite 330	Burr Ridge	IL	USA		60521
Warner Electric LLC	The Krenger CO.	6593 Revlon Drive	Belvidere	IL	USA		61008
Warner Electric LLC	Precision Realty Corporation	722 E. Swihart Street	Columbia City	IN	USA		46725
Altra Holdings, Inc.	Sun Life Assurance Company of Canada	300 Granite Street	Braintree	MA	USA		02184
Formsprag LLC	Ronald D. Fecteku	23554 Hoover Road	Warren	MI	USA		48089
Boston Gear LLC	John H.O. La Gatta	701 Carrier Drive	Charlotte	NC	USA		28216
TB Wood’s, Inc.	Prologis NA3 TRS II LLC	4970 Joule Street	Reno	NV	USA		83502
Nuttall Gear LLC	Wheatfield Business Park, LP.	2221 Niagara Falls Boulevard	Niagara Falls	NY	USA		14304
Ameridrives International LLC	Brian R. Keyes and Lisa Gladden-Keyes	31 N. Sugan Road, Suite 3D	New Hope	PA	USA		18938
Warner Electric LLC	Grapevine Realty, LLC	1705 Northwest Highway, Suite 125	Grapevine	TX	USA		76051
Boston Gear LLC	Caddo Investments LP	2000 North Central Expressway	Plano	TX	USA		75074
Ameridrives International LLC	Ronald B. Snider and Carol C. Snider	1411 FM 1101, Suite B	New Braunfels	TX	USA		78130
Warner Electric LLC	Waukesha East Commerce Center	1701 Pearl Street	Waukesha	WI	USA		53186
Ameridrives International LLC	R. A. Burton Properties, LLC	1680 Cornell Road	Green Bay	WI	USA		54313
TB Wood’s Enterprises, Inc.	Belflint + Lyons	1011 Centre Road, Suite 322	Wilmington	DE	USA		19805

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Ameridrives International LLC	Rockhill Machining Industries Inc.	Storage of raw materials, finished goods inventory, work in progress inventory, fixed assets and machinery	3 Fourth Street	Barberton	Ohio	USA		44203
Inertia Dynamics, LLC	Advanced DC Motors	Inventory storage	6500 New Venture Gear Drive	East Syracuse	New York	USA		13057
Kilian Manufacturing Corporation	Kilian Korea (not affiliated with Kilian Manufacturing Corporation or Alta Industrial Motion, Inc.)	Finished goods inventory consignment	660-2 Bokjung-Dong, SunjungGu, Sungnam-Si	Gyunggi Do	—	Republic of Korea		—

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Kilian Manufacturing Corporation	Kilian Canada ULC	General	310 Judson Street	Etobicoke	Ontario	Canada		—
TB Wood’s, Inc.	International Distribution Corporation	Inventory storage	8530 Market Street	Houston	Texas	USA		77029
TB Wood’s, Inc.	Kaman Industrial	Inventory storage	1703 NE Argyle	Portland	OR	USA		97211
TB Wood’s, Inc.	Industrial Products Company	Inventory Business	126 Texas Ave. Bldg. 3	San Marcos	TX	USA		78666
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	6305 Danville Rd. #1	Mississauga	ON	Canada		—
TB Wood’s, Inc.	Industrial Blaju S. A. de C.V.	General	Av. Comision Federal de Electricidad #850, Parque Industrial Millenium, 78395 San Luis Potosi	San Luis Potosi	—	Mexico		—
TB Wood’s, Inc.	Industrial Blaju S. A. de C.V.	General	Oriente 237 No. 171, Colonia Agricola Oriental, 08500	Mexico, D.F.	—	Mexico		—
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	9779 45th Ave.	Edmonton	Alberta	Canada		—
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	1073 Begin St. Ville St. Laurent	Ville St. Laurent, Montreal	Quebec	Canada		—
Kilian Manufacturing Corporation	Iron Mountain	Document retention	6667 Deere Rd.	East Syracuse	NY	USA		13057
Kilian Manufacturing Corporation	Empire Archives	Document retention	1300 South Salina St.	Syracuse	NY	USA		13202
Formsprag LLC	Chicago Aluminum Castings Co. Inc.	Inventory and equipment storage	2647 West Ogden Ave.	Chicago	IL	USA		60606
Formsprag LLC	Master Machine & Repair	Inventory and equipment storage	6648 S. Narragonsette	Bedford Park	IL	USA		60638
Formsprag LLC	Industrial Boring	Inventory and equipment storage	23175 Blackstone	Warren	MI	USA		48089
Formsprag LLC	North Tool & Mfg. Co.	Inventory and equipment storage	17140 E. 10 Mile Rd.	Eastpointe	MI	USA		46021
Formsprag LLC	ARC Services of Macomb	Inventory and equipment storage	40450 Gratiot	Clinton Twp	MI	USA		48036
Formsprag LLC	D & D Machine Movers	Inventory and equipment storage	29469 Groesbeck Highway	Roseville	MI	USA		48066
Formsprag LLC	Gollnick Tool Company	Inventory and equipment storage	24300 Marmon	Warrren	MI	USA		18313

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Formsprag LLC	Iron Mountain	Document retention	24300 Wahl Ct.	Warren	MI	USA		48089
Formsprag LLC	Iron Mountain	Document retention	7277 North Haggerty Road	Canton	MI	USA		48187
Formsprag LLC	Boston Gear – Canada Warehouse	Inventory and equipment storage	6305 Danville Rd. #1	Mississauga	ON	Canada		—

EXHIBIT B
(See Section 3.5 of Security Agreement)

DEPOSIT ACCOUNTS

			Check here if	Description of
			Deposit Account is	Deposit Account
			a Collection	if not a Collection
Name of Grantor	Name of Institution	Account Number	Account	Account
See attached consolidated bank account listing.

LOCK BOXES

Name of Grantor	Name of Institution	Lock Box Number
See attached consolidated bank account listing.

SECURITIES ACCOUNTS

Name of Grantor	Name of Institution	Account Number
Altra Industrial Motion, Inc.	[*]	[*]
Altra Holdings, Inc.	[*]	[*]
Altra Holdings, Inc.	[*]	[*]

Bank Account Data Collection

Location:	[*]
Submitted by:	[*]
Phone #:	[*]
Email:	[*]

Global Bank Account Information

			Interest
			Bearing (Y			Maximum
Bank	Company Name	Account Type	or N)	Currency	Annual Fees	Amt. Held		Purpose
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]

Authorized Signers:                                      

Carl Christenson
Christian Storch
Todd Patriacca

Bank Account Data Collection

Location:	[*]
Submitted by:	[*]
Phone #:	[*]
Email:	[*]

		Interest
		Bearing (Y			Maximum
Bank	Account Type	or N)	Currency	Annual Fees	Amt. Held	Purpose
[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]	[*]	[*]

Bill Duff
Todd Menickelli

EXHIBIT C-1
(See Section 3.7 of Security Agreement)

LETTER OF CREDIT RIGHTS

None.

CHATTEL PAPER

None.

EXHIBIT C-2
(See definition of Commercial Tort Claims)

EXISTING COMMERCIAL TORT CLAIMS

None.

EXHIBIT D
(See Section 3.10 and 3.11 of Security Agreement)

INTELLECTUAL PROPERTY RIGHTS

PATENTS

Name of Grantor	Patent Description	Patent Number	Issue Date
See attached Consolidated Patent List

PATENT APPLICATIONS

Name of Grantor	Patent Application	Application Filing Date	Application Serial Number
See attached Consolidated Patent List

TRADEMARKS

Name of Grantor	Trademark	Registration Date	Registration Number
See attached Consolidated Trademark List

TRADEMARK APPLICATIONS

Name of Grantor	Trademark Application	Application Filing Date	Application Serial Number
See attached Consolidated Trademark List

COPYRIGHTS

Name of Grantor	Copyright	Registration Date	Registration Number
None

COPYRIGHT APPLICATIONS

Name of Grantor	Copyright Application	Application Filing Date	Application Serial Number
None

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	Canada	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	2024208	07/03/2001	2024208	08/29/1990	Active
Patent	Canada	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC	1315218	3/30/1993	614020	9/28/1989	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	Europe	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	Europe	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	Europe	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	Europe	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	03/29/1995	94306356.0	8/30/1994	Active
Patent	Europe	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/99	Active
Patent	Europe	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active
Patent	Europe	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	Europe	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	Europe	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	Europe	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	Europe	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent	Europe	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	France	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	France	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	2727485	07/17/1998	9514181	011/30/1995	Active
Patent	France	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	France	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	9106536	1/20/1995	9106536	5/30/1991	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	France	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active
Patent	France	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	France	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	France	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	9902452	12/22/2000	9902452	2/26/1999	Active
Patent	France	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	France	Warner Electric Technology Inc.	UNIDAMP ARMATURE	9103732	2/10/1995	9103732	3/27/1991	Active
Patent	France	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
patent	France	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	France	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent	Germany	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	Germany	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	Germany	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	Germany	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	Germany	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	69211088.7	10/9/1992	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	G9106611.5	10/24/1991	G9106611.5	5/29/1991	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378.3	12/10/1990	Active
Patent	Germany	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	69201221.4	6/22/1992	Active
Patent	Germany	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/14/1998	Active
Patent	Germany	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	Germany	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	69401077.4	3/2/1994	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDAMP ARMATURE	P4108975.8-12	01/30/2003	P4108975.8	03/19/1991	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	4,117,614	3/3/2005	P4117614.6	5/29/1991	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDAMP ARMATURE	G9103369.1	8/1/1991	G9103369.1	3/19/1991	Active
patent	Germany	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active

	Issuing			Registration	Registration /		Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date		Number	Filing Date	Status
Patent	Germany	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001		95203457.7	1/12/1993	Active
Patent	Germany	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994		93309865.9	12/9/1993	Active
Patent	Israel	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	152,385	08/05/2009		152385	10/20/2002	Active
Patent	Israel	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	95688	11/19/1992		95688	9/14/1990	Active
Patent	Israel	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	107584	11/12/1993		107584	11/12/1993	Active
Patent	Italy	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009		06770520.2	1/10/2008	Active
Patent	Italy	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996		92309229.0	10/9/1992	Active
Patent	Italy	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994		90313378	12/10/1990	Active
Patent	Italy	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002		98302223.7	03/24/1998	Active
patent	Italy	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004		99303330.7	4/28/1999	Active
Patent	Italy	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997		93300169.5	1/12/1993	Active
Patent	Italy	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001		95203457.7	1/12/1993	Active
Patent	Italy	Warner Electric Technology Inc.	UNIDAMP ARMATURE	1,244,554	7/15/1994		RM91A000202	3/27/1991	Active
Patent	Italy	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994		93309865.9	12/9/1993	Active
Patent	Japan	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	3,723,872	09/30/2005		329,410/95	11/27/1995	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	3,507,954	1/9/2004		288,154/92	10/05/1992	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC	2761413	3/20/1998		275764/89	10/23/1989	Active
Patent	Japan	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	3,966,368	08/29/2007		227,370/94	08/30/1994	Active
Patent	Japan	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	3316595	06/14/2002		191,371/92	06/26/1992	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	3,433,269	5/30/2003		343,834/91	10/28/1991	Active
Patent	Japan	Warner Electric Technology Inc.	UNIDAMP ARMATURE	3074398	06/09/2000	133666/91		03/28/1991	Active
Patent	Japan	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	3,820,554	6/30/2006		2004-14,295	1/22/2004	Active
Patent	Japan	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	3,538,848	4/2/2004		19425/93	1/13/1993	Active
Patent	Malaysia	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	MY-117,623-A	7/31/2004		P120011880	04/20/2001	Active
Patent	Mexico	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	232,309	11/23./2005		PA/a/2001/010462	10/16/2001	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	Mexico	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	238,848	07/24/2006	PA/A/2005/007753	7/21/2005	Active
Patent	Singapore	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	92,564	02/28/2005	200206523-3	04/19/2001	Active
Patent	Singapore	Warner Electric Technology Inc.	FORMLOCK SHOES WITH FLATS	52,991	04/30/2004	9702069-7	06/27/1997	Active
Patent	Singapore	Warner Electric Technology Inc.	Liquid Cooled Brake assembley	141,736	8/31/2009	200802767-4	4/11/2008	Active
Patent	South Korea	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	828,851	05/02/2008	7013844/2001	10/29/2001	Active
Patent	South Korea	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	232799	9/8/1999	18665/1992	10/10/1992	Active
Patent	South Korea	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	530,579	11/16/2005	15334/1999	4/29/1999	Active
Patent	South Korea	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	519,028	09/27/2005	6203/1999	2/25/1999	Active
Patent	South Korea	Warner Electric Technology Inc.	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	323,800	1/25/2002	23609	11/8/1993	Active
Patent	South Korea	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	215,247	5/21/1999	11273/1992	6/26/1992	Active
Patent	South Korea	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	855153	08/22/2008	7024365/2007	10/23/2007	Active
Patent	Spain	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	Spain	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	Taiwan	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	NI61152	6/23/1993	81105630	7/16/1992	Active
Patent	Turkey	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	TR2002 02428B	7/21/2003	02/2428	10/24/2002	Active
Patent	United Kingdom	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	2,295,656	08/12/1998	9524410.9	11/29/1995	Active
Patent	United Kingdom	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	2244529	2/2/1994	9111037.9	5/22/1991	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	United Kingdom	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	2,237,855	1/12/1994	9021038.6	9/27/1990	Active
Patent	United Kingdom	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	United Kingdom	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	2,339,861	07/24/2002	9904390.3	2/25/1999	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	UNIDAMP ARMATURE	2243195	3/30/1994	9106125.9	3/22/1991	Active
Patent	United Kingdom	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent Appl.	Australia	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			2008214106	8/13/2009	Pending
Patent Appl.	Australia	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			2009202888	07/17/2009	Pending
Patent Appl.	Australia	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch			2008247581	11/5/2009	Pending
Patent Appl.	Brazil	Warner Electric Technology LLC	Liquid Cooled Brake assembley			PI 0618103-1	4/30/2008	Pending
Patent Appl.	Brazil	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			PI 0611804-0	4/30/2008	Pending
Patent Appl.	Canada	Warner Electric Technology LLC	Improved Drive Assenmly with lightweight backstop clutch			2597653	08/10/2007	Pending
Patent Appl.	Canada	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			2640240	7/24/2008	Pending
Patent Appl.	Chili	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			301-08	01/31/2008	Pending
Patent Appl.	China	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			200880003823.2	07/31/2009	Pending
Patent Appl.	China	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			06760061.9	1/10/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			06760062.7	1/10/2008	Pending
Patent Appl.	Europe	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			06817212.1	4/24/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			06817231.1	4/24/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			07762680.2	7/15/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			07754729.7	9/29/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	OVERRUNNING CLUTCH			07783919.9	11/20/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			08714083.6.	07/28/2009	Pending
Patent Appl.	Germany	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY			19544321.7	11/28/1995	Pending
Patent Appl.	Germany	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			19908439.4	2/26/1999	Pending
Patent Appl.	India	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			2125/CHENP/2008	4/29/2008	Pending

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	India	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			2692/CHENP/2008	5/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING			2001-563,800	10/29/2001	Pending
Patent Appl.	Japan	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			54761/94	3/2/1994	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515719	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515720	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			TBD	9/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515721	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2009-504258	9/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	OVERRUNNING CLUTCH			2009-511247	11/18/2008	Pending
Patent Appl.	Japan	???	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			50,440/99	02/26/1999	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014993	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014992	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014996	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			MX/a/2008/005291	4/23/2008	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			MX/a/2008/005290	4/23/2008	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH			PCT/US2008/079310	10/09/2008	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			PCT/US09/044679	5/20/2009	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	Russia	Warner Electric Technology LLC	Liquid Cooled Brake assembley			2008121805	5/30/2008	Pending
Patent Appl.	Russia	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			2008121806	5/30/2008	Pending
Patent Appl.	Singapore	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			200802768-2.	4/11/2008	Pending
Patent Appl.	Singapore	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			200904860-4.	07/17/2009	Pending
Patent Appl.	South Africa	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			2009/05050	7/20/2009	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000645	1/9/2008	Pending

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000650	1/9/2008	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000647	1/9/2008	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7023303	9/24/2008	Pending
Patent Appl.	Taiwan	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			096102358	1/22/2007	Pending
Patent	USA	Inertia Dynamics, LLC	Electromagnetic disc brake with rubber friction disk braking surface	6161659	12/19/2000	09/167006	09/29/1998	Active
Patent	USA	Inertia Dynamics, LLC	Clutch system and method	6488133	12/3/2002	09/528690	03/20/2000	Active
Patent	USA	Inertia Dynamics, LLC	Elevator brake assembly	6675939	01/13/2004	09/773722	01/31/2001	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,150,779	9/29/1992	07/820344	1/14/1992	Active
Patent	USA	Inertia Dynamics, LLC	Power-off brake with manual release	5915507	06/29/1999	08/932904	09/17/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electric clutch and brake	6047805	04/11/2000	08/937816	09/29/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electro-mechanical variable speed clutch	5979630	11/9/1999	08/938862	09/26/1997	Active
Patent	USA	Warner Electric Technology LLC	UNIDAMP ARMATURE	5,036,964	8/6/1991	07/500,466	3/28/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	5,096,036	3/17/1992	07/531,465	5/31/1990	Active
Patent	USA	Warner Electric Technology LLC	APPARATUS FOR RESISTANCE BONDING ELECTROMAGNETIC COILS	5,091,619	2/25/1992	07/543,706	6/26/1990	Active
Patent	USA	Warner Electric Technology LLC	FIELD ASSEMBLY FOR AN ELECTROMAGNET	5,250,921	10/5/1993	07/600,199	10/19/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	5,052,534	10/1/1991	07/605,517	10/30/1990	Active
Patent	USA	Warner Electric Technology LLC	LOW COST SPRAG RETAINER	5,070,976	12/10/1991	07/634,903	12/27/1990	Active
Patent	USA	Warner Electric Technology LLC	DIGITAL CONTROL SYSTEM FOR ELECTROMAGNETIC CLUTCH	5,094,332	3/10/1992	07/664,075	12/31/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING ARMATURE ASSEMBLY WITH FLUX ISOLATOR SPRINGS	5,119,915	6/9/1992	07/700,439	5/15/1991	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	5,125,255	6/30/1992	07/721,972	6/27/1991	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	5,119,918	6/9/1992	07/774,92	10/11/1991	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with slip joint seal	5,230,658	07/27/1993	07/864,307	04/06/1992	Active
Patent	USA	TB Woods Enterprises, Inc.	Shaft Mountable Bushing and Hub for Industrail poer transmission	5304101	4/19/1994	07/919223	7/27/1992	Active
Patent	USA	Warner Electric Technology LLC	SPLIT TUBE HAVING RETAINABLE ENDS	5,280,829	1/25/1994	07/931,638	8/18/1992	Active
Patent	USA	Warner Electric Technology LLC	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	5,310,034	5/10/1994	07/973,291	11/9/1992	Active
Patent	USA	Warner Electric Technology LLC	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	5,337,869	8/16/1994	07/991,021	12/15/1992	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	5,285,882	2/15/1994	07/996,122	12/23/1992	Active
Patent	USA	Warner Electric Technology LLC	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,372,228	12/13/1994	08/026,499	3/4/1993	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Warner Electric Technology LLC	ROTOR FOR ELECTROMAGNETIC COUPLING	5,305,865	4/26/1994	08/026,995	3/5/1993	Active
Patent	USA	Warner Electric Technology LLC	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	5,445,259	8/29/1995	08/114,320	8/30/1993	Active
Patent	USA	Warner Electric Technology LLC	UNIDRIVE ARMATURE HUB	5,370,209	12/6/1994	08/119,729	9/10/1993	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH BRAKE ASSEMBLY	5,549,186	8/27/1996	08/346,622	11/30/1994	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling with End Stress Relief Structure	5611732	3/18/1997	08/512,137	8/7/1995	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A COMPONENT FOR AN ELECTROMAGNETIC FRICTION CLUTCHASSEMBLY	5,708,955	1/13/1998	08/558,906	11/16/1995	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with sealed slip joint seal	5,655,968	08/12/1997	08/646,202	05/07/1996	Active
Patent	USA	Warner Electric Technology LLC	FORMLOCK SHOES WITH FLATS	5,865,284	2/2/1999	08/666,068	6/21/1996	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	5,920,981	7/13/1999	08/823,990	3/25/1997	Active
Patent	USA	Warner Electric Technology LLC	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	6,194,803	2/27/2001	09/032,572	2/27/1998	Active
Patent	USA	Warner Electric Technology LLC	MAG STOP CLUTCH WITH CENTER POLE	5,971,121	10/26/1999	09/070,068	4/30/1998	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,364,084	4/2/2002	09/515779	2/29/2000	Active
Patent	USA	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	6,257,388	7/10/2001	09/556510	4/24/2000	Active
Patent	USA	Warner Electric Technology LLC	METHOD FOR MAKING AN ARMATURTE ASSEMBLEY	6,591,477	7/7/2003	09/684,117	10/06/2000	Active
Patent	USA	Dana Corporation	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,557,236	05/06/2003	10/027,095	12/20/2001	Active
Patent	USA	Warner Electric LLC	Electromechanical screw drive actuator	6,927,513	8/9/2005	10/609,883	6/30/2003	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH	7,261,196	08/28/2007	11/064, 611	02/24/05	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150670	6/10/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,493,996	2/24/2009	11/150671	6/10/2005	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling Device	7,390,265	6/24/2008	11/256,463	10/21/2005	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	7,374,027	5/20/2008	11/263,394	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Liquid Cooled Brake assembley	7,591,349	9/22/2009	11/263,399	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,527,134	5/5/2009	11/278,448	4/3/2006	Active
Patent	USA	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch	7,389,863	6/24/2008	11/341,763	01/27/2006	Active
Patent	USA	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			11/670,698	2/2/2007	Active
Patent	USA	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch			11/743,894	5/3/2007	Active
Patent	USA	Warner Electric Technology LLC	Overrunning Clutch			11/750,733	5/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH			11/871,542	10/12/2007	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			12/016,504	1/18/2008	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device			12/048,638	3/14/2008	Active
Patent	USA	Warner Electric Technology LLC	DUAL ACTUATOR FRICTION BRAKE ASSEMBLY	7,556,128	7/7/2009	11/263,395	10/31/2005	Active
Patent Appl.	USA	Warner Electric Technology LLC	“Dual Actuator Friction Brake Assembly”			12/364,116	2/2/2009	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150027	6/10/2005	Pending
Patent Appl.	USA	Kilian Manufacturing Corporation	Bearing assembly for a steering assembly	7,637,667	12/29/2009	11/773,715	7/5/2007	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			12/124,699	5/21/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			12/175,995	07/18/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]

NOTES:

Warner Electric Technology, Inc.
A number of patents and trademarks owned by Warner Electric Technology LLC remain in the former name (Warner Electric Technology, Inc.) of the company on the records of various foreign patent and trademark offices. Efforts to record the change in name are in progress with respect to some of the patents and trademarks. For others, a conscious decision was made to hold off on recordation pending some other action relating to the property (e.g., the next renewal of a trademark registration). For yet others, a decision was made not to record the change in name in view of a decision to allow various registrations or patents to lapse).

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Argentina	Warner Electric Technology Inc.	WICIHITA & Desgn (stylized)	1,970,585	02/16/2004	2472032	10/29/2003	Active
TM	Argentina	TB Woods Enterprises, Inc.	Dura-Flex	1,783,301	3/27/2000	2,066,443	1/23/1997	Active
TM	Australia	Boston Gear LLC	BOSTON GEAR	522543	11/6/1989		11/06/1989	Active
TM	Australia	Warner Electric Technology Inc.	MISTRAL	564784	06/29/1993	564784	10/03/1991	Active
TM	Australia	Warner Electric Technology Inc.	WICHITA	640944	08/05/1996	640944	09/16/1994	Active
TM	Australia	Warner Electric Technology LLC	WARNER LINEAR	1,125,414	7/21/2006	1125414	7/21/2006	Active
TM	Australia	Altra Industrial Motion, Inc.	A&Design	1185473	07/03/2007	1185473	07/03/2007	Active
TM	Australia	TB Woods Enterprises, Inc.	Sure-Flex & Design (stylized)	B375,472	5/13/1982	B375,472	5/13/1982	Active
TM	Austria	Warner Electric Technology LLC	WARNER	36391	04/13/1957	AM 2025/56	10/24/1956	Active
TM	Austria	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	50589	07/19/1963	AM 760/63	03/26/1963	Active
TM	Benelux	Warner Electric Technology LLC	FORMSPRAG	15729	01/21/1971	248	01/21/1971	Active
TM	Benelux	Warner Electric Technology LLC	MISTRAL	508812	10/21/1991	770814		Active
TM	Benelux	Warner Electric Technology LLC	WARNER	42990	01/12/1972	6207	06/15/1971	Active
TM	Benelux	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	44210	06/28/1971	6777	06/28/1971	Active
TM	Benelux	Warner Electric Technology LLC	WICHITA	62029	09/20/1971	12065	09/20/1971	Active
TM	Benelux	TB Woods Enterprises, Inc.	Sure-Flex	0316801	10/20/1972	0316801	10/20/1972	Active
TM	Brazil	Warner Electric Technology Inc.	FORMSPRAG	770219144	04/20/1982	X	08/12/1997	Active
TM	Brazil	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	007069901	02/25/1980	9738/M-72	06/14/1972	Active
TM	Brazil	Warner Electric Technology LLC	WICHITA	006788939	10/10/1978	21912	08/12/1971	Active
TM	Brazil	TB Woods Inc.	Sure-Flex	810,942,631	3/19/1985	810,942,631	8/23/1982	Active
TM Appl.	Brazil	Formsprag LLC	Cebmag			829.095.985	4/13/2007	Pending
TM	Brazil	Formsprag LLC	Cecon	829.095.993	10/6/2009	829.095.993	4/13/2007	Pending
TM	Brazil	Formsprag LLC	Marland	829.096.000	10/6/2009	829.096.000	4/13/2007	Pending
TM Appl.	Brazil	Altra Industrial Motion, Inc.	A&Design			829278044	07/31/2007	Pending
TM Appl.	Brazil	Formsprag LLC	BC MA			901417858	1/22/2009	Pending
TM Appl.	Canada	Altra Industrial Motion, Inc.	A & Design			1374252	11/30/2007	Pending
TM	Canada	Boston Gear LLC	BEAR-N-BRONZ & Design	TMA116839	02/05/1960	252099	07/23/1959	Active
TM	Canada	Boston Gear LLC	BG & Design	TMA116836	02/05/1960	252095	07/23/1959	Active
TM	Canada	Boston Gear LLC	BOST-BRONZ	TMA118130	05/20/1960	252100	07/23/1959	Active
TM	Canada	Boston Gear LLC	BOSTON GEAR & Design	TMA172185	10/23/1970	318048	11/29/1968	Active
TM	Canada	Warner Electric Technology LLC	FORMSPRAG	TMA108144	09/27/1957	0239971	03/21/1957	Active
TM	Canada	Warner Electric Technology Inc.	KOPPER KOOL	TMA568894	10/06/2002	1001794	01/12/1999	Active
TM	Canada	Boston Gear LLC	RATIO MOTOR	UCA6161	06/18/1936	168466	06/18/1936	Active
TM	Canada	Boston Gear LLC	RATIO PAX	TMA208074	7/4/1975	374799	05/01/1974	Active
TM	Canada	Boston Gear LLC	RIGHT-90	TMA143118	12/17/1965	288461	04/01/1965	Active
TM	Canada	Warner Electric Technology LLC	WARNER	UCA50550	04/20/1954	0224428	04/20/1954	Active
TM	Canada	Warner Electric Technology LLC	WARNER ELECTRIC	TMA-134253	01/17/1964	277382	08/19/1963	Active
TM	Canada	Warner Electric Technology LLC	WICHITA	TMA120129	09/19/1958	247460	09/19/1958	Active
TM	Canada	American Enterprises MPT L.P.	AMERICAN	UCA0045654	06/11/1952	215415	06/11/1952	Active
TM	Canada	American Enterprises MPT L.P.	AMERIGEAR	UCA0043128	06/11/1952	215414	06/11/1952	Active
TM	Canada	Warner Electric Technology LLC	SHEAVE-GRIP	TMA728275	11/13/2008	1,176,042	4/28/2003	Active
TM	Canada	Boston Gear LLC	CENTRIC	TMA324230	02/27/1987	562625	05/13/1986	Active
TM	Canada	Kilian Manufacturing Corporation	KILIAN	TMA 354757	4/21/1989	608151	5/27/1998	Active
TM	Canada	Warner Electric Technology LLC	GFR	TMA492416	4/16/1998	845220	5/15/1997	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Canada	Warner Electric Technology LLC	WARNER LINEAR	TMA774,406	7/30/2009	1310145	7/21/2006	Active
TM	Canada	TB Woods Enterprises, Inc.	Formflex	TMA215307	8/13/1976	352,690	4/26/1972	Active
TM	Canada	TB Woods Enterprises, Inc.	Speedlign	TMA665,131	5/29/2006	1,223,603	7/14/2004	Active
TM	Canada	TB Woods Enterprises, Inc.	Sure-Flex	TMA380915	3/1/1991	645,519	11/23/1989	Active
TM	Canada	TB Woods Enterprises, Inc.	Qt Power Chain	TMA623,038	10/20/2004	1,157,003	10/25/2002	Active
TM	Canada	TB Woods Enterprises, Inc.	Woods@Work	TMA626,975	11/29/2004	1,157,004	10/25/2002	Active
TM	Canada	Dana Corp.	Disc-O-Torque	TMA171577	9/25/1970	325923	9/16/1969	Active
TM Appl.	Canada	TB Woods Enterprises, Inc.	G-Flex			1406538	8/7/2008	Pending
TM	Chile	Warner Electric Technology Inc.	WICHITA	543319	06/25/1999	435364	12/14/1998	Active
TM	China	Warner Electric Technology Inc.	FORMSPRAG	520390	05/30/1990	8927113		Active
TM	China	Warner Electric Technology Inc.	WICHITA	520391	05/30/1990	8927115	08/08/1989	Active
TM	China	Warner Electric Technology LLC	WARNER LINEAR	5,655,144	9/7/2009	5655144	10/12/2006	Active
TM	Colombia	Warner Electric Technology Inc.	WICHITA	121609	02/26/1987	92.355.818	08/19/1983	Active
TM	Europe (CTM)	TB Woods Inc.	Dura-Flex	507277	10/2/2000	507.277	4/2/1997	Active
TM Appl.	Europe (CTM)	Altra Industrial Motion, Inc.	A&Design	006067953	05/16/2008	006067953	07/04/2007	Active
TM	Europe (CTM)	Warner Electric Technology LLC	WARNER LINEAR	5,214,648	5/11/2007	5214648	7/21/2006	Active
TM	Finland	Warner Electric Technology Inc.	MAGNUM	111882	05/20/1991	T198601641	04/24/1986	Active
TM	Finland	Warner Electric Technology LLC	MISTRAL	TM 142083	01/22/1996	T199104906	10/16/1991	Active
TM	Finland	Warner Electric Technology Inc.	MAXIM	TM 110492	02/05/1991	T198601642	04/24/1986	Active
TM	France	Boston Gear LLC	BOSTON	1624494	04/12/1991	INPI121128	04/13/1989	Active
TM	France	Boston Gear LLC	BOSTON GEAR	1624493	04/12/1991	INPI121227	04/03/1989	Active
TM	France	Warner Electric Technology LLC	FORMSPRAG	1197077	03/10/1972	622349		Active
TM	France	Warner Electric Technology Inc.	MISTRAL	1700743	10/22/1991			Active
TM	France	Warner Electric Technology LLC	WARNER ELECTRIC	1547742	08/01/1968	940649		Active
TM	France	Warner Electric Technology Inc.	WARNER & Design	1,230,455	04/18/1958			Active
TM	France	Warner Electric Technology Inc.	WICHITA	1248360	09/19/1958	1248360		Active
TM	France	TB Woods Enterprises, Inc.	Speedlign	1,286,266	6/19/1974	717,131	6/19/1974	Active
TM	France	TB Woods Enterprises, Inc.	Sure-Flex	023196347	11/27/2002	023196347	11/27/2002	Active
TM	Germany	Warner Electric Technology LLC	FORMSPRAG	708841	11/28/1957	708 841/7 (F 7773)	04/02/1957	Active
TM	Germany	Warner Electric Technology LLC	FORMSPRAG PCE	998923	03/07/1980	D34116/7WZ	06/07/1979	Active
TM	Germany	Warner Electric Technology LLC	KOPPER KOOL	1,039,311	10/06/1982	D36687/7	10/08/1981	Active
TM	Germany	Warner Electric Technology LLC	MISTRAL	2025422	11/30/1992	T32561	10/19/1991	Active
TM	Germany	Warner Electric Technology Inc.	STIEBER	39511829.8	02/05/1996	X	03/16/1995	Active
TM	Germany	Warner Electric Technology LLC	STIEBER HEIDELBERG	784371	02/24/1964	ST06038	03/29/1963	Active
TM	Germany	Warner Electric Technology Inc.	WARNER & Design	674860	04/22/1955	W04058	05/27/1953	Active
TM	Germany	Warner Electric Technology LLC	WARNER ELECTRIC	39552705.8	12/12/1996	39552705.8	12/27/1995	Active
TM	Germany	TB Woods Enterprises, Inc.	Form-Flex	1,053,953	9/16/1991	1,053,953	9/16/1991	Active
TM	Germany	TB Woods Enterprises, Inc.	Speedlign	935,511	9/17/1975	M39270	6/10/1974	Active
TM	Germany	TB Woods Enterprises, Inc.	SureFlex	926,107	12/17/1974	W24959	5/4/1973	Active
TM	Germany	Warner Electric Technology LLC	GFR	39,333,006	12/9/1997	39333006.5	7/14/1997	Active
TM	Germany	Warner Electric Technology LLC	GFR	39,807,235	3/27/1998	39807235.3	2/11/1998	Active
TM	Great Britain	TB Woods Enterprises, Inc.	SureFlex	B998,327	9/13/1972	B998,327	9/13/1972	Active
TM	Great Britain	TB Woods Enterprises, Inc.	Dura-Flex	1,105,120	11/22/1978	1105120	11/22/1978	Active
TM	Great Britain	TB Woods Enterprises, Inc.	Speedlign	1,029,397	5/13/1974	1,029,397	5/13/1974	Active
TM	Hong Kong	Warner Electric Technology LLC	WARNER LINEAR	300685206	7/21/2006	300685206	7/21/2006	Active
TM	Hong Kong	Altra Industrial Motion, Inc.	A&Design	300906066	07/05/2007	300906066	07/05/2007	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	India	Warner Electric Technology LLC	FORMSPRAG	694707	05/11/2005	694707	01/17/1996	Active
TM	India	Warner Electric Technology Inc.	STIEBER	662847	04/19/1995		04/19/1995	Active
TM	India	Dana Corporation	WARNER ELECTRIC	672106	06/06/1996		07/06/1995	Active
TM	India	Warner Electric Technology LLC	WICHITA	694708	01/09/2004	694708	01/17/1996	Active
TM Appl.	India	Altra Industrial Motion, Inc.	A&Design			1584305	07/25/2007	Pending
TM	Israel	Warner Electric Technology Inc.	WICHITA	57106	06/09/1988	57106	09/07/1983	Active
TM	Italy	Warner Electric Technology Inc.	FORMSPRAG	781,460	05/27/1958	X	04/23/1957	Active
TM	Italy	Warner Electric Technology Inc.	WARNER	1,075,774	11/26/1976	X	03/20/1973	Active
TM	Italy	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	454836	11/12/1966	X	03/26/1963	Active
TM	Italy	Warner Electric Technology Inc.	WICHITA	847,574	11/19/1959	RM98C004872	10/13/1958	Active
TM	Italy	TB Woods Inc.	Sure-Flex	1037180	9/25/1974	MI2003002784	9/25/1992	Active
TM	Japan	Warner Electric Technology LLC	FORMSPRAG	1169444	11/06/1975	127386/1971	11/24/1971	Active
TM	Japan	Warner Electric Technology LLC	FORMSPRAG	4018891	06/27/1997	135207/1995	12/28/1995	Active
TM	Japan	Warner Electric Technology LLC	KOPPER KOOL	1759530	04/23/1985	84256/1981	10/08/1981	Active
TM	Japan	Warner Electric Technology LLC	MISTRAL	4033376	07/25/1997	100751/1991	09/27/1991	Active
TM	Japan	Warner Electric Technology LLC	PCE	1551186	11/26/1982	85449/1978	11/22/1978	Active
TM	Japan	Warner Electric Technology LLC	STIEBER	4109923	02/06/1998	14030/95	02/17/1995	Active
TM	Japan	Warner Electric Technology LLC	WARNER	452198	09/28/1954	564/1954	01/13/1954	Active
TM	Japan	Warner Electric Technology LLC	WARNER ELECTRIC	1719848	10/31/1984	91915/1981	11/02/1981	Active
TM	Japan	Warner Electric Technology LLC	WARNER ELECTRIC	2294610	01/31/1991	91914/81	11/02/1981	Active
TM	Japan	Warner Electric Technology LLC	WICHITA	2246130	07/30/1990	34043/77	05/19/1977	Active
TM	Japan	Warner Electric Technology Inc.	MAXIM	2,477,,826	11/30/92	40400/1986	04/18/1986	Active
TM	Japan	Altra Industrial Motion, Inc.	A&Design	5126277	04/04/2008	2007-075745	07/05/2007	Active
TM	Japan	TB Woods Enterprises, Inc.	Sure-Flex	1,923,250	12/24/1986	40,343/1982	5/12/1982	Active
TM	Japan	TB Woods Enterprises, Inc.	SureFlex and Katakana	1,740,974	1/23/1995	7-700836	1/13/1995	Active
TM	Japan	TB Woods Enterprises, Inc.	Dura-Flex	4,166,483	7/10/1998	27318/97	3/17/1997	Active
TM	Japan	TB Woods Inc.	Form-Flex	1,975,830	8/19/1987	41,517/85	8/19/1987	Active
TM	Malaysia	Warner Electric Technology Inc.	STIEBER	95/02683	03/28/2000	95/02683	03/28/1995	Active
TM	Mexico	IMO Industries Inc.	BOSTON GEAR	473663	9/15/1994	161734	02/26/1993	Active
TM	Mexico	IMO Industries Inc.	BOSTON GEAR	658794	3/24/2000	161733	02/26/1993	Active
TM	Mexico	Warner Electric Technology LLC	FORMSPRAG	205855	09/02/1997	114172	06/22/1997	Active
TM	Mexico	Warner Electric Technology LLC	WARNER	92550	04/14/1958	76668	01/29/1957	Active
TM	Mexico	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	115936	01/01/1964	109532	03/04/1963	Active
TM	Mexico	Warner Electric Technology Inc.	WICHITA	95017	12/09/1958	84314	09/06/1958	Active
TM	Mexico	Warner Electric Technology Inc.	SHEAVE-GRIP	786,246	03/31/2003	590,675	03/04/2003	Active
TM	Mexico	Warner Electric Technology LLC	WARNER LINEAR	1,060,801	7/17/2008	796,858	7/28/2006	Active
TM	Mexico	Altra Industrial Motion, Inc.	A&Design	1053502	08/12/2008	873655	08/07/2007	Active
TM	Mexico	Emerson Power Transmission Corp.	GFR	631,573	10/29/1999	302944	07/30/1997	Active
TM	Mexico	TB Woods Enterprises, Inc.	Dura-Flex	552,086	6/26/1997	297,615	6/9/1997	Active
TM	Mexico	TB Woods Enterprises, Inc.	Qt Power Chain	818826	1/26/2004	573133	10/20/2002	Active
TM	Mexico	TB Woods Enterprises, Inc.	Woods@Work	904275	10/24/2005	573134	10/30/2002	Active
TM	Mexico	TB Woods Enterprises, Inc.	Speedlign	896028	8/23/2005	666,531	7/14/2004	Active
TM Appl.	Mexico	TB Woods Enterprises, Inc.	G-Flex	1,120,117	9/10/2009	953824	8/11/2008	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Unregistered TM	n/a	Warner Electric LLC	Bear Rugged-Mobile Tough	n/a	n/a	n/a	n/a	n/a
Unregistered TM	n/a	Warner Electric LLC	BearTrac	n/a	n/a	n/a	n/a	n/a
Unregistered TM	n/a	Warner Electric LLC	Kodiak	n/a	n/a	n/a	n/a	n/a
TM	Peru	Warner Electric Technology LLC	WICHITA	54452	04/27/1999	75634	12/11/1998	Active
TM	Singapore	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	T82/01188Z	03/07/1988	T82/01188Z	03/09/1982	Active
TM	Singapore	Warner Electric Technology LLC	WARNER LINEAR	T06/20041C	9/26/2006	T06/20041C	9/26/2006	Active
TM	Singapore	Altra Industrial Motion, Inc.	A&Design	T07/15070C	07/06/2007	T0715070C	07/06/2007	Active
TM	Singapore	TB Woods Enterprises, Inc.	SureFlex	T82/02556B	5/21/1982	2556/82	5/21/1982	Active
TM	South Africa	Warner Electric Technology Inc.	WICHITA	81/6897	09/17/1981	81/6897	09/17/1981	Active
TM Appl.	South Africa	Altra Industrial Motion, Inc.	A&Design			2007/14502	07/05/2007	Pending
TM Appl.	South Africa	Formsprag LLC	Marland			2009/17809	9/11/2009	Pending
TM	South Korea	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	84202	09/30/1982	1982-0000088	01/07/1982	Active
TM	South Korea	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	85916	11/23/1982	1982-0000086	01/07/1982	Active
TM	South Korea	Warner Electric Technology LLC	WICHITA	108661	01/08/1985	1983-0011882	08/23/1983	Active
TM	South Korea	Warner Electric Technology LLC	WARNER LINEAR	40-0720036	8/7/2007	40-2006-0051431	10/12/2006	Active
TM	South Korea	Altra Industrial Motion, Inc.	A&Design	40-0775102	01/08/2009	40-2007-0039600	07/25/2007	Active
TM	South Korea	TB Woods Enterprises, Inc.	Form-Flex	140,855	5/25/1987	7981/1986	5/25/1997	Active
TM	Spain	Warner Electric Technology LLC	FORMSPRAG	2006258(3)	07/05/1996	2006258(3)		Active
TM	Spain	Warner Electric Technology Inc.	KOPPER KOOL & Design	1662162	06/05/1992	1662161	10/17/1991	Active
TM	Spain	Warner Electric Technology LLC	MAGNUM	1,142,629	10/02/1989		04/11/1986	Active
TM	Spain	Warner Electric Technology LLC	WARNER ELECTRIC	2010756	10/27/1997	2010756	02/07/1996	Active
TM	Spain	Warner Electric Technology Inc.	WICHITA	1045719	04/05/1984	1045719	08/30/1983	Active
TM	Sweden	Warner Electric Technology LLC	FORMSPRAG	83978	12/20/1957			Active
TM	Sweden	Warner Electric Technology LLC	WARNER ELECTRIC	323081	04/25/1997	95-14891	12/27/1995	Active
TM	Sweden	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	109892	05/19/1964	63-01313	03/27/1963	Active
TM	Sweden	Warner Electric Technology Inc.	WICHATA	90967	12/16/1960	3038	09/25/1958	Active
TM	Switzerland	Warner Electric Technology LLC	FORMCHROME	P-412221	10/18/1994	07371/1993.0	05/17/1993	Active
TM	Switzerland	Warner Electric Technology LLC	FORM-LOCK	P-412226	10/18/1994	7378/1993.2	05/17/1993	Active
TM	Switzerland	Warner Electric Technology LLC	FORMSPRAG	P-287755	04/26/1997	01681/1977	04/01/1997	Active
TM	Switzerland	Warner Electric Technology LLC	FORMSPRAG & Design	P-412187	10/14/1994	07373/1993.3	05/17/1993	Active
TM	Switzerland	Warner Electric Technology Inc.	RL	P-414247	01/31/1995	7376/1993.9	05/17/1993	Active
TM	Switzerland	Warner Electric Technology Inc.	WARNER & Design	P-406103	10/11/1993	2801/1993.6		Active
TM	Switzerland	Warner Electric Technology LLC	WARNER ELECTRIC	P-438835	03/27/1997	14050/1995	12/28/1995	Active
TM	Switzerland	Warner Electric Technology LLC	WICHITA & Design	P-300175	10/09/1979	03810/1978	08/17/1978	Active
TM	Switzerland	TB Woods Enterprises, Inc.	Sure-Flex	405,626	9/14/1992	01605/1993	9/14/1992	Active
TM	Taiwan	Warner Electric Technology Inc.	WARNER & Design	192580	10/01/1982	70043208	12/29/1981	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Taiwan	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	64628	06/16/1993	81047228	09/21/1992	Active
TM	Taiwan	Warner Electric Technology Inc.	WICHITA	245903	05/16/1984	(72)52506	12/21/1983	Active
TM	Taiwan	Warner Electric Technology Inc.	WARNER ELECTRIC AND DESIGN	192,580	9/20/2002			Active
TM	Taiwan	Warner Electric Technology LLC	WARNER LINEAR	1,264,315	6/1/2007	095037880	7/24/2006	Active
TM	Taiwan	Altra Industrial Motion, Inc.	A&Design	1310870	05/16/2008	096031868	07/05/2007	Active
TM	Taiwan	TB Woods Inc.	Dura-Flex	807,300	7/1/1998	(86)5713	2/1/1997	Active
TM	Thailand	Warner Electric Technology LLC	WARNER LINEAR	Kor275083	10/26/2006	642919	10/26/2006	Active
TM	Thailand	Altra Industrial Motion, Inc.	A&Design	Kor296763	07/25/2007	668284	07/25/2007	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	SureFlex	B998,327	9/13/1972	B998,327	9/13/1972	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	Dura-Flex	1,105,120	11/22/1978	1105120	11/22/1978	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	Speedlign	1,029,397	5/13/1974	1,029,397	5/13/1974	Active
TM	United Kingdom	Warner Electric Technology LLC	AUTOGAP	795572	09/17/1959		09/17/1959	Active
TM	United Kingdom	Warner Electric Technology Inc.	MAGNUM	879962	05/25/1965	879962	05/25/1965	Active
TM	United Kingdom	Warner Electric Technology Inc.	MAGNUM	1263574	09/15/1989	1263574	03/27/1986	Active
TM	United Kingdom	Warner Electric Technology LLC	MISTRAL	1475775	06/27/1997		09/07/1991	Active
TM	United Kingdom	Warner Electric Technology LLC	WARNER	792664	06/29/1959	792664		Active
TM	United Kingdom	Warner Electric Technology LLC	WARNER	710,641	09/17/1952	710641	07/15/1952	Active
TM	United Kingdom	Warner Electric Technology LLC	WICHITA	2192400	09/29/2000	2192400	03/20/1999	Active
TM	United Kingdom	Warner Electric Technology LLC	WICHATA	783301	10/29/1958	783301	10/29/1958	Active
TM	United Kingdom	Warner Electric Technology Inc.	DURA-FLEX	1,105,120	11/22/78			Active
TM	United Kingdom	Warner Electric Technology Inc.	FORMSPRAG	2380616	6/24/2005		12/17/2004	Active
TM	United Kingdom	Boston Gear LLC	CENTRIC	1259254	1/30/1986	1259254	1/30/1986	Active
TM	USA	Boston Gear LLC	ACE	1771190	5/18/1993	74253998	3/10/1992	Active
TM	USA	Ameridrives International, LLC	AMERICAN	0529539	8/22/1950	71578852	4/29/1949	Active
TM	USA	Ameridrives International, LLC	AMERICARDAN	2,488,262	09/11/01	75621192	01/15/1999	Active
TM	USA	Ameridrives International, LLC	AMERIDISC & Design	0802185	1/18/1966	72219296	5/19/1965	Active
TM	USA	Ameridrives International, LLC	AMERIDRIVES	2168489	6/23/1998	75204229	11/25/1996	Active
TM	USA	Ameridrives International, LLC	AMERIFLEX	1000720	12/31/1974	72444883	1/2/1973	Active
TM	USA	Warner Electric Technology LLC	AUTOGAP	681,746	07/14/1959	72046678	2/26/1958	Active
TM	USA	Boston Gear LLC	BEAR-N-BRONZ	0603829	3/29/1955	71665847	5/6/1954	Active
TM	USA	Boston Gear LLC	BG & Design	0298486	10/25/1932	71327723	6/4/1932	Active
TM	USA	Boston Gear LLC	BOSTRONG & Design	0837074	10/17/1967	72251147	7/27/1966	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0547544	9/4/1951	71597836	5/20/1950	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0612905	9/27/1955	71677082	11/22/1954	Active
TM	USA	Boston Gear LLC	BOST-FLEX	1111218	1/16/1979	73163090	3/21/1978	Active
TM	USA	Boston Gear LLC	BOSTON	0522912	3/28/1950	71535926	9/27/1947	Active
TM	USA	Boston Gear LLC	BOSTON & Design	1374572	12/10/1985	73514378	12/19/1984	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905805	1/12/1971	72338165	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905846	1/12/1971	72338166	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTONE	1131198	2/26/1980	73163091	3/21/1978	Active
TM	USA	Formsprag LLC	CEBMAG	1352456	08/06/1985	73513313	12/13/1984	Active
TM	USA	Formsprag LLC	CECON	2871858	08/10/04	78/300,412	09/15/2003	Active
TM	USA	Boston Gear LLC	CENTRIC	1365217	10/15/1985	73434105	7/11/1983	Active
TM	USA	Boston Gear LLC	DCX	1689927	6/2/1992	74151919	3/27/1991	Active
TM	USA	Boston Gear LLC	DCX PLUS	1794125	9/21/1993	74151939	3/27/1991	Active
TM	USA	Nuttall Gear LLC	DELROYD	3025384	12/13/2005	76/586088	4/12/2004	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	Warner Electric Technology LLC	ELECTRO-MODULE	0838675	11/14/1967	72200306	8/20/1964	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-PACK	0741888	12/11/1962	72127440	9/7/1961	Active
TM	USA	Warner Electric Technology LLC	F AND DESIGN	0743735	01/15/1963	72125482	8/7/1961	Active
TM	USA	Warner Electric Technology LLC	FORMCHROME	0867512	04/01/1969	72300576	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORM-LOCK	0870852	06/10/1969	72300575	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORMSRPAG & Design	0444642	01/15/1952	71510384	10/7/1946	Active
TM	USA	Warner Electric Technology LLC	FORMSPRAG	1216418	11/16/1982	73326809	9/4/1981	Active
TM	USA	Warner Electric Technology LLC	KOPPER KOOL	1258259	11/22/1983	73334553	10/28/1981	Active
TM	USA	Warner Electric Technology LLC	LLH	1759504	03/23/1993	74303730	8/13/1992	Active
TM	USA	Warner Electric Technology LLC	MAG STOP	1,851,941	08/30/1994	74327472	11/2/1992	Active
TM	USA	Warner Electric Technology LLC	MAGNUM	2,892,316	10/12/2004	76/336,606	11/13/2001	Active
TM	USA	Formsprag LLC	MARLAND	2667819	12/31/2002	76118280	8/28/2000	Active
TM	USA	Warner Electric Technology LLC	MESUR-FIL	0990826	08/13/1974	72464823	8/6/1973	Active
TM	USA	Warner Electric Technology LLC	MISTRAL	2168734	06/30/1998	74240876	1/28/1992	Active
TM	USA	Boston Gear LLC	MOTOR MULTIPLIER	1131648	3/11/1980	73184680	9/5/1978	Active
TM	USA	Nuttall Gear LLC	NGC & Design	3031121	12/20/2005	76/586087	4/12/2004	Active
TM	USA	Nuttall Gear LLC	Nuttall	3031120	12/20/2005	76/586086	4/12/2004	Active
TM	USA	Boston Gear LLC	OPTIMOUNT	0670192	11/25/1958	72046238	2/20/1958	Active
TM	USA	Warner Electric Technology LLC	PCE	1136601	06/03/1980	73193726	11/17/1978	Active
TM	USA	Boston Gear LLC	RATIOPAX	0985828	6/11/1974	72456678	5/7/1973	Active
TM	USA	Boston Gear LLC	RATIOTROL	0743713	1/15/1963	72137450	2/7/1962	Active
TM	USA	Warner Electric Technology LLC	SHEAVE-GRIP	3,085,816	4/25/2006	76/498,191	3/14/2003	Active
TM	USA	Warner Electric Technology LLC	UNIDAMP	1795619	09/28/1993	74038916	3/16/1990	Active
TM	USA	Warner Electric Technology LLC	UNIMODULE	1678062	03/03/1992	74053993	4/30/1990	Active
TM	USA	Warner Electric Technology LLC	WARNER & Design	0527445	07/11/1950	71528385	7/11/1947	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	1,026,080	12/02/1975	73035013	10/18/1974	Active
TM	USA	Ameridrives International, LLC	AMERIGEAR	2,951,600	5/17/2005	78/373,119	2/24/2004	Active
TM	USA	Ameridrives International, LLC	THE AMERICAN FULLY CROWNED TOOTH	2980971	5/10/2005	78/373,135	2/24/2004	Active
TM	USA	Boston Gear LLC	POSIVENT	2875347	08/17/2004	76/423,536	06/20/2002	Active
TM	USA	Boston Gear LLC	STABILI SEAL	3,131,135	08/15/2006	78/564,645	02/10/2005	Active
TM	USA	Warner Electric Technology Inc.	WICHITA CLUTCH	3039567	01/10/2006	76/620135	11/12/04	Active
TM	USA	Altra Industrial Motion, Inc.	A&Design	3,146,781	09/19/2006	78/560930	02/04/2005	Active
TM	USA	Warner Electric Technology LLC	AQUAMAKKS	3,490,449	08/19/2008	78/821,282	02/23/2006	Active
TM	USA	Warner Electric Technology LLC	Warner Electric	3,287,916	09/04/2007	78/790,162	01/12/2006	Active
TM	USA	Boston Gear LLC	CENTRIGARD	3,374,068	1/22/2008	78/774,995	12/16/2005	Active
TM	USA	Altra Industrial Motion, Inc.	Altra Industrial Motion	3360155	12/25/2007	76/621069	11/17/2004	Active
TM	USA	Warner Electric Technology LLC	Warner Linear	3,413,352	04/15/2008	78/910,851	06/19/2006	Active
TM	USA	Altra Industrial Motion, Inc.	A-Track	3,263,081	07/10/2007	78/790085	1/12/2006	Active
TM	USA	Kilian Manufacturing Corporation	KILIAN	1216354	11/16/1982	73277508	9/11/1980	Active
TM	USA	Kilian Manufacturing Corporation	KILROL	2827924	3/30/2004	78213978	2/12/2003	Active
TM	USA	Warner Electric Technology LLC	GFR	3,494,910	9/2/2008	77/247,944	08/06/07	Active
TM	USA	Warner Electric Technology LLC	B-Track	3,609,446	4/21/2009	77/237,461	07/24/2007	Active
TM	USA	TB Woods Enterprises, Inc.	All-Pro	2,165,737	6/16/1998	75/290,731	5/12/1997	Active
TM	USA	TB Woods North Carolina, Inc.	Braketron	1,164,393	8/11/1981	73/254,657	3/19/1980	Active
TM	USA	TB Woods Enterprises, Inc.	Deck & Design (stylized lettering)	1,409,209	9/16/1986	73/581,633	2/7/1986	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	TB Woods Enterprises, Inc.	Disc-O-Torque	859,264	10/29/1968	72/285,224	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Dura-Flex	1,116,828	4/24/1979	73/158,649	2/13/1978	Active
TM	USA	TB Woods Enterprises, Inc.	First In Couplings	1,361,466	9/24/1985	73/526,310	3/11/1985	Active
TM	USA	TB Woods Enterprises, Inc.	Form-Flex	2,152,362	4/21/1998	75/273,175	4/11/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Poole	2,191,918	9/29/1998	75/251,697	2/28/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Qt Power Chain	2,723,745	6/10/2003	76/403,299	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	Roto-Cam	859,263	10/29/1968	72/285,223	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Speedlign	2,991,827	9/6/2005	78/350,700	1/12/2004	Active
TM	USA	TB Woods Enterprises, Inc.	Sure Grip (Stylized)	645,415	5/14/1957	71/640,418	1/6/1953	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Flex	668,649	10/21/1958	72/043,720	1/9/1958	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	646,423	6/4/1957	71/575,508	3/15/1949	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	1,109,150	12/19/1978	73/136,699	8/8/1977	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,969	1/21/1975	73/001,734	10/9/1973	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,970	1/21/1975	73/003,203	10/10/1973	Active
TM	USA	TB Woods Enterprises, Inc.	W TB Wood’s (and design)	2,059,245	5/6/1997	75/107,136	5/20/1996	Active
TM	USA	TB Woods Enterprises, Inc.	G-Flex	3,501,631	9/16/2008	77/397,102.	2/14/2008	Active
TM	USA	Inertia Dynamics, LLC	Unibrake	0809205	05/31/1966	72/219817	05/26/1965	Active
TM Appl.	USA	Kilian Manufacturing Corporation	HI-TECH WORRY BEADS			78/775,032	12/16/2005	Pending
TM Appl.	USA	Formsprag LLC	BC MA			77/649,950	1/15/2009	Pending
Unregistered TM	USA	Inertia Dynamics, LLC	IDI
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	0726202	01/09/1962	72105397	9/28/1960	Active
TM	USA	Warner Electric Technology LLC	WICHITA	1565483	11/14/1989	73753251	8/29/1988	Active
TM	Venezuela	Warner Electric Technology Inc.	WICHITA	120263	04/25/1986	7010-83	09/01/1983	Active
TM	Vietnam	Warner Electric Technology Inc.	WARNER	9997	12/11/1993	11808	03/20/1993	Active
	NOTES:
		American Enterprises MPT L.P.
		This entity is the owner of record of a pair of Canadian registrations. The changes in the company’s name from American Enterprises MPT L.P. to Ameridrives International L.P. (on 04/25/1997) and later from Ameridrives International L.P. to Ameridrives International LLC (on 12/21/2005) have not yet been recorded against the registrations.
		Dana Corporation
		This entity is the owner of record of an Indian trademark registration for “WARNER ELECTRIC.” The assignment of the registration from Dana Corporation to Warner Electric Technology, Inc. and the subsequent name change from Warner Electric Technology, Inc. to Warner Electric Technology LLC have been submitted for recordation. Dana Corporation is also the owner of record of a Canadian trademark registration for “DISC-O-TORQUE” relating to TB Woods. No action has been taken to address the change in ownership of this registration in view of instructions given in 2000 to a prior law firm for TB Woods to allow the registration to lapse (the registration actually remains in force until 2015.

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
		Emerson Power Transmission Corp.
		This entity is the owner of record on a Mexican registration for “GFR.” Assignments from Emerson Power Transmission Corp. to Dana Holdings GmbH and from Dana Holdings GmbH to Warner Electric Technology LLC have been submitted for recordation and the process is ongoing.
		IMO Industries, Inc.
		This entity is the owner of record on a pair of Mexican registrations for “BOSTON GEAR”. An assignment of the Mexican registrations to Boston Gear LLC is in the process of being recorded.
		Warner Electric Technology, Inc.
		A number of patents and trademarks owned by Warner Electric Technology LLC remain in the former name (Warner Electric Technology, Inc.) of the company on the records of various foreign patent and trademark offices. Efforts to record the change in name are in progress with respect to some of the patents and trademarks. For others, a conscious decision was made to hold off on recordation pending some other action relating to the property (e.g., the next renewal of a trademark registration). For yet others, a decision was made not to record the change in name in view of a decision to allow various registrations or patents to lapse).

INTELLECTUAL PROPERTY LICENSES

Name of Grantor	Name of Agreement	Date of Agreement	Parties to Agreement
[*]	License Agreement	August 17, 2009	Ameridrives International, LLC
The Grantors own or license certain off-the-shelf software, which software is ready-made and available for sale, lease, or license to the general public.
From time to time in the course of manufacturing products for their customers, certain customers may grant the Grantors limited licenses to certain of their intellectual property.

EXHIBIT E
(See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)

LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY

STOCKS

					Percentage of
Name of		Certificate	Number of		Outstanding
Grantor	Issuer	Number(s)	Shares	Class of Stock	Shares
Altra Holdings, Inc.	Altra Industrial Motion, Inc.	C-2	1,000	Common Stock, $0.001 par value	100%
Altra Industrial Motion, Inc.	American Enterprises MPT Corp.	102	999	Common Stock, $0.001 par value	100%
Altra Industrial Motion, Inc.	Warner Electric LLC	002	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Warner Electric Technology LLC	002	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Boston Gear LLC	001	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Kilian Manufacturing Corporation	102	10	Stock, no par value	100%
Altra Industrial Motion, Inc.	Warner Electric International Holding, Inc.	2	1,000	Stock, $1.00 par value	100%
Altra Industrial Motion, Inc.	Inertia Dynamics, LLC	002	100%	LLC Interests	100%
Altra Industrial Motion, Inc.	TB Wood’s Corporation	C-2	1,000	Common Stock, $0.01 par value	100%
American Enterprises MPT Corp.	American Enterprises MPT Holdings, LLC	001	100%	LLC Interests	100%
American Enterprises MPT Corp.	Ameridrives International LLC	001	100%	LLC Interests	100%
American Enterprises MPT Corp.	Nuttall Gear LLC	001	1	LLC Interests	100%
American Enterprises MPT Corp.	Formsprag LLC	004	861,429	Units	100%
TB Wood’s Corporation	TB Wood’s Incorporated	2	1,125,000	Common Stock, $0.10 par value	100%
TB Wood’s Incorporated	TB Wood’s Enterprises Inc.	2	3,000	Common Stock, $0.01 par value	100%
TB Wood’s Incorporated	T.B. Wood’s Canada Ltd.	1015	3,415	Common Shares	65%

					Percentage of
Name of		Certificate	Number of		Outstanding
Grantor	Issuer	Number(s)	Shares	Class of Stock	Shares
TB Wood’s Incorporated	Industrial Blaju, S.A. de C.V.	2	25,229,382	Capital Stock, $1.00 par value	65%
Kilian Manufacturing Corporation	3091780 Nova Scotia Company	5, 7	130	Common Shares, no par value	65%
Warner Electric International Holding, Inc.	Warner Electric UK Group Ltd.	6	2,456,508	Ordinary Shares of £1 each, fully paid	65%
Warner Electric International Holding, Inc. *	Warner Electric (Holding) SAS				65%
Warner Electric International Holding, Inc. *	Warner Electric Group GmbH				65%
Warner Electric International Holding, Inc.*	Warner Electric (Netherlands) Holding, B.V.				65%

* NOTE: Certificates for these entities will be provided post-closing.

BONDS

Name of
Grantor	Issuer	Number	Face Amount	Coupon Rate	Maturity
N/A

GOVERNMENT SECURITIES

Name of
Grantor	Issuer	Number	Type	Face Amount	Coupon Rate	Maturity
N/A

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)

			Percentage Ownership
Name of Grantor	Issuer	Description of Collateral	Interest
See below.

Existing Joint Ventures

     Warner Electric LLC holds 40% of Elastomeric Actuators Inc.

EXHIBIT F
(See Section 3.1 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

Name of Grantor	Jurisdiction
Altra Holdings, Inc.	DE
Altra Industrial Motion, Inc.	DE
American Enterprises MPT Corp.	DE
American Enterprises MPT Holdings, LLC	DE
Ameridrives International, LLC	DE
Boston Gear LLC	DE
Formsprag LLC	DE
Inertia Dynamics, LLC	DE
Kilian Manufacturing Corporation	DE
Nuttall Gear LLC	DE
TB Wood’s Corporation	DE
TB Wood’s Enterprises, Inc.	DE
TB Wood’s Incorporated	PA
Warner Electric International Holding, Inc.	DE
Warner Electric LLC	DE
Warner Electric Technology LLC	DE

EXHIBIT G
(See Section 4.4 and 4.8 of Security Agreement)

AMENDMENT

This Amendment, dated                     ,       is delivered pursuant to Section 4.4 of the Security Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement. The undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Pledge and Security Agreement, dated                            ,        , between the undersigned, as the Grantors, and The Bank of New York Mellon Trust Company, N.A., as the Collateral Agent, (the “Security Agreement”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in said Security Agreement.

By:

Name:

Title:

SCHEDULE I TO AMENDMENT

STOCKS

					Percentage of
Name of		Certificate	Number of		Outstanding
Grantor	Issuer	Number(s)	Shares	Class of Stock	Shares

BONDS

Name of
Grantor	Issuer	Number	Face Amount	Coupon Rate	Maturity

GOVERNMENT SECURITIES

Name of
Grantor	Issuer	Number	Type	Face Amount	Coupon Rate	Maturity

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)

			Percentage Ownership
Name of Grantor	Issuer	Description of Collateral	Interest

[Add description of custody accounts or arrangements with securities intermediary, if applicable]

COMMERCIAL TORT CLAIMS

			Case Number; Name of
			Court where Case was
Name of Grantor	Description of Claim	Parties	Filed

EXHIBIT H
(See Section 8.21 of Security Agreement)

Post Closing Matters

		Responsible
Document/Deliverable		Party	Due Date
1.	Deliver to the Collateral Agent the results of patent and trademark searches of the U.S. Patent and Trademark Office databases, together with an Exhibit D attached hereto, listing all Patents and Trademarks (including any licenses of the foregoing) in which such Grantor has an ownership interest, in each case as required under Section 4.7(f) hereof.	Grantors	12/25/09
2.	Execute and deliver to the Collateral Agent (x) a patent security agreement and (y) a trademark security agreement as required under Section 4.7(f) hereof.	Grantors	12/25/09
3.	Deliver to the Collateral Agent copies of existing appraisals with respect to each of the Premises.	Grantors	12/25/09
4.	Deliver to the Collateral Agent certificates of insurance and binder to comply with Acord 25, Acord 28 and Acord 75 with respect to all property, casualty and liability insurance policies (identifying the Collateral Agent as loss payee and additional insured and mortgagee) maintained by the Grantors, together with copies of endorsements to such policies indicating that the Collateral Agent has been named as loss payee and additional insured and mortgagee.	Grantors	12/25/09
5.	Deliver to the Collateral Agent a Mortgage and other related items with respect to each of the Premises as required under Section 4.20 of the Indenture.	Grantors	2/23/10
6.	Deliver to the Collateral Agent copies of existing surveys and Phase I environmental reports with respect to each of the Premises.	Grantors	2/23/10
7.	Deliver to the Collateral Agent certificates evidencing flood insurance, if required, for each of the Premises, and certificates evidencing hazard insurance for each of the Premises.	Grantors	2/23/10
8.	Execute and deliver to the Collateral Agent Control Agreements as required under Section 4.14 hereof.	Grantors	3/25/10

		Responsible
Document/Deliverable		Party	Due Date
9.	Execute and deliver to the Collateral Agent Collateral Access Agreements as required under Section 4.13 and pursuant to Section 4.21 of the Indenture.	Grantors	2/23/10 (for Leases entered into after the date of the Indenture) 3/25/10 (for all other Collateral Access Agreements)
10.	Execute and deliver to the Collateral Agent and Officers’ Certificate certifying that all post-closing matters set forth on this Exhibit H have been executed and/or delivered to the Collateral Agent as set forth herein (which Officers’ Certificate the Trustee and the Collateral Agent shall be entitled to rely on as to the satisfaction of such post-closing matters).	Grantors	3/25/10

EX-10.14

Exhibit 10.14

[*] THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

EXECUTION VERSION

PATENT SECURITY AGREEMENT

     PATENT SECURITY AGREEMENT (this “Agreement”), dated as of December 24, 2009, among Altra Industrial Motion, Inc., a Delaware corporation (the “Company”), the Subsidiaries and Affiliates of the Company named on the signature pages hereto (each, a “Grantor” and collectively, the “Grantors”), and The Bank of New York Mellon Trust Company, N.A., acting in the capacity as Collateral Agent for the benefit of itself and the Holders under the Indenture referred to below (in such capacity, the “Collateral Agent”).

WITNESSETH:

     WHEREAS, pursuant to the terms of that certain Indenture, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), by and among Altra Holdings, Inc. (“Holdings”), the guarantors party thereto and the Collateral Agent, the Holders will purchase the Notes issued by Holdings;

     WHEREAS, pursuant to the Pledge and Security Agreement, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), among the Grantors and the Collateral Agent, the Grantors granted to the Collateral Agent a security interest and continuing lien on all of each Grantors’ right, title and interest in, to and under all Collateral, including the Patent Collateral (as defined below), and all Collateral in each case whether now owned or existing or hereafter acquired or arising to secure the prompt and complete payment and performance of all Secured Obligations (as defined in the Security Agreement) including the obligations of the Grantors under the Indenture;

     WHEREAS, the parties to the Indenture contemplate and intend that, if an Event of Default (as defined in the Indenture) shall occur and be continuing, the Collateral Agent shall have all rights of a secured party in and to the Patent Collateral and any proceeds thereof, including, without limitation, the right to exercise its remedies under the Indenture in connection with all of each Grantor’s right, title and interest in the Patent Collateral; and

     WHEREAS, pursuant to the Indenture and the Security Agreement, the Grantors are required to execute and deliver this Agreement.

     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Grantors agree as follows:

     Section 1. Defined Terms

     Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

     Section 2. Grant of Security Interest in Patents

     The Grantors hereby grant to the Collateral Agent a security interest in all of their right, title and interest in, to and under the Patents, including the Patents listed in Schedule A, in each case whether now owned or hereafter acquired (collectively, the “Patent Collateral”).

     Section 3. Security for Obligations

     This Agreement secures, and the Patent Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise of all Secured Obligations.

     Section 4. Security Agreement

     The security interests granted pursuant to this Agreement are granted in conjunction with the security interests granted to the Collateral Agent pursuant to the Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Collateral Agent with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any irreconcilable conflict between the terms of this Agreement and the terms of the Security Agreement, the terms of the Security Agreement shall control.

     Section 5. Recordation

     The Grantors hereby authorize and request that the Commissioner of Patent and Trademarks and any other applicable United States government officer record this Agreement.

     Section 6. Subordination

     The lien and security interest evidenced by this Agreement and the exercise of any right or remedy by the Collateral Agent in respect thereof is junior and subordinate to the interest of JPMorgan Chase Bank, N.A., individually and as Senior Agent and is subject to the provisions of that certain Intercreditor and Lien Subordination Agreement, dated as of November 25, 2009, as amended, supplemented, modified or replaced from time to time in accordance with the terms thereof among JPMorgan Chase Bank, N.A., as Senior Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, and Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain of their subsidiaries.

     Section 7. Miscellaneous

     This Agreement shall be governed by, and construed in accordance with the laws of the State of New York.

     This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

[Remainder of this page intentionally left blank]

     IN WITNESS WHEREOF, the Grantors have caused this Agreement to be duly executed and delivered by a duly authorized officer as of the date first set forth above.

GRANTORS:
ALTRA INDUSTRIAL MOTION, INC.
ALTRA HOLDINGS, INC.
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:     Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDING, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES, INC.
INERTIA DYNAMICS, LLC
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:	Secretary

COLLATERAL AGENT: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
By:	/s/ Raymond Torres
	Name:	Raymond Torres
	Title:	Senior Associate

SCHEDULE A

TO

PATENT SECURITY AGREEMENT

UNITED STATES PATENTS

[Attached]

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Inertia Dynamics, LLC	Electromagnetic disc brake with rubber friction disk braking surface	6161659	12/19/2000	167006	09/29/1998	Active
Patent	USA	Inertia Dynamics, LLC	Sealed electromagnetic brake	6125975	10/3/2000	193388	11/17/1998	Active
Patent	USA	Inertia Dynamics, LLC	Manual release machanism for a brake	6675940	01/13/2004	253125	09/24/2002	Active
Patent	USA	Warner Electric Technology LLC	FLUID OPERATED BRAKE DEVICE (MISTRAL BRAKE)	5,908,092	6/1/1999	256949	7/27/1994	Active
Patent	USA	Inertia Dynamics, LLC	Clutch system and method	6488133	12/3/2002	528690	03/20/2000	Active
Patent	USA	Inertia Dynamics, LLC	Elevator brake assembly	6675939	01/13/2004	773722	01/31/2001	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,150,779	9/29/1992	820344	1/14/1992	Active
Patent	USA	Inertia Dynamics, LLC	Device for clamping a shaft	6527233	03/04/2003	841507	04/24/2001	Active
Patent	USA	Inertia Dynamics, LLC	Power-off brake with manual release	5915507	06/29/1999	932904	09/17/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electric clutch and brake	6047805	04/11/2000	937816	09/29/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electro-mechanical variable speed clutch	5979630	11/9/1999	938862	09/26/1997	Active
Patent	USA	Warner Electric Technology LLC	DUAL START DRIVE SYSTEM	4,621,720	11/11/1986	06/813,538	12/26/1985	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	5,007,511	4/15/1991	07/430,811	11/2/1989	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	4,974,705	12/4/1990	07/451,609	12/18/1989	Active
Patent	USA	Warner Electric Technology LLC	UNIDAMP ARMATURE	5,036,964	8/6/1991	07/500,466	3/28/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	5,096,036	3/17/1992	07/531,465	5/31/1990	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH/BRAKE UNIT	5,033,595	7/23/1991	07/535,428	6/8/1990	Active
Patent	USA	Warner Electric Technology LLC	APPARATUS FOR RESISTANCE BONDING ELECTROMAGNETIC COILS	5,091,619	2/25/1992	07/543,706	6/26/1990	Active
Patent	USA	Warner Electric Technology LLC	FIELD ASSEMBLY FOR AN ELECTROMAGNET	5,250,921	10/5/1993	07/600,199	10/19/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	5,052,534	10/1/1991	07/605,517	10/30/1990	Active
Patent	USA	Warner Electric Technology LLC	LOW COST SPRAG RETAINER	5,070,976	12/10/1991	07/634,903	12/27/1990	Active
Patent	USA	Warner Electric Technology LLC	DIGITAL CONTROL SYSTEM FOR ELECTROMAGNETIC CLUTCH	5,094,332	3/10/1992	07/664,075	12/31/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING ARMATURE ASSEMBLY WITH FLUX ISOLATOR SPRINGS	5,119,915	6/9/1992	07/700,439	5/15/1991	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	5,125,255	6/30/1992	07/721,972	6/27/1991	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	5,119,918	6/9/1992	07/774,92	10/11/1991	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with slip joint seal	5,230,658	07/27/1993	07/864,307	04/06/1992	Active
Patent	USA	TB Woods Enterprises, Inc.	Shaft Mountable Bushing and Hub for Industrail poer transmission	5304101	4/19/1994	07/919223	7/27/1992	Active
Patent	USA	Warner Electric Technology LLC	SPLIT TUBE HAVING RETAINABLE ENDS	5,280,829	1/25/1994	07/931,638	8/18/1992	Active
Patent	USA	Warner Electric Technology LLC	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	5,310,034	5/10/1994	07/973,291	11/9/1992	Active
Patent	USA	Warner Electric Technology LLC	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	5,337,869	8/16/1994	07/991,021	12/15/1992	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	5,285,882	2/15/1994	07/996,122	12/23/1992	Active
Patent	USA	Warner Electric Technology LLC	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,372,228	12/13/1994	08/026,499	3/4/1993	Active
Patent	USA	Warner Electric Technology LLC	ROTOR FOR ELECTROMAGNETIC COUPLING	5,305,865	4/26/1994	08/026,995	3/5/1993	Active
Patent	USA	Warner Electric Technology LLC	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	5,445,259	8/29/1995	08/114,320	8/30/1993	Active
Patent	USA	Warner Electric Technology LLC	UNIDRIVE ARMATURE HUB	5,370,209	12/6/1994	08/119,729	9/10/1993	Active
Patent	USA	TB Woods Enterprises, Inc.	Combination of power steering pump and air conditioning compressor in an automotive vehicle	5465804	11/14/1995	08/231802	4/25/1994	Active
Patent	USA	Warner Electric Technology LLC	LOCATING RING FOR ENCAPULATING A COIL	5,497,136	3/5/1996	08/238,619	5/4/1994	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH BRAKE ASSEMBLY	5,549,186	8/27/1996	08/346,622	11/30/1994	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling with End Stress Relief Structure	5611732	3/18/1997	08/512,137	8/7/1995	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A COMPONENT FOR AN ELECTROMAGNETIC FRICTION CLUTCHASSEMBLY	5,708,955	1/13/1998	08/558,906	11/16/1995	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with sealed slip joint seal	5,655,968	08/12/1997	08/646,202	05/07/1996	Active
Patent	USA	Warner Electric Technology LLC	FORMLOCK SHOES WITH FLATS	5,865,284	2/2/1999	08/666,068	6/21/1996	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	5,920,981	7/13/1999	08/823,990	3/25/1997	Active
Patent	USA	Warner Electric Technology LLC	SPRAG FAMILY	6,109,409	08/29/2000	08/949,741	10/14/1997	Active
Patent	USA	Warner Electric Technology LLC	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	6,194,803	2/27/2001	09/032,572	2/27/1998	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Warner Electric Technology LLC	MAG STOP CLUTCH WITH CENTER POLE	5,971,121	10/26/1999	09/070,068	4/30/1998	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,364,084	4/2/2002	09/515779	2/29/2000	Active
Patent	USA	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	6,257,388	7/10/2001	09/556510	4/24/2000	Active
Patent	USA	Warner Electric Technology LLC	METHOD FOR MAKING AN ARMATURTE ASSEMBLEY	6,591,477	7/7/2003	09/684,117	10/06/2000	Active
Patent	USA	Dana Corporation	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,557,236	05/06/2003	10/027,095	12/20/2001	Active
Patent	USA	Warner Electric LLC	Electromechanical screw drive actuator	6,927,513	8/9/2005	10/609,883	6/30/2003	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH	7,261,196	08/28/2007	11/064,611	02/24/05	Active
Patent	USA	Inertia Dynamics, LLC	IP copies may be obtained separately	US20050236245		11/115,903		Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	US20060278491		11/150670	6/10/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,493,996	2/24/2009	11/150671	6/10/2005	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling Device	7,390,265	6/24/2008	11/256,463	10/21/2005	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	7,374,027	5/20/2008	11/263,394	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Liquid Cooled Brake assembley	7,591,349	9/22/2009	11/263,399	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,527,134	5/5/2009	11/278,448	4/3/2006	Active
Patent	USA	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch	7,389,863	6/24/2008	11/341,763	01/27/2006	Active
Patent	USA	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)	US20080185239		11/670,698	2/2/2007	Active
Patent	USA	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch	US20080271970		11/743,894	5/3/2007	Active
Patent	USA	Warner Electric Technology LLC	Overrunning Clutch	US20070267264		11/750,733	5/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH	US20090095591		11/871,542	10/12/2007	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	US20080110708		12/016,504	1/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	US20090229941		12/048,638	3/14/2008	Active
Patent	USA	Warner Electric Technology LLC	IP copies may be obtained separately	US20090133974		12/364,116		Active
Patent Appl.	USA	Warner Electric Technology LLC	DUAL ACTUATOR FRICTION BRAKE ASSEMBLY			11/263,395	10/31/2005	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Dual Actuator Friction Brake Assembly”			12/364,116	2/2/2009	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150027	6/10/2005	Pending
Patent Appl.	USA	Inertia Dynamics, LLC [*]	[*]			[*]	[*]	[*]
Patent Appl.	USA	Kilian Manufacturing Corporation	Bearing assembly for a steering assembly			11/773,715	7/5/2007	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			12/124,699	5/21/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			12/175,995	07/18/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Inertia Dynamics, LLC (Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.)	Manual release brake			60/324,812	09/24/2001	Pending
Patent Appl.	USA	Inertia Dynamics, LLC (Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.)	Clutch with wear ring assembly			60/5658	60 04/27/2004	Pending
Patent Appl.	USA	Inertia Dynamics, LLC [*]	[*]			[*]	[*]	[*]

EX-10.15

Exhibit 10.15

EXECUTION VERSION

TRADEMARK SECURITY AGREEMENT

     TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of December 24, 2009, among Altra Industrial Motion, Inc., a Delaware corporation (the “Company”), the Subsidiaries and Affiliates of the Company named on the signature pages hereto (each, a “Grantor” and collectively, the “Grantors”), and The Bank of New York Mellon Trust Company, N.A., acting in the capacity as Collateral Agent for the benefit of itself and the Holders under the Indenture referred to below (in such capacity, the “Collateral Agent”)

WITNESSETH:

     WHEREAS, pursuant to the terms of that certain Indenture, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), by and among Altra Holdings, Inc. (“Holdings”), the guarantors party thereto and the Collateral Agent, the Holders will purchase the Notes issued by Holdings;

     WHEREAS, pursuant to the Pledge and Security Agreement, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), among the Grantors and the Collateral Agent, the Grantors granted to the Collateral Agent a security interest and continuing lien on all of each Grantors’ right, title and interest in, to and under all Collateral, including the Trademark Collateral (as defined below), and all Collateral in each case whether now owned or existing or hereafter acquired or arising to secure the prompt and complete payment and performance of all Secured Obligations (as defined in the Security Agreement) including the obligations of the Grantors under the Indenture;

     WHEREAS, the parties to the Indenture contemplate and intend that, if an Event of Default (as defined in the Indenture) shall occur and be continuing, the Collateral Agent shall have all rights of a secured party in and to the Trademark Collateral and any proceeds thereof, including, without limitation, the right to exercise its remedies under the Indenture in connection with all of each Grantor’s right, title and interest in such Trademark Collateral; and

     WHEREAS, pursuant to the Indenture and the Security Agreement, the Grantors are required to execute and deliver this Agreement.

     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Grantors agree as follows:

     Section 1. Defined Terms

     Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

     Section 2. Grant of Security Interest in Trademarks

     The Grantors hereby grant to the Collateral Agent a security interest in all of their right, title and interest in, to and under the Trademarks, including the Trademarks listed in Schedule A, in each case whether now owned or hereafter acquired (collectively, the “Trademark Collateral”).

     Section 3. Security for Obligations

     This Agreement secures, and the Trademark Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise of all Secured Obligations.

     Section 4. Security Agreement

     The security interests granted pursuant to this Agreement are granted in conjunction with the security interests granted to the Collateral Agent pursuant to the Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Collateral Agent with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any irreconcilable conflict between the terms of this Agreement and the terms of the Security Agreement, the terms of the Security Agreement shall control.

     Section 5. Recordation

     The Grantors hereby authorize and request that the Commissioner of Patent and Trademarks and any other applicable United States government officer record this Agreement.

     Section 6. Subordination

     The lien and security interest evidenced by this Agreement and the exercise of any right or remedy by the Collateral Agent in respect thereof is junior and subordinate to the interest of JPMorgan Chase Bank, N.A., individually and as Senior Agent and is subject to the provisions of that certain Intercreditor and Lien Subordination Agreement, dated as of November 25, 2009, as amended, supplemented, modified or replaced from time to time in accordance with the terms thereof among JPMorgan Chase Bank, N.A., as Senior Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, and Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain of their subsidiaries.

     Section 7. Miscellaneous

     This Agreement shall be governed by, and construed in accordance with the laws of the State of New York.

     This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

[Remainder of this page intentionally left blank]

     IN WITNESS WHEREOF, the Grantors have caused this Agreement to be duly executed and delivered by a duly authorized officer as of the date first set forth above.

GRANTORS:
ALTRA INDUSTRIAL MOTION, INC.
ALTRA HOLDINGS, INC.
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:	Vice President, Legal and Human Resources,
General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDING, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES, INC.
INERTIA DYNAMICS, LLC
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:	Secretary

COLLATERAL AGENT: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
By:	/s/ Raymond Torres
	Name:	Raymond Torres
	Title:	Senior Associate

SCHEDULE A

TO

TRADEMARK SECURITY AGREEMENT

REGISTERED TRADEMARKS

[Attached]

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	Boston Gear LLC	ACE	1771190	5/18/1993	74253998	3/10/1992	Active
TM	USA	Ameridrives International, LLC	AMERICAN	0529539	8/22/1950	71578852	4/29/1949	Active
TM	USA	Ameridrives International, LLC	AMERICARDAN	2,488,262	09/11/01	75621192	01/15/1999	Active
TM	USA	Ameridrives International, LLC	AMERIDISC & Design	0802185	1/18/1966	72219296	5/19/1965	Active
TM	USA	Ameridrives International, LLC	AMERIDRIVES	2168489	6/23/1998	75204229	11/25/1996	Active
TM	USA	Ameridrives International, LLC	AMERIFLEX	1000720	12/31/1974	72444883	1/2/1973	Active
TM	USA	Warner Electric Technology LLC	AUTOGAP	681,746	07/14/1959	72046678	2/26/1958	Active
TM	USA	Boston Gear LLC	BEAR-N-BRONZ	0603829	3/29/1955	71665847	5/6/1954	Active
TM	USA	Boston Gear LLC	BG & Design	0298486	10/25/1932	71327723	6/4/1932	Active
TM	USA	Boston Gear LLC	BOSTRONG & Design	0837074	10/17/1967	72251147	7/27/1966	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0547544	9/4/1951	71597836	5/20/1950	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0612905	9/27/1955	71677082	11/22/1954	Active
TM	USA	Boston Gear LLC	BOST-FLEX	1111218	1/16/1979	73163090	3/21/1978	Active
TM	USA	Boston Gear LLC	BOSTON	0522912	3/28/1950	71535926	9/27/1947	Active
TM	USA	Boston Gear LLC	BOSTON & Design	1374572	12/10/1985	73514378	12/19/1984	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905805	1/12/1971	72338165	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905846	1/12/1971	72338166	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTONE	1131198	2/26/1980	73163091	3/21/1978	Active
TM	USA	Formsprag LLC	CEBMAG	1352456	08/06/1985	73513313	12/13/1984	Active
TM	USA	Formsprag LLC	CECON	2871858	08/10/04	78/300,412	09/15/2003	Active
TM	USA	Boston Gear LLC	CENTRIC	1365217	10/15/1985	73434105	7/11/1983	Active
TM	USA	Boston Gear LLC	DCX	1689927	6/2/1992	74151919	3/27/1991	Active
TM	USA	Boston Gear LLC	DCX PLUS	1794125	9/21/1993	74151939	3/27/1991	Active
TM	USA	Nuttall Gear LLC	DELROYD	3025384	12/13/2005	76/586088	4/12/2004	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-MODULE	0838675	11/14/1967	72200306	8/20/1964	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-PACK	0741888	12/11/1962	72127440	9/7/1961	Active
TM	USA	Warner Electric Technology LLC	F AND DESIGN	0743735	01/15/1963	72125482	8/7/1961	Active
TM	USA	Warner Electric Technology LLC	FORMCHROME	0867512	04/01/1969	72300576	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORM-LOCK	0870852	06/10/1969	72300575	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORMSRPAG & Design	0444642	01/15/1952	71510384	10/7/1946	Active
TM	USA	Warner Electric Technology LLC	FORMSPRAG	1216418	11/16/1982	73326809	9/4/1981	Active
TM	USA	Warner Electric Technology LLC	KOPPER KOOL	1258259	11/22/1983	73334553	10/28/1981	Active
TM	USA	Warner Electric Technology LLC	LLH	1759504	03/23/1993	74303730	8/13/1992	Active
TM	USA	Warner Electric Technology LLC	MAG STOP	1,851,941	08/30/1994	74327472	11/2/1992	Active
TM	USA	Warner Electric Technology LLC	MAGNUM	2,892,316	10/12/2004	76/336,606	11/13/2001	Active
TM	USA	Formsprag LLC	MARLAND	2667819	12/31/2002	76118280	8/28/2000	Active
TM	USA	Warner Electric Technology LLC	MESUR-FIL	0990826	08/13/1974	72464823	8/6/1973	Active
TM	USA	Warner Electric Technology LLC	MISTRAL	2168734	06/30/1998	74240876	1/28/1992	Active
TM	USA	Boston Gear LLC	MOTOR MULTIPLIER	1131648	3/11/1980	73184680	9/5/1978	Active
TM	USA	Nuttall Gear LLC	NGC & Design	3031121	12/20/2005	76/586087	4/12/2004	Active
TM	USA	Nuttall Gear LLC	Nuttall	3031120	12/20/2005	76/586086	4/12/2004	Active
TM	USA	Boston Gear LLC	OPTIMOUNT	0670192	11/25/1958	72046238	2/20/1958	Active
TM	USA	Warner Electric Technology LLC	PCE	1136601	06/03/1980	73193726	11/17/1978	Active
TM	USA	Boston Gear LLC	RATIOPAX	0985828	6/11/1974	72456678	5/7/1973	Active
TM	USA	Boston Gear LLC	RATIOTROL	0743713	1/15/1963	72137450	2/7/1962	Active
TM	USA	Warner Electric Technology LLC	SHEAVE-GRIP	3,085,816	4/25/2006	76/498,191	3/14/2003	Active
TM	USA	Warner Electric Technology LLC	UNIDAMP	1795619	09/28/1993	74038916	3/16/1990	Active
TM	USA	Warner Electric Technology LLC	UNIMODULE	1678062	03/03/1992	74053993	4/30/1990	Active
TM	USA	Warner Electric Technology LLC	WARNER & Design	0527445	07/11/1950	71528385	7/11/1947	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	1,026,080	12/02/1975	73035013	10/18/1974	Active
TM	USA	Ameridrives International, LLC	AMERIGEAR	2,951,600	5/17/2005	78/373,119	2/24/2004	Active
TM	USA	Ameridrives International, LLC	THE AMERICAN FULLY CROWNED TOOTH	2980971	5/10/2005	78/373,135	2/24/2004	Active
TM	USA	Boston Gear LLC	POSIVENT	2875347	08/17/2004	76/423,536	06/20/2002	Active
TM	USA	Boston Gear LLC	STABILI SEAL	3,131,135	08/15/2006	78/564,645	02/10/2005	Active
TM	USA	Warner Electric Technology Inc.	WICHITA CLUTCH	3039567	01/10/2006	76/620135	11/12/04	Active
TM	USA	Altra Industrial Motion, Inc.	A&Design	3,146,781	09/19/2006	78/560930	02/04/2005	Active
TM	USA	Warner Electric Technology LLC	AQUAMAKKS	3,490,449	08/19/2008	78/821,282	02/23/2006	Active
TM	USA	Warner Electric Technology LLC	Warner Electric	3,287,916	09/04/2007	78/790,162	01/12/2006	Active
TM	USA	Boston Gear LLC	CENTRIGARD	3,374,068	1/22/2008	78/774,995	12/16/2005	Active
TM	USA	Altra Industrial Motion, Inc.	Altra Industrial Motion	3360155	12/25/2007	76/621069	11/17/2004	Active
TM	USA	Warner Electric Technology LLC	Warner Linear	3,413,352	04/15/2008	78/910,851	06/19/2006	Active
TM	USA	Altra Industrial Motion, Inc.	A-Track	3,263,081	07/10/2007	78/790085	1/12/2006	Active
TM	USA	Kilian Manufacturing Corporation	KILIAN	1216354	11/16/1982	73277508	9/11/1980	Active
TM	USA	Kilian Manufacturing Corporation	KILROL	2827924	3/30/2004	78213978	2/12/2003	Active
TM	USA	Warner Electric Technology LLC	GFR	3,494,910	9/2/2008	77/247,944	08/06/07	Active
TM	USA	Warner Electric Technology LLC	B-Track	3,609,446	4/21/2009	77/237,461	07/24/2007	Active
TM	USA	TB Woods Enterprises, Inc.	All-Pro	2,165,737	6/16/1998	75/290,731	5/12/1997	Active
TM	USA	TB Woods North Carolina, Inc.	Braketron	1,164,393	8/11/1981	73/254,657	3/19/1980	Active
TM	USA	TB Woods Enterprises, Inc.	Deck & Design (stylized lettering)	1,409,209	9/16/1986	73/581,633	2/7/1986	Active
TM	USA	TB Woods Enterprises, Inc.	Disc-O-Torque	859,264	10/29/1968	72/285,224	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Dura-Flex	1,116,828	4/24/1979	73/158,649	2/13/1978	Active
TM	USA	TB Woods Enterprises, Inc.	First In Couplings	1,361,466	9/24/1985	73/526,310	3/11/1985	Active
TM	USA	TB Woods Enterprises, Inc.	Form-Flex	2,152,362	4/21/1998	75/273,175	4/11/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Poole	2,191,918	9/29/1998	75/251,697	2/28/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Qt Power Chain	2,723,745	6/10/2003	76/403,299	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	Roto-Cam	859,263	10/29/1968	72/285,223	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Speedlign	2,991,827	9/6/2005	78/350,700	1/12/2004	Active
TM	USA	TB Woods Enterprises, Inc.	Sure Grip (Stylized)	645,415	5/14/1957	71/640,418	1/6/1953	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Flex	668,649	10/21/1958	72/043,720	1/9/1958	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	646,423	6/4/1957	71/575,508	3/15/1949	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	1,109,150	12/19/1978	73/136,699	8/8/1977	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,969	1/21/1975	73/001,734	10/9/1973	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,970	1/21/1975	73/003,203	10/10/1973	Active
TM	USA	TB Woods Enterprises, Inc.	W TB Wood’s (and design)	2,059,245	5/6/1997	75/107,136	5/20/1996	Active
TM	USA	TB Woods Enterprises, Inc.	Woods@Work	2,801,090	12/30/2003	76/402,992	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	G-Flex	3,501,631	9/16/2008	77/397,102.	2/14/2008	Active
TM	USA	Inertia Dynamics, LLC	Unibrake	0809205	05/31/1966	72/219817	05/26/1965	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	0726202	01/09/1962	72105397	9/28/1960	Active
TM	USA	Warner Electric Technology LLC	WICHITA	1565483	11/14/1989	73753251	8/29/1988	Active
TM Appl.	USA	Kilian Manufacturing Corporation	HI-TECH WORRY BEADS			78/775,032	12/16/2005	Pending
TM Appl.	USA	Formsprag LLC	BC MA			77/649,950	1/15/2009	Pending
Unregistered TM	USA	Inertia Dynamics, LLC	IDI

EX-10.16

Exhibit 10.16

[*] THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Execution Copy

J. P. Morgan

CREDIT AGREEMENT

dated as of

November 25, 2009

Among

ALTRA INDUSTRIAL MOTION, INC.,

The other Borrowers Party Hereto,

The Loan Guarantors Party Hereto,

The Lenders Party Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger

CHASE BUSINESS CREDIT

TABLE OF CONTENTS

	Page
ARTICLE I. DEFINITIONS		1
SECTION 1.01. Defined Terms		1
SECTION 1.02. Classification of Loans and Borrowings		25
SECTION 1.03. Terms Generally		25
SECTION 1.04. Accounting Terms; GAAP		25
ARTICLE II. THE CREDITS		25
SECTION 2.01. Commitments		25
SECTION 2.02. Loans and Borrowings		26
SECTION 2.03. Requests for Revolving Borrowings		26
SECTION 2.04. Protective Advances		27
SECTION 2.05. Swingline Loans and Overadvances		27
SECTION 2.06. Letters of Credit		29
SECTION 2.07. Funding of Borrowings		32
SECTION 2.08. Interest Elections		33
SECTION 2.09. Termination and Reduction of Commitments; Increase in Revolving Commitments		34
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt		35
SECTION 2.11. Prepayment of Loans		36
SECTION 2.12. Fees		37
SECTION 2.13. Interest		38
SECTION 2.14. Alternate Rate of Interest		39
SECTION 2.15. Increased Costs		39
SECTION 2.16. Break Funding Payments		40
SECTION 2.17. Taxes		41
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs		42
SECTION 2.19. Mitigation Obligations; Replacement of Lenders		44
SECTION 2.20. Defaulting Lenders		45
SECTION 2.21. Returned Payments		46
ARTICLE III. REPRESENTATIONS AND WARRANTIES		46
SECTION 3.01. Organization; Powers		46
SECTION 3.02. Authorization; Enforceability		46
SECTION 3.03. Governmental Approvals; No Conflicts		46
SECTION 3.04. Financial Condition; No Material Adverse Change		47

TABLE OF CONTENTS
(continued)

	Page
SECTION 3.05. Properties		47
SECTION 3.06. Litigation and Environmental Matters		47
SECTION 3.07. Compliance with Laws and Agreements		48
SECTION 3.08. Investment Company Status		48
SECTION 3.09. Taxes		48
SECTION 3.10. ERISA		48
SECTION 3.11. Disclosure		48
SECTION 3.12. Material Agreements		48
SECTION 3.13. Solvency		49
SECTION 3.14. Insurance		49
SECTION 3.15. Capitalization and Subsidiaries		49
SECTION 3.16. Security Interest in Collateral		49
SECTION 3.17. Employment Matters		49
SECTION 3.18. Common Enterprise		50
ARTICLE IV. CONDITIONS		50
SECTION 4.01. Effective Date		50
SECTION 4.02. Each Credit Event		52
ARTICLE V. AFFIRMATIVE COVENANTS		53
SECTION 5.01. Financial Statements; Borrowing Base and Other Information		53
SECTION 5.02. Notices of Material Events		56
SECTION 5.03. Existence; Conduct of Business		57
SECTION 5.04. Payment of Obligations		57
SECTION 5.05. Maintenance of Properties		57
SECTION 5.06. Books and Records; Inspection Rights		57
SECTION 5.07. Compliance with Laws		57
SECTION 5.08. Use of Proceeds		58
SECTION 5.09. Insurance		58
SECTION 5.10. Casualty and Condemnation		58
SECTION 5.11. Appraisals and Field Examinations		58
SECTION 5.12. Depository Banks; Control Agreements		58
SECTION 5.13. Additional Collateral; Further Assurances		59
SECTION 5.14. Collateral Access Agreements		60

ii

TABLE OF CONTENTS
(continued)

	Page
SECTION 5.15. Existing Real Estate Collateral		60
SECTION 5.16. Initial Appraisals and Field Examinations		61
ARTICLE VI. NEGATIVE COVENANTS		61
SECTION 6.01. Indebtedness		61
SECTION 6.02. Liens		63
SECTION 6.03. Fundamental Changes		64
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions		64
SECTION 6.05. Asset Sales		66
SECTION 6.06. Sale and Leaseback Transactions		66
SECTION 6.07. Swap Agreements		66
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness		67
SECTION 6.09. Transactions with Affiliates		69
SECTION 6.10. Restrictive Agreements		69
SECTION 6.11. Amendment of Material Documents		70
SECTION 6.12. Fixed Charge Coverage Ratio		70
SECTION 6.13. Certain Restrictions on Foreign Subsidiaries		70
ARTICLE VII. EVENTS OF DEFAULT		70
ARTICLE VIII. THE ADMINISTRATIVE AGENT		73
ARTICLE IX. MISCELLANEOUS		75
SECTION 9.01. Notices		75
SECTION 9.02. Waivers; Amendments		76
SECTION 9.03. Expenses; Indemnity; Damage Waiver		77
SECTION 9.04. Successors and Assigns		79
SECTION 9.05. Survival		81
SECTION 9.06. Counterparts; Integration; Effectiveness		82
SECTION 9.07. Severability		82
SECTION 9.08. Right of Setoff		82
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process		82
SECTION 9.10. WAIVER OF JURY TRIAL		83
SECTION 9.11. Headings		83
SECTION 9.12. Confidentiality		83
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law		84

iii

TABLE OF CONTENTS
(continued)

	Page
SECTION 9.14. USA PATRIOT Act		84
SECTION 9.15. Disclosure		84
SECTION 9.16. Appointment for Perfection		84
ARTICLE X. LOAN GUARANTY		85
SECTION 10.01. Guaranty		85
SECTION 10.02. Guaranty of Payment		85
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty		85
SECTION 10.04. Defenses Waived		86
SECTION 10.05. Rights of Subrogation		86
SECTION 10.06. Reinstatement; Stay of Acceleration		86
SECTION 10.07. Information		87
SECTION 10.08. Termination		87
SECTION 10.09. Taxes		87
SECTION 10.10. Maximum Liability		87
SECTION 10.11. Contribution		87
SECTION 10.12. Liability Cumulative		88
ARTICLE XI. THE BORROWER REPRESENTATIVE		88
SECTION 11.01. Appointment; Nature of Relationship		88
SECTION 11.02. Powers		88
SECTION 11.03. Employment of Agents		89
SECTION 11.04. Notices		89
SECTION 11.05. Successor Borrower Representative		89
SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate		89
SECTION 11.07. Reporting		89

iv

SCHEDULES:

Commitment Schedule
Schedule 3.05 — Properties
Schedule 3.06 — Disclosed Matters
Schedule 3.12 – Material Agreements
Schedule 3.14 — Insurance
Schedule 3.15 – Capitalization and Subsidiaries
Schedule 5.15 – Existing Real Estate Collateral
Schedule 6.01 — Existing Indebtedness
Schedule 6.02 — Existing Liens
Schedule 6.04 — Existing Investments
Schedule 6.10 — Existing Restrictions

EXHIBITS:

Exhibit A — Form of Assignment and Assumption
Exhibit B — Form of Borrowing Base Certificate
Exhibit C — Form of Compliance Certificate
Exhibit D — Form of Joinder Agreement
Exhibit E — Form of Applicable Rate Certificate

     CREDIT AGREEMENT dated as of November 25, 2009 (as it may be amended or modified from time to time, this “Agreement”), among ALTRA INDUSTRIAL MOTION, INC., the other Borrowers party hereto, the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

     The parties hereto agree as follows:

ARTICLE I.

Definitions

          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

          “Account” has the meaning assigned to such term in the Security Agreement.

          “Account Debtor” means any Person obligated on an Account.

          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Adjusted One Month LIBOR Rate” means, an interest rate per annum equal to the sum of (i) 2.5% per annum plus (ii) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day); provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding).

          “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

          “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

          “Aggregate Credit Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders.

          “Applicable Percentage” means, with respect to any Lender, (a) with respect to Revolving Loans, LC Exposure, Swingline Loans or Overadvances, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Commitment and the denominator of which is the aggregate Revolving Commitment of all Revolving Lenders (if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the aggregate Revolving Exposures at that time); provided that in the case of Section 2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Revolving Commitment shall be disregarded in the calculation and (b) with respect to Protective Advances or with respect to the Aggregate Credit Exposure, a percentage based upon its share

of the Aggregate Credit Exposure and the unused Commitments; provided that when a Defaulting Lender shall exist, the calculation shall be adjusted as provided in Section 2.20.

          “Applicable Rate” means, for any day, with respect to any CBFR Loan or Eurodollar Revolving Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “CBFR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the Borrower’s Average Quarterly Availability as of the most recent determination date, provided that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrowing Base Certificate and related information for the period ending June 30, 2010, the “Applicable Rate” shall be the applicable rate per annum set forth below in Category 2:

Average Quarterly	Revolver			Revolver			Commitment Fee
Availability	CBFR Spread			Eurodollar Spread			Rate
Category 1 ³ $30,000,000		1.75	%		2.75	%		0.250	%
Category 2 < $30,000,000 but ³ $15,000,000		2.00	%		3.00	%		0.375	%
Category 3 < $15,000,000		2.25	%		3.25	%		0.500	%

          For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrowers based upon Borrowing Base Certificates and related information delivered pursuant to Section 5.01 during such fiscal quarter and (b) each change in the Applicable Rate resulting from a change in Borrowing Base Certificates and related information shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such Borrowing Base Certificates and related information indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Average Quarterly Availability shall be deemed to be in Category 3 at the option of the Administrative Agent or at the request of the Required Lenders if the Borrowers fails to deliver the Borrowing Base Certificates and related information required to be delivered by it pursuant to Section 5.01, during the period from the expiration of the time for delivery thereof until such Borrowing Base Certificates and related information are delivered. The Borrower Representative shall deliver to the Administrative Agent not later than 20 days after the end of each quarter an Applicable Rate Certificate setting forth the Average Quarterly Availability for such fiscal quarter and the corresponding Applicable Rate.

          “Applicable Rate Certificate” means a certificate, signed and certified as accurate by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit E.

          “Approved Fund” has the meaning assigned to such term in Section 9.04.

          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

          “Availability” means, at any time, an amount equal to (a) the lesser of (i) the Revolving Commitment and (ii) the Borrowing Base minus (b) the Revolving Exposure of all Revolving Lenders.

- 2 -

          “Availability Period” means the period from and including the Effective Date to but excluding the Maturity Date.

          “Availability Trigger Period” means any period commencing (a) on the date that Availability shall have been less than the greater of (i) $15,000,000 and (ii) 30% of the Available Revolving Commitment, for three consecutive Business Days and ending (b) on the date thereafter on which Availability shall have exceeded the greater of (i) $15,000,000 and (ii) 30% of the Available Revolving Commitment, for ninety (90) consecutive days.

          “Available Revolving Commitment” means, at any time, the Revolving Commitment then in effect minus the Revolving Exposure of all Revolving Lenders at such time.

          “Available Liquidity” means, at any time, the sum, without duplication, of (a) Average Quarterly Availability for the fiscal quarter most recently ended, plus (b) the average daily amount during the fiscal quarter most recently ended of unrestricted cash of the Loan Parties in which the Administrative Agent has first priority Liens, which cash is not subject to the rights, claims or interests of any Person other than the rights and interests of the Loan Parties, the first priority Liens of the Administrative Agent and the second priority Liens in favor of the Senior Secured Notes Collateral Agent, and which cash is on deposit in Deposit Accounts maintained with the Administrative Agent, plus (c) the average daily market value during the fiscal quarter most recently ended of unrestricted Permitted Investments of the Loan Parties in which the Administrative Agent has first priority Liens, which Permitted Investments are not subject to the rights, claims or interests of any Person other than the rights and interests of the Loan Parties, the first priority Liens in favor of the Administrative Agent and the second priority Liens in favor of the Senior Secured Notes Collateral Agent, and which Permitted Investments are held in Securities Accounts maintained with the Administrative Agent or its Affiliates.

          “Average Quarterly Availability” means, for any fiscal quarter, the average daily Availability during such fiscal quarter.

          “Banking Services” means each and any of the following bank services provided to any Loan Party by any Lender or any of its Affiliates in the ordinary course of business: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

          “Banking Services Obligations” of the Loan Parties means any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

          “Banking Services Reserves” means all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

          “Board” means the Board of Governors of the Federal Reserve System of the United States of America.

          “Borrower” or “Borrowers” means, individually or collectively, (i) the Company, (ii) each of the Subsidiaries of the Company listed as a “Borrower” on the signature pages to this Agreement and (iii) each of the Domestic Subsidiary of Holdings that becomes a party to this Agreement as a “Borrower” hereunder after the Effective Date in accordance with the terms of Section 5.13.

          “Borrower Representative” means the Company, in its capacity as contractual representative of the Borrowers pursuant to Article XI.

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          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan, and (c) a Protective Advance and (d) an Overadvance.

          “Borrowing Base” means, at any time, the sum of:

     (a) 85% of the Borrowers’ Eligible Accounts at such time; plus

     (b) the lesser of (i) 60% of the Borrowers’ Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time and (ii) the product of 85% multiplied by the Net Orderly Liquidation Value percentage for each type of Eligible Inventory identified in the most recent inventory appraisal received by the Administrative Agent multiplied by such type of Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time; minus

     (c) Reserves;

          provided, that, the aggregate portion of the Borrowing Base comprised of Eligible Inventory (determined after giving effect to the applicable advance rate) at any time shall not exceed an amount equal to 60% of the Revolving Commitment at such time. The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, adjust Reserves or reduce one or more of the other elements used in computing the Borrowing Base.

          “Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit B or another form which is acceptable to the Administrative Agent in its sole discretion.

          “Borrowing Request” means a request by the Borrower Representative for a Revolving Borrowing in accordance with Section 2.02.

          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

          “Capital Expenditures” means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of Holdings and its Subsidiaries prepared in accordance with GAAP.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Cash Management Bank” means (a) as of the Effective Date, JPMorgan Chase Bank, N.A., in its capacity as the principal depositary bank for the Loan Parties, and (b) at any time after the Effective Date, any one or more Lenders selected by the Loan Parties, with the prior written consent of the Administrative Agent, to become the successor principal depository bank for the Loan Parties; provided, that, unless the Administrative Agent otherwise consents in writing, no Person shall become the successor “Cash Management Bank” unless and until such Person shall have entered into a Control Agreement with the Loan Parties and the Administrative Agent in form and substance reasonably acceptable to the Administrative Agent.

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          “CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall never be less than the Adjusted One Month LIBOR Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day). Any change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted One Month LIBOR Rate shall be effective from and including the effective date of such change in the Prime Rate or the Adjusted One Month LIBOR Rate, respectively.

          “CBFR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the CB Floating Rate.

          “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of Equity Interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Holdings by Persons who were neither (i) nominated by the board of directors of Holdings nor (ii) appointed by directors so nominated; (c) Holdings shall cease to own, free and clear of all Liens or other encumbrances (other than any Lien permitted under Section 6.02(a) or Section 6.02(h)), directly or indirectly, all of the outstanding voting Equity Interests of the Borrowers on a fully diluted basis, except as a result of a transaction permitted under Section 6.03, 6.04 or 6.05(b); or (d) the occurrence of a “Change of Control” as defined in the Senior Secured Notes Indenture.

          “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the 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.

          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Protective Advances or Overadvances.

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

          “Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.

          “Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

          “Collateral Documents” means, collectively, the Security Agreement, the Mortgages and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.

          “Collection Account” has the meaning assigned to such term in the Security Agreement.

          “Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding commercial Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements relating to commercial Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers at such time. The Commercial LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Commercial LC Exposure at such time.

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          “Commitment” means, with respect to each Lender, such Lender’s Revolving Commitment, together with the commitment of such Lender to acquire participations in Protective Advances hereunder. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

          “Commitment Schedule” means the Schedule attached hereto identified as such.

          “Company” means Altra Industrial Motion, Inc. a Delaware corporation.

          “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among (a) the applicable Loan Party, (b) a banking institution, securities broker or securities intermediary at which such Loan Party maintains a Deposit Account or a Securities Account, and (c) the Administrative Agent, providing for the Administrative Agent to have control over the funds or securities and other financial assets held in such Deposit Account or Securities Account.

          “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Defaulting Lender” means any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in Letters of Credit or Swingline Loans within three Business Days of the date required to be funded by it hereunder, (b) notified any Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

          “Deposit Account” has the meaning assigned to such term in Article 9 of the UCC.

          “Dilution Factors” shall mean, without duplication, with respect to any period, the aggregate amount of all deductions, credit memos, returns, adjustments, allowances, bad debt write-offs and other non-cash credits which are recorded to reduce accounts receivable in a manner consistent with current and historical accounting practices of the Borrowers.

          “Dilution Ratio” shall mean, at any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended fiscal months divided by (b) total gross sales for the twelve (12) most recently ended fiscal months.

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          “Dilution Reserve” shall mean, at any date, the applicable Dilution Ratio multiplied by the Eligible Accounts on such date.

          “Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

          “Document” has the meaning assigned to such term in the Security Agreement.

          “dollars” or “$” refers to lawful money of the United States of America.

          “Domestic Subsidiary” means any Subsidiary of Holdings organized under the laws of any jurisdiction within the United States.

          “EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period and (v) any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory), (vi) any non-recurring fees, cash charges and other cash expenses made or incurred in connection with the issuance of the Senior Secured Notes that are paid or otherwise accounted for within 90 days of the issuance of the Senior Secured Notes in an amount not to exceed $6,000,000, minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income for such period, all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

          “Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

          “Eligible Accounts” means, at any time, the Accounts of a Borrower which the Administrative Agent determines in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account:

     (a) which is not subject to a first priority perfected security interest in favor of the Administrative Agent;

     (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent, (ii) a Permitted Encumbrance and (iii) a Lien permitted under Section 6.02(h) which, in the case of clauses (ii) and (iii), does not have priority over the Lien in favor of the Administrative Agent;

     (c) which (i) is unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the original due date, or (ii) which has been written off the books of the Borrower or otherwise designated as uncollectible;

     (d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible hereunder;

     (e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to all Borrowers exceeds 15% of the aggregate amount of Eligible Accounts of all Borrowers;

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     (f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been breached or is not true;

     (g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon the Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to payments of interest;

     (h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Borrower or if such Account was invoiced more than once;

     (i) with respect to which any check or other instrument of payment has been returned uncollected for any reason;

     (j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) has admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

     (k) which is owed by any Account Debtor which has sold all or a substantially all of its assets;

     (l) which is owed by an Account Debtor which (i) does not maintain its chief operating office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., Canada, or any province of Canada unless, in either case, such Account is backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of, and is directly drawable by, the Administrative Agent (except that Accounts in an aggregate amount not in excess of $5,000,000 which are owing from Account Debtors which do not meet either of the requirements set forth in subclauses (i) and (ii) of this clause (l) shall not be excluded pursuant to this clause (l) so long as such Accounts are owing from Account Debtors having a corporate credit rating of at least BBB or better by S&P or Bbb or better by Moody’s);

     (m) which is owed in any currency other than U.S. dollars (except that Accounts owing in Canadian dollars, euros or sterling in an aggregate amount not in excess of $5,000,000 shall not be excluded from Eligible Accounts pursuant to this clause (m) provided that on all Borrowing Base Certificates, reports and other documentation required to be delivered to the Administrative Agent by the Loan Parties hereunder, the aggregate amount of all Accounts denominated in any currency other than U.S. Dollars shall be converted by the Borrowers to U.S. dollars at the applicable foreign exchange conversion rates as of the date of such Borrowing Base Certificate, report or other document);

     (n) which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of the Administrative Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as

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amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative Agent’s satisfaction;

     (o) which is owed by any Affiliate, employee, officer, director, agent or stockholder of any Loan Party;

     (p) which, for any Account Debtor, exceeds a credit limit determined by the Administrative Agent, to the extent of such excess;

     (q) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

     (r) which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

     (s) which is evidenced by any promissory note, chattel paper, or instrument;

     (t) which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction;

     (u) with respect to which such Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Borrower created a new receivable for the unpaid portion of such Account;

     (v) which does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

     (w) which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than such Borrower has or has had an ownership interest in such goods, or which indicates any party other than such Borrower as payee or remittance party;

     (x) which was created on cash on delivery terms; or

     (y) which the Administrative Agent determines may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines is unacceptable for any reason whatsoever.

          In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder, such Borrower or the Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission to the Administrative Agent of the next Borrowing Base Certificate. In determining the amount of an Eligible Account, the face amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that such Borrower may be obligated to rebate to an Account Debtor pursuant to the terms of any

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agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Borrower to reduce the amount of such Account.

          “Eligible Inventory” means, at any time, the Inventory of a Borrower which constitutes finished goods or raw materials (as such types of Inventory are described in the most recent inventory appraisal received by the Administrative Agent) and which the Administrative Agent determines in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory:

     (a) which is not subject to a first priority perfected Lien in favor of the Administrative Agent;

     (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent, (ii) a Permitted Encumbrance and (iii) a Lien permitted under Section 6.02(h) which, in the case of clauses (ii) and (iii), does not have priority over the Lien in favor of the Administrative Agent;

     (c) which is, in the Administrative Agent’s opinion, slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;

     (d) with respect to which any covenant, representation, or warranty contained in this Agreement or the Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority;

     (e) in which any Person other than such Borrower shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

     (f) which constitutes work-in-process, packaging and shipping materials, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

     (g) which is not located in the U.S. or which is in transit with a common carrier from vendors and suppliers;

     (h) which is located in any location leased by such Borrower unless (i) the lessor has delivered to the Administrative Agent a Collateral Access Agreement or (ii) a Reserve for rent, charges, and other amounts due or to become due with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

     (i) which is located in any third party warehouse or is in the possession of a bailee (other than a third party processor) and is not evidenced by a Document, unless (i) such warehouseman or bailee has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may require or (ii) an appropriate Reserve has been established by the Administrative Agent in its Permitted Discretion;

     (j) which is being processed offsite at a third party location or outside processor, or is in-transit to or from said third party location or outside processor;

     (k) which is a discontinued product or component thereof;

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     (l) which is the subject of a consignment by such Borrower as consignor;

     (m) which contains or bears any intellectual property rights licensed to such Borrower unless the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

     (n) which is not reflected in a current perpetual inventory report of such Borrower;

     (o) for which reclamation rights have been asserted by the seller; or

     (p) which the Administrative Agent otherwise determines is unacceptable for any reason whatsoever.

          In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory hereunder, such Borrower or the Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission to the Administrative Agent of the next Borrowing Base Certificate.

          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

          “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Equity Interests “ means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Borrower, 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.

          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an

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intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate 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.

          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Excluded Account” means collectively, (a) any Deposit Account of any Loan Party which is used exclusively for the payment of payroll, payroll taxes, employee benefits or escrow deposits, and (b) any other Deposit Account of any Loan Party in which the aggregate amount of available funds on deposit does not exceed $250,000 for any period of two consecutive Business Days; provided, that the aggregate amount of available funds on deposit in all Deposit Accounts under this clause (b) does not at any time exceed $1,000,000.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) income or franchise taxes 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, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by a Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.17(f), 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 Borrowers with respect to such withholding tax pursuant to Section 2.17(a).

          “Existing Senior Secured Notes” means the 9.00% Senior Secured Notes of the Borrower due 2011, issued pursuant to that certain Indenture dated as of November 30, 2004 among the Borrower, the guarantors party thereto and The Bank of New York Trust Company as trustee and collateral agent, as amended, supplemented or otherwise modified prior to the Effective Date.

          “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 day 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.

          “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of a Borrower.

          “Fixed Charges” means, with reference to any period, without duplication, cash Interest Expense, plus prepayments and scheduled principal payments on Indebtedness made during such period, plus expense for taxes paid in cash, plus dividends or distributions paid in cash, plus Capital Lease Obligation

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payments, plus cash contributions to any Plan, all calculated for Holdings and its Subsidiaries on a consolidated basis.

          “Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) EBITDA minus the unfinanced portion of Capital Expenditures to (b) Fixed Charges, all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

          “Fixed Charge Coverage Restoration Period” means, with respect to any Fixed Charge Coverage Trigger Event, any period of ninety (90) consecutive days following the occurrence of such Fixed Charge Coverage Trigger Event during which Availability shall have exceeded the greater of (i) $12,500,000 or (ii) 25% of the Available Revolving Commitment.

          “Fixed Charge Coverage Trigger Event” any date on which Availability shall have been less than the greater of (i) $12,500,000 or (ii) 25% of the Available Revolving Commitment, for three consecutive Business Days.

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers are located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

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

          “Funding Accounts” has the meaning assigned to such term in Section 4.01(h).

          “Full Cash Dominion” has the meaning assigned to such term in Section 5.12(d).

          “GAAP” means (i) generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, or (ii) International Financial Reporting Standards (“IFRS”) in the event the United States Securities and Exchange Commission mandates U.S. public companies to transition to IFRS prior to the Maturity Date, in each case which are in effect from time to time.

          “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

          “Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

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          “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

          “Historical Financial Statements” has the meaning assigned to such term in Section 3.04(a).

          “Holdings” means Altra Holdings, Inc., a Delaware corporation.

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l) any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Intercreditor Agreement” means the Intercreditor and Lien Subordination Agreement dated as of the Effective Date among the Administrative Agent, the Senior Secured Notes Collateral Agent and the Loan Parties.

          “Interest Election Request” means a request by the Borrower Representative to convert or continue a Revolving Borrowing in accordance with Section 2.07.

          “Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for Holdings and its Subsidiaries for such period in accordance with GAAP.

          “Interest Payment Date” means (a) with respect to any CBFR Loan (other than a Swingline Loan), the first day of each calendar month and the Maturity Date, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date.

          “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is

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one, two, three or six months thereafter, as the Borrower Representative may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

          “Inventory” has the meaning assigned to such term in the Security Agreement.

          “Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

          “Joinder Agreement” has the meaning assigned to such term in Section 5.11.

          “LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

          “LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the Standby LC Exposure. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

          “LC Sublimit” means an amount equal to $25,000,000.

          “Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement.

          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or

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a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities; in each case, irrespective of whether (i) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is based on common law, applicable statutes, or contract, (ii) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is recorded or perfected, and (iii) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances.

          “Loan Documents” means this Agreement, any promissory notes issued pursuant to the Agreement, any Letter of Credit applications, the Collateral Documents, the Intercreditor Agreement and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with the Agreement or the transactions contemplated thereby. Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

          “Loan Guarantor” means each Loan Party.

          “Loan Guaranty” means Article X of this Agreement.

          “Loan Parties” means Holdings, the Domestic Subsidiaries of Holdings (including the Borrowers) and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns.

          “Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans, Overadvances and Protective Advances.

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise, of Holdings and its Subsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a whole to perform any of their obligations under the Loan Documents, (c) the Collateral (taken as a whole), or the Administrative Agent’s Liens (on behalf of itself and the Lenders) on the Collateral (taken as a whole) or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders under the Loan Documents (taken as a whole).

          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties in an aggregate principal amount exceeding $10,000,000, it being understood that the Senior Secured Notes shall at all times constitute “Material Indebtedness” unless and until (a) the Senior Secured Notes shall have been fully defeased or (b) the aggregate outstanding principal amount of the Senior Secured Notes does not exceed $10,000,000. For purposes of determining Material Indebtedness, the “obligations” of any Loan Party in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party would be required to pay if such Swap Agreement were terminated at such time.

          “Maturity Date” means November 25, 2012 or any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

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          “Maximum Liability” has the meaning assigned to such term in Section 10.10.

          “Moody’s” means Moody’s Investors Service, Inc.

          “Mortgages” means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, on real property of a Loan Party, including any amendment, modification or supplement thereto.

          “Mortgaged Property” has the meaning assigned to such term in Section 5.15.

          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

          “Net Income” means, for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Holdings or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which Holdings or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Holdings or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

          “Net Orderly Liquidation Value” means, with respect to each type of Inventory of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net of all costs of liquidation thereof.

          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

          “Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

          “Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.

          “Obligated Party” has the meaning assigned to such term in Section 10.02.

          “Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Administrative Agent, the Issuing Bank or any indemnified party arising under the Loan Documents.

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          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases).

          “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

          “Overadvance” has the meaning assigned to such term in Section 2.05(b).

          “Participant” has the meaning set forth in Section 9.04.

          “Paying Guarantor” has the meaning assigned to such term in Section 10.11.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

          “Permitted Acquisition” means (a) any acquisition (whether by purchase, merger, consolidation or otherwise but excluding in any event a Hostile Acquisition) or series of related acquisitions by any Loan Party of (x) all or substantially all or any significant portion of the assets of a Person or division or line of business or a business unit of a Person, or (y) all or substantially all of the Equity Interests of a Person, and (b) any investment in a joint venture which, in each case, meets each of the following criteria:

          (i) at the time of and after giving effect to such acquisition or joint venture investment, no Default has occurred and is continuing;

          (ii) the Person being acquired or whose assets, division, line of business or business unit is being acquired, or in the case of any joint venture investment, the Person in which such joint venture investment is being made, is, in each case, engaged in a line of business in which the Loan Parties are engaged as of, or immediately prior to, the Effective Date, or any similar or related or complementary business, or that is a reasonable extension or expansion thereof, or any business which provides a service and/or supplies products in connection with a line of business in which the Loan Parties are engaged as of, or immediately prior to, the Effective Date;

          (iii) as soon as available, but not less than ten (10) Business Days prior to the closing of such acquisition or joint venture investment, the Loan Parties shall submit to the Administrative Agent (A) notice of such acquisition or joint venture investment, (B) copies of all business and financial information reasonably requested by the Administrative Agent, (C) pro forma financial statements which demonstrate, on a pro forma basis (1) Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the consummation of such acquisition or joint venture investment, determined as if all consideration for such acquisition or joint venture investment had been paid on the first day of such period, of not less than $35,000,000 and (2) a Fixed Charge Coverage Ratio (determined without giving effect to any prepayments of Indebtedness made prior to the Effective Date) for the period of twelve consecutive months most recently ended of not less than 1.10 to 1.00; and (D) a certificate of a Financial Officer certifying that such pro forma financial statements present fairly in all material respects the financial condition of Holdings and its Subsidiaries on a consolidated basis as of the date thereof after giving effect to such acquisition or joint venture investment and setting forth reasonably detailed calculations demonstrating compliance with the minimum Available Liquidity and minimum Fixed Charge Coverage Ratio requirements set forth in clause (C) above, and which shall include a representation and warranty as to compliance with each of the other criteria for a “Permitted Acquisition”;

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          (iv) if the Accounts or Inventory acquired in connection with such acquisition are proposed to be included in the determination of any Borrowing Base and the Administrative Agent elects to do so in its Permitted Discretion, the Administrative Agent shall have conducted an audit and field examination and appraisal of such Accounts and Inventory to its satisfaction;

          (v) in connection with an acquisition of the Equity Interests of any Person, all Liens on the Inventory and Accounts of such Person, and on the Equity Interests of such Person, shall be terminated, and in connection with an acquisition of the assets of any Person, all Liens on the Inventory and Accounts of such Person shall be terminated;

          (vi) if such acquisition is structured as a merger involving a Loan Party and a Person that is not a Loan Party, such Loan Party will be the surviving corporation;

          (vii) no Loan Party shall, as a result of or in connection with any such acquisition or joint venture investment, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that would be reasonably likely to have a Material Adverse Effect; and

          (viii) if, as a result of any such acquisition or joint venture investment, a new Subsidiary is formed or acquired, the Loan Parties shall comply with all applicable provisions of Section 5.13 (provided that the Loan Parties shall not be obligated to cause any entity in which any Loan Party holds a joint venture interest to comply with the provisions of Section 5.13 if the Loan Parties do not hold more than 50% of the Equity Interests in such joint venture.)

          Solely for the purposes of determining whether the Loan Parties have satisfied the minimum Fixed Charge Coverage Ratio requirement set forth in clause (iii)(C)(2) above in connection with any proposed acquisition or joint venture investment, EBITDA and Fixed Charges shall be calculated after giving pro forma effect to such acquisition or joint venture investment (taking into account (A) in the case of any such acquisition, such adjustments with respect to cost savings as are consistent with the standards set forth in Rule 11-02(b)(6) of Regulation S-X, and (B) in the case of any such acquisition or any such joint venture investment, all transactions that are directly related to such acquisition or such joint venture investments and are entered into in connection and substantially contemporaneously therewith) as if such acquisition or joint venture investment occurred on the first day of the period of twelve consecutive fiscal months most recently ended prior to the closing of such acquisition or joint venture investment. Solely for the purposes of determining whether the Loan Parties have satisfied the minimum Available Liquidity requirement set forth in clause (iii)(C)(1) above in connection with any proposed acquisition or joint venture investment, the computation of Available Liquidity shall include the aggregate amount of cash proceeds received in connection with (A) any issuance of Equity Interests by Holdings, or (B) any issuance of additional Senior Secured Notes, in each case which proceeds are utilized to fund any portion of the consideration for such acquisition or joint venture investment, as if such proceeds had been received on the first day of the period of two consecutive fiscal quarters most recently ended prior to the closing of such acquisition or joint venture investment.

          “Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

          “Permitted Encumbrances” means:

     (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04;

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     (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

     (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

     (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; and

     (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

          “Permitted Investments” means:

     (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

     (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

     (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

     (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

          “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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          “Prepayment Event” means:

     (a) any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party, other than dispositions described in Sections 6.05(a) or (b); or

     (b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party with a fair value immediately prior to such event equal to or greater than $5,000,000; or

     (c) the issuance by Holdings of any Equity Interests for cash consideration, or the receipt by Holdings of any cash capital contribution (provided that the issuance by Holdings of Equity Interests as consideration for a Permitted Acquisition shall not give rise to a Prepayment Event); or

     (d) the incurrence by any Loan Party of any Indebtedness, other than Indebtedness permitted under Section 6.01 or permitted by the Required Lenders pursuant to Section 9.02.

          “Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate at its offices at 270 Park Avenue in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

          “Projections” has the meaning assigned to such term in Section 5.01(f).

          “Protective Advance” has the meaning assigned to such term in Section 2.04.

          “Register” has the meaning set forth in Section 9.04.

          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

          “Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

          “Required Lenders” means, at any time, Lenders having Revolving Exposure and unused Commitments representing at least 51% of the sum of the total Revolving Exposure and unused Commitments at such time; provided that, as long as there are only two Lenders, Required Lenders shall mean both Lenders.

          “Requirement of Law” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, 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.

          “Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, reserves for accrued and unpaid interest on the Secured Obligations, Banking Services Reserves, Dilution Reserves, reserves for rent at locations leased by any Loan Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for Inventory shrinkage, reserves for Swap Obligations, reserves for contingent liabilities of any Loan Party, reserves for

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uninsured losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect to any litigation and reserves for taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party.

          “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Holdings or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in Holdings or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in Holdings or any Subsidiary.

          “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit, Overadvances and Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders’ Revolving Commitments is $50,000,000.

          “Revolving Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure at such time, (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Swingline Loans at such time, plus (c) an amount equal to its Applicable Percentage of the aggregate principal amount of Overadvances and Protective Advances outstanding at such time.

          “Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

          “Revolving Loan” means a Loan made pursuant to Section 2.01(a).

          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

          “Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Obligations owing to one or more Lenders or their respective Affiliates; provided that at or prior to the time that any transaction relating to such Swap Obligation is executed, the Lender party thereto (other than JPMorgan Chase Bank, N.A.) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a Secured Obligation entitled to the benefits of the Collateral Documents.

          “Securities Account” has the meaning assigned to such term in Article 8 of the UCC.

          “Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time.

          “Senior Secured Notes” means the Senior Secured Notes due 2016 issued by Holdings pursuant to the Senior Secured Notes Indenture, as amended, modified, waived or supplemented from time to time in accordance with the terms of the Intercreditor Agreement.

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          “Senior Secured Notes Collateral Agent” means The Bank of New York Mellon Trust Company, N.A. (together with its successors and assigns), in its capacity as the collateral agent for the holders of Senior Secured Notes.

          “Senior Secured Notes Documents” means, collectively, the Senior Secured Notes, the Senior Secured Notes Indenture and all other documents, instruments and agreements executed in connection therewith, each as amended, modified, waived or supplemented from time to time in accordance with the terms of the Intercreditor Agreement.

          “Senior Secured Notes Indenture” means that certain Indenture dated as of the Effective Date among Holdings, the Guarantors party thereto, the Senior Secured Notes Trustee and the Senior Secured Notes Collateral Agent, including any supplemental indenture executed or delivered in connection therewith, as the same may be amended, modified, waived or supplemented from time to time in accordance with the terms of the Intercreditor Agreement.

          “Senior Secured Notes Trustee” means The Bank of New York Mellon Trust Company, N.A. (together with its successors and assigns), in its capacity as trustee under the Senior Secured Notes Indenture.

          “Settlement” has the meaning assigned to such term in Section 2.05(d).

          “Settlement Date” has the meaning assigned to such term in Section 2.05(d).

          “Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding standby Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers at such time. The Standby LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Standby LC Exposure at such time.

          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

          “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

          “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held.

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          “Subsidiary” means any direct or indirect subsidiary of Holdings or a Loan Party, as applicable.

          “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

          “Swap 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 (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

          “Swingline Exposure” means, at any time, the sum of the aggregate undrawn amount of all outstanding Swingline Loans at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

          “Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

          “Swingline Loan” has the meaning assigned to such term in Section 2.05(a).

          “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

          “Transactions” means the execution, delivery and performance by the Borrowers of this Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the CB Floating Rate.

          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

          “Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

          “Variable Rate Demand Revenue Bonds” means the Loan Parties’ variable rate demand revenue bonds issued under the authority of the industrial development corporations of the city of San Marcos, Texas and the City of Chattanooga, Tennessee in an aggregate principal amount as of September 26, 2009 equal to $5,300,000.

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          “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.

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to 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 word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II.

The Credits

          SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make (a) Revolving Loans to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the total Revolving Exposures exceeding the lesser of (x) the sum of the total Revolving Commitments or (y) the Borrowing Base, subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances and Overadvances pursuant to the terms of Section 2.04 and 2.05. Notwithstanding any provision to the contrary set forth in this Agreement, the Aggregate Credit Exposure shall not exceed $30,000,000 at any time until such time as the Administrative Agent shall have notified the Borrower Representative in writing that the Administrative Agent has received (a) final appraisals of the Borrowers’ Inventory from appraisers reasonably satisfactory to the Administrative Agent and (b) a final field examination report with respect to the Borrowers’ books, records, Accounts, Inventory and other Collateral, in each case, satisfactory to the Administrative Agent.

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Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

          SECTION 2.02. Loans and Borrowings.

     (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. Any Protective Advance, any Overadvance and any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.04 and 2.05.

     (b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of CBFR Loans or Eurodollar Loans as the Borrower Representative may request in accordance herewith, provided that all Borrowings made on the Effective Date must be made as CBFR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan shall be a CBFR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

     (c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. CBFR Revolving Borrowings may be in any amount. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of five (5) Eurodollar Borrowings outstanding.

     (d) Notwithstanding any other provision of this Agreement, the Borrower Representative shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

          SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing, the Borrower Representative shall notify the Administrative Agent of such request either in writing (delivered by hand or facsimile) in a form approved by the Administrative Agent and signed by the Borrower Representative or by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Chicago time, three Business Days before the date of the proposed Borrowing or (b) in the case of a CBFR Borrowing, not later than noon, Chicago time, on the date of the proposed Borrowing; provided that any such notice of a CBFR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower Representative. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.01:

     (i) the name of the applicable Borrower;

     (ii) the aggregate amount of the requested Borrowing and a breakdown of the separate wires comprising such Borrowing;

     (iii) the date of such Borrowing, which shall be a Business Day;

     (iv) whether such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and

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     (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be a CBFR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the applicable Borrower(s) shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

          SECTION 2.04. Protective Advances.

     (a) Subject to the limitations set forth below, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that, the aggregate amount of Protective Advances outstanding at any time shall not at any time exceed $5,000,000; provided further that, the aggregate amount of outstanding Protective Advances shall not cause the Aggregate Credit Exposure to exceed the aggregate Revolving Commitments. Protective Advances may be made even if the conditions precedent set forth in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the Liens in favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be CBFR Borrowings. The Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof. At any time that there is sufficient Availability and the conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request the Revolving Lenders to make a Revolving Loan to repay a Protective Advance. At any other time the Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).

     (b) Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Protective Advance.

          SECTION 2.05. Swingline Loans and Overadvances.

     (a) The Administrative Agent, the Swingline Lender and the Revolving Lenders agree that in order to facilitate the administration of this Agreement and the other Loan Documents, promptly after the Borrower Representative requests a CBFR Borrowing, the Swingline Lender may elect to have the terms of this Section 2.05(a) apply to such Borrowing Request by advancing, on

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behalf of the Revolving Lenders and in the amount requested, same day funds to the Borrowers, on the applicable Borrowing date to the Funding Account(s) (each such Loan made solely by the Swingline Lender pursuant to this Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”), with settlement among them as to the Swingline Loans to take place on a periodic basis as set forth in Section 2.05(d). Each Swingline Loan shall be subject to all the terms and conditions applicable to other CBFR Loans funded by the Revolving Lenders, except that all payments thereon shall be payable to the Swingline Lender solely for its own account. In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender shall, subject to the terms and conditions set forth herein (but without any further written notice required), not later than 1:00 p.m., Chicago time, on each Business Day, make available to the Borrowers by means of a credit to the Funding Account(s), the proceeds of a Swingline Loan to the extent necessary to pay items to be drawn on any Controlled Disbursement Account that day (as determined based on notice from the Administrative Agent). The aggregate amount of Swingline Loans outstanding at any time shall not exceed $10,000,000. The Swingline Lender shall not make any Swingline Loan if the requested Swingline Loan exceeds Availability (before giving effect to such Swingline Loan). All Swingline Loans shall be CBFR Borrowings.

     (b) Any provision of this Agreement to the contrary notwithstanding, at the request of the Borrower Representative, the Administrative Agent may in its sole discretion (but with absolutely no obligation), make Revolving Loans to the Borrowers, on behalf of the Revolving Lenders, in amounts that exceed Availability (any such excess Revolving Loans are herein referred to collectively as “Overadvances”); provided that, no Overadvance shall result in a Default due to Borrowers’ failure to comply with Section 2.01 for so long as such Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such Overadvance. In addition, Overadvances may be made even if the condition precedent set forth in Section 4.02(c) has not been satisfied. All Overadvances shall constitute CBFR Borrowings. The authority of the Administrative Agent to make Overadvances is limited to an aggregate amount not to exceed $5,000,000 at any time, no Overadvance may remain outstanding for more than sixty days and no Overadvance shall cause any Revolving Lender’s Revolving Exposure to exceed its Revolving Commitment; provided that, the Required Revolving Lenders may at any time revoke the Administrative Agent’s authorization to make Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.

     (c) Upon the making of a Swingline Loan or an Overadvance (whether before or after the occurrence of a Default and regardless of whether a Settlement has been requested with respect to such Swingline Loan or Overadvance), each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swingline Lender or the Administrative Agent, as the case may be, without recourse or warranty, an undivided interest and participation in such Swingline Loan or Overadvance in proportion to its Applicable Percentage of the Revolving Commitment. The Swingline Lender or the Administrative Agent may, at any time, require the Revolving Lenders to fund their participations. From and after the date, if any, on which any Revolving Lender is required to fund its participation in any Swingline Loan or Overadvance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Loan.

     (d) The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that the Administrative Agent elects, by notifying the Revolving Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon Chicago time on the date of such requested Settlement (the “Settlement Date”). Each Revolving Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Revolving Lender’s Applicable Percentage of the outstanding principal amount of the applicable Loan with respect to which

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Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago time, on such Settlement Date. Settlements may occur during the existence of a Default and whether or not the applicable conditions precedent set forth in Section 4.02 have then been satisfied. Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s Applicable Percentage of such Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively. If any such amount is not transferred to the Administrative Agent by any Revolving Lender on such Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.07.

          SECTION 2.06. Letters of Credit.

     (a) General. Subject to the terms and conditions set forth herein, the Borrower Representative may request the issuance of Letters of Credit for its own account or for the account of another Loan Party, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Loan Parties to, or entered into by the Loan Parties with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower Representative shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the applicable Loan Party also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed the LC Sublimit and (iv) the total Revolving Exposures shall not exceed the lesser of the total Revolving Commitments and the Borrowing Base.

     (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided, that, in the case of any Letter of Credit having an expiration date later than the Maturity Date (including any Letter of Credit subject to automatic renewal or extension), on or prior to the date that is ninety (90) days prior to the Maturity Date, the Borrowers shall have provided the Administrative Agent with cash collateral in an amount equal to 103% of the sum of (x) the undrawn face amount of such Letter of Credit and (y) the amount of any unpaid LC Disbursements with respect thereto.

     (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank

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or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

     (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., Chicago time, on the date that such LC Disbursement is made, if the Borrowers Representative shall have received notice of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such notice has not been received by the Borrower Representative prior to such time on such date, then not later than 11:00 a.m., Chicago time, on the Business Day immediately following the day that the Borrower Representative receives such notice; provided that the Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with a CBFR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting CBFR Revolving Borrowing or Swingline Loan. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of CBFR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.

     (f) Obligations Absolute. The Borrowers’ joint and several obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever,

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whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder. Neither the Administrative Agent, the Revolving Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

     (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the applicable Loan Party by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

     (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to CBFR Revolving Loans; provided that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

     (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the Borrower Representative, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or

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to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

     (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower Representative receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 51% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 103% of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to any Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 51% of the total LC Exposure), be applied to satisfy other Secured Obligations. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three Business Days after all such Defaults have been cured or waived.

          SECTION 2.07. Funding of Borrowings.

     (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., Chicago time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided that, Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the Borrower Representative by promptly crediting the amounts so received, in like funds, to the Funding Account(s); provided that CBFR Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained by the Administrative Agent.

     (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable

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Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, the interest rate applicable to CBFR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

          SECTION 2.08. Interest Elections.

     (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower Representative may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower Representative may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, Overadvances or Protective Advances, which may not be converted or continued.

     (b) To make an election pursuant to this Section, the Borrower Representative shall notify the Administrative Agent of such election by telephone or by electronic transmission of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower Representative, by the time that a Borrowing Request would be required under Section 2.03 if the Borrowers were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request (whether telephonic or by electronic transmission) shall be irrevocable and each telephonic request shall be confirmed promptly by hand delivery, facsimile, or electronic transmission to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower Representative.

     (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

     (i) the Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

     (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

     (iii) whether the resulting Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and

     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

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If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

     (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

     (e) If the Borrower Representative fails to deliver a timely Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to a CBFR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Representative, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to a CBFR Borrowing at the end of the Interest Period applicable thereto.

          SECTION 2.09. Termination and Reduction of Commitments; Increase in Revolving Commitments.

     (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

     (b) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon and on any Letters of Credit, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit (or at the discretion of the Administrative Agent a back up standby letter of credit satisfactory to the Administrative Agent) equal to 103% of the LC Exposure as of such date), (iii) the payment in full of the accrued and unpaid fees, and (iv) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon.

     (c) The Borrowers may from time to time reduce the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $5,000,000 and not less than $5,000,000 and (ii) the Borrowers shall not reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the sum of the Revolving Exposures would exceed the lesser of the total Revolving Commitments and the Borrowing Base.

     (d) The Borrower Representative shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) or (c) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower Representative pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower Representative may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

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     (e) The Borrowers shall have the right to increase the Revolving Commitment by obtaining additional Revolving Commitments, either from one or more of the Lenders or another lending institution provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000, (ii) the Borrower Representative, on behalf of the Borrower, may make a maximum of 3 such requests, (iii) the Administrative Agent has approved the identity of any such new Lender, such approval not to be unreasonably withheld, (iv) any such new Lender assumes all of the rights and obligations of a “Lender” hereunder, and (v) the procedure described in Section 2.09(f) have been satisfied.

     (f) Any supplement hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrowers and the Lender(s) being added or increasing their Commitment, subject only to the approval of all Lenders if any such increase would cause the Revolving Commitment to exceed $65,000,000. As a condition precedent to such an increase, Borrower shall deliver to the Administrative Agent a certificate of each Loan Party (in sufficient copies for each Lender) signed by an authorized officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Borrowers, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article III and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (B) no Default exists.

     (g) Within a reasonable time after the effective date of any increase, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrowers, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement. On the Business Day following any such increase, all outstanding CBFR Advances shall be reallocated among the Lenders (including any newly added Lenders) in accordance with the Lenders’ respective revised Applicable Percentages. Eurodollar Advances shall not be reallocated among the Lenders prior to the expiration of the applicable Interest Period in effect at the time of any such increase.

          SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt.

     (a) The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent, and (iii) to the Administrative Agent the then unpaid principal amount of each Overadvance on the earlier of the Maturity Date and demand by the Administrative Agent.

     (b) At all times that Full Cash Dominion is in effect pursuant to Section 5.12(d), on each Business Day, the Administrative Agent shall apply all funds credited to the Collection Account on such Business Day or the immediately preceding Business Day (at the discretion of the Administrative Agent, whether or not immediately available) as follows: (i) if no Event of Default shall have occurred and be continuing at such time, first to prepay any Protective Advances and Overadvances that may be outstanding, pro rata, second to prepay the Revolving Loans (including Swing Line Loans), third to cash collateralize outstanding LC Exposure, and fourth the balance, if any, to the Borrowers’ general operating account; or (ii) if an Event of Default shall have occurred and be continuing at such time, in accordance with the provisions of Section 2.18(b).

     (c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan

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made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

     (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

     (e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; 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.

     (f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

          SECTION 2.11. Prepayment of Loans.

     (a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (f) of this Section.

     (b) Except for Overadvances permitted under Section 2.05, in the event and on such occasion that the total Revolving Exposure exceeds the lesser of (A) the aggregate Revolving Commitments or (B) the Borrowing Base, the Borrowers shall prepay the Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate amount equal to such excess.

     (c) At all times that Full Cash Dominion is in effect pursuant to Section 5.12(d), the Borrowers shall prepay the Loans and cash collateralize the LC Exposure in accordance with Section 2.10(b).

     (d) In the event and on each occasion that any Net Proceeds are received by or on behalf of a Loan Party in respect of any Prepayment Event, the Borrowers shall, immediately after such Net Proceeds are received by such Loan Party, prepay the Obligations as set forth in Section 2.11(e) below in an aggregate amount equal to 100% of such Net Proceeds, provided that, in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if the Borrower Representative shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding inventory) to be used in the business of the Loan Parties, and certifying that no Default has occurred and is continuing, then either (i) so long as Full Cash Dominion is not in effect pursuant to Section 5.12(d), no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate or (ii) if Full Cash Dominion is in effect pursuant to Section 5.12(d), if the Net Proceeds specified in such certificate are to be applied by (A) the Borrowers, then such Net Proceeds

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shall be applied by the Administrative Agent to reduce the outstanding principal balance of the Revolving Loans (without a permanent reduction of the Revolving Commitment) and upon such application, the Administrative Agent shall establish a Reserve against the Borrowing Base in an amount equal to the amount of such proceeds so applied and (B) any Loan Party that is not a Borrower, then such Net Proceeds shall be deposited in a cash collateral account and in either case, thereafter, such funds shall be made available to the applicable Loan Party as follows:

     (1) the Borrower Representative shall request a Revolving Loan (specifying that the request is to use Net Proceeds pursuant to this Section) or the applicable Loan Party shall request a release from the cash collateral account be made in the amount needed;

     (2) so long as the conditions set forth in Section 4.02 have been met, the Revolving Lenders shall make such Revolving Loan or the Administrative Agent shall release funds from the cash collateral account; and

     (3) in the case of Net Proceeds applied against the Revolving Loan, the Reserve established with respect to such insurance proceeds shall be reduced by the amount of such Revolving Loan;

provided that to the extent of any such Net Proceeds therefrom that have not been so applied by the end of such 180-day period, at which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied; provided, further that the Borrowers shall not be permitted to make elections to use Net Proceeds to acquire (or replace or rebuild) real property, equipment or other tangible assets (excluding inventory) with respect to Net Proceeds in any fiscal year in an aggregate amount in excess of $5,000,000.

     (e) All such amounts pursuant to Section 2.11(d) shall be applied, first to prepay any Protective Advances and Overadvances that may be outstanding, pro rata, and second to prepay the Revolving Loans (including Swing Line Loans) without a corresponding reduction in the Revolving Commitment and to cash collateralize outstanding LC Exposure.

     (f) The Borrower Representative shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 10:00 a.m., Chicago time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of a CBFR Revolving Borrowing, not later than 10:00 a.m., Chicago time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

          SECTION 2.12. Fees.

     (a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue during the period from and including the Effective Date to but excluding the date on which the Lenders’ Revolving Commitments terminate, which

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commitment fee shall be calculated based upon the Applicable Rate on the average daily amount of the Available Revolving Commitment of such Lender for the immediately preceding month. Accrued commitment fees shall be payable in arrears on the first day of each calendar month and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.

     (b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, which participation fee shall accrue at the rate separately agreed upon between the Borrowers and the Administrative Agent, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate separately agreed upon between the Borrowers and the Issuing Bank during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of each calendar month shall be payable on the first day of each calendar month following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.

     (c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.

     (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

          SECTION 2.13. Interest.

     (a) The Loans comprising each CBFR Borrowing (including each Swingline Loan) shall bear interest at the CB Floating Rate plus the Applicable Rate.

     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

     (c) Each Protective Advance and each Overadvance shall bear interest at the CB Floating Rate plus the Applicable Rate for Revolving Loans plus 2%.

     (d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower Representative (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or

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(ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

     (e) Accrued interest on each Loan (for CBFR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a CBFR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

     (f) All interest hereunder shall be computed on the basis of a year of 360 days, and shall be payable for the actual number of days elapsed. The CB Floating Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

          SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

     (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower Representative and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as a CBFR Borrowing.

          SECTION 2.15. Increased Costs.

     (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as the case

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may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

     (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

     (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

     (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

          SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19, then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive

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absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

          SECTION 2.17. Taxes.

     (a) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

     (c) The Borrowers shall jointly and severally indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Representative by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

     (d) Each Lender and the Issuing Bank shall indemnify the Borrowers and the Administrative Agent, within 10 days after written demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and reasonable expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent) incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender or the Issuing Bank, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered to the Borrowers or the Administrative Agent pursuant to Section 2.17(f). Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the Issuing Bank, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this Section 2.17(d).

     (e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrower Representative shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

     (f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which any Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower Representative (with a copy to the Administrative Agent), at the time or times prescribed

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by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower Representative as will permit such payments to be made without withholding or at a reduced rate.

     (g) 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 the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket 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 Borrowers, upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to the Borrowers (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 Section 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 which it deems confidential) to the Borrowers or any other Person.

          SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

     (a) The Borrowers shall make each payment required to be made by them hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, 22^nd Floor, Chicago, Illinois, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Except as otherwise provided in the definition of “Interest Period”, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

     (b) Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrowers), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when Full Cash Dominion is in effect (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with Banking Services or Swap Obligations), second, to pay any fees or expense reimbursements then due to the Lenders from the Borrowers (other than in connection with Banking Services or Swap Obligations), third, to pay interest due in respect of the Overadvances and Protective Advances, fourth, to pay the principal of the Overadvances and Protective Advances, fifth, to pay interest then due and payable on the Loans (other than the Overadvances and Protective Advances) ratably, sixth, to prepay principal on the Loans (other than the Overadvances and Protective Advances) and

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unreimbursed LC Disbursements ratably, seventh, to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate undrawn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as cash collateral for such Obligations, eighth, to payment of any amounts owing with respect to Banking Services and Swap Obligations, and ninth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrowers. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding CBFR Loans of the same Class and, in any such event, the Borrowers shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

     (c) At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of any Borrower maintained with the Administrative Agent. Each Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans and Overadvances, but such a Borrowing may only constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative Agent to charge any deposit account of any Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

     (d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

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     (e) Unless the Administrative Agent shall have received notice from the Borrower Representative prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

     (f) If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and apply any such amounts to, any future funding obligations of such Lender hereunder; application of amounts pursuant to (i) and (ii) above shall be made in such order as may be determined by the Administrative Agent in its discretion.”

          SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

     (a) If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment).

     (b) If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender) pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior

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thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

          SECTION 2.20. 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 unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

     (b) the Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02), provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender;

     (c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then:

     (i) all or any part of such Swingline Exposure and LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time; and

     (ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

     (iii) if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to Section 2.20(c), the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

     (iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 2.20(c), then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; or

     (v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to Section 2.20(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated;

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     (d) The Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.20(c), and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and Defaulting Lenders shall not participate therein); and

     (e) in the event and on the date that each of the Administrative Agent, the Borrowers, the Issuing Bank and the Swingline Lender agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the other Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

          SECTION 2.21. Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.21 shall survive the termination of this Agreement.

ARTICLE III.

Representations and Warranties

          Each Loan Party represents and warrants to the Lenders that:

          SECTION 3.01. Organization; Powers. Each of the Loan Parties is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

          SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law applicable to any Loan Party, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or its assets, or give rise to a right thereunder to require any

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payment to be made by any Loan Party, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party, except Liens created pursuant to the Loan Documents.

          SECTION 3.04. Financial Condition; No Material Adverse Change.

     (a) The Company has heretofore furnished to the Lenders (i) the consolidated balance sheet and statements of income, stockholders equity and cash flows of Holdings and its Subsidiaries as of and for the fiscal years ended December 31, 2006, 2007 and 2008, reported on by Ernst & Young LLP, independent public accountants, (ii) the consolidated balance sheet and statements of income, stockholders equity and cash flows of the Company and its Subsidiaries as of and for the fiscal years ended December 31, 2006, 2007 and 2008, reported on by Ernst & Young LLP, independent public accountants, (iii) the consolidated balance sheet and statements of income of Holdings and its Subsidiaries as of and for the fiscal quarter ended September 26, 2009 and the portion of the fiscal year ended September 26, 2009, together with the consolidated statement of cash flows of Holdings and its Subsidiaries for the portion of the fiscal year ended September 26, 2009, certified by Holdings’ chief financial officer, and (iv) the consolidated balance sheet and statements of income of the Company and its Subsidiaries as of and for the fiscal quarter ended September 26, 2009 and the portion of the fiscal year ended September 26, 2009, together with the consolidated statement of cash flows of the Company and its Subsidiaries as of and for the fiscal quarter and the portion of the fiscal year ended September 26, 2009, certified by the Company’s chief financial officer (collectively, the “Historical Financial Statements”). The Historical Financial Statements present fairly, in all material respects, the financial position and results of operations and cash flows of Holdings and its consolidated Subsidiaries, and of the Company and its consolidated Subsidiaries, as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clauses (iii) and (iv) above.

     (b) No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2008.

          SECTION 3.05. Properties.

     (a) As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by each Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists. Each of the Loan Parties has good and indefeasible title to, or valid leasehold interests in, all its real and personal property, free of all Liens other than those permitted by Section 6.02.

     (b) Each Loan Party owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by the Loan Parties does not infringe in any material respect upon the rights of any other Person, and the Loan Parties’ rights thereto are not subject to any licensing agreement or similar arrangement.

          SECTION 3.06. Litigation and Environmental Matters.

     (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting the Loan Parties or any of their Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be

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expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.

     (b) Except for (i) the Disclosed Matters and (ii) any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party nor any of its Subsidiaries (A) has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability or (B) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (C) has become subject to any Environmental Liability.

     (c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

          SECTION 3.07. Compliance with Laws and Agreements. Each Loan Party and its Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

          SECTION 3.08. Investment Company Status. No Loan Party nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

          SECTION 3.09. Taxes. Each Loan Party and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not be expected to result in a Material Adverse Effect. No tax liens have been filed and no claims are being asserted with respect to any such taxes.

          SECTION 3.10. ERISA. 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. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan by such an amount as could reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.11. Disclosure. Each of the Borrowers and Holdings has disclosed to the Lenders all liabilities or obligations of the Loan Parties under any agreements, instruments or other documents, and all other matters known to such Borrower or to Holdings, that could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrowers and Holdings represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of the Effective Date.

          SECTION 3.12. Material Agreements. All material agreements and contracts to which any Loan Party is a party or is bound as of the date of this Agreement are listed on Schedule 3.12. No Loan Party

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is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing Material Indebtedness.

          SECTION 3.13. Solvency.

     (a) Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of the Loan Parties, on a consolidated basis, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Loan Parties, on a consolidated basis, 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 Loan Parties, on a consolidated basis, will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Loan Parties, on a consolidated basis, 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 Effective Date.

     (b) The Loan Parties, on a consolidated basis, do not intend to incur debts beyond their ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by the Loan Parties and the timing of the amounts of cash to be payable on or in respect of their Indebtedness.

          SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The Loan Parties believe that the insurance maintained by or on behalf of the Loans Parties is adequate.

          SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to Holdings of each and all of Holdings’ Subsidiaries, (b) a true and complete listing of each class of each of the Loan Parties’ authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of each Loan Party. All of the issued and outstanding Equity Interests owned by any Loan Party has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and is fully paid and non-assessable.

          SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances or other Liens permitted pursuant to Section 6.02, to the extent any such Lien would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law and (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

          SECTION 3.17. Employment Matters. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party pending or, to the knowledge of the Borrowers, threatened. Except as could not reasonably be expected to result in a Material Adverse Effect (a) the hours worked by and payments made to employees of the Loan Parties have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, and (b) all payments due from any Loan Party, or for which any claim may be made against any Loan Party, on account

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of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party.

          SECTION 3.18. Common Enterprise. The successful operation and condition of each of the Loan Parties is dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

ARTICLE IV.

Conditions

          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

     (a) Credit Agreement and Loan Documents. The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by Lenders pursuant to Section 2.10 payable to the order of each such requesting Lender.

     (b) Financial Statements and Projections. The Lenders shall have received (i) the Historical Financial Statements, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of Holdings and its Subsidiaries, taken as a whole, since December 31, 2008 and (ii) satisfactory projections through 2012.

     (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the Financial Officers and any other officers of such Loan Party authorized to sign the Loan Documents to which it is a party, and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement, and (ii) a long form good standing certificate for each Loan Party from its jurisdiction of organization.

     (d) No Default Certificate. The Administrative Agent shall have received a certificate, signed by the chief financial officer or treasurer of the Borrower Representative, on the initial Borrowing date (i) stating that no Default has occurred and is continuing, (ii) stating that the

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representations and warranties contained in Article III are true and correct as of such date, and (iii) certifying any other factual matters as may be reasonably requested by the Administrative Agent.

     (e) Fees. J.P. Morgan Securities, Inc. and JPMorgan Chase Bank, N.A. shall have received all fees required to be paid by the Loan Parties on or before the Effective Date, as separately agreed to by J.P. Morgan Securities Inc., JPMorgan Chase Bank, N.A. and Holdings. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date. All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower Representative to the Administrative Agent on or before the Effective Date.

     (f) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions where assets of the Loan Parties are located, and such search shall reveal no liens on any of the assets of the Loan Parties except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

     (g) Pay-Off Letter. The Administrative Agent shall have received satisfactory pay-off letters for all existing Indebtedness to be repaid from the proceeds the initial Borrowing, confirming that all Liens upon any of the property of the Loan Parties constituting Collateral will be terminated concurrently with such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have been cash collateralized or supported by a Letter of Credit.

     (h) Funding Accounts. The Administrative Agent shall have received a notice setting forth the deposit account(s) of the Borrowers (the “Funding Accounts”) to which the Lender is authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

     (i) Customer List. The Administrative Agent shall have received a customer list which is true, correct and complete in all material respects as of the Effective Date.

     (j) [Intentionally Omitted.]

     (k) Solvency. The Administrative Agent shall have received a solvency certificate from a Financial Officer.

     (l) Borrowing Base Certificate. The Administrative Agent shall have received a Borrowing Base Certificate which calculates the Borrowing Base as of September 26, 2009.

     (m) Closing Availability. After giving effect to all Borrowings to be made on the Effective Date and the issuance of any Letters of Credit on the Effective Date and payment of all fees and expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current, the Borrowers’ Availability shall not be less than $30,000,000.

     (n) Senior Secured Notes. The Administrative Agent shall have received final, complete, fully executed copies of all Senior Secured Notes Documents. The Administrative Agent shall have received a certificate from the chief financial officer or treasurer of Holdings certifying that Holdings has received cash proceeds from the issuance of the Senior Secured Notes on the Effective Date totaling not less than $207,000,000, which cash proceeds shall have been applied to redeem or fully defease all Existing Senior Secured Notes, to repay certain other outstanding Indebtedness of the Loan Parties and to pay certain premiums, fees and expenses. The Administrative Agent shall have received a final, complete, fully executed copy of the Intercreditor

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Agreement, which Intercreditor Agreement shall be in form and substance reasonably satisfactory to the Administrative Agent.

     (o) Pledged Equity Interests; Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof; provided that the Loan Parties shall have 30 days following the Effective Date to deliver the original certificates representing the Equity Interests of Foreign Subsidiaries pledged pursuant to the Security Agreement, together with the executed undated powers for each such certificate.

     (p) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.

     (q) Legal Opinions. The Administrative Agent shall have received customary legal opinions from counsel for the Loan Parties.

     (r) Insurance. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.09 and Section 4.12 of the Security Agreement.

     (s) Letter of Credit Application. The Administrative Agent shall have received a properly completed letter of credit application (whether stand alone or pursuant to a master agreement, as applicable) if the issuance of a Letter of Credit will be required on the Effective Date.

     (t) Tax Withholding. The Administrative Agent shall have received a copy of a properly completed and signed IRS Form W-9 for each Loan Party.

     (u) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., Chicago time, on November 25, 2009 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

     (a) The representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all material respects (provided that if any representation or warranty is by its terms qualified by concepts of materiality, such representation or warranty shall be true and correct in all respects) on and as of the date of such Borrowing or the date of issuance, amendment,

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renewal or extension of such Letter of Credit, as applicable (except that representations or warranties that are made as of a specific earlier date shall be true and correct in all material respects as of such earlier date), except to the extent of changes resulting from transactions permitted by this Agreement.

     (b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

     (c) After giving effect to any Borrowing or the issuance of any Letter of Credit, Availability is not less than zero.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a) or (b) of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no obligation to, issue or cause to be issued any Letter of Credit for the ratable account and risk of Lenders from time to time if the Administrative Agent believes that making such Loans or issuing or causing to be issued any such Letter of Credit is in the best interests of the Lenders.

ARTICLE V.

Affirmative Covenants

          Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the Loan Parties, with the Lenders that:

          SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The Borrowers will furnish to the Administrative Agent and each Lender:

     (a) within 90 days after the end of each fiscal year of Holdings, Holdings’ audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants; provided, however, that, so long as Holdings is required to file reports under Section 13 of the Securities and Exchange Act of 1934, the requirements of this paragraph shall be deemed satisfied by the delivery to the Administrative Agent by electronic transmission of the Annual Report of Holdings on Form 10-K for such fiscal year, signed by the duly authorized officer or officers of Holdings;

     (b) within 45 days after the end of each of the first three fiscal quarters of Holdings, Holdings’ consolidated balance sheet and related statements of operations as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year and cash flows for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the

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corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of the Financial Officers of Holdings as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to (i) normal year-end audit adjustments and the absence of footnotes and (ii) those exceptions to GAAP as shall be expressly identified in such financial statements; provided, however, that, so long as Holdings is required to file reports under Section 13 of the Securities and Exchange Act of 1934, the requirements of this paragraph shall be deemed satisfied by the delivery to the Administrative Agent by electronic transmission of the Quarterly Report of Holdings on Form 10-Q for the relevant fiscal quarter, signed by the duly authorized officer or officers of Holdings;

     (c) within 30 days after the end of each fiscal month of Holdings, Holdings’ consolidated balance sheet and related statements of operations as of the end of and for such fiscal month and the then elapsed portion of the fiscal year and cash flows for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to (i) normal year-end audit adjustments and the absence of footnotes and (ii) those exceptions to GAAP as shall be expressly identified in such financial statements;

     (d) concurrently with any delivery of financial statements under clause (a) or (b) or (c) above, a certificate of a Financial Officer of Holdings in substantially the form of Exhibit C (i) certifying, in the case of the financial statements delivered under clause (b) or (c), as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to (i) normal year-end audit adjustments and the absence of footnotes and (ii) those exceptions to GAAP as shall be expressly identified in such financial statements, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) if, as of the last day of the fiscal period covered by such financial statements, (x) the Borrowers had LC Exposure equal to or in excess of $20,000,000 or (y) any Revolving Loans were outstanding, setting forth reasonably detailed calculations of the Fixed Charge Coverage Ratio (regardless of whether a Fixed Charge Coverage Covenant Period is in effect), (iv) certifying as to the Loan Parties’ compliance with Sections 6.04(c), 6.04(d) and 6.04(e) and setting forth reasonably detailed calculations of Available Liquidity during the period of two consecutive fiscal quarters most recently ended, and (v) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

     (e) [intentionally omitted];

     (f) as soon as available, but in any event not later than 30 days after the first day of each fiscal year of Holdings, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) for each of Holdings and its Subsidiaries, for each month of such fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

     (g) as soon as available but in any event within 20 days of the end of each fiscal month (or, during any Availability Trigger Period, by Wednesday of each week), and at such other times as may be requested by the Administrative Agent, as of the period then ended, a Borrowing Base

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Certificate and supporting information in connection therewith, together with any additional reports with respect to the Borrowing as the Administrative Agent may reasonably request;

     (h) as soon as available but in any event within 20 days of the end of each fiscal month (or during any Availability Trigger Period, by Wednesday of each week) and at such other times as may be requested by the Administrative Agent, as of the period then ended, all delivered electronically in a text formatted file acceptable to the Administrative Agent:

     (i) a detailed aging of the Borrowers’ Accounts (1) including all invoices aged by invoice date and due date (with an explanation of the terms offered) and (2) reconciled to the Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the name, address, and balance due for each Account Debtor;

     (ii) a schedule detailing the Borrowers’ Inventory, in form satisfactory to the Administrative Agent, (1) by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw material, work-in-process and finished goods), by product type, and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market and adjusted for Reserves as the Administrative Agent has previously indicated to the Borrower Representative are deemed by the Administrative Agent to be appropriate, (2) including a report of any variances or other results of Inventory counts performed by the Borrowers since the last Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by Borrowers and complaints and claims made against the Borrowers), and (3) reconciled to the Borrowing Base Certificate delivered as of such date;

     (iii) a worksheet of calculations prepared by the Borrowers to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;

     (iv) a reconciliation of the Borrowers’ Accounts and Inventory between the amounts shown in the Borrowers’ general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and

     (v) a reconciliation of the loan balance per the Borrowers’ general ledger to the loan balance under this Agreement;

     (i) as soon as available but in any event within 20 days of the end of each fiscal month and at such other times as may be requested by the Administrative Agent, as of the month then ended, a schedule and aging of the Borrowers’ accounts payable, delivered electronically in a text formatted file acceptable to the Administrative Agent;

     (j) as soon as available but in any event, on or prior to March 31 of each year, and at such other times as may be requested by the Administrative Agent, a list of all customer addresses, delivered electronically in a text formatted file acceptable to the Administrative Agent;

     (k) promptly upon the Administrative Agent’s request:

     (i) copies of invoices in connection with the invoices issued by the Borrowers in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;

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     (ii) copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory or Equipment purchased by any Loan Party; and

     (iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;

     (iv) copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service;

     (l) on or prior to March 31 of each year, a certificate of good standing for each Loan Party from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization; and

     (m) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of any Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

          SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the Administrative Agent and each Lender prompt written notice of the following:

     (a) the occurrence of any Default;

     (b) the occurrence of any default or similar event under the Senior Secured Notes Indenture;

     (c) receipt of any notice of any governmental investigation or any litigation or proceeding commenced or threatened against any Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks injunctive relief, the effect of which could reasonably be expected to have a Material Adverse Effect, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, the effect of which could reasonably be expected to have a Material Adverse Effect, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws, the effect of which could reasonably be expected to have a Material Adverse Effect, (vi) contests any tax, fee, assessment, or other governmental charge in excess of $5,000,000, or (vii) involves any product recall with respect to Inventory having an aggregate value in excess of $5,000,000;

     (d) any Lien (other than Permitted Encumbrances or any Lien permitted Section 6.02(h)) or claim made or asserted against Collateral having an aggregate value in excess of $2,500,000;

     (e) any loss, damage, or destruction to the Collateral in the amount of $2,500,000 or more, whether or not covered by insurance;

     (f) any and all default notices received under or with respect to any leased location or public warehouse where Collateral in excess of $2,500,000 is located (which shall be delivered within two Business Days after receipt thereof);

     (g) all material amendments or supplements to the Senior Secured Notes Documents, together with a copy of each such amendment or supplement;

     (h) the fact that a Loan Party has entered into a Swap Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendments thereto (which shall be delivered within two Business Days);

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     (i) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrowers and their Subsidiaries in an aggregate amount exceeding $2,500,000;

     (j) the delivery by any Loan Party of a notice to the Senior Secured Notes Trustee under the Senior Secured Notes Indenture, together with a copy of such notice; and

     (k) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower Representative setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

          SECTION 5.03. Existence; Conduct of Business. Each Loan Party will (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation, dissolution or other transaction permitted under Section 6.03, 6.05 or 6.09 or under Section 4.15 of the Security Agreement and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted.

          SECTION 5.04. Payment of Obligations. Each Loan Party will pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.05. Maintenance of Properties. Each Loan Party will keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

          SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will (i) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (ii) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. After the occurrence and during the continuance of an Event of Default, each Loan Party shall provide the Administrative Agent and each Lender with access to its suppliers. The Loan Parties acknowledge that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the Lenders.

          SECTION 5.07. Compliance with Laws. Each Loan Party will comply with all Requirements of Law applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

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          SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only for (a) the repayment of certain outstanding Indebtedness and (b) for working capital, Permitted Acquisitions and general corporate purposes. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

          SECTION 5.09. Insurance. Each Loan Party will maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

          SECTION 5.10. Casualty and Condemnation. The Borrowers will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Collateral Documents.

          SECTION 5.11. Appraisals and Field Examinations.

     (a) In the event the Administrative Agent so requests in its Permitted Discretion, the Loan Parties will provide the Administrative Agent with appraisals or updates thereof of the Loan Parties’ Inventory, not more frequently than once (or during an Availability Trigger Period, twice) during each period of twelve consecutive months, such appraisals and updates to be from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, and to include, without limitation, information required by applicable law and regulations. Notwithstanding the foregoing, there shall be no limitation on the number of Inventory appraisals if an Event of Default shall have occurred and be continuing. All such appraisals shall be at the sole expense of the Loan Parties. For purposes of this Section 5.11(a), it is understood and agreed that a single Inventory appraisal may consist of appraisals conducted at multiple relevant sites and involve one or more Loan Parties.

     (b) At the request of the Administrative Agent, the Loan Parties will permit the Administrative Agent to conduct field examinations during normal business hours to ensure the adequacy of Collateral included in the Borrowing Base and related reporting and control systems. Two such field examinations per calendar year shall be at the sole expense of the Loan Parties, provided that there shall be no limitation on the number or frequency of field examinations at the sole expense of the Borrowers if an Event of Default shall have occurred and be continuing. This Section 5.11(b) shall not be construed to limit the Administrative Agent’s right to conduct field examinations with greater frequencies at any time in the Administrative Agent’s Permitted Discretion at the expense of the Lenders. For purposes of this Section 5.11(b), it is understood and agreed that a single field examination may consist of examinations conducted at multiple relevant sites and involve one or more Loan Parties.

          SECTION 5.12. Depository Banks; Control Agreements.

     (a) The Loan Parties will at all times from and after February 23, 2010, maintain the Cash Management Bank as their principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other Deposit Accounts for the conduct of their business.

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     (b) As soon as practicable but in any event not later than February 23, 2010, the Loan Parties shall (i) establish the Cash Management Bank as their principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other Deposit Accounts for the conduct of their business, (ii) cause the Cash Management Bank to enter into a Control Agreement with respect to all Deposit Accounts and Securities Accounts (other than Excluded Accounts) maintained by the Loan Parties with the Cash Management Bank and (iii) to the extent that the Loan Parties will continue to maintain any Deposit Accounts or Securities Accounts (other than Excluded Accounts) at any depository bank or other institution other than the Cash Management Bank from and after February 23, 2010, cause each such other depositary bank or institution to enter into a Control Agreement with respect to such Deposit Account or Securities Account; provided that, in the event the Loan Parties are not able to obtain a Control Agreement with respect to any Deposit Account or Securities Account (other than Excluded Accounts) described in this clause (iii) as of February 23, 2010, then, unless waived by the Administrative Agent, not later than March 25, 2010, the Loan Parties shall close each such Deposit Account or Securities Account (other than an Excluded Account) for which a Control Agreement was not obtained, and shall transfer all cash or securities (or proceeds thereof) maintained in such accounts to new Deposit Accounts or Securities Accounts maintained with a depository bank, securities broker, securities intermediary or other financial institution that is a party to a Control Agreement.

     (c) The Loan Parties will (i) provide prompt written notice to the Administrative Agent of the establishment of any Deposit Account or Securities Account after the Effective Date and (ii) contemporaneous with the establishment of such Deposit Account or Securities Account (other than an Excluded Account), obtain a Control Agreement with respect to such Deposit Account or Securities Account. The Loan Parties will not change the Cash Management Bank without the prior written consent of the Administrative Agent.

     (d) At all times (i) during the continuance of an Availability Trigger Period and (ii) during the continuance of an Event of Default, Loan Parties shall be subject to full cash dominion (“Full Cash Dominion”), such that the Cash Management Bank shall be required to remit to the Collection Account on a daily basis (A) all available funds on deposit in any Deposit Account (other than an Excluded Account) maintained by the Loan Parties with the Cash Management Bank and (B) all cash, checks, electronic funds transfers and other similar payments relating to or constituting payments made in respect of Accounts of the Loan Parties received by the Cash Management Bank, including any such items remitted to any Lock Box maintained or controlled by the Cash Management Bank.

          SECTION 5.13. Additional Collateral; Further Assurances.

     (a) Subject to applicable law, each Borrower and each Subsidiary that is a Loan Party shall cause each of its Domestic Subsidiaries formed or acquired after the date of this Agreement in accordance with the terms of this Agreement to become a Loan Party by executing the Joinder Agreement set forth as Exhibit D hereto (the “Joinder Agreement”). Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, in any property of such Loan Party which constitutes Collateral, including any parcel of real property located in the U.S. owned by any Loan Party having a fair market value in excess of $2,500,000.

     (b) Each Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within

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the meaning of Treas. Reg. Section 1.956-2(c)(2) in each Foreign Subsidiary directly owned by the Borrower or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

     (c) Without limiting the foregoing, each Loan Party will, and will cause each Domestic Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the expense of the Loan Parties.

     (d) If any material assets (including any parcel of real property or improvements thereto having a fair market value in excess of $2,500,000 or any interest therein) are acquired by any Borrower or any Subsidiary that is a Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien in favor of the Security Agreement upon acquisition thereof), the Borrower Representative will notify the Administrative Agent and the Lenders thereof, and, within 90 days after the consummation of such acquisition, the Borrowers will cause such assets to be subjected to a Lien securing the Secured Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.

          SECTION 5.14. Collateral Access Agreements. The Loan Parties shall use commercially reasonable efforts to deliver to the Administrative Agent any Collateral Access Agreements required pursuant to the Security Agreement, in each case, in form and substance reasonably acceptable to the Administrative Agent.

          SECTION 5.15. Existing Real Estate Collateral. Within 90 days after the Effective Date, the Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent the following items with respect to each parcel of real property listed on Schedule 5.15 hereto (each such property, a “Mortgaged Property”):

     (a) a Mortgage with respect to such property, in each case, in form and substance reasonably satisfactory to the Administrative Agent;

     (b) evidence reasonably satisfactory to the Administrative Agent that a counterpart of the Mortgage with respect to such property has been recorded in the place necessary, in the Administrative Agent’s judgment, to create a valid and enforceable first priority Lien in favor of the Administrative Agent for the benefit of itself and the Lenders;

     (c) an ALTA or other mortgagee’s title policy with respect to such property (together with endorsements thereto), all in form and substance reasonably satisfactory to the Administrative Agent;

     (d) to the extent that the Loan Parties have an existing ALTA survey with respect to such property in their possession, a copy of such ALTA survey;

     (e) an opinion of counsel in the state in which such parcel of real property is located in form and substance and from counsel reasonably satisfactory to the Administrative Agent;

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     (f) if any such parcel of real property is determined by the Administrative Agent to be in a flood zone, a flood notification form signed by the Borrower Representative and evidence that flood insurance is in place for the building and contents, all in form and substance satisfactory to the Administrative Agent;

     (g) environmental review reports in the possession of the Loan Parties with respect to each such property, which review reports shall be acceptable to the Administrative Agent, together with an indication of the Loan Parties’ plans with respect to any environmental hazards or liabilities identified in any such environmental review report);

     (h) a hazardous materials indemnity agreement in form and substance reasonably satisfactory to the Administrative Agent; and

     (i) such other information, documentation, and certifications as may be reasonably required by the Administrative Agent.

          SECTION 5.16. Initial Appraisals and Field Examinations. Within 30 days after the Effective Date, (a) the Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent (i) appraisals of the Borrowers’ Inventory from appraisers reasonably satisfactory to the Administrative Agent and (ii) copies of existing appraisals in the possession of the Loan Parties with respect to each of the Mortgaged Properties and (b) the Administrative Agent shall have completed its field examinations of the Borrowers’ books, records, Accounts, Inventory and other Collateral.

ARTICLE VI.

Negative Covenants

          Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Loan Parties covenant and agree, jointly and severally, with the Lenders that:

          SECTION 6.01. Indebtedness. No Loan Party will create, incur or suffer to exist any Indebtedness, except:

     (a) the Secured Obligations;

     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) hereof;

     (c) Indebtedness of (i) any Loan Party to any other Loan Party and (ii) any Loan Party to any Subsidiary that is not a Loan Party; provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

     (d) Guarantees by (i) any Loan Party of Indebtedness of any other Loan Party and (ii) any Loan Party of Indebtedness of any Subsidiary that is not a Loan Party; provided that (x) the Indebtedness so Guaranteed is permitted by this Section 6.01, (y) Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations of the applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

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     (e) Indebtedness of any Loan Party incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) hereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $15,000,000 at any time outstanding;

     (f) Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses (b) and (e), (j) and (k) hereof; provided that, (i) the principal amount of such Indebtedness is not increased, (ii) the interest rate of such refinancing, renewal or extension Indebtedness is not greater than the rate generally available in the market at the time of such extension, refinancing or renewal for similar instruments of Indebtedness having a similar tenor, (iii) any Liens securing such Indebtedness are not extended to any additional property of any Loan Party (other than additional immaterial property), (iv) no Loan Party that is not originally obligated with respect to repayment of such Indebtedness is required to become obligated with respect thereto, (v) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced or renewed, (vi) the terms of any such extension, refinancing, or renewal are not less favorable in any material respect to the obligor thereunder than the original terms of such Indebtedness, (vii) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Secured Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable in all material respects, taken as a whole, to the Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness and (viii) in the case of any refinancing, renewal, or extension of Indebtedness permitted under Section 6.01(k), such refinancing, renewal, or extension Indebtedness shall be subject to the terms of the Intercreditor Agreement;

     (g) Indebtedness owed to any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such person, and Indebtedness in respect of self-insurance obligations, in each case incurred in the ordinary course of business;

     (h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

     (i) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business consistent with past practices;

     (j) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary;

     (k) Indebtedness incurred by the Loan Parties in respect of (i) the Senior Secured Notes bearing interest at a rate of 8.125% issued on the Effective Date in the aggregate principal amount of $210,000,000 and (ii) any additional Senior Secured Notes issued after the Effective Date in accordance with the terms of the Senior Secured Notes Documents (provided that any such issuance of additional Senior Secured Notes shall comply with Section 4.09(a) of the Senior Secured Notes Indenture);

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     (l) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness does not remain outstanding for more than 5 Business Days; and

     (m) other unsecured Indebtedness in an aggregate principal amount not exceeding $15,000,000 at any time outstanding.

          SECTION 6.02. Liens. No Loan Party will create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

     (a) Liens securing the Secured Obligations;

     (b) Permitted Encumbrances;

     (c) any Lien on any property or asset of any Loan Party existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of such Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

     (d) Liens on fixed or capital assets acquired, constructed or improved by any Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of such Loan Party or any other Loan Party;

     (e) any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by any Loan Party or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

     (f) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

     (g) Liens arising out of sale and leaseback transactions permitted by Section 6.06;

     (h) Liens securing the Indebtedness permitted pursuant to Section 6.01(k) (subject to the terms of the Intercreditor Agreement);

     (i) Liens securing the Indebtedness permitted pursuant to Section 6.01(f); and

     (j) Liens on specific items of Inventory or other goods and proceeds of any Loan Party securing such Loan Party’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase shipment or storage of such inventory or other goods.

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Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than those permitted under clause (a) of the definition of Permitted Encumbrance and clauses (a) and (h) above and (2) Inventory, other than those permitted under clauses (a) and (b) of the definition of Permitted Encumbrance and clauses (a) and (h) above.

          SECTION 6.03. Fundamental Changes.

     (a) Except as permitted by Section 6.05(b) or 6.09 of this Agreement or Section 4.15 of the Security Agreement, no Loan Party will merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Person may merge into a Borrower in a transaction in which the surviving entity is a Borrower or another Person organized or existing under the laws of the United States of America, any State thereof or the District of Columbia and such Person expressly assumes, in writing, all the obligations of the Borrowers under the Loan Documents and (ii) any Person may merge into any Loan Party in a transaction in which the surviving entity is or becomes a Loan Party concurrently with such merger; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

     (b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage in any business other than businesses of the type conducted by the Loan Parties on the date of execution of this Agreement and businesses reasonably related thereto.

     (c) No Loan Party shall sell, assign, distribute or otherwise transfer any of its material operating assets to Holdings; provided that this Section 6.03(c) shall not limit the ability of any Loan Party to make Restricted Payments to Holdings in accordance with the terms of Section 6.08.

          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

     (a) Permitted Investments (subject to the requirements set forth in Section 5.12 regarding Control Agreements (other than Permitted Investments maintained in Excluded Accounts) or otherwise subject to a perfected security interest in favor of the Administrative Agent for the benefit of the Lenders or otherwise subject to a perfected security interest in favor of the Administrative Agent for the benefit of the Lenders in accordance with the terms of this Agreement) and Permitted Acquisitions;

     (b) investments in existence on the date of this Agreement and described in Schedule 6.04;

     (c) investments by the Loan Parties in Equity Interests in their respective Subsidiaries, provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the limitations applicable to common stock of a Foreign Subsidiary referred to in Section 5.12) and (B) with respect to investments made after the Closing Date, Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to

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the making of such investment, determined as if such investment had been made on the first day of such period, shall equal or exceed $35,000,000;

     (d) loans or advances made by (i) any Loan Party to any other Loan Party and (ii) any Loan Party to any Subsidiary that is not a Loan Party, provided, that with respect to any loans or advances made by Loan Parties to Subsidiaries that are not Loan Parties after the Closing Date, Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the making of such loan or advance, determined as if such loan or advance had been made on the first day of such period, shall equal or exceed $35,000,000;

     (e) Guarantees constituting Indebtedness permitted by Section 6.01, provided that with respect to any Guarantees by Loan Parties of Indebtedness of Subsidiaries that are not Loan Parties entered into after the Closing Date, Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the date any Loan Party enters into any such Guarantee, determined as if such Guarantee had been entered into on the first day of such period, shall equal or exceed $35,000,000;

     (f) loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $2,000,000 in the aggregate at any one time outstanding;

     (g) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

     (h) investments in the form of Swap Agreements permitted by Section 6.07;

     (i) investments of any Person existing at the time such Person becomes a Domestic Subsidiary of a Loan Party or consolidates or merges with a Loan Party (including in connection with a permitted acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

     (j) investments received in connection with the dispositions of assets permitted by Section 6.05;

     (k) investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances;”

     (l) advances to suppliers and customers in the ordinary course of business, consistent with past practices;

     (m) Investments in securities of any trade creditor or customer received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditor or customer in exchange for a claim against such trade creditor or customer;

     (n) Investments consisting of redemptions, repurchases and exchanges of the Senior Secured Notes, to the extent permitted under Section 6.08(b); and

     (o) other Investments made after the Effective Date (excluding Investments in Foreign Subsidiaries, which shall be subject to the limitations set forth in clauses (c), (d) and (e) of this Section 6.04) having an aggregate fair market value (measured on the date such Investment was

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made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (o) which are then outstanding, not to exceed $20,000,000.

          SECTION 6.05. Asset Sales. No Loan Party will sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will any Subsidiary that is a Loan Party issue any additional Equity Interest in such Subsidiary (other than to another Loan Party in compliance with Section 6.04), except:

     (a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

     (b) sales, transfers and dispositions to Holdings or any Subsidiary, provided that (i) any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09 and (ii) no Loan Party shall consummate any sale, transfer or other disposition to Holdings in violation of Section 6.03(c);

     (c) sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection thereof;

     (d) sales, transfers and dispositions of Permitted Investments and other investments permitted by clauses (i) and (k) of Section 6.04;

     (e) sale and leaseback transactions permitted by Section 6.06;

     (f) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary; and

     (g) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other paragraph of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of pursuant to this paragraph (g), together with all assets sold, transferred or otherwise disposed of pursuant to clause (b) of Section 6.06, shall not exceed $15,000,000 during any fiscal year of the Borrowers;

provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by paragraphs (b) and (f) above) shall be made for fair value and for at least 75% cash consideration.

          SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (a) any such sale of any fixed or capital assets by any Borrower that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Borrower acquires or completes the construction of such fixed or capital asset and (b) sale and leaseback transactions by any Borrower involving fixed or capital assets for cash consideration of not less than the fair market value of such fixed or capital assets; provided that the fair market value of all such assets sold pursuant to this clause (b) when taken together with all assets sold, transferred or otherwise disposed of pursuant to paragraph (g) of Section 6.05, shall not exceed $15,000,000 during any fiscal year of the Borrowers.

          SECTION 6.07. Swap Agreements. No Loan Party will enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any Loan Party has actual exposure (other than those in respect of Equity Interests of any Loan Party), and (b) Swap Agreements

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entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Loan Party.

          SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.

     (a) No Loan Party will declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

     (i) Each of Holdings and its Subsidiaries may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock,

     (ii) Subsidiaries of the Company may declare and pay dividends ratably with respect to their Equity Interests,

     (iii) the Company and its Subsidiaries may make distributions to Holdings to enable Holdings to pay general corporate overhead expenses of Holdings, including franchise taxes and other fees required to maintain the existence of Holdings, insurance premiums and indemnification claims made by directors and officers of Holdings attributable to the ownership or operation of any Loan Party;

     (iv) so long as no Default or Event of Default has occurred or is continuing or would result therefrom, (A) the Company and its Subsidiaries may pay dividends to Holdings to permit Holdings to pay reasonable fees paid to non-independent members of Holdings’ board of directors, (B) the Company and its Subsidiaries may make Restricted Payments to pay reasonable expenses incurred by non-independent members of Holdings’ board of directors, and (C) the Company and its Subsidiaries may make Restricted Payments to pay reasonable fees paid to and expenses incurred by independent members of Holdings’ board of directors;

     (v) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Company and its Subsidiaries may make distributions to Holdings to permit Holdings to (and Holdings may) purchase, repurchase, redeem or otherwise acquire Equity Interests of any Loan Party from employees, former employees, directors or former directors of such Loan Party (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by such Loan Party’s board of directors under which such Persons purchase or sell, or are granted the option to purchase or sell, shares of such Stock; provided, that the aggregate amount of such repurchases and other acquisitions shall not exceed $2,000,000 in any fiscal year, except that the Loan Parties may carry over and make in any subsequent fiscal year, the amount of such repurchases and other acquisitions permitted to have been made but not made in the immediately preceding fiscal year limited to a maximum carry over amount of $2,000,000;

     (vi) the Loan Parties may make cashless repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

     (vii) the Company and its Subsidiaries may make distributions to Holdings (or any direct or indirect parent of Holdings) to be used solely to pay federal, state and local income taxes made no earlier than five days prior to the date on which such Person is

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required to make such payment in an amount not to exceed the aggregate tax liability attributable to the Company and its Subsidiaries for such fiscal year, determined as if the Company and its Subsidiaries were a separate affiliate group (as defined in Section 1504 of the Code) filing a consolidated return, or, to the extent applicable, a separate group filing combined or unitary returns, and then only to the extent that any such payments are actually paid by Holdings to Governmental Authorities;

     (viii) the Company and its Subsidiaries may make Restricted Payments to Holdings to permit Holdings to make payments or other distributions permitted by Section 6.08(b) in respect of the Senior Secured Notes (and permitted refinancings thereof); and

     (ix) the Loan Parties may make other Restricted Payments, so long as (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) Holdings has delivered to the Administrative Agent pro forma financial statements which demonstrate, on a pro forma basis, Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the making of such Restricted Payment, determined as if such Restricted Payment had been made on the first day of such period, of not less than $35,000,000, and (C) Holdings shall have delivered to the Administrative Agent a certificate of a Financial Officer certifying that (x) such pro forma financial statements present fairly in all material respects the financial condition of Holdings and its Subsidiaries on a consolidated basis as of the date thereof after giving effect thereto and setting forth reasonably detailed calculations demonstrating compliance with the minimum Availability requirement set forth in clause (B) above and (y) such Restricted Payment is permitted under the terms of the Senior Secured Notes Indenture.

     (b) No Loan Party will make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

     (i) payment of Indebtedness created under the Loan Documents;

     (ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness (including Indebtedness under the Senior Secured Notes), other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

     (iii) refinancings of Indebtedness to the extent permitted by Section 6.01;

     (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and

     (v) payments or other distributions constituting purchases and redemptions of the Senior Secured Notes and the Variable Rate Demand Revenue Bonds, in each case, so long as (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) Holdings has delivered to the Administrative Agent pro forma financial statements which demonstrate, on a pro forma basis, Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the funding of such purchase or redemption, determined as if the funding of such purchase or redemption had occurred on the first day of such period, of not less than $35,000,000, and (C) Holdings shall have delivered to the Administrative Agent a certificate of a Financial Officer certifying that (x)

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such pro forma financial statements present fairly in all material respects the financial condition of Holdings and its Subsidiaries on a consolidated basis as of the date thereof after giving effect thereto and setting forth reasonably detailed calculations demonstrating compliance with the minimum Available Liquidity requirement set forth in clause (B) above and (y) such purchase or redemption of Senior Secured Notes is permitted under the terms of the Senior Secured Notes Indenture.

     (c) Notwithstanding any provision to the contrary set forth in this Section 6.08, no Restricted Payment or purchase, redemption or payment in respect of Indebtedness shall be permitted to made pursuant to this Section 6.08 if such Restricted Payment or purchase, redemption or payment in respect of Indebtedness is not permitted to be made in accordance with the Senior Secured Notes Indenture.

          SECTION 6.09. Transactions with Affiliates. No Loan Party will sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party than could be obtained on an arm’s-length basis from unrelated third parties; provided, that (x) in the case of any such transaction (or series of related transactions) involving aggregate consideration in excess of $10,000,000, the applicable Loan Party shall have delivered to the Administrative Agent a resolution of such Loan Party’s board of directors set forth in an officer’s certificate certifying that such transaction (or series of related transactions) complies with the provisions of this clause (a) and that such transaction (or series of related transactions) has been approved by a majority of the disinterested members of such board of directors and (y) in the case of any such transaction (or series of related transactions) involving aggregate consideration in excess of $15,000,000, the applicable Loan Party shall have delivered an opinion as to the fairness to such Loan Party of such transaction (or series of related transactions) from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; (b) transactions between or among any Borrower and any Subsidiary that is a Loan Party not involving any other Affiliate; (c) any investment permitted by Sections 6.04(c) or 6.04(d); (d) any Indebtedness permitted under Section 6.01(c); (e) any Restricted Payment permitted by Section 6.08; (f) loans or advances to employees permitted under Section 6.04; (g) the payment of reasonable fees to directors of any Borrower or any Subsidiary who are not employees of such Borrower or Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business; and (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by a Borrower’s board of directors.

          SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or any Senior Secured Notes Document (as in effect on the Effective Date), (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions 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 and (v) clause (a) of the

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foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

          SECTION 6.11. Amendment of Material Documents. No Loan Party will amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, (b) its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents or (c) any Senior Secured Notes Document, to the extent any such amendment, modification or waiver would be materially adverse to the Lenders (it being understood that, without limitation of this clause (c), any amendment or other modification to the Senior Secured Notes Documents that (i) changes the event of default provisions set forth therein to make such provisions more restrictive on the Loan Parties, (ii) adds any financial covenant or changes any existing financial covenant to make such covenant more restrictive on the Loan Parties or (iii) shortens the maturity date of the Senior Secured Notes or otherwise changes the payment provisions thereof to require more frequent payments of principal in respect of the Senior Secured Notes shall, in each case, be deemed to be materially adverse to the Lenders); provided that, if this Agreement or any Loan Document shall be modified or amended to change the Event of Default provisions set forth herein to make such provisions more restriction on the Loan Parties or to add any financial covenant or change any existing financial covenant to make such covenant more restrictive on the Loan Parties, then, the Loan Parties, may, with prior notice to the Administrative Agent, enter into an amendment or modification to the Senior Secured Notes Documents that provides for a similar change to the event of default provisions or financial covenant provisions of the Senior Secured Notes Documents.

          SECTION 6.12. Fixed Charge Coverage Ratio. If a Fixed Charge Coverage Trigger Event shall occur, then, as of the last day of each fiscal month during the period ( the “Fixed Charge Coverage Covenant Period”) commencing on the last day of the fiscal month ended immediately prior to the occurrence of such Fixed Charge Coverage Trigger Event and ending on the completion of the Fixed Charge Coverage Restoration Period related to such Fixed Charge Coverage Trigger Event, the Borrowers will not permit the Fixed Charge Coverage Ratio to be less than 1.10 to 1.00.

          SECTION 6.13. Certain Restrictions on Foreign Subsidiaries. The Loan Parties shall not permit any Foreign Subsidiary (a) to create, incur, assume, suffer or permit to exist any Indebtedness or any Liens on any of its properties or assets, (b) to merge or consolidate with any other Person, (c) to make or permit to exist any loans or advances to, or any investments in, any other Person, (d) to sell, transfer, lease or otherwise dispose of any asset, or (e) to declare or make, or agree to pay or make, any dividend or distribution in respect of, or to repurchase or redeem, any of its Equity Interests, in each case, to the extent any of the foregoing would violate the terms of the Senior Secured Notes Documents.

ARTICLE VII.

Events of Default

          If any of the following events (“Events of Default”) shall occur:

     (a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

     (b) the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

     (c) any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in or in connection with this Agreement or any Loan Document or any

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amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made;

     (d) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI;

     (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those which constitute a default under another Section of this Article), and such failure shall continue unremedied for a period of (i) 5 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10, 5.12 or 5.14 of this Agreement, (ii) 20 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement, or (iii) for a period beyond any applicable period of grace, if any, with respect to any other provision in any other Loan Document;

     (f) any Loan Party shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, subject to applicable grace periods, if any;

     (g) any event or condition occurs (after giving effect to an applicable grace periods) that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

     (i) any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

     (j) any Loan Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

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     (k) one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against any Loan Party or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party to enforce any such judgment or any Loan Party shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

     (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

     (m) a Change in Control shall occur;

     (n) the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or shall give notice to such effect;

     (o) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms hereof or of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the terms or provisions of any Collateral Document, after giving effect to applicable cure periods or notice requirements under such Collateral Documents;

     (p) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or

     (q) loss, theft, damage or destruction occurs with respect to any Collateral having an aggregate value in excess of $10,000,000 and such loss, theft, damage or destruction is not covered by insurance.

then, and in every such event (other than an event with respect to the Borrowers described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower Representative, take either or both of the following actions, at the same or different times:(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to the Borrowers described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without

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presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII.

The Administrative Agent

          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

          The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Loan Parties or any Subsidiary of a Loan Party or other Affiliate thereof as if it were not the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower Representative or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts

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selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

          The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

          Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower Representative. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a commercial bank or an Affiliate of any such commercial bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall 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. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article, Section 2.17(d) and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

          Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

          Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

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          Neither the Sole Bookrunner nor the Sole Lead Arranger have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.

ARTICLE IX.

Miscellaneous

          SECTION 9.01. Notices.

     (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i) if to any Loan Party, to the Borrower Representative at:

Altra Industrial Motion, Inc.
300 Granite Street, Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile No: 781-843-0709

(ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:

270 Park Avenue, 44^th Floor
New York, New York 10017
Attention: Robert A. Kaulius
Facsimile No: 646-534-2288

(iii) if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (ii) sent by facsimile shall be deemed to have been given when sent, provided 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.

     (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent as provided in this Agreement. The Administrative Agent or the Borrower Representative (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying the website address therefor.

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     (c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

          SECTION 9.02. Waivers; Amendments.

     (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

     (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Loan Parties and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender (provided that the Administrative Agent may make Protective Advances as set forth in Section 2.04), (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender, (v) increase the advance rates set forth in the definition of Borrowing Base or add new categories of eligible assets, without the written consent of each Revolving Lender, (vi) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (vii) change Section 2.20, without the consent of each Lender (other than any Defaulting Lender), (viii) release any Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender, or (ix) except as provided in clauses (d) and (e) of this Section or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be (it being understood that any change to Section 2.20 shall require the consent of the Administrative Agent, the Swingline Lender and the Issuing Bank). The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04.

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     (c) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of the all Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interest of any Loan Party that is Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty provided by such Loan Party, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $5,000,000 during any fiscal year without the prior written authorization of the Required Lenders. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

     (d) If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

          SECTION 9.03. Expenses; Indemnity; Damage Waiver.

     (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges

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and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Expenses of the Administrative Agent that the Borrowers shall be obligated to reimburse under this Section include, without limiting the generality of the foregoing, costs and expenses incurred in connection with:

     (i) appraisals (subject to the limits set forth in Section 5.11(a);

     (ii) insurance reviews;

     (iii) field examinations (subject to the limits set forth in Section 5.11(b)) and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination;

     (iv) taxes, fees and other charges for (A) lien and title searches and title insurance and (B) recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

     (v) sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

     (vi) forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

     (b) The Borrowers shall, jointly and severally, indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of their Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of their Subsidiaries, (iv) the failure of the Borrowers to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by the Borrowers for Taxes pursuant to Section 2.17(a), (b), (c), (e), (f) or (g), or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction

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by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

     (c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.

     (d) To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

     (e) All amounts due under this Section shall be payable promptly after written demand therefor.

          SECTION 9.04. Successors and Assigns.

     (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of its rights or obligations hereunder (other than in connection with a transaction permitted by Section 6.03(a)) without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

          (A) the Borrower Representative, provided that no consent of the Borrower Representative shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

          (B) the Administrative Agent; and

          (C) the Issuing Bank.

          (ii) Assignments shall be subject to the following additional conditions:

          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of

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any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower Representative and the Administrative Agent otherwise consent, provided that no such consent of the Borrower Representative shall be required if an Event of Default has occurred and is continuing;

          (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

          (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

          (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more Credit Contacts to whom all syndicate-level information (which may contain material non-public information about the Company, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

For the purposes of this Section 9.04(b), the term “Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and 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.

     (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 and shall continue to be liable for any obligations of such Lender under Section 2.17(d)). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 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 paragraph (c) of this Section.

     (iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank 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 the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

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     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.

     (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower Representative’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower Representative is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.17(f) as though it were a Lender.

     (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in

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connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers or such Loan Guarantor against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrower Representative and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.

     (a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the State of New York, but giving effect to federal laws applicable to national banks.

     (b) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. Federal or New York State court sitting in New York, New York in any action or proceeding arising out of or relating to any Loan Documents, or for

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recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

     (c) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

     (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. 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.

          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT 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 AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

          SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Requirement of Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower Representative, or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender

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on a non-confidential basis from a source other than the Borrowers. For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers; provided that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING HOLDINGS AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT HOLDINGS, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

          SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

          SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the names and addresses of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Act.

          SECTION 9.15. Disclosure Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

          SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be

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perfected only by possession. Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

          SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

ARTICLE X.

Loan Guaranty

          SECTION 10.01. Guaranty. Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to the Lenders, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses including, without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

          SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, any Loan Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

          SECTION 10.03. No Discharge or Diminishment of Loan Guaranty.

     (a) Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of

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any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other person, whether in connection herewith or in any unrelated transactions.

     (b) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

     (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

          SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against any Obligated Party, or any other person. Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

          SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

          SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the

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insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender.

          SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that neither the Administrative Agent, the Issuing Bank nor any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

          SECTION 10.08. Termination. The Lenders may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations.

          SECTION 10.09. Taxes. All payments of the Guaranteed Obligations will be made by each Loan Guarantor free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Loan Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Guarantor shall make such deductions and (iii) such Loan Guarantor shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          SECTION 10.10. Maximum Liability. The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”. This Section with respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Loan Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Guarantor hereunder shall not be rendered voidable under applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.

          SECTION 10.11. Contribution. In the event any Loan Guarantor (a “Paying Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any loss as a result of any

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realization upon any collateral granted by it to secure its obligations under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Loan Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of both the Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.

          SECTION 10.12. Liability Cumulative. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

ARTICLE XI.

The Borrower Representative

          SECTION 11.01. Appointment; Nature of Relationship. The Company is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in the Funding Account(s), at which time the Borrower Representative shall promptly disburse such Loans to the appropriate Borrower, provided that, in the case of a Revolving Loan, such amount shall not exceed such Borrower’s Availability. The Administrative Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 11.01.

          SECTION 11.02. Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

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          SECTION 11.03. Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.

          SECTION 11.04. Notices. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Unmatured Default hereunder 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 Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Administrative Agent and the Lenders. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.

          SECTION 11.05. Successor Borrower Representative. Upon the prior written consent of the Administrative Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative. The Administrative Agent shall give prompt written notice of such resignation to the Lenders.

          SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including without limitation, the Borrowing Base Certificates and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

          SECTION 11.07. Reporting. Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to the Borrower Representative a copy of its Borrowing Base Certificate and any other certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Borrowing Base Certificates and Compliance Certificates required pursuant to the provisions of this Agreement.

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

HOLDINGS AND BORROWERS:
ALTRA HOLDINGS, INC.
ALTRA INDUSTRIAL MOTION, INC.
By Name:	/s/ Glenn E. Deegan Glenn E. Deegan
Title:   Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDINGS, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES, INC.
INERTIA DYNAMICS, LLC
By Name:	/s/ Glenn E. Deegan Glenn E. Deegan
Title:	Secretary

AGENT, ISSUING BANK AND INITIAL LENDER:
JPMORGAN CHASE BANK, N.A., individually, as a Lender and as Administrative Agent, Issuing Bank and Swingline Lender
By Name:	/s/ Kathleen C. Maggi Kathleen C. Maggi
Title:	Senior Vice President

COMMITMENT SCHEDULE

	Revolving
Lender	Commitment
JPMorgan Chase Bank, N.A.	$	50,000,000.00
Total	$	50,000,000.00

EXHIBIT A

FORM OF ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:	[and is an Affiliate/Approved Fund of [identify Lender]1]
3.	Borrowers:	Altra Industrial Motion, Inc. and the other Borrowers under the Credit Agreement described below
4.	Administrative Agent:	JPMorgan Chase Bank, N.A., as the Administrative Agent under the Credit Agreement
5.	Credit Agreement:	The Credit Agreement dated as of November ___, 2009 among Altra Holdings, Inc., Altra Industrial Motion, Inc., the other Loan Parties party thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent

¹ Select as applicable.

Exhibit A

6. Assigned Interest:

		Percentage Assigned of
Aggregate Revolving	Amount of Revolving	Aggregate Revolving
Commitments	Commitment Assigned	Commitments
$	$		%
$	$		%
$	$		%

Effective Date:                      ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrowers, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR [NAME OF ASSIGNOR]
By:
	Title:

ASSIGNEE [NAME OF ASSIGNEE]
By:
	Title:

Exhibit A

Consented to and Accepted:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Issuing Bank
By
Title:
[Consented to:
ALTRA INDUSTRIAL MOTION, INC.,
as Borrower Representative
By	]2

² No consent of the Borrower Representative is required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee.

Exhibit A

ANNEX 1

CREDIT AGREEMENT
Dated as of November [__], 2009
by and among Altra Holdings, Inc.,
Altra Industrial Motion, Inc.,
the other Loan Parties party thereto,
the Lenders from time to time party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of any Borrower, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by any Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and 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 action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

Exhibit A

     3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

Exhibit A

EXHIBIT B

FORM OF BORROWING BASE CERTIFICATE

(Please see attached)

Exhibit B

BORROWING BASE REPORT

	Rpt #
Obligor: Altra Industrial Motion, Inc.	Date:
Loan Number:	Period Covered:                      to

1 Accounts Receivable Availability	0
2 Inventory Availability	0
3 Total Collateral Availability	0
4 Less: Reserves
5 Rent Reserve — 3 months
6 Reserve 2
7 Reserve 3
8 Reserve 4
9 Reserve 5
10 Reserve 6
11 Total Reserves	0
12 Net Collateral Availability	0
13 Revolver Line	50,000
14 Suppressed Availability (if any)	0
15 Maximum Borrowing Limit (Lesser of lines 12 and 13)	0
LOAN STATUS
16 Previous Loan Balance (Previous Report Line 19)
17 Less: A. Net Collections
B. Adjustments / Other
18 Add: A. Request for Funds
B. Adjustments / Other
19 New Loan Balance	0
20 Documentary LC’s/Bankers Acceptance Outstanding	0
21 Stand-By LC’s
22 Availability	0

Pursuant to, and in accordance with, the terms and provisions of that certain Loan and Security Agreement (“Agreement”), between JPM Chase (“Secured Party”) and                      (“Borrower”), Borrower is executing and delivering to Secured Party this Collateral Report accompanied by supporting data (collectively referred to as (“Report”). Borrower warrants and represents to Secured Party that this Report is true, correct, and based on information contained in Borrower’s own financial accounting records. Borrower, by the execution of this Report, hereby ratifies, confirms and affirms all of the terms, conditions and provisions of the Agreement, and further certifies on this                      day of                                         ,                     , that the Borrower is in compliance with said Agreement.

BORROWER NAME: AUTHORIZED SIGNATURE:

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

To: The Lenders parties to the
Credit Agreement Described Below

     This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of November ___, 2009 (as amended, modified, renewed or extended from time to time, the “Agreement”) among Altra Holdings, Inc. (“Holdings”), Altra Industrial Motion, Inc. (the “Company”), the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent for the Lenders and as the Issuing Bank. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

  THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWERS, THAT:

     1. I am the duly elected [          ] of the Borrower Representative;

     2. Attached as Schedule I hereto are the [audited] consolidated financial statements of Holdings and its Subsidiaries for the fiscal [year/quarter/month] ended [___] {the “Accounting Period”) required to be delivered pursuant to Section 5.01[_] of the Credit Agreement. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Company and its Subsidiaries during the Accounting Period [for quarterly or monthly financial statements add: and such financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to (i) normal year-end audit adjustments and the absence of footnotes and (ii) those exceptions to GAAP as shall be expressly identified in such financial statements];

     3. The examinations described in paragraph 2 did not disclose, except as set forth below, and I have no knowledge of (i) the existence of any condition or event which constitutes a Default during or at the end of the Accounting Period or as of the date of this Certificate or (ii) any change in GAAP or in the application thereof that has occurred since the date of the audited financial statements referred to in Section 3.04 of the Agreement;

     4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) principal place of business, (iv) the type of entity it is, (v) its organization identification number, if any, issued by its state of incorporation or other organization or (v) its state of incorporation or organization without having given the Agent the notice required by Section 4.15 of the Security Agreement; and

     5. Set forth on Schedule II attached hereto is a true, correct and complete calculation of the Loan Parties’ Available Liquidity during the period of two consecutive fiscal quarters most recently ended prior to the date of this Compliance Certificate. During the Accounting Period, the Loan Parties have complied with each of the requirements set forth in Sections 6.04(c), 6.04(d) and 6.04(e).

Exhibit C

     6. Check one of the following options based upon (i) whether a Fixed Charge Coverage Covenant Period is in effect as described in Section 6.12 of the Credit Agreement, and (ii) whether the Borrowers had LC Exposure equal to or in excess of $20,000,000, or outstanding Revolving Loans, or both:

o As of the last day of the Accounting Period, a Fixed Charge Coverage Covenant Period is in effect, and therefore, the Loan Parties are required to comply with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Credit Agreement. Accordingly, the attached Schedule III sets forth financial data and computations evidencing the Loan Parties’ compliance with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Agreement, all of which data and computations are true, complete and correct.

o As of the last day of the Accounting Period, a Fixed Charge Coverage Covenant Period is not in effect, and therefore, the Loan Parties are not required to comply with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Credit Agreement. Notwithstanding such fact, as of the last day of the Accounting Period, [the Borrowers had LC Exposure equal to or in excess of $20,000,000] / [the Borrowers had outstanding Revolving Loans] / [the Borrowers had LC Exposure equal to or in excess of $20,000,000, and outstanding Revolving Loans]. Accordingly, the attached Schedule III sets forth (for informational purposes only) financial data and computations evidencing the Loan Parties’ compliance with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Agreement.

o As of the last day of the Accounting Period, a Fixed Charge Coverage Covenant Period is not in effect, and therefore, the Loan Parties are not required to comply with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Credit Agreement. In addition, the Borrowers had LC Exposure less than $20,000,000 and no outstanding Revolving Loans. Accordingly, the Loan Parties are not required to set forth financial data and computations evidencing the Loan Parties’ compliance with the Fixed Charge Coverage Ratio covenant set forth in Section 6.12 of the Agreement.

     Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrowers have taken, are taking, or propose to take with respect to each such condition or event or (ii) the change in GAAP or the application thereof and the effect of such change on the attached financial statements:

Exhibit C

     The foregoing certifications, together with the computations set forth in Schedules II and III hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of                     , ___.

ALTRA INDUSTRIAL MOTION, INC.,

as Borrower Representative

By:

Name:

Title:

Exhibit C

SCHEDULE I

Compliance as of _________, ____ with
Provisions of Section 5.01[     ] of
the Agreement

[Audited] Consolidated Financial Statements

(Attached hereto)

Exhibit C

SCHEDULE II

Calculation of Available Liquidity for the
period of two fiscal quarters ended [                    ]

Available Liquidity:

1.	Available Liquidity for the fiscal quarter ended [                    _]3:
	(a) Average Quarterly Availability for such quarter:	$
	(b) Plus: average daily amount during such fiscal quarter of unrestricted cash of the Loan Parties in which Administrative Agent has first priority Liens, on deposit in Deposit Accounts maintained with Administrative Agent:	$
	(c) Plus: average daily market value during such fiscal quarter of unrestricted Permitted Investments of the Loan Parties in which Administrative Agent has first priority Liens, held in Securities Accounts maintained with Administrative Agent or its Affiliates:	$
	(d) Equals:(Available Liquidity for fiscal quarter ended [________])	$
2.	Available Liquidity for the fiscal quarter ended [                    ___]4:
	(a) Average Quarterly Availability for such quarter:	$
	(b) Plus: average daily amount during such fiscal quarter of unrestricted cash of the Loan Parties in which Administrative Agent has first priority Liens, on deposit in Deposit Accounts maintained with Administrative Agent:	$
	(c) Plus: average daily market value during such fiscal quarter of unrestricted Permitted Investments of the Loan Parties in which Administrative Agent has first priority Liens, held in Securities Accounts maintained with Administrative Agent or its Affiliates:	$
	(d) Equals:(Available Liquidity for fiscal quarter ended [                    ])	$

3	Insert last day of the first of the two most recently ended fiscal quarters.
4	Insert last day of the second of the two most recently ended fiscal quarters.

Exhibit C

SCHEDULE III

Compliance as of _________, ____ with
Provision of Section 6.12 of
the Agreement

Fixed Charge Coverage Ratio

	(a	)	EBITDA
			Net Income	$
			Plus: Interest Expense	$
			Plus: Income tax expense	$
			Plus: Depreciation and amortization	$
			Plus: Extraordinary non-cash charges	$
			Plus: Other non-cash charges (excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory)	$
			Plus: Non-recurring fees, cash charges and other cash expenses made or incurred in connection with the issuance of the Senior Secured Notes that are paid or otherwise accounted for within 90 days of the issuance of the Senior Secured Notes an amount not to exceed $6,000,000	$
			Minus: Cash payments on non-cash charges from prior period	$
			Minus: Extraordinary Gains and any non-cash income	$
			EBITDA for the Period	$	$
	Minus:		unfinanced portion of Capital Expenditures	$	$
					$
Divided by:
	(b	)	Fixed Charges
			Cash Interest Expense	$
			Plus: Prepayments and Scheduled principal payments on Indebtedness	$
			Plus: Expense for taxes paid in cash	$
			Plus: Dividends or distributions paid in cash	$
			Plus: Payments on Capital Lease Obligations	$
			Plus: Cash contributions to any Plan	$
			Fixed Charges for the Period	$	$
			Ratio			:1.00
			Limitation			1.10 :1.00
			In Compliance		YES  NO

Exhibit C

EXHIBIT D

FORM OF JOINDER AGREEMENT

     THIS JOINDER AGREEMENT (this “Agreement”), dated as of                     , ___, 20___, is entered into between                                                             , a                                          (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) under that certain Credit Agreement, dated as of November ___, 2009 among Altra Holdings, Inc., Altra Industrial Motion, Inc., the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent (as the same may be amended, modified, extended or restated from time to time, the “Credit Agreement”). All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree as follows:

     1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Loan Parties set forth in Article III of the Credit Agreement, (b) all of the covenants set forth in Articles V and VI of the Credit Agreement, and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 10.10 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

     2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with the Credit Agreement.

     3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:

Exhibit D

     4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

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

     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[Signature Page to Follow]

Exhibit D

     IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

[NEW SUBSIDIARY]

By:

Name:

Title:

Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:

Name:

Title:

Exhibit D

EXHIBIT E

FORM OF APPLICABLE RATE CERTIFICATE

Altra Industrial Motion, Inc.
as Borrower Representative

Credit Agreement dated November ___, 2009

For the Fiscal quarter ended                                                             

Average Quarterly Availability for such fiscal quarter $

Applicable Rate*

			Applicable Rate for		Applicable Rate for
	Applicable Rate for Revolver		Revolver		Commitment Fee
Category	CBFR Spread		Eurodollar Spread		Rate
Category_____		%		%		%

* based on pricing grid set forth in definition of Applicable Rate

     The undersigned Borrower Representative represents and warrants to JPMorgan Chase Bank, N.A. as administrative agent that the information set forth in this Certificate is true and correct in all material respects as of the date hereof.

ALTRA INDUSTRIAL MOTION, INC,

as Borrower Representative

By:

Name:

Title:

Exhibit E

DISCLOSURE SCHEDULES

TO

CREDIT AGREEMENT

     These Disclosure Schedules are delivered pursuant to the CREDIT AGREEMENT dated as of November 25, 2009 (the “Credit Agreement”), among ALTRA INDUSTRIAL MOTION, INC., the other Borrowers party hereto, the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent. Unless otherwise defined, capitalized terms have the meanings set forth in the Credit Agreement.

     No reference to or disclosure of any item or other matter in these Disclosure Schedules shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in these Disclosure Schedules. No disclosure in these Disclosure Schedules relating to any possible breach or violation of any agreement, law, or regulation shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. If and to the extent any information required to be furnished in any particular schedule is contained in any other schedule, such information shall also be deemed to be included in such particular schedule (without the need for a specific cross reference) to the extent the applicability of such furnished information to such schedule is reasonably apparent.

     These Disclosure Schedules and the information and disclosures contained in these Disclosure Schedules are intended only to qualify and limit the representations and warranties contained in the Credit Agreement and shall not be deemed to expand in any way the scope or effect of any such representations and warranties.

Index

Commitment Schedule
Schedule 3.05 — Properties
Schedule 3.06 — Disclosed Matters
Schedule 3.12 — Material Agreements
Schedule 3.14 — Insurance
Schedule 3.15 — Capitalization and Subsidiaries
Schedule 5.15 — Existing Real Estate Collateral
Schedule 6.01 — Existing Indebtedness
Schedule 6.02 — Existing Liens
Schedule 6.04 — Existing Investments
Schedule 6.10 — Existing Restrictions

Schedule 3.05

(Properties)

Real Property

	Owned/
Entity	Leased	Street	City	State	Country	ZIP
Inertia Dynamics, LLC	Leased	31 Industrial Park Road	New Hartford	CT	USA		06057
Warner Electric LLC	Owned	449 Gardner Street	South Beloit	IL	USA		61080
Warner Electric LLC	Leased	420 Pershing Street	South Beloit	IL	USA		61080
Warner Electric LLC	Leased	960 Gardner Street	South Beloit	IL	USA		61080
Formsprag LLC	Leased	485 S. Frontage Road, Suite 330	Burr Ridge	IL	USA		60521
Warner Electric LLC	Leased	6593 Revlon Drive	Belvidere	IL	USA		61008
Warner Electric, LLC	Owned	802 E. Short Street	Columbia City	IN	USA		46725
Warner Electric LLC	Leased	722 E. Swihart Street	Columbia City	IN	USA		46725
Altra Holdings, Inc.	Leased	300 Granite Street	Braintree	MA	USA		02184
TB Wood’s Corporation	Owned	801 East Industrial Avenue	Mt. Pleasant	MI	USA		48858
Formsprag LLC	Owned	23601 Hoover Road	Warren	MI	USA		48089
Formsprag LLC	Leased	23554 Hoover Road	Warren	MI	USA		48089
Boston Gear LLC	Leased	701 Carrier Drive	Charlotte	NC	USA		28216
TB Wood’s, Inc.	Leased	4970 Joule Street	Reno	NV	USA		83502
Kilian Manufacturing Corporation	Owned	1728-36 Burnet Avenue	Syracuse	NY	USA		13206
Nuttall Gear LLC	Leased	2221 Niagara Falls Boulevard	Niagara Falls	NY	USA		14304
TB Wood’s Corporation	Owned	440 North Fifth Avenue	Chambersburg	PA	USA		17201
TB Wood’s Corporation	Owned	3181 Black Gap Road	Scotland	PA	USA		18407
Ameridrives International LLC	Owned	1802 Pittsburgh Avenue	Erie	PA	USA		16502
Ameridrives International LLC	Leased	31 N. Sugan Road, Suite 3D	New Hope	PA	USA		18938
TB Wood’s Corporation	Owned	33 Houser Rd.	Fayetteville	PA	USA		17222
TB Wood’s Corporation	Owned	521 Airport Road	Chattanooga	TN	USA		37421
Warner Electric LLC	Owned	2800 Fisher Road	Wichita Falls	TX	USA		76302
Warner Electric LLC	Leased	1705 Northwest Highway, Suite 125	Grapevine	TX	USA		76051
TB Wood’s Corporation	Owned	2000 Clovis Barker Road	San Marcos	TX	USA		78666
Boston Gear LLC	Leased	2000 North Central Expressway	Plano	TX	USA		75074
Ameridrives International LLC	Leased	1411 FM 1101, Suite B	New Braunfels	TX	USA		78130
Warner Electric LLC	Leased	1701 Pearl Street	Waukesha	WI	USA		53186
Ameridrives International LLC	Leased	1680 Cornell Road	Green Bay	WI	USA		54313
TB Wood’s Enterprises, Inc.	Leased	1011 Centre Road, Suite 322	Wilmington	DE	USA		19805

2

Owned Intellectual Property

     See Attachment 3.05 setting forth the Intellectual Property of the Company.

Licensed Intellectual Property

• License Agreement dated August 17, 2009 between [*] and Ameridrives International, LLC.

• The Loan Parties own or license certain off-the-shelf software, which software is ready-made and available for sale, lease, or license to the general public.

• From time to time in the course of manufacturing products for their customers, certain customers may grant the Loan Parties limited licenses to certain of their intellectual property.

3

Schedule 3.06

(Disclosed Matters)

(a) None

(b)

Environmental Reports

          Findings or conditions disclosed in environmental reports to be delivered to the Administrative Agent on a post-closing basis which do not result in a Material Adverse Effect.

Other Environmental Matters

• One of the Loan Parties or their affiliates formerly owned a site in Roscoe, Illinois, which is known to have contamination associated with the release of chlorinated solvents. Dana Corporation, which formerly owned the Roscoe facility and sold it to Colfax Corporation, is responsible for remediating the contamination in the area of the former plant. It is the Loan Parties’ understanding that the remediation is being done pursuant to an order. In 2004, Colfax Corporation sold the power transmission business to the Company and retained ownership of the Roscoe, Illinois property and any losses arising from the ownership of the Roscoe, Illinois property. Note, the contamination did not occur while the Loan Parties or their affiliates owned or operated the site.

• A Liability Determination Report dated December 15, 1995 was issued by the Michigan Department of Environmental Qualify, Environmental Response Division, Saginaw Bay District Headquarters with respect to 801 E. Industrial Drive, Mt. Pleasant, Michigan that indicated that solid and groundwater at the facility was contaminated with hazardous substances.

• Ingersoll-Rand’s environmental consulting division continues to monitor wells at Kilian Manufacturing Corporation’s Syracuse and Toronto plants.

• As with most manufacturers, the Loan Parties generate hazardous wastes, which are transported off site for treatment or disposal. A party that arranges for the disposal or treatment of hazardous wastes may be liable for the cost of remediating if the disposal or treatment site becomes contaminated.

4

Schedule 3.12

(Material Agreements)

M&A Agreements

• LLC Purchase Agreement, dated as of October 25, 2004, among Warner Electric Holding, Inc., Colfax Corporation and Altra Holdings, Inc.

• Assignment and Assumption Agreement, dated as of November 21, 2004, between Altra Holdings, Inc. and Altra Industrial Motion, Inc.

• Share Purchase Agreement, dated as of November 7, 2005, among Altra Industrial Motion, Inc. and the stockholders of Hay Hall Holdings Limited listed therein

• Asset Purchase Agreement, dated May 18, 2006, among Warner Electric LLC, Bear Linear LLC and the other guarantors listed therein

• Agreement and Plan of Merger, dated February 17, 2007, among Altra Holdings, Inc., Forest Acquisition Corp. and TB Wood’s Corp.

o Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 11, 2007, among Altra Holdings, Inc., Forest Acquisition Corp. and TB Wood’s Corp.

Stockholders Agreements

• Amended and Restated Stockholders Agreement, dated January 6, 2005, among Altra Holdings, Inc. and the stockholders listed therein

o First Amendment to Amended and Restated Stockholders Agreement, dated May 1, 2005, among Altra Holdings, Inc. and the stockholders listed therein

o Second Amendment to Amended and Restated Stockholders Agreement among Altra Holdings, Inc. and the stockholders listed therein

8 1/8% Senior Secured Notes Agreements

• Form of 8 1/8% Senior Secured Notes due 2016

• Purchase Agreement, dated November 16, 2009 among Altra Holdings, Inc., the Guarantors party thereto and the Initial Purchasers party thereto

• Indenture, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.

• Registration Rights Agreement, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and the Initial Purchasers party thereto

• Security Agreement, dated November 25, 2009, among Altra Holdings, Inc., the Guarantors party thereto and Bank of New York Mellon Trust Company, N.A.

5

Labor Agreements

• Labor Agreement, dated as of August 11, 2007, between Warner Electric LLC (formerly Warner Electric Inc.) and International Association of Machinists and Aerospace Works, AFL-CIO, and Aeronautical Industrial District Lode 776, Local Lodge 2771

• Agreement, dated June 2, 2008 between Formsprag LLC and UAW Local 155

• Labor Agreement, effective as of February 1, 2009, between Warner Electric LLC and United Steelworkers and Local Union No. 3245

• Agreement, effective February 15, 2009, between American Enterprises MPT, L.P. and Steel, Paper and Forestry, Rubber, Manufacturing Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC Local 3199-10

Employment and Related Agreements

• Amended and Restated Employment Agreement, dated as of January 1, 2009, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Carl Christenson

• Employment Agreement, dated as of October 30, 2007, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Christian Storch

• Amended and Restated Employment Agreement, dated as of September 25, 2008, among Altra Industrial Motion, Inc., Altra Holdings, Inc. and Michael L. Hurt

• Indemnification Agreement entered into between Altra Holdings, Inc. and the Directors and certain officers

• Change of Control Agreement entered into among Altra Holdings, Inc., Altra Industrial Motion, Inc. and certain officers

Plans

• Altra Holdings, Inc. 2004 Equity Incentive Plan

o Amendment to 2004 Equity Incentive Plan

o Second Amendment to 2004 Equity Incentive Plan

• Form of Restricted Stock Award Agreement

o Form of Amendment to Restricted Stock Agreements with Michael Hurt

• Subscription Agreement, dated November 30, 2004, among Altra Holdings, Inc., the preferred purchasers and the common purchasers as listed therein

6

Schedule 3.14

(Insurance)

     See Attachment 3.14 attached hereto, setting forth a description of all insurance maintained by or on behalf of the Loan Parties as of the Effective Date, except for international policies placed locally.

7

Schedule 3.15

(Capitalization and Subsidiaries)

(a) See Attachment 3.15 attached hereto, setting forth an organizational chart of the Loan Parties.

(b) and (c)

Entity	Type	Classes	Authorized		Outstanding	Holders
Altra Holdings, Inc.	DE Corp.	Common Stock, $0.001 par value		90,000,000	26,623,171 as of 11/01/2009	Publicly traded
		Undesignated Preferred Stock, $0.001 par value		10,000,000	0	N/A
Altra Industrial Motion, Inc.	DE Corp.	Common Stock, $0.001 par value		1,000	1,000	Altra Holdings, Inc. (100%)
American Enterprises MPT Corp.	DE Corp.	Common Stock, $0.001 par value		1,000	999	Altra Industrial Motion, Inc. (100%)
Nuttall Gear LLC	DE LLC	LLC Interests		N/A	1	American Enterprises MPT Corp. (100%)
American Enterprises MPT Holdings, LLC	DE LLC	LLC Interests		N/A	100%	American Enterprises MPT Corp. (100%)
Ameridrives International, LLC	DE LLC	LLC Interests		N/A	100%	American Enterprises MPT Corp. (100%)
Formsprag LLC	DE LLC	Units		N/A	861,429	American Enterprises MPT Corp. (100%)
Warner Electric LLC	DE LLC	LLC Interests		N/A	1	Altra Industrial Motion, Inc. (100%)
Warner Electric Technology LLC	DE LLC	LLC Interests		N/A	1	Altra Industrial Motion, Inc. (100%)
Boston Gear LLC	DE LLC	LLC Interests		N/A	1	Altra Industrial Motion, Inc. (100%)
Kilian Manufacturing Corporation	DE Corp.	Stock, no par value		100	10	Altra Industrial Motion, Inc. (100%)
Warner Electric International Holding, Inc.	DE Corp.	Stock, $1.00 par value		1,100	1,000	Altra Industrial Motion, Inc. (100%)
TB Wood’s Corporation	DE Corp.	Common Stock, $0.01 par value		1,000	1,000	Altra Industrial Motion, Inc. (100%)
TB Wood’s Incorporated	PA Corp.	Common Stock, par value $0.10		2,500,000	1,125,000	TB Wood’s Corporation (100%)
TB Wood’s Enterprises Inc.	DE Corp.	Common Stock, $0.01 par value		3,000	3,000	TB Wood’s Incorporated (100%)
Inertia Dynamics LLC	DE LLC	LLC Interests		N/A	100%	Altra Industrial Motion, Inc. (100%)

8

Schedule 5.15

(Existing Real Estate Collateral)

     The following is a list of existing owned properties of the Loan Parties having a fair market value in excess of $2,500,000:

Entity	Street	City	State	Country	ZIP
TB Wood’s Corporation	440 North Fifth Avenue	Chambersburg	PA	USA		17201
Warner Electric LLC	2800 Fisher Road	Wichita Falls	TX	USA		76302
TB Wood’s Corporation	2000 Clovis Barker Road	San Marcos	TX	USA		78666

9

Schedule 6.01

(Existing Indebtedness)

Mortgage

     In June 2006, Holdings entered into a mortgage on its building in Heidelberg, Germany with a local bank. In the third quarter of 2009, Holdings re-financed the mortgage. Holdings borrowed an additional €1.0 million. The new mortgage has an interest rate of 3.5% and is payable in monthly installments over three years. As of November 23, 2009 and December 31, 2008, the mortgage had a remaining principal balance outstanding of €2.2 million, or $3.3 million, and €1.6 million or $2.3 million, respectively.

Capital Leases

     The Loan Parties lease certain equipment under capital lease arrangements, whose obligations are included in both short-term and long-term debt.

Intercompany Indebtedness

     As of the Effective Date, the Loan Parties are owed approximately $62.1 million in intercompany indebtedness from certain foreign Subsidiaries of the Loan Parties and owe approximately $3.0 million in intercompany indebtedness to certain foreign Subsidiaries of the Loan Parties.

Defeasance of 9% Senior Secured Notes

     The proceeds of Holdings’ concurrent offering of 8.125% Senior Secured Notes along with cash on hand of the Loan Parties will be used to repurchase and/or redeem the Company’s outstanding 9% Senior Secured Notes due 2011.

Letters of Credit

     As of the Effective Date, certain letters of credit in the aggregate face amount of $9,266,272.79 (collectively, the “Existing LCs”), which were issued by Wells Fargo Foothill, Inc. for the account of the Borrowers under the Existing Credit Agreement remain outstanding. As of the Effective Date, the Issuing Bank has issued a Letter of Credit having an initial face amount of $9,729,586.43 to Wells Fargo Foothill, Inc. for the account of the Borrowers to secure the obligations of the Borrowers in respect of the Existing LCs, until such time as all of the Existing LCs shall have been returned to Wells Fargo Foothill, Inc. and cancelled.

Variable Rate Demand Revenue Bonds

     Holdings has obligations under certain Variable Rate Demand Revenue Bonds issued under the authority of the industrial development corporations of the City of San Marcos, Texas and City of the Chattanooga, Tennessee, in the amounts of $3.0 million and $2.3 million,

10

respectively. These bonds bear variable interest rates and mature in April, 2024 and April, 2022, respectively.

11

Schedule 6.02

(Existing Liens)

UCC Financing Statements

Jurisdiction	Debtor	Secured Party	File No.	Date	Collateral
DE — Secretary of State	Warner Electric LLC	NMHG Financial Services Inc.	60767475	03/06/2006	Certain equipment
		Wells Fargo Equipment Finance, Inc.	61080308	03/30/2006	Certain equipment
			61970144 (Assn)	06/09/2006
			62087708 (Assn)	06/19/2006
		People’s Capital and Leasing Corp.	62702389	08/04/2006	Certain equipment
			70018860 (Assn)	12/26/2006
			70522614 (Assn)	02/08/2007
		U.S. Bancorp	63462645	10/06/2006	Certain equipment
		People’s Capital and Leasing Corp.	70409630	02/01/2007	Certain equipment
		Xerox Corporation	70423201	02/01/2007	Certain equipment
		Xerox Corporation	82073474	06/17/2008	Certain equipment
		TCF Equipment Finance, Inc.	84016398	12/03/2008	Certain equipment
			84198485 (Assn)	12/17/2008
		U.S. Bancorp	90551793	02/19/2009	Certain equipment
		Office Equipment Leasing Co.	90566601	02/20/2009	Certain equipment
		Xerox Corporation	93045819	9/23/2009	Xerox 4112CPC
		U.S. Bancorp	93485759	10/29/2009	Certain equipment
DE — Secretary of State	Nuttall Gear LLC	United States Steel Corporation	84061634	12/08/2008	Certain equipment
DE — Secretary of State	Kilian Manufacturing Corporation	Raymond Leasing	43545235	12/15/2004	Certain equipment
DE — Secretary of State	Inertia Dynamics, LLC	Wells Fargo Equipment Finance, Inc.	60517920	02/13/2006	Certain equipment

12

Jurisdiction	Debtor	Secured Party	File No.	Date	Collateral
DE — Secretary of State	Formsprag LLC	Citibank, N.A.	52264787	07/22/2005	Certain accounts receivable
		Ervin Leasing Company	70465202	02/05/2007	Certain equipment
		Ervin Leasing Company	71754208	05/07/2007	Certain equipment
		Ervin Leasing Company	83519319	10/14/2008	Certain equipment
		Ervin Leasing Company	83520341	10/14/2008	Certain equipment
		Ervin Leasing Company	83520358	10/14/2008	Certain equipment
		Jules and Associates, Inc.	90956299	03/25/2009	Certain equipment
		Jules and Associates, Inc.	90956349	03/25/2009	Certain equipment
PA — Department of State	TB Wood’s Incorporated	JPMorgan Chase Bank	34711519	12/14/2001	Illegible
			34990050 (Assn)	03/04/2002
			2006061400271 (Continuation)	06/14/2006
		Crown Credit Company	2005011400558	01/14/2005	Certain equipment
		Valenite, LLC	2005081504374	08/15/2005	Certain inventory
		General Electric Capital Corp.	2006062105264	06/21/2006	Certain equipment
DE — Secretary of State	Boston Gear LLC	Dell Financial Services LLC	40541989	2/26/2004	All computer equipment and peripherals.
			83122403 (Continuation)	9/15/2008
DE — Secretary of State	Ameridrives International, LLC	Daewoo Heavy Industries America Corporation	50805771	03/10/2005	One Daewoo Model DHM-800 S/N HM800158
		TCF Equipment Finance, Inc.	63313517	09/07/2006	USED 1995 FS-630-200 Fellows CNC Hydrostroke High Speed Gear Shaping Machine
		TCF Equipment Finance, Inc.	64516779	12/22/2006	Doosan Infracore DMV5025/50 taper high precision machining center and Doosan Infracore Puma 400B high performance turning center
		People’s Capital and Leasing Corp.	73234191	08/24/2007	Mitsubishi machine model 3015HV-20CF2-PRT

13

Jurisdiction	Debtor	Secured Party	File No.	Date	Collateral
		TCF Equipment Finance, Inc.	73571352	08/27/2007	One Puma 400B Fanuc 21iTB control and One Puma TL2500L with Fanuc 18iTB Control
		Mazak Corporation	91642856	05/26/2009	Mazak machine serial number 215289
DE — Secretary of State	Altra Industrial Motion, Inc.	TCF Equipment Finance, Inc.	84016398	12/03/2008	Hardinge-Bridgeport GX 480 Vertical Machining Center, and Okuma 2 SP-V40

Judgments

     Judgment against “TB Woods” in the jurisdiction of Franklin County Prothonotary, Pennsylvania, Case No. 2002-1518, filed June 6, 2002, for $1,871.70 by plaintiff Kegerreis/Kyler, et. al.

Defeasance of 9% Senior Secured Notes

     The proceeds of Holdings’ concurrent offering of 8.125% Senior Secured Notes along with cash on hand of the Loan Parties will be used to repurchase and/or redeem the Company’s outstanding 9% Senior Secured Notes due 2011. Liens associated with the 9% Senior Secured Notes will not be terminated until such repurchase and redemption is complete.

Letters of Credit

     As of the Effective Date, certain letters of credit in the aggregate face amount of $9,266,272.79 (collectively, the “Existing LCs”), which were issued by Wells Fargo Foothill, Inc. for the account of the Borrowers under the Existing Credit Agreement remain outstanding. As of the Effective Date, the Issuing Bank has issued a Letter of Credit having an initial face amount of $9,729,586.43 to Wells Fargo Foothill, Inc. for the account of the Borrowers to secure the obligations of the Borrowers in respect of the Existing LCs, until such time as all of the Existing LCs shall have been returned to Wells Fargo Foothill, Inc. and cancelled.

Mortgage

     In June 2006, Holdings entered into a mortgage on its building in Heidelberg, Germany with a local bank. In the third quarter of 2009, Holdings re-financed the mortgage. Holdings borrowed an additional €1.0 million. The new mortgage has an interest rate of 3.5% and is payable in monthly installments over three years. As of November 23, 2009 and December 31, 2008, the mortgage had a remaining principal balance outstanding of €2.2 million, or $3.3 million, and €1.6 million or $2.3 million, respectively.

14

Schedule 6.04
(Existing Investments)

Existing Equity Investments

Entity	Jurisdiction
Altra Industrial Motion, Inc.	Delaware
Altra Industrial Motion (Shenzhen) Ltd	China
3091780 Nova Scotia Company	Nova Scotia, Canada
American Enterprises MPT Corp.	Delaware
American Enterprises MPT Holdings, LLC	Delaware
Ameridrives International, LLC	Delaware
Bibby Group Ltd.	United Kingdom
Bibby Transmissions Ltd.	United Kingdom
Bibby Turboflex SA	South Africa
Boston Gear LLC	Delaware
Dynatork Air Motors Ltd.	United Kingdom
Dynatork, Ltd.	United Kingdom
Formsprag LLC	Delaware
The Hay Hall Group Ltd.	United Kingdom
Hay Hall Holdings Ltd.	United Kingdom
Huco Engineering Industries Ltd.	United Kingdom
Huco Power Transmission, Ltd.	United Kingdom
Inertia Dynamics, LLC	Delaware
Kilian Canada, ULC	Nova Scotia, Canada
Kilian Manufacturing Corporation	Delaware
Matrix International GmbH	Germany
Matrix International, Ltd.	United Kingdom
Nuttall Gear LLC	Delaware
Rathi Turboflex Pty Ltd.	India
Saftek Ltd.	United Kingdom
Stieber GmbH	Germany
Torsiflex Ltd.	United Kingdom
Turboflex Ltd.	United Kingdom
Twiflex Ltd.	United Kingdom
Warner Electric Australia Pty. Ltd.	Australia
Warner Electric Europe SAS	France
Warner Electric Group GmbH	Germany
Warner Electric (Holding) SAS	France
Warner Electric International Holding, Inc.	Delaware
Warner Electric LLC	Delaware
Warner Electric (Netherlands) Holding, B.V.	Netherlands
Warner Electric (Singapore), Ltd.	Singapore
Warner Electric (Taiwan) Ltd.	Taiwan
Warner Electric Technology LLC	Delaware
Warner Electric (Thailand) Ltd.	Thailand
Warner Electric UK Group Ltd.	United Kingdom
Warner Electric UK Holding, Ltd.	United Kingdom
Warner Shui Hing Limited, (HK)	Hong Kong
Wichita Company Ltd.	United Kingdom
Industrial Blaju, S.A. de C.V.	Mexico
TB Wood’s Corporation	Delaware
T.B. Wood’s Canada Ltd.	Canada

15

Entity	Jurisdiction
TB Wood’s Enterprises, Inc.	Delaware
TB Wood’s Incorporated	Pennsylvania

Existing Joint Ventures

     Warner Electric LLC holds 40% of Elastomeric Actuators Inc.

16

Schedule 6.10

(Existing Restrictions)

     None.

17

Attachment 3.05 — Owned Intellectual Property

     See attached.

1

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

TM

USA

Boston Gear LLC

Boston Gear

ACE

1771190

5/18/1993

74253998

3/10/1992

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERICAN

0529539

8/22/1950

71578852

4/29/1949

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERICARDAN

2,488,262

09/11/01

75621192

01/15/1999

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERIDISC & Design

0802185

1/18/1966

72219296

5/19/1965

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERIDRIVES

2168489

6/23/1998

75204229

11/25/1996

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERIFLEX

1000720

12/31/1974

72444883

1/2/1973

Active

Patent

USA

Warner Electric Technology LLC

Warner

AMPLIFYING CLUTCH WITH RADIALLY CONTRACTIBLE SHOE

4,330,054

5/18/1982

151340

5/19/1980

Active

Patent

Singapore

Warner Electric Technology Inc.

FORMSPRAG

ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH

92,564

02/28/2005

200206523-3

04/19/2001

Active

Patent

USA

Warner Electric Technology LLC

FORMSPRAG

ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH

6,257,388

7/10/2001

09/556510

4/24/2000

Active

Patent

Turkey

Warner Electric Technology Inc.

FORMSPRAG

ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH

TR2002 02428B

7/21/2003

02/2428

10/24/2002

Active

Patent

Malaysia

Warner Electric Technology LLC

FORMSPRAG

ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH

MY-117,623-A

7/31/2004

P120011880

04/20/2001

Active

Patent

Israel

Warner Electric Technology Inc.

FORMSPRAG

ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH

152,385

08/05/2009

152385

10/20/2002

Active

Patent

USA

Warner Electric Technology LLC

WARNER

APPARATUS AND METHOD FOR SENSING CLUTCH SLIPPAGE

4,949,828

8/21/1990

07/260,913

10/21/1988

Active

Patent

USA

Warner Electric Technology LLC

ALCOILS

APPARATUS FOR RESISTANCE BONDING ELECTROMAGNETIC COILS

5,091,619

2/25/1992

07/543,706

6/26/1990

Active

Patent

USA

Warner Electric Technology LLC

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

5,150,779

9/29/1992

820344

1/14/1992

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0552011

3/26/1997

EP93300169.5

1/12/1993

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0552011

3/26/1997

EP93300169.5

1/12/1993

Active

Patent

France

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0552011

3/26/1997

EP93300169.5

1/12/1993

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0552011

3/26/1997

EP93300169.5

1/12/1993

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

4,445,606

5/1/1984

06/330,610

12/14/1981

Active

Patent

USA

Warner Electric Technology Inc.

WARNER

ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

6,557,236

05/06/2003

10/027,095

12/20/2001

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

6,364,084

4/2/2002

09/515779

2/29/2000

Active

Patent

South Korea

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

828,851

05/02/2008

7013844/2001

10/29/2001

Active

Patent

Mexico

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

232,309

11/23./2005

PA/a/2001/010462

10/16/2001

Active

Patent Appl.

Japan

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

2001-563,800

10/29/2001

Pending

Patent

Europe

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

1,171,721

05/03/2006

09109241.0

02/14/2001

Active

TM

USA

Warner Electric Technology LLC

Warner

AUTOGAP

681,746

07/14/1959

72046678

2/26/1958

Active

TM

United Kingdom

Warner Electric Technology LLC

Warner

AUTOGAP

795572

09/17/1959

09/17/1959

Active

TM

Canada

Boston Gear LLC

Boston Gear

BEAR-N-BRONZ & Design

TMA116839

02/05/1960

252099

07/23/1959

Active

TM

USA

Boston Gear LLC

Boston Gear

BEAR-N-BRONZ

0603829

3/29/1955

71665847

5/6/1954

Active

TM

Canada

Boston Gear LLC

Boston Gear

BG & Design

TMA116836

02/05/1960

252095

07/23/1959

Active

TM

USA

Boston Gear LLC

Boston Gear

BG & Design

0298486

10/25/1932

71327723

6/4/1932

Active

Patent

Canada

Warner Electric Technology Inc.

FORMSPRAG

IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH

2024208

07/03/2001

2024208

08/29/1990

Active

Patent

Japan

Warner Electric Technology Inc.

Warner

CLUTCH BRAKE ASSEMBLY

3,723,872

09/30/2005

329,410/95

11/27/1995

Active

Patent Appl.

Germany

Warner Electric Technology Inc.

Warner

CLUTCH BRAKE ASSEMBLY

19544321.7

11/28/1995

Pending

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

CLUTCH BRAKE ASSEMBLY

2,295,656

08/12/1998

9524410.9

11/29/1995

Active

Patent

France

Warner Electric Technology Inc.

WARNER

CLUTCH BRAKE ASSEMBLY

2727485

07/17/1998

9514181

011/30/1995

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTRONG & Design

0837074

10/17/1967

72251147

7/27/1966

Active

TM

Canada

Boston Gear LLC

Boston Gear

BOST-BRONZ

TMA118130

05/20/1960

252100

07/23/1959

Active

TM

USA

Boston Gear LLC

Boston Gear

BOST-BRONZ

0547544

9/4/1951

71597836

5/20/1950

Active

TM

USA

Boston Gear LLC

Boston Gear

BOST-BRONZ

0612905

9/27/1955

71677082

11/22/1954

Active

TM

USA

Boston Gear LLC

Boston Gear

BOST-FLEX

1111218

1/16/1979

73163090

3/21/1978

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTON

0522912

3/28/1950

71535926

9/27/1947

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTON & Design

1374572

12/10/1985

73514378

12/19/1984

Active

TM

France

Boston Gear LLC

Boston Gear

BOSTON

1624494

04/12/1991

INPI121128

04/13/1989

Active

TM

Canada

Boston Gear LLC

Boston Gear

BOSTON GEAR

172185

9/27/1985

Active

TM

Canada

Boston Gear LLC

Boston Gear

BOSTON GEAR & Design

TMA172185

10/23/1970

318048

11/29/1968

Active

TM

Mexico

IMO Industries Inc.

Boston Gear

BOSTON GEAR

473663

9/15/1994

161734

02/26/1993

Active

TM

Australia

Boston Gear LLC

Boston Gear

BOSTON GEAR

522543

11/6/1989

11/06/1989

Active

TM

Mexico

IMO Industries Inc.

Boston Gear

BOSTON GEAR

658794

3/24/2000

161733

02/26/1993

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTON GEAR

0905805

1/12/1971

72338165

9/17/1969

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTON GEAR

0905846

1/12/1971

72338166

9/17/1969

Active

TM

France

Boston Gear LLC

Boston Gear

BOSTON GEAR

1624494

04/12/1991

INPI121227

04/03/1989

Active

TM

USA

Boston Gear LLC

Boston Gear

BOSTONE

1131198

2/26/1980

73163091

3/21/1978

Active

Patent

USA

Warner Electric Technology LLC

Warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

5,445,259

8/29/1995

08/114,320

8/30/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

0645550

3/29/1995

EP94306356.0

8/30/1994

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

0645550

3/29/1995

94306356.0

8/30/1994

Active

Patent

France

Warner Electric Technology Inc.

Warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

0645550

3/29/1995

EP94306356.0

8/30/1994

Active

TM

USA

Formsprag LLC

Formsprag

CEBMAG

1352456

08/06/1985

73513313

12/13/1984

Active

TM

USA

Formsprag LLC

Formsprag

CECON

2871858

08/10/04

78/300,412

09/15/2003

Active

TM

USA

Boston Gear LLC

Boston Gear

CENTRIC

1365217

10/15/1985

73434105

7/11/1983

Active

Patent

USA

Warner Electric Technology LLC

Warner

CLUTCH BRAKE ASSEMBLY

5,549,186

8/27/1996

08/346,622

11/30/1994

Active

Patent

USA

Warner Electric Technology LLC

Warner

CLUTCH WITH FAIL-SAFE HELICAL SPRING

4,418,811

12/6/1983

06/260,413

5/4/1981

Active

Patent

USA

Warner Electric Technology LLC

Warner

CLUTCH WITH SPACER FOR SUPPORTING A BEARING

5,285,882

2/15/1994

07/996,122

12/23/1992

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

CLUTCH WITH SPACER FOR SUPPORTING A BEARING

EP0604190

9/3/1997

EP93310365.7

12/21/1993

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

CLUTCH WITH SPACER FOR SUPPORTING A BEARING

EP0604190

9/3/1997

93310365.7

12/21/1993

Active

Patent

France

Warner Electric Technology Inc.

Warner

CLUTCH WITH SPACER FOR SUPPORTING A BEARING

EP0604190

9/3/1997

EP93310365.7

12/21/1993

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

CLUTCH WITH SPACER FOR SUPPORTING A BEARING

EP0604190

9/3/1997

EP93310365.7

12/21/1993

Active

Patent

USA

Warner Electric Technology LLC

WARNER

CLUTCH/BRAKE UNIT

5,033,595

7/23/1991

07/535,428

6/8/1990

Active

TM

USA

Boston Gear LLC

Boston Gear

DCX

1689927

6/2/1992

74151919

3/27/1991

Active

TM

USA

Boston Gear LLC

Boston Gear

DCX PLUS

1794125

9/21/1993

74151939

3/27/1991

Active

TM

USA

Nuttall Gear LLC

Nuttall Gear

DELROYD

3,025,384

12/13/2005

76/586088

4/12/2004

Active

Patent

USA

Warner Electric Technology LLC

ALCOILS

DIGITAL CONTROL SYSTEM FOR ELECTROMAGNETIC CLUTCH

5,094,332

3/10/1992

07/664,075

12/31/1990

Active

Patent

USA

Warner Electric Technology Inc.

Formsprag

DUAL START DRIVE SYSTEM

4,621,720

11/11/1986

06/813,538

12/26/1985

Active

Patent

Japan

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

3,507,954

1/9/2004

288,154/92

10/09/1992

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

5,119,918

6/9/1992

07/774,92

10/11/1991

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

EP0637022

5/29/1996

EP92309229.0

10/9/1992

Active

Patent

Taiwan

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

NI61152

6/23/1993

81105630

7/16/1992

Active

Patent

South Korea

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

232799

9/8/1999

18665/1992

10/10/1992

Active

Patent

Italy

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

EP0637022

5/29/1996

EP92309229.0

10/9/1992

Active

Patent

Germany

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

EP0637022

5/29/1996

P69211088.7

10/9/1992

Active

Patent

France

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

EP0637022

5/29/1996

EP92309229.0

10/9/1992

Active

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent

Europe

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE

EP0637022

5/29/1996

EP92309229.0

10/9/1992

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC COUPLING ARMATURE ASSEMBLY WITH FLUX ISOLATOR SPRINGS

5,119,915

6/9/1992

07/700,439

5/15/1991

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC

4,951,797

8/28/1990

07/262,358

10/25/1988

Active

Patent

Japan

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC

2761413

3/20/1998

275764/89

10/23/1989

Active

Patent

Canada

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC

1315218

3/30/1993

614020

9/28/1989

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.

5,096,036

3/17/1992

07/531,465

5/31/1990

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.

2244529

2/2/1994

9111037.9

5/22/1991

Active

Patent

Germany

Warner Electric Technology Inc.

warner

ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.

G9106611.5

10/24/1991

G9106611.5

5/29/1991

Active

Patent

France

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.

9106536

1/20/1995

9106536

5/30/1991

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

4,974,705

12/4/1990

07/451,609

12/18/1989

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

EP0434272

7/20/1994

EP90313378

12/10/1990

Active

Patent

Italy

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

EP0434272

7/20/1994

EP90313378

12/10/1990

Active

Patent

Germany

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

EP0434272

7/20/1994

90313378.3

12/10/1990

Active

Patent

France

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

EP0434272

7/20/1994

EP90313378

12/10/1990

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS

EP0434272

7/20/1994

EP90313378

12/10/1990

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH - ESS

5,052,534

10/1/1991

07/605,517

10/30/1990

Active

TM

USA

Warner Electric Technology LLC

Warner

ELECTRO-MODULE

0838675

11/14/1967

72200306

8/20/1964

Active

TM

USA

Warner Electric Technology LLC

Warner

ELECTRO-PACK

0741888

12/11/1962

72127440

9/7/1961

Active

TM

USA

Warner Electric Technology LLC

Formsprag

F AND DESIGN

0743735

01/15/1963

72125482

8/7/1961

Active

Patent

USA

Warner Electric Technology LLC

Warner

FIELD ASSEMBLY FOR AN ELECTROMAGNET

5,250,921

10/5/1993

07/600,199

10/19/1990

Active

Patent

USA

Warner Electric Technology LLC

Wichita

FLUID OPERATED BRAKE DEVICE (MISTRAL BRAKE)

5,908,092

6/1/1999

256949

7/27/1994

Active

Patent

USA

Warner Electric Technology LLC

WARNER

FORD AEROSTAR TRANSFER CASE CLUTCH

4,828,091

5/9/1989

07/152,820

2/5/1988

Active

TM

Switzerland

Warner Electric Technology LLC

Formsprag

FORMCHROME

P-412221

10/18/1994

07371/1993.0

05/17/1993

Active

TM

USA

Warner Electric Technology LLC

Formsprag

FORMCHROME

0867512

04/01/1969

72300576

6/17/1968

Active

TM

Japan

Warner Electric Technology LLC

Formsprag

FORMCHROME

1390521

09/28/1979

114147/1975

09/17/1975

Active

TM

Switzerland

Warner Electric Technology LLC

Formsprag

FORM-LOCK

P-412226

10/18/1994

7378/1993.2

05/17/1993

Active

TM

USA

Warner Electric Technology LLC

Formsprag

FORM-LOCK

0870852

06/10/1969

72300575

6/17/1968

Active

Patent

Singapore

Warner Electric Technology Inc.

Formsprag

FORMLOCK SHOES WITH FLATS

52,991

04/30/2004

9702069-7

06/27/1997

Active

Patent

India

Warner Electric Technology Inc.

Formsprag

FORMLOCK SHOES WITH FLATS

200,445

05/25/2006

1122/MAS/97

05/27/1997

Active

Patent Appl.

Germany

Warner Electric Technology Inc.

Formsprag

FORMLOCK SHOES WITH FLATS

19726427.3

06/20/1997

Pending

Patent

United Kingdom

Warner Electric Technology Inc.

Formsprag

FORMLOCK SHOES WITH FLATS

2,314,388

05/31/2000

97127633

06/17/1997

Active

TM

Benelux

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

15729

01/21/1971

248

01/21/1971

Active

TM

Sweden

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

83978

12/20/1957

Active

TM

Canada

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

TMA108144

09/27/1957

0239971

03/21/1957

Active

TM

Mexico

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

205855

09/02/1997

114172

06/22/1997

Active

TM

Switzerland

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

P-287755

04/26/1997

01681/1977

04/01/1997

Active

TM

Italy

Warner Electric Technology Inc.

FORMSPRAG

FORMSPRAG

781,460

05/27/1958

X

04/23/1957

Active

TM

Switzerland

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG & Design

P-412187

10/14/1994

07373/1993.3

05/17/1993

Active

TM

China

Warner Electric Technology Inc.

FORMSPRAG

FORMSPRAG

520390

05/30/1990

8927113

Active

TM

India

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

694707

05/11/2005

694707

01/17/1996

Active

TM

Germany

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

708841

11/28/1957

708 841/7 (F 7773

)

04/02/1957

Active

TM

USA

Warner Electric Technology LLC

FORMSPRAG

FORMSRPAG & Design

0444642

01/15/1952

71510384

10/7/1946

Active

TM

USA

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

1216418

11/16/1982

73326809

9/4/1981

Active

TM

Japan

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

1169444

11/06/1975

127386/1971

11/24/1971

Active

TM

France

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

1197077

03/10/1972

622349

Active

TM

Spain

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

2006258

(3)

07/05/1996

2006258

(3)

Active

TM

Japan

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG

4018891

06/27/1997

135207/1995

12/28/1995

Active

TM

Brazil

Warner Electric Technology Inc.

FORMSPRAG

FORMSPRAG

770219144

04/20/1982

X

08/12/1997

Active

TM

Germany

Warner Electric Technology LLC

FORMSPRAG

FORMSPRAG PCE

998923

03/07/1980

D34115/7WZ

06/07/1979

Active

Patent

USA

Warner Electric Technology LLC

Warner

FRICTION FACE FOR A MAGNETIC COUPLING

4,718,529

1/12/1988

06/891,156

7/31/1986

Active

TM

USA

Boston Gear LLC

Boston Gear

GTS DESIGN

1111207

1/16/1979

73135945

8/1/1977

Active

Patent

Japan

Warner Electric Technology Inc.

warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

3,966,368

08/29/2007

227,370/94

08/30/1994

Active

Patent

Europe

Warner Electric Technology Inc.

warner

HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC

EP0645550

9/9/1994

EP94306356.0

8/30/1994

Active

TM

USA

Boston Gear LLC

Boston Gear

I-MAG

1852254

9/6/1994

74385497

5/3/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Formsprag

IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH

EP2237855

1/12/1994

9021038.6

9/27/1990

Active

Patent

Israel

Warner Electric Technology Inc.

Formsprag

IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH

95688

11/19/1992

95688

9/14/1990

Active

TM

Canada

Warner Electric Technology Inc.

Wichita

KOPPER KOOL

TMA568894

10/06/2002

1001794

01/12/1999

Active

TM

USA

Warner Electric Technology LLC

Wichita

KOPPER KOOL

1258259

11/22/1983

73334553

10/28/1981

Active

TM

Japan

Warner Electric Technology LLC

Wichita

KOPPER KOOL

1759530

04/23/1985

84256/1981

10/08/1981

Active

TM

Germany

Warner Electric Technology LLC

Wichita

KOPPER KOOL

1,039,311

10/06/1982

D36687/7

10/08/1981

Active

TM

Spain

Warner Electric Technology Inc.

Wichita

KOPPER KOOL & Design

1662162

06/05/1992

1662161

10/17/1991

Active

TM

USA

Warner Electric Technology LLC

Formsprag

LLH

1759504

03/23/1993

74303730

8/13/1992

Active

Patent

USA

Warner Electric Technology LLC

Warner

LOCATING RING FOR ENCAPULATING A COIL

5,497,136

3/5/1996

08/238,619

5/4/1994

Active

TM

USA

Warner Electric Technology LLC

Warner

MAG STOP

1,851,941

08/30/1994

74327472

11/2/1992

Active

Patent

South Korea

Warner Electric Technology Inc.

Warner

MAG STOP CLUTCH WITH CENTER POLE

530,579

11/16/2005

15334/1999

4/29/1999

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/99

Active

Patent

USA

Warner Electric Technology LLC

Warner

MAG STOP CLUTCH WITH CENTER POLE

5,971,121

10/26/1999

09/070,068

4/30/1998

Active

Patent

Mexico

Warner Electric Technology Inc.

Warner

MAG STOP CLUTCH WITH CENTER POLE

211,337

11/12/2002

99.3856

4/26/1999

Active

Patent

USA

Warner Electric Technology LLC

WARNER

MAGNETIC FIXTURE ASSEMBLY

4,777,463

10/11/1988

07/101,379

9/25/1987

Active

TM

Finland

Warner Electric Technology Inc.

Wichita

MAGNUM

111882

05/20/1991

T198601641

04/24/1986

Active

TM

United Kingdom

Warner Electric Technology Inc.

Wichita

MAGNUM

879962

05/25/1965

879962

05/25/1965

Active

TM

Germany

Warner Electric Technology Inc.

Wichita

MAGNUM

1147081

10/02/1989

T 25 465

04/17/1986

Active

TM

United Kingdom

Warner Electric Technology Inc.

Wichita

MAGNUM

1263574

09/05/1989

1263574

03/17/1986

Active

TM

USA

Warner Electric Technology LLC

Wichita

MAGNUM

2,892,316

10/12/2004

76/336,606

11/13/2001

Active

TM

France

Warner Electric Technology Inc.

Wichita

MAGNUM

1354695

05/14/1986

796007

Active

TM

Spain

Warner Electric Technology LLC

Wichita

MAGNUM

1,142,629

10/02/1989

04/11/1986

Active

TM

Australia

Warner Electric Technology Inc.

Wichita

MAGNUM

445,110

06/12/1989

445110

05/09/1986

Active

TM

USA

Formsprag LLC

Marland

MARLAND

2667819

12/31/2002

76118280

8/28/2000

Active

TM

USA

Warner Electric Technology LLC

Warner

MESUR-FIL

0990826

08/13/1974

72464823

8/6/1973

Active

Patent

USA

Warner Electric Technology LLC

Warner

METHOD OF FORMING A COUPLING DISC FOR AN ELECTROMAGNETIC COUPLING

4,685,202

8/11/1987

06/818,217

1/13/1986

Active

Patent

USA

Warner Electric Technology LLC

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

5,125,255

6/30/1992

07/721,972

6/27/1991

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

EP0521640

1/18/1995

EP92305695.6

6/22/1992

Active

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent

Japan

Warner Electric Technology Inc.

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

3316595

06/14/2002

191,371/92

06/26/1992

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

EP0521640

1/18/1995

P69201221.4

6/22/1992

Active

Patent

France

Warner Electric Technology Inc.

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

EP0521640

1/18/1995

EP92305695.6

6/22/1992

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

EP0521640

1/18/1995

EP92305695.6

6/22/1992

Active

Patent

USA

Warner Electric Technology LLC

WARNER

METHOD OF MANUFACTURING A COMPONENT FOR AN ELECTROMAGNETIC FRICTION CLUTCHASSEMBLY

5,708,955

1/13/1998

08/558,906

11/16/1995

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

EP0867630

10/16/2002

98302223.7

03/24/1998

Active

Patent

France

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

EP0867630

10/16/2002

98302223.7

03/24/1998

Active

Patent Appl.

Japan

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

96,867/98

03/25/1998

Pending

Patent

USA

Warner Electric Technology LLC

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

5,920,981

7/13/1999

08/823,990

3/25/1997

Active

Patent

Italy

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

EP0867630

10/16/2002

98302223.7

03/24/1998

Active

Patent

Germany

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

EP0867630

10/16/2002

98302223.7

03/14/1998

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY

0867630

10/16/2002

98302223.7

03/24/1998

Active

TM

Finland

Warner Electric Technology LLC

Wichita

MISTRAL

TM 142083

01/22/1996

T199104906

10/16/1991

Active

TM

Benelux

Warner Electric Technology LLC

Wichita

MISTRAL

508812

10/21/1991

770814

Active

TM

Australia

Warner Electric Technology Inc.

Wichita

MISTRAL

564784

06/29/1993

564784

10/03/1991

Active

TM

USA

Warner Electric Technology LLC

Wichita

MISTRAL

2168734

06/30/1998

74240876

1/28/1992

Active

TM

United Kingdom

Warner Electric Technology LLC

Wichita

MISTRAL

1475775

06/27/1997

09/07/1991

Active

TM

France

Warner Electric Technology Inc.

Wichita

MISTRAL

1700743

10/22/1991

Active

TM

Germany

Warner Electric Technology LLC

Wichita

MISTRAL

2025422

11/30/1992

T32561

10/19/1991

Active

TM

Japan

Warner Electric Technology LLC

Wichita

MISTRAL

4033376

07/25/1997

100751/1991

09/27/1991

Active

TM

USA

Boston Gear LLC

Boston Gear

MOTOR MULTIPLIER

1131648

3/11/1980

73184680

9/5/1978

Active

Patent

USA

Warner Electric Technology LLC

Wichita

MULTIPLE ACTUATOR BRAKE

6,029,782

2/29/2000

08/047,002

3/24/1998

Active

Patent

USA

Warner Electric Technology LLC

Warner

NEWFLEX II

4,493,407

1/15/1985

06/330,651

12/14/1981

Active

TM

USA

Nuttall Gear LLC

Nuttall Gear

NGC & Design

3,031,121

12/20/2005

76/586087

4/12/2004

Active

TM

USA

Nuttall Gear LLC

Nuttall Gear

Nuttall

3,031,120

12/20/2005

76/586086

4/12/2004

Active

TM

USA

Boston Gear LLC

Boston Gear

OPTIMOUNT

0670192

11/25/1958

72046238

2/20/1958

Active

TM

USA

Warner Electric Technology LLC

Warner

PCE

1136601

06/03/1980

73193726

11/17/1978

Active

TM

Japan

Warner Electric Technology LLC

Warner

PCE

1551186

11/26/1982

85449/1978

11/22/1978

Active

TM

Canada

Boston Gear LLC

Boston Gear

RATIO MOTOR

UCA6161

06/18/1936

168466

06/18/1936

Active

TM

Canada

Boston Gear LLC

Boston Gear

RATIO PAX

TMA208074

7/4/1975

374799

05/01/1974

Active

TM

USA

Boston Gear LLC

Boston Gear

RATIOPAX

0985828

6/11/1974

72456678

5/7/1973

Active

TM

USA

Boston Gear LLC

Boston Gear

RATIOTROL

0743713

1/15/1963

72137450

2/7/1962

Active

TM

Canada

Boston Gear LLC

Boston Gear

RIGHT-90

TMA143118

12/17/1965

288461

04/01/1965

Active

TM

Switzerland

Warner Electric Technology Inc.

Stieber

RL

P-414247

01/31/1995

7376/1993.9

05/17/1993

Active

Patent

USA

Warner Electric Technology LLC

WARNER

ROTOR FOR ELECTROMAGNETIC COUPLING

5,305,865

4/26/1994

08/026,995

3/5/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

ROTOR FOR ELECTROMAGNETIC COUPLING

EP0614023

5/21/1997

EP94301526.3

3/3/1994

Active

Patent

Germany

Warner Electric Technology Inc.

WARNER

ROTOR FOR ELECTROMAGNETIC COUPLING

EP0614023

5/21/1997

EP94301526.3

3/3/1994

Active

Patent

France

Warner Electric Technology Inc.

WARNER

ROTOR FOR ELECTROMAGNETIC COUPLING

EP0614023

5/21/1997

EP94301526.3

3/3/1994

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

ROTOR FOR ELECTROMAGNETIC COUPLING

EP0614023

5/21/1997

EP94301526.3

3/3/1994

Active

TM

USA

Warner Electric Technology LLC

Warner

SHEAVE-GRIP

3,085,816

4/25/2006

76/498,191

3/14/2003

Active

Patent

USA

Warner Electric Technology LLC

Warner

SOFT-START ELECTROMAGNETIC COUPLING

4,749,073

6/7/1988

07/048,672

5/11/1987

Active

Patent

South Korea

Warner Electric Technology Inc.

Warner

SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

519,028

09/27/2005

6203/1999

2/25/1999

Active

Patent Appl.

Germany

Warner Electric Technology Inc.

Warner

SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

19908439.4

2/26/1999

Pending

Patent

USA

Warner Electric Technology LLC

Warner

METHOD FOR MAKING AN ARMATURTE ASSEMBLEY

6,591,477

7/7/2003

09/684,117

10/06/2000

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

2,338,681

07/24/2002

9904390.3

2/25/1999

Active

Patent

Japan

Warner Electric Technology Inc.

Warner

ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH - ESS

3,433,269

5/30/2003

343,834/91

10/28/1991

Active

Patent

France

Warner Electric Technology Inc.

WARNER

SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

9902452

12/22/2000

9902452

2/26/1999

Active

Patent

USA

Warner Electric Technology LLC

Warner

SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

6,194,803

2/27/2001

09/032,572

2/27/1998

Active

Patent

USA

Warner Electric Technology LLC

Warner

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

5,372,228

12/13/1994

08/026,499

3/4/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0614022

12/11/1996

EP94301484.5

3/2/1994

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0614022

12/11/1996

P69401077.4

3/2/1994

Active

Patent

France

Warner Electric Technology Inc.

Warner

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0614022

12/11/1996

EP94301484.5

3/2/1994

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0614022

12/11/1996

EP94301484.5

3/2/1994

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Formsprag

SPING ENERGIZED CAGE CENTERING DEVICE

2,327,721

06/19/2002

9815920.5

07/21/1998

Active

Patent

USA

Warner Electric Technology LLC

Wichita

SPLIT TUBE HAVING RETAINABLE ENDS

5,280,829

1/25/1994

07/931,638

8/18/1992

Active

Patent

South Korea

Warner Electric Technology Inc.

Formsprag

SPRAG FAMILY

516,444

09/14/2005

42951/1998

10/14/1998

Active

Patent

USA

Warner Electric Technology Inc.

FORMSPRAG

SPRAG FAMILY

6,109,409

08/29/2000

08/949,741

10/14/1997

Active

Patent

Israel

Warner Electric Technology Inc.

Formsprag

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

107584

11/12/1993

107584

11/12/1993

Active

Patent Appl.

Japan

Warner Electric Technology Inc.

Formsprag

SPING ENERGIZED CAGE CENTERING DEVICE

225,209/98

07/27/1998

Pending

Patent Appl.

Germany

Warner Electric Technology Inc.

Formsprag

SPING ENERGIZED CAGE CENTERING DEVICE

19834200.4

07/29/1998

Pending

Patent

China

Warner Electric Technology Inc.

FORMSPRAG

SPING ENERGIZED CAGE CENTERING DEVICE

ZL 9811650.4

3/31/2004

98116650.4

07/29/1998

Active

Patent Appl.

Japan

Warner Electric Technology Inc.

Wichita

SPUD LOCKING ASSEMBLY FOR AN AIR-ACTUATED CLUTCH/BRAKE

376,264/98

12/24/1998

Pending

TM

South Korea

Warner Electric Technology Inc.

Stieber

STIEBER

339391

05/13/1996

6181/1995

02/20/1995

Active

TM

India

Warner Electric Technology Inc.

Stieber

STIEBER

662847

04/19/1995

04/19/1995

Active

TM

Japan

Warner Electric Technology LLC

Stieber

STIEBER

4109923

02/06/1998

14030/95

02/17/1995

Active

TM

Germany

Warner Electric Technology Inc.

Stieber

STIEBER

39511829.8

02/05/1996

X

03/16/1995

Active

TM

Singapore

Warner Electric Technology Inc.

Stieber

STIEBER

T97/01435I

03/08/2000

T97/01435I

02/05/1997

Active

TM

Hong Kong

Warner Electric Technology Inc.

Stieber

STIEBER

7039/2996

07/30/1996

95 02110

Active

TM

Malaysia

Warner Electric Technology Inc.

Stieber

STIEBER

95/02683

03/28/2000

95/02683

03/28/1995

Active

TM

Germany

Warner Electric Technology LLC

Stieber

STIEBER HEIDELBERG

784371

02/24/1964

ST06038

03/29/1963

Active

Patent

USA

Warner Electric Technology LLC

Warner

SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY

5,310,034

5/10/1994

07/973,291

11/9/1992

Active

Patent

Spain

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

0625109

2/11/1993

93903265.2

2/11/1993

Active

Patent

Italy

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

48775BE97

2/11/1993

93903265.2

2/11/1993

Active

Patent

Germany

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

P69307493.0

2/11/1993

EP0625109

2/11/1993

Active

Patent

France

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

EP0625109

2/11/1993

93903265.2

2/11/1993

Active

Patent

Europe

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

0625109

1/15/1997

93903265.2

2/11/1993

Active

Patent

Australia

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

659534

5/18/1995

34602/93

2/11/1993

Active

Patent

Netherlands

Warner Electric Technology Inc.

Wichita

THE MISTRAL BRAKE

EP0625109

2/11/1993

93903265.2

8/12/1993

Active

TM

USA

Warner Electric Technology LLC

Warner

UNIDAMP

1795619

09/28/1993

74038916

3/16/1990

Active

Patent

Japan

Warner Electric Technology Inc.

Warner

UNIDAMP ARMATURE

3074398

06/09/2000

133666/91

03/28/1991

Active

Patent

USA

Warner Electric Technology LLC

Warner

UNIDAMP ARMATURE

5,036,964

8/6/1991

07/500,466

3/28/1990

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

UNIDAMP ARMATURE

2243195

3/30/1994

9106125.9

3/22/1991

Active

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent

Germany

Warner Electric Technology Inc.

Warner

UNIDAMP ARMATURE

P4108975.8-12

01/30/2003

P4108975.8

03/19/1991

Active

Patent

France

Warner Electric Technology Inc.

WARNER

UNIDAMP ARMATURE

9103732

2/10/1995

9103732

3/27/1991

Active

Patent

USA

Warner Electric Technology LLC

Warner

UNIDRIVE ARMATURE HUB

5,370,209

12/6/1994

08/119,729

9/10/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

UNIDRIVE ARMATURE HUB

EP0643236

3/15/1995

EP94306652.2

9/9/1994

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

UNIDRIVE ARMATURE HUB

EP0643236

3/15/1995

EP94306652.2

9/9/1994

Active

Patent

France

Warner Electric Technology Inc.

Warner

UNIDRIVE ARMATURE HUB

EP0643236

3/15/1995

EP94306652.2

9/9/1994

Active

Patent

Europe

Warner Electric Technology Inc.

WARNER

UNIDRIVE ARMATURE HUB

EP0643236

3/15/1995

EP94306652.2

9/9/1994

Active

TM

USA

Warner Electric Technology LLC

Warner

UNIMODULE

1678062

03/03/1992

74053993

4/30/1990

Active

TM

Vietnam

Warner Electric Technology Inc.

WARNER

WARNER

9997

12/11/1993

11808

03/20/1993

Active

TM

Austria

Warner Electric Technology LLC

WARNER

WARNER

36391

04/13/1997

AM 2025/56

10/24/1956

Active

TM

Benelux

Warner Electric Technology LLC

WARNER

WARNER

42990

01/12/1972

6207

06/15/1971

Active

TM

Mexico

Warner Electric Technology LLC

WARNER

WARNER

92550

04/14/1958

76668

01/29/1957

Active

TM

Switzerland

Warner Electric Technology Inc.

WARNER

WARNER & Design

P-406103

03/15/1993

2801/1993.6

Active

TM

Japan

Warner Electric Technology LLC

WARNER

WARNER

452198

09/28/1954

564/1954

01/13/1954

Active

TM

Italy

Warner Electric Technology Inc.

WARNER

WARNER

660502

11/26/1976

X

03/20/1973

Active

TM

Germany

Warner Electric Technology Inc.

WARNER

WARNER & Design

674860

04/22/1955

W04058

05/27/1953

Active

TM

United Kingdom

Warner Electric Technology LLC

WARNER

WARNER

792664

06/29/1959

792664

Active

TM

USA

Warner Electric Technology LLC

WARNER

WARNER & Design

0527445

07/11/1950

71528385

7/11/1947

Active

TM

Canada

Warner Electric Technology LLC

WARNER

WARNER

UCA50550

0/20/1954

0224428

04/20/1954

Active

TM

United Kingdom

Warner Electric Technology LLC

WARNER

WARNER

710,641

09/17/1952

710641

07/15/1952

Active

TM

Sweden

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

323081

04/25/1997

95-14891

12/27/1995

Active

TM

Switzerland

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

P-438835

03/27/1997

14050/1995

12/28/1995

Active

TM

India

Dana Corporation

WARNER

WARNER ELECTRIC

672106

06/06/1996

07/06/1995

Active

TM

France

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

1547742

08/01/1968

940649

Active

TM

Japan

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

1719848

10/31/1984

91915/1981

11/02/1981

Active

TM

USA

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

0726202

01/09/1962

72105397

9/28/1960

Active

TM

Spain

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

2010756

10/27/1997

2010756

02/07/1996

Active

TM

USA

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

1,026,080

12/02/1975

73035013

10/18/1974

Active

TM

Japan

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

2294610

01/31/1991

91914/81

11/02/1981

Active

TM

Germany

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

39552705.8

12/12/1996

39552705.8

12/27/1995

Active

TM

Canada

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC

TMA-134253

01/17/1964

277382

08/19/1963

Active

TM

Benelux

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

44210

06/28/1993

6777

Active

TM

Austria

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

50589

07/19/1963

AM 760/63

03/26/1963

Active

TM

South Korea

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

84202

09/30/1982

1982-0000088

01/07/1982

Active

TM

South Korea

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

85916

11/23/1982

1982-0000086

01/07/1982

Active

TM

Sweden

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

109892

05/19/1964

63-01313

03/27/1963

Active

TM

Mexico

Warner Electric Technology LLC

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

115936

01/01/1964

109532

03/04/1963

Active

TM

Sweden

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

157200

10/22/1976

74-05513

11/27/1974

Active

TM

Taiwan

Warner Electric Technology Inc.

WARNER

WARNER & Design

192580

10/01/1982

70043208

12/29/1981

Active

TM

Italy

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

454836

11/12/1966

X

03/26/1963

Active

TM

United Kingdom

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

830081

01/25/1962

830081

01/25/1962

Active

TM

France

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

1287151

09/28/1994

718228

Active

TM

France

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

1462778

04/29/1998

923760

Active

TM

Brazil

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

007069901

02/25/1980

9738/M-72

06/14/1972

Active

TM

Singapore

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

T82/01188Z

03/07/1988

T82/01188Z

03/09/1982

Active

TM

Australia

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

B179393

03/27/1963

03/27/1963

Active

TM

Taiwan

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND BACKGROUND DESIGN

64628

06/16/1993

81047228

09/21/1992

Active

TM

Peru

Warner Electric Technology LLC

Wichita

WICHITA

54452

04/27/1999

75634

12/11/1998

Active

TM

Norway

Warner Electric Technology Inc.

Wichita

WICHATA

55322

09/24/1958

65174

09/24/1958

Active

TM

Israel

Warner Electric Technology Inc.

Wichita

WICHITA

57106

06/09/1988

57106

09/07/1983

Active

TM

Benelux

Warner Electric Technology LLC

Wichita

WICHITA

62029

07/20/1998

09/20/1971

Active

TM

Sweden

Warner Electric Technology Inc.

Wichita

WICHATA

90967

12/16/1960

3038

09/25/1958

Active

TM

Mexico

Warner Electric Technology Inc.

Wichita

WICHITA

95017

12/06/1958

84314

09/06/1958

Active

TM

South Korea

Warner Electric Technology LLC

Wichita

WICHITA

108661

01/08/1995

1983-0011882

08/23/1983

Active

TM

Canada

Warner Electric Technology LLC

Wichita

WICHITA

TMA120129

09/19/1958

247469

09/19/1958

Active

TM

Columbia

Warner Electric Technology Inc.

Wichita

WICHITA

121609

02/26/1987

92.355.818

08/19/1983

Active

TM

Taiwan

Warner Electric Technology Inc.

Wichita

WICHITA

245903

05/16/1984

(72)52506

12/21/1983

Active

TM

Switzerland

Warner Electric Technology LLC

Wichita

WICHITA & Design

P-300175

10/19/1979

03810/1978

08/17/1978

Active

TM

Italy

Warner Electric Technology Inc.

Wichita

WICHITA

847,574

11/19/1959

RM98C004872

10/13/1958

Active

TM

China

Warner Electric Technology Inc.

Wichita

WICHITA

520391

05/30/1990

8927115

08/08/1989

Active

TM

Chile

Warner Electric Technology Inc.

Wichita

WICHITA

543319

06/25/1999

435364

12/14/1998

Active

TM

Australia

Warner Electric Technology Inc.

Wichita

WICHITA

640944

08/05/1996

640944

09/16/1994

Active

TM

India

Warner Electric Technology LLC

Wichita

WICHITA

694708

01/09/2004

694708

01/17/1996

Active

TM

Spain

Warner Electric Technology LLC

Wichita

WICHITA

1045719

04/05/1984

1045719

08/30/1983

Active

TM

France

Warner Electric Technology Inc.

Wichita

WICHITA

1248360

09/19/1958

1248360

Active

TM

Argentina

Warner Electric Technology Inc.

Wichita

WICIHITA & Desgn (stylized)

1,970,585

10/29/1993

1206927

Active

TM

United Kingdom

Warner Electric Technology LLC

Wichita

WICHITA

2192400

09/29/2000

2192400

03/20/1999

Active

TM

Japan

Warner Electric Technology LLC

Wichita

WICHITA

2246130

07/30/1990

34043/77

05/19/1977

Active

TM

USA

Warner Electric Technology LLC

Wichita

WICHITA

1565483

11/14/1989

73753251

8/29/1988

Active

TM

Brazil

Warner Electric Technology LLC

Wichita

WICHITA

006788939

10/10/1978

21912

08/12/1971

Active

TM

Denmark

Warner Electric Technology Inc.

Wichita

WICHITA

VR 1959 00081

01/17/1958

VA 1958 02549

09/22/1958

Active

TM

South Africa

Warner Electric Technology Inc.

Wichita

WICHITA

81/6897

09/17/1981

816897

09/17/1981

Active

TM

United Kingdom

Warner Electric Technology LLC

Wichita

WICHATA

783301

10/29/1958

783301

10/29/1958

Active

TM

Venezuela

Warner Electric Technology Inc.

Wichita

WICHITA

120263

04/25/1986

7010-83

09/01/1983

Active

Patent

United Kingdom

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/1999

Active

Patent Appl.

United Kingdom

Warner Electric Technology Inc.

Warner

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

01909241.0

2/14/2001

Pending

patent

Spain

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/1999

Active

Patent Appl.

Japan

Warner Electric Technology Inc.

WARNER

SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

54761/94

3/2/1994

Pending

Patent

Japan

Warner Electric Technology Inc.

WARNER

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

3,820,554

6/30/2006

2004-14,295

1/22/2004

Active

Patent

Japan

Warner Electric Technology Inc.

WARNER

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

3,538,848

4/2/2004

19425/93

1/13/1993

Active

patent

Italy

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/1999

Active

patent

Germany

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/1999

Active

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent Appl.

Germany

Warner Electric Technology Inc.

Warner

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

01909241.0

2/14/2001

Pending

Patent

Germany

Warner Electric Technology Inc.

WARNER

ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.

4,117,614

3/3/2005

P4117614.6

5/29/1991

Active

patent

France

Warner Electric Technology Inc.

WARNER

MAG STOP CLUTCH WITH CENTER POLE

0953784

9/22/2004

99303330.7

4/28/1999

Active

Patent Appl.

France

Warner Electric Technology Inc.

Warner

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

01909241.0

2/14/2001

Pending

Patent

United Kingdom

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP00713026

3/28/2001

95203457.7

1/12/1993

Active

Patent

United Kingdom

Warner Electric Technology Inc.

FORMSPRAG

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

602,889

6/22/1994

93309865.9

12/9/1993

Active

Patent

South Korea

Warner Electric Technology Inc.

Warner

SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY

323,800

1/25/2002

23609

11/8/1993

Active

Patent

South Korea

Warner Electric Technology Inc.

Warner

METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC

215,247

5/21/1999

11273/1992

6/26/1992

Active

Patent

Italy

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP0552011

3/26/1997

93300169.5

1/12/1993

Active

Patent

Italy

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP00713026

3/28/2001

95203457.7

1/12/1993

Active

Patent

Italy

Warner Electric Technology Inc.

Warner

UNIDAMP ARMATURE

1,244,554

7/15/1994

RM91A000202

3/27/1991

Active

Patent

Italy

Warner Electric Technology Inc.

FORMSPRAG

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

0602889

6/22/1994

93309865.9

12/9/1993

Active

Patent

Germany

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP00713026

3/28/2001

95203457.7

1/12/1993

Active

Patent

Germany

Warner Electric Technology Inc.

FORMSPRAG

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

0602889

6/22/1994

93309865.9

12/9/1993

Active

Patent

Germany

Warner Electric Technology Inc.

WARNER

UNIDAMP ARMATURE

G9103369.1

8/1/1991

G9103369.1

3/19/1991

Active

Patent

France

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP00713026

3/28/2001

95203457.7

1/12/1993

Active

Patent

France

Warner Electric Technology Inc.

FORMSPRAG

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

0602889

6/22/1994

93309865.9

12/9/1993

Active

Patent

Europe

Warner Electric Technology Inc.

Warner

ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING

EP00713026

3/28/2001

95203457.7

1/12/1993

Active

Patent

Europe

Warner Electric Technology Inc.

FORMSPRAG

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

EP0602889

6/22/1994

93309865.9

12/9/1993

Active

TM

USA

Ameridrives International, LLC

Ameridrives

AMERIGEAR

2,951,600

5/17/2005

78/373,119

2/24/2004

Active

TM

USA

Ameridrives International, LLC

Ameridrives

THE AMERICAN FULLY CROWNED TOOTH

2980971

5/10/2005

78/373,135

2/24/2004

Active

TM Appl.

USA

Ameridrives International L.P.

Ameridrives

TORQUE SENTRY

78/411459

4/30/2004

Pending

TM

USA

Boston Gear LLC

Boston Gear

POSIVENT

2875347

08/17/2004

76/423,536

06/20/2002

Active

TM

USA

Boston Gear LLC

Boston Gear

STABILI SEAL

3,131,135

08/15/2006

78/564,645

02/10/2005

Active

Patent Appl.

USA

Boston Gear LLC

Boston Gear

Conveyor Flange Adaptor

11/114062

02/11/2005

Pending

Patent

USA

Warner Electric Technology Inc.

Formsprag

LOW COST SPRAG RETAINER

5,070,976

12/10/1991

07/634,903

12/27/1990

Active

Patent

USA

Warner Electric Technology Inc.

Formsprag

IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH

5,007,511

4/15/1991

07/430,811

11/2/1989

Active

Patent

USA

Warner Electric Technology LLC

Formsprag

SPRAG RETAINER WITH ROTATIONAL RESTRAINT

5,337,869

8/16/1994

07/991,021

12/15/1992

Active

Patent

USA

Warner Electric Technology Inc.

Formsprag

FORMLOCK SHOES WITH FLATS

5,865,284

2/2/1999

08/666,068

6/21/1996

Active

Patent

USA

Warner Electric Technology LLC

Formsprag

SPING ENERGIZED CAGE CENTERING DEVICE

6,000,512

12/14/1999

08/902,777

7/30/1997

Active

TM

Canada

American Enterprises MPT L.P.

Ameridrives

AMERICAN

UCA0045654

06/11/1952

215415

06/11/1952

Active

TM

Canada

American Enterprises MPT L.P.

Ameridrives

AMERIGEAR

UCA0043128

06/11/1952

215414

06/11/1952

Active

Patent

USA

Warner Electric Technology LLC

FORMSPRAG

Split Thrust/Retainer Ring for Overruning Clutch

4,757,887

7/19/1988

06/884,056

07/19/1998

Active

Patent

USA

Warner Electric Technology LLC

FORMSPRAG

OverRUNNING CLUTCH WITh controlled sprag action

4,756,395

7/12/1988

06/804,802

12/3/1985

Active

Patent Appl.

Germany

Warner Electric Europe SAS

WARNER EUR

Variable Torque Braking Device

197471145

10/24/1997

Pending

TM

Canada

Warner Electric Technology LLC

Warner

SHEAVE-GRIP

728,275

11/13/2008

1,176,042

4/28/2003

Active

TM

Mexico

Warner Electric Technology Inc.

Warner

SHEAVE-GRIP

786,245

03/31/2003

590,675

03/04/2003

Active

TM

Italy

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND DESIGN

454,836

3/26/1993

TM

Taiwan

Warner Electric Technology Inc.

WARNER

WARNER ELECTRIC AND DESIGN

192,580

9/20/2002

Active

TM

United Kingdom

Warner Electric Technology Inc.

Wichita

DURA-FLEX

1,105,120

11/22/78

Active

TM

Japan

Warner Electric Technology Inc.

Wichita

MAXIM

2,477,,826

11/30/92

40400/1986

04/18/1986

Active

TM

Finland

Warner Electric Technology Inc.

Wichita

MAXIM

TM 110492

02/05/1991

T198601642

04/24/1986

Active

Patent Appl.

USA

Warner Electric Technology LLC

Warner

Rotational Coupling Device

12/048,638

3/14/2008

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Warner

Rotational Coupling Device

11/150027

6/10/2005

Pending

Patent

USA

Warner Electric Technology LLC

Warner

Rotational Coupling Device

7,493,996

2/24/2009

11/150671

6/10/2005

Active

Patent Appl.

USA

Warner Electric Technology LLC

Warner

Rotational Coupling Device

11/150670

6/10/2005

Pending

TM

USA

Warner Electric Technology Inc.

Wichita

WICHITA CLUTCH

3039567

01/10/2006

76/620135

11/12/04

Active

Patent Appl.

USA

Warner Electric Technology Inc.

Wichita

DUAL ACTUATOR FRICTION BRAKE ASSEMBLY

11/263,395

10/31/2005

Pending

Patent

USA

Warner Electric Technology Inc.

Wichita

BALANCED FLOW COOLING WATER JACKET

7,374,027

5/20/2008

11/263,394

10/31/2005

Active

Patent

USA

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

7,591,349

9/22/2009

11/263,399

10/31/2005

Active

TM

Canada

Boston Gear LLC

Boston Gear

CENTRIC

TMA324230

02/27/1987

562625

05/13/1986

Active

Patent

Mexico

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

238,848

07/24/2006

PA/A/2005/007753

7/21/2005

Active

TM

USA

Altra Industrial Motion, Inc.

Corporate

A&Design

3,146,781

09/19/2006

78/560930

02/04/2005

Active

TM Appl.

USA

Boston Gear LLC

Boston Gear

CENTRIGARD

1,305,448

06/14/2006

Pending

Patent

USA

Warner Electric Technology Inc.

Formsprag

IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH

7,261,196

08/28/2007

11/064, 611

02/24/05

Active

Patent

USA

Warner Electric Technology Inc.

Formsprag

Automatically released bi-directional overunning clutch

7,389,863

6/24/2008

11/341,763

01/27/2006

Active

TM

USA

Warner Electric Technology LLC

Wichita

AQUAMAKKS

3,490,449

08/19/2008

78/821,282

02/23/2006

Active

Patent

USA

Warner Electric Technology LLC

Warner

Rotational Coupling Device

7,527,134

5/5/2009

11/278,448

4/3/2006

Active

TM

USA

Warner Electric Technology LLC

Warner

Warner Electric

3,287,916

09/04/2007

78/790,162

01/12/2006

Active

TM

USA

Boston Gear LLC

Boston Gear

CENTRIGARD

3,374,068

1/22/2008

78/774,995

12/16/2005

Active

TM Appl.

South Korea

Warner Electric Technology Inc.

Wichita

WICHITA

40-2005-0055110

11/24/2005

Pending

TM

USA

Altra Industrial Motion, Inc.

Corporate

Altra Industrial Motion

3360155

12/25/2007

76/621069

11/17/2004

Active

TM

USA

Warner Electric Technology LLC

Warner Linear

Warner Linear

3,413,352

04/15/2008

78/910,851

06/19/2006

Active

TM

USA

Altra Industrial Motion, Inc.

Warner Linear

A-Track

3,263,081

07/10/2007

78/790085

1/12/2006

Active

TM Appl.

USA

Altra Industrial Motion, Inc.

Warner Linear

A-Track and Design

78/790094

1/12/2006

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

FORMSPRAG

Drive Assenmly with lightweight backstop clutch

PCT/US200

2/14/2006

Pending

Patent

USA

Warner Electric LLC

Warner Linear

Electromechanical screw drive actuator

6,927,513

8/9/2005

10/609,883

6/30/2003

Active

Unregistered TM

n/a

Warner Electric LLC

Warner Linear

Bear Rugged-Mobile Tough

n/a

n/a

n/a

n/a

n/a

Unregistered TM

n/a

Warner Electric LLC

Warner Linear

BearTrac

n/a

n/a

n/a

n/a

n/a

Unregistered TM

n/a

Warner Electric LLC

Warner Linear

Kodiak

n/a

n/a

n/a

n/a

n/a

TM

Canada

Kilian Manufacturing Corporation

Kilian

KILIAN

TMA 354757

4/21/1989

608151

5/27/1998

Active

TM

USA

Kilian Manufacturing Corporation

Kilian

KILIAN

1216354

11/16/1982

73277508

9/11/1980

Active

TM

USA

Kilian Manufacturing Corporation

Kilian

KILROL

2827924

3/30/2004

78213978

2/12/2003

Active

TM Appl.

USA

Kilian Manufacturing Corporation

Kilian

HI-TECH WORRY BEADS

78/775,032

12/16/2005

Pending

TM

Canada

Warner Electric Technology LLC

Stieber

GFR

TMA492416

4/16/1998

845220

5/15/1997

Active

TM

United Kingdom

Warner Electric Technology Inc.

FORMSPRAG

FORMSPRAG

2380616

6/24/2005

12/17/2004

Active

TM

United Kingdom

Boston Gear LLC

Ameridrives

CENTRIC

1259254

1/13/1986

Active

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

Rotational Coupling Device

PCT/US2006/019138

05/17/2006

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

Rotational Coupling Device

PCT/US2006/019172

05/17/2006

Pending

TM

Australia

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

1,125,414

7/21/2006

1125414

7/21/2006

Active

TM

Canada

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

TMA774,406

7/30/2009

1310145

7/21/2006

Active

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

TM

Europe

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

5,214,648

5/11/2007

5214648

7/21/2006

Active

TM

Mexico

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

1,060,801

9/17/2008

796,858

7/28/2006

Active

TM

Taiwan

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

1,264,315

6/1/2007

095037880

7/24/2006

Active

TM

South Korea

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

40-0720036

8/7/2007

40-2006-0051431

10/12/2006

Active

TM

Hong Kong

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

300685206

7/20/2006

300685206

7/20/2006

Active

TM

Thailand

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

Kor275083

10/26/2006

642919

10/26/2006

Active

Patent Appl.

PCT

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

PCT/US06/41038

10/19/2006

Pending

Patent Appl.

PCT

Warner Electric Technology Inc.

Wichita

BALANCED FLOW COOLING WATER JACKET

PCT/US06/41067

10/19/2006

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

11/670698

2/2/2007

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

Rotational Coupling Device

TBD

TBD

Pending

TM

Singapore

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

T06/20041C

9/26/2006

T06/20041C

9/26/2006

Active

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

Rotational Coupling Device

TBD

3/30/2007

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

Rotational Coupling Device

PCT/US07/008252

3/30/2007

Pending

TM

China

Warner Electric Technology LLC

Warner Linear

WARNER LINEAR

5,655,144

9/7/2009

5655144

10/12/2006

Active

Patent Appl.

PCT

Warner Electric Technology LLC

Formsprag

Automatically released bi-directional overunning clutch

PCT/US07/001869

1/25/2007

Pending

Patent Appl.

Taiwan

Warner Electric Technology LLC

Formsprag

Automatically released bi-directional overunning clutch

096102358

1/22/2007

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Formsprag

Torque Arm Assembly for a Backstopping Clutch

11/743,894

5/3/2007

Pending

TM Appl.

Brazil

Formsprag LLC

Formsprag

Cebmag

829.095.985

4/13/2007

Pending

TM Appl.

Brazil

Formsprag LLC

Formsprag

Cecon

829.095.993

4/13/2007

Pending

TM Appl.

Brazil

Formsprag LLC

Marland

Marland

829.096.000

4/13/2007

Pending

Patent Appl.

USA

Formsprag LLC

Formsprag

Overrunning Clutch

11/750,733

5/18/2007

Pending

Patent Appl.

PCT

Formsprag LLC

Formsprag

Overrunning Clutch

PCT/US2007/069235

5/18/2007

Pending

TM Appl.

CTM

Altra Industrial Motion, Inc.

Corporate

A&Design

006067953

05/16/2008

006067953

07/04/2007

Active

TM

South Korea

Altra Industrial Motion, Inc.

Corporate

A&Design

40-0775102

01/08/2009

40-2007-0039600

07/25/2007

Active

TM

Australia

Altra Industrial Motion, Inc.

Corporate

A&Design

1185473

07/03/2007

1185473

07/03/2007

Active

TM

Thailand

Altra Industrial Motion, Inc.

Corporate

A&Design

Kor296763

07/25/2007

668284

07/25/2007

Active

TM

Singapore

Altra Industrial Motion, Inc.

Corporate

A&Design

T07/15070C

07/06/2007

T0715070C

07/06/2007

Active

TM

USA

Warner Electric Technology LLC

Stieber

GFR

3,494,910

9/2/2008

77/247,944

08/06/07

Active

Patent Appl.

USA

Kilian Manufacturing Corporation

Kilian

Bearing assembly for a steering assembly

11/773,715

7/5/2007

Pending

TM

Mexico

Altra Industrial Motion, Inc.

Corporate

A&Design

1053502

08/12/2008

873655

08/07/2007

Active

TM Appl.

India

Altra Industrial Motion, Inc.

Corporate

A&Design

1584305

07/25/2007

Pending

TM Appl.

Brazil

Altra Industrial Motion, Inc.

Corporate

A&Design

829278044

07/31/2007

Pending

TM Appl.

China

Altra Industrial Motion, Inc.

Corporate

A&Design

6208101

08/07/2007

Pending

TM Appl.

Hong Kong

Altra Industrial Motion, Inc.

Corporate

A&Design

300906066

07/05/2007

300906066

07/05/2007

Active

TM Appl.

South Africa

Altra Industrial Motion, Inc.

Corporate

A&Design

2007/14502

07/05/2007

Pending

TM

Taiwan

Altra Industrial Motion, Inc.

Corporate

A&Design

1310870

05/16/2008

096031868

07/05/2007

Active

TM

USA

Altra Industrial Motion, Inc.

Warner Linear

B-Track

3,609,446

4/21/2009

77/237,461

07/24/2007

Active

Patent Appl.

USA

Warner Electric Technology LLC

FORMSPRAG

Sparag Retainer for OVERRUNNING CLUTCH

11/871542

10/12/2007

Pending

Patent

South Korea

Warner Electric Technology Inc.

WARNER

ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING

855153

08/22/2008

7024365/2007

10/23/2007

Active

Patent Appl.

Canada

Warner Electric Technology Inc.

Formsprag

IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH

2597653

02/14/2006

Pending

Patent Appl.

Mexico

Warner Electric Technology LLC

Warner

Rotational Coupling Device

MX/a/2007/014993

11/28/2007

Pending

Patent Appl.

Mexico

Warner Electric Technology LLC

Warner

Rotational Coupling Device

MX/a/2007/014992

11/28/2007

Pending

Patent Appl.

Mexico

Warner Electric Technology LLC

Warner

Rotational Coupling Device

MX/a/2007/014996

11/28/2007

Pending

Patent Appl.

Australia

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

2008214106

8/13/2009

Pending

Patent Appl.

South Africa

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

2009/05050

7/20/2009

Pending

Patent Appl.

Chili

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

301-08

01/31/2008

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

PCT/US2008/052265

01/29/2008

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

12/016,504

1/18/2007

Pending

Patent

Europe

Warner Electric Technology LLC

Warner

Rotational Coupling Device

1,893,884

11/25/2009

06770520.2

1/10/2008

Active

Patent Appl.

Europe

Warner Electric Technology LLC

Warner

Rotational Coupling Device

06760061.9

1/10/2008

Pending

Patent Appl.

Europe

Warner Electric Technology LLC

Warner

Rotational Coupling Device

06760062.7

1/10/2008

Pending

Patent Appl.

South Korea

Warner Electric Technology LLC

Warner

Rotational Coupling Device

10-2008-7000645

1/9/2008

Pending

Patent Appl.

South Korea

Warner Electric Technology LLC

Warner

Rotational Coupling Device

10-2008-7000650

1/9/2008

Pending

Patent Appl.

South Korea

Warner Electric Technology LLC

Warner

Rotational Coupling Device

10-2008-7000647

1/9/2008

Pending

Patent Appl.

Canada

Warner Electric Technology LLC

FORMSPRAG

Drive Assenmly with lightweight backstop clutch

2597653

08/10/2007

Pending

Patent Appl.

Japan

Warner Electric Technology LLC

Warner

Rotational Coupling Device

2008-515719

12/3/2007

Pending

Patent Appl.

Japan

Warner Electric Technology LLC

Warner

Rotational Coupling Device

2008-515720

12/3/2007

Pending

Patent Appl.

Japan

Warner Electric Technology LLC

Warner

Rotational Coupling Device

TBD

9/29/2008

Pending

Patent Appl.

Japan

Warner Electric Technology LLC

Warner

Rotational Coupling Device

2008-515721

12/3/2007

Pending

TM

Japan

Altra Industrial Motion, Inc.

Corporate

A&Design

5126277

04/04/2008

2007-075745

07/05/2007

Active

Patent Appl.

Singapore

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

200802767-4

4/11/2008

Pending

Patent Appl.

Mexico

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

MX/a/2008/005291

4/23/2008

Pending

Patent Appl.

Mexico

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

MX/a/2008/005290

4/23/2008

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Formsprag

Torque Arm Assembly for a Backstopping Clutch

PCT/US2008/062444

5/2/2008

Pending

Patent Appl.

Brazil

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

PI 0618103-1

4/30/2008

Pending

Patent Appl.

India

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

2125/CHENP/2008

4/29/2008

Pending

Patent Appl.

Europe

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

06817212.1

4/24/2008

Pending

Patent Appl.

Brazil

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

PI 0611804-0

4/30/2008

Pending

Patent Appl.

Europe

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

06817231.1

4/24/2008

Pending

Patent Appl.

Russia

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

2008121805

5/30/2008

Pending

Patent Appl.

Russia

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

2008121806

5/30/2008

Pending

Patent Appl.

India

Warner Electric Technology LLC

Wichita

BALANCED FLOW COOLING WATER JACKET

2692/CHENP/2008

5/29/2008

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Wichita

Rotational Coupling Device With Sealed Key

12/124,699

5/21/2008

Pending

Patent Appl.

Europe

Warner Electric Technology LLC

Formsprag

Automatically released bi-directional overunning clutch

07762680.2

7/15/2008

Pending

Patent Appl.

USA

Warner Electric Technology LLC

FORMSPRAG

“Safety Control for Release of Backstopping Clutch”

12/175,995

07/18/2008

Pending

Patent Appl.

Europe

Warner Electric Technology LLC

Warner

Rotational Coupling Device

07754729.7

9/29/2008

Pending

Patent Appl.

South Korea

Warner Electric Technology LLC

Warner

Rotational Coupling Device

10-2008-7023303

9/24/2008

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

FORMSPRAG

Sparag Retainer for OVERRUNNING CLUTCH

PCT/US2008/079310

10/09/2008

Pending

Patent Appl.

Canada

Warner Electric Technology LLC

Formsprag

Automatically released bi-directional overunning clutch

2640240

7/24/2008

Pending

Patent Appl.

Europe

Warner Electric Technology LLC

FORMSPRAG

OVERRUNNING CLUTCH

07783919.9

11/20/2008

Pending

Patent Appl.

USA

Warner Electric Technology LLC

Warner

[*]

[*]

[*]

[*]

Patent Appl.

Japan

Warner Electric Technology LLC

Warner

Rotational Coupling Device

2009-504258

9/29/2008

Pending

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent Appl.

USA

Warner Electric Technology LLC

Wichita

“Dual Actuator Friction Brake Assembly”

12/364,116

2/2/2009

Pending

TM Appl.

Brazil

Formsprag LLC

Formsprag

BC MA

901417858

1/22/2009

Pending

TM Appl.

USA

Formsprag LLC

Formsprag

BC MA

77/649,950

1/15/2009

Pending

Patent Appl.

Japan

Warner Electric Technology LLC

FORMSPRAG

OVERRUNNING CLUTCH

2009-511247

11/18/2008

Pending

Patent Appl.

PCT

Warner Electric Technology LLC

Wichita

Rotational Coupling Device With Sealed Key

PCT/US09/044679

5/20/2009

Pending

Patent

USA

Ameridrives International, LLC

APT

Driveshaft with slip joint seal

5,320,658

07/23/1993

07/864,307

04/06/1992

Active

Patent

USA

Ameridrives International, LLC

APT

Driveshaft with sealed slip joint seal

5,655,968

08/12/1997

08/646,202

05/07/1996

Active

Patent Appl.

Europe

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

08714083.6.

07/28/2009

Pending

Patent Appl.

Singapore

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

200904860-4.

07/17/2009

Pending

Patent Appl.

Australia

Warner Electric Technology LLC

FORMSPRAG

“Safety Control for Release of Backstopping Clutch”

2009202888

07/17/2009

Pending

Patent

USA

Warner Electric Technology LLC

Wichita

“Dual Actuator Friction Brake Assembly”

7,556,128

7/9/2009

11/263,395

10/31/2005

Active

TM Appl.

South Africa

Formsprag LLC

Marland

Marland

2009/17809

9/11/2009

Pending

Patent Appl.

China

Warner Electric Technology LLC

Wichita

AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)

200880003823.2

07/31/2009

Pending

Patent

Singapore

Warner Electric Technology Inc.

Wichita

Liquid Cooled Brake assembley

141,736

8/31/2009

200802767-4

4/11/2008

Active

Patent Appl.

PCT

Warner Electric Technology LLC

Warner

[*]

[*]

[*]

[*]

Patent Appl.

USA

Warner Electric Technology LLC

Formsprag

[*]

[*]

[*]

[*]

Patent Appl.

Australia

Warner Electric Technology LLC

Formsprag

Torque Arm Assembly for a Backstopping Clutch

PCT/US2008/062444

11/5/2009

Pending

TM

Mexico

Emerson Power Transmission Corp.

Stieber

GFR

631,573

10/29/1999

302944

07/30/1997

Active

NOTES:

American Enterprises MPT L.P.

This entity is the owner of record of a pair of Canadian registrations. The changes in the company’s name from American Enterprises MPT L.P. to Ameridrives International L.P. (on 04/25/1997) and later from Ameridrives International L.P. to Ameridrives International LLC (on 12/21/2005) have not yet been recorded against the registrations.

Dana Corporation

This entity is the owner of record of an Indian trademark registration for “WARNER ELECTRIC.” The assignment of the registration from Dana Corporation to Warner Electric Technology, Inc. and the subsequent name change from Warner Electric Technology, Inc. to Warner Electric Technology LLC have been submitted for recordation. Dana Corporation is also the owner of record of a Canadian trademark registration for “DISC-O-TORQUE” relating to TB Woods. No action has been taken to address the change in ownership of this registration in view of instructions given in 2000 to a prior law firm for TB Woods to allow the registration to lapse (the registration actually remains in force until 2015.

Emerson Power Transmission Corp.

This entity is the owner of record on a Mexican registration for “GFR.” Assignments from Emerson Power Transmission Corp. to Dana Holdings GmbH and from Dana Holdings GmbH to Warner Electric Technology LLC have been submitted for recordation and the process is ongoing.

IMO Industries, Inc.

This entity is the owner of record on a pair of Mexican registrations for “BOSTON GEAR”. An assignment of the Mexican registrations to Boston Gear LLC is in the process of being recorded.

Warner Electric Technology, Inc.

A number of patents and trademarks owned by Warner Electric Technology LLC remain in the former name (Warner Electric Technology, Inc.) of the company on the records of various foreign patent and trademark offices. Efforts to record the change in name are in progress with respect to some of the patents and trademarks. For others, a conscious decision was made to hold off on recordation pending some other action relating to the property (e.g., the next renewal of a trademark registration). For yet others, a decision was made not to record the change in name in view of a decision to allow various registrations or patents to lapse).

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
9/21/2003		9/21/2013	500	IMO Industries Inc.	Boston Gear	Fred Sholds	Drives and Controls

Notes	Dana #
	5362 FORM
	5362 FORM
	5362 FORM
	5362 FORM
	5362 FORM
	2785 WARN
	2930 ALC
	3351 WARN
	3351 WARN
	3351 WARN
	3351 WARN
	3351 WARN
	2288 WARN
	5329 WARN
	5329 WARN
Substantive examination was requested in November 2005. Deadline is 02/14/2006	5329 WARN
	5329 WARN
	5329 WARN
	5329 WARN
	2806 FORM
	3678 WARN
	3678 WARN
	3678 WARN
	3678 WARN
	3605 WARN
	3605 WARN
	3605 WARN
	3605 WARN
	3678 WARN
	2287 WARN
	3455 WARN
	3455 WARN
	3455 WARN
	3455 WARN
	3455 WARN
	3116 WARN
	2929 ALC
	2044 FORM
	3245 WARN
	3245 WARN
	3245 WARN
	3245 WARN
	3245 WARN
	3245 WARN
	3245 WARN
	3245 WARN

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
4/23/2005

Notes	Dana #
	3245 WARN
	3239 WARN
	2786 WARN
	2786 WARN
	2786 WARN
	3162 WARN
	3162 WARN
	3162 WARN
	3162 WARN
	2911 WARN
	2911 WARN
	2911 WARN
	2911 WARN
	2911 WARN
	2911 WARN
	3164 WARN
	3165 WARN
	2496 WARN
	4063 FORM
	4063 FORM
	4063 FORM
	4063 FORM
	2448 WARN
	3605 WARN
	3605 WARN
	2806 FORM
	2806 FORM
	3471 ALC
	4598 WARN
	4598 WARN
	4598 WARN
	4598 WARN
	2575 WARN
Instructed by Ian Hakon not to renew
Instructed by Ian Hakon not to renew
	2449 WARN
	3240 WARN
	3240 WARN

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
98302223.7
		1/22/2006
7/4/2005

Notes	Dana #
	3240 WARN
	3240 WARN
	3240 WARN
	3240 WARN
	3734 WARN
	4175 WARN
	4175 WARN
	4175 WARN
	4175 WARN
	4175 WARN
	4175 WARN
	4175 WARN
Pending WPThomson response
Renewed in 2005
	4429 WICH
	2290 WARN
Potential asssignment issue. James could not find re-assignment from IMO Industries. Instructed to record in the name of Boston Gear LLC
	3456 WARN
	3456 WARN
	3456 WARN
	3456 WARN
	3456 WARN
Filed for an extension on 08/24/2005
	2574 WARN
Patent already approved. Pending payment registration fee.	4464 WARN
	4464 WARN
	4464 WARN
	4464 WARN
Will lapse on 05/30/2010	3164 WARN
	4464 WARN
	4464 WARN
	3546 WARN
	3546 WARN
	3546 WARN
	3546 WARN
	3546 WARN
	4318 FORM
	3368 WICH
	4230 FORM
	4230 FORM
	3428 FORM
	4318 FORM
	4318 FORM
	4318 FORM
	4456 WICH
	3430 WARN
	2963 WARN
	2963 WARN
	2963 WARN

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
Note: May be a design mark
2/7/2006

Notes	Dana #
	2963 WARN
	2963 WARN
	3612 WARN
	3612 WARN
	3612 WARN
	3612 WARN
	3612 WARN
Renewed in 2005
Rich instructed to renew.
Will be renewed in December 2005
Renewed in 2005
will be allowed to lapse
Assignment issue. Still not properly assigned from Dana.
	4598 WARN
	5329 WARN
	4598 WARN
	3546 WARN
	3351 WARN
	3351 WARN
	4598 WARN
	4598 WARN

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
NOTE; DUPLICATE ENTRY (SEE ROW 428)
NOTE; DUPLICATE ENTRY (SEE ROW 479)
					6009 WARN
					4318 FORM
					6003 FORM
					6017 WARN
				Filed for an extension on 08/24/2005
					Pending
					Pending
				Published for opposition on 10/11/2005
					6023 FORM

Notes	Dana #
	5329 WARN
	3162 WARN
	4598 WARN
	5329 WARN
	3351 WARN
	3428 FORM
	3430 WARN
	3240 WARN
	3351 WARN
	3351 WARN
	2963 WARN
	3428 FORM
	3351 WARN
	3428 FORM
	2963 WARN
	3351 WARN
	3428 FORM
	3351 WARN
	3428 FORM
Provisional patent applied for S/N 60/531,607—renewal dates reflect expected approval and correspondence date
Trademark application—renewal dates reflect expected approval and correspondence date
Provisional patent applied for S/N 11/114,062—renewal dates reflect expected approval and correspondence date
	2602 FORM
	2806 FORM
	3428 FORM
	4063 FORM
	4318 FORM
	1640 FORM
	2044 FORM
Obsolete per Ian Hakon. Need to check if included in IP Inventory.
Obsolete per Ian Hakon. Need to check if included in IP Inventory.
Obsolete per Ian Hakon. Need to check if included in IP Inventory.
	6020 WARN
	6009 WARN
	6015 WARN
	6016 WARN
	6014 WICH
	6012 WICH
	5329 WARN
Published for opposition on 10/11/2005
	6003 FORM
	6007 FORM
	6018 WARN

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
					6017 WARN
					6018 WARN
					6018 WARN
					6007 FORM
				Published for opposition on 10/11/2005
				Assignment issue. Will re-apply
					6023 FORM
				Substantive examination was requested in November 2005. D	eadline is 02/14/2006 5329 WARN
					4318 FORM
					6009 WARN
					6015 WARN
					6016 WARN
					6022 wich
					6014 WICH
					6009 WARN
					6015 WARN
					6016 WARN
					6016 WARN
					6015 WARN
					6009 WARN
					6016 WARN
					6015 WARN
					6015 WARN
					6009 WARN
				Published for opposition on 10/11/2005
					6014 WICH
					6012 WICH
					6014 WICH
					6025 FORM
					6012 WICH
					6012 WICH
					6012 WICH
					6014 WICH
					6014 WICH
					6012 WICH
					6014 WICH
					6007 FORM
					6026 FORM
					6018 WARN
					6026 FORM
					6007 FORM
					6023 FORM
					6018 WARN
					6018 WARN

Notes	Dana #
	6012 WICH
	6022 wich
	6018 WARN
	6007 FORM
	6007 FORM
	6025 FORM
	FORM 6023
	FORM 6023
	6026 FORM
	5329 WARN
	6003 FORM
	6022 wich
	6022 wich
	6014 WICH
	6009 WARN
	6015 WARN
	6016 WARN
	6016 WARN
	6015 WARN
	6009 WARN
	6009 WARN
	6015 WARN
	6016 WARN
	6014 WICH
	6012 WICH
	6014 WICH
	6025 FORM
	6012 WICH
	6012 WICH
	6012 WICH
	6014 WICH
	6014 WICH
	6027 WICH
	6007 FORM
	6028 FORM
	6026 FORM
	6007 FORM
	6023-1 FORM
	6021 WARN
	6018 WARN
	6013 WICH

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line
					6027 WICH
					6023-1 FORM
					6027 WICH
					6022 wich
					6022 wich
					6028 FORM
					6013 WICH
					6022 wich
					6012 WICH
					6021 WARN
					6025 FORM
					6025 FORM
				Assignment issue. Should have been assigned to Dana and Stieber

Notes	Dana #
	6027 WICH
	6022 wich
	6022 wich
	6028 FORM
	6013 WICH
	6012 WICH
	6025 FORM

IP Type

Issuing Jurisdiction

Owner Entity

Altra BU

Title / Description

Registration Number

Registration / Issue Date

Application Number

Filing Date

Status

Patent

USA

Inertia Dynamics, LLC

IDI

Manual release machanism for a brake

6675940

01/13/2004

253125

09/24/2002

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Elevator brake assembly

6675939

01/13/2004

773722

01/31/2001

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Device for clamping a shaft

6527233

03/04/2003

841507

04/24/2001

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Clutch system and method

6488133

12/3/2002

528690

03/20/2000

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Electromagnetic disc brake with rubber friction disk braking surface

6161659

12/19/2000

167006

09/29/1998

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Sealed electromagnetic brake

6125975

10/3/2000

193388

11/17/1998

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Electric clutch and brake

6047805

04/11/2000

937816

09/29/1997

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Electro-mechanical variable speed clutch

5979630

11/9/1999

938862

09/26/1997

Active

Patent

USA

Inertia Dynamics, LLC

IDI

Power-off brake with manual release

5915507

06/29/1999

932904

09/17/1997

Active

TM

USA

Inertia Dynamics, LLC

IDI

Unibrake

0809205

05/31/1966

72/219817

05/26/1965

Active

Unregistered TM

USA

Inertia Dynamics, LLC

IDI

IDI

N/A

N/A

n/a

Patent Appl.

USA

Inertia Dynamics, LLC

IDI

[*]

[*]

[*]

[*]

Patent Appl.

USA

Inertia Dynamics, LLC

IDI

Manual release brake

60/324,812

09/24/2001

Pending

Patent Appl.

USA

Inertia Dynamics, LLC

IDI

Clutch with wear ring assembly

60/565860

04/27/2004

Pending

Patent Appl.

United States

Inertia Dynamics, LLC

IDI

[*]

[*]

[*]

[*]

Date of Abandonment/	Cumulative Fees/	Date of Next	Costs of Next	Owner or Assignee	Business	Business
Last Renewal	Costs Paid	Renewal	Renewal	of Record	Name	Contact	Product Line

Notes	Previos Counsel
	McCarter & English, LLP -Transfering to Dykema Gossett
	Edwards Angell Palmer & Dodge LLP-Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	McCarter & English, LLP -Transfering to Dykema Gossett
	Newholm; Timothy E., Miller; John M., Horn; John J.
Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.	McCarter & English, LLP -Transfering to Dykema Gossett
	n/a
Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.	Edwards Angell Palmer & Dodge LLP-Transfering to Dykema Gossett
Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.	McCarter & English, LLP -Transfering to Dykema Gossett
Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.	McCarter & English, LLP -Transfering to Dykema Gossett
	Dykema Gossett

	Issuing
IP Type	Jurisdiction	Owner Entity	Altra BU	Title/Description
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	All-Pro
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Braketron
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Deck & Design (stylized lettering)
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Disc-O-Torque
TM	Mexico	TB Woods Enterprises, Inc.	TBW Couplings	Dura-Flex
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Dura-Flex
TM	US	TB Woods Enterprises, Inc.	Electronics	E-Flow
TM	US	TB Woods Enterprises, Inc.	Electronics	E-trAC (Stylized)
TM	US	TB Woods Enterprises, Inc.	Electronics	E-TROL+PLUS
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	First In Couplings
TM	Canada	TB Woods Enterprises, Inc.	TBW Couplings	Formflex
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Form-Flex
TM	US	TB Woods Enterprises, Inc.	Electronics	IMD
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	NLS
TM	Canada	TB Woods Enterprises, Inc.	Electronics	PDA-Trac
TM	Mexico	TB Woods Enterprises, Inc.	Electronics	PDA-Trac
TM	US	TB Woods Enterprises, Inc.	Electronics	PDA-Trac
TM	US	TB Woods Enterprises, Inc.	Electronics	Petro-Trac
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Poole
TM	Mexico	TB Woods Enterprises, Inc.	TBW Other Mechanical	Qt Power Chain
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Qt Power Chain
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Roto-Cam
TM	Canada	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign
TM	US	TB Woods Enterprises, Inc.	Electronics	S-Trac
TM	US	TB Woods Enterprises, Inc.	Electronics	Superstart
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Sure Grip (Stylized)
TM	Great Britain	TB Woods Enterprises, Inc.	TBW Couplings	SureFlex
TM	Australia	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex & Design (stylized)
TM	Canada	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	Japan	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	Switzerland	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	Japan	TB Woods Enterprises, Inc.	TBW Couplings	SureFlex and Katakana
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Grip
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Grip
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	Truetube
TM	US	TB Woods Enterprises, Inc.	Electronics	Ultracon
TM	US	TB Woods Enterprises, Inc.	Electronics	Ultracon II
TM	US	TB Woods Enterprises, Inc.	Electronics	Ultra-Helix
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Ultra-V
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Ultra-V
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Var-A-Cone
TM	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	W TB Wood’s (and design)
TM	Canada	TB Woods Enterprises, Inc.	Electronics	Win-Trac
TM	Community Trademark	TB Woods Enterprises, Inc.	Electronics	Win-Trac
TM	Mexico	TB Woods Enterprises, Inc.	Electronics	Win-Trac
TM	US	TB Woods Enterprises, Inc.	Electronics	Win-Trac
TM	Mexico	TB Woods Enterprises, Inc.	Corporate	Woods@Work

TM	US	TB Woods Enterprises, Inc.	Corporate	Woods@Work
TM	Germany	TB Woods Enterprises, Inc.	TBW Couplings	Form-Flex
TM	Argentina	TB Woods Enterprises, Inc.	TBW Couplings	Dura-Flex
TM	Community Trademark	TB Woods Inc.	TBW Couplings	Dura-Flex
TM	Great Britain	TB Woods Enterprises, Inc.	TBW Couplings	Dura-Flex
TM	Japan	TB Woods Enterprises, Inc.	TBW Couplings	Dura-Flex
TM	Taiwan	TB Woods Inc.	TBW Couplings	Dura-Flex
TM	Japan	TB Woods Inc.	TBW Couplings	Form-Flex
TM	South Korea	TB Woods Enterprises, Inc.	TBW Couplings	Form-Flex
TM	Venezuela	TB Woods Inc.	Electronics	Petro-Trac
TM	Canada	TB Woods Enterprises, Inc.	TBW Other Mechanical	Qt Power Chain
TM	France	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign
TM	Germany	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign
TM	Great Britain	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign
TM	Germany	TB Woods Enterprises, Inc.	TBW Couplings	SureFlex
TM	Singapore	TB Woods Enterprises, Inc.	TBW Couplings	SureFlex
TM	Benelux	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	Brazil	TB Woods Inc.	TBW Couplings	Sure-Flex
TM	France	TB Woods Enterprises, Inc.	TBW Couplings	Sure-Flex
TM	Italy	TB Woods Inc.	TBW Couplings	Sure-Flex
TM	Canada	TB Woods Enterprises, Inc.	Corporate	Woods@Work
Patent	US	TB Woods Inc.	Electronics	Housing for motor control equipment
Patent	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Combination of power steering pump and air conditioning compressor in an automotive vehicle
Patent	US	TB Woods Enterprises, Inc.	TBW Other Mechanical	Shaft Mountable Bushing and Hub for Industrail poer transmission
Patent	US	TB Woods Enterprises, Inc.	Electronics	Precision Winding Method and Apparatus
Patent	US	TB Woods Enterprises, Inc.	TBW Couplings	Flexible Coupling with End Stress Relief Structure
Patent	US	TB Woods Enterprises, Inc.	TBW Couplings	Flexible Coupling Device
TM	Australia	TB Woods Inc.	TBW Couplings	Dura-Flex
TM	Canada	Dana Corp.	TBW Couplings	Disc-O-Torque
Patent Application	US	TB Woods Enterprises, Inc.	TBW Couplings	Ultraflex
TM	US	TB Woods Enterprises, Inc.	TBW Couplings	G-Flex
TM Appl.	Canada	TB Woods Enterprises, Inc.	TBW Couplings	G-Flex
TM Appl.	Mexico	TB Woods Enterprises, Inc.	TBW Couplings	G-Flex
TM	Mexico	TB Woods Enterprises, Inc.	TBW Couplings	Speedlign

						Date of
Registration	Registration /	Application		Filing		Abandonment/
Number	Issue Date	Number		Date	Status	Last Renewal
2,165,737	6/16/1998		75/290,731	5/12/1997	Active	6/16/2008
1,164,393	8/11/1981		73/254,657	3/19/1980	Active	8/11/2011
1,409,209	9/16/1986		73/581,633	2/7/1986	Active	9/16/2016
859,264	10/29/1968		72/285,224	11/20/1967	Active	10/29/2008
552,086	6/26/1997		297,615	6/9/1997	Active	6/9/2007
1,116,828	4/24/1979		73/158,649	2/13/1978	Active	4/24/2009
2,169,361	6/30/1998		75/280,015	4/23/1997	Active	6/30/2008
1,333,061	4/30/1985		73/491,494	7/24/1984	Active	4/30/2015
2,156,683	5/12/1998		75/273,178	4/11/1997	Active	5/12/2008
1,361,466	9/24/1985		73/526,310	3/11/1985	Active	9/24/2015
TMA215307	8/13/1976		352,690	4/26/1972	Active	8/13/2021
2,152,362	4/21/1998		75/273,175	4/11/1997	Active	4/21/2008
2,261,432	7/13/1999		75/272,935	4/11/1997	Active	7/13/2009
2,152,366	4/21/1998		75/273,181	4/11/1997	Active	4/21/2008
TMA669,532	8/9/2006		1,210,875	3/24/2004	Active	8/9/2021
862222	11/30/2004		652272	4/21/2004	Active	4/21/2014
2,986,366	8/16/2005		78/329,999	11/19/2003	Active	8/16/2015
2,641,082	10/22/2002		78/052,072	3/8/2001	Active	10/22/2012
2,191,918	9/29/1998		75/251,697	2/28/1997	Active	9/29/2008
818826	1/26/2004		573133	10/20/2002	Active	10/20/2012
2,723,745	6/10/2003		76/403,299	5/2/2002	Active	6/10/2013
859,263	10/29/1968		72/285,223	11/20/1967	Active	10/29/2008
TMA665,131	5/29/2006		1,223,603	7/14/2004	Active	5/29/2021
2,991,827	9/6/2005		78/350,700	1/12/2004	Active	9/6/2015
2,257,668	6/29/1999		75/272,936	4/11/1997	Active	6/29/2009
1,686,040	5/12/1992		74/104,389	10/9/1990	Active	5/12/2012
645,415	5/14/1957		71/640,418	1/6/1953	Active	5/14/2007
B998,327	9/13/1972		B998,327	9/13/1972	Active	9/13/2007
B375,472	5/13/1982		B375,472	5/13/1982	Active	5/13/2013
TMA380915	3/1/1991		645,519	11/23/1989	Active	3/1/2021
1,923,250	12/24/1986		40,343/1982	5/12/1982	Active	12/24/2016
405,626	9/14/1992		01605/1993	9/14/1992	Active	9/14/2012
668,649	10/21/1958		72/043,720	1/9/1958	Active	10/21/2008
1,740,974	1/23/1995		7-700836	1/13/1995	Active	1/23/2015
646,423	6/4/1957		71/575,508	3/15/1949	Active	6/4/2007
1,109,150	12/19/1978		73/136,699	8/8/1977	Active	12/19/2008
2,152,364	4/21/1998		75/273,177	4/11/1997	Active	4/21/2008
862,655	12/31/1968		72/300,318	6/13/1968	Active	12/31/2008
2,150,835	4/14/1998		75/273,179	4/11/1997	Active	4/14/2008
2,351,349	5/23/2000		75/559,570	9/25/1998	Active	5/23/2010
1,001,969	1/21/1975		73/001,734	10/9/1973	Active	1/21/2015
1,001,970	1/21/1975		73/003,203	10/10/1973	Active	1/21/2015
2,152,365	4/21/1998		75/273,180	4/11/1997	Active	4/21/2008
2,059,245	5/6/1997		75/107,136	5/20/1996	Active	5/6/2017
TMA664,172	5/12/2006		1,210,868	3/24/2004	Active	5/12/2021
3,828,019	11/15/2005		3.828.019	5/20/2004	Active	5/20/2014
			653,047	4/21/2004	Active
2,961,309	6/7/2005		78/306,778	9/29/2003	Active	6/7/2015
904275	10/24/2005		573134	10/30/2002	Active	10/30/2012

2,801,090	12/30/2003	76/402,992	5/2/2002	Active	12/30/2013
1,053,953	9/16/1991	1,053,953	9/16/1991	Active	9/30/2011
1,783,301	3/27/2000	2,066,443	1/23/1997	Active	3/27/2010
507277	10/2/2000	507.277	2/7/1997	Active
1,105,120	11/22/1978	1105120	11/22/1978	Active	11/22/2009
4,166,483	7/10/1998	27318/97	3/17/1997	Active	7/10/2008
807,300	7/1/1998	(86)5713	2/1/1997	Active	6/30/2008
1,975,830	8/19/1987	41,517/85	8/19/1987	Active	8/19/2007
140,855	5/25/1987	7981/1986	5/25/1997	Active	5/25/2007
P-245856	8/22/2003	2001-016447	9/27/2001	Active	8/22/2013
TMA623,038	10/20/2004	1,157,003	10/25/2002	Active	10/20/2019
1,286,266	6/19/1974	717,131	6/19/1974	Active
935,511	9/17/1975	M39270	6/10/1974	Active	6/30/2014
1,029,397	5/13/1974	1,029,397	5/13/1974	Active	5/13/2015
926,107	12/17/1974	W24959	5/4/1973	Active	5/31/2013
T82/02556B	5/21/1982	2556/82	5/21/1982	Active	5/21/2013
0316801	10/20/1972	0316801	10/20/1972	Active
810,942,631	3/19/1985	810,942,631	8/23/1982	Active	3/19/2015
023196347	11/27/2002	023196347	11/27/2002	Active	11/30/2012
1037180	9/25/1974	MI2003002784	9/25/1992	Active	9/25/2012
TMA626,975	11/29/2004	1,157,004	10/25/2002	Active	11/29/2019
D343387	1/18/1994	07/703338	5/21/1991	Active
5465804	11/14/1995	08/231802	4/25/1994	Active
5304101	4/19/1994	07/919223	7/27/1992	Active
6311920	11/6/2001	09/355713	8/3/1999	Active
5611732	3/18/1997	08/512,137	8/7/1995	Active
7,390,265	6/24/2008	11/256,463	10/21/2005	Active
		737738	6/25/1997	Active
TMA171577	9/25/1970	325923	9/16/1969	Active	9/25/2015
		77/341,430	11/30/2007	Pending
3,501,631	9/16/2008	77/397,102.	2/14/2008	Active
		1406538	8/7/2008	Pending
		953824	8/11/2008	Pending
896028	8/23/2005	666,531	7/14/2004	Active

			Owner or
	Date of Next	Costs of Next	Assignee of	Business
Cumulative Fees/Costs Paid	Renewal	Renewal	Record	Name

Machine parts, namely, flexible couplings

Computer software to allow programming
and control of inverters

Flexible torsion couplings

Business
Contact	Product Line	Notes
		Machine Parts, namely sheaves and pulleys
		Electronic brakes for induction motors, will be abandoned
		Gear Couplings
		Clutches
		Flexible power transmission couplings
		Flexible Couplings
		Electromechanical controls, namely, solid state electronic controls for electric motors
		Inverter type AC motor controller
		Electromechanical controls, namely, solid state electronic controls for electric motors
		Parts of machines, namely self-aligning gear couplings
		Machine parts, namely, flexible couplings
		Machine parts, namely, integrated motor drive
		Machine parts, namely, centrifugla clutches, will be abandoned
		Software to allow programming and control of inverters on hand-held operating systems
		Computer software to allow programming and control of inverters
		Software to allow programming and control of inverters on hand-held operating systems
		Variable speed drive train for electric motors
		Gear Couplings for machines
		Mechanical power transmission machinery
		Mechanical power transmission machinery, namely belts and sprockets
		Flexible torsion couplings
		Flexible torsion couplings
		Electronic apparatus, namely, softstart motor controllers for use in industrail machines
		Will be abandoned
		Power transmission belts
		Bearings, shafts, shaft couplings, mechanical power transmission equipment, and all other goods in this class
		Mechanical power transmission equipment, particularly flexible couplings
		Flexible Couplings
		Metalworking machines and tools, etc
		Cutlery, machines and tools, parts thereof Machinery
		Bushings used in mechanical power transmission machinery
		Machine parts, namely drive shafts; will be abandoned
		Electrical control which transforms alternating current to direct current for a D.C. motor producing controllable variable spee doutput from the motor
		Electromechanical controls, namely, a control which transforms alternating current to direct current for a DC motor producing controllable variable speed output from the motor; will be abandoned
		Electrical controller for a filament winding machine used in the textile industry
		Power transmission V-belts
		Sheaves and pulleys
		Machine parts, namely variable pitch pulleys for belt drives; will be abandoned
		Power tranmission belts for machines, couplings for machines, electric motors and parts thereof for machines, and pulleys being parts of machines
		Computer software to allow programming and control of inverters
		Computer software to allow programming and control of inverters
		Computer software to allow programming and control of inverters
		Computer software to allow programming and control of inverters
		Quality production services rendered in association with electronic and mechanical industrial power transmission products

Production of electronic and mechanical industrial power transmissions for others

Flexible power transmission couplings

Flexible drive line couplings

Mechanical power transmisiion machinery

Couplings including supple couplings for torques, supple couplings for machines, transmission for shafts opposed by axis and other rotating organs as well as parts and fittings of these products

Flexible Couplings and parts and fittings

Formerly 654849

Quality production services rendered in association with electronic and mechanical industrial power transmission products

To be abandoned per instructions (12/21/2000) from TB Woods to Barley Snyder,

Attachment 3.14 — Insurance Summary

Policy	Carrier	Policy #	Term	Premium	Limits	Deductibles/ Retention
					[*]

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Attachment 3.15 — Organizational Chart

EX-10.17

Exhibit 10.17

[*] THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Execution Copy

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the “Security Agreement”) is entered into as of November 25, 2009 by and between ALTRA HOLDINGS, INC., a Delaware corporation (“Holdings”), ALTRA INDUSTRIAL MOTION, INC., a Delaware corporation, the other Subsidiaries of Holdings named on the signature pages hereto (each a “Grantor”, and collectively, the “Grantors”), and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below.

PRELIMINARY STATEMENT

     The Grantors, the Administrative Agent and the Lenders are entering into a Credit Agreement dated as of the date hereof (as it may be amended or modified from time to time, the “Credit Agreement”). Each Grantor is entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to the Borrowers under the Credit Agreement and to secure the Secured Obligations that such Grantor has agreed to guarantee pursuant to Article X of the Credit Agreement.

     ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Lenders, hereby agree as follows:

ARTICLE I
DEFINITIONS

     1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

     1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein as defined in the UCC.

     1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings:

     “Accounts” shall have the meaning set forth in Article 9 of the UCC.

     “Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

     “Assigned Contracts” means, with respect to any Grantor, collectively, all of such Grantors’ rights and remedies under, and all moneys and claims for money due or to become due to such Grantor under those contracts and other agreements between such Grantor and any party other than the Administrative Agent or any Lender, and any other material contracts, and any and all amendments, supplements, extensions, and renewals thereof, including all rights and claims of such Grantor now or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder.

     “Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

     “Closing Date” means the date of the Credit Agreement.

     “Collateral” shall have the meaning set forth in Article II.

     “Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the Administrative Agent, between the Administrative Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Grantor for any real property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time.

     “Collateral Report” means any certificate (including any Borrowing Base Certificate), report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.

     “Collection Account” means the account at JPMorgan Chase Bank, N.A., so designated by the Administrative Agent, in a written notice delivered to the Grantors, to be the “Collection Account”, to which funds on deposit in Deposit Accounts, Securities Accounts and Lock Boxes (other than Excluded Accounts) and all payments received in respect of Accounts shall be remitted at all times during an Availability Trigger Period.

     “Commercial Tort Claims” means “commercial tort claims” as set forth in Article 9 of the UCC and shall include, without limitation, the existing commercial tort claims of the Grantors set forth in Exhibit C-2 attached hereto.

     “Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

     “Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

     “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

     “Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

     “Documents” shall have the meaning set forth in Article 9 of the UCC.

     “Equipment” shall have the meaning set forth in Article 9 of the UCC.

     “Event of Default” means an event described in Section 5.1.

     “Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

     “Fixtures” shall have the meaning set forth in Article 9 of the UCC.

     “General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

     “Goods” shall have the meaning set forth in Article 9 of the UCC.

     “Instruments” shall have the meaning set forth in Article 9 of the UCC.

     “Inventory” shall have the meaning set forth in Article 9 of the UCC.

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     “Investment Property” shall have the meaning set forth in Article 9 of the UCC.

     “Lenders” means the lenders party to the Credit Agreement and their successors and assigns.

     “Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

     “Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

     “Lock Boxes” shall have the meaning set forth in Section 7.1(a).

     “Lock Box Agreements” shall have the meaning set forth in Section 7.1(a).

     “Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

     “Permitted Liens” means Liens permitted under Section 6.02 of the Credit Agreement.

     “Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement; provided, however, Pledged Collateral shall not include more than 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) owned by each Grantor in each Foreign Subsidiary.

     “Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

     “Required Secured Parties” means (a) prior to an acceleration of the Obligations under the Credit Agreement, the Required Lenders, (b) after an acceleration of the Obligations under the Credit Agreement but prior to the date upon which the Credit Agreement has terminated by its terms and all of the obligations thereunder have been paid in full, Lenders holding in the aggregate at least a majority of the total of the Aggregate Credit Exposure, and (c) after the Credit Agreement has terminated by its terms and all of the Obligations thereunder have been paid in full (whether or not the Obligations under the Credit Agreement were ever accelerated), Lenders holding in the aggregate at least a majority of the aggregate net early termination payments and all other amounts then due and unpaid from any Grantor to the Lenders under Swap Agreement, as determined by the Administrative Agent in its reasonable discretion.

     “Section” means a numbered section of this Security Agreement, unless another document is specifically referenced.

     “Securities Accounts” has the meaning assigned to such term in Article 8 of the UCC.

     “Security” has the meaning set forth in Article 8 of the UCC.

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     “Stock Rights” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest.

     “Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.

     “Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

     “UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Administrative Agent’s or any Lender’s Lien on any Collateral.

     The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II
GRANT OF SECURITY INTEREST

     To secure the prompt and complete payment and performance of the Secured Obligations, each Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Lenders, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

(i)	all Accounts;
(ii)	all Chattel Paper;
(iii)	all Copyrights, Patents and Trademarks;
(iv)	all Documents;
(v)	all Equipment;
(vi)	all Fixtures;
(vii)	all General Intangibles;
(viii)	all Goods;
(ix)	all Instruments;
(x)	all Inventory;
(xi)	all Investment Property;
(xii)	all cash or cash equivalents;
(xiii)	all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

4

(xiv)	all Deposit Accounts with any bank or other financial institution;
(xv)	all Securities Accounts with any bank or other financial institution;
(xvi)	all Commercial Tort Claims;
(xvii)	all Assigned Contracts; and
(xviii)	and all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing.

     Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and no Grantor shall be deemed to have granted a security interest in, the following: (i) any of such Grantor’s rights or interests in or under, any lease, license, contract or agreement to which such Grantor is a party to the extent, but only to the extent that such a grant would, under the terms of such lease, license, contract or agreement constitute or result in (a) the abandonment, invalidation or unenforceability of any right, title or interest of such Grantor therein or (b) a breach or termination pursuant to the terms of, or a default under such lease, license, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including any bankruptcy or insolvency laws) or principles of equity), provided that (x) immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect and (y) to the extent that any such lease, license, contract or agreement would otherwise constitute Collateral (but for the provisions of this paragraph), all proceeds resulting from the sale or disposition by any Grantor of any rights of such Grantor under such lease, license, contract or agreement shall constitute Collateral, (ii) any equipment or other fixed or capital assets owned by a Grantor acquired after the date hereof that is subject to a Lien securing a purchase money financing, project financing or capital or finance lease obligation permitted to be incurred pursuant to the Credit Agreement if the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money, project financing or capital or finance lease obligation) prohibits the creation of any other Lien on such property, provided, that immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (iii) more than 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary, and (iv) any Trademark applications filed in the U.S. Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such trademark, unless and until acceptable evidence of use of the trademark has been filed with and accepted by the U.S. Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a lien in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

     Each Grantor represents and warrants to the Administrative Agent and the Lenders that:

     3.1. Title, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the security interest in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit F, the Administrative Agent will have a fully perfected first priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).

5

     3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

     3.3. Principal Location. Such Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A.

     3.4. Collateral Locations. All of such Grantor’s locations where Collateral is located are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A.

     3.5. Deposit Accounts; Securities Accounts; Lock Boxes. All of such Grantor’s Deposit Accounts, Securities Accounts and Lock Boxes are listed on Exhibit B.

     3.6. Exact Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

     3.7. Letter-of-Credit Rights; Chattel Paper; Commercial Tort Claims. Exhibit C-1 lists all Letter-of-Credit Rights and Chattel Paper of such Grantor having a value in excess of $500,000, individually. Set forth on Exhibit C-2 is a description of each Commercial Tort Claim of such Grantor having a value in excess of $500,000, individually (including a listing of the parties, description of the dispute, and, if available, case number). All action by the Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item listed on Exhibits C-1 and C-2 (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest in the Collateral listed on Exhibits C-1 and C-2, subject only to Liens permitted under Section 4.1(e).

     3.8. Accounts and Chattel Paper.

          (a) The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be correctly stated in all records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by such Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

          (b) With respect to its Accounts, except as specifically disclosed on the most recent Collateral Report, (i) all Accounts are Eligible Accounts; (ii) all Accounts represent bona fide sales of Inventory or rendering of services to Account Debtors in the ordinary course of such Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper; (iii) there are no setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has not made any agreement with any Account Debtor for any extension of time for the payment thereof, any compromise or settlement for less than the full amount thereof, any release of any Account Debtor from liability therefor, or any deduction therefrom except a discount or allowance allowed by such Grantor in the ordinary course of its business for prompt payment and disclosed to the Administrative Agent; (iv) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (v) such Grantor has not received any notice of proceedings or actions which are threatened or pending against any Account Debtor which might result in any adverse change in such Account Debtor’s financial condition; and (vi) such Grantor has no knowledge that any Account Debtor is unable generally to pay its debts as they become due.

6

          (c) In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; (ii) no payments have been or shall be made thereon except payments immediately delivered to a Lock Box as required pursuant to Section 7.1; and (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.

     3.9. Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and Lenders, and except for Permitted Liens, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and merchantable quality, free from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been substantially produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

     3.10. Intellectual Property. Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in Exhibit D, which exhibit shall be delivered to the Administrative Agent not later than thirty (30) days after the Effective Date pursuant to Section 4.7(f). This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit F and this Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, fully perfected first priority security interests in favor of the Administrative Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.

     3.11. Filing Requirements. None of its Equipment is covered by any certificate of title, except for motor vehicles having an aggregate value not in excess of $2,500,000. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) motor vehicles and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D.

     3.12. No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the Lenders as the secured party and (b) as permitted by Section 4.1(e).

     3.13. Pledged Collateral.

          (a) Exhibit E sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit E as being owned by it, free and clear of any Liens, except for Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in Article

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8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a Control Agreement among such Grantor, the securities intermediary and the Administrative Agent pursuant to which the Administrative Agent has Control and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

          (b) In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

          (c) Except as set forth in Exhibit E, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture.

ARTICLE IV
COVENANTS

     From the date of this Security Agreement, and thereafter until this Security Agreement is terminated, each Grantor agrees that:

     4.1. General.

          (a) Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, updates with respect to Exhibits A, B, C-1, C-2, D, E, F and G hereto in accordance with Section 4.1(c) and such reports relating to such Collateral as the Administrative Agent shall from time to time request.

          (b) Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain, subject to Permitted Liens, a first perfected security interest in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Such Grantor also agrees to furnish any such information to the Administrative Agent promptly upon request.

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Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

          (c) Further Assurances. Such Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder. For purposes of this Security Agreement, all references to Exhibits A, B, C-1, C-2, D, E, F and G hereto shall be deemed to refer to each such exhibit as updated from time to time pursuant to supplements and amendments delivered by the Grantor to the Administrative Agent.

          (d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions specifically permitted pursuant to Section 6.05 of the Credit Agreement.

          (e) Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except Permitted Liens.

          (f) Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 4.1(e). Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

          (g) Locations. Such Grantor will not (i) maintain any Collateral owned by it at any location other than those locations listed on Exhibit A, (ii) otherwise change, or add to, such locations without the Administrative Agent’s prior written consent as required by the Credit Agreement (and if the Administrative Agent gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement for each such location to the extent required by the Credit Agreement), or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by the Credit Agreement.

          (h) Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

     4.2. Receivables.

          (a) Certain Agreements on Receivables. Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of an Event of Default, such Grantor may discount or adjust the amount of Accounts arising from the sale of Inventory in accordance with its present policies and in the ordinary course of business.

          (b) Collection of Receivables. Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it.

          (c) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent immediately upon its request duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify.

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          (d) Disclosure of Counterclaims on Receivables. If (i) any discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on any Receivable owned by such Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened with respect to any such Receivable, such Grantor will promptly disclose such fact to the Administrative Agent in writing. Such Grantor shall send the Administrative Agent a copy of each credit memorandum in excess of $500,000 as soon as issued, and such Grantor shall promptly report each credit memo and each of the facts required to be disclosed to the Administrative Agent in accordance with this Section 4.2(d) on the Borrowing Base Certificates submitted by it.

          (e) Electronic Chattel Paper. Such Grantor shall take all steps necessary to grant the Administrative Agent Control of all electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

     4.3. Inventory and Equipment.

          (a) Maintenance of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory and the Equipment in good repair and working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

          (b) Returned Inventory. If an Account Debtor returns any Inventory to such Grantor when no Event of Default exists, then such Grantor shall promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount. Such Grantor shall immediately report to the Administrative Agent any return involving inventory having a fair market value in excess of $500,000. Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory. In the event any Account Debtor returns Inventory to such Grantor when an Event of Default exists, such Grantor, upon the request of the Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior written consent. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory and such returned Inventory shall not be Eligible Inventory.

          (c) Inventory Count; Perpetual Inventory System. Such Grantor will conduct a physical count of its Inventory at least once per fiscal year, and after and during the continuation of an Event of Default, at such other times as the Administrative Agent requests. Such Grantor, at its own expense, shall deliver to the Administrative Agent the results of each physical verification, which such Grantor has made, or has caused any other Person to make on its behalf, of all or any portion of its Inventory. Such Grantor will maintain a perpetual inventory reporting system at all times.

          (d) Equipment. Such Grantor shall promptly inform the Administrative Agent of any additions to or deletions from its Equipment which individually exceed $2,500,000. Such Grantor will not, without the Administrative Agent’s prior written consent, alter or remove any identifying symbol or number on any of such Grantor’s Equipment constituting Collateral.

     4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) deliver to the Administrative Agent promptly following the execution of this Security Agreement the originals of (x) all Chattel Paper having a value in excess of $500,000 and (y) all Securities and Instruments, in each case constituting Collateral owned by it (if any then exist), (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral and (d) upon the Administrative

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Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit G hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral. Notwithstanding anything to the contrary contained in this Security Agreement or any other Loan Document, not later than thirty (30) days after the Effective Date, such Grantor shall deliver to the Administrative Agent the original certificates representing the Equity Interests of Foreign Subsidiaries which constitute Pledged Collateral owned by such Grantor as of the Effective Date, together with the executed undated powers for each such certificate.

     4.5. Uncertificated Pledged Collateral.

          (a) Such Grantor will cause the issuers of Equity Interests which constitute Pledged Collateral owned by such Grantor to comply with any and all instructions originated by the Administrative Agent regarding such Equity Interests, notwithstanding anything to the contrary in any other agreement between such Grantor and such issuers. Such Grantor further agrees that it shall cause the issuers of Equity Interests which constitute Pledged Collateral owned by such Grantor not to certificate such Equity Interests or register any party other than such Grantor, another Grantor or the Administrative Agent or the Administrative Agent’s designee as the registered owner of any portion of such Equity Interests, or allow any party other than the Administrative Agent or its designee to become the holder of any such Equity Interests or an entitlement thereto, in each case without the prior written consent of the Administrative Agent.

          (b) Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a control agreement with the Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving the Administrative Agent Control.

          (c) Each Grantor that is an issuer of uncertificated securities which constitute Pledged Collateral hereby acknowledges and agrees that (i) the Administrative Agent shall be deemed to have “control” over such uncertificated securities within the meaning of Section 8-106 of the UCC, (ii) such Grantor shall comply with all instructions originated by the Administrative Agent regarding such uncertificated securities, (iii) such Grantor shall market its books and records to reflect the Lien of the Administrative Agent in such uncertificated securities, and (iv) such Grantor shall not register any transfer of any portion of such uncertificated securities to any Person other than to another Grantor or to the Administrative Agent or the Administrative Agent’s designee.

          (d) Each of the parties hereto acknowledges and agrees that this Security Agreement evidences the Administrative Agent’s “control” over all “uncertificated securities” and “investment property” constituting Pledged Collateral in accordance with the applicable provisions of, and as such terms are defined in, Articles 8 and 9 of the UCC.

     4.6. Pledged Collateral.

          (a) Changes in Capital Structure of Issuers. Except as otherwise permitted under the terms of the Credit Agreement, such Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Liens and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any such Pledged Collateral in favor of any of the foregoing.

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          (b) Issuance of Additional Securities. Such Grantor will not permit or suffer the issuer of an Equity Interest constituting Pledged Collateral owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings, except to such Grantor or another Grantor.

          (c) Registration of Pledged Collateral. Such Grantor will permit any registrable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Secured Parties.

          (d) Exercise of Rights in Pledged Collateral.

          (i) Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral.

          (ii) Such Grantor will permit the Administrative Agent or its nominee at any time after the occurrence and during the continuance of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

          (iii) Such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain subject to the Lien created by this Security Agreement; and

          (iv) All Excluded Payments and all other distributions in respect of any of the Pledged Collateral owned by such Grantor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by such Grantor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Grantor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

     4.7. Intellectual Property.

          (a) Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of the Administrative Agent of any License held by such Grantor and to enforce the security interests granted hereunder; provided, however, that the foregoing shall not apply to any License for the use of intellectual property where such License is for the use of intellectual property that is commercially available.

          (b) Such Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s

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ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

          (c) In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving the Administrative Agent prior written notice thereof, and, upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.

          (d) Such Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, except if such Patent, Trademark or Copyright is not material to the conduct of such Grantor’s business.

          (e) Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative Agent shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

          (f) Notwithstanding anything to the contrary contained in this Security Agreement or any other Loan Document, not later than thirty (30) days after the Effective Date, such Grantor shall (i) deliver to the Administrative Agent the results of patent and trademark searches of the U.S. Patent and Trademark Office databases, evidencing its ownership of all Patents and Trademarks held by such Grantor, together with a true, correct and complete listing of all Patents and Trademarks (including any licenses of the foregoing) in which such Grantor has an ownership interest, which listing shall be attached to this Security Agreement as Exhibit D, and (ii) execute and deliver in favor of the Administrative Agent (x) a patent security agreement and (y) a trademark security agreement, in each case in form and substance reasonably satisfactory to the Administrative Agent.

     4.8. Commercial Tort Claims. Such Grantor shall promptly, and in any event within fifteen (15) Business Days after the same is acquired by it, notify the Administrative Agent of any Commercial Tort Claim acquired by it having a value in excess of $500,000 and, unless the Administrative Agent otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit G hereto, granting to Administrative Agent a first priority security interest in such commercial tort claim.

     4.9. Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit having a value in excess of $500,000, it shall promptly, and in any event within two Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative Agent and (ii) agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent.

     4.10. Federal, State or Municipal Claims. Such Grantor will promptly notify the Administrative Agent of any Collateral which constitutes a claim against the United States government or any state or local government or any instrumentality or agency thereof having a value in excess of $1,000,000, the assignment of which claim is restricted by federal, state or municipal law.

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     4.11. No Interference. Such Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

     4.12. Insurance.

          (a) In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on any real property leased by such Loan Party within a “Special Flood Hazard Area”). The amount of flood insurance required by this Section shall be in an amount equal to the lesser of the total Commitment or the total replacement cost value of the improvements.

          (b) All insurance policies required hereunder and under Section 5.09 of the Credit Agreement shall name the Administrative Agent (for the benefit of the Administrative Agent and the Lenders) as an additional insured or as loss payee, as applicable, and shall contain loss payable clauses or mortgagee clauses, through endorsements in form and substance satisfactory to the Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent to be held, remitted to the Grantors or applied against the Secured Obligations as provided in the Credit Agreement; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days prior written notice given to the Administrative Agent.

          (c) All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at the Grantor’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor.

     4.13. Collateral Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain, within 120 days following the Closing Date, a Collateral Access Agreement, from (x) the lessor of each leased property and (y) from any bailee or consignee with respect to any warehouse, processor or converter facility or other location, in each case where inventory having a fair market value in excess of $500,000 is stored or located or where machinery or equipment having a fair market value in excess of $500,000 is stored or located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, bailee or consignee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent. After the Closing Date, no real property or warehouse space shall be leased by such Grantor and no Inventory shall be shipped to a processor or converter under arrangements established after the Closing Date, unless and until a satisfactory Collateral Access Agreement shall first have been obtained with respect to such location (unless the fair market value of the inventory at such location, or the fair market value of the machinery and equipment at such location, is less than $500,000). Notwithstanding the foregoing, if a Collateral Access Agreement has not been obtained with respect to any location where inventory is stored or located, Eligible Inventory at that location shall be subject to the establishment of Reserves acceptable to the Administrative Agent. Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may be located.

     4.14. Control Agreements. Such Grantor will provide to the Administrative Agent Control Agreements to the extent required under Section 5.12 of the Credit Agreement.

     4.15. Change of Name or Location; Change of Fiscal Year. Except as otherwise expressly permitted under the Credit Agreement, such Grantor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or locations at which Collateral is held or stored, or the

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location of its records concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least twenty (20) days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of Lenders, in any Collateral), provided that, any new location shall be in the continental U.S. Such Grantor shall not change its fiscal year which currently ends on December 31.

     4.16. Assigned Contracts. Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce the security interests granted hereunder, except where the failure to obtain such consent or approval could not reasonably be expected to result in a Material Adverse Effect. Such Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided however, that such Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract unless the Grantor shall have reasonably determined that the termination of such Assigned Contract would not have a Material Adverse Effect. Without limiting the generality of the foregoing, such Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. Such Grantor shall notify the Administrative Agent and the Lenders in writing, promptly after such Grantor becomes aware thereof, of any event or fact which could give rise to a claim by it for indemnification in an amount in excess of $500,000 under any of its Assigned Contracts, and shall diligently pursue such right to recover such claim and report to the Administrative Agent on all further developments with respect thereto. If Full Cash Dominion shall be in effect, such Grantor shall deposit into a Deposit Account at the Administrative Agent or subject to a Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all amounts received by such Grantor as indemnification or otherwise pursuant to its Assigned Contracts. If such Grantor shall fail after the Administrative Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may, and at the direction of the Required Secured Parties shall, directly enforce such right in its own or such Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Administrative Agent or the Required Secured Parties, as applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Lenders under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, such Grantor shall indemnify and hold the Administrative Agent and Lenders harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach by such Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from such Grantor to or in favor of such obligor or its successors. All such obligations of such Grantor shall be and remain enforceable only against such Grantor and shall not be enforceable against the Administrative Agent or the Lenders. Notwithstanding any provision hereof to the contrary, such Grantor shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned Contracts, and the Administrative Agent’s or any Lender’s exercise of any of their respective rights with respect to the Collateral shall not release such Grantor from any of such duties and obligations. Neither the Administrative Agent nor any Lender shall be obligated to perform or fulfill any of such Grantor’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.

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ARTICLE V
EVENTS OF DEFAULT AND REMEDIES

     5.1. Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder:

          (a) Any representation or warranty made by or on behalf of any Grantor under or in connection with this Security Agreement shall be materially false as of the date on which made.

          (b) The breach by any Grantor of any of the terms or provisions of Article IV or Article VII.

          (c) The breach by any Grantor (other than a breach which constitutes an Event of Default under any other Section of this Article V) of any of the terms or provisions of this Security Agreement which is not remedied within twenty (20) days after such breach.

          (d) The occurrence of any “Event of Default” under, and as defined in, the Credit Agreement.

          (e) Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a control agreement with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

     5.2. Remedies.

          (a) Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may exercise any or all of the following rights and remedies:

          (i) those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Lenders prior to an Event of Default;

          (ii) those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

          (iii) give notice of sole control or any other instruction under any Control Agreement or and other control agreement with any securities intermediary and take any action therein with respect to such Collateral;

          (iv) without notice (except as specifically provided in Section 8.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for

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future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and

          (v) concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof.

          (b) The Administrative Agent, on behalf of the Lenders, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

          (c) The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Lenders, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

          (d) Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Lenders), with respect to such appointment without prior notice or hearing as to such appointment.

          (e) If, after the Credit Agreement has terminated by its terms and all of the Obligations have been paid in full, there remain Swap Obligations outstanding, the Required Secured Parties may exercise the remedies provided in this Section 5.2 upon the occurrence of any event which would allow or require the termination or acceleration of any Swap Obligations pursuant to the terms of the Swap Agreement.

          (f) Notwithstanding the foregoing, neither the Administrative Agent nor the Lenders shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

          (g) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

     5.3. Grantor’s Obligations Upon Default. Upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, each Grantor will:

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          (a) assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at a Grantor’s premises or elsewhere;

          (b) permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

          (c) prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Administrative Agent may request, all in form and substance satisfactory to the Administrative Agent, and furnish to the Administrative Agent, or cause an issuer of Pledged Collateral to furnish to the Administrative Agent, any information regarding the Pledged Collateral in such detail as the Administrative Agent may specify;

          (d) take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Administrative Agent to consummate a public sale or other disposition of the Pledged Collateral; and

          (e) at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

     5.4. Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V following the occurrence and during the continuance of an Event of Default, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

     6.1. Account Verification. The Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables; provided that, unless an Event of Default shall have occurred and be continuing, the Administrative Agent shall notify the Grantors prior to contacting Account Debtors.

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     6.2. Authorization for Secured Party to Take Certain Action.

          (a) Each Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Administrative Agent to the Secured Obligations as provided in Section 7.4, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Credit Agreement.

          (b) All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Lenders, under this Section 6.2 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Section 6.2(a)(i)-(vi), 6.2(a)(vii) solely with respect to periodic account verifications with prior notice to the Grantors, and Section 6.2(a)(xvi), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

     6.3. Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER

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THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT.

     6.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS,
SECURITIES ACCOUNTS, LOCK BOXES

     7.1. Collection of Receivables. As of the date of this Security Agreement, all Deposit Accounts, Securities Accounts and postal lock boxes (“Lock Boxes”) established by the Grantors with any banking institution, securities broker, securities intermediary or other financial institution are listed on Exhibit B hereto. Each Grantor has and will continue to direct its Account Debtors to remit cash, checks, electronic funds transfers and other similar payments relating to or constituting payments made in respect of Receivables directly to a Lock Box. Such Lock Box shall be subject to an irrevocable lockbox agreement in the form provided by or otherwise acceptable to the Administrative Agent and shall be accompanied by an acknowledgment by the bank where the Lock Box is located of the Lien of the Administrative Agent granted hereunder and of irrevocable instructions to wire all amounts collected therein to the Collection Account during an Availability Trigger Period pursuant to Section 7.2 (a “Lock Box Agreement”). If any Grantor should refuse or neglect to notify any Account Debtor to forward payments directly to a Lock Box after notice from the Administrative Agent, the Administrative Agent shall be entitled to make such notification directly to such Account Debtor.

     7.2. Application of Funds During an Availability Trigger Period. At all times during an Availability Trigger Period, the Grantors shall comply and shall cause the Cash Management Bank to comply with the provisions of Section 5.12(d) of the Credit Agreement. At all times during an Availability Trigger Period, the Administrative Agent shall have the right (i) to declare that Full Cash Dominion is in effect, (ii) to give a notice of sole control or other instruction under any Control Agreement, (iii) to notify each banking institution, securities broker or securities intermediary (including the Cash Management Bank) at which any Grantor maintains any Deposit Account or Securities Account (in each case, other than Excluded Accounts), that (A) the Administrative Agent has taken full dominion and control over all Deposit Accounts and Securities Accounts (in each case, other than Excluded Accounts) and all funds from time to time on deposit therein, (B) such banking institutions, securities brokers and securities intermediaries shall follow all instructions given by the Administrative Agent with respect to such Deposit Accounts and Securities Accounts, and (C) such banking institutions shall remit directly to the Collection Account (or to such other account as the Administrative Agent may direct), on a daily basis (or on such other basis as the Administrative Agent shall direct) all funds from time to time deposited into such Deposit Accounts and Securities Accounts, and (iv) to automatically apply, on a daily basis, all funds remitted to the Collection Account (or to such other account as the Administrative Agent shall so direct), from all such Deposit Accounts and Securities Accounts, and all other proceeds of the Collateral, to repay the Loans and other Obligations in accordance with Sections 2.11 and 2.18 of the Credit Agreement.

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     7.3. Covenant Regarding New Deposit Accounts; Securities Accounts and Lock Boxes. Before opening or replacing any Deposit Account or Securities Account, or establishing a new Lock Box, each Grantor shall (a) obtain the Administrative Agent’s consent in writing to the opening of such Deposit Account, Securities Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open a Deposit Account, Securities Account or Lock Box (in each case, other than an Excluded Account) to enter into a Control Agreement with the Administrative Agent in order to give the Administrative Agent dominion and control over such Deposit Account, Securities Account or Lock Box. In the case of Deposit Accounts or Lock Boxes maintained with Lenders, the terms of such letter shall be subject to the provisions of the Credit Agreement regarding setoffs.

     7.4. Application of Proceeds; Deficiency. In the case of any sale or other disposition of Collateral by the Administrative Agent in the exercise of its remedies provided herein or in any other Loan Document, the proceeds of such sale shall be applied (and allocated) by the Administrative Agent in accordance with Section 2.18 of the Credit Agreement. In the event that the proceeds from any sale or other disposition of Collateral are insufficient to pay all Secured Obligations in full, the Grantors shall remain liable for any deficiency, including any attorneys’ fees and other expenses incurred by the Administrative Agents or any Lender to collect such deficiency.

ARTICLE VIII
GENERAL PROVISIONS

     8.1. Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Administrative Agent or any Lender arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or such Lender as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any Lender, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

     8.2. Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each Lender shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any Lender shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such Lender, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies

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against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2.

     8.3. Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.

     8.4. Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 8.4. The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

     8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and Lenders have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Lenders to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 8.5 shall be specifically enforceable against the Grantors.

     8.6. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the Lenders unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Secured Parties.

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     8.7. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Lender to exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders until the Secured Obligations have been paid in full.

     8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Security Agreement 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 this Security Agreement are declared to be severable.

     8.9. Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

     8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Lenders and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent (except in connection with a transaction permitted under Section 6.03(a) of the Credit Agreement). No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, hereunder.

     8.11. Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.

     8.12. Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any

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periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.

     8.13. Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.

     8.14. Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or Supporting Letter of Credit has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the Lenders which would give rise to any Secured Obligations are outstanding.

     8.15. Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.

     8.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     8.17. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR 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 GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.

     8.18. WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

     8.19. Indemnity. Each Grantor hereby agrees to indemnify the Administrative Agent and the Lenders, and their respective successors, assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the Administrative Agent or any Lender is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or the Lenders, or their respective successors, assigns, agents and employees, in any way relating to or arising out of the execution and delivery of this Security Agreement or any actions taken or omitted to be taken by the Administrative Agent or the Lenders

24

in accordance with the terms of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not discoverable by the Administrative Agent or the Lenders or any Grantor, and any claim for Patent, Trademark or Copyright infringement).

     8.20. Counterparts. This Security 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 Security Agreement by signing any such counterpart.

     8.21. Post Closing Matters. Each of the Parties hereto acknowledges and consents that the documents and deliverables set forth in Exhibit H will be provided by the party responsible therefor in the manner set forth in such exhibit on or prior to the due date specified in such exhibit.

ARTICLE IX
NOTICES

     9.1. Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent by United States mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if sent by telecopier (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), in each case addressed to the Grantors at the notice address set forth on Exhibit A, and to the Administrative Agent and the Lenders at the addresses set forth in accordance with Section 9.01 of the Credit Agreement.

     9.2. Change in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE X
THE ADMINISTRATIVE AGENT

     JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article VIII. Any successor Administrative Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

[Signature Page Follows]

25

     IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security Agreement as of the date first above written.

GRANTORS: ALTRA HOLDINGS, INC. ALTRA INDUSTRIAL MOTION, INC.
By:	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:  Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP. AMERICAN ENTERPRISES MPT HOLDINGS, LLC AMERIDRIVES INTERNATIONAL, LLC BOSTON GEAR LLC FORMSPRAG LLC INERTIA DYNAMICS LLC KILIAN MANUFACTURING CORPORATION NUTTALL GEAR LLC WARNER ELECTRIC INTERNATIONAL HOLDING, INC. WARNER ELECTRIC LLC WARNER ELECTRIC TECHNOLOGY LLC TB WOOD’S CORPORATION TB WOOD’S INCORPORATED TB WOOD’S ENTERPRISES, INC.
By	/s/ Glenn E. Deegan
Name:	Glenn Deegan
Title:	Secretary

ADMINISTRATIVE AGENT JPMORGAN CHASE BANK, N.A., as Administrative Agent
By	/s/ Kathleen C. Maggi
Name:	Kathleen C. Maggi
Title:	Senior Vice President

PLEDGE AND SECURITY AGREEMENT

EXHIBITS

EXHIBIT A
(See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security Agreement)

NOTICE ADDRESS FOR ALL GRANTORS

c/o Altra Holdings, Inc.
300 Granite St., Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile: (781) 843-0709

INFORMATION AND COLLATERAL LOCATIONS OF GRANTORS

I. General Information

Name of Grantor	State	Entity Type	Org. No	Tax No.
Altra Holdings, Inc.	DE	C Corp.	3870357	61-1478870
Altra Industrial Motion, Inc.	DE	C Corp.	3878606	30-0283143
American Enterprises MPT Corp.	DE	C Corp.	2673186	52-2005169
American Enterprises MPT Holdings, LLC	DE	LLC	2686543	52-2005171
Ameridrives International, LLC	DE	LLC	2673483	54-1826102
Boston Gear LLC	DE	LLC	3822981	11-3723980
Formsprag LLC	DE	LLC	3534967	01-0712538
Inertia Dynamics, LLC	DE	LLC	4046002	20-4221420
Kilian Manufacturing Corporation	DE	C Corp.	0817664	06-0933715
Nuttall Gear LLC	DE	LLC	2765519	54-1856788
TB Wood’s Corporation	DE	C Corp.	2531112	25-1771145
TB Wood’s Enterprises, Inc.	DE	C Corp.	3102375	51-0393505
TB Wood’s Incorporated	PA	C Corp.	394660	23-1232420
Warner Electric International Holding, Inc.	DE	C Corp.	3142042	54-1967086
Warner Electric LLC	DE	LLC	3142038	54-1967089
Warner Electric Technology LLC	DE	LLC	3142046	54-1967084

II.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) and Mailing Address:
	Chief Executive Office/Mailing Address of Each Grantor:

c/o Altra Holdings, Inc.
300 Granite St., Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile: (781) 843-0709

III. Locations of Collateral:

(a) Properties Owned by the Grantors:

Grantor/Owner	Street	City	State	Country	ZIP
Warner Electric LLC	449 Gardner Street	South Beloit	IL	USA	61080
Warner Electric, LLC	802 E. Short Street	Columbia City	IN	USA	46725
TB Wood’s Corporation	801 East Industrial Avenue	Mt. Pleasant	MI	USA	48858
Formsprag LLC	23601 Hoover Road	Warren	MI	USA	48089

Grantor/Owner	Street	City	State	Country	ZIP
Kilian Manufacturing Corporation	1728-36 Burnet Avenue	Syracuse	NY	USA	13206
TB Wood’s Corporation	440 North Fifth Avenue	Chambersburg	PA	USA	17201
TB Wood’s Corporation	3181 Black Gap Road	Scotland	PA	USA	18407
Ameridrives International LLC	1802 Pittsburgh Avenue	Erie	PA	USA	16502
TB Wood’s Corporation	33 Houser Rd.	Fayetteville	PA	USA	17222
TB Wood’s Corporation	521 Airport Road	Chattanooga	TN	USA	37421
Warner Electric LLC	2800 Fisher Road	Wichita Falls	TX	USA	76302
TB Wood’s Corporation	2000 Clovis Barker Road	San Marcos	TX	USA	78666

Vehicle	Location	VIN
2006 CHEVROLET SILVERADO	Chambersburg, PA	3GCEK14T06G152780
1990 INTERNATIONAL BOX TRUCK	Chambersburg, PA	1HTSCNDM4LH287202
1985 FORD 4-WHEEL TRUCK	Chambersburg, PA	1FTEF26Y4FNA71159
1991 GMC SIERRA PICKUP	Chambersburg, PA	1GTDC14H7ME546656
2001 CHEVROLET IMPALA	Chambersburg, PA	2G1WF55EX19244569
1998 CHEVROLET PICKUP	Chambersburg, PA	1GCGK24R4WZ191682
2002 FORD TAURUS	Chambersburg, PA	1FAFP53U92A150581
1972 CHEVROLET DUMP TRUCK	Chambersburg, PA	CCE532V120791
2003 CHEVROLET SUBURBAN	Chambersburg, PA	3GNGK26G13G277286
2001 CHEVROLET IMPALA	San Marcos, TX	2G1WF52EX19197905
2000 FORD F350 TRUCK	San Marcos, TX	1FDWF36F2YED44039
2008 CHEVY PICKUP	Wichita Falls, TX	1GBJK39678E198702
2007 CHEVY PICKUP	Wichita Falls, TX	1GBJK39D87E120975
1995 DODGE PICKUP	Wichita Falls, TX	1B7KC26Z2SS315830
1999 FORD PICKUP	Warren, MI	1FTN20L4XEE76081
1993 FORD FF-350 PICKUP	New Hartford, CT	1FTHF36H1PNA98551
2002 INTERNATIONAL BOX TRUCK	New Hartford, CT	1HTMMAAM12H513455
1994 FORD F-350XL	South Beloit, IL	2FDKF37HXRCA58476
1998 DODGE DAKOTA PICKUP	South Beloit, IL	1B7FL26X4WS7649201
2002 PONTIAC MONTANA VAN	Syracuse, NY	1GMDV03E22D237445
2001 DODGE GRAND CARAVAN	Syracuse, NY	2B8GT54L81R105539
2000 GMC SIERRA PICKUP	Syracuse, NY	1GTGK24U8YE121391
1996 DODGE CARAVAN	Syracuse, NY	1B4GP44R6TB397360
2007 HYUNDAI ENTOURAGE	Syracuse, NY	KNDMC233376036654
2006 CHRYSLER PACIFICA	Syracuse, NY	2A4GM6836R606334
2000 DODGE DURANGO	Green Bay, WI	1B4HS28N7YF147026
1999 CHEVY C3500	Green Bay, WI	1GBJC34FOXF086353
1994 CHEVY PICKUP	Niagara Falls, NY	1GCCS1442R8231748
2004 FORD S350	San Marcos, TX	FDWF36P34EC00390
1996 FORD 250	Charlotte, NC	1FTHF25H8TLB93819

(b) Properties Leased by the Grantors (Include Landlord’s Name):

Grantor/Lessee	Landlord	Street	City	State	Country	ZIP
Inertia Dynamics, LLC	Hitchcock Properties, LLC	31 Industrial Park Road	New Hartford	CT	USA		06057

Grantor/Lessee	Landlord	Street	City	State	Country	ZIP
Warner Electric LLC	Hendricks Development Group	420 Pershing Street	South Beloit	IL	USA		61080
Warner Electric LLC	Long Family Properties, LLC	960 Gardner Street	South Beloit	IL	USA		61080
Formsprag LLC	Nicholas Batistich	485 S. Frontage Road, Suite 330	Burr Ridge	IL	USA		60521
Warner Electric LLC	The Krenger CO.	6593 Revlon Drive	Belvidere	IL	USA		61008
Warner Electric LLC	Precision Realty Corporation	722 E. Swihart Street	Columbia City	IN	USA		46725
Altra Holdings, Inc.	Sun Life Assurance Company of Canada	300 Granite Street	Braintree	MA	USA		02184
Formsprag LLC	Ronald D. Fecteku	23554 Hoover Road	Warren	MI	USA		48089
Boston Gear LLC	John H.O. La Gatta	701 Carrier Drive	Charlotte	NC	USA		28216
TB Wood’s, Inc.	Prologis NA3 TRS II LLC	4970 Joule Street	Reno	NV	USA		83502
Nuttall Gear LLC	Wheatfield Business Park, LP.	2221 Niagara Falls Boulevard	Niagara Falls	NY	USA		14304
Ameridrives International LLC	Brian R. Keyes and Lisa Gladden-Keyes	31 N. Sugan Road, Suite 3D	New Hope	PA	USA		18938
Warner Electric LLC	Grapevine Realty, LLC	1705 Northwest Highway, Suite 125	Grapevine	TX	USA		76051
Boston Gear LLC	Caddo Investments LP	2000 North Central Expressway	Plano	TX	USA		75074
Ameridrives International LLC	Ronald B. Snider and Carol C. Snider	1411 FM 1101, Suite B	New Braunfels	TX	USA		78130
Warner Electric LLC	Waukesha East Commerce Center	1701 Pearl Street	Waukesha	WI	USA		53186
Ameridrives International LLC	R. A. Burton Properties, LLC	1680 Cornell Road	Green Bay	WI	USA		54313
TB Wood’s Enterprises, Inc.	Belflint + Lyons	1011 Centre Road, Suite 322	Wilmington	DE	USA		19805

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Ameridrives International LLC	Rockhill Machining Industries Inc.	Storage of raw materials, finished goods inventory, work in progress inventory, fixed assets and machinery	3 Fourth Street	Barberton	Ohio	USA		44203
Inertia Dynamics, LLC	Advanced DC Motors	Inventory storage	6500 New Venture Gear Drive	East Syracuse	New York	USA		13057
Kilian Manufacturing Corporation	Kilian Korea (not affiliated with Kilian Manufacturing Corporation or Alta Industrial Motion, Inc.)	Finished goods inventory consignment	660-2 Bokjung-Dong, SunjungGu, Sungnam-Si	Gyunggi Do	—	Republic of Korea		—

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Kilian Manufacturing Corporation	Kilian Canada ULC	General	310 Judson Street	Etobicoke	Ontario	Canada		—
TB Wood’s, Inc.	International Distribution Corporation	Inventory storage	8530 Market Street	Houston	Texas	USA		77029
TB Wood’s, Inc.	Kaman Industrial	Inventory storage	1703 NE Argyle	Portland	OR	USA		97211
TB Wood’s, Inc.	Industrial Products Company	Inventory Business	126 Texas Ave. Bldg. 3	San Marcos	TX	USA		78666
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	6305 Danville Rd. #1	Mississauga	ON	Canada		—
TB Wood’s, Inc.	Industrial Blaju S. A. de C.V.	General	Av. Comision Federal de Electricidad #850, Parque Industrial Millenium, 78395 San Luis Potosi	San Luis Potosi	—	Mexico		—
TB Wood’s, Inc.	Industrial Blaju S. A. de C.V.	General	Oriente 237 No. 171, Colonia Agricola Oriental, 08500	Mexico, D.F.	—	Mexico		—
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	9779 45th Ave.	Edmonton	Alberta	Canada		—
TB Wood’s, Inc.	TB Wood’s Canada Ltd.	General	1073 Begin St. Ville St. Laurent	Ville St. Laurent, Montreal	Quebec	Canada		—
Kilian Manufacturing Corporation	Iron Mountain	Document retention	6667 Deere Rd.	East Syracuse	NY	USA		13057
Kilian Manufacturing Corporation	Empire Archives	Document retention	1300 South Salina St.	Syracuse	NY	USA		13202
Formsprag LLC	Chicago Aluminum Castings Co. Inc.	Inventory and equipment storage	2647 West Ogden Ave.	Chicago	IL	USA		60606
Formsprag LLC	Master Machine & Repair	Inventory and equipment storage	6648 S. Narragonsette	Bedford Park	IL	USA		60638
Formsprag LLC	Industrial Boring	Inventory and equipment storage	23175 Blackstone	Warren	MI	USA		48089
Formsprag LLC	North Tool & Mfg. Co.	Inventory and equipment storage	17140 E. 10 Mile Rd.	Eastpointe	MI	USA		46021
Formsprag LLC	ARC Services of Macomb	Inventory and equipment storage	40450 Gratiot	Clinton Twp	MI	USA		48036
Formsprag LLC	D & D Machine Movers	Inventory and equipment storage	29469 Groesbeck Highway	Roseville	MI	USA		48066
Formsprag LLC	Gollnick Tool Company	Inventory and equipment storage	24300 Marmon	Warrren	MI	USA		18313

Grantor	Landlord	Purpose	Street	City	State	Country	ZIP
Formsprag LLC	Iron Mountain	Document retention	24300 Wahl Ct.	Warren	MI	USA		48089
Formsprag LLC	Iron Mountain	Document retention	7277 North Haggerty Road	Canton	MI	USA		48187
Formsprag LLC	Boston Gear – Canada Warehouse	Inventory and equipment storage	6305 Danville Rd. #1	Mississauga	ON	Canada		—

EXHIBIT B
(See Section 3.5 of Security Agreement)

DEPOSIT ACCOUNTS

			Check here if	Description of
			Deposit Account is	Deposit Account
			a Collection	if not a Collection
Name of Grantor	Name of Institution	Account Number	Account	Account
See attached consolidated bank account listing.

LOCK BOXES

Name of Grantor	Name of Institution	Lock Box Number
See attached consolidated bank account listing.

SECURITIES ACCOUNTS

Name of Grantor	Name of Institution	Account Number
Altra Industrial Motion, Inc.	[*]	[*]
Altra Holdings, Inc.	[*]	[*]
Altra Holdings, Inc.	[*]	[*]

Bank Account Data Collection

Location:	[*]
Submitted by:	[*]
Phone #:	[*]
Email:	[*]

Global Bank Account Information

			Interest
			Bearing (Y			Maximum
Bank	Company Name	Account Type	or N)	Currency	Annual Fees	Amt. Held		Purpose
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]
[*]	[*]	[*]	[*]	[*]			[*]	[*]

Authorized Signers:                                      

Carl Christenson
Christian Storch
Todd Patriacca

Bank Account Data Collection

Location:	[*]
Submitted by:	[*]
Phone #:	[*]
Email:	[*]

		Interest
		Bearing (Y			Maximum
Bank	Account Type	or N)	Currency	Annual Fees	Amt. Held	Purpose
[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]	[*]	[*]

Bill Duff
Todd Menickelli

EXHIBIT C-1
(See Section 3.7 of Security Agreement)

LETTER OF CREDIT RIGHTS

None.

CHATTEL PAPER

None.

EXHIBIT C-2
(See definition of Commercial Tort Claims)

EXISTING COMMERCIAL TORT CLAIMS

None.

EXHIBIT D
(See Section 3.10 and 3.11 of Security Agreement)

INTELLECTUAL PROPERTY RIGHTS

PATENTS

Name of Grantor	Patent Description	Patent Number	Issue Date
See attached Consolidated Patent List

PATENT APPLICATIONS

Name of Grantor	Patent Application	Application Filing Date	Application Serial Number
See attached Consolidated Patent List

TRADEMARKS

Name of Grantor	Trademark	Registration Date	Registration Number
See attached Consolidated Trademark List

TRADEMARK APPLICATIONS

Name of Grantor	Trademark Application	Application Filing Date	Application Serial Number
See attached Consolidated Trademark List

COPYRIGHTS

Name of Grantor	Copyright	Registration Date	Registration Number
None

COPYRIGHT APPLICATIONS

Name of Grantor	Copyright Application	Application Filing Date	Application Serial Number
None

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	Canada	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	2024208	07/03/2001	2024208	08/29/1990	Active
Patent	Canada	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC	1315218	3/30/1993	614020	9/28/1989	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	Europe	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	Europe	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	Europe	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	Europe	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	03/29/1995	94306356.0	8/30/1994	Active
Patent	Europe	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/99	Active
Patent	Europe	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active
Patent	Europe	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	Europe	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	Europe	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	Europe	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	Europe	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	Europe	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent	Europe	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	France	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	France	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	2727485	07/17/1998	9514181	011/30/1995	Active
Patent	France	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	France	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	9106536	1/20/1995	9106536	5/30/1991	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	France	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	France	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active
Patent	France	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	France	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	France	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	9902452	12/22/2000	9902452	2/26/1999	Active
Patent	France	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	France	Warner Electric Technology Inc.	UNIDAMP ARMATURE	9103732	2/10/1995	9103732	3/27/1991	Active
Patent	France	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
patent	France	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	France	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	France	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent	Germany	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	Germany	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	Germany	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	Germany	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	Germany	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	69211088.7	10/9/1992	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	G9106611.5	10/24/1991	G9106611.5	5/29/1991	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378.3	12/10/1990	Active
Patent	Germany	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	69201221.4	6/22/1992	Active
Patent	Germany	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/14/1998	Active
Patent	Germany	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	Germany	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	69401077.4	3/2/1994	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDAMP ARMATURE	P4108975.8-12	01/30/2003	P4108975.8	03/19/1991	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	Germany	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	4,117,614	3/3/2005	P4117614.6	5/29/1991	Active
Patent	Germany	Warner Electric Technology Inc.	UNIDAMP ARMATURE	G9103369.1	8/1/1991	G9103369.1	3/19/1991	Active
patent	Germany	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active

	Issuing			Registration	Registration /		Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date		Number	Filing Date	Status
Patent	Germany	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001		95203457.7	1/12/1993	Active
Patent	Germany	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994		93309865.9	12/9/1993	Active
Patent	Israel	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	152,385	08/05/2009		152385	10/20/2002	Active
Patent	Israel	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	95688	11/19/1992		95688	9/14/1990	Active
Patent	Israel	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	107584	11/12/1993		107584	11/12/1993	Active
Patent	Italy	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009		06770520.2	1/10/2008	Active
Patent	Italy	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996		92309229.0	10/9/1992	Active
Patent	Italy	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994		90313378	12/10/1990	Active
Patent	Italy	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002		98302223.7	03/24/1998	Active
patent	Italy	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004		99303330.7	4/28/1999	Active
Patent	Italy	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997		93300169.5	1/12/1993	Active
Patent	Italy	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP00713026	3/28/2001		95203457.7	1/12/1993	Active
Patent	Italy	Warner Electric Technology Inc.	UNIDAMP ARMATURE	1,244,554	7/15/1994		RM91A000202	3/27/1991	Active
Patent	Italy	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994		93309865.9	12/9/1993	Active
Patent	Japan	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	3,723,872	09/30/2005		329,410/95	11/27/1995	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	3,507,954	1/9/2004		288,154/92	10/05/1992	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISC AND METHOD OF MAKING THE DISC	2761413	3/20/1998		275764/89	10/23/1989	Active
Patent	Japan	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	3,966,368	08/29/2007		227,370/94	08/30/1994	Active
Patent	Japan	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	3316595	06/14/2002		191,371/92	06/26/1992	Active
Patent	Japan	Warner Electric Technology Inc.	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	3,433,269	5/30/2003		343,834/91	10/28/1991	Active
Patent	Japan	Warner Electric Technology Inc.	UNIDAMP ARMATURE	3074398	06/09/2000	133666/91		03/28/1991	Active
Patent	Japan	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	3,820,554	6/30/2006		2004-14,295	1/22/2004	Active
Patent	Japan	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	3,538,848	4/2/2004		19425/93	1/13/1993	Active
Patent	Malaysia	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	MY-117,623-A	7/31/2004		P120011880	04/20/2001	Active
Patent	Mexico	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	232,309	11/23./2005		PA/a/2001/010462	10/16/2001	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	Mexico	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	238,848	07/24/2006	PA/A/2005/007753	7/21/2005	Active
Patent	Singapore	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	92,564	02/28/2005	200206523-3	04/19/2001	Active
Patent	Singapore	Warner Electric Technology Inc.	FORMLOCK SHOES WITH FLATS	52,991	04/30/2004	9702069-7	06/27/1997	Active
Patent	Singapore	Warner Electric Technology Inc.	Liquid Cooled Brake assembley	141,736	8/31/2009	200802767-4	4/11/2008	Active
Patent	South Korea	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	828,851	05/02/2008	7013844/2001	10/29/2001	Active
Patent	South Korea	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	232799	9/8/1999	18665/1992	10/10/1992	Active
Patent	South Korea	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	530,579	11/16/2005	15334/1999	4/29/1999	Active
Patent	South Korea	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	519,028	09/27/2005	6203/1999	2/25/1999	Active
Patent	South Korea	Warner Electric Technology Inc.	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	323,800	1/25/2002	23609	11/8/1993	Active
Patent	South Korea	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	215,247	5/21/1999	11273/1992	6/26/1992	Active
Patent	South Korea	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	855153	08/22/2008	7024365/2007	10/23/2007	Active
Patent	Spain	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	Spain	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	Taiwan	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	NI61152	6/23/1993	81105630	7/16/1992	Active
Patent	Turkey	Warner Electric Technology Inc.	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	TR2002 02428B	7/21/2003	02/2428	10/24/2002	Active
Patent	United Kingdom	Warner Electric Technology LLC	Rotational Coupling Device	EP1893884	11/25/2009	06770520.2	1/10/2008	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	EP1171721	05/03/2006	09109241.0	02/14/2001	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0552011	3/26/1997	93300169.5	1/12/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY	2,295,656	08/12/1998	9524410.9	11/29/1995	Active
Patent	United Kingdom	Warner Electric Technology Inc.	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	EP0645550	3/29/1995	94306356.0	8/30/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	EP0604190	9/3/1997	93310365.7	12/21/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	EP0637022	5/29/1996	92309229.0	10/9/1992	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME	2244529	2/2/1994	9111037.9	5/22/1991	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	EP0434272	7/20/1994	90313378	12/10/1990	Active
Patent	United Kingdom	Warner Electric Technology Inc.	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	2,237,855	1/12/1994	9021038.6	9/27/1990	Active
Patent	United Kingdom	Warner Electric Technology Inc.	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	EP0521640	1/18/1995	92305695.6	6/22/1992	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	United Kingdom	Warner Electric Technology Inc.	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	EP0867630	10/16/2002	98302223.7	03/24/1998	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ROTOR FOR ELECTROMAGNETIC COUPLING	EP0614023	5/21/1997	94301526.3	3/3/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	2,339,861	07/24/2002	9904390.3	2/25/1999	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0614022	12/11/1996	94301484.5	3/2/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	UNIDAMP ARMATURE	2243195	3/30/1994	9106125.9	3/22/1991	Active
Patent	United Kingdom	Warner Electric Technology Inc.	UNIDRIVE ARMATURE HUB	EP0643236	3/15/1995	94306652.2	9/9/1994	Active
Patent	United Kingdom	Warner Electric Technology Inc.	MAG STOP CLUTCH WITH CENTER POLE	EP’0953784	9/22/2004	99303330.7	4/28/1999	Active
Patent	United Kingdom	Warner Electric Technology Inc.	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	EP0713026	3/28/2001	95203457.7	1/12/1993	Active
Patent	United Kingdom	Warner Electric Technology Inc.	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	EP0602889	6/22/1994	93309865.9	12/9/1993	Active
Patent Appl.	Australia	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			2008214106	8/13/2009	Pending
Patent Appl.	Australia	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			2009202888	07/17/2009	Pending
Patent Appl.	Australia	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch			2008247581	11/5/2009	Pending
Patent Appl.	Brazil	Warner Electric Technology LLC	Liquid Cooled Brake assembley			PI 0618103-1	4/30/2008	Pending
Patent Appl.	Brazil	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			PI 0611804-0	4/30/2008	Pending
Patent Appl.	Canada	Warner Electric Technology LLC	Improved Drive Assenmly with lightweight backstop clutch			2597653	08/10/2007	Pending
Patent Appl.	Canada	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			2640240	7/24/2008	Pending
Patent Appl.	Chili	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			301-08	01/31/2008	Pending
Patent Appl.	China	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			200880003823.2	07/31/2009	Pending
Patent Appl.	China	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			06760061.9	1/10/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			06760062.7	1/10/2008	Pending
Patent Appl.	Europe	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			06817212.1	4/24/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			06817231.1	4/24/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			07762680.2	7/15/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	Rotational Coupling Device			07754729.7	9/29/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	OVERRUNNING CLUTCH			07783919.9	11/20/2008	Pending
Patent Appl.	Europe	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			08714083.6.	07/28/2009	Pending
Patent Appl.	Germany	Warner Electric Technology Inc.	CLUTCH BRAKE ASSEMBLY			19544321.7	11/28/1995	Pending
Patent Appl.	Germany	Warner Electric Technology Inc.	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			19908439.4	2/26/1999	Pending
Patent Appl.	India	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			2125/CHENP/2008	4/29/2008	Pending

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	India	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			2692/CHENP/2008	5/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology Inc.	ARMATURE FOR SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING			2001-563,800	10/29/2001	Pending
Patent Appl.	Japan	Warner Electric Technology Inc.	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			54761/94	3/2/1994	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515719	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515720	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			TBD	9/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2008-515721	12/3/2007	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	Rotational Coupling Device			2009-504258	9/29/2008	Pending
Patent Appl.	Japan	Warner Electric Technology LLC	OVERRUNNING CLUTCH			2009-511247	11/18/2008	Pending
Patent Appl.	Japan	???	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING			50,440/99	02/26/1999	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014993	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014992	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	Rotational Coupling Device			MX/a/2007/014996	11/28/2007	Pending
Patent Appl.	Mexico	Warner Electric Technology Inc.	Liquid Cooled Brake assembley			MX/a/2008/005291	4/23/2008	Pending
Patent Appl.	Mexico	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			MX/a/2008/005290	4/23/2008	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH			PCT/US2008/079310	10/09/2008	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			PCT/US09/044679	5/20/2009	Pending
Patent Appl.	PCT	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	Russia	Warner Electric Technology LLC	Liquid Cooled Brake assembley			2008121805	5/30/2008	Pending
Patent Appl.	Russia	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			2008121806	5/30/2008	Pending
Patent Appl.	Singapore	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			200802768-2.	4/11/2008	Pending
Patent Appl.	Singapore	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			200904860-4.	07/17/2009	Pending
Patent Appl.	South Africa	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			2009/05050	7/20/2009	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000645	1/9/2008	Pending

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000650	1/9/2008	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7000647	1/9/2008	Pending
Patent Appl.	South Korea	Warner Electric Technology LLC	Rotational Coupling Device			10-2008-7023303	9/24/2008	Pending
Patent Appl.	Taiwan	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch			096102358	1/22/2007	Pending
Patent	USA	Inertia Dynamics, LLC	Electromagnetic disc brake with rubber friction disk braking surface	6161659	12/19/2000	09/167006	09/29/1998	Active
Patent	USA	Inertia Dynamics, LLC	Clutch system and method	6488133	12/3/2002	09/528690	03/20/2000	Active
Patent	USA	Inertia Dynamics, LLC	Elevator brake assembly	6675939	01/13/2004	09/773722	01/31/2001	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,150,779	9/29/1992	07/820344	1/14/1992	Active
Patent	USA	Inertia Dynamics, LLC	Power-off brake with manual release	5915507	06/29/1999	08/932904	09/17/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electric clutch and brake	6047805	04/11/2000	08/937816	09/29/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electro-mechanical variable speed clutch	5979630	11/9/1999	08/938862	09/26/1997	Active
Patent	USA	Warner Electric Technology LLC	UNIDAMP ARMATURE	5,036,964	8/6/1991	07/500,466	3/28/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	5,096,036	3/17/1992	07/531,465	5/31/1990	Active
Patent	USA	Warner Electric Technology LLC	APPARATUS FOR RESISTANCE BONDING ELECTROMAGNETIC COILS	5,091,619	2/25/1992	07/543,706	6/26/1990	Active
Patent	USA	Warner Electric Technology LLC	FIELD ASSEMBLY FOR AN ELECTROMAGNET	5,250,921	10/5/1993	07/600,199	10/19/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	5,052,534	10/1/1991	07/605,517	10/30/1990	Active
Patent	USA	Warner Electric Technology LLC	LOW COST SPRAG RETAINER	5,070,976	12/10/1991	07/634,903	12/27/1990	Active
Patent	USA	Warner Electric Technology LLC	DIGITAL CONTROL SYSTEM FOR ELECTROMAGNETIC CLUTCH	5,094,332	3/10/1992	07/664,075	12/31/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING ARMATURE ASSEMBLY WITH FLUX ISOLATOR SPRINGS	5,119,915	6/9/1992	07/700,439	5/15/1991	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	5,125,255	6/30/1992	07/721,972	6/27/1991	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	5,119,918	6/9/1992	07/774,92	10/11/1991	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with slip joint seal	5,230,658	07/27/1993	07/864,307	04/06/1992	Active
Patent	USA	TB Woods Enterprises, Inc.	Shaft Mountable Bushing and Hub for Industrail poer transmission	5304101	4/19/1994	07/919223	7/27/1992	Active
Patent	USA	Warner Electric Technology LLC	SPLIT TUBE HAVING RETAINABLE ENDS	5,280,829	1/25/1994	07/931,638	8/18/1992	Active
Patent	USA	Warner Electric Technology LLC	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	5,310,034	5/10/1994	07/973,291	11/9/1992	Active
Patent	USA	Warner Electric Technology LLC	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	5,337,869	8/16/1994	07/991,021	12/15/1992	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	5,285,882	2/15/1994	07/996,122	12/23/1992	Active
Patent	USA	Warner Electric Technology LLC	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,372,228	12/13/1994	08/026,499	3/4/1993	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Warner Electric Technology LLC	ROTOR FOR ELECTROMAGNETIC COUPLING	5,305,865	4/26/1994	08/026,995	3/5/1993	Active
Patent	USA	Warner Electric Technology LLC	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	5,445,259	8/29/1995	08/114,320	8/30/1993	Active
Patent	USA	Warner Electric Technology LLC	UNIDRIVE ARMATURE HUB	5,370,209	12/6/1994	08/119,729	9/10/1993	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH BRAKE ASSEMBLY	5,549,186	8/27/1996	08/346,622	11/30/1994	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling with End Stress Relief Structure	5611732	3/18/1997	08/512,137	8/7/1995	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A COMPONENT FOR AN ELECTROMAGNETIC FRICTION CLUTCHASSEMBLY	5,708,955	1/13/1998	08/558,906	11/16/1995	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with sealed slip joint seal	5,655,968	08/12/1997	08/646,202	05/07/1996	Active
Patent	USA	Warner Electric Technology LLC	FORMLOCK SHOES WITH FLATS	5,865,284	2/2/1999	08/666,068	6/21/1996	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	5,920,981	7/13/1999	08/823,990	3/25/1997	Active
Patent	USA	Warner Electric Technology LLC	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	6,194,803	2/27/2001	09/032,572	2/27/1998	Active
Patent	USA	Warner Electric Technology LLC	MAG STOP CLUTCH WITH CENTER POLE	5,971,121	10/26/1999	09/070,068	4/30/1998	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,364,084	4/2/2002	09/515779	2/29/2000	Active
Patent	USA	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	6,257,388	7/10/2001	09/556510	4/24/2000	Active
Patent	USA	Warner Electric Technology LLC	METHOD FOR MAKING AN ARMATURTE ASSEMBLEY	6,591,477	7/7/2003	09/684,117	10/06/2000	Active
Patent	USA	Dana Corporation	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,557,236	05/06/2003	10/027,095	12/20/2001	Active
Patent	USA	Warner Electric LLC	Electromechanical screw drive actuator	6,927,513	8/9/2005	10/609,883	6/30/2003	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH	7,261,196	08/28/2007	11/064, 611	02/24/05	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150670	6/10/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,493,996	2/24/2009	11/150671	6/10/2005	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling Device	7,390,265	6/24/2008	11/256,463	10/21/2005	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	7,374,027	5/20/2008	11/263,394	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Liquid Cooled Brake assembley	7,591,349	9/22/2009	11/263,399	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,527,134	5/5/2009	11/278,448	4/3/2006	Active
Patent	USA	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch	7,389,863	6/24/2008	11/341,763	01/27/2006	Active
Patent	USA	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)			11/670,698	2/2/2007	Active
Patent	USA	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch			11/743,894	5/3/2007	Active
Patent	USA	Warner Electric Technology LLC	Overrunning Clutch			11/750,733	5/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH			11/871,542	10/12/2007	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET			12/016,504	1/18/2008	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device			12/048,638	3/14/2008	Active
Patent	USA	Warner Electric Technology LLC	DUAL ACTUATOR FRICTION BRAKE ASSEMBLY	7,556,128	7/7/2009	11/263,395	10/31/2005	Active
Patent Appl.	USA	Warner Electric Technology LLC	“Dual Actuator Friction Brake Assembly”			12/364,116	2/2/2009	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150027	6/10/2005	Pending
Patent Appl.	USA	Kilian Manufacturing Corporation	Bearing assembly for a steering assembly	7,637,667	12/29/2009	11/773,715	7/5/2007	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			12/124,699	5/21/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			12/175,995	07/18/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]

NOTES:

Warner Electric Technology, Inc.
A number of patents and trademarks owned by Warner Electric Technology LLC remain in the former name (Warner Electric Technology, Inc.) of the company on the records of various foreign patent and trademark offices. Efforts to record the change in name are in progress with respect to some of the patents and trademarks. For others, a conscious decision was made to hold off on recordation pending some other action relating to the property (e.g., the next renewal of a trademark registration). For yet others, a decision was made not to record the change in name in view of a decision to allow various registrations or patents to lapse).

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Argentina	Warner Electric Technology Inc.	WICIHITA & Desgn (stylized)	1,970,585	02/16/2004	2472032	10/29/2003	Active
TM	Argentina	TB Woods Enterprises, Inc.	Dura-Flex	1,783,301	3/27/2000	2,066,443	1/23/1997	Active
TM	Australia	Boston Gear LLC	BOSTON GEAR	522543	11/6/1989		11/06/1989	Active
TM	Australia	Warner Electric Technology Inc.	MISTRAL	564784	06/29/1993	564784	10/03/1991	Active
TM	Australia	Warner Electric Technology Inc.	WICHITA	640944	08/05/1996	640944	09/16/1994	Active
TM	Australia	Warner Electric Technology LLC	WARNER LINEAR	1,125,414	7/21/2006	1125414	7/21/2006	Active
TM	Australia	Altra Industrial Motion, Inc.	A&Design	1185473	07/03/2007	1185473	07/03/2007	Active
TM	Australia	TB Woods Enterprises, Inc.	Sure-Flex & Design (stylized)	B375,472	5/13/1982	B375,472	5/13/1982	Active
TM	Austria	Warner Electric Technology LLC	WARNER	36391	04/13/1957	AM 2025/56	10/24/1956	Active
TM	Austria	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	50589	07/19/1963	AM 760/63	03/26/1963	Active
TM	Benelux	Warner Electric Technology LLC	FORMSPRAG	15729	01/21/1971	248	01/21/1971	Active
TM	Benelux	Warner Electric Technology LLC	MISTRAL	508812	10/21/1991	770814		Active
TM	Benelux	Warner Electric Technology LLC	WARNER	42990	01/12/1972	6207	06/15/1971	Active
TM	Benelux	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	44210	06/28/1971	6777	06/28/1971	Active
TM	Benelux	Warner Electric Technology LLC	WICHITA	62029	09/20/1971	12065	09/20/1971	Active
TM	Benelux	TB Woods Enterprises, Inc.	Sure-Flex	0316801	10/20/1972	0316801	10/20/1972	Active
TM	Brazil	Warner Electric Technology Inc.	FORMSPRAG	770219144	04/20/1982	X	08/12/1997	Active
TM	Brazil	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	007069901	02/25/1980	9738/M-72	06/14/1972	Active
TM	Brazil	Warner Electric Technology LLC	WICHITA	006788939	10/10/1978	21912	08/12/1971	Active
TM	Brazil	TB Woods Inc.	Sure-Flex	810,942,631	3/19/1985	810,942,631	8/23/1982	Active
TM Appl.	Brazil	Formsprag LLC	Cebmag			829.095.985	4/13/2007	Pending
TM	Brazil	Formsprag LLC	Cecon	829.095.993	10/6/2009	829.095.993	4/13/2007	Pending
TM	Brazil	Formsprag LLC	Marland	829.096.000	10/6/2009	829.096.000	4/13/2007	Pending
TM Appl.	Brazil	Altra Industrial Motion, Inc.	A&Design			829278044	07/31/2007	Pending
TM Appl.	Brazil	Formsprag LLC	BC MA			901417858	1/22/2009	Pending
TM Appl.	Canada	Altra Industrial Motion, Inc.	A & Design			1374252	11/30/2007	Pending
TM	Canada	Boston Gear LLC	BEAR-N-BRONZ & Design	TMA116839	02/05/1960	252099	07/23/1959	Active
TM	Canada	Boston Gear LLC	BG & Design	TMA116836	02/05/1960	252095	07/23/1959	Active
TM	Canada	Boston Gear LLC	BOST-BRONZ	TMA118130	05/20/1960	252100	07/23/1959	Active
TM	Canada	Boston Gear LLC	BOSTON GEAR & Design	TMA172185	10/23/1970	318048	11/29/1968	Active
TM	Canada	Warner Electric Technology LLC	FORMSPRAG	TMA108144	09/27/1957	0239971	03/21/1957	Active
TM	Canada	Warner Electric Technology Inc.	KOPPER KOOL	TMA568894	10/06/2002	1001794	01/12/1999	Active
TM	Canada	Boston Gear LLC	RATIO MOTOR	UCA6161	06/18/1936	168466	06/18/1936	Active
TM	Canada	Boston Gear LLC	RATIO PAX	TMA208074	7/4/1975	374799	05/01/1974	Active
TM	Canada	Boston Gear LLC	RIGHT-90	TMA143118	12/17/1965	288461	04/01/1965	Active
TM	Canada	Warner Electric Technology LLC	WARNER	UCA50550	04/20/1954	0224428	04/20/1954	Active
TM	Canada	Warner Electric Technology LLC	WARNER ELECTRIC	TMA-134253	01/17/1964	277382	08/19/1963	Active
TM	Canada	Warner Electric Technology LLC	WICHITA	TMA120129	09/19/1958	247460	09/19/1958	Active
TM	Canada	American Enterprises MPT L.P.	AMERICAN	UCA0045654	06/11/1952	215415	06/11/1952	Active
TM	Canada	American Enterprises MPT L.P.	AMERIGEAR	UCA0043128	06/11/1952	215414	06/11/1952	Active
TM	Canada	Warner Electric Technology LLC	SHEAVE-GRIP	TMA728275	11/13/2008	1,176,042	4/28/2003	Active
TM	Canada	Boston Gear LLC	CENTRIC	TMA324230	02/27/1987	562625	05/13/1986	Active
TM	Canada	Kilian Manufacturing Corporation	KILIAN	TMA 354757	4/21/1989	608151	5/27/1998	Active
TM	Canada	Warner Electric Technology LLC	GFR	TMA492416	4/16/1998	845220	5/15/1997	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Canada	Warner Electric Technology LLC	WARNER LINEAR	TMA774,406	7/30/2009	1310145	7/21/2006	Active
TM	Canada	TB Woods Enterprises, Inc.	Formflex	TMA215307	8/13/1976	352,690	4/26/1972	Active
TM	Canada	TB Woods Enterprises, Inc.	Speedlign	TMA665,131	5/29/2006	1,223,603	7/14/2004	Active
TM	Canada	TB Woods Enterprises, Inc.	Sure-Flex	TMA380915	3/1/1991	645,519	11/23/1989	Active
TM	Canada	TB Woods Enterprises, Inc.	Qt Power Chain	TMA623,038	10/20/2004	1,157,003	10/25/2002	Active
TM	Canada	TB Woods Enterprises, Inc.	Woods@Work	TMA626,975	11/29/2004	1,157,004	10/25/2002	Active
TM	Canada	Dana Corp.	Disc-O-Torque	TMA171577	9/25/1970	325923	9/16/1969	Active
TM Appl.	Canada	TB Woods Enterprises, Inc.	G-Flex			1406538	8/7/2008	Pending
TM	Chile	Warner Electric Technology Inc.	WICHITA	543319	06/25/1999	435364	12/14/1998	Active
TM	China	Warner Electric Technology Inc.	FORMSPRAG	520390	05/30/1990	8927113		Active
TM	China	Warner Electric Technology Inc.	WICHITA	520391	05/30/1990	8927115	08/08/1989	Active
TM	China	Warner Electric Technology LLC	WARNER LINEAR	5,655,144	9/7/2009	5655144	10/12/2006	Active
TM	Colombia	Warner Electric Technology Inc.	WICHITA	121609	02/26/1987	92.355.818	08/19/1983	Active
TM	Europe (CTM)	TB Woods Inc.	Dura-Flex	507277	10/2/2000	507.277	4/2/1997	Active
TM Appl.	Europe (CTM)	Altra Industrial Motion, Inc.	A&Design	006067953	05/16/2008	006067953	07/04/2007	Active
TM	Europe (CTM)	Warner Electric Technology LLC	WARNER LINEAR	5,214,648	5/11/2007	5214648	7/21/2006	Active
TM	Finland	Warner Electric Technology Inc.	MAGNUM	111882	05/20/1991	T198601641	04/24/1986	Active
TM	Finland	Warner Electric Technology LLC	MISTRAL	TM 142083	01/22/1996	T199104906	10/16/1991	Active
TM	Finland	Warner Electric Technology Inc.	MAXIM	TM 110492	02/05/1991	T198601642	04/24/1986	Active
TM	France	Boston Gear LLC	BOSTON	1624494	04/12/1991	INPI121128	04/13/1989	Active
TM	France	Boston Gear LLC	BOSTON GEAR	1624493	04/12/1991	INPI121227	04/03/1989	Active
TM	France	Warner Electric Technology LLC	FORMSPRAG	1197077	03/10/1972	622349		Active
TM	France	Warner Electric Technology Inc.	MISTRAL	1700743	10/22/1991			Active
TM	France	Warner Electric Technology LLC	WARNER ELECTRIC	1547742	08/01/1968	940649		Active
TM	France	Warner Electric Technology Inc.	WARNER & Design	1,230,455	04/18/1958			Active
TM	France	Warner Electric Technology Inc.	WICHITA	1248360	09/19/1958	1248360		Active
TM	France	TB Woods Enterprises, Inc.	Speedlign	1,286,266	6/19/1974	717,131	6/19/1974	Active
TM	France	TB Woods Enterprises, Inc.	Sure-Flex	023196347	11/27/2002	023196347	11/27/2002	Active
TM	Germany	Warner Electric Technology LLC	FORMSPRAG	708841	11/28/1957	708 841/7 (F 7773)	04/02/1957	Active
TM	Germany	Warner Electric Technology LLC	FORMSPRAG PCE	998923	03/07/1980	D34116/7WZ	06/07/1979	Active
TM	Germany	Warner Electric Technology LLC	KOPPER KOOL	1,039,311	10/06/1982	D36687/7	10/08/1981	Active
TM	Germany	Warner Electric Technology LLC	MISTRAL	2025422	11/30/1992	T32561	10/19/1991	Active
TM	Germany	Warner Electric Technology Inc.	STIEBER	39511829.8	02/05/1996	X	03/16/1995	Active
TM	Germany	Warner Electric Technology LLC	STIEBER HEIDELBERG	784371	02/24/1964	ST06038	03/29/1963	Active
TM	Germany	Warner Electric Technology Inc.	WARNER & Design	674860	04/22/1955	W04058	05/27/1953	Active
TM	Germany	Warner Electric Technology LLC	WARNER ELECTRIC	39552705.8	12/12/1996	39552705.8	12/27/1995	Active
TM	Germany	TB Woods Enterprises, Inc.	Form-Flex	1,053,953	9/16/1991	1,053,953	9/16/1991	Active
TM	Germany	TB Woods Enterprises, Inc.	Speedlign	935,511	9/17/1975	M39270	6/10/1974	Active
TM	Germany	TB Woods Enterprises, Inc.	SureFlex	926,107	12/17/1974	W24959	5/4/1973	Active
TM	Germany	Warner Electric Technology LLC	GFR	39,333,006	12/9/1997	39333006.5	7/14/1997	Active
TM	Germany	Warner Electric Technology LLC	GFR	39,807,235	3/27/1998	39807235.3	2/11/1998	Active
TM	Great Britain	TB Woods Enterprises, Inc.	SureFlex	B998,327	9/13/1972	B998,327	9/13/1972	Active
TM	Great Britain	TB Woods Enterprises, Inc.	Dura-Flex	1,105,120	11/22/1978	1105120	11/22/1978	Active
TM	Great Britain	TB Woods Enterprises, Inc.	Speedlign	1,029,397	5/13/1974	1,029,397	5/13/1974	Active
TM	Hong Kong	Warner Electric Technology LLC	WARNER LINEAR	300685206	7/21/2006	300685206	7/21/2006	Active
TM	Hong Kong	Altra Industrial Motion, Inc.	A&Design	300906066	07/05/2007	300906066	07/05/2007	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	India	Warner Electric Technology LLC	FORMSPRAG	694707	05/11/2005	694707	01/17/1996	Active
TM	India	Warner Electric Technology Inc.	STIEBER	662847	04/19/1995		04/19/1995	Active
TM	India	Dana Corporation	WARNER ELECTRIC	672106	06/06/1996		07/06/1995	Active
TM	India	Warner Electric Technology LLC	WICHITA	694708	01/09/2004	694708	01/17/1996	Active
TM Appl.	India	Altra Industrial Motion, Inc.	A&Design			1584305	07/25/2007	Pending
TM	Israel	Warner Electric Technology Inc.	WICHITA	57106	06/09/1988	57106	09/07/1983	Active
TM	Italy	Warner Electric Technology Inc.	FORMSPRAG	781,460	05/27/1958	X	04/23/1957	Active
TM	Italy	Warner Electric Technology Inc.	WARNER	1,075,774	11/26/1976	X	03/20/1973	Active
TM	Italy	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	454836	11/12/1966	X	03/26/1963	Active
TM	Italy	Warner Electric Technology Inc.	WICHITA	847,574	11/19/1959	RM98C004872	10/13/1958	Active
TM	Italy	TB Woods Inc.	Sure-Flex	1037180	9/25/1974	MI2003002784	9/25/1992	Active
TM	Japan	Warner Electric Technology LLC	FORMSPRAG	1169444	11/06/1975	127386/1971	11/24/1971	Active
TM	Japan	Warner Electric Technology LLC	FORMSPRAG	4018891	06/27/1997	135207/1995	12/28/1995	Active
TM	Japan	Warner Electric Technology LLC	KOPPER KOOL	1759530	04/23/1985	84256/1981	10/08/1981	Active
TM	Japan	Warner Electric Technology LLC	MISTRAL	4033376	07/25/1997	100751/1991	09/27/1991	Active
TM	Japan	Warner Electric Technology LLC	PCE	1551186	11/26/1982	85449/1978	11/22/1978	Active
TM	Japan	Warner Electric Technology LLC	STIEBER	4109923	02/06/1998	14030/95	02/17/1995	Active
TM	Japan	Warner Electric Technology LLC	WARNER	452198	09/28/1954	564/1954	01/13/1954	Active
TM	Japan	Warner Electric Technology LLC	WARNER ELECTRIC	1719848	10/31/1984	91915/1981	11/02/1981	Active
TM	Japan	Warner Electric Technology LLC	WARNER ELECTRIC	2294610	01/31/1991	91914/81	11/02/1981	Active
TM	Japan	Warner Electric Technology LLC	WICHITA	2246130	07/30/1990	34043/77	05/19/1977	Active
TM	Japan	Warner Electric Technology Inc.	MAXIM	2,477,,826	11/30/92	40400/1986	04/18/1986	Active
TM	Japan	Altra Industrial Motion, Inc.	A&Design	5126277	04/04/2008	2007-075745	07/05/2007	Active
TM	Japan	TB Woods Enterprises, Inc.	Sure-Flex	1,923,250	12/24/1986	40,343/1982	5/12/1982	Active
TM	Japan	TB Woods Enterprises, Inc.	SureFlex and Katakana	1,740,974	1/23/1995	7-700836	1/13/1995	Active
TM	Japan	TB Woods Enterprises, Inc.	Dura-Flex	4,166,483	7/10/1998	27318/97	3/17/1997	Active
TM	Japan	TB Woods Inc.	Form-Flex	1,975,830	8/19/1987	41,517/85	8/19/1987	Active
TM	Malaysia	Warner Electric Technology Inc.	STIEBER	95/02683	03/28/2000	95/02683	03/28/1995	Active
TM	Mexico	IMO Industries Inc.	BOSTON GEAR	473663	9/15/1994	161734	02/26/1993	Active
TM	Mexico	IMO Industries Inc.	BOSTON GEAR	658794	3/24/2000	161733	02/26/1993	Active
TM	Mexico	Warner Electric Technology LLC	FORMSPRAG	205855	09/02/1997	114172	06/22/1997	Active
TM	Mexico	Warner Electric Technology LLC	WARNER	92550	04/14/1958	76668	01/29/1957	Active
TM	Mexico	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	115936	01/01/1964	109532	03/04/1963	Active
TM	Mexico	Warner Electric Technology Inc.	WICHITA	95017	12/09/1958	84314	09/06/1958	Active
TM	Mexico	Warner Electric Technology Inc.	SHEAVE-GRIP	786,246	03/31/2003	590,675	03/04/2003	Active
TM	Mexico	Warner Electric Technology LLC	WARNER LINEAR	1,060,801	7/17/2008	796,858	7/28/2006	Active
TM	Mexico	Altra Industrial Motion, Inc.	A&Design	1053502	08/12/2008	873655	08/07/2007	Active
TM	Mexico	Emerson Power Transmission Corp.	GFR	631,573	10/29/1999	302944	07/30/1997	Active
TM	Mexico	TB Woods Enterprises, Inc.	Dura-Flex	552,086	6/26/1997	297,615	6/9/1997	Active
TM	Mexico	TB Woods Enterprises, Inc.	Qt Power Chain	818826	1/26/2004	573133	10/20/2002	Active
TM	Mexico	TB Woods Enterprises, Inc.	Woods@Work	904275	10/24/2005	573134	10/30/2002	Active
TM	Mexico	TB Woods Enterprises, Inc.	Speedlign	896028	8/23/2005	666,531	7/14/2004	Active
TM Appl.	Mexico	TB Woods Enterprises, Inc.	G-Flex	1,120,117	9/10/2009	953824	8/11/2008	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Unregistered TM	n/a	Warner Electric LLC	Bear Rugged-Mobile Tough	n/a	n/a	n/a	n/a	n/a
Unregistered TM	n/a	Warner Electric LLC	BearTrac	n/a	n/a	n/a	n/a	n/a
Unregistered TM	n/a	Warner Electric LLC	Kodiak	n/a	n/a	n/a	n/a	n/a
TM	Peru	Warner Electric Technology LLC	WICHITA	54452	04/27/1999	75634	12/11/1998	Active
TM	Singapore	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	T82/01188Z	03/07/1988	T82/01188Z	03/09/1982	Active
TM	Singapore	Warner Electric Technology LLC	WARNER LINEAR	T06/20041C	9/26/2006	T06/20041C	9/26/2006	Active
TM	Singapore	Altra Industrial Motion, Inc.	A&Design	T07/15070C	07/06/2007	T0715070C	07/06/2007	Active
TM	Singapore	TB Woods Enterprises, Inc.	SureFlex	T82/02556B	5/21/1982	2556/82	5/21/1982	Active
TM	South Africa	Warner Electric Technology Inc.	WICHITA	81/6897	09/17/1981	81/6897	09/17/1981	Active
TM Appl.	South Africa	Altra Industrial Motion, Inc.	A&Design			2007/14502	07/05/2007	Pending
TM Appl.	South Africa	Formsprag LLC	Marland			2009/17809	9/11/2009	Pending
TM	South Korea	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	84202	09/30/1982	1982-0000088	01/07/1982	Active
TM	South Korea	Warner Electric Technology LLC	WARNER ELECTRIC AND BACKGROUND DESIGN	85916	11/23/1982	1982-0000086	01/07/1982	Active
TM	South Korea	Warner Electric Technology LLC	WICHITA	108661	01/08/1985	1983-0011882	08/23/1983	Active
TM	South Korea	Warner Electric Technology LLC	WARNER LINEAR	40-0720036	8/7/2007	40-2006-0051431	10/12/2006	Active
TM	South Korea	Altra Industrial Motion, Inc.	A&Design	40-0775102	01/08/2009	40-2007-0039600	07/25/2007	Active
TM	South Korea	TB Woods Enterprises, Inc.	Form-Flex	140,855	5/25/1987	7981/1986	5/25/1997	Active
TM	Spain	Warner Electric Technology LLC	FORMSPRAG	2006258(3)	07/05/1996	2006258(3)		Active
TM	Spain	Warner Electric Technology Inc.	KOPPER KOOL & Design	1662162	06/05/1992	1662161	10/17/1991	Active
TM	Spain	Warner Electric Technology LLC	MAGNUM	1,142,629	10/02/1989		04/11/1986	Active
TM	Spain	Warner Electric Technology LLC	WARNER ELECTRIC	2010756	10/27/1997	2010756	02/07/1996	Active
TM	Spain	Warner Electric Technology Inc.	WICHITA	1045719	04/05/1984	1045719	08/30/1983	Active
TM	Sweden	Warner Electric Technology LLC	FORMSPRAG	83978	12/20/1957			Active
TM	Sweden	Warner Electric Technology LLC	WARNER ELECTRIC	323081	04/25/1997	95-14891	12/27/1995	Active
TM	Sweden	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	109892	05/19/1964	63-01313	03/27/1963	Active
TM	Sweden	Warner Electric Technology Inc.	WICHATA	90967	12/16/1960	3038	09/25/1958	Active
TM	Switzerland	Warner Electric Technology LLC	FORMCHROME	P-412221	10/18/1994	07371/1993.0	05/17/1993	Active
TM	Switzerland	Warner Electric Technology LLC	FORM-LOCK	P-412226	10/18/1994	7378/1993.2	05/17/1993	Active
TM	Switzerland	Warner Electric Technology LLC	FORMSPRAG	P-287755	04/26/1997	01681/1977	04/01/1997	Active
TM	Switzerland	Warner Electric Technology LLC	FORMSPRAG & Design	P-412187	10/14/1994	07373/1993.3	05/17/1993	Active
TM	Switzerland	Warner Electric Technology Inc.	RL	P-414247	01/31/1995	7376/1993.9	05/17/1993	Active
TM	Switzerland	Warner Electric Technology Inc.	WARNER & Design	P-406103	10/11/1993	2801/1993.6		Active
TM	Switzerland	Warner Electric Technology LLC	WARNER ELECTRIC	P-438835	03/27/1997	14050/1995	12/28/1995	Active
TM	Switzerland	Warner Electric Technology LLC	WICHITA & Design	P-300175	10/09/1979	03810/1978	08/17/1978	Active
TM	Switzerland	TB Woods Enterprises, Inc.	Sure-Flex	405,626	9/14/1992	01605/1993	9/14/1992	Active
TM	Taiwan	Warner Electric Technology Inc.	WARNER & Design	192580	10/01/1982	70043208	12/29/1981	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	Taiwan	Warner Electric Technology Inc.	WARNER ELECTRIC AND BACKGROUND DESIGN	64628	06/16/1993	81047228	09/21/1992	Active
TM	Taiwan	Warner Electric Technology Inc.	WICHITA	245903	05/16/1984	(72)52506	12/21/1983	Active
TM	Taiwan	Warner Electric Technology Inc.	WARNER ELECTRIC AND DESIGN	192,580	9/20/2002			Active
TM	Taiwan	Warner Electric Technology LLC	WARNER LINEAR	1,264,315	6/1/2007	095037880	7/24/2006	Active
TM	Taiwan	Altra Industrial Motion, Inc.	A&Design	1310870	05/16/2008	096031868	07/05/2007	Active
TM	Taiwan	TB Woods Inc.	Dura-Flex	807,300	7/1/1998	(86)5713	2/1/1997	Active
TM	Thailand	Warner Electric Technology LLC	WARNER LINEAR	Kor275083	10/26/2006	642919	10/26/2006	Active
TM	Thailand	Altra Industrial Motion, Inc.	A&Design	Kor296763	07/25/2007	668284	07/25/2007	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	SureFlex	B998,327	9/13/1972	B998,327	9/13/1972	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	Dura-Flex	1,105,120	11/22/1978	1105120	11/22/1978	Active
TM	United Kingdom	TB Woods Enterprises, Inc.	Speedlign	1,029,397	5/13/1974	1,029,397	5/13/1974	Active
TM	United Kingdom	Warner Electric Technology LLC	AUTOGAP	795572	09/17/1959		09/17/1959	Active
TM	United Kingdom	Warner Electric Technology Inc.	MAGNUM	879962	05/25/1965	879962	05/25/1965	Active
TM	United Kingdom	Warner Electric Technology Inc.	MAGNUM	1263574	09/15/1989	1263574	03/27/1986	Active
TM	United Kingdom	Warner Electric Technology LLC	MISTRAL	1475775	06/27/1997		09/07/1991	Active
TM	United Kingdom	Warner Electric Technology LLC	WARNER	792664	06/29/1959	792664		Active
TM	United Kingdom	Warner Electric Technology LLC	WARNER	710,641	09/17/1952	710641	07/15/1952	Active
TM	United Kingdom	Warner Electric Technology LLC	WICHITA	2192400	09/29/2000	2192400	03/20/1999	Active
TM	United Kingdom	Warner Electric Technology LLC	WICHATA	783301	10/29/1958	783301	10/29/1958	Active
TM	United Kingdom	Warner Electric Technology Inc.	DURA-FLEX	1,105,120	11/22/78			Active
TM	United Kingdom	Warner Electric Technology Inc.	FORMSPRAG	2380616	6/24/2005		12/17/2004	Active
TM	United Kingdom	Boston Gear LLC	CENTRIC	1259254	1/30/1986	1259254	1/30/1986	Active
TM	USA	Boston Gear LLC	ACE	1771190	5/18/1993	74253998	3/10/1992	Active
TM	USA	Ameridrives International, LLC	AMERICAN	0529539	8/22/1950	71578852	4/29/1949	Active
TM	USA	Ameridrives International, LLC	AMERICARDAN	2,488,262	09/11/01	75621192	01/15/1999	Active
TM	USA	Ameridrives International, LLC	AMERIDISC & Design	0802185	1/18/1966	72219296	5/19/1965	Active
TM	USA	Ameridrives International, LLC	AMERIDRIVES	2168489	6/23/1998	75204229	11/25/1996	Active
TM	USA	Ameridrives International, LLC	AMERIFLEX	1000720	12/31/1974	72444883	1/2/1973	Active
TM	USA	Warner Electric Technology LLC	AUTOGAP	681,746	07/14/1959	72046678	2/26/1958	Active
TM	USA	Boston Gear LLC	BEAR-N-BRONZ	0603829	3/29/1955	71665847	5/6/1954	Active
TM	USA	Boston Gear LLC	BG & Design	0298486	10/25/1932	71327723	6/4/1932	Active
TM	USA	Boston Gear LLC	BOSTRONG & Design	0837074	10/17/1967	72251147	7/27/1966	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0547544	9/4/1951	71597836	5/20/1950	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0612905	9/27/1955	71677082	11/22/1954	Active
TM	USA	Boston Gear LLC	BOST-FLEX	1111218	1/16/1979	73163090	3/21/1978	Active
TM	USA	Boston Gear LLC	BOSTON	0522912	3/28/1950	71535926	9/27/1947	Active
TM	USA	Boston Gear LLC	BOSTON & Design	1374572	12/10/1985	73514378	12/19/1984	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905805	1/12/1971	72338165	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905846	1/12/1971	72338166	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTONE	1131198	2/26/1980	73163091	3/21/1978	Active
TM	USA	Formsprag LLC	CEBMAG	1352456	08/06/1985	73513313	12/13/1984	Active
TM	USA	Formsprag LLC	CECON	2871858	08/10/04	78/300,412	09/15/2003	Active
TM	USA	Boston Gear LLC	CENTRIC	1365217	10/15/1985	73434105	7/11/1983	Active
TM	USA	Boston Gear LLC	DCX	1689927	6/2/1992	74151919	3/27/1991	Active
TM	USA	Boston Gear LLC	DCX PLUS	1794125	9/21/1993	74151939	3/27/1991	Active
TM	USA	Nuttall Gear LLC	DELROYD	3025384	12/13/2005	76/586088	4/12/2004	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	Warner Electric Technology LLC	ELECTRO-MODULE	0838675	11/14/1967	72200306	8/20/1964	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-PACK	0741888	12/11/1962	72127440	9/7/1961	Active
TM	USA	Warner Electric Technology LLC	F AND DESIGN	0743735	01/15/1963	72125482	8/7/1961	Active
TM	USA	Warner Electric Technology LLC	FORMCHROME	0867512	04/01/1969	72300576	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORM-LOCK	0870852	06/10/1969	72300575	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORMSRPAG & Design	0444642	01/15/1952	71510384	10/7/1946	Active
TM	USA	Warner Electric Technology LLC	FORMSPRAG	1216418	11/16/1982	73326809	9/4/1981	Active
TM	USA	Warner Electric Technology LLC	KOPPER KOOL	1258259	11/22/1983	73334553	10/28/1981	Active
TM	USA	Warner Electric Technology LLC	LLH	1759504	03/23/1993	74303730	8/13/1992	Active
TM	USA	Warner Electric Technology LLC	MAG STOP	1,851,941	08/30/1994	74327472	11/2/1992	Active
TM	USA	Warner Electric Technology LLC	MAGNUM	2,892,316	10/12/2004	76/336,606	11/13/2001	Active
TM	USA	Formsprag LLC	MARLAND	2667819	12/31/2002	76118280	8/28/2000	Active
TM	USA	Warner Electric Technology LLC	MESUR-FIL	0990826	08/13/1974	72464823	8/6/1973	Active
TM	USA	Warner Electric Technology LLC	MISTRAL	2168734	06/30/1998	74240876	1/28/1992	Active
TM	USA	Boston Gear LLC	MOTOR MULTIPLIER	1131648	3/11/1980	73184680	9/5/1978	Active
TM	USA	Nuttall Gear LLC	NGC & Design	3031121	12/20/2005	76/586087	4/12/2004	Active
TM	USA	Nuttall Gear LLC	Nuttall	3031120	12/20/2005	76/586086	4/12/2004	Active
TM	USA	Boston Gear LLC	OPTIMOUNT	0670192	11/25/1958	72046238	2/20/1958	Active
TM	USA	Warner Electric Technology LLC	PCE	1136601	06/03/1980	73193726	11/17/1978	Active
TM	USA	Boston Gear LLC	RATIOPAX	0985828	6/11/1974	72456678	5/7/1973	Active
TM	USA	Boston Gear LLC	RATIOTROL	0743713	1/15/1963	72137450	2/7/1962	Active
TM	USA	Warner Electric Technology LLC	SHEAVE-GRIP	3,085,816	4/25/2006	76/498,191	3/14/2003	Active
TM	USA	Warner Electric Technology LLC	UNIDAMP	1795619	09/28/1993	74038916	3/16/1990	Active
TM	USA	Warner Electric Technology LLC	UNIMODULE	1678062	03/03/1992	74053993	4/30/1990	Active
TM	USA	Warner Electric Technology LLC	WARNER & Design	0527445	07/11/1950	71528385	7/11/1947	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	1,026,080	12/02/1975	73035013	10/18/1974	Active
TM	USA	Ameridrives International, LLC	AMERIGEAR	2,951,600	5/17/2005	78/373,119	2/24/2004	Active
TM	USA	Ameridrives International, LLC	THE AMERICAN FULLY CROWNED TOOTH	2980971	5/10/2005	78/373,135	2/24/2004	Active
TM	USA	Boston Gear LLC	POSIVENT	2875347	08/17/2004	76/423,536	06/20/2002	Active
TM	USA	Boston Gear LLC	STABILI SEAL	3,131,135	08/15/2006	78/564,645	02/10/2005	Active
TM	USA	Warner Electric Technology Inc.	WICHITA CLUTCH	3039567	01/10/2006	76/620135	11/12/04	Active
TM	USA	Altra Industrial Motion, Inc.	A&Design	3,146,781	09/19/2006	78/560930	02/04/2005	Active
TM	USA	Warner Electric Technology LLC	AQUAMAKKS	3,490,449	08/19/2008	78/821,282	02/23/2006	Active
TM	USA	Warner Electric Technology LLC	Warner Electric	3,287,916	09/04/2007	78/790,162	01/12/2006	Active
TM	USA	Boston Gear LLC	CENTRIGARD	3,374,068	1/22/2008	78/774,995	12/16/2005	Active
TM	USA	Altra Industrial Motion, Inc.	Altra Industrial Motion	3360155	12/25/2007	76/621069	11/17/2004	Active
TM	USA	Warner Electric Technology LLC	Warner Linear	3,413,352	04/15/2008	78/910,851	06/19/2006	Active
TM	USA	Altra Industrial Motion, Inc.	A-Track	3,263,081	07/10/2007	78/790085	1/12/2006	Active
TM	USA	Kilian Manufacturing Corporation	KILIAN	1216354	11/16/1982	73277508	9/11/1980	Active
TM	USA	Kilian Manufacturing Corporation	KILROL	2827924	3/30/2004	78213978	2/12/2003	Active
TM	USA	Warner Electric Technology LLC	GFR	3,494,910	9/2/2008	77/247,944	08/06/07	Active
TM	USA	Warner Electric Technology LLC	B-Track	3,609,446	4/21/2009	77/237,461	07/24/2007	Active
TM	USA	TB Woods Enterprises, Inc.	All-Pro	2,165,737	6/16/1998	75/290,731	5/12/1997	Active
TM	USA	TB Woods North Carolina, Inc.	Braketron	1,164,393	8/11/1981	73/254,657	3/19/1980	Active
TM	USA	TB Woods Enterprises, Inc.	Deck & Design (stylized lettering)	1,409,209	9/16/1986	73/581,633	2/7/1986	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	TB Woods Enterprises, Inc.	Disc-O-Torque	859,264	10/29/1968	72/285,224	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Dura-Flex	1,116,828	4/24/1979	73/158,649	2/13/1978	Active
TM	USA	TB Woods Enterprises, Inc.	First In Couplings	1,361,466	9/24/1985	73/526,310	3/11/1985	Active
TM	USA	TB Woods Enterprises, Inc.	Form-Flex	2,152,362	4/21/1998	75/273,175	4/11/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Poole	2,191,918	9/29/1998	75/251,697	2/28/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Qt Power Chain	2,723,745	6/10/2003	76/403,299	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	Roto-Cam	859,263	10/29/1968	72/285,223	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Speedlign	2,991,827	9/6/2005	78/350,700	1/12/2004	Active
TM	USA	TB Woods Enterprises, Inc.	Sure Grip (Stylized)	645,415	5/14/1957	71/640,418	1/6/1953	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Flex	668,649	10/21/1958	72/043,720	1/9/1958	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	646,423	6/4/1957	71/575,508	3/15/1949	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	1,109,150	12/19/1978	73/136,699	8/8/1977	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,969	1/21/1975	73/001,734	10/9/1973	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,970	1/21/1975	73/003,203	10/10/1973	Active
TM	USA	TB Woods Enterprises, Inc.	W TB Wood’s (and design)	2,059,245	5/6/1997	75/107,136	5/20/1996	Active
TM	USA	TB Woods Enterprises, Inc.	G-Flex	3,501,631	9/16/2008	77/397,102.	2/14/2008	Active
TM	USA	Inertia Dynamics, LLC	Unibrake	0809205	05/31/1966	72/219817	05/26/1965	Active
TM Appl.	USA	Kilian Manufacturing Corporation	HI-TECH WORRY BEADS			78/775,032	12/16/2005	Pending
TM Appl.	USA	Formsprag LLC	BC MA			77/649,950	1/15/2009	Pending
Unregistered TM	USA	Inertia Dynamics, LLC	IDI
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	0726202	01/09/1962	72105397	9/28/1960	Active
TM	USA	Warner Electric Technology LLC	WICHITA	1565483	11/14/1989	73753251	8/29/1988	Active
TM	Venezuela	Warner Electric Technology Inc.	WICHITA	120263	04/25/1986	7010-83	09/01/1983	Active
TM	Vietnam	Warner Electric Technology Inc.	WARNER	9997	12/11/1993	11808	03/20/1993	Active
	NOTES:
		American Enterprises MPT L.P.
		This entity is the owner of record of a pair of Canadian registrations. The changes in the company’s name from American Enterprises MPT L.P. to Ameridrives International L.P. (on 04/25/1997) and later from Ameridrives International L.P. to Ameridrives International LLC (on 12/21/2005) have not yet been recorded against the registrations.
		Dana Corporation
		This entity is the owner of record of an Indian trademark registration for “WARNER ELECTRIC.” The assignment of the registration from Dana Corporation to Warner Electric Technology, Inc. and the subsequent name change from Warner Electric Technology, Inc. to Warner Electric Technology LLC have been submitted for recordation. Dana Corporation is also the owner of record of a Canadian trademark registration for “DISC-O-TORQUE” relating to TB Woods. No action has been taken to address the change in ownership of this registration in view of instructions given in 2000 to a prior law firm for TB Woods to allow the registration to lapse (the registration actually remains in force until 2015.

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
		Emerson Power Transmission Corp.
		This entity is the owner of record on a Mexican registration for “GFR.” Assignments from Emerson Power Transmission Corp. to Dana Holdings GmbH and from Dana Holdings GmbH to Warner Electric Technology LLC have been submitted for recordation and the process is ongoing.
		IMO Industries, Inc.
		This entity is the owner of record on a pair of Mexican registrations for “BOSTON GEAR”. An assignment of the Mexican registrations to Boston Gear LLC is in the process of being recorded.
		Warner Electric Technology, Inc.
		A number of patents and trademarks owned by Warner Electric Technology LLC remain in the former name (Warner Electric Technology, Inc.) of the company on the records of various foreign patent and trademark offices. Efforts to record the change in name are in progress with respect to some of the patents and trademarks. For others, a conscious decision was made to hold off on recordation pending some other action relating to the property (e.g., the next renewal of a trademark registration). For yet others, a decision was made not to record the change in name in view of a decision to allow various registrations or patents to lapse).

INTELLECTUAL PROPERTY LICENSES

Name of Grantor	Name of Agreement	Date of Agreement	Parties to Agreement
[*]	License Agreement	August 17, 2009	Ameridrives International, LLC
The Grantors own or license certain off-the-shelf software, which software is ready-made and available for sale, lease, or license to the general public.
From time to time in the course of manufacturing products for their customers, certain customers may grant the Grantors limited licenses to certain of their intellectual property.

EXHIBIT E
(See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)

LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY

STOCKS

					Percentage of
Name of		Certificate	Number of		Outstanding
Grantor	Issuer	Number(s)	Shares	Class of Stock	Shares
Altra Holdings, Inc.	Altra Industrial Motion, Inc.	C-2	1,000	Common Stock, $0.001 par value	100%
Altra Industrial Motion, Inc.	American Enterprises MPT Corp.	102	999	Common Stock, $0.001 par value	100%
Altra Industrial Motion, Inc.	Warner Electric LLC	002	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Warner Electric Technology LLC	002	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Boston Gear LLC	001	1	LLC Interests	100%
Altra Industrial Motion, Inc.	Kilian Manufacturing Corporation	102	10	Stock, no par value	100%
Altra Industrial Motion, Inc.	Warner Electric International Holding, Inc.	2	1,000	Stock, $1.00 par value	100%
Altra Industrial Motion, Inc.	Inertia Dynamics, LLC	002	100%	LLC Interests	100%
Altra Industrial Motion, Inc.	TB Wood’s Corporation	C-2	1,000	Common Stock, $0.01 par value	100%
American Enterprises MPT Corp.	American Enterprises MPT Holdings, LLC	001	100%	LLC Interests	100%
American Enterprises MPT Corp.	Ameridrives International LLC	001	100%	LLC Interests	100%
American Enterprises MPT Corp.	Nuttall Gear LLC	001	1	LLC Interests	100%
American Enterprises MPT Corp.	Formsprag LLC	004	861,429	Units	100%
TB Wood’s Corporation	TB Wood’s Incorporated	2	1,125,000	Common Stock, $0.10 par value	100%
TB Wood’s Incorporated	TB Wood’s Enterprises Inc.	2	3,000	Common Stock, $0.01 par value	100%
TB Wood’s Incorporated	T.B. Wood’s Canada Ltd.	1015	3,415	Common Shares	65%

					Percentage of
Name of		Certificate	Number of		Outstanding
Grantor	Issuer	Number(s)	Shares	Class of Stock	Shares
TB Wood’s Incorporated	Industrial Blaju, S.A. de C.V.	2	25,229,382	Capital Stock, $1.00 par value	65%
Kilian Manufacturing Corporation	3091780 Nova Scotia Company	5, 7	130	Common Shares, no par value	65%
Warner Electric International Holding, Inc.	Warner Electric UK Group Ltd.	6	2,456,508	Ordinary Shares of £1 each, fully paid	65%
Warner Electric International Holding, Inc. *	Warner Electric (Holding) SAS				65%
Warner Electric International Holding, Inc. *	Warner Electric Group GmbH				65%
Warner Electric International Holding, Inc.*	Warner Electric (Netherlands) Holding, B.V.				65%

* NOTE: Certificates for these entities will be provided post-closing.

BONDS

Name of
Grantor	Issuer	Number	Face Amount	Coupon Rate	Maturity
N/A

GOVERNMENT SECURITIES

Name of
Grantor	Issuer	Number	Type	Face Amount	Coupon Rate	Maturity
N/A

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)

			Percentage Ownership
Name of Grantor	Issuer	Description of Collateral	Interest
See below.

Existing Joint Ventures

     Warner Electric LLC holds 40% of Elastomeric Actuators Inc.

EXHIBIT F
(See Section 3.1 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

Name of Grantor	Jurisdiction
Altra Holdings, Inc.	DE
Altra Industrial Motion, Inc.	DE
American Enterprises MPT Corp.	DE
American Enterprises MPT Holdings, LLC	DE
Ameridrives International, LLC	DE
Boston Gear LLC	DE
Formsprag LLC	DE
Inertia Dynamics, LLC	DE
Kilian Manufacturing Corporation	DE
Nuttall Gear LLC	DE
TB Wood’s Corporation	DE
TB Wood’s Enterprises, Inc.	DE
TB Wood’s Incorporated	PA
Warner Electric International Holding, Inc.	DE
Warner Electric LLC	DE
Warner Electric Technology LLC	DE

EXHIBIT G
(See Section 4.4 and 4.8 of Security Agreement)

AMENDMENT

This Amendment, dated                     , ___ is delivered pursuant to Section 4.4 of the Security Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement. The undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Pledge and Security Agreement, dated                      ___, ___, between the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the Administrative Agent, (the “Security Agreement”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in said Security Agreement.

By:

Name:

Title:

EXHIBIT H
(See Section 8.21 of Security Agreement)

Post Closing Matters

	Responsible
Document/Deliverable	Party	Due Date
1. Deliver to the Administrative Agent the results of patent and trademark searches of the U.S. Patent and Trademark Office databases, together with an Exhibit D attached hereto, listing all Patents and Trademarks (including any licenses of the foregoing) in which such Grantor has an ownership interest, in each case as required under Section 4.7(f) hereof.	Grantors		12/25/09
2. Execute and deliver to the Administrative Agent (x) a patent security agreement and (y) a trademark security agreement as required under Section 4.7(f) hereof.	Grantors		12/25/09
3. Deliver to the Administrative Agent (i) appraisals of the Borrowers’ Inventory and (ii) copies of existing appraisals with respect to each of the Mortgaged Properties as required under Section 5.16 of the Credit Agreement.	Grantors		12/25/09
4. Conduct field examinations of the Borrowers’ books, records, Accounts, Inventory and other Collateral as required under Section 5.16 of the Credit Agreement.	Administrative Agent		12/25/09
5. Deliver to the Administrative Agent a Mortgage and other related items with respect to each Mortgaged Property as required under Section 5.15 of the Credit Agreement.	Grantors		2/23/10
6. Execute and deliver to the Administrative Agreement Control Agreements as required under Section 4.14 hereof and Section 5.12 of the Credit Agreement.	Grantors		2/23/10
7. Deliver to the Administrative Agreement Collateral Access Agreements as required under Section 4.13.	Grantors		3/25/10

EX-10.18

Exhibit 10.18

[*] THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

PATENT SECURITY AGREEMENT

     This PATENT SECURITY AGREEMENT (this “Agreement”), dated as of November 25, 2009, between Altra Industrial Motion, Inc., a Delaware corporation (the “Company”), the Subsidiaries and Affiliates of the Company named on the signature pages hereto (each a “Grantor”, and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., acting in the capacity as Administrative Agent for the benefit of itself and the other Lenders party to the Credit Agreement referred to below (in such capacity, the “Administrative Agent”).

WITNESSETH:

     WHEREAS pursuant to the terms of that certain Credit Agreement, dated as of November ___, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Company, the other Loan Parties from time to time party thereto (collectively with the Company, the “Loan Parties”), the Lenders from time to time party thereto (the “Lenders”) and the Administrative Agent, the Lenders have agreed to extend credit and make certain financial accommodations to the Loan Parties.

     WHEREAS pursuant to the Pledge and Security Agreement, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), among the Loan Parties and the Administrative Agent, the Grantors granted to the Administrative Agent a security interest and continuing lien on all of each Grantors’ right, title and interest in, to and under all Collateral, including the Patent Collateral (as defined below), and all Collateral in each case whether now owned or existing or hereafter acquired or arising to secure the prompt and complete payment and performance of all Secured Obligations (as defined in the Credit Agreement) including the obligations of the Loan Parties under the Credit Agreement;

     WHEREAS the parties to the Credit Agreement contemplate and intend that, if an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the Administrative Agent shall have all rights of a secured party in and to the Patent Collateral and any proceeds thereof, including, without limitation, the right to exercise its remedies under the Credit Agreement in connection with all of each Grantors’ right, title and interest in the Patent Collateral; and

     WHEREAS pursuant to the Credit Agreement and the Security Agreement, the Grantors are required to execute and deliver this Agreement.

     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Grantors agree as follows:

     Section 1. Defined Terms

     Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

     Section 2. Grant of Security Interest in Patents

     The Grantors hereby grant to the Administrative Agent a security interest in all of their right, title and interest in, to and under the Patents, including the Patents listed in Schedule A, in each case whether now owned or hereafter acquired (collectively, the “Patent Collateral”).

     Section 3. Security for Obligations

     This Agreement secures, and the Patent Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise of all Secured Obligations.

     Section 4. Security Agreement

     The security interests granted pursuant to this Agreement are granted in conjunction with the security interests granted to the Administrative Agent pursuant to the Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Administrative Agent with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any irreconcilable conflict between the terms of this Agreement and the terms of the Security Agreement, the terms of the Security Agreement shall control.

     Section 5. Recordation

     The Grantors hereby authorize and request that the Commissioner of Patent and Trademarks and any other applicable United States government officer record this Agreement.

     Section 6. Miscellaneous

     This Agreement shall be governed by, and construed in accordance with the laws of the State of New York.

     This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

[Remainder of this page intentionally left blank]

     IN WITNESS WHEREOF, the Grantors have caused this Agreement to be duly executed and delivered by a duly authorized officer as of the date first set forth above.

GRANTORS:
ALTRA INDUSTRIAL MOTION, INC.
ALTRA HOLDINGS, INC.
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:   Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDINGS, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES INC.
INERTIA DYNAMICS, LLC
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:	Secretary

ADMINISTRATIVE AGENT:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By:	/s/ Kathleen C. Maggi
	Name: Kathleen C. Maggi
	Title: Senior Vice President

SCHEDULE A

TO

PATENT SECURITY AGREEMENT

UNITED STATES PATENTS

Title Patent Number

UNITED STATES PENDING PATENT APPLICATIONS

Title Application Serial Number

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Inertia Dynamics, LLC	Electromagnetic disc brake with rubber friction disk braking surface	6161659	12/19/2000	167006	09/29/1998	Active
Patent	USA	Inertia Dynamics, LLC	Sealed electromagnetic brake	6125975	10/3/2000	193388	11/17/1998	Active
Patent	USA	Inertia Dynamics, LLC	Manual release machanism for a brake	6675940	01/13/2004	253125	09/24/2002	Active
Patent	USA	Warner Electric Technology LLC	FLUID OPERATED BRAKE DEVICE (MISTRAL BRAKE)	5,908,092	6/1/1999	256949	7/27/1994	Active
Patent	USA	Inertia Dynamics, LLC	Clutch system and method	6488133	12/3/2002	528690	03/20/2000	Active
Patent	USA	Inertia Dynamics, LLC	Elevator brake assembly	6675939	01/13/2004	773722	01/31/2001	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,150,779	9/29/1992	820344	1/14/1992	Active
Patent	USA	Inertia Dynamics, LLC	Device for clamping a shaft	6527233	03/04/2003	841507	04/24/2001	Active
Patent	USA	Inertia Dynamics, LLC	Power-off brake with manual release	5915507	06/29/1999	932904	09/17/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electric clutch and brake	6047805	04/11/2000	937816	09/29/1997	Active
Patent	USA	Inertia Dynamics, LLC	Electro-mechanical variable speed clutch	5979630	11/9/1999	938862	09/26/1997	Active
Patent	USA	Warner Electric Technology LLC	DUAL START DRIVE SYSTEM	4,621,720	11/11/1986	06/813,538	12/26/1985	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED BI-DIRECTIONAL BACK STOPPING CLUTCH	5,007,511	4/15/1991	07/430,811	11/2/1989	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC FRICTION BRAKEWITH IMPROVED MOUNTING PINS	4,974,705	12/4/1990	07/451,609	12/18/1989	Active
Patent	USA	Warner Electric Technology LLC	UNIDAMP ARMATURE	5,036,964	8/6/1991	07/500,466	3/28/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING DISCS AND METHOD OF MAKING THE SAME.	5,096,036	3/17/1992	07/531,465	5/31/1990	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH/BRAKE UNIT	5,033,595	7/23/1991	07/535,428	6/8/1990	Active
Patent	USA	Warner Electric Technology LLC	APPARATUS FOR RESISTANCE BONDING ELECTROMAGNETIC COILS	5,091,619	2/25/1992	07/543,706	6/26/1990	Active
Patent	USA	Warner Electric Technology LLC	FIELD ASSEMBLY FOR AN ELECTROMAGNET	5,250,921	10/5/1993	07/600,199	10/19/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC SYNCHRONIZING AND SHIFTING CLUTCH — ESS	5,052,534	10/1/1991	07/605,517	10/30/1990	Active
Patent	USA	Warner Electric Technology LLC	LOW COST SPRAG RETAINER	5,070,976	12/10/1991	07/634,903	12/27/1990	Active
Patent	USA	Warner Electric Technology LLC	DIGITAL CONTROL SYSTEM FOR ELECTROMAGNETIC CLUTCH	5,094,332	3/10/1992	07/664,075	12/31/1990	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC COUPLING ARMATURE ASSEMBLY WITH FLUX ISOLATOR SPRINGS	5,119,915	6/9/1992	07/700,439	5/15/1991	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MAKING AN ELECTROMAGNETIC COUPLING DISC	5,125,255	6/30/1992	07/721,972	6/27/1991	Active
Patent	USA	Warner Electric Technology LLC	ELECTROMAGNETIC CLUTCH WITH PERMANENT MAGNET BRAKE	5,119,918	6/9/1992	07/774,92	10/11/1991	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with slip joint seal	5,230,658	07/27/1993	07/864,307	04/06/1992	Active
Patent	USA	TB Woods Enterprises, Inc.	Shaft Mountable Bushing and Hub for Industrail poer transmission	5304101	4/19/1994	07/919223	7/27/1992	Active
Patent	USA	Warner Electric Technology LLC	SPLIT TUBE HAVING RETAINABLE ENDS	5,280,829	1/25/1994	07/931,638	8/18/1992	Active
Patent	USA	Warner Electric Technology LLC	SUPPORTING HUB FOR CLUTCH AND PUMP ASSEMBLY	5,310,034	5/10/1994	07/973,291	11/9/1992	Active
Patent	USA	Warner Electric Technology LLC	SPRAG RETAINER WITH ROTATIONAL RESTRAINT	5,337,869	8/16/1994	07/991,021	12/15/1992	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH WITH SPACER FOR SUPPORTING A BEARING	5,285,882	2/15/1994	07/996,122	12/23/1992	Active
Patent	USA	Warner Electric Technology LLC	SOUND-DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	5,372,228	12/13/1994	08/026,499	3/4/1993	Active
Patent	USA	Warner Electric Technology LLC	ROTOR FOR ELECTROMAGNETIC COUPLING	5,305,865	4/26/1994	08/026,995	3/5/1993	Active
Patent	USA	Warner Electric Technology LLC	HIGH STRENGTH ELECTROMAGNETIC COUPLING DISC	5,445,259	8/29/1995	08/114,320	8/30/1993	Active
Patent	USA	Warner Electric Technology LLC	UNIDRIVE ARMATURE HUB	5,370,209	12/6/1994	08/119,729	9/10/1993	Active
Patent	USA	TB Woods Enterprises, Inc.	Combination of power steering pump and air conditioning compressor in an automotive vehicle	5465804	11/14/1995	08/231802	4/25/1994	Active
Patent	USA	Warner Electric Technology LLC	LOCATING RING FOR ENCAPULATING A COIL	5,497,136	3/5/1996	08/238,619	5/4/1994	Active
Patent	USA	Warner Electric Technology LLC	CLUTCH BRAKE ASSEMBLY	5,549,186	8/27/1996	08/346,622	11/30/1994	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling with End Stress Relief Structure	5611732	3/18/1997	08/512,137	8/7/1995	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A COMPONENT FOR AN ELECTROMAGNETIC FRICTION CLUTCHASSEMBLY	5,708,955	1/13/1998	08/558,906	11/16/1995	Active
Patent	USA	Ameridrives International, LLC	Driveshaft with sealed slip joint seal	5,655,968	08/12/1997	08/646,202	05/07/1996	Active
Patent	USA	Warner Electric Technology LLC	FORMLOCK SHOES WITH FLATS	5,865,284	2/2/1999	08/666,068	6/21/1996	Active
Patent	USA	Warner Electric Technology LLC	METHOD OF MANUFACTURING A ROTOR FOR AN ELECTROMAGNETIC CLUTCH ASSEMBLY	5,920,981	7/13/1999	08/823,990	3/25/1997	Active
Patent	USA	Warner Electric Technology LLC	SPRAG FAMILY	6,109,409	08/29/2000	08/949,741	10/14/1997	Active
Patent	USA	Warner Electric Technology LLC	SOUND DAMPING ARMATURE ASSEMBLY FOR AN ELECTROMAGNETIC COUPLING	6,194,803	2/27/2001	09/032,572	2/27/1998	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
Patent	USA	Warner Electric Technology LLC	MAG STOP CLUTCH WITH CENTER POLE	5,971,121	10/26/1999	09/070,068	4/30/1998	Active
Patent	USA	Warner Electric Technology LLC	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,364,084	4/2/2002	09/515779	2/29/2000	Active
Patent	USA	Warner Electric Technology LLC	ANTI-SLIP INESERT FOR A BACKSTOPPING CLUTCH	6,257,388	7/10/2001	09/556510	4/24/2000	Active
Patent	USA	Warner Electric Technology LLC	METHOD FOR MAKING AN ARMATURTE ASSEMBLEY	6,591,477	7/7/2003	09/684,117	10/06/2000	Active
Patent	USA	Dana Corporation	ARMATURE FOR A SELECTIVELY ENGAGEABLE AND DISENGAGEABLE COUPLING	6,557,236	05/06/2003	10/027,095	12/20/2001	Active
Patent	USA	Warner Electric LLC	Electromechanical screw drive actuator	6,927,513	8/9/2005	10/609,883	6/30/2003	Active
Patent	USA	Warner Electric Technology LLC	IMPROVED DRIVE ASSEMBLY WITH LIGHTWEIGHT BACKSTOPPPING CLUTCH	7,261,196	08/28/2007	11/064,611	02/24/05	Active
Patent	USA	Inertia Dynamics, LLC	IP copies may be obtained separately	US20050236245		11/115,903		Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	US20060278491		11/150670	6/10/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,493,996	2/24/2009	11/150671	6/10/2005	Active
Patent	USA	TB Woods Enterprises, Inc.	Flexible Coupling Device	7,390,265	6/24/2008	11/256,463	10/21/2005	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	7,374,027	5/20/2008	11/263,394	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Liquid Cooled Brake assembley	7,591,349	9/22/2009	11/263,399	10/31/2005	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	7,527,134	5/5/2009	11/278,448	4/3/2006	Active
Patent	USA	Warner Electric Technology LLC	Automatically released bi-directional overunning clutch	7,389,863	6/24/2008	11/341,763	01/27/2006	Active
Patent	USA	Warner Electric Technology LLC	AquaMaKKs Brake (Liquid Cooled Brake With Support Columns)	US20080185239		11/670,698	2/2/2007	Active
Patent	USA	Warner Electric Technology LLC	Torque Arm Assembly for a Backstopping Clutch	US20080271970		11/743,894	5/3/2007	Active
Patent	USA	Warner Electric Technology LLC	Overrunning Clutch	US20070267264		11/750,733	5/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Sparag Retainer for OVERRUNNING CLUTCH	US20090095591		11/871,542	10/12/2007	Active
Patent	USA	Warner Electric Technology LLC	BALANCED FLOW COOLING WATER JACKET	US20080110708		12/016,504	1/18/2007	Active
Patent	USA	Warner Electric Technology LLC	Rotational Coupling Device	US20090229941		12/048,638	3/14/2008	Active
Patent	USA	Warner Electric Technology LLC	IP copies may be obtained separately	US20090133974		12/364,116		Active
Patent Appl.	USA	Warner Electric Technology LLC	DUAL ACTUATOR FRICTION BRAKE ASSEMBLY			11/263,395	10/31/2005	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Dual Actuator Friction Brake Assembly”			12/364,116	2/2/2009	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device			11/150027	6/10/2005	Pending
Patent Appl.	USA	Inertia Dynamics, LLC [*]	[*]			[*]	[*]	[*]
Patent Appl.	USA	Kilian Manufacturing Corporation	Bearing assembly for a steering assembly			11/773,715	7/5/2007	Pending
Patent Appl.	USA	Warner Electric Technology LLC	Rotational Coupling Device With Sealed Key			12/124,699	5/21/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	“Safety Control for Release of Backstopping Clutch”			12/175,995	07/18/2008	Pending
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Warner Electric Technology LLC	[*]			[*]	[*]	[*]
Patent Appl.	USA	Inertia Dynamics, LLC (Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.)	Manual release brake			60/324,812	09/24/2001	Pending
Patent Appl.	USA	Inertia Dynamics, LLC (Pending assignment recordation issue. Currently in the name of Reliance Electric, former parent.)	Clutch with wear ring assembly			60/5658	60 04/27/2004	Pending
Patent Appl.	USA	Inertia Dynamics, LLC [*]	[*]			[*]	[*]	[*]

EX-10.19

Exhibit 10.19

TRADEMARK SECURITY AGREEMENT

     THIS TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of November 25, 2009, between Altra Industrial Motion, Inc., a Delaware corporation (the “Company”), the Subsidiaries and Affiliates of the Company named on the signature pages hereto (each a “Grantor”, and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., acting in the capacity as Administrative Agent for the benefit of itself and the other Lenders party to the Credit Agreement referred to below (in such capacity, the “Administrative Agent”).

WITNESSETH:

     WHEREAS pursuant to the terms of that certain Credit Agreement, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Company, the other Loan Parties from time to time party thereto (collectively with the Company, the “Loan Parties”), the Lenders from time to time party thereto (the “Lenders”) and the Administrative Agent, the Lenders have agreed to extend credit and make certain financial accommodations to the Loan Parties.

     WHEREAS pursuant to the Pledge and Security Agreement, dated as of November 25, 2009 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), among the Loan Parties and the Administrative Agent, the Grantors granted to the Administrative Agent a security interest and continuing lien on all of each Grantors’ right, title and interest in, to and under all Collateral, including the Trademark Collateral (as defined below), and all Collateral in each case whether now owned or existing or hereafter acquired or arising to secure the prompt and complete payment and performance of all Secured Obligations (as defined in the Credit Agreement) including the obligations of the Loan Parties under the Credit Agreement;

     WHEREAS the parties to the Credit Agreement contemplate and intend that, if an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the Administrative Agent shall have all rights of a secured party in and to the Trademark Collateral and any proceeds thereof, including, without limitation, the right to exercise its remedies under the Credit Agreement in connection with all of each Grantors’ right, title and interest in such Trademark Collateral; and

     WHEREAS pursuant to the Credit Agreement and the Security Agreement, the Grantors are required to execute and deliver this Agreement.

     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Grantors agree as follows:

     Section 1. Defined Terms

     Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

     Section 2. Grant of Security Interest in Trademarks

     The Grantors hereby grant to the Administrative Agent a security interest in all of their right, title and interest in, to and under the Trademarks, including the Trademarks listed in Schedule A, in each case whether now owned or hereafter acquired (collectively, the “Trademark Collateral”).

     Section 3. Security for Obligations

     This Agreement secures, and the Trademark Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise of all Secured Obligations.

     Section 4. Security Agreement

     The security interests granted pursuant to this Agreement are granted in conjunction with the security interests granted to the Administrative Agent pursuant to the Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Administrative Agent with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any irreconcilable conflict between the terms of this Agreement and the terms of the Security Agreement, the terms of the Security Agreement shall control.

     Section 5. Recordation

     The Grantors hereby authorize and request that the Commissioner of Patent and Trademarks and any other applicable United States government officer record this Agreement.

     Section 6. Miscellaneous

     This Agreement shall be governed by, and construed in accordance with the laws of the State of New York.

     This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

[Remainder of this page intentionally left blank]

     IN WITNESS WHEREOF, the Grantors have caused this Agreement to be duly executed and delivered by a duly authorized officer as of the date first set forth above.

GRANTORS:
ALTRA INDUSTRIAL MOTION, INC.
ALTRA HOLDINGS, INC.
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title: Vice President, Legal and Human Resources, General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP.
NUTTALL GEAR LLC
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
FORMSPRAG LLC
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
BOSTON GEAR LLC
KILIAN MANUFACTURING CORPORATION
WARNER ELECTRIC INTERNATIONAL HOLDINGS, INC.
TB WOOD’S CORPORATION
TB WOOD’S INCORPORATED
TB WOOD’S ENTERPRISES INC.
INERTIA DYNAMICS, LLC
By	/s/ Glenn E. Deegan
Name:	Glenn E. Deegan
Title:	Secretary

ADMINISTRATIVE AGENT:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By:	/s/ Kathleen C. Maggi
	Name: Kathleen C. Maggi
	Title: Senior Vice President

SCHEDULE A

TO

TRADEMARK SECURITY AGREEMENT

REGISTERED TRADEMARKS

Trademark Registration Number

UNITED STATES TRADEMARK APPLICATIONS

Trademark Application Serial Number

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	Boston Gear LLC	ACE	1771190	5/18/1993	74253998	3/10/1992	Active
TM	USA	Ameridrives International, LLC	AMERICAN	0529539	8/22/1950	71578852	4/29/1949	Active
TM	USA	Ameridrives International, LLC	AMERICARDAN	2,488,262	09/11/01	75621192	01/15/1999	Active
TM	USA	Ameridrives International, LLC	AMERIDISC & Design	0802185	1/18/1966	72219296	5/19/1965	Active
TM	USA	Ameridrives International, LLC	AMERIDRIVES	2168489	6/23/1998	75204229	11/25/1996	Active
TM	USA	Ameridrives International, LLC	AMERIFLEX	1000720	12/31/1974	72444883	1/2/1973	Active
TM	USA	Warner Electric Technology LLC	AUTOGAP	681,746	07/14/1959	72046678	2/26/1958	Active
TM	USA	Boston Gear LLC	BEAR-N-BRONZ	0603829	3/29/1955	71665847	5/6/1954	Active
TM	USA	Boston Gear LLC	BG & Design	0298486	10/25/1932	71327723	6/4/1932	Active
TM	USA	Boston Gear LLC	BOSTRONG & Design	0837074	10/17/1967	72251147	7/27/1966	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0547544	9/4/1951	71597836	5/20/1950	Active
TM	USA	Boston Gear LLC	BOST-BRONZ	0612905	9/27/1955	71677082	11/22/1954	Active
TM	USA	Boston Gear LLC	BOST-FLEX	1111218	1/16/1979	73163090	3/21/1978	Active
TM	USA	Boston Gear LLC	BOSTON	0522912	3/28/1950	71535926	9/27/1947	Active
TM	USA	Boston Gear LLC	BOSTON & Design	1374572	12/10/1985	73514378	12/19/1984	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905805	1/12/1971	72338165	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTON GEAR	0905846	1/12/1971	72338166	9/17/1969	Active
TM	USA	Boston Gear LLC	BOSTONE	1131198	2/26/1980	73163091	3/21/1978	Active
TM	USA	Formsprag LLC	CEBMAG	1352456	08/06/1985	73513313	12/13/1984	Active
TM	USA	Formsprag LLC	CECON	2871858	08/10/04	78/300,412	09/15/2003	Active
TM	USA	Boston Gear LLC	CENTRIC	1365217	10/15/1985	73434105	7/11/1983	Active
TM	USA	Boston Gear LLC	DCX	1689927	6/2/1992	74151919	3/27/1991	Active
TM	USA	Boston Gear LLC	DCX PLUS	1794125	9/21/1993	74151939	3/27/1991	Active
TM	USA	Nuttall Gear LLC	DELROYD	3025384	12/13/2005	76/586088	4/12/2004	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-MODULE	0838675	11/14/1967	72200306	8/20/1964	Active
TM	USA	Warner Electric Technology LLC	ELECTRO-PACK	0741888	12/11/1962	72127440	9/7/1961	Active
TM	USA	Warner Electric Technology LLC	F AND DESIGN	0743735	01/15/1963	72125482	8/7/1961	Active
TM	USA	Warner Electric Technology LLC	FORMCHROME	0867512	04/01/1969	72300576	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORM-LOCK	0870852	06/10/1969	72300575	6/17/1968	Active
TM	USA	Warner Electric Technology LLC	FORMSRPAG & Design	0444642	01/15/1952	71510384	10/7/1946	Active
TM	USA	Warner Electric Technology LLC	FORMSPRAG	1216418	11/16/1982	73326809	9/4/1981	Active
TM	USA	Warner Electric Technology LLC	KOPPER KOOL	1258259	11/22/1983	73334553	10/28/1981	Active
TM	USA	Warner Electric Technology LLC	LLH	1759504	03/23/1993	74303730	8/13/1992	Active
TM	USA	Warner Electric Technology LLC	MAG STOP	1,851,941	08/30/1994	74327472	11/2/1992	Active
TM	USA	Warner Electric Technology LLC	MAGNUM	2,892,316	10/12/2004	76/336,606	11/13/2001	Active
TM	USA	Formsprag LLC	MARLAND	2667819	12/31/2002	76118280	8/28/2000	Active
TM	USA	Warner Electric Technology LLC	MESUR-FIL	0990826	08/13/1974	72464823	8/6/1973	Active
TM	USA	Warner Electric Technology LLC	MISTRAL	2168734	06/30/1998	74240876	1/28/1992	Active
TM	USA	Boston Gear LLC	MOTOR MULTIPLIER	1131648	3/11/1980	73184680	9/5/1978	Active
TM	USA	Nuttall Gear LLC	NGC & Design	3031121	12/20/2005	76/586087	4/12/2004	Active
TM	USA	Nuttall Gear LLC	Nuttall	3031120	12/20/2005	76/586086	4/12/2004	Active
TM	USA	Boston Gear LLC	OPTIMOUNT	0670192	11/25/1958	72046238	2/20/1958	Active
TM	USA	Warner Electric Technology LLC	PCE	1136601	06/03/1980	73193726	11/17/1978	Active
TM	USA	Boston Gear LLC	RATIOPAX	0985828	6/11/1974	72456678	5/7/1973	Active
TM	USA	Boston Gear LLC	RATIOTROL	0743713	1/15/1963	72137450	2/7/1962	Active
TM	USA	Warner Electric Technology LLC	SHEAVE-GRIP	3,085,816	4/25/2006	76/498,191	3/14/2003	Active
TM	USA	Warner Electric Technology LLC	UNIDAMP	1795619	09/28/1993	74038916	3/16/1990	Active
TM	USA	Warner Electric Technology LLC	UNIMODULE	1678062	03/03/1992	74053993	4/30/1990	Active
TM	USA	Warner Electric Technology LLC	WARNER & Design	0527445	07/11/1950	71528385	7/11/1947	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	1,026,080	12/02/1975	73035013	10/18/1974	Active
TM	USA	Ameridrives International, LLC	AMERIGEAR	2,951,600	5/17/2005	78/373,119	2/24/2004	Active
TM	USA	Ameridrives International, LLC	THE AMERICAN FULLY CROWNED TOOTH	2980971	5/10/2005	78/373,135	2/24/2004	Active
TM	USA	Boston Gear LLC	POSIVENT	2875347	08/17/2004	76/423,536	06/20/2002	Active
TM	USA	Boston Gear LLC	STABILI SEAL	3,131,135	08/15/2006	78/564,645	02/10/2005	Active
TM	USA	Warner Electric Technology Inc.	WICHITA CLUTCH	3039567	01/10/2006	76/620135	11/12/04	Active
TM	USA	Altra Industrial Motion, Inc.	A&Design	3,146,781	09/19/2006	78/560930	02/04/2005	Active
TM	USA	Warner Electric Technology LLC	AQUAMAKKS	3,490,449	08/19/2008	78/821,282	02/23/2006	Active
TM	USA	Warner Electric Technology LLC	Warner Electric	3,287,916	09/04/2007	78/790,162	01/12/2006	Active
TM	USA	Boston Gear LLC	CENTRIGARD	3,374,068	1/22/2008	78/774,995	12/16/2005	Active
TM	USA	Altra Industrial Motion, Inc.	Altra Industrial Motion	3360155	12/25/2007	76/621069	11/17/2004	Active
TM	USA	Warner Electric Technology LLC	Warner Linear	3,413,352	04/15/2008	78/910,851	06/19/2006	Active
TM	USA	Altra Industrial Motion, Inc.	A-Track	3,263,081	07/10/2007	78/790085	1/12/2006	Active
TM	USA	Kilian Manufacturing Corporation	KILIAN	1216354	11/16/1982	73277508	9/11/1980	Active
TM	USA	Kilian Manufacturing Corporation	KILROL	2827924	3/30/2004	78213978	2/12/2003	Active
TM	USA	Warner Electric Technology LLC	GFR	3,494,910	9/2/2008	77/247,944	08/06/07	Active
TM	USA	Warner Electric Technology LLC	B-Track	3,609,446	4/21/2009	77/237,461	07/24/2007	Active
TM	USA	TB Woods Enterprises, Inc.	All-Pro	2,165,737	6/16/1998	75/290,731	5/12/1997	Active
TM	USA	TB Woods North Carolina, Inc.	Braketron	1,164,393	8/11/1981	73/254,657	3/19/1980	Active
TM	USA	TB Woods Enterprises, Inc.	Deck & Design (stylized lettering)	1,409,209	9/16/1986	73/581,633	2/7/1986	Active
TM	USA	TB Woods Enterprises, Inc.	Disc-O-Torque	859,264	10/29/1968	72/285,224	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Dura-Flex	1,116,828	4/24/1979	73/158,649	2/13/1978	Active
TM	USA	TB Woods Enterprises, Inc.	First In Couplings	1,361,466	9/24/1985	73/526,310	3/11/1985	Active
TM	USA	TB Woods Enterprises, Inc.	Form-Flex	2,152,362	4/21/1998	75/273,175	4/11/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Poole	2,191,918	9/29/1998	75/251,697	2/28/1997	Active
TM	USA	TB Woods Enterprises, Inc.	Qt Power Chain	2,723,745	6/10/2003	76/403,299	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	Roto-Cam	859,263	10/29/1968	72/285,223	11/20/1967	Active
TM	USA	TB Woods Enterprises, Inc.	Speedlign	2,991,827	9/6/2005	78/350,700	1/12/2004	Active
TM	USA	TB Woods Enterprises, Inc.	Sure Grip (Stylized)	645,415	5/14/1957	71/640,418	1/6/1953	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Flex	668,649	10/21/1958	72/043,720	1/9/1958	Active
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	646,423	6/4/1957	71/575,508	3/15/1949	Active

	Issuing			Registration	Registration /	Application
IP Type	Jurisdiction	Owner Entity	Title / Description	Number	Issue Date	Number	Filing Date	Status
TM	USA	TB Woods Enterprises, Inc.	Sure-Grip	1,109,150	12/19/1978	73/136,699	8/8/1977	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,969	1/21/1975	73/001,734	10/9/1973	Active
TM	USA	TB Woods Enterprises, Inc.	Ultra-V	1,001,970	1/21/1975	73/003,203	10/10/1973	Active
TM	USA	TB Woods Enterprises, Inc.	W TB Wood’s (and design)	2,059,245	5/6/1997	75/107,136	5/20/1996	Active
TM	USA	TB Woods Enterprises, Inc.	Woods@Work	2,801,090	12/30/2003	76/402,992	5/2/2002	Active
TM	USA	TB Woods Enterprises, Inc.	G-Flex	3,501,631	9/16/2008	77/397,102.	2/14/2008	Active
TM	USA	Inertia Dynamics, LLC	Unibrake	0809205	05/31/1966	72/219817	05/26/1965	Active
TM	USA	Warner Electric Technology LLC	WARNER ELECTRIC	0726202	01/09/1962	72105397	9/28/1960	Active
TM	USA	Warner Electric Technology LLC	WICHITA	1565483	11/14/1989	73753251	8/29/1988	Active
TM Appl.	USA	Kilian Manufacturing Corporation	HI-TECH WORRY BEADS			78/775,032	12/16/2005	Pending
TM Appl.	USA	Formsprag LLC	BC MA			77/649,950	1/15/2009	Pending
Unregistered TM	USA	Inertia Dynamics, LLC	IDI

EX-10.20

Exhibit 10.20

EXECUTION VERSION

INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

among

JPMORGAN CHASE BANK, N.A.,
as Senior Agent,

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee and Collateral Agent,

ALTRA HOLDINGS, INC.,
ALTRA INDUSTRIAL MOTION, INC.,
and certain of their SUBSIDIARIES,

Dated as of November 25, 2009

INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

     THIS INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT dated as of November 25, 2009 (this “Agreement”) is made by and among JPMORGAN CHASE BANK, N.A., as senior agent (the “Original Senior Agent”) under and pursuant to the Original Credit Agreement (as hereinafter defined), THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (“BNY Mellon”), in its capacity as collateral agent under the Indenture Agreements (as hereinafter defined) (in such capacity, the “Collateral Agent”), BNY Mellon, as Trustee under the Indenture Agreements (in such capacity, the “Trustee”), Altra Holdings, Inc., a Delaware corporation (“Parent”), Altra Industrial Motion, Inc., a Delaware corporation (“Company”), those certain subsidiaries of Company identified as Borrowers on the signature pages hereto (collectively with Company, the “Borrowers”) and those certain subsidiaries of Company identified as Guarantors on the signature pages hereto (collectively with Parent, the “Guarantors”).

RECITALS

     A. Parent, the Borrowers, the Guarantors, the Collateral Agent and the Trustee have entered into an Indenture, dated as of November 25, 2009 (the “Indenture”), pursuant to which Parent has incurred or will incur indebtedness for certain 8.125% Senior Secured Notes due 2016 (such notes, together with all other notes issued after the date hereof and exchange notes issued in exchange therefore, the “Notes”) in an aggregate principal amount at maturity of $210,000,000 under the Indenture. The repayment of the Indenture Secured Obligations (as hereinafter defined) is secured by security interests in and liens on the assets and properties of Parent, the Borrowers and the Guarantors (the “Collateral”) as described in (i) the Pledge and Security Agreement dated as of the date hereof (the “Indenture Security Agreement”) made by Parent, the Borrowers and the Guarantors in favor of the Collateral Agent for the benefit of the Collateral Agent, the Trustee, and the Noteholders (as hereinafter defined), and (ii) the other Indenture Agreements (as hereinafter defined).

     B. Parent, the Borrowers, the Guarantors, the Original Senior Agent and the Senior Lenders (as hereinafter defined) have entered into a Credit Agreement dated as of November 25, 2009 (the “Original Credit Agreement”) pursuant to which the Senior Lenders have agreed, upon the terms and conditions stated therein, to make loans and advances to, and to issue letters of credit for the accounts of, the Borrowers up to the initial maximum principal amount of $50,000,000 (subject to increase as provided therein). The repayment of the Credit Agreement Secured Obligations (as hereinafter defined) is secured by first priority security interests in and liens on the Collateral as described in (i) the Pledge and Security Agreement dated as of the date hereof (the “Senior Security Agreement”) made by Parent, the Borrowers and the Guarantors in favor of the Original Senior Agent for the benefit of the Original Senior Agent, the Senior Lenders and the other holders of Credit Agreement Secured Obligations and (ii) the other Senior Credit Documents (as hereinafter defined).

     C. One of the conditions of the Original Credit Agreement is that the priority of the security interests in and liens on the Collateral to secure the Credit Agreement Secured Obligations be senior to the security interests in and liens on the Collateral to secure the Indenture Secured Obligations, in the manner and to the extent provided in this Agreement.

     D. The Original Senior Agent and the Collateral Agent desire to enter into this Agreement concerning the respective rights of the Senior Agent and the Collateral Agent with respect to the priority of their respective security interests in and liens on the Collateral.

     E. The terms of the Indenture permit Parent, the Borrowers and the Guarantors to enter into the Senior Credit Documents, subject to compliance with certain conditions, and in connection therewith authorize and direct the Collateral Agent to enter into this Agreement.

     F. In order to induce the Original Senior Agent and the Senior Lenders to extend credit to the Borrowers and the Guarantors and for purposes of certain conditions precedent and covenants of the Original Credit Agreement, the Original Senior Agent and the Collateral Agent hereby agree as follows:

ARTICLE I.

DEFINITIONS

     Section 1.01 Terms Defined Above and in the Recitals. As used in this Agreement, the following terms shall have the respective meanings indicated in the opening paragraph hereof and in the above Recitals:

“Agreement”
“BNY Mellon”
“Borrowers”
“Collateral”
“Collateral Agent”
“Guarantors”
“Indenture”
“Indenture Security Agreement”
“Original Senior Agent”
“Original Credit Agreement”
“Parent”
“Senior Security Agreement”
“Trustee”

     Section 1.02 Other Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

     “Banking Services” means each and any of the following bank services provided to the Borrowers or the Guarantors by any Senior Lender or any of affiliate of any Senior Lender: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

     “Banking Services Obligations” of the Borrowers and the Guarantors means any and all obligations of the Borrowers or the Guarantors, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

     “Cash Collateral” means any Collateral consisting of cash or cash equivalents, any security entitlement (as defined in the UCC) and any financial assets (as defined in the UCC).

     “Commitment” means, with respect to each Senior Lender, such Senior Lender’s commitment to make loans and acquire participations in Letters of Credit issued and other extensions of credit made or advances under a Credit Agreement.

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     “Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Senior Agent, among (a) the applicable Borrower or Guarantor, (b) a banking institution, securities broker or securities intermediary at which such Borrower or Guarantor maintains a Deposit Account or a Securities Account, and (c) the Senior Agent, providing for the Senior Agent to have control over the funds or securities and other financial assets held in such Deposit Account or Securities Account.

     “Control Collateral” means any Collateral consisting of a certificated security (as defined in the UCC), investment property (as defined in the UCC), a deposit account (as defined in the UCC) and any other Collateral as to which a Lien may be perfected through possession or control by a secured party, or any agent therefor.

     “Credit Agreement” means the Original Credit Agreement and any other Credit Agreement (as defined in the Indenture), in each case, as amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including (a) any agreement extending the maturity of, consolidating, otherwise restructuring (including adding Subsidiaries or affiliates of Parent or the Borrowers or any other Persons as parties thereto) or refinancing the Commitments or all or any portion of the obligations of the Borrowers or the Guarantors under the Original Credit Agreement, (b) any New Credit Facility and (c) any other agreement that itself is a Credit Agreement hereunder and whether by the same or any other agent, lender, group of lenders or institutional investors and whether or not increasing the amount of indebtedness that may be incurred thereunder.

     “Credit Agreement Secured Obligations” means (a) all unpaid principal of and accrued and unpaid interest on all loans outstanding under the Original Credit Agreement, all amounts payable under any Letter of Credit issued pursuant to the Original Credit Agreement, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrowers and the Guarantors to the Senior Agent or any Senior Lender or to the issuer of Letters of Credit under the Original Credit Agreement, (b) all Banking Services Obligations owing to any Senior Lender or any affiliate of any Senior Lender, (c) all Swap Obligations owing to any Senior Lender or any affiliate of any Senior Lender, (d) all other amounts owing or due under the terms of any Credit Agreement or any other Senior Credit Document, including any and all amounts payable under or in respect of the Senior Credit Documents, as amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including principal, premium, interest, fees, attorneys’ fees, costs, charges, expenses, reimbursement obligations, any obligation to post cash collateral in respect of letters of credit or indemnities in respect thereof, indemnities, guarantees, and all other amounts payable thereunder or in respect thereof, and (e) all amounts accruing in respect of any of the obligations or other amounts described in clauses (a) – (d) above on or after the commencement of any Insolvency Proceeding relating to Parent, any Borrower, any Guarantor or any other Person irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in any such Insolvency Proceeding.

     “Deposit Account” has the meaning assigned to such term in Article 9 of the UCC.

     “Discharge in Full of Credit Agreement Secured Obligations” means payment in full in cash (or in the case of Letters of Credit, Banking Services Obligations and Swap Obligations, the cash collateralization as required by the Senior Credit Documents) of all Credit Agreement Secured Obligations (other than Credit Agreement Secured Obligations consisting solely of contingent indemnification obligations under the Senior Credit Documents) after or concurrently with termination of all commitments to extend credit under any Credit Agreement.

     “Discharge of First Priority Credit Agreement Secured Obligations” means payment in full in cash (or in the case of Letters of Credit, Banking Services Obligations and Swap Obligations, the cash collateralization as required by the Senior Credit Documents) of Credit Agreement Secured Obligations

3

(other than Credit Agreement Secured Obligations consisting solely of contingent indemnification obligations under the Senior Credit Documents) in an aggregate amount up to but not exceeding the Maximum Priority Debt Amount, after or concurrently with termination of all commitments to extend credit under any Credit Agreement.

     “Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

     “Excess Credit Agreement Secured Obligations” means, at any time, the aggregate amount of Credit Agreement Secured Obligations at such time that exceed the Maximum Priority Debt Amount at such time.

     “Exercise Any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” means (a) the taking of any action to enforce or realize upon any Lien, including the institution of any foreclosure proceedings or the noticing of any public or private sale or other disposition pursuant to Article 9 of the applicable Uniform Commercial Code, (b) the exercise of any right or remedy provided to a secured creditor or otherwise on account of a Lien under the Senior Credit Documents, the Indenture Agreements, applicable law, in an Insolvency Proceeding or otherwise, including the election to retain Collateral in satisfaction of a Lien, (c) the taking of any action or the exercise of any right or remedy in respect of the collection on, set off against, marshaling of, or foreclosure on the Collateral or the Proceeds of Collateral, (d) the sale, lease, license, or other disposition of all or any portion of the Collateral, by private or public sale, other disposition or any other means permissible under applicable law, (e) the solicitation of bids from third parties to conduct the liquidation of all or a material portion of Collateral to the extent undertaken and being diligently pursued in good faith to consummate the sale of such Collateral within a commercially reasonable time, (f) the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers or other third parties for the purposes of valuing, marketing, promoting and selling the Collateral to the extent undertaken and being diligently pursued in good faith to consummate the sale of such Collateral within a commercially reasonable time, and (g) the exercise of any other enforcement right relating to the Collateral (including the exercise of any voting rights relating to any Equity Interests and including any right of recoupment or set-off) whether under the Senior Credit Documents, the Indenture Agreements, applicable law, in an Insolvency Proceeding or otherwise.

     “Gross Borrowing Base” shall mean , at any time, an amount equal to the sum of (a) 85% of the face amount of all accounts receivable owing to the Guarantors as of the end of most recent calendar month preceding such date, plus (b) 60% of the book value of all inventory owned by the Borrowers and the Guarantors as of the end of the most recent calendar month preceding such date.

     “Indenture Agreements” shall mean (a) the Indenture, the Notes, the Indenture Security Agreement, all other Note Documents (as defined in the Indenture Security Agreement), and all mortgages, other security agreements and Control Agreements made by Parent, any Borrower or any Guarantor in favor of the Collateral Agent for the benefit of the Collateral Agent, the Trustee and the Noteholders, as any such document may be amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time in accordance with this Agreement, and (b) all other agreements, instruments and certificates executed and delivered in connection with any of the document described in clause (a) above, as any such agreement, instrument or certificate may be amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time in accordance with this Agreement.

4

     “Indenture Secured Obligations” means (a) all indebtedness, obligations, liabilities and other amounts owing or due from Parent, the Borrowers or the Guarantors under or in respect of the Indenture, the Notes or any of the other Indenture Agreements, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time, including principal, premium, interest, fees, attorneys’ fees, costs, charges, expenses, reimbursement obligations, any obligation to post cash collateral in respect of indemnities in respect thereof, indemnities, guarantees, and all other amounts payable thereunder or in respect thereof, and (b) all amounts accruing in respect of any of the indebtedness, obligations, liabilities and other amounts described in clause (a) above on or after the commencement of any Insolvency Proceeding relating to Parent, any Borrower, any Guarantor or any other Person irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in any such Insolvency Proceeding.

     “Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

     “Letter of Credit” means any letter of credit issued pursuant to a Credit Agreement.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities; in each case, irrespective of whether (i) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is based on common law, applicable statutes, or contract, (ii) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is recorded or perfected, and (iii) such lien, pledge, hypothecation, encumbrance, charge, security interest, other interest, option, call or other right is contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances.

     “Lien Priority” means with respect to any Lien of the Senior Agent or the Collateral Agent in the Collateral, the order of priority of such Lien as specified in Section 2.01.

     “Loan Documents” means the Senior Credit Documents and the Indenture Agreements.

     “Maximum Priority Debt Amount” means, as of any date of determination, (a) the greater of (i) $65,000,000 minus the amount of all permanent reductions in revolving facility commitments made from and after the date hereof, all permanent repayments of term loans and any permanent cash collateralization of any Letters of Credit made from and after the date hereof under the effective Credit Agreement (but to be reinstated to the full $65,000,000 amount at the time of entering into any New Credit Facility) and (ii) the Gross Borrowing Base, plus (b) the aggregate amount of all Banking Services Obligations incurred by Parent, the Borrowers or the Guarantors in the ordinary course of business and owing to any Senior Lender, plus (c) all Swap Obligations incurred by Parent, the Borrowers or the Guarantors in the ordinary course of business and owing to any Senior Lender, plus (d) all interest, fees, disbursements, costs, expenses and indemnities payable under the Senior Credit Documents or in respect thereof (including, in each case, all amounts accruing on or after the commencement of any Insolvency Proceeding relating to Parent, any Borrower, any Guarantor or any other Person irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in any such Insolvency Proceeding.

5

     “New Credit Facility” means one or more debt facilities entered into by Parent, any Borrower or any of their Subsidiaries following or in connection with a Discharge in Full of Credit Agreement Secured Obligations under the then effective Credit Agreement, providing for revolving credit loans or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time; provided that such debt facility qualifies as a Credit Agreement (as defined in the Indenture).

     “Noteholders” means each of the holders of the Notes.

     “Party” means either the Senior Agent or the Collateral Agent, and “Parties” means both the Senior Agent and the Collateral Agent.

     “Payment Collateral” means all accounts, instruments, chattel paper, letters of credit, deposit accounts, securities accounts, and payment intangibles, together with all supporting obligations (as those terms are defined in the UCC), in each case composing a portion of the Collateral.

     “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

     “Proceeds” means (i) all “proceeds” as defined in Article 9 of the UCC with respect to the Collateral, and (ii) whatever is recoverable or recovered when Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

     “Recovery” has the meaning set forth in Section 5.03.

     “Securities Account” has the meaning assigned to such term in Article 8 of the UCC.

     “Senior Agent” means (a) the Original Senior Agent, together with its successors, assigns and transferees, and (b) any Person designated as the “Administrative Agent” or the “Collateral Agent” under any New Credit Facility (provided that if two or more Persons shall be designated as “Administrative Agent” or “Collateral Agent” under any New Credit Facility, the “Senior Agent” shall mean the Person specified in the documents governing such New Credit Facility as being the “Senior Agent” under this Agreement; provided, that for purposes of this Agreement prior to the Collateral Agent’s receipt of written notice from the Senior Agent that either (i) the Original Credit Agreement has been terminated or (ii) another Person has succeeded to the rights and interests of the Original Senior Agent under the Original Credit Agreement, the Collateral Agent shall be entitled to deal only with the Original Senior Agent and until receipt of such written notice, the Collateral Agent shall not be liable for any such dealings (including the turning over of any Collateral or proceeds thereof to the Original Senior Agent at a time when any other “Agent” and not the Original Senior Agent was entitled thereto).

     “Senior Credit Documents” means (a) the Original Credit Agreement, the Senior Security Agreement, all other “Loan Documents” as such term is defined in the Original Credit Agreement, all Letter of Credit applications, all mortgages, deeds of trust, security agreements and other documents or agreements granting a Lien upon the Collateral as security for the payment of and all liabilities and obligations of the Borrowers or the Guarantors under the Original Credit Agreement, as any such document may be amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, in accordance with this Agreement, (b) any other Credit Agreement and all security, collateral, ancillary or other documents entered into in connection with or related to any agreement that is a Credit Agreement, as any such document may be amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, in accordance with this Agreement, and (c) all other agreements, instruments and certificates executed and delivered in connection with any of the agreements or other documents described in clauses (a) and (b) above, as any

6

such document may be amended, restated, modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, in accordance with this Agreement.

     “Senior Lenders” means the lenders from time to time party to a Credit Agreement.

     “Standstill Notice” means a written notice from the Senior Agent to the Collateral Agent stating that an Event of Default has occurred under the Senior Credit Documents and stating that such written notice is a “Standstill Notice”.

     “Standstill Period” has the meaning set forth in Section 2.03.

     “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

     “Swap 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 (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issuance or perfection of security interests.

     Section 1.03 Rules of Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns.

ARTICLE II.

LIEN PRIORITY

     Section 2.01 Agreement to Subordinate. Notwithstanding the date, time, method, manner or order of grant, attachment, or perfection of any Liens granted to the Collateral Agent, the Trustee, or the Noteholders in respect of all or any portion of the Collateral or of any Liens granted to the Senior Agent or any Senior Lender in respect of all or any portion of the Collateral, or the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of Senior Agent (or any

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Senior Lender) or the Collateral Agent (or the Trustee or any Noteholder) in any Collateral or any provision of the applicable UCC, any other applicable law, the Indenture Agreements, the Senior Credit Documents or any other circumstance whatsoever, each of (i) the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders and (ii) the Senior Agent, on behalf of itself and the Senior Lenders, hereby agrees that:

          (a) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the Collateral Agent, the Trustee, or any Noteholder that secures all or any portion of the Indenture Secured Obligations, shall in all respects be junior and subordinate to all Liens granted to the Senior Agent and the Senior Lenders in the Collateral to secure all or any portion of the Credit Agreement Secured Obligations up to (but not in excess of) the Maximum Priority Debt Amount;

          (b) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the Senior Agent or any Senior Lender that secures all or any portion of the Credit Agreement Secured Obligations in excess of the Maximum Priority Debt Amount, shall in all respects be junior and subordinate to all Liens granted to the Collateral Agent, the Trustee or any Noteholder in the Collateral to secure all or any portion of the Indenture Secured Obligations;

          (c) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the Senior Agent (or any Senior Lender) that secures all or any portion of the Credit Agreement Secured Obligations up to (but not in excess of) the Maximum Priority Debt Amount, shall in all respects be senior and prior to all Liens granted to the Collateral Agent (or the Trustee or any Noteholder) in the Collateral to secure all or any portion of the Indenture Secured Obligations; and

          (d) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the Collateral Agent, the Trustee, or any Noteholder that secures all or any portion of the Indenture Secured Obligations, shall in all respects be senior and prior to all Liens granted to the Senior Agent and the Senior Lenders in the Collateral to secure all or any portion of the Credit Agreement Secured Obligations in excess of the Maximum Priority Debt Amount.

The Collateral Agent, for and on behalf of itself, the Trustee and the Noteholders, acknowledges and agrees that, concurrently herewith, the Senior Agent, for the benefit of itself and the Senior Lenders, has been granted Liens upon all of the Collateral in which the Collateral Agent has been granted Liens and the Collateral Agent hereby consents thereto. The Senior Agent acknowledges and agrees that the Collateral Agent, for the benefit of itself, the Trustee, and the Noteholders, has been granted Liens upon all of the Collateral and the Senior Agent hereby consents thereto. The subordination of Liens (up to the Maximum Priority Debt Amount) by the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders in favor of the Senior Agent and the Senior Lenders herein shall not be deemed to subordinate the Collateral Agent’s Liens to the Liens of any other Person. The subordination of Liens (in excess of the Maximum Priority Debt Amount) in favor of the Collateral Agent, for the benefit of itself, the Trustee and the Noteholders herein shall not be deemed to subordinate the Senior Agent’s Liens to the Liens of any other Person.

     Section 2.02 Waiver of Right to Contest Liens. The Collateral Agent agrees, on behalf of itself, the Trustee and the Noteholders, that it and they shall not (and hereby waives, on behalf of itself the Trustee and the Noteholders any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the Senior Agent in respect of the Collateral. The Collateral Agent, for itself, the Trustee, and on behalf of the Noteholders, agrees that neither the Collateral Agent nor the Trustee will take any action that would hinder any exercise of remedies undertaken by the Senior Agent under the Senior Credit

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Documents, including any public or private sale, lease, exchange, transfer, or other disposition of the Collateral, whether by foreclosure or otherwise. The Collateral Agent, for itself, the Trustee, and on behalf of the Noteholders, hereby waives any and all rights it, the Trustee, or the Noteholders may have as a junior lien creditor or otherwise to contest, protest, object to, interfere with the manner in which the Senior Agent seeks to enforce the Liens in any portion of the Collateral (it being understood and agreed that the terms of this Agreement shall govern with respect to the Collateral even if any portion of the Liens securing the Credit Agreement Secured Obligations are avoided, disallowed, set aside, or otherwise invalidated in any judicial proceeding or otherwise). The Senior Agent, for itself and the Senior Lenders, agrees that it shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the Collateral Agent in respect of the Collateral. Following the Discharge of First Priority Credit Agreement Secured Obligations, the Senior Agent, on behalf of itself and the Senior Lenders, agrees that it will not take any action that would hinder any exercise of remedies undertaken by the Collateral Agent, the Trustee, or any Noteholder under the Indenture Agreements, including any public or private sale, lease, exchange, transfer, or other disposition of the Collateral, whether by foreclosure or otherwise. Following the Discharge of First Priority Credit Agreement Secured Obligations, the Senior Agent, on behalf of itself and the Senior Lenders, hereby waives any and all rights it may have as a junior lien creditor or otherwise to contest, protest, object to, interfere with the manner in which the Collateral Agent, the Trustee or any Noteholder seeks to enforce the Liens in any portion of the Collateral (it being understood and agreed that the terms of this Agreement shall govern with respect to the Collateral even if any portion of the Liens securing the Indenture Secured Obligations are avoided, disallowed, set aside, or otherwise invalidated in any judicial proceeding or otherwise).

     Section 2.03 Remedies Standstill. At any time after the occurrence and during the continuation of an Event of Default under any of the Loan Documents, the Senior Agent may send a Standstill Notice to the Collateral Agent. The Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that from and after the date of the Collateral Agent’s receipt of any Standstill Notice, none of the Collateral Agent, the Trustee or any Noteholder may Exercise Any Secured Creditor Remedies (other than its rights under Section 2.04(d)) unless and until (a) the Senior Agent has expressly waived or acknowledged the cure of the applicable Event of Default in writing or the Discharge of First Priority Credit Agreement Secured Obligations shall have occurred, or (b) 120 days shall have elapsed from the date of the Collateral Agent’s receipt of such Standstill Notice. From and after the earlier to occur of (i) the Collateral Agent’s receipt of such waiver or cure notice, or (ii) the elapsing of such 120th day period, any of the Collateral Agent, the Trustee, or any Noteholder may commence to Exercise Any Secured Creditor Remedies (subject to the provisions of this Agreement, including the immediately succeeding sentence, Section 4.02 hereof and except with respect to any such Collateral as to which the Senior Agent is diligently effecting the collection, foreclosure, sale or other realization upon or disposition of). NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, NONE OF THE COLLATERAL AGENT, THE TRUSTEE OR ANY NOTEHOLDER MAY EXERCISE ANY SECURED CREDITOR REMEDIES PRIOR TO THE DISCHARGE OF FIRST PRIORITY CREDIT AGREEMENT SECURED OBLIGATIONS (X) WITH RESPECT TO ANY ITEM OF COLLATERAL SO LONG AS SENIOR AGENT HAS COMMENCED AND IS DILIGENTLY PURSUING ITS EXERCISE OF SECURED CREDITOR REMEDIES IN RESPECT OF SUCH ITEMS OF COLLATERAL, AND (Y) WITHOUT FIRST PROVIDING SENIOR AGENT AT LEAST FIVE (5) BUSINESS DAYS’ PRIOR WRITTEN NOTICE. The Senior Agent may only send three (3) Standstill Notices following the date hereof (it being understood and agreed as clarification to the foregoing that no more than three (3) Standstill Notices may be provided whether delivered hereunder or under any corresponding provision of any other agreement similar hereto that may be delivered pursuant to Section 7.17 hereof) and no more than one (1) Standstill Notice may be given by the Senior Agent in any consecutive 365-day period. The time period during which the Collateral Agent is not permitted to

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Exercise Any Secured Creditor Remedies under this section is referred to herein as the “Standstill Period”.

     Section 2.04 Exercise of Rights.

          (a) No Other Restrictions. Except as expressly set forth in this Agreement, each of the Collateral Agent, the Trustee, the Noteholders, the Senior Agent and the Senior Lenders shall have any and all rights and remedies it may have as a creditor under applicable law, including the rights to exercise all rights and remedies in foreclosure or otherwise with respect to any of the Collateral; provided, however, that any such exercise by the Collateral Agent, the Trustee or the Noteholders, and any collection or sale of all or any portion of the Collateral by the Collateral Agent, the Trustee or the Noteholders, shall be subject to the Liens of the Senior Agent on the Collateral to the extent provided in Section 2.01 and to the provisions of this Agreement including Section 4.02 hereof. In exercising rights and remedies with respect to the Collateral, the Senior Agent may enforce the provisions of the Senior Credit Documents and exercise remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole discretion. Such exercise and enforcement shall include the sale, lease, license, or other disposition of all or any portion of the Collateral by private or public sale or any other means permissible under applicable law or any agreement; provided, that the Senior Agent agrees to provide copies of any notices that it is required under applicable law to deliver to Parent, any Borrower or any Guarantor to the Collateral Agent; provided further, that the failure to provide any such copies to the Collateral Agent shall not impair any of the Senior Agent’s rights hereunder. In exercising rights and remedies with respect to the Collateral, the Collateral Agent may enforce the provisions of the Indenture Agreements and exercise remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole discretion. Such exercise and enforcement shall include the sale, lease, license, or other disposition of all or any portion of the Collateral by private or public sale or any other means permissible under applicable law or any agreement; provided, that the Collateral Agent agrees to provide copies of any notices that it is required under applicable law to deliver to Parent, any Borrower or any Guarantor to the Senior Agent until the Discharge in Full of Credit Agreement Secured Obligations has occurred; provided further, that the failure to provide any such copies to the Senior Agent shall not impair any of the Collateral Agent’s rights hereunder.

          (b) Release of Liens.

          (i) In the event of any such private or public sale by the Senior Agent or its designee, the Collateral Agent agrees, on behalf of itself, the Trustee, and the Noteholders, that, until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, such sale will be free and clear of the Liens securing the Indenture Secured Obligations and, if the sale or other disposition includes the Equity Interests in any Borrower or any Guarantor, agrees to release the entities whose Equity Interests are sold from all Indenture Secured Obligations so long as the Senior Agent and the Senior Lenders also release the entities whose Equity Interests are sold from all Credit Agreement Secured Obligations. In furtherance thereof, the Collateral Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the Senior Agent in connection therewith, so long as the proceeds from such sale or other disposition of the Collateral are applied in accordance with the terms of this Agreement.

          (ii) If and to the extent that the Senior Agent or its designee releases any of its Liens on any Collateral in connection with the sale, lease, exchange, transfer or other disposition of the Collateral in accordance with the terms of this Agreement, until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, the Liens, if any, of the Collateral Agent, for itself and for the benefit of the Trustee and the Noteholders, on such

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Collateral shall be automatically, unconditionally and simultaneously released and the Collateral Agent, for itself and for each of the Trustee and the Noteholders, promptly shall execute and deliver to the Senior Agent such termination statements, releases and other documents as the Senior Agent may request to effectively confirm such release in respect of such payments. Notwithstanding the foregoing, the obligation of the Collateral Agent to release its Lien on such Collateral shall arise only if such sale, lease, exchange, transfer or other disposition of the Collateral is effected in connection with an exercise of remedies or is permitted by (or permitted pursuant to a waiver of or consent to a transaction otherwise prohibited by) the Senior Credit Documents and the terms hereof.

          (iii) In the event of any private or public sale by the Collateral Agent permitted by the terms of this Agreement following the Discharge of First Priority Credit Agreement Secured Obligations, the Senior Agent agrees, on behalf of itself and the Senior Lenders, that such sale will be free and clear of the Liens securing the Credit Agreement Secured Obligations and, if the sale or other disposition includes the Equity Interests in any Borrower or any Guarantor, agrees to release the entities whose Equity Interests are sold from all Credit Agreement Secured Obligations so long as the Collateral Agent, the Trustee and the Noteholders also release the entities whose Equity Interests are sold from all Indenture Secured Obligations. In furtherance thereof, the Senior Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the Collateral Agent in connection therewith, so long as the proceeds from such sale or other disposition of the Collateral are applied in accordance with the terms of this Agreement.

          (iv) If and to the extent that the Collateral Agent or its designee releases any of its Liens on any Collateral in connection with the sale, lease, exchange, transfer or other disposition of the Collateral in accordance with the terms of this Agreement following the Discharge of First Priority Credit Agreement Secured Obligations, the Liens, if any, of the Senior Agent, for itself or for the benefit of the Senior Lenders, on such Collateral shall be automatically, unconditionally and simultaneously released and the Senior Agent, for itself and for the Senior Lenders, promptly shall execute and deliver to the Collateral Agent such termination statements, releases and other documents as the Collateral Agent may request to effectively confirm such release in respect of such payments. Notwithstanding the foregoing, the obligation of the Senior Agent to release its Lien on such Collateral shall arise only if such sale, lease, exchange, transfer or other disposition of the Collateral is effected in connection with an exercise of remedies or is permitted by (or permitted pursuant to a waiver of or consent to a transaction otherwise prohibited by) the Indenture Agreements and the terms hereof.

          (c) Except as provided in Section 3.01, the Collateral Agent, the Trustee and the Noteholders may exercise, and nothing herein shall constitute a waiver of, any right it may have at law or equity to receive notice of, or to commence or join with any creditor in commencing any Insolvency Proceeding or to join or participate in, any action or proceeding or other activity described in Section 3.01; provided, however, that exercise of any such right by the Collateral Agent shall be subject to all of the terms and conditions of this Agreement, including the obligation to turn over Collateral and Proceeds to the Senior Agent for application to the Credit Agreement Secured Obligations as provided in Section 4.02.

          (d) The Collateral Agent may make such demands or file such claims in respect of the Indenture Secured Obligations as may be necessary to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders or rules of procedure (including, without limitation, the filing of any proofs of claim in any Insolvency Proceeding), but except as provided in this Section 2.04 or otherwise in this Agreement, the Collateral Agent shall not take any

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actions restricted by this Agreement until the Discharge of First Priority Credit Agreement Secured Obligations shall have occurred.

          (e) Following the Discharge of First Priority Credit Agreement Secured Obligations, the other provisions of this Section 2.04 shall apply to the Collateral Agent, for the benefit of itself, the Trustee and the Noteholders as if it were the Senior Agent and the Senior Agent was the Collateral Agent, mutatis mutandis.

     Section 2.05 Insurance. The parties acknowledge that at the time of execution of this Agreement the Senior Agent shall be named as loss payee and/or mortgagee under all insurance policies of Parent, the Borrowers and the Guarantors insuring the Collateral. The parties agree that following the execution of this Agreement, the Collateral Agent may seek to be named as subordinate loss payee and/or subordinate mortgagee on all such insurance policies; provided that until the Discharge of First Priority Credit Agreement Secured Obligations has occurred (i) all such certificates and endorsements to such insurance policies that name the Collateral Agent as loss payee or mortgage shall include a legend or statement indicating that (x) the rights of the Collateral Agent to receive amounts payable under such policies are subordinate and junior to the rights of the Senior Agent to the extent set forth herein and (y) the Senior Agent shall have the exclusive right to the extent set forth herein to provide instructions to each insurer under each such policy, and (ii) the Collateral Agent shall, or shall cause the Borrowers to, provide the Senior Agent with copies of all such certificates and endorsements to such insurance policies that name the Collateral Agent as loss payee or mortgagee. Until such time as the Collateral Agent shall have obtained certificates and endorsements to all such insurance policies that name the Collateral Agent as subordinate loss payee and/or subordinate mortgagee, the Senior Agent agrees that the designation of the Senior Agent as loss payee and/or mortgagee on all such policies shall be as agent for both the holders of the Credit Agreement Secured Obligations and the Indenture Secured Obligations. Until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, subject to the terms of the Senior Credit Documents, the Senior Agent shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. Unless and until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, and subject to the terms of the Loan Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) with respect to the Collateral shall be paid to the Senior Agent and shall be disbursed by the Senior Agent as follows: first, unless an Event of Default shall have occurred and be continuing under the Loan Documents or unless otherwise provided in the Loan Documents, to Parent, Borrowers and Guarantors; second, if an Event of Default shall have occurred and be continuing under the Loan Documents or if otherwise required by the Loan Documents, in accordance with the provisions of Section 4.02(c) of this Agreement; and third, to the extent no Indenture Secured Obligations or Credit Agreement Secured Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. Until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, if the Collateral Agent or any holder of Indenture Secured Obligations shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, the Collateral Agent or such holder of Indenture Secured Obligations shall segregate and hold in trust and forthwith pay such proceeds over to the Senior Agent in accordance with the terms of this Agreement.

     Section 2.06 Collateral Access Agreements.

          (a) The Senior Agent and the Collateral Agent hereby acknowledge and agree that any collateral access agreement, landlord waiver or other similar agreement (any such access agreement, waiver or other agreement, a “Collateral Access Agreement”) by and among the Senior

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Agent, the Collateral Agent, Parent, any Borrower, any Guarantor and any landlord or warehouse operator where any Collateral is stored or located or any other bailee, consignee or other similar Person in possession of any Collateral (any such bailee, consignee or other Person, a “Bailee”), shall be for the benefit of both (x) the Senior Agent and the Senior Lenders, and (y) the Collateral Agent, the Trustee and the Noteholders. Unless and until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, the Senior Agent (as agent for both the holders of the Credit Agreement Secured Obligations and the holders of the Indenture Secured Obligations) shall have the sole and exclusive right to contact, provide instructions, and deliver notices to, all landlords, warehouse operators and Bailees, to exercise rights under Collateral Access Agreements, and to take possession of any Collateral in the possession of any landlord, warehouse operator or Bailee. Following the Discharge of First Priority Credit Agreement Secured Obligations, at the request of the Collateral Agent, the Senior Agent shall (i) assign to the Collateral Agent all rights of the Senior Agent under all Collateral Access Agreements and (ii) use commercially reasonable efforts to notify all landlords, warehouse operators and Bailees that the Senior Agent has assigned its rights to the Collateral Agent and that such landlords, warehouse operators and Bailees shall follow all notices and instructions provided by the Collateral Agent with respect to any and all Collateral in their possession (a “Notice of Assignment”).

          (b) Following the Discharge of First Priority Credit Agreement Secured Obligations and until such time as the Collateral Agent shall have either (i) received an acknowledgement from the landlords, warehouse operators and Bailees party to Collateral Access Agreements of receipt of a Notice of Assignment or (ii) entered into new Collateral Access Agreements with all applicable landlords, warehouse operators and Bailees, the Senior Agent agrees to continue to act as the agent for the Collateral Agent, the Trustee and the Noteholders, and to follow all instructions provided to the Senior Agent by the Collateral Agent with respect to the Collateral in the possession of landlords, warehouse operators and Bailees; provided that, the Senior Agent shall not be obligated to take any action that is, in its reasonable opinion, contrary to any applicable law, rule or regulation, the terms of this Agreement or the terms of any Loan Document. Following the Discharge of First Priority Credit Agreement Secured Obligations, the Collateral Agent (to the extent that the Collateral Agent, in turn, is entitled to enforce a right of reimbursement or indemnification against the Parent, Borrower or Guarantors pursuant to any of the Indenture Agreements), for and on behalf of itself, the Trustee and the Noteholders, agrees to indemnify Senior Agent and its officers, directors, agents and employees for and against all claims, liabilities, and expenses arising out of any action taken by Senior Agent with respect to Collateral in the possession of a landlord, warehouse operator or Bailee at the request or in accordance with the instructions of the Collateral Agent, except to the extent the claims, liabilities, or expenses are determined by a court of competent jurisdiction in a final judgment to have resulted from the gross negligence or willful misconduct of the Senior Agent or its officers, directors, agents or employees.

ARTICLE III.

ACTIONS OF THE PARTIES

     Section 3.01 Limitation on Certain Actions.

          (a) Notwithstanding any other provision hereof, during any Standstill Period prior to the date that the Discharge of First Priority Credit Agreement Secured Obligations occurs, the Collateral Agent will not:

          (i) commence receivership or foreclosure proceedings against Parent, any Borrower, any Guarantor, or any Collateral;

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          (ii) make demands or file claims in respect of the Indenture Secured Obligations except as permitted under Section 2.04(d) hereof;

          (iii) sell, collect, transfer or dispose of any Collateral or Proceeds; or

          (iv) notify third party account debtors to make payment directly to it or any of its agents or other Persons acting on its behalf.

The Collateral Agent, for and on behalf of the Collateral Agent, the Trustee and the Noteholders, agrees that the Collateral Agent shall not take any action that would hinder any exercise of remedies under the Senior Credit Documents (except as is permitted hereunder) or is otherwise prohibited hereunder.

          (b) Notwithstanding any other provision hereof, following the date that the Discharge of First Priority Credit Agreement Secured Obligations has occurred, the Senior Agent will not:

          (i) commence receivership or foreclosure proceedings against Parent, any Borrower, any Guarantor, or any Collateral; or

          (ii) notify third party account debtors to make payment directly to it or any of its agents or other Persons acting on its behalf.

     Section 3.02 Agent for Perfection. Each of the Senior Agent, on behalf of itself and the Senior Lenders, and the Collateral Agent, for and on behalf of itself, the Trustee, and each Noteholder, as applicable, agree to hold all Control Collateral and Cash Collateral that is part of the Collateral in its respective possession, custody, or control (or in the possession, custody, or control of agents or bailees for either, as applicable) as agent for the other solely for the purpose of perfecting the security interest granted to each in such Control Collateral or Cash Collateral subject to the terms and conditions of this Section 3.02. None of the Senior Agent, the Senior Lenders, the Collateral Agent, the Trustee, or the Noteholders, as applicable, shall have any obligation whatsoever to the others to assure that the Control Collateral is genuine or owned by Parent, any Borrower, any Guarantor or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of the Senior Agent and the Collateral Agent under this Section 3.02 are and shall be limited solely to holding or maintaining control of the Control Collateral and the Cash Collateral as agent for the other for purposes of perfecting the Lien held by the Collateral Agent or the Senior Agent, as applicable. The Senior Agent is not and shall not be deemed to be a fiduciary of any kind for the Collateral Agent, the Trustee, the Noteholders or any other Person. The Collateral Agent is not and shall not be deemed to be a fiduciary of any kind for the Senior Agent, any Senior Lender or any other Person. In the event that (a) any of the Collateral Agent, the Trustee, or any Noteholder receives any Proceeds or Collateral in contravention of the Lien Priority, or (b) the Senior Agent or any Senior Lender receives any Proceeds or Collateral in contravention of the Lien Priority, it shall promptly pay over such Proceeds or Collateral to (i) in the case of clause (a), the Senior Agent, or (ii) in the case of clause (b), the Collateral Agent, in the same form as received with any necessary endorsements, for application in accordance with the provisions of Section 4.02 of this Agreement.

ARTICLE IV.

NOTICES AND APPLICATION OF PROCEEDS

     Section 4.01 Notices of Exercise. Concurrently with any exercise by the Collateral Agent of any of its rights and remedies under the Indenture Agreements following the occurrence of any default

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under the Indenture Agreements, the Collateral Agent shall give notice of such exercise to the Senior Agent and shall only exercise such rights or remedies in a manner consistent with the terms of this Agreement. Concurrently with any exercise by the Senior Agent of any of its rights and remedies under the Senior Credit Documents following the occurrence of any default under the Senior Credit Documents, the Senior Agent shall give notice of such exercise to the Collateral Agent and shall only exercise such rights or remedies in a manner consistent with the terms of this Agreement.

     Section 4.02 Application of Proceeds.

          (a) Revolving Nature of Credit Agreement Secured Obligations. As long as the Senior Agent is not exercising any of its remedies as a secured creditor under the Senior Credit Documents and including during any Standstill Period, the Senior Agent may apply any and all of the proceeds of the Collateral consisting of accounts receivable, other rights to payment or Cash Collateral in accordance with the provisions of the Senior Credit Documents, subject to the provisions of this Agreement, including Sections 3.02 and 4.02 hereof. The Collateral Agent, for and on behalf of itself, the Trustee, and the Noteholders, expressly acknowledges and agrees that (a) any such application of the proceeds of accounts receivable, other rights to payment or Cash Collateral or the release of any Lien by the Senior Agent upon any portion of the Collateral in connection with any sale or other disposition of assets by the Borrowers or the Guarantors that is permitted under the terms of the Senior Credit Documents shall not be considered to be the exercise of remedies under this Agreement; and (b) all Proceeds of Cash Collateral received by the Senior Agent in connection therewith may be applied, reversed, reapplied, credited or reborrowed, in whole or in part, as Credit Agreement Secured Obligations without reducing the Maximum Priority Debt Amount. The Collateral Agent, for and on behalf of itself, the Trustee and the Noteholders, further acknowledges that the Credit Agreement Secured Obligations are revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the Credit Agreement Secured Obligations may be modified, extended or amended from time to time (subject to Section 5.02(a)), and that the aggregate amount of the Credit Agreement Secured Obligations may be increased, replaced or refinanced from time to time, subject to the Maximum Priority Debt Amount. The lien priorities provided in this Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the Credit Agreement Secured Obligations.

          (b) Turnover of Cash Collateral After Payment. Upon the Discharge in Full of Credit Agreement Secured Obligations, the Senior Agent shall deliver to the Collateral Agent or execute such documents as the Collateral Agent may reasonably request to cause the Collateral Agent to have control over any Cash Collateral or Control Collateral still in the Senior Agent’s or its designee’s possession, custody or control in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, to be applied by the Collateral Agent to the Indenture Secured Obligations. Proceeds of any exercise by the Senior Agent or the Collateral Agent, as applicable, of any of their respective secured creditor rights or remedies under any of the Loan Documents, under applicable law, or otherwise with respect to any Collateral or Proceeds, shall be applied as provided in Section 4.02(c) below.

          (c) Application of Proceeds. The Senior Agent and the Collateral Agent hereby agree that all Collateral and all Proceeds received by either of them upon the Exercise Of Secured Creditor Remedies shall be applied as follows:

          first, to the payment of costs and expenses of the Senior Agent or the Collateral Agent, as applicable, in connection with such exercise;

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          second, to the payment of the Credit Agreement Secured Obligations up to (but not in excess of) the Maximum Priority Debt Amount;

          third, to the payment of the Indenture Secured Obligations; and

          fourth, to the payment of any Excess Credit Agreement Secured Obligations.

In exercising remedies, whether as a secured creditor or otherwise, the Senior Agent shall have no obligation or liability to the Collateral Agent, the Trustee, or to any Noteholder and the Collateral Agent shall have no obligation or liability to the Senior Agent or any Senior Lender regarding the adequacy of any Proceeds or for any action or omission save and except solely an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.

     Section 4.03 Specific Performance. Each of the Senior Agent and the Collateral Agent is hereby authorized to demand specific performance of this Agreement, whether or not Parent, any Borrower or any Guarantor shall have complied with any of the provisions of any of the Loan Documents, at any time when the other shall have failed to comply with any of the provisions of this Agreement applicable to it; provided, however, the remedy of specific performance shall not be available, and the asserting party shall be free to assert any and all legal defenses it may possess, if such remedy would result in, or otherwise constitute, a violation of the Employee Retirement Income Security Act of 1974, as amended. Each of the Senior Agent and the Collateral Agent hereby irrevocably waives any defense based on the adequacy of a remedy at law, which might be asserted as a bar to such remedy of specific performance.

ARTICLE V.

INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

     Section 5.01 Notice of Acceptance and Other Waivers.

          (a) All Credit Agreement Secured Obligations at any time made or incurred by Parent, any Borrower or any Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, hereby waives (i) notice of acceptance, or proof of reliance, by the Senior Agent of this Agreement, and (ii) notice of the existence, renewal, extension, accrual, creation, or non-payment of all or any part of the Credit Agreement Secured Obligations. Neither the Senior Agent, nor any Senior Lender, nor any of their respective affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or for any delay in doing so (other than in the case of gross negligence or willful misconduct on the part of the Senior Agent or such Senior Lender, as determined by a court of competent jurisdiction) or shall be under any obligation to sell or otherwise dispose of any Collateral or to take any other action whatsoever with regard to the Collateral or any part thereof. If the Senior Agent honors (or fails to honor) a request by a Borrower for an extension of credit pursuant to the Credit Agreement or any of the Senior Credit Documents, whether the Senior Agent has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of the Indenture or any Indenture Agreement or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the Senior Agent otherwise should exercise any of its contractual rights or remedies under the Senior Credit Documents (subject to the express terms and conditions hereof), the Senior Agent shall not have any liability whatsoever to the Collateral Agent, the Trustee or any Noteholder as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Senior Agent will be entitled to manage and supervise its loans and

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extensions of credit under the Credit Agreement and other Senior Credit Documents as the Senior Agent may, in its sole discretion, deem appropriate, and the Senior Agent may manage its loans and extensions of credit without regard to any rights or interests that the Collateral Agent, the Trustee, or any of the Noteholders have in the Collateral or otherwise except as otherwise expressly set forth in this Agreement. The Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that the Senior Agent shall not incur any liability as a result of a sale, lease, license, or other disposition of the Collateral, or any part thereof, pursuant to the Senior Credit Documents conducted in accordance with mandatory provisions of applicable law.

          (b) None of the Collateral Agent, the Trustee, or any of the Noteholders nor any of their affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral or to take any other action whatsoever with regard to the Collateral or any part thereof, except as specifically provided in this Agreement. If the Collateral Agent, the Trustee, or any of the Noteholders should exercise any of their contractual rights or remedies under the Indenture Agreements (subject to the express terms and conditions hereof), none of the Collateral Agent, the Trustee, or any of the Noteholders shall have any liability whatsoever to the Senior Agent as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Collateral Agent, the Trustee, and the Noteholders will be entitled to manage and supervise the Indenture Agreements as they may, in their sole discretion, deem appropriate, subject to the terms of this Agreement. Subject to Section 2.03, the Senior Agent agrees that none of the Collateral Agent, the Trustee, or the Noteholders shall incur any liability as a result of a sale, lease, license, or other disposition of the Collateral, or any part thereof, pursuant to the Indenture Agreements conducted in accordance with mandatory provisions of applicable law.

     Section 5.02 Modifications to Senior Credit Documents and Indenture Agreements.

          (a) The Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, hereby agrees that, without affecting the obligations of the Collateral Agent, the Trustee and the Noteholders hereunder, the Senior Agent, on behalf of itself and the Senior Lenders, may, at any time and from time to time, in its sole discretion without the consent of or notice to the Collateral Agent, the Trustee or any Noteholder (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the Collateral Agent, the Trustee or any Noteholder or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify the Credit Agreement or any of the Senior Credit Documents (except as otherwise provided herein) in any manner whatsoever, including, to

          (i) change the manner, place, time, or terms of payment or renew or alter, all or any of the Credit Agreement Secured Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Credit Agreement Secured Obligations or any of the Senior Credit Documents,

          (ii) retain or obtain a Lien on any property of any Person to secure any of the Credit Agreement Secured Obligations, and in that connection to enter into any additional Senior Credit Documents,

          (iii) amend, or grant any waiver, compromise or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Credit Agreement Secured Obligations,

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          (iv) release its Lien on any Collateral or other property,

          (v) exercise or refrain from exercising any rights against Parent, any Borrower, any Guarantor or any other Person,

          (vi) retain or obtain the primary or secondary obligation of any other Person with respect to any of the Credit Agreement Secured Obligations, and

          (vii) otherwise manage and supervise the Credit Agreement Secured Obligations as the Senior Agent shall deem appropriate;

provided, however, that unless the Collateral Agent, on behalf of itself, the Trustee and the Noteholders agrees in advance in writing, no such amendment, restatement, supplement, replacement, refinancing, extension, consolidation, restructuring, or other modification of the Credit Agreement or any of the Senior Credit Documents shall:

          (A) subject Parent, the Borrowers or the Guarantors to any prohibition or limitation on the making of (x) scheduled payments of interest (including default interest, if applicable) in respect of the Indenture Secured Obligations as required under the Indenture Agreements or (y) indemnification payments provided for under the Indenture Agreements, in each case that are more restrictive to Parent, the Borrowers or the Guarantors than those set forth in the Senior Credit Documents (as in effect on the date hereof);

          (B) contravene the provisions of this Agreement or impose any limitation or restriction as contemplated by Section 5.02(d) below

          (b) The Senior Agent, on behalf of itself and the Senior Lenders, hereby agrees that Collateral Agent, on behalf of itself, the Trustee, and the Noteholders may, at any time and from time to time, in its sole discretion without the consent of or notice to the Senior Agent (except to the extent any such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the Senior Agent or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify the Indenture Agreements in any manner whatsoever, provided, however, that unless the Senior Agent otherwise agrees in advance in writing, no such amendment, restatement, supplement, replacement, refinancing, extension, consolidation, restructuring, or other modification of the Indenture Agreements shall:

          (i) provide for the Collateral Agent, the Trustee or any Noteholder to obtain a Lien on any assets of Parent, any Borrower or any Guarantor not constituting Collateral unless (A) the Senior Agent also obtains a Lien on such assets either before or at the same time as the Collateral Agent, the Trustee or such Noteholder or (B) the Senior Agent declines in a writing to Collateral Agent to obtain a Lien on such assets;

          (ii) subject Parent, the Borrowers or the Guarantors to any prohibition or limitation on the making of any payments of principal, interest, fees or other amounts in respect of the Credit Agreement Secured Obligations as and when the same shall be due under the Senior Credit Documents;

          (iii) change (to earlier dates) any dates upon which payments of principal shall be due under the Indenture Agreements; or

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          (iv) contravene the provisions of this Agreement.

          (c) Notwithstanding anything to the contrary herein, this Section 5.02 shall not be construed to constitute a waiver by the Collateral Agent, the Trustee, or any Noteholder of any provision of the Indenture.

          (d) To the extent the Senior Agent obtains a Lien on any assets of Parent, any Borrower or any Guarantor not constituting Collateral, nothing herein shall be deemed to limit or restrict the right of the Collateral Agent to seek a Lien on such assets on the same basis as the Lien Priority.

     Section 5.03 Reinstatement and Continuation of Agreement.

          (a) If the Senior Agent is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of Parent, any Borrower, any Guarantor or any other Person any amount (a “Recovery”), then the Credit Agreement Secured Obligations shall be reinstated to the extent of such Recovery. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto from such date of reinstatement. All rights, interests, agreements, and obligations of the Collateral Agent, the Trustee, the Senior Agent, the Senior Lenders, and the Noteholders under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of any Insolvency Proceeding by or against Parent, any Borrower or any Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of Parent, any Borrower or any Guarantor in respect of the Credit Agreement Secured Obligations. No priority or right of the Senior Agent shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of Parent, any Borrower or any Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of the Credit Agreement, the Indenture or any of the other Loan Documents, regardless of any knowledge thereof which the Senior Agent may have.

          (b) If the Collateral Agent, the Trustee, or any Noteholder is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of Parent, any Borrower, any Guarantor or any other Person a Recovery, then the Indenture Secured Obligations shall be reinstated to the extent of such Recovery. No priority or right of the Collateral Agent, the Trustee, or any Noteholder shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of Parent, any Borrower or any Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of the Credit Agreement, the Indenture or any of the other Indenture Agreements, regardless of any knowledge thereof which the Collateral Agent, the Trustee, or any Noteholder may have.

     Section 5.04 New Credit Facility. If at any time Parent, any Borrower or any Subsidiaries of Parent or any Borrower enters into a New Credit Facility in connection with a Discharge in Full of Credit Agreement Secured Obligations under the Original Credit Agreement, this Agreement shall be reinstated in full force and effect, and any prior termination thereof, if any, as a result of a prior Discharge in Full of Credit Agreement Secured Obligations, shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto (including the lender providing the New Credit Facility) from such date of reinstatement; provided that in connection with any New Credit Facility, the Company and the lender providing such New Credit Facility or its designee shall execute and deliver to the Collateral Agent an acknowledgment, in substantially the form of Annex A. It is hereby agreed that the entering into of

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any new Credit Agreement would not constitute an amendment, modification or supplement to any of the Indenture Agreements.

ARTICLE VI.

INSOLVENCY PROCEEDINGS

     Section 6.01 DIP Financing. If Parent, any Borrower or any Guarantor shall be subject to any Insolvency Proceeding and the Senior Agent shall desire, prior to the Discharge of First Priority Credit Agreement Secured Obligations, to permit the use of cash collateral or to permit Parent, any Borrower or any Guarantor to obtain financing under Section 363 or Section 364 of Title 11 of the United States Code or any similar provision under the law applicable to any Insolvency Proceeding (“DIP Financing”) to be secured by all or any portion of the Collateral, then the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that it will raise no objection to such use of cash collateral or DIP Financing and will not request adequate protection or any other relief in connection with its or their interest in any such Collateral except to the extent specified in this Section 6.01. To the extent the Liens securing the Credit Agreement Secured Obligations are subordinated or pari passu with such DIP Financing, the Collateral Agent, for and on behalf of itself, the Trustee, and the Noteholders, hereby agrees that the Collateral Agent’s Liens in the Collateral shall be subordinated to such DIP Financing (and all obligations relating thereto and any “carve-out” for professional fees and expenses and United States Trustee fees agreed to by the Senior Agent) upon the terms and conditions specified in this Agreement. Until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral and will not provide or offer to provide any DIP Financing secured by a Lien senior to or pari passu with the Liens securing the Credit Agreement Secured Obligations, in each case unless the Senior Agent otherwise has provided its express written consent.

     Section 6.02 No Contest. The Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that, prior to the Discharge of First Priority Credit Agreement Secured Obligations, none of them shall contest (or support any other Person contesting) (a) any request by the Senior Agent for adequate protection, or (b) any objection by the Senior Agent to any motion, relief, action, or proceeding based on Senior Agent claiming that their interests in the Collateral are not adequately protected or any other similar request under any law applicable to an Insolvency Proceeding. Notwithstanding the foregoing, in any Insolvency Proceeding, if the Senior Agent is granted adequate protection in the form of additional collateral in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of Title 11 of the United States Code or any similar law applicable to any Insolvency Proceeding, then the Collateral Agent, on behalf of itself, the Trustee, or any of the Noteholders, may seek or request adequate protection in the form of a Lien on such additional collateral, which Lien hereby is and shall be deemed to be subordinated to the Liens securing the Credit Agreement Secured Obligations on the same basis as the Lien Priority up to (but not in excess of) the sum of (i) the Maximum Priority Debt Amount and (ii) the amount of such DIP Financing (and all obligations relating thereto and any “carve-out” for professional fees and expenses and United States Trustee fees agreed to by the Senior Agent). In the event the Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, seeks or requests adequate protection and such adequate protection is granted in the form of Liens in respect of additional collateral, then the Collateral Agent, on behalf of itself, the Trustee, and each of the Noteholders, agrees that the Senior Agent also shall be granted a senior Lien on such additional collateral as security for the Credit Agreement Secured Obligations (and for any such DIP Financing) and that any Lien on such additional collateral securing the Indenture Secured Obligations shall be subordinated to the Liens in respect of such additional collateral securing the Credit Agreement Secured Obligations and any such DIP Financing and any other Liens granted to the Senior Agent as

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adequate protection on the same basis as the other Liens securing the Indenture Secured Obligations are subordinated to the Credit Agreement Secured Obligations under this Agreement up to the sum of (i) the Maximum Priority Debt Amount and (ii) the amount of such DIP Financing (and all obligations related thereto and any “carve-out” for professional fees and expenses and United States Trustee fees agreed to by the Senior Agent). Nothing contained herein shall prohibit or in any way limit the Senior Agent, prior to the Discharge of First Priority Credit Agreement Secured Obligations, from objecting in any Insolvency Proceeding or otherwise to any action taken by the Collateral Agent, the Trustee or any of the Noteholders, including the seeking by the Collateral Agent, the Trustee or any Noteholder of adequate protection or the asserting by the Collateral Agent, the Trustee or any Noteholder of any of its rights and remedies under the Indenture Agreements or otherwise.

     Section 6.03 Asset Sales. Until the Discharge of First Priority Credit Agreement Secured Obligations has occurred, the Collateral Agent agrees, on behalf of itself, the Trustee, and the Noteholders, that it will not oppose any sale consented to by the Senior Agent of Collateral pursuant to Section 363 or 365 of Title 11 of the United States Code (or any similar provision in any other applicable Bankruptcy Law) so long as (i) if the proceeds of such sale are retained by the Senior Agent, the Senior Agent agrees to apply such proceeds in accordance with this Agreement or (ii) if the Senior Agent agrees to permit any portion of such proceeds to be retained by Parent, the Borrowers or the Guarantors to be used as cash collateral, the Parent, the Borrowers or the Guarantors use such portion of such proceeds as cash collateral in accordance with the agreement of the Senior Agent, subject to the rights of the Collateral Agent, the Trustee and the Noteholders to seek or request adequate protection in accordance with the provisions of Section 6.02.

     Section 6.04 Enforceability. The provisions of this Agreement are intended to be and shall be enforceable under Section 510 of Title 11 of the United States Code. The Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that all distributions that the Collateral Agent, the Trustee, or any Noteholder receives in any Insolvency Proceeding on account of the Collateral or Proceeds shall be held in trust by such Person and turned over to the Senior Agent, on behalf of itself and the Senior Lenders, for application in accordance with Section 4.02 of this Agreement. To the extent that any amounts received by the Collateral Agent, the Trustee, or any Noteholder are paid over in connection with this provision, the obligations owed by Parent, any Borrower or any Guarantor to such Person will be deemed to be reinstated to the extent of the amounts so paid over.

ARTICLE VII.

MISCELLANEOUS

     Section 7.01 Rights of Subrogation. The Collateral Agent agrees that no payment or distribution to the Senior Agent pursuant to the provisions of this Agreement shall entitle the Collateral Agent, the Trustee, or any Noteholder to exercise any rights of subrogation in respect thereof until the Discharge of First Priority Credit Agreement Secured Obligations shall have occurred. Following the Discharge of First Priority Credit Agreement Secured Obligations, the Senior Agent agrees to execute such documents, agreements, and instruments as the Collateral Agent, the Trustee or any Noteholder may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Credit Agreement Secured Obligations resulting from payments or distributions to the Senior Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Senior Agent are paid by such Person upon request for payment thereof.

     Section 7.02 Further Assurances. The Parties will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that either Party may reasonably request, in order to

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protect any right or interest granted or purported to be granted hereby or to enable the Senior Agent or the Collateral Agent to exercise and enforce its rights and remedies hereunder; provided, however, that no Party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 7.02 to the extent that such action would contravene any law, order or other legal requirement, and in the event of a controversy or dispute, such Party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.02.

     Section 7.03 Representations. The Original Senior Agent represents and warrants to the Collateral Agent that it has the requisite power and authority under the Original Credit Agreement to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the Senior Lenders. The Collateral Agent represents and warrants that it has the requisite power and authority under the Indenture to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself, the Trustee, and the Noteholders.

     Section 7.04 Amendments. No amendment or waiver of any provision of this Agreement nor consent to any departure by any Party hereto shall be effective unless it is in a written agreement executed by the Collateral Agent and the Senior Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

     Section 7.05 Addresses for Notices. All demands, notices and other communications provided for hereunder shall be in writing and, if to the Collateral Agent, mailed or sent by telecopy or delivered to it, addressed to it as follows:

The Bank of New York Mellon Trust Company, N.A.
700 South Flower Street, Suite 500
Los Angeles, California 90017
Attention: Corporate Trust Department/Altra Industrial Motion, Inc.
Telephone: 213-630-6176
Facsimile: 213-630-6298

With a copy to:

Emmet, Marvin & Martin, LLP
120 Broadway 32nd Floor
New York, NY 10271
Attention: Patrick A. McCartney
Tel: 212-238-3030
Facsimile: 212-238-3100

if to the Senior Agent, mailed, sent or delivered thereto, addressed to it as follows:

JPMorgan Chase Bank, N.A.
270 Park Avenue, 44^th Floor
Mail Code: NY1-K855
New York, NY 10017
Attention: Altra Portfolio Manager
Facsimile: 646-534-2274

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With a copy to:

Edwards Angell Palmer & Dodge LLP
111 Huntington Avenue
Boston, MA 02199
Attention: David L. Ruediger, Esq.
Facsimile: 617-227-4420

If to Parent or Administrative Borrower, mailed, sent or delivered thereto, addressed to it as follows:

Altra Industrial Motion, Inc.
300 Granite Street, Suite 201
Braintree, MA 02184
Attention: Chief Financial Officer
Facsimile: 781-843-0709

With a copies to:

Holland and Knight LLP
701 Brickell Avenue, Suite 3000
Miami, FL 33131
Attention: Douglas F. Darbut, Esq.
Facsimile: 305-789-7799

or as to any party at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 7.05. All such demands, notices and other communications shall be effective, when mailed, two business days after deposit in the mails, postage prepaid, when sent by telecopy, when receipt is acknowledged by the receiving telecopy equipment (or at the opening of the next business day if receipt is after normal business hours), or when delivered, as the case may be, addressed as aforesaid.

     Section 7.06 No Waiver, Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

     Section 7.07 Continuing Agreement, Transfer of Secured Obligations. This Agreement is a continuing agreement and shall (i) remain in full force and effect until the Discharge in Full of Credit Agreement Secured Obligations shall have occurred and the Indenture Secured Obligations shall have been paid in full, (ii) be binding upon the Parties and their successors and assigns, and (iii) inure to the benefit of and be enforceable by the Parties and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), the Senior Agent or any Senior Lender, or the Collateral Agent, the Trustee, or any Noteholder may assign or otherwise transfer all or any portion of the Credit Agreement Secured Obligations or the Indenture Secured Obligations, as applicable, to any other Person (other than Parent, any Borrower, any Guarantor or any Affiliate of Parent, any Borrower or any Guarantor), and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the Senior Agent or any Senior Lender, or the Collateral Agent, the Trustee, or any Noteholder, as the case may be, herein or otherwise.

     Section 7.08 Information Concerning Financial Condition.

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          (a) The Collateral Agent hereby assumes responsibility for keeping itself informed of the financial condition of Parent, the Borrowers and Guarantors and of all other circumstances bearing upon the risk of nonpayment of the Indenture Secured Obligations, and agrees that the Senior Agent has and shall have no duty to advise the Collateral Agent of information known to the Senior Agent regarding such condition or any such circumstances. In the event the Senior Agent, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to the Collateral Agent, the Senior Agent shall be under no obligation (i) to provide any such information to the Collateral Agent on any subsequent occasion, (ii) to undertake any investigation, or (iii) to disclose any information which, pursuant to its commercial finance practices, the Senior Agent wishes to maintain confidential. The Collateral Agent acknowledges and agrees that the Senior Agent has made no warranties or representations with respect to the legality, validity, enforceability, collectability or perfection of the Credit Agreement Secured Obligations or any liens or security interests held in connection therewith.

          (b) The Senior Agent hereby assumes responsibility for keeping itself informed of the financial condition of Parent, the Borrowers and Guarantors and of all other circumstances bearing upon the risk of nonpayment of the Credit Agreement Secured Obligations, and agrees that the Collateral Agent has and shall have no duty to advise the Senior Agent of information known to the Collateral Agent regarding such condition or any such circumstances. In the event the Collateral Agent, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to the Senior Agent, the Collateral Agent shall be under no obligation (i) to provide any such information to the Senior Agent on any subsequent occasion, (ii) to undertake any investigation, or (iii) to disclose any information which, pursuant to its commercial finance practices, the Collateral Agent wishes to maintain confidential. The Senior Agent acknowledges and agrees that the Collateral Agent has made no warranties or representations with respect to the legality, validity, enforceability, collectability or perfection of the Indenture Secured Obligations or any liens or security interests held in connection therewith.

     Section 7.09 Governing Law: Entire Agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York except as otherwise preempted by applicable federal law. This Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

     Section 7.10 Counterparts. This Agreement maybe executed in any number of counterparts, and it is not necessary that the signatures of all Parties be contained on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the same document.

     Section 7.11 No Third Party Beneficiary. This Agreement is solely for the benefit of the Parties (and their permitted assignees). No other Person (including Parent, any Borrower, any Guarantor or any Affiliate of Parent, any Borrower or any Guarantor) shall be deemed to be a third party beneficiary of this Agreement.

     Section 7.12 Headings. The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof

     Section 7.13 Severability. If any of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and shall not invalidate the Lien Priority or any other priority set forth in this Agreement.

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     Section 7.14 Collateral Agent Status. Nothing in this Agreement shall be construed to operate as a waiver by the Collateral Agent, with respect to Parent, any Borrower, any Guarantor, the Trustee, or any Noteholder, of the benefit of any exculpatory rights, privileges, immunities, indemnities, or reliance rights contained in the Indenture or any of the other Indenture Agreements. For all purposes of this Agreement, the Collateral Agent may (a) rely in good faith, as to matters of fact, on any representation of fact believed by the Collateral Agent to be true (without any duty of investigation) and that is contained in a written certificate of any authorized representative of Parent, any Borrower or of the Senior Agent or any Senior Lender, and (b) assume in good faith (without any duty of investigation), and rely upon, the genuineness, due authority, validity, and accuracy of any certificate, instrument, notice, or other document believed by it in good faith to be genuine and presented by the proper person. Each of Parent, each Borrower, each Guarantor, the Senior Agent, and each Senior Lender expressly acknowledge that the subordination and related agreements set forth herein by the Collateral Agent are made solely in its capacity as Collateral Agent under the Indenture with respect to the Notes issued thereunder and the other Indenture Agreements and are not made by the Collateral Agent in its individual commercial capacity.

     Section 7.15 Acknowledgment. Parent, each Borrower and each Guarantor hereby acknowledges that it has received a copy of this Agreement and consents thereto, and agrees to recognize all rights granted thereby to the Senior Agent and the Collateral Agent and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement. Parent, each Borrower and each Guarantor further acknowledges and agrees that it is not an intended beneficiary or third party beneficiary under this Agreement.

     Section 7.16 VENUE; JURY TRIAL WAIVER.

          (a) THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE SENIOR AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE SENIOR AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7.16.

          (b) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     Section 7.17 Reciprocal Rights. The parties agree that the provisions of Sections 2.02, 2.03, 2.04, 3.02, 4.02(a) and (b), 6.01, 6.02, 6.03, 6.04 and 7.01, including, as applicable, the defined terms referenced therein (but only to the extent used therein), which govern the relationship, and certain rights, restrictions, and agreements, between the Senior Agent and the holders of Credit Agreement Secured

25

Obligations with respect to the Credit Agreement Secured Obligations, on the first hand, and the Collateral Agent and the Trustee and the Noteholders with respect to the Indenture Secured Obligations, on the second hand, shall, from and after the Discharge of First Priority Credit Agreement Secured Obligations and until the payment in full of the Indenture Secured Obligations, apply to and govern, mutatis mutandis, the relationship between the Collateral Agent and the Trustee and Noteholders with respect to the Indenture Secured Obligations, on the first hand, and the Senior Agent and the holders of Credit Agreement Secured Obligations with respect to the Excess Credit Agreement Secured Obligations, on the second hand.

     Section 7.18 Intercreditor Agreement. This Agreement is the Intercreditor Agreement referred to in the Indenture. If this Agreement or all or any portion of either Party’s rights or obligations hereunder are assigned or otherwise transferred to any other Person, such other Person shall execute and deliver an agreement containing terms substantially identical to those contained in this Agreement.

     Section 7.19 Limitation on Liabilities of the Senior Agent and the Collateral Agent.

          (a) The Senior Agent shall not be liable to the Borrower, the Guarantors, the Collateral Agent, the Trustee or the Noteholders for any action taken, suffered, or omitted to be taken by the Senior Agent in good faith and reasonably believed by the Senior Agent to be authorized or within the discretion or rights or powers conferred upon the Senior Agent by this Agreement. In no event shall the Senior Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Senior Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. The Senior Agent shall not be deemed to have notice of any Default or Event of Default under the Indenture Agreements unless written notice of such Default or Event of Default from the Collateral Agent, the Borrowers or the Guarantors is delivered to the Senior Agent in accordance with the notice provisions set forth in Section 7.05 of this Agreement. The rights, privileges, protections, immunities and benefits given to the Senior Agent, including, without limitation, its right to be indemnified as set forth in the Senior Credit Documents are extended to, and shall be enforceable by, the Senior Agent are incorporated herein by reference. In no event shall the Senior Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Senior Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

          (b) The Collateral Agent shall not be liable to the Borrower, the Guarantors, the Senior Agent or the Senior Lenders for any action taken, suffered, or omitted to be taken by the Collateral Agent in good faith and reasonably believed by the Collateral Agent to be authorized or within the discretion or rights or powers conferred upon the Collateral Agent by this Agreement. In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. The Collateral Agent shall not be deemed to have notice of any Default or Event of Default under the Senior Credit Documents unless written notice of such Default or Event of Default from the Senior Agent, the Borrowers or the Guarantors is delivered to the Collateral Agent in accordance with the notice provisions set forth in Section 7.05 of this Agreement. The rights, privileges, protections, immunities and benefits given to the Collateral Agent, including, without limitation, its right to be indemnified as set forth in the Indenture Agreements are extended to, and shall be enforceable by, the

26

Collateral Agent are incorporated herein by reference. In no event shall the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

     Section 7.20 Limitation on the Rights of Parent, the Borrowers and the Guarantors as Noteholders. Notwithstanding anything to the contrary set forth herein, the parties acknowledge and agree that to the extent the Parent, any Borrower or any Guarantor acquires any interest in any of the Notes: (i) neither the Parent nor any Borrower or Guarantor, in its capacity as a Noteholder, shall be entitled to exercise any rights under or receive any benefits from this Intercreditor Agreement, (ii) neither the Parent nor any of the Borrower or Guarantors, in its capacity as a Noteholder, shall be entitled to receive any payments or distributions in respect of any proceeds of any Collateral, unless and until (x) the Discharge in Full of Credit Agreement Obligations has occurred and (y) all Indenture Secured Obligations (other than Indenture Secured Obligations owing to the Parent, any Borrower or any Guarantor in its capacity as a Noteholder) shall have been paid in full, (iii) neither the Senior Agent nor the Collateral Agent shall be obligated to provide any notice to, or to follow any direction or instruction delivered by, the Parent, any Borrower any Guarantor in its capacity as a Noteholder, and (iv) for purposes of this Agreement, at any time that any Notes are held by the Parent, any Borrower or any Guarantor, such Notes shall be treated as if they had been fully repaid and not outstanding.

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IN WITNESS WHEREOF, the Senior Agent, the Collateral Agent, Parent, each Borrower and each Guarantor has caused this Agreement to be duly executed and delivered as of the date first above written.

SENIOR AGENT:	JPMORGAN CHASE BANK, N.A.
	By:	/s/ Kathleen C. Maggi
	Name: Kathleen C. Maggi
	Title: Senior Vice President

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IN WITNESS WHEREOF, the Senior Agent, the Collateral Agent, Parent, each Borrower and each Guarantor has caused this Agreement to be duly executed and delivered as of the date first above written.

COLLATERAL AGENT AND TRUSTEE	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacities as Collateral Agent and Trustee under the Indenture (and not individually)
	By:	/s/ Raymond Torres
	Name: Raymond Torres
	Title: Senior Associate

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IN WITNESS WHEREOF, the Senior Agent, the Collateral Agent, Parent, each Borrower and each Guarantor has caused this Agreement to be duly executed and delivered as of the date first above written.

PARENT AND BORROWERS: ALTRA HOLDINGS, INC. ALTRA INDUSTRIAL MOTION, INC.
By	/s/ Glenn E. Deegan
Name: Glenn E. Deegan
Title:   Vice President, Legal and Human Resources,             General Counsel and Secretary
AMERICAN ENTERPRISES MPT CORP. AMERICAN ENTERPRISES MPT HOLDINGS, LLC AMERIDRIVES INTERNATIONAL, LLC BOSTON GEAR LLC FORMSPRAG LLC INERTIA DYNAMICS LLC WARNER ELECTRIC LLC KILIAN MANUFACTURING CORPORATION NUTTALL GEAR LLC WARNER ELECTRIC INTERNATIONAL HOLDING, INC. TB WOOD’S CORPORATION TB WOOD’S INCORPORATED TB WOOD’S ENTERPRISES, INC.
By	/s/ Glenn E. Deegan
	Name:	Glenn E. Deegan
	Title:	Secretary

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Annex A

     This ACKNOWLEDGMENT, dated as of            , 20    , is delivered pursuant to Section 5.04 of the Intercreditor and Lien Subordination Agreement (the “Intercreditor Agreement”), dated as of November 25, 2009 by and among JPMorgan Chase Bank, N.A., as “Original Senior Agent”, The Bank of New York Mellon Trust Company, N.A., as “Collateral Agent and Trustee”, Altra Holdings, Inc., as “Parent”, Altra Industrial Motion, Inc. and certain of its Subsidiaries as “Borrowers”, and certain other direct and indirect Subsidiaries of Parent, as “Guarantors”. Capitalized terms used herein but not defined herein are used with the meanings given them in the Intercreditor Agreement.

     By executing and delivering this Acknowledgment, each of Parent, for and on behalf of itself, the Borrowers and the other Guarantors, and ______, the [lender/agent] under the New Credit Facility (the “New [Lender/Agent]”), hereby represents, warrants, acknowledges and agrees that: (i) the New [Lender/Agent] has become a party to the Intercreditor Agreement as the “Senior Agent” with the same force and effect as if originally named as the Original Senior Agent therein; (ii) the New [Lender/Agent] shall be bound by all of the terms and provisions of the Intercreditor Agreement; (iii) the New [Lender/Agent] has assumed all duties and responsibilities of the Senior Agent set forth in the Intercreditor Agreement; (iv) all notices and other correspondence required to be delivered to the Senior Agent under the Intercreditor Agreement shall be delivered to the New [Lender/Agent] at its address set forth below under its signature to this Acknowledgment; and (v) attached hereto are true and correct copies of all material agreements executed and/or delivered in connection with the New Credit Facility. Parent, for and on behalf of itself, the Borrowers and the other Guarantors, hereby further represents and warrants that the Discharge in Full of the Credit Agreement Secured Obligations under the Original Credit Agreement has occurred.

     IN WITNESS WHEREOF, the undersigned has caused this Acknowledgment to be duly executed and delivered as of the date first above written.

ALTRA HOLDINGS, INC.,
	for and on behalf of itself , the Borrowers and the other Guarantors
By:
Name:
Title:

[LENDER PROVIDING NEW CREDIT FACILITY]
 

By:  

Name:  

Title:  

Address for Notices: 

EX-21.1

Exhibit 21.1

Jurisdiction of Incorporation

Altra Holdings, Inc.,	Delaware
- Altra Industrial Motion, Inc.,	Delaware
- American Enterprises MPT Corp.,	Delaware
- Nuttall Gear LLC,	Delaware
- American Enterprises MPT Holdings, LLC,	Delaware
- Ameridrives International, LLC,	Delaware
- Formsprag LLC,	Delaware
- Warner Electric LLC,	Delaware
- Warner Electric Technology LLC,	Delaware
- Boston Gear LLC,	Delaware
- Kilian Manufacturing Corporation,	Delaware
- 3091780 Nova Scotia Company,	Nova Scotia, Canada
- Kilian Canada, ULC,	Nova Scotia, Canada
- Warner Electric International Holding, Inc.,	Delaware
- Warner Electric (Holding) SAS,	France
- Warner Electric Europe SAS,	France
- Warner Electric Group GmbH,	Germany
- Warner Electric Verwaltungs GmbH,	Germany
- Stieber GmbH,	Germany
- Warner Electric (Netherlands) Holding, B.V.,	Netherlands
- Warner Electric Australia Pty. Ltd.,	Australia
- Warner Shui Hing Limited, (HK),	Hong Kong
- Warner Electric (Singapore), Ltd.,	Singapore
- Warner Electric (Taiwan) Ltd.,	Taiwan
- Warner Electric (Thailand) Ltd.,	Thailand
- Warner Electric UK Group Ltd.,	United Kingdom
- Warner Electric UK Holding, Ltd.,	United Kingdom
- Wichita Company Ltd.,	United Kingdom
- TB Wood’s Corporation,	Delaware
- TB Wood’s Incorporated,	Pennsylvania
- Plant Engineering Consultants, LLC,	Tennessee
- T.B. Wood’s Canada Ltd.,	Canada
- Industrial Blaju, S.A. de C.V.,	Mexico
- TB Wood’s Enterprises, Inc.,	Delaware
- Hay Hall Holdings Ltd.,	United Kingdom
- The Hay Hall Group Ltd.,	United Kingdom
- Matrix International, Ltd.,	United Kingdom
- Matrix International GmbH,	Germany
- Inertia Dynamics, LLC,	Delaware
- Bibby Group Ltd.,	United Kingdom
- Bibby Transmissions Ltd.,	United Kingdom
- Bibby Turboflex SA,	South Africa

- Turboflex Ltd.,	United Kingdom
- Torsiflex Ltd.,	United Kingdom
- Rathi Turboflex Pty Ltd,	India
- Huco Power Transmission, Ltd.,	United Kingdom
- Huco Engineering Industries Ltd.,	United Kingdom
- Dynatork Air Motors Ltd.,	United Kingdom
- Dynatork, Ltd.,	United Kingdom
- Twiflex Ltd.,	United Kingdom
- Saftek Ltd.,	United Kingdom

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-140349) pertaining to the 2004 Equity Incentive Plan of Altra Holdings, Inc., and in the Registration Statement (Form S-3 No. 333-162511) of Altra Holdings, Inc., of our report dated March 6, 2009 (except for Note 17, as to which the date is November 4, 2009), with respect to the consolidated financial statements and schedule of Altra Holdings, Inc. as of December 31, 2008 and for each of the two years in the period ended December 31, 2008 included in this Annual Report (Form 10-K) for the year ended December 31, 2009.

/s/ Ernst & Young LLP

Boston, Massachusetts
March 9, 2010

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement No. 333-140349 on Form S-8 and Registration Statement No. 333-162511 on Form S-3, of our reports dated March 9, 2010, relating to the consolidated financial statements and financial statement schedule of Altra Holdings, Inc., and the effectiveness of the Altra Holdings, Inc’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Altra Holdings, Inc. for the year ended December 31, 2009.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
March 9, 2010

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

I, Carl R. Christenson, certify that:

             1. I have reviewed this Annual Report on Form 10-K of Altra Holdings, 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.

By:	/s/ Carl R. Christenson Name: Carl R. Christenson
	Title:   Chief Executive Officer

Date: March 9, 2010

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

I, Christian Storch, certify that:

             1. I have reviewed this Annual Report on Form 10-K of Altra Holdings, 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.

By:	/s/ Christian Storch Name: Christian Storch
	Title:   Chief Financial Officer

Date: March 9, 2010

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          In connection with the Annual Report on Form 10-K of Altra Holdings. (“the Company”) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carl R. Christenson, the Chief Executive Officer of Altra Holdings, Inc. certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By	/s/ Carl R. Christenson Name: Carl R. Christenson
	Title:   Chief Executive Officer

Date: March 9, 2010

          A signed original of this written statement required by Section 906 has been provided to Altra Holdings, Inc. and will be retained by Altra Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          In connection with the Annual Report on Form 10-K of Altra Holdings, Inc. (“the Company”) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christian Storch, the Chief Financial Officer of Altra Holdings, Inc. certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Christian Storch Name: Christian Storch
	Title:   Chief Financial Officer

Date: March 9, 2010

          A signed original of this written statement required by Section 906 has been provided to Altra Holdings, Inc. and will be retained by Altra Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.