Document:

10% Senior Note due 2007

No. 1                                                          $11,000,000

CUSIP No. 49460X  AB  3

                           KINETEK INDUSTRIES, INC.

promises to pay to CEDE & CO.

or registered assigns,

the principal sum of Eleven Million ($11,000,000)

Dollars on May 1, 2007.

Interest Payment Dates:  May 1 and November 1.

Record Dates:  April 15 and October 15.

                               Dated:  April 12, 2002

                               KINETEK INDUSTRIES, INC.

                                       By: /s/ Ron A. Sansom
                                           ------------------------------
                                           Name:  Ron A. Sansom
                                           Title: Chief Executive Officer

Trustee's Certificate of Authentication
Dated:  April 12, 2002

This is one of the Global
Senior Notes referred to in the
within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION,
 as Trustee

By: /s/ Richard H. Prokosch
   --------------------------------
       Authorized Signatory

<PAGE>

           Unless and until it is exchanged in whole or in part for Senior
Notes in definitive form, this Senior Note may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. The Depository Trust Company shall act as the Depository
until a successor shall be appointed by the Company and the Registrar. Unless
this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) ("DTC"), to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as may be requested by an authorized representative of DTC (and any payment is
made to Cede_& Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY Person IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

     THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
     IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
     STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
     EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
     ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
     PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
     SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
     OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
     SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
     SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
     (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY
     BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
     UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
     RULE 144A, (b)_IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
     UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
     PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
     SECURITIES ACT OR (d)_IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
     OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2)_TO THE COMPANY OR
     (3)_PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
     ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
     STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
     EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
     THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
     (A)_ABOVE.

                                      2
<PAGE>

     THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS
     1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. YOU
     MAY CONTACT DANIEL DRURY, THE CHIEF FINANCIAL OFFICER OF THE ISSUER, AT
     OUR EXECUTIVE OFFICES AT ARBORLAKE CENTRE, SUITE 550, 1751 LAKE COOK
     ROAD, DEERFIELD, ILLINOIS 60015, (847) 945-5591, WHO WILL PROVIDE YOU
     WITH ANY REQUIRED INFORMATION REGARDING THE ORIGINAL ISSUE DISCOUNT.

Additional provisions of this Senior Note are set forth on the other side of
this Senior Note.

                                      3
<PAGE>

                                (Back of Note)

                           10% SENIOR NOTE DUE 2007

     1. Interest. Kinetek Industries, Inc. (the "Company") promises to pay
interest on the principal amount of the Senior Notes at the rate and in the
manner specified below. Interest on the Senior Notes will accrue at 10% per
annum from April 12, 2002 until maturity. Interest will be payable
semiannually in cash in arrears on May 1 and November 1 of each year, or if
any such day is not a Business Day on the next succeeding Business Day (each,
an "Interest Payment Date"). Interest on the Senior Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from April 12, 2002; provided that the first Interest Payment Date shall
be May 1, 2002. The Company shall pay interest on overdue principal and
premium, if any, from time to time on demand at the rate of 2% per annum in
excess of the interest rate then in effect and shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered holders of
Senior Notes at the close of business on the record date for the next Interest
Payment Date even if such Senior Notes are canceled after such record date and
on or before such Interest Payment Date. Holders must surrender Senior Notes
to a Paying Agent to collect principal payments on such Senior Notes. The
Company will pay principal, premium, if any, interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company will pay principal, premium, if any, and interest
by wire transfer of immediately available funds to the accounts specified by
the Holders or, if no such account is specified, by mailing a check to each
such Holder's registered address; provided that payment by wire transfer of
immediately available funds will be required with respect to principal,
premium, if any, and interest on all Global Notes.

     3. Paying Agent and Registrar. U.S. Bank National Association (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.

     4. Indenture. The Company issued the Senior Notes under an Indenture,
dated as of April 12, 2002 (the "Indenture"), among the Company, the
Guarantors named therein and the Trustee. The terms of the Senior Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections.
77aaa-77bbbb) as in effect on the date of the original issuance of the Senior
Notes (the "Trust Indenture Act"). The Senior Notes are subject to, and
qualified by, all such terms, certain of which are summarized herein, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of such terms (all capitalized terms not defined herein shall have

                                      4
<PAGE>

the meanings assigned them in the Indenture). The Senior Notes are unsecured
senior obligations of the Company limited in aggregate principal amount to
$11,000,000. Each Holder, by accepting a Senior Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.

     5. Optional Redemption. Senior Notes are redeemable, in whole or in part,
at any time, at the option of the Company at the Make-Whole Price (as defined
in the Indenture), together with all accrued and unpaid interest thereon, if
any, to the Redemption Date.

     6. Mandatory Redemption. Subject to the Company's obligation to make an
offer to purchase Senior Notes under certain circumstances pursuant to
Sections 4.13 and 4.14 of the Indenture (as described in paragraph 7 below),
the Company is not required to make any mandatory redemption, purchase or
sinking fund payments with respect to the Senior Notes.

     7. Mandatory Offers to Purchase Senior Notes. (a) Upon the occurrence of
a Change of Control (such date being the "Change of Control Trigger Date"),
each Holder of Senior Notes shall have the right to require the Company to
purchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Senior Notes pursuant to an offer (a "Change of Control Offer")
at a purchase price in cash equal to 101% of the aggregate principal amount
thereof, plus any accrued and unpaid interest to the date of purchase.

        (b)   If the Company or any Restricted Subsidiary consummates one
or more Asset Sales and does not use all of the Net Proceeds from such Asset
Sales as provided in the Indenture, the Company will be required, under
certain circumstances, to utilize the Excess Proceeds from such Asset Sales to
offer (an "Asset Sale Offer") to purchase Senior Notes at a purchase price
equal to 100% of the principal amount of the Senior Notes, plus any accrued
and unpaid interest to the date of purchase. If the Excess Proceeds are
insufficient to purchase all Senior Notes tendered pursuant to any Asset Sale
Offer, the Trustee shall select the Senior Notes to be purchased in accordance
with the terms of the Indenture.

        (c)   Holders may tender all or, subject to paragraph 8 below, any
portion of their Senior Notes in a Change of Control Offer or Asset Sale Offer
(collectively, an "Offer") by completing the form below entitled "OPTION OF
HOLDER TO ELECT PURCHASE."

        (d)   The Company shall comply with any tender offer rules under
the Exchange Act which may then be applicable, including Rule 14e-1, in
connection with an offer required to be made by the Company to repurchase the
Senior Notes as a result of a Change of Control or an Asset Sale Trigger Date.
To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Indenture by virtue thereof.

                                      5
<PAGE>

     8. Notice of Redemption or Purchase. Notice of an optional redemption or
an Offer will be mailed to each Holder at its registered address at least 30
days but not more than 60 days before the date of redemption or purchase.
Senior Notes may be redeemed or purchased in part, but only in whole multiples
of $1,000 unless all Senior Notes held by a Holder are to be redeemed or
purchased. On or after any date on which Senior Notes are redeemed or
purchased, interest ceases to accrue on the Senior Notes or portions thereof
called for redemption or accepted for purchase on such date.

     9. Denominations, Transfer, Exchange. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples
thereof. The transfer of Senior Notes may be registered and Senior Notes may
be exchanged as provided in the Indenture. Holders seeking to transfer or
exchange their Senior Notes may be required, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not exchange
or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption or tendered pursuant to an Offer. Also, it need not
exchange or register the transfer of any Senior Notes for a period of 15
Business Days before a selection of Senior Notes to be redeemed or between a
record date and the next succeeding Interest Payment Date.

     10. Persons Deemed Owners. The registered Holder of a Senior Note may be
treated as its owner for all purposes.

     11. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Senior Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing Default (except a payment Default) may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Senior Notes. Without the consent of any Holder, the
Indenture or the Senior Notes may be amended to: cure any ambiguity, defect or
inconsistency; provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes; provide for the assumption by another
corporation of the Company's obligations to Holders in the event of a merger
or consolidation of the Company in which the Company is not the surviving
corporation or a sale of substantially all of the Company's assets to such
other corporation; comply with the Securities and Exchange Commission's
requirements to effect or maintain the qualification of the Indenture under
the Trust Indenture Act; provide for additional Guarantees with respect to the
Senior Notes; or, make any change that does not materially adversely affect
any Holder's rights under the Indenture.

     12. Defaults and Remedies. Events of Default include: default for 30 days
in payment of interest on, the Senior Notes; default in payment of principal
of, or premium, if any, on the Senior Notes; failure by the Company for 30
days (or 10 days as applicable) after notice to it to comply with any of its
other agreements or covenants in, or provisions of, the Indenture or the
Senior Notes or the Security Documents; certain defaults under and
acceleration prior to maturity of, or failure to pay at maturity, certain
other Indebtedness; certain final judgments that remain undischarged; any
Security Document ceases to be effective or the Lien created thereby ceases to
be enforceable; certain judicial findings of unenforceability or invalidity as
to any guarantee of the Senior Notes or the disaffirmance or denial by any
guarantor of its guarantee of the Senior Notes; and certain events of
bankruptcy or insolvency involving the Company or any Restricted Subsidiary
that is a Significant Subsidiary. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Senior Notes may declare all the Senior Notes to be immediately due and
payable in an amount equal to the principal of, premium, if any, and any
accrued and unpaid interest on, such Senior Notes; provided, however, that in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, the principal of, premium, if any, and any accrued and unpaid
interest on, the Senior Notes becomes due and payable immediately without
further action or notice. Subject to certain exceptions, Holders of a majority
in principal amount of the then outstanding Senior Notes may direct the
Trustee in its exercise of any trust or power, provided that the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request of Holders unless such Holders have offered to the

                                      6
<PAGE>

Trustee security and indemnity satisfactory to it. Holders may not enforce the
Indenture or the Senior Notes except as provided in the Indenture. The Trustee
may withhold from Holders notice of any continuing default (except a payment
Default) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.

     13. Trustee Dealings with the Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any Affiliate, and may otherwise deal with the
Company or any Affiliate, as if it were not Trustee.

     14. No Recourse Against Others. No officer, employee, director,
stockholder or Subsidiary of the Company shall have any liability for any
Obligations of the Company under the Senior Notes or the Indenture, or for any
claim based on, in respect of, or by reason of, such Obligations or the
creation of any such Obligation, except, in the case of a Subsidiary, for an
express guarantee or an express creation of any Lien by such Subsidiary of the
Company's Obligations under the Senior Notes. Each Holder by accepting a
Senior Note waives and releases all such liability, and such waiver and
release is part of the consideration for the issuance of the Senior Notes. The
foregoing waiver may not be effective to waive liabilities under the Federal
securities law and the Commission is of the view that such a waiver is against
public policy.

     15. Additional Rights of Holders of Transfer Restricted Senior Notes. In
addition to the rights provided to Holders of Senior Notes under the
Indenture, Holders of Transfer Restricted Senior Notes shall have all the
rights set forth in the Registration Rights Agreement, dated as of April 12,
2002, among the Company, the Guarantors and Jefferies & Company, Inc. (the
"Registration Rights Agreement").

     16. Successor Substituted. Upon the consolidation or merger by the
Company with or into another corporation, or upon the sale, lease, conveyance
or other disposition of all or substantially all of its assets to another
corporation, in accordance with the Indenture, the corporation surviving any
such merger or consolidation (if not the Company) or the corporation to which
such assets were sold or transferred to shall succeed to, and be substituted
for, and may exercise every right and power of the Company under the Indenture
with the same effect as if such surviving or other corporation had been named
as the Company in the Indenture.

     17. Governing Law. This Senior Note shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to
the conflict of laws provisions thereof.

     18. Authentication. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

                                      7
<PAGE>

     19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN

     (= joint tenants with right of survivorship and not as tenants in
common), CUST (=Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     20. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Senior Note Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and have directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either
as printed on the Senior Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers printed on the
Senior Notes.

        The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has in it the text of this
Senior Note in larger type. Request may be made to:

                           Kinetek Industries, Inc.
                          ArborLake Centre, Suite 550
                              1751 Lake Cook Road
                           Deerfield, Illinois 60015
                      Attention: Chief Financial Officer

                                      8
<PAGE>

                                   GUARANTEE

     For good and valuable consideration received from the Company by the
undersigned (hereinafter referred to as the "Guarantors," which term includes
any successor or additional Subsidiary Guarantors), the receipt and
sufficiency of which is hereby acknowledged, subject to Sections 10.06 and
10.08 of the Indenture, each Guarantor, jointly and severally, hereby
unconditionally guarantees, irrespective of the validity or enforceability of
the Indenture, the Senior Notes, the Security Documents, the Registration
Rights Agreement or the Obligations thereunder, (a) the due and punctual
payment of the principal and premium, if any, of and interest on the Senior
Notes, whether at maturity or on an interest payment date, by acceleration or
otherwise, (b) the due and punctual payment and performance of all other
obligations under such documents, all in accordance with the terms set forth
in the Indenture, the Senior Notes and the Security Documents, and (c) in case
of any extension of time of payment or renewal of any Senior Notes or any of
such other obligations thereunder or under the Indenture or the Security
Documents, the due and punctual payment or performance thereof in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.

     No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Guarantor, as such, shall have any
liability under this Subsidiary Guarantee or Parent Guarantee for any
obligations of the applicable Guarantor under the Senior Notes, the Indenture,
the Security Documents or the Registration Rights Agreement or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of the Senior Notes by accepting a Senior Note waives and releases
all such liability.

                                      9
<PAGE>

                                 GUARANTORS:

                                 KINETEK, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 MERKLE-KORFF INDUSTRIES, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 THE IMPERIAL ELECTRIC COMPANY

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 GEAR RESEARCH, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 MOTION HOLDINGS, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 MOTION CONTROL ENGINEERING, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                      10
<PAGE>

                                 FIR GROUP HOLDINGS, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 ELECTRICAL DESIGN AND CONTROL COMPANY

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 ADVANCED D.C. HOLDINGS, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                 ADVANCED D.C. MOTORS, INC.

                                 By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                                 Name:   Gordon L. Nelson, Jr.
                                 Title:  Vice President

                                      11
<PAGE>

                                ASSIGNMENT FORM

        To assign this Senior Note, fill in the form below:

(I) or (we) assign and transfer this Senior Note to:

                 -------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

                 -------------------------------------------------------

                 -------------------------------------------------------

                 -------------------------------------------------------
                 (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________ as agent to
transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.

Date:                Your Signature:_________________________________________
                                    (Sign exactly as your name appears on
                                     the other side of this Senior Note)

Signature Guarantee:

                                      12
<PAGE>

                      OPTION OF HOLDER TO ELECT PURCHASE

        If you elect to have this Senior Note purchased by the Company
pursuant to Section 4.13 of the Indenture, check the box:

        If you elect to have this Senior Note purchased by the Company
pursuant to Section 4.14 of the Indenture, check the box:

        If you elect to have only part of this Senior Note purchased by the
Company pursuant to Section 4.13 or 4.14 of the Indenture, state the amount
(multiples of $1,000 only):

$--------------------------

Date:                   Your Signature:______________________________________
                                         (Sign exactly as your name appears on
                                          the other side of this Senior Note)

Signature Guarantee:

                                      13
<PAGE>

                  SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES /1

        The following exchanges of a part of this Global Note for Definitive
Notes have been made:

<TABLE>
<CAPTION>

<S>          <C>                      <C>                       <C>                        <C>

                                                                Principal Amount
                 Amount of            Amount of increase             of this
                 decrease in                 in                   Global Note              Signature of
               Principal Amount         Principal Amount         following such          authorized officer
Date of             of                       of                    decrease                    of
Exchange       this Global Note         this Global Note          (or increase)             Trustee
--------      ------------------       ------------------        ---------------            -------

</TABLE>

----------------------
1       This should be included only if the Senior Note is issued in
        global form.

                                      14REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of April 12, 2002 (this
"Agreement"), is by and among Kinetek Industries, Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), Kinetek,
Inc., a Delaware corporation and parent of the Company (the "Parent"), all of
the Company's current and certain of the Company's future domestic
subsidiaries as listed on the signature pages hereto (the "Subsidiary
Guarantors" and, collectively with the Parent, the "Guarantors"), and
Jefferies & Company, Inc., as initial purchaser of the Notes (the "Initial
Purchaser").

     WHEREAS, pursuant to that certain Purchase Agreement, dated as of the
date hereof (the "Purchase Agreement"), by and among the Company, the Initial
Purchaser and other parties named therein, the Initial Purchaser has agreed to
purchase $15,000,000 aggregate principal amount of 5% Senior Secured Notes due
2007 and $11,000,000 aggregate principal amount of 10% Senior Secured Notes
due 2007 (collectively, the "Notes"), which Notes will be unconditionally
guaranteed on a senior subordinated basis by the Guarantors (the
"Guarantees");

     WHEREAS, in connection with the Purchase Agreement, the Company and the
Guarantors have agreed to register the Notes and the Guarantees for resale by
the purchasers of the Notes from the Initial Purchaser upon their request;

     NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, subject to the
terms and conditions set forth herein, the parties hereby agree as follows:

     Section 1. Certain Definitions. In this Agreement, the following terms
shall have the following respective meanings:

           "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.

           "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the relevant time.

           "Holders" shall mean (i) the purchasers of Notes directly from the
Initial Purchaser, and (ii) each Person holding Notes as a result of a
transfer or assignment to that Person of Notes other than pursuant to an
effective registration statement or Rule 144A under the Securities Act.

           "Indemnified Party" shall have the meaning ascribed to it in
Section 6(c) of this Agreement.

           "Indemnifying Party" shall have the meaning ascribed to it in
Section 6(c) of this Agreement.

           "Initiating Holders" shall mean any Holder or Holders who in the
aggregate hold not less than 33% of the outstanding Notes.

<PAGE>

           "Notes" shall have the meaning ascribed to it in the recitals to
this Agreement.

           "Person" shall mean an individual, corporation, partnership,
limited liability company, estate, trust, association, private foundation,
joint stock company or other entity.

           "Piggyback Notice" shall have the meaning ascribed to it in Section
3 of this Agreement.

           "Piggyback Registration" shall have the meaning ascribed to it in
Section 3 of this Agreement.

           The terms "Register," "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act providing for the sale by the Holders of
Notes and the Guarantees in accordance with the method or methods of
distribution designated by the Holders, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.

           "Registration Expenses" shall mean any and all reasonable expenses
incident to the Company and the Guarantors' performance of or compliance with
this Agreement, including, without limitation, all registration, listing and
qualification fees, printing and accounting fees, and the reasonable fees and
disbursements of one counsel (reasonably acceptable to the Company) to the
Holders in connection with state or federal securities law compliance and
qualification. Registration Expenses shall not include any underwriting
discounts and commission and transfer taxes, if any, relating to the sale or
disposition of the Notes and Guarantees by a Holder.

           "Registration Request" shall have the meaning ascribed to it in
Section 2(a) of this Agreement.

           "Rule 144" shall mean Rule 144 promulgated by the Commission under
the Securities Act.

           "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the relevant time.

           "Suspension Right" shall have the meaning ascribed to it in Section
2(a) of this Agreement.

     Section 2. Demand Registration.

           (a) Upon receipt of a written request (a "Registration Request")
from Initiating Holders at any time prior to the date on which, in the
reasonable opinion of counsel to the Company, all of the Notes may be sold in
accordance with Rule 144(k), the Company and the Guarantors shall (i) promptly

                                      2
<PAGE>

give notice of the Registration Request to all non-requesting Holders and (ii)
prepare and file with the Commission promptly, but in any event within 60 days
after its receipt of such Registration Request, a registration statement for
the purpose of effecting a Registration of the sale of all Notes and
Guarantees requested to be Registered by the requesting Holders and any
non-requesting Holder who requests to have his Notes and Guarantees included
in such registration statement within ten days after receipt of notice by such
Holder of the Registration Request. The Company and the Guarantors shall use
commercially reasonable efforts to effect such Registration as soon as
practicable (including, without limitation, the execution of an undertaking to
file post-effective amendments and appropriate qualification under applicable
state securities laws); and shall keep such Registration continuously
effective until the earlier of (i) the date on which all Notes have been sold
pursuant to such registration statement or Rule 144 and (ii) the date on
which, in the reasonable opinion of counsel to the Company, all of the Notes
may be sold in accordance with Rule 144(k); provided, however, that the
Company and the Guarantors shall not be obligated to take any action to effect
any such Registration, qualification or compliance pursuant to this Section 2
(i) in any particular jurisdiction in which the Company or any Guarantor would
become subject to taxation or would be required to execute a general consent
to service of process in effecting such Registration, qualification or
compliance unless the Company or the Guarantor, as the case may be, is already
subject to taxation or service in such jurisdiction or (ii) during the period
starting with the date 60 days prior to the Company's good faith estimate of
the date of filing of, and ending on a date 180 days after the effective date
of, a Company-initiated registration.

     Notwithstanding the foregoing, the Company shall have the right (the
"Suspension Right") (i) to defer such filing or suspend sales under any filed
registration statement for up to 90 days during any period of 365 days or (ii)
defer the updating of any filed registration statement and suspend sales
thereunder at any time or from time to time, for a period of not more than 90
days during any period of 365 days, if the Company shall furnish to the
Holders a certificate signed by an executive officer or any director of the
Company stating that, in the good faith judgment of the Company, it would be
detrimental to the Company and its shareholders to file such registration
statement or amendment thereto at such time (or continue sales under a filed
registration statement) and therefore the Company has elected to defer the
filing of such registration statement (or suspend sales under a filed
registration statement).

           (b) The Company and the Guarantors shall not be required to effect
more than two Registrations pursuant to this Section 2.

     Section 3. Piggyback Registrations. As long as the Holders hold any Notes
that are not registered (unless in the reasonable opinion of counsel to the
Company, all of the Notes may be sold in accordance with Rule 144(k)), if the
Company or the Parent proposes to register any of the Notes and Guarantees or
any other notes under the Securities Act (other than pursuant to (i) a
registration on Form S-4 or any successor form, or (ii) an offering of
securities in connection with an employee benefit, share dividend, share
ownership or dividend reinvestment plan), the Company or the Parent, as
applicable, shall give prompt written notice to all Holders of its intention
to effect such a registration (each a "Piggyback Notice") and the Company or
the Parent, as applicable, shall include in such registration all Notes and
Guarantees with respect to which the Company or the Parent has received
written requests for inclusion therein within ten days after the date of
receipt of the Piggyback Notice (a "Piggyback Registration"). Nothing herein
shall affect the right of the Company, the Parent or the Guarantors to

                                      3
<PAGE>

withdraw any such registration in its sole discretion prior to its
effectiveness, and the Company and the Parent shall have the same Suspension
Rights set forth in Section 2 above with respect to any Piggyback Registration
effected pursuant to this Section 3.

     Section 4. Registration Procedures.

           (a) The Company shall promptly notify the Holders of the occurrence
of the following events:

               (i) when any registration statement relating to the Notes and
     Guarantees or post-effective amendment thereto filed with the Commission
     has become effective;

               (ii) the issuance by the Commission of any stop order
     suspending the effectiveness of any registration statement relating to
     the Notes and Guarantees;

               (iii) the suspension of an effective registration statement by
     the Company in accordance with the last paragraph of Section 2(a) or the
     last sentence of Section 3 hereof;

               (iv) the Company's or any Guarantor's receipt of any
     notification of the suspension of the qualification of any Notes or
     Guarantees covered by a registration statement for sale in any
     jurisdiction; and

               (v) the existence of any event, fact or circumstance that
     results in a registration statement or prospectus relating to the Notes
     and Guarantees or any document incorporated therein by reference
     containing an untrue statement of material fact or omitting to state a
     material fact required to be stated therein or necessary to make the
     statements therein not misleading during the distribution of securities.

     The Company agrees to use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any such registration
statement or any state qualification as promptly as possible. The Holders
agree that upon receipt of any notice from the Company or any Guarantor of the
occurrence of any event of the type described in Sections 4(a)(ii), (iii),
(iv) or (v) to immediately discontinue their disposition of Notes and
Guarantees pursuant to any registration statement relating to such securities
until the Holders receive written notice from the Company that such
disposition may be made.

           (b) The Company shall provide to the Holders, at no cost to the
Holders, a copy of the registration statement and any amendment thereto used
to effect the Registration of the Notes and the Guarantees, each prospectus
contained in such registration statement or post-effective amendment and any
amendment or supplement thereto and such other documents as the requesting
Holders may reasonably request in order to facilitate the disposition of the
Notes and the Guarantees covered by such registration statement. The Company
consents to the use of each such prospectus and any supplement thereto by the
Holders in connection with the offering and sale of the Notes and the
Guarantees covered by such registration statement or any amendment thereto.

                                      4
<PAGE>

           (c) The Company and the Guarantors shall use commercially
reasonable efforts to cause the Notes and the Guarantees covered by a
registration statement to be registered with or approved by such state
securities authorities as may be necessary to enable the Holders to consummate
the disposition of such Notes and Guarantees pursuant to the plan of
distribution set forth in the registration statement; provided, however, that
neither the Company nor any Guarantor shall be obligated to take any action to
effect any such Registration, qualification or compliance pursuant to this
Section 4 in any particular jurisdiction in which the Company or any Guarantor
would become subject to taxation or would be required to execute a general
consent to service of process in effecting such Registration, qualification or
compliance unless the Company or such Guarantor is already subject to taxation
or service in such jurisdiction.

           (d) Subject to the Company's Suspension Right, if any event, fact
or circumstance requiring an amendment to a registration statement relating to
the Notes and Guarantees or supplement to a prospectus relating to the Notes
and Guarantees shall exist, immediately upon becoming aware thereof the
Company shall notify the Holders and prepare and furnish to the Holders a
post-effective amendment to the registration statement or supplement to the
prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Notes and Guarantees, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.

           (e) The Company, the Guarantors and the Holders shall use
commercially reasonable efforts to comply with the Securities Act and the
Exchange Act in connection with the offer and sale of Notes and Guarantees
pursuant to a registration statement, and, as soon as reasonably practicable
following the end of any fiscal year during which a registration statement
effecting a Registration of the Notes and Guarantees shall have been
effective, to make available to the Holders an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act.

           (f) The Company shall cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates representing
Notes to be sold pursuant to a Registration and not bearing any Securities Act
legend; and enable certificates for such Notes to be issued and registered in
such names and amounts as the Holders may reasonably request at least two
business days prior to any sale of Notes.

     Section 5. Expenses of Registration. The Company shall pay all
Registration Expenses incurred in connection with the undertaking of any one
Registration pursuant to Section 2 hereof and any Registration undertaken
pursuant to Section 3 hereof. The Holders shall pay all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Notes and Guarantees pursuant to any
Registration.

     Section 6. Indemnification.

           (a) The Company and the Guarantors, jointly and severally, shall
indemnify each Holder, each Holder's officers and directors, and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages and liabilities (including

reasonable legal fees and expenses), arising out of or based on any untrue

                                      5
<PAGE>

statement (or alleged untrue statement) of a material fact contained in any
registration statement or prospectus relating to the Notes and the Guarantees,
or any amendment or supplement thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided, however,
that neither the Company nor any Guarantor shall be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises out
of or is based on any untrue statement or omission or alleged untrue statement
or omission, made in reliance upon and in conformity with information
furnished in writing to the Company or any Guarantor by such Holder for
inclusion therein.

           (b) Each Holder, if Notes and Guarantees held by such Holder are
included in the securities as to which such registration is being effected,
shall indemnify the Company and each Guarantor, each of their respective
directors and each of their respective officers who sign the registration
statement, each underwriter, if any, of the Company's securities covered by
such registration statement, and each person who controls the Company, any
Guarantor or such underwriter within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (including
reasonable legal fees and expenses) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
such registration statement or prospectus, or any amendment or supplement
thereto, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement or prospectus, in
reliance upon and in conformity with information furnished in writing to the
Company or any Guarantor by such Holder for inclusion therein.

           (c) Each party entitled to indemnification under this Section 6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
but the omission to so notify the Indemnifying Party shall not relieve it from
any liability which it may have to the Indemnified Party pursuant to the
provisions of this Section 6 except to the extent of the actual damages
suffered by such delay in notification. The Indemnifying Party shall assume
the defense of such action, including the employment of counsel to be chosen
by the Indemnifying Party to be reasonably satisfactory to the Indemnified
Party, and payment of expenses. The Indemnified Party shall have the right to
employ its own counsel in any such case, but the legal fees and expenses of
such counsel shall be at the expense of the Indemnified Party, unless the
employment of such counsel shall have been authorized in writing by the
Indemnifying Party in connection with the defense of such action, or the
Indemnifying Party shall not have employed counsel to take charge of the
defense of such action or the Indemnified Party shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to those available to the Indemnifying Party (in
which case the Indemnifying Party shall not have the right to direct the
defense of such action on behalf of the Indemnified Party), in any of which
events such fees and expenses shall be borne by the Indemnifying Party. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such

                                      6
<PAGE>

Indemnified Party of a release from all liability in respect to such claim or
litigation.

           (d) If the indemnification provided for in this Section 6 is
unavailable to a party that would have been an Indemnified Party under this
Section 6 in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that would have been an Indemnifying Party
hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such
expenses, claims, losses, damages and liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and such Indemnified Party on the other in connection with the statement
or omission which resulted in such expenses, claims, losses, damages and
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party or such Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, each Guarantor and each
Holder agree that it would not be just and equitable if contribution pursuant
to this Section were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 6(d).

           (e) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

           (f) In no event shall any Holder be liable for any expenses,
claims, losses, damages or liabilities pursuant to this Section 6 in excess of
the net proceeds to such Holder of any Notes sold by such Holder pursuant to
the registration statement in question.

     Section 7. Information to be Furnished by Holders. Each Holder shall
furnish to the Company and the Guarantors such information as the Company or
any Guarantor may reasonably request and as shall be required in connection
with the Registration and related proceedings referred to in Section 2 or
Section 3 hereof. If any Holder fails to provide the Company or such Guarantor
with such information within 10 days of receipt of the Company's or such
Guarantor's request, the Company's and the Guarantors' obligations under
Section 2 or Section 3 hereof, as applicable, with respect to such Holder or
the Notes and Guarantees owned by such Holder shall be suspended until such
Holder provides such information.

     Section 8. Rule 144 Sales

           (a) The Company shall use its commercially reasonable efforts to
file the reports required to be filed by the Company under the Exchange Act,
so as to enable any Holder to sell Notes pursuant to Rule 144 under the
Securities Act.

           (b) In connection with any sale, transfer or other disposition by
any Holder of any Notes pursuant to Rule 144 under the Securities Act, the
Company shall cooperate with such Holder to facilitate the timely preparation

                                      7
<PAGE>

and delivery of certificates representing Notes to be sold and not bearing any
Securities Act legend, and enable certificates for such Notes to be for such
number of shares and registered in such names as the selling Holder may
reasonably request at least two business days prior to any sale of Notes.

     Section 9. Assignment of Registration Rights. The rights of the Holders
hereunder, including the right to have the Company register Notes and
Guarantees pursuant to this Agreement, shall be automatically assignable by
each Holder to any transferee of all or any portion of the Notes if: (i) the
Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company after such
assignment, (ii) the Company is furnished with written notice of (a) the name
and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws, and (iv) the transferee or assignee
agrees in writing for the benefit of the Company and the Guarantors to be
bound by all of the provisions contained herein.

     Section 10. Miscellaneous.

           (a) Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of Illinois.

           (b) WAIVER OF JURY TRIAL. THE COMPANY, THE GUARANTORS AND THE
HOLDERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.

           (c) Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties hereto and their affiliates with respect
to the matters set forth herein.

           (d) Amendments and Waivers. No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be
charged with enforcement and no provision of this Agreement may be amended
other than by an instrument in writing signed by the Company, the Guarantors
and Holders of 66% of the aggregate principal amount of the Notes.

           (e) Notices. Each notice, demand, request, request for approval,
consent, approval, disapproval, designation or other communication (each of
the foregoing being referred to herein as a notice) required or desired to be
given or made under this Agreement shall be in writing (except as otherwise
provided in this Agreement), and shall be effective and deemed to have been
received (i) when delivered in person, (ii) when sent by fax with receipt
acknowledged, (iii) five days after having been mailed by certified or
registered United States mail, postage prepaid, return receipt requested, or
(iv) the next business day after having been sent by a nationally recognized
overnight mail or courier service, receipt requested. Notices shall be
addressed as follows: (a) if to a Holder, at the Holder's address or fax
number set forth below its signature hereon, or at such other address or fax
number as the Holder shall have furnished to the Company in writing, or (b) if
to any assignee or transferee of an Holder, at such address or fax number as

                                      8
<PAGE>

such assignee or transferee shall have furnished the Company in writing, (c)
if to the Company or the Guarantors, at the address set forth below. Any
notice or other communication required to be given hereunder to a Holder in
connection with a registration may instead be given to the designated
representative of such Holder.

            If to the Company or the Guarantors:

            Kinetek Industries, Inc.
            ArborLake Centre, Suite 550
            1751 Lake Cook Road
            Deerfield, IL  60015

            with a copy to:

            Mayer, Brown, Rowe & Maw
            190 S. LaSalle Street
            Chicago, IL 60603-3441
            Facsimile:   (312) 701-7711
            Attn: Philip J. Niehoff

           (f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

           (g) Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.

           (h) Headings. The headings herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to
limit or otherwise affect any of the provisions hereof.

           (i) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Except as provided herein, none of the Company, the Guarantors or any Holder
shall assign this Agreement or any rights or obligations hereunder.

           (j) Joint Participation in Drafting. Each party to this Agreement
has participated in the negotiation and drafting of this Agreement. As such,
the language used herein shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.

           (k) Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the

intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

                                      9
<PAGE>

           (l) Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

                                      10
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                              KINETEK INDUSTRIES, INC.

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              KINETEK, INC., as the Parent

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              MERKLE-KORFF INDUSTRIES, INC., as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              IMPERIAL ELECTRIC COMPANY, as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              GEAR RESEARCH, INC., as a Subsidiary Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                                      11
<PAGE>

                              MOTION HOLDINGS, INC., as a Subsidiary Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              MOTION CONTROL ENGINEERING, INC., as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              FIR GROUP HOLDINGS, INC., as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              ELECTRIC DESIGN AND CONTROL COMPANY, as a
                              Subsidiary Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              ADVANCED D.C. HOLDINGS, INC., as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                                      12
<PAGE>

                              ADVANCED D.C. MOTORS, INC., as a Subsidiary
                              Guarantor

                              By:  /s/ Gordon L. Nelson, Jr.
                                  -----------------------------------------
                              Name:   Gordon L. Nelson, Jr.
                              Title:  Vice President

                              JEFFERIES & COMPANY, INC.

                              By:  /s/ M. Brent Stevens
                                  -----------------------------------------
                              Name:   M. Brent Stevens
                              Title:  Executive Vice President

                              Address:  11100 Santa Monica Boulevard,
                              10th Floor, Los Angeles, California 90025
                              Fax:  (310) 575-5165

                                      13

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