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COLLATERAL ASSIGNMENTSPLIT DOLLAR INSURANCE AGREEMENT
         PURPOSE




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POLICY
   POLICY INTERESTS
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INCIDENTS OF OWNERSHIP
     PAYMENT OF PREMIUMS
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(a)
    
    The Participant shall pay a portion of each premium equal to
the current term rate for the insureds age multiplied by the excess of
the current death benefit over the Companys Policy Interest. The
Company shall pay to the Participant as a Bonus Payment an amount
equal to Participants portion of the premium due from the Participant.
Such Bonus Payment shall be in addition to any other bonus or
incentive payment payable to the Participant. Such Bonus Payment
shall be subject to any tax or other withholding required by law or
authorized by the Participant. For purposes of this subparagraph, the
current term rate shall mean the lesser of the insurers annual term
insurance rate or the rates specified in Revenue Rulings 64-328, C.B.
1964-2, 11 and 66-110, C.B. 1966-1, 12.(b)
    
    The Company shall pay a portion of the premium in excess of the
portion of the premium paid by the Participant but in no event less
than that amount necessary to keep the Policy in force as determined by
the Insurer or greater than an amount which, when combined with the
Participants portion of the premium, will not exceed the total premium
allowable under the Policy pursuant to subparagraph (c) of this
Article.(c)
    
    Subparagraphs (a) and (b) combined of Paragraph 5.2, together
with Article VI, shall not result in a total premium equal to an amount
that would make the Policy a Modified Endowment Contract pursuant to
Section 7702A of the Internal Revenue Code of 1986, as amended, or that
would cause this Policy to fail the definition of life insurance
pursuant to Section 7702 of the Internal Revenue Code of 1986, as
amended.
  ADDITIONAL POLICY BENEFITS AND RIDERS
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NO ASSIGNMENT
 ab initio
  AMENDMENT
   MERGER AND REORGANIZATION OF COMPANY
   TERMINATION
  (a)
    
    In the event of termination of this Agreement as provided in
clauses (i), (ii), or (iii) of this Paragraph 10.1, above, the
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Participant shall pay the Company within 60 days of the date of
termination an amount equal to the Companys Policy Interest. If
the Participant pays the Company as provided in the immediately
preceding sentence, the Company shall take all steps necessary to
release the Assignment such that the Companys Policy Interest comes
under the full control of the Participant, and the Company shall
thereafter no longer have any rights, interest, and/or obligations,
whatsoever, under the Policy.
 (b)
    
    If the Participant fails to pay the Company within 60 days of
the date of termination of this Agreement pursuant to the provisions of
subparagraph 10.1(a), above, the Participant shall have no further
rights or ownership interests in the Policy, but the Participant shall
execute any and all instruments that may be required to vest ownership
of said Policy in the Company; and thereupon the Company shall refund
to the Participant that part of any payment made by the Participant
under Article V for the premium payment period in which termination
occurred representing the unexpired portion of that period.(c)
    
    In the event of termination of this Agreement as provided in
clause (iv) of this Paragraph 10.1 above, or in the event this
Agreement has terminated as provided in clauses (i), (ii), or (iii) of
this Paragraph 10.1 above and 60 days from the date of termination have
not elapsed and the Participant has not paid the Company pursuant to
the provisions of subparagraph 10.1(a) above but within such 60 day
period Participant dies, the Company shall be entitled to receive an
amount of the death benefit of the Policy equal to the Companys Policy
Interest, and the remainder (if any) of the death benefit of the Policy
(the Participants Policy Interest) shall be paid to the beneficiary
thereof in accordance with the Policy and the Assignment.(d)
    
    Any payments under the Policy to the Company in connection with
the rights or ownership interests assigned to the Company in the
Assignment referred to in Paragraph 3.4 herein shall first be made from
the Cash Value. The Participant shall have no rights or ownership
interests in the Cash Value except to the extent the Cash Value thereof
exceeds the total Companys Policy Interest.
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ERISA PROVISIONS
  (a)
    
    The named fiduciary and Plan Administrator: The Argo-Tech
Corporation Benefits Committee.(b)
    
    The funding policy is that all premiums on the Policy be
remitted to the Insurer when due.(c)
    
    Direct payment by the Insurer is the basis of payment of
benefits, with those benefits in turn being based on the payment of
premiums as provided herein.
  (a)
    
    If for any reason a claim for benefits under the Plan is denied
by the Company, the Plan Administrator shall deliver to the claimant a
written explanation setting forth the specific reasons for the denial,
pertinent references to the Plan section on which the denial is based,
such other data as may be pertinent and information on the procedures
to be followed by the claimant in obtaining a review of his claim, all
written in a manner calculated to be understood by the claimant. For
this purpose:
 (i)
    
    the claimants claim shall be deemed filed when
presented orally or in writing to the Plan Administrator; and(ii)
    
    the Plan Administrators explanation shall be in
writing delivered to the claimant within 90 days of the date the
claim is filed.
 (b)
    
    The claimant shall have 60 days following his receipt of the
denial of the claim to file with the Plan Administrator a written
request for review of the denial. For such review, the claimant or his
representative may submit pertinent documents and written issues and
comments.(c)
    
    The Plan Administrator shall decide the issue on review and
furnish the claimant with a copy within 60 days following his receipt
of the claimants request for review of his claims. The decision on
review shall be in writing and shall include specific
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reasons for the decision written in a manner calculated to be
understood by the claimant, as well as specific references to the
pertinent plan provisions on which the decision is based. If a copy
of the decision is not furnished to the claimant within such 60
days, the claim shall be deemed denied on review.
  (a)
    
    The plan is a single employer plan sponsored by Argo-Tech
Corporation.(b)
    
    The Companys employer identification number (EIN) assigned
by the Internal Revenue Service is 06 1100916 and the Plan number
assigned by the Company is 010.(c)
    
    The Plan Administrator is The Argo-Tech Benefits Committee, c/o
Argo-Tech Corporation, 23555 Euclid Avenue, Cleveland, Ohio 44117
(216/692-5259). The Plan Administrator shall also be the agent for the
service of process at the above address.(d)
    
    The end of the Plan year for purposes of keeping Plan records
is December 31st of each year.(e)
    
    In order to be eligible to participate in the plan, an employee
must be selected by the Company.
  As a participant in this plan you are entitled to certain rights and protection under ERISA.
ERISA provides that all plan participants shall be entitled to:
 (a)
    
    Examine, without charge, at the Plan Administrators office all
plan documents, including insurance contracts.(b)
    
    Obtain copies of all plan documents and other plan information
upon written request to the Plan Administrator. The Plan Administrator
may make a reasonable charge for the copies.
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(c)
    
    In addition to creating rights for plan participants, ERISA
imposes duties upon the people who are responsible for the operation of
this employee benefit plan. The people who operate your plan are
called fiduciaries of the plan, and have a duty to do so prudently
and in the interest of you and other plan participants and
beneficiaries. No one, including your employer or any other person,
may fire you or otherwise discriminate against you in any way to
prevent you from obtaining your benefits or exercising your rights
under ERISA.(d)
    
    You are entitled to receive a written explanation for the
denial of your claims and you have the right to have the plan review
and reconsider your claim. If you do not receive the material
requested within 30 days of the request, you may file suit in Federal
Court. The court may require the Plan Administrator to pay you up to
$100 a day until you receive the requested materials.(e)
    
    If you are improperly denied a claim for benefits you may file
suit in Federal Court. If it should happen that plan fiduciaries
misuse the Plans money, or if you are discriminated against, you may
seek assistance from the U.S. Department of Labor or you may file suit
in Federal Court. If you are successful in your suit, the court may,
if it so decides, require the other party to pay your legal costs,
including attorneys fees.(f)
    
    If you have any questions about this plan, you should contact
the Plan Administrator. If you have any questions about this statement
or about your rights under ERISA, you should contact the nearest office
of the U.S. Labor-Management Services Administration, Department of
Labor.
  NOT AN EMPLOYMENT CONTRACT
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INSURER PROTECTION
    PAROL EVIDENCE AND GOVERNING LAW
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INTERPRETATION
   MISCELLANEOUS
 Enforceability
 Notices
 Counterparts
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ARGO-TECH CORPORATION/s/ Carol J. Forre
    
    By:
    
    /s/ Paul R. Keen(Witness)
    
    Its:
    
    Vice President, General Counsel and Secretary
 [illegible]
    
    /s/ Michael S. Lipscomb(Witness)
    
    Michael S. Lipscomb
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EXHIBIT A
  Insurer:
    
    Pacific Mutual Insurance CompanyFace Amount:
    
    $1,173,791.00Policy Number:
    
    1A2302127-0Date of Policy:
    
    December 28, 1995