<PAGE>
                       EIGHTH AMENDMENT TO LOAN DOCUMENTS



         This EIGHTH AMENDMENT TO LOAN DOCUMENTS ("Amendment") dated March 31,
2003 (with an effective date of March 28, 2003), is made by and among TB WOOD'S
INCORPORATED, individually and as Agent under the Borrower Agency Agreement (the
"Borrower Agent") and PNC BANK, NATIONAL ASSOCIATION, a national banking
association, as Agent for the Banks under the Credit Agreement referred to
herein (the "Agent") and PNC BANK, NATIONAL ASSOCIATION, WACHOVIA BANK (as
successor to First Union National Bank) and NATIONAL CITY BANK OF PENNSYLVANIA
as the Banks.

         Reference is made to the Revolving Credit Agreement dated October 10,
1996, by and among TB Wood's Incorporated, a Pennsylvania corporation, Plant
Engineering Consultants, Inc., a Tennessee corporation ("Plant Engineering"), TB
Wood's Enterprises, Inc., a Delaware corporation, TB Wood's North Carolina,
Inc., a Delaware corporation, TB Wood's Foreign Sales Corporation, a Barbados
corporation, TB Wood's Foreign Investment Company, a Delaware corporation,
Industrial Blaju, S.A., de C.V. Mexico City, Mexico, a Mexican corporation
(successor to TB Wood's Mexico, S.A. de C.V. f/k/a Grupo Blaju, S.A., de C.V.),
TB Wood's Canada, Ltd., an Ontario corporation, Berges Electronic GmbH, Berges
Electronic, S.r.l. (such corporations being the "Borrowers"), and PNC Bank,
National Association, as Agent and the Banks party thereto as amended on April
7, 1997, January 20, 1998, April 24, 1998, July 21, 1999, November 8, 1999,
February 25, 2002 (with an effective date of December 28, 2001) and April 30,
2002 (as so amended, the "Agreement") pursuant to which the Banks extended to
the Borrowers a $40,000,000 revolving line of credit, which amount has
heretofore been increased to $52,500,000 pursuant to amendment. The obligations
under the Agreement and the Loan Documents are evidenced by the Borrowers' Notes
payable to the Banks. (Capitalized terms used herein not otherwise defined shall
have the meanings provided for in the Agreement.)


<PAGE>

         Pursuant to this Amendment, the Commitments shall be reduced to
$46,000,000, one of the Banks shall terminate its Commitment entirely, another
Bank shall increase its Commitment and certain parties will grant to the Agent
on behalf of the Banks a security interest in all of their property located in
the United States (excluding securities, titled vehicles and real estate).

         NOW, THEREFORE, in consideration of the foregoing and for other
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

         1. Amendment to Agreement.

(a) Section 1.1 [Certain Definitions] of the Agreement is hereby amended as
follows:

         (i) The Commitments are being reduced to $46,000,000 in the aggregate
and, accordingly, Schedule 1.1(B) is hereby amended and restated to read in its
entirety as shown on the attached Schedule 1.1(B) (Amended 2003).

         (ii) The expiration date for the revolving credit facility is extended
to October 10, 2004 and, accordingly, the definition of Expiration Date is
hereby amended and restated to read in its entirety as follows:

                  Expiration Date shall mean, with respect to the Commitments,
                  October 10, 2004, as such date may be extended in accordance
                  with Section 2.10.

         (iii) The definition of Permitted Liens is hereby amended by adding at
the end thereof an additional subsection to read as follows:

                  (xii) any Lien created in connection with the Tennessee Bonds
                  or the Texas Bonds.

                                       2
<PAGE>

         (iv) The definition of Required Banks is hereby amended and restated to
read in its entirety as follows:

                  Required Banks shall mean

                  (i) if there are no Loans, Reimbursement Obligations or Letter
                  of Credit Borrowings outstanding, Banks whose Commitments
                  aggregate at least 65% of the Commitments of all of the Banks,
                  or

                  (ii) if there are Loans, Reimbursement Obligations, or Letter
                  of Credit Borrowings outstanding, any Bank or group of Banks
                  if the sum of the Loans, Reimbursement Obligations and Letter
                  of Credit Borrowings of such Banks then outstanding aggregates
                  at least 65% of the total principal amount of all of the
                  Loans, Reimbursement Obligations and Letter of Credit
                  Borrowings then outstanding. Reimbursement Obligations and
                  Letter of Credit Borrowings shall be deemed, for purposes of
                  this definition, to be in favor of the Agent and not a
                  participating Bank if such Bank has not made its Participation
                  Advance in respect thereof and shall be deemed to be in favor
                  of such Bank to the extent of its Participation Advance if it
                  has made its Participation Advance in respect thereof.

         (v) A new definition of "Security Agreement" is hereby added to read in
its entirety as follows:

                  Security Agreement shall mean the Security Agreement dated
                  March 31, 2003 executed and delivered by the Company, Plant
                  Engineering Consultants, Inc. and TB Wood's Enterprises, Inc.
                  and any other Borrower organized under the laws of a state of
                  the United States of America which later becomes a party
                  thereto and executed and delivered to the Agent on behalf of
                  the Banks to secure the Obligations and also the obligation of
                  each Loan Party under any currency or interest rate hedging or
                  derivative arrangement or agreement with any Bank; the
                  "collateral" described therein consists of substantially all
                  of the personal property (other than real estate, securities
                  and titled vehicles) of such Persons. The Security Agreement
                  is and shall be a "Loan Document."

                                       3
<PAGE>

         (vi) Section 2.3 [Commitment Fees] of the Agreement is hereby amended
by replacing, as of April 1, 2003, the pricing grid therein with the following
pricing grid:

                  (a) if the Borrowers' Leverage Ratio is less than or equal to
                  1.0 to 1.0, then the Commitment Fee Applicable Margin shall be
                  .20%; and

                  (b) if the Borrowers' Leverage Ratio is greater than 1.0 to
                  1.0 but less than or equal to 1.5 to 1.0, then the Commitment
                  Fee Applicable Margin shall be .25%; and

                  (c) if the Borrowers' Leverage Ratio is greater than 1.5 to
                  1.0 but less than or equal to 2.0 to 1.0, then the Commitment
                  Fee Applicable Margin shall be .30%; and

                  (d) if the Borrowers' Leverage Ratio is greater than 2.0 to
                  1.0 but less than or equal to 2.5 to 1.0, then the Commitment
                  Fee Applicable Margin shall be .35%; and

                  (e) if the Borrowers' Leverage Ratio is greater than 2.5 to
                  1.0, but less than 3.0 to 1.0, then the Commitment Fee
                  Applicable Margin shall be .40%; and

                  (f) if the Borrowers' Leverage Ratio is greater than 3.0 to
                  1.0, then the Commitment Fee Applicable Margin shall be .45%.

         (vii) Section 4.1.1 of the Agreement is hereby amended and restated to
read in its entirety as follows:

                      (i) Revolving Credit Interest Rate Options.

                      The Borrowers shall have the right to select from the
following Interest Rate Options applicable to the Loans:

                      (1) Base Rate Option: A fluctuating rate per annum
                          (computed on the basis of a year of 365 or 366 days,
                          as the case may be, and actual days elapsed) equal to
                          the Base Rate, such interest rate to change
                          automatically from time to time effective as of the
                          effective date of each change in the Base Rate;

                                       4
<PAGE>

                      (2) Revolving Credit Euro-Rate Option: A rate per annum
                          (computed on the basis of a year of 360 days and
                          actual days elapsed) equal to the Euro-Rate plus the
                          rate per annum (the "Applicable Margin") described
                          below measured in respect of the Borrowers' Leverage
                          Ratio as of the end of each fiscal quarter:

                  (a) if the Borrowers' Leverage Ratio is less than or equal to
                  1.0 to 1.0, then the Applicable Margin shall be 1.25%; and

                  (b) if the Borrowers' Leverage Ratio is greater than 1.0 to
                  1.0 but less than or equal to 1.5 to 1.0, then the Applicable
                  Margin shall be 1.50%; and

                  (c) if the Borrowers' Leverage Ratio is greater than 1.5 to
                  1.0 but less than or equal to 2.0 to 1.0, then the Applicable
                  Margin shall be 1.75%; and

                  (d) if the Borrowers' Leverage Ratio is greater than 2.0 to
                  1.0 but less than or equal to 2.5 to 1.0, then the Applicable
                  Margin shall be 2.00%; and

                  (e) if the Borrowers' Leverage Ratio is greater than 2.5 to
                  1.0, but less than 3.0 to 1.0 then the Applicable Margin shall
                  be 2.25%; and

                  (f) if the Borrowers' Leverage Ratio is greater than 3.0 to
                  1.0, then the Applicable Margin shall be 2.50%.

         Any changes in the Applicable Margin pursuant to the provisions of this
Section 4.1(a)(ii) shall become effective from the fifth day after the Agent
shall have received the Certificate delivered pursuant to Section 8.3.4 in
respect of such fiscal quarter; provided, that, in the event that the
Certificate delivered pursuant to Section 8.3.4 for any fiscal quarter is not
timely delivered, then the Applicable Margin shall be the amount set forth in
item (f) above commencing as of the date such certificate was required to be
delivered until the delivery of such certificate.

                                       5
<PAGE>

         (viii) Section 8.2 [Negative Covenants] of the Agreement is hereby
amended by deleting therefrom Section 8.2.21 [Minimum Net Worth] and
substituting therefor a new Section 8.2.21 to read in its entirety as follows:

                  8.2.21 Fixed Charge Coverage.
                  The Borrowers shall maintain at all times a ratio of (x)
                  EBITDA less unfunded capital expenditures to (y) cash
                  dividends paid, cash taxes paid, net interest expense and
                  current maturities of long term debt (other than the Loans) of
                  not less than 1.05 to 1.0, calculated for the four (4) fiscal
                  quarters ending December 31, 2003 and quarterly thereafter.
                  For purposes of this section, unfunded capital expenditures
                  shall include, inter alia, capital expenditures funded with
                  proceeds of any Loan or with cash.

         (ix) Section 8.2.5 [Dividends and Related Distributions] of the
Agreements is hereby amended by adding at the end thereof before the period (.)
the following phrase:

                  and except for purchases by the Parent of its own common stock
                  not to exceed (x) $1,500,000 if the Leverage Ratio (after such
                  repurchase) is less than 3.0 to 1.0 and (y) $2,000,000 if the
                  Leverage Ratio (after such repurchase) is less than 2.75 to
                  1.0.

         (x) Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions]
of the Agreement is hereby amended and restated to read in its entirety as
follows:

                  8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
                  Each of the Loan Parties shall not, and shall not permit any
                  of its Subsidiaries to, dissolve, liquidate or wind-up its
                  affairs, or become a party to any merger or consolidation, or
                  acquire by purchase, lease or otherwise all or substantially
                  all of the assets or capital stock of any other Person,
                  provided that

                      (1) any Loan Party may consolidate or merge into another
                  Loan Party which is wholly-owned by one or more of the other
                  Loan Parties and which is a Domestic Borrower or a Domestic
                  Subsidiary, and



                                       6
<PAGE>

                      (2) any Borrower may acquire, whether by purchase or by
                  merger, (A) all of the ownership interests of another Person
                  which is not a Foreign Person or (B) substantially all of
                  assets of another Person or of a business or division of
                  another Person which is not a Foreign Person (except that any
                  Loan Party may acquire the stock or assets of a Foreign Person
                  with the prior written approval of Required Banks, which may
                  be withheld for any reason) (each such acquisition being a
                  "Permitted Acquisition"), provided that each of the following
                  requirements is met:

                      (i) such Person has had for the prior fiscal year positive
                  operating income (calculated in accordance with GAAP);

                      (ii) the Company demonstrates to the Banks pro forma
                  covenant compliance over the next four (4) quarter period
                  taking into account the projected Total Debt immediately
                  following such acquisitions; in calculating such compliance,
                  EBITDA (to the extent applicable) shall include the EBITDA of
                  such acquired Person to the extent such EBITDA is described in
                  financial statements audited by an accounting firm acceptable
                  to the Banks or is otherwise established by a third party
                  financial due diligence review in form and substance
                  satisfactory to the Banks;

                      (iii) if the Loan Parties are acquiring the ownership
                  interests in such Person, such Person shall execute a Joinder
                  and join this Agreement as a Borrower pursuant to, and
                  otherwise comply with, Section 11.18 on or before the date of
                  such Permitted Acquisition (unless it is subject to the
                  provisions of clause (xi) hereof;

                      (iv) the board of directors or other equivalent governing
                  body of such Person shall have approved such Permitted
                  Acquisition and the Company shall have delivered to the Banks
                  written evidence of such approval prior to such Permitted
                  Acquisition;

                      (v) the business acquired, or the business conducted by
                  the Person whose ownership interests are being acquired, as
                  applicable, shall be substantially the same as one or more
                  line or lines of business conducted by the Borrowers and shall
                  comply with Section 8.2.10;



                                       7
<PAGE>

                      (vi) no Potential Default or Event of Default shall exist
                  immediately prior to and after giving effect to such Permitted
                  Acquisition;

                      (vii) the Company shall demonstrate that the Loan Parties
                  shall be in compliance with the covenants contained in
                  Sections 8.2.15, 8.2.16, 8.2.17, 8.2.18 and 8.2.21 after
                  giving effect to such Permitted Acquisition by delivering at
                  least twenty (20) Business Days prior to such Permitted
                  Acquisition a certificate in the form of Exhibit 8.2.6
                  evidencing such compliance;

                      (viii) the Consideration paid by the Borrowers for such
                  Acquisition shall not exceed $8,000,000 and after giving
                  effect to such acquisition, the Consideration paid by the Loan
                  Parties for all Permitted Acquisitions made during the current
                  fiscal year of the Loan Parties shall not exceed an amount
                  equal to (x) $16,000,000 less (y) any amount added to the
                  Outside Investment Amount in such fiscal year by the making of
                  investments of the type contemplated in the definition
                  thereof, unless Required Banks shall, in their sole
                  discretion, consent to the payment of more Consideration;

                      (ix) the Company shall demonstrate, on a pro forma basis
                  after giving effect to such acquisition, availability under
                  the Commitments of not less than $2,500,000;

                      (x) if the Consideration to be paid in any acquisition
                  exceeds $2,500,000, then the Company shall have delivered to
                  the Agent financial statements of the Person acquired within
                  sixty (60) days following such acquisition; and

                      (xi) if the Person acquired therein will not be a
                  Subsidiary after the acquisition, then the Consideration paid
                  in such acquisition shall be subject to the limitation set
                  forth in Section 8.2.20.

         (xi) Section 8.2.16 [Minimum Interest Coverage Ratio] is hereby amended
and restated to read in its entirety as follows:



                                       8
<PAGE>

                  8.2.16 Minimum Interest Coverage Ratio.

                  Through the period ending on last day of the third fiscal
                  quarter of 2003, the Loan Parties shall not permit the ratio
                  of EBIT to consolidated net interest expense of the Borrowers
                  calculated as of the end of each fiscal quarter for the four
                  fiscal quarters then ended, to be less than 2.5 to 1.0.



         (xii) Section 8.2.17 [Minimum Tangible Net Worth] is hereby amended and
restated to read in its entirety as follows:

                  8.2.17 Minimum Tangible Net Worth.
                  The Borrowers shall not at any time permit Consolidated
                  Tangible Net Worth to be less than $7,000,000 plus an amount
                  equal to 50% of consolidated net income of the Borrowers for
                  each fiscal quarter in which net income was earned (as opposed
                  to a net loss) during the quarterly reporting periods from
                  October 1, 1999 through the date of determination minus an
                  amount (not to exceed $1,000,000) equal to one-half (50%) of
                  the Dollar amount of stock repurchases made by the Parent of
                  its own common stock pursuant to the final exception in
                  Section 8.2.5 [Dividends and Distributions].

         (xiii) Section 8.2.18 [Maximum Leverage Ratio] of the Agreement is
hereby amended and restated to read in its entirety as follows:

                  8.2.18 Maximum Leverage Ratio.
                  The Borrowers shall not permit at any time the Borrowers'
                  Leverage Ratio to exceed 3.25 to 1.0 from March 27, 2003
                  through December 30, 2003 and 3.0 to 1.0 from and after
                  December 31, 2003.

         (xiv) Section 8.3.1 of the Agreement is hereby amended and restated to
read in its entirety as follows:

                  8.3.1 Accounts Receivable. Within forty-five (45) days after
                  the end of each fiscal quarter and otherwise as reasonably
                  requested by the Agent, an aged list of accounts receivable
                  and other related information reasonably requested by the
                  Agent, all as certified as true and correct by the Company's
                  chief financial officer or treasurer.

                                       9
<PAGE>

                  (b) Each Subsidiary of the Parent party hereto ratifies and
confirms its agreement hereto and to the authority of the Borrower Agent to act
on its behalf.
                  (c) Notwithstanding anything to the contrary in any of the
Notes, the liability of Berges Electronic GmbH, Berges Electronic, S.r.l. and TB
Wood's Foreign Sales Corporation under the Notes shall be limited to the
principal amount advanced respectively to such Persons under the Agreement and
interest and costs of collection thereon.

         2. Amendment Fee.

                  On the date hereof, the Borrowers shall pay to the Agent on
behalf of the Banks according to their relative Commitments a non-refundable
amendment fee of $46,000 in the aggregate in consideration of the Agent and the
Banks entering into this Amendment. Such fee is not payment for the use of money
but is to compensate the Banks for the consideration and approval of this
Amendment.

         3. Revised Commitments.

                  Contemporaneously herewith, the Commitment of Fleet Bank has
been reduced to zero ($0) and Wachovia Bank has increased its Commitment to
$10,000,000 and the Agent and each Bank specifically consents thereto. The
relative Commitments of the Banks are as set forth on the attached Schedule
1.1(B) (Amended 2003). From and after the date hereof, Fleet Bank shall have no
further obligation to make loans under the Agreement.

         4. Conditions to Closing.

                  This Amendment is effective upon the satisfaction of the
following conditions:

                                       10
<PAGE>

            (a) The Company, Plant Engineering and TB Wood's Enterprises, Inc.
shall each have delivered a fully executed Security Agreement, including duly
completed and attached schedules and exhibits, and shall have caused to be
prepared and filed such UCC-1 financing statements and other items as the Agent
deems advisable to perfect or evidence the Lien of the Agent (on behalf of the
Banks) on the collateral described therein.

            (b) The Borrowers shall have delivered true and complete copies of
amended and restated Schedule 6.1.1, Schedule 6.1.2 and Schedule 6.1.3
describing all foreign and domestic subsidiaries of the Borrowers, their
jurisdictions of formation and the Borrowers' ownership (direct and indirect)
thereof. Such amended and restated Schedule 6.1.1, Schedule 6.1.2 and Schedule
6.1.3 are attached to this Amendment.

            (c) Contemporaneously herewith, the Borrowers have executed and
delivered to Wachovia Bank an amended and restated Note reflecting such Bank's
increased Commitment.

         5. Miscellaneous.

            (a) All of the terms, conditions, provisions and covenants in the
Notes, the Agreement, the Loan Documents, and all other documents delivered to
the Banks and the Agent in connection with any of the foregoing documents and
obligations secured thereby shall remain unaltered and in full force and effect
except as modified by this Amendment.

            (b) The Borrowers hereby represent and warrant to the Banks and the
Agent as of the date of this Amendment that, after giving effect to this
Amendment:

                (i) there exists no Event of Default or Potential Default under
any of the Loan Documents and that after giving effect to this Amendment, the
representations and warranties in Section 6 of the Agreement are true and
correct in all respects on and as of the date hereof; and

                                       11
<PAGE>

                (ii) the execution and delivery of the Security Agreement by the
Loan Parties party thereto have been authorized by all necessary corporate
action and the Security Agreement is the legal, valid and binding obligation of
such parties.

            (c) The Borrowers agree to pay all of the Agent's expenses incurred
in connection with the preparation of this Amendment and the transactions
contemplated by this Amendment, including without limitation, the reasonable
fees and expenses of the Agent's counsel.

            (d) This Amendment shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.

            (e) Each and every one of the terms and provisions of this Amendment
shall be binding upon and shall inure to the benefit of the Borrowers, the Banks
and the Agent and their respective successors and assigns.

            (f) This Amendment may be executed in one or more counterparts, each
of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall constitute but one and the same
instrument. This Amendment supersedes all prior understandings and agreements,
whether written or oral, between the parties hereto and thereto relating to the
transactions provided for herein or therein, including any prior proposal or
commitment letters.

            (g) The execution and delivery of this waiver shall not be construed
to establish a course of conduct or imply that any other, future or further
waivers, consents or forbearance shall be considered, provided or agreed to.

            (h) There are no Subsidiaries of the Parent who are not listed on
Schedule 6.1.3 (as amended through the date hereof) and all Domestic
Subsidiaries are Loan Parties.

                                       12
<PAGE>

         6. Effective Time.

            This Amendment, the Security Agreement and the Amended and Restated
Note payable to the Order of Wachovia Bank, each dated March 31, 2003, are
executed and delivered on such date with an effective time of March 28, 2003;
the termination or increase of the Commitments described herein, the accrual of
interest, the transfer or payments of monies and obligations and the other
transactions contemplated herein shall occur, on the later to occur of (i) March
31, 2003 and (ii) the date of the delivery of an opinion of counsel relating to
the Company, Plant Engineering (with certain limitations as to scope) and TB
Wood's Enterprises, Inc. and certified resolutions approving the execution and
delivery of the documents contemplated in this Amendment and copies of the
charter and by-laws for the Company, Plant Engineering and TB Wood's
Enterprises, Inc. acceptable in form and substance to the Agent.

         7. Post-Closing Obligations.

            The Borrowers agree: (i) to deliver to the Agent and each of the
Banks on or before May 1, 2003 copies of its insurance policies and endorsement
showing the Agent (on behalf of the Banks) as lender loss payee and (ii) to use
their reasonable best efforts to obtain on or before May 1, 2003 a landlord
waiver for the benefit of the Agent (on behalf of the Bank) reasonably
acceptable to the Agent in respect of the location in Reno, Nevada, all in form
and substance satisfactory to the Agent. Failure timely to comply with items (i)
and (ii) above shall constitute an Event of Default.

                   Remainder of Page Intentionally Left Blank



                                       13
<PAGE>


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.


                                  TB WOOD'S INCORPORATED, individually
                                  and as Borrower Agent

                                  By:___________________________________
                                  Title:________________________________


                                  PLANT ENGINEERING CONSULTANTS, INC.

                                  By:___________________________________
                                  Title:________________________________

                                  INDUSTRIAL BLAJU S.A., de C.V. MEXICO
                                  CITY, MEXICO

                                  By:___________________________________
                                  Title:________________________________

                                  TB WOOD'S CANADA, LTD.

                                  By:___________________________________
                                  Title:________________________________

                                  BERGES ELECTRONIC GMBH


                                  By:___________________________________
                                  Title:________________________________



                SIGNATURES TO EIGHTH AMENDMENT TO LOAN DOCUMENTS
                             CONTINUED ON NEXT PAGE



                                       14
<PAGE>


                SIGNATURES TO EIGHTH AMENDMENT TO LOAN DOCUMENTS
                            CONTINUED FROM PRIOR PAGE


                                  BERGES ELECTRONIC, S.r.l.


                                  By:___________________________________
                                  Title:________________________________

                                  TB WOOD'S NORTH CAROLINA, INC.,
                                  a Delaware corporation;


                                  By:___________________________________
                                  Title:________________________________

                                  TB WOOD'S FOREIGN SALES CORPORATION,
                                  a Barbados corporation;


                                  By:___________________________________
                                  Title:________________________________

                                  TB WOOD'S FOREIGN INVESTMENT COMPANY,
                                  a Delaware corporation.


                                  By:___________________________________
                                  Title:________________________________

                                  TB WOOD'S ENTERPRISES, INC.,
                                  a Delaware corporation;


                                  By:___________________________________
                                  Title:________________________________

                SIGNATURES TO EIGHTH AMENDMENT TO LOAN DOCUMENTS
                             CONTINUED ON NEXT PAGE


                                       15
<PAGE>


                SIGNATURES TO EIGHTH AMENDMENT TO LOAN DOCUMENTS
                            CONTINUED FROM PRIOR PAGE


                                  PNC BANK, NATIONAL ASSOCIATION,
                                  individually and as Agent


                                  ___________________________________________
                                  Thomas C. Dilworth
                                  Vice President


                                  NATIONAL CITY BANK OF PENNSYLVANIA


                                  ___________________________________________
                                  W. Christopher Kohler
                                  Vice President


                                  WACHOVIA BANK, successor to First Union
                                  National Bank


                                  ___________________________________________
                                  Fred D. Siglin
                                  Vice President


ACCEPTED AND AGREED:

TB WOOD'S CORPORATION



By:___________________________
Title:________________________


                                       16
<PAGE>


                         SCHEDULE 1.1(B) (Amended 2003)
                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                   Page 1 of 2

Part 1--Commitments of Banks and Addresses for Notices to Banks

Bank                                           Commitment         Ratable Share
----                                           ----------         -------------

PNC Bank, N.A.                                 $20,000,000           43.5%
4242 Carlisle Pike
Camp Hill, PA  17011
Attention:  Thomas C. Dilworth
Telephone:  (717) 730-2368
fax: (717) 730-2387

National City Bank of                          $16,000,000           34.8%
  Pennsylvania
National City Center
20 Stanwix Street
Pittsburgh, PA  15222
Attention: W. Christopher Kohler
Telephone: (412) 644-8879
fax: (412) 644-6224

Wachovia Bank                                  $10,000,000           21.7%
12 East Market St.
York, PA  17401
Attention: Fred D. Siglin
Telephone  (717) 852-5308
fax: (717) 852-5213

         Total                                 $46,000,000            100%



                                       17
<PAGE>

                                 SCHEDULE 1.1(B)
                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                   Page 2 of 2

Part 2--Addresses for Notices to Agent, Borrowers and Guarantor(s):

AGENT

PNC Capital Markets, Inc.
1600 Market Street, 21st Floor
Philadelphia, PA  19103
Attention: Jeff Doherty
Telephone: (215) 585-4315
Telecopy: (215) 585-7669



BORROWERS:

TB Wood's Incorporated
440 North Fifth Avenue
Chambersburg, PA  17201-1778
Attention Thomas F. Tatarczuch
Vice President - Finance
Telephone:  (717) 264-7161  x4464
fax:  (717) 264-7732

GUARANTOR:

TB Wood's Corporation
440 North Fifth Avenue
Chambersburg, PA  17201-1778
Attention Thomas F. Tatarczuch
Vice President - Finance
Telephone:  (717) 264-7161  x4464
fax:  (717) 264-7732



                                       18
<PAGE>

                                 SCHEDULE 6.1.1
                          QUALIFICATIONS TO DO BUSINESS
                             (Amended and Restated)


TB Wood's Incorporated
----------------------
Pennsylvania
Texas
Tennessee
Connecticut
Georgia
Michigan
Florida



Plant Engineering Consultants
-----------------------------
Tennessee


TB Wood's Canada
----------------
N/A

TB Wood's (Mexico) S.A. de C.V. (Mexico)
----------------------------------------
N/A

TB Wood's Foreign Investment Company
N/A

TB Wood's Enterprises
N/A

TB Wood's Foreign Sales Corporation
-----------------------------------
N/A

TB Wood's North Carolina
N/A


                                       19
<PAGE>
                                 SCHEDULE 6.1.2
                             (Amended and Restated)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Company                            Shares Authorized                    Shares Outstanding         Owner
--------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                  <C>                        <C>
TB Wood's Incorporated             2,500,000 shares common stock per    100                        TB Wood's Corporation
                                   value $.10
--------------------------------------------------------------------------------------------------------------------------
TB Wood's Canada Ltd               40,000 shares common stock no par    5,255                      TB Wood's Incorporated
                                   value
--------------------------------------------------------------------------------------------------------------------------
Plant Engineering Consultants,     10,000,000 shares common stock par   168,298                    TB Wood's Incorporated
Inc                                value $.01
--------------------------------------------------------------------------------------------------------------------------
Industrial Blaju, S.A. de C.V.     7,425,010 shares common stock        7,425,009                  TB Wood's Incorporated
(Mexico)                                                                1                          T. Tatarczuch
--------------------------------------------------------------------------------------------------------------------------
TB Wood's Foreign Sales            Inactive                             Inactive                   TB Wood's Incorporated
Corporation(Barbados)
--------------------------------------------------------------------------------------------------------------------------
TB Wood's Enterprises, Inc.        3,000 shares common stock            3,000                      TB Wood's Incorporated
(Delaware)
--------------------------------------------------------------------------------------------------------------------------
TB Wood's Foreign Investment       1,000 shares common stock            1,000                      TB Wood's Incorporated
Company (Delaware)
--------------------------------------------------------------------------------------------------------------------------
TB Wood's North                    Inactive                             Inactive                   TB Wood's Incorporated
Carolina, Inc. (Delaware)
--------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       20
<PAGE>

                                 SCHEDULE 6.1.3
                             (Amended and Restated)

                                 March **, 2003

Non-Borrower Subsidiaries
-------------------------

The following is a wholly owned subsidiary of TB Wood's Foreign Investment
Company.

         TB Wood's  (Deutschland) GmbH (Germany)




The following are non-borrower Joint Ventures:


         TB Wood's (India) Private LTD (India)
            TB Wood's Incorporated                   92.05%
            Entertec Chicago, Inc.                    7.95%




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