INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

Exhibit 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

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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.

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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”

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“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,

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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.

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“ 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,

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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,

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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

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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),

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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

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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 deliv