SECOND AMENDMENT

Exhibit 10.1

SECOND AMENDMENT

          THIS SECOND AMENDMENT (this “Amendment”) dated as of January 25, 2005 is entered into among REGAL-BELOIT CORPORATION (the “Company”), various financial institutions, BANK OF AMERICA, N.A., as Syndication Agent, and M&I MARSHALL & ILSLEY BANK, as Administrative Agent.

W I T N E S S E T H:

          WHEREAS, the Company, various financial institutions (the “Banks”), the Syndication Agent and the Administrative Agent are parties to an Amended and Restated Credit Agreement dated as of May 5, 2004 (as previously amended, the “Credit Agreement”; capitalized terms used but not defined herein have the respective meanings given to them in the Credit Agreement); and

          WHEREAS, the parties hereto desire to amend the Credit Agreement as hereinafter set forth;

          NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

          SECTION 1.     AMENDMENT TO CREDIT AGREEMENT.  Effective on the Amendment Effective Date (as defined below), Section 10.9(d) the Credit Agreement is amended by replacing the reference to “35% of Tangible Net Worth as of the last day of the immediately preceding Fiscal Year” with “$50,000,000”.

          SECTION 2.     REPRESENTATIONS AND WARRANTIES.  The Company represents and warrants to the Banks and the Administrative Agent that:

          2.1     Authorization; No Conflict.  The execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Credit Agreement as amended hereby (as so amended, the “Amended Credit Agreement”) have been duly authorized by all necessary corporate action (including any necessary shareholder action), have received all necessary governmental approval (if any shall be required), and do not and will not (a) violate any provision of law or any order, decree or judgment of any court or other government agency which is binding on the Company or any Guarantor, (b) contravene or conflict with, or result in a breach of, any provision of the certificate of incorporation, partnership agreement, by-laws or other organizational documents of the Company or any Guarantor or of any agreement, indenture, instrument or other document which is binding on the Company, any Guarantor or any other Subsidiary or (c) result in, or require, the creation or imposition of any Lien on any property of the Company, any Guarantor or any other Subsidiary.

          2.2     Validity and Binding Nature.  This Amendment has been duly executed and delivered by the Company, and this Amendment and the Amended Credit Agreement are legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

          2.3     Reaffirmation of Warranties.  The warranties contained in Section 9 of the Amended Credit Agreement are true and correct on the date of this Amendment, except to the extent that such warranties solely relate to an earlier date.

          SECTION 3.     CONDITIONS PRECEDENT.  This Amendment shall become effective on the date (the “Amendment Effective Date”) on which the Administrative Agent has received the following:

          3.1     Counterparts.  Executed counterparts of this Amendment from the Company and the Required Banks.