Exhibit 10.24


 


PATENT SECURITY AGREEMENT


 


This
PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made
this 30th day of November,  2004, among the Grantors listed on the
signature pages hereof (collectively, jointly and severally,  “Grantors” and each individually “Grantor”),
and THE BANK OF NEW YORK TRUST COMPANY, N.A., in its capacity as Collateral
Agent for itself, the Holders and the Trustee (together with its successors and
assigns in such capacity, “Collateral Agent”).


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS,
pursuant to that certain Indenture dated as of November 30,  2004 (as amended. restated, amended and
restated, supplemented or otherwise modified from time to time, including all
exhibits and schedules thereto, the “Indenture”) among Altra Industrial
Motion Inc. (the “Company”), each of the Guarantors named therein (“Guarantors”),
The Bank of New York Trust Company, N.A., as Trustee (in such capacity, the “Trustee”)
[and Collateral Agent] Company has issued to the Holders its 9% Senior Secured Notes
Due 2011, and may issue from time to time additional notes in connection with
the provisions of the Indenture (as the same may be amended and restated,
supplemented or otherwise modified from time to time, collectively, the “Notes”);


 


WHEREAS,
it is a condition precedent to the purchase by the Holders of the Notes that
Grantors shall have executed and delivered to Collateral Agent, for the benefit
of the Holders, Trustee and Collateral Agent, that certain Security Agreement
dated as of November 30, 2004 (including all annexes, exhibits or
schedules thereto, as from time to time amended, restated, amended and
restated, supplemented or otherwise modified, the “Security Agreement”);
and


 


WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and
deliver to Collateral Agent, for the benefit of the Holders, Trustee and
Collateral Agent, this Patent Security Agreement.


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:


 


1.                                       DEFINED
TERMS. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Security Agreement and/or the Indenture.


 


2.                                       GRANT
OF SECURITY INTEREST IN PATENT COLLATERAL.  Each Grantor hereby grants to Collateral
Agent, for the benefit of the Holders, Trustee and Collateral Agent, a
continuing first priority security interest (subject to Permitted Liens) in all
of such Grantor’s right, title and interest in, to and under the following,
whether presently existing or hereafter created or acquired (collectively, the “Patent
Collateral”):


 


(a)                                  all
of its Patents and rights in and to Patent Intellectual Property Licenses to
which it is a party including those referred to on Schedule I
hereto;


 


(b)                                 all
reissues, continuations, continuations-in-part, substitutes, extensions or
renewals of, and improvements on, the foregoing; and


 


(c)                                  all
products and proceeds of the foregoing, including, without limitation, any
claim by such Grantor against third parties for past, present or future
infringement of any Patent.


 


3.                                       SECURITY
AGREEMENT.  The security interests
granted pursuant to this Patent Security Agreement are granted in conjunction
with the security interests granted to Collateral


 





















 


Agent, for the benefit of the Holders, Trustee and Collateral Agent, pursuant to the Security
Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of 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.


 


4.                                       AUTHORIZATION
TO SUPPLEMENT.  Grantors hereby
authorize Collateral Agent unilaterally to modify this Agreement by amending Schedule I
to include any patentable inventions or applications therefor which become part
of the Patent Collateral under the Security Agreement. Notwithstanding the
foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I
shall in any way affect, invalidate or detract from Collateral Agent’s
continuing security interest in all Collateral, whether or not listed on Schedule I.


 


5.                                       COUNTERPARTS.
 This Patent Security Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument. Any signatures delivered by a party by facsimile
transmission or by e-mail transmission shall be deemed an original signature
hereto.


 


[SIGNATURE PAGES FOLLOW]


 





















 


IN
WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be executed
and delivered by its duly authorized officer as of the date first set forth
above.


 


	
  GRANTORS:

  	
  WARNER ELECTRIC TECHNOLOGY

  LLC,

  
	
   

  	
  a Delaware limited liability company, as a

  Grantor,

  
	
   

  	
  BOSTON GEAR LLC,

  
	
   

  	
  a Delaware limited liability company, as a

  Grantor,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Hurt

  	
   

  
	
   

  	
  Name:

  	
  Michael L. Hurt

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  



 





















 


	
  COLLATERAL AGENT:

  	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A.,

  
	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sandeé Parks

  	
   

  
	
   

  	
  Name:

  	
  Sandeé Parks

  
	
   

  	
  Title:

  	
  Vice President