8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 15, 2010

Motorcar Parts of America, Inc.

(Exact name of registrant as specified in its charter)

New York	001-33861	11-2153962
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2929 California Street, Torrance CA	90503
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 212-7910

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On December 15, 2010, Motorcar Parts of America, Inc. (the “Registrant”) loaned Fenwick Automotive Products Limited, a corporation incorporated under the laws of Ontario (“Fenwick”), an additional US$2,969,121.14 pursuant to an Amended and Restated Debenture executed by Fenwick in favor of the Registrant, dated December 15, 2010 (the “Amended and Restated Debenture”). The Amended and Restated Debenture replaces the original debenture (the “Original Debenture”) executed by Fenwick in favor of the Registrant on August 24, 2010 pursuant to which the Registrant had loaned Fenwick US$1,894,034.09 (the “Original Loan”). Pursuant to the Amended and Restated Debenture, the Registrant has loaned Fenwick an aggregate amount of US$4,863,155.23 (the “Aggregate Loan”). The Aggregate Loan now matures on July 31, 2012 and shall continue to accrue interest at the same rate as the Original Loan, which rate is equal to the prime rate as announced by The Wall Street Journal from time to time plus 8.75% per annum. The Registrant’s rights to the payment of any amounts due in connection with the Aggregate Loan and its rights as a secured party under related security agreements are subordinated to the rights of M&T Bank, as a lender to, and secured party of, Fenwick.

On December 15, 2010, the Registrant entered into an Amended and Restated Addendum to Unanimous Shareholders Agreement with Fenwick Enterprises Inc., Jack Shuster, Gordon Fenwick, Paul Fenwick, Joel Fenwick, FAPL Holdings, Inc. (“FAPL”), Fenwick, Introcan Inc., Escal Holdings Inc., Fencity Holdings Inc. and Jofen Holdings Inc. (the “Amended Addendum”) replacing the original Addendum to Unanimous Shareholders Agreement that was executed on August 24, 2010 (the “Original Addendum”). In connection with the Aggregate Loan and pursuant to the Amended Addendum, the Registrant was granted an amended option (the “Amended Option”) to purchase treasury shares representing 80% of the common stock of FAPL (or at the election of the Registrant, another Fenwick entity) for an aggregate purchase price of CDN$10,000,000 (the “Option Purchase Price”). The Amended Option is exercisable until 11:59 p.m. on August 23, 2012 (the “Option Expiration”).

If the Registrant exercises the Amended Option, the Registrant also has a call right to acquire all the outstanding shares of FAPL (or the applicable Fenwick entity) from its other shareholders for an aggregate purchase price of 360,000 shares of common stock of the Registrant plus an additional 40,000 shares of common stock of the Registrant if FAPL’s adjusted net income for the fiscal year ending March 31, 2011 is equal to or greater than CDN$4,000,000 (the “Call Right Exercise Price”). This call right expires on August 24, 2013. If the call right expires without being exercised by the Registrant, the Amended Addendum includes a put right (as did the Original Addendum) pursuant to which the remaining shareholders can require the Registrant to acquire all but not less than all the remaining shares at the Call Right Exercise Price.

The foregoing summaries of the Amended and Restated Debenture and Amended Addendum do not purport to be complete and are qualified in their entirety by the terms of the Amended and Restated Debenture and the Amended Addendum, which are attached hereto as Exhibit 10.1 and Exhibit 10.2 and are incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On December 21, 2010, the Registrant issued a press release announcing the Aggregate Loan and the Amended Option, a copy of which is furnished as Exhibit 99.1 and is incorporated herein by reference. In accordance with general instruction B.2 to Form 8-K, the information in this Form 8-K under Item 7.01 (Regulation FD Disclosure) shall be deemed “furnished” and not “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

10.1	Amended and Restated Debenture, dated December 15, 2010, issued by Fenwick Automotive Products Limited to Motorcar Parts of America, Inc.
10.2	Amended and Restated Addendum to Unanimous Shareholders Agreement, dated December 15, 2010, between Motorcar Parts of America, Inc., Fenwick Enterprises Inc., Jack Shuster, Gordon Fenwick, Paul Fenwick, Joel Fenwick, FAPL, Fenwick Automotive Products Limited, Introcan Inc., Escal Holdings Inc., Fencity Holdings Inc. and Jofen Holdings Inc.
99.1	Press Release, dated December 21, 2010

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MOTORCAR PARTS OF AMERICA, INC.
Date: December 21, 2010	/s/ Michael M. Umansky
	Michael M. Umansky
	Vice President and General Counsel

EXHIBIT INDEX

10.1	Amended and Restated Debenture, dated December 15, 2010, issued by Fenwick Automotive Products Limited to Motorcar Parts of America, Inc.
10.2	Amended and Restated Addendum to Unanimous Shareholders Agreement, dated December 15, 2010, between Motorcar Parts of America, Inc., Fenwick Enterprises Inc., Jack Shuster, Gordon Fenwick, Paul Fenwick, Joel Fenwick, FAPL, Fenwick Automotive Products Limited, Introcan Inc., Escal Holdings Inc., Fencity Holdings Inc. and Jofen Holdings Inc.
99.1	Press Release, dated December 21, 2010

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED DEBENTURE

FENWICK AUTOMOTIVE PRODUCTS LIMITED

Issued to:           MOTORCAR PARTS OF AMERICA, INC.

Issued by:           FENWICK AUTOMOTIVE PRODUCTS LIMITED

US$4,863,155.23
(Aggregate Principal Amount)

ARTICLE 1
PROMISE TO PAY

Section 1.1 Promise to Pay

     FENWICK AUTOMOTIVE PRODUCTS LIMITED (the “Corporation”), a corporation incorporated under the laws of Ontario and having its chief executive office at 1100 Caledonia Road, Toronto, Ontario M6A 2W5, for value received, hereby promises to pay to or to the order of MOTORCAR PARTS OF AMERICA, INC., its successors and permitted assigns (the “Holder”), at 2929 California Street, Torrance California 90503, United States of America, or at such other place as the Holder may direct at any time and from time to time, the amount of US$4,863,155.23 (the “Loan Amount”) on the Maturity Date (as hereinafter defined) (or such other date as amounts owing hereunder may become due and payable in accordance with the terms hereof) and to pay interest, calculated annually and payable in cash quarterly (in arrears), on the last day of each calendar quarter (beginning on September 30, 2010) on the principal amount outstanding and on all other amounts now or hereafter owing hereunder (including accrued and unpaid interest), at the Prime Rate plus 8.75% per annum (calculated monthly and not in advance) until and including the Maturity Date (or such other date as amounts owing hereunder may become due and payable in accordance with the terms hereof). The principal amount owing from time to time, any interest payable thereon and all other amounts now or hereafter payable hereunder, and at any time outstanding hereunder, shall be referred to herein as the “Obligations”.

Section 1.2 Transfer and Assignment

     The Holder may, at any time, transfer and assign this Debenture to any Person, provided that the terms and conditions of this Debenture shall enure to the benefit of and be binding upon the Holder’s successors and permitted assigns. Prior to an Event of Default, the Holder may, with the prior written consent of the Corporation (such consent not to be unreasonably withheld), disclose to potential or actual transferees or assignees any confidential information regarding the Corporation, the Parent and the Subsidiaries (including, any such information provided by the Corporation to the Holder), subject to such reasonable confidentiality restrictions as the Corporation may require, and shall not be liable for any such disclosure. For greater certainty and notwithstanding anything else to the contrary in any other agreement between the Holder and the Corporation or the Parent, no such consent of the Parent or the Corporation will be necessary to disclose such confidential information upon the occurrence and during the continuance of an Event of Default.

ARTICLE 2
INTERPRETATION

Section 2.1 Definitions

In this Debenture:

“Addendum” means the amended and restated addendum to the unanimous shareholders agreement dated July 2, 2010 among Fenwick Enterprises Inc., Escal Holdings Inc., Fencity Holdings Inc., Jofen Holdings Inc., Gordon Fenwick, Paul Fenwick, Joel Fenwick, Jack Shuster and FAPL Holdings Inc. dated the date hereof, as may be further amended and restated from time to time;

“Business Day” means a day other than a Saturday, Sunday or any other day on which the principal commercial banks located in the City of Toronto, Province of Ontario are not open for business during normal banking hours;

“Change of Control” means (a) any sale of all or substantially all of the assets of the Parent or the Corporation; (b) any merger or other business consolidation in which the current shareholders of the Parent or the Corporation do not own more than 50% of the surviving entity; or (c) the acquisition by a purchaser or group of purchasers who are not current shareholders (or related to any existing shareholder) at the time of such acquisition of securities exchangeable for or convertible into voting securities of the Parent or the Corporation resulting in the purchaser(s) of such securities owning more than 50% of all of the outstanding voting securities of the Parent or the Corporation on a fully diluted basis; or (d) any Person or group of Persons, other than those existing shareholders as of the date hereof, gaining effective control of the board of directors of the Parent or the Corporation, but in any event shall exclude the consequences of the exercise by the Holder of the Option;

“Corporation” has the meaning attributed thereto in Section 1.1;

“Corporation Security” means the security executed and delivered by the Corporation in favour of the Holder, including the security listed on Exhibit “A”;

“Debenture”, “hereto”, “herein”, “hereof’, “hereby”, “hereunder”, and any similar expressions refer to this amended and restated secured debenture of the Corporation (which amends and restates and replaces in its entirety the secured debenture issued to the Holder by the Corporation on August 24, 2010) and the schedules attached hereto and not to any particular article, Section or other portion hereof, and include any and every instrument supplemental hereto or amending any part hereof;

“Debt” of the Corporation means, without duplication:

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(a) all indebtedness of the Corporation for or in respect of borrowed money, credit or other financial accommodation, including liabilities and obligations (whether contingent or otherwise) with respect to letters of credit, letters of guarantee, bankers’ acceptances or similar instruments issued or accepted by banks and other financial institutions for the account of the Corporation;

(b) all indebtedness of the Corporation for or in respect of the purchase or acquisition price of property or services, whether or not recourse is limited to the repossession and sale of any such property;

(c) all obligations under any lease entered into by the Corporation as lessee which would be classified as a capital lease in accordance with GAAP;

(d) all obligations of the Corporation to purchase, redeem, retract or otherwise acquire any securities issued by the Corporation; and

(e) all Debt (as hereinbefore defined) or any other debt which is directly or indirectly guaranteed by the Corporation or which the Corporation has agreed to purchase or otherwise acquire or in respect of which the Corporation has otherwise assured a creditor against loss;

but “Debt” shall not include unsecured trade debt incurred in the ordinary course of business consistent with past practice, nor any contingent liabilities (other than guarantees) in connection with contracts entered into in the ordinary course of business;

“Event of Default” has the meaning attributed thereto in Section 8.1;

“GAAP” means, at any time, the generally accepted accounting principles in Canada, applied on a consistent basis, and statements and interpretations (if applicable) issued by the Canadian Institute of Chartered Accountants or any successor body in effect from time to time;

“Governmental Charges” means all taxes, levies, assessments, reassessments and other charges together with all related penalties, interest and fines, due and payable to any domestic or foreign government (federal, provincial, municipal or otherwise) or to any regulatory authority, agency, commission or board of any domestic or foreign government, or imposed by any court or any other law, regulation or rulemaking entity having jurisdiction in relevant circumstances if failure to pay could reasonably be expected to have a material adverse effect on the Parent, the Corporation or the Subsidiaries;

“Guarantee” means the guarantee executed and delivered by each of the Guarantors in favour of the Holder;

“Guarantors” means, collectively, the Parent, Autocat Catalogue Services, Inc., 778355 Ontario Inc.;

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“Guarantor Security means the security executed and delivered by each of the Guarantors in favour of the Holder, including the security listed on Exhibit “B”;

“Holder” has the meaning attributed thereto in Section 1.1;

“Indebtedness” means the indebtedness of the Corporation to the Royal Bank of Canada pursuant to certain credit arrangements which were replaced by the M&T Indebtedness;

“Intellectual Property” means domestic and foreign intellectual property rights including: (i) patents, applications for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) copyrights, copyright registrations and applications for copyright registration; (iii) mask works, mask work registrations and applications for mask work registrations; (iv) designs, design registrations, design registration applications and integrated circuit topographies and (v) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trade-marks, trade-mark registrations, trade mark applications, trade dress and logos, and the goodwill associated with any of the foregoing;

“Lien” means any lien, mortgage, charge, hypothec, pledge, security interest, prior assignment, option, warrant, lease, sublease, right to possession, encumbrance, claim, right or restriction which affects, by way of a conflicting ownership interest or otherwise, the right, title or interest in or to any particular property;

“Material Agreements” means all agreements to which the Parent, the Corporation or any of the Subsidiaries is a party with a value of greater than $175,000;

“Maturity Date” means July 31, 2012;

“Motorcar Equity Purchase” means the investments by the holder in the Parent or its subsidiaries as described in the Addendum;

“M&T Indebtedness” means the indebtedness of the Corporation to M&T Bank pursuant to the terms of a credit agreement dated November 8, 2010 among, inter alia, the Corporation and M&T Bank;

“Obligations” has the meaning attributed thereto in Section 1.1;

“Option” means the option granted to the Holder to purchase 80% of all outstanding shares in the capital of the Parent as more fully documented in the Addendum;

“Parent” means FAPL Holdings Inc. and its successors;

“Permitted Debt” means this Debenture, the M&T Indebtedness, the indebtedness secured by Permitted Encumbrances, indebtedness due by any Subsidiaries to the Corporation or among any of the Subsidiaries and the Corporation, accounts

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payable, accrued liabilities, income tax, deferred revenues, operating leases incurred in the ordinary course of business, consistent with past practice, and capital lease obligations incurred in the ordinary course of business (such existing capital lease obligations being subject to a limit of $806,000.00 and additional capital leases entered into after the date hereof being subject to a limit of $200,000.00), consistent with past practice, and includes, without limitation, the Corporation’s obligations under its existing and future real property leases;

“Permitted Encumbrances” has the meaning attributed thereto in Schedule “A” hereto;

“Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted;

“Prime Rate” means the Wall Street Journal Prime Rate as published in the Wall Street Journal from time to time;

“Secured Property” has the meaning attributed thereto in Section 4.1;

“Security Documents” has the meaning attributed thereto in Section 4.1;

“Shareholder Advances” means amounts owing from the Corporation or the Parent to their shareholders or related parties, respectively, on account of loans advanced by such shareholders to the Corporation or the Parent and as more particularly described in Schedule “B”;

“Shareholder Security” means the security granted by the Corporation with respect to Shareholder Advances;

“Subsidiaries” means Autocat Catalogue Services, Inc., 778355 Ontario Inc., Introcan Inc., Rafko Enterprises Inc., Rafko Holdings Inc., LH Distribution Inc., Flo-Pro Inc. and Fapco S.A. DE C.V.;

“Transaction Documents” means this Debenture and the Security Documents; and

Section 2.2 Headings

     The inclusion of headings in this Debenture is for convenience of reference only and shall not affect the construction or interpretation hereof.

Section 2.3 References to Sections

     Whenever in this Debenture a particular article, section or other portion thereof is referred to, such reference pertains to the particular article, section or portion thereof contained herein, unless otherwise indicated.

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Section 2.4 Currency

     Except where otherwise expressly provided, all amounts in this Debenture are stated and shall be paid in Canadian currency.

Section 2.5 Gender and Number

     In this Debenture, unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

Section 2.6 Invalidity of Provisions

     Each of the provisions contained in this Debenture is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

Section 2.7 Amendment or Waiver

     No amendment or waiver of this Debenture shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Debenture shall constitute a waiver of any other provision nor shall any waiver of any provision of this Debenture constitute a continuing waiver unless otherwise expressly provided.

Section 2.8 Governing Law; Attornment

     This Debenture shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. Each of the Corporation, and, by its acceptance hereof, the Holder hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario with respect to any matter arising under or relating to this Debenture.

Section 2.9 Non-Business Days

     If any date on which any payment is due or any action is required to be taken is not a Business Day, the date for payment or taking such action shall be the next Business Day following the date specified for such payment or action.

Section 2.10 Interest Act (Canada)

     For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Debenture are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Debenture.

Section 2.11 Certain Phrases, etc.

     In this Debenture (i) the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”, and (ii) the phrase “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or

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total or sum), without duplication, of”. Unless otherwise specified, the words “Article” and “Section” followed by a number mean and refer to the specified Article or Section of this Debenture. In the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.

ARTICLE 3
PAYMENT

Section 3.1 Repayment

     The outstanding amount of the Obligations shall become due and payable by the Corporation on the Maturity Date and the Corporation shall repay the outstanding amount of the Obligations in cash to the Holder on the Maturity Date.

ARTICLE 4
SECURITY

Section 4.1 Security in favour of the Holder

     As continuing security for the payment of the Obligations, the Corporation, the Parent and the Subsidiaries shall execute and deliver in favour of the Holder a general security agreement, collateral mortgage and pledge agreement (collectively, the “Security Documents”), granting the Holder a security interest in and to all present and after-acquired undertakings, property and assets of the Parent, the Corporation and the Subsidiaries including any and all securities owned by the Parent, the Corporation and any Subsidiaries, in form and substance satisfactory to the Holder and its counsel (the “Secured Property”). In addition, the Holder shall have the continuing right to obtain, at its election, a mortgage creating on any real property of the Parent, the Corporation or the Subsidiaries a perfected lien on such real property as additional security for the payment of the Obligations.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

Section 5.1 The Parent and the Corporation jointly and severally represent, warrant and covenant to the Holder that:

(1) Incorporation and Status. Each of the Parent, the Corporation and the Subsidiaries is duly incorporated and organized, and is validly existing under its jurisdiction of organization. Each of the Parent, the Corporation and the Subsidiaries is duly registered, licensed or qualified as an extra-provincial or foreign corporation, and is up to date in the filing of all corporate and similar returns under the laws of those jurisdictions where it operates and where failure to be so registered, licensed, qualified or up to date would have a material adverse effect on it.

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(2) Ownership. The Parent is the registered and beneficial owner of all of the issued and outstanding shares in the capital of the Corporation.

(3) Corporate Power and Due Authorization. The Parent and the Corporation has the corporate power and capacity to enter into, and to perform its obligations under this Debenture, the Security Documents and the Addendum. Each of this Debenture, the Security Documents and the Addendum has been duly authorized, executed and delivered by the Corporation (including, without limitation, receipt of all requisite director and shareholder approvals) and is a valid and binding obligation of the Corporation enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies.

(4) Business of the Corporation. Each of the Parent, the Corporation and the Subsidiaries has the corporate power and capacity to own, lease or license its assets and to carry on its business.

(5) No Contravention. None of the entering into of this Debenture, the Security Documents or the Addendum or the issuance, and/or exercise by the Holder, of the Option, or the performance by the Parent or the Corporation of any of its other obligations hereunder or thereunder will contravene, breach, result in any default or result in any acceleration, bonus or benefit to any other party under the articles, by-laws, constating documents or other organizational documents of the Corporation or under any mortgage, lease, license agreement, agreement, other legally binding instrument, license, permit, statute, regulation, order, judgment, decree or law to which it is a party or by which it may be bound.

(6) Approvals and Consents. Except for those that have already been duly obtained, given or made and are in full force and effect, no authorization, consent or approval of, or filing with or notice to, any governmental agency, regulatory body, court or other person is required in connection with the execution, delivery or performance and compliance with the terms of this Debenture and the Security Documents nor will such performance and compliance contravene any statute, rule or regulation binding on the Corporation.

(7) As to Certain Contracts In and Out of the Ordinary Course. The Corporation is not a party to nor is it bound by any contract, agreement or commitment that materially adversely affects or could reasonably be expected to materially adversely affect the Corporation’s business or its financial condition or any of its assets. Additionally, since March 31, 2010, the Corporation has not:

(a) other than in the ordinary course and consistent with past practices of the Corporation, sold, transferred or otherwise disposed of, or created, assumed or permitted any encumbrance on or in respect of, its property or assets or any part thereof;

(b) incurred, assumed or become subject to any material liability except in the ordinary course of business other than:

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(i) professional fees and other expenses incurred in respect of the Indebtedness, efforts to replace the Indebtedness and entering into the M&T Indebtedness;

(ii) those Shareholder Advances made between March 31, 2010 and July 6, 2010; and

(iii) the M&T Indebtedness;

(c) amended its articles, by-laws or other governing documents; and

(d) conducted its business, in all material respects, other than in the ordinary course;

(e) cancelled or released any debts or claims or waived or surrendered any rights which, in the aggregate, are material; or

(f) except as described in the Corporation’s financial statements, made any change in its accounting principles and practices as theretofore applied including, without limitation, the basis upon which its assets and liabilities are recorded on its books and its earnings, profits and losses are ascertained.

(8) No Default Under Agreements. The Corporation is not in default or breach under any term or provision of its constating documents, by-laws or resolutions or of any contract, agreement, lease or other instrument to which it is a party which default or breach has had or could reasonably be expected to have a material adverse effect on the Corporation taken as a whole and there exists no state of facts that after notice or the passage of time, or both, would constitute such a default or breach and all those contracts, agreements, leases and other instruments are now in good standing in all material respects, and the Corporation is entitled to all benefits, rights and privileges thereunder.

(9) Title to Assets. The Parent, the Corporation and each of the Subsidiaries is the absolute beneficial owner of and has good and marketable title, free of all charges except for Permitted Encumbrances, to all the assets owned by it (including all Investments) and used in connection with the Corporation’s business.

(10) Financial Matters. The audited consolidated financial statements of the Parent and notes thereto as at and for the year ended March 31, 2009 present fairly in all material respects the consolidated financial position of the Corporation as at the dates indicated and the results of its operations and changes in its financial position for the periods specified and reflect all material liabilities (absolute, accrued, contingent or otherwise) of the Corporation as of the dates thereof and such financial statements have been prepared in conformity with GAAP applied, except as otherwise stated therein, on a consistent basis.

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(11) Assets in Good Condition. All the material physical assets of the Parent, the Corporation and the Subsidiaries and is in good operating condition and in a state of good maintenance and repair subject to the usual wear and tear for assets of that age.

(12) Licences and Agreements. Each of the material licenses and agreements to which the Corporation is a party is in good standing and in full force and effect, and the Corporation, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any other party thereto, is not in breach of any material covenants, conditions or obligations contained therein.

(13) Tax Matters. The Corporation has filed or caused to be filed all tax returns required to be filed in all applicable jurisdictions and has paid all Governmental Charges. There are no proceedings in progress, pending or, to the best of the knowledge, information and belief of the Corporation, after due inquiry, threatened in respect of any Governmental Charges and, in particular, there are no currently outstanding reassessments or written enquiries that have been issued or raised by any governmental authority relating to any Governmental Charges. The Corporation has withheld or collected and remitted all amounts required to be withheld or collected and remitted by them in respect of any Governmental Charges.

(14) Insurance. All physical assets of the Corporation are covered by insurance which is, to the best of the knowledge, information and belief of the Corporation, after due inquiry, with responsible insurers against such risks and in such amounts as are reasonable for prudent owners of comparable assets. The Corporation is not in default with respect to any of the material provisions contained in any current insurance policy nor has it failed to give any notice or pay any premium or present any unsettled claim under any current insurance policy in a due and timely fashion.

(15) Intellectual Property. All registrations with and applications to governmental authorities in respect of the Intellectual Property are valid and in full force and effect and as of the date hereof are not subject to the payment of any taxes or maintenance fees or the taking of any other actions by the Corporation to maintain their validity or effectiveness, other than routine filings and payments applicable to registrations of that kind. All Intellectual Property used by the Corporation is owned by or, where necessary, licensed to, the Corporation and the Corporation has all rights, licenses, permits, authorizations and other approvals necessary to use that Intellectual Property. As of the date hereof, no notice has been received by the Corporation that its rights to any Intellectual Property owned or licensed by it or otherwise used in the conduct of its business are invalid or unenforceable or that any infringement or misappropriation thereof, in whole or in part, by any Person has occurred, and no legal proceedings alleging any infringement of the Intellectual Property owned, licensed or used by the Corporation in the conduct of its business have been initiated or, to the best of the knowledge, information and belief of the Corporation, threatened. To the best of the knowledge, information and belief of the Corporation, the conduct of the business of the Corporation does not infringe the intellectual property rights of any Person.

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(16) Permits, Registrations and Elections. The Corporation holds all permits, licenses, approvals, consents, authorizations, registrations, certificates and franchises of governmental agencies or regulatory bodies required to own its properties and assets and to carry on its business (collectively, the “Permits”) except where the failure to hold such Permits would not have a material adverse effect on the Corporation. All the Permits are in full force and effect; the Corporation is in compliance in all material respects with all the terms and conditions relating to the Permits; and there are no proceedings in progress, pending or, to the best of the knowledge, information and belief of the Corporation, after due inquiry, threatened that may result in revocation, cancellation, suspension, rescission or any adverse modification of any of the Permits nor, to the best of the knowledge, information and belief of the Corporation, after due inquiry, are there any facts upon which proceedings could reasonably be based.

(17) Compliance with Laws and Litigation.

(a) The Corporation is conducting its business in compliance with all applicable laws, regulations, by-laws and ordinances of each jurisdiction in which its business is carried on, except where the failure to be in such compliance would not have a material adverse effect on the Corporation;

(b) There is no court, administrative, regulatory or similar proceeding (whether civil, quasi-criminal or criminal); arbitration or other dispute settlement procedure; investigation or enquiry by any governmental, administrative, regulatory or similar body; or any similar matter or proceeding (collectively, “Proceedings”) against or involving the Corporation or any of its officers or directors (whether in progress, pending or, to the best of the knowledge, information and belief of the Corporation after due inquiry, threatened); no event has occurred that might give rise to any Proceedings and the Corporation is not aware of any existing grounds on which such Proceedings might be commenced and there is no judgment, decree, injunction, rule, award or order of any court, government department, board, commission, agency, arbitrator or similar body outstanding against the Corporation, officers, directors or its Subsidiaries.

(18) Material Facts Disclosed. None of the statements, documents, certificates or other items prepared or supplied by the Corporation with respect to the transactions contemplated hereby contains an untrue statement of a material fact, or fails to disclose a fact that is necessary to be made in order for any material statement not to be misleading.

(19) No Rights to Acquire Assets or Shares. Except for the Holder, no person has any agreement or option or right or privilege (whether pre-emptive or contractual) capable of becoming an agreement for the purchase of any assets (other than the sale of inventory in the ordinary course of business) or shares (from treasury or otherwise) of the Parent or the Corporation.

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(20) Debt. The Corporation has no Debt senior to the indebtedness represented by this Debenture other than Permitted Debt. Neither the Corporation nor any of its Subsidiaries has any other direct or contingent Debt other than Permitted Debt.

(21) Location of Assets. There is no location at which the Parent, the Corporation or the Subsidiaries has any assets (except for inventory or products in transit) other than those locations listed on Schedule 5.1(21). Schedule 5.1(21) contains a true, correct and complete list, as of the date hereof, of each place of business and the chief executive office of the Parent, the Corporation and the Subsidiaries.

(22) Material Agreements. True, correct and complete copies of all Material Agreements have been delivered to the Holder. The Corporation has performed all of the obligations required to be performed by it and is entitled to all benefits under the Material Agreements. The Corporation is not alleged to be in default of any Material Agreement. Each of the Material Agreements is in full force and effect, unamended, and there exists no default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default under any Material Agreement.

     All provisions contained herein which are qualified by or require any person or entity to make a determination or assessment of any event or circumstance or other matter to its knowledge shall be a reference to the knowledge of such person or entity and shall be deemed to require such person or entity to make all due inquiries and investigations as may be necessary or prudent in the circumstances before making any such determination or assessment. The Holder will be entitled to rely on the representations and warranties of the Corporation contained in this Debenture notwithstanding any investigation which the Purchaser may undertake or which may be undertaken on the Holder’s behalf.

ARTICLE 6
COVENANTS OF THE CORPORATION

Section 6.1 General Covenants

     For as long as this Debenture remains outstanding, the Corporation and the Parent declare, covenant and agree as follows:

(1) Use of Proceeds. The Corporation shall use the aggregate principal amount for general corporate purposes;

(2) To Pay Principal and Interest. The Corporation will duly and punctually pay the principal and interest accrued on this Debenture at the time and in the manner specified herein;

(3) Maintain Corporate Existence. The Parent and the Corporation shall (and shall cause the Subsidiaries to) maintain its corporate existence, carry on and conduct its business in a proper and business-like manner, take all reasonable action to maintain

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all rights, privileges and franchises necessary or desirable in the normal conduct of its business and comply with all applicable legal requirements;

(4) Delivery of Security and Perfection. The Parent and the Corporation shall (and shall cause the Subsidiaries to) effect such registrations and obtain such consents and give such other security, at the sole cost and expense of the Corporation, as may be required or desirable to preserve, protect or perfect the security interests to be created with respect to the Secured Property;

(5) No Encumbrances. Neither the Parent, the Corporation nor the Subsidiaries shall create, assume or suffer to exist any Lien (other than Permitted Encumbrances), including, without limitation, any agreement to give any of the foregoing or any conditional sale or other title retention agreement, upon all or any part of the Secured Property. The Corporation will defend the Secured Property against, and will take such other action as is necessary to remove, any and all security interests on and claims in respect of the Secured Property other than the security interests created by the Security Documents and Permitted Encumbrances, and the Corporation will defend the right, title and interest of the Holder in and to the Secured Property against the claims and demands of all Persons;

(6) Operating Leases. None of the Parent, the Corporation or the Subsidiaries will enter into or maintain operating leases (other than real property leases) such that the aggregate annual expenditure on such operating leases would be greater than $100,000.00;

(7) Insurance. The Corporation shall keep its assets fully insured against such perils and in such manner as would be customarily insured by companies carrying on a similar business or owning similar assets;

(8) Non-arm’s Length Transactions. The Parent and the Corporation shall not enter into any transaction with any officer, director, employee, shareholder or any Person not dealing at arm’s length (within the meaning of the Income Tax Act (Canada)) or any affiliate of any of the foregoing, specifically excluding (a) any employment or option agreement, and (b) any transaction for which prior written evidence, satisfactory to the Holder, is provided that such transaction will be on terms equal to or greater than fair market value;

(9) Certificate of Compliance. The Corporation covenants that at any time if requested by the Holder, and at least on a monthly basis, the Corporation shall furnish to the Holder a current certificate of a senior officer of the Corporation stating that the Corporation and its Subsidiaries have complied with all covenants, conditions and other requirements contained in any document, instrument or agreement executed and delivered by any of them to the Holder and there has not occurred any Event of Default or non-compliance with any covenant, condition or other requirement contained in the Transaction Documents and any other document, instrument or agreement (including any Material Agreement) which would constitute an Event of Default or event which with the giving of notice or the lapse of time or both or, if such is not the case, specifying the covenant, condition or other requirement which

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has not been complied with and giving particulars of such non-compliance and the action, if any, the Corporation or any of its Subsidiaries proposes to take with respect thereto;

(10) Additional Reporting. The Corporation covenants that, not later than the time furnished to any other lender in accordance with the terms of any other Debt permitted in accordance with the terms hereof, it shall deliver to the Holder copies of each report, certificate, statement or notice furnished to such other lender, and, promptly following the effectiveness thereof, a copy of each amendment of, supplement to or waiver with respect to any of the M&T Indebtedness;

(11) Certificate of Representations and Warranties. The Corporation covenants that at any time if requested by the Holder, and at least on a quarterly basis, the Corporation shall furnish to the Holder a current certificate of a senior officer of the Corporation stating that the representations and warranties contained herein are true and correct as of the date of the certificate with the same force and effect as if such representations and warranties had been made on and as of such time except for such representations and warranties stated to be true as of a specific date or, if such is not the case, specifying the representation or warranty which is not true or correct and giving particulars of such representation and warranty and the action, if any, the Corporation or any of its Subsidiaries proposes to take with respect thereto;

(12) Annual Business Plan. The Corporation shall prepare a draft annual business plan before the start of each financial year. The draft annual business plan must contain a detailed monthly consolidated financial budget prepared in accordance with GAAP. The budget must (i) include a pro forma balance sheet, income statement and statement of changes in financial position of the Corporation for such financial year, (ii) include comparison statements from the previous financial year, (iii) be accompanied by a statement of the nature and amount of all capital expenditures to be incurred during such financial year, and (iv) be supported by the explanations, notes and information upon which the projections underlying the annual business plan have been based. The Corporation must deliver the draft annual business plan to the Holder at least 60 days prior to the start of the applicable financial year. The Holder will review the draft annual business plan and make such amendments and modifications it determines appropriate, acting reasonably. Upon approval by the Holder, the draft annual business plan becomes the “Annual Business Plan” for the applicable financial year. In the event that the Holder, acting reasonably, does not approve any annual business plan in whole or in part prior to the start of a financial year, the financial budget contained in the Annual Business Plan for the preceding financial year will continue to apply to the extent of such disagreement until a complete annual business plan is approved;

(13) Information Rights. The Corporation shall maintain proper, complete and accurate books and accounts in accordance with GAAP consistently applied and in effect from time to time. The Corporation shall provide on a timely basis the following to the Holder:

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(a) one copy of its audited consolidated financial statements within 90 days following the end of each financial year. The annual financial statements will be audited by the auditors of the Corporation and will include the balance sheet and statements of income, retained earnings and changes in financial position, together with all supporting schedules, and the auditors’ report;

(b) a monthly financial report within 30 days after the end of each month. The report will consist of the monthly and year-to-date financial statements on a consolidated basis in a form consistent with the Annual Business Plan and as normally prepared by management for its own use. The report will also contain a comparison of budget to actual and to the prior year for the same period;

(c) such other information and documents respecting the Corporation’s business and affairs which the Holder may reasonably request including a copy of any minutes of board meetings or other materials provided to directors at the same time as are circulated to the directors; and

(d) copies of all written reports and information provided to the Parent’s or the Corporation’s lenders.

(14) Approval Rights. From and after the advance by the Holder of the Loan Amount and until the expiry of the Option exercise period, neither the Parent nor the Corporation may make a decision about, take action on, or implement any of the following (for itself or any of the Subsidiaries) without the prior written consent of the Holder, in addition to any other approval required by law:

(a) incur, issue or make any request for or permit to exist Debt, except for the Permitted Debt;

(b) grant or permit the existence of any security for Debt of the Corporation other than the Permitted Encumbrances;

(c) keep, locate, or maintain assets outside of Canada, the United States of America or Mexico;

(d) make any prepayment of any Debt that is subordinate to or pari passu with the Obligations (for the purposes of this Debenture, any conversion of Debt into equity of the Corporation shall not be considered to be a prepayment);

(e) make any amendment to the articles or by-laws of the Parent or the Corporation in a manner which may prejudice the Holder or potentially result in a material adverse change to the Corporation at the sole discretion of the Holder, acting reasonably;

(f) provide or permit a guarantee in respect of the obligations of any Person, other than guarantees given in respect of indebtedness secured by a Permitted Encumbrance or in respect of Permitted Debt;

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(g) acquire or commence any business other than the business currently conducted by the Parent or the Corporation or effect any material change in the business or take any action which may reasonably lead to or result in such material change;

(h) sell, lease, exchange, transfer or dispose of all or a substantial part of the assets and undertaking of the Parent, the Corporation or the Subsidiaries;

(i) amend or vary the articles or by-laws of the Parent, the Corporation or the Subsidiaries;

(j) dissolve, liquidate or wind-up the Parent, the Corporation or the Subsidiaries or otherwise distribute the assets of the Parent, the Corporation or the Subsidiaries for the purpose of winding-up its affairs, whether voluntary or involuntary;

(k) issue any security or sell, transfer or otherwise dispose of any securities or other ownership, equity or proprietary interest in any other Person, including securities held by the Parent in the Corporation or by the Corporation in any of its Subsidiaries, except as contemplated by an Annual Business Plan;

(l) purchase, lease or otherwise acquire any property or assets, which individually or in the aggregate exceed $100,000, or make any commitment to do so, except as contemplated by an Annual Business Plan;

(m) purchase or otherwise acquire any securities or other ownership, equity or proprietary interests in any other Person, or incorporate or create any subsidiary, except as contemplated by an Annual Business Plan;

(n) make any loan or advance to any person in excess of $25,000, except as contemplated by an Annual Business Plan;

(o) amalgamate, merge or enter into an arrangement or other corporate reorganization involving the Parent or the Corporation or continue the Parent or the Corporation into any other jurisdiction;

(p) enter into any transaction between the Parent or the Corporation and any person not dealing at arm’s length with the Parent or the Corporation, or enter into any transactions by the Parent or the Corporation for the benefit of any person not dealing at arm’s length with the Parent or the Corporation; provided, however, that the Parent or the Corporation may enter into management and/or services agreements with its managers and/or service providers in the ordinary course of business;

(q) change the auditors of the Parent or the Corporation;

(r) change the number of directors on the board of directors of the Parent or the Corporation;

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(s) declare or pay any dividend or other distribution on or in respect of any shares or other securities of the Parent or the Corporation;

(t) purchase, redeem or acquire any shares or other securities of the Parent or the Corporation, except as expressly permitted in writing by the Holder;

(u) pay or distribute amounts out of any stated capital account, reduce any stated capital account, distribute any surplus or earnings, or return any capital;

(v) mortgage, charge, grant a security interest in or encumber any of its assets, except for purchase money security interests incurred in the ordinary course of business or otherwise provided for in an approved Annual Business Plan;

(w) enter into any borrowing of funds, or incur any indebtedness, obligation or liability in excess of or make any expenditure of any amount in excess of an amount stipulated in an approved Annual Business Plan;

(x) enter into any transfer, purchase, redemption, split, conversion or exchange of shares, other securities or the granting of any option or right (including convertible securities, warrants, or convertible obligations of any nature) for the purchase or issuance of any shares or other securities of the Parent or the Corporation or any agreement in the foregoing regards;

(y) enter into any guarantee howsoever of the indebtedness or obligations of any person;

(z) make any payment of any management or administration fees in excess of an amount stipulated in an approved Annual Business Plan;

(aa) establish any executive committee or delegate any power, right or duty of the directors;

(bb) enter into a transaction for the incorporation or acquisition of any person;

(cc) make or file any material tax election;

(dd) replace its current chief financial officer or any successor thereto;

(ee) enter into any Material Agreement;

(ff) agree or otherwise commit to take any action described in paragraphs (i) — (ee) above; or

(gg) hold assets in Quebec having a value in the aggregate of greater than $200,000.

(15) Other Interests. The Parent, the Corporation and the Subsidiaries shall not permit those entities in which they have a controlling interest to incur liabilities (other than Permitted Debt) or to grant any security for Debt of that entity without the prior written consent of the Holder.

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(16) Further Documentation. The Corporation will from time to time at its expense promptly and duly authorize, execute and deliver such further instruments and documents, and take such further action, as the Holder may reasonably request for the purpose of preserving the Secured Property, and full benefits of, and the rights and powers granted by, the Security Documents (including the filing of any financing statements or financing change statements under any applicable legislation, application for the registration or an application for the registration of a rectification with respect to the Secured Property and including any steps required to register security on real property if necessary). Accordingly, the Corporation agrees that the Holder will have the right to require that the Security Documents be amended, supplemented or replaced, and that the Corporation will immediately on request by the Holder authorize, execute and deliver any such amendment, supplement or replacement (i) to reflect any changes in such laws, whether arising as a result of statutory amendments, court decisions or otherwise, (ii) to facilitate the creation and registration of appropriate security in all appropriate jurisdictions, or (iii) if the Corporation merges or amalgamates with any other Person or enters into any corporate reorganization, in each case in order to confer on the Holder security interests similar to, and having the same effect as, the security interests created by the Security Documents.

(17) Delivery and Pledge of Certain Collateral. Promptly upon request from time to time by the Holder and immediately (without any request by the Holder being necessary) upon the occurrence and during the continuance of any Event of Default, the Parent and the Corporation will deliver (or cause to be delivered) to the Holder, endorsed and/or accompanied by such instruments of assignment and transfer in such form and substance as the Holder may reasonably request, any and all instruments, securities, documents of title and chattel paper included in or relating to the Secured Property as the Holder may specify in its request (other than Secured Property to which the holder of a Permitted Encumbrance holds a prior ranking charge).

(18) Payment of Expenses; Indemnification. The Parent and the Corporation will pay within thirty (30) days of demand therefor, and will indemnify and save the Holder harmless from, any and all liabilities, reasonable costs and expenses (including reasonable legal fees (without reduction for tariff rates or similar reductions) and expenses and any sales, goods and services or other similar taxes payable to any governmental authority with respect to any such liabilities, costs and expenses) (i) incurred by the Holder in the enforcement of the Security Documents, (ii) with respect to, or resulting from, any failure or delay by the Corporation in performing or observing any of its obligations under the Security Documents, or (iii) incurred by the Holder in performing or observing any of the other covenants of the Corporation under the Security Documents.

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(19) Maintenance of Records. The Corporation will keep and maintain accurate and complete records of the Secured Property.

(20) Right of Inspection. The Holder (or any agent of the Holder) may, at any time during normal business hours, upon reasonable notice, without charge, examine all books and records evidencing or relating to the Secured Property, and may discuss the affairs, finances and accounts of the Parent and the Corporation with its officers and accountants in the presence of such representatives of the Corporation as the Corporation may designate. The Holder (or any agent of the Holder) may also, upon reasonable notice, without charge, enter the premises of the Parent, the Corporation or the Subsidiaries where any of the Secured Property is located for the purpose of inspecting the Secured Property, observing its use or otherwise protecting its interests in the Secured Property. The Corporation, at its expense, will prepare and provide the Holder (or any agent of the Holder) with such documentation and analysis, including, without limitation, the delivery of copies, electronic or otherwise, of all books and records evidencing or relating to the Secured Property and provide such clerical and other assistance as may be reasonably requested by the Holder (or any agent of the Holder) to exercise any of its rights under this paragraph.

(21) Limitations on Dispositions of Collateral. Other than in the ordinary course of business, the Parent and the Corporation will not (and will cause the Subsidiaries not to), without the Holder’s prior written consent, sell, lease or otherwise dispose of any of the Secured Property, except that inventory may be sold, leased or otherwise disposed of, equipment may be replaced that is obsolete or requires replacement and accounts may be collected. Following the occurrence and during the continuance of any Event of Default, all proceeds of the Secured Property (including all amounts received in respect of accounts receivable), whether or not arising in the ordinary course of the Corporation’s business, will, subject to the rights of the lead banker to the Corporation pursuant to the M&T Indebtedness, be received by the Corporation as trustee and agent of the Holder and will be immediately paid over to the Holder.

(22) Compliance with Laws, etc. The Parent and the Corporation will comply and cause the Subsidiaries to comply with the requirements of all applicable laws (including environmental laws) , judgments, orders, decisions and awards.

(23) Notices. The Corporation will provide immediate notice to the Holder in accordance with Section 11.4 hereof, upon becoming aware of (i) any security interest (other than the security interests created by the Security Documents and Permitted Encumbrances) on, or claim asserted against, any of the Secured Property, (ii) the occurrence of any event, claim or occurrence that is or could reasonably be expected to have a material adverse effect on the value of the Secured Property, or (iii) any material loss of or damage to any of the Secured Property. The Corporation will provide thirty (30) days notice to the Holder in accordance with Section 11.4 hereof of (i) any change in the location of the chief executive office of the Corporation, (ii) any change in the location of any of the corporeal or tangible material Secured Property (including additional locations) and (iii) any proposed Change of Control.

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(24) Limitations on Modifications, Waivers, Extensions. Other than in the ordinary course of business, the Parent and the Corporation will not and will cause the Subsidiaries not to (i) amend, modify, terminate or waive any provision of any permit, contract or any agreement giving rise to an account owing to the Corporation or a Subsidiaries in any manner which is or could reasonably be expected to be materially adverse to the Corporation or the Holder or (ii) fail to exercise promptly and diligently its rights under each permit, contract and agreement giving rise to an account owing to the Corporation or a Subsidiaries if such failure is or could reasonably be expected to be materially adverse to the Corporation or a Subsidiaries or the Holder.

(25) Quebec Assets. The Parent and the Corporation agree (i) to notify the Holder promptly if and when the total value of the assets in Quebec owned by the Parent, the Corporation or any Subsidiary, in the aggregate, exceeds $200,000 (the “Threshold”); and (ii) the Parent or the Corporation shall or shall cause a Subsidiary, as applicable, to take all actions reasonably necessary to provide security in Quebec within ten (10) days of such notification, together with all additional documents, security, registrations and legal opinions of the Parent, the Corporation and the Subsidiaries’ counsel, as applicable, as the Holder may reasonably require.

ARTICLE 7
DELIVERIES AT CLOSING

     Concurrently herewith, and as a condition of closing in favour of the Holder, the Corporation shall deliver the following documents to the Holder:

(a) favourable legal opinions, in form and substance satisfactory to the Holder, acting reasonably, from counsel to the Parent, the Corporation and the Subsidiaries, addressing, among other things (without limitation) the due authorization of the Debenture, the Security Documents and related instruments and agreements, the enforceability (subject to customary limitations) of the Debenture, the Security Documents and related instruments and agreements and search results in respect of the Corporation and its Subsidiaries, subject to customary qualifications, assumptions and reliances and the authenticity of all signatures of all individuals;

(b) certificates signed by appropriate officers of the Parent, the Corporation and the Subsidiaries, addressed to the Holder and its counsel, with respect to their articles and by-laws, all resolutions of their directors and other corporate action relating to this Debenture and the Security Documents and with respect to such other matters as the Holder may reasonably request;

(c) the Security Documents;

(d) the receipt by the Corporation of all approvals and consents reasonably required by the Holder, in form and substance reasonably satisfactory to the Holder; and

(e) such other documents as the Holder may reasonably request.

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ARTICLE 8
EVENTS OF DEFAULT

Section 8.1 Events of Default

     Any of the following shall constitute an Event of Default under this Debenture:

(a) failure by the Corporation to pay in cash all or any part of the Obligations when due and payable;

(b) the Parent, the Corporation or the Subsidiaries ceases to carry on business in the normal course or any material part of its business;

(c) the Parent, the Corporation or the Subsidiaries becomes unable to satisfy its liabilities as they become due and/or the realizable value of the Corporation’s assets is less than the aggregate sum of its liabilities;

(d) the Parent, the Corporation, the Subsidiaries, any creditor of the Parent, the Corporation or any Subsidiaries or any other Person institutes any proceeding or takes any corporate action or executes any agreement in connection with the commencement of any proceeding:

(i) seeking to adjudicate the Parent, the Corporation or the Subsidiaries a bankrupt or insolvent;

(ii) seeking liquidation, dissolution, winding-up, reorganization, arrangement (including any plan of arrangement involving or affecting its creditors under applicable corporate law), protection, relief or composition of the Parent, the Corporation or the Subsidiaries or any material part of their property or debt, or making a proposal with respect to the Parent, the Corporation or the Subsidiaries under any law relating to bankruptcy, insolvency, reorganization or compromise of debts or other similar laws; or

(iii) seeking appointment of a receiver, trustee, agent, custodian, monitor or other similar official for the Parent, the Corporation or the Subsidiaries or for any material part of their properties and assets or for any part of the Secured Property;

(e) any creditor of the Parent, the Corporation or the Subsidiaries, or any other Person privately appoints a receiver, trustee or similar official for any material part of the properties or assets of the Parent, the Corporation or any Subsidiaries;

(f) any execution, distress or other enforcement process, whether by court order or other formal proceeding becomes enforceable (it being acknowledged and

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agreed that the making of a demand by a third party without court or other formal sanction shall not in itself constitute an Event of Default hereunder) against any material properties of assets of the Parent, the Corporation or the Subsidiaries which could have a material adverse effect on the business of the Corporation on a consolidated basis;

(g) the occurrence of any default in payment of monies or otherwise, or any event or condition which, with the giving of notice or passage of time, or both, would constitute a default in payment of monies or otherwise by the Parent, the Corporation or the Subsidiaries under the terms of any other Debt permitted in accordance with the terms hereof;

(h) if any representation or warranty made by the Parent, the Corporation or the Subsidiaries to the Holder in this Debenture or the Security Documents is untrue or incorrect in any material respect as of the date on which it is made;

(i) the Parent, the Corporation or any of the Subsidiaries fails to observe in any material respect, any other term, covenant or agreement contained in this Debenture, the Security Documents, the M&T Indebtedness, the terms of any other Debt permitted in accordance with the terms hereof or the Addendum (including the failure to preserve the ranking of the security interests created by the Security Documents);

(j) with respect to Debt of the Parent, the Corporation or the Subsidiaries under any agreement with a third party (other than agreements entered into with customers in the ordinary course of business), the Parent, the Corporation or any of the Subsidiaries, as the case may be, fails to pay any principal, interest or other amount pursuant to such agreement when such amount becomes due and payable (whether by scheduled maturity, required repayment, acceleration, demand or otherwise), other than the extension of the payment of trade and accounts payable in the ordinary course consistent with the past practice of the Corporation or Subsidiaries, as the case may be, provided such extension has no material adverse effect upon the Corporation on a consolidated basis;

(k) a notice is sent to or received by the Parent, the Corporation or the Subsidiaries from any creditor with respect to the intention of such creditor to enforce its Lien on any of the property of the Parent, the Corporation or Subsidiaries, as the case may be, unless such notice is being contested in good faith by appropriate legal proceedings and such notice has not resulted in, or does not involve, any immediate prospect of the sale or forfeiture or loss of any of the property of the Parent, the Corporation or Subsidiaries, as the case may be, that is subject to such notice;

(l) the Parent, the Corporation or the Subsidiaries challenges the validity or enforceability of this Debenture or the Security Documents or terminates or repudiates any of them or attempts to do so;

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(m) any occurrence, development or change (other than an occurrence, development or change to which the Holder consents), which would result in the Debenture ceasing to have priority over all other Debt except for Permitted Encumbrances;

(n) any holder of any Lien enforces against, or becomes entitled to enforce against, or otherwise takes possession, management or control of the Secured Property or the interest of the Corporation in such Secured Property, or any part of such Secured Property or interest;

(o) a distress, execution, warrant, garnishment, attachment, sequestration, levy, writ, or any similar process is issued or enforced upon or against all or any part of the Secured Property, or any third party demand is issued by the Crown, governmental authority, administrative body or any taxation authority in respect of the Corporation or all or any part of the Secured Property, or any other seizure is made in respect of all or any part of the Secured Property;

(p) the termination or resignation of the auditor of the Corporation provided that such auditor is not replaced with an auditor from one of the four largest accounting firms in Canada or such other accounting firm agreed to by the Holder;

(q) any claim, action, litigation, arbitration or proceeding against the Parent, the Corporation or the Subsidiaries results in a judgment against or settlement by the Parent, the Corporation or the Subsidiaries which, if enforced or paid in accordance with its terms, could have a material adverse effect on the business of the Corporation on a consolidated basis or on the Parent, the Corporation or the Subsidiaries;

(r) any material portion of the Secured Property is damaged or destroyed, and such loss is not covered by insurance;

(s) the security interest created under any of the Security Documents ceases to be a valid and perfected security interest;

(t) any resolution is passed for, the winding up, dissolution or liquidation or amalgamation of the Parent, the Corporation or any of its Subsidiaries other than with or into the Parent, the Corporation or another Subsidiary or if the Corporation or any of its Subsidiaries loses its charter by expiration, cancellation, forfeiture or otherwise;

(u) there occurs any change, condition, event or occurrence which, when considered individually or together with all other changes, conditions, events or occurrences, could reasonably be expected to have a material adverse effect (or a series of adverse effects, none of which is material in of itself but which, cumulatively, results in a material adverse effect) on: (A) the business, operations, assets, financial condition or prospects of the Parent, the

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Corporation or its Subsidiaries taken as a whole; or (B) to the extent applicable, the ability of the Parent or the Corporation to perform any of its obligations under this Debenture, any other Material Agreement or any document, instrument or agreement executed and delivered by the Parent, the Corporation or any of its Subsidiaries at any time to or in favour of the Holder; or (C) the ability of the Holder to enforce any of the obligations of the Parent, the Corporation or its Subsidiaries under this Debenture or any other of the Transaction Documents; or (D) the priority of the Security Documents against the Secured Property;

(v) there is an adverse qualification to any of the audited financial statements of the Corporation or its Subsidiaries by its auditors; or

(w) a Change of Control of the Parent or the Corporation occurs.

Section 8.2 Notice of Event of Default

     The Corporation will give notice in writing to the Holder of the occurrence of any Event of Default or other event which, with the lapse of time or giving of notice or otherwise, would be an Event of Default, forthwith upon becoming aware thereof. Such written notice shall specify the nature of such default or Event of Default and the steps taken to remedy the same.

Section 8.3 Default under Other Encumbrances

     Any amount paid by the Holder after the occurrence of an Event of Default on account of monies payable under any encumbrance upon the Secured Property or any part thereof shall:

(a) be added to the Obligations and constitute a charge upon the Secured Property;

(b) be repaid by the Corporation to the Holder on demand.

Section 8.4 Judgment

     Neither the taking of any judgment nor the exercise of any power of seizure or sale shall operate to extinguish the liability of the Corporation to perform the Obligations nor shall such operate as a merger of any covenant or affect the right of the Holder to receive interest at the specified rate, and any judgment shall bear interest at such rate.

ARTICLE 9
REMEDIES

Section 9.1 Consequences of an Event of Default

     Upon the occurrence of an Event of Default and during the continuance, the Holder may provide written notice to the Corporation declaring the Obligations to be immediately due and payable by the Corporation to the Holder. Without the necessity of any further act or formality, but subject to applicable law, the security hereby created and created by the Security Documents shall become enforceable.

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Section 9.2 Limitation of Liability

     The Holder shall not be liable by reason of any entry into or taking possession of any of the Secured Property hereby charged or intended so to be or any part thereof, to account as mortgagee in possession or for anything except actual receipts or be liable for any loss on realization or any act or omission for which a secured party in possession might be liable. The Holder shall not, by virtue of these presents, be deemed to be a mortgagee in possession of the Secured Property. The Holder shall not be liable or accountable for any failure to exercise its remedies, take possession of, seize, collect, realize, sell, lease or otherwise dispose of or obtain payment for the Secured Property and shall not be bound to institute proceedings for such purposes or for the purpose of preserving any rights, remedies or powers of the Holder, the Corporation or any other person in respect of same. The Corporation hereby releases and discharges the Holder from every claim of every nature, whether sounding in damages or not, which may arise or be caused to the Corporation or any person claiming through or under the Corporation by reason or as a result of anything done or omitted to be done, as the case may be, by the Holder or any successor or assign claiming through or under the Holder under the provisions of this Debenture, unless such claim is the result of gross negligence or wilful misconduct.

ARTICLE 10
CONFIRMATIONS

     Section 10.1 Corporation Confirmations.

(1) The Corporation acknowledges, confirms and agrees that the Corporation Security remains in full force and effect as security for the payment and performance of all past, present and future indebtedness, liabilities and obligations of the Corporation to the Holder, including, without limitation, all debts, liabilities and obligations of the Corporation whether present or future, direct or indirect, absolute or contingent, matured or unmatured, under, in connection with or pursuant to this Agreement and the other Transaction Documents to which the Corporation is a party.

     Section 10.2 Guarantor Confirmations.

(1) Each of the Guarantors confirms that:

(a) it has been provided with and has reviewed the terms of this Agreement;

(b) the Guarantee to which it is a party remains in full force and effect and guarantees the payment of all present and future debts and liabilities owing by the Corporation to the Holder, whether direct or indirect, arising out of, in connection with, or pursuant to this Agreement and the other Transaction Documents to which the Guarantor, as applicable, is a party; and

(c) the Guarantor Security to which it is a party remains in full force and effect and, without in any way limiting the scope of the indebtedness, liabilities and

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obligations secured thereby, such Guarantor Security secures the payment and performance of all of its past, present and future indebtedness, liabilities and obligations to the Holder arising pursuant to or in respect of the applicable Guarantee.

ARTICLE 11
GENERAL

Section 11.1 Releases

     The Holder may in its discretion from time to time release any part of the Secured Property or any other security either with or without any sufficient consideration therefor, without responsibility therefor and without thereby releasing any other part of the Secured Property or any other security or any Person from the security created by this Debenture or the Security Documents or from any of the covenants herein contained. Each and every portion into which the Secured Property is or may hereafter be divided does and shall stay charged with the Obligations. No Person shall have the right to require the Obligations to be apportioned and the Holder shall not be accountable to the Corporation for any moneys except those actually received by the Holder.

Section 11.2 Expenses

     The Corporation shall pay to the Holder on demand all of the Holder’s reasonable costs, charges and expenses in connection with the enforcement by any means of any provisions hereof or the exercise of any rights, powers or remedies hereunder, including, without limitation, all such costs, charges and expenses in connection with taking possession, maintaining, completing, preserving, protecting, collecting or realizing upon all or any part of the Secured Property.

Section 11.3 Discharge of Debenture

     After the Obligations have been irrevocably repaid in full, the Holder shall return the Secured Property to the Corporation, cancel and discharge this Debenture with respect to any Obligations that are payable by the Corporation to the Holder and execute and deliver to the Corporation such instruments as shall be necessary to discharge this Debenture and the Security Documents.

Section 11.4 Communication

     Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by prepaid first-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Any such notice or other communication, if mailed by prepaid first-class mail at any time other than during, or within three (3) Business Days prior to, a general discontinuance of postal service due to strike, lockout or otherwise, shall be deemed to have been received on the fourth Business Day after the postmarked date thereof, or if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the Business Day of the sending (provided it was sent before 4:30 p.m. Toronto time) and the applicable printed facsimile record shall be definitive evidence of the time and date of such facsimile transmission, or if delivered by hand shall be deemed to have been received at the time it is delivered to the

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applicable address noted below either to the individual designated below or to an employee of the addressee at such address with responsibility for matters to which the information relates. Notice of change of address shall also be governed by this Section 11.4. In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications shall be delivered by hand or sent by facsimile or other means of electronic communication and shall be deemed to have been received in accordance with the foregoing. Notices and other communications shall be addressed as follows:

(a) if to the Corporation:

1100 Caledonia Road
Toronto, Ontario
M6A 2W5

Attention: President

Facsimile: (416) 784-1197

with a copy (that does not constitute notice) to:

Wisebrod/Zeliger Associates
245 Fairview Mall Drive
Suite 510
Toronto, Ontario
M2J 4T1

Attention:            Avi Wisebrod

Facsimile:           (416) 496-1708

(b) if to the Holder:

2929 California Street
Torrance CA 9053
United States of America

Attention:           General Counsel

Facsimile:            (310) 212-6315

with a copy (that does not constitute notice) to:

Stikeman Elliott LLP
5300 Commerce Court West
199 Bay Street
Toronto, Ontario
M5L 1B9

Attention:            David Weinberger

Facsimile:            (416) 947-0866

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Section 11.5 Successors and Assigns

     This Debenture shall be binding on the Corporation and its successors and shall enure to the benefit of the Holder and its successors and permitted assigns.

Section 11.6 No Set-Off

     The Obligations secured by this Debenture shall be paid by the Corporation without regard to any set-off, counterclaim or equities between the Corporation and the Holder.

Section 11.7 Judgment Currency.

(1) If for the purposes of obtaining judgment in any court it is necessary to convert all or any part of the Obligations or any other amount due to the Holder in respect of the Corporation’s obligations under this Debenture in any currency (the “Original Currency”) into another currency (the “Other Currency”), the Corporation, to the fullest extent that it may effectively do so, agrees that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Holder could purchase the Original Currency with the Other Currency on the Business Day preceding that on which final judgment is paid or satisfied.

(2) The obligations of the Corporation in respect of any sum due in the Original Currency from it to the Holder shall, notwithstanding any judgment in any Other Currency, be discharged only to the extent that on the Business Day following receipt by the Holder, of any sum adjudged to be so due in such Other Currency the Holder may, in accordance with its normal banking procedures, purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due to the Holder in the Original Currency, the Corporation agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Holder against such loss, and if the amount of the Original Currency so purchased exceeds the sum originally due to the Secured Creditor in the Original Currency, the Holder agrees to remit such excess to the Corporation.

Section 11.8 Permitted Encumbrance

     Notwithstanding any other provision in this Debenture, the parties confirm their intent that the references to Permitted Encumbrances herein are not intended to imply the subordination by the Holder to any person.

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     IN WITNESS WHEREOF the Corporation has executed this Debenture on the 15^th day of December, 2010.

FENWICK AUTOMOTIVE PRODUCTS LIMITED
By:
	Authorized Signing Officer
I have the authority to bind the corporation

ACKNOWLEDGED AND AGREED to on the 15^th day of December, 2010.

FAPL HOLDINGS INC.
By:
	Authorized Signing Officer
I have the authority to bind the corporation
AUTOCAT CATALOGUE SERVICES, INC.
By:
	Authorized Signing Officer
I have the authority to bind the corporation
778355 ONTARIO INC.
By:
	Authorized Signing Officer
I have the authority to bind the corporation

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EX-10.2

Exhibit 10.2

FENWICK ENTERPRISES INC.

JACK SHUSTER

MOTORCAR PARTS OF AMERICA, INC.

as Shareholders

and

GORDON FENWICK

PAUL FENWICK

JOEL FENWICK

as Principals

and

FAPL HOLDINGS INC.

as Corporation

FENWICK AUTOMOTIVE PRODUCTS LIMITED

INTROCAN INC.

ESCAL HOLDINGS INC.

FENCITY HOLDINGS INC.

JOFEN HOLDINGS INC.

AMENDED AND RESTATED ADDENDUM TO UNANIMOUS SHAREHOLDERS AGREEMENT

DECEMBER 15, 2010

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION
Section 1.1 Defined Terms	1
Section 1.2 Gender and Number	6
Section 1.3 Headings etc.	6
Section 1.4 Currency	6
Section 1.5 Certain Phrases, etc.	6
Section 1.6 Accounting Terms	6
Section 1.7 Statutory References	6
Section 1.8 Reference to and Effect on the Shareholders Agreement	6
Section 1.9 Schedules	7
Section 1.10 Fully Diluted Basis	7
ARTICLE 2 IMPLEMENTATION OF AGREEMENT AND TERM
Section 2.1 Actions in Accordance with Addendum	7
Section 2.2 Conflicts	7
Section 2.3 Corporation Consent	7
Section 2.4 Share Certificates	7
Section 2.5 Term of Addendum	8
Section 2.6 Agreement to be Bound	8
Section 2.7 Deemed Consent under Articles	8
ARTICLE 3 DIRECTOR OR OBSERVER
Section 3.1 General	8
Section 3.2 Indemnification	9
Section 3.3 Insurance	9
ARTICLE 4 BUSINESS AND MANAGEMENT OF THE CORPORATION
Section 4.1 Business of the Corporation	10
Section 4.2 Management of the Corporation	10
Section 4.3 Approvals	10
Section 4.4 Annual Business Plan	12
Section 4.5 Financial Information	12
Section 4.6 Adjusted Net Income	13
Section 4.7 Books and Records	13
ARTICLE 5 COVENANTS
Section 5.1 Transfer by Shareholders	14
Section 5.2 Encumbering of Shares	14

ARTICLE 6 OPTION
Section 6.1 Option	14
Section 6.2 Purchase Price	14
Section 6.3 Closing	14
Section 6.4 Assignment of Rights	15
ARTICLE 7 PROCEDURE FOR ISSUANCE OF SHARES
Section 7.1 Closing Procedures	15
Section 7.2 Non-Completion by the Corporation or Shareholders	16
Section 7.3 Irrevocable Power of Attorney	16
ARTICLE 8 CALL OPTION
Section 8.1 Call of MPA	17
Section 8.2 Calculation of Purchase Price	17
Section 8.3 Closing	17
Section 8.4 Hold Period	17
Section 8.5 Certificates for the MPA Shares	18
ARTICLE 9 SHAREHOLDERS PUT OPTION
Section 9.1 Put by Shareholders	19
Section 9.2 Closing	19
Section 9.3 Hold Period	19
ARTICLE 10 REPRESENTATIONS AND WARRANTIES
Section 10.1 Representations and Warranties of the Shareholders and Principals	20
Section 10.2 Representations and Warranties of the Corporation	21
Section 10.3 Representations and Warranties of MPA	23
Section 10.4 Survival	24
ARTICLE 11 MISCELLANEOUS
Section 11.1 Notices	24
Section 11.2 Time of the Essence	26
Section 11.3 Announcements	26
Section 11.4 Third Party Beneficiaries	26
Section 11.5 Joint and Several Liability	26
Section 11.6 No Agency or Partnership	26

Section 11.7 Expenses	27
Section 11.8 Amendments	27
Section 11.9 Waiver	27
Section 11.10 Entire Agreement	27
Section 11.11 Successors and Assigns	27
Section 11.12 Severability	28
Section 11.13 Governing Law	28
Section 11.14 Counterparts	28
Section 11.15 Corporate Opportunities	28
Section 11.16 Non-Competition	28
Section 11.17 Non-Solicitation of Customers	29
Section 11.18 Non-Solicitation of Employees	29
Section 11.19 English Language	30
SCHEDULES
SCHEDULE 6.1 Subscription Notice SCHEDULE 7.1(2) Life Insurance Policies SCHEDULE 8.1 Form of Call Notice SCHEDULE 10.1(f) Share Ownership SCHEDULE 10.1(g) Principals SCHEDULE “A” Post Option Shareholders Agreement

AMENDED AND RESTATED ADDENDUM TO UNANIMOUS SHAREHOLDERS AGREEMENT

     This Amended and Restated Addendum to the Unanimous Shareholders Agreement dated December 15, 2010, between Fenwick Enterprises Inc. (“FEI”), Escal Holdings Inc. (“Escal”), Fencity Holdings Inc. (“Fencity”), Jofen Holdings Inc. (“Jofen”), Motorcar Parts of America, Inc. (“MPA”), Gordon Fenwick (“GF”), Paul Fenwick (“PF”), Joel Fenwick (“JF”), Jack Shuster (“JS”), and FAPL Holdings Inc. (the “Corporation”).

RECITALS:

(a) FEI and JS are the registered and beneficial owners of the Shares of the Corporation as set out in Schedule 10.1(f);

(b) Escal, Fencity and Jofen are the registered and beneficial owners of the shares of FEI;

(c) GF, PF and JF are Principals of FEI;

(d) FEI, JS, Escal, Fencity, Jofen, GF, PF, JF and the Corporation are, inter alia, parties to an Unanimous Shareholders Agreement made as of the 2^nd day of July, 2010 (the “Shareholders Agreement”);

(e) The Parties, inter alia, entered into an Addendum to the Unanimous Shareholders Agreement on August 24, 2010 (the “Original Addendum”); and

(f) The Parties have entered into this Addendum to amend and restate the Original Addendum and to establish, among other things, rights in favour of MPA.

     In consideration of the above recitals and the mutual agreements contained in this Addendum (the receipt and adequacy of which are acknowledged), the Parties agree as follows:

ARTICLE 1
INTERPRETATION

Section 1.1 Defined Terms.

As used in this Addendum, the following terms have the following meanings:

“Act” means the Business Corporations Act (Ontario).

“Addendum” means this amended and restated addendum to the Shareholders Agreement and all schedules attached to it as it may be amended, modified, restated, replaced or supplemented from time to time in accordance with this Addendum.

“Adjusted Net Income” has the meaning specified in Section 4.6.

“Affiliate” has the meaning given to it in the Act on the date.

“Annual Business Plan” means, in respect of a Financial Year, the annual business plan approved under Section 4.4.

“Arm’s Length” has the meaning given to it in the Income Tax Act (Canada).

“Articles” means the certificate and articles of incorporation of the Corporation dated March 23, 2004, as amended to the date of this Addendum, and as may be amended, replaced or superseded from time to time in accordance with this Addendum.

“Auditor” means BDO Dunwoody LLP, or such other firm of chartered accountants appointed as the auditors of the Corporation.

“Authorization” means, with respect to a Person, any order, permit, approval, consent, waiver, licence or similar Authorization of any Governmental Entity having jurisdiction over the Person.

“Board Nominee” means the person proposed by MPA, in its sole discretion, to be nominated as a Director of the Corporation and any replacement therefor.

“Books and Records” means all information in any form relating to the operations of the Corporation and its Subsidiaries, including books of account, financial and accounting information and records, personnel records, tax records, sales and purchase records, customer and supplier lists, lists of potential customers, referral sources, research and development reports and records, production reports and records, equipment logs, operating guides and manuals, business reports, plans and projections, marketing and advertising materials and all other documents, files, correspondence and other information (whether in written, printed, electronic or computer printout form, or stored on computer discs or other data and software storage or media devices).

“Business” has the meaning specified in Section 4.1.

“Business Day” means any day of the year, other than a Saturday, Sunday or day on which major banks are closed for business in Toronto, Ontario or Torrance, California.

“By-laws” means the by-laws of the Corporation, as amended to the date of this Addendum, and as may be amended, replaced or superseded from time to time in accordance with this Addendum.

“Call Option” has the meaning specified in Section 8.1.

“Call Purchase Price” has the meaning specified in Section 9.1.

“Closing Date” has the meaning specified in, Section 6.3.

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“Contract” means any agreement, contract, licence, undertaking, engagement or commitment of any nature, written or oral.

“Corporation” means FAPL Holdings Inc. and any successor corporation resulting from any amalgamation, merger, arrangement or other corporate reorganization.

“Debenture” means the amended and restated debenture in the aggregate amount of US$4,863,155.23 issued by Fenwick Automotive Products Limited, a Subsidiary of the Corporation, in favour of MPA, as the same may be further amended or amended and restated from time to time.

“Directors” means the Persons who are elected or appointed as directors of the Corporation in accordance with this Addendum.

“Financial Year” means the twelve month period commencing on April 1 of each year and ending March 31 of the immediately following year, or such other twelve month period approved by the Directors in accordance with the By-laws.

“Forbearance Agreement” means the forbearance agreement dated as of July 6, 2010 among Royal Bank of Canada, the Corporation and the Subsidiaries;

“GAAP” means accounting principles generally accepted in Canada as recommended in the Handbook of the Canadian Institute of Chartered Accountants, at the relevant time applied on a consistent basis.

“Governmental Entity” means (i) any international, multinational, national, federal, provincial, state, municipal, local or other governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the above, (iii) any stock exchange and (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above.

“Indebtedness” has the meaning specified in the Forbearance Agreement.

“Introcan” means Introcan Inc., a Delaware corporation.

“Laws” means applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common and civil law and equity, orders, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Entity, and (iii) policies, practices and guidelines of, or Contracts with, any Governmental Entity, which, although not actually having the force of law, are considered by such Governmental Entity as requiring compliance as if having the force of law, in each case binding on or affecting the Person, or the assets of the Person, referred to in the context in which such word is used.

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“Lien” means (i) any mortgage, charge, pledge, hypothecation, security interest, assignment by way of security, encumbrance, lien (statutory or otherwise), hire purchase agreement, conditional sale agreement, deposit arrangement, title retention agreement or arrangement; (ii) any trust arrangement, (iii) any arrangement which creates a right of set-off out of the ordinary course of business, (iv) any option, warrant, right or privilege capable of becoming a Transfer or (v) any agreement to grant any such rights or interests.

“Material Agreement” means any agreement to which the Corporation or any Subsidiary thereof is a party with a value of greater than $175,000.00;

“MPA Common Stock” means the common stock, par value $0.01 per share, of MPA.

“MPA Shares” means the shares of MPA Common Stock issuable pursuant to Section 8.2(1).

“Notice” has the meaning specified in Section 11.1.

“Observer” has the meaning specified in Section 3.1(2).

“Opco” means Fenwick Automotive Products Limited.

“Option Exercise Period” means the period expiring at 11:59 p.m. on August 23, 2012.

“Optioned Shares” has the meaning specified in Section 6.1.

“Option Transaction” has the meaning specified in Section 6.3.

“Parties” means the Corporation, MPA, the Principals and the Shareholders.

“Permitted Transferee” means, in respect of any Person, any one or more of:

(a) his or her Spouse or Co-Vivant;

(b) his or her natural born and legally adopted children and all natural born or legally adopted descendants of such children;

(c) a trust, the sole beneficiaries of which are Persons specified in any one or more subsections of this definition, provided that the terms of the trust include a valid condition precedent that any Shares or securities of a Shareholder will vest in the beneficiaries of such trust only if such beneficiaries have complied with the provisions of Section 2.6;

(d) another Person, all of the voting securities or other ownership interests of which are owned by him, her or it or Persons specified in any one or more subsections of this definition, and in respect of Escal, Fencity, Jofen, GF, PF, JF and GF, any of them; and

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(e) in the case of a Transfer of shares of FEI, any Person who, as of the date hereof, already owned shares in the capital stock of FEI.

“Person” means a natural person, partnership, limited partnership, limited liability partnership, corporation, limited liability company, unlimited liability company, joint stock company, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning.

“Post Option Shareholders Agreement” means the Unanimous Shareholders Agreement substantially in the form attached hereto as Schedule “A”.

“Principal” means, in respect of a Shareholder, a Person listed on Schedule 10.1(g) as a principal of the Shareholder.

“Purchase Price” has the meaning specified in Section 8.2.

“Put Closing Date” has the meaning specified in Section 9.2.

“Put Notice” has the meaning specified in Section 9.1.

“Put Option” has the meaning specified in Section 9.1.

“Put Shares” has the meaning specified in Section 9.1.

“Put Transaction” has the meaning specified in Section 9.2.

“Shares” means the common shares of the Corporation, and where the context permits, includes (i) any securities into which such shares may be converted, reclassified, redesignated, subdivided, consolidated or otherwise changed, (ii) any securities of the Corporation or of any other Person received by the holders of such shares as a result of any merger, amalgamation, reorganization, arrangement or other similar transaction involving the Corporation, (iii) any securities of the Corporation which are received by any one or more Persons as a stock dividend or distribution on or in respect of such shares, and (iv) any security, other instrument or right that is exercisable, exchangeable or convertible into, or evidences the right to acquire, any shares of the Corporation or any of the other above securities.

“Shareholders” means FEI and JS and any Person who acquires Shares in accordance with the Shareholders Agreement and “Shareholder” means any one of them.

“Shareholders Agreement” has the meaning ascribed to it in the recitals.

“Subscription Notice” has the meaning specified in Section 6.1.

“Subsidiary” has the meaning given to it in the Securities Act (Ontario).

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“Time of Closing” means 10:00 a.m. (Toronto time) or such other time on the Closing Date as the parties to the Option Transaction agree.

“Transfer” means (i) any transfer, sale, assignment, exchange, gift, donation or other disposition of securities where possession, legal title, beneficial ownership or the economic risk or return associated with such securities passes directly or indirectly from one Person to another or to the same Person in a different legal capacity, whether or not for value, whether or not voluntary and however occurring, and for greater certainty includes the granting of a security interest, and (ii) any agreement, undertaking or commitment to effect any of the foregoing.

Section 1.2 Gender and Number.

     Any reference in this Addendum to gender includes all genders. Words importing the singular number only include the plural and vice versa.

Section 1.3 Headings etc.

     The provision of a Table of Contents, the division of this Addendum into Articles and Sections and the insertion of headings are for convenient reference only and do not affect its interpretation.

Section 1.4 Currency.

     All references in this Addendum to dollars or to “$” are expressed in Canadian currency unless otherwise specifically indicated.

Section 1.5 Certain Phrases, etc.

     In this Addendum, (i) the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”, and (ii) the words “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”. The expressions “Article”, “Section” and other subdivision followed by a number mean and refer to the specified Article, Section or other subdivision of the Addendum. In the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.

Section 1.6 Accounting Terms.

     All accounting terms not specifically defined in this Addendum are to be interpreted in accordance with GAAP.

Section 1.7 Statutory References.

     Except as otherwise provided in this Addendum, any reference in this Addendum to a statute refers to such statute and all rules and regulations made under it as they may have been or may from time to time be amended, re enacted or superseded.

Section 1.8 Reference to and Effect on the Shareholders Agreement.

(1) Upon the effectiveness of this Addendum, each reference in the Shareholders Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like

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import shall mean and be a reference to the Shareholders Agreement as supplemented and amended hereby, and each reference to the Shareholders Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Shareholders Agreement shall mean and be a reference to the Shareholders Agreement as supplemented and amended hereby.

(2) The Shareholders Agreement, as supplemented and amended by this Addendum shall remain in full force and effect and the provisions thereof are hereby ratified and confirmed.

Section 1.9 Schedules.

     The schedules attached to this Addendum form an integral part of it for all purposes of it.

Section 1.10 Fully Diluted Basis.

     Whenever ownership or holding of a number of Shares is determined under this Addendum, unless otherwise provided, such determination will be made on a fully diluted basis taking into account the issued and outstanding Shares and assuming conversion to or exercise for Shares of all preferred shares, debentures, options, warrants, convertible securities or other rights exercisable or convertible for Shares.

ARTICLE 2
IMPLEMENTATION OF AGREEMENT AND TERM

Section 2.1 Actions in Accordance with Addendum.

     Each Shareholder will vote its Shares to give effect to this Addendum whether at a meeting of the Shareholders or by written resolution of the Shareholders. Each Principal will vote and otherwise deal with its securities in the Shareholder of which it is a Principal to (i) give effect to this Addendum, (ii) cause the Shareholder to perform its obligations under this Addendum and (iii) cause the Shareholder to otherwise act in accordance with this Addendum.

Section 2.2 Conflicts.

     In the event of any conflict between the provisions of this Addendum and the provisions of the Shareholders Agreement, Articles or By-laws, the provisions of this Addendum shall prevail to the extent permitted by Law. Each of the Shareholders will take such steps and proceedings as may be required to amend the Shareholders Agreement, Articles and By-laws to resolve any conflicts in favour of this Addendum.

Section 2.3 Corporation Consent.

     The Corporation consents to this Addendum and is governed by its terms.

Section 2.4 Share Certificates.

     In addition to any legends required by applicable securities Laws, all certificates representing Shares must bear the following legend:

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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

The shares represented by this certificate are subject to a [unanimous shareholders agreement dated l between the Corporation and its shareholders,] as amended and supplemented by an addendum dated l, as may be amended from time to time, and such shares may not be pledged, sold or otherwise transferred except in accordance with the terms of that agreement. Any transfer made in contravention of such restrictions is null and void. A copy of the agreement and the addendum are on file at the registered office of the Corporation and available for inspection on request and without charge.”

Section 2.5 Term of Addendum.

(1) Subject to Section 2.5(2), this Addendum terminates on the earliest of:

(a) The date on which one Person acquires all of the issued and outstanding Shares;

(b) The date on which this Addendum is terminated by written agreement of the Parties; and

(c) The date that the Post Option Shareholders Agreement comes into effect.

(2) Even if this Addendum is terminated, each Party is responsible for paying all amounts owing by it under this Addendum prior to the date of termination, including any amounts owing for Shares purchased under this Addendum.

Section 2.6 Agreement to be Bound.

     Each Person who becomes a Shareholder or Principal must concurrently with becoming a Shareholder or Principal execute and deliver to the Corporation a counterpart copy of this Addendum or a written agreement in form and substance satisfactory to the Parties, agreeing to be bound by this Addendum.

Section 2.7 Deemed Consent under Articles.

     Each of the Parties (i) consents to the issuance of Shares by the Corporation made in accordance with this Addendum, and (ii) agrees that this consent satisfies any restriction on the transfer or issuance of the Shares contained in the Articles or By-laws and that no further consent is required under the Articles or By-laws for any such issuance.

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ARTICLE 3
DIRECTOR OR OBSERVER

Section 3.1 General.

(1) During the Option Exercise Period, the Corporation and the Shareholders shall:

(a) maintain capacity on the board of Directors for the Board Nominees and the Shareholder nominees referred to below;

(b) cause the board of Directors to consist of no greater than five (5) Directors, subject to increase with the prior written consent of MPA;

(c) upon the written request of:

(i) MPA, propose up to two (2) Board Nominees;

(ii) FEI, propose two (2) nominees; and

(iii) JS, propose one (1) nominee,

for nomination for election to the board of Directors and to each committee thereof at the earliest of: (i) any meeting of shareholders electing directors; and (ii) the next scheduled board of Directors Meeting; provided that if no such meeting is scheduled to occur within five (5) days of such request, the board of Directors will meet and appoint such Board Nominees and Shareholder nominees to the board of Directors prior to the expiration of such five (5) days;

(d) within five (5) days of a Director leaving the board of Directors, proceed to fill the vacancy thus created with the appointment of the replacement Board Nominee designated by MPA or Shareholder nominee designated by FEI or JS pursuant to their respective rights in accordance with Section 3.1(1) to the board of Directors and each committee thereof in accordance with Section 3.1(1); and

(e) pay the Directors all consideration that is normally paid to a member of the board of Directors or any committee thereof, for the period that such Director is a director or member of any such committee.

(2) If MPA elects not to have a Board Nominee elected to the board of Directors under Section 3.1(1), until the expiry of the Option Exercise Period, MPA shall be entitled to appoint, from time to time, an observer (the “Observer”) who shall be entitled to attend and participate in the discussions at all meetings of the board of Directors or any committees thereof. Such observer shall be entitled to all materials provided in connection with meetings of the board of Directors or any committees thereof and shall be entitled to reimbursement of expenses as if the observer were a Director.

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Section 3.2 Indemnification.

     The Corporation will indemnify the Board Nominee and Observer to the fullest extent permitted by the Act. Nothing in this Addendum limits the right of any Board Nominee and Observer to claim indemnity apart from the provisions of this Addendum, if the Board Nominee and Observer is entitled to such indemnity.

Section 3.3 Insurance.

     The Corporation will purchase and maintain insurance for the benefit of the Directors and officers of the Corporation against such liabilities, in such amounts and on such terms as the Directors determine and as are permitted by Law, which insurance shall cover the Board Nominee and Observer.

ARTICLE 4
BUSINESS AND MANAGEMENT OF THE CORPORATION

Section 4.1 Business of the Corporation.

     The business of the Corporation and its Subsidiaries is the manufacturing and remanufacturing and distribution of aftermarket auto parts (the “Business”).

Section 4.2 Management of the Corporation.

     The Directors will manage, or supervise the management of, the business and affairs of the Corporation in accordance with this Addendum, the Shareholders Agreement, the Act and the By-laws.

Section 4.3 Approvals.

(1) Until the expiry of the Option Exercise Period, but other than in respect of decisions and actions required to be undertaken by the Corporation to fulfill its obligations arising under the survivorship provisions set forth in the Shareholders Agreement in consequence of a death which gives rise to the application of those survivorship provisions, the Corporation may not make a decision about, take action on or implement any of the following (for itself and any of its Subsidiaries) without the prior written consent of MPA, in addition to any other approval required by Law:

(a) the acquisition or commencement of any business other than the Business or any material change in the Business or the taking of any action which may reasonably lead to or result in such material change;

(b) any sale, lease, exchange, transfer or other disposal of all or a substantial part of the assets and undertaking of the Corporation or any of its Subsidiaries;

(c) any amendment or other variation to the Articles or By-laws; any dissolution, liquidation or winding-up of the Corporation or any of its Subsidiaries or other distribution of the assets of the Corporation or any of its Subsidiaries for the purpose of winding-up its affairs, whether voluntary or involuntary;

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(d) issuing any Shares, security or selling, transferring or otherwise disposing of any securities or other ownership, equity or proprietary interest in any other Person, including securities held by the Corporation in any of its Subsidiaries, except as contemplated by an Annual Business Plan;

(e) purchasing, leasing or otherwise acquiring any property or assets, which individually or in the aggregate exceed $100,000, or making any commitment to do so, except as contemplated by an Annual Business Plan;

(f) purchasing or otherwise acquiring any securities or other ownership, equity or proprietary interests in any other Person, or incorporating or creating any Subsidiary, except as contemplated by an Annual Business Plan;

(g) making any loan or advance to any person in excess of $25,000, except as contemplated by an Annual Business Plan;

(h) amalgamating, merging or entering into an arrangement or other corporate reorganization involving the Corporation or the continuance of the Corporation into any other jurisdiction;

(i) any transaction between the Corporation and any Person not dealing at Arm’s Length with the Corporation, or any transactions by the Corporation for the benefit of any Person not dealing at Arm’s Length with the Corporation; provided, however, that the Corporation may enter into management and/or services agreements with its managers and/or service providers in the ordinary course of business;

(j) any change in the Auditors of the Corporation;

(k) any change in the number of Directors on the board;

(l) declaring or paying any dividend or other distribution on or in respect of any Shares or other securities of the Corporation;

(m) purchasing, redeeming or acquiring any Shares or other securities of the Corporation, except as expressly permitted;

(n) paying or distributing amounts out of any stated capital account, reducing any stated capital account, distributing any surplus or earnings, or returning any capital;

(o) any Lien by the Corporation of any of the assets of the Corporation, except for purchase money security interests incurred in the ordinary course of business or otherwise provided for in an approved Annual Business Plan;

(p) save for the replacement of the Royal Bank of Canada as lead banker to Corporation, any borrowing of funds, any incurring of indebtedness, obligation or liability by the Corporation in excess of or any expenditure by

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the Corporation of any amount in excess of an amount stipulated in an approved Annual Business Plan;

(q) any transfer, purchase, redemption, split, conversion or exchange of Shares, other securities or the granting of any option or right (including convertible securities, warrants, or convertible obligations of any nature) for the purchase or issuance of any Shares or other securities of the Corporation or any agreement in the foregoing regards;

(r) any guarantee howsoever by the Corporation of the indebtedness or obligations of any Person;

(s) the payment of any management or administration fees in excess of an amount stipulated in an approved Annual Business Plan;

(t) the establishment of any executive committee or any other delegation of any power, right or duty of the Directors;

(u) the incorporation or acquisition of any Person;

(v) making or filing any material tax election;

(w) entering into any Material Agreement; and

(x) replacing the current CFO or any successor thereto.

Section 4.4 Annual Business Plan.

     The Corporation will prepare and present to MPA a draft annual business plan at least sixty (60) days before the start of each Financial Year. The draft annual business plan must contain a detailed monthly financial budget prepared in accordance with GAAP. The budget must (i) have a pro forma balance sheet, income statement and statement of changes in financial position of the Corporation for such Financial Year, (ii) include comparison statements from the previous Financial Year, (iii) be accompanied by a statement of the nature and amount of all capital expenditures to be incurred during such Financial Year, and (iv) be supported by the explanations, notes and information upon which the projections underlying the annual business plan have been based. Upon approval by MPA, the draft annual business plan shall become the “Annual Business Plan” for the applicable Financial Year.

Section 4.5 Financial Information.

     The Corporation shall maintain proper, complete and accurate books and accounts in accordance with GAAP. The Corporation shall provide on a timely basis the following to MPA:

(a) one copy of its audited consolidated financial statements within 65 days following the end of each Financial Year. The annual financial statements will be audited by the Auditors and will include the balance sheet and

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statements of income, retained earnings and changes in financial position, together with all supporting schedules, and the Auditors’ report;

(b) a monthly financial report within 30 days after the end of each month. The report will consist of the monthly and year-to-date financial statements on a consolidated basis in a form consistent with the Annual Business Plan and as normally prepared by management for its own use. The report will also contain a comparison of budget to actual and to the prior year for the same period;

(c) such other information and documents respecting the Corporation’s business and affairs MPA may reasonably request including a copy of any minutes of board meetings or other materials provided to directors at the same time as are circulated to the directors; and

(d) copies of all written reports and information provided to the Corporation’s lenders.

Section 4.6 Adjusted Net Income

     For the purposed of this agreement, “Adjusted Net Income” means the net income of the Corporation on a consolidated basis, calculated in accordance with Canadian GAAP and derived from the Corporation’s audited financial statements for the fiscal year ended March 31, 2011, adjusted to exclude: foreign exchange gains and losses, any impact of fluctuations in the Canadian Dollar/United States Dollar exchange rate above or below par, any extraordinary gains, any gains or losses from the disposition of assets outside of the ordinary course of business, and bona fide expenses incurred in connection with the Corporation’s restructuring process, including expenses relating to the refinancing of the indebtedness to RBC, the obtaining of new or replacement bank financing, the transactions contemplated hereby and the prior proposed transactions (to a maximum of $275,000) relating to the Corporation’s restructuring.

     The Corporation shall prepare a draft calculation of and adjustments to net income described above (“Draft ANI”) within two business days of the finalization of the audited financial statements in respect of the Corporation’s fiscal year ended March 31, 2011 and deliver the Draft ANI to MPA. If the Corporation and MPA agree on the calculation of the Draft ANI, then it shall be the Adjusted Net Income for the purposes of this Agreement. If the Corporation and MPA do not agree on the calculation of the Draft ANI within 10 days of its delivery to MPA, the parties shall mutually appoint a third party to calculate Adjusted Net Income (on the basis set forth above). If the parties cannot agree on a third party to so calculate Adjusted Net Income, then PricewaterhouseCoopers LLP shall be appointed to calculate Adjusted Net Income, at the expense of the Corporation. The determination of Adjusted Net Income by the third party, if appointed, or PricewaterhouseCoopers LLP, as the case may be, shall be final.

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Section 4.7 Books and Records.

     The Corporation will maintain accurate and complete Books and Records. MPA or its nominee or other authorized agent or representative is entitled to examine such Books and Records during normal business hours on reasonable notice and at its own expense.

ARTICLE 5
COVENANTS

Section 5.1 Transfer by Shareholders.

     In addition to any restrictions imposed by the Shareholders Agreement, and except as otherwise contemplated hereby, no Shareholder or Principal may Transfer any Shares until the transferee complies with Section 2.6.

Section 5.2 Encumbering of Shares.

     No Shareholder may grant a Lien on any of its Shares without the prior written consent of MPA, which consent may be unreasonably or arbitrarily withheld.

ARTICLE 6
OPTION

Section 6.1 Option.

     At any time during the Option Exercise Period, MPA has the right to purchase (the “MPA Option”) at its option, either (i) from the Corporation that number of Shares necessary for MPA to hold, in the aggregate, 80% of the Shares in the Corporation on a fully diluted basis, after taking into account the conversion referred to in Section 7.1(2), or (ii) from Opco and Introcan that number of shares necessary for MPA to hold, in the aggregate, 80% (subject to adjustment, as set forth in Section 6.2 below) of the shares of each of Opco and Introcan (in each case, the “Optioned Shares”). The option may be exercised by delivering a notice to the Corporation in the form attached as Schedule 6.1 (the “Subscription Notice”) at any time during the Option Exercise Period. The Corporation or Opco and Introcan, as the case may be, will issue to MPA and MPA will purchase from the Corporation or Opco and Introcan, as the case may be, the Optioned Shares on and subject to the terms of this Article 6 and Article 7.

Section 6.2 Purchase Price.

     The aggregate purchase price for the Optioned Shares (the “Option Purchase Price”) shall be CDN TEN MILLION DOLLARS (CDN$10,000,000). At the option of MPA, the Option Purchase Price (or a portion thereof) may be satisfied by MPA assigning to the Corporation the Debenture (or a portion thereof), in which case MPA will be credited for all amounts due under the portion of the Debenture being allocated to satisfy the Option Purchase Price, which amounts will be set off against the Option Purchase Price. The balance of the Option Purchase Price shall be paid in cash in the manner contemplated in Section 7.1(3)(b).

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Section 6.3 Closing.

     The completion of the transaction of purchase and sale contemplated by this Article 6 (the “Option Transaction”) will take place on the Closing Date in accordance with and subject to Article 7. “Closing Date” means (i) 10 days after the delivery of the Subscription Notice or, (ii) unless all filings, notices and Authorizations necessary to complete the Option Transaction have not been made, given or obtained by that date in which case the closing date will be extended for up to 45 days in order to make, give or obtain the filings, notices and Authorizations, or (iii) such earlier or later date as the parties to the Option Transaction agree in writing.

Section 6.4 Assignment of Rights.

     MPA is entitled to assign its rights under Section 6.1 to any of its Affiliates, subject to such Affiliate complying with Section 2.6.

(a) such Affiliate complying with Section 2.6; and

(b) MPA remaining a party to this Agreement and becoming a guarantor of its Assignee’s obligations under the Post Option Shareholders Agreement.

ARTICLE 7
PROCEDURE FOR ISSUANCE OF SHARES

Section 7.1 Closing Procedures.

(1) The completion of the Option Transaction will take place at the offices of Stikeman Elliott LLP, Suite 5300, Commerce Court West, Toronto, Ontario, at the Time of Closing on the Closing Date or at such other place, on such other date and at such other time as the parties to the Option Transaction may agree to in writing.

(2) Prior to the closing of the Option Transaction, any indebtedness owing by the Corporation and its Affiliates to any of the Shareholders, the Principals or their respective Affiliates, prior to July 6, 2010, shall be capitalized and converted to Shares. On or prior to such conversion each of GF, PF and JF (the “Insured Principals”) shall have the right to obtain from Holdings an assignment to him of the whole life policy of insurance on his life owned by the Corporation, particulars of which are set forth on Schedule 7.1(2) of this Agreement. Such assignment shall be made upon a written request therefore and in consideration of the reduction of the indebtedness owing at that time by the Corporation to the Insured Principal making such request or any corporation in respect of which he is a Principal by way of the set-off of the Cash Surrender Value of such policy as at the date of such assignment against such indebtedness, provided that in the event that such Cash Surrender Value is then more than the amount of such indebtedness, the amount of the shortfall shall be paid in full. Until the said policies are assigned to GF, PF and JF, respectively, the premiums shall be paid by the Corporation.

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(3) Subject to satisfaction or waiver by MPA of any conditions of closing, at the closing of the Option Transaction:

(a) The Corporation (or Opco and Introcan, as the case may be) will issue and deliver to MPA (i) actual possession of the share certificates representing the Optioned Shares and (ii) a certified copy of the resolution of the directors of the Corporation (or Opco and Introcan, as the case may be) approving the issuance of the Optioned Shares to MPA; and

(b) Subject to Section 6.2, MPA will pay or satisfy the Option Purchase Price by delivering to the Corporation (or Opco and Introcan, as the case may be) a certified cheque, bank draft or wire transfer of immediately available funds and, if applicable, the original executed version of the Debenture; and

(c) The Corporation, the Shareholders and MPA will deliver an executed copy of the Post Option Shareholders Agreement and evidence of any indebtedness in favour of MPA (including the Debenture, or a portion thereof, as applicable) that will survive the closing of the Option Transaction.

Section 7.2 Non-Completion by the Corporation or Shareholders.

(1) In addition to and without limiting any remedy that may be available at Law to MPA, if at the Time of Closing, the Corporation fails to complete the Option Transaction, MPA has the right, if not in default under this Addendum, to make payment of the Purchase Price for the Optioned Shares to the Corporation by depositing such amount to the credit of the Corporation in the main branch of the Corporation’s bankers in the City of Toronto. Such deposit constitutes valid and effective payment of the Purchase Price of the Optioned Shares to the Corporation. If the Purchase Price of the Optioned Shares has been so paid, then from the date of deposit, the Option Transaction is deemed to have been completed and all right, title, benefit and interest, both at law and in equity in and to the Optioned Shares is deemed to have been issued to and become vested in MPA.

(2) The Corporation is entitled to receive the amount deposited with the Corporation’s bankers under Section 7.2(1) on delivery to MPA of the documents referred to in Section 7.1(3) and in compliance with all other provisions of this Addendum.

Section 7.3 Irrevocable Power of Attorney.

(1) The Corporation and each Shareholder irrevocably constitutes and appoints MPA as the true and lawful attorney of the Corporation and Shareholder. As the attorney of the Corporation and Shareholder, MPA has the power to act for and in the name of the Corporation and Shareholder, with full power of substitution, to execute and deliver such documents, instruments or agreements, (including all transfers, share certificates, resignations and releases) and do all acts and things necessary to:

(a) complete any Option Transaction; and

(b) execute and deliver the Post Option Shareholders Agreement.

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(2) This power of attorney is irrevocable, is coupled with an interest, has been given for valuable consideration (the receipt and adequacy of which is acknowledged) and survives, and does not terminate upon, the legal or mental incapacity, death, bankruptcy, dissolution, winding-up or insolvency of the Corporation and Shareholder. This power of attorney extends to and is binding upon the Corporation and Shareholder’s successors and permitted assigns. This power of attorney supersedes any prior delegation of authority that conflicts with it.

ARTICLE 8
CALL OPTION

Section 8.1 Call of MPA

     At any time following the exercise of the MPA Option but prior to August 24, 2013, MPA has the right (the “Call Option”) to require all other Shareholders and any Permitted Transferee thereof holding Shares (collectively, the “Call Seller”) to sell all but not less than all of the Shares owned by the Call Seller (the “Called Shares”). The call right may be exercised by delivering a notice to the Corporation in the form attached as Schedule 8.1 (the “Call Notice”) at any time. The Call Seller will sell to MPA and MPA will purchase from the Call Seller the Called Shares on and subject to the terms of this Article 8.

Section 8.2 Calculation of Purchase Price.

(1) The purchase price for the Called Shares (the “Call Purchase Price”) shall be, in aggregate, 360,000 shares of MPA Common Stock (the “Base Purchase Price”) plus an additional 40,000 shares of MPA Common Stock (the “Contingent Purchase Price”), which Contingent Purchase Price will only be payable to the Call Sellers if Adjusted Net Income is CDN$4 million or greater.

(2) The number of MPA Shares issuable hereunder shall be adjusted to take into account any share reclassification, share reorganization, share consolidation, stock split, exchange or other similar transaction (each a “Transaction”) to give effect to such Transaction such that the Call Seller shall be entitled to receive and shall accept, in lieu of the number of MPA Shares to which the Call Seller was theretofore entitled on the Closing Date, the kind and number or amount of shares or other securities which the Call Seller would have been entitled to receive as a result of such Transaction, if on the effective date thereof, the Call Seller had been the holder of the number of MPA Shares to which the Call Seller was theretofore entitled on the Closing Date.

Section 8.3 Closing.

     The completion of any transaction of purchase and sale contemplated by this Article 8 (a “Sale Transaction”) will take place on the Closing Date. “Closing Date” means (i) 45 days after the delivery of the Call Notice, however, in the event the Adjusted Net Income has not been finally determined at such time, the Closing Date in respect of the Contingent Purchase Price shall be 45 days after the Adjusted Net Income is finally determined, (ii) unless all filings, notices and Authorizations necessary to complete the Sale

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Transaction have not been made, given or obtained by that date in which case the closing date will be extended for up to but not later than 45 days in order to make, give or obtain the filings, notices and Authorizations, or (iii) such earlier or later date as the parties to the Sale Transaction agree in writing.

Section 8.4 Hold Period.

     On the Closing Date(s), the Call Seller shall: (i) agree not to directly or indirectly offer, sell, contract to sell, make any short sale, pledge or otherwise dispose of, or enter into any hedging transaction that is likely to result in a transfer of, any of the MPA Shares, options to acquire MPA Shares or securities exchangeable for or convertible into MPA Shares which she, he or it may beneficially own (as defined in Rule 13d-3-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), grant or sell any option to purchase or enter into any agreement to dispose of any of the MPA Shares or publicly disclose the intention to take any such action for a period of 12 months following the date of issuance thereof and (ii) enter into such agreement or agreements as MPA shall require to ensure that the offer and issuance of the MPA Shares will comply with all applicable Securities Laws (as defined below) and be exempt from the requirements of Section 5 of the Securities Act of 1933, as amended, and any other comparable requirements of any other applicable Securities Laws. “Securities Laws” means: (i) all federal securities laws of the United States of America, all rules and regulations promulgated in connection with such laws and all governmental orders and decrees issued by any regulatory authority granted to authority to issue orders or decrees pursuant to such laws (collectively, “US Federal Securities Laws”); (ii) the rules and regulations of any self-regulatory organization authorized pursuant to the US Federal Securities Laws; (iii) the listing requirements of any exchange on which the MPA Shares are listed, including, without limitation, NASDAQ; (iv) all securities laws of any state of the United States of America, all rules and regulations promulgated in connection with such laws and all governmental orders and decrees issued by any regulatory authority granted the authority to issue orders or decrees pursuant to such laws; (v) all federal securities laws of Canada, all rules and regulations promulgated in connection with such laws and all governmental orders and decrees issued by any regulatory authority granted the authority to issue orders or decrees pursuant to such laws; and (vi) all securities laws of any province of Canada, all rules and regulations promulgated in connection with such laws and all governmental orders and decrees issued by any regulatory authority granted the authority to issue orders or decrees pursuant to such laws.

Section 8.5 Certificates for the MPA Shares.

     In addition to any legends required by applicable securities Laws, all certificates representing the MPA Shares must bear the following legend:

“The shares represented by this certificate have not been registered with the United States Securities and Exchange Commission or the securities commission of any state and have been issued in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws and, accordingly, may not be offered, sold or otherwise transferred except pursuant to an effective registration

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statement under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws as evidenced by a legal opinion of counsel to such effect, the substance of which shall be reasonably acceptable to the Corporation.

The shares represented by this certificate are subject to certain restrictions contained in that certain Amended and Restated Addendum to a [Unanimous Shareholders Agreement dated l between FAPL Holdings Inc. and its shareholders,] as amended and supplemented by an addendum dated l, as may be amended from time to time, and such shares may not be pledged, sold or otherwise transferred except in accordance with the terms of that agreement. Any transfer made in contravention of such restrictions is null and void. A copy of the agreement and the addendum are on file at the registered office of the Corporation and available for inspection on request and without charge.”

ARTICLE 9
SHAREHOLDERS PUT OPTION

Section 9.1 Put by Shareholders.

     Provided that the MPA Option has been exercised and the Call Option has expired unexercised, at any time within 30 days following August 24, 2013 (the “Put Exercise Period”), the Shareholders, collectively, have the right (the “Put Option”) to require MPA to acquire all but not less than all of the Shares owned by the Shareholders (the “Put Shares”). The put right may be exercised by delivering a notice to MPA (the “Put Notice”) at any time during the Put Exercise Period. The purchase price for the Put Shares (the “Put Purchase Price”) shall be equal to and be calculated on the same basis as the Call Purchase Price. The Shareholders (other than MPA) will sell to MPA and MPA will purchase from the Shareholders (other than MPA) the Put Shares on and subject to the terms of this Article 9.

Section 9.2 Closing.

     The completion of any transaction of purchase and sale contemplated by this Article 9 (a “Put Transaction”) will take place on the Put Closing Date. The Put Closing Date means (i) 90 days after the delivery of the Put Notice, (ii) unless all filings, notices and Authorizations necessary to complete the Put Transaction have not been made, given or obtained by that date in which case the closing date will be extended for up to 45 days in order to make, give or obtain the filings, notices and Authorizations, or (iii) such earlier or later date as the parties to the Put Transaction agree in writing.

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Section 9.3 Hold Period.

     On the Closing Date(s), the Shareholder shall: (i) agree not to directly or indirectly offer, sell, contract to sell, make any short sale, pledge or otherwise dispose of, or enter into any hedging transaction that is likely to result in a transfer of, any of the MPA Shares, options to acquire MPA Shares or securities exchangeable for or convertible into MPA Shares which she, he or it may beneficially own under the Exchange Act, grant or sell any option to purchase or enter into any agreement to dispose of any of the MPA Shares or publicly disclose the intention to take any such action for a period of 12 months following the date of issuance thereof and (ii) enter into such agreement or agreements as MPA shall require to ensure that the offer and issuance of the MPA Shares will comply with all applicable Securities Laws (as defined in Section 8.4) and be exempt from the requirements of Section 5 of the Securities Act of 1933, as amended, and any other comparable requirements of any other applicable Securities Laws.

ARTICLE 10
REPRESENTATIONS AND WARRANTIES

Section 10.1 Representations and Warranties of the Shareholders and Principals.

     Each Shareholder and its Principals, if any, represent and warrant as follows and acknowledge and confirm that MPA is relying on such representations and warranties in entering into this Addendum:

(a) Qualification. If the Shareholder or Principal is an individual, he or she is of legal age and is legally competent to enter into and perform his or her obligations under this Addendum. If the Shareholder or Principal is a corporation, it is a corporation incorporated and existing under the laws of its jurisdiction of incorporation and has the corporate power to enter into and perform its obligations under this Addendum.

(b) Authorization. If the Shareholder or Principal is not an individual, the execution and delivery of and performance by it of this Addendum and the consummation of the transactions contemplated by this Addendum have been duly authorized by all necessary corporate or other action on the part of the Shareholder or Principal.

(c) Validity of Addendum. The execution and delivery of and performance by the Shareholder and Principal of this Addendum:

(i) if it is not an individual, will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or violation of or a conflict with, or allow any other Person to exercise any rights under, any of the terms or provisions of its constating documents or by-laws;

(ii) will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or

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violation of or a conflict with, or allow any other Person to exercise any rights under any Contracts or instruments to which the Shareholder or Principal is a party or pursuant to which any of the Shareholder’s or Principal’s assets may be affected;

(iii) will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Shareholder or Principal or necessary to the ownership of Shares by the Shareholder; and

(iv) will not result in the violation of any Law.

(d) Authorizations and Consents. There is no requirement on the part of the Shareholder or Principal to make any filing with or give any notice to any Governmental Entity, or obtain any Authorization, in connection with the completion of the transactions contemplated by this Addendum, except for filings and notifications required by applicable securities Laws. There is no requirement on the part of the Shareholder or Principal to obtain any consent, approval or waiver of any Person under any Contracts or instruments to which the Shareholder or Principal is a party or pursuant to which any of the Shareholder’s or Principal’s assets may be affected in connection with the completion of the transactions contemplated by this Addendum.

(e) Execution and Binding Obligation. This Addendum has been duly executed and delivered by the Shareholder and Principal and constitutes a legal, valid and binding agreement of each of the Shareholder and Principal enforceable against it in accordance with its terms subject only to any limitation under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other Laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

(f) Title to Shares. The Shares set out opposite the Shareholder’s name in Schedule 10.1(f) are owned by the Shareholder as the registered and beneficial owner with good title, free and clear of all Liens (except in the case of MPA), other than those restrictions on transfer, if any, contained in the articles of the Corporation.

(g) Authorized Capital. If the Shareholder is a corporation, (i) the Principals of the Shareholder are the Persons identified as such in Schedule 10.1(g); (ii) its authorized capital is described in Schedule 10.1(g) of which at this date, the securities identified in Schedule 10.1(g) (and no more) have been duly issued and are outstanding as fully paid and non assessable, (iii) all of the issued and outstanding securities of the Shareholder are owned beneficially and of record by those Persons identified in Schedule 10.1(g), (iv) the only asset of the Shareholder are the Shares set out opposite its name in Schedule 10.1(f), and (v) no Person has any written or oral agreement, option or

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warrant or any right or privilege (whether by Law, pre-emptive or contractual) capable of becoming such for (A) the purchase or acquisition from the Principal of any of the issued and outstanding securities of the Shareholder, or (B) the purchase, subscription, allotment or issuance of any of the unissued securities of the Shareholder.

Section 10.2 Representations and Warranties of the Corporation.

     The Corporation represents and warrants as follows and acknowledges and confirms that MPA is relying on such representations and warranties in entering into this Addendum:

(a) Qualification. It is a corporation incorporated and existing under the laws of its jurisdiction of incorporation and has the corporate power to enter into and perform its obligations under this Addendum.

(b) Authorization. The execution and delivery of and performance by it of this Addendum and the consummation of the transactions contemplated by this Addendum have been duly authorized by all necessary corporate or other action on the part of the Corporation.

(c) Validity of Addendum. The execution and delivery of and performance by the Corporation of this Addendum:

(i) will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or violation of or a conflict with, or allow any other Person to exercise any rights under, any of the terms or provisions of its constating documents or by-laws;

(ii) will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or violation of or a conflict with, or allow any other Person to exercise any rights under any Contracts or instruments to which the Corporation is a party or pursuant to which any of the Corporation’s assets may be affected;

(iii) will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Corporation; and

(iv) will not result in the violation of any Law.

(d) Authorizations and Consents. There is no requirement on the part of the Corporation to make any filing with or give any notice to any Governmental Entity, or obtain any Authorization, in connection with the completion of the transactions contemplated by this Addendum, except for filings and notifications required by applicable securities Laws. There is no requirement on the part of the Corporation to obtain any consent, approval or waiver of any Person under any Contracts or instruments to which the Corporation is a

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party or pursuant to which any of the Corporation’s assets may be affected in connection with the completion of the transactions contemplated by this Addendum.

(e) Execution and Binding Obligation. This Addendum has been duly executed and delivered by the Corporation and constitutes a legal, valid and binding agreement of the Corporation enforceable against it in accordance with its terms subject only to any limitation under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other Laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

(f) Authorized Capital. The Corporation’s authorized capital is described in Schedule 10.1(f) of which at this date, the securities identified in Schedule 10.1(f) (and no more) have been duly issued and are outstanding as fully paid and non assessable, and (ii) no Person has any written or oral agreement, option or warrant or any right or privilege (whether by Law, pre-emptive or contractual) capable of becoming such for (A) the purchase, subscription, allotment or issuance of any of the unissued securities of the Corporation.

(g) Optioned Shares. Upon completion of the Option Transaction, MPA will have good and valid title to the Optioned Shares, free and clear of all Liens other than (i) those restrictions on transfer, if any, contained in the articles of the Corporation and the Post Option Shareholders Agreement, and (ii) Liens granted by MPA.

Section 10.3 Representations and Warranties of MPA.

     MPA represents and warrants as follows and acknowledges and confirms that the Shareholders, Principals and the Corporation are relying on such representations and warranties in entering into this Addendum:

(a) Qualification. It is a corporation, it is a corporation incorporated and existing under the laws of its jurisdiction of incorporation and has the corporate power to enter into and perform its obligations under this Addendum.

(b) Authorization. The execution and delivery of and performance by it of this Addendum and the consummation of the transactions contemplated by this Addendum have been duly authorized by all necessary corporate or other action on the part of MPA.

(c) Validity of Addendum. The execution and delivery of and performance by MPA of this Addendum:

(i) will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or violation of or a conflict with, or allow any other Person to exercise

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any rights under, any of the terms or provisions of its constating documents or by-laws;

(ii) will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or violation of or a conflict with, or allow any other Person to exercise any rights under any Contracts or instruments to which MPA is a party or pursuant to which any of MPA’s assets may be affected; and

(iii) will not result in the violation of any Law.

(d) MPA Common Stock. The MPA Common Stock is the class of securities of MPA listed on the NASDAQ Global Market as of the date of this Addendum.

(e) Execution and Binding Obligation. This Addendum has been duly executed and delivered by MPA and constitutes a legal, valid and binding agreement of MPA enforceable against it in accordance with its terms subject only to any limitation under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other Laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

Section 10.4 Survival.

     The representations, warranties and covenants of the Parties contained in this Article survive the execution and delivery of this Addendum and continue in full force and effect with respect to each Party until it ceases to be bound by the provisions of this Addendum.

ARTICLE 11
MISCELLANEOUS

Section 11.1 Notices.

     Any notice, direction or other communication given pursuant to this Addendum (each a “Notice”) must be in writing, sent by personal delivery, courier or facsimile (but not by email) and addressed:

(a) to Motorcar Parts of America, Inc. at:

2929 California Street
Torrance CA 90503
United States of America

Attention:      Michael M. Umansky
Telephone:       (310) 972-4015
Facsimile:      (310) 943-1630

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with a copy (that does not constitute notice) to:

Stikeman Elliott LLP
Barristers & Solicitors
5300 Commerce Court West,
199 Bay Street,
Toronto, ON
M5L 1B9
Canada

Attention:      David Weinberger
Telephone:      (416) 869-5515
Facsimile:      (416) 947-0866

(b) to FEI at:

1100 Caledonia Road
Toronto, ON
M6A 2W5

Attention:      Gordon Fenwick
Telephone:      (416) 787-1723
Facsimile:      (416) 787-7621

(c) to Gordon Fenwick or Escal Holdings Inc. at:

475 Spadina Road
Toronto, ON
M5P 2W6

(d) to Paul Fenwick or Fencity Holdings Inc. at:

125 Bedford Road
Toronto, ON
M5R 2K6

(e) to Joel Fenwick or Jofen Holdings Inc. at:

28 Ridge Hill Drive
Toronto, ON
M6G 3A3

(f) to the Corporation or Opco or Introcan at:

1100 Caledonia Road
Toronto, ON
M6A 2W5

Attention:      Jack Shuster, President
Telephone:      (416) 787-1723
Facsimile:      (416) 784-1197

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with a copy (that does not constitute notice) to:

Wisebrod/Zeliger Associates
Barristers & Solicitors, Notaries
245 Fairview Mall Drive
Suite 510
Toronto, ON
M2J 4T1

Attention:      Avi Wisebrod
Telephone:      (416) 496-2600 x 201
Facsimile:      (416) 496-1708

(g) to Jack Shuster at:

48 King Cross Avenue
Richmond Hill, ON
L4B 2S9

A Notice is deemed to be given and received (i) if sent by personal delivery or same day courier, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day, (ii) if sent by overnight courier, on the next Business Day, or (iii) if sent by facsimile, on the Business Day following the date of confirmation of transmission by the originating facsimile. A Party may change its address for service from time to time by providing a Notice in accordance with the foregoing. Any subsequent Notice must be sent to the Party at its changed address. Any element of a Party’s address that is not specifically changed in a Notice will be assumed not to be changed.

Section 11.2 Time of the Essence.

     Time is of the essence in this Addendum.

Section 11.3 Announcements.

     No press release, public statement or announcement or other public disclosure with respect to this Addendum or the transactions contemplated in this Addendum may be made except with the prior written consent and joint approval of the Parties, or if required by Law or a Governmental Entity.

Section 11.4 Third Party Beneficiaries.

     The Parties intend that this Addendum will not benefit or create any right or cause of action in favour of any Person, other than the Parties. No Person, other than the Parties, is entitled to rely on the provisions of this Addendum in any action, suit, proceeding, hearing or other forum. The Parties reserve their right to vary or rescind the rights at any time and in any way whatsoever, if any, granted by or under this Addendum to any Person who is not a Party, without notice to or consent of that Person.

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Section 11.5 Joint and Several Liability.

     Each Principal, other than each Non-Active Principal, is jointly and severally liable with the Shareholder of which it is the Principal as a principal and not as a surety, with respect to all of the representations, warranties, covenants, indemnities and agreements of such Shareholder under this Addendum.

Section 11.6 No Agency or Partnership.

     Nothing contained in this Addendum makes or constitutes any Party, or any of its directors, officers or employees, the trustee, fiduciary, representative, agent, principal, partner, joint venturer, employer, employee of any other Party. It is understood that no Party has the capacity to make commitments of any kind or incur obligations or liabilities binding upon any other Party.

Section 11.7 Expenses.

     Other than MPA, each Party will pay for its own costs and expenses incurred in connection with the Debenture, this Addendum and the transactions contemplated by it. The Corporation shall be responsible for the payment of MPA’s reasonable costs and expenses incurred in connection with the Debenture, this Addendum and the transactions contemplated by them. The fees and expenses referred to in this Section are those which are incurred in connection with the negotiation, preparation, execution and performance of this Addendum and the Debenture, and the transactions contemplated by this Addendum and the Debenture, including the fees and expenses of legal counsel, investment advisers and accountants.

     Any expense reimbursement obligations shall be paid by the Corporation to or to the order of MPA forthwith, and in any event within two business days following receipt of written notice from MPA setting out the amount due as well as supporting documentation in form satisfactory to the Corporation, acting reasonably.

Section 11.8 Amendments.

     This Addendum may be amended, supplemented or otherwise modified by written agreement signed by (i) Shareholders then holding 90% or more of the Shares; and (ii) MPA.

Section 11.9 Waiver.

     No waiver of any of the provisions of this Addendum will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party’s failure or delay in exercising any right under this Addendum will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

Section 11.10 Entire Agreement.

     This Addendum and the Shareholders Agreement constitutes the entire agreement between the Parties with respect to the matters contemplated therein and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties related to such matters.

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Section 11.11 Successors and Assigns.

(1) This Addendum becomes effective only when executed by all of the Parties. After that time, it is binding on and endures to the benefit of the Parties and their respective heirs, administrators, executors, legal personal representatives, successors and permitted assigns.

(2) Except as otherwise provided in this Addendum, neither this Addendum nor any of the rights or obligations under this Addendum are assignable or transferable by any Party without the prior written consent of the other Parties, which may be unreasonably withheld.

Section 11.12 Severability.

     If any provision of this Addendum is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from this Addendum and the remaining provisions will remain in full force and effect.

Section 11.13 Governing Law.

     This Addendum is governed by, and is to be interpreted and enforced in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Section 11.14 Counterparts.

     This Addendum may be executed in any number of counterparts (including counterparts by facsimile) and all such counterparts taken together will be deemed to constitute one and the same instrument. The Party sending the facsimile transmission will also deliver the original signed counterpart to the other Party, however, failure to deliver the original signed counterpart shall not invalidate this Addendum.

Section 11.15 Corporate Opportunities

     The Corporation and the Shareholders acknowledge that MPA will likely have, from time to time, information acquired independently from its relationship with the Corporation and the Shareholders and that may be of interest to the Corporation (the “Information”) regarding a wide variety of matters including, by way of example, (a) MPA’s investments, plans and services, and plans and strategies relating thereto, (b) current and future investments MPA has made, may make, may consider or may become aware of with respect to other companies and other investments, products and services, including, without limitation, products and services that may be competitive with the Corporation’s and (c) developments with respect to the auto parts industry, products and services, and plans and strategies relating thereto, of other companies, including, without limitation, companies that may be competitive with the Corporation. The Corporation and the Shareholders recognize that a portion of such Information may be of interest to the Corporation. Such Information may or may not be known by MPA. The Corporation and the Shareholders, as a material part of the consideration for this Agreement, agree that MPA shall have no duty to disclose any Information to the Corporation or permit the Corporation to participate in any projects or investments based on any Information, or to otherwise take advantage of any opportunity that may be of interest to the Corporation if it were aware of such Information,

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and hereby waives, to the extent permitted by law, any claim based on the corporate opportunity doctrine or otherwise that could limit MPA’s ability to pursue opportunities based on such Information or that would require any such party to disclose any such Information to the Corporation or offer any opportunity relating thereto to the Corporation.

Section 11.16 Non-Competition.

     During the term of this agreement and for a period of two years following, the later of the date upon which the employment of a Shareholder or Principal by the Corporation is terminated for any reason or such Shareholder or Principal ceases to be a director of the Corporation, such Shareholder or Principal shall not, on his own behalf or on behalf of or in connection with any Person, directly or indirectly, in any capacity whatsoever, carry on, be engaged in, have any financial or other interest in or be otherwise commercially involved in any endeavour, activity or business in all or any part of the Territory which is substantially the same as or is in competition, in whole or in part, with the Business.

Section 11.17 Non-Solicitation of Customers.

     During the term of this agreement and for a period of two years following the later of the date upon which the employment of a Shareholder or Principal by the Corporation is terminated for any reason or such Shareholder or Principal ceases to be a director of the Corporation, such Shareholder or Principal shall not, on his own behalf or on behalf of or in connection with any other Person, directly or indirectly, in any capacity whatsoever:

(i) canvass or solicit the business of (or procure or assist the canvassing or soliciting of the business of) any customer or prospective customer of the Corporation or its Affiliates;

(ii) accept (or procure or assist the acceptance of) any business from any customer or prospective customer of the Corporation or its Affiliates; or

(iii) supply (or procure or assist the supply of) any goods or services to any customer or prospective customer of the Corporation or its Affiliates;

provided that the “canvassing”, “soliciting”, “accepting business” and “supplying” prohibited above is limited in each case to undertaking such activity in relation to services or products which are substantially the same as or in competition, in whole or in part, services or products manufactured, remanufactured or distributed in connection with the Business in the relevant period.

Section 11.18 Non-Solicitation of Employees.

     During the term of this agreement and for a period of two years following the later of the date upon which the employment of a Shareholder or Principal by the Corporation is terminated for any reason or such Shareholder or Principal ceases to be a director of the Corporation, such Principal shall not, on their own behalf or on behalf of or in connection with any other Person, directly or indirectly, in any capacity whatsoever:

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(i) employ, offer employment to or solicit the employment or engagement of or otherwise entice away from the employment of the Corporation or its Affiliates any individual who is employed by the Corporation or its Affiliates, whether or not such individual would commit any breach of his contract or terms of employment by leaving the employ of the Corporation or its Affiliates; or

(ii) procure or assist any Person to employ, offer employment or solicit the employment or engagement of or otherwise entice away from the employment of the Corporation or its Affiliates any such individual who is employed by the Corporation or its Affiliates, whether or not such individual would commit any breach of his contract or terms of employment by leaving the employ of the Corporation or its Affiliates.

Section 11.19 English Language.

     The Parties have agreed that this Addendum as well as any document or instrument relating to it be drawn up in English only but without prejudice to any such document or instrument which may from time to time be drawn up in French only or in both French and English. Les parties aux présentes ont convenu que la présente Convention ainsi que tous autres actes ou documents s’y rattachant soient rédigés en anglais seulement mais sans préjudice à tous tels actes ou documents qui pourraient à l’occasion être rédigés en français seulement ou à la fois en anglais et en français.

     IN WITNESS WHEREOF the Parties have executed this Addendum.

FENWICK ENTERPRISES INC.
By:
	Name:	Gordon Fenwick
	Title:	President
MOTORCAR PARTS OF AMERICA, INC.
By:
	Name:
	Title:

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Witness	Gordon Fenwick
Witness	Paul Fenwick
Witness	Joel Fenwick
Witness	Jack Shuster

FAPL HOLDINGS INC.
By:
	Name:	Gordon Fenwick
	Title:
FENWICK AUTOMOTIVE PRODUCTS LIMITED
By:
	Name:	Jack Shuster
	Title:	President
INTROCAN INC.
By:
	Name:	Jack Shuster
	Title:	President

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ESCAL HOLDINGS INC.
By:
	Name:	Gordon Fenwick
	Title:	President
FENCITY HOLDINGS INC.
By:
	Name:	Paul Fenwick
	Title:	President
JOFEN HOLDINGS INC.
By:
	Name:	Joel Fenwick
	Title:	President

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EX-99.1

Exhibit 99.1

NEWS RELEASE

CONTACT:  Gary S. Maier
Maier & Company, Inc.
(310) 442-9852

MOTORCAR PARTS OF AMERICA INCREASES STRATEGIC INVESTMENT
IN TORONTO-BASED FENWICK AUTOMOTIVE

     LOS ANGELES, CA — December 21, 2010 — Motorcar Parts of America, Inc. (NasdaqGM:MPAA) today announced it has increased the company’s strategic investment in Fenwick Automotive Products Limited to an aggregate amount of approximately US$5.0 million.

     In August 2010 Motorcar Parts of America made a US$1.9 million (CDN$2.0 million) strategic investment in Fenwick Automotive Products Limited structured as a secured loan with an option to acquire substantial ownership of the company for an aggregate CDNS10.0 million. Under revised terms of the agreement, Motorcar Parts of America has the right to acquire all the outstanding shares of Fenwick for an aggregate purchase price of 360,000 common shares plus an additional 40,000 shares of common stock if Fenwick’s adjusted net income for the fiscal year ending March 31, 2011 is equal to or greater than CDN$4.0 million.

     “This additional investment and revised terms move both companies closer to the potential exercise of Motorcar Parts’option to acquire Fenwick,” said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America, Inc.

     “We remain excited about the Fenwick opportunity. Although there can be no assurances, we anticipate that the acquisition will be completed in early Fiscal 2012,” Joffe added.

About Fenwick Automotive Products Limited

     Based in Toronto, Canada, Fenwick Automotive Products Limited is a manufacturer and distributor of new and remanufactured aftermarket auto parts — including steering components (pumps, gears and racks), brake calipers, master cylinders, hub assembly and bearings, clutches and clutch hydraulics, constant velocity drive shafts, water pumps, control arms and loaded struts for the full range of passenger and truck vehicles in use in the markets it serves. Its products are sold through all major distribution channels of the automotive aftermarket throughout the United States, Canada and Mexico. The company’s facilities are located in Pennsylvania, New Hampshire, Toronto and Mexico. Additional information is available at www.fencoparts.com

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Motorcar Parts of America, Inc.
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About Motorcar Parts of America

     Motorcar Parts of America, Inc. is a remanufacturer of alternators and starters for imported and domestic passenger vehicles, light trucks and heavy duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada. The company’s facilities are located in California, Tennessee, Mexico, Malaysia and Singapore. Additional information is available at www.motorcarparts.com

     The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company’s current expectations and beliefs concerning future developments and their potential effects on the company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors. Reference is also made to the Risk Factors set forth in the company’s Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) in June 2010 and in its Form 10-Q filed with the SEC thereafter for additional risks and uncertainties facing the company. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

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