EX-10.33 Supplement No.2 to Security Agreement, dated as of April 5, 2007

EX-10.33 16 b65343s4exv10w33.txt EX-10.33 SUPPLEMENT NO.2 TO SECURITY AGREEMENT, DATED AS OF APRIL 5, 2007 EXHIBIT 10.33 Supplement No. 2 (this "Supplement") dated as of April 5, 2007, to the Security Agreement dated as of November 30, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the "Security Agreement") among Altra Industrial Motion, Inc., a Delaware corporation ("Company"), each of the parties listed as "Grantors" on the signature pages thereto and those additional entities that thereafter become grantors thereunder (collectively, jointly and severally, "Grantors" and each individually "Grantor"), and THE BANK OF NEW YORK COMPANY, N.A., in its capacity as Collateral Agent for the Holders (together with its successors and assigns in such capacity, "Collateral Agent"). WITNESSETH: WHEREAS, pursuant to that certain Indenture dated of November 30, 2004 (as amended, restated, supplemented or otherwise modified from time to time, including all exhibits and schedules thereto, the "Indenture") among Company, each of the Guarantors named therein ("Guarantors"), and the Bank of New York Trust Company, N.A., as Trustee and Collateral Agent, Company has issued to the Holders its 9% Senior Secured Notes Due 2011, and may issue from time to time additional notes in connection with the provisions of the Indenture (as same may be amended and restated, supplemented or otherwise modified from time to time, collectively, the "Notes") from time to time pursuant to the terms and conditions thereof; WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and/or the Indenture; WHEREAS, the New Grantors (as hereinafter defined) have entered into this Supplement in order to induce the Purchasers to purchase additional notes in the aggregate principal amount of $105,000,000; and WHEREAS, pursuant to Section 4.15 of the Indenture, new Domestic Restricted Subsidiaries of Company, must execute and deliver to Collateral Agent certain amendments to the Collateral Agreements, including the Security Agreement, and the execution and delivery of such amendment thereof by the undersigned new Grantor or Grantors (collectively, the "New Grantors") may be accomplished by the execution and delivery of this Supplement in favor of Collateral Agent, for the benefit of the Trustee, Collateral Agent and the Holders. NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each New Grantor hereby agrees as follows: 1. In accordance with Section 24 of the Security Agreement, each New Grantor, by its signature below, becomes a "Grantor" under the Security Agreement with the same force and effect as if originally named therein as a "Grantor" and each New Grantor hereby (a) agrees to all of the terms and provisions of the Security Agreement applicable to it as a "Grantor" thereunder and (b) represents and warrants that the representations and warranties made by it as a "Grantor" thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, each New Grantor, as security for the payment and performance in full of the Secured Obligations, does hereby grant, assign, and pledge to Collateral Agent, for the benefit of the Trustee, Collateral Agent and the Holders, a security interest in and security title to the assets of such New Grantor of the type described in Section 2 of the Security Agreement to secure the full and prompt payment of the Secured Obligations, including, without limitation, any interest thereon, plus reasonable attorneys' fees and expenses if the Secured Obligations represented by the Security Agreement are collected by law, through an attorney-at-law, or under advice therefrom to the extent such fees and expenses are required to be paid by the Borrowers under the Credit Agreement. Schedule 1, "Copyrights," Schedule 2, "Intellectual Property Licenses," Schedule 3, "Patents," Schedule 4, "Pledged Companies," Schedule 5, "Trademarks," Schedule 6, "Commercial Tort Claims," Schedule 7, "Owned Real Property," and Schedule 8, "List of Uniform Commercial Code Filing Jurisdictions," attached hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule 7, and Schedule 8, respectively, to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement. Each reference to a "Grantor" in the Security Agreement shall be deemed to include each New Grantor. The Security Agreement is incorporated herein by reference. 2. Each New Grantor represents and warrants to the Trustee, Collateral Agent and the Holders that this Supplement has been duly executed and delivered by such New Grantor and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity). 3. This Supplement may be executed in multiple 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. Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission shall be as effective as delivery of a manually executed counterpart hereof. 4. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. 5. Notwithstanding anything to the contrary contained herein, this Supplement shall not be effective until the execution and delivery of the Fifth Supplemental Indenture dated as of the date hereof, entered into by the Company, the Guarantors signatory thereto, the New Guarantors (as defined therein), and the Trustee, at which time this Supplement shall be effective immediately without any further action. 6. This Supplement shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflict of laws principles thereof. [SIGNATURE PAGES FOLLOW] 2 IN WITNESS WHEREOF, each New Grantor and Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written. NEW GRANTORS: TB WOOD'S INCORPORATED, a Pennsylvania corporation, as a New Grantor By: /s/ William T. Fejes, Jr. ------------------------------------ Name: William T. Fejes, Jr. ---------------------------------- Title: President, CEO and Director --------------------------------- PLANT ENGINEERING CONSULTANTS, LLC, a Tennessee limited liability company, as a New Grantor By: /s/ William T. Fejes, Jr. ------------------------------------ Name: William T. Fejes, Jr. --------------------------------- Title: President --------------------------------- TB WOOD'S ENTERPRISES, INC., a Delaware corporation, as a New Grantor By: /s/ Joseph C. Horvath ------------------------------------ Name:Joseph C. Horvath ----------------------------------- Title:President and Treasurer ---------------------------------- TB WOOD'S CORPORATION, a Delaware corporation, as a New Grantor By: /s/ William T. Fejes, Jr. ------------------------------------ Name: William T. Fejes, Jr. ---------------------------------- Title: President, CEO and Director --------------------------------- COLLATERAL AGENT: THE BANK OF NEW YORK TRUST COMPANY, N.A., as Collateral Agent By: /s/ Sandee Parks ---------------------------------- Name: Sandee Parks ---------------------------------- Title: Vice President --------------------------------- [SIGNATURE PAGE OF SUPPLEMENT TO SECURITY AGREEMENT] SCHEDULE 1 COPYRIGHTS None. i SCHEDULE 2 INTELLECTUAL PROPERTY LICENSES Trademark Licenses: 1. Agreement between T.B. Wood's Sons Company and Nabeya Kogyo Co., Ltd., dated April 8, 1986. 2. Agreement between T.B. Wood's Sons Company and Daido-Sprag Ltd., dated December 13, 1994. 3. Agreement between T.B. Wood's Incorporated and Daido Precision Ltd., dated April 1, 2000. 4. License Agreement between Plant Engineering Consultants, Inc. and TB Wood's Enterprises, Inc. dated January 1, 2000. 5. License Agreement between Societe Industrielle de Transmissions d/b/a Texrope and T.B. Wood's Sons Company dated July 1, 1972. 6. Addendum Number 1 to the License Agreement between TB Wood's Sons company and Societe Industrielle de Transmissions d/b/a Texrope, dated June 18, 1982. ii SCHEDULE 3 PATENTS

iii SCHEDULE 4 PLEDGED COMPANIES

iv SCHEDULE 5 TRADEMARKS

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ix SCHEDULE 6 COMMERCIAL TORT CLAIMS None. x SCHEDULE 7 OWNED REAL PROPERTY TB WOOD'S INCORPORATED Main offices, warehouse Mechanical Division manufacturing plant: 440 North Fifth Street Chambersburg, PA 17201 Electronics Division Offices and manufacturing plant 3181 Black Gap Road Chambersburg, PA 17201 801 E. Industrial Ave. Mt. Pleasant, Michigan ###-###-#### Clovis Baker Road San Marcos, TX 78666 Houser Road Greene, PA xi SCHEDULE 8 LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

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