VALLEY INDUSTRIES LLC, POS AM, 1999-04-26

VALLEY INDUSTRIES LLC
POS AM, 1999-04-26

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<PAGE> 1

As filed with the Securities and Exchange Commission on April 26, 1999

REGISTRATION NO. 333-49011
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------

POST-EFFECTIVE AMENDMENT NO. 1

TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------

ADVANCED ACCESSORY SYSTEMS, LLC
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3714 13-3848156
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

-------------------------
12900 HALL ROAD, SUITE 200, STERLING HEIGHTS, MICHIGAN 48313
(810) 997-2900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
AAS CAPITAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 6719 13-3969422
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

-------------------------
12900 HALL ROAD, SUITE 200, STERLING HEIGHTS, MICHIGAN 48313
(810) 997-2900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
AAS HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 6719 38-3319226
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

-------------------------
12900 HALL ROAD, SUITE 200, STERLING HEIGHTS, MICHIGAN 48313
(810) 997-2900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
SPORTRACK, LLC
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3714 13-3848154
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

-------------------------
12900 HALL ROAD, SUITE 200, STERLING HEIGHTS, MICHIGAN 48313
(810) 997-2900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------
VALLEY INDUSTRIES, LLC
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3714 38-3363492
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

VALTEK, LLC
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3714 38-3402070
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

TERENCE C. SEIKEL

CHIEF EXECUTIVE OFFICER
12900 HALL ROAD, SUITE 200
STERLING HEIGHTS, MICHIGAN 48313
(810) 997-2900
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
-------------------------

With a copy to:

JAMES M. LURIE, ESQ. AND ILAN S. NISSAN, ESQ.

O'SULLIVAN GRAEV & KARABELL, LLP
30 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10112
(212) 408-2400
-------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
-------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2

ADVANCED ACCESSORY SYSTEMS, LLC
AAS CAPITAL CORPORATION
------------------------

CROSS REFERENCE SHEET

PURSUANT TO REGULATION S-K, ITEM 501(B),
SHOWING LOCATION OF INFORMATION REQUIRED BY ITEMS OF FORM S-4

<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION LOCATION OF CAPTION IN PROSPECTUS
-------------------------------- ---------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus..... Facing Page of Registration Statement;
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus.............................. Inside Front and Outside Back Cover Pages
of Prospectus; Available Information
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information.............. Prospectus Summary; Risk Factors; Selected
Consolidated Financial Information
4. Terms of the Transaction................... Prospectus Summary; Description of the
Notes
5. Pro Forma Financial Information............ *
6. Material Contracts with the Company Being
Acquired................................... *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
be Underwriters............................ Plan of Distribution
8. Interests of Named Experts and Counsel..... *
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ *
10. Information With Respect to S-3
Registrants................................ *
11. Incorporation of Certain Information by
Reference.................................. *
12. Information With Respect to S-2 or S-3
Registrants................................ *
13. Incorporation of Certain Information by
Reference.................................. *
14. Information With Respect to Registrants
Other Than S-2 or S-3 Registrants.......... Prospectus Summary; Risk Factors; Selected
Consolidated Financial Information;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Description of the
Credit Facilities
15. Information With Respect to S-3
Companies..................................
16. Information With Respect to S-2 or S-3
Companies.................................. *
17. Information With Respect to Companies Other
Than S-2 or S-3 Companies.................. *
18. Information if Proxies, Consents or
Authorization Are to be Solicited.......... *
19. Information if Proxies, Consents or
Authorizations Are Not to be Solicited, or
in an Exchange Offer....................... Management; Ownership of Capital Stock;
Certain Transactions
</TABLE>

- -------------------------
* Not applicable or answer is in the negative.
<PAGE> 3

PROSPECTUS

$125,000,000

ADVANCED ACCESSORY SYSTEMS, LLC

AAS CAPITAL CORPORATION

9 3/4% SERIES B SENIOR SUBORDINATED NOTES DUE 2007

Advanced Accessory Systems, LLC ("AAS") and AAS Capital Corporation have
issued $125,000,000 aggregate principal amount of our 9 3/4% Series B Senior
Subordinated Notes due 2007 (the "Notes"). The Notes are direct obligations of
both of us.

We will pay interest on the Notes, in arrears, in cash on April 1 and
October 1. We began paying interest on the Notes on October 1, 1998. We may
redeem the Notes subject to certain limitations described in this Prospectus.

The Notes are unsecured and are subordinated in right of payment to all of
our existing and future senior debt. Our domestic subsidiaries as of this date
guarantee the Notes. The guarantees of our domestic subsidiaries are unsecured
obligations and are subordinated in right of payment for all of their existing
and future senior debt. Our foreign subsidiaries do not guarantee the Notes.

We will not receive any proceeds from the sale of the Notes.

We prepared this Prospectus for use by Chase Securities Inc. ("CSI") in
connection with offers and sales in market-making transactions. CSI may act as a
principal or agent in these market-making transactions. Such sales will be made
at prices related to prevailing market prices at the time of sale. See "Plan of
Distribution."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR INFORMATION YOU SHOULD CONSIDER
BEFORE INVESTING IN THE NOTES.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

The date of this Prospectus is [April , 1999]

<PAGE> 4

MARKET DATA USED THROUGHOUT THIS PROSPECTUS WAS OBTAINED THROUGH OUR
RESEARCH, SURVEYS OR STUDIES PURCHASED BY US OR THE INITIAL PURCHASERS (AS
DEFINED). THE RESEARCH WAS ALSO CONDUCTED BY THIRD PARTIES OR OBTAINED FROM
INDUSTRY OR GENERAL PUBLICATIONS. WE HAVE NOT INDEPENDENTLY VERIFIED MARKET DATA
PROVIDED BY THIRD PARTIES OR INDUSTRY OR GENERAL PUBLICATIONS. SIMILARLY,
INTERNAL COMPANY SURVEYS, WHICH WE BELIEVE TO BE RELIABLE, HAVE NOT BEEN
VERIFIED BY ANY INDEPENDENT SOURCES.

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

FORWARD LOOKING STATEMENTS

SOME OF THE STATEMENTS CONTAINED IN THIS PROSPECTUS DISCUSS FUTURE
EXPECTATIONS, CONTAIN PROJECTIONS OR RESULTS OF OPERATIONS AND FINANCIAL
CONDITION OR STATE OTHER "FORWARD-LOOKING" INFORMATION. THE FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY THE STATEMENTS. THE FORWARD-LOOKING INFORMATION IS BASED ON
VARIOUS FACTORS AND WAS DERIVED FROM USING NUMEROUS ASSUMPTIONS. IMPORTANT
FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO BE MATERIALLY DIFFERENT FROM THE
FORWARD-LOOKING STATEMENTS ARE DISCLOSED UNDER THE HEADING "RISK FACTORS" AND
THROUGHOUT THIS PROSPECTUS.

2
<PAGE> 5

AVAILABLE INFORMATION

To register the Notes, we filed a Registration Statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act"). This Prospectus does not contain complete information about us, nor does
it contain all of the information contained in the Registration Statement. For
information about the contracts, agreements and other documents we refer to in
this Prospectus, you should consult the Exhibits to the Registration Statement.

You may review the Registration Statement without charge at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048. You may get your own copy at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, for a fee. You may inspect the materials contained in the
Registration Statement on the Internet at http://www.sec.gov.

We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and we will
file reports and other information with the Commission. You may inspect or
obtain a copy of such materials filed by us with the Commission at the offices
listed above.

If we cease to be subject to the reporting requirements of the Exchange
Act, we have agreed that, as long as the Notes remain outstanding, we will file
with the Commission and give holders of the Notes copies of the financial
information that would have been contained in annual reports and quarterly
reports, that we would have been required to file with the Commission. The
financial information will include annual reports containing consolidated
financial statements, together with an opinion expressed by an independent
accounting firm, as well as quarterly reports containing unaudited condensed
consolidated financial statements for the first three quarters of each fiscal
year. We will also make the reports available to prospective purchasers of the
Notes, securities analysts and broker-dealers upon their request.

3
<PAGE> 6

PROSPECTUS SUMMARY

The following summary highlights selected information from this Prospectus
and may not contain all of the information that is important to you. This
Prospectus includes specific terms of the Notes we sold, as well as information
regarding our business, certain recent transactions entered into by us and
detailed financial data. We encourage you to read this Prospectus in its
entirety. Unless otherwise indicated, the words "Company", "we" "ours", and "us"
refer to Advanced Accessory Systems, LLC and its subsidiaries, including AAS
Capital Corporation.

Our subsidiaries include the following:

- SportRack, LLC ("SportRack" or "SportRack, LLC").

- SportRack International, Inc. ("SportRack International").

- Brink International B.V. ("Brink" or, "Brink International, B.V.").

- Valley Industries, LLC ("Valley" or, "Valley Industries, LLC").

- ValTek, LLC ("ValTek" or, "ValTek, LLC").

- AAS Capital Corporation ("Capital Corp." or "AAS Capital Corporation").

THE COMPANY

GENERAL

We are one of the world's largest suppliers of towing and rack systems and
related accessories for the automotive original equipment manufacturer ("OEM")
market and the automotive aftermarket. Our products include a complete line of
towing systems including accessories such as trailer balls, ball mounts,
electrical harnesses, safety chains and locking hitch pins. We also make rack
systems and accessories which can be installed on vehicles to carry items such
as bicycles, skis, luggage, surfboards and sailboards. In 1998, approximately
45% of our net sales were generated from products sold for light trucks. For the
year ended December 31, 1998, net sales and EBITDA (as defined), were $290.1
million and $38.4 million, respectively.

COMPETITIVE ADVANTAGES

Leading Global Market Position. Based on our knowledge of our industry, we
believe that we are one of the world's largest suppliers of towing systems and
of rack systems. Based on our knowledge of our industry, we believe that we are;

- The largest supplier of towing systems in Europe.

- The largest supplier of towing systems to automotive OEMs in North
America.

- The second largest supplier of towing systems to the aftermarket in North
America.

- One of the two largest suppliers of rack systems to automotive OEMs in
North America.

We have 25 engineering, manufacturing and distribution facilities
strategically located in North America and Europe. By virtue of our size and
global presence, we believe that we benefit from several competitive advantages,
including the ability to:

- Satisfy local design, production, quality and timing requirements of
global OEMs.

- Provide "one-stop shopping" for customers' product and service
requirements.

- Optimize plant production.

- Maximize our raw material purchasing power.

- Spread our selling, administrative and product development expenses over
a large base of net sales.

- Develop and maintain state-of-the-art production facilities.

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<PAGE> 7

Strong Relationships with Diverse Customer Base. We have an established
position as a Tier 1 supplier of towing and/or rack systems to most of the OEMs
manufacturing in North America and/or Europe, including DaimlerChrysler, General
Motors, Toyota, Opel, Volvo, Isuzu, Ford, BMW, Subaru, Fiat, Mitsubishi, Nissan,
Volkswagen, SEAT, Skoda, Daiwoo and Kia. In our case, "Tier 1" means that we
supply our products directly to the manufacturer of the vehicle. We supply
DaimlerChrysler with substantially all its North American towing systems and
rack systems and accessories. We also supply General Motors with approximately
50% of its towing and rack system requirements. Tier 1 status and strong
customer relationships are important elements in achieving continued profitable
growth because, as OEMs narrow their supplier bases, well regarded, existing
suppliers have an advantage in gaining new contracts. As OEM relationships turn
into strategic partnerships, Tier 1 suppliers like us with system integration
capabilities have an advantage in retaining existing contracts as well as
participating in the design phase for new vehicles, which is integral to
becoming a supplier for such new vehicles. We are also a leading supplier of
towing and rack systems to automotive aftermarket wholesalers, retailers and
installers, such as U-Haul, Pep Boys, Balkamp, Advance Auto Parts, Coast
Distribution Systems, Discount Auto Parts, Ace Hardware, Norauto, Brezan,
Feuvert and Canadian Tire.

Comprehensive Product Line. We advertise ourselves as a leading supplier of
a growing range of products and services. By offering over 2,000 towing system
models, our products fit virtually every light vehicle produced in North America
and Europe. We are one of a limited number of European manufacturers with such a
broad product line that also satisfies European Community ("EC") regulatory
safety standards. We believe that competitors whose products do not satisfy such
standards face substantial design and testing costs to offer a comparable
product line that meets these safety standards. We provide OEMs with fixed rack
systems for approximately half of the light truck models produced in North
America that utilize vehicle-specific fixed racks. We believe that our broad
product offerings also facilitate strategic partnerships with automotive
aftermarket wholesalers, retailers and installers.

Design and Engineering Expertise. We have an engineering and research and
development staff that develops new products and processing technologies. We
work directly with OEM designers to simplify vehicle assembly and reduce vehicle
cost and weight. We are responsible for many industry innovations, including
lighter, less obtrusive, round tube towing hitches as well as push button and
pull lever stanchions on fixed rack systems. We believe that our design and
engineering capabilities provide significant value to our customers by:

- Shortening OEM new product development cycles.

- Lowering OEM manufacturing costs.

- Providing technical expertise.

- Permitting aftermarket customers to maintain lower inventory levels.

We believe that our design innovations have helped to produce products that
are durable and easy to install.

High Quality, Low Cost Manufacturing Position. We believe that we are one
of the highest quality, lowest cost suppliers of towing and rack systems in
North America and Europe. We have received numerous quality and performance
awards, including:

- DaimlerChrysler's Gold Pentastar Award.

- Ford's Q-1 Award.

- Toyota's Distinguished Supplier Award.

- Nissan's Superior Supplier Performance Award.

Supplier quality systems are currently being standardized across OEMs
through the ISO-9000 and QS-9000 programs. We have achieved ISO-9000 or QS-9000
certification for 11 of our 20 manufacturing and engineering facilities, and we
are in the process of obtaining certification for other of our facilities. Our
low cost position is the result of our strict cost controls and continuous
improvement programs. OEMs typically

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<PAGE> 8

prefer stable suppliers who can generate productivity gains that can be shared
to reduce their costs. Our low cost position is closely integrated with our
quality driven manufacturing operations. Our low cost position allows us to
profitably deliver high quality, easy to install and competitively priced
components on a just-in-time basis. Our focus on low cost manufacturing also
provides benefits when selling products to the less price sensitive aftermarket.

BUSINESS STRATEGY

Our objective is to strengthen our position as a leading global supplier of
automotive exterior accessories. To accomplish our goals, we intend to pursue
the following strategies:

Increase Global Market Share. Our plan to increase our global market share
is as follows:

- Attract international customers by having operations in both North
America and Europe.

- Make newly acquired product lines available to our current customers.

- Continually develop new and more profitable products which we can sell to
our existing customers and use to attract new customers.

Maintain and Enhance Strong Customer Relationships. We intend to strengthen
and expand our relationships with global automotive OEMs and aftermarket
customers by:

- Continuing to develop new OEM and aftermarket products.

- Building on our position as a low cost supplier of quality accessory
products.

- Offering new products to our existing customers.

- Working with aftermarket customers to develop new marketing strategies.

Increase Operating Efficiencies. We believe we can increase profits through
inter-company cooperation including:

- Realizing economies of scale from the combined purchasing power of a
larger company.

- Achieving production and other operating efficiencies through the
implementation of a "best practices" program.

- Reducing certain common expenses by coordinating our efforts.

Pursue Strategic Acquisitions. We will continue to pursue strategic
acquisitions to:

- Respond to our customers increasing preference for "one stop" producers.

- Add new products and services we believe our customers will value.

- Expand geographically.

INDUSTRY OVERVIEW

Our products are sold as standard accessories or options for a variety of
light vehicles. In 1998, we estimate that approximately 45% of our net sales
were generated from products sold for light trucks. Our research indicates that
growth in this market, and in towing systems and rack systems in particular,
resulted in large part from the increased production and sale of light trucks,
which in 1998 accounted for approximately 50% of total light vehicle production
in North America as compared to 32% in 1986. According to DRI/ McGraw-Hill
Ward's Global Automotive Group, production of light trucks in North America and
Western Europe has outpaced overall production in the light vehicle market. We
cannot give you any assurance that such production rates of light trucks will
continue or will continue to outpace overall production.

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<PAGE> 9

The strong growth in production of light trucks is attributable to several
factors, including:

- The changing lifestyle of an aging population.

- The versatile product offerings targeted toward both the luxury and
economy market sectors.

- The increasing acceptance of light truck use for everyday transportation.

- The durability and special performance capabilities of light trucks.

As automobile and light truck manufacturers have faced increased global
competition, they have sought to significantly improve quality, reduce costs and
shorten the development time required for new vehicle models. These changes have
altered the OEM/supplier relationship and benefited larger suppliers that have
strong product engineering and development capabilities, superior quality
products, lower unit costs and the ability to deliver products on a timely
basis. As a result, we believe that we will continue to benefit from the
following automotive OEM and aftermarket trends:

- Consolidation of supplier base by OEMs.

- Emergence of EC safety standards.

- Increased levels of manufacturing in North America by foreign companies.

- Increased outsourcing by OEMs.

MANAGEMENT AND OWNERSHIP

Chase Capital Partners ("CCP") and certain members of our management formed
the Company in September 1995 to make strategic acquisitions of automotive
exterior accessory manufacturers and to integrate those acquisitions into a
global enterprise that would be a preferred supplier to the automotive industry.
Our senior management team has an average of over 20 years of experience in
manufacturing and marketing automotive-related products. We believe that members
of our management team have strong and successful track records in the operation
of their respective businesses. Members of our senior management own, in the
aggregate, approximately 17% of our issued and outstanding voting securities on
a fully diluted basis.

CCP is the private equity group of The Chase Manhattan Corporation, one of
the largest bank holding companies in the United States, and is one of the
largest private equity organizations in the United States, with over $7.0
billion under management. Through its affiliates, CCP invests in leveraged
buyouts, recapitalizations and venture capital opportunities by providing equity
and mezzanine debt capital. Affiliates of CCP own approximately 50% of our
issued and outstanding voting securities on a fully diluted basis.

ACQUISITION HISTORY

In September 1995, our subsidiary, SportRack, acquired substantially all of
the net assets of the MascoTech Accessories division (the "MascoTech Division")
of MascoTech, Inc. ("MascoTech"). The MascoTech Division was a North American
supplier of rack systems and accessories to the automotive OEM market and
aftermarket.

In October 1996, we acquired all of the capital stock of Brink B.V. (the
"Brink Acquisition"), a private company with limited liability incorporated
under the laws of The Netherlands and a European supplier of towing systems to
the automotive OEM market and aftermarket. In December 1996, ownership of Brink
B.V. and its subsidiaries was transferred to our newly formed subsidiary, Brink
International B.V.

In August 1997, we formed Valley to acquire the net assets of Valley
Industries, Inc. ("Valley Industries"), a North American supplier of towing
systems to the automotive OEM market and aftermarket (the "Valley Acquisition").

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<PAGE> 10

In July 1997 we completed two smaller acquisitions though a subsidiary of
SportRack called SportRack International, Inc. SportRack International acquired
from Bell Sports Corporation ("Bell") the net assets of Bell's sportrack
division, a Canadian supplier of rack systems and accessories to the automotive
aftermarket. CCP was a significant equity investor in Bell. SportRack
International also acquired the capital stock of Nomadic Sports, Inc.
("Nomadic"), a Canadian supplier of rack systems and accessories to the
automotive OEM market and aftermarket. The acquisitions of the sportrack
division of Bell and the capital stock of Nomadic are collectively referred to
in this Prospectus as the "SportRack International Acquisition."

In January 1998, we formed Ellebi S.r.l. ("Ellebi") to acquire the net
assets of a division of Ellebi S.p.A. (the "Ellebi Acquisition"). Ellebi is an
Italian supplier of towing systems to the European automotive OEM market and
aftermarket.

In February 1998, our subsidiary, SportRack International, Inc., acquired
the net assets of Transfo-Rakzs, Inc. (the "Transfo-Rakzs Acquisition"), a
Canadian supplier of rear hitch rack carrying systems and related products to
the automotive aftermarket.

RECENT DEVELOPMENTS

Effective April 15, 1999, we elected Terrence C. Seikel, our former Vice
President of Finance and Administration and Chief Financial Officer, to replace
Marshall D. Gladchun as our President and Chief Executive Officer. We also
promoted Richard E. Borghi, formerly the Executive Vice President and Chief
Operating Officer of SportRack to President and Chief Operating Officer of
SportRack.

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

Capital Corp. is a Delaware corporation and is a wholly owned subsidiary of
the Company. Capital Corp. has no assets, no liabilities other than with respect
to the Notes and does not conduct any operations. The Notes are the joint and
several obligations of AAS and Capital Corp.

Our principal executive offices are located at 12900 Hall Road, Suite 200,
Sterling Heights, Michigan 48313 and our telephone number is (810) 997-2900.

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<PAGE> 11

SUMMARY DESCRIPTION OF THE NOTES

Issuers....................... Advanced Accessory Systems, LLC and AAS Capital
Corporation

Notes Outstanding............. $125,000,000 aggregate principal amount of
9 3/4% Series B Senior Subordinated Notes due
2007.

Maturity...................... October 1, 2007.

Interest Payment Dates........ April 1, and October 1.

Sinking Fund.................. None.

Optional Redemption........... Except as described below, we may not redeem
the Notes prior to October 1, 2002. On or after
October 1, 2002 we may redeem some or all of
the Notes at the redemption prices set forth in
this Prospectus.

At any time on or prior to October 1, 2000, we
may redeem up to 35% of the aggregate principal
amount of the Notes with the net cash proceeds
of one or more Public Equity Offerings made by
us as long as we pay 109.750% of the principal
amount to be redeemed, plus interest.

If we do that, at least 65% of the aggregate
principal amount of the Notes originally issued
must remain outstanding after each such
redemption. See "Description of the
Notes -- Optional Redemption."

Change of Control............. Upon the occurrence of a Change of Control, we
must make an offer to repurchase the Notes at a
price equal to 101% of the principal amount,
plus interest. See "Description of the Notes --
Change of Control."

Subsidiary Guarantees......... Our domestic subsidiaries fully and
unconditionally on a joint and several basis
guarantee our obligations to pay principal and
interest on the Notes. Before we may pay any
principal or interest on the Notes, we must
first have paid all principal and interest due
under our existing Senior Indebtedness,
including any Senior Indebtedness we may incur
in the future. See "Description of the Notes --
Guarantees of the Notes."

Ranking....................... The Notes are not secured by any collateral.

The Notes and the guarantees of our
subsidiaries rank below all of our and our
subsidiary guarantors' senior debt. Therefore,
if we default, your right to payment under the
Notes will be junior to the rights of holders
of our and our subsidiary guarantors' senior
debt to collect money we owe them at the time.
In addition, if we do not pay you under the
terms of the Notes, we may not be able to make
additional borrowings and our senior debt may
become due and payable immediately. The Notes
will effectively rank below all liabilities
(including trade payables) of our subsidiaries
which are not guarantors. On December 31, 1998
the aggregate amount of senior debt was $63.0
million. See "Description of the Notes --
Ranking" and "-- Subordination of the Notes."

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<PAGE> 12

Certain Covenants............. The indenture under which the Notes were issued
(the "Indenture") contains certain covenants
that, among other things, limit our ability to:

- Incur additional indebtedness.

- Pay dividends on or redeem our membership
interests or make certain payments to others.

- Make investments.

- Sell our assets or membership units to third
parties.

- Enter into transactions with our affiliates.

- Consolidate, merge or transfer all or
substantially all of our assets.

The covenants are subject to a number of significant exceptions and
qualifications. See "Description of the Notes -- Certain Covenants."

10
<PAGE> 13

RISK FACTORS

In addition to other matters set forth in this Prospectus, you should
carefully consider the following factors before purchasing the Notes.

OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND
PREVENT US FROM PAYING YOU

Indebtedness in relation to our members' equity is high. Our indebtedness
at December 31, 1998 was $187.5 million. Our ratio of indebtedness to total
capital was 0.9 to 1.0. Our ratio of earnings to fixed charges was 1.04 to 1.0
for the year ended December 31, 1998. Our net loss for the year ended December
31, 1998 was $90,000. In addition, the Amended and Restated Credit Agreement and
the Indenture subject us to certain restrictions if we incur additional debt to
finance acquisitions or capital expenditures or for other purposes. See
"Capitalization," "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources," "Description of
the Credit Facilities" and "Description of the Notes."

Our high level of debt in relation to our members' equity may have
important consequences for us. These consequences include:

- Our ability to obtain additional financing for acquisitions, working
capital, capital expenditures, or other purposes on terms favorable to
us, or at all, may be impaired.

- We must use a substantial portion of our cash flow to pay our interest
expense and repay our debts. This will reduce the funds that would
otherwise be available to us for our operations and future business
opportunities.

- Our existing capital structure requires cash interest and debt
amortization payments estimated to be approximately $21.0 million in 1999
and payments ranging from approximately $26.2 million to $27.0 million in
2000 through 2003.

- A substantial decrease in our net operating cash flows or an increase in
our expenses could make it difficult for us to meet our debt payments and
force us to modify our operations.

- We may have a higher amount of debt in relation to our members' equity
than our competitors, which may place us at a competitive disadvantage.

- Our high amount of debt in relation to our members' equity may make us
more vulnerable than our competitors to a downturn in our business cycle
or the economy generally.

- Any inability to repay our debts or obtain additional financing when we
needed it would have a material adverse effect on us.

Our ability to pay principal and interest on the Notes and to pay our other
debts will depend upon our future operating performance. Our performance will be
affected by prevailing economic conditions and other financial and business
factors. Some of these factors are beyond our control. Our ability to obtain
revolving credit borrowings under the Amended and Restated Credit Agreement or
any other financing agreement we might enter into may be dependent upon certain
factors beyond our control. We anticipate that we will be able to meet our debt
obligations in the foreseeable future. We base this on our expectations of
current and expected levels of operations, operating cash flows and our
borrowings under the Amended and Restated Credit Agreement. If we can not make
payments on our indebtedness, we will be forced to takes actions such as
reducing or delaying acquisitions and/or capital expenditures, selling assets,
selling more of our equity or restructuring or refinancing our indebtedness,
including the Notes. There is no assurance that we could take any of these
actions on satisfactory terms to us, or at all.

11
<PAGE> 14

RESTRICTIVE DEBT COVENANTS LIMIT OUR ABILITY TO OBTAIN FINANCING

The Amended and Restated Credit Agreement and the Indenture impose
restrictions which limit our ability to:

- Declare dividends or redeem or repurchase membership interests.

- Prepay or redeem debt, including the Notes.

- Incur liens.

- Make loans and investments.

- Incur additional debt.

- Amend or otherwise alter debt and other material agreements.

- Make capital expenditures.

- Engage in mergers, acquisitions and asset sales.

- Enter into transactions with affiliates; and

- Alter the business we conduct.

The indebtedness outstanding under the Amended and Restated Credit
Agreement is guaranteed by all of our domestic subsidiaries and is secured by a
first priority lien on substantially all of our current and future properties
and assets and the current and future properties and assets of our domestic
subsidiaries. This includes a pledge of all of the shares of our current and
future domestic subsidiaries, and up to 65% of the shares of our current and
future foreign subsidiaries and certain of the tangible and intangible assets of
our current and future foreign subsidiaries. In addition, under the Amended and
Restated Credit Agreement, we are required to comply with financial covenants
with respect to:

- a maximum leverage ratio;

- a minimum fixed charge coverage ratio;

- a minimum net worth;

- capital expenditures; and

- rentals.

If we were unable to borrow under the Amended and Restated Credit Agreement
due to a default or failure to meet certain specified borrowing base
prerequisites for borrowing, we could be left without sufficient liquidity.

WE MUST PAY OTHER DEBTS BEFORE WE PAY YOU

The Notes and the Guarantees are unsecured and subordinated to the prior
payment in full, in cash, of all of our Senior Indebtedness. As of December 31,
1998, the aggregate outstanding principal amount of all Senior Indebtedness was
approximately $63.0 million. In the event of a bankruptcy, liquidation or
reorganization of the Company, our assets and the assets of the Guarantors will
be available to pay obligations on the Notes only after all of our Senior
Indebtedness or the Senior Indebtedness of the Guarantors, has been paid in
full. After that, we may not have sufficient assets remaining to pay amounts due
on any or all of the Notes. In addition, we may not pay principal or premium, if
any, or interest on the Notes if any Senior Indebtedness is not paid when due or
any other default on any Senior Indebtedness occurs and the maturity of the
Senior Indebtedness is accelerated in accordance with its terms. However, if the
amount owed is paid in full or the default has been cured or waived and such
acceleration has been rescinded then we can pay what we owe on the Notes. In
addition, if any default occurs with respect to certain Senior Indebtedness and
certain other conditions are satisfied, we may not make any payments on the
Notes for a designated period of time. Finally, if any judicial proceeding is
pending because of default in payment on any Senior Indebtedness, or other

12
<PAGE> 15

default with respect to certain Senior Indebtedness, or if the maturity of the
Notes is accelerated because of a default under the Indenture and the default
constitutes a default with respect to any Senior Indebtedness, we may not make
any payment on the Notes.

The Notes are not guaranteed by any of the Company's foreign subsidiaries.
See "Description of the Notes." Our subsidiaries which are not guarantors of the
Notes represented 34% of our net sales in 1998 and 43% of our total assets at
December 31, 1998.

OUR INTEREST PAYMENTS ON DEBT COULD INCREASE

A significant portion of our outstanding indebtedness bears interest at
variable rates. While we may enter interest rate protection agreements to limit
our exposure to increases in such interest rates, such agreements will not
eliminate the exposure to variable rates. Any increase in the interest rates on
our indebtedness will reduce funds available to us for our operations and future
business opportunities.

OUR INTEGRATION STRATEGY MIGHT NOT SUCCEED

We want to grow through acquisitions. We can not assure you that the
integration of any future acquisitions will be successful or that the
anticipated strategic benefits of any future acquisitions will be realized.
Acquisitions involve a number of special risks, including, but not limited to,
adverse short-term effects on our reported operating results, diversion of
management's attention, standardization of accounting systems, dependence on
retaining, hiring and training key personnel and unanticipated problems or legal
liabilities. Our ability to successfully implement our acquisition strategy
depends on a number of factors, some of which are beyond our control. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

We cannot assure you that we will be able to consummate acquisitions in the
future on terms acceptable to us.

WE FACE POTENTIAL RISKS BECAUSE WE HAVE OPERATIONS IN FOREIGN COUNTRIES

We manufacture and/or sell our products in Europe, Canada and Mexico. In
1998, approximately 34% of our net sales were derived from operations conducted
outside the United States. These sales are principally in currencies other than
U.S. dollars. Foreign operations are subject to certain risks that can
materially affect our sales, profits, cash flows and financial position. These
risks include currency exchange rate fluctuations, inflation, changes in import
duties, exchange controls and variable political conditions. In particular,
currency exchange rate fluctuations may impact the revenues and gross margins of
our foreign operations. Moreover, most of our foreign subsidiaries' indebtedness
is denominated in U.S. dollars and exchange rate fluctuations and other factors
may affect the amount and availability of dollars to service such debt. We are
currently not a party to any material currency hedging agreements. In addition,
a highly inflationary economy may also give rise to increased production costs
without correspondingly increased prices, especially if products are exported to
countries with low inflation rates. See Note 12 of the notes to our consolidated
financial statements.

THE INTERESTS OF OUR CONTROLLING MEMBERS MAY CONFLICT WITH YOUR INTERESTS

CCP and its affiliates in the aggregate own approximately 50% of our issued
and outstanding voting securities on a fully diluted basis. In addition,
pursuant to the Members' Agreement (as defined), affiliates of CCP have the
ability to appoint a majority of the members of our Board of Managers. See
"Management -- Members' Agreement." Accordingly, CCP can exert substantial
influence on the direction and future operations of the Company. See "Security
Ownership of Certain Beneficial Owners and Management" and "Plan of
Distribution."

OUR BUYERS CAN EXERT PRESSURE ON US

We compete in the global OEM supplier industry, which is characterized by a
small number of OEMs which are able to exert considerable pressure on OEM
suppliers, including us. Sales to OEM customers were

13
<PAGE> 16

approximately 68% of our aggregate net sales in 1998. In addition, sales to
DaimlerChrysler and General Motors were approximately 32% and 11%, respectively,
of our aggregate net sales in 1998. Sales to these customers consist of a large
number of different parts, tooling and other services, which are sold to
separate divisions and operating groups within each customer's organizations.
Although we have purchase orders from these customers, these purchase orders
generally provide for supplying the customer's requirements for a particular
model or model year rather than for manufacturing a specific quantity of
products. The loss of either of the customers or any of the purchase orders, or
a significant decrease in demand for certain models or a group of related models
sold by any of its major customers could have a material adverse effect on us.
Failure to obtain new business for new models or to retain or increase business
on redesigned existing models could adversely affect us. OEM customers are also
able to exert considerable pressure on component and system suppliers to reduce
costs, provide integrated systems (as opposed to just parts), finance tooling,
improve quality and provide additional design and engineering capabilities. We
can not assure you that the additional costs of increased quality standards,
price reductions or additional engineering or systems integration capabilities
required by OEMs will not have a material adverse effect on the financial
condition or results of operations of the Company. In addition, we may not be
able to pass on increases in the cost of raw materials to our OEM customers.

The OEM supplier industry is highly cyclical and, in large part, dependent
upon the overall strength of consumer demand for light trucks and passenger
cars. We can not assure you that the automotive industry for which we supply
components and systems, will not experience downturns in the future. An economic
recession typically impacts substantially leveraged companies like us more than
similarly situated companies with less leverage. A decrease in overall consumer
demand for motor vehicles in general or specific types of vehicles could have a
material adverse effect on our financial condition and results of operations.

SOME OF OUR EMPLOYEES ARE UNIONIZED

Approximately 160 of our employees in the United States at the Port Huron,
Michigan facility are represented by the Teamsters Union. Collective bargaining
agreements with the Teamsters Union affecting these employees expire in April
2004. As is common in many European jurisdictions, substantially all of our
employees in Europe are covered by country-wide collective bargaining
agreements. While we believe that our relations with our employees are
satisfactory, a dispute with our employees could have a material adverse effect
on us.

LABOR DISPUTES AT OUR CUSTOMERS AND OTHER SUPPLIERS OF OUR CUSTOMERS COULD
ADVERSELY AFFECT US

Many of our OEM and other Tier 1 supplier customers, and other suppliers to
our customers, are unionized, and work stoppages, slowdowns or other labor
disputes experienced by, and the labor relations policies of, OEMs and other
Tier 1 suppliers could have an adverse effect on our financial condition and our
results of operations.

WE MAY NOT BE ABLE TO PAY THE NOTES UPON CHANGE OF CONTROL

Upon a Change of Control, we are required to offer to purchase all
outstanding Notes at 101% of the principal amount of the Notes plus accrued and
unpaid interest to the date of purchase. The source of funds for any such
purchase will be our available cash or cash generated from operations or other
sources, including borrowing, sales of assets, sales of equity or funds provided
by a new controlling person. However, we can not assure you that sufficient
funds will be available at the time of any Change of Control to make any
required repurchases of Notes tendered, or that, if applicable, restrictions in
the Amended and Restated Credit Agreement will allow us to make such required
repurchases. See "Description of the Notes -- Change of Control."

OUR INDUSTRY IS HIGHLY COMPETITIVE

Our industry is highly competitive. A large number of actual or potential
competitors exist, some of which are larger than us and have substantially
greater resources than we have. See "Business --

14
<PAGE> 17

Competition." Our business may be adversely affected by increased competition in
the markets in which we currently operate or in markets in which we will operate
in the future, and we can not assure you that we will be able to improve or
maintain our profit margins. In addition, we principally compete for new
business both at the beginning of the development of new models and upon the
redesign of existing models by our major customers. New model development
generally begins two to four years prior to the marketing of such models to the
public.

OEMs have increasingly stressed the need for suppliers with global
capabilities. We can not assure you that by further expanding into international
markets we will be successful either in competing with other suppliers, domestic
or foreign, or in maintaining our relationship with various OEMs, such that our
international operations will be profitable.

ENVIRONMENTAL REGULATION IMPOSES RISKS AND COSTS ON US

Our operations are subject to federal, state, local and foreign laws and
regulations governing the protection of the environment, including those
regulating discharges into the air and water, the management of wastes, the
cleanup of contamination, and the control of noise and odors. Like all
companies, we are subject to potentially significant fines or penalties if we
fail to comply with these environmental regulatory requirements. Under certain
environmental laws, a current or previous owner or operator of real property,
and parties that generate or transport hazardous substances that are disposed of
at real property, may be held liable for the cost to investigate or clean up
such substances on or under the property. We may be subject to liability,
including liability for cleanup costs, if contamination is discovered at one of
our facilities or at a landfill or other location where we have disposed of
wastes. We have made and will continue to make capital expenditures to comply
with current and future environmental requirements. Because environmental
requirements are becoming increasingly stringent, our expenditures for
environmental compliance may increase and we may incur material costs associated
with environmental compliance in the future. See "Business -- Environmental
Regulation."

YOU MAY BE RESTRICTED BY BLUE SKY REGULATIONS

In order to comply with the securities laws of certain jurisdictions, the
Notes may not be offered or resold by any Holder unless the Notes have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and the requirements of such
exemption have been satisfied. We do not currently intend to register or qualify
the resale of the Notes in any such jurisdictions. However, an exemption is
generally available for sales to registered broker-dealers and certain
institutional buyers. Other exemptions under applicable state securities laws
may also be available.

AN ACTIVE TRADING MARKET FOR THE NOTES MAY NOT DEVELOP

The Notes are a class of securities with no established trading market. We
do not intend to list the Notes on any national securities exchange or to seek
the admission thereof to trading in the NASDAQ National Market. We have been
advised by CSI that CSI currently intends to make a market in the Notes. CSI is
not obligated to do so. Any market-making activities with respect to the Notes
may be discontinued at any time without notice. Market-making activity is
subject to the limits imposed by the Securities Act and the Exchange Act. We can
not assure you that an active public or other market will develop for the Notes.
If a trading market does not develop or is not maintained, you may experience
difficulty in reselling the Notes or you may be unable to sell them at all. If a
market develops for the Notes, future trading prices of the Notes will depend on
many factors, including among other things, prevailing interest rates, our
financial condition and results of operations, and the market for similar notes.
Depending on those and other factors, the Notes may trade for less than what you
paid for them.

USE OF PROCEEDS

We will not receive any proceeds from any sales of the Notes.

15
<PAGE> 18

CAPITALIZATION

The following table sets forth our actual capitalization as of December 31,
1998. You should read information set forth below in conjunction with the
"Selected Historical Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements of the Company, and the notes thereto, included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1998
-----------------
(IN THOUSANDS)
<S> <C>
Cash........................................................ $ 11,240
========
Long-term debt (including current maturities):
Amended and Restated Credit Agreement(1):
Revolving Credit Facility(2)........................... $ --
Tranche A Term Loan.................................... 14,777
Tranche B Term Loan.................................... 15,592
Acquisition Facility(3)................................ 21,000
Canadian Credit Agreement(1)(2)...........................
Term Note.............................................. 11,590
Revolving Note......................................... --
Notes(4).................................................. 124,565
--------
Total long-term debt................................... 187,524
Mandatorily redeemable warrants(5).......................... 4,409
Members' equity............................................. 15,147
--------
Total capitalization................................... $207,080
========
</TABLE>

- -------------------------
(1) See "Description of the Credit Facilities."

(2) The Company has up to $25.0 million available under the Revolving Credit
Facility. Borrowings by SportRack International under the revolving note of
the Canadian Credit Agreement (as defined) are counted against availability
under the Revolving Credit Facility.

(3) On December 31, 1997, the Company borrowed $21.0 million under its
Acquisition Facility. On January 2, 1998, the proceeds of such borrowing
were used to make the Ellebi Acquisition.

(4) The principal amount of the Notes is $125.0 million. The Notes are presented
net of unamortized discount of $435,000.

(5) Represents the value assigned to certain warrants associated with certain
senior subordinated debt. This senior subordinated debt was repaid with
proceeds from the Notes. The warrants are being accreted to their redemption
value through periodic charges to members' equity.

16
<PAGE> 19

SELECTED HISTORICAL FINANCIAL DATA

The information below presents historical financial data of the MascoTech
Division ("Predecessor") for the year ended December 31, 1994 and the period
from January 1, 1995 through September 27, 1995 (the period prior to the
acquisition of the net assets of MascoTech Division by the Company). The data as
of and for the year ended December 31, 1994 have been derived from the unaudited
financial statements of the MascoTech Division and the data for the period from
January 1, 1995 through September 27, 1995 have been derived from the audited
financial statements of the MascoTech Division. The data as of and for the
period from September 28, 1995 through December 31, 1995 and for the years ended
December 31, 1996, 1997 and 1998 represent consolidated financial data of the
Company subsequent to the acquisition of the MascoTech Division, have been
derived from our audited financial statements and include:

- The operations of Brink subsequent to the Brink Acquisition on October
31, 1996.

- The operations of the sportrack division of Bell and Nomadic subsequent
to the SportRack International Acquisition on July 2, 1997 and July 24,
1997, respectively.

- The operations of Valley subsequent to the Valley Acquisition on August
5, 1997.

- The operations of Ellebi subsequent to the Ellebi Acquisition on January
2, 1998.

- The operations of Tranfo-Rakzs subsequent to the Transfo-Rakzs
Acquisition on February 7, 1998.

The following table should be read in conjunction with our financial
statements and notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
COMPANY PREDECESSOR
-------------------------------------------------- -------------------------------
PERIOD FROM PERIOD FROM
YEAR ENDED DECEMBER 31, SEPTEMBER 28, TO JANUARY 1 TO YEAR ENDED
------------------------------ DECEMBER 31, SEPTEMBER 27, DECEMBER 31,
1998(3) 1997(2) 1996(1) 1995 1995 1994
------- ------- ------- ---------------- ------------- ------------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................. $290,139 $188,678 $ 81,466 $16,299 $48,698 $ 60,882
Cost of sales(4)........................... 213,435 135,556 53,607 12,458 38,645 47,716
-------- -------- -------- ------- ------- ------------
Gross profit............................. 76,704 53,122 27,859 3,841 10,053 13,166
Selling, administrative and product
development expenses(4).................. 50,839 31,350 13,413 1,472 6,107 7,313
Amortization of intangible assets.......... 3,551 2,336 2,475 546 -- --
Impairment charge(4)....................... 7,863 -- -- -- -- --
-------- -------- -------- ------- ------- ------------
Operating income......................... 14,451 19,436 11,971 1,823 3,946 5,853
Other (income) expense
Interest expense(5)...................... 18,633 12,627 4,312 975 -- --
Foreign currency (gain) loss(6).......... (4,995) 6,097 1,330 -- -- --
Other, net............................... -- -- (80) (22) 65 (105)
-------- -------- -------- ------- ------- ------------
Income before minority interest,
extraordinary charge and income
taxes.................................. 813 712 6,409 870 3,881 5,958
Provision (benefit) for income taxes(7).... 903 (2,856) (491) -- 1,324 2,114
-------- -------- -------- ------- ------- ------------
Income (loss) before minority interest
and extraordinary charge............... (90) 3,568 6,900 870 2,557 3,844
Minority interest.......................... -- 97 69 9 -- --
-------- -------- -------- ------- ------- ------------
Income (loss) before extraordinary
charge................................. (90) 3,471 6,831 861 2,557 3,844
Extraordinary charge(8).................... -- 7,416 1,970 -- -- --
-------- -------- -------- ------- ------- ------------
Net income (loss)........................ $ (90) $ (3,945) $ 4,861 $ 861 $ 2,557 $ 3,844
======== ======== ======== ======= ======= ============
OTHER DATA:
Cash flows from operating activities....... $ 21,879 $ 6,982 $ 9,917 $ 1,390 $ 3,741 $ 1,165
EBITDA(9).................................. 38,364 27,916 16,448 2,651 4,735 6,773
Depreciation............................... 10,857 6,144 2,002 282 789 920
Capital expenditures....................... 9,998 7,751 3,124 491 2,079 1,392
Ratio of EBITDA to interest expense(5)..... 2.06x 2.21x 3.81x 2.72x -- --
Ratio of earnings to fixed
charges(5)(10)........................... 1.04x 1.06x 2.43x 1.89x -- --
BALANCE SHEET DATA (AT END OF PERIOD)
Cash....................................... $ 11,240 $ 27,348 $ 2,514 $ 1,637 $ 3 $ 8
Working capital............................ 49,232 65,803 14,368 3,960 4,002 3,518
Total assets............................... 258,981 265,558 148,359 59,979 24,698 21,743
Total debt, including current
maturities(5)............................ 187,524 197,126 93,142 34,900 -- --
Mandatorily redeemable warrants(5)......... 4,409 3,507 3,498 200 -- --
Members' equity............................ 15,147 16,444 18,463 14,221 15,794 13,664
</TABLE>

(footnotes on following page)

17
<PAGE> 20

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

(1) In October 1996, we acquired Brink. We accounted for the Brink Acquisition
in accordance with the purchase method of accounting. Accordingly, the
operating results of Brink are included in our consolidated operating
results subsequent to October 31, 1996.

(2) We acquired the net assets of the sportrack division of Bell on July 2,
1997, Nomadic on July 24, 1997, and the net assets of Valley Industries on
August 5, 1997. The SportRack International Acquisition and Valley
Acquisition have been accounted for in accordance with the purchase method
of accounting. Accordingly, the operating results of SportRack
International and Valley are included in our consolidated operating results
subsequent to the respective acquisition dates.

(3) We acquired the towbar segment of Ellebi S.p.A. on January 2, 1998 and the
net assets of Transfo-Rakzs on February 7, 1998. We accounted for the
Ellebi Acquisition and Transfo-Rakzs Acquisition in accordance with the
purchase method of accounting. Accordingly, the operating results of Ellebi
and Transfo-Rakzs are included in our consolidated operating results
subsequent to the respective acquisition dates.

(4) In June 1998, information became available that indicated that certain
assets acquired from Bell in connection with the SportRack International
Acquisition (accounts receivable, inventory and tooling) had a fair value
less than originally recorded. The SportRack International Acquisition was
renegotiated and a $2.0 million reimbursement was received from Bell.
Accounts receivable, inventory and tooling were reduced by $6.5 million and
additional goodwill of $4.5 million, net of the $2.0 million reimbursement
from Bell, was recorded. During the second half of 1998, management further
reassessed the operations of SportRack International, restructured the
operations, and recorded restructuring charges totaling $1.9 million.
Restructuring charges have been included in cost of sales ($1.1 million)
and in selling, administrative and product development expenses ($832,000)
in our consolidated statement of operations. Management believes that
substantially all restructuring costs have been incurred as of December 31,
1998. Concurrent with the reassessment of the SportRack International
operations, management reviewed the carrying value of goodwill and other
intangible assets, determined that future cash flows would not be
sufficient to recover recorded amounts, and recorded an impairment charge
of $7.9 million.

(5) Prior to its acquisition by the Company on September 28, 1995, the
Predecessor was a division of MascoTech and, accordingly, had no
outstanding indebtedness.

(6) Primarily represents net currency gains and loss on indebtedness of our
foreign subsidiaries denominated in currencies other than their functional
currency.

(7) The Predecessor, as a division of MascoTech, was allocated a portion of the
consolidated income tax provision, which approximated the division's
federal income tax provision on a stand-alone basis. We are a limited
liability corporation and, as such, our earnings and the earnings of our
domestic subsidiaries are included in the taxable income of our unit
holders and no federal income tax provision is required. Our foreign
subsidiaries provide for income taxes on their results of operations.

(8) In connection with the indebtedness extinguished as a result of the Brink
Acquisition, a prepayment penalty of $220,000 and unamortized deferred debt
issuance costs of $1.8 million were charged to operations during 1996. In
connection with indebtedness extinguished as a result of issuing the Notes,
a prepayment penalty of $1.4 million, $3.1 million of unamortized debt
discount, and unamortized deferred debt issuance costs of $3.2 million were
charged to operations during 1997. The debt extinguishment charges in 1997
were reduced by $365,000 representing the income tax benefit recognized by
Brink.

(9) EBITDA is defined as operating income plus depreciation and amortization
adjusted in 1998 for the non-cash portion of impairment and restructuring
charges ($9.5 million for the year ended December 31, 1998), which
definition may not be comparable to similarly titled measures reported by
other companies. EBITDA is presented because it is generally accepted as
providing useful information regarding a company's ability to service
and/or incur indebtedness. However, you should not consider EBITDA in
isolation from or as an alternative to net income, cash flows from
operating activities and other consolidated income or cash flow statement
data prepared in accordance with generally accepted accounting principles
or as a measure of profitability or liquidity. In addition, funds depicted
by the

18
<PAGE> 21

EBITDA measurement are not fully available for discretionary use because of
debt service requirements, expenditures for capital replacement and
expansion, and the need to conserve funds for other commitments and
uncertainties.

(10) For purposes of determining the ratio of earnings to fixed charges,
"earnings" are defined as income (loss) before minority interest,
extraordinary charge and income taxes, plus fixed charges. "Fixed charges"
consist of interest expense on all indebtedness (including amortization of
deferred debt issuance costs) and the component of operating lease rental
expense that management believes is representative of the interest
component of rent expense.

19
<PAGE> 22

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

CCP and certain members of the Company's management formed the Company in
September 1995 to make strategic acquisitions of automotive exterior accessory
manufacturers and to integrate those acquisitions into a global enterprise that
would be a preferred supplier to the automotive industry.

ACQUISITIONS

In September 1995, the Company, through its SportRack subsidiary, acquired
the MascoTech Division of MascoTech. The MascoTech Division was a North American
supplier of rack systems and accessories to the automotive OEM market and
aftermarket.

In October 1996, the Company consummated the Brink Acquisition by acquiring
all of the capital stock of Brink B.V., a private company with limited liability
incorporated under the laws of The Netherlands and a European supplier of towing
systems to the automotive OEM market and aftermarket. In December 1996,
ownership of Brink B.V. and its subsidiaries was transferred to Brink, a newly
formed subsidiary of the Company.

In August 1997, the Company formed Valley to effect the Valley Acquisition
by acquiring the net assets of Valley Industries, a North American supplier of
towing systems to the automotive OEM market and aftermarket.

Two smaller acquisitions were completed in July 1997 by SportRack
International. SportRack International acquired from Bell the net assets of its
sportrack division, a Canadian supplier of rack systems and accessories to the
automotive aftermarket. CCP at that time was a significant equity investor in
Bell. SportRack International also acquired the capital stock of Nomadic, a
Canadian supplier of rack systems and accessories to the automotive OEM market
and aftermarket.

In January 1998, the Company through Brink International B.V., acquired the
net assets of the towbar segment of Ellebi S.p.A., an Italian supplier of towing
systems to the automotive OEM market and aftermarket.

In February 1998, the Company through SportRack International, Inc.,
acquired the net assets of Transfo-Rakzs, a Canadian supplier of rear hitch rack
carrying systems and related products to the automotive aftermarket.

20
<PAGE> 23

SUMMARY RESULTS OF OPERATIONS

The following table presents the major components of the statement of
operations together with percentages of each component as a percentage of net
sales.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net sales............................ $290,139 100.0% $188,678 100.0% $81,466 100.0%
Gross profit....................... 76,704 26.4 53,122 28.2 27,859 34.2
Selling, administrative and product
development expenses............... 50,839 17.5 31,350 16.6 13,413 16.5
Amortization of intangible
assets.......................... 3,551 1.2 2,336 1.2 2,475 3.0
Impairment charge.................... 7,863 2.7 -- -- -- --
Operating income................... 14,451 5.0 19,436 10.3 11,971 14.7
Interest expense..................... 18,633 6.4 12,627 6.7 4,312 5.3
Foreign currency (gain) loss......... (4,995) (1.7) 6,097 3.2 1,330 1.6
Income before minority interest,
extraordinary charge and income
taxes.............................. 813 0.3 712 0.4 6,409 7.9
Income tax provision (benefit)..... 903 0.4 (2,856) (1.5) (491) (0.2)
Extraordinary charge................. -- -- 7,416 3.9 1,970 2.4
Net income (loss).................... (90) 0.0 (3,945) (2.1) 4,861 6.0
</TABLE>

RESULTS OF OPERATIONS

1998 COMPARED TO 1997

Net sales. Net sales for 1998 were $290.1 million, representing an increase
of $101.5 million, or 53.8% over net sales for 1997. The increase resulted
primarily from the Ellebi Acquisition in January 1998, the Transfo-Rakzs
Acquisition in February 1998, the Valley Acquisition in August 1997 and the
SportRack International Acquisition in July 1997. The 1998 sales increase
resulting from these acquisitions was $80.1 million. The remaining sales
increase of $21.4 million resulted primarily from increased sales volumes of OEM
rack systems on existing programs and the effect of having a full year of sales
on new OEM rack system programs launched during 1997. On a pro forma basis, if
the net sales of Ellebi and Transfo-Rakzs and the net sales of Valley and
SportRack International prior to acquisition were included with those of the
Company for 1997, net sales for 1997 would have been $268.5 million, as compared
to net sales of $290.1 million for 1998, an increase of $21.6 million, or 8.1%.

Gross profit. Gross profit for 1998 was $76.7 million, representing an
increase of $23.6 million, or 44.4%, over the gross profit for 1997. This
increase resulted from the increase in net sales offset by a decrease in the
gross margin. Gross profit as a percentage of net sales was 26.4% in 1998
compared to 28.2% in 1997. The decrease in gross margin resulted primarily from
lower gross margins of newly acquired businesses, lower gross profit margins
from sales of OEM rack systems resulting from increased sales of lower margin
programs and restructuring charges (as further discussed below) related to the
operations of SportRack International.

Selling, administrative and product development expenses. Selling,
administrative and product development expenses for 1998 were $50.8 million,
representing an increase of $19.5 million, or 62.2% over selling, administrative
and product development expenses for 1997, reflecting the increase in net sales.
Selling, administrative and product development expenses as a percentage of net
sales increased to 17.5% in 1998 from 16.6% in 1997. This increase is the result
of increased spending on research and development activities, higher selling,
administrative and product development expenses as a percentage of net sales for
Ellebi, increased costs in the roof rack aftermarket as a percentage of net
sales and restructuring charges (as further discussed below) related to the
operations of SportRack International.

Impairment and restructuring charges. In June 1998, information became
available that indicated that certain assets acquired from Bell in connection
with the SportRack International Acquisition (accounts

21
<PAGE> 24

receivable, inventory and tooling) had a fair value less than originally
recorded. The SportRack International purchase price was renegotiated and a $2.0
million reimbursement was received from Bell. Accounts receivable, inventory and
tooling were reduced by $6.5 million and additional goodwill of $4.5 million,
net of the $2.0 million reimbursement from Bell, was recorded.

During the second half of 1998, management further reassessed the
operations of SportRack International, and as a result took actions to
restructure the operations, rationalize the product offerings, customer and
supplier base, distribution channels and warehousing, and terminated 14
employees, including certain members of SportRack International's senior
management. A restructuring charge totaling $1.9 million was recorded including
cash expenditures made during 1998 totaling $258,000 consisting of outside legal
and accounting fees, employee severance and costs to dispose of obsolete
inventory. Non-cash expenses included in the restructuring charge totaling $1.6
million included recording of inventory reserves related to the product
rationalization of $1.1 million and recording of customer allowances, bad debts
and other items of $574,000. The restructuring charge related to inventory ($1.1
million) has been included in cost of sales and other restructuring costs
($832,000) have been included in selling, administrative and product development
expenses in the Company's consolidated statement of operations.

Concurrent with the reassessment of SportRack International's operations,
management reviewed the revised carrying value of goodwill and other intangible
assets, determined that future cash flows would not be sufficient to recover
recorded amounts, and recorded an impairment charge of $7.9 million. No
impairment or restructuring charge was recorded during 1997.

Operating income. Operating income for 1998 was $14.5 million, a decrease
of $5.0 million, or 25.6%, compared to operating income for 1997. The decrease
was due primarily to an impairment and restructuring charge in 1998. Excluding
the impairment and restructuring charges, operating income in 1998 would have
been $24.2 million, representing an increase of $4.8 million, or 24.6% over
operating income for 1997. Excluding the impairment and restructuring charge,
operating income as a percentage of net sales decreased to 8.3% in 1998 from
10.3% in 1997 as a result of lower gross margins and higher selling,
administrative and product development expenses as a percentage of net sales in
1998.

Interest expense. Interest expense for 1998 was $18.6 million, an increase
of $6.0 million, or 47.6%, over interest expense for 1997. The increase was
primarily due to additional borrowings to finance (i) the SportRack
International Acquisition in July 1997, (ii) the Valley Acquisition in August
1997, (iii) the Ellebi Acquisition in January 1998, (iv) the Transfo-Rakzs
Acquisition in February 1998, and (v) the effect of the issuance of the Notes
(as defined below), of which a portion of the proceeds were used to repay debt
from the Valley Acquisition and other then existing debt. These increases were
partially offset by lower interest expense due to lower average line of credit
borrowings during the year and lower interest rates on the Company's variable
rate debt.

Foreign currency (gain) loss. Foreign currency gain in 1998 was $5.0
million. The foreign currency gain primarily relates to the debt of Brink (whose
functional currency was the Dutch Guilder through December 31, 1998) which is
denominated in U.S. Dollars including intercompany debt and substantially all
outstanding loans under the Company's Second Amended and Restated Credit
Agreement, except for Term Note A (as defined below) which was changed from a
U.S. Dollar denominated loan to a Dutch Guilder denominated loan in October
1998. During 1998, the U.S. dollar weakened significantly in relation to the
Dutch Guilder. At December 31, 1997, the exchange rate of the Dutch Guilder to
the U.S. dollar was 2.02:1, whereas at December 31, 1998 the exchange rate was
1.89:1, or a 6.4% increase in the relative value of the Dutch Guilder.

Provision (benefit) for income taxes. The Company and certain of its
domestic subsidiaries have elected to be taxed as limited liability companies
for federal income tax purposes. As a result of this election, the Company's
domestic taxable income accrues to the individual members. Certain of the
Company's domestic subsidiaries and foreign subsidiaries are subject to income
taxes in their respective jurisdictions. During 1998, the Company had a loss
before income taxes for its taxable subsidiaries totaling $9.2 million and
recorded a provision for income taxes of $903,000. The effective tax rate
differs from the U.S. federal income tax rate primarily due to changes in
valuation allowances on the deferred tax assets of SportRack International

22
<PAGE> 25

recorded during 1998 and differences in the tax rates of foreign countries.
During 1997, the Company had a loss before income taxes for its taxable
subsidiaries totaling $9.9 million and recorded a benefit for income taxes of
$3.2 million.

Extraordinary charge. There were no extraordinary charges incurred by the
Company during the year ended December 31, 1998. The extraordinary charge
resulting from debt extinguishment in 1997 was $7.4 million. In connection with
the issuance of the Notes, the Company repaid, in full, its Senior Subordinated
Debt and Junior Subordinated Guilder Note and repaid a portion of certain term
notes under the Amended and Restated Credit Agreement. In connection with such
debt extinguishments, the Company recorded an extraordinary charge comprised of
$1.4 million in prepayment penalties, $3.1 million of unamortized debt discount
and $3.2 million of unamortized debt issuance costs, less $365,000 of tax
benefit.

Net income (loss). The net loss for 1998 was $90,000 as compared to a net
loss of $3.9 million in 1997, a decrease of $3.9 million. Operating income for
1998 was $14.5 million, representing a decrease of $5.0 million, or 25.6%
compared to operating income for 1997. The decreased operating income, resulting
from the impairment and restructuring charges offset by the inclusion of Valley
and SportRack International's operating results for a full year in 1998 as
compared to five and six months, respectively, in 1997, the Ellebi acquisition
in January 1998 and the Transfo-Rakzs acquisition in February 1998, and
increased interest expense ($6.0 million) was offset by the foreign currency
gain in 1998 as compared with a foreign currency loss in 1997 related to Brink
Acquisition debt denominated in U.S. dollars ($11.1 million), and no
extraordinary charge in 1998 compared with an extraordinary charge resulting
from debt extinguishment in 1997 ($7.4 million), and reduced by the provision
for income taxes in 1998 as compared to an income tax benefit in 1997 ($3.8
million).

1997 COMPARED TO 1996

Net sales. Net sales for 1997 were $188.7 million, representing an increase
of $107.2 million, or 131.6% over net sales for 1996. The increase was due
primarily to the Valley Acquisition in August 1997, $37.9 million (representing
net sales for the five month period ended December 31, 1997, the period of 1997
subsequent to acquisition), the SportRack International Acquisition in July
1997, $2.5 million (representing net sales for the six month period ended
December 31, 1997, the period 1997 subsequent to acquisition), and the full year
sales of Brink in 1997 as compared to two months in 1996 ($54.8 million
representing net sales for the ten month period ended October 31, 1997, the
period of 1997 comparable to the period prior to acquisition in 1996). In
addition, sales for SportRack increased $12.0 million because of increased sales
of rack systems to OEMs for installation on new light truck models and increased
OEM production of certain light truck models which use SportRack's systems. On a
pro forma basis, if the net sales of Valley and SportRack International, prior
to their respective acquisition dates, were included with those of the Company
for 1996 and 1997, and Brink sales, prior to its acquisition date, were included
with those of the Company for 1996, net sales for 1997 would have been $246.7
million, as compared to net sales of $233.5 million for 1996, an increase of
$13.2 million, or 5.7%.

Gross profit. Gross profit for 1997 was $53.1 million, representing an
increase of $25.3 million, or 90.7%, over the gross profit for 1996. This
increase resulted from the increase in net sales offset by a decrease in the
gross margin. Gross profit as a percentage of net sales was 28.2% in 1997
compared to 34.2% in 1996. The decrease in gross margin resulted from a lower
gross margin on sales contributed by Valley and a lower gross margin on sales of
rack systems to the OEMs due to (i) launch costs related to new programs, (ii)
lower margins on certain newly launched programs, and (iii) price givebacks on
certain OEM programs.

Selling, administrative and product development expenses. Selling,
administrative and product development expenses for 1997 were $31.4 million,
representing an increase of $17.9 million, or 133.7% over selling,
administrative and product development expenses for 1996, reflecting the
increase in net sales. Selling, administrative and product development expenses
as a percentage of net sales increased to 16.6% in 1997 from 16.5% in 1996.
Certain selling, administrative and product development expenses are relatively
fixed and do not increase proportionately with sales. The effect of these fixed
expenses was offset by higher expenses associated with the Company's European
expansion and new corporate headquarters. In addition, selling,

23
<PAGE> 26

administrative and product development expenses were higher as a percentage of
net sales for Brink, which was acquired in October 1996, and SportRack
International, which was acquired in July 1997, than for the Company.

Operating income. Operating income for 1997 was $19.4 million, an increase
of $7.5 million, or 62.4%, over operating income for 1996. The increase was due
primarily to inclusion of Brink operating results for the full year in 1997 as
compared to two months in 1996 together with the increases from the SportRack
International and Valley Acquisitions in July and August of 1997, respectively.
Operating income as a percentage of net sales decreased to 10.3% in 1997 from
14.7% in 1996 primarily reflecting a decrease in gross margins.

Interest expense. Interest expense for 1997 was $12.6 million, an increase
of $8.3 million, or 192.8%, over interest expense for 1996. The increase was
primarily due to additional borrowings to finance (i) the Brink Acquisition in
October 1996, (ii) the SportRack International Acquisition in July 1997, (iii)
the Valley Acquisition in August 1997, and (iv) the effect of the issuance of
the Notes (as defined below), of which a portion of the proceeds were used to
repay debt from the Valley Acquisition and the Brink Acquisition.

Foreign currency (gain) loss. Foreign currency loss in 1997 was $6.1
million. The foreign currency loss primarily relates to the debt of Brink (whose
functional currency was the Dutch Guilder through December 31, 1998) which is
denominated in U.S. Dollars including intercompany debt and substantially all
outstanding loans under the Company's Second Amended and Restated Credit
Agreement. During 1997, the U.S. dollar strengthened significantly in relation
to the Dutch Guilder. At December 31, 1996, the exchange rate of the Dutch
Guilder to the U.S. dollar was 1.75:1, whereas at December 31, 1997 the exchange
rate was 2.02:1, or a 15.4% decline in the relative value of the Dutch Guilder.

Provision (benefit) for income taxes. The Company and certain of its
domestic subsidiaries have elected to be taxed as limited liability companies
for federal income tax purposes. As a result of this election, the Company's
domestic taxable income accrues to the individual members. Certain of the
Company's domestic subsidiaries and foreign subsidiaries are subject to income
taxes in their respective jurisdictions. During 1997, the Company had a loss
before income taxes for its taxable subsidiaries totaling $9.9 million and
recorded a benefit for income taxes of $3.2 million. During 1996, the Company
had a loss before income taxes for its taxable subsidiaries totaling $1.8
million and recorded a benefit for income taxes of $491,000.

Extraordinary charge. The extraordinary charge resulting from debt
extinguishment in 1997 was $7.4 million. In connection with the issuance of $125
million aggregate principal amount of 9 3/4% Series A Senior Subordinated
Promissory Notes due 2007 (the "Series A Notes"), the Company repaid, in full,
its Senior Subordinated Debt and Junior Subordinated Guilder Note and repaid a
portion of certain term notes under the Amended and Restated Credit Agreement.
In connection with such debt extinguishments, the Company recorded an
extraordinary charge comprised of $1.4 million in prepayment penalties, $3.1
million of unamortized debt discount and $3.2 million of unamortized debt
issuance costs, less $400,000 of tax benefit.

Net income (loss). The net loss for 1997 was $3.9 million as compared to
net income of $4.9 million in 1996, a decrease of $8.8 million. Operating income
for 1997 was $19.4 million, representing an increase of $7.5 million, or 62.4%
over operating income for 1996. The increased operating income, resulting from
inclusion of Brink's operating results for a full year in 1997 as compared to
two months in 1996, the Valley Acquisition in August 1997, and the SportRack
International Acquisition in July 1997, was offset by increased interest costs
associated with such acquisitions ($8.3 million), increased foreign currency
loss related to Brink Acquisition debt denominated in U.S. dollars ($4.8
million), and an increase in an extraordinary charge resulting from debt
extinguishment ($5.4 million), collectively offset by an increase in the related
income tax benefit ($2.4 million).

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal liquidity requirements are to service its debt
under its existing credit facilities and meet its working capital and capital
expenditure needs. The Company's indebtedness at December 31, 1998 was $187.5
million including current maturities of $4.5 million. The Company expects to be
able to meet

24
<PAGE> 27

its liquidity requirements through cash provided by operations and through
borrowings available under its Second Amended and Restated Credit Agreement
("U.S. Credit Facility").

WORKING CAPITAL AND CASH FLOWS

Working capital and key elements of the consolidated statement of cash
flows are:

<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Working Capital............................................. $49,232 $65,803 $14,368
Cash flows provided by operating activities................. 21,879 6,982 9,917
Cash flows (used for) investing activities.................. (31,618) (79,733) (57,463)
Cash flows provided by (used for) financing activities...... (8,367) 97,080 48,605
</TABLE>

Working capital

Working capital decreased by $16.6 million to $49.2 million at December 31,
1998 from $65.8 million at December 31, 1997 due to a decrease in cash of $16.1
million, a decrease of $5.7 million in working capital of SportRack
International related to the change in estimated fair value of accounts
receivable and inventory recorded in June 1998 and restructuring charges
recorded in 1998 (as discussed above) and a decrease in accounts receivable of
$5.9 million primarily related to the timing of collections of accounts
receivable from large customers, primarily OEMs. Offsetting these decreases are
increases in working capital of $9.7 million attributable to the Ellebi and
Transfo-Rakzs acquisitions. Working capital increased by $51.4 million to $65.8
million at December 31, 1997 from $14.4 million at December 31, 1996 due to an
increase in cash of $24.8 million ($21.0 million of which was used to acquire
Ellebi on January 2, 1998), an increase of $17.6 million attributable to the
Valley and SportRack International acquisitions and an increase in accounts
receivable of $8.6 million primarily attributable to the timing of collections
of accounts receivable from large customers, primarily OEMs.

Cash decreased by $16.1 million to $11.2 million at December 31, 1998 from
$27.3 million at December 31, 1997 primarily due to cash used for investing and
financing activities of $31.6 million and $8.4 million, respectively, offset by
cash provided by operating activities of $21.9 million. Cash increased by $24.8
million to $27.3 million at December 31, 1997 from $2.5 million at December 31,
1996 primarily due to cash provided by operating and financing activities of
$7.0 million and $97.1 million (of which $21.0 million was borrowed to finance
the acquisition of Ellebi on January 2, 1998), respectively, offset by cash used
for investing activities of $79.7 million.

Operating Activities

Cash flow provided by operating activities for 1998 was $21.9 million,
compared to $7.0 million in 1997 and $9.9 million in 1996. Cash flow for 1998
increased due to the cash flows provided by acquisitions completed in 1998,
including the Ellebi Acquisition and the Transfo-Rakzs Acquisition, and the full
year effect of acquisitions completed in 1997, including the Valley Acquisition
and the SportRack International Acquisition. Acquisition related increases in
operating cash flow totaled $4.0 million. The remaining increase in operating
cash flows is attributable to improved operating performance and lower working
capital of SportRack. SportRack's working capital decreased primarily as a
result of the timing of collections of accounts receivable from large customers,
primarily OEMs.

The Company's European and Canadian subsidiaries have income tax net
operating loss carryforwards ("NOLs") of approximately $1.3 million and $11.0
million, respectively, at December 31, 1998. The European NOLs have no
expiration date and the Canadian NOLs expire primarily in 2005. Management
believes that it is more likely than not that a portion of the deferred tax
assets of the Canadian subsidiaries will not be realized and a valuation
allowance of $4.2 million has been recorded against such assets. No valuation
allowance has been recorded for the European NOLs as it is management's belief
that it is more likely than not that the related deferred tax asset will be
realized.

25
<PAGE> 28

Investing Activities

Investing cash flows include acquisitions of property and equipment of
$10.0 million, $7.8 million, and $3.1 million in 1998, 1997 and 1996,
respectively. The increase in capital expenditures during 1998 was primarily
attributable to the capital expenditures of Ellebi and Transfo-Rakzs, which were
acquired in 1998, and the increased capital expenditures of Valley and SportRack
International, which were acquired during 1997. The Company estimates that
capital expenditures for 1999 will be primarily for the expansion of capacity,
productivity and process improvements and maintenance. The Company's 1999
capital expenditures are anticipated to include approximately $5.0 million for
replacing and upgrading existing equipment. The Company's ability to make
capital expenditures is subject to restrictions in the Amended and Restated
Credit Agreement, including a maximum of $12.5 million of capital expenditures
annually.

Investing cash flows also include $22.8 million, $70.8 million, and $54.3
million in 1998, 1997, and 1996, respectively, for the acquisition of the Ellebi
and Transfo-Rakzs (January and February 1998, respectively), SportRack
International and Valley (July and August 1997, respectively) and Brink (October
1996).

Financing Activities

During 1998, financing cash flows were primarily limited to scheduled
payments of principal on the Company's term indebtedness of $3.7 million and net
repayments of borrowings under the Company's revolving loans of $4.5 million.
Financing cash flows in 1997 and 1996 include borrowings of $90.5 million, and
$46.1 million, respectively for the acquisition of the SportRack International,
Valley and Ellebi (July, August and December 1997, respectively) and Brink
(October 1996). Although the Ellebi Acquisition was consummated in January 1998,
proceeds related to borrowing for the purchase were received in December 1997
and were included in the Company's cash at December 31, 1997. Debt issuance
costs in connection with such borrowings were $2.6 million in both 1997 and
1996. In October 1997 the Company issued the Series A Notes. Proceeds from the
issuance, which totaled $124.5 million, were used to reduce or eliminate certain
of the Company's outstanding senior and subordinated debt and to pay $4.7
million in offering costs. Proceeds from the issuance of membership units were
not significant in 1998 and were $5.0 million, and $4.6 million in 1997, and
1996, respectively. Distributions to members, in amounts sufficient to meet the
tax liability on the Company's domestic taxable income which accrues to
individual members, were not significant in 1998 and were $2.9 million in 1997
and $3.7 million in 1996.

Debt and Credit Sources

Borrowings under the Company's U.S. Credit Facility and the Company's First
Amended and Restated Credit Agreement ("Canadian Credit Facility") bear interest
at floating rates which require interest payments on varying dates depending on
the interest rate option selected by the Company. Under the terms of these
credit facilities, the Company will be required to make principal payments
totaling approximately $4.5 million in 1999, $11.0 million in 2000, $11.8
million in 2001 and $11.8 million in 2002. The Company is also required to
purchase and maintain interest rate protection with respect to a portion of the
term loans for three years. The Notes bear interest at 9.75% which is payable
semiannually in arrears. See "Note 4" to the Company's "Consolidated Financial
Statements" for additional information regarding the U.S. Credit Facility, the
Canadian Credit Facility and the Senior Subordinated Notes.

The Company is exposed to interest rate volatility with regard to variable
rate debt. The Company uses interest rate swaps to reduce interest rate
volatility. At December 31, 1998 and 1997 the notional value of interest rate
swaps was $18.5 million. Under the terms of the interest rate swap agreements,
the Company pays a fixed interest rate on the notional principal amount. The
effects of interest rate swaps are reflected in interest expense and are not
material.

The Company expects that its primary sources of cash will be from operating
activities and borrowings under the U.S. Credit Facility and Canadian Credit
Facility each of which provide the Company with revolving loans. As of December
31, 1998, the Company had no amounts borrowed under the revolving note of either
the U.S. Credit Facility or the Canadian Credit Facility and has $25.0 million
available borrowing capacity. As part of the U.S. Credit Facility, Chase and NBD
committed to provide a $22.0 million

26
<PAGE> 29

Acquisition Revolving Note to finance acquisitions. On December 31, 1997, the
Company borrowed $21.0 million under the Acquisition Revolving Note and used
such proceeds to acquire the net operating assets of the towbar segment of
Ellebi S.p.A. on January 2, 1998. Future acquisitions, if any, may require
additional third party financing and there can be no assurances that such funds
would be available on terms satisfactory to the Company, if at all.

The Company's ability to satisfy its debt obligations will depend upon its
future operating performance, which will be affected by prevailing economic
conditions and financial, business, and other factors, certain of which are
beyond its control, as well as the availability of revolving credit borrowings
under the Amended and Restated Credit Agreement or a successor facility. The
Company anticipates that, based on current and expected levels of operations,
its operating cash flow, together with borrowings under the U.S. Credit Facility
and the Canadian Credit Facility, should be sufficient to meet its debt service,
working capital and capital expenditure requirements for the foreseeable future,
although no assurances can be given in this regard, including as to the ability
to increase revenues or profit margins. If the Company is unable to service its
indebtedness, it will be forced to take actions such as reducing or delaying
acquisitions and/or capital expenditures, selling assets, restructuring or
refinancing its indebtedness, or seeking additional equity capital. There is no
assurance that any of these remedies can be effected on satisfactory terms, if
at all, including, whether, and on what terms, the Company could raise equity
capital. See "Forward Looking Statements".

INTERNATIONAL OPERATIONS

The Company conducts operations in several foreign countries including
Canada, The Netherlands, Denmark, the United Kingdom, Sweden, France, Germany,
Poland, Spain and, Italy. Net sales from international operations during 1998
were approximately $99.8 million, or 34.4% of the Company's net sales. At
December 31, 1998, assets associated with these operations were approximately
42.6% of total assets, and the Company had indebtedness denominated in
currencies other than the U.S. dollar of approximately $26.4 million.

The Company's international operations may be subject to volatility because
of currency fluctuations, inflation and changes in political and economic
conditions in these countries. Most of the revenues and costs and expenses of
the Company's operations in these countries are denominated in the local
currencies. The financial position and results of operations of the Company's
foreign subsidiaries are measured using the local currency as the functional
currency. Certain of the Company's foreign subsidiaries have debt denominated in
currencies other than their functional currency. As the exchange rates between
the currency of the debt and the subsidiaries' functional currency change the
Company is subject to foreign currency gains and losses.

The Company may periodically use foreign currency forward option contracts
to offset the effects of exchange rate fluctuations on cash flows denominated in
foreign currencies. The Company has no outstanding foreign currency forward
options at December 31, 1998 and does not use derivative financial instruments
for trading or speculative purposes.

YEAR 2000

General

The "Year 2000 Issue" is the result of computer programs that were written
using two digits rather than four to define the applicable year. If the
Company's computer programs with date-sensitive functions are not Year 2000
compliant, they may recognize a date using "00" as the Year 1900 rather than the
Year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activities.

The Company and each of its operating subsidiaries are in the process of
implementing Year 2000 readiness programs with the objective of having all of
their significant business systems, including those that affect facilities and
manufacturing activities, functioning properly with respect to the Year 2000
Issue before June 30, 1999. Each operating subsidiary is in a different stage of
Year 2000 readiness.

27
<PAGE> 30

Project

Generally each subsidiary's Year 2000 program is divided into three major
sections -- internal business software and hardware, internal non-financial
software and embedded chip technology and external compliance by customers and
suppliers. The general phases common to all sections are: (1) inventorying Year
2000 items; (2) assessing the Year 2000 compliance of identified items; (3)
repairing or replacing material items that are determined not to be Year 2000
compliant; (4) testing material items; and (5) designing and implementing
contingency and business continuation plans for each organization and company
location.

The internal business software and hardware section of the Company's Year
2000 plans vary by operating subsidiary and include either the conversion or
reprogramming of applications software that is not Year 2000 compliant, the
inclusion of acquired companies on the Company's existing Enterprise Resource
Planning System (ERP System) or, where available from the supplier, the
upgrading of such software to a Year 2000 compliant version. The Company
estimates that this phase is on schedule to be completed by June 1999.

The testing phase of this section, scheduled for completion by June 1999,
is ongoing. The Company does not currently have contingency plans in place for
its internal business software and hardware. Such contingency plans will be
developed in the second quarter of 1999 should the current implementation plans
fall behind schedule.

The total cost associated with required modifications to the Company's
internal business software and hardware to become Year 2000 compliant is not
expected to be material to the Company's financial position. The estimated total
cost of the Year 2000 program is approximately $935,000. The total amount
expended on the program through December 31, 1998, was $570,000, of which
approximately $170,000 related to the cost of software modification and
approximately $400,000 related to the cost of upgrading existing software to
Year 2000 compliant versions. The estimated future cost of completing the Year
2000 program is estimated to be approximately $165,000 for reprogramming of
applications software and approximately $200,000 related to the cost of
including acquired companies on existing ERP Systems. Funds for the program are
provided from existing operating budgets for all items and are included in
operating expenses as incurred.

The Company has completed all phases of its Year 2000 plan related to
non-financial software, embedded chip technology, and its non-financial systems
such as manufacturing equipment, security equipment, etc. Few of these systems
have been identified as not being in compliance. Accordingly, the cost of
achieving Year 2000 compliance for these systems was minimal.

The Company has identified and contacted its critical suppliers, service
providers and contractors to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remedy their
own Year 2000 issues. Each of the suppliers contacted have indicated that they
are currently undergoing or have completed programs related to the Year 2000
problem within their organizations. Due to the satisfactory responses with its
critical suppliers, the Company does not intend to change suppliers, service
providers or contractors. The Company has not independently verified the status
of its critical suppliers', service providers' and contractors' Year 2000
readiness. Many of the Company's customers are large OEMs which are preparing
for the Year 2000 Issue and it is believed that they will be compliant by the
Year 2000. However, the Company does not currently have any formal information
concerning the Year 2000 compliance status of its customers, particularly in the
aftermarket, but has received indications that most of its customers are working
on Year 2000 compliance.

Risks

The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in large part from the
uncertainty of the Year 2000 readiness of third-party suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on its results of operations,
liquidity or financial condition. The Year 2000 program is expected to
significantly reduce the Company's level of uncertainty about the Year 2000

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<PAGE> 31

problem and, in particular, about the Year 2000 compliance and readiness of its
material customers and suppliers. The Company believes that, with the
implementation of new business systems and completion of the program as
scheduled, the possibility of significant interruptions of normal operations
should be reduced.

NEW ACCOUNTING PRONOUNCEMENTS

In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued SOP 98-1, "Accounting For the Costs of Computer Software
Developed For or Obtained For Internal Use" ("SOP 98-1"). SOP 98-1 is effective
for the Company beginning on January 1, 1999. SOP 98-1 will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal use. This
statement will be applied prospectively, however, the impact of this new
standard is not expected to have a significant effect on the Company's financial
position or results of operations.

In April 1998, the AICPA issued Statement of Position ("SOP 98-5"),
"Reporting the Costs of Start-up Activities" (SOP 98-5). SOP 98-5 is effective
beginning on January 1,1999, and requires that start-up costs capitalized prior
to January 1, 1999 be written off and any future start-up costs to be expensed
as incurred. The Company believes it is in compliance with the standards
established by SOP 98-5 and as such SOP 98-5 will not impact the Company's
future earnings or financial position.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities'("FAS 133"). The statement is effective for fiscal years
beginning after June 15, 1999. The Company plans to adopt this statement at the
beginning of fiscal 2000. The Company is completing an analysis of FAS 133 which
is not expected to have a material impact on the Company's results of
operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks which exist as a part of its
ongoing business operations. Primary exposures include fluctuations in the value
of foreign currency investments in subsidiaries, volatility in the translation
of foreign currency earnings to U.S. Dollars and movements in Federal Funds
rates and the London Interbank Offered Rate ("LIBOR"). The Company uses
derivative financial instruments, where appropriate, to manage these risks. The
Company, as a matter of policy, does not engage in trading or speculative
transactions.

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<PAGE> 32

BUSINESS

THE COMPANY

The Company is one of the world's largest suppliers of towing and rack
systems and related accessories for the automotive original equipment
manufacturer ("OEM") market and the automotive aftermarket. The Company's
products include a complete line of towing systems including accessories such as
trailer balls, ball mounts, electrical harnesses, safety chains and locking
hitch pins. The Company's broad offering of rack systems includes fixed and
detachable racks and accessories which can be installed on vehicles to carry
items such as bicycles, skis, luggage, surfboards and sailboards. The Company's
products are sold as standard accessories or options for a variety of light
vehicles. In 1998, the Company estimates that approximately 45% of its net sales
were generated from products sold for light trucks. For the year ended December
31, 1998, the Company's net sales and EBITDA, as adjusted, were $290.1 million
and $38.4 million, respectively.

COMPETITIVE ADVANTAGES

Leading Global Market Position. Based on its knowledge of the industry, the
Company believes that it is one of the world's largest suppliers of towing
systems and one of the world's largest suppliers of rack systems. The Company
also believes, based on its knowledge of the industry, that it is the largest
supplier of towing systems in Europe, the largest supplier of towing systems to
automotive OEMs in North America and the second largest supplier of towing
systems to the aftermarket in North America. The Company also believes that it
is one of the two largest suppliers of rack systems sold to automotive OEMs in
the North America. The Company has 25 engineering, manufacturing and
distribution facilities strategically located in North America and Europe. By
virtue of its size and global presence, the Company believes it benefits from
several competitive advantages, including the ability to (i) satisfy local
design, production, quality and timing requirements of global OEMs; (ii) provide
"one-stop shopping" for customers' product and service requirements; (iii)
optimize plant production; (iv) maximize its raw material purchasing power; (v)
spread its selling, administrative and product development expenses over a large
base of net sales; and (vi) develop and maintain state-of-the-art production
facilities.

Strong Relationships with Diverse Customer Base. The Company has an
established position as a Tier 1 supplier of towing and/or rack systems to most
of the OEMs manufacturing in North America and/or Europe including
DaimlerChrysler, General Motors, Toyota, Opel, Volvo, Isuzu, Ford, BMW, Subaru,
Fiat, Mitsubishi, Nissan, Volkswagen, SEAT, Skoda, Daewoo and Kia. The Company
supplies DaimlerChrysler with substantially all its North American towing
systems and rack systems and accessories. The Company also supplies
approximately 50% of the towing and rack system requirements of General Motors.
Tier 1 status and strong customer relationships are important elements in
achieving continued profitable growth because, as OEMs narrow their supplier
bases, well regarded, existing suppliers have an advantage in gaining new
contracts. The evolution of OEM relationships into strategic partnerships
provides a significant advantage to Tier 1 suppliers with system integration
capabilities (such as the Company) in retaining existing contracts as well as in
participating during the design phase for new vehicles, which is integral to
becoming a supplier for such new platforms. The Company is also a leading
supplier of towing and rack systems to automotive aftermarket wholesalers,
retailers and installers, such as U-Haul, Pep Boys, Balkamp, Advance Auto Parts,
Coast Distribution System, Discount Auto Parts, Ace Hardware, Norauto, Brezan,
Feuvert and Canadian Tire.

Comprehensive Product Line. The Company continues to position itself as a
leading supplier to its customers for a growing range of products and services.
Through its offering of over 2,000 towing system models, the Company's products
fit virtually every light vehicle produced in North America and Europe. The
Company is one of a limited number of European manufacturers with such a broad
product line that also satisfies EC regulatory safety standards, even though
such standards have not yet been adopted by each EC member country. Competitors
whose products do not satisfy such standards face substantial design and testing
costs to offer a comparable product line that meets these safety standards. The
Company has provided OEMs with fixed rack systems for approximately half of the
light truck models produced in North America that utilize vehicle-specific fixed
racks. The Company believes that its broad product offerings also facilitate
strategic partnerships with automotive aftermarket wholesalers, retailers and
installers.

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<PAGE> 33

Design and Engineering Expertise. The Company has an engineering and
research and development staff that develops new products and processing
technologies. The Company works directly with OEM designers to create innovative
solutions that simplify vehicle assembly and reduce vehicle cost and weight. The
Company is responsible for many industry innovations, including lighter, less
obtrusive, round tube towing hitches as well as push button and pull lever
stanchions on fixed rack systems. The Company believes its design and
engineering capabilities provide significant value to its customers by (i)
shortening OEM new product development cycles; (ii) lowering OEM manufacturing
costs; (iii) providing technical expertise; and (iv) permitting aftermarket
customers to maintain lower inventory levels. The Company also believes that its
design innovations have created value for end users by providing products that
are durable and easy to install and that enhance vehicle utility and appearance.

High Quality, Low Cost Manufacturing Position. The Company believes that it
is one of the highest quality, lowest cost suppliers of towing and rack systems
in North America and Europe. The Company has received numerous quality and
performance awards, including DaimlerChrysler's Gold Pentastar Award, Ford's Q-1
Award, Toyota's Distinguished Supplier Award and Nissan's Superior Supplier
Performance Award. Supplier quality systems are currently being standardized
across OEMs through the ISO-9000 and QS-9000 programs. The Company has achieved
ISO-9000 or QS-9000 certification for 11 of its 20 manufacturing and engineering
facilities and is in the process of obtaining certification for other of its
facilities. The Company's low cost position is a result of its strict cost
controls and continuous improvement programs designed to enhance productivity.
OEMs typically prefer stable suppliers who can generate productivity gains that
can be shared to reduce OEM costs. The Company's cost controls are closely
integrated with its quality driven manufacturing operations, thereby allowing it
to profitably deliver high quality, easy to install and competitively-priced
components on a just-in-time basis. The Company's focus on low cost
manufacturing also provides benefits when selling products to the less price
sensitive aftermarket.

BUSINESS STRATEGY

The Company's objective is to strengthen its position as a leading global
supplier of automotive exterior accessories, thereby increasing revenue and cash
flow. In order to accomplish its goal, the Company intends to pursue the
following strategies.

Increase Global Market Share. The Company intends to capitalize on its
expanded presence in North America and Europe by marketing products to its
global automotive OEM customers. Through its past acquisitions of complementary
product lines, the Company is able to offer an expanded range of products and
services to its extended customer base. The Company also expects to secure new
customers by virtue of its expanded market presence and broad product and
service offerings. The Company believes its continued emphasis on new technology
(both product and process), will result in the development of more innovative,
high margin towing and rack system products which it expects to market to its
expanding customer base.

Maintain and Enhance Strong Customer Relationships. The Company intends to
strengthen and expand its relationships with global automotive OEMs and
aftermarket customers by (i) continuing its commitment to innovative design and
development of products during the early stages of vehicle design and redesign;
(ii) building on its position as a low cost supplier of quality accessory
products; (iii) offering new products in existing and new geographic areas by
taking advantage of existing OEM relationships; and (iv) working with
aftermarket customers to develop new products and marketing strategies.

Increase Operating Efficiencies. The Company believes there are
opportunities for improvement in margins and cash flow through intercompany
cooperation among its various acquired business units, including (i) realizing
economies of scale from the combined purchasing power of a larger company; (ii)
achieving production and other operating efficiencies through the implementation
of a "best practices" program; (iii) reducing certain selling, general and
administrative and product development expenses; and (iv) reducing capital and
operating expenditures from coordinated use of manufacturing resources.

Pursue Strategic Acquisitions. In response to the trend in the OEM market
toward systems suppliers, the Company is focused on making strategic
acquisitions that will enhance its ability to provide integrated systems (such
as a towing or rack system) or otherwise leverage its existing business by
providing additional product,
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manufacturing and service capabilities. The Company also intends to pursue
acquisitions which will expand its customer base by providing an entree to new
customers, including expansion into selected geographic areas. The Company
believes that such acquisitions should provide additional opportunities for
increased net sales and cash flow by enhancing the Company's manufacturing and
marketing capabilities.

INDUSTRY OVERVIEW

The Company's products are sold as standard accessories or options for a
variety of light vehicles. In 1998, the Company estimates that approximately 45%
of its net sales were generated from products sold for light trucks. Growth in
this market, and in towing systems and rack systems in particular, resulted in
large part from the increased production and sale of light trucks, which in 1998
accounted for approximately 50% of total light vehicle production in North
America as compared to 32% in 1986. According to DRI/McGraw-Hill Ward's Global
Automotive Group, production of light trucks in North America and Western Europe
has outpaced overall production in the light vehicle market, resulting primarily
from the growth in minivans and SUVs, although no assurance can be given that
such production rates of light trucks will continue or will continue to outpace
overall production.

Strong growth in production of light trucks is attributable to several
factors, including (i) the more sizable and comfortable interiors and
aesthetically pleasing modern designs offered by light trucks; (ii) the changing
lifestyle of the population, which is aging and therefore devoting more time to
recreational activities; (iii) the versatile product offerings targeted toward
both the luxury and economy market sectors; (iv) the increasing acceptance of
light truck use for everyday transportation; and (v) the durability and special
performance capabilities (e.g. four-wheel drive) of light trucks.

Automotive OEM and Aftermarket Trends

As automobile and light truck manufacturers have faced increased global
competition, they have sought to significantly improve quality, reduce costs and
shorten the development time required for new vehicle models. These changes have
altered the OEM/supplier relationship and benefited larger suppliers that have
strong product engineering and development capabilities, superior quality
products, lower unit costs and the ability to deliver products on a timely
basis. As a result, the Company believes that it has benefited and will continue
to benefit from the following automotive OEM and aftermarket trends:

Consolidation of Supplier Base by OEMs. Since the 1980's, OEMs have
significantly consolidated their supplier base in an effort to reduce their
procurement-related costs, ensure high quality and accelerate new model
development. As a result, many smaller, poorly capitalized suppliers with
limited product lines and engineering and design capabilities have been
eliminated as suppliers to OEMs. Consequently, larger suppliers with broad
product lines, in-house design and engineering capabilities and the ability to
effectively manage their own supplier bases, have been able to significantly
increase their market share.

The consolidation by OEMs has altered the typical structure of supplier
contracts. In the past, OEMs supplied all design, development and manufacturing
expertise for accessory parts and were responsible for consistency of quality
and reliability of delivery. On newer models, however, there has been a trend
toward involving potential suppliers earlier in the design and development
process to encourage suppliers to share design and development responsibility.
In some cases, sole-source supply contracts which cover the life of a vehicle or
platform are awarded. Both OEMs and suppliers benefit from the consolidation
trend. Suppliers are able to devote the resources necessary for proprietary
product development with the expectation that they will have the opportunity to
profit on such investment over the multi-year life of a contract. OEMs benefit
from shared manufacturing cost savings attributable to long, multi-year
production runs at high capacity utilization levels.

Emergence of European Community Safety Standards. Trends within the
European towing systems market result primarily from emerging EC safety
standards and the corresponding legislative framework. Such standards provide
that a towing system must fit all the vehicle manufacturer's recommended fitting
points, must not interfere with the vision of the number plate when not in use
and must meet strict testing criteria for durability and safety. These standards
have been adopted by The Netherlands, Germany, Sweden, Italy, the

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<PAGE> 35

United Kingdom and Scandinavia. Other EC countries are expected to adopt the
legislation within two years. All of the Company's towing systems sold in Europe
currently undergo rigorous safety testing in order to satisfy these EC
regulatory standards.

Increased Levels of Manufacturing in North America by Transplants. As a
result of the relative cost advantage of producing vehicles in North America,
many foreign automobile manufacturers with manufacturing operations in the
United States ("transplants") have increased their share of North American light
vehicle production from approximately 6% in 1986 to approximately 22% in 1998.
Industry sources forecast that this trend will continue. For example, BMW
commenced manufacturing in the U.S. in 1996. In addition, Toyota has announced
plans to build its T-100 pickup truck in Indiana by 1999, Honda has announced
plans to build its Odyssey minivan in North America by 1999, and BMW has
announced plans to build its E-53 SUV in North America by 1999. The Company
believes that increased levels of manufacturing of light trucks in North America
by transplants will benefit full service, high quality suppliers with North
American operations such as the Company.

Outsourcing by OEMs. In an effort to facilitate and enhance product design,
reduce costs and simplify manufacturing processes, automotive OEMs are
increasingly outsourcing the manufacture of many components that were previously
manufactured internally. This trend results from independent suppliers being
generally able to design, manufacture and deliver components at a lower cost
than OEMs as a result of (i) their significantly lower direct labor, fringe
benefit and overhead costs; (ii) their ability to spread research and
development and engineering costs over products provided to multiple OEMs; and
(iii) the economies of scale inherent in product specialization. Independent
suppliers such as the Company have benefited from outsourcing because the
aggregate number, complexity and value of components that they manufacture have
increased dramatically. OEMs, in turn, have benefited because outsourcing has
allowed them to reduce costs and to focus on overall vehicle design and consumer
marketing.

PRODUCTS

The principal product lines of the Company are towing systems and rack
systems and accessories. In 1998, towing systems constituted approximately 60%
and rack systems and accessories constituted approximately 40% of the Company's
net sales. The Company believes it offers a more comprehensive product line than
any of its competitors. The Company has devoted considerable resources to the
engineering and designing of its products and, as a result, considers itself a
market leader in the research and new product development of towing systems and
rack systems.

Towing Systems. The Company supplies towing systems to automotive OEMs and
the automotive aftermarket which fit virtually every light vehicle produced in
North America and Europe. In the aggregate, the Company supplies over 2,000
different towing systems, including a complete line of towing accessories.

The Company's towing systems sold in Europe are installed primarily on
passenger cars. The Company's primary product within the European market is the
fixed ball towbar that is specifically designed to be mounted on a particular
car model in accordance with the OEM's specified mounting points. The Company
also markets sophisticated detachable ball systems which are popular with owners
of more expensive cars or cars on which the license plate would otherwise be
blocked by a fixed ball towbar. The Company's towing system products sold in
Europe currently undergo rigorous safety testing in order to satisfy EC
regulatory standards. Competitors whose products do not satisfy such standards
face substantial design and testing costs to offer a comparable product line
that meets the safety standards.

The Company's towing systems sold in North America are installed primarily
on light trucks. Two of the Company's most innovative product designs have been
the tubular trailer hitch which is lighter in weight, less obtrusive and
stronger than the conventional hitch, and a device which ensures secure
attachment of a towing product to the vehicle. These product innovations have
enabled the Company to improve the functionality and safety of towing systems
while, at the same time, enhancing the overall appearance of vehicles utilizing
these towing products.

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The Company offers a complete line of towing accessories, including trailer
balls, ball mounts, electrical harnesses, safety chains and locking hitch pins.
To capitalize on the strong growth trend in light trucks, the Company has
recently expanded its product line to include other products designed
specifically for this market, such as grille guards, brush guards and spare tire
carriers.

Fixed Rack Systems. The Company supplies fixed roof rack systems for
individual vehicle models that are generally sold to the automotive OEMs for
installation at the factory or dealership. These rack systems typically remain
on a model for the life of its design, which generally ranges from four to six
years. The Company has been an industry leader in developing designs which not
only complement the styling themes of a particular vehicle, but also increase
the utility and functionality of the rack system.

Most of the fixed rack systems sold by the Company are composed of side
rails which run along both sides of the vehicle's roof, feet which mount the
side rails to the vehicle's roof, and cross rails which run between the side
rails. Cross rails, which are attached to the side rails with stanchions, are
typically movable and can be used to carry a load. The Company uses advanced
materials such as lightweight, high strength plastics and roll formed aluminum
to develop durable rack systems that optimize vehicle performance. Many of these
products incorporate innovative features such as push button and pull lever
stanchions, which allow easy movement of the cross rails to accommodate various
size loads. These rack systems are utilized on a large number of light trucks,
including Jeep Grand Cherokee and Cherokee, DaimlerChrysler minivans, GM
Suburban, Tahoe and Yukon and Mercedes Benz ML320.

Detachable Rack Systems. The Company supplies detachable roof and rear
mount rack systems for distribution in both the automotive and sporting
accessory aftermarkets. A detachable rack system typically consists of cross
rails which are attached to the roof of a vehicle by removable mounting clips.
The Company offers a full line of detachable rack systems, including the
SportRack(R), SnapRack(TM) and Mondial(R) rack systems.

Rack System Accessories. The Company designs and manufactures lifestyle
accessories for distribution in both the automotive and sporting accessory
aftermarkets. These accessories typically attach to the Company's rack systems
and are used for carrying items such as bicycles, skis, luggage, surfboards and
sailboards.

CUSTOMERS AND MARKETING

Management believes that the Company's strong and diverse industry
relationships are based on its reputation for high service levels, strong
technical support, innovative product development, high quality and competitive
pricing. Sales to OEM and aftermarket customers represented approximately 68%
and 32% of the Company's net sales, respectively, in 1998. In addition, sales to
DaimlerChrysler and General Motors were approximately 32% and 11%, respectively,
of the Company's aggregate net sales in 1998.

Automotive OEMs. The Company obtains most of its new orders through a
presourcing process by which the customer invites one or a few preferred
suppliers to manufacture and design a component or system that meets certain
price, timing, functional and aesthetic parameters. Upon selection at the
development stage, the Company and the customer typically agree to cooperate in
developing the product to meet the specified parameters. Upon completion of the
development stage and the award of the manufacturing business, the Company
receives a purchase order that covers parts to be supplied for a particular car
model. Such supply arrangements typically involve annual renewals of the
purchase order over the life of the model, which is generally four to six years.
In addition, the Company enters into long-term contracts with certain OEM
customers which require the Company to make annual price reductions. The Company
also competes to supply parts for successor models even though the Company may
currently supply parts on the predecessor model. Sales to OEMs are made directly
by the Company's internal sales staff of 52 individuals and 44 outside sales
representatives.

The Company sells its products to most of the automotive OEMs selling light
vehicles in North America and/or Europe, including DaimlerChrysler, General
Motors, Toyota, Opel, Volvo, Isuzu, Ford, Mercedes, BMW, Subaru, Fiat,
Mitsubishi, Nissan, Volkswagen, SEAT, Skoda, Daewoo and Kia. The Company

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supplies DaimlerChrysler with substantially all of its North American towing
systems and rack systems and accessories. The Company also supplies
approximately 50% of the towing system and rack system requirements of General
Motors. The following chart sets forth information regarding vehicle models on
which the Company's automotive products are used or for which the Company has
been awarded business.

<TABLE>
<CAPTION>
AWARDED BUSINESS ON
PRODUCT OEM CUSTOMER 1998 PRODUCTION(A) FUTURE PRODUCTION(B)
------- ------------ ------------------ --------------------
<S> <C> <C> <C>
Towing Systems DaimlerChrysler Cherokee, Grand Cherokee, Caravan, Cherokee, Plymouth Prowler, Ram
Voyager, Town & Country, Ram Pick-up, Van, 300M, Neon
Dakota, Wrangler, Durango
General Motors Suburban, Yukon, Tahoe, Astro, Frontera, Corsa, Arena (van),
Safari, CK Pick-up, ML Van, S-10 Vectra
Blazer, APV Vans, Bravada Jimmy, Geo
Tracker, Blazer, Corsa, Astra
(hatchback), Astra (Sedan), Astra
(Station wagon), Calibra, Vectra
(Hatchback), Vectra (Sedan), Vectra
(Station wagon), Omega (Sedan), Omega
(Station wagon), Campo, Frontera,
Monterey, Zafira
Ford Expedition, Explorer, Ranger, Explorer, Focus, Focus Wagon,
Aerostar Minivan, Mercury Villager, Ranger, Mondeo
Windstar Minivan, Navigator, Fiesta,
Escort (all models), Mondeo, Mondeo
(Wagon), Scorpio (Sedan), Scorpio
(Wagon), Maverick, Transit
Renault Laguna (Station wagon), Laguna, Twingo, Laguna, Clio
Megane, Twingo, Espace
Isuzu Rodeo, Trooper
Toyota 4-Runner, Land Cruiser, RAV4, Lexus, Corolla, Lexus LS200, Carina,
646T, 477T, 860T, Corolla, Carina, Carina Wagon, Yaris
Camry, Hi-Lux, Picnic, Previa,
Hi-Ace, Celica
Nissan Pathfinder, Pick-up, Quest, Infiniti Almera, Primera Wagon, Micra,
vehicle, QW Truck, Micra, Sunny, Patrol, Terrano
Almera, Primera, Maxima, King Cab,
Terrano, Patrol
Mazda 121, MPV, Xedos-9, Xedos-6, 626, 323 626 Wagon, 323
Honda Passport PF Van, CRV
Mitsubishi Montero, Carisma, L200 Spacestar, Challenger
FIAT Almost all models
Alpha Romeo Almost all models
Lancia Almost all models
Subaru Outback 79V
Range Rover Range Rover, Land Rover
Volvo 900 series (Sedan), 900 series 900 series, S/V 70 series
(Station wagon), 850 (Sedan), 850
(Station wagon)
SAAB 9000 series, 900 series 900 series, 9000 series, 9000
station wagon, small car 9-3,
small car 9-5, small station wagon
Peugeot 106, 306, 406 (Sedan), 406 (Station 206, 206 Sport, 207, 306 Break
wagon), 406 (Coupe), 605, 806, J5
(Van), Boxer (Van)
Suzuki Wagon R. Grand Vitara
Daihatsu Sirion, More, Charade
SEAT Toledo
Skoda SK240
Volkswagen Gold Combi, Vento
Daewoo LD100
</TABLE>

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

(a) Represents models for which the Company produced products in 1998.

(b) The amount of products produced under these awards is dependent on the
number of vehicles manufactured by the OEMs. Many of the models are versions
of vehicles not yet in production. See "Risk Factors -- Our Buyers Can Exert
Pressure On Us." There can be no assurance that any of these vehicles will
be produced or that the Company will generate certain revenues under these
awards even if the models are produced.

Automotive Aftermarket. The Company sells its products directly into the
automotive aftermarket through a number of channels, including wholesalers,
retailers and installers, through its internal sales force and outside sales
representatives. The largest of the Company's aftermarket customers include
U-Haul, Pep Boys, Balkamp, Advance Auto Parts, Coast Distribution System,
Discount Auto Parts, Ace Hardware, Norauto, Brezan, Feuvert and Canadian Tire.
The Company believes that it has established a reputation as a highly reliable
aftermarket supplier able to meet its customers' requirements for on-time
deliveries while minimizing the carrying levels of inventory. For example,
Valley began supplying towing systems to U-Haul (which the Company believes,
based on its research, is the largest installer of towing systems in the United
States) in 1994 and for the year ended December 31, 1998, supplied approximately
50% of U-Haul's towing system requirements. The Company believes aftermarket
customers such as U-Haul represent opportunities to cross-sell existing products
such as rack systems and accessories.

MANUFACTURING PROCESS

The Company's manufacturing operations are directed toward achieving
ongoing quality improvements, reducing manufacturing and overhead costs,
realizing efficiencies and adding flexibility. The manufacturing operations
utilized by the Company include metal cutting, bending, cold forming, roll
forming, stamping, welding, plastic injection molding, painting, assembly and
packaging. The Company performs most manufacturing operations in-house but
outsources certain processes depending on the capabilities and capacities of
individual plants and cost considerations. For example, while some of the
Company's towing systems manufacturing facilities have painting capabilities,
the Company has chosen to outsource the painting of its rack systems.

In some cases, the Company has also developed special machinery to meet its
particular needs. For example, the hardware that accompanies certain towing
systems is selected automatically by special equipment and is then weighed and
transferred into the final package without human intervention. The Company has
developed specialized, computer operated machinery to enable it to efficiently
perform this operation. The Company has organized its production process to
minimize the number of manufacturing functions and the frequency of material
handling, thereby improving quality and reducing costs. In addition, the Company
uses cellular manufacturing which improves scheduling flexibility, productivity
and quality while reducing work in process and costs.

The Company has established quality procedures at each of its facilities
and strives to manufacture the highest quality product possible. The Company has
achieved ISO-9000 or QS-9000 certification for 11 of its 20 manufacturing and
engineering facilities and is in the process of obtaining certification for
other of its

36
<PAGE> 39

facilities. The Company has received numerous quality and performance awards
from its OEM customers, including DaimlerChrysler's Gold Pentastar Award, Ford's
Q-1 Award, Toyota's Distinguished Supplier Award and the Nissan Superior
Supplier Performance Award.

PRODUCT DESIGN, DEVELOPMENT AND TESTING

The Company believes that it is a leader in the design of towing systems
and rack systems and accessories. The Company believes it offers products that
possess greater quality, reliability and performance than the products sold by
many of its competitors. The 94 members of the Company's engineering and design
staff possess strong technical skills. The Company currently holds more than 150
U.S. and foreign patents, and has numerous patent applications pending. The
expiration of such patents are not expected to have a material adverse effect on
the Company's operations.

The Company spent $9.6 million, $5.9 million and $3.5 million on
engineering, research and development in 1998, 1997, and 1996, respectively. The
Company works closely with OEMs to constantly improve design and manufacturing
technology and product functionality. When an OEM is in the process of
developing a new model, it typically approaches an established or incumbent
supplier with a request to supply the required towing system or rack system. The
Company is typically contacted two to four years prior to the start of
production of the new model. The Company's product development engineers then
work closely with the OEM to develop a product that satisfies the OEM's
aesthetic and functional requirements. This relationship also provides the
Company with a competitive advantage in the aftermarket because the Company
already possesses the knowledge to create a system compatible with new model
vehicles prior to release.

The Company has extensive testing capabilities which enable it to test and
certify its products. The Company subjects its products to tests which it
believes are more demanding than conditions which would occur during normal use.
The Company has specialized equipment which it has purchased or developed for
use in its testing laboratories.

Since May 1994, six European countries enacted the new EC regulatory
standards which require that towing systems undergo significant safety testing
prior to gaining approval for sale. This safety testing requires that a towing
system be extensively tested for fatigue and includes subjecting a towing system
to upwards of two million high load pulses. The Company does its testing in its
own laboratory under the control of an independent institute that is authorized
by the EC to approve the towing systems for sale. The quality assurance system
is regularly audited by an independent institute and by the automotive OEMs
themselves. The Company has continually been awarded the highest distinction of
achievement by the independent institute.

RAW MATERIALS

The principal raw material used in the Company's products is steel, which
is purchased in sheets, rolls, bars or tubes and represents approximately 50% of
the Company's raw material costs. The Company also purchases significant amounts
of aluminum and plastics. The Company has various suppliers globally and has not
had difficulties in procuring raw materials nor does it expect to have any
problems in the future. The Company is committed to supplier development and
long-term supplier relationships. However, most of the Company's raw material
demands are for commodities and, as such, can be purchased on the open market on
an as needed basis. The Company selects among available suppliers by comparing
cost, consistent quality and timely delivery as well as compliance with QS-9000
and ISO-9000 standards.

The Company customarily obtains its supplies through individual purchase
orders. In some instances, the Company will enter into short-term contracts with
its suppliers which generally run one year or less. However, the Company has
signed a long-term supply agreement which terminates in 2004 with one of its
painting suppliers, Crown Group, Inc. ("Crown"), under which Crown opened a
state-of-the-art paint line in a facility adjacent to the Company's Port Huron,
Michigan facility.

37
<PAGE> 40

COMPETITION

The Company's industry is highly competitive. A large number of actual or
potential competitors exist, some of which are larger than the Company and have
substantially greater resources than the Company. The Company competes primarily
on the basis of product quality, cost, timely delivery, customer service,
engineering and design capabilities and new product innovation in both the
automotive OEM market and aftermarket. The Company believes that, as OEMs
continue to strive to reduce new model development cost and time, innovation and
design and engineering capabilities will become more important as a basis for
distinguishing competitors. The Company believes it has an outstanding
reputation in both of these areas. In the automotive aftermarket, the Company
believes that its wide range of product applications is a competitive advantage.
For example, the Company has developed towing systems to fit substantially all
the light vehicles produced in North America and Europe. The Company believes
its competitive advantage in the aftermarket is enhanced by its close
relationship with OEMs, allowing the Company access to automobile design at an
earlier time than its competitors.

In the towing systems market, the Company competes with Draw-Tite Inc. and
Reese Products Inc., both of which are subsidiaries of MascoTech, Bosal Holding
B.V., The Oris Group, Production Stamping Inc. and numerous smaller competitors.

In the rack systems and accessories market, the Company's competitors
include JAC Holding Corp., Thule, which is a wholly-owned subsidiary of Eldon AB
(a Swedish company), Yakima Products Inc., Barrecrafters, Graber Products Inc.
and several smaller competitors.

EMPLOYEES

At December 31, 1998, the Company had approximately 1,800 employees of whom
approximately 1,500 are hourly employees and approximately 300 are salaried
personnel. Approximately 160 of the Company's employees in the United States at
the Port Huron, Michigan facility are represented by the Teamsters Union.
Collective bargaining agreements with the Teamsters Union affecting these
employees expire in April 2004. As is common in many European jurisdictions,
substantially all of the Company's employees in Europe are covered by
country-wide collective bargaining agreements. The Company believes that its
relations with its employees are good.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS

For financial information about foreign and domestic operations of the
Company, see "Note 12" of the Company's "Notes to Consolidated Financial
Statements".

FACILITIES

The Company's executive offices are located in 14,550 square feet of leased
space in Sterling Heights, Michigan. The Company has 25 facilities with a total
of 2,054,050 square feet of space. The Company believes that substantially all
of its property and equipment is in good condition and that it has sufficient
capacity to meet its current and projected manufacturing and distribution needs.

38
<PAGE> 41

The Company's facilities are as follows:

<TABLE>
<CAPTION>
SQUARE OWNED/ LEASE
LOCATION FUNCTION FEET LEASED EXPIRATION**
-------- -------- ------ ------ ------------
<S> <C> <C> <C> <C>
North America
Shelby Township, Michigan* Manufacturing 42,800 Owned --
Shelby Township, Michigan* Manufacturing and warehousing 13,000 Leased 2008
Port Huron, Michigan* Manufacturing and warehousing 200,000 Owned --
Sterling Heights, Michigan* Administration and engineering 14,550 Leased 2003
Mt. Clemens, Michigan Warehousing 25,000 Leased Month to Month
Lodi, California Administration, manufacturing, 150,000 Owned --
engineering and warehousing
Lodi, California Warehousing 25,000 Leased Month to Month
Auburn Hills, Michigan Warehousing 49,000 Leased 2005
Madison Heights, Michigan* Administration and manufacturing 90,000 Leased 2002
Madison Heights, Michigan* Engineering and manufacturing 18,000 Leased 2002
Granby, Quebec Administration, manufacturing and 72,000 Leased 2001
warehousing
Granby, Quebec Warehousing 14,000 Leased Month to Month
Bromptonville, Quebec Manufacturing 2,000 Leased 1999
Hamer Bay, Ontario Manufacturing and administration 7,500 Owned --
Europe
Sandhausen, Germany Administration and engineering 5,000 Leased Month to Month
Barcelona, Spain Manufacturing and administration 6,200 Leased 1999
Staphorst, The Netherlands* Administration, manufacturing, 405,000 Owned --
warehousing and engineering
Hoogeveen, The Netherlands* Manufacturing and warehousing 185,000 Owned --
Fensmark, Denmark* Manufacturing and warehousing 95,000 Owned --
Nuneaton, United Kingdom* Manufacturing and warehousing 75,000 Owned --
Vanersborg, Sweden* Manufacturing, warehousing and 160,000 Leased 2004
engineering
Wolsztyn, Poland Warehousing 5,000 Leased Month to Month
Reims, France Manufacturing and warehousing 115,000 Owned --
St. Victoria di Gualtieri,
Italy Administration, manufacturing, 170,000 Leased 2003
warehousing and engineering
St. Victoria di Gualtieri,
Italy Manufacturing and warehousing 110,000 Leased 2003
</TABLE>

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

* QS 9000 and/or ISO certification.

** Gives effect to all renewal options.

ENVIRONMENTAL REGULATION

The Company's operations are subject to foreign, federal, state and local
environmental laws and regulations that limit the discharges into the
environment and establish standards for the handling, generation, emission,
release, discharge, treatment, storage and disposal of certain materials,
substances and wastes. In many jurisdictions, these laws are complex, change
frequently, and have tended to become more stringent over time. In jurisdictions
such as the United States, such obligations, including but not limited to those
under the Comprehensive Environmental Response, Compensation & Liability Act
("CERCLA"), may be joint and several and may apply to conditions at properties
presently or formerly owned or operated by an entity or its predecessors, as
well as to conditions at properties at which waste or other contamination
attributable to an entity or its predecessors have been sent or otherwise come
to be located. The Company believes that its operations are in substantial
compliance with the terms of all applicable environmental laws and regulations
as currently interpreted. In addition, to the best of the Company's knowledge,
there are no existing or potential environmental claims against the Company nor
has the Company received any notification nor is there any current investigation
regarding, the disposal, release, or threatened release at any location of any
hazardous substance generated or transported by the Company. However, the
Company cannot predict with any certainty that it will not in the future incur
liability under environmental laws and regulations with respect to contamination
of sites currently or formerly owned or operated by the Company (including
contamination caused by prior owners and operators of such sites), or the
off-site disposal of hazardous substances.

While historically the Company has not had to make significant capital
expenditures for environmental compliance, the Company cannot predict with any
certainty its future capital expenditures for environmental

39
<PAGE> 42

compliance because of continually changing compliance standards and technology.
Future events, such as changes in existing environmental laws and regulations or
unknown contamination of sites owned or operated by the Company (including
contamination caused by prior owners and operators of such sites), may give rise
to additional compliance costs which could have a material adverse effect on the
Company's financial condition. Furthermore, actions by foreign, federal, state
and local governments concerning environmental matters could result in laws or
regulations that could increase the cost of producing the products manufactured
by the Company or otherwise adversely affect the demand for its products.
Additionally, the Company does not currently have any insurance coverage for
environmental liabilities and does not anticipate obtaining such coverage in the
future. See "Risk Factors -- Environmental Regulation Imposes Risks and Costs on
Us."

LEGAL PROCEEDINGS

From time to time, the Company is subject to legal proceedings and other
claims arising in the ordinary course of its business. The Company believes that
it is not presently a party to any litigation the outcome of which would have a
material adverse effect on its financial condition or results of operations. The
Company maintains insurance coverage against claims in an amount which it
believes to be adequate.

MANAGEMENT

BOARD OF MANAGERS, EXECUTIVE OFFICERS AND OTHER SIGNIFICANT EMPLOYEES

The following table sets forth the names and ages of each of the
individuals that currently serves as a member (each, a "Board Member") of the
Company's board of managers (the "Board of Managers"), executive officer and
other significant employee of the Company. The Board Members are designated
pursuant to the Members Agreement and serve at the pleasure of the Members (as
defined). See "Limited Liability Company Agreement." The officers of the Company
are chosen by the Board of Managers and serve at the pleasure of the Board of
Managers.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
F. Alan Smith........................ 67 Chairman of the Board of Managers of the Company
Terence C. Seikel.................... 42 President and Chief Executive Officer of the Company;
Board Member
Richard E. Borghi.................... 52 President and Chief Operating Officer of SportRack;
Board Member
Roger T. Morgan...................... 54 President of Valley; Board Member
Gerrit de Graaf...................... 35 General Manager and Chief Executive Officer of Brink;
Board Member
J. Wim Rengelink..................... 44 Managing Director of Brink
Gary K. Houston...................... 45 Vice President of OEM Operations of Valley
Bryan A. Fletcher.................... 39 Vice President of Aftermarket Operations of Valley
Donald J. Hofmann, Jr................ 41 Board Member, Vice President and Secretary of the
Company
Barry Banducci....................... 63 Board Member
Gerard J. Brink...................... 55 Board Member
</TABLE>

F. Alan Smith has served in the automotive industry for 37 years and has
been Chairman of the Board of Managers of the Company since its formation in
September 1995. He served in various assignments at General Motors from 1956 to
1992, including President of GM Canada from 1978 to 1980. He was a member of the
Board of Directors of General Motors from 1981 to 1992 and Chief Financial
Officer of General Motors from 1981 to 1988. Mr. Smith is a director of The
Minnesota Mining and Manufacturing Corporation ("3M") and TransPro, Inc.
("TransPro").

40
<PAGE> 43

Terence C. Seikel has served in the automotive industry for 15 years and
has been President and Chief Executive Officer of the Company since April 15,
1999. Prior to that, Mr. Seikel was Vice President of Finance and Administration
and Chief Financial Officer of the Company and SportRack since January 1996.
From 1985 to 1996, Mr. Seikel was employed by Larizza Industries, a publicly
held supplier of interior trim to the automotive industry, in various capacities
including Chief Financial Officer.

Richard E. Borghi has served in the automotive industry for 31 years and
has been President and Chief Operating Officer of SportRack since April 15,
1999. Prior to that he was Executive Vice President of Operations and Chief
Operating Officer of SportRack since 1995. From 1988 to 1995, Mr. Borghi held
various senior management positions with MascoTech, and was the Executive Vice
President of Operations of the MascoTech Division at the time of its acquisition
by the Company.

Roger T. Morgan has served in the automotive industry for 36 years and has
been President of Valley since June 1990. Prior to joining Valley, he worked for
General Motors for 12 years and Rockwell International Automotive Group as Vice
President -- Operations for 14 years.

Gerrit de Graaf has been General Manager and Chief Executive Officer of
Brink since November 1996. From 1989 to 1996, Mr. de Graaf worked for Philips
Medical Systems as a consultant and most recently as Philips' Marketing Manager
in the United States.

J. Wim Rengelink has served in the automotive industry for 12 years and has
been Managing Director of Brink since 1995. From 1988 to 1995 he worked in
Brink's internal audit department.

Gary K. Houston has served in the automotive industry for 25 years and has
been Vice President of OEM Operations of Valley since 1995. From 1991 to 1995 he
was Vice President of Manufacturing of Valley. Prior thereto, Mr. Houston worked
for Rockwell International for 18 years, most recently as a manufacturing
manager.

Bryan A. Fletcher has served in the automotive industry for 10 years and
has been Vice President of Aftermarket Operations of Valley since 1991.

Donald J. Hofmann, Jr. has been a Board Member, Vice President and
Secretary of the Company since October 1995. Mr. Hofmann has been a General
Partner of CCP since 1992. Prior to joining CCP, Mr. Hofmann held positions in
the Acquisition Finance Division of Manufacturers Hanover and at Smith Barney.
Mr. Hofmann is a director of Penske Corporation and Berry Plastics Corporation.

Barry Banducci has been a Board Member of the Company since October 1995.
Since September 1995, Mr. Banducci has been the Chairman of TransPro. Prior
thereto, Mr. Banducci served in various capacities at Equion Corporation, a
supplier of automotive components, from 1983 to 1995, including President, Chief
Executive Officer and Vice Chairman. Mr. Banducci is a director of TransPro and
Aristotle Corporation.

Gerard J. Brink has been a Board Member of the Company since October 1996.
Mr. Brink was General Manager of Brink from 1965 to 1996.

BOARD MEMBER COMPENSATION

The Board Members do not currently receive compensation for their service
on the Board of Managers or any committee thereof but are reimbursed for their
out-of-pocket expenses. In addition, Messrs. Smith and Banducci have consulting
agreements with the Company. See "Executive Compensation -- Consulting
Agreements."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Managers has an Audit Committee consisting of Messrs. Banducci
and Brink, and a Compensation Committee consisting of Messrs. Hofmann and Smith.
The Audit Committee reviews the scope and results of audits and internal
accounting controls and all other tasks performed by the independent public
accountants of the Company. The Compensation Committee determines compensation
for executive officers of the Company and administers the Company's 1995 Option
Plan.

41
<PAGE> 44

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation for
1998 and 1997 for the former and current chief executive officer of the Company
and the three next most highly compensated executive officers of the Company.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------- ------------
OTHER
ANNUAL SECURITIES ALL OTHER
FISCAL SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS(#) ($)
--------------------------- ------ ------ ----- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
F. Alan Smith........................... 1998 217,000 105,000 -- 32 --
Chairman of the Company 1997 200,000 100,000 -- -- --
Marshall D. Gladchun(1)................. 1998 382,300 200,000 -- 86 --
Former President and Chief Executive 1997 362,500 195,000 -- -- --
Officer of the Company and SportRack
Terence C. Seikel(2).................... 1998 215,000 95,000 -- 65 --
President and Chief Executive Officer 1997 200,600 94,000 -- -- --
of the Company
Roger T. Morgan......................... 1998 250,000 87,500 -- -- --
President of Valley 1997 107,220 73,000 -- 178 --
Richard E. Borghi(3).................... 1998 219,965 115,000 -- 32 --
President and Chief 1997 206,500 94,000 -- -- --
Operating Officer of SportRack
</TABLE>

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

(1) Mr. Gladchun's employment with the Company was terminated on April 15, 1999.

(2) Effective April 15, 1999 Mr. Seikel was appointed President and Chief
Executive Officer of the Company. Prior to that he was Vice President of
Finance and Administration and Chief Financial Officer of the Company and
SportRack.

(3) Effective April 15, 1999 Mr. Borghi was appointed President and Chief
Operating Officer of SportRack. Prior to that he was Executive Vice
President and Chief Operating Officer of SportRack.

42
<PAGE> 45

OPTION GRANTS IN 1998

The following tables set forth information with respect to membership unit
options pursuant to the 1995 Option Plan granted to the named executive officers
of the Company during 1998. All options were granted at an exercise price less
than the fair market value per share of Class A Units on the date of grant.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------------------------- ANNUAL RATES OF
NUMBER OF CLASS A UNIT PRICE
SECURITIES PERCENT OF TOTAL EXERCISE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OR BASE OPTION TERM($)(1)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED(#) 1998(%) ($/SH) DATE 5% 10%
---- ---------- ---------------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
F. Alan Smith.......................... 32 11.4 3,029 7/1/13 $105,000 $308,000
Marshall D. Gladchun................... 86 30.7 3,029 7/1/13 281,000 818,000
Terence C. Seikel...................... 65 23.2 3,029 7/1/13 212,000 626,000
Roger T. Morgan........................ -- -- -- -- -- --
Richard E. Borghi...................... 32 11.4 3,029 7/1/13 105,000 308,000
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT YEAR END(#) AT YEAR END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
F. Alan Smith................... -- -- 218/264 741,000/833,000
Marshall D. Gladchun(2)......... -- -- 696/890(2) 2,366,000/2,852,000(2)
Terence C. Seikel............... -- -- 265/400 901,000/1,228,000
Roger T. Morgan................. -- -- 72/106 --/--
Richard E. Borghi............... -- -- 276/356 938,000/1,145,000
</TABLE>

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

(1) Potential realizable value is based on the assumption that the price of the
Company's Class A Units appreciate at the annual rate shown, compounded
annually, from the date of grant until the end of the 15-year option term.
The values are calculated in accordance with rules promulgated by the
Securities and Exchange Commission and do not reflect the Company's estimate
of future Class A Unit price appreciation.

(2) Mr. Gladchun's unexercisable options were cancelled on April 15, 1999, in
connection with the termination of his employment with SportRack and in
accordance with his option agreements.

EMPLOYMENT AGREEMENTS

Each of Roger T. Morgan, Terence C. Seikel, Richard E. Borghi and Gerrit de
Graaf has entered into an employment agreement (collectively, the "Employment
Agreements") with the Company. Mr. Morgan's Employment Agreement provides for an
annual base salary of $250,000, subject to increases at the sole discretion of
the Board of Managers, and a bonus in the range of 50% to 70% of his base
salary. Mr. Seikel's Employment Agreement provides for an annual base salary of
$165,000 subject to increases at the sole discretion of the Board of Managers,
and a bonus in the range of 30-50% of his base salary. Mr. Borghi's Employment
Agreement provides for an annual base salary of $161,200, subject to increases
at the sole discretion of the Board of Managers, a bonus in the range of 30-50%
of his base salary, and an Ending Bonus of $100,000. Mr. de Graaf's Employment
Agreement provides for an annual base salary of NLG 170,000, subject to
increases at the sole discretion of the Board of Managers, and a bonus in the
range of 30% to 50% of his base salary. The Employment Agreements also provide
for twelve months of severance pay to the executive officer in the event such
officer is terminated without cause (as defined in the Employment Agreements.)

The Employment Agreements expire at various times between June 30, 2000 and
December 31, 2000 (except that Gerrit de Graaf's Employment Agreement may be
terminated by either party upon three month's prior written notice) but
automatically extends for successive two-year terms unless terminated by the
Company upon 30 days notice prior to the expiration of the current term. Each
Employment Agreement prohibits the executive officer from disclosing non-public
information about the Company. The Employment

43
<PAGE> 46

Agreements also require the executive officers to assign to the Company any
designs, inventions and other related items and intellectual property rights
developed or acquired by the executive officer during the term of his
employment. In addition, for a period of five years after termination of
employment (two years if the termination is without cause) each executive
officer has agreed, in his respective Employment Agreement, not to (i) engage in
any Competitive Business (as defined in the Employment Agreements), (ii)
interfere with or disrupt any relationship between the Company and its
customers, suppliers and employees and (iii) induce any employee of the Company
to terminate his or her employment with the Company or engage in any Competitive
Business.

Mr. Gladchun, the Company's former Chief Executive Officer and President,
entered into an employment agreement with SportRack which provided for an annual
base salary of $277,304, subject to increases at the sole discretion of the
Board of Managers, a bonus in the range of 50-70% of his base salary, and a
one-time bonus of $400,000 on the earlier of (i) September 20, 2002, (ii) his
termination date, and (iii) a sale of the Company (any such bonus and "Ending
Bonus"). In connection with the termination of Mr. Gladchun's employment with
SportRack and its affiliates, effective April 15, 1999, Mr. Gladchun is entitled
to receive severance payments and the Ending Bonus in accordance with the terms
of his employment agreement.

CONSULTING AGREEMENTS

F. Alan Smith and Barry Banducci, both members of the Board of Managers,
have each entered into consulting agreements (the "Consulting Agreements") with
the Company dated as of September 28, 1995. Mr. Smith's Consulting Agreement
provides for an annual consulting fee of $150,000 subject to increases at the
sole discretion of the Board of Managers, and a performance based bonus in the
range of 30-50% of the annual consulting fee. Mr. Banducci's Consulting
Agreement provides for an annual consulting fee of $50,000. The initial term of
the Consulting Agreements expired on March 28, 1997. The Consulting Agreements
automatically extend for successive six-month periods unless terminated by the
Company upon 30 days notice prior to the expiration of the then current term.
The Consulting Agreements prohibit Messrs. Smith and Banducci from disclosing
non-public information about the Company.

MEMBERS' AGREEMENT

Pursuant to the Second Amended and Restated Members' Agreement dated as of
August 5, 1997 (the "Members' Agreement") among the Company and certain of the
holders of outstanding units (the "Units") of the Company, affiliates of CCP
have the ability to appoint a majority of the members of the Company's Board of
Managers.

44
<PAGE> 47

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of April 15, 1999, the outstanding membership interests of the Company
consisted of 16,450 Units. The following table sets forth certain information
regarding the beneficial ownership of the Units by (i) each person known by the
Company to own more than 5% of the Units, (ii) each named director, (iii) each
named executive officer and (iv) all of the Company's directors and executive
officers treated as a group. To the knowledge of the Company, each of such
holders of Units has sole voting and investment power as to the Units owned
unless otherwise noted.

<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS(1) UNITS OWNED OWNERSHIP(2)
------------------- ----------- ------------
<S> <C> <C>
CB Capital Investors, L.P.(3)......................... 10,251 60.47%
380 Madison Avenue, 12th Floor
New York, New York 10017
MascoTech, Inc. ...................................... 1,500 9.12
275 Rex Boulevard
Auburn Hills, Michigan 48326
Celerity Partners..................................... 1,500 9.12
C/o Mark Benham
300 Sand Hill Road
Building 4, Suite 230
Menlo Park, California 94025
F. Alan Smith(4)...................................... 518 3.11
Marshall D. Gladchun(5)............................... 1,196 6.98
Roger T. Morgan(6).................................... 119 0.72
Gerrit de Graaf(7).................................... 34 0.21
Terence C. Seikel(8).................................. 505 3.01
Richard E. Borghi(9).................................. 476 2.85
Barry Banducci(10).................................... 405 2.44
59 Old Quarry Road
Guildford, Connecticut 06437
Gerard J. Brink....................................... 410 2.49
Lijsterbeslaan 10
B-2950 Kapellen
Belgium
All directors and executive officers as a group (8
persons)............................................ 2,498 14.72
</TABLE>

- -------------------------
(1) Unless otherwise indicated, address is c/o Advanced Accessory Systems, LLC,
12900 Hall Road, Suite 200, Sterling Heights, Michigan 48313.

(2) Beneficial ownership is determined in accordance with the rules of the
Commission and includes voting and investment power with respect to the
Units. Units subject to options or warrants currently exercisable or
exercisable within 60 days of April 15, 1999 are deemed outstanding for
purposes of computing the percentage ownership of the person holding such
options or warrants, but are not deemed outstanding for purposes of
computing the percentage of any other person.

(3) CB Capital Investors, L.P. is an affiliate of CCP. Includes 501 Units
subject to warrants exercisable within 60 days.

(4) Includes 218 Units subject to options exercisable within 60 days. 300 Units
are owned by the F. Alan Smith Family Limited Partnership.

(5) Includes 696 Units subject to options exercisable within 60 days.

(6) Includes 30 Units subject to options exercisable within 60 days.

45
<PAGE> 48

(7) Includes 8 Units subject to options exercisable within 60 days.

(8) Includes 305 Units subject to options exercisable within 60 days.

(9) Includes 276 Units subject to options exercisable within 60 days.

(10) Includes 155 Units subject to options exercisable within 60 days. All Units
are owned by the Banducci Family, LLC.

LIMITED LIABILITY COMPANY AGREEMENT

The Company, Valley and SportRack are each limited liability companies
organized under the Delaware Limited Liability Company Act (the "LLC Act").
Valley's equity securities are held 99% by the Company and 1% by SportRack.
SportRack's equity securities are held 100% by the Company. The Company controls
the policies and operations of Valley and SportRack. The Company's operations
are governed by a Second Amended and Restated Operating Agreement (the "LLC
Agreement") among the Company, CB Capital Investors L.P. ("CBC"), certain
members of the Company's management and the investors defined therein (each a
"Member" and collectively the "Members"). The LLC Agreement governs the relative
rights and duties of the Members.

Units. The Company is authorized to issue up to 25,000 Class A Units and up
to 2,000 Class B Units. As of April 15, 1999, 16,450 Class A Units were issued
and outstanding, 4,200 Class A Units have been duly reserved for issuance to
employees, directors and independent consultants and contractors of the Company
or any subsidiary thereof pursuant to the 1995 Option Plan of the Company, and
no Class B Units have been issued or reserved for issuance.

Management. The Board of Managers of the Company consists of up to 11
members as designated pursuant to the Member's Agreement. The Board of Managers
is selected by a majority of the Members holding Class A Units (each a "Class A
Member"). Under the Member's Agreement, CBC is entitled at all times to hold a
seat on the Board of Managers and has the ability to appoint a majority of the
Members of the Board of Managers. A majority of the Chase Members (as defined in
the Members Agreement) may hold a seat on the Board of Managers through their
representative. Any Board Member of the Company may be removed without cause by
the vote of a majority of the Class A Members so long as the Members entitled to
appoint such Board Member have consented.

If a vacancy on the Board of Managers is not filled by a majority of the
Class A Members within 60 days after such vacancy occurs such vacancy may be
filled by a vote of the majority of the Board Members then in office or, if
none, by a vote of all Members.

Distributions. Both the Amended and Restated Credit Agreement and the
Indenture generally limit the Company's ability to make cash distributions to
Members other than distributions to cover the income tax liabilities of the
Members. Specifically, within 90 days of the end of each fiscal year, the
Company will distribute to each Member an amount (if any) equal to 44% of the
excess of Net Profits over Net Losses (each as defined in the LLC Agreement) to
such Member's capital account less any distributions previously made in that
year.

Restriction on Transfer. No Member may transfer its interest without having
obtained the prior written consent of a majority of the Board Members who hold
in the aggregate more than 50% of the profits and capital interest of the
Company, which consent may be withheld in their sole discretion.

Dissolution. The Company will be dissolved upon the earliest to occur of
(a) December 31, 2025; (b) the determination of the Board of Managers and a
majority of Class A Members to dissolve the Company; or (c) the occurrence of an
event of withdrawal of a Board Member or any other dissolution event under
Section 18-801 of the LLC Act. An event of withdrawal of any Member will not
dissolve the Company if within 90 days of such event the business of the Company
is continued by a majority of its remaining Members.

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<PAGE> 49

CERTAIN TRANSACTIONS

CSI, The Chase Manhattan Bank ("Chase"), The Chase Manhattan Bank of Canada
("Chase Canada") and CCP are affiliates of CBC, which owns approximately 48% of
the Company's issued and outstanding voting securities on a fully diluted basis.
CSI acted as an Initial Purchaser in connection with the offering of the Notes
(the "Offering"), for which it received customary fees. Chase is agent bank and
a lender to the Company under the Amended and Restated Credit Agreement and has
received customary fees and reimbursement of expenses in such capacities. Chase
Canada is agent bank and a lender to the Company under the Canadian Credit
Agreement and has received customary fees and reimbursement of expenses in such
capacities. Chase received its proportionate share, $6.0 million, of the
repayment by the Company of $90.0 million under the Amended and Restated Credit
Agreement from the proceeds of the Offering. An affiliate of CCP and CSI held a
portion of the Senior Subordinated Debt and received its proportionate share,
$10.7 million, including prepayment penalties of $700,000, of the repayment by
the Company of such debt from the proceeds of the Offering. As a result of the
Offering, such affiliate was relieved of its obligation to provide up to an
additional $20.0 million of senior subordinated debt financing. In addition, an
affiliate of CSI and CCP purchased a portion of the Notes in connection with the
Offering. Donald J. Hofmann, Jr., a general partner of CCP, is a member of the
Board of Managers of the Company. In addition, CSI, Chase and their affiliates
participate on a regular basis in various investment banking and commercial
banking transactions for the Company and its affiliates.

The Company is a party to the Consulting Agreements with F. Alan Smith, the
Chairman of the Company, and Barry Banducci, a Board Member of the Company. See
"Management -- Consulting Agreements."

In connection with the acquisition of the MascoTech Division by the
Company, the Company loaned Messrs. Gladchun and Borghi $400,000 and $100,000,
respectively, to enable them to make their initial equity investments in the
Company. The loans bear interest at 6.2% and mature in September 2002. Mr.
Gladchun's loan became due and payable on April 15, 1999 in connection with the
termination of his employment with SportRack and its affiliates.

DESCRIPTION OF THE CREDIT FACILITIES

The following information relating to the Credit Facilities is qualified in
its entirety by reference to the complete text of the documents entered into in
connection therewith. The following is a description of the material terms of
the Credit Facilities:

CANADIAN CREDIT AGREEMENT

To finance the SportRack International Acquisition and provide working
capital financing in Canada, Chase Canada, First Chicago NBD Bank, Canada, and
Bank of Nova Scotia (collectively, the "Canadian Lenders") have provided to
SportRack International a C$20 million (approximately $13.1 million) term loan
and a C$4.0 million (approximately $2.6 million) working capital revolving
credit facility under a First Amended and Restated Credit Agreement dated as of
March 19, 1998 (the "Canadian Credit Agreement"). The Canadian Credit Agreement
is scheduled to mature on October 31, 2003 and the term loan portion amortizes
in quarterly installments. The Canadian Credit Agreement is guaranteed by the
Company and SportRack and is secured by a pledge of 100% of the stock and assets
of SportRack International. The guarantees of the Company and SportRack are
secured by substantially the same collateral that secures the obligations of
those companies under the Amended and Restated Credit Agreement described below.
The interest margins under the Canadian Credit Agreement are comparable to those
under the Revolving Credit Facility and the Tranche A Term Loan described below.

AMENDED AND RESTATED CREDIT AGREEMENT

In connection with the Valley Acquisition, the Company entered into the
Second Amended and Restated Credit Agreement, dated as of August 5, 1997 (as
amended, the "Amended and Restated Credit Agreement"), with certain of its
subsidiaries, the lenders party thereto, Chase as Co-Administrative Agent and
Syndication Agent and NBD as Administrative Agent, Documentation Agent and
Collateral Agent. The

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<PAGE> 50

Amended and Restated Credit Agreement amended the Company's existing credit
agreement and provided for (i) a Tranche A Term Loan in the aggregate principal
amount of $65 million (the "Tranche A Term Loan"), (ii) a Tranche B Term Loan in
the aggregate principal amount of $55 million (the "Tranche B Term Loan" and
together with the Tranche A Term Loan, collectively, the "Term Loan Facilities")
and (iii) a revolving credit facility in the aggregate principal amount of $25
million (the "Revolving Credit Facility"), which includes a $2 million swing
line sub facility and a $10 million letter of credit sub facility. Borrowings by
SportRack International under the revolving credit facility of the Canadian
Credit Agreement count against availability under the Revolving Credit Facility.
The outstanding principal amounts of the Tranche A Term Loan and the Tranche B
Term Loan were reduced to $17.5 million and $16.0 million through prepayments
from the proceeds of the sale of the Notes. Subsequent to the sale of the Notes,
the Amended and Restated Credit Agreement was further amended to provide a $22
million acquisition facility to finance future acquisitions (the "Acquisition
Facility"). The Tranche A Term Loan, the Tranche B Term Loan, the Revolving
Credit Facility and the Acquisition Facility are referred to collectively as the
"Domestic Facilities".

Use of Proceeds; Maturity. The proceeds of the Term Loan Facilities were
used to finance the Valley Acquisition and to refinance existing debt. The
proceeds of the Revolving Credit Facility were used to refinance existing debt,
pay fees and expenses of the Valley Acquisition and for general corporate
purposes. The proceeds of a $21.0 million borrowing under the Acquisition
Facility were used to finance the acquisition of the assets of Ellebi. Prior to
December 31, 1999, the Acquisition Facility may be repaid and reborrowed to
finance future acquisitions. The Term Loan Facilities have maturity schedules as
follows: (i) the Tranche A Term Loan matures on October 30, 2003 and amortizes
in quarterly installments; and (ii) the Tranche B Term Loan matures on October
30, 2004 and amortizes in quarterly installments. The Revolving Credit Facility
matures on October 30, 2003. The Acquisition Facility matures on October 30,
2003 and amortizes in quarterly installments commencing on December 31, 1999.

Revolving Credit Facility. The availability of the commitments under the
Revolving Credit Facility is subject to a borrowing base which generally equals
specified percentages of the then Eligible Receivables or Eligible Inventory
(each as defined in the Amended and Restated Credit Agreement) of the Company
and certain of its Subsidiaries. As of December 31, 1998, $25.0 million of
commitments under the Revolving Credit Facility is available to the Company.

Prepayments; Reduction of Commitments. The Term Loan Facilities are
required to be prepaid with (i) 100% of the net proceeds of any sale or issuance
of equity or any incurrence of indebtedness for borrowed money, subject to
certain exceptions; (ii) 100% of the net proceeds of any sale or other
disposition of any material assets, except for the sale of inventory in the
ordinary course of business, subject to certain exceptions; and (iii) 50% of
excess cash flow for each fiscal year. Such mandatory prepayments are applied
pro rata between the Tranche A Term Loans and the Tranche B Term Loans and, in
each case, in the inverse order of maturity. Any Tranche B Term Loan lender may
decline any mandatory prepayment prescribed in subsections (i) through (iii)
above, in which case the amounts declined are applied as a mandatory prepayment
pro rata to the Term Loan A Lenders in the inverse order of maturity.

Interest. The Domestic Facilities bear interest at a rate per annum, at the
option of the Company, equal to the adjusted eurocurrency base rate (the
"Eurocurrency Base Rate") or the rate which is equal to the higher of (i) NBD's
prime rate and (ii) the federal funds rate plus 1/2 of 1% ("ABR"), in each case
plus an applicable margin based on the leverage ratio from time to time in
effect. The applicable margins range from .75% to 2.00% for ABR Revolving Credit
Facility advances and Tranche A Term Loans and from 1.25% to 2.50% for ABR
Tranche B Term Loans. For Revolving Credit Facility advances and Tranche A Term
Loans bearing interest based on the Eurocurrency Base Rate, the applicable
margins range from 1.75% to 3.00%. For Tranche B Term Loans bearing interest at
the Eurocurrency Base Rate, the applicable margins range from 2.25% to 3.50%.
The rates for letter of credit fees are the same as the applicable margins for
Eurocurrency Revolving Credit advances.

Collateral and Guarantees. The Domestic Facilities are guaranteed by the
Company and substantially all of its existing U.S. subsidiaries. The Domestic
Facilities are secured by a first priority lien on (i) all of the capital stock
(or partnership or other membership interest) of the Company, SportRack and each
of the

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<PAGE> 51

material direct and indirect U.S. subsidiaries of the Company and 65% of the
capital stock of first tier non-U.S. subsidiaries and (ii) substantially all
tangible and intangible assets of the Company and each material direct and
indirect U.S. subsidiary. With respect to certain of the loans made to non-U.S.
subsidiaries, it is currently contemplated that all of the capital stock of
certain non-U.S. subsidiaries and, to the extent permitted by applicable law,
liens on the receivables and inventory of certain of the non-U.S. subsidiaries
and mortgage liens of certain real estate owned by Brink will be pledged to
secure the loans to Brink. The collateral also secures interest rate swaps,
currency or other hedge obligations owning to any lender.

Covenants. The Amended and Restated Credit Agreement contains covenants
restricting the ability of the Company and its subsidiaries to, among other
things, (i) declare dividends or redeem or repurchase capital stock; (ii)
prepay, redeem or purchase debt; (iii) incur liens; (iv) make loans and
investments; (v) issue additional debt; (vi) amend or otherwise alter debt and
other material agreements; (vii) engage in mergers, acquisitions and asset
sales; (viii) engage in transactions with affiliates; and (ix) alter the
business they conduct. The Company has also provided certain customary
indemnification of the Agents, lenders and their respective agents and is
required to comply with financial covenants with respect to (i) maximum leverage
ratio; (ii) minimum fixed charge coverage ratio; (iii) a minimum net worth; and
(iv) capital expenditures; and (v) rentals. The Company must also comply with
certain customary affirmative covenants.

Events of Default. Events of default under the Amended and Restated Credit
Agreement include but are not limited to (i) the Company's failure to pay
principal when due or interest within three business days of the date when due;
(ii) the Company's breach of certain covenants, representations or warranties
contained in the loan documents; (iii) customary cross-default provisions; (iv)
events of bankruptcy, insolvency or dissolution of the Company or its
subsidiaries; (v) the levy of certain judgements against the Company, its
subsidiaries, or their assets; (vi) the actual or asserted invalidity of
security documents or guarantees of the Company or its subsidiaries; (vii) a
Change of Control (as defined in the Amended and Restated Credit Agreement) of
the Company; (viii) the occurrence of certain ERISA events; (ix) or the event
that subordination provisions evidencing subordinated debt shall cease to be
valid or in full force and effect.

DESCRIPTION OF THE NOTES

The Notes were issued under an Indenture (the "Indenture") among the
Company, Capital Corp., the Guarantors and First Union National Bank, as trustee
(the "Trustee"). The following summary of the material provisions of the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and to all of the provisions of the Indenture, including
the definitions of certain terms therein and those terms made a part of the
Indenture by reference to the Trust Indenture Act, as in effect on the date of
the Indenture. The definitions of certain capitalized terms used in the
following summary are set forth below under "Certain Definitions." References in
this "Description of the Notes" section to "the Company" mean only Advanced
Accessory Systems, LLC and not any of its Subsidiaries.

GENERAL

The Notes are joint and several obligations of the Company and Capital
Corp. The Notes are issued only in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. The Issuers have
appointed the Trustee to serve as registrar and paying agent under the Indenture
at its offices at 40 Broad Street, 5th Floor, Suite 550, New York, New York
10004. No service charge will be made for any registration of transfer or
exchange of the Notes, except for any tax or other governmental charge that may
be imposed in connection therewith.

RANKING

The Notes rank junior to, and subordinate in right of payment to, all
existing and future Senior Indebtedness of the Issuers, pari passu in right of
payment with all senior subordinated Indebtedness of the Issuers and senior in
right of payment to all Subordinated Indebtedness of the Issuers. At December
31, 1998, the Company had approximately $63.0 million of Senior Indebtedness
outstanding (exclusive of unused

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<PAGE> 52

commitments). All debt incurred under the Credit Facilities will be Senior
Indebtedness of the Company, will be guaranteed by each of the Guarantors on a
senior basis and will be secured by substantially all of the assets of the
Company and the Guarantors.

MATURITY, INTEREST AND PRINCIPAL OF THE NOTES

The Notes are limited to $125,000,000 aggregate principal amount and will
mature on October 1, 2007. Interest on the Notes accrues at a rate of 9 3/4% per
annum and is payable in cash semi-annually in arrears on each April 1 and
October 1, which commenced on October 1, 1998, to the holders of record of Notes
at the close of business on March 15 and September 15, respectively, immediately
preceding such interest payment date. Interest accrues from the most recent
interest payment date to which interest has been paid or, if no interest has
been paid, from April 1, 1998. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

OPTIONAL REDEMPTION

The Notes are redeemable at the option of the Issuers, in whole or in part,
at any time on or after October 1, 2002, at the redemption prices (expressed as
a percentage of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
beginning on October 1 of the years indicated below:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2002........................................................ 104.875%
2003........................................................ 103.250%
2004........................................................ 101.625%
2005 and thereafter......................................... 100.000%
</TABLE>

In addition, at any time and from time to time on or prior to October 1,
2000, the Issuers may redeem in the aggregate up to 35% of the originally issued
aggregate principal amount of the Notes with the net cash proceeds of one or
more Public Equity Offerings by the Company at a redemption price in cash equal
to 109.750% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of redemption (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the aggregate
principal amount of the Notes originally issued must remain outstanding
immediately after giving effect to each such redemption (excluding any Notes
held by the Company or any of its Affiliates). Notice of any such redemption
must be given within 60 days after the date of the closing of the relevant
Public Equity Offering of the Company.

SELECTION AND NOTICE OF REDEMPTION

In the event that less than all of the Notes are to be redeemed at any time
pursuant to an optional redemption, selection of such Notes for redemption will
be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Notes of a principal amount of $1,000 or less shall
be redeemed in part; provided further, however, that if a partial redemption is
made with the net cash proceeds of a Public Equity Offering by the Company,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of The Depository Trust Company), unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Note. On and after

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<PAGE> 53

the redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Company has deposited with the paying agent
for the Notes funds in satisfaction of the applicable redemption price pursuant
to the Indenture.

SUBORDINATION OF THE NOTES

The payment of the principal of, premium, if any, and interest on the Notes
is subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash of all Senior Indebtedness.

Upon any payment or distribution of assets or securities of the Issuers of
any kind or character, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding any payment
from the trust described under "Satisfaction and Discharge of Indenture;
Defeasance" (a "Defeasance Trust Payment")), upon any dissolution or winding-up
or total liquidation or reorganization of the Issuers, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
Senior Indebtedness then due shall first be paid in full in cash before the
Holders of the Notes or the Trustee on behalf of such Holders shall be entitled
to receive any payment by the Issuers of the principal of, premium, if any, or
interest on the Notes, or any payment by the Issuers to acquire any of the Notes
for cash, property or securities, or any distribution by the Issuers with
respect to the Notes of any cash, property or securities (excluding any payment
or distribution of Permitted Junior Securities and excluding any Defeasance
Trust Payment). Before any payment may be made by, or on behalf of, the Issuers
of the principal of, premium, if any, or interest on the Notes upon any such
dissolution or winding-up or total liquidation or reorganization, or in
bankruptcy, insolvency or receivership any payment or distribution of assets or
securities of the Issuers of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior Securities
and excluding any Defeasance Trust Payment), to which the Holders of the Notes
or the Trustee on their behalf would be entitled, but for the subordination
provisions of the Indenture, shall be made by the Issuers or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Indebtedness (pro
rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders) or their representatives or to the trustee or
trustees or agent or agents under any agreement or indenture pursuant to which
any of such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness then due in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.

No direct or indirect payment (excluding any payment or distribution of
Permitted Junior Securities and excluding any Defeasance Trust Payment) by or on
behalf of the Issuers of principal of, premium, if any, or interest on the
Notes, whether pursuant to the terms of the Notes, upon acceleration, pursuant
to an Offer to Purchase or otherwise, will be made if, at the time of such
payment, there exists a default in the payment of all or any portion of the
obligations on any Senior Indebtedness, whether at maturity, on account of
mandatory redemption or prepayment, acceleration or otherwise, and such default
shall not have been cured or waived or the benefits of this sentence waived by
or on behalf of the holders of such Senior Indebtedness. In addition, during the
continuance of any non-payment event of default with respect to any Designated
Senior Indebtedness pursuant to which the maturity thereof may, in accordance
with the terms of the agreement or other instrument under which such Designated
Senior Indebtedness was created, be immediately accelerated, and upon receipt by
the Trustee of written notice (a "Payment Blockage Notice") from the holder or
holders of such Designated Senior Indebtedness or the trustee or agent acting on
behalf of the holders of such Designated Senior Indebtedness, then, unless and
until such event of default has been cured or waived or has ceased to exist or
such Designated Senior Indebtedness has been discharged or repaid in full in
cash or the benefits of these provisions have been waived by the holders of such
Designated Senior Indebtedness, no direct or indirect payment (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment) will be made by or on behalf of the Issuers of
principal of, premium, if any, or interest on the Notes, to such Holders, during
a period (a "Payment Blockage Period") commencing on the date of receipt of such
notice by the Trustee and ending 179 days thereafter. Notwithstanding anything
in the subordination provisions of the Indenture or the Notes to the contrary,
(x) in no event will a Payment

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<PAGE> 54

Blockage Period extend beyond 179 days from the date the Payment Blockage Notice
in respect thereof was given, (y) there shall be a period of at least 181
consecutive days in each 360-day period when no Payment Blockage Period is in
effect and (z) not more than one Payment Blockage Period may be commenced with
respect to the Notes during any period of 360 consecutive days. No event of
default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period (to the extent the holder of Designated
Senior Indebtedness, or trustee or agent, giving notice commencing such Payment
Blockage Period had knowledge of such existing or continuing event of default)
may be, or be made, the basis for the commencement of any other Payment Blockage
Period by the holder or holders of such Designated Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event of
default has been cured or waived for a period of not less than 90 consecutive
days.

The failure to make any payment or distribution for or on account of the
Notes by reason of the provisions of the Indenture described under this
"Subordination of the Notes" heading will not be construed as preventing the
occurrence of any Event of Default in respect of the Notes. See "Events of
Default" below.

By reason of the subordination provisions described above, in the event of
insolvency of the Issuers, funds which would otherwise be payable to Holders of
the Notes will be paid to the holders of Senior Indebtedness to the extent
necessary to pay the Senior Indebtedness in full in cash, and the Issuers may be
unable to meet fully their obligations with respect to the Notes.

As of December 31, 1998 the United States/Canadian Credit Facility is the
only outstanding Senior Indebtedness. Subject to the restrictions set forth in
the Indenture, in the future the Company may issue additional Senior
Indebtedness to refinance existing Indebtedness or for other corporate purposes.

GUARANTEES OF THE NOTES

The Indenture provides that each of the Guarantors fully and
unconditionally guarantees on a joint and several basis (the "Guarantees") all
of the Issuers' obligations under the Notes, including its obligations to pay
principal, premium, if any, and interest with respect to the Notes. The
Guarantees are general unsecured obligations of the Guarantors. The obligations
of each Guarantor under its Guarantee is subordinated and junior in right of
payment to the prior payment in full of all existing and future Guarantor Senior
Indebtedness of such Guarantor substantially to the same extent as the Notes are
subordinated to all existing and future Senior Indebtedness of the Company. The
Guarantors also guarantee all obligations under the Credit Facilities, and each
Guarantor has granted a security interest in all or substantially all of its
assets to secure the obligations under the Credit Facilities. The obligations of
each Guarantor are limited to the maximum amount which, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under the Indenture, will
result in the obligations of such Guarantor under its Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under Federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount, based
on the net assets of each Guarantor determined in accordance with GAAP.

The Indenture provides that the Company shall cause each Restricted
Subsidiary issuing a Guarantee after the Issue Date pursuant to "Certain
Covenants -- Guarantees by Restricted Subsidiaries" to (i) execute and deliver
to the Trustee a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall become a party to the
Indenture and thereby unconditionally guarantee all of the Issuers' Obligations
under the Notes and the Indenture on the terms set forth therein and (ii)
deliver to the Trustee an Opinion of Counsel that such supplemental indenture
has been duly authorized, executed and delivered by such Restricted Subsidiary
and constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary (which opinion may be subject to customary assumptions and
qualifications). Thereafter, such Restricted Subsidiary shall (unless released
in accordance with the terms of this Indenture) be a Guarantor for all purposes
of the Indenture.

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<PAGE> 55

Each Guarantee is a continuing guarantee and will (a) remain in full force
and effect until payment in full of all of the obligations covered thereby, (b)
be binding upon each Guarantor and (c) inure to the benefit of and be
enforceable by the Trustee, the Holders and their successors, transferees and
assigns.

The Indenture provides that if the Notes are defeased in accordance with
the terms of the Indenture, or if, subject to the requirements of the first
paragraph under "-- Certain Covenants -- Merger, Sale of Assets, etc." all or
substantially all of the assets of any Guarantor or all of the Equity Interests
of any Guarantor are sold (including by issuance or otherwise) by the Company in
a transaction constituting an Asset Sale, and if (x) the Net Cash Proceeds from
such Asset Sale are used in accordance with the covenant described under
"Certain Covenants-Disposition of Proceeds of Asset Sales" or (y) the Company
delivers to the Trustee an Officers' Certificate to the effect that the Net Cash
Proceeds from such Asset Sale shall be used in accordance with the covenant
described under "Certain Covenants -- Disposition of Proceeds of Asset Sales"
and within the time limits specified by such covenant, then such Guarantor (in
the event of a sale or other disposition of all of the Equity Interests of such
Guarantor) or the corporation acquiring such assets (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
shall be released and discharged of its Guarantee obligations in respect of the
Indenture and the Notes. In addition, if no Default or Event of Default has
occurred and is continuing, upon the release of the guarantees of any Guarantor
of amounts outstanding under the Credit Facilities, the Guarantee of such
Guarantor shall be automatically released.

Any Guarantor that is designated an Unrestricted Subsidiary pursuant to and
in accordance with "Designation of Unrestricted Subsidiaries" below shall upon
such Designation be released and discharged of its Guarantee obligations in
respect of the Indenture and the Notes and any Unrestricted Subsidiary whose
Designation is revoked pursuant to "Designation of Unrestricted Subsidiaries"
below will be required to become a Guarantor in accordance with the procedure
described in the third preceding paragraph.

OFFER TO PURCHASE UPON CHANGE OF CONTROL

Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
Holders of the Notes of such occurrence in the manner prescribed by the
Indenture and shall, within 20 days after the Change of Control Date, make an
Offer to Purchase all Notes then outstanding at a purchase price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date).

If a Change of Control occurs which also constitutes an event of default
under the Credit Facilities, the lenders under the Credit Facilities would be
entitled to exercise the remedies available to a secured lender under applicable
law and pursuant to the terms of the Credit Facilities. Accordingly, any claims
of such lenders with respect to the assets of the Issuers will be prior to any
claim of the Holders of the Notes with respect to such assets.

Neither the Board of Managers of the Company nor the Trustee may waive the
covenant relating to a Holder's right to redemption upon a Change of Control.
Restrictions in the Indenture described herein on the ability of the Company and
its Restricted Subsidiaries to incur additional Indebtedness, to grant Liens on
their property, to make Restricted Payments and to make Asset Sales may also
make more difficult or discourage a takeover of the Company, whether favored or
opposed by the management of the Company. Consummation of any such transaction
in certain circumstances may require redemption or repurchase of the Notes, and
there can be no assurance that the Company or the acquiring party will have
sufficient financial resources to effect such redemption or repurchase. Such
restrictions and the restrictions on transactions with Affiliates may, in
certain circumstances, make more difficult or discourage any leveraged buyout of
the Company or any of its Restricted Subsidiaries by the management of the
Company. While such restrictions cover a wide variety of arrangements which have
traditionally been used to effect highly leveraged transactions, the Indenture
may not afford the Holders of Notes protection in all circumstances from the
adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.

with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the "Change of Control" provisions of the Indenture, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under the "Change of Control" provisions of the
Indenture by virtue thereof.

Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the Holders of the Notes to
require that the Company repurchase or redeem the Notes in the event of a
takeover, recapitalization or similar transaction.

CERTAIN COVENANTS

Limitation on Indebtedness. The Company shall not, and shall not cause or
permit any Restricted Subsidiary to, directly or indirectly, Incur any
Indebtedness (including Acquired Indebtedness), except for Permitted
Indebtedness; provided, however,that the Company and any Domestic Restricted
Subsidiary may Incur Indebtedness if, at the time of and immediately after
giving pro forma effect to such Incurrence of Indebtedness and the application
of the proceeds therefrom, the Consolidated Coverage Ratio would be greater than
2.0 to 1.0 if the Indebtedness is Incurred prior to December 31, 1999 and 2.25
to 1.0 if the Indebtedness is Incurred thereafter; and provided further, that
any Foreign Restricted Subsidiary may incur Indebtedness in accordance with "--
Limitation on Foreign Indebtedness" below.

Limitation on Foreign Indebtedness. The Company shall not cause or permit
any Foreign Restricted Subsidiary of the Company to, directly or indirectly,
Incur any Indebtedness (including Acquired Indebtedness) other than Permitted
Indebtedness set forth in clauses (a) through (m) of the definition thereof
unless (i) the Indebtedness is Incurred, denominated and payable in U.S. dollars
or the local currencies of the jurisdictions of the operations of the Foreign
Restricted Subsidiary Incurring such Indebtedness or of the business or the
location of assets being acquired with the proceeds of such Indebtedness;
provided, however, that any Indebtedness permitted to be Incurred in a Western
European currency pursuant to this clause (i) may be Incurred in such Western
European currency or, any other Western European currency, (ii) after giving
effect to the Incurrence of such Indebtedness and the receipt of the application
of the proceeds therefrom, (A) if, as a result of the Incurrence of such
Indebtedness, such Restricted Subsidiary will be or become subject to any
restriction or limitation on the payment of dividends or the making of other
distributions, (I) the ratio of Foreign EBITDA to Foreign Interest Expense
(determined on a pro forma basis for the last four fiscal quarters for which
financial statements are available at the date of determination) is greater than
3.0 to 1.0 and (II) the Company's Consolidated Coverage Ratio (determined on a
pro forma basis for the last four fiscal quarters of the Company for which
financial statements are available at the date of determination) is greater than
2.0 to 1.0 if the Indebtedness is Incurred prior to December 31, 1999 and 2.25
to 1.0 if the Indebtedness is Incurred thereafter and (B) in any other case, the
Company's Consolidated Coverage Ratio (determined on a pro forma basis for the
last four fiscal quarters of the Company for which financial statements are
available at the date of determination) is greater than 2.0 to 1.0 if the
Indebtedness is Incurred prior to December 31, 1999 and 2.25 to 1.0 if the
Indebtedness is Incurred thereafter, and (iii) no Default or Event of Default
shall have occurred and be continuing at the time or as a consequence of the
Incurrence of such Indebtedness.

Limitation on Senior Subordinated Indebtedness. The Company shall not,
directly or indirectly, Incur any Indebtedness that by its terms would expressly
rank senior in right of payment to the Notes and subordinate in right of payment
to any other Indebtedness of the Company.

The Company shall not permit any Guarantor to, and no Guarantor shall,
directly or indirectly, Incur any Indebtedness that by its terms would expressly
rank senior in right of payment to the Guarantee of such Guarantor and
subordinate in right of payment to any Indebtedness of such Guarantor.

Limitation on Restricted Payments. The Company shall not, and shall not
cause or permit any Restricted Subsidiary to, directly or indirectly,

(i) declare or pay any dividend or any other distribution on any
Equity Interests of the Company or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their

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capacities as such) of Equity Interests of the Company or any Restricted
Subsidiary (other than any dividends, distributions and payments made to
the Company or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests of the Company
or in options, warrants or other rights to purchase Qualified Equity
Interests of the Company);

(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any Restricted Subsidiary (other than
any such Equity Interests owned by the Company or any Restricted
Subsidiary);

(iii) make any Investment in any Person (other than Permitted
Investments); or

(iv) designate any Subsidiary of the Company as an "Unrestricted
Subsidiary" under the Indenture (a "Designation"); provided, however, that
the Designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be deemed to include the Designation of all of the
Subsidiaries of such Subsidiary.

(any such payment or any other action (other than any exception thereto)
described in (i), (ii), (iii) or (iv) each, a "Restricted Payment"), unless

(a) no Default or Event of Default shall have occurred and be continuing at
the time of or immediately after giving effect to such Restricted Payment;

(b) immediately after giving effect to such Restricted Payment, the Company
would be able to Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the "Limitation on Indebtedness" covenant above; and

(c) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after the
Issue Date does not exceed an amount equal to the sum of (1) 50% of cumulative
Consolidated Net Income determined for the period (taken as one period) from the
beginning of the first fiscal quarter commencing on the Issue Date and ending on
the last day of the most recent fiscal quarter immediately preceding the date of
such Restricted Payment for which consolidated financial information of the
Company is available (or if such cumulative Consolidated Net Income shall be a
loss, minus 100% of such loss), plus (2) 100% of the aggregate net cash proceeds
received by the Company either (x) as capital contributions to the Company after
the Issue Date or (y) from the issue and sale (other than to a Restricted
Subsidiary) of its Qualified Equity Interests after the Issue Date (excluding
the net proceeds from any issuance and sale of Qualified Equity Interests
financed, directly or indirectly, using funds borrowed from the Company or any
Restricted Subsidiary until and to the extent such borrowing is repaid), plus
(3) the principal amount (or accreted amount (determined in accordance with
GAAP), if less) of any Indebtedness of the Company or any Restricted Subsidiary
Incurred after the Issue Date which has been converted into or exchanged for
Qualified Equity Interests of the Company (minus the amount of any cash or
property distributed by the Company or any Restricted Subsidiary upon such
conversion or exchange), plus (4) so long as the Designation thereof was treated
as a Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary
after the Issue Date in accordance with "Designation of Unrestricted
Subsidiaries" below, the Company's proportionate interest in an amount equal to
the Fair Market Value of such Subsidiary, plus (5) in the case of the
disposition or repayment of any Investment constituting a Restricted Payment
made after the Issue Date (including the sale of an Unrestricted Subsidiary) or
dividends, distributions or interest payments received in cash, an amount equal
to 100% of the net cash proceeds received by the Company or its Restricted
Subsidiaries therefrom.

The foregoing provisions will not prevent (i) the payment of any dividend
or distribution on, or redemption of, Equity Interests within 60 days after the
date of declaration of such dividend or distribution or the giving of formal
notice of such redemption, if at the date of such declaration or giving of such
formal notice such payment or redemption would comply with the provisions of the
Indenture; (ii) the purchase, redemption, retirement or other acquisition of any
Equity Interests of the Company or its Restricted Subsidiaries that are not
owned by the Company or its Restricted Subsidiaries in exchange for, or out of
the net cash proceeds of the substantially concurrent issue and sale (other than
to a Restricted Subsidiary) of, Qualified Equity Interests of the Company;
provided, however, that any such net cash proceeds and the value
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<PAGE> 58

of any Qualified Equity Interests issued in exchange for such retired Equity
Interests are excluded from clause (c)(2) of the preceding paragraph (and were
not included therein at any time) and are not used to redeem the Notes pursuant
to "-- Optional Redemption" above; (iii) the purchase, redemption or other
acquisition for value of Equity Interests of the Company (other than
Disqualified Capital Stock) or options on such Equity Interests held by officers
or employees or former officers or employees (or their estates or beneficiaries
under their estates) upon the death, disability, retirement or termination of
employment of such current or former officers or employees pursuant to the terms
of an employee benefit plan or any other agreement pursuant to which such shares
of capital stock or options were issued or pursuant to a severance, buy-sell or
right of first refusal agreement with such current or former officer or
employee; provided, however, that the aggregate cash consideration paid, or
distributions made, pursuant to this clause (iii) does not exceed $5.0 million;
(iv) Investments constituting Restricted Payments made as a result of the
receipt of non-cash consideration from any Asset Sale made pursuant to and in
compliance with "-- Disposition of Proceeds of Asset Sales" below; (v) Tax
Distributions; (vi) the payment of dividends on the Company's Common Stock,
following the first Public Equity Offering of the Company's Common Stock after
the Issue Date, of up to 6% per annum of the net proceeds received by the
Company in such public offering; and (vii) the purchase, redemption, retirement
or other acquisition prior to June 30, 1999 of Equity Interests of the Company
from unaffiliated third parties; provided, however, that the aggregate cash
consideration paid pursuant to this clause (vii) does not exceed $7.5 million;
provided, however, that in the case of each of clauses (ii), (iii), (iv), (vi)
and (vii) no Default or Event of Default shall have occurred and be continuing
or would arise therefrom.

In determining the amount of Restricted Payments permissible under this
covenant, amounts expended pursuant to clauses (i), (iii), (iv), (vi) and (vii)
of the immediately preceding paragraph shall be included as Restricted Payments.
The amount of any non-cash Restricted Payment shall be deemed to be equal to the
Fair Market Value thereof at the date of the making of such Restricted Payment.
In determining the amount of any Restricted Payment made under clause (iv) of
the first paragraph of this covenant, the amount of such Restricted Payment (the
"Designation Amount") shall be equal to the Fair Market Value of the Company's
proportionate interest in such Subsidiary on such date. Any such Designation
shall be evidenced by a Board Resolution.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (b) make loans or advances to, or guarantee any
Indebtedness or other obligations of, or make any Investment in, the Company or
any other Restricted Subsidiary or (c) transfer any of its properties or assets
to the Company or any other Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) the Credit
Facilities, or any other agreement of the Company or the Restricted Subsidiaries
outstanding on the Issue Date, in each case as in effect on the Issue Date, and
any amendments, restatements, renewals, replacements or refinancings thereof;
provided, however, that any such amendment, restatement, renewal, replacement or
refinancing is no more restrictive in the aggregate with respect to such
encumbrances or restrictions than those contained in the agreement being
amended, restated, reviewed, replaced or refinanced; (ii) applicable law; (iii)
any instrument governing Indebtedness or Equity Interests of an Acquired Person
acquired by the Company or any Restricted Subsidiary as in effect at the time of
such acquisition (except to the extent such Indebtedness was Incurred by such
Acquired Person in connection with, as a result of or in anticipation or
contemplation of such acquisition); provided, however, that such encumbrances
and restrictions are not applicable to the Company or any Restricted Subsidiary,
or the properties or assets of the Company or any Restricted Subsidiary, other
than the Acquired Person; (iv) customary non-assignment provisions in contracts
or leases entered into in the ordinary course of business and consistent with
past practices; (v) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only imposes encumbrances and restrictions on
the property so acquired; (vi) any agreement for the sale or disposition of the
Equity Interests or assets of any Restricted Subsidiary; provided, however, that
such encumbrances and restrictions described in this clause (vi) are only
applicable to such Restricted Subsidiary
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or assets, as applicable, and any such sale or disposition is made in compliance
with Disposition of Proceeds of Asset Sales" below to the extent applicable
thereto; (vii) secured Indebtedness otherwise permitted to be incurred pursuant
to the covenants described under "Limitation on Indebtedness" and "Limitation on
Liens" that limit the right of the debtor to dispose of the assets securing such
Indebtedness; (viii) customary provisions in joint venture agreements and other
similar agreements entered into in the ordinary course of business; (ix) an
agreement governing Indebtedness incurred to refinance the Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clauses (i) through
(viii) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such Indebtedness are no less
restrictive in the aggregate than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clauses; (x) an
agreement governing Senior Indebtedness permitted to be incurred pursuant to the
"Limitation on Indebtedness" covenant; provided, however, that the provisions
relating to such encumbrance or restriction contained in such Indebtedness are
no less favorable to the Company in any material respect as determined by the
Board of Managers of the Company in its reasonable and good faith judgment than
the provisions contained in the Amended and Restated Credit Agreement as in
effect on the Issue Date; or (xi) the Indenture.

Designation of Unrestricted Subsidiaries. The Company shall not and shall
not cause or permit any Restricted Subsidiary at any time to (x) provide credit
support for, subject any of its property or assets (other than the Equity
Interests of any Unrestricted Subsidiary) to the satisfaction of, or guarantee,
any Indebtedness of any Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be
directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary, except for any non-recourse
guarantee given solely to support the pledge by the Company or any Restricted
Subsidiary of the capital stock of any Unrestricted Subsidiary.

The Company may revoke any Designation of a Subsidiary as an Unrestricted
Subsidiary (a "Revocation") only if:

(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and

(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, be permitted to be Incurred for all purposes of the Indenture.

All Designations and Revocations must be evidenced by resolutions of the
Board of Managers of the Company, delivered to the Trustee certifying compliance
with the foregoing provisions.

Limitation on Liens. The Company shall not, and shall not cause or permit
any Restricted Subsidiary to, directly or indirectly, Incur any Liens of any
kind against or upon any of their respective properties or assets now owned or
hereafter acquired, or any proceeds therefrom or any income or profits
therefrom, to secure any Indebtedness unless contemporaneously therewith
effective provision is made, in the case of the Company, to secure the Notes and
all other amounts due under the Indenture, and in the case of a Restricted
Subsidiary which is a Guarantor, to secure such Restricted Subsidiary's
Guarantee of the Notes and all other amounts due under the Indenture, equally
and ratably with such Indebtedness (or, in the event that such Indebtedness is
subordinated in right of payment to the Notes or such Restricted Subsidiary's
Guarantee, prior to such Indebtedness) with a Lien on the same properties and
assets securing such Indebtedness for so long as such Indebtedness is secured by
such Lien, except for (i) Liens securing Senior Indebtedness and Guarantor
Senior Indebtedness and (ii) Permitted Liens.

Disposition of Proceeds of Asset Sales. The Company shall not, and shall
not cause or permit any Restricted Subsidiary to, directly or indirectly, make
any Asset Sale, unless (i) the Company or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed of and
(ii) at least 75% of such consideration

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consists of (A) cash or Cash Equivalents; provided, however, that the amount of
(x) any liabilities (as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet) of the Company or any Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Notes) that are
assumed by the transferee of any such assets, and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) shall be deemed to be
cash for the purposes of this clause (A), or (B) properties and capital assets
that replace the properties and assets that were the subject of such Asset Sale
or in properties and capital assets that will be used in a Related Business
("Replacement Assets"); provided, however, that if such property or assets
subject to such Asset Sale were directly owned by the Company or a Guarantor,
such Replacement Assets shall also be directly owned by the Company or a
Guarantor. The amount of any Indebtedness (other than any Subordinated
Indebtedness) of the Company or any Restricted Subsidiary that is actually
assumed by the transferee in such Asset Sale and from which the Company and the
Restricted Subsidiaries are fully and unconditionally released shall be deemed
to be cash for purposes of determining the percentage of cash consideration
received by the Company or the Restricted Subsidiaries.

The Company or such Restricted Subsidiary, as the case may be, may (i)
apply the Net Cash Proceeds of any Asset Sale within 180 days of receipt thereof
to repay Senior Indebtedness and permanently reduce any related commitment, or
(ii) make an Investment in Replacement Assets; provided, however, that such
Investment occurs or the Company or a Restricted Subsidiary enters into
contractual commitments to make such Investment, subject only to customary
conditions (other than the obtaining of financing), on or prior to the 180th day
following the receipt of such Net Cash Proceeds and Net Cash Proceeds
contractually committed are so applied within 270 days following the receipt of
such Net Cash Proceeds.

To the extent all or part of the Net Cash Proceeds of any Asset Sale are
not applied as described in clause (i) or (ii) of the immediately preceding
paragraph within the time periods set forth therein (the "Net Proceeds
Utilization Date") (such Net Cash Proceeds, the "Unutilized Net Cash Proceeds"),
the Company shall, within 20 days after such Net Proceeds Utilization Date, make
an Offer to Purchase all outstanding Notes up to a maximum principal amount
(expressed as a multiple of $1,000) of Notes equal to such Unutilized Net Cash
Proceeds, at a purchase price in cash equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the Purchase Date;
provided, however, that the Offer to Purchase may be deferred until there are
aggregate Unutilized Net Cash Proceeds equal to or in excess of $5 million, at
which time the entire amount of such Unutilized Net Cash Proceeds, and not just
the amount in excess of $5 million, shall be applied as required pursuant to
this paragraph.

With respect to any Offer to Purchase effected pursuant to this covenant,
among the Notes, to the extent the aggregate principal amount of Notes tendered
pursuant to such Offer to Purchase exceeds the Unutilized Net Cash Proceeds to
be applied to the repurchase thereof, such Notes shall be purchased pro rata
based on the aggregate principal amount of such Notes tendered by each Holder.
To the extent the Unutilized Net Cash Proceeds exceed the aggregate amount of
Notes tendered by the Holders of the Notes pursuant to such Offer to Purchase,
the Company may retain and utilize any portion of the Unutilized Net Cash
Proceeds not applied to repurchase the Notes for any purpose consistent with the
other terms of the Indenture and such Unutilized Net Cash Proceeds shall no
longer be counted in determining the available amount of Unutilized Net Cash
Proceeds for purposes of this covenant.

The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of the Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the "Asset Sale" provisions of the Indenture by virtue
thereof.

Each Holder shall be entitled to tender all or any portion of the Notes
owned by such Holder pursuant to the Offer to Purchase, subject to the
requirement that any portion of a Note tendered must be tendered in an

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integral multiple of $1,000 principal amount and subject to any proration among
tendering Holders as described above.

Merger, Sale of Assets, etc. The Indenture provides that neither of the
Issuers may consolidate with or merge with or into any other entity and the
Company shall not and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's and the Restricted Subsidiaries' properties
and assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions, unless: (i) either (x) the Company shall be the Surviving
Person or (y) the Surviving Person (if other than the Company) shall be a
corporation or limited liability company organized and validly existing under
the laws of the United States of America or any State thereof or the District of
Columbia or, if any such Restricted Subsidiary was a Foreign Restricted
Subsidiary, under the laws of the United States of America or any state thereof
or the District of Columbia or the jurisdiction under which such Foreign
Restricted Subsidiary was organized, and shall, in any such case, expressly
assume by a supplemental indenture, the due and punctual payment of the
principal of, premium, if any, and interest on all the Notes and the performance
and observance of every covenant of the Indenture and the Registration Rights
Agreement to be performed or observed on the part of the Company; (ii)
immediately thereafter, no Default or Event of Default shall have occurred and
be continuing; and (iii) immediately after giving effect to any such transaction
involving the Incurrence by the Company or any Restricted Subsidiary, directly
or indirectly, of additional Indebtedness (and treating any Indebtedness not
previously an obligation of the Company or any Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) under the
Consolidated Coverage Ratio of the first paragraph of "Limitation on
Indebtedness" covenant described above.

Notwithstanding the foregoing clause (iii) of the immediately preceding
paragraph, any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company or any
Restricted Subsidiary that is a Guarantor.

For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interest of which constitutes all or substantially all
the properties and assets of the Company shall be deemed to be the transfer of
all or substantially all the properties and assets of the Company.

No Guarantor (other than a Guarantor whose Guarantee is to be released in
accordance with the terms of its Guarantee and the Indenture as provided in the
third paragraph under "Guarantees of the Notes" above) shall consolidate with or
merge with or into another Person, whether or not such Person is affiliated with
such Guarantor and whether or not such Guarantor is the Surviving Person, unless
(i) the Surviving Person (if other than such Guarantor) is a corporation or
limited liability company organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia; (ii) the Surviving
Person (if other than such Guarantor) expressly assumes by a supplemental
indenture all the obligations of such Guarantor under its Guarantee of the Notes
and the performance and observance of every covenant of the Indenture and the
Registration Right Agreement to be performed or observed by such Guarantor;
(iii) at the time of and immediately after such Disposition, no Default or Event
of Default shall have occurred and be continuing; and (iv) immediately after
giving effect to any such transaction involving the Incurrence by such
Guarantor, directly or indirectly, of additional Indebtedness (and treating any
Indebtedness not previously an obligation of such Guarantor in connection with
or as a result of such transaction as having been Incurred at the time of such
transaction), the Company could Incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the Consolidated Coverage Ratio of the
first paragraph of the "Limitation of Indebtedness" covenant described above;
provided, however, that this paragraph shall not be a condition to a merger or
consolidation of a Guarantor if such merger or consolidation only involves the
Company and/or one or more other Guarantors.

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In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraphs in
which the Company or a Guarantor, as the case may be, is not the Surviving
Person and the Surviving Person is to assume all the Obligations of the Company
under the Notes, the Indenture and the Registration Rights Agreement or of such
Guarantor under its Guarantee, the Indenture and the Registration Rights
Agreement, as the case may be, pursuant to a supplemental indenture, such
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Guarantor, as the case may be, and
the Company, as the case may be, shall be discharged from its Obligations under
the Indenture and the Notes or such Guarantor shall be discharged from its
Obligations under the Indenture and its Guarantee.

Transactions with Affiliates. The Company shall not, and shall not cause or
permit any Restricted Subsidiary to, directly or indirectly, conduct any
business or enter into any transaction (or series of related transactions) with
or for the benefit of any of their respective Affiliates (including, without
limitation, any Unrestricted Subsidiary) or any officer, director or employee of
the Company or any Subsidiary (each an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms which are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than could be available in a
comparable transaction with an unaffiliated third party and (ii) if such
Affiliate Transaction (or series of related Affiliate Transactions) involves
aggregate payments or other consideration having a Fair Market Value in excess
of $1.0 million, such Affiliate Transaction is in writing and a majority of the
disinterested members of the Board of Managers of the Company shall have
approved such Affiliate Transaction and determined that such Affiliate
Transaction complies with the foregoing provisions. In addition, any Affiliate
Transaction involving aggregate payments or other consideration having a Fair
Market Value in excess of $5.0 million will also require a written opinion from
an Independent Financial Advisor (filed with the Trustee) stating that the terms
of such Affiliate Transaction are fair, from a financial point of view, to the
Company or the Restricted Subsidiary involved in such Affiliate Transaction, as
the case may be.

Notwithstanding the foregoing, the restrictions set forth in this covenant
shall not apply to (i) transactions with or among the Company and any Restricted
Subsidiary or between or among Restricted Subsidiaries; (ii) reasonable fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees, consultants or agents of the Company or any Restricted Subsidiary of
the Company as determined in good faith by the Company's Board of Managers;
(iii) any transactions undertaken pursuant to any contractual obligations in
existence on the Issue Date (as in effect on the Issue Date); (iv) any
Restricted Payments made in compliance with "Limitation on Restricted Payments"
above; (v) the provision by Persons who may be deemed Affiliates or stockholders
of the Company of investment banking, commercial banking, trust, lending or
financing, investment, underwriting, placement agent, financial advisory or
similar services to the Company or its Subsidiaries; (vi) reasonable and
customary loans to employees of the Company and its Subsidiaries which are
approved by the Board of Managers of the Company in good faith; and (vii)
transactions with customers, clients, suppliers or purchasers or sellers of
goods or services, in each case in the ordinary course of business and otherwise
in compliance with the terms of the Indenture, which are fair to the Company or
its Restricted Subsidiaries, in the reasonable determination of the Board of
Managers of the Company or the senior management thereof, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party.

Limitation on the Sale or Issuance of Equity Interests of Restricted
Subsidiaries. The Company shall not sell any Equity Interest of a Restricted
Subsidiary, and shall not cause or permit any Restricted Subsidiary, directly or
indirectly, to issue or sell or have outstanding any Equity Interests, except:
(i) to the Company or a Wholly Owned Restricted Subsidiary; or (ii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary. Notwithstanding
the foregoing, the Company is permitted to sell all the Equity Interests of a
Restricted Subsidiary as long as the Company is in compliance with the terms of
the covenants described under "Disposition of Proceeds of Asset Sales" and, if
applicable, "Merger, Sale of Assets, etc." above.

Guarantees by Restricted Subsidiaries. The Indenture provides that the
Company will not create or acquire, nor cause or permit any of the Restricted
Subsidiaries, directly or indirectly, to create or acquire, any Subsidiary other
than (A) an Unrestricted Subsidiary in accordance with the other terms of the
Indenture,
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(B) a Foreign Restricted Subsidiary or (C) a Domestic Restricted Subsidiary
that, simultaneously with such creation or acquisition, executes and delivers a
supplemental indenture to the Indenture pursuant to which it will become a
Guarantor under the Indenture in accordance with "Guarantees of the Notes"
above.

Provision of Financial Information. Whether or not the Company is subject
to Section 13(a) or 15(d) of the Exchange Act, or any successor provision
thereto, the Company shall file with the SEC (if permitted by SEC practice and
applicable law and regulations) the annual reports, quarterly reports and other
documents which the Issuers would have been required to file with the SEC
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Company were so subject, such documents to be filed with the SEC on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject. The
Company shall also in any event (a) within 15 days of each Required Filing Date
(whether or not permitted or required to be filed with the SEC) (i) transmit (or
cause to be transmitted) by mail to all Holders, as their names and addresses
appear in the Note register, without cost to such Holders, and (ii) file with
the Trustee, copies of the annual reports, quarterly reports and other documents
which the Company is required to file with the SEC pursuant to the preceding
sentence, or, if such filing is not so permitted, information and data of a
similar nature, and (b) if, notwithstanding the preceding sentence, filing such
documents by the Issuers with the SEC is not permitted by SEC practice or
applicable law or regulations, promptly upon written request supply copies of
such documents to any Holder. In addition, for so long as any Notes remain
outstanding and prior to the later of the consummation of the Exchange Offer and
the filing of the Initial Shelf Registration Statement, if required, the Company
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, and, to any beneficial holder of
Notes, if not obtainable from the SEC, information of the type that would be
filed with the SEC pursuant to the foregoing provisions, upon the request of any
such holder.

EVENTS OF DEFAULT

The occurrence of any of the following is defined as an "Event of Default"
under the Indenture: (a) failure to pay principal of (or premium, if any, on)
any Note when due (whether or not prohibited by the provisions of the Indenture
described under "Subordination of the Notes" above); (b) failure to pay any
interest on any Note when due, which failure continues for 30 days or more
(whether or not prohibited by the provisions of the Indenture described under
"Subordination of the Notes" above); (c) default in the payment of principal of
or interest on any Note required to be purchased pursuant to any Offer to
Purchase required by the Indenture when due and payable or failure to pay on the
Purchase Date the Purchase Price for any Note validly tendered pursuant to any
Offer to Purchase (whether or not prohibited by the provisions of the Indenture
described under "Subordination of the Notes" above); (d) failure to perform any
other covenant or agreement of the Company under the Indenture or in the Notes
or of the Guarantors under the Indenture or in the Guarantees which failure
continues for 30 days or more after written notice to the Company by the Trustee
or Holders of at least 25% in aggregate principal amount of the outstanding
Notes; (e) default or defaults under the terms of one or more instruments
evidencing or securing Indebtedness of the Company or any of its Restricted
Subsidiaries having an outstanding principal amount of $5.0 million or more
individually or in the aggregate that has resulted in the acceleration of the
payment of such Indebtedness or failure by the Company or any of its Restricted
Subsidiaries to pay principal when due at the stated maturity of any such
Indebtedness and such default or defaults shall have continued after any
applicable grace period and shall not have been cured or waived; (f) the
rendering of a final judgment or judgments (not subject to appeal) against the
Company or any of its Restricted Subsidiaries in an amount of $5.0 million or
more (net of any amounts covered by insurance) which remains undischarged or
unstayed for a period of 60 days after the date on which the right to appeal has
expired; (g) certain events of bankruptcy, insolvency or reorganization
affecting the Company or any of its Significant Restricted Subsidiaries; or (h)
other than as provided in or pursuant to any Guarantee or the Indenture, any
Guarantee of a Significant Restricted Subsidiary ceases to be in full force and
effect or is declared null and void and unenforceable or found to be invalid or
any Guarantor denies in writing its liability under its Guarantee (other than by
reason of a release of such Guarantor from its Guarantee in accordance with the
terms of the Indenture and such Guarantee).

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Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders of Notes, unless
such Holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the outstanding Notes will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
such Trustee.

If an Event of Default with respect to the Notes (other than an Event of
Default with respect to the Company described in clause (g) of the preceding
paragraph) occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of the outstanding Notes, by notice in writing to
the Company may declare the unpaid principal of (and premium, if any) and
accrued interest to the date of acceleration on all the outstanding Notes to be
due and payable immediately and, upon any such declaration, such principal
amount (and premium, if any) and accrued interest, notwithstanding anything
contained in the Indenture or the Notes to the contrary will become immediately
due and payable. If an Event of Default specified in clause (g) of the preceding
paragraph with respect to the Company occurs under the Indenture, the Notes will
ipso facto become immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder of the Notes.

Any such declaration with respect to the Notes may be annulled by the
Holders of a majority in aggregate principal amount of the outstanding Notes
upon the conditions provided in the Indenture. For information as to waiver of
defaults, see "Modification and Waiver" below.

The Indenture provides that the Trustee shall, within 30 days after the
occurrence of any Default or Event of Default with respect to the Notes
outstanding, give the Holders of the Notes thereof notice of all uncured
Defaults or Events of Default thereunder known to it; provided, however, that,
except in the case of a Default or an Event of Default in payment with respect
to the Notes or a Default or Event of Default in complying with "Certain
Covenants -- Merger, Sale of Assets, etc." above, the Trustee shall be protected
in withholding such notice if and so long as a committee of its trust officers
in good faith determines that the withholding of such notice is in the interest
of the Holders of the Notes.

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default thereunder and unless the Holders of at least 25% of the aggregate
principal amount of the outstanding Notes shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as the
Trustee, and the Trustee shall have not have received from the Holders of a
majority in aggregate principal amount of such outstanding Notes a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of such a Note for enforcement of payment of the
principal of and premium, if any, or interest on such Note on or after the
respective due dates expressed in such Note.

The Company is required to furnish to the Trustee annually a statement as
to the performance by the Issuers of certain of their obligations under the
Indenture and as to any default in such performance.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATOR, MEMBERS,
MANAGERS AND STOCKHOLDERS

No director, officer, employee, incorporator, member, manager or
stockholder of either of the Issuers or any of their Affiliates, as such, shall
have any liability for any obligations of either of the Issuers or any of their
Affiliates under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.

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LEGAL DEFEASANCE AND COVENANT DEFEASANCE

The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance"). Such Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, except for (i) the rights of Holders to
receive payments in respect of the principal of, premium, if any, and interest
on the Notes when such payments are due, (ii) the Company's obligations with
respect to the Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payments, (iii) the rights, powers, trust, duties and immunities of
the Trustee and the Company's obligations in connection therewith and (iv) the
Legal Defeasance provisions of the Indenture. In addition, the Company may, at
its option and at any time, elect to have the obligations of the Company
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or an Event of Default with respect
to the Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, reorganization and insolvency
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders cash in U.S. dollars, non-callable United States Government
Obligations, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest on the Notes on the
stated date for payment thereof or on the applicable redemption date, as the
case may be; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or, insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, the Indenture or any other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound; (vi) the
Company shall have delivered to the Trustee an officers' certificate stating
that the deposit was not made by the Company with the intent of preferring the
Holders over any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or others;
(vii) the Company shall have delivered to the Trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance have been
complied with; (viii) the Company shall have delivered to the Trustee an opinion
of counsel to the effect that (A) the trust funds will not be subject to any
rights of holders of Senior Indebtedness, including, without limitation, those
arising under the Indenture, and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the date of the
deposit and that no Holder is an insider of the Company, after the 91st day
following the date of the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; and (ix) certain other customary
conditions precedent are satisfied. Notwithstanding the foregoing, the opinion
of counsel required by clause (ii) above need not be delivered if all Notes not
theretofore delivered to the Trustee for cancellation (x) have become due and
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payable, (y) will become due and payable on the maturity date within one year or
(z) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.

SATISFACTION AND DISCHARGE

The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration or transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all outstanding Notes
when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be; (ii)
the Company has paid all other sums payable under the Indenture by the Company;
and (iii) the Company has delivered to the Trustee an officers' certificate and
an opinion of counsel stating that all conditions precedent under the Indenture
relating to the satisfaction and discharge of the Indenture have been complied
with.

GOVERNING LAW

The Indenture, the Notes and the Guarantees are governed by the laws of the
State of New York without regard to principles of conflicts of laws.

MODIFICATION AND WAIVER

Modifications and amendments of the Indenture may be made by the Issuers,
the Guarantors, and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes (including consents obtained
in connection with a tender offer or exchange offer for the Notes); provided,
however, that no such modification or amendment to the Indenture may, without
the consent of the Holder of each Note affected thereby, (a) change the maturity
of the principal of or any installment of interest on any such Note or alter the
optional redemption or repurchase provisions of any such Note or the Indenture
in a manner adverse to the Holders of the Notes; (b) reduce the principal amount
(or the premium) of any such Note; (c) reduce the rate of or extend the time for
payment of interest on any such Note; (d) change the place or currency of
payment of principal of (or premium) or interest on any such Note; (e) modify
any provisions of the Indenture relating to the waiver of past defaults (other
than to add sections of the Indenture or the Notes subject thereto) or the right
of the Holders of Notes to institute suit for the enforcement of any payment on
or with respect to any such Note or any Guarantee in respect thereof or the
modification and amendment provisions of the Indenture and the Notes (other than
to add sections of the Indenture or the Notes which may not be amended,
supplemented or waived without the consent of each Holder affected); (f) reduce
the percentage of the principal amount of outstanding Notes necessary for
amendment to or waiver of compliance with any provision of the Indenture or the
Notes or for waiver of any Default in respect thereof; (g) waive a default in
the payment of principal of, interest on, or redemption payment with respect to,
the Notes (except a rescission of acceleration of the Notes by the Holders
thereof as provided in the Indenture and a waiver of the payment default that
resulted from such acceleration); (h) modify the ranking or priority of any Note
or the Guarantee in respect thereof of any Guarantor or modify the definition of
Senior Indebtedness or Guarantor Senior Indebtedness or amend or modify the
subordination provisions of the Indenture in any manner adverse to the Holders
of the Notes; (i) modify the provisions of any covenant (or the related
definitions) in the Indenture requiring the Company to make an Offer to Purchase
in a manner materially adverse to the Holders of Notes affected thereby
otherwise than in accordance with the Indenture;

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or (j) release any Guarantor from any of its obligations under its Guarantee or
the Indenture otherwise than in accordance with the Indenture.

The Holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all Holders of Notes, may waive compliance by the Issuers
and the Guarantors with certain restrictive provisions of the Indenture. Subject
to certain rights of the Trustee, as provided in the Indenture, the Holders of a
majority in aggregate principal amount of the Notes, on behalf of all Holders,
may waive any past default under the Indenture (including any such waiver
obtained in connection with a tender offer or exchange offer for the Notes),
except a default in the payment of principal, premium or interest or a default
arising from failure to purchase any Notes tendered pursuant to an Offer to
Purchase, or a default in respect of a provision that under the Indenture cannot
be modified or amended without the consent of the Holder of each Note that is
affected.

THE TRUSTEE

Except during the continuance of a Default, the Trustee will perform only
such duties as are specifically set forth in the Indenture. During the existence
of a Default, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.

The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of either of the Issuers, any Guarantor or any other obligor
upon the Notes, to obtain payment of claims in certain cases or to realize on
certain property received by it in respect of any such claim as security or
otherwise. The Trustee is permitted to engage in other transactions with the
Issuers or an Affiliate of the Issuers; provided, however, that if it acquires
any conflicting interest (as defined in the Indenture or in the Trust Indenture
Act), it must eliminate such conflict or resign.

CERTAIN DEFINITIONS

Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full definition of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.

"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an Acquisition from such Person or (b) existing at the time such
Person becomes a Restricted Subsidiary or is merged or consolidated with or into
the Company or any Restricted Subsidiary.

"Acquired Person" means, with respect to any specified Person, any other
Person which merges with or into or becomes a Subsidiary of such specified
Person.

"Acquisition" means (i) any capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) by the Company or any Restricted
Subsidiary to any other Person, or any acquisition or purchase of Equity
Interests of any other Person by the Company or any Restricted Subsidiary, in
either case pursuant to which such Person shall become a Restricted Subsidiary
or shall be consolidated with or merged into the Company or any Restricted
Subsidiary or (ii) any acquisition by the Company or any Restricted Subsidiary
of the assets of any Person which constitute substantially all of an operating
unit or line of business of such Person or which is otherwise outside of the
ordinary course of business.

"Acquisition Facility" means a credit facility entered into by the Company
and one or more commercial banks or other lenders pursuant to which the Company
and/or its Restricted Subsidiaries may incur Indebtedness for the purpose of
financing one or more acquisitions of assets or equity securities of any Related
Business and paying related fees and expenses.

"Affiliate" of any specified person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common

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control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.

"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
(that has the effect of a disposition) or other disposition (including, without
limitation, any merger, consolidation or sale-leaseback transaction) to any
Person other than the Company or a Wholly Owned Restricted Subsidiary, in one
transaction or a series of related transactions, of (i) any Equity Interest of
any Restricted Subsidiary (other than directors' qualifying shares, to the
extent mandated by applicable law); (ii) any assets of the Company or any
Restricted Subsidiary which constitute substantially all of an operating unit or
line of business of the Company or any Restricted Subsidiary; or (iii) any other
property or asset of the Company or any Restricted Subsidiary outside of the
ordinary course of business (including the receipt of proceeds paid on account
of the loss of or damage to any property or asset and awards of compensation for
any asset taken by condemnation, eminent domain or similar proceedings). For the
purposes of this definition, the term "Asset Sale" shall not include (a) any
transaction consummated in compliance with "Certain Covenants -- Merger, Sale of
Assets, etc." above and the creation of any Lien not prohibited by "Certain
Covenants -- Limitation on Liens" above; (b) sales of property or equipment that
has become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of the Company or any Restricted Subsidiary, as the
case may be; (c) any transaction consummated in compliance with "Certain
Covenants -- Limitation on Restricted Payments" above; and (d) any transfers of
properties and assets to the Company, between the Company and Wholly Owned
Restricted Subsidiaries that are Guarantors or between Wholly Owned Restricted
Subsidiaries. In addition, solely for purposes of "Certain
Covenants -- Disposition of Proceeds of Asset Sales" above, any sale,
conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions, involving assets
with a Fair Market Value not in excess of $1.0 million in any fiscal year shall
be deemed not to be an Asset Sale.

"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, as at the time of determination, the present value (discounted according
to GAAP at the cost of indebtedness implied in the lease) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Lease-Back Transaction (including any period for
which such lease has been extended).

"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Managers of such Person or a duly authorized
committee of such Board of Managers.

"Capitalized Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on the balance sheet in
accordance with GAAP.

"Cash Equivalents" means: (a) securities issued or directly and fully
guaranteed or insured by the U.S. government or any agency or instrumentality
thereof, the government of Canada or the government of any member of the
European Union, in each case having maturities of not more than one year from
the date of acquisition; (b) domestic and Eurocurrency certificates of deposit,
time deposits and base rate certificates of deposit with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any commercial bank incorporated under the laws of the United States, any
state thereof, the District of Columbia or its branches or agencies or under the
laws of Canada or the laws of any member of the European Union and having
capital and surplus in excess of $250 million and whose long-term debt is rated
at least "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Act); (c) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (a) and (b)
above entered into with any financial institution meeting the qualifications
specified in clause (b) above; (d) commercial paper rated P-1, A-1 or the
equivalent thereof by Moody's Investors Service, Inc. ("Moody's") or Standard &
Poor's Ratings Group ("S&P"), respectively, and in each case maturing within six
months after the date of acquisition; (e) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of

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acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's; (f) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (a) through (e)
above; and (g) in the case of any Foreign Restricted Subsidiary, Investments:
(i) in direct obligations of the sovereign nation (or any agency thereof) in
which such Foreign Restricted Subsidiary is organized and is conducting business
or in obligations fully and unconditionally guaranteed by such sovereign nation
(or any agency thereof) or (ii) of the type and maturity described in clauses
(a) and (b) above of foreign obligors, which Investments or obligors (of the
parents of such obligors) have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies.

"Change of Control" means the occurrence of any of the following events
(whether or not approved by the Board of Managers of the Company): (i) any
Person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other
than one or more Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time, upon the happening of an event or otherwise),
directly or indirectly, of more than 35% of the total voting power of the then
outstanding Voting Equity Interests of the Company; (ii) the Company
consolidates with, or merges with or into, another Person (other than a Wholly
Owned Restricted Subsidiary) or the Company or any of its Subsidiaries sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of the assets of the Company and its Subsidiaries (determined
on a consolidated basis) to any Person (other than the Company or any Wholly
Owned Restricted Subsidiary), other than any such transaction where immediately
after such transaction the Person or Persons that "beneficially owned" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all securities that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time) immediately prior to such transaction,
directly or indirectly, a majority of the total voting power of the then
outstanding Voting Equity Interests of Holdings or the Company, as the case may
be, "beneficially own" (as so determined), directly or indirectly, a majority of
the total voting power of the then outstanding Voting Equity Interests of the
surviving or transferee Person; (iii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Managers of the Company (together with any new directors whose election by such
Board of Managers or whose nomination for election by the members of the Company
was approved by a vote of a majority of the directors of the Company 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 Managers of the Company then in
office; or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with the
provisions described under "-- Merger, Sale of Assets, etc."

"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of Consolidated EBITDA for the four quarter
period of the most recent four consecutive fiscal quarters ending prior to the
date of such determination (the "Four Quarter Period") to (ii) Consolidated
Fixed Charges for such Four Quarter Period; provided, however, that (1) if the
Company or any Restricted Subsidiary has incurred any Indebtedness since the
beginning of such Four Quarter Period that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated
EBITDA and Consolidated Fixed Charges for such Four Quarter Period shall be
calculated after giving effect on a pro forma basis to such Indebtedness as if
such Indebtedness had been Incurred on the first day of such Four Quarter Period
and the discharge of any other Indebtedness repaid, repurchased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such Four Quarter Period, (2) if since the
beginning of such Four Quarter Period the Company or any Restricted Subsidiary
shall have made any Asset Sale described in clauses (i) or (ii) of the
definition thereof, the Consolidated EBITDA for such Four Quarter Period shall
be reduced by an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets that are the subject of such Asset Sale for such Four
Quarter Period or increased by an amount equal to the Consolidated EBITDA (if
negative) directly attributable thereto for such Four
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Quarter Period and Consolidated Fixed Charges for such Four Quarter Period shall
be reduced by an amount equal to the Consolidated Fixed Charges directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Sale for such
Four Quarter Period (or, if the Equity Interests of any Restricted Subsidiary
are sold, the Consolidated Fixed Charges for such Four Quarter Period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such Four Quarter
Period the Company or any Restricted Subsidiary (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any Person that becomes
a Restricted Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction causing a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit
of a business, Consolidated EBITDA and Consolidated Fixed Charges for such Four
Quarter Period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such Four Quarter Period and (4) if
since the beginning of such Four Quarter Period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such Four Quarter Period) shall
have made any Asset Sale or any Investment or acquisition of assets that would
have required an adjustment pursuant to clause (2) or (3) above if made by the
Company or a Restricted Subsidiary during such Four Quarter Period, Consolidated
EBITDA and Consolidated Fixed Charges for such Four Quarter Period shall be
calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition of assets occurred on, with respect to any Investment
or acquisition, the first day of such Four Quarter Period and, with respect to
any Asset Sale, the day prior to the first day of such Four Quarter Period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Fixed Charges associated with any Indebtedness Incurred
in connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of the Company in
accordance with Regulation S-X under the Securities Act as in effect on the
Issue Date. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any agreement under
which Interest Rate Protection Obligations are outstanding applicable to such
Indebtedness if such agreement under which such Interest Rate Protection
Obligations are outstanding has a remaining term as at the date of determination
in excess of 12 months); provided, however, that the Consolidated Fixed Charges
of the Company attributable to interest on any Indebtedness Incurred under a
revolving credit facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the Four Quarter
Period.

"Consolidated EBITDA" means, for any period, the Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) Consolidated Income Tax Expense for such period;
(ii) Consolidated Interest Expense for such period; and (iii) Consolidated
Non-cash Charges for such period less (A) all non-cash items increasing
Consolidated Net Income for such period and (B) all cash payments during such
period relating to non-cash charges that were added back in determining
Consolidated EBITDA in any prior period.

"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense and
(ii) the product of (x) the amount of all dividends on any series of Preferred
Equity Interest (other than Qualified Equity Interests) of such Person and its
Restricted Subsidiaries (other than dividends paid solely in Qualified Equity
Interests) paid, accrued or scheduled to be paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated federal, state and local
tax rate of such Person, expressed as a decimal.

"Consolidated Income Tax Expense" means, with respect to the Company for
any period, the provision for federal, state, local and foreign income taxes
payable by the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.

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"Consolidated Interest Expense" means, with respect to the Company for any
period, without duplication, the sum of (i) the interest expense of the Company
and the Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount and amortization or write-off of deferred
financing costs, (b) the net cost or benefit under Interest Rate Protection
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (e) all capitalized interest and all accrued interest, (f) non-cash
interest expense and (g) interest on Indebtedness of another Person that is
guaranteed by the Company or any Restricted Subsidiary actually paid by the
Company or any Restricted Subsidiary and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and the Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.

"Consolidated Net Income" means, for any period, the consolidated net
income (loss) of the Company and the Restricted Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income: (i) any net
income (loss) of any Person if such person is not a Subsidiary, except (A) to
the extent of cash actually distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution and (B)
the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income; (ii) any net income (loss) of any person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition; (iii) any net income (but not
loss) of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company to the extent of such restrictions; (iv) any gain or loss realized upon
the sale or other disposition of any asset of the Company or the Restricted
Subsidiaries (including pursuant to any sale/leaseback transaction) outside of
the ordinary course of business (including, without limitation, on or with
respect to Investments) and there shall not be included dividends, distributions
or interest thereon; (v) any extraordinary gain or loss and any foreign currency
gains or losses; (vi) the cumulative effect of a change in accounting principles
after the Issue Date; and (vii) any restoration to income of any contingency
reserve of an extraordinary, non-recurring or unusual nature, except to the
extent that provision for such reserve was made out of Consolidated Net Income
accrued at any time following the Issue Date.

"Consolidated Non-cash Charges" means, with respect to any Person, for any
period the sum of (A) depreciation, (B) amortization and (C) other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP (excluding, for
purposes of clause (C) only, such charges which require an accrual of or a
reserve for cash charges or payments for any future period and excluding
minority interest).

"Credit Facilities" means (i) the Second Amended and Restated Credit
Agreement, dated as of August 5, 1997, among the Company, the Subsidiaries of
the Company identified on the signature pages thereof and any Restricted
Subsidiary that is later added thereto, the lenders named therein, NBD Bank, as
Administrative Agent and Documentation and Collateral Agent, and The Chase
Manhattan Bank, as Co-Administrative Agent and Syndication Agent, (ii) the
Credit Agreement, dated as of July 2, 1997, among Advanced Accessory Systems
Canada Inc., First Chicago NBD Bank, Canada, as Agent, First Chicago NBD Bank,
Canada and The Chase Manhattan Bank of Canada, as lenders and the guarantors
identified on the signature pages thereof and (iii) an Acquisition Facility, in
each case, as amended, including any deferrals, renewals, extensions,
replacements, refinancings or refundings thereof, or amendments, modifications
or supplements thereto and any agreement providing therefor, whether by or with
the same or any other lender, creditor, group of lenders or group of creditors,
and including related notes, guarantee and note agreements and other instruments
and agreements executed in connection therewith.

"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
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"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

"Designated Senior Indebtedness" means (a) any Indebtedness outstanding
under the Credit Facilities and (b) any other Senior Indebtedness which, at the
time of determination, has an aggregate principal amount outstanding, together
with any commitments to lend additional amounts, of at least $25.0 million, if
the instrument governing such Senior Indebtedness expressly states that such
Indebtedness is "Designated Senior Indebtedness" for purposes of the Indenture.

"Disposition" means, with respect to any Person, any merger, consolidation
or other business combination involving such Person (whether or not such Person
is the Surviving Person) or the sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of such Person's assets.

"Disqualified Equity Interest" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof
(except, in each case, upon the occurrence of a Change of Control), in whole or
in part, or exchangeable into Indebtedness on or prior to the final maturity
date of the Notes.

"Domestic" with respect to any Person shall mean a Person whose
jurisdiction of incorporation or formation is the United States, any state
thereof or the District of Columbia.

"Equity Interest" in any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.

"Existing Management Holder" means each of F. Alan Smith, Marshall D.
Gladchun, Roger T. Morgan, Terence C. Seikel, Richard E. Borghi, Barry Banducci
and Gerard J. Brink.

"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined conclusively by the Board
of Managers of the Company acting in good faith, and shall be evidenced by
resolutions of the Board of Managers of the Company delivered to the Trustee.

"Foreign EBITDA" means, for any period, the aggregate of the Consolidated
EBITDA of each of the Company's Foreign Restricted Subsidiaries.

"Foreign Interest Expense" means, for any period, the aggregate of the
Consolidated Interest Expense of each of the Company's Foreign Restricted
Subsidiaries.

"Foreign Restricted Subsidiary" means a Restricted Subsidiary other than a
Domestic Restricted Subsidiary.

"GAAP" means, at any date of determination, generally accepted accounting
principles in effect in the United States which are applicable at the date of
determination and which are consistently applied for all applicable periods.

"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the

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event of non-performance) of all or any part of such obligation, including,
without limiting the foregoing, the payment of amounts drawn down by letters of
credit.

"Guarantee" means the guarantee of the Notes by each Guarantor under the
Indenture.

"Guarantor" means (i) each Domestic Subsidiary of the Company existing on
the Issue Date and (ii) each other Domestic Restricted Subsidiary, formed,
created or acquired before or after the Issue Date, required to become a
Guarantor after the Issue Date.

"Guarantor Senior Indebtedness" means, with respect to any Guarantor, at
any date, (a) all Obligations of such Guarantor under the Credit Facilities; (b)
all Interest Rate Protection Obligations of such Guarantor; (c) all Obligations
of such Guarantor under letters of credit; and (d) all other Indebtedness of
such Guarantor, including principal, premium, if any, and interest (including
Post-Petition Interest) on such Indebtedness unless the instrument under which
such Indebtedness of such Guarantor is Incurred expressly provides that such
Indebtedness is not senior or superior in right of payment to such Guarantor's
Guarantee of the Notes, and all renewals, extensions, modifications, amendments
or refinancings thereof. Notwithstanding the foregoing, Guarantor Senior
Indebtedness shall not include (a) to the extent that it may constitute
Indebtedness, any Obligation for federal, state, local or other taxes; (b) any
Indebtedness among or between such Guarantor and any Subsidiary of such
Guarantor or any Affiliate of such Guarantor or any of such Affiliate's
Subsidiaries; (c) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods or
materials, or for services obtained, in the ordinary course of business; (d)
Indebtedness evidenced by such Guarantor's Guarantee of the Notes; (e)
Indebtedness of such Guarantor that is expressly subordinate or junior in right
of payment to any other Indebtedness of such Guarantor; (f) to the extent that
it may constitute Indebtedness, any obligation owing under leases (other than
Capitalized Lease Obligations) or management agreements; and (g) any obligation
that by operation of law is subordinate to any general unsecured obligations of
such Guarantor.

"Holders" means the registered holders of the Notes.

"Income Tax Liabilities" means with respect to any member or, in the event
such member is a flow-through entity, such direct or indirect owner or owners of
such member as is or are subject to income taxes on income of the Company or any
of its Restricted Subsidiaries that are limited liability companies for any
calendar year, an amount determined by multiplying (a) such Person's allocable
share of all taxable income and gains of such limited liability company by (b)
forty four percent (44%).

"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Acquired Person or any of its
Subsidiaries existing at the time such Acquired Person becomes a Restricted
Subsidiary (or is merged into or consolidated with the Company or any Restricted
Subsidiary), whether or not such Indebtedness was Incurred in connection with,
as a result of, or in contemplation of, such Acquired Person becoming a
Restricted Subsidiary (or being merged into or consolidated with the Company or
any Restricted Subsidiary), shall be deemed Incurred at the time any such
Acquired Person becomes a Restricted Subsidiary or merges into or consolidates
with the Company or any Restricted Subsidiary.

"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (a) every obligation of such Person for money borrowed; (b)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments; (c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (d) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable incurred in the ordinary course of business and payable
in accordance with industry practices, or other accrued liabilities arising in
the ordinary course of business); (e) every Capital Lease Obligation of such
Person; (f) every net obligation under Interest Rate Protection Obligations or
similar agreements or Currency

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Agreements of such Person; (g) Attributable Indebtedness; (h) every obligation
of the type referred to in clauses (a) through (g) of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or liable
for, directly or indirectly, as obligor, guarantor or otherwise; and (i) any and
all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a) through (h) above. Indebtedness (i) shall not include
obligations of any Person (x) arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within five Business Days of their
incurrence, (y) resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business and consistent with past business
practices and (z) under stand-by letters of credit to the extent collateralized
by cash or Cash Equivalents; (ii) which provides that an amount less than the
principal amount thereof shall be due upon any declaration of acceleration
thereof shall be deemed to be incurred or outstanding in an amount equal to the
accreted value thereof at the date of determination; (iii) shall include the
liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company or any Restricted
Subsidiary; and (iv) shall not include obligations under performance bonds,
performance guarantees, surety bonds and appeal bonds, letters of credit or
similar obligations, incurred in the ordinary course of business.

"Independent Financial Advisor" means a nationally recognized, accounting,
appraisal or investment banking firm or consultant (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Managers of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.

"Insolvency or Liquidation Proceeding" means, with respect to any Person,
any liquidation, dissolution or winding up of such Person, or any bankruptcy,
reorganization, insolvency, receivership or similar proceeding with respect to
such Person, whether voluntary or involuntary.

"interest" means, with respect to the Notes, the sum of any cash interest
and any Additional Interest (as defined under "Registration Rights" below) on
the Notes.

"Interest Rate Protection Obligations" means, with respect to any Person,
the Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.

"Investment" means, with respect to any Person, any direct or indirect
loan, advance, guarantee or other extension of credit or capital contribution to
(by means of transfers of cash or other property or assets to others or payments
for property or services for the account or use of others, or otherwise), or
purchase or acquisition of capital stock, bonds, notes, debentures or other
securities or evidences of Indebtedness issued by, any other Person. For
purposes of the "Limitation on Restricted Payments" covenant above, the amount
of any Investment shall be the original cost of such Investment, plus the cost
of all additions thereto, but without any other adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment; reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment; provided, however, that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. In determining the
amount of any Investment involving a transfer of any property or asset other
than cash, such property shall be valued at its Fair Market Value at the time of
such transfer, as determined in good faith by the Board of Managers (or
comparable body) of the Person making such transfer. If the Company or any
Restricted Subsidiary sells or otherwise disposes of any Voting Equity Interests
of any direct or indirect Restricted Subsidiary such that, after giving effect
to any such sale or disposition, the Company no longer owns, directly or
indirectly, greater than 50% of the outstanding Voting Equity Interests of such
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of
Voting Equity Interests of such former Restricted Subsidiary not sold or
disposed of.

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"Issue Date" means the original issue date of the Notes.

"Lien" means any lien, mortgage, charge, security interest, hypothecation,
assignment for security or encumbrance of any kind (including any conditional
sale or capital lease or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest).

"Maturity Date" means the date, which is set forth on the face of the
Notes, on which the Notes will mature.

"Net Cash Proceeds" means the aggregate proceeds in the form of cash or
Cash Equivalents received by the Company or any Restricted Subsidiary in respect
of any Asset Sale, including all cash or Cash Equivalents received upon any
sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale (including payments made to obtain or avoid the need for the
consent of any holder of such Indebtedness); (d) amounts deemed, in good faith,
appropriate by the Board of Managers of the Company to be provided as a reserve,
in accordance with GAAP, against any liabilities associated with such assets
which are the subject of such Asset Sale; including, without limitation, pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as reflected in an officers' certificate
delivered to the Trustee (provided that the amount of any such reserves shall be
deemed to constitute Net Cash Proceeds at the time such reserves shall have been
reversed or are not otherwise required to be retained as a reserve); and (e)
with respect to Asset Sales by Restricted Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Restricted
Subsidiary.

"Obligations" means any principal, interest (including, without limitation,
Post-Petition Interest), penalties, fees, indemnifications, reimbursement
obligations, damages and other liabilities payable under the documentation
governing any Indebtedness.

"Offer to Purchase" means a written offer (the "Offer") sent by or on
behalf of the Company by first-class mail, postage prepaid, to each holder at
his address appearing in the register for the Notes on the date of the Offer
offering to purchase up to the principal amount of Notes specified in such Offer
at the purchase price specified in such Offer (as determined pursuant to the
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase, which shall
be not less than 30 days nor more than 60 days after the date of such Offer, and
a settlement date (the "Purchase Date") for purchase of Notes to occur no later
than five Business Days after the Expiration Date. The Company shall notify the
Trustee at least 15 days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
The Offer shall also contain information concerning the business of the Company
and its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to the Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable law
to be included therein). The Offer shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Offer to
Purchase. The Offer shall also state: (1) the Section of the Indenture pursuant
to which the Offer to Purchase is being made; (2) the

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Expiration Date and the Purchase Date; (3) the aggregate principal amount of the
outstanding Notes offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which such amount has
been determined pursuant to the Section of the Indenture requiring the Offer to
Purchase) (the "Purchase Amount"); (4) the purchase price to be paid by the
Company for each $1,000 aggregate principal amount of Notes accepted for payment
(as specified pursuant to the Indenture) (the "Purchase Price"); (5) that the
Holder may tender all or any portion of the Notes registered in the name of such
Holder and that any portion of a Note tendered must be tendered in an integral
multiple of $1,000 principal amount; (6) the place or places where Notes are to
be surrendered for tender pursuant to the Offer to Purchase; (7) that interest
on any Note not tendered or tendered but not purchased by the Company pursuant
to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date
the Purchase Price will become due and payable upon each Note being accepted for
payment pursuant to the Offer to Purchase and that interest thereon shall cease
to accrue on and after the Purchase Date; (9) that each Holder electing to
tender all or any portion of a Note pursuant to the Offer to Purchase will be
required to surrender such Note at the place or places specified in the Offer
prior to the close of business on the Expiration Date (such Note being, if the
Company or the Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing); (10) that each Holder will be entitled to withdraw all or any portion
of any Notes tendered by such Holder if the Company (or its Paying Agent)
receives, not later than the close of business on the fifth Business Day next
preceding the Expiration Date, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of the Note
such Holder tendered, the certificate number of the Note such Holder tendered
and a statement that such Holder is withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate principal amount less than or equal to
the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to
Purchase, the Company shall purchase all such Notes and (b) if Notes in an
aggregate principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase Notes
having an aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only Notes in
denominations of $1,000 principal amount or integral multiples thereof shall be
purchased); and (12) that in the case of any Holder whose Note is purchased only
in part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of the
Note so tendered.

An Offer to Purchase shall be governed by and effected in accordance with
the provisions above pertaining to any Offer.

"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

"Permitted Holder" means each of (i) CCP and its affiliates, (ii) the
Existing Management Holders and (iii) any corporation, a majority of the
outstanding Voting Equity Interests of which are owned, directly or indirectly,
by persons listed in clauses (i) and (ii) of this definition, and no more than
35% of the outstanding Voting Equity Interests of which are beneficially owned,
directly or indirectly, by any Person (other than Permitted Holders) or group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-15d(b)(1) under the Exchange Act.

"Permitted Indebtedness" means the following, each of which shall be given
independent effect:

(a) Indebtedness under the Notes;

(b) Indebtedness of the Company or any Restricted Subsidiary Incurred
under the Credit Facilities in an aggregate principal amount at any one
time outstanding not to exceed the greater of (i) $25.0 million and (ii)
the sum of 85% of the total book value of accounts receivable and 50% of
the total book value of inventory, in each case as reflected on the
Company's most recent consolidated financial statements prepared in
accordance with GAAP;

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(c) Indebtedness of any Restricted Subsidiary owed to and held by the
Company or any other Restricted Subsidiary, and Indebtedness of the Company
owed to and held by any Restricted Subsidiary which is unsecured and
subordinated in right of payment to the payment and performance of the
Company's obligations under any Senior Indebtedness, the Indenture and the
Notes; provided, however, that an Incurrence of Indebtedness that is not
permitted by this clause (c) shall be deemed to have occurred upon (i) any
sale or other disposition of any Indebtedness of the Company or any
Restricted Subsidiary referred to in this clause (c) to a Person (other
than the Company or a Restricted Subsidiary), (ii) any sale or other
disposition of Equity Interests of any Restricted Subsidiary which holds
Indebtedness of the Company or another Restricted Subsidiary such that such
Restricted Subsidiary ceases to be a Subsidiary and (iii) the Designation
of a Restricted Subsidiary that holds Indebtedness of the Company or any
other Restricted Subsidiary as an Unrestricted Subsidiary;

(d) the Guarantees and guarantees by any Guarantor of Indebtedness of
the Company or its Restricted Subsidiaries and the guarantees by the
Company of Indebtedness of the Restricted Subsidiaries; provided, however,
that if such guarantee is of Subordinated Indebtedness, then the Guarantee
of such Guarantor or the Company's obligations under the Notes, as the case
may be; shall be senior to such Guarantor's or the Company's, as the case
may be, guarantee of such Subordinated Indebtedness;

(e) Interest Rate Protection Obligations relating to Indebtedness of
the Company (which Indebtedness (i) bears interest at fluctuating interest
rates and (ii) is otherwise permitted to be Incurred under the "Limitation
on Indebtedness" covenant); provided, however, that (i) such Interest Rate
Protection Obligations have been entered into for bona fide business
purposes and not for speculation and (ii) the notional principal amount of
such Interest Rate Protection Obligations, at the time of the incurrence
thereof, does not exceed the principal amount of the Indebtedness to which
such Interest Rate Protection Obligations relate;

(f) Purchase Money Indebtedness and Capitalized Lease Obligations
which, at the time of the incurrence thereof, do not, in the aggregate with
all such other Indebtedness incurred pursuant to this clause (f), exceed
5.0% of the total assets of the Company and its Restricted Subsidiaries, on
a consolidated basis determined consistent with the Company's most recent
balance sheet prepared in accordance with GAAP at any one time outstanding;

(g) Indebtedness under Currency Agreements; provided, however, that in
the case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the principal amount of Indebtedness of the
Company and its Restricted Subsidiaries outstanding other than as a result
of fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;

(h) Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date, reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereof;

(i) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business
in an amount not to exceed $3.0 million in the aggregate at any time
outstanding;

(j) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; provided, however, that (i) such
Indebtedness is not reflected on the balance sheet of the Company or any
Restricted Subsidiary of the Company (contingent obligations referred to in
a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (i))

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and (ii) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including noncash
proceeds (the fair market value of such noncash proceeds being measured at
the time it is received and without giving effect to any subsequent changes
in value) actually received by the Company and its Restricted Subsidiaries
in connection with such disposition;

(k) Obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
of the Company in the ordinary course of business;

(l) Indebtedness of the Company or any Restricted Subsidiary Incurred
under an Acquisition Facility in an aggregate principal amount at any one
time outstanding not to exceed $22.0 million, reduced by any required
permanent repayments (which are accompanied by corresponding permanent
commitment reduction thereunder);

(m) Indebtedness to the extent representing a replacement, renewal,
defeasance, refinancing or extension (collectively, a "refinancing") of
outstanding Indebtedness Incurred in compliance with the "Limitation on
Indebtedness" covenant or clauses (a), (h) or (l) of this definition;
provided, however, that (i) any such refinancing shall not exceed the sum
of the principal amount (or accreted amount (determined in accordance with
GAAP), if less) of the Indebtedness being refinanced, plus the amount of
accrued interest thereon, plus the amount of any reasonably determined
prepayment premium necessary to accomplish such refinancing and such
reasonable fees and expenses incurred in connection therewith, (ii)
Indebtedness representing a refinancing of Indebtedness other than Senior
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being refinanced; and (iii) Indebtedness that is pari passu with the Notes
may only be refinanced with Indebtedness that is made pari passu with or
subordinate in right of payment to the Notes and Subordinated Indebtedness
may only be refinanced with Subordinated Indebtedness; and

(n) in addition to the items referred to in clauses (a) through (m)
above, Indebtedness of the Company (including any Indebtedness under the
Credit Facilities that utilizes this clause (m)) having an aggregate
principal amount not to exceed $10.0 million at any one time outstanding.

"Permitted Investments" means (a) cash and Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) Interest Rate Protection Obligations and Currency Agreements; (d)
Investments received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers, in each case arising in the
ordinary course of business; (e) Investments in the Company and Investments in
Restricted Subsidiaries or Persons that, as a result of or in connection with
any such Investment, become Restricted Subsidiaries or are merged with or into
or consolidated with the Company or another Restricted Subsidiary; (f)
Investments paid for in Qualified Equity Interests of the Company; (g) loans or
advances to officers or employees of the Company and its Restricted Subsidiaries
in the ordinary course of business for bona fide business purposes of the
Company and its Restricted Subsidiaries (including, but not limited to, travel
and moving expenses) not in excess of $1 million in the aggregate at any one
time outstanding; (h) Investments in Replacement Assets made in compliance with
the "Limitation on Asset Sales" covenant; (i) Investments of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time such Person merges or consolidates with
the Company or any of its Restricted Subsidiaries, in either case in compliance
with the Indenture; provided that such Investments were not made by such Person
in connection with, or in anticipation or contemplation of, such Person becoming
a Restricted Subsidiary of the Company or such merger or consolidation; and (j)
Investments (including, without limitation, in the form of joint ventures with
unaffiliated third parties) in Related Businesses not in excess of $10 million
in the aggregate at any one time outstanding.

"Permitted Junior Securities" means any securities of the Company or any
other Person that are (i) equity securities without special covenants or (ii)
debt securities expressly subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Notes are subordinated as provided
in the Indenture, in any event pursuant to a
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court order so providing and as to which (a) the rate of interest on such
securities shall not exceed the effective rate of interest on the Notes on the
date of the Indenture, (b) such securities shall not be entitled to the benefits
of covenants or defaults materially more beneficial to the holders of such
securities than those in effect with respect to the Notes on the date of the
Indenture and (c) such securities shall not provide for amortization (including
sinking fund and mandatory prepayment provisions) commencing prior to the date
six months following the final scheduled maturity date of the Senior
Indebtedness (as modified by the plan of reorganization of readjustment pursuant
to which such securities are issued).

"Permitted Liens" means (a) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not secure any
property or assets of the Company or any Restricted Subsidiary other than the
property or assets subject to the Liens prior to such merger or consolidation;
(b) Liens imposed by law such as carriers', warehousemen's, mechanics',
suppliers', materialmen's, landlords' and repairmen's Liens and other similar
Liens arising in the ordinary course of business which secure payment of
obligations not more than 30 days past due or which are being contested in good
faith and by appropriate proceedings; (c) Liens existing on the Issue Date; (d)
Liens securing only the Notes or the Guarantees; (e) Liens in favor of the
Company or any Restricted Subsidiary; (f) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings; provided, however, that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (g) easements, reservation of rights of way,
restrictions (including, but not limited to, zoning and building restrictions)
and other similar easements, licenses, restrictions on the use of properties, or
minor imperfections of title that in the aggregate are not material in amount
and do not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of the Company and the
Restricted Subsidiaries; (h) Liens resulting from the deposit of cash or notes
in connection with contracts, bids, sales or tenders or expropriation
proceedings, or to secure workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practices in
connection therewith, surety, appeal and performance bonds, costs of litigation
when required by law and public and statutory obligations or obligations under
franchise arrangements entered into in the ordinary course of business; (i)
Liens securing Indebtedness consisting of Capitalized Lease Obligations,
Purchase Money Indebtedness, mortgage financings, industrial revenue bonds or
other monetary obligations, in each case incurred solely for the purpose of
financing all or any part of the purchase price or cost of construction or
installation of assets used in the business of the Company or the Restricted
Subsidiaries, or repairs, additions or improvements to such assets, provided,
however, that (I) such Liens secure Indebtedness in an amount not in excess of
the original purchase price or the original cost of any such assets or repair,
addition or improvement thereto (plus an amount equal to the reasonable fees and
expenses in connection with the incurrence of such Indebtedness), (II) such
Liens do not extend to any other assets of the Company or the Restricted
Subsidiaries (and, in the case of repair, addition or improvements to any such
assets, such Lien extends only to the assets (and improvements thereto or
thereon) repaired, added to or improved), (III) the Incurrence of such
Indebtedness is permitted by "Certain Covenants -- Limitation on Indebtedness"
above and (IV) such Liens attach within 120 days of such purchase, construction,
installation, repair, addition or improvement; (j) any interest or title of a
lessor under any Capitalized Lease Obligation; provided, however, that such
Liens do not extend to any property or assets which are not leased property
subject to such Capitalized Lease Obligation; (k) Liens upon specific items of
inventory or other goods and proceeds of any Person securing such Person's
obligations in respect of bankers' acceptances issued or created for the account
of such Person to facilitate the purchase, shipment or storage of such inventory
or other goods; (l) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof; (m) Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Company or any of its
Restricted Subsidiaries, including rights of offset and set-off; (n) Liens
securing Interest Swap Obligations and Currency Agreements which Obligations and
agreements are otherwise permitted under the Indenture; (o) Liens by reason of
judgments, attachments or decree not otherwise resulting in an Event of Default;
(p) Liens securing

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Indebtedness of non-Guarantor Restricted Subsidiaries Incurred in compliance
with the Indenture; and (q) Liens to secure any refinancings, renewals,
extensions, modifications or replacements (collectively, "refinancing") (or
successive refinancings), in whole or in part, of any Indebtedness secured by
Liens referred to in the clauses above so long as such Lien does not extend to
any other property (other than improvements thereto).

"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, limited liability
partnership, trust, unincorporated organization or government or any agency or
political subdivision thereof.

"Post-Petition Interest" means, with respect to any Indebtedness of any
Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.

"Preferred Equity Interest," in any Person, means an Equity Interest of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Equity
Interests of any other class in such Person.

"principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.

"Public Equity Offering" means, with respect to the Company, an
underwritten public offering of Qualified Equity Interests of the Company
pursuant to an effective registration statement filed under the Securities Act
(excluding registration statements filed on Form S-8).

"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary Incurred for the purpose of financing all or any part of
the purchase price or the cost of installation, construction or improvement of
any property; provided, however, that the aggregate principal amount of such
Indebtedness does not exceed the lesser of the fair market value of such
property or such purchase price or cost, including any refinancing of such
Indebtedness that does not increase the aggregate principal amount (or accreted
amount, if less) thereof as of the date of refinancing.

"Qualified Equity Interest" in any Person means any Equity Interest in such
Person other than any Disqualified Equity Interest.

"Related Business" means any business related, ancillary or complementary
(as determined in good faith by the Board of Managers) to the business of the
Company and the Restricted Subsidiaries on the Issue Date.

"Restricted Subsidiary" means any Subsidiary of the Company that has not
been designated by the Board of Managers of the Company, by a resolution of the
Board of Managers of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to "Certain Covenants -- Designation of Unrestricted
Subsidiaries" above. Any such designation may be revoked by a resolution of the
Board of Managers of the Company delivered to the Trustee, subject to the
provisions of such covenant.

"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of the
Company of any real or tangible personal Property, which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing.

"SEC" means the Securities and Exchange Commission.

"Senior Indebtedness" means, at any date, (a) all Obligations under the
Credit Facilities; (b) all Interest Rate Protection Obligations of the Company;
(c) all Obligations of the Company under letters of credit; and (d) all other
Indebtedness of the Company, including principal, premium, if any, and interest
(including Post-Petition Interest) on such Indebtedness, unless the instrument
under which such Indebtedness of the
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Company is Incurred expressly provides that such Indebtedness is not senior or
superior in right of payment to the Notes, and all renewals, extensions,
modifications, amendments or refinancings thereof. Notwithstanding the
foregoing, Senior Indebtedness shall not include (a) to the extent that it may
constitute Indebtedness, any Obligation for Federal, state, local or other
taxes; (b) any Indebtedness among or between the Company and any Subsidiary of
the Company; (c) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods or
materials, or for services obtained, in the ordinary course of business; (d)
Indebtedness evidenced by the Notes; (e) Indebtedness of the Company that is
expressly subordinate or junior in right of payment to any other Indebtedness of
the Company; (f) to the extent that it may constitute Indebtedness, any
obligation owing under leases (other than Capitalized Lease Obligations) or
management agreements; and (g) any obligation that by operation of law is
subordinate to any general unsecured obligations of the Company.

"Significant Restricted Subsidiary" means, at any date of determination,
(a) any Restricted Subsidiary that, together with its Subsidiaries that
constitute Restricted Subsidiaries (i) for the most recent fiscal year of the
Company accounted for more than 10.0% of the consolidated revenues of the
Company and the Restricted Subsidiaries or (ii) as of the end of such fiscal
year, owned more than 10.0% of the consolidated assets of the Company and the
Restricted Subsidiaries, all as set forth on the consolidated financial
statements of the Company and the Restricted Subsidiaries for such year prepared
in conformity with GAAP, and (b) any Restricted Subsidiary which, when
aggregated with all other Restricted Subsidiaries that are not otherwise
Significant Restricted Subsidiaries and as to which any event described in
clause (h) of "Events of Default" above has occurred, would constitute a
Significant Restricted Subsidiary under clause (a) of this definition.

"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable.

"Subordinated Indebtedness" means, with respect to the Issuers or any
Guarantor, any Indebtedness of the Issuers or such Guarantor, as the case may
be, which is expressly subordinated in right of payment to the Notes or such
Guarantor's Guarantee, as the case may be.

"Subsidiary" means, with respect to any Person, (a) any corporation of
which the outstanding Voting Equity Interests having at least a majority of the
votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, by such Person, or (b) any other Person of which
at least a majority of Voting Equity Interests are at the time, directly or
indirectly, owned by such first named Person.

"Surviving Person" means, with respect to any Person involved in or that
makes any Disposition, the Person formed by or surviving such Disposition or the
Person to which such Disposition is made.

"Tax Distribution" means, as of the time of determination thereof, any
distribution by the Company and any of its Restricted Subsidiaries that are
limited liability companies to their respective members (or in each case, if
such member is a flow-through entity, such direct or indirect owner or owners of
such member as is or are subject to income taxes on income of such limited
liability company) which (i) with respect to quarterly estimated tax payments
due in each calendar year shall be equal to twenty-five percent (25%) of the
relevant member's Income Tax Liabilities for such calendar year as estimated in
writing by the chief financial officer of the Company and (ii) with respect to
tax payments to be made with income tax returns filed for a full calendar year
or with respect to adjustments to such returns imposed by the Internal Revenue
Service or other taxing authority, shall be equal to the Income Tax Liabilities
of such member for such calendar year minus the aggregate amount distributed to
such member for such calendar year as provided in clause (i) above. In the event
the amount determined under clause (ii) is negative amount, the amount of any
distributions to the relevant member in the succeeding calendar year (or, if
necessary, any subsequent calendar years) shall be reduced by such negative
amount.

"United States Government Obligations" means direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.

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"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to the "Designation of Unrestricted Subsidiaries" covenant. Any
such designation may be revoked by a resolution of the Board of Managers of the
Company delivered to the Trustee, subject to the provisions of such covenant.

"Voting Equity Interests" means Equity Interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders
thereof to elect the Board of Managers or other governing body of such
corporation or Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.

"Western Europe" means, with respect to any jurisdictional matter, any of
the twelve current member states of the European Community and Switzerland,
Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European"
shall have a meaning correlative to the foregoing).

"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of
which at least 99.0% of the outstanding Voting Equity Interests (other than
qualifying shares or other Equity Interests owned by directors or other members
of any comparable governing body) of which are owned, directly or indirectly, by
the Company and/or one or more Wholly Owned Restricted Subsidiaries.

This Prospectus may be used by CSI in connection with offers and sales
related to market-making transactions in the Notes. CSI may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale. The Company will not receive any
of the proceeds of such sales. CSI has no obligation to make a market in the
Notes and may discontinue its market-making activities at any time without
notice, at its sole discretion. The Company has agreed to indemnify CSI against
certain liabilities, including liabilities under the Securities Act of 1933, and
to contribute to payments which CSI might be required to make in respect
thereof.

For a description of certain relationships between the Company and CSI and
its affiliates, see "Certain Transactions."

PLAN OF DISTRIBUTION

This Prospectus has been prepared for use by CSI in connection with offers
and sales of the Notes in market-making transactions effected from time to time.
CSI may act as a principal or agent in such transactions, including as agent for
the counterparty when acting as principal or as agent for both counterparties,
and may receive compensation in the form of discounts and commissions, including
from both counterparties when it acts as agent for both counterparties. Such
sales will be made at prevailing market prices at the time of sale, at prices
related thereto or at negotiated prices. The Company will not receive any of the
proceeds of such sales.

The Company has been advised by CSI that, subject to applicable laws and
regulations, CSI currently intends to make a market in the Notes. However, CSI
is not obligated to do so and any such market-making may be interrupted or
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act. There can be no assurance that an active trading market will
develop or be sustained. See "Risk Factors -- An Active Trading Market for the
Notes May Not Develop."

LEGAL MATTERS

The validity of the Notes offered hereby was passed upon for the Issuers by
O'Sullivan Graev & Karabell, LLP, New York, New York.

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EXPERTS

The consolidated financial statements of the Company as of and for the
years ended December 31, 1998, 1997 and 1996, included in this Prospectus, have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated financial statements of Brink B.V. as of and for the
period from January 1, 1996 through October 31, 1996, included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers N.V., independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of Valley Industries, Inc. as of and for the
period from December 29, 1996 through August 5, 1997, included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of Valley Industries, Inc. at December 28, 1996
and for the year then ended, appearing in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

The financial statements of the towbar segment of Ellebi S.p.A. as of and
for the years ended December 31, 1996 and 1997, included in this Prospectus,
have been so included in reliance on the report of AXIS S.r.l., independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

81
<PAGE> 84

ADVANCED ACCESSORY SYSTEMS, LLC

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ADVANCED ACCESSORY SYSTEMS, LLC AND SUBSIDIARIES
Report of Independent Accountants........................... F-2

Consolidated Balance Sheets -- December 31, 1998 and 1997... F-3
Consolidated Statements of Operations -- Years Ended
December 31, 1998, 1997 and 1996.......................... F-4
Consolidated Statements of Cash Flows -- Years Ended
December 31, 1998, 1997 and 1996.......................... F-5
Consolidated Statements of Changes in Members'
Equity -- Years Ended December 31, 1998, 1997 and 1996.... F-6
Notes to Consolidated Financial Statements.................. F-7

BRINK B. V.
Report of Independent Accountants........................... F-30
Consolidated Balance Sheet -- October 31, 1996.............. F-31
Consolidated Profit and Loss Account -- Ten Months Ended
October 31, 1996.......................................... F-31
Consolidated Cash Flows Statement -- Ten Months Ended
October 31, 1996.......................................... F-32
Notes to Consolidated Financial Statements.................. F-32

VALLEY INDUSTRIES, INC.
Report of Independent Accountants........................... F-42
Report of Independent Auditors.............................. F-43
Balance Sheets -- December 28, 1996 and August 5, 1997...... F-44
Statements of Income -- Year Ended December 28, 1996 and the
Period Ended August 5, 1997............................... F-45
Statements of Shareholders' Equity -- Year Ended December
28, 1996 and the Period Ended August 5, 1997.............. F-46
Statements of Cash Flows -- Year Ended December 28, 1996 and
the Period Ended August 5, 1997........................... F-47
Notes to Financial Statements............................... F-48

ELLEBI S.P.A.
Report of Independent Accountants........................... F-53
Balance Sheets -- December 31, 1996 and 1997................ F-54
Statements of Operations -- Years Ended December 31, 1996
and 1997.................................................. F-55
Statements of Cash Flows -- Years ended December 31, 1996
and 1997.................................................. F-56
Statements of Changes in Ellebi S.p.A. Investment -- Years
ended December 31, 1996 and 1997.......................... F-57
Notes to Financial Statements............................... F-58
</TABLE>

F-1
<PAGE> 85

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Managers

and Members of

Advanced Accessory Systems, LLC

In our opinion, the accompanying consolidated balance sheets and related
consolidated statements of operations, of cash flows and of changes in members'
equity present fairly, in all material respects, the financial position of
Advanced Accessory Systems, LLC and its subsidiaries at December 31, 1998 and
1997, and the results of their operations, their cash flows and changes in
members' equity for each of the three years in the period ended December 31,
1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PricewaterhouseCoopers LLP

Bloomfield Hills, Michigan

March 15, 1999

F-2
<PAGE> 86

ADVANCED ACCESSORY SYSTEMS, LLC

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1998 1997
---- ----
(DOLLAR AMOUNTS IN
THOUSANDS)
<S> <C> <C>
ASSETS
Current assets
Cash...................................................... $ 11,240 $ 27,348
Accounts receivable, less reserves of $2,766 and $1,699,
respectively........................................... 40,727 43,523
Inventories............................................... 43,087 34,408
Deferred income taxes..................................... 280 --
Other current assets...................................... 3,964 6,531
-------- --------
Total current assets................................. 99,298 111,810
Property and equipment, net................................. 61,295 53,560
Goodwill, net............................................... 87,079 85,889
Other intangible assets, net................................ 6,592 9,963
Deferred income taxes....................................... 1,933 3,626
Other noncurrent assets..................................... 2,784 710
-------- --------
$258,981 $265,558
======== ========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Current maturities of long-term debt...................... $ 4,536 $ 3,746
Accounts payable.......................................... 23,115 23,018
Accrued liabilities....................................... 21,335 17,910
Deferred income taxes..................................... 1,080 1,333
-------- --------
Total current liabilities............................ 50,066 46,007
-------- --------
Noncurrent liabilities
Deferred income taxes..................................... 1,790 3,545
Other noncurrent liabilities.............................. 4,581 2,675
Long-term debt, less current maturities................... 182,988 193,380
-------- --------
Total noncurrent liabilities......................... 189,359 199,600
-------- --------
Commitments and contingencies (Note 11)
Mandatorily redeemable warrants............................. 4,409 3,507
-------- --------
Members' equity
Class A Units 25,000 authorized, 16,450 and 16,411 issued
at December 31, 1998 and 1997, respectively............ 22,276 23,163
Class B Units, 2,000 authorized, no Units issued at
December 31, 1998 and 1997............................. -- --
Other comprehensive loss.................................. (615) (490)
Accumulated deficit....................................... (6,514) (6,229)
-------- --------
15,147 16,444
-------- --------
$258,981 $265,558
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 87

ADVANCED ACCESSORY SYSTEMS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------------------
1998 1997 1996
---- ---- ----
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Net sales................................................... $290,139 $188,678 $81,466
Cost of sales............................................... 213,435 135,556 53,607
-------- -------- -------
Gross profit.............................................. 76,704 53,122 27,859
Selling, administrative and product development expenses.... 50,839 31,350 13,413
Amortization of intangible assets........................... 3,551 2,336 2,475
Impairment charge........................................... 7,863 -- --
-------- -------- -------
Operating income.......................................... 14,451 19,436 11,971
-------- -------- -------
Other (income) expense
Interest expense.......................................... 18,633 12,627 4,312
Foreign currency (gain) loss.............................. (4,995) 6,097 1,330
Other (income) expense.................................... -- -- (80)
-------- -------- -------
Income before minority interest, extraordinary charge and
income taxes.............................................. 813 712 6,409
Provision (benefit) for income taxes........................ 903 (2,856) (491)
-------- -------- -------
Income (loss) before minority interest and extraordinary
charge.................................................... (90) 3,568 6,900
Minority interest........................................... -- 97 69
Extraordinary charge resulting from debt extinguishment..... -- 7,416 1,970
-------- -------- -------
Net income (loss)........................................... $ (90) $ (3,945) $ 4,861
======== ======== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 88

ADVANCED ACCESSORY SYSTEMS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1998 1997 1996
---- ---- ----
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Net income (loss).......................................... $ (90) $ (3,945) $ 4,861
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization............................ 15,093 9,360 4,689
Deferred taxes........................................... (688) (3,146) (363)
Impairment and restructuring charge...................... 9,505 -- --
Foreign currency (gain) loss............................. (4,948) 5,500 1,118
Loss on disposal of assets............................... 191 -- 10
Extraordinary charge resulting from debt
extinguishment........................................ -- 7,416 1,970
Changes in assets and liabilities:
Accounts receivable................................... 5,873 (8,661) (118)
Inventories........................................... (1,457) 582 (3,736)
Other current assets.................................. 1,513 378 (1,742)
Other noncurrent assets............................... (1,934) (482) (67)
Accounts payable...................................... (3,032) (2,719) 1,995
Accrued liabilities................................... 1,133 2,819 3,144
Other noncurrent liabilities.......................... 720 (217) (1,913)
Minority interest in consolidated subsidiaries........ -- 97 69
-------- --------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES........... 21,879 6,982 9,917
-------- --------- --------
CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Acquisition of machinery and equipment..................... (9,998) (7,751) (3,124)
Amount due from sellers of Valley Industries, Inc.......... 1,150 (1,150) --
Acquisition of subsidiaries, net of cash acquired.......... (22,770) (70,832) (54,339)
-------- --------- --------
NET CASH USED FOR INVESTING ACTIVITIES.............. (31,618) (79,733) (57,463)
-------- --------- --------
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES
Proceeds from issuance of debt............................. -- 215,050 88,842
Proceeds from issuance of warrants......................... -- -- 3,498
Increase (decrease) in revolving loan...................... (4,505) 504 4,300
Extinguishment of warrants................................. -- -- (1,600)
Repayment of debt.......................................... (3,682) (113,248) (44,628)
Debt issuance costs........................................ -- (7,280) (2,643)
Issuance of membership units............................... 29 4,999 4,562
Repurchase of membership units............................. (14) -- --
Distributions to members................................... (195) (2,945) (3,726)
-------- --------- --------
NET CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES....................................... (8,367) 97,080 48,605
-------- --------- --------
Effect of exchange rate changes............................ 1,998 505 (182)
Net increase (decrease) in cash............................ (16,108) 24,834 877
Cash at beginning of period................................ 27,348 2,514 1,637
-------- --------- --------
Cash at end of period...................................... $ 11,240 $ 27,348 $ 2,514
======== ========= ========
Cash paid for interest..................................... $ 17,559 $ 8,302 $ 4,215
======== ========= ========
Cash paid for income taxes................................. $ 934 $ 581 $ --
======== ========= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 89

ADVANCED ACCESSORY SYSTEMS, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY

(DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
OTHER RETAINED TOTAL
MEMBERS' COMPREHENSIVE EARNINGS MEMBERS'
CAPITAL INCOME (LOSS) (DEFICIT) EQUITY
-------- ------------- --------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1995........................ $13,360 $ -- $ 861 $14,221
Issuance of additional units........................ 4,562 -- -- 4,562
Accretion of membership warrants.................... -- -- (1,400) (1,400)
Distributions to members, net of minority
interest.......................................... -- -- (3,692) (3,692)
Comprehensive income:
Currency translation adjustment................... -- (89) -- --
Net income for 1996............................... -- -- 4,861 --
Total comprehensive income..................... -- -- -- 4,772
------- ----- ------- -------
Balance at December 31, 1996........................ 17,922 (89) 630 18,463
Issuance of additional units........................ 5,250 -- -- 5,250
Accretion of membership warrants.................... (9) -- -- (9)
Distributions to members, net of minority
interest.......................................... -- -- (2,914) (2,914)
Comprehensive loss:
Currency translation adjustment................... -- (401) -- --
Net loss for 1997................................. -- -- (3,945) --
Total comprehensive loss....................... -- -- -- (4,346)
------- ----- ------- -------
Balance at December 31, 1997........................ 23,163 (490) (6,229) 16,444
Issuance of additional units........................ 150 -- -- 150
Notes receivable for unit purchase.................. (121) -- -- (121)
Repurchase of membership units...................... (14) -- -- (14)
Accretion of membership warrants.................... (902) -- -- (902)
Distributions to members............................ -- -- (195) (195)
Comprehensive loss:
Currency translation adjustment................... -- (125) -- --
Net loss for 1998................................. -- -- (90) --
Total comprehensive loss....................... -- -- -- (215)
------- ----- ------- -------
Balance at December 31, 1998........................ $22,276 $(615) $(6,514) $15,147
======= ===== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 90

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT UNIT RELATED DATA)

1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

BUSINESS ACTIVITIES

Advanced Accessory Systems, LLC (formerly AAS Holdings, LLC) (the
"Company") is engaged in the design, manufacture and supply of towing and rack
systems and accessories for the automotive original equipment manufacturer
("OEM") market and the automotive aftermarket. The Company's business commenced
on September 28, 1995, with the acquisition of certain of the net assets of
MascoTech Accessories (the "Predecessor"), a division of MascoTech, Inc.,
through the Company's majority-owned subsidiary, SportRack, LLC. As described in
Note 2, in October 1996 the Company acquired Brink B.V., in July and August of
1997 acquired the sportrack division of Bell Sports Corporation, Nomadic Sports,
Inc. and certain net assets of Valley Industries, Inc. and in January and
February 1998 acquired the net assets of the towbar segment of Ellebi S.p.A. and
the net assets of Transfo-Rakzs, Inc.

PRINCIPLES OF CONSOLIDATION

The Company includes the accounts of the following:

<TABLE>
<S> <C>
SportRack, LLC............................ 100% owned by Advanced Accessory Systems, LLC
SportRack Automotive, GmbH.............. A German corporation, 100% owned by SportRack, LLC
SportRack International, Inc. and its
consolidated subsidiary.............. A Canadian corporation, 100% owned by SportRack, LLC
AAS Holdings, Inc......................... 100% owned by Advanced Accessory Systems, LLC
Brink International B.V. and its
consolidated subsidiaries............ A Dutch corporation, 100% owned by AAS Holdings,
Inc.
Valley Industries, LLC.................... 99% owned by Advanced Accessory Systems, LLC and 1%
owned by SportRack, LLC
ValTek, LLC............................... 99% owned by Advanced Accessory Systems, LLC and 1%
owned by SportRack, LLC
AAS Capital Corporation................... 100% owned by Advanced Accessory Systems, LLC
</TABLE>

All intercompany transactions have been eliminated in consolidation.

REVENUE RECOGNITION

Revenue and related cost of goods sold are recognized upon shipment of the
product to the customer. Sales allowances, discounts, rebates and other
adjustments are recorded or accrued in the period of the sale.

SIGNIFICANT ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the fiscal period. Actual results could differ from those
estimates.

FINANCIAL INSTRUMENTS

Financial instruments at December 31, 1998 and 1997, including cash,
accounts receivable and accounts payable, are recorded at cost, which
approximates fair value due to the short-term maturities of these assets and
liabilities. The carrying value of the obligations under the bank agreements are
considered to approximate fair value as the agreements provide for interest rate
revisions based on changes in prevailing market rates or

F-7
<PAGE> 91

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

were entered into at rates that approximate market rates at December 31, 1998
and 1997. The carrying value of the Notes (as defined below) approximate fair
value based upon quoted prices at December 31, 1998 in the market in which the
Notes are traded.

The Company is exposed to certain market risks which exist as a part of its
ongoing business operations. Primary exposures include fluctuations in the value
of foreign currency investments in subsidiaries, volatility in the translation
of foreign currency earnings to U.S. Dollars and movements in Federal Funds
rates and the London Interbank Offered Rate (LIBOR). The Company uses derivative
financial instruments, where appropriate, to manage these risks. The Company, as
a matter of policy, does not engage in trading or speculative transactions.

CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all
highly-liquid investments with a maturity of three months or less from the date
of purchase to be cash equivalents.

CURRENCY TRANSLATION

The functional currency for the Company's foreign subsidiaries is the
applicable local currency. Assets and liabilities of foreign subsidiaries are
translated into U.S. dollars at the exchange rates in effect at the balance
sheet date; translation adjustments are reported as a separate component of
members' equity. Revenues, expenses and cash flows for foreign subsidiaries are
translated at average exchange rates during the period; foreign currency
transaction gains and losses are included in current earnings. The accompanying
consolidated statement of operations for the years ended December 31, 1998, 1997
and 1996 includes net currency gains (losses) of $4,995, $(6,097) and $(1,330),
respectively, relating primarily to debt denominated in U.S. Dollars at Brink
International B.V., whose functional currency was the Dutch Guilder through
December 31, 1998. At December 31, 1998, U.S. Dollar denominated debt recorded
at Brink includes intercompany debt and substantially all outstanding loans
under the Company's Second Amended and Restated Credit Agreement, except for the
Term note A (as defined below) which was changed from a U.S. Dollar denominated
loan to a Dutch Guilder denominated loan in October 1998.

INVENTORIES

Inventories are stated at the lower of cost or market, with cost being
determined on the first-in, first-out (FIFO) method. Inventories are
periodically reviewed and reserves established for excess and obsolete items.

TOOLING

The Company incurs costs to develop new tooling used in the manufacture of
products sold to OEMs. Tooling costs that are reimbursed by the OEMs as the
tooling is completed are included in other current assets. All other customer
tooling costs are included in other noncurrent assets and amortized over the
expected product life, generally four to six years. Company owned tooling is
included in property and equipment and depreciated over its expected useful
life, generally three to five years. Management periodically evaluates the
recoverability of tooling costs, based on estimated future cash flows, and makes
provisions for tooling costs that will not be recovered, if any, when such
amounts are known.

PROPERTY AND EQUIPMENT

Property and equipment is stated at acquisition cost, which reflects the
fair market value of assets acquired at the acquisition date for all
subsidiaries. Property and equipment purchased other than through the
acquisitions described in Note 2 is stated at cost. Expenditures for normal
repairs and maintenance are

F-8
<PAGE> 92

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

charged to operations as incurred. Depreciation is computed using the
straight-line method over the following estimated useful lives:

<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings and improvements.................................. 5-50
Machinery, equipment and tooling............................ 2-10
Furniture and fixtures...................................... 5-7
</TABLE>

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill of $87,079 and $85,889 (net of accumulated amortization of $8,400
and $5,251) at December 31, 1998 and 1997, respectively, represents the costs in
excess of net assets acquired and is amortized using the straight line method
over periods of up to 30 years.

Debt issuance costs of $5,958 and $6,467, net of accumulated amortization
at December 31, 1998 and 1997, respectively, are amortized over the terms of the
loan agreements, which are six to ten years. Debt issuance cost amortization of
$587, $551 and $212 for 1998, 1997 and 1996, respectively, has been included in
interest expense.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets and certain identifiable intangibles
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable. The Company determines
the impairment of long-lived assets by comparing the undiscounted future net
cash flows to be generated by the assets to their carrying value. Impairment
losses are then measured as the amount by which the carrying amount of the asset
exceeds the fair value of the asset. In 1998, as described in Note 3, the
Company determined that certain intangible assets of its subsidiary, SportRack
International, Inc. had been impaired.

INCOME TAXES

The Company and certain of its domestic subsidiaries have elected to be
taxed as limited liability companies for federal income tax purposes. As a
result of this election, the Company's domestic taxable income accrues to the
individual members. Distributions are made to the members in amounts sufficient
to meet the tax liability on the Company's domestic taxable income accruing to
the individual members. Distributions to members, net of minority interest, of
$195, $2,914 and $3,692 were made during 1998, 1997 and 1996, respectively.

Certain of the Company's domestic subsidiaries and foreign subsidiaries are
subject to income taxes in their respective jurisdictions. Income tax provisions
for these entities are based on the U.S. Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". Deferred tax assets and
liabilities are provided for the expected future tax consequences of temporary
differences between the carrying amounts and the tax basis of such entities'
assets and liabilities. Deferred tax assets are reduced by a valuation allowance
for tax benefits that are not expected to be realized. The Company does not
provide for U.S. income taxes or foreign withholding taxes on the undistributed
earnings of foreign subsidiaries because of management's intent to permanently
reinvest in such operations.

The Company and certain subsidiaries are subject to taxes, including
Michigan Single Business Tax and Canadian capital tax, which are based primarily
on factors other than income. As such, these amounts are included in selling,
administrative and product development expenses in the accompanying consolidated

F-9
<PAGE> 93

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

statements of income. Deferred taxes related to Michigan Single Business Tax are
provided on the temporary differences resulting from capital acquisitions and
depreciation.

RESEARCH, DEVELOPMENT AND ENGINEERING

Research, development and engineering costs are expensed as incurred and
aggregated approximately $9,611, $5,860 and $3,548 for the years ended December
31, 1998, 1997 and 1996, respectively, for the Company.

RECLASSIFICATIONS

Certain amounts from the 1997 financial statements have been reclassified
to conform with the 1998 financial statement presentation.

2. ACQUISITIONS

Acquisitions of the Company from inception through December 31, 1998 are as
follows:

<TABLE>
<CAPTION>
PURCHASE GOODWILL
ACQUIRED COMPANY ACQUISITION DATE PRICE RECORDED LOCATION PRODUCT LINES
---------------- ---------------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
MascoTech Accessories.......... September 28, 1995 $46,050 $32,781 United States Rack systems
Brink B.V...................... October 30, 1996 54,339 27,730 Europe Towing systems
Sportrack division of Bell
Sports....................... July 2, 1997 13,505 1,198 Canada Rack systems
Nomadic Sports, Inc............ July 24, 1997 849 433 Canada Rack systems
Valley Industries, Inc......... August 5, 1997 56,478 32,891 United States Towing systems
Towbar segment of Ellebi
S.p.A........................ January 2, 1998 21,938 5,645 Italy Towing systems
Transfo-Rakzs, Inc............. February 7, 1998 1,040 902 Canada Rack systems
</TABLE>

The above acquisitions have each been accounted for in accordance with the
purchase method of accounting. Accordingly, the respective purchase price of
each acquisition has been allocated to assets acquired and liabilities assumed
based upon their estimated fair values at the acquisition date. The excess of
the aggregate purchase price over the estimated fair value of the net assets
acquired has been recorded as goodwill. The operating results of these entities
have been included in the Company's consolidated financial statements since the
date of each acquisition. Each acquisition represented the purchase of the net
assets of the respective company with the exceptions of Brink B.V. and Nomadic
Sports, Inc. which were purchases of the outstanding shares. Each company was
purchased for cash except for Brink B.V. which was purchased for $54,339 in cash
and a 12,500 Junior Subordinated Note ($7,340) denominated in Dutch Guilders, to
Brink Holdings, B.V.

Pro Forma Data

The following unaudited pro forma consolidated results of operations have
been prepared as if the Valley, SportRack International, Inc., Ellebi and
Tranfo-Rakzs, Inc. acquisitions had occurred on January 1, 1997.

<TABLE>
<CAPTION>
1997
----
<S> <C>
Net sales................................................... $268,489
Income before extraordinary charge.......................... 2,015
Net loss.................................................... (5,401)
</TABLE>

Pro forma results for 1998 have not been presented as they are
substantially the same as the Company's actual results. The pro forma data is
not intended to be a projection of future results.

F-10
<PAGE> 94

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. ACQUISITIONS -- (CONTINUED)

The pro forma data included above includes adjustments to historical
results of operations for increased depreciation expense, intangible asset
amortization and interest expense, net of the related tax benefits.

3. IMPAIRMENT AND RESTRUCTURING CHARGES

In July 1997, the Company acquired the net assets of the sportrack division
of Bell Sports Corporation ("Bell") for approximately $13,500 and recorded
goodwill of approximately $1,200, representing the excess of the purchase price
over the then estimated fair value of net assets acquired. In June 1998
information became available which indicated that certain assets acquired from
Bell (accounts receivable, inventory, and tooling) had a fair value less than
originally recorded. The SportRack International purchase was renegotiated and a
$2,000 reimbursement was received from Bell. Accounts receivable, inventory and
tooling were reduced by $6,500 and additional goodwill of $4,500, net of the
$2,000 reimbursement from Bell, was recorded.

During the second half of 1998, management further reassessed the
operations of SportRack International, and as a result took actions to
restructure the operations and rationalize the product offerings, customer and
supplier base, distribution channels and warehousing, and terminated 14
employees, including certain members of SportRack International's senior
management. Concurrent with the reassessment of the SportRack International's
operations, management reviewed the revised carrying value of goodwill and other
intangible assets, determined that future cash flows would not be sufficient to
recover recorded amounts, and recorded an impairment charge of $7,863.

The SportRack International impairment and restructuring charges are
comprised of the following:

<TABLE>
<S> <C> <C>
Impairment of:
Goodwill.................................................. $6,116
Other intangible assets................................... 1,747 $7,863
------
Restructuring charges for:
Product rationalization................................... 1,068
Other costs............................................... 832 1,900
------ ------
$9,763
======
</TABLE>

The restructuring charge related to inventory has been included in cost of
sales and other costs have been included in selling, administrative and product
development expenses in the accompanying 1998 consolidated statement of
operations. Management believes that substantially all restructuring costs have
been incurred as of December 31, 1998, including cash expenditures during 1998
of $258.

Sales for SportRack International during the year ended December 31, 1998
were approximately $4,000 and total assets as of December 31 1998 were
approximately $7,100 after the impairment charge.

F-11
<PAGE> 95

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT

Long-term debt is comprised of the following:

<TABLE>
<CAPTION>
OUTSTANDING AT
DECEMBER 31,
INTEREST RATE AT --------------------
DECEMBER 31, 1998 1998 1997
----------------- ---- ----
<S> <C> <C> <C>
Senior Subordinated Notes, less discount of $435 and $464,
respectively............................................ 9.75% $124,565 $124,536
Second Amended and Restated Credit Agreement
(U.S. Credit Facility)
Term note A.......................................... 5.09% 14,777 17,065
Term note B.......................................... 7.54% 15,592 15,883
Revolving line of credit note........................ -- -- 1,900
Acquisition revolving note........................... 7.09% 21,000 21,000
First Amended and Restated Credit Agreement
(Canadian Credit Facility)
Canadian term note................................... 7.50% 11,590 13,952
Canadian revolving line of credit note............... -- -- 2,790
-------- --------
187,524 197,126
Less -- current portion................................... 4,536 3,746
-------- --------
$182,988 $193,380
======== ========
</TABLE>

During 1998, the Company exchanged 100% of its Senior Subordinated Notes
(the "Old Notes") for a new series of notes issued under a registration
statement having terms substantially identical to the Old Notes.

SENIOR SUBORDINATED NOTES

Borrowings under the Company's Series B Senior Subordinated Notes (the
"Notes"), due October 1, 2007, are unsecured and are subordinated in right of
payment to all existing and future senior indebtedness of the Company, including
the loans under the U.S. and Canadian Credit Agreements described below. The
Company, at its option, may redeem the Notes, in whole or in part, together with
accrued and unpaid interest subsequent to October 1, 2002 at certain redemption
prices as set forth by the indenture, under which the Notes have been issued. In
addition, at any time on or prior to October 1, 2000, the Company may redeem up
to 35% of the aggregate principal amount of the Notes with the net cash proceeds
of one or more public equity offerings at a redemption price equal to 109.75% of
the principal amount to be redeemed. Upon the occurrence of a change of control
of the Company, as defined by the indenture, the Company is required to make an
offer to repurchase the Notes at a price equal to 101% of the principal amount
of the notes. The indenture places certain limits on the Company, the most
restrictive of which include, the incurrence of additional indebtedness by the
Company, the payment of dividends on, and redemption of capital of the Company,
the redemption of certain subordinated obligations, investments, sales of assets
and stock of certain subsidiaries, transactions with affiliates, consolidations,
mergers and transfers of all or substantially all of the Company's assets.
Interest on the Notes is payable semi-annually in arrears on April 1 and October
1 of each year.

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

The Company's Second Amended and Restated Credit Agreement ("U.S. Credit
Facility"), which is administered by First Chicago NBD Bank ("NBD") and The
Chase Manhattan Bank ("Chase"), is secured by substantially all the assets of
the Company and places certain restrictions on the Company related to
indebtedness, sales of assets, investments, capital expenditures, dividend
payments, management fees, and

F-12
<PAGE> 96

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT -- (CONTINUED)

members' equity transactions. In addition, the agreement subjects the Company to
certain restrictive covenants, including the attainment of designated operating
ratios and minimum net worth levels. The Company, at its election, may make
prepayments of the term notes under the credit agreement on a pro-rata basis.
Additionally, mandatory prepayments of the term notes are required in the event
of sales of assets meeting certain criteria, as set forth by the agreement, or
based upon periodic calculations of excess cash flows, as defined by the
agreement.

The U.S. Credit Facility provides for two term notes (Term note A and Term
note B), a revolving line of credit note and an acquisition revolving note.
Loans under each of the term notes and the revolving note can be converted, at
the election of the Company, in whole or in part, into Base Rate Loans or
Eurocurrency Loans. Interest is payable in arrears quarterly on Base Rate Loans,
and in arrears in one, two or three months on Eurocurrency Loans, as determined
by the length of the Eurocurrency Loan, as selected by the Company. Interest is
charged at an adjustable rate plus the applicable margin. The applicable margin
is based upon the Company's Senior Debt Ratio, as defined by the Credit
Agreement. Eurocurrency Loans under the Term note A can be made in U.S. dollars
or certain other currencies, at the option of the Company. The U.S. Credit
Facility also provides for a Letter of Credit Facility. At December 31, 1998, no
letters of credit were outstanding.

Term note A

On October 30, 1996 the Company borrowed $65,000 under Term note A. On
October 1, 1997 the Company made a mandatory prepayment totaling $43,475 in
connection with the issuance of the Old Notes. In October 1998, the loan under
Term note A, which was denominated in U.S. Dollars, was exchanged for a loan
denominated in Dutch Guilders. All other provisions of Term note A were
unchanged. At December 31, 1998 the principal balance of Term note A was 27,913
Dutch Guilders. The applicable margin for Term note A ranges from .75% to 2.0%
for Base Rate Loans and from 1.75% to 3.0% for Eurocurrency Loans. Repayments
under the note are required in the following installments:

<TABLE>
<CAPTION>
QUARTERLY
---------
<S> <C>
March 31, 1999 through September 30, 1999................... $552
December 31, 1999 through September 30, 2000................ 736
December 31, 2000 through June 30, 2003..................... 883
Final installment on October 30, 2003....................... 464
</TABLE>

Term note B

On August 5, 1997, the Company borrowed $55,000 under Term note B. On
October 1, 1997 the Company made a mandatory prepayment totaling $39,044 in
connection with the issuance of the Old Notes. The applicable margin for Term
note B ranges from 1.25% to 2.5% for Base Rate Loans and from 2.25% to 3.5% for
Eurocurrency Loans. Repayments under Term note B are required in the following
installments:

<TABLE>
<S> <C>
March 31, 1999 through September 30, 2003 (quarterly)....... $ 73
December 31, 2003........................................... 2,912
March 30, 2004, June 30, 2004 and October 30, 2004.......... 3,764
</TABLE>

Revolving line of credit note

The Company has the ability to borrow up to $25,000 under the revolving
line of credit which expires on October 30, 2003. Available borrowings, however,
are limited to a defined borrowing base amount equal to 85% eligible domestic
accounts receivable and 80% of certain eligible foreign accounts receivable. The
base

F-13
<PAGE> 97
ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT -- (CONTINUED)

borrowing amount is increased by the lesser of the sum of 50% of domestic
eligible inventory and 40% to 50% of certain eligible foreign inventory or
$10,000. Available borrowings are reduced by amounts outstanding under the
Canadian revolving line of credit note described below. The applicable margin
for the revolving line of credit ranges from .75% to 2.0% for Base Rate Loans
and from 1.75% to 3.0% for Eurocurrency Loans. A commitment fee of .375% to .5%
is charged on the unused balance based on the Company's Senior Leverage Ratio,
as defined. At December 31, 1998, $25,000 was available under the facility.

Acquisition revolving note

On December 31, 1997, the Company borrowed $21,000 under its $22,000
acquisition revolving note. The proceeds were used to acquire the net assets of
Ellebi on January 2, 1998, as discussed in Note 2. The note is available to the
Company on a revolving credit basis until September 24, 1999 at which time the
outstanding principal balance will convert to a term loan which will amortize in
sixteen equal quarterly installments with a final maturity of October 30, 2003.
The applicable margin for the acquisition revolving note ranges from .75% to
2.0% for Base Rate Loans and from 1.75% to 3.0% for Eurocurrency Loans. A
commitment fee of .375% to .5% is charged on the unused balance based on the
Company's Senior Leverage Ratio, as defined.

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

The Company's First Amended and Restated Credit Agreement ("Canadian Credit
Facility"), which is administered by NBD and Chase, is secured by substantially
of all the assets of the Company's Canadian subsidiaries and is guaranteed by
the Company.

The Canadian Credit Facility provides for a C$20,000 term note and a
C$4,000 revolving note, (U.S. $13,068 and U.S. $2,614) at December 31, 1998,
respectively. Loans under each of the notes can be converted at the election of
the company, in whole or in part, into Floating Rate advances, U.S. Base Rate
advances or LIBOR advances. Floating rate advances are denominated in Canadian
dollars and bear interest at a variable rate based on the bank's prime lending
rate plus a variable margin. U.S. Base Rate advances are denominated in U.S.
dollars and bear interest at the bank's prime lending rate plus a variable
margin. LIBOR advances are denominated in U.S. dollars and bear interest at
LIBOR plus a variable margin. The variable margin is based upon the Company's
Senior Debt Ratio, as defined by the Canadian Credit Facility and ranges from
.5% to 1.75% for U.S. Base Rate advances and from 1.5% to 2.75% for LIBOR
advances.

Canadian term note

Repayments under the Canadian term note are required in the following
installments:

<TABLE>
<CAPTION>
QUARTERLY
---------
<S> <C>
March 31, 1999 through September 30, 1999................... $430
December 31, 1999 through September 30, 2000................ 563
December 31, 2000 through June 30, 2003..................... 671
Final installment on October 30, 2003....................... 667
</TABLE>

Canadian revolving line of credit note

A commitment fee of .5% is charged on the unused balance of the Canadian
revolving line of credit note.

SENIOR SUBORDINATED LOANS

On October 30, 1996, the Company borrowed $20,000 under its Senior
Subordinated Note Purchase Agreement ("Senior Subordinated Loans") with CB
Capital and International Mezzanine. The Senior

F-14
<PAGE> 98

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT -- (CONTINUED)

Subordinated Loans were repaid in full on October 1, 1997 with the proceeds of
the Notes discussed above. Interest on the Senior Subordinated Loans was payable
in arrears semiannually and accrued at a rate of 12.5% per annum. The Senior
Subordinated Loans provided for a prepayment penalty if the Senior Subordinated
Loans were paid prior to October 30, 2002. Under this provision, a prepayment
penalty totaling $1,400 was paid in 1997 and is included in the extraordinary
charge resulting from debt extinguishment.

In connection with the issuance of the Senior Subordinated Loans, the
Company issued warrants to purchase 1,002 membership units. The warrants have an
exercise price of one cent per warrant, are exercisable immediately, and expire
October 30, 2004. As provided in the Warrant Agreement, the warrant holder can
put the warrants and membership units acquired through the exercise of the
warrants back to the Company after October 30, 2001 or upon occurrence of a
Triggering Event, as defined, but prior to the earlier of October 30, 2004 or
the consummation of a Qualified Public Offering for an amount equal to Fair
Market Value, as defined. Additionally, as provided in the Warrant Agreement,
the Company may call the warrants and membership units acquired through the
exercise of the warrants at any time after the sixth anniversary of the Closing
Date, but prior to the earlier of October 30, 2004 or a Qualified Public
Offering for an amount equal to Fair Market Value, as defined.

At the date of issuance, the proceeds from the Senior Subordinated Loans
were allocated between the Senior Subordinated Loans and the warrants based upon
their estimated relative fair market value; accordingly, the Senior Subordinated
Loans were recorded at a discount of $3,498, which was partially amortized prior
to repayment on October 1, 1997. The remaining unamortized balance of $3,145 was
charged to 1997 operations as part of the extraordinary charge resulting from
debt extinguishment.

The warrants are being accreted to their redemption value through periodic
charges against Members' Equity through the earlier of October 30, 2001 or the
time redemption first becomes available. Thereafter the warrants will be
recorded at redemption value. The aforementioned warrants have been presented as
mandatorily redeemable warrants in the accompanying balance sheets.

JUNIOR SUBORDINATED NOTE

On October 30, 1996, the Company issued a 12,500 Junior Subordinated Note
("Junior Note"), denominated in Dutch Guilders, to Brink Holdings B.V. as part
of the consideration paid for the purchase of Brink B.V. The Junior Note was due
April 30, 2005, but was repaid in full on October 1, 1997 with the proceeds of
the Old Notes discussed above. The Junior Note accrued interest at a rate of 7%
per annum, payable semi-annually in arrears.

EXTINGUISHMENT OF DEBT

1997 Extinguishments

As discussed above, on October 1, 1997 the Company repaid, in full, its
Senior Subordinated Loans and Junior Note and prepaid a portion of the term
notes under the U.S. Credit Facility. In connection with this extinguishment,
the Company recorded an extraordinary charge of $7,416, net of a tax benefit of
$365. The extinguishment charge is comprised of $1,400 prepayment penalties,
$3,145 of unamortized debt discount and $3,236 of unamortized debt issuance
costs.

1996 Extinguishments

On October 30, 1996, the Company prepaid all amounts outstanding under a
$30,000 credit agreement and a prior $11,000 senior subordinated loan agreement.
In connection with these extinguishments, the

F-15
<PAGE> 99

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT -- (CONTINUED)

Company recorded an extraordinary charge of $1,970. The extinguishment charge is
comprised of prepayment penalties totaling $220, unamortized debt discount
totaling $150 and debt issuance costs of $1,600.

In connection with the issuance of the prior senior subordinated loan, the
Company issued warrants to purchase 617 membership units. The proceeds from the
issuance were allocated based on the estimated relative fair market values;
accordingly, the notes were recorded at a discount of $200. As part of the
extinguishment of the prior senior subordinated loan, the Company paid $1,600 to
redeem the warrants.

INTEREST RATE RISK

The Company is exposed to interest rate volatility with regard to variable
rate debt. The Company uses interest rate swaps to reduce interest rate
volatility. At December 31, 1998 and 1997, the notional value of interest rate
swaps was $18,500. Under the terms of the interest rate swap agreements, the
Company pays a fixed interest rate on debt equal to the notional value. The
effects of interest rate swaps are reflected in interest expense.

SCHEDULED MATURITIES

The aggregate scheduled annual principal payments due in each of the years
ending December 31, is as follows:

<TABLE>
<S> <C>
1999........................................................ $ 4,536
2000........................................................ 10,994
2001........................................................ 11,757
2002........................................................ 11,757
2003........................................................ 12,623
2004 and thereafter......................................... 136,292
--------
187,959
Less -- discount............................................ 435
--------
$187,524
========
</TABLE>

5. INCOME TAXES

The Company's C corporation subsidiaries and taxable foreign subsidiaries
account for income taxes in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". The Company and certain
domestic subsidiaries are limited liability corporations; as such, the Company's
earnings are included in the taxable income of the Company's members. Income
(loss) before minority interest, income taxes and the pre-tax charge resulting
from debt extinguishment were attributable to the following sources:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
United States............................................... $10,002 $ 2,872 $ 6,283
Foreign..................................................... (9,189) (9,941) (1,844)
------- ------- -------
$ 813 $(7,069) $ 4,439
======= ======= =======
</TABLE>

F-16
<PAGE> 100

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES -- (CONTINUED)

The provision (benefit) for income taxes, including $365 of income tax
benefit allocated to the extraordinary charge in 1997, is comprised of the
following:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CURRENTLY PAYABLE (REFUNDABLE)
United States............................................. $ -- $ -- $ --
Foreign................................................... 1,591 290 (128)
------ ------- -----
1,591 290 (128)
------ ------- -----
DEFERRED
United States............................................. -- -- --
Foreign................................................... (688) (3,511) (363)
------ ------- -----
903 (3,511) (363)
------ ------- -----
$ 903 $(3,221) $(491)
====== ======= =====
</TABLE>

The effective tax rates differ from the U.S. federal income tax rate as
follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Income tax provision (benefit) at U.S. statutory rate
(35%)..................................................... $ 286 $(2,474) $ 1,554
U. S. income taxes attributable to members.................. (3,502) (1,005) (2,200)
Change in valuation allowance............................... 4,225 -- --
Nondeductible foreign goodwill.............................. 270 229 102
Foreign rate differences and other, net..................... (376) 29 53
------- ------- -------
$ 903 $(3,221) $ (491)
======= ======= =======
</TABLE>

F-17
<PAGE> 101

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES -- (CONTINUED)

Deferred tax assets and liabilities, related primarily to the Company's
foreign subsidiaries, comprise the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1998 1997
---- ----
<S> <C> <C>
DEFERRED TAX ASSETS
Net operating loss carryforwards of foreign subsidiaries... $ 4,689 $ 3,255
Fixed assets............................................... 5,185 296
Goodwill................................................... 621 --
Inventory.................................................. 150 --
Other...................................................... 427 75
------- -------
11,072 3,626
DEFERRED TAX LIABILITIES
Fixed assets............................................... (5,816) (3,296)
Inventory.................................................. (1,363) (1,244)
Employee benefits and other................................ (159) (176)
Other...................................................... (166) (162)
------- -------
(7,504) (4,878)
Valuation allowance........................................ (4,225) --
------- -------
Net deferred tax liability................................. $ (657) $(1,252)
======= =======
</TABLE>

The net operating loss carryforwards of the Company's European subsidiaries
approximate $1,300 at December 31, 1998 and have no expiration date. The net
operating loss carryforwards of the Company's Canadian subsidiaries approximate
$11,000 at December 31, 1998 and expire primarily in 2005. During 1998, the
Company recorded a valuation allowance of $4,225 based upon management's current
assessment of the likelihood of realizing the Canadian subsidiaries' deferred
tax assets. Management believes that it is more likely than not that the related
deferred tax assets recorded for its other subsidiaries will be realized and no
valuation allowance has been provided against such amounts as of December 31,
1998. If certain substantial changes in the Company's ownership should occur,
there could be an annual limit on the amount of certain carryforwards which can
be utilized.

6. RELATED PARTY TRANSACTIONS AND ALLOCATIONS

In connection with the acquisition of Brink B.V., the Company entered into
the Junior Note Agreement, with Brink Holdings B.V., as described in Note 4 to
the financial statements. Concurrent with this acquisition, owners of Brink
Holdings B.V. purchased 1,230 membership units of the Company for cash of $4,286
($3,485 per unit).

A portion of the Company's U.S. Credit Facility and $20,000 Senior
Subordinated Loans, as described in Note 4, is with Chase and CB Capital
Investors, Inc., respectively, affiliates of certain members of the Company.

Charges to operations related to consulting services provided to the
Company by certain members of the Company aggregated approximately, $386, $350
and $243 for the years ended December 31, 1998, 1997 and 1996, respectively.

Certain employees and consultants of the Company hold Class A Units of the
Company.

F-18
<PAGE> 102

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. OPTION PLAN

The Company adopted the disclosure requirements of Financial Accounting
Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation". The
Company, however, has elected to continue to measure compensation cost using the
intrinsic value method, in accordance with APB Opinion 25 ("APB 25"),
"Accounting for Stock Issued to Employees".

The Company has issued options to purchase Class A Units which are
outstanding under the Company's 1995 Option Plan ("the Plan"). As of December
31, 1998 and 1997, the Company was authorized under the Plan to issue options to
purchase up to 4,200 Class A Units to officers, directors and employees of the
Company and its subsidiaries. At December 31, 1998, there were 229 options that
remained available for grant under the Plan.

Information concerning options to purchase Class A Units is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
NUMBER EXERCISE NUMBER EXERCISE NUMBER EXERCISE
OF UNITS PRICE OF UNITS PRICE OF UNITS PRICE
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at January 1............... 3,903 $1,415 3,525 $1,000 2,925 $1,000
Options granted........................ 280 $3,135 378 $5,287 600 $1,000
Options exercised...................... -- -- -- -- -- --
Options cancelled...................... 212 $5,035 -- -- -- --
----- ----- -----
Outstanding at December 31............. 3,971 $1,343 3,903 $1,415 3,525 $1,000
===== ===== =====
Exercisable at December 31............. 1,654 $1,367 938 $1,000 480 $1,000
===== ===== =====
</TABLE>

Options granted vest as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER EXERCISE
OF UNITS PRICE VESTING PERIOD
- -------- -------- --------------
<C> <C> <S>
215 $3,029 Options vest immediately.
2,854 $1,200 Options vest over periods, generally up to ten years, as
determined by the Option Committee. Vesting may be
accelerated based on the results of a Liquidity Event, as
defined in the Plan, or based upon the achievement of
certain operating results of the Company or its
subsidiaries.
275 $1,000 Options vest based on the results of a Liquidity Event, as
defined in the Plan.
627 $1,566 Options vest based upon achievement of certain operating
results of the Company.
</TABLE>

The Company has elected to continue applying the provisions of APB 25 and
accordingly, recognized compensation cost of $558, $263 and $332 for the years
ended December 31, 1998, 1997 and 1996, respectively. If compensation cost and
the fair value of options granted had been determined based upon the fair value
method in accordance with SFAS 123, the pro forma net income (loss) of the
Company would have been ($290), ($3,985) and $4,846 the years ended December 31,
1998, 1997 and 1996, respectively. The weighted average fair value of options
granted was $2.4, $0.2 and $0.4 for the years ended December 31, 1998, 1997 and
1996, respectively.

F-19
<PAGE> 103

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. OPTION PLAN -- (CONTINUED)

The fair value of options granted and related pro forma compensation cost
were estimated using the Black-Scholes option-pricing model with the following
assumptions:

<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Dividend yield......................................... 0.0% 0.0% 0.0%
Risk-free rate of return............................... 5.50% 6.12% 6.21%
Expected option term (in years)........................ 8 8 8
</TABLE>

The following table summarizes the status of the Company's options
outstanding and exercisable at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------
WEIGHTED
AVERAGE
EXERCISE REMAINING OPTIONS
PRICES UNITS CONTRACTUAL LIFE EXERCISABLE
- -------- ----- ---------------- -----------
<S> <C> <C> <C>
1$,000 3,525 12 1,396
3$,029 215 14 215
3$,485 65 14 13
5$,610 166 14 30
</TABLE>

8. PENSION PLANS

The Company has a defined benefit pension plan covering substantially all
of SportRack, LLC's domestic employees covered under a collective bargaining
agreement. An employee's monthly pension benefit is determined by multiplying a
defined dollar amount by the years of credited service earned. Plan assets are
comprised principally of marketable equity securities and short-term
investments. The Company's funding policy is to contribute annually the amounts
necessary to comply with ERISA funding requirements.

F-20
<PAGE> 104

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. PENSION PLANS -- (CONTINUED)

The following table sets forth the change in the plan's benefit obligations
and plan assets, and the funded status of the plan as of and for the years ended
December 31, 1998 and 1997:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1998 1997
---- ----
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year................... $1,929 $1,637
Benefits earned during the year........................... 99 76
Interest on projected benefit obligation.................. 140 124
Actuarial loss............................................ 202 217
Benefits paid............................................. (69) (125)
------ ------
Benefit obligation at end of year......................... 2,301 1,929
------ ------
Change in plan assets:
Market value of assets at beginning of year............... 1,586 1,308
Actual return on plan assets.............................. 167 303
Employer contributions.................................... 147 100
Benefits paid............................................. (69) (125)
------ ------
Market value of assets at end of year..................... 1,831 1,586
------ ------
Funded status............................................... (470) (343)
Unrecognized prior service cost............................. 9 11
Unrecognized net (gain) loss................................ 49 (133)
------ ------
Accrued pension cost........................................ $ (412) $ (465)
====== ======
</TABLE>

The weighted average discount rate used in determining the actuarial
present value of the accumulated benefit obligation was 6.75% and 7.00% at
December 31, 1998 and 1997, respectively. The expected long-term rate of return
on plan assets was 9.00% at December 31, 1998 and 1997.

The Company has various defined contribution retirement plans for its
domestic and certain foreign subsidiaries, including 401(k) plans, whereby
participants can contribute a portion of their salary up to certain maximums
established by the related plan documents. The Company makes matching
contributions, which are based upon the amounts contributed by employees. The
Company's matching contributions charged to operations aggregated $306, $229 and
$130 in 1998, 1997 and 1996, respectively.

Substantially all of the employees of Brink International B.V. are covered
by a union-sponsored, collectively-bargained, multi-employer defined benefit
plan. Pension expense was $1,302, $660 and $118 for the years ended December 31,
1998 and 1997 and for the two-month period from November 1, 1996 through
December 31, 1996, respectively.

F-21
<PAGE> 105

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. OPERATING LEASES

The Company leases certain equipment under leases expiring on various dates
through 2004. Future minimum annual lease payments required under leases that
have a noncancellable lease term in excess of one year at December 31, 1998 are
as follows:

<TABLE>
<S> <C>
1999........................................................ $2,927
2000........................................................ 2,332
2001........................................................ 1,924
2002........................................................ 1,478
2003 and thereafter......................................... 868
------
$9,529
======
</TABLE>

Rental expense charged to operations was approximately $3,947, $2,252 and
$669 for the years ended December 31, 1998, 1997 and 1996, respectively.

10. ACCOUNT BALANCES

Account balances included in the consolidated balance sheets are comprised
of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1998 1997
---- ----
<S> <C> <C>
INVENTORIES
Raw materials............................................. $12,805 $13,744
Work-in-process........................................... 12,707 5,040
Finished goods............................................ 17,575 15,624
------- -------
$43,087 $34,408
======= =======
PROPERTY AND EQUIPMENT
Land, buildings and improvements.......................... $22,552 $20,966
Furniture, fixtures and computer hardware................. 8,137 6,299
Machinery, equipment and tooling.......................... 46,003 32,458
Construction-in-progress.................................. 1,984 1,985
------- -------
78,676 61,708
Less -- accumulated depreciation.......................... (17,381) (8,148)
------- -------
$61,295 $53,560
======= =======
ACCRUED LIABILITIES
Compensation and benefits................................. $ 9,239 $ 8,900
Interest.................................................. 3,256 3,154
Income taxes.............................................. 1,692 646
Other taxes............................................... 766 478
Other..................................................... 6,382 4,732
------- -------
$21,335 $17,910
======= =======
</TABLE>

11. COMMITMENTS AND CONTINGENCIES

The Company is party to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of business.
Management believes that the resolution of these matters will not have a
material adverse effect on the financial position, results of operations or cash
flows of the Company.

F-22
<PAGE> 106

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. SEGMENT INFORMATION

The Company operates in one reportable segment, providing towing and rack
systems and related accessories to the automotive OEM and aftermarket. All sales
are to unaffiliated customers. Revenues by geographic area, accumulated by the
geographic area where the revenue originated, revenues by product line and
long-lived assets, which include net property and equipment and net goodwill and
debt issuance costs, by geographic area are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
REVENUES
United States............................... $190,300 $122,294 $73,895
The Netherlands............................. 35,543 36,268 2,791
Italy....................................... 19,900 -- --
Other foreign............................... 44,396 30,116 4,780
-------- -------- -------
$290,139 $188,678 $81,466
======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
REVENUES
Towing systems.............................. $175,236 $100,293 $ 7,571
Rack systems................................ 114,903 88,385 73,895
-------- -------- -------
$290,139 $188,678 $81,466
======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1998 1997
---- ----
<S> <C> <C>
LONG-LIVED ASSETS
United States......................................... $ 93,628 $ 94,931
The Netherlands....................................... 33,432 32,508
Italy................................................. 10,774 --
Other foreign......................................... 16,511 20,845
-------- --------
$154,345 $148,284
======== ========
</TABLE>

The Company has two significant customers in the automotive OEM industry.
Sales to these customers represented 32% and 11% for the year ended December 31,
1998, 29% and 13% for the year ended December 31, 1997 and 60% and 21% for the
year ended December 31, 1996. Accounts receivable from these customers
represented 42% and 6% of the Company's trade accounts receivable at December
31, 1998, and 33% and 8% at December 31, 1997, respectively.

Although the Company is directly affected by the economic well being of the
industries and customers referred to above, management does not believe
significant credit risk exists at December 31, 1998. Consistent with industry
practice, the Company does not require collateral to reduce such credit risk.

13. CONDENSED CONSOLIDATING INFORMATION

The Notes have been issued by the Company and its wholly-owned subsidiary,
AAS Capital Corporation and are guaranteed on a full and unconditional and joint
and several basis, by all of the Company's wholly-owned domestic subsidiaries.
The following condensed consolidating financial information for 1998 and 1997
presents the financial position, results of operations and cash flows of (i) the
Company as parent, as if it

F-23
<PAGE> 107

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

accounted for its subsidiaries on the equity method, and AAS Capital Corporation
as issuers; (ii) guarantor subsidiaries which are domestic, wholly-owned
subsidiaries and include SportRack LLC, AAS Holdings, Inc., Valley Industries,
LLC, and ValTek LLC; and (iii) the non-guarantor subsidiaries which are foreign,
wholly-owned subsidiaries and include Brink International B.V., SportRack
International, Inc., and SportRack Automotive, GmbH. The financial position and
operating results of the guarantor and non-guarantor subsidiaries for the year
ended December 31, 1998 include a management fee of $1,198 and $318,
respectively, in addition to having been charged interest on their intercompany
balances. For the year ended December 31, 1997 the financial position and
operating results of the guarantor and non-guarantor subsidiaries do not include
any allocation of overhead or similar charges except that certain foreign
subsidiaries were charged interest on their intercompany debt balance. Separate
financial statements of the guarantor subsidiaries are not presented because
management has determined that the separate financial statements are not
material to investors. Since its formation in September 1997, AAS Capital
Corporation has had no operations and has no assets or liabilities at December
31, 1998.

Guarantor subsidiaries for 1996 include SportRack LLC and AAS Holdings,
Inc. and their financial statements are substantially those of the Company and
include Brink, a non-guarantor subsidiary acquired October 30, 1996. The 1996
consolidated results of operations include Brink for the two months ended
December 31, 1996 and reflect Brink's net sales of $7,571 and a net loss of
$1,353. At December 31, 1996, Brink's total assets and total liabilities were
$86,348 and $75,574, respectively. ValTek, LLC was formed in November 1997 and
is not significant.

F-24
<PAGE> 108

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1998

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATIONS/
ISSUERS SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash................................... $ -- $ 5,636 $ 5,604 $ -- $ 11,240
Accounts receivable.................... -- 28,437 12,290 -- 40,727
Inventories............................ -- 15,630 27,457 -- 43,087
Deferred income taxes and other current
assets.............................. 4 2,687 1,553 -- 4,244
-------- -------- -------- --------- --------
Total current assets.............. 4 52,390 46,904 -- 99,298
-------- -------- -------- --------- --------
Property and equipment, net.............. -- 28,416 32,879 -- 61,295
Goodwill, net............................ 1,105 59,261 26,713 -- 87,079
Other intangible assets, net............. 4,846 300 1,446 -- 6,592
Deferred income taxes and other
noncurrent assets...................... 28 2,285 2,404 -- 4,717
Investment in subsidiaries............... 34,373 10,022 -- (44,395) --
Intercompany notes receivable............ 109,300 -- -- (109,300) --
-------- -------- -------- --------- --------
Total assets...................... $149,656 $152,674 $110,346 $(153,695) $258,981
======== ======== ======== ========= ========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Current maturities of long-term debt... $ -- $ -- $ 4,536 $ -- $ 4,536
Accounts payable....................... -- 14,260 8,855 -- 23,115
Accrued liabilities and deferred income
taxes............................... 3,702 6,995 11,718 -- 22,415
-------- -------- -------- --------- --------
Total current liabilities......... 3,702 21,255 25,109 -- 50,066
-------- -------- -------- --------- --------
Deferred income taxes and other
noncurrent liabilities................. 1,153 1,255 3,963 -- 6,371
Long-term debt, less current
maturities............................. 124,565 -- 58,423 -- 182,988
Intercompany debt........................ -- 77,951 31,349 (109,300) --
Mandatorily redeemable warrants.......... 4,409 -- -- -- 4,409
Members' equity.......................... 15,827 52,213 (8,498) (44,395) 15,147
-------- -------- -------- --------- --------
Total liabilities and members'
equity......................... $149,656 $152,674 $110,346 $(153,695) $258,981
======== ======== ======== ========= ========
</TABLE>

F-25
<PAGE> 109

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATIONS/
ISSUERS SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash................................... $ -- $ 2,217 $ 25,131 $ -- $ 27,348
Accounts receivable.................... -- 31,649 11,874 -- 43,523
Inventories............................ -- 14,835 19,573 -- 34,408
Other current assets................... -- 4,912 1,619 -- 6,531
-------- -------- -------- --------- --------
Total current assets.............. -- 53,613 58,197 -- 111,810
-------- -------- -------- --------- --------
Property and equipment, net.............. -- 28,009 25,551 -- 53,560
Goodwill, net............................ 1,145 61,431 23,313 -- 85,889
Other intangible assets, net............. 5,558 722 3,683 -- 9,963
Deferred income taxes and other
noncurrent assets...................... -- 384 3,952 -- 4,336
Investment in subsidiaries............... 26,500 10,022 -- (36,522) --
Intercompany notes receivable............ 115,056 -- -- (115,056) --
-------- -------- -------- --------- --------
Total assets...................... $148,259 $154,181 $114,696 $(151,578) $265,558
======== ======== ======== ========= ========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Current maturities of long-term debt... $ -- $ -- $ 3,746 $ -- $ 3,746
Accounts payable....................... -- 19,053 3,965 -- 23,018
Accrued liabilities and deferred income
taxes............................... 3,607 7,180 8,456 -- 19,243
-------- -------- -------- --------- --------
Total current liabilities.............. 3,607 26,233 16,167 -- 46,007
-------- -------- -------- --------- --------
Deferred income taxes and other
noncurrent liabilities................. 595 1,318 4,307 -- 6,220
Long-term debt, less current
maturities............................. 126,436 -- 66,944 -- 193,380
Intercompany debt........................ -- 89,218 25,838 (115,056) --
Mandatorily redeemable warrants.......... 3,507 -- -- -- 3,507
Members' equity.......................... 14,114 37,412 1,440 (36,522) 16,444
-------- -------- -------- --------- --------
Total liabilities and members'
equity......................... $148,259 $154,181 $114,696 $(151,578) $265,558
======== ======== ======== ========= ========
</TABLE>

F-26
<PAGE> 110

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1998

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATIONS/
ISSUERS SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales............................... $ -- $122,294 $ 66,384 $ -- $188,678
Cost of sales........................... -- 89,647 45,909 -- 135,556
------- -------- -------- ------- --------
Gross profit.......................... -- 32,647 20,475 -- 53,122
Selling, administrative and product
development expenses.................. 721 14,685 15,944 -- 31,350
Amortization of intangible assets....... 53 1,571 712 -- 2,336
------- -------- -------- ------- --------
Operating income (loss)............... (774) 16,391 3,819 -- 19,436
Interest expense........................ 3,348 3,760 5,519 -- 12,627
Equity in net income (loss) of
subsidiaries.......................... 5,169 -- -- (5,169) --
Foreign currency gain (loss)............ 1,041 -- (7,138) -- (6,097)
------- -------- -------- ------- --------
Income (loss) before minority interest
and income taxes...................... 2,088 12,631 (8,838) (5,169) 712
Provision (benefit) for income taxes.... -- -- (2,856) -- (2,856)
------- -------- -------- ------- --------
Income (loss) before minority
interest........................... 2,088 12,631 (5,982) (5,169) 3,568
Minority interest....................... -- 97 -- -- 97
------- -------- -------- ------- --------
Extraordinary charge resulting from debt
extinguishment........................ 6,153 525 738 -- 7,416
------- -------- -------- ------- --------
Net income (loss)....................... $(4,065) $ 12,009 $ (6,720) $(5,169) $ (3,945)
======= ======== ======== ======= ========
</TABLE>

F-27
<PAGE> 111

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATIONS/
ISSUERS SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used for)
operating activities.................. $(4,216) $ 18,479 $ 7,616 $ -- $ 21,879
------- -------- -------- ----- --------
Cash flows from investing activities:
Acquisition of property and
equipment.......................... -- (4,358) (5,640) -- (9,998)
Amount due from sellors of Valley
Industries, Inc.................... -- 1,150 -- -- 1,150
Acquisition of subsidiaries, net of
cash acquired...................... -- -- (22,770) -- (22,770)
------- -------- -------- ----- --------
Net cash used for investing
activities............................ -- (3,208) (28,410) -- (31,618)
------- -------- -------- ----- --------
Cash flows provided by (used for)
financing activities:
Change in intercompany debt........... 6,101 (11,657) 5,556 -- --
Net reduction in revolving loan....... (1,900) -- (2,605) -- (4,505)
Repayment of debt..................... -- -- (3,682) -- (3,682)
Issuance of membership units.......... 29 -- -- -- 29
Repurchase of membership units........ (14) -- -- -- (14)
Distributions from subsidiaries....... 195 -- -- (195) --
Distributions to members.............. (195) (195) -- 195 (195)
------- -------- -------- ----- --------
Net cash provided by (used for)
financing activities.................. 4,216 (11,852) (731) -- (8,367)
------- -------- -------- ----- --------
Effect of exchange rate changes......... -- -- 1,998 -- 1,998
------- -------- -------- ----- --------
Net increase (decrease) in cash......... -- 3,419 (19,527) -- (16,108)
Cash at beginning of period............. -- 2,217 25,131 -- 27,348
------- -------- -------- ----- --------
Cash at end of period................... $ -- $ 5,636 $ 5,604 $ -- $ 11,240
======= ======== ======== ===== ========
</TABLE>

F-28
<PAGE> 112

ADVANCED ACCESSORY SYSTEMS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. CONDENSED CONSOLIDATING INFORMATION -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
GUARANTOR NON-GUARANTOR ELIMINATIONS/
ISSUERS SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used for)
operating activities................. $ 3,522 $ 5,092 $ (1,632) $ -- $ 6,982
-------- -------- -------- ------- ---------
Cash flows from investing activities:
Acquisition of property and
equipment......................... -- (6,005) (1,746) -- (7,751)
Amount due from sellors of Valley
Industries, Inc................... -- (1,150) -- -- (1,150)
Acquisition of subsidiaries, net of
cash acquired..................... -- (56,478) (14,354) -- (70,832)
-------- -------- -------- ------- ---------
Net cash used for investing
activities........................... -- (63,633) (16,100) -- (79,733)
-------- -------- -------- ------- ---------
Cash flows provided by (used for)
financing activities:
Change in intercompany debt.......... (99,971) 76,412 23,559 -- --
Proceeds from issuance of debt....... 124,529 55,000 35,521 -- 215,050
Increase (decrease) in revolving
loan.............................. 1,900 (4,300) 2,904 -- 504
Repayment of debt.................... (27,699) (63,500) (22,049) -- (113,248)
Debt issuance costs.................. (7,280) -- -- -- (7,280)
Issuance of membership units......... 4,999 -- -- -- 4,999
Distributions from subsidiaries...... 2,915 -- -- (2,915) --
Distributions to members............. (2,915) (2,945) -- 2,915 (2,945)
-------- -------- -------- ------- ---------
Net cash provided by (used for)
financing activities............ (3,522) 60,667 39,935 -- 97,080
-------- -------- -------- ------- ---------
Effect of exchange rate changes........ -- -- 505 -- 505
-------- -------- -------- ------- ---------
Net increase in cash................... -- 2,126 22,708 -- 24,834
Cash at beginning of period............ -- 91 2,423 -- 2,514
-------- -------- -------- ------- ---------
Cash at end of period.................. $ -- $ 2,217 $ 25,131 $ -- $ 27,348
======== ======== ======== ======= =========
</TABLE>

F-29
<PAGE> 113

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of Brink B.V.:

We have audited the accompanying consolidated balance sheets of Brink B.V.
as of October 31, 1996 and the related statements of consolidated income and
cash flows for the ten month period ended October 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements have been prepared in accordance with
accounting principles generally accepted in The Netherlands.

We conducted our audits in accordance with auditing standards generally
accepted in The Netherlands, which are substantially similar to those followed
in the United States. These 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, 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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Brink B.V. at
October 31, 1996 and the consolidated results of their operations and their cash
flows for the ten month period ended October 31, 1996 in conformity with
accounting principles generally accepted in The Netherlands.

Accounting principles generally accepted in The Netherlands vary in certain
respects from accounting principles generally accepted in the United States. The
application of the latter would have affected the determination of net income
for the ten months ended October 31, 1996 and the shareholders' equity as of
October 31, 1996 to the extent summarized in Note 1.7 to the consolidated
financial statements.

PricewaterhouseCoopers N.V.

Zwolle, The Netherlands
September 4, 1997

F-30
<PAGE> 114

BRINK B.V.

1.1 CONSOLIDATED BALANCE SHEET AS OF OCTOBER 31, 1996 (AFTER PROFIT
APPROPRIATION)

<TABLE>
<CAPTION>
OCTOBER 31, 1996
---------------------
NLG 1,000 NLG 1,000
<S> <C> <C>
FIXED ASSETS
Tangible fixed assets....................................... 30,662
Financial fixed assets...................................... --
------
30,662
CURRENT ASSETS
Stocks...................................................... 25,087
Accounts receivable......................................... 22,107
Cash on hand and at bank.................................... 3,517
------
50,711
------
Total assets.............................................. 81,373
------
GROUP EQUITY................................................ 33,294
DEFERRED INVESTMENT GRANTS.................................. 1,334
PROVISIONS.................................................. 3,395
LONG-TERM LIABILITIES....................................... 20,118
CURRENT LIABILITIES......................................... 23,232
------
81,373
------
</TABLE>

1.2 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE TEN MONTHS ENDED OCTOBER 31,
1996

<TABLE>
<CAPTION>
FOR THE TEN MONTHS
ENDED
OCTOBER 31, 1996
---------------------
NLG 1,000 NLG 1,000
<S> <C> <C>
NET TURNOVER................................................ 98,393
Costs of raw materials and supplies......................... 36,872
Work contracted out and other external costs................ 5,082
Personnel expenses.......................................... 28,088
Depreciation................................................ 4,363
Other operating expenses.................................... 14,090
------
TOTAL OF OPERATING EXPENSES................................. 88,495
------
OPERATING RESULT............................................ 9,898
Interest income............................................. 17
Interest expense............................................ (1,788)
------
Financial income and expense................................ (1,771)
------
Result from ordinary activities before income tax........... 8,127
Income tax.................................................. 2,871
------
GROUP RESULT................................................ 5,256
------
</TABLE>

F-31
<PAGE> 115
BRINK B.V. -- (CONTINUED)

1.3 CONSOLIDATED CASH FLOWS STATEMENT FOR THE TEN MONTHS ENDED OCTOBER 31, 1996

<TABLE>
<CAPTION>
FOR THE TEN MONTHS
ENDED
OCTOBER 31, 1996
---------------------
NLG 1,000 NLG 1,000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net result.................................................. 5,256
Depreciation................................................ 4,394
------
9,650
Changes in:
Stocks.................................................... 4,146
Accounts receivable....................................... (7,575)
Current liabilities....................................... 2,669
Provisions and other changes.............................. 337
------
(423)
------
Cash flows from operating activities........................ 9,227
CASH FLOWS FROM INVESTING ACTIVITIES
Net additions to tangible fixed assets...................... 4,957
------
Cash flows from investing activities........................ (4,957)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in loans............................................. 1,631
Change in credit institutions............................... (3,182)
Change in financial assets.................................. 141
------
Cash flows from financing activities........................ (1,410)
------
Total cash flows............................................ 2,860
Cash on hand and at bank January 1.......................... 657
------
CASH ON HAND AND AT BANK AT END OF PERIOD................... 3,517
------
</TABLE>

1.4 GENERAL NOTES

1.4.1 General

Activities

The activities of Brink B.V. and its subsidiaries mainly comprise the
development, manufacture and sale of towbars and accessories.

Group structure

Brink B.V. forms part of the Brink Group. The ultimate parent company of
the group is Brink Holding B.V. As of November 1, 1996 Brink Holding B.V. sold
the shares in Brink B.V. to Advanced Accessory Systems, LLC, (formerly AAS
Holdings, LLC), in the United States of America. Advanced Accessory Systems, LLC
subsequently established Brink International B.V. in The Netherlands. The shares
of Brink B.V. have been transferred from Advanced Accessory Systems, LLC to
Brink International B.V. in December 1996. At that time, Brink B.V. transferred
the shares of its foreign subsidiaries to Brink International B.V.

F-32
<PAGE> 116
BRINK B.V. -- (CONTINUED)

The consolidated financial statements for the ten month period ended
October 31, 1996 comprise the financial information of Brink B.V. and the
following wholly-owned subsidiaries:

<TABLE>
<S> <C>
- - Brink Trekhaken B.V. Hoogeveen, The Netherlands
- - Nordisk Komponent Holding A/S Naestved, Denmark
- - Brink A/S Naestved, Denmark
- - Brink UK Ltd. Nuneaton, England
- - Brink Sverige AB Vanersborg, Sweden
- - Brink France Sarl Paris, France
- - SCI l'Elmontaise Aiglemont, France
- - Societe de Fabrication
d'Equipements
et d'Accessoires SA (SFEA) Betheny, France
</TABLE>

The information stated in the financial statements of the consolidated
investments are included for 100% in the consolidation.

Outstanding intercompany accounts between group companies, as well as
intercompany supplies and other costs charged between group companies have been
eliminated in the consolidation. Profits on intercompany supplies which have not
yet been delivered to third parties are eliminated in the consolidation.

1.4.2 Accounting principles and determination of result

Comparison with the previous year

The accounting principles and determination of result remained unchanged
compared with the previous year.

General

Assets and liabilities are carried at face value, unless indicated
otherwise. If deemed necessary, a provision is deducted from accounts
receivable.

Foreign currency translation

a. Transactions in foreign currencies

Assets and liabilities denominated in foreign currencies are
translated at the rate of exchange prevailing on the balance sheet
date.

The resulting translation differences are included in the profit and
loss account, except for those on long-term loans, which relate to
the financing of foreign investments.

The exchange differences on these loans are directly added to or
charged against equity.

Transactions in foreign currencies during the reporting period have
been processed in the financial statements at the rate at transaction
date.

b. Investments in group companies

The financial statements denominated in foreign currencies are
translated at the rates prevailing on the balance sheet date.

The exchange difference on the opening balance of investments and the
changes during the year are directly added to or charged against
shareholders' equity.

Tangible fixed assets

Valuation occurs at historical cost less depreciation, being a fixed
percentage of cost in accordance with the estimated useful life. The
depreciation period commences at the moment the asset is put into use.

F-33
<PAGE> 117
BRINK B.V. -- (CONTINUED)

In connection with the acquisition of Brink B.V. by Advanced Accessory
Systems, LLC, the fair value of the tangible fixed assets of Brink B.V. and its
subsidiaries was required to be determined. The fair value of such assets at
November 1996 was approximately NLG 50,000.

Stocks

Stocks consist of raw materials and supplies, work in progress and finished
goods and trade goods.

- Raw materials and supplies are valued at purchase prices.

- Work in progress is valued at the processed raw materials and
supplies, direct labor costs incurred as well as an uplift for
indirect manufacturing costs.

- Installments invoiced to customers are deducted from work in progress.

- Foreseeable losses are provided for and deducted from work in
progress.

- Finished goods and trade goods are valued at manufacturing cost
(direct costs of materials and labor, with an uplift for indirect
costs) and the last known purchase price respectively.

A provision is included for possible obsolescence.

Deferred investment grants

The rights to investment grants are recognized in the year in which they
arise as deferred income. The grants are amortized in the result over the
depreciation period of the assets concerned.

PROVISIONS

Deferred tax liabilities:

This concerns liabilities resulting from the differences in valuation of
assets and liabilities for the financial statements and those for tax purposes.
They are included at nominal value, based on the prevailing tax rate in the
countries concerned.

Deferred tax debits are carried if it can reasonably be assumed that
realization will take place in due course.

Long-term liabilities

Long-term liabilities are debts with a remaining term of more than one
year.

Determination of result

The result represents the difference between the proceeds from goods
supplied or services rendered and the costs and other charges for the year.

Results on transactions are recognized in the year in which they are
realized; losses are taken when foreseeable.

Depreciation takes place according to the straight-line method on the basis
of the estimated useful lives.

a. Net turnover

Net turnover represents the amounts charged to third parties for the
goods, supplies and services rendered less discounts and excluding
VAT, as well as the changes in the added value in the stock of work
in progress and of finished goods.

F-34
<PAGE> 118
BRINK B.V. -- (CONTINUED)

b. Costs of raw materials and supplies

Costs of raw materials and supplies represent the use of raw
materials and supplies in the production by the manufacturing
companies.

c. Work contracted out and other external costs

Costs of work contracted out and other external costs represent the
costs, except for the use of raw materials and supplies, that can
directly be allocated to the manufactured goods and services rendered
in the current financial year.

d. Other operating expenses

Costs are allocated to the reporting year to which they relate.

e. Taxation

Deferred tax assets and liabilities are recognized for the expected
future tax consequences of events that have been included in the
financial statements or tax returns, and are determined annually
based on the difference between financial statement and tax bases
using enacted tax laws and rates in effect for the year in which the
differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized. The provision for
taxes on income is the tax payable for the year plus the change in
deferred tax assets and liabilities during the year.

1.5 NOTES TO THE CONSOLIDATED BALANCE SHEET

1.5.1 Tangible fixed assets

The changes in tangible fixed assets can be summarized as follows (x NLG
1,000):

<TABLE>
<CAPTION>
1996
----
<S> <C>
BALANCE JANUARY 1
Cost........................................................ 62,847
Cumulative depreciation..................................... (32,748)
--------
Book value.................................................. 30,099
--------
CHANGE IN BOOK VALUE
Additions................................................... 5,120
Disposals................................................... (550)
Depreciation................................................ (4,394)
Exchange rate adjustments................................... 387
--------
563
--------
BALANCE OCTOBER 31, 1996
Cost........................................................ 67,804
Cumulative depreciation..................................... (37,142)
--------
Book value.................................................. 30,662
--------
</TABLE>

Tangible fixed assets can be specified by category as follows:

<TABLE>
<CAPTION>
OCTOBER 31, DEPRECIATION
1996 RATES
----------- ------------
<S> <C> <C>
Land and buildings...................................... 19,892 0-10%
Machinery and equipment................................. 7,564 20-25%
Other................................................... 3,206 20-50%
------
30,662
------
</TABLE>

F-35
<PAGE> 119
BRINK B.V. -- (CONTINUED)

Tangible fixed assets also include the investment commitments of NLG
237,000.

Tangible fixed assets contain land and buildings, machinery and equipment
with a book value of NLG 1,550,000, financed by means of financial lease. The
lease commitments for the buildings run until 2000, after which year the
buildings will be in the group's ownership.

1.5.2 Stocks

The stocks of raw materials and supplies, work in progress, finished goods
and trade goods within the group can be detailed as follows (x NLG 1,000):

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
<S> <C>
Towbars and accessories..................................... 24,749
Other stock................................................. 338
------
25,087
------
</TABLE>

On account of article 410 sub 2, Book 2 of the Dutch Civil Code, Title 9,
stocks are not broken down.

1.5.3 Accounts receivable

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Trade debtors............................................... 18,334
Taxes and social security premiums.......................... 274
Other debtors, prepayments and accrued income............... 3,499
------
22,107
------
</TABLE>

1.5.4 Group equity; shareholders' equity

a. Issued and paid-up capital

The authorized capital amounts to NLG 50,000. The issued and paid-up
capital at October 31, 1996 amounts to NLG 50,000, consisting of 200
shares of NLG 250 nominal each. There were no changes during the ten
month period ended October 31, 1996.

b. Share premium reserve

This concerns the share premium received upon the share issue in
1985. No changes took place during the ten months' period ended
October 31, 1996.

c. Legal reserve

A statutory reserve has been formed for income from investments, the
payment of which income cannot be realized without restriction. At
October 31, 1996, this reserve amounted to NLG 0.

d. Other reserves

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Balance as of January 1..................................... 28,039
Profit appropriation........................................ 5,256
Exchange rate adjustments................................... (1)
------
Balance at end of period.................................... 33,294
------
</TABLE>

F-36
<PAGE> 120
BRINK B.V. -- (CONTINUED)

1.5.5 Deferred investment grants

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Balance as of January 1..................................... 1,335
Exchange rate adjustments................................... 30
Release to the result....................................... (31)
-----
Balance at end of period.................................... 1,334
-----
</TABLE>

1.5.6 Provisions

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
<S> <C>
Deferred tax liabilities.................................... 3,395
-----
</TABLE>

The provisions are mainly of a long-term nature.

1.5.7 Long-term liabilities

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Loan from parent............................................ 19,588
Lease commitments........................................... 530
------
20,118
------
</TABLE>

Redemption liabilities due within 12 months after year end have not been
included in the above amounts but are accounted for under current liabilities.

Foreign currencies

a. This concerns a loan from Advanced Accessory Systems LLC at an
average interest rate of 6.5%. No redemption schedules or securities
have been agreed.

b. Lease commitments: this concerns the capitalized financial lease
agreements, denominated in FFR. The assets concerned have been given
as collateral for the lease commitments.

1.5.8 Current liabilities

<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Redemptions on long-term loans.............................. 175
Credit institutions......................................... 1,005
Creditors................................................... 12,271
Income tax.................................................. 297
Other taxes and social premiums............................. 2
Other debts, accruals and deferred income................... 9,482
------
23,232
------
</TABLE>

In addition to the securities given for credits received, recognized under
long-term liabilities, a chattel mortgage has been given to credit institutions
by the Swedish subsidiary.

F-37
<PAGE> 121
BRINK B.V. -- (CONTINUED)

1.5.9 Contingent liabilities

Liability

The company and its Dutch subsidiary are severally liable for each other's
total commitments vis-a-vis the Dutch credit institution.

Lease commitments

The annual amount of lease commitments entered into with third parties
totals approximately NLG 2,400,000.

The operating lease commitments have a term of two to four years.

1.6 NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

1.6.1 Net turnover

The turnover can be broken down into geographical area as follows (x NLG
1,000):

<TABLE>
<CAPTION>
TEN MONTH
PERIOD ENDED
OCTOBER 31,
1996
------------
<S> <C>
The Netherlands............................................. 22,816
Foreign countries........................................... 75,577
------
98,393
------
</TABLE>

1.6.2 Personnel expenses (x NLG 1,000)

<TABLE>
<CAPTION>
TEN MONTH
PERIOD ENDED
OCTOBER 31,
1996
------------
<S> <C>
Wages and salaries.......................................... 23,838
Social charges.............................................. 3,920
Pension charges............................................. 1,067
------
28,825
Charged on by maintenance service........................... (737)
------
28,088
------
</TABLE>

Pension Plan

Approximately 98% of the company's employees are covered by a union
sponsored collective bargaining, multiemployer defined benefit pension plan.

F-38
<PAGE> 122
BRINK B.V. -- (CONTINUED)

1.6.3 Employees

During the year, the group employed on average 563 persons, spread over
geographical areas as follows:

<TABLE>
<CAPTION>
TEN MONTH
PERIOD ENDED
OCTOBER 31,
1996
------------
<S> <C>
The Netherlands............................................. 277
Other European countries.................................... 286
---
563
---
</TABLE>

1.6.4 Depreciation (x NLG 1,000)

<TABLE>
<CAPTION>
TEN MONTH
PERIOD ENDED
OCTOBER 31,
1996
------------
<S> <C>
Buildings................................................... 629
Plant, machinery and equipment.............................. 3,375
Other fixed assets.......................................... 390
-----
4,394
Release of investment grants................................ (31)
-----
4,363
-----
</TABLE>

1.6.5 Income taxes (x NLG 1,000)

The income tax for the period ended October 31, 1996 consists of the
following:

<TABLE>
<S> <C>
Deferred taxes.............................................. 339
Current taxes............................................... 2,532
-----
2,871
-----
</TABLE>

1.7 SUMMARY OF DIFFERENCES BETWEEN DUTCH AND U.S. GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES

Brink's consolidated financial statements have been prepared in accordance
with Dutch GAAP which differs in certain significant respects from U.S. GAAP.
These differences relate principally to the following items, and the effect of
the adjustments to group result and group equity which would be required under
U.S. GAAP are set out in the tables below.

1.7.1 Purchase accounting

Under Dutch GAAP, goodwill arising upon acquisition represents the
difference between the book value of assets acquired and consideration paid, and
is immediately written off against reserves. Under U.S. GAAP, goodwill
represents the difference between fair value of assets acquired and
consideration paid. Resulting goodwill is held as an intangible asset in the
balance sheet and amortized over its estimated useful life, not to exceed 40
years.

F-39
<PAGE> 123
BRINK B.V. -- (CONTINUED)

Group Result

<TABLE>
<CAPTION>
TEN MONTH
PERIOD ENDED
OCTOBER 31,
1996
------------
NLG 1,000
<S> <C>
Group result reported under Dutch GAAP...................... 5,256
-----
U.S. GAAP adjustments
Depreciation.............................................. (301)
Amortization of goodwill.................................. (218)
-----
Pre-tax effect of U.S. GAAP adjustments..................... (519)
Tax effect of U.S. GAAP adjustments......................... 105
-----
Net effect of U.S. GAAP adjustments......................... (414)
-----
Group result under U.S. GAAP................................ 4,842
-----
</TABLE>

Group equity

<TABLE>
<CAPTION>
TEN MONTHS
ENDED
OCTOBER 31,
1996
-----------
NLG 1,000
<S> <C>
Group equity under Dutch GAAP............................... 33,294
------
U.S. GAAP adjustments:
Goodwill.................................................. 3,929
Accumulated amortization.................................. (480)
Fixed assets.............................................. 2,563
Accumulated depreciation.................................. (1,106)
Deferred tax.............................................. (506)
------
Net U.S. GAAP adjustments.............................. 4,400
------
Group equity under U.S. GAAP................................ 37,694
------
</TABLE>

2 OTHER INFORMATION

2.1 REPORT OF INDEPENDENT ACCOUNTANTS

The report of the independent accountants is enclosed on page F-30 of this
report.

2.2 PROVISIONS IN THE ARTICLES OF ASSOCIATION RE PROFIT APPROPRIATION

Article 19

The profit available for distribution is at the disposal of the general
meeting of shareholders. The general meeting of shareholders can allocate this
profit in full or in part to the (general) reserves or other reserves, for the
payment of bonuses and/or distribution of dividend.

The company is only allowed to make payments to shareholders and other
persons entitled to the profit available for distribution, insofar as the
shareholders' equity exceeds the paid-up and called-in capital increased by the
statutory reserves.

F-40
<PAGE> 124
BRINK B.V. -- (CONTINUED)

2.3 PROPOSED PROFIT APPROPRIATION

It is proposed to the general meeting of shareholders that the profit for
the period January 1 - October 31, 1996 of NLG 5,256 be added to the other
reserves.

In anticipation of the approval of the general meeting of shareholders,
this proposal has already been processed in the financial statements.

2.4 EVENTS OCCURRED AFTER BALANCE SHEET DATE

In August 1997, the Company executed a nonbinding letter of intent to
acquire a manufacturer of towing systems.

F-41
<PAGE> 125

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Shareholders
Valley Industries, Inc.

In our opinion, the accompanying balance sheet and the related statements
of income and shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of Valley Industries, Inc. at August
5, 1997 and the results of its operations and its cash flows for the period then
ended in conformity with generally accepted accounting principles. Those
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.

As discussed in Note 7, on August 5, 1997, Valley Industries, Inc. sold
certain net operating assets to Advanced Accessory Systems, LLC. The
accompanying financial statements do not give effect to this transaction.

PricewaterhouseCoopers LLP

Bloomfield Hills, Michigan
December 5, 1997

F-42
<PAGE> 126

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Valley Industries, Inc.

We have audited the accompanying balance sheet of Valley Industries, Inc.
as of December 28, 1996, and the related statements of income, shareholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements 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 financial statements referred to above present fairly,
in all material respects, the financial position of Valley Industries, Inc. at
December 28, 1996, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

Ernst & Young LLP

Sacramento, California
March 10, 1997

F-43
<PAGE> 127

VALLEY INDUSTRIES, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 28, AUGUST 5,
1996 1997
------------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 34 $ 2,328
Accounts and notes receivable, less allowance of $288 and
$246, respectively..................................... 13,304 12,673
Receivable from shareholders.............................. -- 93
Inventories:
Raw materials.......................................... 5,007 5,599
Work in progress....................................... 2,463 1,965
Finished products...................................... 4,038 4,823
------- -------
11,508 12,387
Less LIFO reserve...................................... 706 706
------- -------
10,802 11,681
Prepaid expenses and other current assets................. 849 1,151
------- -------
Total current assets................................. 24,989 27,926
Property, plant and equipment:
Land...................................................... 428 428
Buildings and improvements................................ 2,588 2,596
Machinery and equipment................................... 10,245 11,218
Furniture and office equipment............................ 2,221 2,654
Construction in progress.................................. 701 901
------- -------
16,183 17,797
Less accumulated depreciation and amortization............ 8,707 9,300
------- -------
7,476 8,497
Other assets................................................ 621 871
------- -------
$33,086 $37,294
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable to bank...................................... $ 8,709 $13,721
Accounts payable.......................................... 9,996 11,952
Accrued compensation...................................... 1,174 959
Other accrued liabilities................................. 749 860
Current portion of long-term debt......................... 777 692
------- -------
Total current liabilities............................ 21,405 28,184
Long-term debt.............................................. 1,500 1,480
Note payable to shareholder................................. 5,046 5,046
Commitments (Note 6)
Shareholders' equity:
Common stock, no par value; 1,000 shares authorized, 555
shares issued and outstanding.......................... 443 --
Class A voting common stock, no par value; 2,775 shares
authorized, issued and outstanding..................... -- 22
Class B non-voting common stock, no par value; 52,725
shares authorized, issued and outstanding.............. -- 421
Shareholder note receivable............................... (117) --
Retained earnings......................................... 4,809 2,141
------- -------
Total shareholders' equity........................... 5,135 2,584
------- -------
$33,086 $37,294
======= =======
</TABLE>

See accompanying notes to the financial statements.

F-44
<PAGE> 128

VALLEY INDUSTRIES, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 29,
DECEMBER 28, 1996 TO
1996 AUGUST 5, 1997
------------ --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net sales................................................... $85,721 $53,510
Cost of products sold....................................... 68,876 41,630
Selling and distribution expenses........................... 5,559 4,560
General and administrative expenses......................... 6,453 4,686
Product development costs................................... 301 352
------- -------
Operating income............................................ 4,532 2,282
Other income (expense):
Interest expense.......................................... (892) (587)
Other, net................................................ (5) (125)
------- -------
Income before provision (benefit) for income taxes.......... 3,635 1,570
Provision (benefit) for income taxes........................ 133 (11)
------- -------
Net income.................................................. $ 3,502 $ 1,581
======= =======
</TABLE>

See accompanying notes to the financial statements.
F-45
<PAGE> 129

VALLEY INDUSTRIES, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY

YEAR ENDED DECEMBER 28, 1996,

AND THE PERIOD FROM DECEMBER 29, 1996 TO AUGUST 5, 1997

<TABLE>
<CAPTION>
SHAREHOLDER TOTAL
COMMON NOTE RETAINED SHAREHOLDERS'
STOCK RECEIVABLE EARNINGS EQUITY
------ ----------- -------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at December 31, 1995........................ $443 $(200) $ 2,144 $ 2,387
Dividends........................................... -- -- (837) (837)
Payments received on note receivable................ -- 83 -- 83
Net income.......................................... -- -- 3,502 3,502
---- ----- ------- -------
Balance at December 28, 1996........................ 443 (117) 4,809 5,135
Dividends........................................... -- -- (4,249) (4,249)
Payments received on note receivable................ -- 117 -- 117
Net income.......................................... -- -- 1,581 1,581
---- ----- ------- -------
Balance at August 5, 1997........................... $443 $ -- $ 2,141 $ 2,584
==== ===== ======= =======
</TABLE>

See accompanying notes to the financial statements.
F-46
<PAGE> 130

VALLEY INDUSTRIES, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 29,
DECEMBER 28, 1996 TO
1996 AUGUST 5, 1997
------------ --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 3,502 $ 1,581
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 1,153 775
Deferred income tax expense (benefit)..................... 135 (23)
Net changes in operating assets and liabilities:
Accounts, notes and shareholder receivable............. (5,033) 538
Inventories............................................ (224) (879)
Prepaid expenses and other current assets.............. (231) (529)
Accounts payable....................................... 1,502 1,956
Accrued compensation................................... 727 (215)
Other accrued liabilities.............................. 48 111
------- -------
Net cash provided by operating activities.............. 1,579 3,315
------- -------
INVESTING ACTIVITIES
Purchases of property, plant and equipment.................. (1,771) (1,844)
Other, net.................................................. 17 48
------- -------
Net cash used in investing activities.................. (1,754) (1,796)
------- -------
FINANCING ACTIVITIES
Net proceeds from notes payable to bank..................... 1,894 5,012
Proceeds of long-term debt.................................. 2,650 251
Payments of long-term debt.................................. (3,587) (356)
Payments received on note receivable from shareholder....... 83 117
Dividends paid.............................................. (837) (4,249)
------- -------
Net cash provided by financing activities................... 203 775
------- -------
Net increase in cash........................................ 28 2,294
Cash at beginning of period................................. 6 34
------- -------
Cash at end of period....................................... $ 34 $ 2,328
======= =======
</TABLE>

See accompanying notes to the financial statements.
F-47
<PAGE> 131

VALLEY INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

1. SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Valley Industries, Inc. (the "Company") is engaged in the manufacture and
marketing of automotive vehicle products (primarily trailer hitches and towing
products) and sells to original equipment manufacturers and automotive
aftermarket customers principally within the United States.

FISCAL YEAR

The Company operates with a 52/53 week fiscal year ending on the last
Saturday in December. The fiscal year ended December 28, 1996 included 52 weeks.

INVENTORIES

Inventories for the Company's Western division are carried at the lower of
cost, as determined by the last-in, first-out (LIFO) method, or market. The
current costs of LIFO inventories exceed their balance sheet carrying amount by
$706 at December 28, 1996, and August 5, 1997, respectively. In 1996, inventory
quantities at the Western division were reduced. This reduction resulted in a
liquidation of LIFO inventory quantities carried at lower costs prevailing in
prior years as compared with current year costs. The effect of this liquidation
was to increase net income by approximately $80 for the year ended December 28,
1996.

Inventories for the Company's Eastern division are carried at the lower of
cost, as determined by the first-in, first-out (FIFO) method, or market.

RECEIVABLE FROM SHAREHOLDERS

Shareholder receivables represent costs associated with the sale of Valley
Industries, Inc. of $93 which the Shareholders have agreed to pay.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost and depreciated or
amortized on a straight-line basis over the estimated useful lives of the assets
or the capital lease term, whichever is less. The estimated useful lives range
from 5 to 20 years. Amortization of equipment recorded under capital leases is
included in depreciation expense.

INCOME TAXES

The Company has elected S corporation status for federal and state income
tax purposes except for California income tax purposes for which the Company
files its tax return as a C corporation. No provision has been made for federal
income taxes in the accompanying financial statements because the federal income
tax consequences of the Company's operations are the responsibility of the
individual shareholders. The Company provided for income taxes in California and
is subject to the Michigan Single Business Tax (MSBT). MSBT is based primarily
on factors other than income, and accordingly, is classified as general and
administrative expense.

The liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

F-48
<PAGE> 132
VALLEY INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

1. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
REVENUE RECOGNITION

Revenues are recognized when the product is shipped to the customer.

ADVERTISING COSTS

The Company accounts for advertising costs as expense in the period in
which incurred. Advertising expense for the year ended December 28, 1996 was
$622. Advertising expense for the period ended August 5, 1997 was $428.

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

The Company manufactures and sells automotive vehicle products to companies
in the automotive industry. The Company performs periodic credit evaluations of
its customers and generally does not require collateral. At December 28, 1996
and August 5, 1997, primarily all of the Company's accounts receivable were from
customers in the automotive industry. The Company believes that adequate
provision for uncollectible accounts receivable has been made in the
accompanying financial statements.

Three customers accounted for approximately 22%, 16% and 14% of net sales
for fiscal 1996. Three customers accounted for approximately 21%, 17% and 17% of
net sales for the period ended August 5, 1997.

USE OF ESTIMATES

The preparation of 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.

2. FINANCING ARRANGEMENTS

NOTE PAYABLE TO BANK

The Company has a revolving credit agreement with a bank that expires in
April 1998. Pursuant to an amendment on March 10, 1997, the agreement provides
for borrowings of up to $14,000 based upon specified percentages of eligible
accounts receivable and inventory. Under the agreement, borrowings bear interest
at either the bank's prime rate or a defined Eurodollar-based rate. At August 5,
1997, the outstanding borrowings of $13,721 bear interest at the bank's prime
rate of 8.5%. The Company is subject to certain restrictive covenants under the
revolving credit agreement, including, among other things, the maintenance of
certain financial ratios, and restrictions on repayment of the note payable to
shareholder, payment of dividends (except for tax distributions to the Company's
shareholders), the sale or redemption of the Company's common stock and the
incurrence of additional indebtedness. Substantially all of the Company's assets
are pledged as collateral for borrowings under the revolving credit agreement.

The term note payable to a bank (see "Long-Term Debt" below) is subject to
the restrictive covenants and security arrangements discussed above. As
explained in Note 7, the Company's outstanding debt at August 5, 1997 was repaid
from the proceeds of the sale of certain of the Company's net operating assets.

NOTE PAYABLE TO SHAREHOLDER

The note payable to shareholder is secured by the Company's Lodi facilities
including land and building with a net book value at August 5, 1997 of
approximately $1,365. Payments of principal on the note payable to shareholder
were not made through August 4, 1997 due to the restrictive covenants under the
Company's

F-49
<PAGE> 133
VALLEY INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

2. FINANCING ARRANGEMENTS -- (CONTINUED)
current and former revolving credit agreements. While the agreements with the
Company's principal bank permit the payment of interest on the note payable to
shareholder, the Company and the note holder have agreed to forego the payment
or accrual of interest.

LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 28, AUGUST 5,
1996 1997
------------ ---------
<S> <C> <C>
Term note payable to a bank due in quarterly installments of
principal of $194 through March 1998, and quarterly
installments of principal of $113 from June 1998 to April
2001; with interest at the bank's prime rate (8.5% at
August 5, 1997)........................................... $2,107 $2,032
Capitalized lease obligation due in monthly installments of
$6, including principal and interest imputed at 10.6%,
through December 1999..................................... 170 140
------ ------
2,277 2,172
Less current portion........................................ 777 692
------ ------
$1,500 $1,480
====== ======
</TABLE>

On March 10, 1997, the Company executed an amendment to the term note
payable to a bank with an outstanding balance of $2,032 at August 5, 1997. In
addition, the Company obtained a new term credit facility which provides for
borrowings of up to $900 to fund a portion of certain planned capital
expenditures. Borrowings under the new term equipment note are due in eight
equal quarterly installments commencing September 1997. No borrowings have been
made under the new term equipment note through August 5, 1997. The term note
payable of $2,032 was repaid from the proceeds of the sale of certain of the
Company's net operating assets as described in Note 7.

Interest paid during 1996 was $889. Interest paid during the period ended
August 5, 1997 was $628.

3. SHAREHOLDERS' EQUITY

On January 1, 1995, the Company sold 55 shares of common stock to its
President in exchange for a note receivable in the amount of $292. The note
receivable is due in ten annual installments of $29 commencing January 1, 2000,
and bears interest payable annually at a variable rate of interest
(approximately 6% at December 28, 1996). In addition, any cash dividend
distributions on the related common stock are to be applied as a reduction of
the note receivable balance. For 1996 and 1997, cash dividends of $83 and $117,
respectively, were applied against the note receivable balance.

In connection with the issuance of common stock, the Company and the
President have entered into an agreement which provides the Company the right of
first refusal in the event the President attempts to sell or dispose of such
shares. The Company's purchase option allows the Company to acquire the shares
at the lesser of adjusted book value or a bona fide offer from a third party.
Adjusted book value is defined as book value per share adjusted for the per
share difference, if any, between the net book value and fair value of certain
of the Company's real estate.

In July 1997, the Company's Board of Directors approved an amendment to the
Company's certificate of incorporation to create two new classes of common
stock. Pursuant to the amendment, each existing share of

F-50
<PAGE> 134
VALLEY INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

3. SHAREHOLDERS' EQUITY -- (CONTINUED)
common stock was exchanged for five shares of Class A voting common stock and
ninety-five shares of Class B nonvoting common stock.

4. INCOME TAXES

The income tax provision (benefit), which relates solely to California
state taxes, consists of the following components (in thousands):

<TABLE>
<CAPTION>
PERIOD
YEAR ENDED ENDED
DECEMBER 28, AUGUST 5,
1996 1997
------------ ---------
<S> <C> <C>
Current expense.......................................... $ (2) $103
Deferred expense (benefit) before benefit of net
operating loss and California manufacturers' investment
tax credit............................................. 215 (23)
California manufacturers' investment tax credit.......... (80) (91)
---- ----
$133 $(11)
==== ====
</TABLE>

The components of deferred tax assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 28, AUGUST 5,
1996 1997
------------ ---------
<S> <C> <C>
Inventory................................................ $ 50 $ 82
Accounts receivable...................................... 14 12
California manufacturers' investment tax credit.......... 23 --
Accrued liabilities and other............................ 21 40
---- ----
$108 $134
==== ====
</TABLE>

There were no tax payments made during the year ended December 28, 1996, or
the period ended August 5, 1997.

5. PENSION PLANS

DEFINED CONTRIBUTION PLAN

Effective January 1, 1993, substantially all employees became eligible to
participate in a tax deferred investment plan (the "401(k) Plan") established by
the Company. Effective November 1, 1995, the Company's former profit sharing
plan was merged into the 401(k) Plan. The 401(k) Plan permits each participant
to contribute up to 15% of compensation on a pre-tax basis, to a specified
maximum amount per year. The Company, at its discretion, may make matching
contributions. Matching contributions were approximately $32 and $16 for 1996
and 1997, respectively.

6. LEASE COMMITMENTS

In May 1993, the Company sold the land and building relating to its
principal operating facility in Michigan for $1,450 cash to Valley Industries
Realty, L.P. (the "Partnership"), a related party. Concurrent with the sale, the
Company leased the facilities back from the Partnership through December 31,
2002. The lease requires minimum monthly rentals of approximately $15, with
escalations in certain circumstances. At August 5, 1997, the Company is
obligated to pay minimum lease payments of approximately $84 for the

F-51
<PAGE> 135
VALLEY INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

6. LEASE COMMITMENTS -- (CONTINUED)
remaining period of 1997, and approximately $180 in each of the five years
ending December 31, 2002. The lease arrangement has been accounted for as an
operating lease.

The Company also leases certain machinery, equipment and facilities under
agreements which expire at various dates through 2002. At August 5, 1997, annual
minimum lease and rental payments for all capital leases and noncancellable
operating leases are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1997........................................................ $ 28 $ 274
1998........................................................ 68 634
1999........................................................ 64 527
2000........................................................ -- 473
2001........................................................ -- 401
Thereafter.................................................. -- 290
---- ------
160 $2,599
======
Less amount representing interest........................... (20)
----
Present value of net minimum lease payments................. $140
====
</TABLE>

Rental expense for 1996 was approximately $453. Rental expense for the
period ended August 5, 1997 was $295.

7. SUBSEQUENT EVENTS

On August 5, 1997, the net operating assets of the Company were acquired by
Advanced Accessory Systems, LLC. The Company's outstanding debt at August 5,
1997 was repaid from the proceeds of the sale. In conjunction with the sale of
the Company, in July 1997 management and other bonuses aggregating approximately
$900 were paid. The associated expense is included within general and
administrative expenses for the period ended August 5, 1997.

F-52
<PAGE> 136

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
of Ellebi S.p.A.

In our opinion, the accompanying balance sheets and the related statements
of operations and of cash flows present fairly, in all material respects, the
financial position of the towbar segment of Ellebi S.p.A. (the Company), at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1997, in conformity
with U.S. generally accepted accounting principles. These financial statements
are the responsibility of the management of the Company; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with U.S. generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

The Company, as disclosed in Note 1 to the accompanying financial
statements, is a division of Ellebi S.p.A. and has extensive transactions and
relationships with Ellebi S.p.A. Because of these relationships, it is possible
that the terms of these transactions are not the same as those that would result
from transactions among wholly unrelated parties.

As discussed in Note 9, on January 2, 1998, Ellebi S.p.A. sold certain net
assets of the Company to Brink International B.V. The accompanying financial
statements do not give effect to this purchase transaction.

AXIS S.r.1.

Reggio Emilia, Italy
March 13, 1998

F-53
<PAGE> 137

TOWBAR SEGMENT OF ELLEBI S.P.A.

BALANCE SHEETS
(AMOUNTS IN MILLIONS OF ITALIAN LIRA)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. 558 10
Trade receivables, less allowance of 248 and 248 at
December 31, 1996 and 1997, respectively............... 6,337 7,113
Other receivables, less allowance of 142 at December 31,
1996 and 1997, respectively............................ 482 627
Inventories............................................... 17,015 15,926
------ ------
Total current assets................................... 24,392 23,676
Property, plant and equipment, net.......................... 4,632 4,733
Receivables from associated company......................... 71 71
Other receivables........................................... 4 113
Intangible assets........................................... 103 57
------ ------
TOTAL ASSETS........................................... 29,202 28,650
====== ======
LIABILITIES AND ELLEBI S.P.A. INVESTMENT
Current liabilities
Trade payables............................................ 5,913 3,876
Tax payable............................................... 1,796 2,707
Social Security payable................................... 311 345
Other payables............................................ 1,104 1,237
------ ------
Total current liabilities.............................. 9,124 8,165
Agents severance fund....................................... 462 380
Termination indemnity....................................... 1,780 1,769
------ ------
TOTAL LIABILITIES...................................... 11,366 10,314
------ ------
Ellebi S.p.A. investment.................................... 17,836 18,336
------ ------
TOTAL LIABILITIES AND ELLEBI S.P.A. INVESTMENT......... 29,202 28,650
====== ======
</TABLE>

See accompanying notes to the financial statements.
F-54
<PAGE> 138

TOWBAR SEGMENT OF ELLEBI S.P.A.

STATEMENTS OF OPERATIONS
(AMOUNTS IN MILLIONS OF ITALIAN LIRA)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1997
---- ----
<S> <C> <C>
Net sales................................................... 32,541 36,378
Cost of sales............................................... 20,547 21,180
------ ------
Gross profit.............................................. 11,994 15,198
Selling, general and product development expenses........... 6,187 6,988
------ ------
Operating income.......................................... 5,807 8,210
Other expense............................................... (173) (37)
------ ------
Income before provision for income taxes.................. 5,634 8,173
Taxes on income............................................. 3,130 4,460
------ ------
Net income................................................ 2,504 3,713
====== ======
</TABLE>

See accompanying notes to the financial statements.
F-55
<PAGE> 139

TOWBAR SEGMENT OF ELLEBI S.P.A.

STATEMENTS OF CASH FLOWS
(AMOUNTS IN MILLIONS OF ITALIAN LIRA)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1997
---- ----
<S> <C> <C>
Net income.................................................. 2,504 3,713
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization............................. 1,141 823
Termination indemnity provision........................... 322 323
Changes in assets and liabilities
Trade receivables...................................... 134 (776)
Other receivables...................................... 72 (145)
Inventories............................................ (2,707) 1,089
Trade, tax and social security payables................ (1,897) (1,092)
Other payables......................................... (499) 133
Agents severance fund.................................. 41 (82)
Other, net............................................. (93) (282)
------ ------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.... (982) 3,704
------ ------
CASH FLOW FROM INVESTING ACTIVITIES
Intangible asset additions.................................. (147) (22)
Property, plant and equipment additions..................... (2,486) (909)
Other....................................................... (71) (108)
------ ------
NET CASH USED IN INVESTING ACTIVITIES.................. (2,704) (1,039)
------ ------
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid.............................................. (227) --
Increase (decrease) in Ellebi S.p.A. investment............. 2,690 (3,213)
------ ------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES....... 2,463 (3,213)
------ ------
Net decrease in cash........................................ (1,223) (548)
Cash at beginning of year................................... 1,781 558
------ ------
Cash at end of year......................................... 558 10
====== ======
</TABLE>

See accompanying notes to the financial statements.
F-56
<PAGE> 140

TOWBAR SEGMENT OF ELLEBI S.P.A.

STATEMENT OF CHANGES IN ELLEBI S.P.A. INVESTMENT
(AMOUNTS IN MILLIONS OF ITALIAN LIRA)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1997
---- ----
<S> <C> <C>
BEGINNING ELLEBI S.P.A. INVESTMENT.......................... 12,869 17,836
Net income.................................................. 2,504 3,713
Intercompany activity....................................... 2,690 (3,213)
Dividends paid.............................................. (227) --
------ ------
ENDING ELLEBI S.P.A. INVESTMENT............................. 17,836 18,336
====== ======
</TABLE>

See accompanying notes to the financial statements.
F-57
<PAGE> 141

TOWBAR SEGMENT OF ELLEBI S.P.A.

NOTES TO FINANCIAL STATEMENTS
(AMOUNTS IN MILLIONS OF ITALIAN LIRA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The towbar segment of Ellebi S.p.A. (the "Company"), is a manufacturer and
distributor of trailers, towbars, accessories and spare parts. The financial
statements have been prepared on a carve-out basis and present the historical
financial position, results of operations and cash flows of the Company
previously included in the financial statements of Ellebi S.p.A. The Company's
financial information included herein is not necessarily indicative of its
financial position, results of operations and cash flows in the future, or of
the results which would have been reported if the Company had operated as an
unaffiliated enterprise.

SIGNIFICANT ESTIMATES

The preparation of combined financial statements on a carve-out basis in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.

REVENUE RECOGNITION

Revenue from product sales is recognized at the time of shipment to the
customer, which represents the moment when ownership passes.

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially expose the Company to a
concentration of credit risk, consist primarily of accounts receivable. The
Company does not require collateral from its customers. To minimize this risk,
ongoing credit evaluations of customers' financial condition are performed. At
December 31, 1996 and 1997, approximately 41% of trade accounts receivable were
from the Company's ten major customers. For the same years the major customer
(Fiat Auto S.p.A.) represented 28% and 25%, respectively, of trade accounts
receivable.

FINANCIAL INSTRUMENTS

The carrying value of the Company's financial instruments, comprising cash,
accounts receivable, accounts payable and accrued liabilities, approximate their
fair values.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and on deposit.

RECEIVABLES

Receivables are stated at face value reduced to their estimated realizable
value by the allowance for doubtful accounts.

INVENTORIES

Inventories are carried at the lower of cost, as determined per item by the
last-in-first-out (LIFO) method, or market. Inventories are periodically
reviewed and reserves established for excess and obsolete items.

F-58
<PAGE> 142
TOWBAR SEGMENT OF ELLEBI S.P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful trade receivables is provided for based on
specific identification.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at cost and depreciated using
estimated useful lives. Depreciation is computed on the straight-line method.
Maintenance and repairs costs are charged to expense as incurred. Plant and
equipment additions and improvements are capitalized. Yearly depreciation rates
are as follows:

<TABLE>
<S> <C>
Plant and machinery......................................... 10%
Equipment and tools (molds)................................. 25%
Cars........................................................ 25%
Furniture................................................... 12%
Computers................................................... 20%
Vans........................................................ 20%
</TABLE>

Management believes that there are no impairments of property, plant and
equipment or other long-lived assets at December 31, 1997.

INTANGIBLE ASSETS

Intangible assets are carried at cost and amortized on the straight-line
method over their estimated useful lives.

RESEARCH, DEVELOPMENT AND ENGINEERING

Research, development and engineering costs are charged to expense as
incurred. These costs for the years ended December 31, 1996 and 1997 were 1,150
and 1,350, respectively.

DEFERRED COMPENSATION

All employees are covered by a plan required under Italian law and labor
contracts which grants a termination indemnity based on compensation and years
of service. The Company accrues the amount due to each employee, based on the
relevant factors at year-end.

TRANSACTIONS IN FOREIGN CURRENCIES

Transactions in foreign currencies are recorded using the exchange rates in
effect at the transaction dates. Exchange gains or losses realized during the
year are included in the statement of income. The effect of translation of
foreign currency receivables and payables using year-end rates are reported as
other payables in the balance sheet.

INCOME TAXES

The Company is included in the income tax return of Ellebi S.p.A. In
preparing its financial statements, the Company has determined its tax provision
on a separate return basis and the resulting liability is settled on an
intercompany basis. There are no temporary differences that give rise to
deferred taxes.

F-59
<PAGE> 143
TOWBAR SEGMENT OF ELLEBI S.P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. INTERCOMPANY TRANSACTIONS AND ALLOCATIONS

The profit and loss accounts are prepared based upon an allocation of costs
between Ellebi S.p.A. and the Company. The allocation of costs has been prepared
taking into account the activities of the Company and of Ellebi S.p.A. and also
under the assumption that the segments were separate and that each segment
should carry its own direct operating costs.

Management believes that the methods utilized to allocate costs to the
Company, as discussed above, are reasonable. However, the terms of transactions
between the Company and Ellebi S.p.A., including allocated costs, may differ
from those that would result from transactions with unrelated parties.

3. NET SALES

Classification of net sales is as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------
1996 1997
---- ----
<S> <C> <C>
Towbars -- aftermarket...................................... 15,610 16,946
Towbars -- OEM.............................................. 4,844 5,939
Trailers.................................................... 9,381 10,894
Accessories and spare parts................................. 3,178 3,106
Other....................................................... 96 233
Bonuses to customer......................................... (568) (740)
------ ------
32,541 36,378
====== ======
</TABLE>

4. TAXES ON INCOME

Current income tax expense for the two years ended December 31, 1997 was
calculated at a rate of 53.2% on taxable income. Current income tax expense
included in the statements of operations are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1996 1997
---- ----
<S> <C> <C>
Income before taxes......................................... 5,634 8,173
Non deductible costs........................................ 252 207
----- -----
5,886 8,380
----- -----
Tax charge.................................................. 3,130 4,460
===== =====
</TABLE>

5. INVENTORIES

The difference between LIFO and current valuation as of December 31, 1996
and 1997 is 3,670 and 2,770, respectively.

F-60
<PAGE> 144
TOWBAR SEGMENT OF ELLEBI S.P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. ACCOUNT BALANCES

Account balances included in the balance sheet are comprised of the
following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
---- ----
<S> <C> <C>
CASH AND CASH EQUIVALENTS
Banks and postal deposit.................................... 550 --
Cash on hand................................................ 8 10
------- -------
558 10
======= =======
OTHER RECEIVABLES
Due from personnel.......................................... 20 6
Due from sales agents....................................... 266 397
Due from freight forwarders................................. 167 209
Due from suppliers.......................................... 23 10
Other....................................................... 148 147
Allowance for doubtful accounts............................. (142) (142)
------- -------
482 627
======= =======
INVENTORIES VALUED AT LIFO
Raw materials and supplies.................................. 4,664 2,846
Work-in-process............................................. 6,133 6,491
Finished goods and merchandise.............................. 6,425 6,793
Allowance for obsolescence and slow-moving items............ (207) (204)
------- -------
17,015 15,926
======= =======
PROPERTY, PLANT AND EQUIPMENT
Plant and machinery......................................... 9,198 10,050
Molds, jigs and other tools................................. 9,282 9,476
Other fixed assets.......................................... 2,180 2,283
Assets under construction and advances...................... 44 8
Accumulated depreciation.................................... (16,072) (17,084)
------- -------
4,632 4,733
======= =======
TAXES PAYABLE
Income taxes................................................ 1,483 2,325
Tax on equity............................................... 57 30
V.A.T. tax.................................................. 55 150
Withholding tax............................................. 201 202
------- -------
1,796 2,707
======= =======
OTHER PAYABLES
Due to customers............................................ 567 740
Due to workers.............................................. 478 444
Other....................................................... 59 53
------- -------
1,104 1,237
======= =======
</TABLE>

7. ELLEBI S.P.A. INVESTMENT

The Ellebi S.p.A. investment balance represents the cumulative activity
from transactions between the Company and Ellebi S.p.A.

F-61
<PAGE> 145
TOWBAR SEGMENT OF ELLEBI S.P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. LEASE COMMITMENTS

The Company leases certain buildings under operating lease agreements. Rent
charged from Ellebi S.p.A. to the Company approximates 750 annually.

9. SUBSEQUENT EVENT (UNAUDITED)

On January 2, 1998, Ellebi S.p.A. sold substantially all of the net assets
of the Company to Brink International B.V. for approximately 35,000, subject to
certain post-closing adjustments. The accompanying financial statements do not
give effect to this transaction.

F-62
<PAGE> 146

================================================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUERS SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................... 3
Prospectus Summary...................... 4
Risk Factors............................ 11
Use of Proceeds......................... 15
Capitalization.......................... 16
Selected Historical Financial Data...... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 20
Business................................ 30
Management.............................. 40
Security Ownership of Certain Beneficial
Owners and Management................. 45
Limited Liability Company Agreement..... 46
Certain Transactions.................... 47
Description of the Credit Facilities.... 47
Description of the Notes................ 49
Plan of Distribution.................... 80
Legal Matters........................... 80
Experts................................. 81
Index to Financial Statements........... F-1
</TABLE>

================================================================================

$125,000,000

ADVANCED ACCESSORY SYSTEMS, LLC

AAS CAPITAL CORPORATION

9 3/4% SERIES B SENIOR
SUBORDINATED NOTES DUE 2007

------------------------
PROSPECTUS
------------------------

April [ ], 1999

================================================================================
<PAGE> 147

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director. Pursuant to Section 102(b)(7) of the General
Corporation Law of the State of Delaware, the Certificate of Incorporation of
Capital Corp. and AAS Holdings, Inc. provide that the directors of Capital Corp.
and AAS Holdings, Inc., individually or collectively, shall not be held
personally liable to Capital Corp. or AAS Holdings, Inc. (as the case may be) or
their respective stockholders for monetary damages for breaches of fiduciary
duty as directors, except that any director shall remain liable (1) for any
breach of the director's fiduciary duty of loyalty to Capital Corp. or AAS
Holdings, Inc. (as the case may be) or their respective stockholders, (2) for
acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law, (3) for liability under Section 174 of the General
Corporation Law of the State of Delaware or (4) for any transaction from which
the director derived an improper personal benefit. The by-laws of Capital Corp.
and AAS Holdings, Inc. provide for indemnification of their respective officers
and directors to the full extent authorized by law.

Section 18-108 of the Delaware Limited Liability Company Act (the "Act")
provides that, subject to such standards and restrictions, if any, as are set
forth in a limited liability company's operating agreement, a limited liability
company may, and shall have the power to, indemnify and hold harmless any member
or manager or other person from and against any and all claims and demands
whatsoever. The Bylaws of AAS, SportRack, LLC and Valley Industries, LLC provide
that AAS, SportRack, LLC and Valley Industries, LLC shall, to the fullest extent
authorized under the Act, indemnify and hold harmless against all expense,
liability and loss (including attorneys' fees, judgments, fines, excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered, any
manager or officer of AAS, SportRack, LLC or Valley Industries, LLC, as the case
may be, including indemnification for negligence or gross negligence but
excluding indemnification (i) for acts or omissions involving actual fraud or
willful misconduct or (ii) with respect to any transaction from which the
indemnity derived an improper personal benefit.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS.

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
3.1 Amended and Restated Certificate of Formation of AAS.
3.2 Second Amended and Restated Operating Agreement of AAS.
3.3 Amended Bylaws of AAS.
4.1 Indenture dated as of October 1, 1997 for the Notes
(including the form of New Note attached as Exhibit B
thereto) among the Issuers, the Guarantors named therein and
First Union National Bank, as Trustee.
5.1 Opinion of O'Sullivan Graev & Karabell, LLP.
10.1 Asset Purchase Agreement among MascoTech Automotive Systems
Group, Inc., MascoTech Accessories, Inc. and Advanced
Accessory Systems, LLC dated as of September 28, 1995.
10.2 Agreement for the Sale and Purchase of Shares in Brink BV
dated October 30, 1996 among AAS Holdings, Inc., AAS
Holdings, LLC, Brink Holding BV and Brink BV.
10.3 Asset Purchase Agreement among Bell Sports Corp., Bell
Sports Canada, Inc. and Advanced Accessory Systems Canada
Inc./Les Systemes d'Accessoire Advanced Canada Inc. dated as
of July 2, 1997.
</TABLE>

II-1
<PAGE> 148

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.4 Stock Purchase Agreement dated July 24, 1997 among Robert
Boulard and Alan Hamer and Advanced Accessory Systems Canada
Inc./Les Systems d'Accessoire Advanced Canada Inc.
10.5 Asset Purchase Agreement among Valley Industries, LLC,
Valley Industries, Inc., certain affiliates of Valley
Industries, Inc., Robert L. Fisher and Roger T. Morgan dated
as of August 5, 1997.
10.6 Preliminary Agreement for the Transfer of a Business dated
December 16, 1997 between Ellebi S.p.A. and Brink Italia
S.r.1. and Brink International B.V.
10.7 Second Amended and Restated Credit Facility among AAS,
SportRack, LLC, Brink International BV, Brink BV and Valley
Industries, LLC, as Borrowers, NBD Bank as Administrative
Agent and Documentation and Collateral Agent and The Chase
Manhattan Bank as Co-Administrative Agent and Syndication
Agent dated August 5, 1997.
10.7(a) Amendment No 1. Dated as of September 5, 1997 to Second
Amended and Restated Credit Agreement Dated as of August 5,
1997 and Security Agreements Dated as of October 5, 1996.
Incorporated by reference to Exhibit 10.7(a) to AAS' Annual
Report on Form 10-K for the fiscal year ended December 31,
1998 (File No. 333-49011).
10.7(b) Amendment No. 2 Dated as of September 24, 1997 to Second
Amended and Restated Credit Agreement Dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(b) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.7(c) Amendment No. 3 Dated as of December 29, 1997 to Second
Amended and Restated Credit Agreement dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(c) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.7(d) Amendment No. 4 Dated as of December 31, 1997 to Second
Amended and Restated Credit Agreement Dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(d) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.7(e) Amendment No. 5 and Waiver Dated as of December 31, 1998 to
Second Amended and Restated Credit Agreement Dated as of
August 5, 1997. Incorporated by reference to Exhibit 10.7(e)
to AAS' Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.8 First Amended and Restated Credit Agreement among SportRack
International, Inc. and First Chicago NBD Bank, Canada, The
Chase Manhattan Bank of Canada and The Bank of Nova Scotia
dated as of March 19, 1998.
10.9 Employment Agreement between AAS and Richard Borghi dated
September 28, 1995.
10.10 Employment Agreement between AAS and Marshall Gladchun dated
September 28, 1995.
10.11 Management Consulting Agreement between AAS and Barry
Banducci dated September 28, 1995.
10.12 Management Consulting Agreement between AAS and F. Alan
Smith dated September 28, 1995.
10.13 Employment Agreement between AAS and Terence C. Seikel dated
January 22, 1996.
10.14 Employment Agreement between AAS and Roger T. Morgan dated
August 5, 1997.
10.15 Employment Agreement between Brink B.V. and Gerrit de Graaf
dated November 1, 1996.
10.17 Lease dated as of January 24, 1997 between Valley Industries
Realty, L.P. and Valley Industries, Inc.
</TABLE>

II-2
<PAGE> 149

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.18 Addendum to Sublease dated as of July 2, 1997 between Bell
Sports Canada, Inc. and SportRack International, Inc.
(formerly known as Advanced Accessory Systems Canada Inc./
Les Systems d'Accessoire Advanced Canada Inc.).
10.19 Lease dated May 25, 1994 between VBG Towbars AB and VBG
Produkter AB.
10.20 Lease Agreement for commercial use between Ellebi S.p.A. and
Brink Italia S.r.l.
10.21 Registration Rights Agreement dated September 25, 1997 by
and among Advanced Accessory Systems, LLC, AAS Capital
Corporation, the Guarantors named therein and Chase
Securities, Inc. and First Chicago Capital Markets, Inc.
*12.1 Statement Re: Computation of ratios.
21.1 Subsidiaries of the Registrant.
23.1 Consent of O'Sullivan Graev & Karabell, LLP (included in
Exhibit 5.1).
*23.2 Consent of PricewaterhouseCoopers LLP.
*23.3 Consent of PricewaterhouseCoopers N.V.
*23.4 Consent of PricewaterhouseCoopers LLP.
*23.5 Consent of Ernst & Young LLP.
*23.6 Consent of AXIS S.r.l.
24.1 F. Alan Smith Power of Attorney. Incorporated by reference
to Exhibit 24.2 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.2 Barry Banducci Power of Attorney. Incorporated by reference
to Exhibit 24.3 to AAS' Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.3 Gerard Jacobus Brink Power of Attorney. Incorporated by
reference to Exhibit 24.4 to AAS's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No.
333-49011).
24.4 Donald J. Hofmann Power of Attorney. Incorporated by
reference to Exhibit 24.5 to AAS's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No.
333-49011).
24.5 Roger T. Morgan Power of Attorney. Incorporated by reference
to Exhibit 24.6 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.6 Gerrit de Graaf Power of Attorney. Incorporated by reference
to Exhibit 24.7 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
25.1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of First Union National Bank as
Trustee.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4 Form of Letter to Clients.
</TABLE>

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

(B) FINANCIAL STATEMENT SCHEDULES:

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

All other schedules for which provision is made in the applicable
accounting regulations of the Commission are not required under the related
instructions, are inapplicable or not material, or the

II-3
<PAGE> 150

information called for thereby is otherwise included in the financial statements
and therefore have been omitted.

ITEM 22. UNDERTAKINGS.

(a) The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrants pursuant to the DGCL, the Act, the
Certificate of Incorporation and Bylaws of Capital Corp., the Certificate of
Formation, Operating Agreement and Bylaws of AAS, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of any registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(c) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(d) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-4
<PAGE> 151

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 26th day of
April, 1999.

ADVANCED ACCESSORY SYSTEMS, LLC

By: /s/ TERENCE C. SEIKEL

------------------------------------
Name: Terence C. Seikel

Title: President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement on Form S-4 has
been signed as of the 26th day of April, 1999 by the following persons in the
capacity indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ TERENCE C. SEIKEL President and Chief Executive Officer and
- ----------------------------------------------------- Manager (principal executive officer and
Terence C. Seikel principal financial and accounting officer)

* Chairman of the Board of Managers
- -----------------------------------------------------
F. Alan Smith

/s/ RICHARD E. BORGHI Manager
- -----------------------------------------------------
Richard E. Borghi

* Manager
- -----------------------------------------------------
Barry Banducci

* Manager
- -----------------------------------------------------
Gerard Jacobus Brink

* Manager
- -----------------------------------------------------
Donald J. Hofmann

* Manager
- -----------------------------------------------------
Roger T. Morgan

* Manager
- -----------------------------------------------------
Gerrit de Graaf

*By: /s/ TERENCE C. SEIKEL
------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-5
<PAGE> 152

SIGNATURES

AAS CAPITAL CORPORATION

By: /s/ TERENCE C. SEIKEL
------------------------------------
Name: Terence C. Seikel
Title: Treasurer

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

* President (principal executive officer)
- -----------------------------------------------------
Donald J. Hofmann

/s/ TERENCE C. SEIKEL Treasurer and Director (principal financial
- ----------------------------------------------------- and accounting officer)
Terence C. Seikel

* Director
- -----------------------------------------------------
John J. Daileader

*By: /s/ TERENCE C. SEIKEL
------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-6
<PAGE> 153

SIGNATURES

AAS HOLDINGS, INC.

By: /s/ TERENCE C. SEIKEL

------------------------------------
Name: Terence C. Seikel

Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement on Form S-4 has
been signed as of the 26th day of April, 1998 by the following persons in the
capacity indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ TERENCE C. SEIKEL Chief Executive Officer and Director
- ----------------------------------------------------- (principal executive officer and principal
Terence C. Seikel financial and accounting officer)

* Chairman of the Board of Directors
- -----------------------------------------------------
F. Alan Smith

* Director
- -----------------------------------------------------
Barry Banducci

* Director
- -----------------------------------------------------
Donald J. Hofmann

/s/ RICHARD E. BORGHI Director
- -----------------------------------------------------
Richard E. Borghi

By: /s/ TERENCE C. SEIKEL
-------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-7
<PAGE> 154

SIGNATURES

SPORTRACK, LLC

By: /s/ TERENCE C. SEIKEL

------------------------------------
Name: Terence C. Seikel

Title:Vice President of Finance
and Administration and
Manager

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ RICHARD E. BORGHI President and Chief Operating Officer and
- ----------------------------------------------------- Manager (principal executive officer)
Richard E. Borghi

/s/ TERENCE C. SEIKEL Vice President of Finance and
- ----------------------------------------------------- Administration, Chief Financial Officer and
Terence C. Seikel Manager
(principal financial and accounting officer)

* Chairman of the Board of Managers
- -----------------------------------------------------
F. Alan Smith

* Manager
- -----------------------------------------------------
Barry Banducci

* Manager
- -----------------------------------------------------
Donald J. Hofmann

*By: /s/ TERENCE C. SEIKEL
------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-8
<PAGE> 155

SIGNATURES

VALLEY INDUSTRIES, LLC

By: /s/ TERENCE C. SEIKEL

------------------------------------
Name: Terence C. Seikel

Title: Chief Executive Officer

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

* President and Manager
- -----------------------------------------------------
Roger T. Morgan

/s/ TERENCE C. SEIKEL Chief Executive Officer and Manager
- ----------------------------------------------------- (principal executive officer and principal
Terence C. Seikel financial and accounting officer)

* Chairman of the Board of Managers
- -----------------------------------------------------
F. Alan Smith

* Manager
- -----------------------------------------------------
Barry Banducci

* Manager
- -----------------------------------------------------
Gerard Jacobus Brink

/s/ RICHARD E. BORGHI Manager
- -----------------------------------------------------
Richard E. Borghi

* Manager
- -----------------------------------------------------
Donald J. Hofmann

* Manager
- -----------------------------------------------------
Roger T. Morgan

*By: /s/ TERENCE C. SEIKEL
------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-9
<PAGE> 156

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrants
have duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 26th day of
April, 1999.

VALTEK, LLC

By: /s/ TERENCE C. SEIKEL

------------------------------------
Name: Terence C. Seikel

Title: Chief Executive Officer

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

* Chairman of the Board of Managers
- -----------------------------------------------------
F. Alan Smith

* Manager
- -----------------------------------------------------
Barry Banducci

/s/ RICHARD E. BORGHI Manager
- -----------------------------------------------------
Richard E. Borghi

* Manager
- -----------------------------------------------------
Gerard Jacobus Brink

* Manager
- -----------------------------------------------------
Donald J. Hofmann

* Manager
- -----------------------------------------------------
Roger T. Morgan

*By: /s/ TERENCE C. SEIKEL
------------------------------------------------
Terence C. Seikel, Attorney-in-Fact
</TABLE>

II-10
<PAGE> 157

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 Amended and Restated Certificate of Formation of AAS.
3.2 Second Amended and Restated Operating Agreement of AAS.
Incorporated by reference to Exhibit 3.2 to AAS'
Registration Statement on Form S-4 (File No. 333-49011).
3.3 Amended Bylaws of AAS.
4.1 Indenture dated as of October 1, 1997 for the Notes
(including the form of New Note attached as Exhibit B
thereto) among the Issuers, the Guarantors named therein and
First Union National Bank, as Trustee.
5.1 Opinion of O'Sullivan Graev & Karabell, LLP.
10.1 Asset Purchase Agreement among MascoTech Automotive Systems
Group, Inc., MascoTech Accessories, Inc. and Advanced
Accessory Systems, LLC dated as of September 28, 1995.
10.2 Agreement for the Sale and Purchase of Shares in Brink BV
dated October 30, 1996 among AAS Holdings, Inc., AAS
Holdings, LLC, Brink Holding BV and Brink BV.
10.3 Asset Purchase Agreement among Bell Sports Corp., Bell
Sports Canada, Inc. and Advanced Accessory Systems Canada
Inc. / Les Systemes d'Accessoire Advanced Canada Inc. dated
as of July 2, 1997.
10.4 Stock Purchase Agreement dated July 24, 1997 among Robert
Boulard and Alan Hamer and Advanced Accessory Systems Canada
Inc. / Les Systems d'Accessoire Advanced Canada Inc.
10.5 Asset Purchase Agreement among Valley Industries, LLC,
Valley Industries, Inc., certain affiliates of Valley
Industries, Inc., Robert L. Fisher and Roger T. Morgan dated
as of August 5, 1997.
10.6 Preliminary Agreement for the Transfer of a Business dated
December 16, 1997 between Ellebi S.p.A. and Brink Italia
S.r.1. and Brink International B.V.
10.7 Second Amended and Restated Credit Facility among AAS,
SportRack, LLC, Brink International BV, Brink BV and Valley
Industries, LLC, as Borrowers, NBD Bank as Administrative
Agent and Documentation and Collateral Agent and The Chase
Manhattan Bank as Co-Administrative Agent and Syndication
Agent dated August 5, 1997.
10.7(a) Amendment No 1. Dated as of September 5, 1997 to Second
Amended and Restated Credit Agreement Dated as of August 5,
1997 and Security Agreements Dated as of October 5, 1996.
Incorporated by reference to Exhibit 10.7(a) to AAS' Annual
Report on Form 10-K for the fiscal year ended December 31,
1998 (File No. 333-49011).
10.7(b) Amendment No. 2 Dated as of September 24, 1997 to Second
Amended and Restated Credit Agreement Dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(b) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.7(c) Amendment No. 3 Dated as of December 29, 1997 to Second
Amended and Restated Credit Agreement dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(c) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.7(d) Amendment No. 4 Dated as of December 31, 1997 to Second
Amended and restated Credit Agreement Dated as of August 5,
1997. Incorporated by reference to Exhibit 10.7(d) to AAS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
</TABLE>

<PAGE> 158

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.7(e) Amendment No. 5 and Waiver Dated as of December 31, 1998 to
Second Amended and Restated Credit Agreement Dated as of
August 5, 1997. Incorporated by reference to Exhibit 10.7(e)
to AAS' Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 333-49011).
10.8 First Amended and Restated Credit Agreement among SportRack
International, Inc. and First Chicago NBD Bank, Canada, The
Chase Manhattan Bank of Canada and The Bank of Nova Scotia
dated as of March 19, 1998.
10.9 Employment Agreement between AAS and Richard Borghi dated
September 28, 1995.
10.10 Employment Agreement between AAS and Marshall Gladchun dated
September 28, 1995.
10.11 Management Consulting Agreement between AAS and Barry
Banducci dated September 28, 1995.
10.12 Management Consulting Agreement between AAS and F. Alan
Smith dated September 28, 1995.
10.13 Employment Agreement between AAS and Terence C. Seikel dated
January 22, 1996.
10.14 Employment Agreement between AAS and Roger T. Morgan dated
August 5, 1997.
10.15 Employment Agreement between Brink B.V. and Gerrit de Graaf
dated November 1, 1996.
10.17 Lease dated as of January 24, 1997 between Valley Industries
Realty, L.P. and Valley Industries, Inc.
10.18 Addendum to Sublease dated as of July 2, 1997 between Bell
Sports Canada, Inc. and SportRack International, Inc.
(formerly known as Advanced Accessory Systems Canada Inc. /
Les Systems d'Accessoire Advanced Canada Inc.).
10.19 Lease dated May 25, 1994 between VBG Towbars AB and VBG
Produkter AB.
10.20 Lease Agreement for commercial use between Ellebi S.p.A. and
Brink Italia S.r.l.
10.21 Registration Rights Agreement dated September 25, 1997 by
and among Advanced Accessory Systems, LLC, AAS Capital
Corporation, the Guarantors named therein and Chase
Securities, Inc. and First Chicago Capital Markets, Inc.
*12.1 Statement Re: Computation of ratios.
21.1 Subsidiaries of the Registrant.
23.1 Consent of O'Sullivan Graev & Karabell, LLP (Included in
Exhibit 5.1).
*23.2 Consent of PricewaterhouseCoopers LLP.
*23.3 Consent of PricewaterhouseCoopers N.V.
*23.4 Consent of PricewaterhouseCoopers LLP.
*23.5 Consent of Ernst & Young LLP.
*23.6 Consent of AXIS S.r.l.
24.1 F. Alan Smith Power of Attorney. Incorporated by reference
to Exhibit 24.2 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.2 Barry Banducci Power of Attorney. Incorporated by reference
to Exhibit 24.3 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.3 Gerard Jacobus Brink Power of Attorney. Incorporated by
reference to Exhibit 24.4 to AAS's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No.
333-49011).
</TABLE>

<PAGE> 159

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
24.4 Donald J. Hofmann Power of Attorney. Incorporated by
reference to Exhibit 24.5 to AAS's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (File No.
333-49011).
24.5 Roger T. Morgan Power of Attorney. Incorporated by reference
to Exhibit 24.6 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
24.6 Gerrit de Graaf Power of Attorney. Incorporated by reference
to Exhibit 24.7 to AAS's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File No. 333-49011).
25.1 Statement of Eligibility and Qualifications under the Trust
Indenture Act of 1939 of First Union National Bank as
Trustee.
*27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4 Form of Letter to Clients.
</TABLE>

- -------------------------
* Filed herewith.
<PAGE> 160

ADVANCED ACCESSORY SYSTEMS, LLC

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996,

(DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
--------------------------
BALANCE AT CHARGED TO CHARGED TO
BEGINNING OF COSTS AND OTHER BALANCE AT
YEAR EXPENSES ACCOUNTS (1) WRITE-OFFS END OF YEAR
------------ ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS
For the year ended December 31,
1998.............................. $1,699 $2,413 $ 523 $1,869 $2,766
1997.............................. 605 458 734 98 1,699
1996.............................. 368 54 268 85 605
ALLOWANCE FOR INVENTORY AND LOWER OF
COST OR MARKET RESERVE
For the year ended December 31,
1998.............................. $2,590 $4,735 $ 15 $3,423 $3,917
1997.............................. 1,579 423 1,303 715 2,590
1996.............................. 564 70 1,173 228 1,579
ALLOWANCE FOR REIMBURSABLE TOOLING
For the year ended December 31,
1998.............................. $ 890 $ 294 $ -- $ 860 $ 324
1997.............................. 368 195 493 166 890
1996.............................. 257 300 -- 189 368
</TABLE>

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

(1) Charges to other accounts includes amounts related to acquired companies and
the effects of changing foreign currency exchange rates for the Company's
foreign subsidiaries.

<PAGE> 1

EXHIBIT 12.1

ADVANCED ACCESSORY SYSTEMS, LLC

STATEMENT REGARDING COMPUTATION OF RATIOS --

FIXED CHARGE COVERAGE RATIO

FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Pre-tax income (loss) from continuing operations............ $ 813 $ 712 $ 6,409
Minority interest in the income of subsidiary with fixed
charges................................................... -- 97 69
------- ------- -------
813 809 6,478
------- ------- -------
Fixed Charges:
Interest expense and amortization of debt discount and
premium on all indebtedness............................ 18,633 12,627 4,312
Rentals(1).................................................. 1,317 751 223
------- ------- -------
Total fixed charges......................................... 19,950 13,378 4,535
------- ------- -------
Earnings before income taxes, minority interest and fixed
charges................................................... $20,763 $14,187 $11,013
======= ======= =======
Ratio of earnings to fixed charges.......................... 1.04x 1.06x 2.43x
======= ======= =======
</TABLE>

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

(1) Amount included in fixed charges for rentals is considered by management to
be a reasonable approximation of the interest factor.

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 1 of this Registration Statement on Form S-4 of
Advanced Accessory Systems, LLC and AAS Capital Corporation, of our report dated
March 15, 1999 relating to the financial statements of Advanced Accessory
Systems, LLC, which appears in such Prospectus. We also consent to the
application of such report to the Financial Statement Schedule for the three
years ended December 31, 1998 listed under Item 21(b) of this Registration
Statement when such schedule is read in conjunction with the financial
statements referred to in our report. The audits referred to in such report also
included this schedule. We also consent to the reference to us under the heading
"Experts" in such Prospectus.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Bloomfield Hills, Michigan

April 22, 1999

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

/s/ PricewaterhouseCoopers N.V.

PricewaterhouseCoopers N.V.

Zwolle, The Netherlands

April 22, 1999

<PAGE> 1

EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Bloomfield Hills, Michigan

April 22, 1999

<PAGE> 1

EXHIBIT 23.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 10, 1997, with respect to the financial
statements of Valley Industries, Inc. included in Post-Effective Amendment No. 1
of its Registration Statement (Form S-4, No. 333-49011) and related Prospectus
of Advanced Accessory Systems, LLC and AAS Capital Corporation for the
registration of $125,000,000 of their 9 3/4% Series B Senior Subordinated Notes
due 2007.

/s/ Ernst & Young LLP

Detroit, Michigan

April 22, 1999

<PAGE> 1

EXHIBIT 23.6

CONSENT OF INDEPENDENT ACCOUNTANTS

/s/ AXIS S.r.l.

AXIS S.r.l.

Reggio Emilia, Italy

April 19, 1999

<ARTICLE> 5
<CIK> 0001057836
<NAME> Advanced Accessory Systems, LLC
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 11,240
<SECURITIES> 0
<RECEIVABLES> 40,727
<ALLOWANCES> 2,766
<INVENTORY> 43,087
<CURRENT-ASSETS> 99,298
<PP&E> 61,295
<DEPRECIATION> 17,381
<TOTAL-ASSETS> 258,981
<CURRENT-LIABILITIES> 50,066
<BONDS> 187,524
0
0
<COMMON> 0
<OTHER-SE> 15,147
<TOTAL-LIABILITY-AND-EQUITY> 258,981
<SALES> 290,139
<TOTAL-REVENUES> 290,139
<CGS> 213,435
<TOTAL-COSTS> 275,688
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 294
<INTEREST-EXPENSE> 18,633
<INCOME-PRETAX> 813
<INCOME-TAX> 903
<INCOME-CONTINUING> (90)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (90)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>