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                                                                    EXHIBIT 10.4

                                                                  EXECUTION COPY

                             SUBORDINATION AGREEMENT

          THIS SUBORDINATION AGREEMENT (as amended, modified or supplemented
from time to time, this "AGREEMENT"), dated as of November 25, 2002 made by each
of the Borrower and each of its Subsidiaries party hereto (each, a "PARTY" and,
together with any additional Subsidiary that becomes a Party to this Agreement
pursuant to Section 7 hereof, the "PARTIES") and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as collateral agent (together with any successor collateral agent, the
"COLLATERAL AGENT"), for the benefit of the Senior Creditors (as defined below).
Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings ascribed to them in the Credit Agreement referred to below.

                              W I T N E S S E T H :
                              - - - - - - - - - -

          WHEREAS, RBS Global, Inc. ("HOLDINGS"), Rexnord Corporation (the
"BORROWER"), the lenders party thereto from time to time (the "LENDERS"),
Deutsche Bank Trust Company Americas, as Administrative Agent, General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners (the "Joint Lead Arrangers") (the Administrative Agent, together with
the Collateral Agent, each other Agent and their respective successors and
assigns, the "LENDER CREDITORS") have entered into a Credit Agreement, dated as
of November 25, 2002, providing for the making of Loans to the Borrower and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower, all as contemplated therein (as used herein, the term "CREDIT
AGREEMENT" means the Credit Agreement described above in this paragraph, as the
same may be amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers or guarantors thereunder or
any increase in the amount borrowed) all or any portion of, the indebtedness
under such agreement or any successor agreement, whether or not with the same
agent, trustee, representative, lenders or holders, PROVIDED that, with respect
to any agreement providing for the refinancing or replacement of indebtedness
under the Credit Agreement, such agreement shall only be treated as, or as part
of, the Credit Agreement hereunder if either (A) all obligations under the
Credit Agreement being refinanced or replaced shall be paid in full at the time
of such refinancing or replacement, and all commitments and letters of credit
issued pursuant to the refinanced or replaced Credit Agreement shall have
terminated in accordance with their terms or (B) the Required Lenders shall have
consented in writing to the refinancing or replacement indebtedness being
treated as indebtedness pursuant to the Credit Agreement);

          WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively, the "Covered Agreements") with one or more Lenders or any
affiliate thereof (each such Lender or affiliate party to such a Covered
Agreement, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any

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reason, together with such Lender's or affiliate's successors and assigns, if
any, collectively, the "OTHER CREDITORS" and, together with the Lender
Creditors, the "SECURED CREDITORS");

          WHEREAS, pursuant to the Subsidiaries Guaranty, the Guarantors have
jointly and severally guaranteed to the Secured Creditors the payment when due
of all obligations and liabilities of the Borrower under or with respect to (x)
the Credit Documents (as used herein, the term "CREDIT DOCUMENTS" shall have the
meaning provided in the Credit Agreement and shall include any documentation
executed and delivered in connection with any replacement or refinancing Credit
Agreement), and (y) each Interest Rate Protection Agreement with one or more
Other Creditors;

          WHEREAS, for certain extensions of Indebtedness to the Borrower and
its Domestic Subsidiaries to be permitted under the Credit Agreement, this
Agreement must be executed and delivered by the Parties hereto on the date
hereof, and additional Subsidiaries after the date hereof;

          WHEREAS, pursuant to the Senior Subordinated Note Documents, the
Borrower has issued the Senior Subordinated Notes and the Guarantors have
guaranteed same on a senior subordinated basis;

          WHEREAS, each of the Parties hereto desires to execute this Agreement
to satisfy the conditions described in the immediately preceding paragraph.

          NOW, THEREFORE, in consideration of the mutual premises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties hereto, the Parties and the
Collateral Agent (for the benefit of the holders from time to time of Senior
Indebtedness (as defined in Section 5 hereof)) hereby agree as follows:

          1.   All Subordinated Debt (as defined in Section 5 hereof), is, and
shall continue to be, subject and subordinate in right of payment to the prior
payment in full, in cash, of all Senior Indebtedness to the extent, and in the
manner, set forth herein. The foregoing shall apply, notwithstanding the
availability of other collateral to the Senior Creditors (as defined in Section
5 hereof) or the actual date and time of execution, delivery, recordation,
filing or perfection of any security interests granted with respect to the
Senior Indebtedness, or the lien or priority of payment thereof, and in any
instance wherein the Senior Indebtedness or any claim for the Senior
Indebtedness is subordinated, avoided or disallowed, in whole or in part, under
Title 11 of the United States Code (the "BANKRUPTCY CODE") or other applicable
federal, foreign, state or local law. In the event of a proceeding, whether
voluntary or involuntary, for insolvency, liquidation, reorganization,
dissolution, bankruptcy or other similar proceeding pursuant to the Bankruptcy
Code or other applicable federal, foreign, state or local law (each, a
"BANKRUPTCY PROCEEDING"), the Senior Indebtedness shall include all interest
accrued on the Senior Indebtedness, in accordance with and at the rates
specified in the Senior Indebtedness, both for periods before and for periods
after the commencement of any of such proceeding, even if the claim for such
interest is not allowed pursuant to the Bankruptcy Code or other applicable law.

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          2.   Each Party (as a lender of any Subordinated Debt) hereby agrees
that until all Senior Indebtedness has been repaid in full in cash:

          (a)  (a)  Such Party shall not, without the prior written consent of
the Required Senior Creditors (as defined in Section 5 hereof), which consent
may be withheld or conditioned in the Required Senior Creditors' sole
discretion, commence, or join or participate in, any Enforcement Action (as
defined in Section 5 hereof);

          (b)  (b)  in the event that (i) all or any portion of any Senior
Indebtedness becomes due (whether at stated maturity, by acceleration or
otherwise), (ii) any Event of Default under the Credit Agreement or any event of
default under, and as defined in, any other Senior Indebtedness, then exists or
would result from such payment on the Subordinated Debt, (iii) any Party
receives any payment or prepayment of principal or interest, in whole or in
part, of (or with respect to) the Subordinated Debt contrary to the terms of the
Subordinated Debt or in violation of the terms of the Credit Agreement or any
other Senior Indebtedness or (iv) any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or otherwise,
is made of all or any part of the property, assets or business of the Borrower
or any of its Subsidiaries or the proceeds thereof, in whatever form, to any
creditor or creditors of the Borrower or any of its Subsidiaries or to any
holder of indebtedness of the Borrower, any of its Subsidiaries or by reason of
any liquidation, dissolution or other winding up of the Borrower, any of its
Subsidiaries or their respective business, or of any receivership or
custodianship for the Borrower or any of its Subsidiaries or of all or
substantially all of their respective property, or assignment for the benefit of
creditors or of any Bankruptcy Proceeding, then, and in any such event, any
payment or distribution of any kind or character, whether in cash, property or
securities which shall be payable or deliverable with respect to any or all of
the Subordinated Debt or which has been received by any Party shall be held in
trust by such Party for the benefit of the Senior Creditors and shall forthwith
be paid or delivered directly to the Senior Creditors for application to the
payment of the Senior Indebtedness to the extent necessary to make payment in
full in cash of all sums due under the Senior Indebtedness remaining unpaid
after giving effect to any concurrent payment or distribution to the Senior
Creditors, provided that any such payment or distribution may be made to any
Qualified Credit Party during an event described in clause (ii) or (iv) above to
the extent same is expressly permitted under the Credit Agreement and, in event,
only if no Default under Section 9.01 or 9.05 or Event of Default under Section
9.01 or 9.05 exists at the time of such payment or distribution. In any such
event, the Senior Creditors may, but shall not be obligated to, demand, claim
and collect any such payment or distribution that would, but for these
subordination provisions, be payable or deliverable with respect to the
Subordinated Debt. In the event of the occurrence of any event referred to in
clauses (i), (ii), (iii) or (iv) above and until the Senior Indebtedness shall
have been fully paid in cash and satisfied and all of the obligations of the
Borrower to the Senior Creditors have been performed in full, no payment of any
kind or character (whether in cash, property, securities or otherwise) shall be
made to or accepted by any Party in respect of the Subordinated Debt, except as
otherwise permitted in the proviso contained in the second preceding sentence;

          (c)  (c)  if any Party shall acquire by indemnification, subrogation
or otherwise, any lien, estate, right or other interest in any of the assets or
properties of the Borrower or any of its Subsidiaries, that lien, estate, right
or other interest shall be subordinate in right of payment to the Senior
Indebtedness and the lien of the Senior Indebtedness as provided

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herein, and any Party hereby waives any and all rights it may acquire by
subrogation or otherwise to any lien of the Senior Indebtedness or any portion
thereof until such time as all Senior Indebtedness has been repaid in full in
cash;

          (d)  (d)  no party shall pledge, assign, hypothecate, transfer, convey
or sell any Subordinated Debt or any interest in any Subordinated Debt to any
entity (other than pursuant to the Security Documents or to a Subsidiary of the
Borrower that is a party hereto or who agrees in a writing delivered to the
Administrative Agent to be subject to the terms hereof) without the prior
written consent of the Administrative Agent (with the prior written consent of
the Required Senior Creditors);

          (e)  (e)  after request by the Administrative Agent or the Required
Senior Creditors, each Party shall within ten (10) Business Days furnish the
Senior Creditors with a statement, duly acknowledged and certified setting forth
the original principal amount of the loans evidencing the indebtedness of the
Subordinated Debt, the unpaid principal balance, all accrued but unpaid interest
and any other sums due and owing in connection therewith, the rate of interest,
the monthly payments and that to the best knowledge of the lender of the
respective Subordinated Debt there exists no defaults under the Subordinated
Debt, or if any such defaults exist, specifying the defaults and the nature
thereof;

          (f)  (f)  in the case any Bankruptcy Proceeding is commenced by or
against the Borrower or any of its Subsidiaries, the Required Senior Creditors
shall have the exclusive right to exercise any voting rights in respect of the
claims of any Party against the Borrower or any of its Subsidiaries;

          (g)  (g)  if, at any time, all or part of any payment with respect to
Senior Indebtedness theretofore made (whether by the Borrower or any other
Person or by enforcement of any right of setoff or otherwise) is rescinded or
must otherwise be returned by the holders of Senior Indebtedness for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of the Borrower or such other Persons), the subordination
provisions set forth herein shall continue to be effective or be reinstated, as
the case may be, all as though such payment had not been made;

          (h)  (h)  no Party shall object to the entry of any order or orders
approving any cash collateral stipulations, adequate protection stipulations or
similar stipulations executed by the Senior Creditors in any Bankruptcy
Proceeding or any other proceeding under the Bankruptcy Code; and

          (i)  (i)  each Party waives any marshalling rights with respect to the
Senior Creditors in any Bankruptcy Proceeding or any other proceeding under the
Bankruptcy Code.

          3.   Any payments made to, or received by, any Party in respect of any
guaranty or security in support of the Subordinated Debt shall be subject to the
terms of this Subordination Agreement and applied on the same basis as payments
made directly by the obligor under such Subordinated Debt. To the extent that
any Subsidiary of the Borrower (other than the respective obligor or obligors
which are already Parties hereto) provides a guaranty or any security in support
of any Subordinated Debt, the Party which is the lender of the respective

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Subordinated Debt will cause each such Person to become a Party hereto (if such
Person is not already a Party hereto) not later than the date of the execution
and delivery of the respective guarantee or security documentation, PROVIDED
that any failure to comply with the foregoing requirements of this Section 3
will have no effect whatsoever on the subordination provisions contained herein
(which shall apply to all payments received with respect to any guarantee or
security for any Subordinated Debt, whether or not the Person furnishing such
guarantee or security is a Party hereto).

          4.   Each Party hereby acknowledges and agrees that no payments will
be accepted by it in respect of the Subordinated Debt (unless promptly turned
over to the holders of Senior Indebtedness as contemplated by Section 2 above)
to the extent such payments would be prohibited under any Senior Indebtedness.

          5.   DEFINITIONS. As and in this Agreement, the terms set forth below
shall have the respective meanings provided below:

          "BORROWER DEBT" shall mean all loans, advances and other Indebtedness
     owed by the Borrower to any Subsidiary of the Borrower.

          "CREDIT DOCUMENT OBLIGATIONS TERMINATION DATE" shall mean the first
     date after the Effective Date upon which all Commitments pursuant to the
     Credit Agreement have terminated (and no further Commitments can be
     provided pursuant to the terms thereof) and all Credit Document Obligations
     (as defined below) have been paid in full in cash.

          "ENFORCEMENT ACTION" shall mean any acceleration of all or any part of
     the Subordinated Debt, any foreclosure proceeding, the exercise of any
     power of sale, the obtaining of a receiver, the seeking of default
     interest, the suing on, or otherwise taking action to enforce the
     obligation of the Borrower or any of its Subsidiaries to pay any amounts
     relating to any Subordinated Debt, the exercising of any banker's lien or
     rights of set-off or recoupment, the institution of a Bankruptcy Proceeding
     against the Borrower or any of its Subsidiaries, or the taking of any other
     enforcement action against any asset or property of the Borrower or its
     Subsidiaries.

          "GUARANTOR DEBT" shall mean all loans, advances and other Indebtedness
     owed by any Guarantor to any Subsidiary of the Borrower.

          "OBLIGATION" shall mean any principal, interest, premium, penalties,
     fees, indemnities and other liabilities and obligations payable under the
     documentation governing any Senior Indebtedness (including, without
     limitation, all interest after the commencement of any bankruptcy,
     insolvency, receivership or similar proceeding at the rate provided in the
     governing documentation, whether or not such interest is an allowed claim
     in such proceeding).

          "REQUIRED SENIOR CREDITORS" shall mean (i) the Required Lenders at all
     times prior to the Credit Document Obligations Termination Date and (ii)
     after the Credit Document Obligations Termination Date, the holders of a
     majority of the outstanding Senior Indebtedness.

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          "SENIOR CREDITORS" shall mean all holders from time to time of any
     Senior Indebtedness and shall include, without limitation, the Lender
     Creditors, the Other Creditors and the holders of the Senior Subordinated
     Notes.

          "SENIOR INDEBTEDNESS" shall mean:

          (i) all obligations, liabilities and indebtedness (including, without
     limitation, principal, premium, interest (including, without limitation,
     all interest that accrues after the commencement of any case, proceeding or
     other action relating to the bankruptcy, insolvency, reorganization or
     similar proceeding of any Credit Party at the rate provided for in the
     respective documentation, whether or not a claim for post-petition interest
     is allowed in any such proceeding), reimbursement obligations under Letters
     of Credit, fees, costs and indemnities) of each Credit Party to the Lender
     Creditors, whether now existing or hereafter incurred under, arising out
     of, or in connection with, the Credit Agreement and the other Credit
     Documents to which each Credit Party is a party (including, without
     limitation, in the event each Credit Party is a Guarantor, all such
     obligations, liabilities and indebtedness of each Credit Party under its
     Guaranty) and the due performance and compliance by each Credit Party with
     all of the terms, conditions and agreements contained in the Credit
     Agreement and in such other Credit Documents (all such obligations,
     liabilities and indebtedness under this clause (i), except to the extent
     consisting of obligations or indebtedness with respect to Covered
     Agreements, being herein collectively called the "Credit Document
     Obligations");

               (ii) all obligations, liabilities and indebtedness (including,
     without limitation, all interest that accrues after the commencement of any
     case, proceeding or other action relating to the bankruptcy, insolvency,
     reorganization or similar proceeding of any Credit Party at the rate
     provided for in the respective documentation, whether or not a claim for
     post-petition interest is allowed in any such proceeding) owing by such
     Credit Party to the Other Creditors, now existing or hereafter incurred
     under, arising out of or in connection with any Covered Agreement, whether
     such Covered Agreement is now in existence or hereinafter arising
     (including, without limitation, in the case of a Credit Party that is a
     Guarantor, all obligations, liabilities and indebtedness of such Credit
     Party under its Guaranty in respect of the Covered Agreements), and the due
     performance and compliance by such Credit Party with all of the terms,
     conditions and agreements contained in each such Covered Agreement (all
     such obligations, liabilities and indebtedness under this clause (ii) being
     herein collectively called the "Other Obligations"); and

               (iii) all obligations, liabilities and indebtedness (including,
     without limitation, all interest that accrues after the commencement of any
     case, proceeding or other action relating to the bankruptcy, insolvency,
     reorganization or similar proceeding of any Credit Party at the rate
     provided for in the respective documentation, whether or not a claim for
     post-petition interest is allowed in any such proceeding) owing by such
     Credit Party to the holders from time to time of the Senior Subordinated
     Notes, now existing or hereafter incurred under, arising out of or in
     connection with any Senior Subordinated Note Documents (including, without
     limitation, all such obligations and liabilities under any

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     guarantees relating thereto) and the due performance and compliance by each
     Credit Party with the terms of each such Senior Subordinated Note Document.

          "SUBORDINATED DEBT" shall mean the principal of, interest on, and all
     other amounts owing from time to time in respect of all Borrower Debt and
     all Guarantor Debt (in each case, including without limitation pursuant to
     guarantees thereof or security therefor) at any time outstanding.

          6.   Each Party agrees to be fully bound by all terms and provisions
contained in this Agreement, both with respect to any Subordinated Debt
(including any guarantees thereof and security therefor) owed to it, and with
respect to all Subordinated Debt (including all guarantees thereof and security
therefor) owing by it.

          7.   It is understood and agreed that any Credit Party or any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the requirements of any Credit
Agreement or other Senior Indebtedness shall become a Party hereunder by
executing a counterpart hereof (or an assumption agreement in form and substance
satisfactory to the Collateral Agent) and delivering same to the Collateral
Agent.

          8.   No failure or delay on the part of any party hereto or any holder
of Senior Indebtedness in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.

          9.   Each Party hereto acknowledges that to the extent that no
adequate remedy at law exists for breach of its obligations under this
Agreement, in the event any Party fails to comply with its obligations
hereunder, the Collateral Agent, the Administrative Agent or the holders of
Senior Indebtedness shall have the right to obtain specific performance of the
obligations of such defaulting Party, injunctive relief or such other equitable
relief as may be available.

          10.  Any notice to be given under this Agreement shall be in writing
and shall be sent in accordance with the provisions of the Security Agreement.

          11.  In the event of any conflict between the provisions of this
Agreement and the provisions of the Subordinated Debt, the provisions of this
Agreement shall prevail.

          12.  No person other than the parties hereto, the Senior Creditors
from time to time and their permitted successors and assigns as holders of the
Senior Indebtedness shall have any rights under this Agreement.

          13.  This Agreement may be executed in any number of counterparts each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

          14.  No amendment, supplement, modification, waiver or termination of
this Agreement shall be effective unless such amendment, supplement,
modification, waiver or

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termination was made in a writing signed by the Parties hereto and the
Collateral Agent (with the written consent of the Required Senior Creditors).

          15.  In case any one or more of the provisions contained in this
Agreement, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein, and any other application thereof, shall
not in any way be affected or impaired thereby.

          16.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.

          17.  This Agreement shall bind and inure to the benefit of the
Collateral Agent, the Senior Creditors and each Party and their respective
successors, permitted transferees and assigns.

                                      * * *

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.

                                        RBS GLOBAL, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD CORPORATION,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        RBS NORTH AMERICA, Inc.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        RBS ACQUISITION CORPORATION,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        RAC - I, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        RBS CHINA HOLDINGS, L.L.C.,
                                          as a Party

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                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD NORTH AMERICA
                                          HOLDINGS, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        ADDAX, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        BETZDORF CHAIN COMPANY, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        CLARKSON INDUSTRIES, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

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                                        PT COMPONENTS, INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        PRAGER INCORPORATED,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD GERMANY - I INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD INTERNATIONAL INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD, LTD.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        REXNORD PUERTO RICO INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

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                                        WINFRED BERG LICENSCO INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

                                        W.M. BERG INC.,
                                          as a Party


                                        By:                 /s/ Thomas Jansen
                                           -------------------------------------
                                           Name:
                                           Title:

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Accepted and Agreed to:

DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Collateral Agent

By:                /s/
   ---------------------------------
Name:   Diane F. Rolfe
Title:  Vice President