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| Date of Determination                                          | Maximum Ratio |
|----------------------------------------------------------------|---------------|
| June 30, 2009 and at the end of each fiscal quarter thereafter | 3.00:1        |

| Level: | Total Funded Debt to EBITDA Ratio:                    | Add-On for LIBOR Loans: | Commitment Fee: |
|--------|-------------------------------------------------------|-------------------------|-----------------|
| I      | greater than or equal to 2.5:1                        | 3.50%                   | .375%           |
| II     | less than 2.5.0:1, but greater than or equal to 2.0:1 | 3.00%                   | .25%            |
| III    | less than 2.0:1, but greater than or equal to 1.5:1   | 2.50%                   | .25%            |
| IV     | less than 1.5:1 but greater than or equal to 1.0:1    | 2.25%                   | .25%            |
| V      | less than 1.0:1                                       | 2.00%                   | .25%            |

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|   | M&I MARSHALL & ILSLEY BANK  By:______________________________________Title:______________________________________Attest:______________________________________Title:______________________________________  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | TWIN DISC, INCORPORATEDBy:______________________________________Name:  Christopher J. EperjesyTitle: VP – Finance, Chief Financial Officer and Treasurer                                                      |
|   |                                                                                                                                                                                                                               |

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 1           If a Default or an Event of Default exists, specify (a) the facts and circumstances of such Default or Event of Default, and (b) the actions that the Borrower has taken, is taking or proposesto take to remedy such Default or Event of Default.

 2           For the certificate delivered with the annual financial statements, delete the phrase “subject to audit and normal year-end adjustments.”

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| A.     | the Total Funded Debt to EBITDA Ratio as of ____________________, 200___ is:                             | __________:1.0 |
|--------|----------------------------------------------------------------------------------------------------------|----------------|
|   | the maximum Total Funded Debt to EBITDA Ratio covenant is the following ratio as of the following dates: |           |

|   | Date of Determination                                                                         | Maximum Ratio                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | June 30, 2009 and at the end of each fiscal quarter thereafter                                | 3.00 to 1.0                                                                                                                                                                                                                          |
|   |                                                                                          |                                                                                                                                                                                                                                 |
| B.     | the Net Worth as of _________, 200___ is:                                                     | $_______________                                                                                                                                                                                                                     |
|   | the Net Worth covenant is:                                                                    | $70,321,000 plus 35% of the positive consolidated Net Income for each fiscal quarter from and after December 31, 2002 on a cumulative basis[any adjustment for pension liabilities permitted by Section 5.13(a) is $_______________] |
| C.     | the EBITDA as of ____________________, 200___ is:                                        | $_______________                                                                                                                                                                                                                     |
|   | the minimum EBITDA covenant is at least the following amount as of the following dates:  |                                                                                                                                                                                                                                 |
|   | Date of Determination                                                                         | Minimum EBITDA                                                                                                                                                                                                                       |
|   | March 31, 2004 and at the end of each fiscal quarter thereafter                          | $11,000,000                                                                                                                                                                                                                          |
|   |                                                                                          |                                                                                                                                                                                                                                 |

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