ELEVENTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT AND
AMENDMENT AGREEMENT
This Eleventh Amendment to Amended and Restated Credit Agreement and
Amendment Agreement (this "Amendment" or this "Eleventh Amendment") is entered
into on May 16, 2002 between Bank One, Michigan, fka NBD Bank ("Bank One"), PNC
Bank, National Association (collectively with Bank One, the "Banks"), with Bank
One as agent for the Banks (the "Agent"), Owosso Corporation ("Owosso"), Ahab
Investment Company, DWZM, Inc. ("DWZM"), SMX Liquidation Corp., Inc., f/k/a
Snowmax Incorporated ("Snowmax"), GBMC, Inc. ("GBMC"), Stature Electric, Inc.
("Stature"), Owosso Motor Group, Inc., AAC Liquidation Corp., Inc., f/k/a Astro
Air Coils, Inc. ("Astro Air"), Motor Products-Ohio Corporation, Motor
Products-Owosso Corporation and Owosso-Delaware, Inc., f/k/a Xxxxxx Company
("Xxxxxx") (collectively, the "Borrowers" or the "Parties" and referred to
individually, collectively and in all combinations as the "Parties").
RECITALS
This Amendment is based on the following recitals ("Recitals"), which
are incorporated into and made a part of this Amendment:
1. The Banks and the Borrowers are parties to an Amended and Restated
Credit Agreement dated as of January 22, 1999, as amended by a First Amendment
to Amended and Restated Credit Agreement dated as of June 14, 2000, a Second
Amendment to Amended and Restated Credit Agreement dated as of September 28,
2000, a Third Amendment to Amended and Restated Credit Agreement, Revolving
Credit Note, Amended and Restated Pledge Agreement and Security Agreement dated
effective as of October 29, 2000, a Fourth Amendment to Amended and Restated
Credit Agreement, Revolving Credit Notes and Security Agreement dated as of
November 30, 2000, a Fifth Amendment to Amended and Restated Credit Agreement,
Revolving Credit Notes, Amended and Restated Pledge Agreement and Security
Agreement dated January 24, 2001, an Amendment Agreement dated February 12, 2001
(the "Amendment Agreement"), a Seventh Amendment to Amended and Restated Credit
Agreement dated as of May 9, 2001, an Eighth Amendment to Amended and Restated
Credit Agreement and Amendment Agreement dated as of July 31, 2001, a Ninth
Amendment to Amended and Restated Credit Agreement and Amendment Agreement dated
January 7, 2002, and a Tenth Amendment to Amended and Restated Credit Agreement
and Amendment Agreement dated February 7, 2002 (as amended, the "Loan
Agreement") and two Amended and Restated Revolving Credit Notes dated February
7, 2002 each running in favor of one of the Banks (the "Notes") as well as
various other documents executed previously, simultaneously therewith or
subsequently (all of the foregoing, including the Loan Agreement, are
collectively referred to as the "Loan Documents"). Capitalized terms used but
not defined in this Eleventh Amendment have the same meanings as in the
Amendment Agreement.
2. Each Party acknowledges and agrees that (i) the Amendment Agreement
is in full force and effect; (ii) the Banks have fully performed all of their
obligations under the Loan Documents (including the Amendment Agreement); (iii)
the Banks have no obligation to continue to lend to Borrowers or to forbear from
enforcing their rights and remedies beyond the Forbearance Period; and (iv) the
Banks have made no representations of any nature or kind that funding in any
amount will continue, or that the Forbearance Period will be extended beyond the
expiration thereof.
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3. Each Party represents and warrants to the Banks that it has received
direct and substantial economic benefit from all of the Obligations and that it
will continue to receive direct and substantial economic benefit from such
loans, and from any other loans made or which may be made in the future to any
of the Borrowers.
4. The Parties have advised the Banks that, due to tax law changes,
they will receive tax refunds totaling $4,970,000, of which $4,675,000 has
already been received, which tax refunds are subject to the lien and security
interest given by the Parties in favor of the Agent, for the benefit of the
Banks. The Parties and the Banks have agreed how the tax refunds will be applied
and wish to formalize that agreement.
5. Subject to the terms and conditions of this Eleventh Amendment, and
in reliance on the Parties' agreements, acknowledgments, representations, and
warranties in this Eleventh Amendment, the Banks have agreed to amend the Loan
Documents.
AGREEMENT
Based on the foregoing Recitals (which are incorporated herein
as representations, warranties, acknowledgments and agreements
of the parties, as the case may be) and for other good and
valuable consideration, the receipt and adequacy of which is
mutually acknowledged by the parties hereto, Borrowers and
Banks agree as follows:
A. The Loan Agreement and Amendment Agreement are amended as follows:
(1) The "Commitment" of each of the Banks is hereby permanently
reduced to the following amounts as of the date of this Agreement: for
Bank One, $14,000,000, for PNC, $8,000,000 and collectively
$22,000,000. Any borrowings in excess of the lesser of (a) the
Commitments as in effect from time to time less the total amount of L/C
Outstandings or (b) the Borrowing Base are immediately due and payable.
(2) Section 2.2(d) of the Loan Agreement is amended and restated in
its entirety to read as follows:
"(d) The Commitments will additionally cumulatively reduce by
the following amounts at the following times in accordance with the
terms of this Section 2.2:
Cumulative New
Date Reduction Commitment
---- --------- ----------
On or before
July 1, 2002 $9,000,000 $13,000,00.00
As part of the calculation of the cumulative reduction, the
Commitments will reduce on a dollar for dollar basis by 100% of the
net proceeds (net only of reasonable costs of closing pursuant to
sale terms and conditions acceptable to the Banks in their
reasonable discretion) promptly upon the Borrowers' receipt thereof
of the sale of any of the assets of the Borrowers, including without
limitation the real estate owned by Snowmax and Xxxxxx, and by 100%
the face value of any Letter of Credit or full amount of any cash
deposit related thereto returned to either of the Banks promptly
upon the Borrowers' receipt thereof."
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(3) The definition of "Additional Amount" is added to Section 1.1 of
the Loan Agreement is amended and restated in its entirety to read as
follows:
""Additional Amount" means $16,835,000, less the
following amounts immediately upon the Borrowers' receipt thereof:
100% of the net proceeds (net only of reasonable costs of closing
pursuant to sale terms and conditions acceptable to the Banks in
their reasonable discretion) of the sale of any of the assets of the
Borrowers, including without limitation the real estate owned by
Snowmax and Xxxxxx; and the face value of any Letter of Credit or
full amount of any cash deposit related thereto returned to either
of the Banks."
B. The Notes are amended and restated in their entireties by the
Amended and Restated Revolving Credit Notes in the form of collective Exhibit A
hereto (the "New Notes").
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C. The Borrowers acknowledge that, prior to the date of this Eleventh
Amendment but with their consent, the Agent debited their accounts by $150,000
(to cover payment of the forbearance fee which was due and payable on February
15, 2002) and $138,688.33 (to reimburse the Agent for previously incurred legal
fees). All other legal fees will be paid by the Borrowers within 15 business
days of the submission of an invoice.
D. The Borrowers have indicated to the Banks that they would like the
Banks to consider allowing certain payments to be made to subordinated
creditors, which payments are currently prohibited by the terms of the Loan
Documents and the Forbearance Agreement. The Banks have not agreed that such
payments will be permitted, but have agreed to review any comprehensive proposal
that may be provided by the Borrowers.
E. From and after the date of this Amendment, references in the Loan
Documents (i) to the Loan Agreement are to be treated as referring to the Loan
Agreement, as amended by this Amendment, (ii) to the Notes are to be treated as
referring to the New Notes, and (iii) to "obligations", "Obligations" and
"liabilities" are to be treated as referring to all indebtedness and obligations
referred to in this Amendment or the Loan Documents.
F. Each Borrower expressly acknowledges and agrees that (i) each
Borrower, jointly, jointly and severally, and severally remains liable for any
and all obligations and indebtedness under the Loan Documents and (ii) except to
the extent heretofore or herein released, all collateral security and security
interests, liens, pledges, and mortgages heretofore or hereafter granted the
Banks including, without limitation, such collateral, security interests, liens,
pledges, and mortgages granted under the Loan Documents, extend to and cover all
of each Borrower's obligations to the Banks, now existing or hereafter arising
including, without limitation, those arising in connection with this Amendment
and under all guaranty agreements now or in the future given by any Borrower in
either Bank's favor, each Borrower's present and future obligations to the Banks
under foreign exchange contracts, derivatives or hedging transactions, including
but not limited to interest rate, commodity, currency, or credit swaps or
options that may be provided from time to time by the Banks to the Borrowers,
all of which security interests, liens, pledges, and mortgages are ratified,
reaffirmed, confirmed and approved.
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G. There are no promises or inducements which have been made to any
signatory hereto to cause such signatory to enter into this Eleventh Amendment
other than those which are set forth in this Eleventh Amendment.
H. Reservation of Rights.
(a) The Amendment Agreement grants a limited forbearance until the
expiration of the Forbearance Period on the terms and conditions set forth in
the Amendment Agreement (as amended by this Eleventh Amendment). Except for such
forbearance through the expiration of the Forbearance Period and notwithstanding
anything to the contrary in this Eleventh Amendment or the Amendment Agreement,
all of the Banks' rights and remedies with respect to the Parties are expressly
reserved. Likewise, nothing herein shall be deemed to constitute a waiver of any
default existing as of the date hereof or new Events of Default or defaults or
shall in any way prejudice the rights and remedies of the Banks under the Loan
Documents (including the Amendment Agreement) or applicable law. Further, the
Banks shall have the right to waive any conditions set forth in this Eleventh
Amendment or the Loan Documents, in their sole discretion, and any waiver shall
not prejudice, waive or reduce any other right or remedy which the Banks may
have against the Parties or any of them. However, the Parties agree that no
waiver by the Banks of any right or condition of this Eleventh Amendment or the
Loan Documents shall be effective unless contained in a writing signed by an
authorized agent of the Agent or each of the Banks, as appropriate.
(b) ANYTHING CONTAINED IN THIS ELEVENTH AMENDMENT OR IN ANY OTHER
AGREEMENT TO THE CONTRARY NOTWITHSTANDING, NOTHING CONTAINED IN THIS ELEVENTH
AMENDMENT OR IN ANY OTHER AGREEMENT SHALL IN ANY WAY RESTRICT OR PROHIBIT THE
BANKS' RIGHT TO BLOCK, STOP OR PROHIBIT PAYMENTS TO ANY SUBORDINATED CREDITOR
I. Each Borrower represents and warrants to the Banks that:
(1) (a) The execution, delivery and performance of this Amendment by
each Borrower and all agreements and documents delivered by each
Borrower in connection with this Amendment have been duly authorized by
all necessary corporate or other organizational action and does not and
will not require any consent or approval of its stockholders or
members, violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it or of its articles of incorporation,
articles of organization, or bylaws, or result in a breach of or
constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which any Borrower is a
party or by which it or its properties may be bound or affected.
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(b) No authorization, consent, approval, license, exemption of
or filing a registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary to the valid execution, delivery or
performance by Borrowers of this Amendment and all agreements and
documents delivered in connection with this Amendment.
(c) This Amendment and all agreements and documents delivered by
Borrowers in connection with this Amendment are the legal, valid and
binding obligations of each Borrower enforceable against it in
accordance with the terms thereof.
(2) After giving effect to the amendments contained in this
Amendment, all of the representations and warranties contained in the
Loan Documents are true and correct in all material respects on and as
of the date hereof with the same force and effect as if made on and as
of the date hereof.
(3) Each Borrower's interim financial statements furnished to the
Banks, which have been provided through December 23 2001, fairly
present such Borrower's financial condition as at such dates and the
results of such Borrower's operations for the periods indicated, with
the exception of the fact that inventory values for Snowmax and Astro
Air were collectively overstated by $425,000. The Borrowers'
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis,
and since the date of the last such financial statement there has been
no material adverse change in such financial condition.
(4) Except for the Specified Defaults, such Borrower has duly and
properly performed, complied with and observed each of its covenants,
agreements, and obligations contained in the Loan Documents.
(5) Any party executing this Eleventh Amendment in a representative
capacity on behalf of such Borrower has the authority to execute this
Eleventh Amendment and legally bind such Borrower.
(6) Such Borrower has not assigned any claim, set off or defense to
any individual or entity.
J. This Eleventh Amendment and all of the Exhibits and other written
material delivered by any one or more of the Parties to the Banks in connection
with the transactions contemplated hereby do not contain any statement that is
false or misleading with respect to any material fact and do not omit to state a
material fact necessary in order to make the statements therein not false or
misleading. There is no additional fact of which any Party is aware that has not
been disclosed in writing to the Banks that materially affects adversely or, so
far as each Party can reasonably foresee, will materially affect adversely, any
Party's financial condition or business prospects.
K. The terms and provisions of this Amendment amend, add to and
constitute a part of the Loan Agreement, the Amendment Agreement and the other
Loan Documents. Except as expressly modified and amended by the terms of this
Amendment, all of the other terms and conditions of the Loan Agreement, the
Amendment Agreement and the other Loan Documents remain in full force and effect
and are ratified, reaffirmed, confirmed, and approved.
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L. No failure or delay on the part of the Agent or either of the Banks
in the exercise of any power or right, and no course of dealing between any one
or more of the Parties and the Agent or either of the Banks, operates as a
waiver of such power or right, nor shall any single or partial exercise of any
power or right preclude other or further exercise thereof or the exercise of any
other power or right. The remedies provided for herein are cumulative and not
exclusive of any remedies which may be available to the Agent or either of the
Banks at law or in equity. No notice to or demand on any Party not required
hereunder or under the Loan Documents entitles any such Party to any other or
further notice or demand in similar or other circumstances, or waives the right
of the Agent or either of the Banks to any other or further action in any
circumstances without notice or demand. Any waiver of any provision of this
Eleventh Amendment or the Loan Documents and any consent to any departure by any
one or more of the Parties from the terms of any provision of this Eleventh
Amendment or the Loan Documents is effective only if in writing signed by an
authorized officer of the Agent or the Banks, as appropriate, and only in the
specific instance and for the specific purpose for which given.
M. All agreements, representations and warranties made in this Eleventh
Amendment (and all agreements referred to or incorporated herein) survive the
execution of this Eleventh Amendment (and all documents and agreements referred
to or incorporated herein). Notwithstanding anything in this Eleventh Amendment
(or any documents or agreements referred to or incorporated herein) to the
contrary, no investigation or inquiry by the Agent or the Banks (including by
their agents) with respect to any matter which is the subject of any
representation, warranty, covenant or other agreement set forth herein or
therein is intended, nor shall it be interpreted, to limit, diminish or
otherwise affect the full scope and effect of any such representation, warranty,
covenant or other agreement. All terms, covenants, agreements, representations
and warranties of each Party made herein (or in any documents or agreements
referred to or incorporated herein), or in any certificate or other document
delivered or to be delivered pursuant hereto, are deemed to be material and to
have been relied upon by the Agent and the Banks, notwithstanding any
investigation heretofore or hereafter made by the Agent or the Banks or their
agents.
N. The execution and delivery of this Eleventh Amendment (and all
agreements and documents referred to herein) does not impair or affect any other
security (by endorsement or otherwise) for the Obligations, or any one or more
of the Parties' other obligations to the Banks. No security taken before or
after as security for the Obligations impairs or affects this Eleventh Amendment
(or any agreement or document referred to herein). All present and future
additional security is to be considered as cumulative security.
O. This Eleventh Amendment and the Exhibit hereto constitute the
Parties' and the Banks' entire understanding with respect to the subject matter
hereof. Modifications or amendments to this Eleventh Amendment must be in
writing and signed by the party to be charged in order to be effective. This
Eleventh Amendment is governed by the internal laws of the State of Michigan
(without regard to conflicts of law principles). This Eleventh Amendment is
binding on each Party and their respective successors, assigns, heirs, and
personal representatives and shall inure to the Banks' benefit and the benefit
of their successors and assigns. If any provision of this Eleventh Amendment
conflicts with any applicable statute or law, or is otherwise unenforceable,
such offending provision is null and void only to the extent of such conflict or
unenforceability, and is deemed separate from and does not invalidate any other
provision of this Eleventh Amendment.
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P. This Eleventh Amendment is being entered into among competent
persons, who are experienced in business and represented by counsel, and has
been reviewed by the Parties and their counsel, if any. Therefore, any ambiguous
language in this Eleventh Amendment will not necessarily be construed against
any particular party as the drafter of such language.
Q. If there is an express conflict between the terms of this Amendment
and the terms of the Loan Agreement or the other Loan Documents, the terms of
this Amendment govern and control.
R. This Amendment may be executed in any number of counterparts with
the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one instrument.
S. STATUTE OF FRAUDS. THIS ELEVENTH AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE BANKS AND THE PARTIES WITH REGARD TO THE SUBJECT MATTER
HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. ALL PRIOR AND CONTEMPORANEOUS ORAL
AGREEMENTS, IF ANY, BETWEEN EITHER OF THE BANKS OR THE AGENT, ON THE ONE HAND,
AND ANY ONE OR MORE OF THE PARTIES, ON THE OTHER HAND, ARE MERGED INTO THIS
ELEVENTH AMENDMENT AND SHALL NOT SURVIVE THE EXECUTION OF THIS ELEVENTH
AMENDMENT.
T. WAIVER OF JURY TRIAL.
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BORROWERS AND BANKS EACH ACKNOWLEDGE THAT THE RIGHT TO A TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THE RIGHT MAY BE WAIVED. BORROWERS AND
BANKS EACH KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND WITHOUT COERCION, WAIVE ALL
RIGHTS TO TRIAL BY JURY OF ALL DISPUTES BETWEEN THEM. NEITHER OF THE BANKS NOR
ANY BORROWER SHALL BE DEEMED TO HAVE GIVEN UP THIS WAIVER OF JURY TRIAL UNLESS
THE PARTY CLAIMING THAT THIS WAIVER HAS BEEN RELINQUISHED HAS A WRITTEN
INSTRUMENT SIGNED BY THE OTHER PARTY STATING THAT THIS WAIVER HAS BEEN GIVEN UP.
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U. RELEASE. AS OF THE DATE HEREOF EACH OF THE BORROWERS REPRESENTS AND
WARRANTS THAT THEY ARE AWARE OF, AND POSSESS, NO CLAIMS OR CAUSES OF ACTION
AGAINST EITHER OF THE BANKS OR THE AGENT. NOTWITHSTANDING THIS REPRESENTATION
AND AS FURTHER CONSIDERATION FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, EACH
OF THE BORROWERS INDIVIDUALLY, JOINTLY, SEVERALLY, AND JOINTLY AND SEVERALLY, IN
EVERY CAPACITY, INCLUDING BUT NOT LIMITED TO, AS SHAREHOLDERS, OFFICERS,
PARTNERS, DIRECTORS, INVESTORS, OR CREDITORS OF ANY ONE OR MORE OF THE
BORROWERS, EACH OF ITS EMPLOYEES, AGENTS, EXECUTORS, SUCCESSORS AND ASSIGNS,
HEREBY RELEASES EACH OF THE BANKS AND THE AGENT, THEIR OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS
FROM ANY LIABILITY, CLAIM, RIGHT OR CAUSE OF ACTION THAT NOW EXISTS, OR
HEREAFTER ARISES, WHETHER KNOWN OR UNKNOWN, ARISING FROM OR IN ANY WAY RELATED
TO FACTS IN EXISTENCE AS OF THE DATE HEREOF. BY WAY OF EXAMPLE AND NOT
LIMITATION, THE FORGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO ACTIONS TAKEN
OR OMITTED TO BE TAKEN BY EITHER OF THE BANKS OR THE AGENT UNDER THE LOAN
DOCUMENTS, THE BUSINESS RELATIONSHIP WITH EITHER OF THE BANKS OR THE AGENT AND
ALL OTHER OBLIGATIONS OF ANY NATURE OR KIND OF ANY ONE OR MORE OF THE BORROWERS,
ANY ORAL AGREEMENTS OR UNDERSTANDINGS (ACTUAL OR ALLEGED), ANY BANKING
RELATIONSHIPS THAT ANY ONE OR MORE OF THE BORROWERS HAS OR MAY HAVE HAD WITH
EITHER OF THE BANKS AT ANY TIME AND FOR ANY REASON INCLUDING, BUT NOT LIMITED
TO, DEMAND DEPOSIT ACCOUNTS, OR OTHERWISE, BUT DOES NOT INCLUDE THE PARTIES'
FUTURE RIGHTS TO RECEIVE LOANS UNDER THE TERMS OF THE LOAN DOCUMENTS, AS AMENDED
BY THIS AGREEMENT, OR AS TO AMOUNTS ON DEPOSIT WITH EITHER OF THE BANKS OR STOCK
CERTIFICATES PLEDGED TO AND HELD BY EITHER OF THE BANKS AS COLLATERAL FOR THE
OBLIGATIONS.
BANK ONE, MICHIGAN, f/k/a PNC BANK, NATIONAL ASSOCIATION
NBD BANK, individually and as Agent
By: /s/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------ -------------------
Name: Xxxxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxx
Title: First Vice President Title: Vice President
OWOSSO CORPORATION AHAB INVESTMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
[Signatures continued on following page]
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[Signatures continued from previous page]
DWZM, INC. SMX LIQUIDATION CORP., INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
GBMC, INC. STATURE ELECTRIC, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: Vice-President
OWOSSO MOTOR GROUP, INC. AAC LIQUIDATION CORP., INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
OWOSSO-DELAWARE, INC. MOTOR PRODUCTS-OHIO
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: Vice-President
MOTOR PRODUCTS-OWOSSO
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice-President
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