Document:

Exhibit 10.25

 

EXECUTION
COPY

 

TRADEMARK SECURITY AGREEMENT

 

This
TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is
made this 30th day of November, 2004, among Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors”
and each individually “Grantor”), and WELLS FARGO FOOTHILL, INC., in its
capacity as Agent for the Lender Group and the Bank Product Providers (together
with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS,
pursuant to that certain Credit Agreement dated 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 “Credit
Agreement”) among Altra Industrial Motion, Inc., a Delaware corporation (“Parent”),
each of Parent’s Subsidiaries identified on the signature pages thereof (Parent
and such Subsidiaries, “Borrowers”), the lenders party thereto as “Lenders”
(“Lenders”), and Agent, the Lender Group agreed to make certain
financial accommodations available to Borrowers from time to time pursuant to
the terms and conditions thereof;

 

WHEREAS,
the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of Lender Group and the Bank Product
Providers, 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 Agent, for the benefit of Lender Group and the Bank Product
Providers, this Trademark 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 Credit Agreement.

 

2.             GRANT
OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each Grantor hereby grants to Agent, for the
benefit of the Lender Group and the Bank Product Providers, 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 “Trademark Collateral”):

 

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

 

(b)           all
extensions, modifications and renewals of the foregoing;

 

(c)           all
goodwill of the business connected with the use of, and symbolized by, each
Trademark; and

 

(d)           all
products and proceeds of the foregoing, including, without limitation, any
claim by such Grantor against third parties for past, present or future (i)
infringement or dilution of any Trademark, or (ii) injury to the goodwill
associated with any Trademark.

 

 

3.             SECURITY
AGREEMENT.  The security interests
granted pursuant to this Trademark Security Agreement are granted in
conjunction with the security interests granted to Agent, for the benefit of
the Lender Group and the Bank Product Providers, pursuant to the Security
Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the security interest in the Trademark 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 Agent unilaterally
to modify this Agreement by amending Schedule I to include any trademarks,
registrations, or applications therefor (including, without limitation,
extensions or renewals) which become part of the Trademark Collateral under the
Security Agreement.  Notwithstanding the
foregoing, no failure to so modify this Trademark Security Agreement or amend Schedule
I shall in any way affect, invalidate or detract from Agent’s continuing
security interest in all Collateral, whether or not listed on Schedule I.

 

5.             COUNTERPARTS.  This Trademark 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]

 

2

 

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

 

	
  GRANTORS:

  	
  KILIAN MANUFACTURING

  CORPORATION,

  a Delaware corporation, as a Grantor,

  WARNER ELECTRIC TECHNOLOGY

  LLC,

  a Delaware limited liability company, as a

  Grantor,

  FORMSPRAG LLC,

  a Delaware limited liability company, as a

  Grantor,

  BOSTON GEAR LLC,

  a Delaware limited liability company, as a

  Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Michael
  L. Hurt

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERIDRIVES INTERNATIIONAL, L.P.,

  a Delaware limited partnership, as a Grantor,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  American
  Enterprises MPT Corp., its

  general partner  

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael
  L. Hurt

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
										

 

 

	
  AGENT:

  	
  WELLS FARGO FOOTHILL, INC.,

  
	
   

  	
  a
  California corporation, as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

[SIGNATURE PAGE OF
TRADEMARK SECURITY AGREEMENT]

 

 

 

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

 

Trademark
Registrations/Applications

 

	
  Grantor

  	
   

  	
  Country

  	
   

  	
  Mark

  	
   

  	
  Application/

  Registration No.

  	
   

  	
  App/Reg DateExhibit 10.26

 

EXECUTION
COPY

 

 

 

INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

 

 

among

 

 

WELLS FARGO FOOTHILL, INC.,

as Senior Agent,

 

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee and Collateral Agent,

 

ALTRA INDUSTRIAL MOTION, INC.,

and certain of its SUBSIDIARIES,

as Borrowers and Guarantors

 

Dated as of November 30,
2004

 

 

 

 

INTERCREDITOR AND LIEN
SUBORDINATION AGREEMENT

 

THIS INTERCREDITOR AND LIEN
SUBORDINATION AGREEMENT dated as of November 30, 2004 (this “Agreement”)
is made by and among WELLS FARGO FOOTHILL, INC., as senior agent (the “Original
Senior Agent”) under and pursuant to the Credit Agreement (as hereinafter
defined), THE BANK OF NEW YORK TRUST COMPANY, N.A. (“BNY”), in its
capacity as collateral agent under the Indenture Loan Documents (as hereinafter
defined) (in such capacity, the “Collateral Agent”), BNY as Trustee
under the Indenture Loan Documents (in such capacity, the “Trustee”), Altra
Industrial Motion, Inc., a Delaware corporation (“Parent” ), those
certain subsidiaries of Parent identified as Borrowers on the signature pages
hereto (collectively with Parent, the “Borrowers”) those certain
subsidiaries of Parent identified as Guarantors on the signature pages hereto (collectively
with Parent, the “Guarantors”).

 

RECITALS

 

A.            Borrowers,
Guarantors, Collateral Agent, and Trustee have entered into an Indenture, dated
as of November 30, 2004 (the “Indenture”), pursuant to which the
Borrowers incurred indebtedness for certain notes (such notes, together with
all other notes issued after the date hereof and exchange notes issued in
exchange therefore, the “Notes”) in an aggregate principal amount at
maturity of $165,000,000 under the Indenture which, together with the interest,
premiums, fees, costs and expenses (including, without limitation, attorneys
fees and disbursements and including interest accrued after the initiation of
any Insolvency Proceeding, whether or not allowed or allowable in any
Insolvency Proceeding) and the other Secured Obligations (as defined in the
Indenture Security Agreement (defined below)) are referred to herein as the “Indenture
Secured Obligations”.  The repayment
of the Indenture Secured Obligations is secured by security interests in and
liens on the assets and properties (the “Collateral”) described in the
Security Agreement dated as of the date hereof (the “Indenture Security
Agreement”) made by the Borrowers and the Guarantors in favor of the
Collateral Agent for the benefit of the Collateral Agent, the Trustee, and the
Noteholders, the Trademark Security Agreement, dated as of the date hereof,
made by the Borrowers and Guarantors in favor of the Collateral Agent for the
benefit of the Collateral Agent, the Trustee, and the Noteholders (the “Indenture
Trademark Security Agreements”), the Copyright Security Agreement, entered
into from time to time, made by the Borrowers and Guarantors in favor of the
Collateral Agent for the benefit of the Collateral Agent, the Trustee, and the
Noteholders (the “Indenture Copyright Security Agreements”), the Patent
Security Agreement, dated as of the date hereof, made by the Borrowers and
Guarantors in favor of the Collateral Agent for the benefit of the Collateral
Agent, the Trustee, and the Noteholders (the “Indenture Patent Security
Agreements”), and certain real property mortgages (made from time to time,
in each case, by a Borrower or a Guarantor in favor of the Collateral Agent for
the benefit of the Collateral Agent, the Trustee, and the Noteholders, each an “Indenture
Mortgage” and, together with the

 

1

 

Indenture,
the Indenture Security Agreement, the Indenture Trademark Security Agreement,
Indenture Copyright Security Agreement, Indenture Patent Security Agreement,
and all Control Agreements (as defined in the Indenture Security Agreement),
and the other Note Documents (as defined in the Indenture Security Agreement)
executed and delivered in connection therewith, the “Indenture Agreements”).

 

B.            Parent, the Borrowers,
the Original Senior Agent and the lenders a party thereto have entered into a Credit
Agreement dated as of November 30, 2004 (the “Original Credit Agreement”)
and the Guarantors, the Senior Lenders and the Original Senior Agent have
entered into those certain guarantees (the “Guarantees”) pursuant to
which the Senior Lenders agreed, upon the terms and conditions stated therein,
to make loans and advances to and to issue letters of credit on account of the
Borrowers up to the principal amount of $30,000,000, together with the fees,
interest, expenses and other obligations due under the Original Credit
Agreement.  The repayment of the
Obligations (as that term is defined in the Original Credit Agreement) is
secured by first priority security interests in and liens on the Collateral
described in the Security Agreement dated as of the date hereof (the “Senior
Security Agreement”) made by the Borrowers and the Guarantors in favor of
the Original Senior Agent for the benefit of the Original Senior Agent, the
Senior Lenders and the Bank Product Providers (as defined in the Credit
Agreement), the Trademark Security Agreement, dated as of the date hereof, made
by the Borrowers and the Guarantors in favor of the Original Senior Agent for
the benefit of the Original Senior Agent, the Senior Lenders and the Bank Product
Providers (the “Senior Trademark Security Agreements”), the Copyright
Security Agreement, entered into from time to time, made by the Borrowers and
the Guarantors in favor of the Original Senior Agent for the benefit of the
Original Senior Agent, the Senior Lenders and the Bank Product Providers (the “Senior
Copyright Security Agreements”), the Patent Security Agreement, dated as of
the date hereof, made by the Borrowers and the Guarantors in favor of the
Original Senior Agent for the benefit of the Original Senior Agent, the Senior
Lenders and the Bank Product Providers (the “Senior Patent Security
Agreements”), and certain real property mortgages (made from time to time,
in each case, by a Borrower or a Guarantor in favor of the Original Senior
Agent for the benefit of the Original Senior Agent, the Senior Lenders and the
Bank Product Providers, each a “Senior Mortgage” and, together with the Credit
Agreement, the Guarantees, the Senior Security Agreement, the Senior Trademark
Security Agreement, Senior Copyright Security Agreement, Senior Patent Security
Agreement, and all Control Agreements (as defined in the Credit Agreement) and
the other Loan Documents (as defined in the Credit Agreement) executed and
delivered in connection therewith, the “Senior Agreements”).

 

C.            One of the
conditions of the Original Credit Agreement is that the priority of the
security interests in and liens on the Collateral to secure the Credit
Agreement Secured Obligations (as hereinafter defined) be senior to the
security interests in and liens on the Collateral to secure the Indenture
Secured Obligations, in the manner and to the extent provided in this
Agreement.

 

2

 

D.            The Senior Agent and
the Collateral Agent desire to enter into this Agreement concerning the
respective rights of the Senior Agent and the Collateral Agent with respect to
the priority of their respective security interests in and liens on the
Collateral.

 

E.             The terms of the
Indenture permit the Borrowers and the Guarantors to enter into the Original Credit
Agreement, subject to compliance with certain conditions, and in connection
therewith authorize and direct the Collateral Agent to enter into this
Agreement.

 

F.             In order to induce
the Senior Agent to extend credit to the Borrowers and the Guarantors and for
purposes of certain conditions precedent and covenants of the Original Credit
Agreement, the Senior Agent and the Collateral Agent hereby agree as follows:

 

ARTICLE
I.

 

DEFINITIONS

 

Section 1.01           Terms
Defined Above and in the Recitals. 
As used in this Agreement, the following terms shall have the respective
meanings indicated in the opening paragraph hereof and in the above Recitals:

 

“Agreement”

“BNY”

“Borrower”

“Collateral”

“Collateral
Agent”

“Guarantees”

“Guarantors”

“Indenture”

“Indenture
Agreements”

“Indenture
Copyright Security Agreement”

“Indenture
Patent Security Agreement”

“Indenture
Secured Obligations”

“Indenture
Security Agreement”

“Indenture
Trademark Security Agreement”

“Original
Senior Agent”

“Original
Credit Agreement”

“Parent”

“Senior
Agreements”

“Senior
Copyright Security Agreement”

“Senior
Patent Security Agreement”

“Senior
Security Agreement”

“Senior
Trademark Security Agreement”

 

3

 

“Trustee”

 

Section 1.02           Credit
Agreement Definitions.  All
capitalized terms which are used but not defined herein shall have the same
meaning as in the Original Credit Agreement, as in effect on the date hereof.

 

Section 1.03           Other
Definitions.  As used in this Agreement,
the following terms shall have the meanings set forth below:

 

“Capital
Stock” means (a) in the case of a corporation, corporate stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(d) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of property
of, the issuing Person.

 

“Cash
Collateral” means any Collateral consisting of cash or cash equivalents,
any security entitlement (as defined in the UCC) and any financial assets (as
defined in the UCC).

 

“Control
Collateral” means any Collateral consisting of a certificated security (as
defined in the UCC), investment property (as defined in the UCC), a deposit
account (as defined in the UCC and any other Collateral as to which a Lien may
be perfected through possession or control by the secured party, or any agent
therefor.

 

“Credit
Agreement” means any Credit Agreement (as defined in the Indenture),
including one or more credit facilities (including the Original Credit Agreement),
in each case, as amended, restated, modified, renewed, refunded, replaced, or
refinanced in whole or in part from time to time, including (a) any agreement
extending the maturity of, consolidating, otherwise restructuring (including
adding Subsidiaries or affiliates of the Borrowers or any other Persons as
parties thereto) or refinancing all or any portion of the Obligations or
Commitments as those terms are defined in the Original Credit Agreement, (b)
any New Credit Facility and (c) any other agreement that itself is a Credit
Agreement hereunder) and whether by the same or any other agent, lender, group
of lenders or institutional investors and whether or not increasing the amount
of indebtedness that may be incurred thereunder.

 

“Credit
Agreement Secured Obligations” means all Obligations and all other amounts
owing or due under the terms of any Credit Agreement and the other Senior Loan
Documents, including any and all amounts payable under or in respect of the Senior
Loan Documents, as amended, restated, modified, renewed, refunded, replaced, or
refinanced in whole or in part from time to time, including principal, premium,
interest, fees, attorneys’ fees, costs, charges, expenses, reimbursement
obligations, any obligation to post cash collateral in respect of letters of
credit or indemnities in respect thereof,

 

4

 

indemnities, guarantees, and
all other amounts payable thereunder or in respect thereof (including, in each
case, all amounts accruing on or after the commencement of any Insolvency
Proceeding relating to any Borrower, any Guarantor or any other Person
irrespective of whether a claim for all or any portion of such amounts is
allowable or allowed in any Insolvency Proceeding).

 

“Discharge
of Credit Agreement Secured Obligations” means payment in full in cash (or
in the case of Letters of Credit and Bank Product Obligations, the cash
collateralization as required by the Senior Loan Documents) of the Credit
Agreement Secured Obligations (other than Credit Agreement Secured Obligations
consisting solely of contingent indemnification obligations under the Senior
Loan Documents) after or concurrently with termination of all commitments to
extend credit under any Credit Agreement.

 

“Equity
Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

 

“Exercise
Any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies”
means (a) the taking of any action to enforce or realize upon any Lien,
including the institution of any foreclosure proceedings or the noticing of any
public or private sale or other disposition pursuant to Article 9 of the applicable
Uniform Commercial Code, (b) the exercise of any right or remedy provided to a
secured creditor or otherwise on account of a Lien under the Senior Loan
Documents, the Indenture Loan Documents, applicable law, in an Insolvency
Proceeding or otherwise, including the election to retain Collateral in
satisfaction of a Lien, (c) the taking of any action or the exercise of any
right or remedy in respect of the collection on, set off against, marshaling
of, or foreclosure on the Collateral or the Proceeds of Collateral, (d) the
sale, lease, license, or other disposition of all or any portion of the
Collateral, by private or public sale, other disposition or any other means
permissible under applicable law, (e) the solicitation of bids from third
parties to conduct the liquidation of all or a material portion of Collateral
to the extent undertaken and being diligently pursued in good faith to
consummate the sale of such Collateral within a commercially reasonable time,
(f) the engagement or retention of sales brokers, marketing agents, investment
bankers, accountants, appraisers, auctioneers or other third parties for the
purposes of valuing, marketing, promoting and selling the Collateral to the
extent undertaken and being diligently pursued in good faith to consummate the
sale of such Collateral within a commercially reasonable time, and (g) the
exercise of any other enforcement right relating to the Collateral (including
the exercise of any voting rights relating to any Capital Stock and including
any right of recoupment or set-off) whether under the Senior Loan Documents,
the Indenture Loan Documents, applicable law, in an Insolvency Proceeding or
otherwise.

 

5

 

“Indenture
Loan Documents” shall mean the Indenture, the Notes, the Indenture
Agreements, and such other agreements, instruments and certificates as defined
or referred to in the Indenture.

 

“Insolvency
Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

 

“Lien”
means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, irrespective of whether
(a) such interest is based on the common law, statute, or contract,
(b) such interest is recorded or perfected, and (c) such interest is
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances. 
Without limiting the generality of the foregoing, the term “Lien”
includes the lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement, conditional sale or trust receipt, or from a lease, consignment, or
bailment for security purposes and also includes reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting Real Property.

 

“Lien
Priority” means with respect to any Lien of the Senior Agent or the
Collateral Agent in the Collateral, the order of priority of such Lien as
specified in Section 2.01.

 

“Loan
Documents” means the Senior Loan Documents and the Indenture Loan
Documents.

 

“Maximum
Priority Debt Amount” means, as of any date of determination, the principal
amount (including the undrawn amount of all letters of credit) of Credit
Agreement Secured Obligations as of such date up to, but not in excess of, $30,000,000, (a) minus the amount of
all permanent commitment reductions made from and after the date hereof under
the effective Credit Agreement, but to be reinstated at the time of entering
into any New Credit Facility, and (b) plus any interest, fees, Lender Group
Expenses and indemnities payable under the Senior Loan Documents or in respect
thereof (including, in each case, all amounts accruing on or after the
commencement of any Insolvency Proceeding relating to any Borrower, any
Guarantor or any other Person irrespective of whether a claim for all or any
portion of such amounts is allowable or allowed in any such Insolvency
Proceeding).

 

“New
Credit Facility” means one or more debt facilities entered into by any
Borrower or any of its Subsidiaries following a Discharge of Credit Agreement
Secured Obligations under the then effective Credit Agreement, providing for
revolving credit loans or letters of credit, in each case, as amended,
restated, modified, renewed,

 

6

 

refunded, replaced, or
refinanced in whole or in part from time to time; provided that such debt
facility qualifies as a Credit Agreement (as defined in the Indenture).

 

“Noteholders”
means each of the holders of the Notes.

 

“Party”
means Senior Agent and Collateral Agent.

 

“Payment
Collateral” means all accounts, instruments, chattel paper, letters of
credit, deposit accounts, securities accounts, and payment intangibles,
together with all supporting obligations (as those terms are defined in the
UCC), in each case composing a portion of the Collateral.

 

“Person”
means any natural person, corporation, limited liability company, limited
partnership, general partnership, limited liability partnership, joint venture,
trust, land trust, business trust, or other organization, irrespective of
whether such organization is a legal entity, and shall include a government and
any agency or political subdivision thereof.

 

“Proceeds”
means (i) all “proceeds” as defined in Article 9 of the UCC with respect
to the Collateral, and (ii) whatever is recoverable or recovered when
Collateral is sold, exchanged, collected, or disposed of, whether voluntarily
or involuntarily.

 

“Recovery”
has the meaning set forth in Section 5.03.

 

“Senior
Agent” means the Original Senior Agent, together with all successors,
assigns, transferees, participants, replacement or refinancing lenders, of the
Original Senior Agent, including any Person designated as an Agent under any
Credit Agreement; provided, that for purposes of this Agreement, the
Collateral Agent, prior to the termination of the Original Credit Agreement,
shall be entitled to deal only with the Original Senior Agent until such time
as the Original Senior Agent shall have assigned or otherwise transfer to
another Agent thereof all of its rights and obligations hereunder to such other
Agent pursuant to a written document which has been provided by the Original
Senior Agent or a designee to the Collateral Agent and until receipt thereof,
Collateral Agent shall not be liable for any such dealings (including the
turning over of any Collateral or proceeds thereof to the Original Senior Agent
at a time when any other Agent and not the Original Senior Agent was entitled
thereto).

 

“Senior
Lenders” means the lenders from time to time party to a Credit Agreement.

 

“Senior
Loan Documents” means any Credit Agreement and the other Loan Documents (as
such term is defined in the Original Credit Agreement), or any other security,
collateral, ancillary or other document entered into in connection with or
related to any agreement that is a Credit Agreement, as such documents may be
amended,

 

7

 

restated,
modified, renewed, refunded, replaced, or refinanced in whole or in part from
time to time, in accordance with this Agreement.

 

“Standstill
Notice” means a written notice from or on behalf of Senior Agent to the
Collateral Agent stating that an Event of Default has occurred and stating that
such written notice is a “Standstill Notice”.

 

“Standstill
Period” has the meaning set forth in Section 2.03.

 

“UCC”
means the Uniform Commercial Code as from time to time in effect in the State
of New York

 

Rules
of Construction.  Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references
to the singular include the plural, the term “including” is not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.”  The
words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement.  Article,
section, subsection, clause, schedule, and exhibit references herein are to
this Agreement unless otherwise specified. 
Any reference in this Agreement to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.

 

ARTICLE
II.

 

LIEN
PRIORITY

 

Section 2.01           Agreement
to Subordinate.  Notwithstanding the
date, time, method, manner or order of grant, attachment, or perfection of any
Liens granted to the Collateral Agent, the Trustee, or the Noteholders in
respect of all or any portion of the Collateral or of any Liens granted to the Senior
Agent or any Senior Lender in respect of all or any portion of the Collateral,
or the order or time of filing or recordation of any document or instrument for
perfecting the Liens in favor of Senior Agent (or any Senior Lender) or the
Collateral Agent (or the Trustee or any Noteholder) in any Collateral or any
provision of the applicable Uniform Commercial Code, any other applicable law,
the Indenture Loan Documents, the Senior Loan Documents or any other circumstance
whatsoever, the Collateral Agent, on behalf of itself, the Trustee, and the
Noteholders, hereby agrees that:

 

(a)           (i)
any Lien in respect of all or any portion of the Collateral now or hereafter
held by or on behalf of the Collateral Agent, the Trustee, or any Noteholder
that

 

8

 

secures all or any portion of the Indenture Secured Obligations, shall
in all respects be junior and subordinate to all Liens
granted to the Senior Agent and the Senior Lenders in the Collateral to secure
all or any portion of the Credit Agreement Secured Obligations up to (but not
in excess of) the Maximum Priority Debt Amount, and (ii) any Lien in respect of
all or any portion of the Collateral now or hereafter held by or on behalf of
the Senior Agent or any Senior Lender that secures all or any portion of the Credit
Agreement Secured Obligations in excess of the Maximum Priority Debt Amount,
shall in all respects be junior and subordinate to all Liens granted to the
Collateral Agent, the Trustee or any Noteholder in the Collateral to secure all
or any portion of the Indenture Secured Obligations, and

 

(b)           (i)
any Lien in respect of all or any portion of the Collateral now or hereafter
held by or on behalf of the Senior Agent (or any Senior Lender) that secures
all or any portion of the Credit Agreement Secured Obligations up to (but not
in excess of) the Maximum Priority Debt Amount, shall in all respects be senior
and prior to all Liens granted to the Collateral Agent (or the Trustee or any
Noteholder) in the Collateral to secure all or any portion of the Indenture
Secured Obligations, and (ii) any Lien in respect of all or any portion of the
Collateral now or hereafter held by or on behalf of the Collateral Agent, the
Trustee, or any Noteholder that secures all or any portion of the Indenture
Secured Obligations, shall in all respects be senior and prior to all Liens
granted to the Senior Agent and the Senior Lenders in the Collateral to secure
all or any portion of the Credit Agreement Secured Obligations in excess of the
Maximum Priority Debt Amount,

 

The
Collateral Agent, for and on behalf of itself, the Trustee and the Noteholders,
acknowledges and agrees that, concurrently herewith, the Senior Agent, for the
benefit of itself and the Senior Lenders, has been granted Liens upon all of
the Collateral in which the Collateral Agent has been granted Liens and the
Collateral Agent hereby consents thereto. 
The Senior Agent acknowledges and agrees that the Collateral Agent, for
the benefit of itself, the Trustee, and the Noteholders, has been granted Liens
upon all of the Collateral and the Senior Agent hereby consents thereto.  The subordination of Liens (up to the Maximum
Priority Debt Amount) by the Collateral Agent, on behalf of itself, the
Trustee, and the Noteholders in favor of the Senior Agent and the Senior
Lenders herein shall not be deemed to subordinate the Collateral Agent’s Liens
to the Liens of any other Person.  The
subordination of Liens (in excess of the Maximum Priority Debt Amount) in favor
of the Collateral Agent, for the benefit of itself, the Trustee and the
Noteholders herein shall not be deemed to subordinate the Senior Agent’s Liens
to the Liens of any other Person.

 

Section 2.02           Waiver
of Right to Contest Liens.  The
Collateral Agent agrees, on behalf of itself, the Trustee, and the Noteholders,
that it and they shall not (and hereby waives, on behalf of itself and the
Noteholders any right to) take any action to contest or challenge (or assist or
support any other Person in contesting or challenging), directly or indirectly,
whether or not in any proceeding (including in any Insolvency Proceeding),

 

9

 

the
validity, priority, enforceability, or perfection of the Liens of the Senior
Agent in respect of the Collateral.  The
Collateral Agent, for itself, the Trustee, and on behalf of the Noteholders,
agrees that neither the Collateral Agent nor the Trustee will take any action
that would hinder any exercise of remedies undertaken by the Senior Agent under
the Senior Loan Documents, including any public or private sale, lease,
exchange, transfer, or other disposition of the Collateral, whether by
foreclosure or otherwise.  The Collateral
Agent, for itself, the Trustee, and on behalf of the Noteholders, hereby waives
any and all rights it, the Trustee, or the Noteholders may have as a junior
lien creditor or otherwise to contest, protest, object to, interfere with the
manner in which the Senior Agent seeks to enforce the Liens in any portion of
the Collateral (it being understood and agreed that the terms of this Agreement
shall govern with respect to the Collateral even if any portion of the Liens
securing the Credit Agreement Secured Obligations are avoided, disallowed, set
aside, or otherwise invalidated in any judicial proceeding or otherwise).    The Senior Agent, for itself and the Senior
Lenders, agrees that it shall not (and hereby waives any right to) take any
action to contest or challenge (or assist or support any other Person in
contesting or challenging), directly or indirectly, whether or not in any
proceeding (including in any Insolvency Proceeding), the validity, priority,
enforceability, or perfection of the Liens of the Collateral Agent in respect
of the Collateral.  Following the
Discharge of Credit Agreement Secured Obligations, the Senior Agent, on behalf
of itself and the Senior Lenders, agrees that it will not take any action that
would hinder any exercise of remedies undertaken by the Collateral Agent, the
Trustee, or any Noteholder under the Indenture Loan Documents, including any
public or private sale, lease, exchange, transfer, or other disposition of the
Collateral, whether by foreclosure or otherwise.  Following the Discharge of Credit Agreement Secured
Obligations, the Senior Agent, on behalf of itself and the Senior Lenders, hereby
waives any and all rights it may have as a junior lien creditor or otherwise to
contest, protest, object to, interfere with the manner in which the Collateral
Agent, the Trustee or any Noteholder seeks to enforce the Liens in any portion
of the Collateral (it being understood and agreed that the terms of this
Agreement shall govern with respect to the Collateral even if any portion of
the Liens securing the Indenture Secured Obligations are avoided, disallowed,
set aside, or otherwise invalidated in any judicial proceeding or otherwise).

 

Section 2.03           Remedies
Standstill.   At any time after the
occurrence and during the continuation of an Event of Default under any of the
Loan Documents, the Senior Agent may send a Standstill Notice to the Collateral
Agent.  The Collateral Agent, on behalf
of itself, the Trustee, and the Noteholders, agrees that from and after the
date of its receipt of any Standstill Notice, neither the Collateral Agent nor
the Trustee will Exercise Any Secured Creditor Remedies (other than its rights
under Section 2.04(d)) unless and until (a) the Senior Agent has expressly
waived or acknowledged the cure of the applicable Event of Default in writing
or the Discharge of the Credit Agreement Secured Obligations shall have
occurred, or (b) 120 days shall have elapsed from the date of the Collateral
Agent’s receipt of such Standstill Notice. 
From and after the earlier to occur of (i) the Collateral Agent’s
receipt of such waiver or cure notice, or (ii) the elapsing of such

 

10

 

120th
day period, any of the Collateral Agent, the Trustee, or any Noteholder may
commence to Exercise Any Secured Creditor Remedies (subject to the provisions
of this Agreement, including the immediately succeeding sentence, Section 4.02
hereof and except with respect to any such Collateral as to which the Senior
Agent is diligently effecting the collection, foreclosure, sale or other realization
upon or disposition of).  Notwithstanding
any other provision in this Agreement, none of the Collateral Agent, the
Trustee or any Noteholder may Exercise Any Secured Creditor Remedies prior to
the Discharge of Credit Agreement Secured Obligations (x) with respect to any item
of Collateral so long as Senior Agent has commenced and is diligently pursuing
its Exercise of Secured Creditor Remedies in respect of such items of
Collateral, and (y) without first providing Senior Agent at least 5 Business Days’
prior written notice.  The Senior Agent may
only send three (3) Standstill Notices following the date hereof (it being
understood and agreed as clarification to the foregoing that no more than three
(3) Standstill Notices may be provided whether delivered hereunder or under any
corresponding provision of any other agreement similar hereto that may be
delivered pursuant to Section 7.17 hereof) and no more than one (1) Standstill
Notice may be given by the Senior Agent in any consecutive 365-day period.  The time period during which the Collateral
Agent is not permitted to Exercise any Secured Creditor Remedies under this
section is referred to herein as the “Standstill Period”.

 

Section 2.04           Exercise of
Rights.

 

(a)           No
Other Restrictions.  Except as expressly
set forth in this Agreement, each of the Collateral Agent, the Trustee, the
Noteholders, the Senior Agent and the Senior Lenders shall have any and all
rights and remedies it may have as a creditor under applicable law, including
the rights to exercise all rights and remedies in foreclosure or otherwise with
respect to any of the Collateral; provided, however, that any
such exercise by the Collateral Agent, the Trustee or the Noteholders, and any
collection or sale of all or any portion of the Collateral by the Collateral
Agent, the Trustee or the Noteholders, shall be subject to the Liens of the Senior
Agent on the Collateral to the extent provided in Section 2.01 and to the
provisions of this Agreement including Section 4.02 hereof.  In exercising rights and remedies with
respect to the Collateral, the Senior Agent may enforce the provisions of the Senior
Loan Documents and exercise remedies thereunder, all in such order and in such
manner as it may determine in the exercise of its sole discretion. Such
exercise and enforcement shall include the sale, lease, license, or other
disposition of all or any portion of the Collateral by private or public sale
or any other means permissible under applicable law or any agreement; provided,
that the Senior Agent agrees to provide copies of any notices that it is
required under applicable law to deliver to Parent, any Borrower or any
Guarantor to the Collateral Agent; provided  further, that the
failure to provide any such copies to the Collateral Agent shall not impair any
of the Senior Agent’s rights hereunder. 
In exercising rights and remedies with respect to the Collateral, the
Collateral Agent may enforce the provisions of the Indenture Security Documents
and exercise remedies thereunder, all in such order and in such manner as it
may determine in the exercise of its

 

11

 

sole discretion. Such exercise and enforcement shall include the sale,
lease, license, or other disposition of all or any portion of the Collateral by
private or public sale or any other means permissible under applicable law or
any agreement; provided, that the Collateral Agent agrees to provide
copies of any notices that it is required under applicable law to deliver to
Parent, any Borrower or any Guarantor to the Senior Agent; provided  further,
that the failure to provide any such copies to the Senior Agent shall not
impair any of the Collateral Agent’s rights hereunder.

 

(b)           Release
of Liens.  (i)  In the event of any such private or public sale,
Collateral Agent agrees, on behalf of itself, the Trustee, and the Noteholders,
that such sale will be free and clear of the Liens securing the Indenture
Secured Obligations and, if the sale or other disposition includes the Equity
Interests in any Borrower or any Guarantor, agrees to release the entities
whose Equity Interests are sold from all Indenture Secured Obligations so long
as Senior Agent and Senior Lenders also release the entities whose Equity
Interests are sold from all Credit Agreement Secured Obligations.  In furtherance thereof, Collateral Agent
agrees that it will execute any and all Lien releases or other documents
reasonably requested by Senior Agent in connection therewith, so long as the
proceeds from such sale or other disposition of the Collateral are applied in
accordance with the terms of this Agreement.

 

(ii)           If and to the extent that the Senior
Agent or its designee releases any of its Liens on any Collateral in connection
with the sale, lease, exchange, transfer or other disposition of the Collateral
in accordance with the terms of this Agreement, the Liens, if any, of the
Collateral Agent, for itself or for the benefit of the Trustee and the
Noteholders, on such Collateral shall be automatically, unconditionally and
simultaneously released and the Collateral Agent, for itself and for each of
the Trustee and the Noteholders, promptly shall execute and deliver to the
Senior Agent such termination statements, releases and other documents as the
Senior Agent may request to effectively confirm such release in respect of such
payments.  Notwithstanding the foregoing,
the obligation of the Collateral Agent to release its Lien on such Collateral
shall arise only if such sale, lease, exchange, transfer or other disposition
of the Collateral is effected in connection with an exercise of remedies or is
permitted by (or permitted pursuant to a waiver of or consent to a transaction
otherwise prohibited by) the Senior Loan Documents and the terms hereof.

 

(iii)          In the event of any private or public
sale by Collateral Agent permitted by the terms of this Agreement, Senior Agent
agrees, on behalf of itself and the Lender Group, that such sale will be free
and clear of the Liens securing the Senior Secured Obligations and, if the sale
or other disposition includes the Equity Interests in any Borrower or any
Guarantor, agrees to release the entities whose Equity Interests are sold from
all Senior Secured Obligations so long as Collateral Agent, the Trustee and the
Noteholders also release the entities whose Equity Interests are sold from all Indenture
Secured Obligations.  In furtherance
thereof, Senior Agent agrees that it will execute any and all Lien releases or
other documents reasonably requested by Collateral Agent in

 

12

 

connection
therewith, so long as the proceeds from such sale or other disposition of the
Collateral are applied in accordance with the terms of this Agreement.

 

(iv)          If and to the extent that the Collateral
Agent or its designee releases any of its Liens on any Collateral in connection
with the sale, lease, exchange, transfer or other disposition of the Collateral
in accordance with the terms of this Agreement, the Liens, if any, of the Senior
Agent, for itself or for the benefit of the Lender Group, on such Collateral
shall be automatically, unconditionally and simultaneously released and the Senior
Agent, for itself and for the Lender Group, promptly shall execute and deliver
to the Collateral Agent such termination statements, releases and other
documents as the Collateral Agent may request to effectively confirm such
release in respect of such payments. 
Notwithstanding the foregoing, the obligation of the Senior Agent to
release its Lien on such Collateral shall arise only if such sale, lease,
exchange, transfer or other disposition of the Collateral is effected in
connection with an exercise of remedies or is permitted by (or permitted
pursuant to a waiver of or consent to a transaction otherwise prohibited by)
the Indenture Documents and the terms hereof.

 

(c)           Except
as provided in Section 3.01, the Collateral Agent, the Trustee and the
Noteholders may exercise, and nothing herein shall constitute a waiver of, any
right it may have at law or equity to receive notice of, or to commence or join
with any creditor in commencing any Insolvency Proceeding or to join or
participate in, any action or proceeding or other activity described in Section
3.01; provided, however, that exercise of any such right by the
Collateral Agent shall be subject to all of the terms and conditions of this
Agreement, including the obligation to turn over Collateral and Proceeds to the
Senior Agent for application to the Credit Agreement Secured Obligations as
provided in Section 4.02.

 

(d)           The
Collateral Agent may make such demands or file such claims in respect of the
Indenture Secured Obligations as may be necessary to prevent the waiver or bar
of such claims under applicable statutes of limitations or other statutes,
court orders or rules of procedure (including, without limitation, the filing
of any proofs of claim in any Insolvency Proceeding), but except as provided in
this Section 2.04 or otherwise in this Agreement, the Collateral Agent shall
not take any actions restricted by this Agreement until the Discharge of Credit
Agreement Secured Obligations shall have occurred.

 

(e)           Following
the Discharge of Credit Agreement Secured Obligations, the other provisions of
this Section 2.04 shall apply to the Collateral Agent, for the benefit of
itself, the Trustee and the Noteholders as if it were the Senior Agent and the Senior
Agent was the Collateral Agent, mutatis  mutandis.

 

13

 

ARTICLE
III.

 

ACTIONS
OF THE PARTIES

 

Section 3.01           Limitation
on Certain Actions. Notwithstanding any other provision hereof, during any
Standstill Period prior to the date that the Discharge of Credit Agreement
Secured Obligations occurs, the Collateral Agent will not:

 

(a)           commence
receivership or foreclosure proceedings against any Borrower, any Guarantor, or
any Collateral;

 

(b)           make
demands or file claims in respect of the Indenture Secured Obligations except
as permitted under Section 2.04(d) hereof;

 

(c)           sell,
collect, transfer or dispose of any Collateral or Proceeds; or

 

(d)           notify
third party account debtors to make payment directly to it or any of its agents
or other Persons acting on its behalf.

 

Section 3.02           Agent
for Perfection.  Each of the Senior
Agent, on behalf of itself and the Senior Lenders, and the Collateral Agent, for
and on behalf of itself, the Trustee, and each Noteholder, as applicable, agree
to hold all Control Collateral and Cash Collateral that is part of the
Collateral in its respective possession, custody, or control (or in the
possession, custody, or control of agents or bailees for either, as applicable)
as agent for the other solely for the purpose of perfecting the security
interest granted to each in such Control Collateral or Cash Collateral subject
to the terms and conditions of this Section 3.02.  None of the Senior Agent, the Senior Lenders,
the Collateral Agent, the Trustee, or the Noteholders, as applicable, shall
have any obligation whatsoever to the others to assure that the Control
Collateral is genuine or owned by any Borrower, any Guarantor or any other
Person or to preserve rights or benefits of any Person.  The duties or responsibilities of the Senior
Agent and the Collateral Agent under this Section 3.02 are and shall be limited
solely to holding or maintaining control of the Control Collateral and the Cash
Collateral as agent for the other for purposes of perfecting the Lien held by
the Collateral Agent or the Senior Agent, as applicable.  The Senior Agent is not and shall not be
deemed to be a fiduciary of any kind for the Collateral Agent, the Trustee, the
Noteholders or any other Person.  The
Collateral Agent is not and shall not be deemed to be a fiduciary of any kind
for the Senior Agent, any Senior Lender or any other Person.  In the event that (a) any of the Collateral
Agent, the Trustee, or any Noteholder receives any Proceeds or Collateral in
contravention of the Lien Priority, or (b) the Senior Agent or any Senior
Lender receives any Proceeds or Collateral in contravention of the Lien
Priority, it shall promptly pay over such Proceeds or Collateral to (i) in the
case of clause (a), the Senior Agent, or (ii) in the case of clause (b), the
Collateral Agent, in the same form as received with any necessary endorsements,
for application in accordance with the provisions of Section 4.02 of this
Agreement.

 

14

 

ARTICLE
IV.

 

NOTICES
AND APPLICATION OF PROCEEDS

 

Section 4.01           Notices
of Exercise.  Concurrently with any
exercise by the Collateral Agent of any of its rights and remedies under the
Indenture Loan Documents following the occurrence of any default under the
Indenture Loan Documents, the Collateral Agent shall give notice of such
exercise to the Senior Agent and shall only exercise such rights or remedies in
a manner consistent with the terms of this Agreement.  Concurrently with any exercise by the Senior
Agent of any of its rights and remedies under the Senior Loan Documents
following the occurrence of any default under the Senior Loan Documents, the Senior
Agent shall give notice of such exercise to the Collateral Agent and shall only
exercise such rights or remedies in a manner consistent with the terms of this
Agreement.

 

Section 4.02           Application
of Proceeds.

 

(a)           Revolving
Nature of Credit Agreement Secured Obligations.  As long as the Senior Agent is not exercising
any of its remedies as a secured creditor under the Senior Loan Documents and
including during any Standstill Period, the Senior Agent may apply any and all
of the proceeds of the Collateral consisting of accounts receivable, other
rights to payment or Cash Collateral in accordance with the provisions of the Senior
Loan Documents, subject to the provisions of this Agreement, including Sections
3.02 and 4.02 hereof.  The Collateral
Agent, for and on behalf of itself, the Trustee, and the Noteholders, expressly
acknowledges and agrees that (a) any such application of the proceeds of
accounts receivable, other rights to payment or Cash Collateral or the release
of any Lien by the Senior Agent upon any portion of the Collateral in
connection with a Permitted Disposition (as that term is defined in the Credit
Agreement) shall not be considered to be the exercise of remedies under this
Agreement; and (b) all Proceeds or Cash Collateral received by Senior Agent in
connection therewith may be applied, reversed, reapplied, credited or
reborrowed, in whole or in part, as Credit Agreement Secured Obligations
without reducing the Maximum Priority Debt Amount.

 

(b)           Turnover
of Cash Collateral After Payment. 
Upon the Discharge of the Credit Agreement Secured Obligations, the Senior
Agent shall deliver to the Collateral Agent or execute such documents as the
Collateral Agent may reasonably request to cause the Collateral Agent to have
control over any Cash Collateral or Control Collateral still in Senior Agent’s or
its designee’s possession, custody or control in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may
otherwise direct, to be applied by the Collateral Agent to the Indenture
Secured Obligations.  Proceeds of any
exercise by the Senior Agent or the Collateral Agent, as applicable, of any of
their respective secured creditor rights or remedies under any of the Loan
Documents, under applicable law, or otherwise with respect to any Collateral or
Proceeds, shall be (a) until the Discharge of the Credit Agreement Secured

 

15

 

Obligations, retained by the Senior Agent or promptly turned over by
the Collateral Agent, the Trustee, or any Noteholder, as the case may be, to
the Senior Agent in the same form as received, with any necessary endorsements,
(b) after the Discharge of the Credit Agreement Secured Obligations and until
all Indenture Secured Obligations have been paid in full in cash, retained by
the Collateral Agent or promptly turned over by the Senior Agent to the
Collateral Agent in the same form as received, with any necessary endorsements,
and (c) if there are any amounts still due or any obligations outstanding to
the Senior Agent under the Senior Loan Documents in excess of the Maximum
Priority Debt Amount after the payment in full in cash of all Indenture Secured
Obligations, shall be retained by the Senior Agent or promptly turned over by
the Collateral Agent to the Senior Agent in the same form as received, with any
necessary endorsements.

 

(c)           Application
of Proceeds.  The Senior Agent and
the Collateral Agent hereby agree that all Collateral
and all Proceeds received by either of them upon the Exercise Of Secured Creditor
Remedies shall be applied,

 

first, to the payment of costs and expenses of the
Senior Agent or the Collateral Agent, as applicable, in connection with such
exercise,

 

second, to the payment of the Credit Agreement
Secured Obligations up to (but not in excess of) the Maximum Priority Debt
Amount,

 

third, to the payment of the Indenture Secured
Obligations, and

 

fourth, to the payment of any Credit Agreement
Secured Obligations in excess of the Maximum Priority Debt Amount.

 

In exercising remedies,
whether as a secured creditor or otherwise, the Senior Agent shall have no
obligation or liability to the Collateral Agent, the Trustee, or to any
Noteholder and the Collateral Agent shall have no obligation or liability to
the Senior Agent or any Senior Lender regarding the adequacy of any Proceeds or
for any action or omission save and except solely an action or omission that
breaches the express obligations undertaken by each Party under the terms of
this Agreement.

 

Section 4.03           Specific
Performance.  Each of the Senior Agent
and the Collateral Agent is hereby authorized to demand specific performance of
this Agreement, whether or not any Borrower or any Guarantor shall have
complied with any of the provisions of any of the Loan Documents, at any time
when the other shall have failed to comply with any of the provisions of this
Agreement applicable to it; provided, however, the remedy of
specific performance shall not be available, and the asserting party shall be
free to assert any and all legal defenses it may possess, if such remedy would
result in, or otherwise constitute, a violation of the Employee Retirement
Income Security Act of 1974, as amended. 
Each of the Senior Agent and the Collateral Agent hereby irrevocably
waives any defense based on the adequacy of a remedy at law, which might be
asserted as a bar to such remedy of specific performance.

 

16

 

ARTICLE
V.

 

INTERCREDITOR
ACKNOWLEDGEMENTS AND WAIVERS

 

Section 5.01           Notice
of Acceptance and Other Waivers.

 

(a)           All
Credit Agreement Secured Obligations at any time made or incurred by any Borrower
or any Guarantor shall be deemed to have been made or incurred in reliance upon
this Agreement, and the Collateral Agent, on behalf of itself, the Trustee, and
the Noteholders, hereby waives (i) notice of acceptance, or proof of
reliance, by the Senior Agent of this Agreement, and (ii) notice of the
existence, renewal, extension, accrual, creation, or non-payment of all or any
part of the Credit Agreement Secured Obligations.  Neither the Senior Agent, nor any Senior
Lender, nor any of their respective affiliates, directors, officers, employees,
or agents shall be liable for failure to demand, collect, or realize upon any
of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral or to take any other action
whatsoever with regard to the Collateral or any part thereof, except as
specifically provided in this Agreement. 
If the Senior Agent honors (or fails to honor) a request by a Borrower
for an extension of credit pursuant to the Credit Agreement or any of the Senior
Loan Documents, whether Senior Agent has knowledge that the honoring of (or
failure to honor) any such request would constitute a default under the terms
of the Indenture or any Indenture Loan Document or an act, condition, or event
that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if Senior Agent otherwise should exercise any of
its contractual rights or remedies under the Senior Loan Documents (subject to
the express terms and conditions hereof),  Senior Agent shall not have any liability
whatsoever to the Collateral Agent, the Trustee or any Noteholder as a result
of such action, omission, or exercise (so long as any such exercise does not
breach the express terms and provisions of this Agreement).  The Senior Agent will be entitled to manage
and supervise its loans and extensions of credit under the Credit Agreement and
other Senior Loan Documents as the Senior Agent may, in its sole discretion,
deem appropriate, and the Senior Agent may manage its loans and extensions of
credit without regard to any rights or interests that the Collateral Agent, the
Trustee, or any of the Noteholders have in the Collateral or otherwise except
as otherwise expressly set forth in this Agreement.  The Collateral Agent, on behalf of itself,
the Trustee, and the Noteholders, agrees that the Senior Agent shall not incur
any liability as a result of a sale, lease, license, or other disposition of
the Collateral, or any part thereof, pursuant to the Senior Loan Documents
conducted in accordance with mandatory provisions of applicable law.

 

(b)           None
of Collateral Agent, Trustee, or any of the Noteholders nor any of their affiliates,
directors, officers, employees, or agents shall be liable for failure to
demand, collect, or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral or to take any other action whatsoever with regard to the Collateral
or any part thereof, except as specifically

 

17

 

provided in this Agreement.  If
Collateral Agent, Trustee, or any of the Noteholders should exercise any of
their contractual rights or remedies under the Indenture Agreements (subject to
the express terms and conditions hereof), none of Collateral Agent, Trustee, or
any of the Noteholders shall have any liability whatsoever to the Senior Agent as
a result of such action, omission, or exercise (so long as any such exercise
does not breach the express terms and provisions of this Agreement).  The Collateral Agent, Trustee, and
Noteholders will be entitled to manage and supervise the Parent’s obligations under
the Indenture Agreements as they may, in their sole discretion, deem
appropriate, and they may manage such obligations without regard to any rights
or interests that the Senior Agent has in the Collateral or otherwise except as
otherwise expressly set forth in this Agreement.  Subject to Section 2.03, the Senior Agent agrees
that none of the Collateral Agent, the Trustee, or the Noteholders shall incur
any liability as a result of a sale, lease, license, or other disposition of
the Collateral, or any part thereof, pursuant to the Indenture Agreements
conducted in accordance with mandatory provisions of applicable law.

 

Section 5.02           Modifications
to Senior Loan Documents and Indenture Agreements.

 

(a)           The
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, hereby
agrees that, without affecting the obligations of the Collateral Agent, the
Trustee and the Noteholders hereunder, the Senior Agent, on behalf of itself
and the Senior Lenders, may, at any time and from time to time, in its sole discretion
without the consent of or notice to the Collateral Agent, the Trustee or any
Noteholder (except to the extent such notice or consent is required pursuant to
the express provisions of this Agreement), and without incurring any liability
to the Collateral Agent, the Trustee or any Noteholder or impairing or
releasing the subordination provided for herein, amend, restate, supplement,
replace, refinance, extend, consolidate, restructure, or otherwise modify the Credit
Agreement or any of the Senior Loan Documents in any manner whatsoever,
including, to

 

(i)            change
the manner, place, time, or terms of payment or renew or alter, all or any of
the Credit Agreement Secured Obligations or otherwise amend, restate,
supplement, or otherwise modify in any manner, or grant any waiver or release
with respect to, all or any part of the Credit Agreement Secured Obligations or
any of the Senior Loan Documents,

 

(ii)           retain
or obtain a Lien on any property of any Person to secure any of the Credit
Agreement Secured Obligations, and in that connection to enter into any
additional Senior Loan Documents,

 

(iii)          amend,
or grant any waiver, compromise or release with respect to, or consent to any
departure from, any guaranty or other obligations of any Person obligated in
any manner under or in respect of the Credit Agreement Secured Obligations,

 

18

 

(iv)          release
its Lien on any Collateral or other property,

 

(v)           exercise
or refrain from exercising any rights against any Borrower, any Guarantor or
any other Person,

 

(vi)          retain
or obtain the primary or secondary obligation of any other Person with respect
to any of the Credit Agreement Secured Obligations, and

 

(vii)         otherwise
manage and supervise the Credit Agreement Secured Obligations as the Senior
Agent shall deem appropriate.

 

(b)           The
Senior Agent, on behalf of itself and the Senior Lenders, hereby agrees that
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders may, at
any time and from time to time, in its sole discretion without the consent of
or notice to the Senior Agent (except to the extent such notice or consent is
required pursuant to the express provisions of this Agreement), and without
incurring any liability to the Senior Agent or impairing or releasing the
subordination provided for herein, amend, restate, supplement, replace,
refinance, extend, consolidate, restructure, or otherwise modify the Indenture
Agreements in any manner whatsoever, provided, however, that in
no event shall Collateral Agent, the Trustee, or any Noteholder obtain a Lien
on any assets of any Borrower or any Guarantor not constituting Collateral
unless (i)  Senior Agent also obtains a
Lien on such assets either before or at the same time as Collateral Agent, the
Trustee or such Noteholder or (ii) Senior Agent declines in a writing to
Collateral Agent to obtain a Lien on such assets.

 

(c)           Notwithstanding
anything to the contrary herein, this Section 5.02 shall not be construed to
constitute a waiver by the Collateral Agent, the Trustee, or any Noteholder of any
provision of the Indenture.

 

Section 5.03           Reinstatement
and Continuation of Agreement.

 

(a)           If
Senior Agent is required in any Insolvency Proceeding or otherwise to turn over
or otherwise pay to the estate of any Borrower, any Guarantor or any other
Person any amount (a “Recovery”), then the Credit Agreement Secured
Obligations shall be reinstated to the extent of such Recovery.  If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and
effect, and such prior termination shall not diminish, release, discharge,
impair, or otherwise affect the obligations of the parties hereto from such
date of reinstatement.  All rights,
interests, agreements, and obligations of the Collateral Agent, the Trustee,
the Senior Agent, the Senior Lenders, and the Noteholders under this Agreement
shall remain in full force and effect and shall continue irrespective of the
commencement of, or any discharge, confirmation, conversion, or dismissal of
any Insolvency Proceeding by or against any Borrower or any Guarantor or any
other circumstance which otherwise might constitute a defense available to, or
a discharge of any Borrower or any Guarantor in

 

19

 

respect of the Credit Agreement Secured Obligations.  No priority or right of the Senior Agent shall
at any time be prejudiced or impaired in any way by any act or failure to act
on the part of any Borrower or any Guarantor or by the noncompliance by any
Person with the terms, provisions, or covenants of the Credit Agreement, the
Indenture or any of the other Loan Documents, regardless of any knowledge
thereof which the Senior Agent may have.

 

(b)           If
Collateral Agent, the Trustee, or any Noteholder is required in any Insolvency
Proceeding or otherwise to turn over or otherwise pay to the estate of any
Borrower, any Guarantor or any other Person a Recovery, then the Indenture
Secured Obligations shall be reinstated to the extent of such Recovery.  No priority or right of the Collateral Agent,
the Trustee, or any Noteholder shall at any time be prejudiced or impaired in
any way by any act or failure to act on the part of any Borrower or any
Guarantor or by the noncompliance by any Person with the terms, provisions, or
covenants of the Credit Agreement, the Indenture or any of the other Indenture
Agreements, regardless of any knowledge thereof which the Collateral Agent, the
Trustee, or any Noteholder may have.

 

Section 5.04           New
Credit Facility.  At any time any
Borrower or any of its Subsidiaries enters into a New Credit Facility (provided
that the lender providing such New Credit Facility or its designee executes an
acknowledgment, in substantially the form of Annex A), this Agreement shall be
reinstated in full force and effect, and any prior termination thereof, if any,
as a result of a prior Discharge of Credit Agreement Secured Obligations, shall
not diminish, release, discharge, impair, or otherwise affect the obligations
of the parties hereto (including the lender providing for the New Credit
Facility) from such date of reinstatement. 
It is hereby agreed that the entering into of any new Credit Agreement
would not constitute an amendment, modification or supplement to any of the
Indenture Loan Documents.

 

ARTICLE
VI.

 

INSOLVENCY
PROCEEDINGS

 

Section 6.01           DIP
Financing.  If any Borrower or any
Guarantor shall be subject to any Insolvency Proceeding and the Senior Agent
shall desire, prior to the Discharge of Credit Agreement Secured Obligations,
to permit the use of cash collateral or to permit any Borrower or any Guarantor
to obtain financing under Section 363 or Section 364 of Title 11 of the United
States Code or any similar provision under the law applicable to any Insolvency
Proceeding (“DIP Financing”) to be secured by all or any portion of the
Collateral, then the Collateral Agent, on behalf of itself, the Trustee, and
the Noteholders, agrees that it will raise no objection to such use of cash
collateral or DIP Financing and will not request adequate protection or any
other relief in connection with its or their interest in any such Collateral
except to the extent specified in this Section 6.01.  To the extent the Liens securing the Credit
Agreement Secured Obligations are subordinated or

 

20

 

pari passu
with such DIP Financing, the Collateral Agent, for and on behalf of itself, the
Trustee, and the Noteholders, hereby agrees that its Liens in the Collateral
shall be subordinated to such DIP Financing (and all obligations relating
thereto) upon the terms and conditions specified in this Agreement.  Until the Discharge of Credit Agreement
Secured Obligations has occurred, the Collateral Agent, on behalf of itself,
the Trustee, and the Noteholders, agrees that none of them shall seek relief
from the automatic stay or any other stay in any Insolvency Proceeding in
respect of the Collateral and will not provide or offer to provide any DIP
Financing secured by a Lien senior to or pari passu with
the Liens securing the Credit Agreement Secured Obligations, in each case
unless the Senior Agent otherwise has provided its express written consent.

 

Section 6.02           No
Contest.  The Collateral Agent, on
behalf of itself, the Trustee, and the Noteholders, agrees that, prior to the
Discharge of Credit Agreement Secured Obligations, none of them shall contest
(or support any other Person contesting) (a) any request by the Senior Agent for
adequate protection, or (b) any objection by the Senior Agent to any motion,
relief, action, or proceeding based on Senior Agent claiming that their
interests in the Collateral are not adequately protected or any other similar
request under any law applicable to an Insolvency Proceeding. Notwithstanding
the foregoing, in any Insolvency Proceeding, if the Senior Agent is granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of cash collateral under Section 363 or Section 364 of
Title 11 of the United States Code or any similar law applicable to any
Insolvency Proceeding, then the Collateral Agent, on behalf of itself, the
Trustee, or any of the Noteholders, may seek or request adequate protection in
the form of a Lien on such additional collateral, which Lien hereby is and shall
be deemed to be subordinated to the Liens securing the Credit Agreement Secured
Obligations up to (but not in excess of) the Maximum Priority Debt Amount and
such DIP Financing (and all obligations relating thereto) on the same basis as
the Lien Priority.  In the event the
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, seeks
or requests adequate protection and such adequate protection is granted in the
form of Liens in respect of additional collateral, then the Collateral Agent, on
behalf of itself, the Trustee, and each of the Noteholders, agrees that the Senior
Agent also shall be granted a senior Lien on such additional collateral as
security for the Credit Agreement Secured Obligations (and for any such DIP
Financing) and that any Lien on such additional collateral securing the
Indenture Secured Obligations shall be subordinated to the Liens in respect of
such additional collateral securing the Credit Agreement Secured Obligations
and any such DIP Financing and any other Liens granted to the Senior Agent as
adequate protection on the same basis as the other Liens securing the Indenture
Secured Obligations are subordinated to the Credit Agreement Secured
Obligations under this Agreement up to the Maximum Priority Debt Amount.  Nothing contained herein shall prohibit or in
any way limit the Senior Agent, prior to the Discharge of Credit Agreement
Secured Obligations, from objecting in any Insolvency Proceeding or otherwise
to any action taken by the Collateral Agent, the Trustee or any of the
Noteholders, including the seeking by the Collateral Agent, the Trustee or any
Noteholder of adequate protection or the asserting by the Collateral Agent, the
Trustee or

 

21

 

any
Noteholder of any of its rights and remedies under the Indenture Loan Documents
or otherwise.

 

Section 6.03           Asset
Sales.  The Collateral Agent agrees,
on behalf of itself, the Trustee, and the Noteholders, that it will not oppose
any sale consented to by Senior Agent of Collateral pursuant to Section 363 or
365 of Title 11 of the United States Code (or any similar provision in any
other applicable Bankruptcy Law) so long as the proceeds of such sale are
applied in accordance with this Agreement.

 

Section 6.04           Enforceability.  The provisions of this Agreement are intended
to be and shall be enforceable under Section 510 of Title 11 of the United
States Code.  The Collateral Agent, on
behalf of itself, the Trustee, and the Noteholders, agrees that all
distributions that the Collateral Agent, the Trustee, or any Noteholder
receives in any Insolvency Proceeding on account of the Collateral or Proceeds
shall be held in trust by such Person and turned over to the Senior Agent, on
behalf of itself and the Senior Lenders, for application in accordance with
Section 4.02 of this Agreement.  To the
extent that any amounts received by the Collateral Agent, the Trustee, or any
Noteholder are paid over in connection with this provision, the obligations
owed by the Borrower to such Person will be deemed to be reinstated to the
extent of the amounts so paid over.

 

ARTICLE
VII.

 

MISCELLANEOUS

 

Section 7.01           Rights
of Subrogation.  The Collateral Agent
agrees that no payment or distribution to the Senior Agent pursuant to the
provisions of this Agreement shall entitle the Collateral Agent, the Trustee,
or any Noteholder to exercise any rights of subrogation in respect thereof
until the Discharge of Credit Agreement Secured Obligations shall have
occurred.  Following the Discharge of Credit
Agreement Secured Obligations, the Senior Agent agrees to execute such
documents, agreements, and instruments as the Collateral Agent, the Trustee or
any Noteholder may reasonably request to evidence the transfer by subrogation
to any such Person of an interest in the Credit Agreement Secured Obligations
resulting from payments or distributions to the Senior Agent by such Person, so
long as all costs and expenses (including all reasonable legal fees and
disbursements) incurred in connection therewith by the Senior Agent are paid by
such Person upon request for payment thereof.

 

Section 7.02           Further
Assurances.  The Parties will, at
their own expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that either Party may reasonably
request, in order to protect any right or interest granted or purported to be
granted hereby or to enable the Senior Agent or the Collateral Agent to
exercise and enforce its rights and remedies hereunder; provided, however,
that no Party shall be required to pay over any payment or distribution,
execute any instruments or documents, or take any other action referred to in
this Section 7.02 to the extent that such

 

22

 

action
would contravene any law, order or other legal requirement, and in the event of
a controversy or dispute, such Party may interplead any payment or distribution
in any court of competent jurisdiction, without further responsibility in
respect of such payment or distribution under this Section 7.02.

 

Section 7.03           Representations.  The Original Agent represents and warrants to
the Collateral Agent that it has the requisite power and authority under the Original
Credit Agreement to enter into, execute, deliver, and carry out the terms of
this Agreement on behalf of itself and the Senior Lenders.  The Collateral Agent represents and warrants
that it has the requisite power and authority under the Indenture to enter
into, execute, deliver, and carry out the terms of this Agreement on behalf of
itself, the Trustee, and the Noteholders.

 

Section 7.04           Amendments.  No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Party hereto shall be
effective unless it is in a written agreement executed by the Collateral Agent
and the Senior Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

 

Section 7.05           Addresses
for Notices.  All demands, notices
and other communications provided for hereunder shall be in writing and, if to
the Collateral Agent, mailed or sent by telecopy or delivered to it, addressed
to it as follows:

 

The Bank of New York Trust
Company, N.A.

700 South Flower Street, Suite 500

Los Angeles, California 90017

Attention: Corporate Trust Department/Altra Industrial Motion, Inc.

Telephone:  213-630-6176

Facsmile:  213-630-6298

 

With
a copy to:

 

Proskauer Rose LLP

1585 Broadway

New York, NY

Attention: Julie Allen, Esq..

Facsmile: 212-969-2900

 

if to the Senior Agent,
mailed, sent or delivered thereto, addressed to it as follows:

 

Wells Fargo Foothill, Inc.

One Boston Place

Boston, MA 02108

Attention:  Business Finance Manager

Facsimile:   (617) 523-5839

 

23

 

With
a copy to:

 

Morrison & Foerster LLP

1290 Avenue of the Americas

New York, NY 10104

Attention:  Mark B. Joachim, Esq.

Facsimile:  (212) 468-7900

 

If to Parent or
Administrative Borrower, mailed, sent or delivered thereto, addressed to it as
follows:

 

Altra Industrial Motion,
Inc.

14 Hayward St.

Quincy, Massachusetts 02171

Attention:  Michael L. Hurt

Facsimile:   (617) 689-6202

 

With
a copies to:

 

Genstar Capital, L.P.

Four Embarcadero Center,
Suite 1900

San Francisco, CA 94111

Attention:  Darren J. Gold

Facsimile:  (415) 834-2383

 

and

 

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite
300

Dallas, Texas 75201

Attention:  Angela L. Fontana, Esq.

Facsimile:  (214) 746-7777

 

or as to any party at such
other address as shall be designated by such party in a written notice to the
other parties complying as to delivery with the terms of this Section
7.05.  All such demands, notices and
other communications shall be effective, when mailed, two business days after
deposit in the mails, postage prepaid, when sent by telecopy, when receipt is
acknowledged by the receiving telecopy equipment (or at the opening of the next
business day if receipt is after normal business hours), or when delivered, as
the case may be, addressed as aforesaid.

 

Section 7.06           No
Waiver, Remedies.  No failure on the
part of any Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other

 

24

 

or
further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

Section 7.07           Continuing
Agreement, Transfer of Secured Obligations. 
This Agreement is a continuing agreement and shall (i) remain in
full force and effect until the Discharge of the Credit Agreement Secured
Obligations shall have occurred and the Indenture Secured Obligations shall
have been paid in full, (ii) be binding upon the Parties and their
successors and assigns, and (iii) inure to the benefit of and be
enforceable by the Parties and their respective successors, transferees and
assigns.  Without limiting the generality
of the foregoing clause (iii), the Senior Agent or any Senior Lender, or the
Collateral Agent, the Trustee, or any Noteholder may assign or otherwise
transfer all or any portion of the Credit Agreement Secured Obligations or the
Indenture Secured Obligations, as applicable, to any other Person (other than any
Borrower, any Guarantor or any Affiliate of any Borrower or any Guarantor), and
such other Person shall thereupon become vested with all the rights and
obligations in respect thereof granted to the Senior Agent or any Senior
Lender, or the Collateral Agent, the Trustee, or any Noteholder, as the case
may be, herein or otherwise.

 

Section 7.08           Information
Concerning Financial Condition.

 

(a)           Collateral
Agent hereby assumes responsibility for keeping itself informed of the
financial condition of the Borrowers and Guarantors and of all other
circumstances bearing upon the risk of nonpayment of the Indenture Secured
Obligations, and agrees that Senior Agent has and shall have no duty to advise
Collateral Agent of information known to Senior Agent regarding such condition
or any such circumstances.  In the event
Senior Agent, in its sole discretion, undertakes, at any time or from time to
time, to provide any such information to Collateral Agent, Senior Agent shall
be under no obligation (i) to provide any such information to Collateral Agent
on any subsequent occasion, (ii) to undertake any investigation, or (iii) to
disclose any information which, pursuant to its commercial finance practices, Senior
Agent wishes to maintain confidential. 
Collateral Agent acknowledges and agrees that Senior Agent has made no
warranties or representations with respect to the legality, validity,
enforceability, collectability or perfection of the Credit Agreement Secured
Obligations or any liens or security interests held in connection therewith.

 

(b)           Senior
Agent hereby assumes responsibility for keeping itself informed of the
financial condition of the Borrowers and Guarantors and of all other
circumstances bearing upon the risk of nonpayment of the Credit Agreement
Secured Obligations, and agrees that Collateral Agent has and shall have no
duty to advise Senior Agent of information known to Collateral Agent regarding
such condition or any such circumstances. 
In the event Collateral Agent, in its sole discretion, undertakes, at
any time or from time to time, to provide any such information to Senior Agent,
Collateral Agent shall be under no obligation (i) to provide any such
information to Senior Agent on any subsequent occasion, (ii) to undertake any
investigation, or (iii) to disclose any 

 

25

 

information which, pursuant to its commercial finance practices,
Collateral Agent wishes to maintain confidential.  Senior Agent acknowledges and agrees that
Collateral Agent has made no warranties or representations with respect to the
legality, validity, enforceability, collectability or perfection of the
Indenture Secured Obligations or any liens or security interests held in
connection therewith.

 

Section 7.09           Governing
Law: Entire Agreement.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York except as otherwise preempted by applicable federal
law.  This Agreement constitutes the
entire agreement and understanding among the Parties with respect to the
subject matter hereof and supersedes any prior agreements, written or oral,
with respect thereto.

 

Section 7.10           Counterparts.  This Agreement maybe executed in any number of
counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.

 

Section 7.11           No Third
Party Beneficiary.  This Agreement is
solely for the benefit of the Parties (and their permitted assignees).  No other Person (including Borrower, any
Guarantor or any Affiliate of Borrower and any Subsidiary of Borrower or any
Guarantor) shall be deemed to be a third party beneficiary of this Agreement.

 

Section 7.12           Headings.  The headings of the articles and sections of
this Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof

 

Section 7.13           Severability.  If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement and shall not invalidate the Lien Priority or
any other priority set forth in this Agreement.

 

Section 7.14           Collateral
Agent Status.  Nothing in this
Agreement shall be construed to operate as a waiver by the Collateral Agent,
with respect to any Borrower, any Guarantor, the Trustee, or any Noteholder, of
the benefit of any exculpatory rights, privileges, immunities, indemnities, or
reliance rights contained in the Indenture or any of the other Indenture Loan
Documents.  For all purposes of this
Agreement, the Collateral Agent may (a) rely in good faith, as to matters of
fact, on any representation of fact believed by the Collateral Agent to be true
(without any duty of investigation) and that is contained in a written
certificate of any authorized representative of any Borrower or of the Senior
Agent or any Senior Lender, and (b) assume in good faith (without any duty of
investigation), and rely upon, the genuineness, due authority, validity, and
accuracy of any certificate, instrument, notice, or other document believed by
it in good faith to be genuine and presented by the proper person.  Each Borrower, Senior Agent, and each Senior Lender
expressly acknowledge that the subordination and related agreements set forth
herein by the Collateral Agent are made solely in its capacity as Collateral
Agent

 

26

 

under
the Indenture with respect to the Notes issued thereunder and the other
Indenture Loan Documents and are not made by the Collateral Agent in its
individual commercial capacity.

 

Section 7.15           Acknowledgment.  Each Borrower and each Guarantor hereby
acknowledges that it has received a copy of this Agreement and consents
thereto, and agrees to recognize all rights granted thereby to the Senior Agent
and the Collateral Agent and will not do any act or perform any obligation
which is not in accordance with the agreements set forth in this Agreement.
Each Borrower and each Guarantor further acknowledges and agrees that it is not
an intended beneficiary or third party beneficiary under this Agreement.

 

Section 7.16           VENUE; JURY
TRIAL WAIVER.

 

(a)           THE
PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE CITY OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT SENIOR AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SENIOR AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. 
EACH PARTY HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON  CONVENIENS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 7.16.

 

(b)           EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY HERETO REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section 7.17           Intercreditor Agreement.  This Agreement is the Intercreditor Agreement
referred to in the Indenture.  If this
Agreement or all or any portion of either Party’s rights or obligations
hereunder are assigned or otherwise transferred to any other Person, such other
Person shall execute and deliver an agreement containing terms substantially
identical to those contained in this Agreement.

 

27

 

IN WITNESS WHEREOF, the Senior
Agent, the Collateral Agent, each Borrower and each Guarantor has caused this
Agreement to be duly executed and delivered as of the date first above written.

 

	
  SENIOR
  AGENT:

  	
  WELLS
  FARGO FOOTHILL, INC.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

28

 

	
  COLLATERAL

  	
  THE
  BANK OF NEW YORK TRUST COMPANY,

  
	
  AGENT
  AND

  	
  N.A., in its capacities as Collateral Agent and
  Trustee under

  
	
  TRUSTEE:

  	
  the
  Indenture (and not individually)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

29

 

The undersigned, each a
Borrower or Guarantor referred to in the foregoing Intercreditor Agreement,
hereby agrees to comply with all of the terms and provisions of the
Intercreditor Agreement in all respects. 

 

	
   

  	
  ALTRA
  INDUSTRIAL MOTION, INC.,

  a Delaware corporation, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARNER
  ELECTRIC LLC,

  a Delaware limited liability company, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KILIAN
  MANUFACTURING CORPORATION,

  a Delaware corporation, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARNER
  ELECTRIC TECHNOLOGY LLC,

  a Delaware limited liability company, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FORMSPRAG
  LLC,

  a Delaware limited liability company, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOSTON
  GEAR LLC,

  a Delaware limited liability company, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NUTTALL
  GEAR LLC,

  a Delaware limited liability company, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  

 

30

 

	
   

  	
  AMERIDRIVES
  INTERNATIONAL, L.P.,

  a Delaware limited partnership, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  KILIAN COMPANY,

  a Delaware corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARNER
  ELECTRIC INTERNATIONAL HOLDING,

  INC.,

  a Delaware corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  ENTERPRISES MPT CORP.,

  a Delaware corporation, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  ENTERPRISES MPT, L.P.,

  a Delaware limited partnership, as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

31

 

Annex
A

 

This ACKNOWLEDGMENT,
dated as of               
     , 20   , is delivered pursuant to
Section 5.04 of the Intercreditor and Lien Subordination Agreement (the “Intercreditor
Agreement”, dated as of November 30, 2004 by Wells Fargo Foothill, Inc. (as
Senior Agent) and The Bank Of New York, as Collateral Agent and Trustee, and
acknowledged by Altra Industrial Motion, Inc., as a Borrower and certain of its
Subsidiaries as Borrowers and Guarantors. 
Capitalized terms used herein but not defined herein are used with the
meanings given them in the Intercreditor Agreement.

 

By executing and delivering
this Acknowledgment, the undersigned, as provided in Section 5.04 of the
Intercreditor Agreement, hereby becomes a party to the Intercreditor Agreement
as Senior Agent, with the same force and effect as if originally named as the Original
Senior Agent therein.

 

IN WITNESS WHEREOF, the
undersigned has caused this Acknowledgment to be duly executed and delivered as
of the date first above written.

 

	
   

  	
  [LENDER PROVIDING NEW
  CREDIT FACILITY]

  
	
   

  	
   

  
	
   

  	
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]