Document:

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                                                                   Exhibit 10.34

                        SEPARATION AGREEMENT AND RELEASE
                        --------------------------------

     In recognition of the importance and value to Delco Remy International,
Inc. (the "Company") of your services, you and the Company agree as follows:

     If you are employed by the Company, and your employment is terminated
either (i) by the Company for any reason other than Cause (as defined herein) or
(ii) by you for Good Reason (as defined herein):

     1.   (A) On the date of termination, the Company shall pay Employee: (i)
          his accrued salary to the date of termination; (ii) a lump sum payment
          equal to six months' salary; (iii) and continue to pay Employee's
          salary for an additional twelve (12) months. In addition, Employee
          will be paid for the pro rata share of any unused vacation for that
          calendar year computed based upon the date of termination.

     (B) Company shall guarantee payment of the following bonuses:

          (i)  Pro-rata bonus for the current fiscal year, computed upon the
               date of termination, plus

          (ii) Employee's target bonus for a further period of eighteen (18)
               months, such target bonus being computed at 60% of his salary for
               eighteen (18) months on the date of termination. Six (6) months
               of this bonus will be paid in a lump sum payment on the date of
               termination, and the remaining bonus amount shall be equally
               divided and paid with the Employee's salary as set forth in
               paragraph 1 (A) above.

     Payments made pursuant to paragraph 1 (A) and (B) above will include
deductions for all local, state, and federal taxes, including FICA, which are
required by law to be withheld.

     (C) Company also agrees it shall provide to Employee the same group health
insurance coverage (if any and as such plan may be amended from time to time) as
is provided to other employees of Company holding the same or similar level
position as that last held by Employee for eighteen (18) months after
termination date or until new employment is secured, whichever is sooner. It is
understood and agreed that an eighteen (18) month period of time during which
health insurance is provided to Employee pursuant to this paragraph shall be
considered the continuation coverage period. Employee is entitled to an
additional eighteen (18) months coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1986, as amended ("COBRA") at 102% of monthly
premium at the Employee's expense.

     (D) Company shall reimburse employee for executive relocation expenses to
Michigan, per existing relocation program.

     (E) Company will provide for executive outplacement services in Michigan
with Right Associates for a period of twelve (12) months from date of
termination.

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     (F) Options granted at date of hire will vest. The exercise period of such
options will be until the earlier of the sale of the Company or IPO, per Change
of Control Agreement.

     It is understood and agreed that the payments and benefits which will be
provided to Employee by Company pursuant to paragraph 1 are consideration
provided to Employee in addition to anything of value to which he is already
entitled. Except as provided above, Employee shall receive no other payments,
benefits or remuneration of any kind after date of termination. It is further
understood in this agreement that the Company has no right of "set off" of
payments owed to Employee, except for any monies owed to the Company by Employee
on the date of termination.

     As used herein, the following shall have the meanings set forth below:

"Cause" shall mean the occurrence or existence of any of the following with
respect to you, as determined in good faith by the Board of Directors of the
Company:

         (i)   conviction of a felony or conviction of any crime or offense
               lesser than a felony involving the property of the Company or an
               Affiliate of the Company, whether such conviction occurs before
               or after your termination of employment;

         (ii)  engaging in conduct that has caused demonstrable and material
               injury to the Company or an Affiliate of the Company, monetary or
               otherwise; however, an act or failure to act on employee's part
               shall not be considered "willful" if done, or omitted to be done
               by employee, in good faith and with reasonable belief that his
               actions or omission was in the best interest of the Company.

         (iii) gross dereliction of duties or other gross misconduct and the
               failure to cure such situation within thirty (30) days after
               receipt of notice thereof from the compensation committee of the
               Company, the Board of Directors of the Company, the Company or an
               Affiliate of the Company; or

         (iv)  the disclosure or use of confidential information other than in
               the normal and ordinary performance of services for the Company
               or any Affiliate of the Company.

"Good Reason" shall mean the occurrence or existence of any of the following
with respect to you:

         (i)   your base salary plus bonus at target is reduced from that
               currently in effect, or your other employee benefits are in the
               aggregate materially reduced from those currently in effect prior
               to the Change of Control (unless such reduction of employee
               benefits applies to employees of the Company generally); or

         (ii)  the assignment to you of any duties or responsibilities which are
               fundamentally inconsistent with your officer position with the
               Company which is not cured within thirty (30) days of receipt by
               the Company of written notice from you of such assignment of
               inconsistent duties or responsibilities.

         (iii) the Company fails to require a successor in interest to assume
               and to adopt this severance agreement.

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     2.   In consideration of Company's agreement to the provisions and payment
          of the amounts and other consideration set forth in paragraph 1 above,
          Employee (for himself and his personal representatives, heirs and
          assigns) RELEASES AND FOREVER DISCHARGES Company, DRI and their
          predecessors, successors, parent companies, subsidiaries, affiliates,
          release companies, principals and insurers (and their current or
          former officers, directors, employees, agents, shareholders,
          successors and assigns), and any and all employee benefit plans (and
          any fiduciary of such plans) sponsored by any of them, and all other
          persons, firms or corporations who might be claimed to be liable by
          Employee (collectively "Released Parties"), from any and all claims
          (including, but not limited to, claims for attorneys' fees), demands,
          losses, damages, agreements, actions promises or causes of action
          (known or unknown) which he now has or may later discover or which may
          hereafter exist against them, or any of them, connection with or
          arising directly or indirectly out of or in any way related to any and
          all matters, transactions, events or other things occurring prior to
          the date hereof, including all those arising out of or in connection
          with his former employment with Company or the cessation of his
          employment, or which occurred during the course of Employee's
          employment with Company or incidental thereto, or arising out of any
          other matter or claim of any kind whatsoever and whether pursuant to
          common law, statute, ordinance, regulation or otherwise and including
          claims of fraud or misrepresentation in the making, negotiation or
          execution of this Agreement. Claims or actions released herein
          include, but are not limited to, those based on allegations of
          wrongful discharge and/or breach of contract; those arising under the
          National Labor Relations Act; those alleging discrimination on the
          basis of race, color, sex, religion, national origin, age, disability
          or handicap under Title VII of the Civil Rights Act of 1964, the Age
          Discrimination in Employment Act of 1967, the Rehabilitation Act of
          1973, the Equal Pay Act of 1963, the Americans with Disabilities Act
          of 1990, the Civil Rights Act of 1991, the Family and Medical Leave
          Act, the Indiana Civil Rights Law (all as amended) or any other
          federal, state or local law, ordinance, rule or regulation; and those
          arising under the Employee Retirement Income Security Act of 1974, as
          amended. Employee agrees and understands that any claims he may have
          under the aforementioned statutes or any other federal, state or local
          law, ordinance, rule or regulation; and those arising under the
          Employee Retirement Income Security Act of 1974, as amended. Employee
          agrees and understands that any claims he may have under the
          aforementioned statutes or any other federal, state or local law,
          ordinance, rule or regulation are effectively waived by this
          Agreement. No rights or claims arising after the execution of this
          Agreement are waived hereby.

     3.   In consideration of the promises and covenants contained herein from
          Employee to DRA/DRI, DRA/DRI, for itself, its predecessors,
          successors, parent companies, subsidiaries, and affiliates (and their
          current or former offices, directors, employees, agents, shareholders,
          successors, and assigns) hereby RELEASES AND FOREVER DISCHARGES
          Employee from any and all any and all claims (including, but not
          limited to, claims for attorneys' fees), demands, losses, damages,
          agreements, actions, promises or causes of action (known or unknown)
          arising out of any acts actually disclosed by Employee to DRA/DRI
          prior to the effective date of this Agreement. The Parties understand
          and agree that no rights or claims arising after the execution of this
          Agreement are waived hereby. Employee agrees to take any action
          necessary to carry out the purpose and intent of this Agreement.
          Employee further agrees that he will be solely

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          and individually responsible for compensating any attorney(s) for the
          services they have rendered to or for him in connection with this
          settlement or any other matter whatsoever.

     4.   In further consideration of Company's agreement to the provisions and
          payment of the amounts and other consideration set forth in paragraph
          1 above, Employee agrees that he (i) will never assert a legal or
          equitable action in any state or federal court against Company, DRI,
          and/or any of their subsidiaries, affiliates, parent companies,
          officers, directors, shareholders or any other person named as
          Released Parties, including successors and assigns, with respect to
          the matters herein resolved and settled; and (ii) hereby waives all
          future rights to consideration for employment with Company, DRI and
          any of their subsidiaries, affiliates, parent companies or other
          released entities. Employee further agrees that if he hereafter
          institutes an action against any of the released entities or persons
          concerning any of the claims he has released in this Agreement, except
          for claims arising under ADEA, he will repay to Company the amounts
          and value of benefits described in paragraph 1 above, with legal
          interest, and will pay the persons or entities for all costs and
          expenses, including attorneys' fees, incurred by them in defending
          against such claims.

     5.   Employee agrees that he shall not disclose to any third party any
          "trade secrets" or other confidential information relative to the
          business of Company, DRI or any of their respective subsidiaries or
          affiliates. The term "trade secrets," as used herein, means
          information, including, without limitation, a formula, pattern,
          compilation, strategic planning, program, device, method, technique or
          process, that derives independent economic value, actual or potential,
          from not being generally known, and not being readily ascertainable by
          proper means, by other persons who can obtain economic value from its
          disclosure or use. This paragraph shall not prevent Employee from
          using his general knowledge and expertise in any and all future
          employment or other business activities. Employee affirms that, on or
          before the date of this Agreement, he will surrender to Company any
          and all documents, records, and/or property in his possession or
          control that belong to Company, DRI or any of their respective
          subsidiaries or affiliates.

          Employee agrees that if he fails to keep confidential "trade secrets"
          or other confidential information as specified above, Company, DRI
          and/or their respective affiliates shall have the right and remedy to
          have such provisions specifically enforced by any court having equity
          jurisdiction and that any breach will cause injury to Company, DRI and
          their respective affiliates, among other legal and equitable remedies,
          which will upon judgment entitle Company, DRI and their respective
          affiliates to recover any monies paid hereunder after such breach has
          occurred. Further, Employee's agreements herein will be independent of
          each other and will be severally enforceable by Company, DRI or any of
          their respective affiliates. If any provision of this paragraph 5 is
          determined to be unenforceable by reach of the breadth of scope or
          otherwise, it is Employee's, DRI's and Company's intention that such
          determination will not bar in any way or affect Company's, DRI's or
          their respective affiliates' rights to relief concerning any other
          provision or in any other jurisdiction.

     6.   It is understood and agreed that Company and DRI have denied and
          continue to deny that they are liable to Employee on any theory, and
          that nothing in this Agreement, including,

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          but not limited to, the payment of the amounts set forth in paragraph
          1 hereof by Company, constitutes an admission by Company or DRI of any
          fact, damage or liability to Employee on any theory. It is expressly
          understood and agreed that this Agreement was entered into by the
          parties solely to avoid the burden and expense of litigation.

     7.   Employee agrees that neither he nor any attorney, agent or
          representative of his will discuss or in any fashion disclose to any
          person, other than his spouse, attorney and accountant who will each
          be informed of and must agree to be bound by this confidentiality
          clause, any of the terms of this Agreement or the circumstances
          surrounding its making, unless required to do so by law. Employee
          agrees that in the event that he, his spouse or any attorney,
          accountant, agent or representative, acting on his behalf, discloses
          any information to anyone in breach or violation of this paragraph, he
          will repay to Company, with legal interest, the amounts and value of
          benefits paid by it pursuant to paragraph 1 of this Agreement.
          Notwithstanding anything to the contrary herein, Employee agrees to
          immediately cease all communication with customers of DRI, Company
          and/or any other respective affiliates or subsidiaries (collectively,
          the "DRI Entities"), in each case regarding such DRI Entities and/or
          their businesses or business relationships with or affecting such
          customers; however, Delco approves communication for future employment
          purposes.

     Employee also agrees that he shall not take any action or make any public
statement in degradation of the good name or business interest of Company, DRI
or their respective subsidiaries and affiliates. The Company agrees it will not
authorize any public statement of degradation of employee's good name.

     8.   Employee represents and warrants that in the making, negotiation and
          execution of this Agreement, he is not relying upon any
          representation, statement or assertion of fact or opinion made by any
          agent, attorney, employee or representative of the persons, parties or
          corporations being released herein, and he hereby waives any rights to
          rely upon all prior agreements and/or oral representations made by any
          agent, attorney, employee or representative of such persons, parties
          or corporations.

     9.   The parties stipulate and agree that all clauses and provisions of
          this Agreement are distinct and severable, and Employee understands,
          and it is his intent, that in the event this Agreement is ever held to
          be invalid or unenforceable (in whole or in part) as to any particular
          type of claim or as to any particular circumstances, it shall remain
          fully valid and enforceable as to all other claims and circumstances.
          As to any actions or claims that would not be released because of the
          invalidity or unenforceability of this Agreement, Employee understands
          that if he asserts or brings any such actions or claims against
          Company, DRI or any of the other entities or persons released herein
          he must repay to Company the amounts paid to him and the value of the
          benefits provided to him pursuant to paragraph 1 above, with legal
          interest, and that the return to Company of the amounts paid to him
          and the value of the benefits provided to him pursuant to paragraph 1
          above, with legal interest, is a prerequisite to asserting or bringing
          any such actions or claims.

     10.  This Agreement contains the entire agreement of the parties and
          supersedes all previous negotiations, whether written or oral. This
          Agreement may be changed only by an instrument in writing signed by
          the parties.

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     11.  This Agreement shall inure to the benefit of, may be enforced by, and
          shall be binding on the parties and their heirs, executors,
          administrators, personal representatives, assigns and successors in
          interest.

     12.  In the event of any dispute about this Agreement, the laws of the
          State of Indiana shall govern the validity, performance, enforcement,
          and all other aspects of this Agreement without regard to any
          conflicts of laws provisions. Any suit or other proceeding shall be
          brought only in Madison or Marion Counties, Indiana and each party
          agrees to submit to personal jurisdiction in the State of Indiana.

     13.  Employee represents that he has read this Agreement; fully understands
          each and every provision of this Agreement; and has voluntarily, on
          his own accord, executed this Agreement. Employee acknowledges that in
          entering into this Agreement in return for Company's payments and
          other consideration set forth in paragraph 1 above, he is giving up
          possible future administrative and/or legal claims. EMPLOYEE ALSO
          ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY COMPANY AND DRI TO CONSULT AN
          ATTORNEY BEFORE HE EXECUTES THIS AGREEMENT.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date set forth below.

                              Employee:  /s/ Rajesh K. Shah
                                         ---------------------------------------

                              Date:    3/18/2002
                                       -----------------------------------------

                              Delco Remy International, Inc.

                              By:      /s/ Roderick English
                                       -----------------------------------------

                              Title:   Senior Vice President Human Resources

                              Date:    3/18/2002
                                       -----------------------------------------<PAGE>

                                                                   Exhibit 10.35

                               ADVISORY AGREEMENT
                               ------------------

     This Advisory Agreement (this "Agreement") is made and entered into as of
December 10, 2002 by and among Delco Remy International, Inc. ("Delco Remy") and
the subsidiaries of Delco Remy set forth on the signature pages hereto and such
other subsidiaries of Delco Remy as shall join in this Agreement (the
"Subsidiaries," and collectively with Delco Remy, the "Companies"), and CVC
Management LLC, a Delaware limited liability company ("Advisor").

     WHEREAS, the Companies desire to retain Advisor and Advisor desires to
perform for the Companies and/or their subsidiaries certain services;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:

     1. Term. This Agreement shall be in effect for an initial term commencing
on the date hereof through and including December 31, 2006 (the "Term"), and
shall be automatically extended thereafter on a year to year basis unless the
Companies provide or Advisor provides written notice of its or their desire to
terminate this Agreement to the other party ninety (90) days prior to the
expiration of the Term or any extension thereof; provided, however that this
Agreement shall terminate automatically upon a Change of Control (as defined in
the Indenture dated as of April 26, 2001 among Delco Remy, certain of Delco
Remy's subsidiaries signatory thereto and First Union National Bank, as Trustee,
which indenture relates to Delco Remy's 11% Senior Subordinated Notes Due 2009,
as such indenture may be amended from time to time).

     2. Services. Advisor shall perform or cause to be performed such services
for the Companies and/or their subsidiaries as directed by such Company's board
of directors, which may include, without limitation, the following:

          (a) the identification, support and analysis of tender offers,
     acquisitions, dispositions, mergers, exchange offers, recapitalizations,
     restructurings and other similar transactions by such Company or its
     subsidiaries;

          (b) support and analysis of financing alternatives, including, without
     limitation, in connection with acquisitions, capital expenditures and
     refinancing of existing indebtedness;

          (c) finance functions, including assistance in the preparation of
     financial projections, and monitoring of compliance with financing
     agreements;

<PAGE>

          (d) human resource functions, including searching and hiring of
     executives; and

          (e) other services for such Company or its subsidiaries upon which
     such Company's board of directors and Advisor agree.

     In the event the provision of services under this Agreement requires any
federal, state or local licensure or registration, such services shall be
provided by persons or entities having such licensure or registration.

     3. Advisory Fee.

          (a) Management Fees. Subject to the terms and conditions herein,
     payment for services rendered by Advisor and/or its affiliates pursuant to
     this Agreement will equal $1,000,000 for the period commencing on the date
     hereof and ending December 31, 2002 (the "Initial Fee") and $1,000,000 per
     annum thereafter (collectively with the Initial Fee, the "Management
     Fees"). The Initial Fee shall be due and payable to Advisor or its designee
     as follows: $500,000 on October 1, 2002, $500,000 on December 1, 2002 and
     all other Management Fees described in this Section 3(a) shall be payable
     to Advisor or its designee in quarterly installments of $250,000 in
     advance, commencing as of January 1, 2003.

          (b) Transaction Fees. At the closing of the financing contemplated by
     the Financing Agreement (defined below), the Companies shall pay to Advisor
     or its designees a transaction fee equal to Two Million Five Hundred
     Thousand Dollars ($2,500,000). In addition, during the Term, the Companies
     shall pay to Advisor or its designees a transaction fee in connection with
     the consummation of each acquisition, divestiture or financing by any of
     the Companies or their subsidiaries in connection with which Advisor
     provided services under this Agreement in an amount to be mutually agreed
     upon by the parties hereto. Such fees shall be payable to Advisor or its
     designees by wire transfer to an account designated in writing by Advisor.
     For purposes hereof, the "Financing Agreement" means the Loan and Security
     Agreement, dated June 28, 2002 by and among certain of the Companies, as
     Borrowers, Delco Remy and certain of the Companies, as Guarantors and
     Congress Financial Corporation (Central), as Administrative Agent and US
     Collateral Agent, Wachovia Bank, National Association, as Documentation
     Agent, and the financial institutions named therein, as Lenders.

          (c) Collection of Fee. Subject to the limitation described in Section
     3(d) below, the decision whether to collect any fee contemplated by this
     Agreement (an "Advisory Fee") in a given period shall be in the Advisor's
     sole discretion. The Advisor's decision not to collect or to defer an
     Advisory Fee in any given year shall not be construed to be a waiver of the
     Advisor's right to collect a deferred Advisory Fee or an Advisory Fee in
     any future period.

          (d) Restrictions. Notwithstanding any other provision of this Section
     3, the Companies shall not be required to pay any of the Management Fees
     contemplated by

                                       2

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Section 3(a), if and to the extent such payment is expressly prohibited by the
provisions of the Financing Agreement, the Indentures governing the 85/8% Senior
Notes Due 2007 in an aggregate principal amount of $145 million, 11% Senior
Subordinated Notes Due 2009 in an aggregate principal amount of $165 million and
the 105/8% Senior Subordinated Notes Due 2006 in an aggregate principal amount
of $140 million (the "Indentures") or any other credit, financing or other
agreements or instruments binding upon the Companies or their properties, as
each of the foregoing agreements or instruments may be amended, modified or
supplemented, from time to time and so long as each such agreement or instrument
has not been terminated and remains in full force and effect; provided, however,
that if, as a result of the operation of any such prohibitions, payments
otherwise owed hereunder are not made, such payments shall not be cancelled but
rather shall accrue, and shall be payable by the Companies promptly when, and to
the extent that, the Companies are no longer prohibited from making such
payments, together with accrued interest calculated at the Base Rate of interest
then charged under the foregoing Financing Agreement from the date such payment
was due through the date of payment. Other than the foregoing Financing
Agreement and Indentures, the Companies will not enter into any financing
agreements or instruments which would prohibit payment of any amounts otherwise
owed hereunder without the prior written approval of the Advisor. This Section
3(d) will not prohibit nor restrict, in any manner, the Companies' obligation to
make the payments specified in Section 3(b), to provide indemnification pursuant
to Section 6, or to make any other payments contemplated by this Agreement.

     4. Personnel. Advisor shall provide and devote to the performance of this
Agreement such partners, employees and agents of Advisor as Advisor shall deem
appropriate to the furnishing of the services required.

     5. Liability. Neither Advisor nor any other Indemnitee (as defined in
Section 6 below) shall be liable to any of the Companies or any of their
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of an Indemnitee acting within the scope of such person's employment or
authority. Except as expressly set forth in this Section, Advisor makes no
representations or warranties, express or implied, in respect of the services to
be provided by Advisor or any of the other Indemnitees. Advisor shall provide
services under this Agreement in compliance with all applicable federal, state
and local laws and regulations. Except as Advisor may otherwise agree in writing
after the date hereof: (i) Advisor shall have the right to, and shall have no
duty (contractual or otherwise) not to, directly or indirectly: (A) engage in
the same or similar business activities or lines of business as any of the
Companies or any of their subsidiaries, including those competing with any of
the Companies or any of their subsidiaries and (B) do business with any client
or customer of any of the Companies or any of their subsidiaries; (ii) neither
Advisor nor any officer, director, employee, partner, affiliate or associated
entity thereof shall be liable to any of the Companies or any of their
subsidiaries or affiliates for breach of any duty (contractual or otherwise) by
reason of any such activities of or of such person's participation therein; and

                                       3

<PAGE>

(iii) in the event that Advisor acquires knowledge of a potential transaction or
matter that may be a corporate opportunity for the Companies or any of their
subsidiaries, on the one hand, and Advisor, on the other hand, or any other
person, Advisor shall have no duty (contractual or otherwise) to communicate or
present such corporate opportunity to the Companies or any of their subsidiaries
and, notwithstanding any provision of this Agreement to the contrary, shall not
be liable to the Companies or any of their affiliates for breach of any duty
(contractual or otherwise) by reasons of the fact that Advisor directly or
indirectly pursues or acquires such opportunity for itself, directs such
opportunity to another person, or does not present such opportunity to the
Companies. In no event will any of the parties hereto be liable to any other
party hereto for any indirect, special, incidental or consequential damages,
including lost profits or savings, whether or not such damages are foreseeable,
or in respect of any liabilities relating to any third party claims (whether
based in contract, tort or otherwise) other than the Claims (as defined in
Section 6 below) relating to the service to be provided by Advisor hereunder.

     6. Indemnity. Each of the Companies and their subsidiaries shall defend,
indemnify and hold harmless each of Advisor, its affiliates and their respective
members, partners, directors, officers, employees and agents (collectively, the
"Indemnitees") from and against any and all loss, liability, damage or expenses
(including in connection with investigating, preparing for, defending, or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation)
arising from any claim by any person or entity with respect to, or in any way
related to, the performance of services contemplated by this Agreement
(including, without limitation, attorneys' fees) (collectively, "Claims")
resulting from any act or omission of any of the Indemnitees, other than for
Claims which shall be the direct result of gross negligence, bad faith or
willful misconduct by an Indemnitee as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each of the Companies
and their subsidiaries shall defend at its own cost and expense any and all
suits or actions (just or unjust) which may be brought against any such Company,
any of its subsidiaries or any of the Indemnitees or in which any of the
Indemnitees may be impleaded with others upon any Claims, or upon any matter,
directly or indirectly, related to or arising out of this Agreement or the
performance hereof by any of the Indemnitees, whether or not any Indemnitee is
named as a party thereto and whether or not any liability results therefrom, or,
at the option of any Indemnitee, shall reimburse each such Indemnitee for all
costs and expenses, including fees of such Indemnitee's counsel, as they are
incurred, in connection with the foregoing, except that if such damage shall be
the direct result of gross negligence, bad faith or willful misconduct by an
Indemnitee as determined pursuant to a final non-appealable order of a court of
competent jurisdiction, then such Indemnitee shall reimburse the Companies and
their subsidiaries for the costs of defense and other costs incurred by the
Companies and their subsidiaries to the extent due to such gross negligence, bad
faith or willful misconduct.

Each of the Companies and their subsidiaries further shall not, without the
prior written consent of Advisor, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification may be sought

                                       4

<PAGE>

hereunder (whether or not any Indemnitee is an actual or potential party to such
claim, action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of Advisor and each other Indemnitee hereunder
from all liability arising out of such claim, action, suit or proceeding. EACH
OF THE COMPANIES AND THEIR SUBSIDIARIES HEREBY ACKNOWLEDGES THAT THE FOREGOING
INDEMNITY SHALL BE APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OR
EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE
OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF ADVISOR OR
ANY OTHER INDEMNITEE. The foregoing right to indemnity shall be in addition to
any rights that Advisor and/or any other Indemnitee may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of this Agreement. Each of the Companies and their subsidiaries
hereby consents to personal jurisdiction and to service and venue in any court
in which any claim which is subject to this Agreement is brought against Advisor
or any other Indemnitee. It is understood that, in connection with Advisor's
engagement hereunder, Advisor may also be engaged to act for the Companies or
their subsidiaries in one or more additional capacities, and that the terms of
this engagement or any such additional engagement may be embodied in one or more
separate written agreements. This indemnification shall apply to the engagement
hereunder as well as to any such additional engagement(s) (whether written or
oral) and any modification of said engagement or such additional engagement(s)
and shall remain in full force and effect following the completion or
termination of said engagement or such additional engagements.

     7. Notices. All notices hereunder shall be in writing and shall be
delivered personally or mailed by United States mail, postage prepaid, addressed
to the parties as follows:

        To the Companies, as appropriate:

                 Delco Remy International, Inc.
                 2902 Enterprise Dr.
                 Anderson, IN  46013
                 Attention:  President
                 Facsimile:  (765) 778-6515

        To Advisor:

                 CVC Management LLC
                 399 Park Avenue, 14th Floor
                 Zone 4
                 New York, NY 10043
                 Attention:   Thomas F. McWilliams
                 Facsimile:  (212) 888-2940

     8. Assignment. The Companies may not assign any obligations hereunder to
any other party without the prior written consent of Advisor (which consent
shall not be

                                       5

<PAGE>

unreasonably withheld or delayed), and Advisor may not assign any Advisor
obligations hereunder to any other party without the prior written consent of
the Companies (which consent shall not be unreasonably withheld or delayed).

     9. Successors. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and permitted assigns of the parties.

     10. Counterparts. This Agreement may be executed and delivered by each
party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.

     11. Joinder. In the event any subsidiary of Delco Remy has not become a
party hereto (the "New Party"), such New Party shall execute an Agreement of
Joinder in the form attached as Exhibit A hereto and upon the execution thereof,
the New Party shall be bound by all the terms and conditions hereof to the same
extent as though such New Party had originally executed this Agreement. The
addition of the New Party shall not in any manner affect the obligations of the
other Companies hereto.

     12. Entire Agreement; Modification; Governing Law. The terms and conditions
hereof constitute the entire agreement between the parties hereto with respect
to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions thereof shall be binding upon
either party unless approved in writing by an authorized representative of such
party. All issues concerning this Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of New York.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       6

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Advisory Agreement as of
the date first written above.

                                COMPANY:

                                DELCO REMY INTERNATIONAL, INC.

                                By: /s/ David E. Stoll
                                    --------------------------------------------
                                    Name:   David E. Stoll
                                    Title:  Vice President, Treasurer and
                                            Secretary

                                SUBSIDIARIES:

                                BALLANTRAE CORPORATION
                                DELCO REMY AMERICA, INC.
                                DR SALES, INC.
                                FRANKLIN POWER PRODUCTS, INC.
                                HSG I, INC.
                                HSG II, INC.
                                INTERNATIONAL FUEL SYSTEMS, INC.
                                JAX REMAN, L.L.C.
                                KRAFTUBE, INC.
                                M. & M. KNOPF AUTO PARTS, L.L.C.
                                MAGNUM POWER PRODUCTS, L.L.C.
                                NABCO, INC.
                                POWER INVESTMENTS, INC.
                                POWRBILT PRODUCTS, INC.
                                REMAN HOLDINGS, L.L.C.
                                REMY INTERNATIONAL, INC.
                                REMY KOREA HOLDINGS, L.L.C.
                                REMY LOGISTICS, L.L.C.
                                REMY REMAN, L.L.C.
                                TRACTECH, INC.
                                WILLIAMS TECHNOLOGIES, INC.
                                WORLD WIDE AUTOMOTIVE, INC.

                                By: /s/ David E. Stoll
                                    --------------------------------------------
                                    Name:  David E. Stoll
                                    Title: Vice President

                       (Signatures continue on next page)
                                       7

<PAGE>

                                ENGINE MASTER, L.P.

                                By:   HSG I, Inc.

                                By: /s/ David E. Stoll
                                    --------------------------------------------
                                    Name:  David E. Stoll
                                    Title: Vice President Finance and Secretary

                                ADVISOR:

                                CVC MANAGEMENT LLC

                                By: /s/ Michael A. Delaney
                                    --------------------------------------------
                                    Name:  Michael A. Delaney
                                    Title: Managing Director

                                       8

<PAGE>
                                 EXHIBIT A
                                 ---------

                      FORM OF JOINDER TO ADVISORY AGREEMENT

     This Joinder dated as of ______________, ____ is delivered pursuant to that
certain Advisory Agreement dated as of _________ __, 2002 among the "Companies"
named therein (as amended, supplemented or modified from time to time, the
"Agreement") and CVC Management LLC. All capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement.

     The undersigned hereby agrees that on and after the date hereof, it shall
be a Company under the Agreement and be obligated to perform all of the
obligations of the Companies thereunder.

                                [COMPANY NAME]

                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:

                                       9

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