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Champion Parts Announces Agreement with Vendors

10 July 1997

Champion Parts Announces Agreement with Vendors

    GLEN ELLYN, Ill., July 10 -- Champion Parts, Inc.
announced today that the company has reached an agreement with
certain of its trade creditors to restructure approximately $3.4 million in
past due obligations.  Under the terms of this agreement, Champion Parts made
a cash distribution in the amount of 10% of the total restructured
indebtedness, issued approximately $1.0 million in non-interest bearing
promissory notes, and issued other obligations entitling the trade creditors
to a portion of the company's defined free cash flow in years 2005 to 2009 of
up to an aggregate of approximately $1.5 million.
    The company also announced that it settled a deferred compensation
agreement with a former CEO of the company.  Under the agreement, Champion
Parts has received $195,000 in cash and a release of the deferred compensation
obligation from the former CEO in exchange for assignment of two policies
insuring the former CEO.
    The company also said it is continuing discussions with other unsecured
creditors to restructure the associated indebtedness upon terms substantially
the same as the settlement with the trade creditors.
    Champion Parts also said it is in discussion with its bank group on an
interim financing agreement.
    Champion Parts, Inc. remanufactures fuel systems, front wheel drive
assembly components and underhood electrical and mechanical products for the
passenger car, agricultural and heavy duty truck parts aftermarket.

SOURCE  Champion Parts, Inc.