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<SEC-DOCUMENT>0000912057-97-008933.txt : 19970318
<SEC-HEADER>0000912057-97-008933.hdr.sgml : 19970318
ACCESSION NUMBER: 0000912057-97-008933
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 18
CONFORMED PERIOD OF REPORT: 19961231
FILED AS OF DATE: 19970317
SROS: NASD

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: AFTERMARKET TECHNOLOGY CORP
CENTRAL INDEX KEY: 0000933405
STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714]
IRS NUMBER: 954486486
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-21803
FILM NUMBER: 97557320

BUSINESS ADDRESS:
STREET 1: 33309 1ST WAY SOUTH
STREET 2: STE A 206
CITY: FEDERAL WAY
STATE: WA
ZIP: 98003
BUSINESS PHONE: 2068380346

MAIL ADDRESS:
STREET 1: 33309 FIRST WAY S
STREET 2: SUITE A 206
CITY: FEDERAL WAY
STATE: WA
ZIP: 98003
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<DESCRIPTION>FORM 10-K
<TEXT>

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM 10-K

(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-21803

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

AFTERMARKET TECHNOLOGY CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 95-4486486
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

33309 FIRST WAY SOUTH, SUITE A-206
FEDERAL WAY, WASHINGTON 98003
(Address of Principal Executive Offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 838-0346
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /

The aggregate market value of the voting stock held by non-affiliates
of the Registrant (based on the closing price of such stock, as reported by The
Nasdaq National Market, on February 28, 1997) was $92,848,490.

The number of shares outstanding of the Registrant's Common Stock, as
of February 28, 1997, was 16,980,794 shares.

DOCUMENTS INCORPORATED BY REFERENCE
None.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
Page
----

ITEM 1. BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

ITEM 2. PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

ITEM 3. LEGAL PROCEEDINGS.. . . . . . . . . . . . . . . . . . . . . . . . .8

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.. . . . . . . .9

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.. . . . . . . . . . . . . . . . . . . . . . . .9

ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . .9

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.. . . . . . . . . . . . . . . 11

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.. . . . . . . . . . . 16

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.. . . . . . . . . . . . . . . 35

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . 35

ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . . 37

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . 41

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . . 43

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.. . . . . . . . . . . . . . . . . . . . . . . . . . . 45

<PAGE>

PART I

ITEM 1. BUSINESS.

BACKGROUND

Aftermarket Technology Corp. ("ATC") was incorporated under the laws
of Delaware in July 1994 at the direction of Aurora Capital Partners L.P.
("ACP") to acquire Aaron's Automotive Products, Inc. ("Aaron's"), H.T.P., Inc.
("HTP"), Mamco Converters, Inc. ("Mamco") and RPM Merit, Inc. ("RPM")
(collectively, the "Initial Acquisitions"). Aaron's, HTP, Mamco and RPM as they
existed prior to the Initial Acquisitions are hereinafter collectively referred
to as the "Predecessor Companies." Subsequent to the Initial Acquisitions, the
Company acquired Component Remanufacturing Specialists, Inc. ("CRS") and Mascot
Truck Parts Inc. ("Mascot") in June 1995, and King-O-Matic Industries Limited
("King-O-Matic") in September 1995 (collectively, the "1995 Acquisitions"),
Tranzparts, Inc. ("Tranzparts") in April 1996 and Diverco, Inc. ("Diverco") in
October 1996 (collectively, the "1996 Acquisitions") and Replacement and
Exchange Parts Co., Inc. ("Repco") in January 1997. ATC conducts all of its
operations through its wholly-owned subsidiaries and each of their respective
subsidiaries. Throughout this Annual Report, except where the context otherwise
requires, the "Company" refers collectively to ATC and its subsidiaries and the
Predecessor Companies.

On December 20, 1996, ATC consummated an initial public offering of
its Common Stock (the "IPO"). Simultaneous with the consummation of the IPO,
Aftermarket Technology Holdings Corp., the sole stockholder of ATC prior to the
IPO ("Holdings") was merged into ATC (the "Reorganization"). Upon the
effectiveness of such merger, each outstanding share of Holdings Common Stock
was converted into one share of ATC Common Stock, and each outstanding share of
Holdings Redeemable Exchangeable Cumulative Preferred Stock (the "Holdings
Preferred Stock") was converted into one share of ATC Redeemable Exchangeable
Cumulative Preferred Stock (the "Preferred Stock"), which was immediately
thereafter redeemed for an amount in cash equal to $100.00 plus an amount in
cash equal to accrued and unpaid dividends on the Holdings Preferred Stock to
the date of the Reorganization.

GENERAL

The Company is a leading remanufacturer and distributor of drive train
products used in the aftermarket repair of passenger cars and light trucks. The
Company's principal products include remanufactured transmissions, torque
converters and engines, as well as remanufactured and new parts for the repair
of automotive drive train and engine assemblies. The Company's principal
customers include: (i) independent transmission rebuilders, general repair shops
and distributors (the "Independent Aftermarket"); (ii) original equipment
manufacturers ("OEMs"), principally Chrysler, for use as replacement parts by
their dealers; and (iii) retail automotive parts stores.

The Company believes the key elements of its success are the quality
and breadth of its product offerings and the Company's emphasis on strong
customer relationships, promoted by strong technical support, rapid delivery
time, innovative product development and competitive pricing. In addition, the
Company has benefited from the increasing use of remanufactured transmissions,
engines and other parts for aftermarket repairs as the industry recognizes that
remanufacturing provides a higher quality, lower cost alternative to rebuilding
the assembly or replacing it with a new assembly manufactured by an OEM.

The automotive aftermarket in the United States and Canada consists of
sales of parts and services for vehicles after their original purchase. The
Company competes specifically in the aftermarket segment for automotive
transmissions, engines and other drive train related products.

<PAGE>

PRODUCTS

The Company's product lines include remanufactured transmissions,
remanufactured engines and hard parts used in drive train repairs. In addition,
the Company distributes repair kits used in drive train repairs and certain
other products.

In its remanufacturing operations, the Company obtains used
transmissions, hard parts, engines and related components, commonly known as
"cores," which are sorted by make and model and either placed into immediate
production or stored until needed. In the remanufacturing process, the cores
are evaluated and disassembled into their component parts. The components that
can be incorporated into the remanufactured product are cleaned, tested and
refurbished. All components determined not reusable or repairable are replaced
by other remanufactured or new components. The units are then reassembled using
high-volume precision manufacturing techniques into finished assemblies.
Inspection and testing are conducted at various stages of the remanufacturing
process, and each finished assembly is tested on equipment designed to simulate
performance under operating conditions. Primarily as a result of its rigorous
quality control procedures, the Company has experienced an insignificant number
of warranty claims on its products. After testing, completed products are then
packaged for immediate delivery or shipped to one of the Company's distribution
centers.

Generally, the cores used in the Company's remanufacturing process for
sale to its OEM customers are provided to the Company by the OEM or its dealer
network. The majority of the cores used in the Company's remanufacturing
process for sale to its Independent Aftermarket and retail customers are
obtained from customers as trade-ins. The Company encourages its Independent
Aftermarket and retail customers to return cores on a timely basis and charges
customers a supplemental core charge in connection with purchases of engines and
critical hard parts. The customer can satisfy this charge by returning a usable
core or making a cash payment equal to the amount of the supplemental core
charge. If cores are not returned in a timely manner, the Company then must
procure cores through its network of independent core brokers. While core
prices are subject to supply and demand price volatility, the Company believes
its procurement network for cores will continue to provide cores at reasonable
prices. The preceding sentence contains a forward-looking statement, and there
can be no assurance that actual results will not differ materially from the
information contained in the preceding sentence.

TRANSMISSIONS

The Company remanufactures transmissions which are factory approved
and suitable for warranty and post-warranty replacement of transmissions for
Chrysler and 12 foreign OEMs, including Hyundai Motor America, Subaru of America
and American Isuzu, for their United States dealer networks. The number of
transmission models remanufactured by the Company has been increasing to
accommodate the greater number of models currently used in vehicles manufactured
by the Company's OEM customers. The majority of the Company's transmissions are
sold to Chrysler under Chrysler's MOPAR brand name. In addition, the Company
rebuilds heavy duty and light duty truck transmissions and air compressors.

HARD PARTS

The Company remanufactures torque converters (the coupler between the
transmission and engine), planetary gears (speed regulating devices inside the
transmission) and transmission fluid pumps. These "hard" parts are sold
principally to the Independent Aftermarket for use in drive train repairs. Hard
parts are sold under the RPM, HTP, MAMCO, TRANZPARTS and DIVERCO brand names.

ENGINES

The Company remanufactures engines designed as replacement engines for
use in many domestic passenger cars and light trucks. Principal customers are
Western Auto and O'Reilly Auto Parts, as well as the Independent Aftermarket.
Over the past three years, the variety of engine models remanufactured by the
Company has increased as the Company has expanded the range of engines offered
to meet customer requirements.

<PAGE>

REPAIR KITS AND OTHER PRODUCTS

Repair kits sold by the Company consist of gaskets, friction plates,
seals, bands, filters and other "soft" parts that are used in rebuilding
transmissions for substantially all domestic and most imported passenger cars
and light trucks. Kits are currently sold principally to the Independent
Aftermarket. Each kit is designed specifically to include substantially all of
the soft parts necessary for rebuilding a particular model of transmission. In
addition to manufacturing or remanufacturing certain of the components that are
used in its kits, the Company maintains a variety of supply relationships that
allow it to purchase components for its kits at competitive prices. The
components manufactured or remanufactured by the Company include various
friction plates, gaskets and bands. The repair kits are sold under the RPM,
HTP, KING-O-MATIC, TRANZPARTS and DIVERCO brand names.

Other products consist principally of remanufactured rack and pinion
assemblies and CV axles for passenger cars and light trucks for the Independent
Aftermarket, and cleaning and testing equipment for the Independent Aftermarket
and other industrial businesses. These products are sold under the RPM, HTP,
KING-O-MATIC, TRANZPARTS and INTERCONT brand names.

MARKETING AND DISTRIBUTION

The Company distributes its products to: (i) the Independent
Aftermarket; (ii) its OEM customers for use as replacement parts by their
dealers; and (iii) retail automotive parts stores.

INDEPENDENT AFTERMARKET

The Company supplies transmission repair kits and hard parts used in
drive train repairs to independent transmission rebuilders and distributors in
the United States and Canada, such as AAMCO Transmissions Inc., MOTRA Corp. and
Lee Myles Associates Corp. These products are used in the Independent
Aftermarket to rebuild transmissions and other assemblies using remanufactured
and new component parts purchased from a variety of suppliers. In addition, the
Company supplies transmission and engine repair kits, hard parts used in drive
train repairs, remanufactured engines and certain remanufactured components such
as CV axles to general repair shops in the United States. Transmission and
engine repairs performed in the Independent Aftermarket are generally for
vehicles no longer covered by warranty or for OEM dealers who do not have access
to remanufactured assemblies. The Company believes that it currently supplies
less than one-third of the remanufactured or new drive train component
requirements of its Independent Aftermarket customers.

There are two characteristics of the Independent Aftermarket that
influence the Company's business strategy. First, as the number of vehicle
models has proliferated and repairs have become increasingly complex, the
Independent Aftermarket has grown more dependent on its suppliers for technical
support and for assistance in managing inventory by delivering product on a
just-in-time basis at competitive prices. Second, Independent Aftermarket
customers (including those affiliated with larger organizations such as AAMCO,
MOTRA and Lee Myles) generally purchase parts at the individual repair shop
level. Independent Aftermarket customers tend to make purchasing decisions
based on availability and rapid delivery of products, competitive pricing,
breadth of product offering and technical assistance. To respond to these
requirements, the Company has developed a strategy of geographic expansion of
its distribution system to provide its Independent Aftermarket customers with
short-notice rapid delivery, high service levels and technical support for a
broad product offering in each local market. This is accomplished through
47 distribution centers located throughout the United States and Canada from
which the Company provides local technical support and a wide range of products
delivered by Company-operated trucks to its customers.

The Company has developed a common product identification and
numbering system which is currently being implemented on a Company-wide basis.
In addition, the Company is in the process of electronically linking its
distribution centers through a computer network that will enable each center to
determine more quickly if and where a particular part is located within the
distribution system, thereby further enhancing customer service. The Company
expects to implement this process in stages during 1997 and 1998, and it
believes that the process will be completed by the third quarter of 1998. These
changes are expected to improve customer service, increase

<PAGE>

product availability, enhance inventory management and improve operational
efficiencies. The preceding sentence contains a forward-looking statement, and
there can be no assurance that actual results will not differ materially from
the information contained in the preceding sentence.

New customers are developed by a direct sales force operating from the
Company's local distribution centers, by national and local trade publication
advertising and by telemarketing. The Company also participates in trade shows.
The Company believes its RPM, HTP, KING-O-MATIC, MAMCO, TRANZPARTS, INTERCONT
and DIVERCO brand names are well recognized and respected in their regional
markets. Net sales to Independent Aftermarket customers accounted for 47.8% of
the Company's revenues in 1995 and 41.1% in 1996.

OEM CUSTOMERS

The Company provides factory-approved remanufactured transmissions to
OEMs for use in warranty and, to a lesser extent, post-warranty repair work by
their dealers. The Company's largest OEM customer is Chrysler, to whom the
Company also supplies certain factory-approved remanufactured engines. The
Company sells to 12 foreign OEMs, including Hyundai Motor America, Subaru of
America and American Isuzu. Products are sold to each OEM pursuant to supply
arrangements for individual transmission models. Net sales to the Company's OEM
customers accounted for 44.7% of the Company's 1995 revenues and 51.9% of
revenues in 1996. Net sales to Chrysler accounted for 35.4% and 37.2% of the
Company's revenues in 1995 and 1996, respectively. Net sales to Chrysler grew
from $67.6 million in 1995 to $101.5 million in 1996.

Over the past 12 years, the Company has developed and maintained
strong relationships at many levels of both the corporate and the factory
organizations of Chrysler. In recognition of the Company's consistently high
level of service and product quality throughout its relationship with Chrysler,
in 1995 and 1996 the Company was awarded the Platinum Pentastar award, the
highest award Chrysler bestows on a supplier. Chrysler awarded only 14 Platinum
Pentastar awards in 1995 and only 13 in 1996. The 1995 award marked the first
time that the Platinum Pentastar had been awarded to a remanufacturer or to a
supplier that serves exclusively as a MOPAR aftermarket parts supplier. In
addition to its Platinum Pentastar, the Company received Gold Pentastar awards
in 1993, 1994, 1995 and 1996. Only seven suppliers received the Gold Pentastar
award in each of these years.

Chrysler began implementing remanufacturing programs for its
transmission models in 1986 and selected the Company as its sole supplier of
remanufactured transmissions in 1989. Chrysler has advised the Company that, by
implementing a remanufacturing program, Chrysler has realized substantial
warranty cost savings, standardized the quality of its dealers' aftermarket
repairs and reduced its own inventory of replacement parts. Currently, Chrysler
has remanufacturing programs for transmission models that are used in less than
70% of its vehicles, and the Company is the only factory-approved supplier of
remanufactured transmissions for these models.

As part of its expanding relationship with Chrysler and in response to
a periodic shortage of cores, in 1996 the Company established a central core
return center for all of Chrysler's transmission models. Chrysler dealers make
arrangements to ship transmission and engine cores to a regional depot, which
then ships directly to the Company's central core return center located near its
main remanufacturing facility. The Company thus assists Chrysler by improving
the efficient and timely return of cores at a cost savings to Chrysler.
Furthermore, the Company performs value-added services such as core audit and
analysis in conjunction with Chrysler engineers. The Company is currently
working with Chrysler to improve the tracking and management of cores, which
will allow the Company to schedule its production more efficiently. The Company
believes that this central core facility has reduced the risk of future Chrysler
core shortages.

Although the Company is currently the only factory-approved supplier
of remanufactured transmissions to Chrysler, Chrysler is not obligated to
continue to purchase the Company's products and there can be no assurance that
the Company will be able to maintain or increase the level of its sales to
Chrysler or that Chrysler will not approve other suppliers in the future. In
addition, Chrysler reduced its standard new vehicle warranty from seven
years/70,000 miles to three years/36,000 miles and could implement a shorter
warranty in the

<PAGE>

future. Any such action could have the effect of reducing the amount of warranty
work performed by Chrysler dealers.

RETAIL AUTOMOTIVE PARTS STORES

The Company supplies remanufactured engines, transmission filter kits,
engine components and engine repair kits to automotive aftermarket retail stores
throughout the United States, which offer new and remanufactured parts and
assemblies to a broad range of customers, principally "do-it-yourself" customers
and general repair shops. The retail automotive parts store market is highly
fragmented with most retail stores obtaining products similar to those provided
by the Company from a variety of regional suppliers. These customers tend to
make purchasing decisions based on price, rapid delivery of products and breadth
of product offering. As a supplier with a national scope and a broader product
line than many of its competitors, the Company provides high quality products,
competitive prices and high service levels as well as promotional literature and
advertisements. The Company's principal retail customers are Western Auto,
O'Reilly Auto Parts and Advance Auto. Net sales to retail automotive parts
stores accounted for 7.6% of the Company's revenues in 1995 and 7.1% in 1996.

ACQUISITIONS

Strategic acquisitions have been an important element in the Company's
historical growth. By integrating an acquired company's products into the
Company's distribution system, the Company is able to offer these products to a
substantially greater number of markets than was the case prior to the
acquisition. In addition, the Company expects to realize economies of scale in
areas including purchasing, administration and inventory management. The
Company's management is experienced in identifying acquisition opportunities and
completing and integrating acquisitions within the automotive aftermarket.
Since its formation and acquisition of Aaron's, HTP, Mamco and RPM in 1994, ATC
has acquired CRS, Mascot and King-O-Matic in 1995, Tranzparts and Diverco in
1996 and Repco in 1997.

COMPETITION

The Company competes in the highly fragmented yet highly competitive
automobile aftermarket for transmissions, engines and other drive train
components, in which the majority of industry supply comes from small
local/regional participants. However, certain of the Company's competitors are
larger than the Company and have greater financial and other resources available
to them than does the Company. Competition is based primarily on product
quality, service, delivery, technical support and price.

EMPLOYEES

As of January 31, 1997, the Company employed approximately 3,250
people. The Company believes its employee and labor relations are good. None
of the Company's subsidiaries has experienced a work stoppage in its history,
and the Company has not experienced any work stoppage since its formation in
1994. None of the Company's employees are members of any labor union.

ENVIRONMENTAL

The Company is subject to various evolving federal, state, local and
foreign environmental laws and regulations governing, among other things,
emissions to air, discharge to waters and the generation, handling, storage,
transportation, treatment and disposal of a variety of hazardous and
non-hazardous substances and wastes. These laws and regulations provide for
substantial fines and criminal sanctions for violations. The operation of
automotive parts remanufacturing plants involves environmental risks.

<PAGE>

"EPA") as the Baldwin Park Operable Unit ("BPOU") of the San Gabriel Valley
Superfund Sites. The federal Superfund law (the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA")) both
provides for the appropriate cleanup of contaminated sites and assigns liability
for the cost of such cleanups. The parties held responsible for cleanup costs
are broadly defined under CERCLA, and generally include present owners and
operators of a site and certain past owners and operators. Liability for
cleanup costs imposed against such "responsible parties" is strict, joint and
several. However, such costs are typically allocable among responsible parties
through settlement or litigation based on factors including each particular
party's relative contribution of contaminants to the site and ability to pay.

The EPA has proposed a groundwater treatment system as an interim
remedial measure for the BPOU. The EPA has estimated that it will cost
approximately $47 million to construct this system and approximately $4 million
per year for an indefinite period to operate it. The Company has not
independently evaluated this estimate, and the actual cost may vary
substantially from this estimate. In addition, the EPA has incurred substantial
costs to date and will likely continue to incur such costs in overseeing the
implementation of remedial measures. The EPA has informally estimated that
these costs may be in excess of $1 million. Further, if the EPA determines that
the interim remedial measures are not adequate, additional costs could be
incurred. As discussed above, the "responsible parties" for this site could be
held liable for these EPA costs. In addition to cleanup costs, the responsible
parties may be required to pay for damages for injuries to natural resources
such as soil, groundwater or wildlife caused by the contamination at the BPOU.
To date, the government agencies authorized to claim natural resource damages
for this site have not made any assessment of the value, if any, of such
damages. In 1993, the EPA notified the Prior RPM Company, the general
partnership consisting of the Prior RPM Company shareholders which owns the
Azusa Properties and approximately 100 other entities that they may be
potentially responsible parties ("PRPs") for the San Gabriel Valley Superfund
Sites as present or former owners or operators of properties located within that
Site. In January 1995, the EPA sent letters to 16 of these parties with respect
to 15 properties in the BPOU, describing 4 of those properties as apparently the
"largest contributors to the groundwater contamination" and the remaining 11
properties as apparently in a range of moderate to lesser contributors. The
letters identify the recipients as PRPs for the proposed interim remediation and
request that they enter into negotiations to design, construct and operate the
cleanup remedy. The recipients of the letters included a general partnership
comprised of the Prior RPM Company shareholders, which was informed that the EPA
considers it responsible for two of the sites described as lesser to moderate
contributors to the contamination.

In conjunction with the federal and state environmental investigation
of this area, the Prior RPM Company has been required by the California Regional
Water Quality Control Board (the "Water Board") to conduct an investigation on
the Azusa Properties. This investigation has detected soil contamination on
certain of the Azusa Properties formerly leased by RPM and as a result, the
Prior RPM Company is being required by the Water Board to undertake further
investigations and may be required to undertake remedial action on those
properties.

For one year after the RPM Acquisition, the Company leased the Azusa
Properties pursuant to leases which provide that the Company has not assumed any
liabilities with respect to environmental conditions existing on or about these
properties prior to the commencement of the lease period, although the Company
could be held responsible for such liabilities under various legal theories.
Since the RPM Acquisition, the Company has been engaged in negotiations with the
EPA to settle any liability that it may have for this site. The RPM acquisition
agreement provides that the Company did not assume any environmental liabilities
associated with hazardous substances existing on or about the Azusa Properties
occupied by the Prior RPM Company prior to the RPM Acquisition and that the
Prior RPM Company and the Prior RPM Company shareholders will jointly and
severally indemnify the Company for all liabilities or damages (other than
consequential damages) that the Company may reasonably incur as a result of any
claim asserted against the Company relating to unassumed environmental
liabilities. There can be no assurance, however, that the Company would be able
to make any recovery under any indemnification provisions. The Company also
could become responsible if the conduct of its business contributed to any
environmental contamination on these properties. The Company took steps to
ensure that its business at these properties was conducted in compliance with
applicable environmental laws and in a manner that does not contribute to any
environmental contamination. Moreover, the Company has significantly reduced
its presence at the site and has moved all manufacturing operations off-site.
Since July 18, 1995, the Company's only real property

6
<PAGE>

interest in the Azusa Properties has been the lease of a 6,000 square foot
storage and distribution facility. The Company believes, although there can be
no assurance, that it will not incur any material liability as a result of the
pre-existing environmental conditions.

In connection with the CRS, Mascot, King-O-Matic, Aaron's, RPM, HTP,
Mamco, Tranzparts, Diverco and Repco acquisitions, the Company conducted certain
investigations of these companies' facilities and their compliance with
applicable environmental laws. The investigations, which included "Phase I"
assessments by independent consultants of all manufacturing and certain
distribution facilities, found that certain remedial, reporting and other
regulatory requirements, including certain waste management procedures, were not
or may not have been satisfied. Based in part on the investigations conducted,
and the indemnification provisions of the agreements entered into in connection
with these acquisitions, the Company believes, although there can be no
assurance, that its liabilities relating to these environmental matters will not
have a material adverse effect, individually or in the aggregate, on the
Company.

ITEM 2. PROPERTIES.

The Company currently leases 60 facilities with total leased space of
approximately 2.1 million square feet. The following table sets forth certain
information regarding the manufacturing facilities and distribution centers of
the Company.
LEASE
APPROXIMATE EXPIRATION TYPE OF FACILITY/PRODUCTS
LOCATION SQ. FEET DATE MANUFACTURED
- -------- ----------- ---------- --------------------------
Phoenix, Arizona 22,000 1997 Distribution Center
Tucson, Arizona 6,400 1998 Distribution Center
Azusa, California 6,000 1998 Distribution Center
Fresno, California 14,000 1997 Distribution Center
Los Angeles, California 4,700 1998 Distribution Center
Oakland, California 10,000 1997 Distribution Center
Rancho Cucamonga, California 153,000 2002 Distribution Center, Torque
Converters, Repair Kits, Hard
Parts
Sacramento, California 11,200 1998 Distribution Center
San Diego, California 10,000 1997 Distribution Center
San Jose, California 10,000 2000 Distribution Center
Van Nuys, California 6,800 2000 Distribution Center
Colorado Springs, Colorado 5,000 1997 Distribution Center
Denver, Colorado 9,000 1997 Distribution Center
Orlando, Florida 11,900 2001 Distribution Center
Atlanta, Georgia 14,900 1998 Distribution Center
Hillside, Illinois 20,000 2000 Distribution Center
Harvey, Illinois 46,000 2001 Distribution Center,
Transmissions, Hard Parts,
Engine Repair Kits
Louisville, Kentucky 51,500 1999 Distribution Center, Repair
Kits, Hard Parts
Louisville, Kentucky 9,200 (1) CV Axles
Grand Rapids, Michigan 9,000 1998 Distribution Center
Taylor, Michigan 12,200 2000 Distribution Center
Joplin, Missouri 264,000 1998 Transmissions, Engines
Creve Coeur, Missouri 9,700 1998 Distribution Center
Kansas City, Missouri 10,200 2000 Distribution Center
Springfield, Missouri 280,800 2004 Transmissions, Engines
Springfield, Missouri 30,000 1998 Torque Converters
Springfield, Missouri 12,100 2001 Distribution Center
Springfield, Missouri 34,000 1998 Cleaning and Testing Equipment
Springfield, Missouri 60,400 2000 Core Storage
Springfield, Missouri 98,800 (1) Core Storage

<PAGE>

Springfield, Missouri 10,000 (1) Core Storage
Springfield, Missouri 200,000 2006 Core Storage
Las Vegas, Nevada 7,500 1999 Distribution Center
Mahwah, New Jersey 92,900 2002 Distribution Center,
Transmissions
Albuquerque, New Mexico 7,000 1997 Distribution Center
Charlotte, North Carolina 23,000 2001 Distribution Center
Dayton, Ohio 42,000 1999 Torque Converters
Portland, Oregon 20,000 1997 Distribution Center
Memphis, Tennessee 37,800 2003 Distribution Center, Repair
Kits
Austin, Texas 5,000 1997 Distribution Center
Dallas, Texas 93,000 2011 Distribution Center, Repair
Kits, Hard Parts
Houston, Texas 13,500 2011 Distribution Center
San Antonio, Texas 13,000 2001 Distribution Center
Salt Lake City, Utah 15,000 1997 Distribution Center
Norfolk, Virginia 9,700 2000 Distribution Center
Federal Way, Washington 1,600 1998 Corporate Offices
Seattle, Washington 22,000 1997 Distribution Center
Spokane, Washington 9,500 2000 Distribution Center
Janesville, Wisconsin 30,000 2001 Distribution Center, Repair
Kits, Hard Parts
Calgary, Alberta 9,200 2001 Distribution Center
Edmonton, Alberta 14,800 1998 Distribution Center, Heavy
Duty Truck Transmissions
Vancouver, British Columbia 7,800 1997 Distribution Center
Vancouver, British Columbia 7,300 1997 Distribution Center
Moncton, New Brunswick 12,000 2000 Distribution Center
Mississauga, Ontario 35,100 1998 Distribution Center, Heavy
Duty Truck Transmissions and
Air Compressors
Mississauga, Ontario 12,200 2001 Repair Kits
Mississauga, Ontario 24,000 2000 Distribution Center
Montreal, Quebec 11,200 2000 Distribution Center
Regina, Saskatchewan 600 (1) Distribution Center
Mexicali, Mexico 77,100 1998 Torque Converters, Cleaning
and Testing Equipment
- -------------

(1) Month-to-month lease.

The Company believes that its current manufacturing facilities and
distribution centers are adequate for the current level of the Company's
activities. The Company's transmission and engine remanufacturing facility in
Springfield, Missouri is currently employing two work shifts, seven days a week.
Other manufacturing sites have the flexibility to add both additional shifts and
production workers needed to accommodate additional demand for products and
services. However, in the event the Company were to experience a material
increase in sales, the Company may require additional manufacturing facilities.
The Company believes such additional facilities are readily available on a
timely basis on commercially reasonable terms. Further, the Company believes
that the leased space housing its existing manufacturing and distribution
facilities is not unique and could be readily replaced, if necessary, at the end
of the terms of its existing leases on commercially reasonable terms. Many of
the Company's leases are renewable at the option of the Company.

ITEM 3. LEGAL PROCEEDINGS.

From time to time, the Company has been and is involved in various
legal proceedings. Management believes that all of such litigation is routine
in nature and incidental to the conduct of its business, and that none of such
litigation, if determined adversely to the Company, would have a material
adverse effect, individually or in the aggregate, on the Company.

<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

One matter was submitted to a vote of the sole stockholder of the
Company during the quarter ended December 31, 1996. On December 13, 1996, a
special meeting of the sole stockholder was held to approve the amendment and
restatement of the Company's Certificate of Incorporation to increase the
authorized number of shares of Common Stock to 30,000,000 and Preferred Stock to
5,000,000. All 1,000 votes held by the sole stockholder were cast in favor of
the proposal.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock presently is traded on the Nasdaq National
Market under the symbol "ATAC." As of February 28, 1997, there were
approximately 1,680 record holders of its Common Stock. The Common Stock was
not listed on the Nasdaq National Market for a full quarterly period during the
fiscal year ended December 31, 1996.

The Company has not paid cash dividends on its Common Stock to date.
Because the Company currently intends to retain any earnings to provide funds
for the operation and expansion of its business and for the servicing and
repayment of indebtedness, the Company does not intend to pay cash dividends on
the Common Stock in the foreseeable future. Furthermore, as a holding company
with no independent operations, the ability of the Company to pay cash dividends
will be dependent upon the receipt of dividends or other payments from its
subsidiaries. Under the terms of the indentures governing the Company's senior
subordinated notes due 2004, the Company is not permitted to pay any dividends
on the Common Stock unless certain financial ratio tests are satisfied. In
addition, the Company's revolving credit facility contains certain covenants
that, among other things, prohibit the payment of dividends by the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources." Any determination to pay cash
dividends on the Common Stock in the future will be at the sole discretion of
the Company's Board of Directors.

ITEM 6. SELECTED FINANCIAL DATA.

The selected financial data presented below with respect to the
statements of income data for the seven months ended July 31, 1994, five months
ended December 31, 1994, and the years ended December 31, 1995 and 1996 and the
balance sheet data at December 31, 1995 and 1996 are derived from the Combined
Financial Statements of the Predecessor Companies and Consolidated Financial
Statements of the Company that have been audited by Ernst & Young LLP,
independent auditors, and are included elsewhere herein, and are qualified by
reference to such financial statements and notes related thereto. The selected
financial data with respect to the statement of income data for the year ended
December 31, 1992 and 1993 and the balance sheet data at December 31, 1992, 1993
and 1994, are derived from the audited Combined Financial Statements of the
Predecessor Companies that have been audited by Ernst & Young LLP, independent
auditors, but are not included herein. The data provided should be read in
conjunction with the Consolidated Financial Statements, related notes, and other
financial information included in this Annual Report.

<PAGE>

COMBINED CONSOLIDATED
--------------------------------- ---------------------------------

FOR THE FOR THE FOR THE YEAR
YEAR ENDED SEVEN MONTHS FOR THE FIVE ENDED
DECEMBER 31, ENDED MONTHS ENDED DECEMBER 31,
-------------------- JULY 31, DECEMBER 31, --------------------
1992 1993 1994(1) 1994 1995 1996
-------- --------- --------- -------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales. . . . . . . . . . $75,264 $110,702 $90,056 $67,736 $190,659 $272,879
Cost of sales. . . . . . . . 45,588 66,687 52,245 40,112 115,499 166,811
-------- --------- --------- -------- --------- --------
Gross profit . . . . . . . . 29,676 44,015 37,811 27,624 75,160 106,068
Selling, general and
administrative expenses . . 22,103 25,682 20,475 14,206 38,971 55,510
Amortization of intangible
assets. . . . . . . . . . . 28 28 16 1,210 3,308 3,738
Operating income . . . . . . 7,545 18,305 17,320 12,208 32,881 46,820
Interest expense (income),
net . . . . . . . . . . . . (258) (302) (158) 6,032 16,915 19,106
Income taxes (2) . . . . . . 150 471 (5) 2,565 6,467 11,415
-------- --------- --------- -------- --------- --------
Net income . . . . . . . . . $ 7,653 $ 18,136 $ 17,483 $ 3,611 $ 9,499 $ 16,299
-------- --------- ---------
-------- --------- ---------
Preferred stock dividends. . 853 2,093 2,222
-------- --------- --------
Net income available to
common stockholders . . . . $ 2,758 $ 7,406 $ 14,077
-------- --------- --------
-------- --------- --------
Pro forma (unaudited) (3)
Net income per share. . . . $ 0.65 $ 1.02
Shares used in computation
of net income per share . . 14,616 15,918

OTHER DATA:
Capital expenditures (4) . . $ 1,141 $ 2,310 $ 1,850 $ 1,336 $ 5,187 $ 7,843

</TABLE>

COMBINED CONSOLIDATED
------------------- ---------------------------------
DECEMBER 31,
-------------------------------------------------------
1992 1993 1994 1995 1996
------- ------- ------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital. . . . . . . . . . . . $18,639 $26,651 $40,499 $60,012 $103,371
Property, plant and
equipment (net) . . . . . . . . . . . 3,274 4,678 6,196 10,784 17,482
Total assets . . . . . . . . . . . . . 32,654 45,618 187,293 247,932 320,747
Long-term debt (5) . . . . . . . . . . 1,497 998 121,483 165,724 167,233
Preferred stock. . . . . . . . . . . . -- -- 20,853 22,946 --
Common stockholders' equity. . . . . . 22,107 31,720 22,757 30,188 105,832

</TABLE>

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

(1) The combined financial statements for the seven months ended July 31, 1994
include the operations of the Predecessor Companies up to their respective
acquisition dates; operations for RPM between July 20, 1994 and July 31,
1994 and for the other three Predecessor Companies for August 1st and 2nd,
1994 are not significant. All material transactions between the
Predecessor Companies have been eliminated.

(2) Two of the Predecessor Companies elected to be taxed as S Corporations for
all periods through consummation of the Initial Acquisitions; therefore,
for federal and state income tax purposes, any income or loss generally was
not taxed to these companies but was reported by their respective
stockholders. A pro forma provision for taxes based on income reflecting
the estimated provision for federal and state income taxes which would have
been provided had these companies been C Corporations and included in
consolidated returns with the Company is as follows: $3,036 and $7,334 for
the years ended December 31, 1992 and 1993, respectively, and $7,004 for
the seven months ended July 31, 1994.

(3) See Note 1 to consolidated financial statements.

<PAGE>

(4) Excludes capital expenditures made by each of CRS, Mascot, King-O-Matic,
Tranzparts and Diverco prior to such subsidiaries' respective acquisitions
and any capital expenditures made in connection with such acquisitions.

(5) Includes deferred tax liabilities of $1,438, $3,478 and $5,252 at
December 31, 1994, 1995 and 1996, respectively.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

OVERVIEW

The following discussion should be read in conjunction with the
Combined Financial Statements of the Predecessor Companies and the Consolidated
Financial Statements of the Company and notes thereto included elsewhere in this
Annual Report. The Combined Financial Statements of the Predecessor Companies
represent the combination of the historical financial statements of the four
separate businesses of the Predecessor Companies.

The Company's revenues are generated through the sale of drive train
products used in the automotive aftermarket repair of passenger cars and light
trucks. Since its formation, the Company has benefited from a combination of
internal and acquisition-related revenue growth. The Company achieved compound
annual growth in revenue of 38.0% from 1992 through 1996 (29.2% if the 1995 and
1996 Acquisitions are excluded).

The Company's revenues from sales to Independent Aftermarket customers
increased by 17.7% compounded annually from $58.5 million to $112.1 million
between 1992 and 1996. This growth was due to geographic expansion through the
addition of distribution centers, a broadened product line, enhanced customer
service, effective sales efforts and acquisitions. During the same period,
revenues from sales to OEM customers increased by 70.4% compounded annually from
$16.8 million to $141.5 million due to increased sales to existing customers,
including Chrysler, and the addition of new customers. Revenues from sales to
retail automotive parts stores increased from virtually zero in 1992 to $19.3
million in 1996.

The primary components of the Company's cost of goods sold are the
cost of cores and component parts, labor costs and overhead. While certain of
these costs have fluctuated as a percentage of sales over time, cost of goods
sold as a percentage of sales has remained relatively constant from 1992 through
1996. Selling, general and administrative ("SG&A") expenses consist primarily
of salaries, commissions, rent, marketing expenses and other management
infrastructure expenses. SG&A expenses as a percentage of sales declined from
29.4% in 1992 to 20.3% in 1996 principally due to the effect of spreading
certain fixed costs over a larger sales base.

In the fourth quarter of 1996, the Company recorded a non-cash charge
of approximately $485,000 for deferred compensation expense relating to the
difference between the exercise price and the intrinsic value for financial
statement presentation purposes of the Company's Common Stock for 628,176
options granted in October 1996. Substantially all of such options were granted
to Mr. Stephen J. Perkins, the Company's Chief Executive Officer, and other
members of senior management at $4.67 per share. This compensation expense will
aggregate $3.3 million, and will be recognized over the respective vesting
periods of the options, which generally range from three to five years.

RESULTS OF OPERATIONS

The following table sets forth certain financial statement data
expressed in millions of dollars and as a percentage of net sales. The pro
forma statement of income for the year ended December 31, 1994 reflects the
combined financial statements for the seven months ended July 31, 1994 for
Aaron's, HTP, Mamco and RPM, and the consolidated operations of these companies
for the five months ended December 31, 1994. Pro forma expense adjustments were
made to reflect the Initial Acquisitions as if they had occurred on January 1,
1994.

11
<PAGE>

YEAR ENDED DECEMBER 31,
---------------------------------------------------------
PRO FORMA CONSOLIDATED CONSOLIDATED
1994 1995 1996
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . $157.8 100.0% $190.7 100.0% $ 272.9 100.0%
Cost of sales. . . . . . . . . . . . . . . . 92.9 58.9 115.5 60.6 166.8 61.1
------- ------- ------- ------- ------- -------
Gross profit . . . . . . . . . . . . . . . . 64.9 41.1 75.2 39.4 106.1 38.9
Selling, general and administrative. . . . . 30.4 19.2 39.0 20.5 55.5 20.3
Amortization of intangible assets. . . . . . 3.0 1.9 3.3 1.7 3.8 1.4
------- ------- ------- ------- ------- -------
Operating income . . . . . . . . . . . . . . 31.5 20.0 32.9 17.2 46.8 17.2
Interest expense (income), net . . . . . . . 14.5 9.2 16.9 8.8 19.1 7.0
Provision for income taxes . . . . . . . . . 6.9 4.4 6.5 3.4 11.4 4.2
------- ------- ------- ------- ------- -------
Net income . . . . . . . . . . . . . . . . . $ 10.1 6.4% $ 9.5 5.0% $16.3 6.0%
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------

</TABLE>

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net income increased 71.6% from $9.5 million in 1995 to $16.3 million
in 1996, as the Company experienced significant revenue growth from all three of
its customer groups, OEMs, retail automotive parts stores and the Independent
Aftermarket. More than half of the revenue growth occurred from OEM customers.
Growth from the Independent Aftermarket was achieved largely through two
strategic acquisitions (Tranzparts and Diverco), and to a lesser extent from
internal growth. The higher net income was primarily achieved from the
Company's ability to spread its overhead expenses over a larger revenue base.

Although the Company's IPO resulted in an increase in the number of
shares used in the earnings per share ("EPS") calculation, EPS increased
significantly from $0.65 in 1995 to $1.02 in 1996. The numbers of shares used
in the calculation of EPS were 14.6 million for 1995 and 15.9 million for 1996 .

NET SALES. Net sales increased $82.2 million or 43.1%, from $190.7
million in 1995 to $272.9 million in 1996. Of this increase, $42.8 million was
due to internal growth and $39.4 million was due to the incremental net sales
generated by the companies acquired in 1995 and 1996: CRS, Mascot, King-O-Matic,
Tranzparts and Diverco, which were acquired on June 1, 1995, June 9, 1995,
September 12, 1995, April 2, 1996 and October 1, 1996, respectively.

The internal growth was generated primarily from increased sales
volumes with existing OEM customers. To a lesser extent, internal growth was
also generated by the incremental sales from five new distribution centers
opened during the second half of 1995, increased sales volumes through existing
distribution centers and increased sales volumes with existing retail customers.

Net sales to Chrysler of $101.5 million in 1996 represented 37.2% of
the Company's total net sales for the year, as compared to $67.6 million and
35.4% in 1995. The increase in net sales to Chrysler is partially reflective of
an effort by Chrysler during the third quarter of 1995 to reduce its inventory
of remanufactured transmissions. Management believes that the Chrysler
inventory reduction during the third quarter of 1995 was a one-time effort to
reverse an inventory build-up in 1994 and is not expected to recur. The
preceding sentence contains a forward-looking statement, and there can be no
assurance that actual results will not differ materially from the information
contained in the preceding sentence.

GROSS PROFIT. Gross profit as a percentage of net sales decreased
slightly from 39.4% in 1995 to 38.9% in 1996. The decrease in gross profit
margin was largely attributable to certain non-recurring start-up costs incurred
during 1996 in connection with the Company's new plant in Joplin, Missouri and
the expansion of capacity at the Company's plant in Springfield, Missouri needed
to support sales growth to retail and OEM customers.

<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses decreased
slightly as a percentage of net sales from 20.4% in 1995 to 20.3% in 1996.
However, SG&A expenses increased in absolute dollars from $39.0 million in 1995
to $55.5 million in 1996, representing an increase of $16.5 million or 42.4%.
The increase in SG&A expenses was due largely to the ongoing incremental SG&A
expenses of the companies acquired in 1995 and 1996: CRS, Mascot, King-O-Matic,
Tranzparts and Diverco. Other significant factors contributing to the increase
in SG&A expenses include the ongoing incremental expenses associated with the
five new distribution centers opened during the second half of 1995, and certain
start-up and ongoing SG&A expenses incurred in connection with the Company's new
plant in Joplin, Missouri. In addition, SG&A expenses in 1996 included a charge
of $0.7 million for certain planned reorganization costs associated with the
relocation of the Company's corporate headquarters to the Chicago area and the
integration of the Independent Aftermarket division.

AMORTIZATION OF INTANGIBLE ASSETS. Amortization of intangible assets
increased $0.4 million in 1996 as compared to 1995, reflecting the increase in
intangible assets that occurred as a result of the acquisitions of CRS, Mascot,
King-O-Matic, Tranzparts and Diverco.

INCOME FROM OPERATIONS. Principally as a result of the factors
described above, income from operations increased 42.2%, from $32.9 million in
1995 to $46.8 million in 1996. As a percentage of net sales, income from
operations in 1996 was 17.2%, equal to the same percentage of net sales in 1995.

INTEREST EXPENSE (INCOME), NET. Interest expense increased $2.3
million from $18.0 million in 1995 to $20.3 million in 1996. The increase was
due to a full year of interest expense on the Series D senior subordinated notes
which were used to finance the acquisitions of CRS, Mascot and King-O-Matic, and
the related amortization of debt issuance costs. The Series D notes were issued
on June 1, 1995 and therefore were only outstanding for the last seven months of
1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO PRO FORMA YEAR ENDED DECEMBER 31,
1994

The Company experienced revenue growth of 20.8% in 1995, its first
full year of operation since its formation. However, net income decreased from
$10.1 million in 1994 (on a pro forma basis) to $9.5 million in 1995. The
decrease in net income resulted from the combined effect on 1995 results of
higher interest expense and a lower percentage of income from operations. On
June 1, 1995, the Company issued its Series D senior subordinated notes, which
added $2.7 million of interest expense for the year. Income from operations
decreased from 20.0% of net sales in 1994 to 17.2% in 1995, principally as a
result of a lower gross profit margin and higher SG&A expenses as discussed
below.

NET SALES. Net sales increased by $32.9 million or 20.8% from $157.8
million in 1994 to $190.7 in 1995 primarily as a result of the acquisitions of
CRS, Mascot, and King-O-Matic. The three new acquisitions provided
$24.7 million in additional revenues. Net sales of remanufactured transmissions
increased from $68.4 million in 1994 to $85.9 million in 1995. The volume
increase of remanufactured transmissions resulted principally from the
acquisitions of CRS and Mascot, partially offset by a reduction in net sales of
remanufactured transmissions to Chrysler from $66.8 million in 1994 to $64.8
million in 1995. Net sales to Chrysler reflected a decrease from $19.8 million
during the third quarter of 1994 to $13.2 million for the third quarter of 1995
as Chrysler reduced its inventory of remanufactured transmissions, partially
offset by an increase from $16.4 million during the fourth quarter of 1994 to
$18.9 million for the fourth quarter of 1995. Net sales of repair kits, hard
parts and other drive train products increased $6.0 million from $69.0 million
in 1994 to $75.0 million in 1995 primarily as a result of the Company's
acquisition of King-O-Matic. Net sales of remanufactured engines increased $4.6
million from $15.2 million in 1994 to $19.8 million in 1995. The volume
increase of remanufactured engines resulted from increased demand from Western
Auto at its retail outlets, and the addition of new retail customers.

GROSS PROFIT. Gross profit as a percentage of net sales decreased
from 41.1% in 1994 to 39.4% in 1995. The gross profit decrease of 1.7% of net
sales was due in large part to increased labor costs relating to remanufactured
engines and transmissions. The Company was not able to recover all of the
additional costs through increased selling prices.

<PAGE>

In addition, the aggregate gross profit was affected by the
acquisitions that occurred in 1995. Total net sales in 1995 includes $24.7
million for CRS, Mascot and King-O-Matic at a combined gross profit, which was
somewhat lower than that of the Company as a whole for 1995.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased
from $30.4 million in 1994 to $39.0 in 1995 or, as a percentage of net sales,
from 19.2% in 1994 to 20.5% in 1995. The increase was partly due to the
Company's acquisitions of CRS, Mascot and King-O-Matic, which comprised $3.3
million of the Company's SG&A expenses in 1995. Other significant factors that
contributed to the increase in SG&A expenses were the relocation of RPM's main
facilities from Azusa, California to Rancho Cucamonga, California and the
addition of a new manufacturing plant in Joplin, Missouri, both of which
resulted in an increase in ongoing SG&A expenses and a significant amount of
non-recurring SG&A expenses being incurred during 1995. Legal, audit, tax and
other professional fees were also higher in 1995 principally due to a full year
of ATC operations as compared with only five months of operations in 1994.

AMORTIZATION OF INTANGIBLE ASSETS. Amortization of intangible assets
increased $0.3 million in 1995, reflecting the increase in intangible assets
that occurred as a result of the acquisitions of CRS, Mascot and King-O-Matic.

INCOME FROM OPERATIONS. Principally as a result of the factors
described above, income from operations increased 4.4% from $31.5 million in
1994 to $32.9 million in 1995. As a percentage of net sales, income from
operations decreased from 20.0% in 1994 to 17.2% in 1995.

INTEREST EXPENSE (INCOME), NET. Interest expense increased $2.4
million from $14.5 million in 1994 to $16.9 million in 1995. The increase in
interest expense reflects additional interest on the Series D notes that were
issued principally to finance the acquisitions of CRS, Mascot and King-O-Matic
and the related amortization of debt issuance costs.

LIQUIDITY AND CAPITAL RESOURCES

The Company raised total net proceeds of $61.6 million in its IPO and
concurrent private placement of Common Stock in December 1996. From the
Company's inception in July 1994 to December 1996, the Company had funded its
operations and investments in property and equipment, including acquisitions,
through the issuance of senior subordinated notes totaling $162.4 million, the
private sale of Preferred Stock of $20 million and Common Stock of $20.0
million, and to a lesser extent through cash provided by operating activities
and revolving bank lines. In December 1996, the Preferred Stock was redeemed
and, in February 1997, $40 million of the Senior Subordinated notes were
redeemed, with a combination of the proceeds from the IPO and borrowings under
the Company's revolving credit facility.

The Company had total cash and cash equivalents on hand of $46.5
million at December 31, 1996, representing an increase in net cash of $37.7
million for the year then ended. Net cash provided by operating activities was
$17.8 million in 1996. Net cash used in investing activities was $20.0 million
in 1996, including a total of $12.2 million for the acquisition of Tranzparts
and Diverco, and $7.8 million in capital expenditures largely for transmission
and engine remanufacturing equipment and other improvements related to the
Company's new plant in Joplin, Missouri. Net cash provided by financing
activities was $39.9 million, including net proceeds of $61.6 million from the
IPO and concurrent private placement of Common Stock, payments totaling $25.2
million in connection with the redemption of Preferred Stock, and net borrowings
of $3.5 million on bank lines of credit.

The Company has budgeted a total of $9.6 million for capital
expenditures in 1997, including approximately $2.0 million carried over from the
1996 budget. The 1997 budget consists primarily of additional transmission,
engine and torque converter remanufacturing equipment and other improvements to
support planned increases in production capacity in the Joplin, Missouri,
Springfield, Missouri and Mahwah, New Jersey plants. Overall, planned capital
expenditures for 1997 are considered adequate for normal replacement and
consistent with projections for future sales and earnings.

<PAGE>

As of December 31, 1996, the Company had approximately $27.0 million
available on its then existing $30 million revolving credit facility with The
Chase Manhattan Bank ("Chase") that had been scheduled to mature in July 1999.
In February 1997, the Company terminated that facility and replaced it with a
new $100 million revolving credit facility with Chase. The new revolving credit
facility is available to finance the Company's working capital requirements,
future acquisitions and other general corporate needs, and will expire in
December 2001. Amounts advanced under the agreement are secured by
substantially all assets of the Company.

In July 1996, the Company entered into an agreement with Bank of
Montreal for a revolving credit facility to accommodate the working capital
needs of the Company's Canadian subsidiaries. Borrowings under the agreement
are limited to certain advance rates based upon the eligible accounts receivable
and inventory of King-O-Matic and Mascot up to an aggregate maximum of C$3.0
million.

In January 1997, the Company acquired Repco, a drive train parts
distributor based in Dallas, Texas with three additional distribution centers in
Texas and one in Florida, for a purchase price of approximately $12.0 million.
With the acquisition of Repco, the Company has entered geographic markets of
distribution in several cities where it previously had little or no presence.
The Company evaluates potential acquisitions on an ongoing basis and expects to
continue to do so in the future.

The Company believes that cash on hand, cash flow from operations and
existing borrowing capacity will be sufficient to fund its ongoing operations.
In pursuing future acquisitions, the Company expects to have to consider the
effect any such acquisition costs may have on its liquidity. In order to
consummate such acquisitions, the Company may need to raise additional capital
through additional debt or equity financings.

INFLATION; LACK OF SEASONALITY

Although the Company is subject to the effects of changing prices, the
impact of inflation has not been a significant factor in results of operations
for the periods presented. In some circumstances, market conditions or customer
expectations may prevent the Company from increasing the prices of its products
to offset the inflationary pressures that may increase its costs in the future.
Historically, there has been little seasonal fluctuation in the Company's
business.

ENVIRONMENTAL MATTERS

See "Business -- Environmental" for a discussion of certain
environmental matters relating to the Company.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Aftermarket Technology Corp.

Consolidated Financial Statements

Years Ended December 31, 1994, 1995 and 1996

CONTENTS

Report of Ernst & Young LLP, Independent Auditors.....................17

Audited Consolidated Financial Statements

Consolidated Balance Sheets...........................................18
Consolidated Statements of Income.....................................19
Consolidated Statements of Stockholders' Equity.......................20
Consolidated Statements of Cash Flows.................................21
Notes to Consolidated Financial Statements............................22

<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Stockholders and Board of Directors
Aftermarket Technology Corp.

We have audited the accompanying consolidated balance sheets of
Aftermarket Technology Corp. (the Company) as of December 31, 1995 and 1996, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the five months ended December 31, 1994 and for the years ended
December 31, 1995 and 1996. We have also audited the accompanying combined
statements of income, stockholders' equity, and cash flows of the Predecessor
Companies to Aftermarket Technology Corp. (the Predecessor Companies) for the
seven months ended July 31, 1994. Our audits also included the financial
statement schedule listed in the Index at Item 14(a). These financial
statements are the responsibility of the Company's and Predecessor Companies'
managements. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Aftermarket Technology Corp. at December 31, 1995 and 1996, and the
consolidated results of the Company's operations and cash flows for the five
months ended December 31, 1994, and for the years ended December 31, 1995 and
1996 and the combined results of the operations of the Predecessor Companies to
Aftermarket Technology Corp. and their cash flows for the seven months ended
July 31, 1994, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth herein.

ERNST & YOUNG LLP

Seattle, Washington
February 14, 1997

<PAGE>

AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED BALANCE SHEETS

December 31,
------------- -------------
1995 1996
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . $ 8,755,691 $ 46,498,249
Accounts receivable, net. . . . . . . . . . . 32,965,874 38,779,538
Inventories . . . . . . . . . . . . . . . . . 43,064,712 60,586,056
Prepaid and other assets. . . . . . . . . . . 2,032,671 2,916,197
Deferred tax assets . . . . . . . . . . . . . 2,267,000 2,272,000
------------- -------------
Total current assets . . . . . . . . . . . . . 89,085,948 151,052,040
Equipment and leasehold improvements:
Machinery and equipment . . . . . . . . . . . 7,187,840 12,907,232
Autos and trucks. . . . . . . . . . . . . . . 1,503,760 2,012,450
Furniture and fixtures. . . . . . . . . . . . 858,070 1,552,660
Leasehold improvements. . . . . . . . . . . . 2,860,711 4,584,329
------------- -------------
12,410,381 21,056,671

Less accumulated depreciation
and amortization. . . . . . . . . . . . . . (1,625,917) (3,574,276)
------------- -------------
10,784,464 17,482,395
Debt issuance costs, net . . . . . . . . . . . 7,162,690 6,320,179
Cost in excess of net assets acquired, net . . 140,652,620 145,430,296
Other assets . . . . . . . . . . . . . . . . . 245,897 461,714
------------- -------------
Total assets . . . . . . . . . . . . . . . . . $ 247,931,619 $ 320,746,624
------------- -------------
------------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . $ 12,951,575 $ 25,225,797
Accrued payroll and related costs . . . . . . 2,094,237 4,429,339
Accrued interest payable. . . . . . . . . . . 8,097,647 7,995,405
Other accrued expenses. . . . . . . . . . . . 3,170,162 3,371,562
Bank lines of credit. . . . . . . . . . . . . 811,067 4,334,686
Income taxes payable. . . . . . . . . . . . . 1,912,116 321,299
Due to former stockholders. . . . . . . . . . 36,734 2,002,824
------------- -------------
Total current liabilities. . . . . . . . . . . 29,073,538 47,680,912

12% Series B and D Senior Subordinated Notes . 162,245,762 161,981,356
Deferred tax liabilities . . . . . . . . . . . 3,478,000 5,252,000
Commitments and contingencies. . . . . . . . .
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 5,000,000
Issued and outstanding shares - 200,000
and 0 at December 31, 1995 and 1996,
respectively . . . . . . . . . . . . . . . 22,946,300 --
Common stock, $.01 par value:
Authorized shares - 30,000,000
Issued and outstanding shares - 12,000,000
and 16,980,794 at December 31, 1995 and
1996, respectively . . . . . . . . . . . . 20,000,000 81,549,668
Retained earnings . . . . . . . . . . . . . . 10,163,019 24,239,467
Cumulative translation adjustment . . . . . . 25,000 43,221
------------- -------------
Total stockholders' equity . . . . . . . . . . 53,134,319 105,832,356
------------- -------------
Total liabilities and stockholders' equity . . $ 247,931,619 $ 320,746,624
------------- -------------
------------- -------------

<PAGE>

AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF INCOME

Combined Consolidated
------------- ------------------------------------------
Seven Months Five Months
Ended Ended
July 31, December 31, Year Ended December 31,
1994 1994 1995 1996
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . $ 90,055,996 $ 67,735,869 $190,659,143 $272,878,458
Cost of sales. . . . . . . . . . . . . 52,245,178 40,111,819 115,499,023 166,810,941
------------- ------------ ------------ ------------
Gross profit . . . . . . . . . . . . . 37,810,818 27,624,050 75,160,120 106,067,517

Selling, general, and
administrative expense. . . . . . . . 20,475,113 14,205,750 38,971,230 55,509,529
Amortization of intangible assets. . . 15,534 1,209,971 3,307,563 3,738,382
------------- ------------ ------------ ------------

Income from operations . . . . . . . . 17,320,171 12,208,329 32,881,327 46,819,606

Interest and other income. . . . . . . 288,059 341,342 1,099,588 1,181,473
Interest expense . . . . . . . . . . . 130,036 6,373,921 18,015,346 20,287,419
------------- ------------ ------------ ------------

Income before income taxes . . . . . . 17,478,194 6,175,750 15,965,569 27,713,660
Provision (benefit) for income
taxes . . . . . . . . . . . . . . . . (5,000) 2,565,000 6,467,000 11,415,000
------------- ------------ ------------ ------------

Net income . . . . . . . . . . . . . . $ 17,483,194 3,610,750 9,498,569 16,298,660
------------- ------------ ------------ ------------
-------------
Dividends accrued on preferred
stock . . . . . . . . . . . . . . . . 853,288 2,093,012 2,222,212
------------ ------------ ------------
Net income available to common
stockholders. . . . . . . . . . . . . $ 2,757,462 $ 7,405,557 $ 14,076,448
------------ ------------ ------------
------------ ------------ ------------
Pro forma (unaudited):
Income before income taxes per
above . . . . . . . . . . . . . . . $ 17,478,194
Provision for income taxes. . . . . . 7,004,000
-------------
Pro forma net income. . . . . . . . . $ 10,474,194
-------------
-------------
Net income per share. . . . . . . . . $0.65 $1.02
------------ ------------
------------ ------------

Shares used in calculation of pro
forma net income per share. . . . . 14,616,160 15,918,384
------------ ------------
------------ ------------

</TABLE>

<PAGE>

AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Combined
Seven Months
Ended
July 31,
1994
------------
Stockholders' equity at beginning of period............ $31,719,717
Distributions to stockholders........................ (5,503,000)
Net income........................................... 17,483,194
------------
Stockholders' equity at end of period.................. $43,699,911
------------
------------

Consolidated
------------------------------------------------------------------------
Cumulative
Preferred Common Retained Translation
Stock Stock Earnings Adjustment Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Issuance of 200,000 shares of
preferred stock for cash at $100
per share, August 2, 1994. . . . . . $ 20,000,000 $ -- $ -- $ -- $20,000,000
Issuance of 12,000,000 shares of
common stock for cash at $1.67
per share, August 2, 1994. . . . . . -- 20,000,000 -- -- 20,000,000
Net income for the five months
ended December 31, 1994. . . . . . . -- -- 3,610,750 -- 3,610,750
Accrued dividends on preferred
stock. . . . . . . . . . . . . . . . 853,288 -- (853,288) -- --
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1994 . . . . . 20,853,288 20,000,000 2,757,462 -- 43,610,750
Translation adjustment . . . . . . . . -- -- -- 25,000 25,000
Net income for the year ended
December 31, 1995. . . . . . . . . . -- -- 9,498,569 -- 9,498,569
Accrued dividends on preferred
stock. . . . . . . . . . . . . . . . 2,093,012 -- (2,093,012) -- --
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1995 . . . . . 22,946,300 20,000,000 10,163,019 25,000 53,134,319
Issuance of 4,980,794 shares of
common stock for cash at
$13.50 per share, December 17,
1996 net of offering costs of
$4,787,832 . . . . . . . . . . . . . -- 61,549,668 -- -- 61,549,668
Accrued dividends on preferred
stock. . . . . . . . . . . . . . . . 2,222,212 -- (2,222,212) -- --
Redeem preferred stock,
December 20, 1996. . . . . . . . . . (25,168,512) -- -- -- (25,168,512)
Translation adjustment . . . . . . . . -- -- -- 18,221 18,221
Net income for the year ended
December 31, 1996. . . . . . . . . . -- -- 16,298,660 -- 16,298,660
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1996 . . . . . $ -- $81,549,668 $24,239,467 $ 43,221 $105,832,356
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------

</TABLE>

<PAGE>

AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Combined Consolidated
------------ ------------------------------------------
Seven Months Five Months
Ended Ended
July 31, December 31, Year Ended December 31,
1994 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . $17,483,194 $ 3,610,750 $ 9,498,569 $ 16,298,660
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization. . . . . 726,761 1,598,491 4,680,388 5,773,238
Amortization of debt issuance costs. . -- 268,650 710,281 842,511
Increase (decrease) in allowance for
losses on accounts receivable. . . . 249,176 192,208 496,591 (1,149,916)
Loss (gain) on sale of equipment . . . 24,276 4,804 (5,955) 21,912
Increase in net deferred tax
liabilities . . . . . . . . . . . . . -- 50,000 1,274,000 1,769,000
Changes in operating assets and
liabilities:
Accounts receivable . . . . . . . . (6,218,650) (1,799,626) (3,172,303) (2,719,859)
Inventories . . . . . . . . . . . . (2,716,807) (576,145) (8,118,364) (12,574,161)
Prepaid and other assets. . . . . . (519,553) 299,101 (1,137,901) (987,949)
Accounts payable and accrued
expenses . . . . . . . . . . . . . 2,102,961 4,249,395 6,555,947 10,520,582
------------ ------------ ------------ ------------
Net cash provided by operating
activities. . . . . . . . . . . . . . . 11,131,358 7,897,628 10,781,253 17,794,018

INVESTING ACTIVITIES:
Purchases of equipment . . . . . . . . . (1,850,224) (1,335,551) (5,187,400) (7,843,401)
Acquisition of companies, net of cash
received. . . . . . . . . . . . . . . . -- (146,954,457) (40,264,452) (12,199,106)
Proceeds from sale of fixed assets . . . 78,657 55,603 7,685 86,271
------------ ------------ ------------ ------------
Net cash used in investing activities. . (1,771,567) (148,234,405) (45,444,167) (19,956,236)

FINANCING ACTIVITIES:
Issuance of senior subordinated notes. . -- 120,000,000 42,400,000 --
Borrowings on revolving credit facility. -- 18,160,000 3,500,000 --
Payments on revolving credit facility. . -- (17,000,000) (4,742,458) --
Borrowings (payments) on bank lines
of credit . . . . . . . . . . . . . . . (1,000,000) -- -- 3,523,619
Payment of debt issuance costs . . . . . -- (5,697,413) (2,179,167) --
Payment of offering costs. . . . . . . . -- (5,339,855) -- --
Payment of initial public
offering costs. . . . . . . . . . . . . -- -- -- (4,787,832)
Net payments on other long-term debt . . (100,584) (358,637) -- --
Sale of common stock . . . . . . . . . . -- 20,000,000 -- 66,337,500
Sale of preferred stock. . . . . . . . . -- 20,000,000 -- --
Preferred stock redemption . . . . . . . -- -- -- (25,168,511)
Net payments to related parties. . . . . (88,737) -- -- --
Distributions to stockholders. . . . . . (5,503,000) -- -- --
Payments on amounts due to former
stockholders. . . . . . . . . . . . . . -- -- (4,987,088) --
------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities. . . . . . . . . . (6,692,321) 149,764,095 33,991,287 39,904,776
Increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . 2,667,470 9,427,318 (671,627) 37,742,558
Cash and cash equivalents at
beginning of period . . . . . . . . . . 581,680 -- 9,427,318 8,755,691
------------ ------------ ------------ ------------
Cash and cash equivalents at end
of period . . . . . . . . . . . . . . . $ 3,249,150 $ 9,427,318 $ 8,755,691 $ 46,498,249
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . $ 128,259 $ 185,817 $ 15,376,365 $ 19,411,691
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Income taxes. . . . . . . . . . . . . . $ 209,671 $ 2,571,000 $ 3,221,356 $ 10,970,402
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

</TABLE>

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements of Aftermarket Technology Corp.
(ATC or the Company) include the results of the following remanufactured
automotive products businesses which sell to customers throughout the United
States and Canada: (i) Aaron's Automotive Products, Inc. (Aaron's), a
Springfield, Missouri-based remanufacturer of transmissions, engines, torque
converters, and other drive train parts for automotive original equipment
manufacturers, independent rebuilders and distributors, and retail chain store
customers; (ii) Component Remanufacturing Specialists (CRS), a Mahwah, New
Jersey-based remanufacturer and distributor of automotive drive train and
transmission components; (iii) H.T.P., Inc. (HTP), a Louisville, Kentucky-based
remanufacturer and warehouse distributor of new and remanufactured parts for
independent transmission rebuilders; (iv) Mamco Converters, Inc. (Mamco), a
Dayton, Ohio-based remanufacturer of torque converters for independent
transmission rebuilders and distributors; (v) King-O-Matic (King) and Mascot
Truck Parts Inc. (Mascot), Canadian-based remanufacturers and distributors of
automotive components and a rebuilder of heavy duty truck transmissions,
respectively, are located in Mississauga, Canada; (vi) RPM Merit (RPM), a Rancho
Cucamonga, California (formerly Azusa, California)-based remanufacturer of
torque converters, constant velocity axles, and transmission fluid pumps, and a
warehouse distributor of remanufactured parts and new part kits to independent
transmission rebuilders; (vii) Tranzparts, Inc. (Tranzparts), a Janesville,
Wisconsin-based remanufacturer and warehouse distributor of new and
remanufactured parts for independent transmission rebuilders; (viii) ATC
Components, Inc. (ATAC), a Memphis, Tennessee-based warehouse distributor of
transmission parts, engines, engine kits, and parts to independent transmission
and engine rebuilders; and (ix) Diverco, Inc. (Diverco) a Harvey, Illinois-based
distributor of standard drive train parts, engine parts, gaskets, and other soft
parts for transmission and engine repair and complete transmissions for light
trucks and automobiles.

The combined financial statements of the Predecessor Companies to
Aftermarket Technology Corp. (the Predecessor Companies) represent the
combination of the historical financial statements of Aaron's, RPM, HTP, and
Mamco. The Company was formed for the purpose of effecting the acquisitions of
the Predecessor Companies. The Predecessor Companies were acquired pursuant to
four separate purchase agreements for a total purchase price of approximately
$160.4 million (the Initial Acquisitions). The combined financial statements for
the seven months ended July 31, 1994 include the operations of the Predecessor
Companies up to their respective closing dates, which approximated July 31,
1994.

PRINCIPLES OF CONSOLIDATION

The Company's acquisitions have been accounted for as purchases, and
the consolidated financial statements for the years ended December 31, 1995 and
1996 and the five months ended December 31, 1994 include operations of the
Company and its wholly owned operating subsidiaries from the dates of
acquisition. Significant intercompany accounts and transactions have been
eliminated in consolidation.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out
method) or market and consist primarily of new and used engine and transmission
parts, and cores and finished goods. Appropriate consideration is given to
deterioration, obsolescence, and other factors in evaluating estimated market
value.

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements are stated at cost. Depreciation
is computed using accelerated and straight-line methods over the estimated
useful lives of the assets, which range from three to fifteen years.
Depreciation expense was $711,227, $388,520, $1,372,825 and $2,034,856 for the
seven months ended July 31, 1994, the five months ended December 31, 1994, and
the years ended December 31, 1995 and 1996, respectively.

FOREIGN CURRENCY TRANSLATION

The financial statements of Canadian subsidiaries have been translated
into U.S. dollars in accordance with Statement of Financial Accounting Standards
(SFAS) No. 52, "Foreign Currency Translation." All balance sheet accounts have
been translated using the exchange rates in effect at the balance sheet date.
Income statement amounts have been translated using the average exchange rate
for the year. The translation gain resulting from the changes in exchange rates
has been reported separately as a component of stockholders' equity.

The effect on the statements of income of transaction gains or losses
is insignificant for the periods presented.

DEBT ISSUANCE COSTS

Debt issuance costs incurred in connection with the sale of the 12%
Series B and Series D Senior Subordinated Notes (Note 6) and Revolving Credit
Facility (Note 5) are being amortized over the life of the debt of ten, nine,
and seven years, respectively.

COST IN EXCESS OF NET ASSETS ACQUIRED

The excess of the purchase price over the fair value of the assets
purchased is being amortized over 40 years on a straight-line basis. Cost in
excess of net assets acquired is reflected net of accumulated amortization of
$4,466,669 and $8,261,622 at December 31, 1995 and 1996, respectively.

In accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of," the Company
assesses the recoverability of cost in excess of net assets acquired by
determining whether the amortization of the asset balance over its remaining
life can be recovered through the undiscounted future operating cash flows of
the acquired operation. The amount of the impairment, if any, is measured based
on projected discounted future operating cash flows. The Company believes that
no impairment has occurred and that no reduction in the estimated useful life is
warranted.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist of accounts receivable from its
customers, which are primarily in the automotive aftermarket industry throughout
the United States and Canada. The credit risk associated with the Company's
accounts receivable is mitigated by its credit evaluation process, reasonably
short collection terms and, except for one significant customer, the
geographical dispersion of sales transactions.

The Company grants credit to certain customers who meet
pre-established credit requirements. Customers who do not meet those
requirements are required to pay for products upon delivery. Credit losses are
provided for in the financial statements and consistently have been within
management's expectations.

Accounts receivable is reflected net of an allowance for doubtful
accounts of $2,469,000 and $1,326,000 December 31, 1995 and 1996, respectively.

WARRANTY POLICY

For certain products on which the Company provides a warranty, the
warranty period is generally up to twelve months or 12,000 miles.

STOCK-BASED COMPENSATION

Effective January 1, 1996, the Company adopted SFAS No. 123,
"Accounting for Stock-Based Compensation." As permitted under SFAS No. 123, the
Company has continued its current accounting for employee stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25. The
effect of applying SFAS No. 123 to the Company's stock-based awards on net
income and earnings per share is immaterial.

RECLASSIFICATIONS

Certain prior-year amounts have been reclassified to conform to the
1996 presentation.

PRO FORMA DATA (UNAUDITED)

INCOME TAXES

Two of the Predecessor Companies elected to be taxed as S Corporations
for all periods through the respective closing dates of the Acquisitions;
therefore, for federal and state income tax purposes, any income or loss accrued
prior to that date generally was not taxed to these companies but was reported
by their respective stockholders. The pro forma provision for taxes reflects the
estimated provision for federal and state income taxes which could have been
provided had these companies been C Corporations and filed consolidated returns.
Because these pro forma income taxes do not represent obligations of, and will
not be paid by, the Predecessor Companies, they have not been reflected in the
combined balance sheets or in the combined statements of cash flows.

PRO FORMA NET INCOME PER SHARE

Pro forma net income per share is based on the weighted average number
of shares of common stock and common equivalent shares outstanding using the
treasury stock method and the estimated number of shares of common stock issued
in the Company's initial public offering whose net proceeds were used to redeem
the outstanding preferred stock including accrued dividends. Pursuant to the
Securities and Exchange Commission requirements, common and common equivalent
shares issued during the 12-month period prior to the filing of the

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Company's initial public offering have been included in the calculation as if
they were outstanding for all periods presented using the treasury stock method,
based on the initial public offering price.

Historical earnings per share is not considered meaningful due to the
significant changes in the Company's capital structure that occurred upon the
closing of the Company's initial public offering; accordingly, such per share
information is not presented.

2. ACQUISITIONS

During the year ended December 31, 1995, the Company acquired three
companies for a total purchase price of approximately $42.8 million. The CRS and
Mascot acquisitions closed on June 1, 1995, and June 9, 1995 respectively, and
the King acquisition closed on September 12, 1995 (collectively, the 1995
Acquisitions). The Company issued $40 million in principal amount of 12% Senior
Subordinated Notes due in 2004 concurrently with the acquisition of CRS, the
proceeds of which financed the 1995 Acquisitions (Note 6). In addition, on
April 2, 1996, the Company acquired Tranzparts, Inc. for $4.0 million and on
October 1, 1996 the Company acquired Diverco, Inc. for $10.5 million
(collectively the 1996 Acquisitions). All such acquisitions have been accounted
for as purchases. Accordingly, the allocation of the cost of the acquired assets
and liabilities has been made on the basis of the estimated fair value.

The consolidated financial statements include the operating results of
each business from the date of acquisition. The following unaudited pro forma
information for the year ended December 31, 1995 gives effect to the 1995
acquisitions as if such acquisitions had occurred on January 1, 1995. Pro forma
information to reflect the 1996 acquisitions has not been presented because the
effect of such acquisitions was not material to prior periods. The pro forma
information includes adjustments for interest expense that would have been
incurred to finance the acquisitions, additional depreciation based on the fair
market values of the property, plant, and equipment acquired, and amortization
of intangibles arising from the transactions. The pro forma financial
information is not necessarily indicative of the results of operations as they
would have been had the transactions been effected on the assumed dates.

YEAR ENDED
DECEMBER 31, 1995
-----------------
(IN THOUSANDS)
Net sales.......................... $ 210,958
Net income......................... 10,043

3. RELATED-PARTY TRANSACTIONS

The Company had liabilities to former stockholders totaling $36,734 at
December 31, 1995 and $2,002,824 at December 31, 1996. The 1996 amounts are
composed primarily of an additional purchase price payable to Diverco's former
stockholder. The remaining amount will be paid in the first quarter of 1997.

The Company paid Aurora Capital Partners (ACP), a significant
stockholder, approximately $1.1 million in fees for investment banking services
provided in connection with the 1995 and 1996 acquisitions. In addition, ACP was
paid management fees of $500,000 and $513,015 in 1995 and 1996, respectively.
ACP is also entitled to various additional fees depending on the Company's
profitability or future acquisitions. No such additional fees were paid in 1995
and 1996.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. INVENTORIES

Inventories consist of the following:

DECEMBER 31,
------------------------
1995 1996
----------- -----------
Raw materials, including core inventories........ $19,015,530 $30,412,730
Work-in-process.................................. 1,394,479 1,166,275
Finished goods................................... 22,654,703 29,007,051
----------- -----------
$43,064,712 $60,586,056
----------- -----------
----------- -----------

Finished goods include purchased parts which are available for sale.

5. BANK LINES OF CREDIT

CURRENT LIABILITIES

In July 1996, the Company entered into a Revolving Credit Agreement
with Bank of Montreal (BOM Revolving Credit Agreement) providing for a revolving
credit facility to accommodate the working capital needs of King and Mascot (the
Canadian subsidiaries). Advances under the BOM Revolving Credit Agreement may
be made, due upon demand, up to an aggregate of 75% of the eligible accounts
receivable and 50% of the eligible inventory of the Canadian subsidiaries, in
each case as defined in the BOM Revolving Credit Agreement, up to a maximum of
C$3.0 million. Amounts advanced are secured by substantially all assets of the
Canadian subsidiaries and are guaranteed by the Company. The agreement will
expire initially in June 1997 and may be renewed subject to an annual review.
Interest is payable monthly at the Bank of Montreal prime lending rate plus
0.25%. At December 31, 1996, $1.4 million was outstanding under this line of
credit and the interest rate in effect was 5.0%. At December 31, 1995, $0.8
million was outstanding under a former credit line used by the Canadian
subsidiaries.

In January 1996, the Company entered into an agreement with Commerce
Bank, N.A. providing financing for equipment purchases by Aaron's up to a
maximum of $2.9 million, secured by the underlying equipment purchased.
Interest is payable monthly at a fixed rate equal to 70% of the bank's prime
lending rate at the date of the advance plus 1%. As of December 31, 1996, $2.9
million was outstanding under this loan agreement. The agreement contains
several covenants including levels of net worth, leverage, interest coverage and
earnings before interest, taxes, depreciation, and amortization (EBITDA).

REVOLVING CREDIT FACILITY

On July 19, 1994, the Company entered into an agreement with The Chase
Manhattan Bank, as agent, providing for a $30 million revolving credit facility
(Revolving Credit Facility) to finance the Initial Acquisitions and for working
capital purposes. The funds available to be advanced may not exceed 85% of the
Company's eligible accounts receivable and 60% of the Company's eligible
inventories, as defined in the agreement. The available borrowing base at
December 31, 1996 was approximately $27 million. All amounts advanced are
secured by all accounts receivable and inventories and become due on July 31,
1999. The Company may prepay outstanding advances in whole or in part without
incurring any premium or penalty.

At the Company's election, amounts advanced under the Revolving Credit
Facility will bear interest at either (i) the Alternate Base Rate plus 1.25% or
(ii) the Eurodollar Rate plus 2.25%. The Alternate Base Rate is equal to the
highest of (a) the Bank's prime rate, (b) the secondary market rate for
three-month certificates of deposit plus 1.0%, or (c) the federal funds rate
plus 0.5%. Interest payments on advances which bear interest based upon the
Alternate Base Rate are due quarterly in arrears, and interest payments on
advances which bear interest

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. BANK LINES OF CREDIT(CONTINUED)

based upon the Eurodollar Rate are due on the last day of each relevant interest
period (or, if such period exceeds three months, quarterly after the first day
of such period).

The Company paid the Bank a one-time facility and commitment fee upon
establishing the Revolving Credit Facility and is required to pay the Bank
quarterly in arrears a commitment fee of 0.5% per annum of the average daily
unused portion of the Revolving Credit Facility.

The Revolving Credit Facility contains several covenants, including
levels of net worth, leverage, EBITDA and cash flow coverage, and certain limits
on the Company to incur indebtedness, make capital expenditures, create liens,
engage in mergers and consolidations, make restricted payments (including
dividends), make asset sales, make investments, issue stock, and engage in
transactions with affiliates of the Company and its subsidiaries. At
December 31, 1996, no amounts were outstanding under this line of credit.

6. 12% SERIES B AND SERIES D SENIOR SUBORDINATED NOTES

On August 2, 1994, the Company completed a private placement issuance
of $120 million in principal amount of 12% Series A Senior Subordinated Notes
due in 2004. Proceeds from the issuance were used to partially finance the
Initial Acquisitions. The privately placed debt was exchanged for public debt
(designated Series B) on February 22, 1995.

On June 1, 1995, the Company completed another private placement
issuance of $40 million in principal amount of 12% Series C Senior Subordinated
Notes due in 2004. Proceeds of $42.4 million from the issuance were used to
finance the 1995 Acquisitions. These notes have an effective interest rate of
10.95%. The privately placed debt was exchanged for public debt (designated
Series D) on September 10, 1995.

Interest on the Notes is payable semiannually on February 1 and
August 1 of each year, commencing on February 1, 1995 for the Series B Notes and
August 1, 1995 for the Series D Notes. The Notes will mature on August 1, 2004.
On or after August 1, 1999, the Notes may be redeemed at the option of the
Company, in whole or in part, at specified redemption prices plus accrued and
unpaid interest:

Year Redemption Price
---- ----------------
1999..................................... 106%
2000..................................... 104
2001..................................... 102
2002 and thereafter...................... 100

In addition, at any time on or prior to August 1, 1997, the Company
may, subject to certain requirements, redeem up to $30 million of the Series B
Notes and $10 million of the Series D Notes aggregate principal amounts with the
net cash proceeds of one or more public equity offerings, at a price equal to
112% of the principal amount to be redeemed plus accrued and unpaid interest. On
February 16, 1997 the Company exercised its right and redeemed $30 million in
principal amount of the Series B Notes and $10 million in principal amount of
the Series D Notes resulting in a loss on early extinguishment of debt of $4.8
million.

In the event of a change in control, the Company would be required to
offer to repurchase the Notes at a price equal to 101% of the principal amount
plus accrued and unpaid interest.

The Notes are general obligations of the Company, subordinated in
right of payment to all existing and future senior debt (including the Revolving
Credit Facility). The Notes are guaranteed by each of the Company's existing and
future subsidiaries other than any subsidiary designated as an unrestricted
subsidiary (as defined). The Company may incur additional indebtedness,
including borrowings under its $30 million Revolving Credit Facility (Note 5),
subject to certain limitations.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. 12% SERIES B AND SERIES D SENIOR SUBORDINATED NOTES (CONTINUED)

The indenture under which the Notes were issued contains certain
covenants that, among other things, limit the Company from incurring other
indebtedness, issuing disqualified capital stock, engaging in transactions with
affiliates, incurring liens, making certain restricted payments (including
dividends), making certain asset sales, and permitting certain restrictions on
the ability of its subsidiaries to make distributions. As of December 31, 1996,
the Company was in compliance with such covenants.

7. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and assets are
as follows:

DECEMBER 31
---------- ----------
1995 1996
---------- ----------
Deferred tax liabilities:
Book basis of intangible assets
in excess of tax amounts.................. $3,208,000 $4,630,000
Other...................................... 270,000 622,000
---------- ----------
Total deferred tax liabilities.................. 3,478,000 5,252,000
Deferred tax assets:
Inventory obsolescence reserve............. 898,000 1,182,000
Bad debt reserves.......................... 545,000 778,000
Product warranty accruals.................. 438,000 312,000
Other...................................... 386,000 --
---------- ----------
Total deferred tax assets....................... 2,267,000 2,272,000
---------- ----------
Net deferred tax liability...................... $1,211,000 $2,980,000
---------- ----------
---------- ----------

Significant components of the provision for income taxes attributable
to operations are as follows:
YEAR ENDED
FIVE MONTHS ENDED DECEMBER 31,
DECEMBER 31, -------------------------
1994 1995 1996
---------- ---------- -----------
Current:
Federal.................... $2,136,000 $4,429,000 $8,499,000
State...................... 379,000 764,000 1,147,000
---------- ---------- -----------
Total current................... 2,515,000 5,193,000 9,646,000
Deferred:
Federal.................... 53,000 1,137,000 1,621,000
State...................... (3,000) 137,000 148,000
---------- ---------- -----------
Total deferred.................. 50,000 1,274,000 1,769,000
---------- ---------- -----------
$2,565,000 $6,467,000 $11,415,000
---------- ---------- -----------
---------- ---------- -----------

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)

The components of the provision for deferred income taxes are as
follows:

FIVE MONTHS YEAR ENDED
ENDED DECEMBER 31,
DECEMBER 31, ------------------------
1994 1995 1996
---------- ---------- -----------
Amortization of intangible assets......... $754,000 $1,759,000 $1,422,000
Inventory obsolescence reserve............ (483,000) (333,000) (284,000)
Bad debt reserves......................... (85,000) (223,000) (233,000)
Product warranty accruals................. (56,000) (20,000) 126,000
Depreciation.............................. 2,000 339,000 427,000
Other..................................... (82,000) (248,000) 311,000
---------- ---------- -----------
Provision for deferred income taxes....... $50,000 $1,274,000 $1,769,000
---------- ---------- -----------
---------- ---------- -----------

The reconciliation of income tax expense computed at the U.S. federal
statutory tax rates to income tax expense is as follows:

<TABLE>
<CAPTION>
FIVE MONTHS YEAR ENDED
ENDED DECEMBER 31, 1995
-------------------- ---------------------------------------------
DECEMBER 31, 1994 1995 1996
-------------------- -------------------- ---------------------
Amount Percent Amount Percent Amount Percent
---------- ------- ---------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Tax at U.S. statutory rates............... $2,159,000 35.0% $5,588,000 35.0% $9,700,000 35.0%
State income taxes, net of
federal tax benefit...................... 244,000 3.9 529,000 3.3 842,000 3.0
Other..................................... 162,000 2.7 350,000 2.2 873,000 3.2
---------- ------- ---------- ------- ----------- -------
$2,565,000 41.6% $6,467,000 40.5% $11,415,000 41.2%
---------- ------- ---------- ------- ----------- -------
---------- ------- ---------- ------- ----------- -------

</TABLE>

8. COMMON AND PREFERRED STOCK

On December 13, 1996, the Company amended and restated its charter to
increase its authorized Common Stock to 30,000,000 shares and consummated a
six-for-one stock split, and to increase its authorized Preferred Stock to
5,000,000 shares. The accompanying financial statements have been retroactively
adjusted to reflect the stock split.

The Company sold 4,025,000 shares of common stock through a public
offering (Public Offering). The price per share for such Common Stock was
$13.50 (Public Offering Price). At approximately the same time, the Company
sold to General Electric Pension Trust (GEPT) $12.0 million of Common Stock
(955,794 shares) in a private placement. The price per share for such privately
placed Common Stock was the price per share paid by the Underwriters in the
Public Offering ($12.555), that is the public offering price per share less
Underwriters' discounts and commissions. Although GEPT received Common Stock
which has not been registered under the Securities Act of 1933, it also received
a "demand" registration right and a "piggyback" registration right with respect
to such stock and 300,000 shares of Common Stock it currently owns, which rights
are not exercisable until after June 14, 1997.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. COMMON AND PREFERRED STOCK (CONTINUED)

STOCK OPTION PLAN

The Company adopted its 1994 Stock Incentive Plan (Plan) in July 1994
in order to provide incentives to employees and directors of the Company. The
Company had reserved 1,800,000 shares of common stock for issuance under the
plan. On September 19, 1996, the shareholders approved an amendment to the Plan
to increase the number of shares available for issuance to 2,400,000. Options
are generally granted at the fair value on the date of grant and vest over a
period of time to be determined by the Board of Directors, generally from three
to five years. The options expire 10 years from the date of grant.

The following table summarizes the stock option activity:

SHARES SUBJECT PRICE
TO OPTION PER SHARE
-------------- -----------
Granted in 1994..................... 1,403,514 $ 1.67
--------------
Balance, December 31, 1994.............. 1,403,514 1.67
Granted in 1995..................... 123,264 1.67
--------------
Balance, December 31, 1995.............. 1,526,778 1.67
Granted in 1996..................... 745,440 4.67
--------------
Balance, December 31, 1996.............. 2,272,218 $1.67-4.67
--------------
--------------

At December 31, 1996, 1,117,098 options are exercisable and 127,782
options remain available for future grant.

In connection with the prior acquisitions, warrants to purchase
350,880 shares of common stock at $1.67 per share were issued to two
individuals. The warrants are exercisable through 2004. The Company has also
issued a warrant to one member of the Board of Directors to purchase 70,176
shares of common stock at $1.67 per share, the fair value of the common stock on
the date of grant.

At December 31, 1996, the Company had 2,821,056 shares of common stock
reserved for the exercise and future granting of stock options and warrants.

Following the completion of the Public Offering, the Company redeemed
its outstanding Preferred Stock.

9. EMPLOYEE RETIREMENT PLAN

The Company sponsors several defined contribution plans to provide
substantially all U.S. salaried and hourly employees of the Company an
opportunity to accumulate personal funds for their retirement, subject to
minimum duration of employment requirements. Contributions are made on a
before-tax basis to substantially all of these plans.

As determined by the provisions of each plan, the Company matches a
portion of the employees' basic voluntary contributions. Company matching
contributions to the plans were approximately $65,000, $108,000, and $206,000
for the plan years ending in 1994, 1995, and 1996, respectively. The net assets
of these plans approximated $2.6 million as of the 1996 plan year ends.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company leases certain facilities under various operating lease
agreements, which expire on various dates through 2004. Leases that expire
generally are expected to be renewed or replaced by other leases. Future minimum
lease payments as of December 31, 1996 are as follows:

YEAR ENDING DECEMBER 31
-----------------------
1997............................................. $ 5,062,498
1998............................................. 4,230,712
1999............................................. 3,383,449
2000............................................. 2,690,464
2001............................................. 2,369,592
Thereafter....................................... 4,042,372
------------
$21,779,087
------------
------------

Rent expense under operating leases approximated $1,159,000, $902,000,
$3,114,999 and $4,582,000 for the seven months ended July 31, 1994, the five
months ended December 31, 1994, and the years ended December 31, 1995 and 1996,
respectively.

Rent expense includes amounts paid to related parties of $254,000,
$611,000, and $940,000 for the five months ended December 31, 1994, the year
ended December 31, 1995, and the year ended December 31, 1996, respectively.

Prior to the RPM Acquisition, the company from which RPM acquired its
assets (the "Prior RPM Company") leased nine properties in the City of Azusa,
California (the "Azusa Properties") from a general partnership consisting of the
Prior RPM Company shareholders. The Azusa Properties are within an area which,
as a result of regional groundwater contamination, has been designated by the
Environmental Protection Agency (EPA) as the Baldwin Park Operable Unit ("BPOU")
of the San Gabriel Valley Superfund Sites. The federal Superfund law (the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA")) both provides for the appropriate cleanup of contaminated
sites and assigns liability for the cost of such cleanups. The parties held
responsible for cleanup costs are broadly defined under CERCLA, and generally
include present owners and operators of a site and certain past owners and
operators. Liability for cleanup costs imposed against such "responsible
parties" is strict, joint and several. However, such costs are typically
allocable among responsible parties through settlement or litigation based on
factors including each particular party's relative contribution of contaminants
to the site and ability to pay.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

cleanup costs, the responsible parties may be required to pay for damages for
injuries to natural resources such as soil, groundwater, or wildlife caused by
the contamination at the BPOU. To date, the government agencies authorized to
claim natural resource damages for this site have not made any assessment of the
value, if any, of such damages. In 1993, the EPA notified the Prior RPM
Company, the general partnership consisting of the Prior RPM Company
shareholders which owns the Azusa Properties and approximately 100 other
entities that they may be potentially responsible parties ("PRPs") for the San
Gabriel Valley Superfund Sites as present or former owners or operators of
properties located within that Site. In January 1995, the EPA sent letters to
16 of these parties with respect to 15 properties in the BPOU, describing four
of those properties as apparently the "largest contributors to the groundwater
contamination" and the remaining 11 properties as apparently in a range of
moderate to lesser contributors. The letters identify the recipients as PRPs
for the proposed interim remediation and request that they enter into
negotiations to design, construct, and operate the cleanup remedy. The
recipients of the letters included a general partnership comprised of the Prior
RPM Company shareholders, which was informed that the EPA considers it
responsible for two of the sites described as lesser to moderate contributors to
the contamination.

In connection with the CRS, Mascot, King-O-Matic, Aaron's, RPM, HTP,
Mamco, Tranzparts, and Diverco acquisitions, the Company conducted certain
investigations of these companies' facilities and their compliance with
applicable environmental laws. The investigations, which included "Phase I"
assessments by independent consultants of all manufacturing and certain
distribution facilities, found that certain remedial, reporting, and other
regulatory requirements, including certain waste management procedures, were not
or may not have been satisfied. Based in part on the investigations conducted,
and the indemnification provisions of the agreements entered into in connection
with these acquisitions, the Company believes, although there can be no
assurance, that its liabilities relating to these environmental matters will not
have a material adverse effect, individually or in the aggregate, on the
Company.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company is also involved in several lawsuits which arise in the
ordinary course of business which management believes will not have a material
adverse effect, individually or in the aggregate, on the Company's consolidated
financial position or results of operations.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of all financial instruments approximate their
fair values at December 31, 1995 and 1996, except for the Series B and Series D
subordinated debt.

The fair values of the Company's Series B and Series D subordinated
debt are estimated using discounted cash flow analyses, based on the Company's
current incremental borrowing rates for similar types of borrowing arrangements.

The carrying amounts and fair values of these financial instruments at
December 31 are as follows:

1995 1996
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
(IN THOUSANDS)
12% subordinated notes (Series B)....... $120,000 $126,600 $120,000 $126,900
12% subordinated notes (Series D)....... 40,000 42,200 40,000 42,300

12. SIGNIFICANT CUSTOMER

For the seven months ended July 31, 1994, the five months ended
December 31, 1994, the year ended December 31, 1995, and the year ended
December 31, 1996, sales to one customer accounted for 43%, 45%, 35%, and 37% of
net sales, respectively. Additionally, at December 31, 1995 and 1996, this
customer accounted for approximately 46% and 51% of accounts receivable,
respectively. No other customer accounted for more than 10% of net sales in any
period.

13. SUBSEQUENT EVENTS

On February 14, 1997 the Company terminated its $30 million revolving
credit facility and replaced it with a new $100 million revolving credit
facility with The Chase Manhattan Bank, as agent, (New Revolving Credit
Facility) to finance the Company's working capital requirements, future
acquisitions, and other general corporate needs. Amounts advanced under the New
Revolving Credit Facility are secured by substantially all assets of the Company
and will become due on December 31, 2001, although the Company may prepay
outstanding advances in whole or in part without incurring any premium or
penalty. The New Revolving Credit Facility contains several covenants,
including levels of net worth, leverage, EBITDA, and cash flow coverage, and
certain limits on the Company to incur indebtedness, make capital expenditures,
create liens, engage in mergers and consolidations, make restricted payments
(including dividends), make asset sales, make investments, issue stock, and
engage in transactions with affiliates of the Company and its subsidiaries.

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. QUARTERLY RESULTS (UNAUDITED)

Quarter
-------------------------------------
First Second Third Fourth
------- -------- ------- --------
1995
- ----
Net sales....................... $40,638 $45,094 $46,740 $58,187
Gross profit.................... 15,668 18,066 16,686 24,740
Net income...................... 1,953 2,924 1,344 3,278
Pro forma earnings per share.... $0.14 $0.20 $0.09 $0.22

1996
- ----
Net sales....................... $64,146 $66,873 $68,287 $73,572
Gross profit.................... 25,788 25,063 25,998 29,219
Net income...................... 4,399 3,891 4,051 3,958
Pro forma earnings per share.... $0.28 $0.25 $0.26 $0.23

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth the name, age and position with the
Company of each of the persons who serve as directors and executive officers of
the Company. Each director of the Company will hold office until the next annual
meeting of stockholders of the Company or until his successor has been elected
and qualified. Officers of the Company are elected by the Board of Directors of
the Company and serve at the discretion of the Board.

NAME AGE POSITIONS
---- --- ---------
William A. Smith 51 Chairman of the Board of Directors
Stephen J. Perkins 49 President, Chief Executive Officer and
Director
John C. Kent 45 Chief Financial Officer
Wesley N. Dearbaugh 45 President and General Manager,
Independent Aftermarket
James R. Wehr 43 President, Aaron's
Michael L. LePore 43 President, CRS
Robert Anderson 75 Director
Richard R. Crowell 42 Director
Mark C. Hardy 33 Director
Dr. Michael J. Hartnett 51 Director
William E. Myers, Jr. 37 Director
Gerald L. Parsky 55 Director
Richard K. Roeder 48 Director

WILLIAM A. SMITH has been the Chairman of the Board of Directors since
July 1994. Mr. Smith was the President and Chief Executive Officer of the
Company from July 1994 until October 1996. From March 1993 to July 1994,
Mr. Smith served as a consultant to ACP in connection with the Initial
Acquisitions. From March 1992 to March 1993, Mr. Smith was President of the
Rucker Fluid Power Division of Lucas Industries, plc. From October 1988 to
March 1992, Mr. Smith was Vice President of Parts Operations for Navistar
International Transportation Corporation, a truck engine manufacturer, where
Mr. Smith managed its aftermarket parts business, including four new aftermarket
business lines. From July 1985 to October 1988, Mr. Smith served as President
for Labinal, Inc., a French automotive and aerospace equipment manufacturer,
where he was in charge of its North American operations. From 1979 to 1985,
Mr. Smith was Vice President of Marketing of the Cummins Diesel Recon business,
Cummins Engine Company's aftermarket remanufacturing division. From 1972 to
1979, Mr. Smith held several director level positions at Cummins Engine Company
covering distribution, technical service, service training, market planning,
parts marketing, service publications and warranty administration.

STEPHEN J. PERKINS was elected as the President and Chief Executive
Officer of the Company in October 1996. From February 1992 to October 1996, Mr.
Perkins was President and Chief Executive Officer of Senior Flexonics, an
international division of Senior Engineering, plc. Senior Flexonics included 20
operations in 13 countries which manufactured and distributed engineered
flexible tubular products for the automotive, aerospace and industrial markets.
From September 1983 to February 1992, Mr. Perkins was President and Chief
Executive Officer of Flexonics, Inc., the privately held predecessor of Senior
Flexonics. From March 1979 to September 1983, Mr. Perkins was the Director of
Manufacturing and then Vice President and General Manager of the Flexonics
Division of what is now Allied Signal. From July 1971 to March 1979, Mr. Perkins
held several management positions in manufacturing at multiple facilities for
the Steel Tubing Group of Copperweld Corporation. Mr. Perkins began his career
with U.S. Steel as an Industrial Engineer.

JOHN C. KENT became Chief Financial Officer of the Company in
July 1994. From March 1990 to July 1994, Mr. Kent was Vice President, Finance
and Chief Financial Officer of Aerotest, Inc., an aircraft

<PAGE>

maintenance and modification company. In March 1995, Aerotest filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code. The
Aerotest bankruptcy proceedings are still pending. From 1987 to March 1990,
Mr. Kent was an Assistant Treasurer at Security Pacific Auto Finance. From 1978
to 1987 Mr. Kent served in several capacities at Western Airlines, Inc.,
including Director of Cash and Risk Management.

WESLEY N. DEARBAUGH joined ATC as President and General Manager of
Independent Aftermarket in June 1996. From 1993 to June 1996, Mr. Dearbaugh was
a Partner and Vice President of Marketing for Cummins, S.W., a multi-branch
distributor of heavy duty parts and service. From 1992 to 1993, he was Vice
President of Marketing for SEI, a large pension consulting firm. From 1983 to
1992, Mr. Dearbaugh held senior management and partner positions in value
investment funds and limited partnerships. From 1979 to 1983, Mr. Dearbaugh held
positions at Cummins Diesel Recon, Cummins Engine Company's Aftermarket
Remanufacturing Division including General Manager of Fuel Systems,
Director-Product Management, and Manager of Sales & Marketing. From 1974 to
1979, Mr. Dearbaugh held several positions in industrial engineering and
technical sales at Atlas Crankshaft, a manufacturing division of Cummins Engine
Company.

JAMES R. WEHR has been President of Aaron's, since August 1990 and has
responsibility for developing and maintaining the relationships between Aaron's
and Chrysler, other OEMs and Western Auto. In 1983 Mr. Wehr founded
Intercont, Inc., a cleaning and testing equipment division of Aaron's. Mr. Wehr
has been involved in the automotive aftermarket since 1969.

MICHAEL L. LEPORE has been President of CRS since 1984. From 1976 to
1984 Mr. LePore was manager of U.S. Operations for Borg-Warner Parts and Service
Division, a subsidiary of Borg Warner LTD U.K.

ROBERT ANDERSON became a director of the Company in March 1997. Mr.
Anderson has been associated with Rockwell International Corporation since 1968,
where he has been Chairman Emeritus since 1990 and served previously as Chairman
of the Executive Committee from 1988 to 1990 and as Chairman of the Board and
Chief Executive Officer from 1979 to 1988. Mr. Anderson is a director of
Gulfstream Aerospace Corporation, Optical Data Systems Company and Timken
Company.

RICHARD R. CROWELL became a director of the Company in July 1994.
Mr. Crowell is a founding partner and Managing Director of ACP. Prior to forming
ACP in 1991, Mr. Crowell was a Managing Director of Rosecliff, Inc., the
management company for Acadia Partners L.P. since its inception in 1987. Mr.
Crowell is a also director of Astor Corporation.

MARK C. HARDY became a director of the Company in July 1994. Mr. Hardy
is a Vice President of ACP and joined ACP in June 1993. Prior to joining ACP,
Mr. Hardy was an Associate at Bain & Company, a consulting firm. Mr. Hardy is
also a director of Astor Corporation.

DR. MICHAEL J. HARTNETT became a director of the Company in July 1994.
Since March 1992 Dr. Hartnett has been Chairman, President and Chief Executive
Officer of Roller Bearing Company of America, Inc., a manufacturer of ball and
roller bearings that is controlled by an affiliate of ACP. Prior to joining
Roller Bearing in 1990 as General Manager of its Industrial Tectonics
subsidiary, Dr. Hartnett spent 18 years with The Torrington Company, a bearing
manufacturer.

WILLIAM E. MYERS, JR. became a director of the Company in July 1994.
Mr. Myers has been, for more than the past five years, the Chairman of the Board
and Chief Executive Officer of W.E. Myers and Company, a private merchant bank.

GERALD L. PARSKY became a director of the Company in March 1997. Mr.
Parsky is the Chairman and a founding partner of ACP. Prior to forming ACP in
1991, Mr. Parsky was a senior partner and a member of the Executive and
Management Committees with the law firm of Gibson, Dunn & Crutcher LLP. Prior
to that, he served as an official with the United States Treasury Department and
the Federal Energy Office, and as Assistant Secretary of the Treasury for
International Affairs.

<PAGE>

RICHARD K. ROEDER became a director of the Company in July 1994.
Mr. Roeder is a founding partner and Managing Director of ACP. Prior to forming
ACP in 1991, Mr. Roeder was a partner in the law firm of Paul, Hastings,
Janofsky & Walker, where he served as Chairman of the firm's Corporate Law
Department and a member of its National Management Committee. Mr. Roeder is a
also director of Astor Corporation.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Exchange Act requires the Company's officers, directors and
persons who own more than 10% of any equity security of the Company to file
reports of ownership and changes in ownership with the SEC and to furnish copies
of these reports to the Company. Based solely on a review of the copies of the
forms that the Company received, the Company believes that Forms 4 were not
timely filed on January 10, 1997 by reporting persons to report (i) the purchase
of shares in the Company's IPO and/or (ii) the redemption of preferred stock
following the Reorganization, which purchases and redemptions occurred on
December 20, 1996. These transactions were subsequently reported on Forms 5
that were timely filed on February 14, 1997, thereby correcting the oversight.
The reporting persons who purchased shares in the IPO are William A. Smith,
Stephen J. Perkins, John C. Kent, Wesley N. Dearbaugh, Michael L. LePore and
Gerald L. Parsky. The reporting persons who's preferred stock was redeemed
following the Reorganization are William A. Smith, James R. Wehr, Richard R.
Crowell, Mark C. Hardy, Kurt B. Larsen (a former director), Gerald L. Parsky and
Richard K. Roeder.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION SUMMARY. The following table sets forth, for the period
beginning with the commencement of the Company's operations in July 1994 and
ending on December 31, 1994, and for the years ended December 31, 1995 and 1996,
the cash compensation paid or awarded by the Company to the Chief Executive
Officer, and the other four most highly compensated executive officers of ATC
and its subsidiaries (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------------- --------------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) COMPENSATION($)
- --------------------------- ------ ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
William A. Smith (2) 1996 $319,196 $315,803 -- --
Chairman of the Board of Directors 1995 300,000 -- -- --
1994 150,000 -- 842,106 $250,000(3)

Stephen J. Perkins (4) 1996 70,385 125,000 498,000 --
President and Chief Executive Officer 1995 -- -- -- --
1994 -- -- -- --

James R. Wehr 1996 284,070 300,000 -- --
President, Aaron's 1995 258,000 -- -- --
1994 109,000 -- 140,352 --

Michael L. LePore 1996 226,520 181,745 -- --
President, CRS 1995 160,838(5) 179,038(6) 70,176 --
1994 120,451 131,119 -- --

John C. Kent 1996 127,918 100,000 35,088 --
Chief Financial Officer 1995 124,615 12,000 -- --
1994 56,154 -- 70,176 --

Kenneth A. Bear 1996 107,467 80,000 -- --
Executive Vice President and General 1995 103,200 60,000 -- --
Manager, Aaron's 1994 44,140 32,960 70,176 --

</TABLE>

- ---------------
(1) Includes only options to purchase securities of the Company, which options
were issued pursuant to the Stock Incentive Plan. Pursuant to the Stock
Incentive Plan, the Compensation Committee of the Board of Directors
determines the terms and conditions of each option granted.

<PAGE>

(2) Mr. Smith served as the Company's Chief Executive Officer until October
1996.

(3) In July 1994 the Company paid Mr. Smith $250,000 for consultation services
rendered in connection with the Initial Acquisitions.

(4) Mr. Perkins was appointed as the Company's President and Chief Executive
Officer in October 1996. See "Management Compensation and Employment
Agreements" below.

(5) Includes five months salary of $56,777 prior to the acquisition by the
Company of CRS in April 1995.

(6) Includes $86,759 of bonus earned prior to the acquisition by the Company of
CRS in April 1995.

OPTION GRANTS. Shown below is information concerning grants of
options issued by the Company to the Named Executive Officers for the year ended
December 31, 1996.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL VALUE AT
GRANTS ASSUMED ANNUAL RATES
--------------------------------- OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------------- --------------- ----------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
William A. Smith. . . . . . -- -- -- -- -- --
Stephen J. Perkins. . . . . 498,000(2) 66.8% $4.67 10/7/06 $1,462,608 $3,706,404
James R. Wehr . . . . . . . -- -- -- -- -- --
John C. Kent. . . . . . . . 35,088(3) 4.7 4.67 10/1/06 103,052 261,145
Michael L. LePore . . . . . -- -- -- -- -- --
Kenneth A. Bear . . . . . . -- -- -- -- -- --

</TABLE>

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

(1) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts shown
are for the assumed rates of appreciation only, do not constitute
projections of future stock price performance, and may not necessarily be
realized. Actual gains, if any, on stock option exercises depend on the
future performance of the Common Stock, continued employment of the
optionee through the term of the options, and other factors.

(2) These options were granted under the Stock Incentive Plan. One third of the
options vest and become exercisable on each of the first three
anniversaries of the date of grant.

(3) These options were granted under the Stock Incentive Plan. One third of the
options vest and become exercisable on the first, third and fifth
anniversaries of the date of the grant.

EXERCISES OF OPTIONS AND AGGREGATE YEAR-END OPTION VALUES. Shown
below is information with respect to the year-end values of all options held by
the Named Executive Officers. No Named Executive Officer exercised any options
during the fiscal year ended December 31, 1996.

<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ------------ -------------
William A. Smith....... 842,106 -- $13,120,012 --
Stephen J. Perkins..... -- 498,000 -- $6,264,840
James R. Wehr.......... 93,568 46,784 1,457,789 728,895
John C. Kent........... 23,392 81,872 364,447 1,170,302
Michael L. LePore...... 23,392 46,784 364,447 728,895
Kenneth A. Bear........ 23,392 46,784 364,447 728,895

- ----------

(1) Calculated using closing price on December 31, 1996 of $17.25 per share.

MANAGEMENT COMPENSATION AND EMPLOYMENT AGREEMENTS

William A. Smith has an employment agreement with the Company
pursuant to which he serves as Chairman of the Board of Directors of the
Company at an annual salary of $316,000 (subject to cost-of-living
adjustments). The employment agreement with Mr. Smith contains a noncompete
provision for a period of five years from the cessation of his employment
with the Company and a nondisclosure provision which is effective for the
term of the employment agreement and indefinitely thereafter. Mr. Smith is
also entitled to participate in any bonus, incentive or other benefit plans
provided by the Company to its employees.

Stephen J. Perkins entered into an employment agreement with the
Company effective as of October 7, 1996, pursuant to which he will serve as
President and Chief Executive Officer of the Company at an annual salary of
$300,000 for a period of three years. The employment agreement with Mr. Perkins
contains a noncompete provision for a period of 18 months from the cessation of
his employment with the Company and a nondisclosure provision which is effective
for the term of the employment agreement and indefinitely thereafter.
Mr. Perkins is also entitled to participate in any bonus, incentive or other
benefit plans provided by the Company to its employees.

John C. Kent entered into an employment agreement with the Company
effective as of October 1, 1996, pursuant to which he will serve as Chief
Financial Officer of the Company at an annual salary of $150,000 for a period of
three years. The employment agreement with Mr. Kent contains a noncompete
provision for a period of 18 months from the cessation of his employment with
the Company and a nondisclosure provision which is effective for the term of the
employment agreement and indefinitely thereafter. Mr. Kent is also entitled to
participate in any bonus, incentive or other benefit plans provided by the
Company to its employees.

James R. Wehr entered into an employment agreement with Aaron's
effective as of August 2, 1994, pursuant to which he will serve as President of
Aaron's at an annual salary of $260,000 (subject to cost-of-living adjustments
which make the current annual salary approximately $274,000) for a period of
three years, which Aaron's may renew annually for an additional one year term.
The employment agreement and related agreements with Mr. Wehr contain a
noncompete provision for a period ending August 1, 1999 and a nondisclosure
provision which is effective for the term of his employment with Aaron's and
indefinitely thereafter. Mr. Wehr is also entitled to participate in any bonus,
incentive or other benefit plans provided by Aaron's to its employees.

Michael L. LePore entered into an employment agreement with CRS
effective as of June 1, 1995, pursuant to which he will serve as President of
CRS at an annual salary of approximately $180,000 (subject to

<PAGE>

cost-of-living adjustments which make the current annual salary approximately
$185,000) for a period of five years, which CRS may renew for an additional one
year term. The employment agreement and related agreements with Mr. LePore
contain a noncompete provision for a period ending June 1, 2002 and a
nondisclosure provision which is effective for the term of his employment with
CRS and indefinitely thereafter. Mr. LePore is also entitled to participate in
any bonus, incentive or other benefit plans provided by CRS to its employees.

Kenneth A. Bear entered into an employment agreement with Aaron's
effective July 28, 1994, pursuant to which he will serve as Executive Vice
President and General Manager of Aaron's at an annual salary of $104,000 for a
period of three years, which Aaron's may renew annually for an additional one
year term. The employment agreement with Mr. Bear contains a nondisclosure
provision which is effective for the term of his employment with Aaron's and
indefinitely thereafter. Mr. Bear is also entitled to participate in any bonus,
incentive or other benefit plans provided by Aaron's to its employees.

The Compensation Committee is also considering implementation of one
or more forms of retirement or similar plans for its officers and employees. In
addition, the Compensation Committee reviews the employment contracts described
above on an annual basis.

1996 STOCK INCENTIVE PLAN. In 1994, Holdings adopted the 1994 Stock
Incentive Plan in order to provide incentives to employees and directors of the
Company by granting them awards tied to the common stock of Holdings. In
February 1995, the plan was amended to include non-employee directors and
independent contractors. Upon effectiveness of the Reorganization, the plan
became the stock incentive plan of ATC and was renamed the 1996 Stock Incentive
Plan (the "Stock Incentive Plan"). The Stock Incentive Plan is administered by
the Compensation Committee, which has broad authority in administering and
interpreting the Stock Incentive Plan. Awards are not restricted to any
specified form or structure and may include, without limitation, sales or
bonuses of stock, restricted stock, stock options, reload stock options, stock
purchase warrants, other rights to acquire stock, securities convertible into or
redeemable for stock, stock appreciation rights, phantom stock, dividend
equivalents, performance units or performance shares (collectively, "Awards").
Options granted to employees under the Stock Incentive Plan may be options
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended, or options not intended to so qualify. An
Award granted under the Stock Incentive Plan to an employee or independent
contractor may include a provision terminating the Award upon termination of
employment under certain circumstances or accelerating the receipt of benefits
upon the occurrence of specified events, including, at the discretion of the
Compensation Committee, any change of control of the Company.

As of February 28, 1997, the Company had granted options to purchase
an aggregate of up to 2,272,218 shares of Common Stock to officers and employees
of the Company. The exercise price for these options to purchase an aggregate of
1,526,778 shares is $1.67 per share and $4.67 per share for options to purchase
an aggregate of 745,440 shares. Each option is subject to certain vesting
provisions. All options expire on the tenth anniversary of the date of grant.
As of February 28, 1997, the number of shares available for issuance pursuant to
options not yet granted under the Stock Incentive Plan was 127,782. For certain
information regarding options granted to officers of the Company, see "Security
Ownership of Certain Beneficial Owners and Management."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
members of the Compensation Committee are Richard K. Roeder, William A. Smith
and Richard R. Crowell. Mr. Smith does not participate in any matters considered
by the Committee relating to his compensation. Messrs. Roeder and Crowell are
(i) two of the three stockholders and directors of Aurora Advisors, Inc., the
general partner of ACP, which is the general partner of Aurora Equity Partners,
a significant stockholder of ATC, and (ii) two of the three stockholders and
directors of Aurora Overseas Advisors, Ltd., the general partner of Aurora
Overseas Capital Partners L.P., the general partner of Aurora Overseas Equity
Partners I, L.P., also a significant stockholder of ATC. See "Security
Ownership of Certain Beneficial Owners and Management." In addition, Messrs.
Roeder and Crowell are two of the three managing directors of ACP, which
provides management services to the Company pursuant to a management services
agreement. See "Certain Relationships and Related Transactions."

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of each class
of issued and outstanding voting securities of the Company, as of February 28,
1997, by each director of the Company, each of the Named Executive Officers, the
directors and executive officers of the Company as a group and each person who
at such time beneficially owned more than 5% of the outstanding shares of any
class of voting securities of the Company.

NUMBER OF VOTING
SHARES (1) PERCENTAGE
------------ ---------
Aurora Equity Partners L.P. (Other beneficial owners:
Richard R. Crowell, Richard K. Roeder and
Gerald L. Parsky) (2)(4)(5). . . . . . . . . . . . . 11,772,339 69.3
Aurora Overseas Equity Partners I, L.P. (Other
beneficial owners: Richard R. Crowell, Richard K.
Roeder and Gerald L. Parsky) (3)(4)(5) . . . . . . . 5,519,889 32.5
General Electric Pension Trust(4). . . . . . . . . . . 2,018,652 11.9
3003 Summer Street
Stamford, CT 06905 . . . . . . . . . . . . . . . . .
William A. Smith (6)(7). . . . . . . . . . . . . . . . 895,984 5.0
Stephen J. Perkins (7)(8). . . . . . . . . . . . . . . 1,000 *
John C. Kent (7)(9). . . . . . . . . . . . . . . . . . 24,392 *
James R. Wehr (10)(11) . . . . . . . . . . . . . . . . 971,068 5.7
Michael L. LePore (12) . . . . . . . . . . . . . . . . 24,992 *
400 Corporate Drive
Mahwah, NJ 07430
Kenneth A. Bear (11)(12) . . . . . . . . . . . . . . . 23,692 *
Robert Anderson (13) . . . . . . . . . . . . . . . . . 18,918 *
10877 Wilshire Boulevard, Suite 1405
Los Angeles, CA 90024-4341
Richard R. Crowell (2)(3)(4)(14)(15) . . . . . . . . . 12,960,489 76.3
Mark C. Hardy (14)(15) . . . . . . . . . . . . . . . . 8,460 *
Dr. Michael J. Hartnett (16) . . . . . . . . . . . . . 70,176 *
60 Round Hill Road
Fairfield, CT 06430
William E. Myers, Jr. (16) . . . . . . . . . . . . . . 280,704 1.6
2 North Lake Avenue, Suite 650
Pasadena, CA 91101
Gerald L. Parsky (2)(3)(4)(14)(15)(17) . . . . . . . . 12,960,489 76.3
Richard K. Roeder (2)(3)(4)(14)(15). . . . . . . . . . 12,960,489 76.3
All directors and officers as a group (14 persons)(18) 15,259,787 83.2

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

* Less than 1%.

(1) The shares of Common Stock underlying options, warrants, rights or
convertible securities that are exercisable as of February 28, 1997 or that
will become exercisable within 60 days thereafter are deemed to be
outstanding for the purpose of calculating the beneficial ownership of the
holder of such options, warrants, rights or convertible securities, but are
not deemed to be outstanding for the purpose of computing the beneficial
ownership of any other person.

(2) Includes 2,313,087 shares of Common Stock that are subject to an
irrevocable proxy granted to Aurora Equity Partners L.P. ("AEP") and Aurora
Overseas Equity Partners I, L.P. ("AOEP") by certain holders of Common
Stock, including Messrs. Crowell, Hardy, Parsky, Roeder, certain other
limited partners of AEP and certain affiliates of a limited partner of
AOEP. The proxy terminates upon the transfer of such shares. AEP is a
Delaware limited partnership the general partner of which is ACP, a
Delaware limited partnership

<PAGE>

whose general partner is Aurora Advisors, Inc. ("AAI"). Messrs. Crowell,
Parsky and Roeder are the sole stockholders and directors of AAI, are
limited partners of ACP and may be deemed to beneficially share ownership
of the Company's Common Stock beneficially owned by AEP and may be deemed
to be the organizers of the Company under regulations promulgated under the
Securities Act. Also includes the 2,018,652 shares of the Company's Common
Stock held by General Electric Pension Trust ("GEPT"). See Footnote (4)
below.

(3) Includes 2,313,087 shares of the Company's Common Stock that are subject to
an irrevocable proxy granted to AEP and AOEP by certain holders of Common
Stock, including Messrs. Crowell, Hardy, Parsky, Roeder, certain other
limited partners of AEP and certain affiliates of a limited partner of
AOEP. The proxy terminates upon the transfer of such shares. AOEP is a
Cayman Islands limited partnership the general partner of which is Aurora
Overseas Capital Partners, L.P. ("AOCP"), a Cayman Islands limited
partnership whose general partner is Aurora Overseas Advisors, Ltd.
("AOAL"). Messrs. Crowell, Parsky and Roeder are the sole stockholders and
directors of AOAL, are limited partners of AOCP and may be deemed to
beneficially own the shares of the Company's Common Stock beneficially
owned by AOEP. Also includes the 2,018,652 shares of the Company's Common
Stock held by GEPT. See Footnote (4) below.

(4) With limited exceptions, GEPT has agreed to vote these shares in the same
manner as AEP and AOEP vote their respective shares of the Company's Common
Stock. This provision terminates upon the transfer of such shares.

(5) The address for this beneficial holder is West Wind Building, P.O. Box
1111, Georgetown, Grand Cayman, Cayman Islands, B.W.I.

(6) Includes 842,106 shares of Common Stock subject to options granted under
the Stock Incentive Plan that are exercisable as of February 28, 1997 or
that will become exercisable within 60 days thereafter.

(7) The address for this beneficial holder is 33309 First Way South,
Suite A-206, Federal Way, WA 98003.

(8) Excludes 498,000 shares of Common Stock subject to options granted under
the Stock Incentive Plan that are not exercisable within 60 days of
February 28, 1997.

(9) Consists of 23,392 shares of Common Stock subject to options granted under
the Stock Incentive Plan that are exercisable as of February 28, 1997 or
that will become exercisable within 60 days thereafter. Excludes 81,872
shares of Common Stock subject to options granted under the Stock Incentive
Plan that are not exercisable within 60 days of February 28, 1997.

(10)Includes 93,568 shares of Common Stock subject to options granted under the
Stock Incentive Plan that are exercisable as of February 28, 1997 or that
will become exercisable within 60 days thereafter. Excludes 46,784 shares
of Common Stock subject to options granted under the Stock Incentive Plan
that are not exercisable within 60 days of February 28, 1997.

(11)The address for this beneficial holder is 2699 North Westgate, Springfield,
MO 65803.

(12)Consists of 23,392 shares of Common Stock subject to options granted under
the Stock Incentive Plan that are exercisable as of February 28, 1997 or
that will become exercisable within 60 days thereafter. Excludes
46,784 shares of Common Stock subject to options granted under the Stock
Incentive Plan that are not exercisable within 60 days of February 28,
1997.

(13)Includes 4,290 shares held by Mr. Anderson's wife (including 2,790 shares
held by her as trustee for her relatives), as to which Mr. Anderson
disclaims beneficial ownership.

(14)The address for this beneficial holder is 1800 Century Park East,
Suite 1000, Los Angeles, CA 90067.

<PAGE>

(15)The holder of these shares has granted an irrevocable proxy covering these
shares to AEP and AOEP.

(16)Consists of shares of Common Stock subject to exercisable warrants.

(17)Includes 2,000 shares held by Mr. Parsky's wife, as to which Mr. Parsky
disclaims beneficial ownership.

(18)Includes 1,356,730 shares of Common Stock subject to warrants and employee
stock options that are exercisable as of February 28, 1997 or that will
become exercisable within 60 days thereafter.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company believes the transactions described below that were
entered into by the Company and its subsidiaries were beneficial to the
respective companies, and were at least as favorable to the respective companies
as could have been obtained from unaffiliated third parties pursuant to
arms-length negotiations.

RELATIONSHIP WITH ACP

Fees of approximately $1.1 million were paid to ACP for investment
banking services provided in connection with the acquisitions of Mascot, CRS and
King-O-Matic in 1995 and Tranzparts and Diverco in 1996. The Company has also
agreed to pay to ACP a base annual management fee of approximately $530,000 for
advisory and consulting services pursuant to a written management services
agreement (the "Management Services Agreement"). ACP is also entitled to
reimbursements from the Company for all of its reasonable out-of-pocket costs
and expenses incurred in connection with the performance of its obligations
under the Management Services Agreement. The base annual management fee is
subject to increase, at the discretion of the disinterested members of the
Company's Board of Directors, by up to an aggregate of $250,000 in the event the
Company consummates one or more significant corporate transactions. The base
annual management fee was not increased as a result of the acquisitions of CRS,
Mascot, King-O-Matic, Tranzparts and Diverco. The base annual management fee is
also subject to increase for specified cost of living increases. If the
Company's EBITDA in any year exceeds management's budgeted EBITDA by 15.0% or
more for that year, ACP will be entitled to receive an additional management fee
equal to one half of its base annual management fee for such year. Because the
Company's EBITDA did not exceed management's budgeted EBITDA by 15.0% in 1995
and 1996, ACP did not receive this additional management fee in 1995 or 1996. In
the event the Company consummates any significant corporate transaction, ACP
will be entitled to receive a closing fee from the Company equal to 2.0% of the
first $75.0 million of the acquisition consideration (including debt assumed and
current assets retained) and 1.0% of acquisition consideration (including debt
assumed and current assets retained) in excess of $75.0 million. Notwithstanding
the foregoing, no payment will be made to ACP pursuant to the Management
Services Agreement at any time that certain events of default shall have
occurred and be then continuing under either of the indentures governing the
Company's senior subordinated notes or the Revolving Credit Agreement. The
Management Services Agreement also provides that the Company shall provide ACP
and its directors, employees, partners and affiliates with customary
indemnification against all actions not involving gross negligence or willful
misconduct. The base annual management fee payable to ACP will be reduced as the
collective beneficial ownership of Common Stock by AEP and AOEP declines below
50%: for any period during which the collective beneficial ownership of AEP and
AOEP is less than 50% but at least 40%, the base annual management fee payable
for the period will be 80% of the original base annual management fee (as such
original base annual management fee may previously have been adjusted due to
discretionary increases by the Board of Directors or cost of living increases as
described above, the "Original Fee"); for any period during which AEP's and
AOEP's collective beneficial ownership is less than 40% but at least 30%, the
base annual management fee payable for the period will be 60% of the Original
Fee; and for any period during which the collective beneficial ownership of AEP
and AOEP is less than 30% but at least 20%, the base annual management fee
payable for the period will be 40% of the Original Fee. If AEP's and AOEP's
collective beneficial ownership declines below 20%, the Management Services
Agreement will terminate. For information regarding the general and certain of
the limited partners of ACP, see "Security Ownership of Certain Beneficial
Owners and Management."

<PAGE>

In October 1996, the Company granted options for an aggregate of
48,000 shares to certain directors and consultants of the Company who are
employees of ACP, including Mr. Hardy.

FACILITY LEASES

In connection with its acquisition of Aaron's, the Company entered
into a lease with an affiliate of James R. Wehr for Aaron's headquarters and
primary remanufacturing facility located in Springfield, Missouri with an
initial term beginning January 1, 1994 and expiring December 31, 2004, subject
to the Company's option to extend the term for a period of five years. The
monthly base rent is $33,105 and the Company is responsible for paying property
taxes, insurance and maintenance expenses for the leased premises. The Company
also entered into three leases with affiliates of Mr. Wehr for three
manufacturing facilities comprising approximately 84,000 square feet for an
aggregate rent of $12,000 per month with an initial term beginning January 1,
1994 and expiring December 31, 1996 and December 31, 1998 (depending upon the
facility), subject to the Company's option to extend the term of the lease for a
30,000 square foot facility for one successive period of five years through
December 31, 2003. In November 1994, the Company entered into another lease with
the same parties for a 98,800 square foot storage facility for monthly rent of
$7,300 per month. The initial term of the lease expired during 1995 and pursuant
to its terms, continues as a month-to-month lease until terminated. In January
1996, the Company entered into a new lease with an affiliate of Mr. Wehr' for
Aaron's 200,000 square foot core storage facility for an initial term of ten
years, expiring October 31, 2006, with an option to renew for five years. The
base monthly rent is currently $36,667 for the initial term, with specified
increases every three years. The Company is also required to pay taxes,
maintenance and operating expenses. On January 1, 1997 the Company entered into
a three-year lease with an affiliate of Mr. Wehr for a 60,430 square foot
facility used for core storage, warehousing and office space for rent of $5,973
per month. The Company also leases from Mr. Wehr eight acres adjacent to the
manufacturing facility in Joplin, Missouri. This acreage is used for employee
parking at the manufacturing facility. The lease was entered into on July 1,
1996 and expires on June 30, 2006 with a monthly base rent of $1,265. The
Company is responsible for paying property taxes, insurance and maintenance
expenses for each of these leased premises. Mr. Wehr is an executive officer of
the Company.

PAYMENT OF PREFERRED STOCK REORGANIZATION CONSIDERATION

In connection with the formation of Holdings, in July and August 1994
it issued Holdings Preferred Stock to each purchaser of its common stock for
consideration of $100 per share, totaling an aggregate of 200,000 outstanding
shares. In the Reorganization, each outstanding shares of Holdings preferred
stock was converted into one share of the Company's Preferred Stock, following
which the Preferred Stock was redeemed for an amount in cash equal to
$100.00 plus an amount in cash equal to accrued and unpaid dividends on the
Holdings Preferred Stock to the date of the Reorganization. Messrs. Smith,
Wehr, Anderson, Crowell, Hardy, Parsky and Roeder (each of whom is a director
and/or executive officer of the Company) held the following numbers of shares of
Preferred Stock, respectively: 563; 11,250; 188; 1,264; 109; 1,401; and 243.
Upon redemption of such shares, Messrs. Smith, Wehr, Anderson, Crowell, Hardy,
Parsky and Roeder received the following amounts, respectively: $70,765;
$1,414,051; $23,630; $159,195; $13,701; $176,403; and $30,596. AEP and AOEP
originally purchased 95,392 and 15,233 shares of Preferred Stock, respectively,
which were subsequently distributed to their general and limited partners,
including AOCP and ACP, which received $19,183 and $120,159, respectively, upon
redemption of ATC's Preferred Stock.

REGISTRATION RIGHTS

The holders of the Company's Common Stock outstanding before the IPO
have been granted certain "demand" and "piggyback" registration rights pursuant
to a Stockholders Agreement. In addition, GEPT was granted certain "demand" and
"piggyback" registration rights with respect to 300,000 shares of Common Stock
owned by GEPT and 955,794 shares sold to GEPT in a private placement
concurrently with the IPO.

<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.

(a) Index to Financial Statements, Financial Statement Schedules and Exhibits:

1. Financial Statements Index

See Index to Financial Statements and Supplemental Data on page 16.

2. Financial Statement Schedules Index

II -- Valuation and Qualifying Accounts.......................S-1

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.

3. Exhibit Index

The following exhibits are filed as part of this Annual Report on Form
10-K, or are incorporated herein by reference.

EXHIBIT
NUMBER DESCRIPTION
------- -----------
*3.1 Amended and Restated Certificate of Incorporation of Aftermarket
Technology Corp.
*3.2 Certificate of Designations, Preferences, and Relative, Participating,
Option and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof of
Redeemable Exchangeable Cumulative Preferred Stock of Aftermarket
Technology Corp.
*3.3 Amended and Restated Bylaws of Aftermarket Technology Corp.
4.1 Indenture, dated August 2, 1994, among Aftermarket Technology Corp.,
the Guarantors named therein and Firstar Bank of Minnesota, N.A.
(formerly known as American Bank N.A.), as Trustee for the Series
B Notes (previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-4 filed on November 30, 1994,
Commission File No. 33-86838, and incorporated herein by this
reference)
4.2 Indenture, dated June 1, 1995, among Aftermarket Technology Corp., the
Guarantors named therein and Firstar Bank of Minnesota, N.A.
(formerly known as American Bank N.A.), as Trustee for the
Series D Notes (previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-4 filed on June 21, 1995,
Commission File No. 33-93776, and incorporated herein by this
reference)
4.3 First Supplemental Indenture, dated as of February 23, 1995, among
Aftermarket Technology Corp., the Guarantors named therein and
Firstar Bank of Minnesota, N.A. (formerly known as American Bank
N.A.), as Trustee for the Series B Notes (previously filed as
Exhibit 4.3 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed on October 25, 1996, Commission File
No. 333-6697, and incorporated herein by this reference)
4.4 Second Supplemental Indenture, dated as of June 1, 1995, among
Aftermarket Technology Corp., the Guarantors named therein and
Firstar Bank of Minnesota, N.A. (formerly known as American
Bank N.A.), as Trustee for the Series B Notes (previously filed
as Exhibit 4.4 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed on October 25, 1996, Commission
File No. 333-5597, and incorporated herein by this reference)
4.5 Third Supplemental Indenture to the Series B Indenture and First
Supplemental Indenture to the Series D Indenture, dated as of July
25, 1996, among Aftermarket Technology Corp., the Guarantors
named therein and Firstar Bank of Minnesota, N.A. (formerly known
as American Bank N.A.), as Trustee for the Notes (previously
filed as Exhibit 4.5 to Amendment No. 1 to the Company's
Registration Statement on Form S-1 filed on October 25, 1996,
Commission File No. 333-5597, and incorporated herein by this
reference)

<PAGE>

10.1 Stockholders Agreement, dated as of August 2, 1994, among Holdings,
and certain of its stockholders, optionholders and warrant holders
(the "Stockholders Agreement") (previously filed as Exhibit 10.1
to the Company's Registration Statement on Form S-4 filed on
November 30, 1994, Commission File No. 33-86838, and incorporated
herein by this reference)
10.2 Amendment No. 1 to the Stockholders Agreement, dated as of June 24,
1996 (previously filed as Exhibit 10.38 to Amendment No. 2 to the
Company's Registration Statement on Form S-1 filed on November 6,
1996, Commission File No. 333-5597, and incorporated herein by
this reference)
10.3 Amendment No. 2 to the Stockholders Agreement, dated as of October 24,
1996 (previously filed as Exhibit 10.39 to Amendment No. 2 to the
Company's Registration Statement on Form S-1 filed on November 6,
1996, Commission File No. 333-5597, and incorporated herein by
this reference)
*10.4 Amendment No. 3 to Stockholders Agreement, dated as of December 4,
1996
*10.5 Amendment No. 4 to Stockholders Agreement, dated as of December 16,
1996
*10.6 Credit Agreement, dated as of February 14, 1996, among Aftermarket
Technology Corp., the Lenders from time to time parties thereto
and The Chase Manhattan Bank (the "Credit Agreement")
*10.7 Guarantee and Collateral Agreement, dated as of February 14, 1996, by
Aftermarket Technology Corp. and each of the signatories thereto
in favor of The Chase Manhattan Bank as Agent for the banks and
other financial institutions from time to time parties to the
Credit Agreement
*10.8 Amended and Restated Tax Sharing Agreement, dated as of December 20,
1996, among Aftermarket Technology Holdings Corp., Aaron's
Automotive Products, Inc., ATC Components, Inc., CRS Holdings
Corp., Diverco Acquisition Corp., H.T.P., Inc., Mamco Converters,
Inc., R.P.M. Merit, Inc. and Tranzparts Acquisition Corp.
10.9 Amended and Restated Management Services Agreement, dated as of
November 18, 1996, by and among Aftermarket Technology Corp., the
subsidiaries of Aftermarket Technology Corp., and Aurora Capital
Partners L.P. (previously filed as Exhibit 10.4 to Amendment No.
4 to the Company's Registration Statement on Form S-1 filed on
October 25, 1996, Commission File No. 333-5597, and incorporated
herein by this reference)
*10.10 Aftermarket Technology Corp. 1996 Stock Incentive Plan
10.11 Form of Incentive Stock Option Agreement (previously filed as Exhibit
10.36 to Amendment No. 1 to the Company's Registration Statement
on Form S-1 filed on October 25, 1996, Commission File No.
333-5597, and incorporated herein by this reference)
10.12 Form of Non-Qualified Stock Option Agreement (previously filed as
Exhibit 10.37 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed on October 25, 1996, Commission File
No. 333-5597, and incorporated herein by this reference)
10.13 Employment Agreement, dated as of October 7, 1996, between Aftermarket
Technology Corp. and William A. Smith (previously filed as
Exhibit 10.6 to the Company's Registration Statement on
Form S-4 filed on November 30, 1994, Commission File
No. 33-86838, and incorporated herein by this reference)
10.14 Employment Agreement, dated as of October 7, 1996, between Stephen J.
Perkins and Aftermarket Technology Corp. (previously filed as
Exhibit 10.35 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed on October 25, 1996, Commission File
No. 333-5597, and incorporated herein by this reference)
10.15 Employment Agreement, dated as of October 1, 1996, between John C.
Kent and Aftermarket Technology Corp. (previously filed as
Exhibit 10.7 to Amendement No. 2 to the Company's Registration
Statement on Form S-1 filed on November 6, 1996, Commission
File No. 333-5597, and incorporated herein by this reference)
10.16 Employment Agreement, dated August 2, 1994, between James R. Wehr and
Aaron's Automotive Products, Inc. (previously filed as Exhibit
10.9 to the Company's Registration Statement on Form S-4 filed on
November 30, 1994, Commission File No. 33-86838, and incorporated
herein by this reference)
10.17 Employment Agreement, dated as of June 1, 1995, between Michael L.
LePore and Component Remanufacturing Specialists, Inc. (previously
filed as Exhibit 10.11 to the Company's Registration Statement on
Form S-4 filed on June 21, 1995, Commission File No. 33-93776, and
incorporated herein by this reference)

<PAGE>

*10.18 Amended and Restated Warrant Certificate, dated as of August 2, 1994,
for 280,704 warrants issued to William E. Myers, Jr.
*10.19 Amended and Restated Warrant Certificate, dated as of August 2, 1994,
for 70,176 warrants issued to Brian E. Sanderson
*10.20 Amended and Restated Warrant Certificate, dated June 24, 1996, for
70,176 warrants issued to Michael J. Hartnett
10.21 Stock Purchase Agreement, dated May 16, 1994, by and among C.R. Wehr,
Jr., Rev. Liv. Trust, James R. Wehr, Aaron's Automotive Products,
Inc. and AAP Acquisition Corp. (previously filed as Exhibit 10.14
to the Company's Registration Statement on Form S-4 filed on
November 30, 1994, Commission File No. 33-86838, and incorporated
herein by this reference)
10.22 Stock Purchase Agreement, dated July 21, 1994, by and among John B.
Maynard, Kenneth T. Hester, H.T.P., Inc. and HTP Acquisition Corp.
(previously filed as Exhibit 10.15 to the Company's Registration
Statement on Form S-4 filed on November 30, 1994, Commission File
No. 33-86838, and incorporated herein by this reference)
10.23 Stock Purchase Agreement, dated July 21, 1994, by and among John B.
Maynard, Mamco Converters, Inc. and Mamco Acquisition Corp.
(previously filed as Exhibit 10.16 to the Company's Registration
Statement on Form S-4 filed on November 30, 1994, Commission File
No. 33-86838, and incorporated herein by this reference)
10.24 Asset Purchase Agreement, dated June 24, 1994, by and among RPM Merit,
Donald W. White, John A. White, The White Family Trust and RPM
Acquisition Corp. (previously filed as Exhibit 10.17 to the
Company's Registration Statement on Form S-4 filed on
November 30, 1994, Commission File No. 33-86838, and incorporated
herein by this reference)
10.25 Agreement and Plan of Merger and Reorganization, dated May 10, 1995,
by and among Component Remanufacturing Specialists, Inc., James
R. Crane, Michael L. LePore, Aftermarket Technology Corp., CRS
Holdings Corp. and CRS Acquisition Corp. (previously filed as
Exhibit 2 to the Company's Current Report on Form 8-K filed on
June 15, 1995, Commission File No. 33-80838-01, and incorporated
herein by this reference)
10.26 Stock Purchase Agreement, dated June 9, 1995, by and among Dianne
Hanthorn, Jobian Limited, Randall Robinson, Barry E. Schwartz,
Bradley Schwartz, Angela White, John White, Incorporated
Investments Limited, Glenn M. Hanthorn, Guido Sala and Tony
Macharacek, Mascot Truck Parts Inc. and Mascot Acquisition
Corp. (previously filed as Exhibit 10.22 to the Company's
Registration Statement on Form S-4 filed on June 21, 1995,
Commission File No. 33-93776, and incorporated herein by this
reference)
10.27 Stock Purchase Agreement, dated September 12, 1995, by and among
Gordon King, 433644 Ontario Limited, 3179338 Canada Inc.,
King-O-Matic Industries Limited, KOM Acquisition Corp. and
Aftermarket Technology Corp. (previously filed as Exhibit 10.23
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 and incorporated herein by
this reference)
10.28 Stock Purchase Agreement, dated as of April 2, 1996, by and among the
Charles T. and Jean F. Gorham Charitable Remainder Trust dated
March 27, 1996, Charles T. Gorham, J. Peter Donoghue, Tranzparts,
Inc. and Tranzparts Acquisition Corp. (previously filed as Exhibit
10.23 to Amendment No. 1 to the Company's Registration Statement
on Form S-1 filed on October 25, 1996, Commission File
No. 333-5597, and incorporated herein by this reference)
10.29 Stock Purchase Agreement, dated as of October 1, 1996, by and among
Robert T. Carren Qualified Annuity Trust, Robert T. Carren,
Diverco, Inc., and Diverco Acquisition Corp. (previously filed
as Exhibit 10.34 to Amendment No. 1 to the Company's
Registration Statement on Form S-1 filed on October 25, 1996,
Commission File No. 333-5597, and incorporated herein by this
reference)
*10.30 Stock Purchase Agreement, dated as of January 31, 1997, by and among
S. Jay Wilemon, Ricki J. Wilemon, Bradley J. Wilemon, Corby L.
Wilemon, Replacement & Exchange Parts Co., Inc., Aftermarket
Technology Corp. and Repco Acquisition Corp.
10.31 Lease, dated February 24, 1995, between 29 Santa Anita Partnership
L.P. and Replacement Parts Manufacturing with respect to
property located at 12250 E. 4th Street, Rancho Cucamonga,
California (previously filed as Exhibit 10.24 to Amendment No.
2 to the Company's Registration Statement on Form S-1 filed on
November 6, 1996, Commission File No. 333-5597, and
incorporated herein by this reference)

<PAGE>

10.32 Lease, dated January 1, 1994, between CRW, Incorporated and Aaron's
Automotive Products, Inc. with respect to property located at
2600 North Westgate, Springfield, Missouri (previously filed as
Exhibit 10.4 to the Company's Registration Statement on Form
S-4 filed on November 30, 1994, Commission File No. 33-86838,
and incorporated herein by this reference)
10.33 Lease Purchase Agreement, dated April 21, 1995, between Fleming
Companies, Inc. and Aaron 's Automotive Products, Inc. with
respect to property located at 3001 Davis Boulevard, Joplin,
Missouri, as amended (previously filed as Exhibit 10.26 to
Amendment No. 2 to the Company's Registration Statement on Form
S-1 filed on November 6, 1996, Commission File No. 333-5 597,
and incorporated herein by this reference)
10.34 Sublease, dated April 20, 1994, between Troll Associates, Inc. and
Component Remanufacturing Specialists, Inc. with respect to
property located at 400 Corporate Drive, Mahwah, New Jersey
(previously filed as Exhibit 10.40 to Amendment No. 2 to the
Company's Registration Statement on Form S-1 filed on November
6, 1996, Commission File No. 333-5597, and incorporated herein
by this reference)
10.35 Sublease Modification and Extension Agreement, dated as of February
28, 1996, between Olde Holding Company and Component
Remanufacturing Specialists, Inc. with respect to property
located at 400 Corporate Drive, Mahwah, New Jersey (previously
filed as Exhibit 10.41 to Amendment No. 2 to the Company's
Registration Statement on Form S-1 filed on November 6, 1996,
Commission File No. 333-55 97, and incorporated herein by this
reference)
10.36 Exchange and Registration Rights Agreement, dated August 2, 1994, by
and among Aftermarket Technology Corp., the subsidiaries of
Aftermarket Technology Corp., Chemical Securities Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation (previously
filed as Exhibit 10.13 to the Company's Registration Statement
on Form S-4 filed on November 30, 1994, Commission File No.
33-83868, and incorporated herein by this reference)
10.37 Exchange and Registration Rights Agreement, dated June 1, 1995, by and
among Aftermarket Technology Corp., the subsidiaries of
Aftermarket Technology Corp., Chemical Securities Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation (previously
filed as Exhibit 10.16 to the Company's Registration Statement on
Form S-4 filed on June 21, 1995, Commission File No. 33-93776,
and incorporated herein by this reference)
10.38 Firstbank Lending Agreement, dated as of June 28, 1996, between Mascot
Trust Parts Inc. and/or King-O-Matic Industries Ltd. and Bank of
Montreal (previously filed as Exhibit 10.33 to Amendment No. 1 to
the Company's Registration Statement on Form S-1 filed on October
25, 1996, Commission File No. 333-5597, and incorporated herein
by this reference)
10.29 Stock Subscription Agreement, dated as of November 18, 1996, between
Aftermarket Technology Corp. and the Trustees of the General
Electric Pension Trust (previously filed as Exhibit 10.44 to
Amendment No. 4 to the Company's Registration Statement on Form
S-1 filed on October 25, 1996, Commission File No. 333-5597,
and incorporated herein by this reference)
*11.1 Computation of Pro Forma Net Income Per Share
*21.1 List of Subsidiaries
*23.1 Consent of Ernst & Young LLP, independent auditors

- -----------
* Filed herewith

(b) Reports on Form 8-K

The Company filed no Reports on Form 8-K during the last quarter of
the 1996 fiscal year.

(d) Refer to (a) 2 above.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized,
on March 14, 1997.

AFTERMARKET TECHNOLOGY CORP.

By: /S/ STEPHEN J. PERKINS
-------------------------
Stephen J. Perkins
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this
Annual Report on Form 10-K has been signed by the following persons in the
capacities indicated on the dates indicated.

SIGNATURE TITLE DATE
- -------------------------- ----------------------------- ------------------
/S/ STEPHEN J. PERKINS
-------------------------
Stephen J. Perkins Chief Executive Officer
(Principal Executive Officer) March 14, 1997
/S/ JOHN C. KENT
-------------------------
John C. Kent Chief Financial Officer
(Principal Financial Officer) March 14, 1997
/S/ DANIEL C. BUIE
-------------------------
Daniel C. Buie Corporate Controller
(Principal Accounting Officer) March 14, 1997
/S/ WILLIAM A. SMITH
-------------------------
William A. Smith Chairman of the Board of
Directors March 14, 1997
/S/ ROBERT ANDERSON
-------------------------
Robert Anderson Director March 14, 1997

/S/ RICHARD R. CROWELL
-------------------------
Richard R. Crowell Director March 14, 1997

/S/ MARK C. HARDY
-------------------------
Mark C. Hardy Director March 14, 1997

/S/ MICHAEL J. HARTNETT
-------------------------
Michael J. Hartnett Director March 14, 1997

/S/ WILLIAM E. MYERS, JR.
-------------------------
William E. Myers, Jr. Director March 14, 1997

<PAGE>

/S/ GERALD L. PARSKY
-------------------------
Gerald L. Parsky Director March 14, 1997

/S/ RICHARD K. ROEDER
-------------------------
Richard K. Roeder Director March 14, 1997

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

ADDITIONS
---------------------------
BALANCE AT CHARGED TO CHARGE TO
BEGINNING OF COSTS AND OTHER BALANCE AT END
PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Combined:
Seven months ended July 31, 1994:
Reserve and allowances deducted from asset accounts:
Allowance for uncollectible accounts $324,750 $ 308,550 $ - $ 32,588(1) $ 600,712
Consolidated:
Five months ended December 31, 1994:
Reserve and allowances deducted from asset accounts:
Allowance for uncollectible accounts 600,712 190,044 - 24,756(1) 766,000
Reserve for inventory obsolescence - 785,603 - - 785,603
Year ended December 31, 1995:
Reserve and allowances deducted from asset accounts:
Allowance for uncollectible accounts 766,000 1,239,138 1,216,529(2) 752,667(1) 2,469,000
Reserve for inventory obsolescence 785,603 1,034,259 294,442(2) - 2,114,304
Year ended December 31, 1996:
Reserve and allowances deducted from asset accounts:
Allowance for Uncollectible accounts 2,469,000 667,857 14,594(2) 1,825,368(1) 1,326,476
Reserve for inventory obsolescence 2,114,304 1,411,013 - 784,543 2,740,774

(1) Accounts written off, net of recoveries

(2) Balances added through new acquisitionsh

</TABLE>

S-1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<DESCRIPTION>EX 3.1
<TEXT>

<PAGE>

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AFTERMARKET TECHNOLOGY CORP.
A DELAWARE CORPORATION

The undersigned, for the purpose of amending and restating the
Certificate of Incorporation of Aftermarket Technology Corp., a Delaware
corporation (the "Corporation"), does hereby certify that:

1. The date of filing of the Corporation's original Certificate of
Incorporation with the Secretary of State of the State of Delaware was April 25,
1994 and the name under which it originally incorporated was Aftermarket
Technologies & Components, Inc. A Restated Certificate of Incorporation was
filed with the Secretary of State of the State of Delaware on June 21, 1996.

2. This Amended and Restated Certificate of Incorporation has been
duly adopted pursuant to Section 228, 242 and 245 of the Delaware General
Corporation Law. Written consent of the Corporation's stockholders has been
given in accordance with Section 228 of the DGCL and written notice has been
given as provided in such Section.

3. The Certificate of Incorporation of the Corporation is hereby
amended and restated in its entirety as follows:

ARTICLE I
NAME OF CORPORATION

The name of this corporation is:

Aftermarket Technology Corp.

ARTICLE II

REGISTERED OFFICE

The address of the registered office of the Corporation in the
State of Delaware is 9 East Loockerman Street, in the city of Dover, County
of Kent and the name of its registered agent at that address is National
Registered Agents, Inc.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

<PAGE>

ARTICLE IV

AUTHORIZED CAPITAL STOCK

SECTION 1. AUTHORIZED SHARES. The Corporation shall be authorized
to issue two classes of shares of stock to be designated, respectively,
"Preferred Stock" and "Common Stock"; the total number of shares that the
Corporation shall have authority to issue is Thirty-Five Million
(35,000,000); the total number of shares of Preferred Stock shall be Five
Million (5,000,000) and all such shares shall have a par value of one cent
($.01); and the total number of shares of Common Stock shall be Thirty
Million (30,000,000), and each such share shall have a par value of one cent
($.01).

SECTION 2. PREFERRED STOCK. The shares of Preferred Stock may be
issued from time to time in one or more series. The Board of Directors of
the Corporation (the "Board") is hereby vested with authority to fix by
resolution or resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including, without
limitation, the dividend rate, conversion or exchange rights, redemption
price and liquidation preference, of any series of shares of Preferred Stock,
and to fix the number of shares constituting any such series, and to increase
or decrease the number of shares of any such series (but not below the number
of shares thereof then outstanding). In case the number of shares of any
such series shall be so decreased, the shares constituting such decrease
shall resume the status that they had prior to the adoption of the resolution
or resolutions originally fixing the number of shares of such series.

SECTION 3. DISTRIBUTIONS UPON LIQUIDATION. In the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of the Corporation, the holders of each
series of Preferred Stock shall be entitled to receive, out of the net assets
of the Corporation, an amount for each share of such series of Preferred
Stock equal to the amount fixed and determined by the Board in the resolution
or resolutions creating such series and providing for the issuance of such
shares, and no more, before any of the assets of the Corporation shall be
distributed or paid over to the holders of Common Stock. After payment in
full of said amounts to the holders of Preferred Stock of all series, the
remaining assets and funds of the Corporation shall be divided among and paid
to the holders of shares of Common Stock. If, upon such dissolution,
liquidation or winding up, the assets of the Corporation distributable as
aforesaid among the holders of Preferred Stock of all series shall be
insufficient to permit full payment to them of said preferential amounts,
then such assets shall be distributed ratably among such holders of Preferred
Stock in proportion to the respective total amounts that they shall be
entitled to receive as provided in this Section 3.

<PAGE>

ARTICLE V

ANNUAL MEETINGS OF STOCKHOLDERS

The annual meeting of stockholders shall be held at such time, on
such date and at such place (within or without the State of Delaware) as
provided in the Bylaws of the Corporation. Subject to any requirement of
applicable law, the books of the Corporation may be kept outside the State of
Delaware at such place or places as may be designated from time to time by
the Board or in the Bylaws of the Corporation. Elections of directors need
not be by written ballot unless the Bylaws of the Corporation shall so
provide.

ARTICLE VI

CALL OF SPECIAL MEETINGS OF STOCKHOLDERS

Special meetings of stockholders of the Corporation for any purpose
or purposes may be called at any time (i) by a majority of the members of the
Board or (ii) by a committee of the Board that has been duly designated by
the Board and whose power and authority, as provided in a resolution by the
Board or in the Bylaws of the Corporation, includes the power to call such
meetings; but such special meetings of stockholders of the Corporation may
not be called by any other Person or Persons or in any other manner;
PROVIDED, HOWEVER, that if and to the extent that any special meeting of
stockholders may be called by any other Person or Persons specified in any
certificate of designations filed under Section 151(g) of the Delaware
General Corporation Law (or its successor statute as in effect from time to
time), then such special meeting may also be called by the Person or Persons,
in the manner, at the times and for the purposes so specified.

ARTICLE VII

STOCKHOLDER ACTION BY WRITTEN CONSENT

Any election of directors or other action by the stockholders of
the Corporation must be effected at an annual or special meeting of
stockholders and may not be effected by written consent without a meeting.

ARTICLE VIII

ELECTION OF DIRECTORS

SECTION 1. BALLOT. Elections of directors need not be by written
ballot unless the Bylaws of the Corporation shall so provide.

SECTION 2. ELECTION OF DIRECTORS BY PREFERRED STOCKHOLDERS.
During any period when the holders of any Preferred Stock or any one or more
series thereof,

<PAGE>

voting as a class, shall be entitled to elect a specified number of
directors, by reason of dividend arrearages or other provisions giving them
the right to do so, then and during such time as such right continues (1) the
then otherwise authorized number of directors shall be increased by such
specified number of directors, and the holders of such Preferred Stock or
such series thereof, voting as a class, shall be entitled to elect the
additional directors so provided for, pursuant to the provisions of such
Preferred Stock or series; (2) each such additional director shall serve for
such term, and have such voting powers, as shall be stated in the provisions
pertaining to such Preferred Stock or series; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, any such director's term shall earlier expire
upon the due election and qualification of a successor to such director or
upon any resignation, disqualification or removal of such director in
accordance with law. Whenever the holders of shares of any series of
Preferred Stock are divested of such rights to elect a specified number of
directors pursuant to the resolution or resolutions of the Board creating
such series and providing for the issuance of such shares, the terms of
office of all directors elected by the holders of such series of Preferred
Stock pursuant to such rights, or elected to fill any vacancies resulting
from the death, resignation or removal of directors so elected by the holders
of such series of Preferred Stock, shall forthwith terminate and the
authorized number of directors shall be reduced accordingly.

SECTION 3. STOCKHOLDER NOMINEES. Nominations by stockholders of
persons for election to the Board shall be made only in accordance with the
procedures set forth in the Bylaws of the Corporation.

SECTION 4. REMOVAL. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, any director, or the entire
Board, may be removed from office with or without cause, at any time, and
only by the affirmative vote of the holders of a majority of the shares of
Voting Stock then outstanding.

ARTICLE IX

LIABILITY AND INDEMNIFICATION

To the fullest extent permitted by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (the "Delaware Law"), a
director of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
The Corporation shall indemnify, in the manner and to the fullest extent
permitted by the Delaware Law, any person (or the estate of any person) who
is or was a party to, or is threatened to be made a party to, any threatened,
pending or completed action, suit or proceeding, whether or not by or in the
right of the Corporation, and whether civil, criminal, administrative,
investigative or otherwise, by reason of the fact that such person is or was
a director or officer of the Corporation, or is or was serving at the request
of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise. The Corporation may
indemnify, in the manner and to the fullest extent permitted by the Delaware
Law, any person (or the estate of any person) who is or was a party to, or is

<PAGE>

threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was an employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. Expenses incurred by any such
director, officer, employee or agent in defending any such action, suit or
proceeding may be advanced by the Corporation prior to the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director, officer, employee or agent to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified as authorized by the Delaware Law and this Article X. The
Corporation may, to the fullest extent permitted by the Delaware Law,
purchase and maintain insurance on behalf of any such director, officer,
employee or agent against any liability which may be asserted against such
person. To the fullest extent permitted by the Delaware Law, the
indemnification provided herein shall include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement and, in the manner
provided by the Delaware Law, any such expenses may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding. The indemnification provided herein shall not be deemed to limit
the right of the Corporation to indemnify any other person for any such
expenses to the fullest extent permitted by the Delaware Law, nor shall it be
deemed exclusive of any other rights to which any person seeking
indemnification from the Corporation may be entitled under any agreement,
vote of stockholders or disinterested directors, or otherwise, both as to
action in such person's official capacity and as to action in another
capacity while holding such office.

No repeal or modification of the foregoing paragraph shall
adversely affect any right or protection of a director of the Corporation
existing by virtue of the foregoing paragraph at the time of such repeal or
modification.

ARTICLE X

CREDITOR COMPROMISE OR ARRANGEMENT

Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application of this
Corporation or of any creditor or stockholder thereof or on the application
of any receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this Corporation,

<PAGE>

as the case may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or on all
the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.

<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this Amended and
Restated Certificate of Incorporation on behalf of the Corporation and does
hereby verify and affirm, under penalty of perjury, that this Amended and
Restated Certificate of Incorporation is the act and deed of the Corporation
and that the facts stated herein are true as of December 13, 1996.

/s/ John C. Kent
--------------------------------
John C. Kent, Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<DESCRIPTION>EX 3.2
<TEXT>

<PAGE>

CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND
RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
OF
REDEEMABLE EXCHANGEABLE CUMULATIVE PREFERRED STOCK
OF
AFTERMARKET TECHNOLOGY CORP.

______________________________

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________

Aftermarket Technology Corp., a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article IV of its
Certificate of Incorporation, and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, its
Board of Directors, by unanimous written consent of the Board of Directors
dated as of December 13, 1996, adopted the following resolution creating a
series of its Preferred Stock, par value $0.01 per share, designated as
Redeemable Exchangeable Cumulative Preferred Stock:

WHEREAS, in connection with the future merger of Aftermarket Technology
Holdings Corp., a Delaware corporation and the Corporation's parent
("Holdings"), with and into the Corporation with the Corporation as the
surviving corporation (the "Merger"), each outstanding share of preferred
stock of Holdings will be converted into one share of preferred stock of the
Corporation; and

WHEREAS, the Certificate of Incorporation of the Corporation authorizes
a class of shares known as Preferred Stock, par value $0.01 per share, to be
issuable from time to time in one or more series;

RESOLVED, that pursuant to the authority expressly granted to and vested
in the Board of Directors of the Corporation by the provisions of the
Certificate of Incorporation, the Board hereby creates a series of the class
of authorized Preferred Stock of the Corporation, and hereby fixes the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof as
follows:

<PAGE>

1. DESIGNATION, ISSUANCE AND STATED VALUE. The designation of the
series of Preferred Stock authorized by this resolution shall be "Redeemable
Exchangeable Cumulative Preferred Stock" (the "Redeemable Preferred Stock").
The number of shares of Redeemable Preferred Stock issuable hereunder shall
be 200,000. The shares of Redeemable Preferred Stock shall be issued by the
Corporation in such amounts, at such times and to such persons as shall be
specified by the Corporation's Board of Directors, from time to time. For
the purposes hereof, the "Stated Value" of each share of Redeemable Preferred
Stock (regardless of its par value) shall be $100 plus an amount equal to the
accrued but unpaid dividends with respect to a share of Redeemable Exchange
Cumulative Preferred Stock, par value $0.01 per share, of Holdings as of the
effective date of the Merger, which Stated Value shall be proportionately
increased or decreased for any stock consolidation or stock split,
respectively, of the outstanding shares of Redeemable Preferred Stock.

2. RANK. The Redeemable Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution, rank
junior to all classes and series of stock of the Corporation now or hereafter
authorized, issued or outstanding (collectively, the "Senior Securities")
other than the Corporation's "Junior Securities." For the purposes hereof,
"Junior Securities" means all series and classes of common stock, $.01 par
value per share (the "Common Stock"), of the Corporation, and such classes or
series of stock of the Corporation as shall be designated as junior to the
Redeemable Preferred Stock. The Corporation shall not issue any series or
class of stock ranking senior to the Redeemable Preferred Stock without the
affirmative vote of a majority of the outstanding shares of Redeemable
Preferred Stock.

3. DIVIDENDS.

(a) AMOUNT. On the last business day of June in each calendar year
(the "Dividend Accrual Date"), the holder of record of each share of the
Redeemable Preferred Stock as their names appear in the stock register of the
Corporation on such date shall become entitled to receive (when, as and if
declared by the Board of Directors of the Corporation) a dividend (the
"Annual Dividend") equal to the sum of (i) ten percent (10%) of the Stated
Value of such share (pro-rated for any portion of a full year that such share
shall have been issued and outstanding) plus (ii) ten percent (10%) of the
Unpaid Dividend Amount (as defined below) as of the previous Dividend Accrual
Date. The Unpaid Dividend Amount with respect to each share of the
Redeemable Preferred Stock shall be equal to the aggregate of all Annual
Dividends that the holder of such share shall have theretofore become
entitled to receive for such share but that shall not have been declared and
paid by the Board of Directors of the Corporation.

(b) ACCUMULATION AND TIME OF PAYMENT. Dividends on each share of
the Redeemable Preferred Stock shall be cumulative and shall accrue from day
to day, whether or not earned or declared, commencing with the date of issue
of such share. Dividends shall be payable annually, when, as and if declared
by the Board of Directors of the Corporation.

2
<PAGE>

(c) PAYMENT OF ACCUMULATED DIVIDENDS. Accumulated dividends not
paid on prior Dividend Accrual Dates may be declared by the Board of
Directors and paid to the holders of record of outstanding shares of
Redeemable Preferred Stock as their names shall appear on the stock register
of the Corporation on a record date to be established by the Board of
Directors, which record date shall be not more than sixty (60) nor less than
thirty (30) days preceding the date of payment, whether or not such date is a
Dividend Accrual Date. Holders of outstanding shares of Redeemable Preferred
Stock shall not be entitled to receive any dividends in excess of the full
cumulative dividends to which such holders are entitled as provided in this
Section 3.

(d) RESTRICTIONS ON PAYMENT OF DIVIDENDS. Notwithstanding anything
contained herein to the contrary, no dividends on shares of Redeemable
Preferred Stock shall be declared by the Board of Directors or paid or set
apart for payment by the Corporation: (i) unless, prior to or concurrently
with such declaration, payment or setting apart, all accrued and unpaid
dividends, if any, on shares of Senior Securities shall have been paid or
declared and set apart for payment through the dividend payment period with
respect to such Senior Securities which next precedes or coincides with the
Dividend Accrual Date; or (ii) at such time as such declaration, payment or
setting apart is prohibited by the Delaware General Corporation Law (the
"DGCL"); or (iii) at such time as the terms and provisions of any contract or
other agreement of the Corporation or any of its subsidiaries entered into or
assumed providing financing (including acquisition financing) or working
capital to the Corporation or any of its subsidiaries (whether or not entered
into prior to, at or after the issuance of the Redeemable Preferred Stock),
specifically prohibits such declaration, payment or setting apart for payment
or provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder.

4. RESTRICTIONS ON JUNIOR PAYMENTS. So long as any shares of
Redeemable Preferred Stock are outstanding, the Corporation shall not (a)
declare, pay or set apart for payment any dividend on, or make any
distribution in respect of, Junior Securities or any warrants, rights, calls
or options exercisable or convertible into any Junior Securities, either
directly or indirectly, whether in cash, obligations or shares of the
Corporation or other property (other than distributions or dividends solely
in the form of a particular class or series of Junior Securities, or
warrants, rights or options exercisable for such Junior Securities, to
holders of such Junior Securities), (b) make any payment on account of, or
set apart for payment money for a sinking or other similar fund for, the
purchase, redemption, retirement or other acquisition for value of any of, or
redeem, purchase, retire or otherwise acquire for value any of, the Junior
Securities (other than as a result of a reclassification of Junior Securities
or the exchange or conversion of one class or series of Junior Securities for
or into another class or series of Junior Securities) or any warrants,
rights, calls or options exercisable for or convertible into any of the
Junior Securities, or (c) permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase, redeem, retire or
otherwise acquire for value any of the Junior Securities or any warrants,
rights, calls or options exercisable for or convertible into any Junior
Securities; PROVIDED, HOWEVER, that the restrictions of this Section 4 may be
waived by the affirmative vote of a majority of the

3
<PAGE>

outstanding shares of Redeemable Preferred Stock; PROVIDED FURTHER, HOWEVER,
that the restrictions of this Section 4 shall not apply to the repurchase or
redemption of shares of Common Stock or Redeemable Preferred Stock under that
certain Stockholders Agreement dated as of July 18, 1994 among Holdings and
certain of its stockholders, optionholders and warrantholders, to which the
Corporation will become a party at the effective time of the Merger, as the
same may be supplemented, amended or otherwise modified from time to time,
(i) out of the net cash proceeds derived by the Corporation out of a prior or
substantially contemporaneous issuance of Junior Securities or (ii) for an
aggregate purchase price not to exceed the lesser of (A) 25% of the net
income of Holdings and its subsidiaries for the period commencing July 1,
1994 through the effective time of the Merger plus 25% of the net income of
the Corporation and its subsidiaries for the period commencing at the
effective time of the Merger through the date of determination, in each case
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied for such periods, and (B)
$1,000,000.

5. LIQUIDATION PREFERENCE.

(a) THE LIQUIDATION PREFERENCE. In the event of any voluntary or
involuntary liquidation, dissolution or winding up the affairs of the
Corporation, the holders of shares of Redeemable Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, whether such assets are
capital or surplus and whether or not any dividends are declared, an amount
equal to the Stated Value for each share outstanding plus an amount equal to
all accrued but unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding up (the "Liquidation Preference"), before any payment
shall be made or any assets distributed to the holders of Junior Securities.
If the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of the
Redeemable Preferred Stock and any series of preferred stock or any other
class of stock on a parity, as to rights on liquidation, dissolution or
winding up, with the Redeemable Preferred Stock, then the holders of all such
shares shall share ratably in such distribution of assets in accordance with
the amount that would be payable on such distribution if the amounts to which
the holders of outstanding shares of Redeemable Preferred Stock and the
holders of outstanding shares of such other securities are entitled were paid
in full. Nothing herein contained shall be deemed to prevent redemption of
shares of the Redeemable Preferred Stock by the Corporation in the manner
provided in Section 6. The liquidation payment with respect to each
outstanding fractional share of Redeemable Preferred Stock shall be equal to
a ratably proportionate amount of the liquidation payment with respect to
each outstanding share of Redeemable Preferred Stock. All payments for which
this Section 5 provides shall be in cash, property (valued at its fair market
value, as determined by an independent nationally recognized investment
banking firm) or a combination thereof; PROVIDED, HOWEVER, that no cash shall
be paid to holders of Junior Securities unless each holder of the outstanding
shares of Redeemable Preferred Stock has been paid in cash the full amount
of the Liquidation Preference to which such holder is entitled as provided
herein. After payment of the full amount of the Liquidation Preference to
which each holder is entitled, such holders of shares

4
<PAGE>

of Redeemable Preferred Stock will not be entitled to any further
participation in any distribution of the assets of the Corporation.

(b) EVENTS NOT CONSTITUTING LIQUIDATION. For the purposes of this
Section 5, neither the voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into any other corporation
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation.

6. REDEMPTION.

(a) OPTIONAL REDEMPTION. Subject to the restrictions set forth in
Section 6(c) hereof, the Corporation may, at the option of the Board of
Directors, at any time or from time to time, in whole or in part, redeem the
shares of Redeemable Preferred Stock at the time outstanding, at a redemption
price equal to the Stated Value per share, together with an amount equal to
accrued and unpaid dividends thereon to the date fixed for such redemption.

(b) MANNER OF REDEMPTION. No prior notice of redemption of
outstanding shares of Redeemable Preferred Stock pursuant to Section 6(a) to
the holders of record of outstanding shares of Redeemable Preferred Stock
selected for redemption shall be required. If, as a result of a redemption,
a holder would be left with a fraction of a share of Redeemable Preferred
Stock, the Corporation shall redeem the number of shares of such holder that
it otherwise would redeem rounded up or down, in the Corporation's sole
discretion, to the nearest whole number.

(c) RESTRICTIONS ON REDEMPTIONS. No shares of Redeemable Preferred
Stock shall be redeemed in whole or part under Sections 6(a) or 6(b) hereof:
(i) at any time that such redemption is prohibited by the DGCL; (ii) at any
time that the terms and provisions of any contract or other agreement of the
Corporation or any of its subsidiaries entered into or assumed providing
financing (including acquisition financing) or working capital to the
Corporation or any of its subsidiaries (whether or not entered into prior to,
at or after the issuance of the Redeemable Preferred Stock), specifically
prohibits such redemption or provides that such redemption would constitute a
breach thereof or a default thereunder; (iii) unless, prior to or
concurrently with such redemption, all unpaid and accrued dividends on Senior
Securities for dividend periods preceding or ending on the redemption date
have been paid in full or have been declared and set aside for payment in
full; or (iv) at any time that the Corporation shall be in default in respect
of any of its redemption obligations on or under Senior Securities.

(d) PRIORITY AS TO JUNIOR SECURITIES. The Corporation shall take
no action that would otherwise require the Corporation to redeem any
outstanding shares of Redeemable Preferred Stock pursuant to Section 6(a)
hereof (each a "Redemption Obligation")

5
<PAGE>

if at such time the Corporation is unable to discharge its Redemption
Obligation; PROVIDED, HOWEVER, that if the Corporation fails to discharge any
Redemption Obligation (without regard as to the circumstances pursuant to
which such Redemption Obligation arose), (x) the Redemption Obligation shall
be discharged as soon as the Corporation is able to discharge such Redemption
Obligation, and (y) so long as such Redemption Obligation shall be
outstanding but shall not be fully discharged, the Corporation shall not (i)
declare, pay or set apart for payment any dividend on, or make any
distribution in respect of, the Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the Junior
Securities, either directly or indirectly, whether in cash, obligations or
shares of the Corporation or other property (other than distributions or
dividends of a particular class or series of Junior Securities, or warrants,
rights or options exercisable for such Junior Securities, to holders of such
Junior Securities), or (ii) make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the purchase,
redemption, retirement or other acquisition for value of any of, or redeem,
purchase, retire or otherwise acquire for value any of, the Junior Securities
(other than as a result of a reclassification of Junior Securities or the
exchange or conversion of one class or series of Junior Securities for or
into another class or series of Junior Securities, other than through the use
of the proceeds of a substantially contemporaneous sale of other Junior
Securities) or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities, or (iii) permit any
corporation or other entity directly or indirectly controlled by the
Corporation to purchase, redeem, retire or otherwise acquire for value any of
the Junior Securities or any warrants, rights, calls or options exercisable
for or convertible into any of the Junior Securities. Notwithstanding the
immediately preceding sentence, the restrictions of this Section 6(d) shall
not apply to the repurchase or redemption of shares of the Corporation's
capital stock in accordance with Section 4 hereof.

7. EXCHANGE. The Redeemable Preferred Stock is exchangeable to the
extent of funds legally available for the redemption thereof on the date of
exchange, at the sole option of the Corporation, in whole or in part from
time to time, on or after January 1, 1995, for the Corporation's Subordinated
Exchange Debentures due July 31, 2006 (the "Exchange Debentures"). The
Exchange Debentures shall be issued pursuant to an indenture, the form of
which shall have been approved by the Corporation and the holders of a
majority of the then outstanding shares of Redeemable Preferred Stock.
Holders of the outstanding shares of Redeemable Preferred Stock will be
entitled to receive $100.00 principal amount of the Exchange Debentures in
exchange for each share of Redeemable Preferred Stock held by them at the
time of exchange and, at the option of the Corporation, cash or such
principal amount of the Exchange Debentures equal to all accrued but unpaid
dividend amounts at the time of the exchange. Such holders may receive
Exchange Debentures in amounts less than $100.00 as may be necessary due to
the issuance of fractional shares of Redeemable Preferred Stock. The
Corporation will cause the Exchange Debentures to be authenticated as of the
date on which the exchange is effective and dated the Dividend Accrual Date
that coincides with the date of exchange.

6
<PAGE>

8. PROCEDURE FOR REDEMPTION OR EXCHANGE.

(a) SELECTION. In the event that fewer than all of the outstanding
shares of Redeemable Preferred Stock are to be redeemed or exchanged pursuant
to Section 6 or 7 hereof, the number of shares to be redeemed or exchanged,
shall be determined by the Board of Directors at its sole option and shall be
redeemed or exchanged pro rata among all holders of the Redeemable Preferred
Stock.

(b) NOTICE. If the Corporation exchanges shares of Redeemable
Preferred Stock, notice of every exchange of shares of Redeemable Preferred
Stock shall be mailed by first class mail, postage prepaid, not less than
thirty (30) days nor more than sixty (60) days prior to the exchange date
addressed to the holders of record of the shares to be exchanged at their
respective last addresses as they shall appear on the books of the
Corporation; PROVIDED, HOWEVER, that the failure to give such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
exchange of any shares so to be exchanged except as to the holder to whom the
Corporation has failed to give such notice or except as to the holder to whom
such notice was defective. Each such notice shall state: (i) the exchange
date; (ii) that shares of Redeemable Preferred Stock are to be exchanged and,
if less than all the shares held by such holder are to be exchanged, the
number of such shares to be exchanged; (iii) the exchange price; (iv) the
place or places where certificates for such shares are to be surrendered for
payment of the exchange price; and (v) that dividends on the shares to be
exchanged will cease to accrue on such redemption date.

(c) EFFECT OF REDEMPTION OR EXCHANGE. From and after the
redemption date or as of the exchange date, dividends on the shares of
Redeemable Preferred Stock so called for redemption or exchange shall cease
to accrue, and said shares shall no longer be deemed to be outstanding and
shall be retired and shall have the status of authorized but unissued shares
of preferred stock, unclassified as to series, and shall not be reissued as
shares of Redeemable Preferred Stock, and all rights of the holders thereof
as stockholders of the Corporation (except the right to receive from the
Corporation the redemption price as provided in Section 6 or the Exchange
Debentures upon exchange and any accrued and unpaid dividends, in cash or
Exchange Debentures as provided in Section 7) shall cease and terminate. In
the event of redemption, if prior to the date of redemption all said funds
necessary for such redemption shall have been irrevocably deposited in trust,
for the account of the holders of the shares of the Redeemable Preferred
Stock to be redeemed (and so as to be and continue to be available therefor),
with a bank or trust company thereupon and without awaiting the redemption
date, all shares of the Redeemable Preferred Stock with respect to which such
deposit shall have been so made, shall be deemed to be no longer outstanding
and all rights with respect to such shares of the Redeemable Preferred Stock
shall forthwith upon such deposit in trust cease and terminate (except the
right of the holders thereof on or after the redemption date to receive from
such deposit the amount payable upon the redemption). In case the holders of
shares of the Redeemable Preferred Stock that shall have been called for
redemption shall not within two years (or any longer period if required by
law) after the redemption date claim any amount so deposited in trust for the
redemption of such shares, such

7
<PAGE>

bank or trust company shall, upon demand and if permitted by applicable law,
pay over to the Corporation any such unclaimed amount so deposited with it
and shall thereupon be relieved of all responsibility in respect thereof, and
thereafter the holders of such shares shall, subject to applicable escheat
laws, look only to the Corporation for payment of the redemption price
thereof. Upon surrender of the certificates for any shares so redeemed or
exchanged (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require), the redemption price provided
in Section 6 or the Exchange Debentures and any cash to be delivered by the
Corporation pursuant to Section 6 shall be delivered to the registered holder
of such certificates. In case fewer than all the shares represented by any
such certificate are redeemed or exchanged, a new certificate shall be issued
representing the unredeemed or unexchanged shares without cost to the holder
thereof.

9. VOTING RIGHTS. Except as specifically set forth herein or in the
DGCL, the holders of shares of Redeemable Preferred Stock shall not be
entitled to any voting rights with respect to any matters voted upon by
stockholders of the Corporation.

10. SECTION HEADINGS. Section headings are for convenience of reference
only and shall not constitute a part of this Certificate or be referred to in
connection with the interpretation or construction hereof.

8
<PAGE>

IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed, signed and acknowledged by Mark C. Hardy, its Vice President, and
to be attested by John C. Kent, its Secretary, this 13th day of December,
1996.

/s/ MARK C. HARDY
-------------------------------------
Mark C. Hardy, Vice President

Attest: /s/ JOHN C. KENT
- -------------------------------------
John C. Kent, Secretary

9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>4
<DESCRIPTION>EX 3.3
<TEXT>

<PAGE>

BYLAWS

AFTERMARKET TECHNOLOGY CORP.

AMENDED AS OF JANUARY 31, 1997

<PAGE>

AFTERMARKET TECHNOLOGY CORP.

(A DELAWARE CORPORATION)

BYLAWS

ARTICLE I

OFFICES

SECTION 1.01 REGISTERED OFFICE. The registered office of Aftermarket
Technology Corp. (hereinafter called the Corporation) in the State of Delaware
shall be at 1013 Centre Road, City of Wilmington, County of New Castle, and the
name of the registered agent in charge thereof shall be Corporation Service
Company.

SECTION 1.02 OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors (hereinafter called the Board) may from time
to time determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 2.01 ANNUAL MEETINGS. Annual meetings of the stockholders of the
Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings may be held at such
time, date and place as the Board shall determine by resolution.

SECTION 2.02 SPECIAL MEETINGS. A special meeting of the stockholders for
the transaction of any proper business may be called at any time by the Board or
by the President.

SECTION 2.03 PLACE OF MEETINGS. All meetings of the stockholders shall
be held at such places, within or without the State of Delaware, as may from
time to time be designated by the person or persons calling the respective
meeting and specified in the respective notices or waivers of notice thereof.

SECTION 2.04 NOTICE OF MEETINGS. Except as otherwise required by law,
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder of record entitled to vote at such meeting by delivering a
typewritten or printed notice thereof to him personally, or by depositing such
notice in the United States mail, in a postage prepaid envelope, directed to him
at his post office address furnished by him to the Secretary of the Corporation
for such purpose or, if he shall not have furnished to the Secretary his address
for such purpose, then at his post office address last known to the Secretary,
or by transmitting a notice thereof to him at

<PAGE>

such address by telegraph, cable, or wireless. Except as otherwise expressly
required by law, no publication of any notice of a meeting of the stockholders
shall be required. Every notice of a meeting of the stockholders shall state
the place, date and hour of the meeting, and, in the case of a special
meeting, shall also state the purpose or purposes for which the meeting is
called. Notice of any meeting of stockholders shall not be required to be
given to any stockholder who shall have waived such notice and such notice
shall be deemed waived by any stockholder who shall attend such meeting in
person or by proxy, except as a stockholder who shall attend such meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Except as otherwise expressly required by law, notice of any
adjourned meeting of the stockholders need not be given if the time and place
thereof are announced at the meeting at which the adjournment is taken.

SECTION 2.05 QUORUM. Except in the case of any meeting for the election
of directors summarily ordered as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation entitled
to be voted thereat, present in person or by proxy, shall constitute a quorum
for the transaction of business at any meeting of the stockholders of the
Corporation or any adjournment thereof. In the absence of a quorum at any
meeting or any adjournment thereof, a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat or, in
the absence therefrom of all the stockholders, any officer entitled to preside
at, or to act as secretary of, such meeting may adjourn such meeting from time
to time. At any such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally called.

SECTION 2.06 VOTING.

(a) Each stockholder shall, at each meeting of the stockholders, be
entitled to vote in person or by proxy each share or fractional share of the
stock of the Corporation having voting rights on the matter in question and
which shall have been held by him and registered in his name on the books of the
Corporation:

(i) on the date fixed pursuant to Section 6.05 of these Bylaws as
the record date for the determination of stockholders entitled to notice
of and to vote at such meeting, or

(ii) if no such record date shall have been so fixed, then (a) at
the close of business on the day next preceding the day on which notice
of the meeting shall be given or (b) if notice of the meeting shall be
waived, at the close of business on the day next preceding the day on
which the meeting shall be held.

(b) Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors in such other corporation is held, directly or indirectly, by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity
shall be entitled to vote such stock. Persons whose stock is pledged shall be
entitled to vote, unless in the transfer by the pledgor on the books of the
Corporation he shall have expressly empowered the

<PAGE>

pledgee to vote thereon, in which case only the pledgee, or his proxy, may
represent such stock and vote thereon. Stock having voting power standing of
record in the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants in common, tenants by entirety or otherwise, or
with respect to which two or more persons have the same fiduciary
relationship, shall be voted in accordance with the provisions of the General
Corporation Law of the State of Delaware.

(c) Any such voting rights may be exercised by the stockholder entitled
thereto in person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto authorized and
delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period. The attendance at any meeting of a
stockholder who may theretofore have given a proxy shall not have the effect of
revoking the same unless he shall in writing so notify the secretary of the
meeting prior to the voting of the proxy. At any meeting of the stockholders
all matters, except as otherwise provided in the Certificate of Incorporation,
in these Bylaws or by law, shall be decided by the vote of a majority in voting
interest of the stockholders present in person or by proxy and entitled to vote
thereat and thereon, a quorum being present. The vote at any meeting of the
stockholders on any question need not be by ballot, unless so directed by the
chairman of the meeting. On a vote by ballot each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and it shall state
the number of shares voted.

SECTION 2.07 LIST OF STOCKHOLDERS. The Secretary of the Corporation
shall prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

SECTION 2.08 JUDGES. If at any meeting of the stockholders a vote by
written ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
ability. Such judges shall decide upon the qualification of the voters and
shall report the number of shares represented at the meeting and entitled to
vote on such question, shall conduct and accept the votes, and, when the voting
is completed, shall ascertain and report the number of shares voted respectively
for and against the question. Reports of judges shall be in writing and
subscribed and delivered by them to the Secretary of the Corporation. The
judges need not be stockholders of the Corporation, and any officer of the
Corporation may be a judge on any question other than a vote for or against a
proposal in which he shall have a material interest.

<PAGE>

ARTICLE III

BOARD OF DIRECTORS

SECTION 3.01 GENERAL POWERS. The property, business and affairs of the
Corporation shall be managed by the Board.

SECTION 3.02 NUMBER AND TERM OF OFFICE. The number of directors shall be
not less than one nor more than 15 until changed in accordance with applicable
law. The exact number of directors shall be fixed from time to time, within the
limits specified, by resolutions of the Board or the stockholders. Subject to
the foregoing provisions for changing the exact number of directors, the number
of directors of the Corporation shall be nine. Directors need not be
stockholders. Each of the directors of the Corporation shall hold office until
his successor shall have been duly elected and shall qualify or until he shall
resign or shall have been removed in the manner hereinafter provided.

SECTION 3.03 ELECTION OF DIRECTORS. The directors shall be elected
annually by the stockholders of the Corporation and the persons receiving the
greatest number of votes, up to the number of directors to be elected, shall be
the directors.

SECTION 3.04 RESIGNATIONS. Any director of the Corporation may resign at
any time by giving written notice to the Board or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately upon
its receipt; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

SECTION 3.05 VACANCIES. Except as otherwise provided in the Certificate
of Incorporation, any vacancy in the Board, whether because of death,
resignation, disqualification, an increase in the number of directors, or any
other cause, may be filled by vote of the majority of the remaining directors,
although less than a quorum. Each director so chosen to fill a vacancy shall
hold office until his successor shall have been elected and shall qualify or
until he shall resign or shall have been removed in the manner hereinafter
provided.

SECTION 3.06 PLACE OF MEETING, ETC. The Board may hold any of its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of notice
of any such meeting. Directors may participate in any regular or special
meeting of the Board by means of conference telephone or similar communications
equipment pursuant to which all persons participating in the meeting of the
Board can hear each other, and such participation shall constitute presence in
person at such meeting.

SECTION 3.07 FIRST MEETING. The Board shall meet as soon as practicable
after each annual election of directors and notice of such first meeting shall
not be required.

SECTION 3.08 REGULAR MEETINGS. Regular meetings of the Board may be held
at such times as the Board shall from time to time by resolution determine. If
any day fixed for a

<PAGE>

regular meeting shall be a legal holiday at the place where the meeting is to
be held, then the meeting shall be held at the same hour and place on the
next succeeding business day not a legal holiday. Except as provided by law,
notice of regular meetings need not be given.

SECTION 3.09 SPECIAL MEETINGS. Special meetings of the Board shall be
held whenever called by the President or a majority of the authorized number of
directors. Except as otherwise provided by law or by these Bylaws, notice of
the time and place of each such special meeting shall be given to each director
in writing and delivered personally, mailed to his or her address appearing on
the records of the Corporation, or given by telegram, cable, telephone,
telecopy, facsimile or a nationally recognized overnight delivery service.

(i) Notice to directors by mail shall be given at least two business
days before the meeting and shall be deemed to be given when mailed to
the director at his or her address appearing on the records of the
Corporation.

(ii) Notice to directors by telegram, cable, personal delivery,
telephone or wireless shall be given a reasonable time before the meeting
but in no event less than one hour before the meeting. Notice by
telegram or cable shall be deemed to be given when the telegram or cable
addressed to the director at his or her address appearing on the records
of the Corporation is delivered to the telegraph company. Notice by
telephone or wireless shall be deemed to be given when transmitted by
telephone or wireless to the telephone number or wireless call
designation appearing on the records of the Corporation for the director
(regardless of whether the director shall have personally received such
telephone call or wireless message), provided confirmation of
transmission shall be made promptly by telegram or cable in the manner
specified above.

Except where otherwise required by law or by these Bylaws, notice of the
purpose of a special meeting need not be given. Notice of any meeting of the
Board shall not be required to be given to any director who is present at such
meeting, except a director who shall attend such meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.

SECTION 3.10 QUORUM AND MANNER OF ACTING. Except as otherwise provided
in these Bylaws or by law, the presence of a majority of the authorized number
of directors shall be required to constitute a quorum for the transaction of
business at any meeting of the Board, and all matters shall be decided at any
such meeting, a quorum being present, by the affirmative votes of a majority of
the directors present. In the absence of a quorum, a majority of directors
present at any meeting may adjourn the same from time to time until a quorum
shall be present. Notice of any adjourned meeting need not be given. The
directors shall act only as a Board, and the individual directors shall have no
power as such.

SECTION 3.11 ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case

<PAGE>

may be, and such written consent is filed with the minutes of proceedings of
the Board or committee.

SECTION 3.12 REMOVAL OF DIRECTORS. Subject to the provisions of the
Certificate of Incorporation, any director may be removed at any time, either
with or without cause, by the affirmative vote of the stockholders having a
majority of the voting power of the Corporation given at a special meeting of
the stockholders called for the purpose.

SECTION 3.13 COMPENSATION. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution of
the Board. The Board may also provide that the Corporation shall reimburse each
such director for any expense incurred by him on account of his attendance at
any meetings of the Board or Committees of the Board. Neither the payment of
such compensation nor the reimbursement of such expenses shall be construed to
preclude any director from serving the Corporation or its subsidiaries in any
other capacity and receiving compensation therefor.

SECTION 3.14 COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. Any such committee,
to the extent provided in the resolution of the Board and except as otherwise
limited by law, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Any such committee shall keep written minutes of its meetings and
report the same to the Board at the next regular meeting of the Board. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or disqualified
member.

ARTICLE IV

OFFICERS

SECTION 4.01 NUMBER. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof and their respective
titles to be determined by the Board), a Secretary and a Chief Financial
Officer.

SECTION 4.02 ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The officers
of the Corporation, except such officers as may be appointed in accordance with
Section 4.03, shall be elected annually by the Board at the first meeting
thereof held after the election thereof. Each officer shall hold office until
his successor shall have been duly chosen and shall qualify or until his
resignation or removal in the manner hereinafter provided.

SECTION 4.03 ASSISTANTS, AGENTS AND EMPLOYEES, ETC. In addition to the
officers specified in Section 4.01, the Board may appoint other assistants,
agents and employees as it may deem necessary or advisable, including one or
more Assistant Secretaries, and one or more Assistant Treasurers, each of whom
shall hold office for such period, have such authority,

<PAGE>

and perform such duties as the Board may from time to time determine. The
Board may delegate to any officer of the Corporation or any committee of the
Board the power to appoint, remove and prescribe the duties of any such
assistants, agents or employees.

SECTION 4.04 REMOVAL. Any officer, assistant, agent or employee of the
Corporation may be removed, with or without cause, at any time: (i) in the case
of an officer, assistant, agent or employee appointed by the Board, only by
resolution of the Board; and (ii) in the case of an officer, assistant, agent or
employee, by any officer of the Corporation or committee of the Board upon whom
or which such power of removal may be conferred by the Board.

SECTION 4.05 RESIGNATIONS. Any officer or assistant may resign at any
time by giving written notice of his resignation to the Board or the Secretary
of the Corporation. Any such resignation shall take effect at the time
specified therein, or, if the time be not specified, upon receipt thereof by the
Board or the Secretary, as the case may be; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

SECTION 4.06 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or other cause, may be filled for the
unexpired portion of the term thereof in the manner prescribed in these Bylaws
for regular appointments or elections to such office.

SECTION 4.07 THE PRESIDENT. The President of the Corporation shall be
the chief executive officer of the Corporation and shall have, subject to the
control of the Board, general and active supervision and management over the
business of the Corporation and over its several officers, assistants, agents
and employees.

SECTION 4.08 THE VICE PRESIDENTS. Each Vice President shall have such
powers and perform such duties as the Board may from time to time prescribe. At
the request of the President, or in case of the President's absence or inability
to act upon the request of the Board, a Vice President shall perform the duties
of the President and when so acting, shall have all the powers of, and be
subject to all the restrictions upon, the President.

SECTION 4.09 THE SECRETARY. The Secretary shall, if present, record the
proceedings of all meetings of the Board, of the stockholders, and of all
committees of which a secretary shall not have been appointed in one or more
books provided for that purpose; he shall see that all notices are duly given in
accordance with these Bylaws and as required by law; he shall be custodian of
the seal of the Corporation and shall affix and attest the seal to all documents
to be executed on behalf of the Corporation under its seal; and, in general, he
shall perform all the duties incident to the office of Secretary and such other
duties as may from time to time be assigned to him by the Board.

SECTION 4.10 THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer
shall have the general care and custody of the funds and securities of the
Corporation, and shall deposit all such funds in the name of the Corporation in
such banks, trust companies or other depositories as shall be selected by the
Board. He shall receive, and give receipts for, moneys

<PAGE>

due and payable to the Corporation from any source whatsoever. He shall
exercise general supervision over expenditures and disbursements made by
officers, agents and employees of the Corporation and the preparation of such
records and reports in connection therewith as may be necessary or desirable.
He shall, in general, perform all other duties incident to the office of
Chief Financial Officer and such other duties as from time to time may be
assigned to him by the Board.

SECTION 4.11 COMPENSATION. The compensation of the officers of the
Corporation shall be fixed from time to time by the Board. None of such
officers shall be prevented from receiving such compensation by reason of the
fact that he is also a director of the Corporation. Nothing contained herein
shall preclude any officer from serving the Corporation, or any subsidiary
corporation, in any other capacity and receiving such compensation by reason of
the fact that he is also a director of the Corporation. Nothing contained
herein shall preclude any officer from serving the Corporation, or any
subsidiary corporation, in any other capacity and receiving proper compensation
therefor.

ARTICLE V

CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 5.01 EXECUTION OF CONTRACTS. The Board, except as in these
Bylaws otherwise provided, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the Corporation, and such authority may be general or confined to
specific instances; and unless so authorized by the Board or by these Bylaws, no
officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or in any amount.

SECTION 5.02 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidence of indebtedness, issued in the name of
or payable to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board. Each such officer, assistant, agent or attorney shall
give such bond, if any, as the Board may require.

SECTION 5.03 DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, the President, any
Vice President or the Chief Financial Officer (or any other officer or officers,
assistant or assistants, agent or agents, or attorney or attorneys of the
Corporation who shall from time to time be determined by the Board) may endorse,
assign and deliver checks, drafts and other orders for the payment of money
which are payable to the order of the Corporation.

<PAGE>

SECTION 5.04 GENERAL AND SPECIAL BANK ACCOUNTS. The Board may from time
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.

ARTICLE VI

SHARES AND THEIR TRANSFER

SECTION 6.01 CERTIFICATES FOR STOCK. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
President or a Vice President, and by the Secretary or an Assistant Secretary or
by the Chief Financial Officer or an Assistant Treasurer. Any of or all of the
signatures on the certificates may be a facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon, any such certificate, shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, such certificate
may nevertheless be issued by the Corporation with the same effect as though the
person who signed such certificate, or whose facsimile signature shall have been
placed thereupon, were such officer, transfer agent or registrar at the date of
issue. A record shall be kept of the respective names of the persons, firms or
corporations owning the stock represented by such certificates, the number and
class of shares represented by such certificates, respectively, and the
respective dates thereof, and in case of cancellation, the respective dates of
cancellation. Every certificate surrendered to the Corporation for exchange or
transfer shall be cancelled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 6.04.

SECTION 6.02 TRANSFERS OF STOCK. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary, or with a transfer clerk or a
transfer agent appointed as provided in Section 6.03, and upon surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon. The person in whose name shares of stock stand on the books
of the Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation. Whenever any transfer of shares shall be made for collateral
security, and not absolutely, such fact shall be so expressed in the entry of
transfer if, when the certificate or certificates shall be presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.

<PAGE>

SECTION 6.03 REGULATIONS. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.

SECTION 6.04 LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. In any
case of loss, theft, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided, however, that a new
certificate may be issued without requiring any bond when, in the judgment of
the Board, it is proper so to do.

SECTION 6.05 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any other change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board may fix, in advance, a record date, which shall not be more than 60
nor less than 10 days before the date of such meeting, nor more than 60 days
prior to any other action. If in any case involving the determination of
stockholders for any purpose other than notice of or voting at a meeting of
stockholders or expressing consent to corporate action without a meeting the
Board shall not fix such a record date, the record date for determining
stockholders for such purpose shall be the close of business on the day on which
the Board shall adopt the resolution relating thereto. A determination of
stockholders entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of such meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting.

ARTICLE VII

INDEMNIFICATION

SECTION 7.01 ACTION, ETC., OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to

<PAGE>

believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.

SECTION 7.02 ACTIONS, ETC., BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.

SECTION 7.03 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Section 7.01 or 7.02 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 7.01 and 7.02. Such determination shall be made
(i) by the Board by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (iii) by
the stockholders.

SECTION 7.04 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article, to the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 7.01 or 7.02, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

SECTION 7.05 PREPAID EXPENSES. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay

<PAGE>

such amount unless it shall ultimately be determined that he is entitled to
be indemnified by the Corporation as authorized in this Article. Such
expenses incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the Board deems appropriate.

SECTION 7.06 OTHER RIGHTS AND REMEDIES. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

SECTION 7.07 INSURANCE. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.

SECTION 7.08 CONSTITUENT CORPORATIONS. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, so
that any person who is or was a director, officer, employee or agent of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.

SECTION 7.09 OTHER ENTERPRISES, FINES AND SERVING AT CORPORATION'S
REQUEST. For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.

<PAGE>

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01 SEAL. The Board shall provide a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and words
and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.

SECTION 8.02 WAIVER OF NOTICES. Whenever notice is required to be given
by these Bylaws or the Certificate of Incorporation or by law, the person
entitled to said notice may waive such notice in writing, either before or after
the time stated therein, and such waiver shall be deemed equivalent to notice.

SECTION 8.03 AMENDMENTS. These Bylaws, or any of them, may be altered,
amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a
majority of the number of directors then in office as directors, acting at any
meeting of the Board, or (ii) by the stockholders, at any annual meeting of
stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, modification,
repeal or adoption is given in the notice of special meeting. Any Bylaws made
or altered by the stockholders may be altered or repealed by either the Board or
the stockholders.

<PAGE>

CERTIFICATE OF SECRETARY

The undersigned, being the duly elected Secretary of Aftermarket Technology
Corp., a Delaware corporation, hereby certifies that the Bylaws to which this
Certificate is attached were duly adopted by the Board of Directors of said
Corporation as of January 31, 1997.

--------------------------------------
John C. Kent

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<DESCRIPTION>EX 10.4
<TEXT>

<PAGE>

AMENDMENT NO. 3 TO
STOCKHOLDERS AGREEMENT

This Amendment No. 3 to Stockholders Agreement (this "Amendment") is
made and entered into as of December 4, 1996 by and between Aftermarket
Technology Holdings Corp., a Delaware corporation (the "Company"), Aurora
Equity Partners L.P., a Delaware limited partnership ("AEP"), Aurora Overseas
Equity Partners I, L.P., a Cayman Islands exempted limited partnership
("AOEP"), and each of the stockholders of the Company who are signatories
hereto (the "Stockholders").

WHEREAS, Section 10.2 of that certain Stockholders Agreement dated as of
August 2, 1994 among the Company and certain of its stockholders,
optionholders and warrantholders, as amended (the "Stockholders Agreement"),
permits the amendment thereof by a written agreement signed by (a) the
Company, (b) AEP and AOEP and (c) the holders of a majority in voting
interest of the outstanding shares of Common Stock and Preferred Stock of the
Company;

WHEREAS, the Stockholders hold a majority in voting interest of the
outstanding shares of Common Stock and Preferred Stock of the Company; and

WHEREAS, the parties hereto desire to amend the Stockholders Agreement
as follows: (i) to clarify that from and after the effective date of the
merger (the "Merger") of the Company into Aftermarket Technology Corp., the
Company's wholly-owned subsidiary ("ATC"), any reference to the "Company"
shall be deemed to be a reference to ATC; (ii) to add demand registration
rights for the benefit of any stockholder who is a party to the Stockholders
Agreement and who, after a distribution of shares by AEP or AOEP to their
limited partners, owns at least 10% of the outstanding common stock and is
therefore unable to resell his shares without registration because his stock
ownership causes him to be an affiliate of ATC (and therefore subject to
certain statutory resale restrictions); (iii) to clarify that the Company
will pay all expenses relating to the registration of securities resulting
from an exercise of the "piggyback" or demand registration rights granted
therein; and (iv) to clarify that the holdback agreement provision applicable
to underwritten offerings applies to

<PAGE>

a Qualified IPO (as defined in the Stockholders Agreement) that is
consummated on or before March 31, 1997.

NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:

1. AMENDMENT.

(a) Section 10.6 of the Stockholders Agreement is hereby deleted in
its entirety and the following is hereby substituted in its place:

"10.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Stockholders
and their respective heirs, personal representatives, successors and
permitted assigns. In the event that the Company is merged into Aftermarket
Technology Corp., a Delaware corporation and the Company's wholly-owned
subsidiary ("ATC"), upon the effectiveness of such merger, any reference
in this Agreement to the "Company" shall be deemed to be a reference to
ATC."

(b) Exhibit D to the Stockholders Agreement is hereby deleted in its
entirety and the attached Annex A is hereby substituted in its place.

2. GOVERNING LAW. This Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware without
reference to choice or conflicts of law principles thereof.

3. EFFECT OF AMENDMENT. Except as amended by this Amendment, the
Stockholders Agreement shall remain unchanged and shall remain in full force
and effect.

<PAGE>

IN WITNESS WHEREOF, the Company, AEP, AOEP and each of the Stockholders
have duly executed this Amendment as of the date first above written.

AFTERMARKET TECHNOLOGY
HOLDINGS CORP.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

THE CLASS A STOCKHOLDERS:

----------------------------------
WILLIAM A. SMITH

JAMES R. WEHR REVOCABLE TRUST

----------------------------------
James R. Wehr, Grantor/Trustee

----------------------------------
KENNETH T. HESTER

<PAGE>

THE CLASS B STOCKHOLDERS:

ALLENWOOD VENTURES, INC.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
JOHN E. ANDERSON

ROBERT ANDERSON VARIABLE TRUST

By:
-------------------------------
Robert Anderson, Trustee

THE ANDREW W. MELLON FOUNDATION

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

AURORA CAPITAL PARTNERS L.P.

By: Aurora Advisors, Inc.,
its general partner

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

<PAGE>

AURORA OVERSEAS CAPITAL
PARTNERS, L.P.

By: Aurora Overseas Advisors Ltd.,
its general partner

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

BANCBOSTON INVESTMENTS, INC.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

BANKAMERICA CAPITAL CORPORATION

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

<PAGE>

CASTLEROCK INVESTMENTS LTD.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

CHEMICAL EQUITY ASSOCIATES

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

CHEMICAL INVESTMENTS, INC.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
RICHARD R. CROWELL

----------------------------------
ROBERT L. CUMMINGS III

THE TRUSTEES OF DARTMOUTH COLLEGE

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

<PAGE>

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO RICHARD R. CROWELL

By:
-------------------------------
Richard R. Crowell, Trustee

By:
-------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO MARK C. HARDY

By:
-------------------------------
Richard R. Crowell, Trustee

By:
-------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO KURT B. LARSEN

By:
-------------------------------
Richard R. Crowell, Trustee

By:
-------------------------------
Richard K. Roeder, Trustee

<PAGE>

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO GERALD L. PARSKY

By:
-------------------------------
Richard R. Crowell, Trustee

By:
-------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO W. MONTAGUE YORT

By:
-------------------------------
Richard R. Crowell, Trustee

By:
-------------------------------
Richard K. Roeder, Trustee

DELTA MASTER TRUST

By:
-------------------------------
Trustee

----------------------------------
JEFFREY S. DEUTSCHMAN

----------------------------------
FREDERICK J. ELSEA, III

<PAGE>

GENERAL ELECTRIC PENSION TRUST

By:
-------------------------------
Name:
-----------------------------
Title: Trustee

HARBOURTON REASSURANCE, INC.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
MARK C. HARDY

HELLER FINANCIAL, INC.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
AMBASSADOR JAMES D. HODGSON

----------------------------------
CLEON T. KNAPP

<PAGE>

L-A&A GIFT TRUST FBO
ELLIOT LEEDOM ACKERMAN

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

L-A&A GIFT TRUST FBO
NATHANEL LEEDOM ACKERMAN

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
KURT B. LARSEN

LODWRICK AND CAROLE COOK AS
TRUSTEES OF THE COOK FAMILY
TRUST DATED SEPTEMBER 16, 1991

By:
-------------------------------
Trustee

----------------------------------
JOHN T. MAPES

<PAGE>

NHL HOLDINGS LTD.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

OGAC LIMITED

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

ORYX EQUITY PARTNERS FUND I LTD.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
GERALD L. PARSKY

G.M. ROEDER AND R.K. ROEDER, JTWROS

By:
-------------------------------
Gloria M. Roeder

By:
-------------------------------
Richard K. Roeder

<PAGE>

SOMERVILLE S TRUST

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

SPRINGBROOK, G.P.

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

----------------------------------
PATRICK J. STEINER

SUMITOMO BANK OF CA TTEE FOR GIBSON, DUNN
& CRUTCHER RETIREMENT PLAN FBO
H. RICHARD DALLAS

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

SUMITOMO BANK OF CA TTEE FOR
GIBSON, DUNN & CRUTCHER RETIREMENT
PLAN FBO BRUCE D. MEYER

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

<PAGE>

UNIVERSITY OF SOUTHERN CALIFORNIA

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

W. S. INVESTMENTS L.P.

By:
-------------------------------
Name:
-----------------------------
General Partner

----------------------------------
JEROME C. WEINTRAUB

----------------------------------
W. MONTAGUE YORT

<PAGE>
THE CLASS C STOCKHOLDERS:

AURORA EQUITY PARTNERS L.P.

By: Aurora Capital Partners L.P.,
its general partner

By: Aurora Advisors, Inc.,
its general partner

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

AURORA OVERSEAS EQUITY
PARTNERS I, L.P.

By: Aurora Overseas Capital Partners, L.P.,
its general partner

By: Aurora Overseas Advisors Ltd.,
its general partner

By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------

<PAGE>

ANNEX A

EXHIBIT D

REGISTRATION RIGHTS

1. "PIGGY-BACK" REGISTRATION.

(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Except in the case of a
Qualified IPO that is consummated on or before March 31, 1997, if the Company
at any time proposes to effect a Qualified IPO or, following a Qualified IPO,
proposes to register any of its equity securities under the Act (other than
by a registration on Form S-4 or S-8 or any successor or similar forms),
whether or not for sale for its own account, in a manner which would permit
registration of Registrable Securities for sale to the public under the Act,
then the Company will each such time give prompt written notice (which shall
be at least 30 days prior to filing) to all Eligible Holders of Registrable
Securities of its intention to do so and of such Eligible Holders' rights
under this Paragraph 1. Upon the written request of any such Eligible Holder
made within 20 days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by such
Eligible Holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities
in the registration statement which covers the securities which the Company
proposes to register or in a separate registration statement concurrently
filed and on terms substantially the same as those being offered to the
Company; PROVIDED that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give
written notice of such determination to each Eligible Holder of Registrable
Securities and, thereupon:

(i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay
the Registration Expenses in connection therewith), and

(ii) in the case of a delay in registering, shall be permitted
to delay registering any Registrable Securities for the same period
as the delay in registering such other securities.

(b) PRIORITY IN "PIGGY-BACK" REGISTRATIONS. If a registration
pursuant to this Paragraph 1 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
securities

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-1
<PAGE>

requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the offering, the Company will
include in such registration to the extent of the number which the Company is so
advised can be sold in such offering without adversely affecting the offering,
securities determined as follows:

(i) first, the securities proposed by the Company to be sold
for its own account,

(ii) second, any Registrable Securities requested to be included
in such registration PRO RATA among the holders thereof requesting such
registration on the basis of the number of shares of such securities
requested to be included by such holders, and

(iii) third, any other securities of the Company proposed to be
included in such registration statement in accordance with the priorities,
if any, then existing among the holders of such securities.

2. DEMAND REGISTRATION RIGHT OF CERTAIN ELIGIBLE HOLDERS.

(a) RIGHT TO REQUIRE REGISTRATION. Subject to the provisions of this
Paragraph 2, if, at any time after the first anniversary of the consummation
of a Qualified IPO, any Eligible Holder (other than the Aurora Entities) is
the record owner of 10% or more of the outstanding Common Stock immediately
after a distribution of shares by either or both of the Aurora Entities to
their limited partners (such Eligible Holder being a "Demand Holder"), such
Demand Holder shall have the right to require the Company to file a registration
statement under the Securities Act for a public offering of all or any portion
of the Registrable Securities held by such Holder when such right is exercised
(the Registrable Securities to be subject to such registration being the "Demand
Registration Securities"), PROVIDED that any demand for registration under this
Paragraph 2 (a "Registration Demand") shall not be otherwise deemed to be
effective unless such Registration Demand is with respect to Registrable
Securities constituting at least five percent of the outstanding shares of the
class of Registrable Securities. The demand registration rights granted to the
Demand Holders in this Paragraph 2 are subject to the following limitations:

(i) each Demand Holder may make a Registration Demand under this
Paragraph 2 only one time, PROVIDED, HOWEVER, that if, after completion of
the resulting registered offering, such Demand Holder continues to hold
10% or more of the outstanding Common Stock or holds 10% or more of the
outstanding Common Stock as the result of a subsequent distribution of
shares by either or both of the Aurora Entities to their limited
partners, such Demand

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-2

<PAGE>

Holder shall have the right to make one additional Registration Demand;

(ii) the Company shall not be obligated to cause any registration
statement filed under this Paragraph 2 to be declared effective less than
six months after the effective date of the most recent registration
statement filed by the Company on its own behalf;

(iii) the managing underwriter of any such offering shall be a
nationally recognized investment banking firm selected by the Company and
approved by the Demand Holder making the Registration Demand (which
approval shall not be unreasonably withheld);

(iv) notwithstanding the giving of a Registration Demand by a
Demand Holder, the Company may elect to convert the required registration
into a registration of shares for sale by the Company pursuant to
Paragraph 1 hereof by providing notice to the Eligible Holders in
accordance with Paragraph 1, and in such event the provisions of
Paragraph 1 shall apply to such registration rather than the provisions
of this Paragraph 2 and such registration shall not count as the exercise
of such Demand Holder's registration right under this Paragraph 2;

(v) during any two-year period, the Company may make a one-time
election to postpone the filing or the effectiveness of a registration
statement in response to a Registration Demand for up to six months if
the Board determines, in its good faith judgment, that (x) such
registration would reasonably be expected to have an adverse effect on,
interfere with or delay any proposal or plan by the Company or any of its
subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer
or similar transaction, (y) the filing of a registration statement or a
sale of Registrable Securities pursuant thereto would require disclosure
of material information that the Company has a bona fide business purpose
for preserving as confidential, or (z) the Company is unable to comply
with the registration requirements of the Commission; PROVIDED, that, in
such event, the Demand Holder making the Registration Demand will be
entitled to withdraw such demand and, if such demand is withdrawn, such
demand will not count as a Registration Demand hereunder and the Company
will pay all Registration Expenses in connection with such withdrawn
demand; and

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-3

<PAGE>

(vi) any Registration Demand under this Paragraph 2 shall be for
for a firm commitment underwritten offering, with respect to which the
Company shall be required to maintain an effective registration statement
for a maximum of 30 days.

(b) NOTICE OF REGISTRATION DEMAND; PARTICIPATION RIGHTS. Any Demand
Holder desiring to make a Registration Demand shall do so by providing
written notice to the Company (which notice shall state the number of shares
of Registrable Securities the Demand Holder desires the Company to register),
and the Company promptly shall provide written notice of such Registration
Demand to all of the other Eligible Holders and all of the Eligible Holders
then will have the opportunity to include in the offering shares of
Registrable Securities then owned by such Eligible Holders, but in each case
only to the extent permitted by subdivision (c) of this Paragraph 2. In
addition, subject to subdivision (c) of this Paragraph 2, the Company may
elect to include in any registration statement and offering pursuant to this
Paragraph 2 newly issued shares of Registrable Securities. Solely for
purposes of Paragraphs 3 through 9 below, any securities registered pursuant
to this Paragraph 2 shall be deemed to be Registrable Securities.

(c) PRIORITY. Notwithstanding the foregoing, if the managing
underwriter of a registered offering being made in response to a Registration
Demand advises the Company in writing that the number of shares of
Registrable Securities desired to be offered by the Company or Eligible
Holders other than the Demand Holder who made the Registration Demand,
together with the Demand Registration Securities of such Demand Holder,
exceeds the maximum number of such shares which the managing underwriter
considers, in good faith, to be appropriate based on market conditions and
other relevant factors (including, without limitation, pricing) (the "Maximum
Number"), then the securities proposed to be included by Eligible Holders
other than such Demand Holder (the "Other Sellers") shall be excluded from
such registration before any such securities of such Demand Holder or the
Company shall be excluded. If, and to the extent that, after the exclusion
of the securities proposed to be included by the Other Sellers, the number of
securities proposed to be included by such Demand Holder and the Company
exceeds the Maximum Number, such securities to be included on behalf of the
Company shall be excluded to the extent necessary to avoid exceeding the
Maximum Number. Each of the Demand Holder, the Other Sellers and the Company
(in the event that any securities are to be offered by the Company) may
withdraw from any demand registration pursuant to this Paragraph 2 by giving
written notice to the Company prior to the filing date of such registration
statement and, in the event of a withdrawal by the Demand Holder whose
Registration Demand gave rise to the registration, such withdrawn
Registration Demand shall not be deemed to be a Registration Demand counting
against the permissible number of Registration Demands set forth in Paragraph
2(a)(i) if the Demand Holder pays or promptly reimburses the Company for all
Registration Expenses incurred by the Company in connection with such
withdrawn Registration Demand.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-4

<PAGE>

3. REGISTRATION PROCEDURES. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable
Securities under the Act as provided in Paragraph 1 or 2, the Company will as
expeditiously as possible (and, in any event, within 90 days), subject to the
terms and conditions of Paragraph 1 or 2:

(a) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause
such registration statement to become effective; PROVIDED, HOWEVER, that
the Company may discontinue any registration of its securities which are
not Registrable Securities at any time prior to the effective date of
the registration statement relating thereto;

(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the disposition of all securities covered by such registration
statement until the earlier of such time as all of such securities have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such registration statement
or the expiration of 90 days after such registration statement becomes
effective; PROVIDED that if less than all the Registrable Securities are
withdrawn from registration after the expiration of such period, the shares
so withdrawn shall be allocated PRO RATA among the holders thereof on the
basis of the respective numbers of Registrable Securities held by them
included in such registration;

(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule 424
under the Act, in conformity with the requirements of the Act, and such
other documents, as such seller may reasonably request;

(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such securities or blue sky laws of such jurisdictions as each
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement
remains in effect, and take any other action which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller,
except that the Company shall not for any such purpose be required to:

(i) qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subdivision (d) be obligated to be so qualified,

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-5

<PAGE>

(ii) subject itself to taxation in any such jurisdiction, or

(iii) consent to general service of process in any such
jurisdiction;

(e) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;

(f) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any), of:

(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such registration includes
an underwritten public offering, an opinion of counsel for the Company
dated the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller, and

(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a "comfort" letter dated the date of the
closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial
statements included in such registration statement,

covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to the underwriters
in underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters as such seller or such
holder (or the underwriters, if any) may reasonably request;

(g) immediately notify each holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act, of the happening of
any event or the existence of any condition as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, or if in the opinion of counsel for the Company it
is necessary to supplement or amend such prospectus to comply with law
and, at the request of any such holder promptly prepare and furnish to
such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-6

<PAGE>

be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made or such prospectus,
as supplemented or amended, shall comply with law;

(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and the rules and
regulations of the Commission thereunder, and not file any amendment or
supplement to such registration statement or prospectus to which any such
seller of Registrable Securities covered by such registration statement
shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements
of the Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least five business days prior to the filing
thereof;

(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;

(j) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed; and

(k) pay all Registration Expenses relating to any such registration.

The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information and undertakings as it may reasonably request regarding such
seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.

Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities as follows:

(A) that upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (g) of
this Paragraph 3, such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until
such holder's receipt of the copies of the supplemented or

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-7

<PAGE>

amended prospectus contemplated by subdivision (g) of this
Paragraph 3 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the
time of receipt of such notice, and

(B) that it will immediately notify the Company, at any time
when a prospectus relating to the registration of such Registrable
Securities is required to be delivered under the Act, of the
happening of any event as a result of which information previously
furnished by such holder to the Company in writing for inclusion in
such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made.

In the event the Company or any such holder shall give any such notice,
the period referred to in subdivision (b) of this Paragraph 3 shall be
extended by a number of days equal to the number of days during the period
from and including the giving of notice pursuant to subdivision (g) of this
Paragraph 3 to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by subdivision
(g) of this Paragraph 3.

4. UNDERWRITTEN OFFERINGS.

(a) UNDERWRITING AGREEMENT. If the Company at any time proposes
to register any of its securities under the Act as contemplated by
Paragraph 1 and such securities are to be distributed by or through one
or more underwriters or if the Company at any time is required to
register any of its securities under the Act as contemplated by
Paragraph 2, the Company will, subject to the provisions of subdivision
(b) of Paragraph 1 or subdivision (c) of Paragraph 2, use its best
efforts to arrange for such underwriters to include the Registrable
Securities to be offered and sold by each holder among the securities to
be distributed by such underwriters, and each holder of Registrable
Securities agrees, by acquisition of such Registrable Securities, that
all Registrable Securities of such holder to be included in such
registration shall be distributed and sold through such underwriters.
The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the
Company and such underwriters and may, at their option, require that any
or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions
precedent to the obligations of such

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-8

<PAGE>

underwriters shall also be made to and for the benefit of such holders
of Registrable Securities. No holder of Registrable Securities shall be
required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties
or agreements regarding such holder and such holder's intended method of
distribution and any other representation required by law.

(b) SELECTION OF UNDERWRITERS. The selection of the underwriter
or underwriters for the public offering to be made pursuant to a
registration statement filed under Paragraph 1 shall be made by the
Company, in its sole discretion, from amongst underwriting firms of
national reputation. Notwithstanding anything else in this Exhibit D to
the contrary, if General Electric Pension Trust ("GEPT") is eligible to
participate in an underwriting pursuant to the terms hereof and the
General Electric Company is directly or indirectly the beneficial owner
of five percent (5%) or more of the outstanding equity interests of an
underwriter or underwriters acting in such underwriting, GEPT shall have
the absolute right to disapprove such underwriter or underwriters so
owned by General Electric Company.

(i) Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities, if so required by the
managing underwriter, not to effect any public sale or distribution
of such securities or sales of such securities pursuant to Rule 144
under the Act or otherwise, during the seven days prior to and the
90 days after any firm commitment underwritten registration
pursuant to Paragraph 1 or 2 or any Qualified IPO that is
consummated on or before March 31, 1997 has become effective or, if
the managing underwriter advises the Company in writing that, in
its opinion, no such public sale or distribution should be effected
for a specific period longer than 90 days after such underwritten
registration in order to complete the sale and distribution of
securities included in such registration and the Company gives
notice to such holder of Registrable Securities of such advice,
during a reasonable longer period of up to 270 days after such
underwritten registration, except as part of such underwritten
registration, whether or not such holder participates in such
registration.

(ii) The Company agrees:

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-9

<PAGE>

except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or S-8 or any successor
or similar forms thereto, and

(B) to use its best efforts to cause each holder of its
equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in
each case purchased from the Company at any time after the
date hereof (other than in a public offering) to agree not to
effect any such public sale or distribution of such
securities, during such period or, in either case, if the
managing underwriter advises the Company in writing that in
its opinion, no such public sale or distribution should be
effected for a specified period longer than 90 days after such
underwritten registration in order to complete the sale and
distribution of securities included in such registration,
during a reasonably longer period after such underwritten
registration, except as part of such underwritten registration.

5. PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Act, the
Company will give the holders of Registrable Securities registered under such
registration statement, their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with
the Commission, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities
to discuss the business, finances and accounts of the Company and its
subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the Act.

6. CERTAIN RIGHTS OF HOLDERS. The Company will not file any
registration statement under the Act which refers to any holder of
Registrable Securities by name or otherwise as the holder of any securities
of the Company, unless it shall first have given such holder the right to
require:

(a) the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that, in the opinion of such
holder, the holding by such holder of such securities does not make such
holder a "controlling person" of the Company within the meaning of the
Act and is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that
such holding does not imply that such holder will assist in meeting any
future financial requirements of the Company, or

(b) in the event that such reference to such holder by name or
otherwise is not required by the Act or any rules and regulations
promulgated thereunder, the deletion of the reference to such holder.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-10

<PAGE>

7. INDEMNIFICATION.

(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Act, the Company
will, and hereby does, indemnify and hold harmless the seller of any
Registrable Securities covered by any registration statement filed
pursuant to Paragraph 1 or 2, its directors, officers, partners,
employees, agents and investment advisors, each other Person who
participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or
any such underwriter within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act, from and against any losses, claims,
damages or liabilities, joint or several (or actions or proceedings,
whether commenced or threatened, in respect thereof) (collectively,
"Claims"), to which such seller or any such director or officer or
employee or agent or investment advisor or underwriter or controlling
person may become subject under either Section 15 of the Act or Section
20 of the Exchange Act or otherwise, insofar as such Claims arise out of
or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which
such securities were registered under the Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or
any amendment or supplement thereto (if used during the period the
Company is required to keep the registration statement current)
(collectively, "Registration Documents"), or any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances in which made, or any violation by the Company of the
Act or any state securities law, or any rule or regulation promulgated
under the Act or any state securities law, or any other law applicable
to the Company relating to any such registration or qualification, and
the Company will reimburse such seller and each such director, officer,
employee, agent, investment advisor, underwriter and controlling person
for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; PROVIDED that
the Company shall not be liable in any such case to the extent that any
such Claim or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
such Registration Document in reliance upon and in conformity with
written information furnished to the Company through an instrument duly
executed by such seller stating that it is for use in the preparation
thereof; PROVIDED FURTHER that the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act in any such case to the extent that any
such Claim, or expense arises out of such Person's failure to send or
give a copy of the final prospectus to the Person claiming an untrue
statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in
such final prospectus. Such indemnity shall remain in

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-11

<PAGE>

full force and effect regardless of any investigation made by or on
behalf of such seller or any such director, officer, employee, agent,
investment advisor, partner, underwriter or controlling person and shall
survive the transfer of such securities by such seller.

(b) INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Paragraph 1 or 2, that the Company shall
have received an undertaking satisfactory to it from the prospective
seller of such securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this
Paragraph 7) the Company, each director of the Company, each officer of
the Company and each other person, if any, who controls the Company
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act, with respect to any statement or alleged statement or
omission or alleged omission from such Registration Document, if such
statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by such seller
specifically stating that it is for use in the preparation of such
Registration Document. Notwithstanding the foregoing, in no event shall
any selling stockholder or any director, officer, employee, agent,
investment advisor or controlling person thereof be liable to indemnify
the Company pursuant to this subdivision (b) of this Paragraph 7 hereof
in an amount in excess of the amount of the net proceeds of the
Registrable Securities sold by him, her or it in any such offering.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company of any such director,
officer or controlling person and shall survive the transfer of such
securities by such seller.

(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Claim referred to in the preceding subdivisions
of this Paragraph 7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action; PROVIDED that the
failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Paragraph 7, except to the extent that
the indemnifying party is actually prejudiced by such failure to give
notice. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-12

<PAGE>

for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall consent to entry of any
judgment or enter into any settlement of any pending or threatened
proceeding in respect of which an indemnified party is or could have
been a party and indemnity could have been sought under subdivision (a)
of this Paragraph 7 without the consent of the indemnified party which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

(d) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subdivisions of this Paragraph 7 (with
appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or
other qualification of securities under any Federal or state law or
regulation of any governmental authority, other than the Act. If the
indemnification provided for in subdivision (a), (b) or (c) of this
Paragraph 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party or parties on the
other hand from the offering of the securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that in no event shall any contribution by the
selling stockholder or any director, officer, employee, agent,
investment advisor or controlling person thereof pursuant to this
subdivision (d) of this Paragraph 7 exceed the amount of the net
proceeds of the Registrable Securities sold by him, her or it in any
such offering.

(e) INDEMNIFICATION PAYMENTS. The indemnification required by
this Paragraph 7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred.

8. ADJUSTMENT AFFECTING REGISTRABLE SECURITIES. The Company will not
effect or permit to occur any combination or subdivision of shares which
would adversely affect the ability of the holders of Registrable Securities
to effect the registration of such securities in the manner contemplated by
these registration rights provisions.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-13

<PAGE>

9. COVENANTS RELATING TO RULE 144. At all times after the effective
date of the registration statement under the Act of the initial underwritten
public offering of Common Stock, and until such time as all of the
Registrable Securities are deregistered, the Company will file reports in
compliance with the Exchange Act and will, at its expense, forthwith upon the
request of any holder of Restricted Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating:

(a) the Company's name, address and telephone number (including
area code),

(b) the Company's Internal Revenue Service identification number,

(d) the number of shares of Common Stock of the Company
outstanding as shown by the most recent report or statement published by
the Company, and

(e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least 90 days prior to the
date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-14

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<DESCRIPTION>EX 10.5
<TEXT>

<PAGE>

AMENDMENT NO. 4 TO
STOCKHOLDERS AGREEMENT

This Amendment No. 4 to Stockholders Agreement (this "Amendment") is
made and entered into as of December 16, 1996 by and between Aftermarket
Technology Holdings Corp., a Delaware corporation (the "Company"), Aurora
Equity Partners L.P., a Delaware limited partnership ("AEP"), Aurora Overseas
Equity Partners I, L.P., a Cayman Islands exempted limited partnership
("AOEP"), and each of the stockholders of the Company who are signatories
hereto (the "Stockholders").

WHEREAS, the Stockholders hold a majority in voting interest of the
outstanding shares of Common Stock and Preferred Stock of the Company; and

WHEREAS, the parties hereto desire to amend the Stockholders Agreement
to make certain changes to the registration rights provided in Amendment No.
3 to the Stockholders Agreement to stockholders holding more than 10% of the
outstanding common stock under certain circumstances.

NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:

1. AMENDMENT. Exhibit D to the Stockholders Agreement is hereby
deleted in its entirety and the attached Annex A is hereby substituted in its
place.

3. EFFECT OF AMENDMENT. Except as amended by this Amendment, the
Stockholders Agreement shall remain unchanged and shall remain in full force
and effect.

<PAGE>

IN WITNESS WHEREOF, the Company, AEP, AOEP and each of the Stockholders
have duly executed this Amendment as of the date first above written.

AFTERMARKET TECHNOLOGY HOLDINGS CORP.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

THE CLASS A STOCKHOLDERS:

--------------------------------------
WILLIAM A. SMITH

JAMES R. WEHR REVOCABLE TRUST

--------------------------------------
James R. Wehr, Grantor/Trustee

--------------------------------------
KENNETH T. HESTER

2
<PAGE>

THE CLASS B STOCKHOLDERS:

ALLENWOOD VENTURES, INC.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

-------------------------------------
JOHN E. ANDERSON

ROBERT ANDERSON VARIABLE TRUST

By:
----------------------------------
Robert Anderson, Trustee

THE ANDREW W. MELLON FOUNDATION

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

AURORA CAPITAL PARTNERS L.P.

By: Aurora Advisors, Inc.,
its general partner

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

3
<PAGE>

AURORA OVERSEAS CAPITAL PARTNERS, L.P.

By: Aurora Overseas Advisors Ltd.,
its general partner

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

BANCBOSTON INVESTMENTS, INC.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

BANKAMERICA CAPITAL CORPORATION

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

4
<PAGE>

CASTLEROCK INVESTMENTS LTD.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

CHEMICAL EQUITY ASSOCIATES

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

CHEMICAL INVESTMENTS, INC.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
RICHARD R. CROWELL

--------------------------------------
ROBERT L. CUMMINGS III

THE TRUSTEES OF DARTMOUTH COLLEGE

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

5
<PAGE>

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO RICHARD R. CROWELL

By:
-----------------------------------
Richard R. Crowell, Trustee

By:
-----------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO MARK C. HARDY

By:
-----------------------------------
Richard R. Crowell, Trustee

By:
-----------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO KURT B. LARSEN

By:
-----------------------------------
Richard R. Crowell, Trustee

By:
-----------------------------------
Richard K. Roeder, Trustee

6
<PAGE>

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO GERALD L. PARSKY

By:
-----------------------------------
Richard R. Crowell, Trustee

By:
-----------------------------------
Richard K. Roeder, Trustee

DEAN WITTER AS CUSTODIAN FOR AURORA
CAPITAL PARTNERS VIP PLUS 401(K) PLAN
FBO W. MONTAGUE YORT

By:
-----------------------------------
Richard R. Crowell, Trustee

By:
-----------------------------------
Richard K. Roeder, Trustee

DELTA MASTER TRUST

By:
-----------------------------------
Trustee

--------------------------------------
JEFFREY S. DEUTSCHMAN

--------------------------------------
FREDERICK J. ELSEA, III

7
<PAGE>

GENERAL ELECTRIC PENSION TRUST

By:
-----------------------------------

Name:
---------------------------------

Title: Trustee

HARBOURTON REASSURANCE, INC.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
MARK C. HARDY

HELLER FINANCIAL, INC.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
AMBASSADOR JAMES D. HODGSON

--------------------------------------
CLEON T. KNAPP

8
<PAGE>

L-A&A GIFT TRUST FBO
ELLIOT LEEDOM ACKERMAN

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

L-A&A GIFT TRUST FBO
NATHANEL LEEDOM ACKERMAN

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
KURT B. LARSEN

LODWRICK AND CAROLE COOK AS
TRUSTEES OF THE COOK FAMILY
TRUST DATED SEPTEMBER 16, 1991

By:
-----------------------------------
Trustee

--------------------------------------
JOHN T. MAPES

9
<PAGE>

NHL HOLDINGS LTD.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

OGAC LIMITED

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

ORYX EQUITY PARTNERS FUND I LTD.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
GERALD L. PARSKY

G.M. ROEDER AND R.K. ROEDER, JTWROS

By:
-----------------------------------
Gloria M. Roeder

By:
-----------------------------------
Richard K. Roeder

10
<PAGE>

SOMERVILLE S TRUST

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

SPRINGBROOK, G.P.

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

--------------------------------------
PATRICK J. STEINER

SUMITOMO BANK OF CA TTEE FOR GIBSON,
DUNN & CRUTCHER RETIREMENT PLAN FBO
H. RICHARD DALLAS

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

SUMITOMO BANK OF CA TTEE FOR
GIBSON, DUNN & CRUTCHER RETIREMENT
PLAN FBO BRUCE D. MEYER

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

11
<PAGE>

UNIVERSITY OF SOUTHERN CALIFORNIA

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

W. S. INVESTMENTS L.P.

By:
-----------------------------------

Name:
---------------------------------
General Partner

--------------------------------------
JEROME C. WEINTRAUB

--------------------------------------
W. MONTAGUE YORT

12
<PAGE>

THE CLASS C STOCKHOLDERS:
AURORA EQUITY PARTNERS L.P.

By: Aurora Capital Partners L.P.,
its general partner

By: Aurora Advisors, Inc.,
its general partner

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

AURORA OVERSEAS EQUITY PARTNERS I, L.P.

By: Aurora Overseas Capital
Partners, L.P.,
its general partner

By: Aurora Overseas Advisors Ltd.,
its general partner

By:
-----------------------------------

Name:
---------------------------------

Title:
--------------------------------

13
<PAGE>

ANNEX A
EXHIBIT D

REGISTRATION RIGHTS

1. "PIGGY-BACK" REGISTRATION.

(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Except in the case of
a Qualified IPO that is consummated on or before March 31, 1997, if the
Company at any time proposes to effect a Qualified IPO or, following a
Qualified IPO, proposes to register any of its equity securities under the
Act (other than by a registration on Form S-4 or S-8 or any successor or
similar forms), whether or not for sale for its own account, in a manner
which would permit registration of Registrable Securities for sale to the
public under the Act, then the Company will each such time give prompt
written notice (which shall be at least 30 days prior to filing) to all
Eligible Holders of Registrable Securities of its intention to do so and of
such Eligible Holders' rights under this Paragraph 1. Upon the written
request of any such Eligible Holder made within 20 days after the receipt of
any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such Eligible Holder and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the Act of all Registrable Securities which the Company
has been so requested to register by the holders thereof, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register or in a separate
registration statement concurrently filed and on terms substantially the same
as those being offered to the Company; PROVIDED that if, at any time after
giving written notice of its intention to register any securities and prior
to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register
or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to each Eligible Holder
of Registrable Securities and, thereupon:

(ii) in the case of a delay in registering, shall be permitted to
delay registering any Registrable Securities for the same period as
the delay in registering such other securities.

(b) PRIORITY IN "PIGGY-BACK" REGISTRATIONS. If a registration
that is subject to this Paragraph 1 (except for a registration that is
subject to Paragraph 2, which shall be governed by Paragraph 2(d) rather than
this Paragraph 1(b)) involves

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-1
<PAGE>

an underwritten offering and the managing underwriter advises the Company in
writing that the number of securities requested to be included in such
registration pursuant to this Paragraph 1, together with all other securities
to be included in such registration, exceeds the Maximum Number (as defined
below), then such securities shall be included in the offering up to the
Maximum Number in the following priority:

(i) first, (x) in the case of a Company Registration (as
defined below), the securities proposed to be sold by the Company or
(y) in the case of an Investor Registration (as defined below), the
securities proposed to be sold by the Demand Investors (as defined
below) on such basis as shall be provided in the agreement(s) pursuant
to which the Demand Investors have the right to demand or include
securities in an Investor Registration;

(ii) second, in the case of an Investor Registration, the
securities, if any, proposed to be sold by the Company for its own
account;

(iii) third, any Registrable Securities requested to be included
in such registration pursuant to this Paragraph 1 PRO RATA among the
holders thereof requesting such registration on the basis of the
number of shares of such securities requested to be included by such
holders; and

(iv) fourth, any other securities of the Company proposed to be
included in such registration statement in accordance with the
priorities, if any, then existing among the holders of such
securities.

If at the time that the registration statement ceases to be effective in
accordance with Paragraph 3(b) there remain unsold securities under such
registration, such securities will be withdrawn and shall be allocated as
follows:

(1) first, among the holders of the securities referred to in
clause (iv) above in accordance with the priorities, if any, then
existing among the holders of such securities;

(2) second, on a pro rata basis among the holders of Registrable
Securities included in such registration pursuant to this Paragraph 1
on the basis of the respective numbers of Registrable Securities of
each such holder included in such registration

(3) third, in the case of an Investor Registration, to the
Company in the event that any securities were offered by the Company;
and

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-2
<PAGE>

(4) fourth, (x) in the case of a Company Registration, to the
Company or (y) in the case of an Investor Registration, among the
Demand Investors on such basis as shall be provided in the agreements
pursuant to which the Demand Investors have the right to demand or
include securities in an Investor Registration.

As used herein, the following terms have the following meanings:

"Company Registration" means a registration the primary purpose
of which is to sell securities for the account of the Company.

"Demand Investor" means any Person who is exercising (x) a
"demand" right to require the Company register securities held by such
Person or (y) a "piggyback" right to include securities in a
registration on a pro rata basis with the Person whose demand right
results in such registration.

"Investor Registration" means a registration the primary purpose
of which is to sell securities for the account of one or more Demand
Investors.

"Maximum Number" means, in the case of an underwritten offering,
the maximum number of securities that the managing underwriter
considers, in good faith, to be appropriate based on market conditions
and other relevant factors (including, without limitation, pricing).

2. REGISTRATION RIGHTS OF CERTAIN ELIGIBLE HOLDERS.

(a) RIGHT TO REQUIRE REGISTRATION. Subject to the provisions of
this Paragraph 2, if, at any time after the first anniversary of the
consummation of a Qualified IPO, any Eligible Holder (other than the Aurora
Entities) is the record owner of 10% or more of the outstanding Common Stock
immediately after a distribution of shares by either or both of the Aurora
Entities to their limited partners (such Eligible Holder, so long as it
continues to own 10% or more of the outstanding Common Stock, is hereinafter
referred to as a "10% Holder"), such 10% Holder shall have the right to
require the Company to file a registration statement under the Securities Act
for a public offering of all or any portion of the Registrable Securities
held by such Holder when such right is exercised (the "Paragraph 2 Securities"),
PROVIDED that any demand for registration under this Paragraph 2(a) (a "Demand
Registration Demand") shall not be otherwise deemed to be effective unless such
Demand Registration Demand is with respect to Paragraph 2 Securities
constituting at least five percent of the outstanding shares of

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-3
<PAGE>

the class of Registrable Securities. The demand registration rights granted
to the 10% Holders in this Paragraph 2(a) are subject to the following
limitations:

(i) each 10% Holder may make a Demand Registration Demand
under this Paragraph 2(a) only one time, PROVIDED, HOWEVER, that if,
after completion of the resulting registered offering, such Person
continues to be a 10% Holder or becomes a 10% Holder as the result of
a subsequent distribution of shares by either or both of the Aurora
Entities to their limited partners, such 10% Holder shall have the
right to make one additional Demand Registration Demand;

(ii) the Company shall not be obligated to cause any
registration statement filed under this Paragraph 2(a) to be declared
effective less than six months after the effective date of the most
recent Company Registration;

(iii) the managing underwriter of any such offering shall be a
nationally recognized investment banking firm selected by the Company
and approved by the 10% Holder making the Demand Registration Demand
(which approval shall not be unreasonably withheld);

(iv) notwithstanding the giving of a Demand Registration Demand
by a 10% Holder, the Company may elect to convert the required
registration into a Company Registration by providing notice to the
Eligible Holders in accordance with Paragraph 1, and in such event the
provisions of Paragraph 1 shall apply to such registration rather than
the provisions of this Paragraph 2 and such registration shall not
count as the exercise of such 10% Holder's registration right under
this Paragraph 2(a);

(v) during any two-year period, the Company may make a one-time
election to postpone the filing or the effectiveness of a registration
statement in response to a Demand Registration Demand for up to six
months if the Board determines, in its good faith judgment, that (x)
such registration would reasonably be expected to have an adverse
effect on, interfere with or delay any proposal or plan by the Company
or any of its subsidiaries to engage in any acquisition of assets
(other than in the ordinary course of business) or any merger,
consolidation, tender offer or similar transaction, (y) the filing of
a registration statement or a sale of Registrable Securities pursuant
thereto would require disclosure of material information that the
Company has a bona fide business purpose for preserving as
confidential, or (z) the Company is unable to comply with the
registration requirements of the Commission; PROVIDED,

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-4
<PAGE>

that, in such event, the 10% Holder making the Demand Registration
Demand will be entitled to withdraw such demand and, if such demand is
withdrawn, such demand will not count as a Demand Registration Demand
hereunder and the Company will pay all Registration Expenses in
connection with such withdrawn demand; and

(vi) any Demand Registration Demand under this Paragraph 2(a)
shall be for a firm commitment underwritten offering, with respect to
which the Company shall be required to maintain an effective
registration statement until the earlier of (x) such time as all the
securities covered by such registration statement shall have been
disposed of or (y) the expiration of 45 days after the effectiveness
of such registration statement.

(b) PIGGY BACK REGISTRATION. If after the date of Amendment No. 4
to this Agreement the Company enters into a registration rights agreement
with any third party (the "Subsequent Investor") pursuant to which the
Subsequent Investor is granted the right to thereafter require the Company on
one or more occasions to file a registration statement under the Act for a
public offering of all or any of the Subsequent Investor's shares of the
capital stock of the Company, such registration rights agreement (the
"Subsequent Agreement") must provide that all 10% Holders shall have the
right to require the Company to include any or all of such Holders' Paragraph
2 Securities in any registration statement filed pursuant to the Subsequent
Agreement. The piggy back registration right granted to the 10% Holders in
this Section 2(b) is subject to the following limitations:

(i) a 10% Holder may not make a demand for inclusion of
Paragraph 2 Securities in a registration statement under a Subsequent
Agreement (a "Piggy Back Registration Demand") (x) before the first
anniversary of the consummation of a Qualified IPO or (y) after such
Holder's exercise of both its rights under Paragraph 2(a);

(ii) the rights of the Company and limitations on the Company's
obligations provided for in the Subsequent Agreement shall apply to
the 10% Holders to the same extent that they apply to the Subsequent
Investor; and

(iii) the method of distribution shall be selected by the
Subsequent Investor.

As used herein, the term "Registration Demand" means either the Demand
Registration Demand or a Piggyback Registration Demand, as the case may be.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-5
<PAGE>

(c) NOTICE OF REGISTRATION DEMAND; PARTICIPATION RIGHTS. Any 10%
Holder desiring to make a Registration Demand shall do so by providing
written notice to the Company (which notice shall state the number of shares
of Paragraph 2 Securities the 10% Holder desires the Company to register),
and the Company promptly shall provide written notice of such Registration
Demand to (i) the Subsequent Investor (in the case of a Piggy Back
Registration Demand) and any other 10% Holders, (ii) all of the other
Eligible Holders and (iii) any other Person who then has "piggy back"
registration rights (an "Additional Securityholder"), and all of the other
10% Holders, Eligible Holders and Additional Securityholders then will have
the opportunity to include in the offering shares of Registrable Securities
then owned by such 10% Holders, Eligible Holders and Additional
Securityholders, but in each case only to the extent permitted by Paragraph
2(d). In addition, subject to Paragraph 2(d), the Company may elect to
include in any registration statement and offering pursuant to this Paragraph
2 newly issued shares of Registrable Securities. Solely for purposes of
Paragraphs 2 through 9, any securities registered pursuant to this Paragraph
2 shall be deemed to be Registrable Securities.

(d) PRIORITY. Notwithstanding the foregoing, if the managing
underwriter of a registered offering being made in response to the
Registration Demand advises the Company in writing that the number of shares
of Registrable Securities desired to be offered by the 10% Holders, the
Subsequent Investor (if any), the Company, the Eligible Holders and the
Additional Securityholders exceeds the Maximum Number, then Registrable
Securities shall be included in the offering, up to the Maximum Number, in
the following priority:

(i) First, (A) in the case of a Demand Registration Demand,
the Registrable Securities desired to be offered by the 10% Holders
on a pro rata basis based on the number of Paragraph 2 Securities
then owned by each such 10% Holder, or (B) in the case of a Piggy
Back Registration Demand, the Registrable Securities desired to be
offered by the 10% Holders and the Registrable Securities desired
to be offered by the Subsequent Investor, PROVIDED that if such
Registrable Securities exceed the Maximum Number, the 10% Holders and
the Subsequent Investor shall be entitled to include Registrable
Securities on a pro rata basis based on the number of Paragraph 2
Securities then owned by each such 10% Holder and the number of shares
of Common Stock then owned by the Subsequent Investor that are subject
to the Subsequent Agreement;

(ii) Second, the Registrable Securities desired to be offered
by the Company;

(iii) Third, the Registrable Securities desired to be offered
by Eligible Holders pursuant to Paragraph 1; and

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-6
<PAGE>

(iv) Fourth, the Registrable Securities desired to be offered
by Additional Securityholders in such relative amounts and priorities
as shall be provided in the agreements that define the relative rights
of the Additional Securityholders.

Each of the 10% Holders, the Subsequent Investor, the Eligible Holders, the
Additional Securityholders and the Company (in the event that any securities
are to be offered by the Company) may withdraw from the registration by
giving written notice to the Company prior to the filing date of such
registration statement. In the event of a withdrawal by a 10% Holder of a
Demand Registration Demand, such withdrawn demand shall not be deemed to be
one of the Demand Registration Demands to which such 10% Holder is entitled
PROVIDED that such 10% Holder pays or promptly reimburses the Company for all
Registration Expenses incurred by the Company in connection with such
withdrawn demand. In the event of a withdrawal of a Demand Registration
Demand where any other 10% Holder does not withdraw from the registration,
such nonwithdrawing 10% Holder shall be deemed to have made a Demand
Registration Demand. In the event that the Subsequent Investor withdraws
from the registration but any 10% Holder does not withdraw its Piggyback
Registration Demand, such Piggyback Registration Demand shall thereafter
constitute a Demand Registration Demand by such 10% Holder. If at the time
that the registration statement ceases to be effective in accordance with
Paragraph 2(a)(vi) or, in the case of a registration subject to Paragraph
2(b), in accordance with the Subsequent Agreement there remain unsold
Registrable Securities, such Registrable Securities will be withdrawn and
shall be allocated as follows:

(1) first, among the Additional Securityholders on the basis
of the relative amounts and priorities as shall be provided in the
agreements that define the relative rights of the Additional
Securityholders;

(2) second, on a pro rata basis among the Eligible Holders
(other than 10% Holders) on the basis of the respective numbers of
Registrable Securities of each of them included in such registration;

(3) third, to the Company (in the event that any securities
were offered by the Company); and

(4) fourth, (x) in the case of a Demand Registration Demand, to
the 10% Holders on the basis of the respective numbers of Registrable
Securities of each of them included in such registration or (y) in
the case of a Piggy Back Registration Demand, to the 10% Holders and
the Subsequent Investor on the basis of the respective numbers of
Registrable Securities of each of them included in such registration.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-7
<PAGE>

3. REGISTRATION PROCEDURES. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Act as provided in Paragraph 1 or 2, the Company will as expeditiously
as possible (and, in any event, within 90 days), subject to the terms and
conditions of Paragraph 1 or 2:

(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the disposition of all securities covered by such registration
statement until the earlier of such time as all of such securities have
been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registration statement or
the expiration of 90 days after such registration statement becomes
effective or, in the case of a registration pursuant to Paragraph 2(a), the
period provided in Paragraph 2(a)(vi); PROVIDED that if less than all the
Registrable Securities are withdrawn from registration after the expiration
of such period, the shares so withdrawn shall be allocated PRO RATA among
the holders thereof on the basis of the to respective numbers of
Registrable Securities held by them included in such registration;

(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule 424 under
the Act, in conformity with the requirements of the Act, and such other
documents, as such seller may reasonably request;

(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such securities or blue sky laws of such jurisdictions as each seller
thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains
in effect, and take any other action which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to:

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-8
<PAGE>

(i) qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subdivision (d) be obligated to be so qualified,

(ii) subject itself to taxation in any such jurisdiction, or

(iii) consent to general service of process in any such
jurisdiction;

(f) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any), of:

covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters as such seller or such
holder (or the underwriters, if any) may reasonably request;

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-9
<PAGE>

which they were made, or if in the opinion of counsel for the Company it
is necessary to supplement or amend such prospectus to comply with law and,
at the request of any such holder promptly prepare and furnish to such
holder a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made or such
prospectus, as supplemented or amended, shall comply with law;

(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and the rules and regulations of the
Commission thereunder, and not file any amendment or supplement to such
registration statement or prospectus to which any such seller of
Registrable Securities covered by such registration statement shall have
reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Act or of
the rules or regulations thereunder, having been furnished with a copy
thereof at least five business days prior to the filing thereof;

(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;

(j) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any of
the Registrable Securities are then listed; and

(k) pay all Registration Expenses relating to any such registration.

The Company may require each seller of Registrable Securities as to which
any registration is effected to furnish the Company with such information and
undertakings as it may reasonably request regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request in writing.

Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities as follows:

(A) that upon receipt of any notice from the Company of the
happening of any event of the kind described in

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-10
<PAGE>

subdivision (g) of this Paragraph 3, such holder will forthwith
discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by
subdivision (g) of this Paragraph 3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such
holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such
notice, and

(B) that it will immediately notify the Company, at any time
when a prospectus relating to the registration of such
Registrable Securities is required to be delivered under the Act,
of the happening of any event as a result of which information
previously furnished by such holder to the Company in writing for
inclusion in such prospectus contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they
were made.

4. UNDERWRITTEN OFFERINGS.

(a) UNDERWRITING AGREEMENT. If the Company at any time proposes to
register any of its securities under the Act as contemplated by Paragraph 1
and such securities are to be distributed by or through one or more
underwriters or if the Company at any time is required to register any of
its securities under the Act as contemplated by Paragraph 2, the Company
will, subject to the provisions of subdivision (b) of Paragraph 1 or
subdivision (d) of Paragraph 2, use its best efforts to arrange for such
underwriters to include the Registrable Securities to be offered and sold
by each holder among the securities to be distributed by such underwriters,
and each holder of Registrable Securities agrees, by acquisition of such
Registrable Securities, that all Registrable Securities of such holder to
be included in such registration shall be distributed and sold through such
underwriters. The holders of Registrable Securities to be distributed by
such underwriters shall be parties to the

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-11
<PAGE>

underwriting agreement between the Company and such underwriters and may,
at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and for the
benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters shall also
be made to and for the benefit of such holders of Registrable Securities.
No holder of Registrable Securities shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such holder and such holder's intended method of distribution and any other
representation required by law.

(b) SELECTION OF UNDERWRITERS. The selection of the underwriter or
underwriters for the public offering to be made pursuant to a registration
statement filed under Paragraph 1 shall be made by the Company, in its sole
discretion, from amongst underwriting firms of national reputation.
Notwithstanding anything else in this Exhibit D to the contrary, if General
Electric Pension Trust ("GEPT") is eligible to participate in an
underwriting pursuant to the terms hereof and the General Electric Company
is directly or indirectly the beneficial owner of five percent (5%) or more
of the outstanding equity interests of an underwriter or underwriters
acting in such underwriting, GEPT shall have the absolute right to
disapprove such underwriter or underwriters so owned by General Electric
Company.

(i) Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities, if so required by the managing
underwriter, not to effect any public sale or distribution of such
securities or sales of such securities pursuant to Rule 144 under the
Act or otherwise, during the seven days prior to and the 90 days after
any firm commitment underwritten registration pursuant to Paragraph 1
or 2 or any Qualified IPO that is consummated on or before March 31,
1997 has become effective or, if the managing underwriter advises the
Company in writing that, in its opinion, no such public sale or
distribution should be effected for a specific period longer than 90
days after such underwritten registration in order to complete the
sale and distribution of securities included in such registration and
the Company gives notice to such holder of Registrable Securities of
such advice, during a reasonable longer period of up to 270 days after
such underwritten registration, except as part of such underwritten
registration, whether or not such holder participates in such
registration.

(ii) The Company agrees:

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-12
<PAGE>

(A) not to effect any public sale or distribution of its equity
securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days
prior to and the 90 days after any firm commitment underwritten
registration pursuant to Paragraph 1 or 2 has become effective,
except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or S-8 or any successor or
similar forms thereto, and

(B) to use its best efforts to cause each holder of its equity
securities or any securities convertible into or exchangeable or
exercisable for any of such securities, in each case purchased
from the Company at any time after the date hereof (other than in
a public offering) to agree not to effect any such public sale or
distribution of such securities, during such period or, in either
case, if the managing underwriter advises the Company in writing
that in its opinion, no such public sale or distribution should
be effected for a specified period longer than 90 days after such
underwritten registration in order to complete the sale and
distribution of securities included in such registration, during
a reasonably longer period after such underwritten registration,
except as part of such underwritten registration.

6. CERTAIN RIGHTS OF HOLDERS. The Company will not file any registration
statement under the Act which refers to any holder of Registrable Securities by
name or otherwise as the holder of any securities of the Company, unless it
shall first have given such holder the right to require:

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-13
<PAGE>

recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
holder will assist in meeting any future financial requirements of the
Company, or

(b) in the event that such reference to such holder by name or
otherwise is not required by the Act or any rules and regulations
promulgated thereunder, the deletion of the reference to such holder.

7. INDEMNIFICATION.

(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration
of any securities of the Company under the Act, the Company will, and
hereby does, indemnify and hold harmless the seller of any Registrable
Securities covered by any registration statement filed pursuant to
Paragraph 1 or 2, its directors, officers, partners, employees, agents and
investment advisors, each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any,
who controls such seller or any such underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any losses, claims, damages or liabilities, joint or several (or
actions or proceedings, whether commenced or threatened, in respect
thereof) (collectively, "Claims"), to which such seller or any such
director or officer or employee or agent or investment advisor or
underwriter or controlling person may become subject under either Section
15 of the Act or Section 20 of the Exchange Act or otherwise, insofar as
such Claims arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto (if used during the period
the Company is required to keep the registration statement current)
(collectively, "Registration Documents"), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which made, or any violation by the Company of the Act or
any state securities law, or any rule or regulation promulgated under the
Act or any state securities law, or any other law applicable to the Company
relating to any such registration or qualification, and the Company will
reimburse such seller and each such director, officer, employee, agent,
investment advisor, underwriter and controlling person for any legal or any
other expenses reasonably incurred by them in connection with investigating
or defending any such Claim; PROVIDED that the Company shall not be liable
in any such case to the extent that any such Claim or expense arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such Registration Document in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller stating that it
is for use in the preparation thereof; PROVIDED FURTHER that the Company
shall not be liable to any Person who

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-14
<PAGE>

participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act in any such case to the extent that any such Claim, or
expense arises out of such Person's failure to send or give a copy of the
final prospectus to the Person claiming an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director,
officer, employee, agent, investment advisor, partner, underwriter or
controlling person and shall survive the transfer of such securities by
such seller.

(b) INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Paragraph 1 or 2, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of
such securities, to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this Paragraph 7) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, with respect to
any statement or alleged statement or omission or alleged omission from
such Registration Document, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company through an instrument
duly executed by such seller specifically stating that it is for use in the
preparation of such Registration Document. Notwithstanding the foregoing,
in no event shall any selling stockholder or any director, officer,
employee, agent, investment advisor or controlling person thereof be liable
to indemnify the Company pursuant to this subdivision (b) of this Paragraph
7 hereof in an amount in excess of the amount of the net proceeds of the
Registrable Securities sold by him, her or it in any such offering. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company of any such director,
officer or controlling person and shall survive the transfer of such
securities by such seller.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-15
<PAGE>

such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim,
the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall consent to entry of
any judgment or enter into any settlement of any pending or threatened
proceeding in respect of which an indemnified party is or could have been a
party and indemnity could have been sought under subdivision (a) of this
Paragraph 7 without the consent of the indemnified party which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect to such claim or litigation.

(d) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding subdivisions of this Paragraph 7 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification
of securities under any Federal or state law or regulation of any
governmental authority, other than the Act. If the indemnification
provided for in subdivision (a), (b) or (c) of this Paragraph 7 is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand from the
offering of the securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnified party or
parties on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations; PROVIDED, HOWEVER, that in no
event shall any contribution by the selling stockholder or any director,
officer, employee, agent, investment advisor or controlling person thereof
pursuant to this subdivision (d) of this Paragraph 7 exceed the amount of
the net proceeds of the Registrable Securities sold by him, her or it in
any such offering.

(e) INDEMNIFICATION PAYMENTS. The indemnification required by this
Paragraph 7 shall be made by periodic payments of the amount thereof during
the

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-16
<PAGE>

course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.

8. ADJUSTMENT AFFECTING REGISTRABLE SECURITIES. The Company will not
effect or permit to occur any combination or subdivision of shares which would
adversely affect the ability of the holders of Registrable Securities to effect
the registration of such securities in the manner contemplated by these
registration rights provisions.

9. COVENANTS RELATING TO RULE 144. At all times after the effective date
of the registration statement under the Act of the initial underwritten public
offering of Common Stock, and until such time as all of the Registrable
Securities are deregistered, the Company will file reports in compliance with
the Exchange Act and will, at its expense, forthwith upon the request of any
holder of Restricted Securities, deliver to such holder a certificate, signed by
the Company's principal financial officer, stating:

(a) the Company's name, address and telephone number (including area
code),

(b) the Company's Internal Revenue Service identification number,

(d) the number of shares of Common Stock of the Company outstanding
as shown by the most recent report or statement published by the Company,
and

(e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least 90 days prior to the date
of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.

EXHIBIT D TO STOCKHOLDERS AGREEMENT
D-17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>7
<DESCRIPTION>EX 10.6
<TEXT>

<PAGE>

EXECUTION COPY

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

REVOLVING

CREDIT AGREEMENT

AMONG

AFTERMARKET TECHNOLOGY CORP.,

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

AND

THE CHASE MANHATTAN BANK,

AS AGENT

DATED AS OF FEBRUARY 14, 1997

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

<PAGE>

SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Other Definitional Provisions . . . . . . . . . . . . . . . .17

SECTION 2. AMOUNT AND TERMS OF CREDIT COMMITMENTS. . . . . . . . . . . .17
2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . .17
2.2. Procedure for Borrowing . . . . . . . . . . . . . . . . . . .18
2.3. Termination or Reduction of Commitments . . . . . . . . . . .18
2.4. Swing Line Commitments. . . . . . . . . . . . . . . . . . . .19

SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . .20
3.1. L/C Commitment. . . . . . . . . . . . . . . . . . . . . . . .20
3.2. Procedure for Issuance of Letters of Credit.. . . . . . . . .21
3.3. L/C Participations. . . . . . . . . . . . . . . . . . . . . .21
3.4. Reimbursement Obligation of the Borrower. . . . . . . . . . .22
3.5. Obligations Absolute. . . . . . . . . . . . . . . . . . . . .23
3.6. Letter of Credit Payments.. . . . . . . . . . . . . . . . . .23
3.7. Application.. . . . . . . . . . . . . . . . . . . . . . . . .24

SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS
OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.1. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.2. Repayment of Loans; Evidence of Debt. . . . . . . . . . . . .25
4.3. Optional and Mandatory Prepayments. . . . . . . . . . . . . .26
4.4. Conversion and Continuation Options . . . . . . . . . . . . .27
4.5. Maximum Number of Tranches. . . . . . . . . . . . . . . . . .27
4.6. Interest Rates and Payment Dates. . . . . . . . . . . . . . .28
4.7. Computation of Interest and Fees. . . . . . . . . . . . . . .28
4.8. Inability to Determine Interest Rate. . . . . . . . . . . . .28
4.9. Pro Rata Treatment and Payments . . . . . . . . . . . . . . .29
4.10. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . .29
4.11. Requirements of Law . . . . . . . . . . . . . . . . . . . . .30
4.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
4.13. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . .32
4.14. Change of Lending Office. . . . . . . . . . . . . . . . . . .33

SECTION 5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .33
5.1. Financial Condition . . . . . . . . . . . . . . . . . . . . .33
5.2. No Change; Solvency . . . . . . . . . . . . . . . . . . . . .34
5.3. Corporate Existence; Compliance with Law. . . . . . . . . . .34
5.4. Corporate Power; Authorization; Enforceable Obligations . . .34
5.5. No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . .35
5.6. No Material Litigation. . . . . . . . . . . . . . . . . . . .35

i
<PAGE>

5.7. No Default. . . . . . . . . . . . . . . . . . . . . . . . . .35
5.8. Ownership of Property; Liens. . . . . . . . . . . . . . . . .35
5.9. Intellectual Property . . . . . . . . . . . . . . . . . . . .35
5.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
5.11. Federal Regulations . . . . . . . . . . . . . . . . . . . . .36
5.12. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
5.13. Investment Company Act; Other Regulations . . . . . . . . . .37
5.14. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . .37
5.15. Purpose of Loans. . . . . . . . . . . . . . . . . . . . . . .37
5.16. Environmental Matters . . . . . . . . . . . . . . . . . . . .37
5.17. No Burdensome Restrictions. . . . . . . . . . . . . . . . . .38
5.18. No Material Misstatements . . . . . . . . . . . . . . . . . .38
5.19. Collateral. . . . . . . . . . . . . . . . . . . . . . . . . .38
5.20. Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . .39

SECTION 6. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . .39
6.1. Conditions to Extensions of Credit. . . . . . . . . . . . . .39
6.2. Conditions to Each Extension of Credit. . . . . . . . . . . .41

SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .42
7.1. Financial Statements. . . . . . . . . . . . . . . . . . . . .42
7.2. Certificates; Other Information . . . . . . . . . . . . . . .43
7.3. Payment of Obligations. . . . . . . . . . . . . . . . . . . .44
7.4. Conduct of Business and Maintenance of Existence. . . . . . .44
7.5. Maintenance of Property; Insurance. . . . . . . . . . . . . .44
7.6. Inspection of Property; Books and Records; Discussions. . . .45
7.7. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .45
7.8. Environmental Laws. . . . . . . . . . . . . . . . . . . . . .46
7.9. Additional Collateral . . . . . . . . . . . . . . . . . . . .46
7.10. Further Assurances. . . . . . . . . . . . . . . . . . . . . .47
7.11. Redemption of Senior Subordinated Notes . . . . . . . . . . .48
7.12. Property Matters. . . . . . . . . . . . . . . . . . . . . . .48

SECTION 8. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .48
8.1. Financial Condition Covenants . . . . . . . . . . . . . . . .48
8.2. Limitation on Indebtedness. . . . . . . . . . . . . . . . . .49
8.3. Limitation on Liens . . . . . . . . . . . . . . . . . . . . .51
8.4. Limitation on Guarantee Obligations . . . . . . . . . . . . .52
8.5. Limitation on Fundamental Changes . . . . . . . . . . . . . .53
8.6. Limitation on Sale of Assets. . . . . . . . . . . . . . . . .53
8.7. Limitation on Leases. . . . . . . . . . . . . . . . . . . . .54
8.8. Limitation on Dividends . . . . . . . . . . . . . . . . . . .54
8.9. Limitation on Capital Expenditures. . . . . . . . . . . . . .54
8.10. Limitation on Investments, Loans and Advances . . . . . . . .55
8.11. Limitation on Optional Payments and Modifications of Debt I .57

ii
<PAGE>

8.12. Limitation on Transactions with Affiliates. . . . . . . . . .57
8.13. Limitation on Sales and Leasebacks. . . . . . . . . . . . . .58
8.14. Limitation on Changes in Fiscal Year. . . . . . . . . . . . .58
8.15. Limitation on Negative Pledge Clauses . . . . . . . . . . . .58
8.16. Limitation on Lines of Business; Creation of Subsidiaries . .58
8.17. Limitation on Borrowings. . . . . . . . . . . . . . . . . . .58

SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . .58

SECTION 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . .62
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . .62
10.2. Delegation of Duties. . . . . . . . . . . . . . . . . . . . .62
10.3. Exculpatory Provisions. . . . . . . . . . . . . . . . . . . .62
10.4. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . .62
10.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . .63
10.6. NonReliance on Agent and Other Lenders. . . . . . . . . . . .63
10.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . .63
10.8. Agent in Its Individual Capacity. . . . . . . . . . . . . . .64
10.9. Successor Agent . . . . . . . . . . . . . . . . . . . . . . .64

SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . .64
11.1. Amendments and Waivers. . . . . . . . . . . . . . . . . . . .64
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .65
11.3. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . .66
11.4. Survival of Representations and Warranties. . . . . . . . . .66
11.5. Payment of Expenses and Taxes . . . . . . . . . . . . . . . .66
11.6. Successors and Assigns; Participations and Assignments. . . .67
11.7. Adjustments; Setoff . . . . . . . . . . . . . . . . . . . . .70
11.8. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .70
11.9. Severability. . . . . . . . . . . . . . . . . . . . . . . . .70
11.10. Integration . . . . . . . . . . . . . . . . . . . . . . . . .70
11.11. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . .71
11.12. Submission To Jurisdiction; Waivers . . . . . . . . . . . . .71
11.13. Acknowledgements. . . . . . . . . . . . . . . . . . . . . . .71
11.14. WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . .72

iii
<PAGE>

SCHEDULES

A Performance Pricing Grid
1.1 Commitments and Address of Lenders
5.14 Subsidiaries
5.16 Environmental Matters
8.3 Existing Liens

EXHIBITS

A-1 Form of Revolving Credit Note
A-2 Form of Swing Line Note
B Form of Guarantee and Collateral Agreement
C-1 Form of Opinion of Borrower's Counsel
C-2 Form of Opinion of Local Counsel
D Form of Borrowing Certificate
E Form of Assignment and Acceptance
F Terms and Conditions of Senior Subordinated Notes
G Form of Exemption Certificate

<PAGE>

CREDIT AGREEMENT, dated as of February 14, 1997, among AFTERMARKET
TECHNOLOGY CORP., a Delaware corporation (the "BORROWER"), the several banks and
other financial institutions from time to time parties to this Agreement (the
"LENDERS") and THE CHASE MANHATTAN BANK, a New York banking corporation, as
agent for the Lenders hereunder.

The parties hereto hereby agree as follows:

WHEREAS, the Borrower has requested that the Lenders make available to
it a revolving credit facility in the amount of $100,000,000 upon the terms and
subject to the conditions set forth herein; and

WHEREAS, the Lenders are willing to provide such financing to the
Borrower on the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:

"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Chase
Manhattan Bank in connection with extensions of credit to debtors); "BASE
CD RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "C/D ASSESSMENT RATE" shall mean, for any day, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.3(d) (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States; "C/D RESERVE PERCENTAGE" shall mean, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board) in respect
of new non-personal time deposits in Dollars having a maturity of 30 days
or more; "THREE-MONTH

<PAGE>

SECONDARY CD RATE" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day
(or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board of Governors of the Federal Reserve System (the "BOARD")
through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it; and
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. Any change in the ABR due to a change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Effective Rate, respectively.

"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.

"ADJUSTMENT DATE": each date on or after June 30, 1997, that is the
second Business Day following receipt by the Agent of both (i) the
financial statements required to be delivered pursuant to subsection 7.1(a)
or 7.1(b), as applicable, for the most recently completed four fiscal
quarters and (ii) the related Compliance Certificate required to be
delivered pursuant to subsection 7.2(b) with respect to such four fiscal
quarters.

"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.

"AGENT": the Chase Manhattan Bank, together with its affiliates, as
the arranger of the Commitments and as the agent for the Lenders under this
Agreement and the other Loan Documents.

2
<PAGE>

"AGGREGATE OUTSTANDING EXTENSIONS OF CREDIT": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such Lender then outstanding, (b) such Lender's
Commitment Percentage of the aggregate unpaid principal amount at such time
of all Swing Line Loans, PROVIDED that for purposes of calculating
Available Commitments pursuant to subsection 4.1(a) such amount shall be
zero and (c) such Lender's Commitment Percentage of the L/C Obligations
then outstanding.

"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.

"APPLICABLE MARGIN": for the period from the Closing Date until the
first Adjustment Date, the Applicable Margin in respect of Loans shall
equal the rate per annum set forth under the relevant column heading below:

Eurodollar
Abr Loans Loans
--------- ---------

0.25% 1.25%

PROVIDED such Applicable Margin will be adjusted on each Adjustment Date to
the applicable rate per annum set forth under the heading "ABR Applicable
Margin" or "Eurodollar Applicable Margin" on Schedule A which corresponds
to the Leverage Ratio determined from the financial statements and
Compliance Certificate relating to the end of the four fiscal quarters of
the Borrower immediately preceding such Adjustment Date; PROVIDED, FURTHER
that in the event that the financial statements required to be delivered
pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related
Compliance Certificate required to be delivered pursuant to subsection
7.2(b), are not delivered when due, then

(a) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered (without giving effect to
any applicable cure period) and the Applicable Margin increases from
that previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then the Applicable
Margin in respect of the Loans during the period from the date upon
which such financial statements and Compliance Certificate were
required to be delivered (without giving effect to any applicable cure
period) until the date upon which they actually are delivered shall,
except as otherwise provided in clause (c) below, be the Applicable
Margin as so increased;

(b) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered and the Applicable Margin
decreases from that previously in effect as a result of the delivery
of such financial statements and Compliance Certificate, then such
decrease in the Applicable Margin shall not

3
<PAGE>

become applicable until the date upon which such financial statements
and Compliance Certificate actually are delivered; and

(c) if such financial statements and Compliance Certificate are
not delivered prior to the expiration of the applicable cure period,
then, effective upon such expiration, for the period from the date
upon which such financial statements and Compliance Certificate were
required to be delivered (after the expiration of the applicable cure
period) until two Business Days following the date upon which such
financial statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of the Loans shall be
0.25% per annum, in the case of ABR Loans, and 1.25% per annum, in the
case of Eurodollar Loans.

"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.

"ASSIGNEE": as defined in subsection 11.6(c).

"AVAILABLE COMMITMENT": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Commitment over
(b) such Lender's Aggregate Outstanding Extensions of Credit.

"AURORA": Aurora Capital Partners L.P., a California limited
partnership.

"BANK ASSIGNEE": as defined in subsection 11.6(c).

"BORROWING CERTIFICATE": a certificate of the Borrower, substantially
in the form of Exhibit D.

"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.4 as a date on which the Borrower requests the Lenders
to make Loans hereunder.

"BUSINESS": as defined in subsection 5.16.

"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.

"CANADIAN SUBSIDIARIES": Mascot and King-O-Matic.

"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.

<PAGE>

"CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit of any Lender, eurodollar deposits, time deposits, overnight bank
deposits, bankers acceptances and repurchase agreements of any commercial
bank which has capital and surplus in excess of $200,000,000 having
maturities of one year or less from the date of acquisition, (c) commercial
paper of an issuer rated at least A-2 by Standard & Poor's Corporation and
P-2 by Moody's Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments having maturities of six
months or less from the date of acquisition, (d) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth
or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least AA by S&P or Aa by
Moody's, (e) securities with maturities of one year or less from the date
of acquisition fully backed by standby letters of credit issued by any
Lender or any commercial bank in each case satisfying the requirements of
clause (b) of this definition and (f) money market accounts or funds which
invest primarily in the types of securities described in (a) through (c)
above.

"CHANGE OF CONTROL": the occurrence of any of the following events:
(i) any sale, transfer or other conveyance, whether direct or indirect, of
all or substantially all of the assets of the Borrower, on a consolidated
basis, in one transaction or a series of related transactions, if,
immediately after giving effect to such transaction, any Person or "group"
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended) other than any Excluded Person is or becomes the
"beneficial owner," directly or indirectly, of more than 35% of the total
voting power in the aggregate normally entitled to vote in the election of
directors, managers or trustees, as applicable, of the transferee, (ii) any
Person or "group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) other than any Excluded Person
is or becomes the "beneficial owner," directly or indirectly, of more than
35% of the total voting power in the aggregate of all classes of Capital
Stock of the Borrower then outstanding normally entitled to vote in
elections of directors, unless the percentage so owned by Excluded Persons
is greater or (iii) during any period of 12 consecutive months after the
Closing Date, individuals who at the beginning of any such 12 month period
constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board or whose nomination for election by
the shareholders of the Borrower was approved by a vote of a majority of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors of the Borrower then in office.

"CHASE": the Chase Manhattan Bank, a New York banking corporation.

<PAGE>

"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 6.1 shall be satisfied or waived.

"CODE": the Internal Revenue Code of 1986, as amended.

"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Agreement.

"COMMERCIAL LETTER OF CREDIT": as defined in subsection.

"COMMITMENT": as to any Lender, the obligation of such Lender to make
Loans to and/or issue or participate in Letters of Credit on behalf of the
Borrower in a principal amount not to exceed the amount set forth opposite
such Lender's name on Schedule 1.1, as such amount may be reduced from time
to time in accordance with the provisions of this Agreement.

"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
been terminated, the percentage which the aggregate principal amount of
such Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).

"COMMITMENT PERIOD": the period from and including the Closing Date
to but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.

"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

"COMPLIANCE CERTIFICATE": as defined in subsection 7.2(b).

"CONSOLIDATED CAPITAL EXPENDITURES": of any Person for any period,
the amount of expenditures of such Person, determined on a consolidated
basis in accordance with GAAP (whether accrued under Capital Leases or
otherwise), for such period in respect of the purchase or other acquisition
of fixed or capital assets (excluding any such asset acquired in connection
with normal replacement and maintenance programs properly charged to
current operations).

"CONSOLIDATED EBITDA": of any Person for any period, Consolidated Net
Income of such Person for such period PLUS, without duplication and to the
extent reflected as a charge in the statement of such Consolidated Net
Income, the sum of (a) provision for income and franchise tax expense, (b)
Consolidated Interest Expense, (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill),
organization costs and deferred financing costs, (e)

<PAGE>

writeoff of goodwill and other non cash charges, including, without
limitation, interest expense representing payment in the form of non-cash
"payment-in-kind" instruments, and (f) any extraordinary losses (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income, losses on the sales of assets outside of the
ordinary course of business), MINUS, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income, any
extraordinary gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income, gains on
the sales of assets outside of the ordinary course of business).

"CONSOLIDATED INTEREST EXPENSE": of any Person for any period the
amount of cash interest expense, determined on a consolidated basis in
accordance with GAAP, for such period on the aggregate principal amount of
its Indebtedness.

CONSOLIDATED LEASE EXPENSE": for any Person for any period, the
aggregate amount of fixed and contingent rentals payable by such Person
with respect to such period, determined on a consolidated basis in
accordance with GAAP, for such period with respect to operating leases of
real and personal property.

"CONSOLIDATED NET INCOME": of any Person for any period, net income
of such Person for such period, determined on a consolidated basis in
accordance with GAAP.

"CONSOLIDATED NET WORTH": of any Person, as of the date of
determination, the sum of (i) all items which in conformity with GAAP would
be included under shareholders' equity on a consolidated balance sheet of
such Person at such date PLUS (ii) mandatorily redeemable preferred stock
of the Borrower which by its terms is not mandatorily redeemable or
redeemable at the option of the holder thereof prior to the Termination
Date.

"CONSOLIDATED TOTAL INDEBTEDNESS": of any Person, as of the date of
determination, all Indebtedness of such Person which, in accordance with
GAAP, would be included as Indebtedness on a consolidated balance sheet of
such Person at such date.

"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

"CSI": Chase Securities Inc.

"DEFAULT": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.

"DOLLARS" and "$": dollars in lawful currency of the United States of
America.

7
<PAGE>

"ELIGIBLE ACCOUNTS": the gross outstanding balance, determined in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower as of the date hereof, of accounts receivable of
the Borrower and its Subsidiaries arising out of sales of goods or services
made by the Borrower and its Subsidiaries in the ordinary course of
business ("ACCOUNTS") that the Borrower, in its reasonable discretion,
shall deem eligible, less all finance charges, late fees and other fees
that are unearned, and less (i) the value of any accrual which has been
recorded by the Borrower with respect to downward price adjustments and
(ii) such other reserves as the Borrower, in its reasonable discretion,
shall deem appropriate.

"ELIGIBLE INVENTORY": all inventory of the Borrower and its
Subsidiaries ("INVENTORY"), valued at the lower of (i) cost determined in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower as of the date hereof or (ii) market value, that
the Borrower, in its reasonable discretion, shall deem eligible, reduced by
(x) the value of reserves which have been recorded by the Borrower with
respect to obsolete, slow-moving or excess Inventory and (y) such other
reserves as the Borrower, in its reasonable discretion, shall deem
appropriate.

"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.

"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by the Agent.

"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest
Period.

8
<PAGE>

"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.

"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):

EURODOLLAR BASE RATE
----------------------------------
1.00 - Eurocurrency Reserve Requirements

"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).

"EVENT OF DEFAULT": any of the events specified in Section 9,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.

"EXCLUDED PERSON": (a) the Borrower or any wholly-owned Subsidiary
which is a Guarantor, (b) any employee benefit plan of the Borrower or any
wholly owned Subsidiary which is a Guarantor or any trustee or similar
fiduciary holding Capital Stock of the Borrower for or pursuant to the
terms of any such plan and (c) all Related Persons of the Borrower as of
the Closing Date and any Person that becomes a Related Person of such
Related Person thereafter.

"EXISTING CREDIT AGREEMENTS": the Credit Agreement, dated as of July
19, 1994, among the Borrower, the several banks and other financial
institutions from time to time parties thereto and the Chase Manhattan Bank
(as successor to Chemical Bank) as agent, and the $6,500,000 Promissory
Note, dated January 31, 1997 made by the Borrower for the benefit of Chase.

"EXTENSION OF CREDIT": as to any Lender, the making of (a) a Loan by
such Lender, (b) a Swing Line Loan or (c) the issuance of, or participation
in, a Letter of Credit by such Lender.

"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.

"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.

9
<PAGE>

"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.

"GUARANTEE AND COLLATERAL AGREEMENT": the guarantee and collateral
agreement to be executed and delivered by the Borrower and its domestic
Subsidiaries, substantially in the form of Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.

"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person as of any date of determination shall be deemed to be the lower of
(a) an amount equal to the then stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.

"GUARANTOR": any Person delivering a guarantee pursuant to the
Guarantee and Collateral Agreement.

"HEDGING AGREEMENT": with respect to any Person, any interest rate or
currency exchange rate swap agreement, interest or currency exchange rate
future, interest or currency exchange rate option, interest or currency
exchange rate cap or other interest or currency rate hedge arrangement, to
or under which such Person is a party or a beneficiary.

<PAGE>

"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than trade liabilities and accrued expenses
incurred in the ordinary course of business and payable not more than 12
months after the incurrence thereof in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person,
(e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (f) unreimbursed drawings under letters of credit
and (g) for the purposes of subsection 8.2 (other than clauses (a) through
(f) and (h) thereof) and 9(e) only, all obligations or liabilities under
Hedging Agreements, PROVIDED that for the purposes of subsection 9(e), the
"principal amount" of the obligations of such Person in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Person would be required to pay
if such Hedging Agreement were terminated at such time. For the purposes
of any financial calculation hereunder, the amount of any Indebtedness at
any date shall be the principal or similar primary amount of such
obligation on such date, including capitalized interest (i.e., indebtedness
issued in lieu of cash payment of interest or interest on which interest is
accruing) and capitalized payment obligations with respect thereto, in each
such case, as of such date.

"INDENTURES": as defined in subsection 5.20.

"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.

"INSOLVENT": pertaining to a condition of Insolvency.

"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period.

"INTEREST PERIOD": with respect to any Eurodollar Loan:

(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, if available, nine months
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and

(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one,

<PAGE>

two, three, six or, if available, nine months thereafter, as selected
by the Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;

PROVIDED that, all of the foregoing provisions relating to Interest Periods are
subject to the following:

(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;

(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and

(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.

"ISSUING LENDER": Chase or one of its Affiliates or another Lender or
Lenders designated by the Borrower and the Agent.

"KING-O-MATIC": King-O-Matic Industries Limited, a Canadian
subsidiary of the Borrower.

"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to subsection.

"L/C PARTICIPANTS": the collective reference to all the Lenders
holding Commitments other than the Issuing Lender.

"LETTERS OF CREDIT": as defined in subsection.

"LEVERAGE RATIO": as of the end of each fiscal quarter of the
Borrower, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Consolidated Total Indebtedness as of such
date to Consolidated EBITDA for the four fiscal quarters of the Borrower
then ended.

"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any

<PAGE>

preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever which makes any property or
asset available for the payment or performance of any liability in priority
to the payment or performance of ordinary, unsecured creditors (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).

"LOAN": any loan made by any Lender pursuant to this Agreement.

"LOAN DOCUMENTS": this Agreement, the Notes, the Applications and the
Security Agreements.

"LOAN PARTIES": the Borrower and each Subsidiary which is a party to
a Loan Document.

"MASCOT": Mascot Truck Parts Inc., a Canadian subsidiary of the
Borrower.

"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement, any of the Notes or any Application or
any of the other Loan Documents or the material rights or remedies of the
Agent or the Lenders hereunder or thereunder.

"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

"NEW LENDING OFFICE": as defined in subsection 4.12(b).

"NET PROCEEDS": with respect to any asset sale, the net amount equal
to the aggregate amount received in cash (including any cash received by
way of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so received)
in connection with such asset sale MINUS the sum of (i) the principal
amount of Indebtedness which is secured by any such asset (other than
Indebtedness assumed by the purchaser of such asset) and which is required
to be, and is, repaid in connection with the sale or disposition thereof
(other than Indebtedness outstanding hereunder), (ii) the reasonable fees
(including, without limitation, reasonable attorneys' fees), commissions
and other out-of-pocket expenses (as evidenced by supporting documentation
provided to the Agent and as reasonably approved by the Agent) incurred by
the Borrower in connection with such asset sale

<PAGE>

and (iii) federal, state and local taxes incurred by the Borrower in
connection with such sale, whether payable at such time or thereafter.

"1994 SENIOR SUBORDINATED NOTES": the senior subordinated notes due
2004, in aggregate principal amount at any time outstanding not exceeding
$120,000,000, issued by the Borrower pursuant to the Indenture dated as of
August 2, 1994.

"1995 SENIOR SUBORDINATED NOTES": the senior subordinated notes due
2004, in aggregate principal amount at any time outstanding not exceeding
$40,000,000, issued by the Borrower pursuant to the Indenture dated as of
June 1, 1995.

"NON-EXCLUDED TAXES": as defined in subsection 4.12(a).

"NON-U.S. LENDER": as the context requires, as defined in subsections
4.12(b) and 11.6(d).

"NOTES": the collective reference to the Revolving Credit Notes and
the Swing Line Note.

"PARTICIPANT": as defined in subsection 11.6(b).

"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.

"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

"PROHIBITED TRANSACTION": a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA, respectively.

"PROPERTIES": as defined in subsection 5.16.

"REGISTER": as defined in subsection 11.6(d).

"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.

<PAGE>

"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subSection for amounts drawn under
Letters of Credit.

"RELATED PERSON": (a) any Person who controls, is controlled by or
under common control with such Excluded Person; PROVIDED, HOWEVER, that for
purposes of this definition "control" means the beneficial ownership of
more than 50% of the total voting power of a Person normally entitled to
vote in the election of directors, managers or trustees, as applicable of a
Person and (b) as to any natural person, (i) such person's spouse, parents
and descendants (whether by blood or adoption, and including stepchildren)
and the spouses of any of such natural persons and (ii) any corporation,
partnership, trust or other Person in which no one has any interest
(directly or indirectly) except for any of such natural person, such
spouse, parents and descendants (whether by blood or adoption, and
including stepchildren) and the spouses of any of such natural persons.

"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.

"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 4043.

"REQUIRED LENDERS": at any time, Lenders holding more than 50% of the
Commitments in effect at such time or, if the Commitments have then
terminated or are no longer in effect, the then outstanding Loans and the
then outstanding participations, or potential participations, in the
outstanding L/C Obligations (including, in the case of the Issuing Lender,
its remaining direct interest therein).

"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

"RESPONSIBLE OFFICER": the chief executive officer, the president or
the chief financial officer of the Borrower.

"REVOLVING CREDIT LOANS": as defined in Section 2.1.

"REVOLVING CREDIT NOTES": as defined in Section 4.2(e).

"SECURITY AGREEMENTS": the collective reference to the Guarantee and
Collateral Agreement, any leasehold mortgages and all other security
documents hereafter delivered to the Agent granting a Lien on any asset or
assets of any Person to secure the obligations and liabilities of the
Borrower hereunder or under any of the

15
<PAGE>

other Loan Documents or to secure any guarantee of any such obligations and
liabilities.

"SENIOR SUBORDINATED NOTES": the collective reference to the 1994
Senior Subordinated Notes and the 1995 Senior Subordinated Notes.

"SENIOR SUBORDINATED NOTE INDENTURE": each of the respective
Indentures described in the definitions of "1994 Senior Subordinated Notes"
and "1995 Senior Subordinated Notes".

"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

"SOLVENT" and "SOLVENCY": with respect to any Person on a particular
date, the condition that on such date, (a) the fair value of the property
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small amount of capital.

"SPECIFIED PREFERRED STOCK": any preferred stock of the Borrower (as
designated in the Borrower's charter documents in effect on the date
hereof) issued to common stockholders from time to time (i) compliance with
the terms of which would not violate or be inconsistent with any of the
provisions of this Agreement and (ii) which does not have any mandatory
payment, dividend, redemption or similar covenants.

"STANDBY LETTER OF CREDIT": as defined in paragraph.

"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

"SWING LINE COMMITMENT": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 2.4.

16
<PAGE>

"SWING LINE LENDER": Chase in its capacity as provider of the Swing
Line Loans.

"SWING LINE LOANS": as defined in subsection 2.4.

"SWING LINE NOTE": as defined in subsection 2.4.

"TERMINATION DATE": December 31, 2001.

"TRANSFEREE": as defined in subsection 11.6(f).

"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.

"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.

1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.

(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.

(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF CREDIT COMMITMENTS

2.1 COMMITMENTS. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make revolving credit loans (each a "REVOLVING
CREDIT LOAN", collectively, "REVOLVING CREDIT LOANS") to the Borrower from time
to time during the Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Lender's Commitment Percentage of the
then outstanding L/C Obligations and Swing Line Loans (after giving effect to
any repayment of Swing Line Loans at the time of the making of such Revolving
Credit Loans), does not exceed the amount of such Lender's Commitment.

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(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsections 2.2 or
4.4, as applicable, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Termination Date.
During the Commitment Period the Borrower may use the Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.

2.2 PROCEDURE FOR BORROWING. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, PROVIDED that the
Borrower shall give the Agent, except as expressly set forth in subsections 3.4
and 4.8, irrevocable notice (which notice must be received by the Agent prior to
11:00 A.M., New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Loans are to be initially
Eurodollar Loans or (b) one Business Day prior to the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be entirely or
partly of Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Periods therefor. Each borrowing
under the Commitments shall be in an amount equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof (or, if the then aggregate Available
Commitments are less than $500,000, such lesser amount). Upon receipt of any
such notice from the Borrower, the Agent shall promptly notify each Lender
thereof. Each Lender will make the amount of its pro rata share of each
borrowing available to the Agent for the account of the Borrower at the office
of the Agent specified in subsection 11.2 prior to 1:00 P.M., New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Agent, PROVIDED that, the Borrower shall give the Agent and the
Lenders irrevocable notice by 11:00 A.M. New York City time one Business Day
before the requested Borrowing Date, if the Closing Date is a Borrowing Date,
and on such date each Lender shall make such funds available to the Agent prior
to 10:00 A.M., New York City time. Such borrowing will then be made available
to the Borrower by the Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.

2.3 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower shall have
the right, upon not less than five Business Days' notice to the Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments. Any such reduction shall be in an amount equal to $1,000,000 or a
whole multiple of $1,000,000 in excess thereof and shall reduce permanently the
applicable Commitments then in effect, PROVIDED that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the aggregate principal amount of the Revolving Credit
Loans then outstanding, when added to the then outstanding L/C Obligations and
the then outstanding Swing Line Loans, would exceed the Commitments then in
effect.

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2.4 SWING LINE COMMITMENTS. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (individually, a
"SWING LINE LOAN"; collectively, the "SWING LINE LOANS") to the Borrower from
time to time during the Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed $3,000,000, PROVIDED that at no time may
the sum of the then outstanding Swing Line Loans, Revolving Credit Loans and L/C
Obligations exceed the Commitments then in effect. Amounts borrowed by the
Borrower under this subsection 2.4 may be repaid and, through but excluding the
Termination Date, reborrowed. All Swing Line Loans shall be made as ABR Loans
and shall not be entitled to be converted into Eurodollar Loans. The Borrower
shall give the Swing Line Lender irrevocable notice (which notice must be
received by the Swing Line Lender prior to 3:00 p.m., New York City time) on the
requested Borrowing Date specifying the amount of the requested Swing Line Loan
which shall be in an amount equal to $250,000 or a whole multiple of $50,000 in
excess thereof. The proceeds of the Swing Line Loan will be made available by
the Swing Line Lender to the Borrower at the office of the Swing Line Lender by
crediting the account of the Borrower at such office with such proceeds in
Dollars.

(b) The Borrower agrees that, upon the request to the Agent by the
Swing Line Lender made on or prior to the Closing Date or in connection with any
assignment pursuant to subsection 11.6, to evidence the Swing Line Loans the
Borrower will execute and deliver to the Swing Line Lender a promissory note
substantially in the form of Exhibit A-3, with appropriate insertions (as the
same may be amended, supplemented, replaced or otherwise modified from time to
time, the "SWING LINE NOTE"), payable to the order of the Swing Line Lender and
representing the obligation of the Borrower to pay the amount of the Swing Line
Commitment or, if less, the unpaid principal amount of the Swing Line Loans made
to the Borrower, with interest thereon as prescribed in subsection 4.6. The
Swing Line Note shall (a) be dated the Closing Date, (b) be stated to mature on
the Termination Date and (c) provide for the payment of interes