<PAGE>
                      U.S. SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                    FORM 10-KSB

 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the fiscal year ended December 31, 1999
                          Commission file number  0-24690


                             CLARION TECHNOLOGIES, INC.
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                   (Name of small business issuer in its charter)

            Delaware                                 91-1407411
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    (State of incorporation)            (I.R.S. Employer Identification No.)

     235 Central Avenue, Holland, Michigan                          49423
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    (Address of principal executive offices)                      (Zip Code)

                      Issuer's telephone number:  (616) 494-8885


Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                           COMMON STOCK, $.001 PAR VALUE
   --------------------------------------------------------------------------
                                  (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

The registrant's revenue for the year ended December 31, 1999 was $28,059,000

As of March 15, 2000, the aggregate market value of voting stock held by non-
affiliates of the registrant, based upon the closing sales price for the
registrant's common stock, as reported on the NASDAQ Small Cap Market, was
$78,532,943.

The number of shares outstanding of registrant's common stock was 20,534,504 as
of March 15, 2000.

                        DOCUMENTS INCORPORATED BY REFERENCE

The following documents (or parts thereof) are incorporated by reference into
the following parts of this Form 10-KSB:  Information required in Part III of
this Form 10-KSB is incorporated from the registrant's Proxy Statement for its
2000 Annual Meeting of Shareholders.

Transitional Small Business Disclosure Format (check one):  Yes    No X
                                                               ---   ---

                                  -1-


CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION

The statements contained in this document or incorporated by reference that
are not historical facts are forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995.  The forward-looking statements are based on management's
current expectations or beliefs and are subject to a number of risks and
uncertainties.  In particular, any statement contained herein regarding the
consummation and benefits of future acquisitions, as well as expectations
with respect to future sales, operating efficiencies, and product expansion
are subject to known and unknown risks, uncertainties and contingencies,
many of which are beyond the control of the Company, which may cause actual
results, performance or achievements to differ materially from those
described in the forward looking statements.  Factors which may cause
actual results to differ materially from those contemplated by the forward-
looking statements, include, among other things: overall economic and
business conditions; the demand for the Company's goods and services;
competitive factors in the industries in which the Company competes;
increases in production or material costs that cannot be recouped in
product pricing; changes in government regulations; changes in tax
requirements (including tax rate changes, new tax laws and revised tax law
interpretations); interest rate fluctuations and other capital market
conditions; the ability to achieve anticipated synergies and other cost
savings in connection with acquisitions; and the timing, impact and other
uncertainties of future acquisitions.  The Company undertakes no obligation
to update publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.


                                PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT

Clarion Technologies, Inc. and its subsidiaries (collectively referred to
as "Clarion" or the "Company") is a full-service custom injection molder to
the automotive, heavy truck, office furniture and consumer goods
industries.

Clarion was originally incorporated in Nevada as Kar Ventures on March 17,
1988. The name was changed to Clarion House, Inc. in 1991 when the Company
acquired a publishing business by that name which consisted of book
distribution, primarily through direct sales, to the public using mailings
and other advertising.  The Company's publishing activities never
progressed beyond the development stage, and active operations ceased in
1992.  In 1993, Clarion acquired a business that was licensed to use an
insecticidal coating technology and the Insecta(R) trademark. The Company
distributed Insecta(R) products to consumer, industrial and agricultural
markets; however, sufficient revenues were not achieved to support


                                  -2-


operations and those activities ceased in 1995.  The Company had no active
operations during 1996 and 1997.  On October 2, 1998, the Company changed
its name to Clarion Technologies, Inc. and changed its state of
incorporation from Nevada to Delaware.

After discontinuing its Insecta(R) business, the Company began to develop a
strategy that focused on the highly fragmented plastic injection-molding
industry with the intent of creating, primarily through acquisitions, a
significant full-service custom injection molder to the automotive, heavy
truck, office furniture, and consumer goods industries.

The Company began to execute its strategy on December 31, 1997 when it
acquired Triangle Plastics, Inc., located in Montpelier, Ohio.  This unit
has been designated as the Company's large-tonnage operation, and in 1999
was moved into a newly constructed $17.3 million, 168,000 square foot
facility equipped with injection molding machines that range in size from
950 to 5,000 tons of clamping force.

On April 29, 1999, the Company acquired Mito Plastics, Inc. ("Mito"), which
is located in Jenison, Michigan, a suburb of Grand Rapids.  Mito is an
award winning, full-service product development company providing program
management, industrial design, engineering, prototyping and tooling from
concept through delivery of complete assemblies all under one roof.  This
operation serves as the Company's technology center and has become the
Company's hub for all product development activities.

On August 31, 1999, the Company acquired Wamar Products, Inc, ("Wamar
Products"), and Wamar Tool & Machine Co. ("Wamar Tool"), both of which are
located in Caledonia, Michigan, a suburb of Grand Rapids.  Wamar Products
is a plastic injection molder and assembler of plastic component and
finished products.  Wamar Tool is a fully equipped mold making and mold
repair firm that serves the plastic injection molding industry.

On October 1, 1999, the Company acquired Double "J" Molding, Inc. ("Double
J"), which is located in South Haven, Michigan.  Double J is a tier two
automotive supplier of plastic injection molded parts.  In a related
transaction, the Company also acquired the real estate owned by a
partnership controlled by the former Double J shareholders.

Effective February 1, 2000, the Company acquired the assets of Drake
Products Corporation ("Drake"), a full-service plastic injection molding
firm with two plants in Greenville, Michigan and one in Anderson, South
Carolina.  Drake posted sales in excess of $50 million for 1999,
approximately two-thirds of which were to the home appliance industry.

These acquisitions along with the new large-tonnage manufacturing facility
have become the platform for the Company to build on to meet its objective
of becoming one of the largest, most preferred full-service custom
injection molders.



                                  -3-


BUSINESS OF THE ISSUER

General

The Company is a full-service custom injection molder, providing rapid
prototyping and design models, mold design and engineering services, mold
manufacturing, injection molding, and post-molding assembly to a diverse
base of customers in the automotive, heavy truck, office furniture, and
consumer goods industries.  Clarion produces injection molded plastic
products for its customers on a contract basis and does not sell
proprietary products to the general marketplace.

Business Strategy

Clarion's business strategy is to create, through acquisitions and internal
growth, one of the largest full-service custom injection molding business
in the highly fragmented plastic injection-molding industry to serve
customers in the Company's target markets.  The Company seeks to make
acquisitions of high-quality companies that (i) service the Company's
chosen industries; (ii) provides additional products, manufacturing, and
technical capabilities; (iii) can improve the Company's geographic delivery
capabilities; and (iv) can grow and increase the Company's presence in a
region.  The Company intends to seek future acquisitions that will
strengthen the Company's ability to supply its products to its chosen
industries.  The Company believes that internal growth will be obtained by
expanding sales and increasing throughput in its current injection molding
plants.

Products and Services

The Company manufactures, and in certain instances, assembles a broad range
of custom plastic injection-molded components that are used by
manufacturers in the automotive, heavy truck, office furniture, and
consumer goods industries.  These components include, but are not limited
to; automotive interior and exterior trim parts, wheel covers, grilles,
door panels, heavy truck grilles and motor baffle covers, office chair
components, waste receptacles and home appliance parts.  The Company also
provides program management, industrial design, engineering, prototyping
and tooling from concept through delivery of complete assemblies.  In
addition, the Company has a fully equipped mold making and mold repair
company that serves the plastic injection molding industry.

The Company designs, engineers and constructs molds used to produce plastic
components at its Technology Center in Jenison, Michigan.  It also produces
concept models, appearance models, engineering prototypes and
pre-production samples at this location.  This facility is equipped with
modern design and machining equipment, including CAD/CAM systems,
translators and plotters, electrical discharge machining equipment and
miscellaneous support equipment.



                                  -4-


The Technology Center also conducts prototype and development projects,
frequently in conjunction with resin suppliers and customers' engineers.
Through the many projects undertaken at its Technology Center, the Company
has gained experience with nearly all resins currently in use for injection
molding.  This expertise combined with the Company's injection molding
production experience enables the Company to provide innovative solutions
for its customers.

As of March 15, 2000, the Company had six full-service custom injection
molding facilities.  These facilities collectively house 155 horizontal
injection-molding machines with capacities ranging from 55 tons to 5,000
tons of clamping force.  The injection molding process is supported by
automated systems for raw material drying, conveying and regrinding.  All
of the Company's plants have received QS 9000 certification.

The Company also offers value added post-molding secondary services to its
customers, including assembly and on-line packaging.

The Company maintains an in-house sales and engineering staff which assists
in the design of products to customer specifications, designs molds to
produce those products and oversees the construction of necessary molds.
Clarion's "program management" concept promotes early involvement with
customers' engineers to assist with product and tooling design and the
establishment of acceptable quality standards.

The Company's customers generally place orders for goods based on their
production requirements for the following three to four months, with a
non-binding estimate of requirements over six to twelve months.  Management
believes that the relatively long production cycles for its customers make
these estimates reliable.

Company personnel generate the majority of sales.  A very limited amount of
sales are made through outside sales representatives.  The Company plans to
continue to aggressively pursue manufacturers in the industries that it has
chosen to operate in.

Customers

Approximately 50% of the Company's 1999 sales were automotive and heavy
truck products.  Johnson Controls, Inc., a tier 1 automotive supplier,
accounted for approximately 18% of the Company's total net sales.  Because
of the importance of new vehicle and truck sales by the major automotive
and truck manufacturers to the Company's operations, the business is
affected by general business conditions in those industries.  The remaining
sales were generated from the Company's other target industries, with no
other single customer accounting for more than 10% of the Company's total
net sales.  During the first quarter of 2000 the Company acquired
substantially all the assets of Drake Products Corporation.  Drake posted
sales in excess of $50 million in 1999; approximately two-thirds of Drake's
sales were to Frigidare.


                                  -5-


Competition

The plastic injection-molded industry is highly fragmented and
characterized by intense competition.  The Company's competitive market,
however, is regional due to the significant impact of freight costs.
Within the region where the Company operates, there are many suppliers of
plastic injection molded components.  The Company believes that none of its
competitors has a dominant position in the market, although some of them
have, or may have, greater financial and other resources than the Company.
The Company believes that its ability to compete depends primarily upon its
customer service, including timely delivery and engineering/design
capabilities; product quality and durability; and competitive pricing.

The Company believes that its primary competitive strengths include its
ability to provide technologically advanced design and manufacturing
services, to hire and retain experienced product managers and a skilled
manufacturing work force, to maintain superior product quality and to
deliver finished products on a just-in-time or scheduled lead time basis.

Suppliers and Raw Materials

The primary raw materials used to produce the majority of the Company's
products are plastic resins, primarily polycarbonate, polyethylene and
polystyrene.  The Company selects its suppliers primarily on the basis of
quality, price, technical support and service.  However, in many instances,
the customer specifies the suppliers that the Company must use.  Virtually
all of the plastic resins used in the Company's operations are manufactured
within the United States.  Although the plastics industry has from time to
time experienced shortages of plastic resins, to date the Company has not
experienced any difficulties with shortages.  Management believes that
there are adequate vendors' sources available to meet its raw material
needs.

The Company's financial performance is dependent to a substantial extent on
the plastic resin market.  The primary plastic resins used by the Company
are produced from petrochemical feedstock mostly derived from natural gas
liquids.  Supply and demand cycles in the petrochemical industry, which are
often impacted by OPEC policies, can cause substantial price fluctuations.
Consequently, plastic resin prices may increase as a result of changes in
natural gas liquid prices and the capacity, supply and demand for resin and
petrochemical feedstock from which they are produced.

The Company is not a significant purchaser of plastic resin in the United
States and, therefore, is not able to achieve significant discounts from
market prices for volume purchases.  However, a common arrangement with
some of the Company's largest customers is to purchase raw materials under
contracts with terms that have been negotiated by the customer.

In many instances the Company has been able to pass through changes in the
cost of its raw materials to customers in the form of price increases.


                                  -6-


However, there is no assurance that the Company will be able to continue
such pass throughs, or that the timing of such pass throughs will coincide
with the Company's increased costs.  To the extent that increases in the
cost of plastic resin cannot be passed on to customers, or that the
duration of time lags associated with a pass through becomes significant,
such increases may have an adverse impact on gross profit margins and the
overall profitability of the Company.

Environmental and Safety Matters

The Company's operations are subject to certain federal, state and local
environmental laws and regulations that impose limitations on the discharge
of pollutants into the air and water and establish standards for the
treatment, storage and disposal of solid and hazardous wastes.  While
historically the Company has not had to make significant capital
expenditures for environmental compliance, the Company cannot predict with
any certainty its future capital expenditures for environmental compliance
because of continually changing compliance standards and technology.

The Company routinely monitors environmental compliance at its
manufacturing facilities.  The cost of such compliance has not been
significant.  The Company is not currently subject to any environmental
proceedings.  During 1999, the Company did not make any material capital
expenditures for environmental control facilities, nor does it anticipate
any such expenditures in the near future.  Actions by federal, state and
local governmental agencies concerning environmental matters could result
in laws or regulation that could increase the cost of producing the
products manufactured by the Company or otherwise adversely affect the
demand for its products.

The Company does not have insurance coverage for environmental liabilities
and does not anticipate obtaining such coverage in the future.

Employees

As of March 15, 2000, the Company had approximately 900 full-time
employees.  None of the Company's employees are represented by a union.
The Company believes that its future success will depend on its ability to
continue recruiting, retaining and motivating qualified personnel at all
levels of the Company.  The Company considers its relations with employees
to be good.











                                  -7-


ITEM 2.  DESCRIPTION OF PROPERTY.

The following table provides information regarding Clarion's principle
facilities at March 15, 2000.

                              Square     Leased
          Location            Footage    /Owned      Description of Use
---------------------------  ---------  --------  ------------------------
Caledonia, Michigan            86,000    Leased    Manufacturing and tool
                                                     making

Greenville, Michigan          190,000    Owned     Manufacturing

Holland, Michigan               1,000    Leased    Executive office

Jenison, Michigan              23,000    Leased    Engineering, design,
                                                     sales and tool making

South Haven, Michigan         110,000    Owned     Manufacturing

Montpelier, Ohio              164,000    Owned     Manufacturing

Anderson, South Carolina      131,000    Owned     Manufacturing


The Company's buildings, machinery and equipment have been well maintained,
are in good operating condition, and are adequate for current production
requirements.


ITEM 3.  LEGAL PROCEEDINGS.

The Company is not currently involved in any material lawsuits.  The
Company is subject to claims and litigation in the ordinary course of its
business, but does not believe that any such claim or litigation will have
a material adverse effect on its consolidated financial position, results
of operations or cash flow.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None during the fourth quarter of the fiscal year covered by this report.










                                  -8-


                                PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

During 1999, the Company's Common Stock was quoted on the OTC Bulletin
Board under the symbol CLTC.  On February 29, 2000 the Company received
approval from The NASDAQ-Amex Market Group for listing of its Common Stock
on the NASDAQ SmallCap Market effective March 2, 2000 under the symbol
CLAR.

The Company considers its Common Stock to be thinly traded, therefore, any
reported bid or sale price may not reflect a true market-based valuation.
The following table sets forth the range of high and low bid prices for the
Company's common stock for the periods indicated:

                                                High          Low
                                              ---------    ---------
         1998
           First Quarter                       $ 0.375      $ 0.375
           Second Quarter                        2.000        0.250
           Third Quarter                         2.000        0.437
           Fourth Quarter                        4.875        1.625

         1999
           First Quarter                         8.062        2.687
           Second Quarter                        8.250        4.250
           Third Quarter                         7.375        5.750
           Fourth Quarter                        6.812        1.750

The foregoing quotations represent inter-dealer prices without retail mark-
up, mark-down or commission and may not represent actual transactions.

The Company has never declared or paid any cash dividends on it Common
Stock.  The Company currently intends to retain its earnings to finance
operations and future growth and, therefore, does not anticipate paying any
cash dividends on its Common Stock in the foreseeable future.  The Company
does pay cash dividends on its preferred stock.

As of March 15, 2000, the approximate number of stockholders of record of
Common Stock was 400.

Sales of Unregistered Securities:

During the fiscal year ended December 31, 1999, the Company sold
unregistered shares of its Common Stock in the following transactions:

In February, the Company issued 51,209 shares of Common Stock as
consideration for consulting services rendered to the Company.  The
securities were issued at an agreed value of $2.00 per share pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the "Act").  There
were no underwriters involved in the transaction.

                                  -9-


In February, the Company sold 2,887,490 shares of Common Stock at $2.00 per
share. The offering was conducted pursuant to Section 4(2) of the Act.
There were no underwriters involved in the transaction.

In March, the Company issued 20,000 shares of Common Stock to an employee
of the Company in connection with an employment agreement.  The securities
were issued at an agreed value of $1.00 per share and were issued pursuant
to Section 4(2) of the Act. There were no underwriters involved in the
transaction.

In March, the Company issued 25,000 shares of Common Stock as consideration
for services rendered to the Company.  The securities were issued at an
agreed value of $3.25 per share pursuant to Section 4(2) of the Act.  There
were no underwriters involved in the transaction.

In April, the Company sold 100,000 shares of Common Stock at $3.50 per
share.  The offering was conducted pursuant to Section 4(2) of the Act.
There were no underwriters involved in the transaction.

In April, the Company issued 13,495 shares of Common Stock as consideration
for equipment and services received by the Company.  The securities were
issued at an agreed value of $2.00 per share pursuant to Section 4(2) of
the Act.  There were no underwriters involved in the transaction.

In April, the Company issued 71,000 shares of Common Stock as consideration
for consulting services rendered to the Company.  The securities were
issued at an agreed value of $2.00 per share pursuant to Section 4(2) of
the Act.  There were no underwriters involved in the transaction.

In April, the Company issued 310,000 shares of Common Stock as
consideration for the Company's acquisition of Mito Plastics, Inc.  The
securities were issued pursuant to Section 4(2) of the Act.  There were no
underwriters involved in the transaction.

In May, a holder of outstanding options exercised their rights to purchase
75,000 shares of Common Stock at a price of $1.00 per share.  The
securities were issued pursuant to Section 4(2) of the Act.  There were no
underwriters involved in the transaction.

In May, the Company issued 25,000 shares of Common Stock to an employee of
the Company in connection with an employment agreement.  The securities
were issued at an agreed value of $2.00 per share and were issued pursuant
to Section 4(2) of the Act. There were no underwriters involved in the
transaction.

In June, the Company sold 107,693 shares of Common Stock at $3.25 per
share.  The offering was conducted pursuant to Section 4(2) of the Act.
There were no underwriters involved in the transaction.




                                  -10-


In June, a holder of outstanding options exercised their rights to purchase
30,000 shares of Common Stock at an exercise price of $1.00 per share.  The
securities were issued pursuant to Section 4(2) of the Securities Act.
There were no underwriters involved in the transaction.

In July, the Company sold 30,770 shares of Common Stock at $3.25 per share.
The offering was conducted pursuant to Section 4(2) of the Act.  There were
no underwriters involved in the transaction.

In August, the Company issued 193,704 shares of Common Stock as
consideration for services rendered to the Company.  The securities were
issued at an agreed value of $3.50 per share pursuant to Section 4(2) of
the Act.  There were no underwriters involved in the transaction.

In August, the Company issued 200,000 shares of Common Stock as
consideration for the Company's acquisition of Wamar Tool & Machine Co.
The securities were issued pursuant to Section 4(2) of the Act.  There were
no underwriters involved in the transaction.

In August, the Company issued 200,000 shares of Common Stock as
consideration for the Company's acquisition of Wamar Products, Inc.  The
securities were issued pursuant to Section 4(2) of the Act.  There were no
underwriters involved in the transaction.

In September, the Company issued 7,250 shares of Common Stock as
consideration for consulting services rendered to the Company.  The
securities were issued at an agreed value of $4.84 per share pursuant to
Section 4(2) of the Act.  There were no underwriters involved in the
transaction.

In September, the Company issued 850,000 shares of Common Stock as
consideration for the Company's acquisition of Double "J" Molding, Inc.
The securities were issued pursuant to Section 4(2) of the Act.  There were
no underwriters involved in the transaction.

In November, the Company issued 8,000 shares of Common Stock as
consideration for consulting services rendered to the Company.  The
securities were issued at an agreed value of $3.50 per share pursuant to
Section 4(2) of the Act.  There were no underwriters involved in the
transaction.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

This Management's Discussion and Analysis or Plan of Operation should be
read in conjunction with the Company's Consolidated Financial Statements,
Notes to Consolidated Financial Statements, and the Cautionary Statement
for Forward-Looking Information included elsewhere in this annual report.


                                  -11-


The Company is a full-service custom injection molder, providing rapid
prototyping and design models, mold design and engineering services, mold
manufacturing, injection molding and post-molding assembly to a diverse
base of customers in the automotive, heavy truck, office furniture and
consumer goods industries.

As described in Note 2 of the Notes to Consolidated Financial Statements,
the Company entered into two business combinations during 1999 that were
accounted for as poolings of interests.  In April, the Company acquired
Mito Plastics, Inc. a full-service product development company providing
program management, industrial design, engineering, prototyping and tooling
from concept through delivery of complete assemblies all under one roof.
In August, the Company acquired Wamar Tool & Machine Co., a fully equipped
mold making and mold repair firm that serves the plastic injection molding
industry.  Accordingly, all financial data in the Management's Discussion
and Analysis or Plan of Operation is reported as though these companies
have always been one entity.

The Company also made two other acquisitions in 1999 that were accounted
for under the purchase method of accounting, as described in Note 2 of the
Notes to Consolidated Financial Statements, that impact the comparability
of results between the years presented.  In August, the Company acquired
Wamar Products, Inc. a plastic injection molder and assembler of plastic
component and finished products.  In September, the Company acquired Double
"J" Molding, Inc., a tier two automotive supplier of plastic injection
molded parts.

RESULTS OF OPERATIONS

The table below outlines the components of the Company's Statement of
Income as a percentage of net sales:
                                               YEAR ENDED DECEMBER 31,
                                               -----------------------
                                                 1999           1998
                                               --------       --------
  Net sales                                      100.0%         100.0%
  Cost of sales                                   96.7%          92.6%
                                               --------       --------
    Gross profit                                   3.3%           7.4%

  Selling, general and
    administrative expenses                       48.8%          51.3%
                                               --------       --------
    Operating loss                               (45.5%)        (43.9%)

  Other income(expense)                           (5.3%)         (2.6%)
                                               --------       --------
    Loss before income taxes                     (50.8%)        (46.5%)
  Provision for income taxes                        .4%           (.6%)
                                               --------       --------
    Net loss                                     (51.2%)        (45.9%)
                                               ========       ========
                                  -12-


Net sales

Net sales for 1999 were $28.1 million, an increase of $18.1 million, or
181.5%, over net sales of $10.0 million for 1998.  Of this increase, $11.8
million was due to the acquisition of Wamar Products in August 1999 and
Double J in September 1999.  The remaining sales increase was primarily
attributable to higher sales volume due to increased manufacturing capacity
at the new Montpelier, Ohio facility.  No significant price increases
occurred during 1999.

Gross profit

Gross profit as a percentage of net sales in 1999 was 3.3% compared to 7.4%
in 1998.  Overall gross profit margins did not reach levels consistent with
the injection molding industry due to the under absorption of overhead
costs at the new Montpelier facility.  That location is still operating
below practical capacity, however, business booked for mid 2000 and beyond
should bring that facility closer to normal operating levels within the
next three to six months.  Manufacturing overhead at that facility is being
minimized where possible, however, the fixed costs there are now being
fully recognized as operations are now completely on line.  The Montpelier
start-up expenses were partially offset by gross profits recorded by Wamar
Products and Double J during the last four months and three months of the
year, respectively.

The decline in gross profit percentage was also impacted by an increase in
outsourced mold manufacturing, which generates lower profit margins.  More
molds were sold in 1999 that exceeded the Company's internal production
capabilities.  The Company can produce plastic injection molds requiring up
to 300 tons of clamping force; molds in excess of that size are outsourced
to other vendors.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 168.6% from $5.1
million in 1998 to $13.7 million in 1999, but decreased as a percentage of
net sales to 48.8% in 1999 compared to 51.3% in 1998.  The primary reason
for the increase in absolute dollars reflected the ongoing investment being
made, primarily for technical talent, in order to support the Company's
long-term strategy of growth through acquisitions. Sales, engineering, and
management personnel have been added in order to sustain and grow the base
of business that is booked for 2000.  The Company anticipates that the
level of selling, general and administrative expenses will continue to
increase in order to support continued growth and expansion, however,
management believes that selling, general and administrative expenses will
continue to decrease as a percentage of net sales.






                                  -13-


Other income (expense)

Other expense, net increased $1.2 million to $1.5 million in 1999 compared
to $0.3 million in 1998.  Interest expense increased $0.7 million to $1.0
million in 1999 due to higher debt levels for financing the new Montpelier
facility, certain acquisition funding and general working capital needs.
The Company also recognized a $0.2 million loss on the sale of the assets
of Clarion Specialty Products and a loss of $0.3 million on the disposal of
other property and equipment.  Partially offsetting those expenses was $0.1
million of interest income.

Income taxes

The Company's 1999 effective income tax rate differed from the applicable
statutory rate primarily due to nondeductible goodwill amortization, the
effect of Michigan Single Business tax, and fully reserving future federal
income tax benefits, which were comprised primarily of net operating loss
carryforwards.  The 1998 effective income tax rate differed from the
applicable statutory rate primarily due to nondeductible goodwill
amortization and partially reserving future tax benefits, which were
primarily comprised of net operating loss carryforwards.

Net Loss

Net loss for 1999 increased to $14.4 million, or $0.88 per basic share,
compared to $4.6 million, or $0.53 per basic share, for 1998.


LIQUIDITY AND CAPITAL RESOURCES

The Company had a total cash balance of $6,560,000 at December 31, 1999.
The Company's primary cash requirements are for ongoing operating costs,
working capital needs, capital expenditure requirements, business
acquisitions, debt service obligations and preferred stock dividends.
These cash requirements have increased due to the growth of the Company and
are expected to continue to increase as a result of future anticipated
growth.  Historically, the Company's main sources of cash have been from
the sale of equity securities and bank borrowings.  The Company believes
that cash generated from operations, together with amounts available under
its revolving credit facility and any other available financing source,
will be adequate to permit the Company to meet its cash requirements,
although no assurance can be given in this regard.  Changes in the
Company's economic condition or other unforeseen circumstances could cause
these funds to not be available to meet its cash requirements.  In
addition, the Company intends to pursue, as part of its business strategy,
future growth through acquisitions that may involve the expenditure of
significant funds.  Depending upon the nature, size and timing of future
acquisitions, the Company may be required to obtain additional debt or
equity financing in connection with such transactions.  There can be no
assurance, however, that additional financing will be available to the
Company, when and if needed, on acceptable terms or at all.

                                  -14-


Net cash used by operating activities increased to $14.0 million in 1999
from $3.6 million in 1998.  The increase in cash used by operations was
primarily attributable to the operations at the Company's new Montpelier,
Ohio facility and the ongoing investment being made, primarily for
technical talent, in order to support the Company's long-term strategy of
growth through acquisitions.  The increase in cash used by operations was
partially offset by positive operating cash generated from Wamar Products
and Double J subsequent to their effective acquisition dates.  Working
capital at December 31, 1999 was $5.7 million, compared with a negative
$3.2 million at December 31, 1998.  The increase reflected the positive
working capital of companies acquired during 1999 and the effect of
converting short-term construction obligations at December 31, 1998 for the
new Montpelier facility to long-term debt.

During 1999, the Company used cash of $14.0 million for capital
expenditures, $6.2 million, net of cash acquired, for acquisitions and
$145,000 to pay dividends to preferred shareholders.

The most significant capital expenditures during 1999 consisted of $11.3
million for the building and equipment at the Company's newly constructed
Montpelier facility, and $1.9 million for land and buildings associated
with the acquisition of Double J. The Company anticipates that capital
expenditures for 2000 will be approximately $3.9 million, primarily for
machinery and equipment.

In May of 1999, the Company sold the assets of its Clarion Specialty
Products subsidiary after determining that business was not consistent with
the Company's strategic growth plan.  The Company received $107,500 in cash
and the buyer also assumed certain of the operation's liabilities.  The
Company also received $102,000 in cash from the sale of other assets.

During the third quarter the Company acquired all the outstanding stock of
Wamar Products, Inc. for approximately $6.8 million in cash and 200,000
shares of Clarion common stock.  In addition, a $200,000 holdback liability
was been recorded that was paid in cash to an escrow fund during the first
quarter of 2000.  Cash in the escrow fund will be paid to the seller's one
year after the closing date, less any adjustments to the acquisition price
as agreed to by Clarion and the sellers.  The real property where Wamar
Products currently conducts its business was retained by an affiliate of
the sellers and is being leased to Clarion.  The Company and the affiliate
have entered into an option and put agreement for the real property whereby
Clarion may exercise an option to purchase the real property and the
sellers may exercise an option to sell the real property to Clarion.  The
cash purchase price, which ranges from $3.3 million to $3.7 million, is
determined by the date the option or put is exercised, in accordance with a
pre-defined schedule of terms.

On October 1, 1999 the Company acquired all the outstanding capital stock
of Double "J" Molding, Inc. (Double J) in exchange for 850,000 shares of



                                  -15-


Clarion common stock.  In a related transaction, the Company also acquired
the real property owned by a partnership controlled by the former Double J
shareholders, and used by Double J, for approximately $2 million in cash
and the assumption of $1.3 million in debt.  Of the 850,000 Clarion shares
issued for the acquisition, 425,000 shares ("Put Shares") are subject to
the terms of stock put agreements ("Put Agreements") which require the
Company to purchase some or all of the Put Shares from the holders at a
price of $6.00 per share.  The maximum potential repurchase obligation of
the Company is $2,550,000.  The outstanding put options expire on November
15, 2000 and are exercisable between October 1, 2000 and November 14, 2000.
The Put Shares have been reclassified on the December 31, 1999 balance
sheet to a temporary equity account entitled "Value of Shares Subject to
Redemption."  Concurrent with the issuance of these stock put options, the
Company entered into a stock put agreement with a Clarion shareholder which
requires that shareholder to purchase a number of shares of Clarion common
stock equal to the product of: (i) the aggregate purchase price paid by
Clarion for the Put Shares, divided by the lesser of (ii) the closing price
of the common stock quoted on NASDAQ on the date Clarion receives notice of
its obligation to perform under the Put Agreements, or (iii) $6.00.  The
Company's put option expires on November 25, 2000 and is exercisable
between October 1, 2000 and November 14, 2000.  In exchange for that put
agreement, the Director received 200,000 warrants to purchase Clarion
common stock at an exercise price of $5.00 per share.  The warrants expire
on September 30, 2002.

At December 31, 1999, the Company's total debt was $23.8 million, of which
$22.8 million represented bank debt.  This is in comparison to the $1.9
million in total debt at December 31, 1998, of which $1.6 million
represented bank debt.  The increase in total debt resulted principally
from new long-term bank borrowings of $20.3 million and debt acquired with
the Wamar Products and Double J acquisitions, offset by the repayments
totaling $5.9 million.  The bank debt outstanding at December 31, 1999 was
replaced by a new revolving credit facility and term loans in February
2000.

Effective February 1, 2000, the Company acquired substantially all the
assets of Drake Products Corporation, a full-service plastic injection
molding firm based in Greenville, Michigan.  Consideration for the
acquisition included 2 million shares of Clarion common stock,
approximately $25 million in cash, a $5 million subordinated promissory
note and the assumption of approximately $6.5 million of liabilities.  To
fund the cash portion of the transaction, the Company entered into a
$26,000,000 term loan agreement with a variable interest rate of LIBOR plus
3.50% or prime rate plus 1.00%, at the option of the Company.  The loan
requires monthly principal payments of $250,000 through February 2001,
$333,333 through February 2002, and $416,667 through January 2003, plus
interest.  A final principal payment of $14.4 million plus interest is due
in February 2003.  Borrowings are collateralized by all tangible and
intangible assets.  In a related transaction, the Company also acquired the
real property used by Drake for $2,200,000 in cash and the issuance of a
$1,000,000 promissory note.

                                  -16-


On February 29, 2000, the Company entered into a new revolving credit
agreement that provides for up to $15.0 million in borrowings through
February 2003.  The Company borrowed $11.8 million under the new credit
facility and used the proceeds to pay existing bank debt.  At the option of
the Company, interest is payable based on LIBOR plus 3.50% or the bank's
prime rate plus 1.00%.  In February 2001, interest will be variable based
on the Company's leverage ratio and will range between LIBOR plus 1.75% to
3.00% or prime rate, to prime rate plus 1.00%, at the option of the
Company.  In addition, a commitment fee is payable on the unused portion of
the credit line.  At February 29, 2000, the Company did not have any unused
borrowing capacity under the credit agreement's most restrictive debt
covenant.  Borrowings are collateralized by all tangible and intangible
assets.

Concurrent with the revolving credit agreement, the Company entered into a
$12.0 million term loan agreement that requires a lump sum payment of
principal and interest in February 2003.  Proceeds were used to pay
existing bank debt.  At the option of the Company, interest is payable
based on LIBOR plus 1.00% or the bank's prime rate.  Borrowings are
collateralized by all tangible and intangible assets, in addition to
certain personal guarantees.  Two members of Clarion's Board of Directors
and a Clarion executive officer have guaranteed $3 million of the term debt
by each providing $1 million in standby letters of credit.  Two other
individuals not related to the Company have guaranteed the remaining $9
million; one by providing a standby letter of credit for $3 million, the
other by making a $6 million cash deposit with the lending bank.  The
Company has agreed to pay, on behalf of the guarantors providing standby
letters of credit, the 1% annual fees due under the letters of credit plus
1% per month on the guaranteed amount.  The Company is paying the guarantor
providing the cash deposit a 2% fee per month.

Debt covenants covering the new credit facilities require the Company to
maintain certain fixed charge coverage and leverage ratios.  Other
provisions establish minimum tangible net worth and EBITDA targets, and
limit capital expenditures and Company indebtedness.  There are also
restrictions on the payment of certain dividends.

During 1999, the Company sold, pursuant to various private offerings,
3,125,953 shares of its common stock at prices ranging from $2.00 per share
to $3.50 per share for total proceeds of approximately $6.6 million.

During 1999, the Company authorized 3,000,000 shares of convertible
cumulative preferred stock with a par value of $0.001 per share.  In
conjunction with the Wamar Products acquisition, and to fund general
working capital needs, the Company issued 1,490,000 shares of preferred
stock at a private offering price of $7.99 per share.  The Company issued
an additional 468,750 shares of preferred stock at a private offering price
of $7.99 per share in December 1999.  Annual cumulative dividends of $1.12
per share accruing from the date of issuance are payable in cash quarterly



                                  -17-


commencing on September 30, 1999.  The preferred stock is convertible at
the option of the holder at any time, unless previously redeemed, into
shares of common stock of the Company at an initial conversion rate of 2
shares of common stock for each share of preferred stock, subject to
adjustment in certain events.  After December 31, 2000, the conversion rate
is subject to adjustment in accordance with a pre-defined formula.  The
Company may at any time redeem all or any portion of the convertible
preferred stock for $10 per share plus all accrued and unpaid dividends
thereon.


TAX CONSIDERATIONS

The Company has net operating loss ("NOL") carryforwards for tax purposes
that are available to offset future taxable income.  However, there are
federal tax laws that restrict or eliminate NOL carryforwards when certain
changes of control occur.  A 50% change of control, which is calculated
over a rolling three-year period, may cause the Company to lose some or all
of its NOL carryforward benefits.  Due to the significant number of equity
transactions that have occurred in recent years the Company believes there
have been changes in control, however, the Company also believes there are
currently no restrictions that would eliminate the future cash benefits
from utilizing its NOL carryforwards.  As the Company executes it strategy
of growth through acquisitions, there are likely to be more transactions in
the future involving private or public sales of equity securities.  The
Company cannot make any assurances that such transactions will not result
in the loss of NOL carryforward benefits in the future due to changes in
control.


INFLATION

The Company does not believe that sales of its products are affected
materially by inflation, although there can be no assurance that inflation
will not affect sales in the future.  The Company does believe that its
financial performance could be adversely affected by inflation in the
plastic resin market.  The primary plastic resins used by the Company are
produced from petrochemical feedstock mostly derived from natural gas
liquids.  Supply and demand cycles in the petrochemical industry, which are
often impacted by OPEC policies, can cause substantial price fluctuations.
Consequently, plastic resin prices may increase as a result of changes in
natural gas liquid prices and the capacity, supply and demand for resin and
petrochemical feedstock from which they are produced.

In many instances the Company has been able to pass through changes in the
cost of its raw materials to customers in the form of price increases.
However, there is no assurance that the Company will be able to continue
such pass throughs, or that the timing of such pass throughs will coincide
with the Company's increased costs.  To the extent that increases in the



                                  -18-


cost of plastic resin cannot be passed on to customers, or that the
duration of time lags associated with a pass through becomes significant,
such increases may have an adverse impact on gross profit margins and the
overall profitability of the Company.


YEAR 2000 READINESS DISCLOSURE

Many computer systems and software products were designed to accept only
two digits in date code fields which could result in recognizing the entry
"00" as the year 1900 rather than the year 2000.  Consequently, such
computer systems and software products need to be upgraded to comply with
Year 2000 ("Y2K") requirements. Clarion had actively taken steps prior to
December 31, 1999 to insure that information technology systems, embedded
technology and material third parties were all prepared to process date-
related information in the Year 200 without disruption.

As of the date of this filing, the Company has not experienced any Y2K-
related problems and is unaware of any future potential interruptions that
could result from Y2K readiness issues.  The Company continues to monitor
its operations and transactions with customers and vendors for possible Y2K
issues.


ITEM 7.  FINANCIAL STATEMENTS

The following report, financial statements and notes are included with this
report:

    Independent Auditors' Report
    Consolidated Balance Sheets
    Consolidated Statements of Income
    Consolidated Statements of Shareholders' Equity
    Consolidated Statements of Cash Flows
    Notes to Consolidated Financial Statements

















                                  -19-







                          Independent Auditors' Report
                          ----------------------------


To the Board of Directors
Clarion Technologies, Inc. and Subsidiaries
Holland, Michigan


We have audited the accompanying consolidated balance sheets of Clarion
Technologies, Inc. and Subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of income, changes in shareholders'
equity, and cash flows for the years then ended.  These consolidated
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Clarion
Technologies, Inc. and Subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.


PERRIN, FORDREE & COMPANY, P.C.


 /s/ Perrin, Fordree & Company, P.C.


March 11, 2000
Troy, Michigan





                                  -20-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS


                                                       DECEMBER 31,
                                                -------------------------
                                                    1999          1998
                                                -----------   -----------
ASSETS
Current assets:
  Cash and cash equivalents                     $ 6,560,000   $ 3,973,000
  Accounts receivable, net of allowances
    of $883,000 in 1999 and $55,000 in 1998       9,543,000     1,951,000
  Inventories                                     3,752,000     1,013,000
  Prepaid expenses and other current assets         706,000       339,000
                                                -----------   -----------
    Total current assets                         20,561,000     7,276,000


Property, plant and equipment:
  Land                                              315,000       188,000
  Buildings and improvements                     13,930,000       102,000
  Machinery and equipment                        30,343,000     5,714,000
  Furniture and office equipment                  4,098,000     1,556,000
  Construction in progress                           53,000     6,379,000
                                                -----------   -----------
                                                 48,739,000    13,939,000
  Less accumulated depreciation                 (15,145,000)   (3,235,000)
                                                -----------   -----------
                                                 33,594,000    10,704,000
Other assets:
  Costs in excess of net assets acquired,
    net of accumulated amortization of
    $212,000 in 1999 and $79,000 in 1998          5,567,000     1,102,000
  Deferred tax assets                                     -        68,000
  Other assets                                      592,000        20,000
                                                -----------   -----------
                                                  6,159,000     1,190,000
                                                -----------   -----------
                                                $60,314,000   $19,170,000
                                                ===========   ===========



       See accompanying notes to consolidated financial statements.







                                  -21-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS


                                                       DECEMBER 31,
                                                -------------------------
                                                    1999          1998
                                                -----------   -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term debt                               $    87,000   $   600,000
  Current portion of long-term debt                 463,000       426,000
  Accounts payable                                8,395,000     4,145,000
  Accrued construction costs                              -     4,430,000
  Accrued payroll and benefits                    2,641,000       208,000
  Accrued dividends                                 426,000             -
  Other current liabilities                       2,818,000       674,000
                                                -----------   -----------
    Total current liabilities                    14,830,000    10,483,000

Long-term debt, net of current portion           23,204,000       863,000
Deferred tax liability                              197,000             -
Other liabilities                                   540,000             -
                                                -----------   -----------
    Total liabilities                            38,771,000    11,346,000


Value of shares subject to redemption             2,550,000             -


Shareholders' equity:
  Preferred stock, $0.001 par value,
    3,000,000 shares authorized; 1,958,750
    shares issued and outstanding in 1999,
    stated at liquidation value of $8.00
    per share                                    15,670,000             -
  Common stock, $0.001 par value in 1999,
    $0.01 par value in 1998, 40,000,000
    shares authorized; 18,534,504 and
    13,978,893 issued and outstanding
    in 1999 and 1998, respectively                   19,000       140,000
  Additional paid-in capital                     23,820,000    13,257,000
  Accumulated deficit                           (20,516,000)   (5,573,000)
                                                -----------   -----------
      Total shareholders' equity                 18,993,000     7,824,000
                                                -----------   -----------
                                                $60,314,000   $19,170,000
                                                ===========   ===========

       See accompanying notes to consolidated financial statements.


                                  -22-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME


                                                 YEAR ENDED DECEMBER 31,
                                               --------------------------
                                                    1999          1998
                                               ------------   -----------

Net sales                                      $ 28,059,000   $ 9,966,000
Cost of sales                                    27,139,000     9,224,000
                                               ------------   -----------
    Gross profit                                    920,000       742,000

Selling, general and
  administrative expenses                        13,685,000     5,117,000
                                               ------------   -----------
    Operating loss                              (12,765,000)   (4,375,000)

Other income (expense):
  Interest expense                               (1,010,000)     (258,000)
  Interest income                                    81,000         2,000
  Loss on sale of business                         (222,000)            -
  Loss on sale of equipment                        (330,000)       (2,000)
                                               ------------   -----------
                                                 (1,481,000)     (258,000)
                                               ------------   -----------
    Loss before income taxes                    (14,246,000)   (4,633,000)

Provision for income taxes                          126,000       (55,000)
                                               ------------   -----------
    Net loss                                   $(14,372,000)  $(4,578,000)
                                               ============   ===========

Loss designated to common shareholders         $(14,943,000)  $(4,578,000)
                                               ============   ===========

Loss per share:
  Basic                                               $(.88)        $(.53)
                                                      =====         =====
  Diluted                                             $(.88)        $(.53)
                                                      =====         =====



       See accompanying notes to consolidated financial statements.






                                  -23-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
                                                      ADDITIONAL
                             PREFERRED     COMMON      PAID-IN      ACCUMULATED
                               STOCK        STOCK      CAPITAL        DEFICIT        TOTAL
                            -----------   --------   -----------   ------------   -----------
<S>                         <C>           <C>        <C>           <C>            <C>
Previously reported
  balances at
  December 31, 1997         $         -   $ 52,000   $ 1,513,000   $ (1,511,000)  $    54,000
Adjustment for pooling of
  interest, Mito                      -      3,000        (3,000)       203,000       203,000
Adjustment for pooling of
  interest, Wamar Tool                -      2,000         8,000        313,000       323,000
                            -----------   --------   -----------   ------------   -----------
Restated balances at
  December 31, 1997                   -     57,000     1,518,000       (995,000)      580,000

Net loss                              -          -             -     (4,578,000)   (4,578,000)
Issuance of common stock
  for services rendered               -      3,000       336,000              -       339,000
Issuance of common stock
  relating to employment
  agreements                          -      2,000       147,000              -       149,000
Common stock issued with
  acquisition                         -     10,000       940,000              -       950,000
Issuance of common stock              -     68,000    10,316,000              -    10,384,000
                            -----------   --------   -----------   ------------   -----------
Balances at
  December 31, 1998                   -    140,000    13,257,000     (5,573,000)    7,824,000

Net loss                              -          -             -    (14,372,000)  (14,372,000)
Change in par value of
  common stock from
  $.01 to $.001                       -   (125,000)      125,000              -             -
Issuance of common stock
  for services rendered               -          -     1,093,000              -     1,093,000
Net issuance of common
  stock relating to
  employment agreements               -          -         4,000              -         4,000
Common stock issued for
  acquisitions                        -      1,000     4,199,000              -     4,200,000
Issuance of common stock
  for cash                            -      3,000     6,586,000              -     6,589,000
Issuance of preferred
  stock for cash             15,670,000          -       (19,000)             -    15,651,000
Reclassification of shares
  subject to redemption               -          -    (2,550,000)             -    (2,550,000)
Stock-based compensation              -          -     1,125,000              -     1,125,000
Preferred dividends
  declared                            -          -             -       (571,000)     (571,000)
                            -----------   --------   -----------   ------------   -----------
Balances at
  December 31, 1999         $15,670,000   $ 19,000   $23,820,000   $(20,516,000)  $18,993,000
                            ===========   ========   ===========   ============   ===========
</TABLE>



       See accompanying notes to consolidated financial statements.



                                  -24-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                     YEAR ENDED DECEMBER 31,
                                                   ---------------------------
                                                       1999            1998
                                                   ------------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $(14,372,000)   $(4,578,000)
  Adjustments to reconcile net income to net
   cash provided by operations
    Depreciation and amortization                     1,948,000         768,000
    Deferred income taxes                                     -         (43,000)
    Allowance for doubtful accounts                     532,000               -
    Loss on sale of equipment                           330,000           2,000
    Loss on sale of business                            222,000               -
    Stock-based compensation expense                  1,125,000               -
    Changes in operating assets and liabilities:
      Accounts receivables                           (1,085,000)       (567,000)
      Inventories                                      (847,000)       (584,000)
      Prepaid expenses and other assets                 230,000        (233,000)
      Accounts payable                               (4,871,000)      1,299,000
      Accruals and other liabilities                  2,780,000         295,000
                                                   ------------     -----------
Cash used in operating activities                   (14,008,000)     (3,641,000)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                              (14,003,000)     (2,950,000)
  Proceeds from sale of equipment                       102,000           3,000
  Proceeds from sale of business                        107,000               -
  Proceeds from notes receivable                              -          25,000
  Acquisitions, net of cash acquired                 (6,245,000)       (871,000)
                                                   ------------     -----------
Cash used in investing activities                   (20,039,000)     (3,793,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net change in short-term debt                         487,000         220,000
  Proceeds from borrowings                           20,253,000         211,000
  Repayments of long-term debt                       (5,920,000)       (658,000)
  Capital lease payments                               (281,000)        (17,000)
  Net proceeds from issuance of preferred stock      15,651,000               -
  Net proceeds from issuance of common stock          6,589,000      11,725,000
  Preferred stock dividends paid                       (145,000)              -
                                                   ------------     -----------
Cash provided by financing activities                36,634,000      11,481,000
                                                   ------------     -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS             2,587,000       4,047,000

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR          3,973,000         (74,000)
                                                   ------------     -----------
CASH AND CASH EQUIVALENTS, END OF YEAR             $  6,560,000     $ 3,973,000
                                                   ============     ===========



       See accompanying notes to consolidated financial statements.



                                  -25-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following summary of significant accounting policies of Clarion
Technologies, Inc. is presented to assist the reader in evaluating the
financial statements.  Certain amounts in 1998 have been reclassified to
conform with the 1999 presentation.

PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of Clarion
Technologies, Inc. and subsidiaries (collectively, the "Company" or
"Clarion").  All significant intercompany accounts and transactions have
been eliminated.

USE OF ESTIMATES
----------------
The preparation of these financial statements in conformity with generally
accepted accounting principles requires management to make estimates,
including estimates related to assumptions, that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements.  Such estimates and
assumptions also affect the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates and assumptions.

CASH AND CASH EQUIVALENTS
-------------------------
The company considers all highly liquid instruments with a maturity of
three months or less when purchased to be cash equivalents.  The carrying
amount reported in the balance sheet for cash and cash equivalents
approximates fair value.

INVENTORIES
-----------
Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market.  Components of inventories are summarized as
follows:

                                                      DECEMBER 31,
                                                ------------------------
                                                   1999          1998
                                                ----------    ----------
  Raw materials                                 $1,626,000    $  447,000
  Work in process                                1,331,000       277,000
  Finished goods                                   795,000       289,000
                                                ----------    ----------
                                                $3,752,000    $1,013,000
                                                ==========    ==========
                                  -26-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION
----------------------------------------------
Property, plant and equipment are recorded at cost.  Expenditures for
significant renewals and improvements are capitalized.  Repairs and
maintenance costs are charged to expense as incurred.  Depreciation is
recognized over the estimated useful lives of the assets using primarily
the straight-line method.  The estimated useful lives used ranges from 5 to
40 years for buildings and improvements, 3 to 12 years for machinery and
equipment, and 2 to 10 furniture and office equipment.  Leasehold
improvements are amortized over the shorter of the lives of the leases or
estimated service lives.

COSTS IN EXCESS OF NET ASSETS ACQUIRED AND OTHER LONG-LIVED ASSETS
---------------------------------------------------------------------
Costs in excess of net assets acquired represent the excess of purchase
price and related costs over the value assigned to net tangible assets of
businesses acquired. These intangible assets are being amortized on a
straight-line basis over the period estimated to be benefitted, not
exceeding 40 years.

The Company continually reviews the recoverability of its long-lived assets
by determining whether unamortized balances can be recovered through
undiscounted future operating cash flows over the remaining lives of the
assets in accordance with the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 121.  If the sum of the expected future
cash flows is less than the carrying value of the assets, an impairment
loss is recognized for the excess of the carrying value over the fair
value.  The estimated fair value is determined by discounting the expected
future cash flows at a rate that would be similar for an investment with
like risks.

REVENUE RECOGNITION
-------------------
Sales are recorded when products are shipped or a service is performed.

RESEARCH AND DEVELOPMENT
------------------------
Research and development expenditures are expensed when incurred.

INCOME TAXES
------------
The provision for income taxes is based on income reported in the financial
statements.  Deferred income taxes are recognized for all temporary
differences between the tax and financial reporting bases of assets and
liabilities.

                                  -27-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

EARNINGS PER SHARE
------------------
Basic earnings per share ("EPS") is computed by dividing net income by the
weighted-average number of common shares outstanding in each year.  Diluted
EPS is computed by dividing net income by the weighted-average number of
common shares outstanding plus all shares that would have been outstanding
if every potentially dilutive common share had been issued.  The following
table reconciles the numerators and denominators used in the calculation of
basic and diluted EPS.

                                                 1999            1998
                                             ------------    -----------
  Numerators:
    Net loss                                 $(14,372,000)   $(4,578,000)
    Preferred stock dividends declared           (571,000)             -
                                             ------------    -----------
    Loss designated to common shareholders
      for basic and diluted EPS              $(14,943,000)   $(4,578,000)
                                             ============    ===========

  Denominators:
    Weighted-average shares outstanding
      for basic and diluted EPS                16,930,770      8,662,711
                                               ==========      =========

Diluted EPS was the same as basic EPS in 1999 and 1998.  The diluted share
base excluded all common stock equivalents because of the anti-dilutive
effect caused by the Company's operating losses during each of those years.

RELATED PARTY TRANSACTION
--------------------------
In January 1999, the Company entered into an agreement with a firm owned by
a Director of the Company to provide consulting services for strategic
initiatives.  Terms of the agreement provide for monthly payments of
$15,000 through December 2002.

CONCENTRATIONS OF CREDIT RISK
-----------------------------
The Company's financial instruments that are exposed to concentrations of
credit risk consist primarily of cash equivalents and trade receivables.

The Company maintains its cash accounts with various major financial
institutions.  The Company performs periodic evaluations of the relative
credit standing of these financial institutions and limits the amount of
credit exposure with any one institution.

                                  -28-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company sells its products directly to other manufacturers.  No single
customer accounted for more than 10% of consolidated revenue in 1998.  For
the year ended December 31, 1999, the Company had one customer that
accounted for approximately 18% of consolidated net sales and approximately
28% of trade accounts receivable.  The Company routinely assesses the
financial strength of its customers in order to manage its concentration of
credit risk.


NOTE 2.  BUSINESS COMBINATIONS

Purchase Transactions:

On September 30, 1999 the Company acquired all the outstanding stock of
Double "J" Molding, Inc. ("Double J") in exchange for 850,000 shares of
Clarion common stock.  Double J is a tier-two automotive supplier of
plastic injection molded parts.  The transaction was accounted for under
the purchase method of accounting, therefore, assets and liabilities were
recorded based on their fair values at the date of acquisition.  Operating
results have been included in the Company's consolidated statements of
income from the date of acquisition.  The Company recorded $1.4 million of
costs in excess of net assets acquired, which are being amortized over 40
years.

In a related transaction, the Company also acquired the real property where
Double J conducts it business from a partnership controlled by the former
Double J shareholders.  The Company paid approximately $2 million in cash
and assumed $1.3 million in debt for the property.

On August 31, 1999, the Company acquired Wamar Products, Inc. ("Wamar
Products"), a plastic injection molder and assembler of plastic component
and finished products.  The Company purchased all the outstanding stock of
Wamar Products for approximately $6.8 million in cash and 200,000 shares of
Clarion common stock.  In addition, a $200,000 holdback liability has been
recorded that was paid into an escrow fund during the first quarter of
2000.  Cash in the escrow fund will be paid to the seller's one year after
the closing date, less any adjustments to the acquisition price as agreed
to by Clarion and the sellers.  The transaction was accounted for under the
purchase method of accounting, therefore, assets and liabilities were
recorded based upon their fair values at the date of acquisition.
Operating results have been included in the Company's consolidated
statements of income from the date of acquisition.  The Company recorded
$3.2 million of costs in excess of net assets acquired, which are being
amortized over 40 years.


                                  -29-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.  BUSINESS COMBINATIONS (continued)

The real property where Wamar Products currently conducts its business was
retained by an affiliate of the sellers and is being leased to Clarion.
The Company and the affiliate have entered into an option and put agreement
for the real property whereby Clarion may exercise an option to purchase
the real property at anytime until August 31, 2004.  The sellers may
exercise an option to sell the real property to Clarion beginning
September 1, 2000 until August 31, 2001.  The cash purchase price, which
ranges from $3.3 million to $3.7 million, is determined by the date the
option or put is exercised, in accordance with a pre-defined schedule of
terms.

On June 15, 1998 the Company acquired all the outstanding stock of Rose and
Associates, Inc. ("Rose") in exchange for 950,000 shares of Clarion common
stock.  Rose is a sales and marketing firm specializing in plastic
injection molded parts.  The transaction was accounted for under the
purchase method of accounting, therefore, assets and liabilities were
recorded based upon their fair values at the date of acquisition.
Operating results have been included in the Company's consolidated
statements of income from the date of acquisition.  The Company recorded
$950,000 of costs in excess of net assets acquired, which are being
amortized over 7 years.

The following unaudited pro forma consolidated results of operations are
presented as if the acquisitions of Wamar Products and Double J had been
made at the beginning of the periods presented.  The effects of the Rose
acquisition on the consolidated financial statements was not significant
and has been excluded from the pro forma presentation.

                                               YEAR ENDED DECEMBER 31,
                                             ---------------------------
                                                1999            1998
                                             -----------     -----------
  Net sales                                  $56,087,000     $51,051,000
  Net loss                                   (16,142,000)     (3,896,000)
  Loss per share:
    Basic                                          (0.91)          (0.40)
    Diluted                                        (0.91)          (0.40)

The unaudited pro forma information is not necessarily indicative of the
results of operations that would have occurred had the purchases been made
at the beginning of the periods presented or of the future results of the
combined operations.




                                  -30-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.  BUSINESS COMBINATIONS (continued)

Pooling Transactions:

On April 29, 1999 the Company acquired Mito Plastics, Inc. ("Mito") by
exchanging 310,000 shares of Clarion common stock for all the outstanding
stock of Mito.  Mito is a full-service product development company
providing program management, industrial design, engineering, prototyping
and tooling from concept through delivery of complete assemblies all under
one roof.  The acquisition has been accounted for as a pooling of interests
and accordingly all prior period consolidated financial statements have
been restated to include the combined results of operations, financial
position and cash flows of Mito.

On August 31, 1999 the Company completed the acquisition of Wamar Tool &
Machine Co. ("Wamar Tool") by exchanging 200,000 shares of Clarion common
stock for all the outstanding stock of Wamar Tool.  Wamar Tool is a fully
equipped mold making and mold repair firm that serves the plastic injection
molding industry.  The acquisition has been accounted for as a pooling of
interests and accordingly all prior period consolidated financial
statements have been restated to include the combined results of
operations, financial position and cash flows of Wamar Tool.

Net sales and net income of the separate companies for the period preceding
the acquisitions and the combined amounts presented in the accompanying
consolidated financial statements are presented below:

                                                                 1998
                                                             -----------
  Net sales:
    Clarion Technologies, Inc.                               $ 3,401,000
    Mito                                                       4,978,000
    Wamar Tool                                                 1,587,000
                                                             -----------
      Combined                                               $ 9,966,000
                                                             ===========
  Net earnings (loss):
    Clarion Technologies, Inc.                               $(4,397,000)
    Mito                                                        (260,000)
    Wamar Tool                                                    79,000
                                                             -----------
      Combined                                               $(4,578,000)
                                                             ===========





                                  -31-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.  BUSINESS COMBINATIONS (continued)

Divestiture:

On April 26, 1999 the Company sold substantially all the assets of its
Clarion Specialty Products subsidiary, for $107,000 and recorded a non-cash
book loss of approximately $222,000.  The business had net sales of
$227,000 and a net loss of $357,000 in 1998.  Net sales of $163,000 and a
net loss of $485,000 were included in the Company's results of operations
for 1999.


NOTE 3.  SHORT-TERM AND LONG-TERM DEBT

At December 31, 1999 and 1998, short-term debt outstanding was $3,587,000
and $600,000, respectively, which consisted of bank lines of credit that
provided for secured borrowings of up to $3,600,000 and $1,125,000,
respectively.  The weighted average interest rates for short-term debt
outstanding was 8.5% in 1999 and 8.75% in 1998.  Short-term borrowings of
the Company are collateralized by all tangible and intangible assets.
Short-term debt of $3,500,000 at December 31, 1999 was consolidated into a
new credit facility on February 29, 2000 as described further in Note 9.
Accordingly, that short-term obligation has been excluded from the
Company's current liabilities.

Long-term debt consisted of the following:
                                                      DECEMBER 31,
                                               -------------------------
                                                   1999          1998
                                               -----------    ----------
  Line of credit refinanced (See Note 9)       $ 3,500,000    $        -
  Revolving credit agreements                    5,575,000             -
  Term debt                                     13,752,000       914,000
  Promissory notes                                       -       115,000
  Capital lease obligations                        840,000       260,000
                                               -----------    ----------
                                                23,667,000     1,289,000
    Less current portion                           463,000       426,000
                                               -----------    ----------
                                               $23,204,000    $  863,000
                                               ===========    ==========







                                  -32-

              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.  SHORT-TERM AND LONG-TERM DEBT (continued)

The Company had several secured revolving credit agreements with a single
bank providing up to $7,150,000 in borrowings with expiration dates in
February and March of 2002.  Interest rates varied depending on the
agreement, and ranged from the Bank's prime rate to prime rate plus 1.25%,
and LIBOR plus 2.25% to LIBOR plus 2.75%. Actual rates of interest in
effect at December 31, 1999 ranged from 8.5% to 9.5%.  All of the Company's
revolving credit agreements were consolidated into a new credit facility on
February 29, 2000 as described further in Note 9.

Term debt consisted of mortgages and equipment loans at fixed and variable
interest rates, ranging from 5.5% to 9.75%, with required periodic
principal payments through 2006.  Substantially all of the Company's term
debt was consolidated into a new credit facility on February 29, 2000 as
described further in Note 9.

Long-term borrowings of the Company are collateralized by all tangible and
intangible assets.

Maturities of long-term debt are as follows:

  At December 31, 1999:
    2000                                                  $   463,000
    2001                                                      215,000
    2002                                                      164,000
    2003                                                   22,762,000
    2004                                                       63,000
                                                          -----------
                                                          $23,667,000
                                                          ===========

Credit agreements require the Company to comply with certain restrictive
covenants, which, among other things, include maintaining certain financial
ratios and a minimum level of tangible net worth.  At December 31, 1999 the
Company was in compliance with these restrictive covenants, except for
covenants requiring minimum fixed charge and interest coverage ratios.
Waivers for these covenant violations were not obtained since the Company
entered into a new agreement with the lending bank to consolidate all
outstanding debt subject to the covenants into a new credit facility on
February 29, 2000, as described further in Note 9.

Interest paid on short-term and long-term debt was $1,134,000 and $163,000
in 1999 and 1998, respectively.  Deferred financing costs are amortized
over the lives of the related debt agreements.

The carrying amount of the Company's debt instruments approximates fair
value.  Fair value is estimated based on discounted cash flows, as well as
other valuation techniques.
                                  -33-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4.  LEASES

The Company leases certain office and production facilities and equipment
under agreements expiring from 2000 to 2007.  New equipment acquired under
capital lease obligations totaled $780,000 and $0 in 1999 and 1998,
respectively.  Assets under capital leases were as follows:

                                                       DECEMBER 31,
                                                 -----------------------
                                                    1999          1998
                                                 ----------    ---------
  Equipment                                      $1,244,000    $ 439,000
  Less accumulated depreciation                    (330,000)    (239,000)
                                                 ----------    ---------
    Net assets under capital leases              $  914,000    $ 200,000
                                                 ==========    =========

The following is a schedule of future minimum rental payments required
under capital and operating leases that have initial or remaining
noncancellable lease terms in excess of one year as of December 31, 1999:

                                                  Capital     Operating
                                                  --------    ----------
  At December 31, 1999:
    2000                                          $313,000    $  540,000
    2001                                           228,000       503,000
    2002                                           191,000       484,000
    2003                                           191,000       479,000
    2004                                            64,000       392,000
    Thereafter                                           -       728,000
                                                  --------    ----------
      Total minimum lease payments                 987,000    $3,126,000
                                                              ==========
      Amount representing interest                 147,000
                                                  --------
      Present value of minimum lease payments     $840,000
                                                  ========

Rent expense for all operating leases was $658,000 and $371,000 for the
years ended December 31, 1999 and 1998, respectively.








                                  -34-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5.  INCOME TAXES

Losses before provisions for income taxes were derived entirely from
domestic operations.  The following is a summary of the components of
income tax provisions:

                                                 YEAR ENDED DECEMBER 31,
                                                ------------------------
                                                   1999          1998
                                                ----------    ----------
  Current:
    Federal                                     $        -    $  (13,000)
    State and local                                126,000             -
  Deferred:
    Federal                                              -       (42,000)
                                                ----------    ----------
                                                $  126,000    $  (55,000)
                                                ==========    ==========

The following table reconciles the U.S. statutory rate to the Company's
effective tax rate:

                                                 YEAR ENDED DECEMBER 31,
                                                 -----------------------
                                                    1999         1998
                                                 ----------   ----------
  Statutory rate                                    (34.0)%      (34.0)%
  State income tax                                    0.9            -
  Other items, net                                   (1.9)         1.3
  Valuation allowances                               35.9         31.5
                                                 ----------   ----------
    Effective tax rate                                0.9 %       (1.2)%
                                                 ==========   ==========















                                  -35-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5.  INCOME TAXES (continued)

The primary components of the Company's deferred tax assets and liabilities
and the related valuation allowances were as follows:

                                                      DECEMBER 31,
                                                ------------------------
                                                   1999          1998
                                                ----------    ----------
  Assets:
    Net operating loss carryforwards            $5,763,000    $2,019,000
    Accounts receivable reserves                   300,000        19,000
    Inventory reserves                             390,000             -
    Employee benefits                              919,000        34,000
    Other accrued liabilities                      437,000             -
    Valuation allowances                        (6,958,000)   (1,839,000)
                                                ----------    ----------
                                                   851,000       233,000
  Liabilities:
    Depreciation                                (1,048,000)     (165,000)
                                                ----------    ----------
                                                (1,048,000)     (165,000)
                                                ----------    ----------
    Net deferred tax asset (liability)          $ (197,000)   $   68,000
                                                ==========    ==========

At December 31, 1999, the Company had $16.5 million of available net
operating loss ("NOL") carryforwards for income tax purposes, which expire
2006 through 2019.  The Company established valuation allowances in 1999
and 1998, primarily for NOL carryforwards, due to the uncertainty of future
profitability and changes in shareholder control.  Federal tax laws
restrict or eliminate NOL carryforwards when certain changes of control
occur.  A 50% change of control, which is calculated over a rolling three-
year period, may cause the Company to lose some or all of its NOL
carryforward benefits.  Due to the significant number of equity
transactions that have occurred in recent years the Company believes there
have been changes in control, however, the Company also believes there are
currently no restrictions that would eliminate the future cash benefits
from utilizing its NOL carryforwards.  As the Company executes it strategy
of growth through acquisitions, there are likely to be more transactions in
the future involving private or public sales of equity securities.  The
Company cannot make any assurances that such transactions will not result
in the loss of NOL carryforward benefits in the future due to changes in
control.

The Company made income tax payments, net of refunds, of $95,000 in 1999
and had refunds, net of income tax payments, of $9,000 in 1998.

                                  -36-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.  EMPLOYEE BENEFIT AND STOCK OPTIONS PLANS

The Company maintains 401(k) retirement savings plans for the benefit of
substantially all full-time employees.  Participant contributions are
matched by the Company based on applicable matching formulas.  The
Company's matching expense for the plan was $66,000 and $42,000 in 1999 and
1998, respectively.

The Company has two stock option plans covering 1,750,000 shares of Clarion
common stock.  The plans permit options to be granted to officers,
directors and other key employees.  Options granted may either be incentive
stock options or nonqualified stock options.  Incentive stock options
awarded under the plans may not be granted at a price less than the fair
market value on the date of grant.  Nonqualified options awarded under the
plans may not be granted at a price less than eighty-five percent (85%) of
the fair market value on the date of grant.  Conditions of vesting are
determined at the time of grant.  The maximum option term may not exceed
ten years from the date of grant.

At December 31, 1999, 1,180,000 shares were available for future grants
under the Company's two stock option plans.  The following table summarizes
stock option activity since December 31, 1997:

                                                                Weighted
                                                                Average
                                                                Exercise
                                                     Shares      Prices
                                                   ----------   --------
  Outstanding at December 31, 1997                    670,000     $1.95
    Granted                                         3,099,500      1.02
    Exercised                                      (3,242,704)      .96
                                                   ----------
  Outstanding at December 31, 1998                    526,796      2.56

    Granted                                         1,735,000      3.28
    Exercised                                        (105,000)     1.00
    Expired or canceled                              (151,796)     1.13
                                                   ----------
  Outstanding at December 31, 1999                  2,005,000      3.38
                                                   ==========








                                  -37-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.  EMPLOYEE BENEFIT AND STOCK OPTIONS PLANS (continued)

The following table summarizes information about outstanding and
exercisable options at December 31, 1999:

                     Outstanding                         Exercisable
  -------------------------------------------------  -------------------
                               Weighted
                               Average      Weighted            Weighted
     Range of                  Remaining    Average             Average
     Exercise                 Contractual   Exercise            Exercise
      Prices       Shares    Life in Years   Prices    Shares   Prices
  --------------  ---------  -------------  --------  --------  --------
  $1.00 - $ 2.00   610,000        3.8        $ 1.18    562,000   $ 1.11
   3.25 -   3.75   890,000        3.2          3.31    590,000     3.33
   5.00 -   6.88   430,000        2.9          5.30    325,000     5.03
   9.00 -  12.00    75,000        2.7         11.00          -        -
                 ---------                           ---------
                 2,005,000        3.3          3.38  1,477,000     2.86
                 =========                           =========

The Company accounts for its stock option plans in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," ("APB 25") and related interpretations.
Accordingly, compensation expense is recorded on the date of grant only if
the current market price of the underlying stock exceeds the exercise
price.  During 1999, the Company recorded non-cash compensation expense of
$1,125,000 in accordance with APB 25.  If compensation costs had been
computed under the provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company would have recognized additional after-tax
expense of $2,888,000 in 1999 and $0 in 1998.  The loss per share (basic
and diluted) in 1999 and 1998 would have increased by $.17 and $0,
respectively.

The fair value of each option grant was estimated on the date of grant
using the Black-Scholes model with the following assumptions:

                                                 1999           1998
                                            -------------    -----------
  Dividend yield                                       0%             0%
  Volatility                                          62%            20%
  Risk-free interest rates                  4.57% - 5.78%           5.0%
  Expected life of options                    3 - 5 years    1 - 4 years

Black-Scholes is a widely accepted stock option pricing model, however, the
ultimate value of stock options granted will be determined by the actual
length of time options are held and the future price levels of the
Company's common stock.
                                  -38-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.  SHAREHOLDERS' EQUITY

During 1998, the Company sold, pursuant to various private offerings,
3,556,000 shares of its common stock at prices ranging from $1.00 per share
to $2.00 per share. The proceeds from these offerings were used to fund
general working capital needs and capital expenditures.

During 1999, the Company's shareholders approved a change of the par value
of the Company's Common Stock from $0.01 par value to $0.001 par value.
Also, the shareholders approved an increase in the number of authorized
common shares from 20 million to 40 million.

During 1999, the Company sold, pursuant to various private offering,
3,125,953 shares of its common stock at prices ranging from $2.00 per share
to $3.50 per share.  The proceeds of these offerings were used to fund
general working capital needs and capital expenditures.  The Company also
issued to certain individuals and vendors, as payment for services
rendered, 369,658 shares of Clarion common stock at agreed upon prices
ranging from $2.00 per share to $4.84 per share.

As described in Note 2, the Company issued 850,000 shares of Clarion common
stock in connection with the acquisition of Double J.  Of the 850,000
Clarion shares issued for the acquisition, 425,000 shares ("Put Shares")
are subject to the terms of stock put agreements ("Put Agreements") which
require the Company to purchase some or all of the Put Shares from the
holders at a price of $6.00 per share.  The maximum potential repurchase
obligation of the Company is $2,550,000.  The outstanding put options
expire on November 15, 2000 and are exercisable between October 1, 2000 and
November 14, 2000.  The Put Shares have been reclassified on the December
31, 1999 balance sheet to a temporary equity account entitled "Value of
Shares Subject to Redemption."  Concurrent with the issuance of these stock
put options, the Company entered into a stock put agreement with a member
of the Board of Directors which requires that Director to purchase a number
of shares of Clarion common stock equal to the product of: (i) the
aggregate purchase price paid by Clarion for the Put Shares, divided by the
lesser of (ii) the closing price of the common stock quoted on NASDAQ on
the date Clarion receives notice of its obligation to perform under the Put
Agreements, or (iii) $6.00.  The Company's put option expires on November
25, 2000 and is exercisable between October 1, 2000 and November 14, 2000.
In exchange for that put agreement, the Director received 200,000 warrants
to purchase Clarion common stock at an exercise price of $5.00 per share.
The warrants expire on September 30, 2002.






                                  -39-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.  SHAREHOLDERS' EQUITY (continued)

During 1999, the Company authorized 3,000,000 shares of convertible
cumulative preferred stock with a par value of $0.001 per share.  In
conjunction with the Wamar Products acquisition, and to fund general
working capital needs, the Company issued 1,490,000 shares of preferred
stock at a private offering price of $7.99 per share.  The Company issued
an additional 468,750 shares of preferred stock at a private offering price
of $7.99 per share in December 1999.  Annual cumulative dividends of $1.12
per share accruing from the date of issuance are payable in cash quarterly
commencing on September 30, 1999.  The preferred stock is convertible at
the option of the holder at any time, unless previously redeemed, into
shares of common stock of the Company at an initial conversion rate of 2
shares of common stock for each share of preferred stock, subject to
adjustment in certain events.  After December 31, 2000, the conversion rate
is subject to adjustment in accordance with a pre-defined formula.  The
Company may at any time redeem all or any portion of the convertible
preferred stock for $10 per share plus all accrued and unpaid dividends
thereon.  Holders of the convertible preferred stock have voting rights and
preference over common stockholders in dividends and liquidation rights.


NOTE 8.  GEOGRAPHIC AND SEGMENT DATA

The Company operates in a single geographic location, North America, and in
a single reportable business segment, plastic injection molding.


NOTE 9.  SUBSEQUENT EVENTS

Effective February 1, 2000, the Company acquired substantially all the
assets of Drake Products Corporation, a full-service plastic injection
molding firm based in Greenville, Michigan.  Consideration for the
acquisition included 2 million shares of Clarion common stock,
approximately $25 million in cash, a $5 million subordinated promissory
note and the assumption of approximately $6.5 million of liabilities.  To
fund the cash portion of the transaction, the Company entered into a
$26,000,000 term loan agreement with a variable interest rate of LIBOR plus
3.50% or prime rate plus 1.00%, at the option of the Company.  The loan
requires monthly principal payments of $250,000 through February 2001,
$333,333 through February 2002, and $416,667 through January 2003, plus
interest.  A final principal payment of $14.4 million plus interest is due
in February 2003.  Borrowings are collateralized by all tangible and
intangible assets.  In a related transaction, the Company also acquired the
real property used by Drake for $2,200,000 in cash and the issuance of a
$1,000,000 promissory note.


                                  -40-


              CLARION TECHNOLOGIES, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9.  SUBSEQUENT EVENTS (continued)

On February 29, 2000, the Company entered into a new revolving credit
agreement that provides for up to $15.0 million in borrowings through
February 2003.  The Company borrowed $11.8 million under the new credit
facility and used the proceeds to pay existing bank debt.  At the option of
the Company, interest is payable based on LIBOR plus 3.50% or the bank's
prime rate plus 1.00%.  In February 2001, interest will be variable based
on the Company's leverage ratio and will range between LIBOR plus 1.75% to
3.00% or prime rate, to prime rate plus 1.00%, at the option of the
Company.  In addition, a commitment fee is payable on the unused portion of
the credit line.  At February 29, 2000, the Company did not have any unused
borrowing capacity under the credit agreement's most restrictive debt
covenant.  Borrowings are collateralized by all tangible and intangible
assets.

Concurrent with the revolving credit agreement, the Company entered into a
$12.0 million term loan agreement that requires a lump sum payment of
principal and interest in February 2003.  Proceeds were used to pay
existing bank debt.  At the option of the Company, interest is payable
based on LIBOR plus 1.00% or the bank's prime rate.  Borrowings are
collateralized by all tangible and intangible assets, in addition to
certain personal guarantees.  Two members of Clarion's Board of Directors
and a Clarion executive officer have guaranteed $3 million of the term debt
by each providing $1 million in standby letters of credit.  Two other
individuals not related to the Company have guaranteed the remaining $9
million; one by providing a standby letter of credit for $3 million, the
other by making a $6 million cash deposit with the lending bank.  The
Company has agreed to pay, on behalf of the guarantors providing standby
letters of credit, the 1% annual fees due under the letters of credit plus
1% per month on the guaranteed amount.  The Company is paying the guarantor
providing the cash deposit a 2% fee per month.
















                                  -41-


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

Not applicable.

                               PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Information required to be furnished by Items 401 and 405 of Regulation S-B
is included in the Company's definitive Proxy Statement for its 2000 annual
meeting of shareholders filed with the Commission (the "2000 Proxy
Statement") and is incorporated herein by reference.


ITEM 10. EXECUTIVE COMPENSATION.

Information required to be furnished by Item 402 of Regulation S-B is
included in the Company's 2000 Proxy Statement and is incorporated herein
by reference.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information required to be furnished by Item 403 of Regulation S-B is
included in the Company's 2000 Proxy Statement and is incorporated herein
by reference.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information required to be furnished by Item 404 of Regulation S-B is
included in the Company's 2000 Proxy Statement and is incorporated herein
by reference.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

    (a) See Exhibit Index located on page 45.

    (b) The Company filed the following three reports on Form 8-K during
        the three months ended December 31, 1999:

          October 13, 1999; pursuant to Item 2, the Company reported the
          acquisition of all the outstanding stock of Double "J" Molding,
          Inc.





                                  -42-


          November 15, 1999; pursuant to Item 7, the Company amended its
          current report previously filed related to the acquisitions of
          Wamar Products, Inc. and Wamar Tool & Machine Co.  The amended
          report included audited financial statements for both of the
          acquired companies and proforma financial information.

          December 13, 1999; pursuant to Item 7, the Company amended its
          current report previously filed related to the acquisition of
          Double "J" Molding, Inc.  The amended report included audited
          financial statements for Double "J" Molding, Inc. and proforma
          financial information.









































                                  -43-


                               SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                CLARION TECHNOLOGIES, INC.


Date:  March 14, 2000            /s/ Jack Rutherford
                                -----------------------------------------
                                Jack D. Rutherford, Chairman of the Board

In accordance with the Securities Exchange Act of 1934, this report has
been signed below on this 14th day of March 2000, by the following persons
on behalf of the Registrant and in the capacities indicated.  Each Director
of the Registrant whose signature appears below hereby appoints David W.
Selvius as his attorney-in-fact to sign in his name and on his behalf, and
to file with the Commission any and all amendments to this report on Form
10-K to the same extent and with the same effect as if done personally.


 /s/ William Beckman                    /s/ David W. Selvius
----------------------------------     -----------------------------------
William Beckman, President             David W. Selvius, Chief Financial
  (Principal Executive Officer)          Officer and Secretary (Principal
                                         Financial and Accounting Officer)


 /s/ Jack D. Rutherford                 /s/ Harrington Bischof
----------------------------------     -----------------------------------
Jack D. Rutherford, Director           Harrington Bischof, Director


/s/ Bryan C. Cressey
----------------------------------     -----------------------------------
Bryan C. Cressey, Director             Terence M. Graunke, Director


 /s/ Fred Sotok                         /s/ Frank T. Steck
----------------------------------     -----------------------------------
Fred Sotok, Director                   Frank T. Steck, Director


 /s/ Craig Wierda                       /s/ Troy D. Wiseman
----------------------------------     -----------------------------------
Craig Wierda, Director                 Troy D. Wiseman, Director





                                  -44-

EXHIBIT                                                              PAGE
 NUMBER                        DESCRIPTION                          NUMBER
-------  ---------------------------------------------------------  ------
  2(a)   Agreement of Merger (Reincorporation in Delaware) dated      n/a
         June 5, 1998, by and between Clarion House, Inc., a
         Nevada corporation and Clarion Technologies, Inc., a
         Delaware corporation (filed as exhibit to Form 8-K dated
         October 20, 1998 (Commission File No. 0-24690) and
         incorporated herein by reference)

  2(b)   Agreement and Plan of Reorganization by and between          n/a
         Clarion Technologies, Inc., R. Townley Rose, Jr. and
         Rose & Associates, Inc., dated June 3, 1998 (filed as
         exhibit to Form 10-KSB for the year ended December 31,
         1998 (Commission File No. 0-24690) and incorporated
         herein by reference)

  2(c)   Agreement by and between Clarion Technologies, Inc. and      n/a
         R. Townley Rose, Jr., dated March 31, 1999 (filed as
         exhibit to Form 10-KSB for the year ended December 31,
         1998 (Commission File No. 0-24690) and incorporated
         herein by reference)

  2(d)   Stock Purchase Agreement dated March 26, 1999 between        n/a
         Clarion Technologies, Inc. and Michael Muller and Thomas
         Boerema (filed as exhibit to Form 8-K dated May 13, 1999
         (Commission File No. 0-24690) and incorporated herein by
         reference)

  2(e)   Stock Purchase Agreement dated June 29, 1999 and First       n/a
         Amendment to Stock Purchase Agreement between Clarion
         Plastics Technologies, Inc. and the shareholders of
         Wamar Products, Inc. (filed as exhibit to Form 8-K dated
         September 14, 1999 (Commission File No. 0-24690) and
         incorporated herein by reference)

  2(f)   Stock Purchase Agreement dated June 29, 1999 and First       n/a
         Amendment to Stock Purchase Agreement between Clarion
         Plastics Technologies, Inc. and the shareholder of Wamar
         Tool & Machine Inc. (filed as exhibit to Form 8-K dated
         September 14, 1999 (Commission File No. 0-24690) and
         incorporated herein by reference)

  2(g)   Merger and Plan of Reorganization dated April 23, 1999       n/a
         by and among Clarion Technologies, Inc., Newco, Inc.,
         William Maatman, Edward Rycenga, and Larry Pratt
         regarding the stock of Double "J" Molding, Inc. (filed
         as exhibit to Form 8-K dated October 12, 1999
         (Commission File No. 0-24690) and incorporated herein
         by reference)



                                  -45-

EXHIBIT                                                              PAGE
 NUMBER                        DESCRIPTION                          NUMBER
-------  ---------------------------------------------------------  ------
  2(h)   Asset Purchase Agreement dated January 27, 2000 by and       n/a
         among Clarion Technologies, Inc., Clarion-Drake
         Acquisition, Inc., and Drake Products Corporation,
         Jeffrey W. Anonick, and Michael C. Miller (filed as
         exhibit to Form 8-K dated March 15, 2000 (Commission
         File No. 0-24690) and incorporated herein by reference)

  3(a)   Certificate of Incorporation (filed as exhibit to Form       n/a
         8-K dated October 20, 1998 (Commission File No. 0-24690)
         and incorporated herein by reference)

  3(b)   Certificate of Amendment of Certificate of Incorporation     48
         amending Article IV

  3(c)   Bylaws of the Company (filed as exhibit to Form 8-K          n/a
         dated October 27, 1998 (Commission File No. 0-24690) and
         incorporated herein by reference)

  4(a)   Specimen of Common Stock Certificate (filed as exhibit       n/a
         to Form 10-SB dated August 12, 1994 (Commission File No.
         0-24690) and incorporated herein by reference)

  4(b)   Certificate of Designations of Clarion Technologies,         50
         Inc. designating 2,500,000 shares of preferred stock as
         convertible preferred stock

 10(a)   Credit Agreement dated February 29, 2000 by and among        66
         Clarion Technologies, Inc. and its subsidiaries, LaSalle
         Bank National Association, and Bank One Michigan


The following material contracts identified with "*" preceding the exhibit
number are agreements or compensation plans with or relating to executive
officers, directors or related parties.


*10(b)   Clarion House, Inc. 1998 Stock Option Plan (filed as         n/a
         exhibit to Form 10-KSB for the year ended December 31,
         1998 (Commission File No. 0-24690) and incorporated
         herein by reference)

*10(c)   Clarion Technologies, Inc. 1999 Stock Incentive Plan         180

*10(d)   Employment Agreement, dated April 1, 1998, between the       n/a
         Company and R. Townley Rose, Jr. (filed as exhibit to
         Form 10-KSB for the year ended December 31, 1998
         (Commission File No. 0-24690) and incorporated herein by
         reference)


                                  -46-

EXHIBIT                                                              PAGE
 NUMBER                        DESCRIPTION                          NUMBER
-------  ---------------------------------------------------------  ------
*10(e)   Amendment No. 1 to Employment Agreement, dated March 31,     n/a
         1999, between the Company and R. Townley Rose, Jr.
         (filed as exhibit to Form 10-KSB for the year ended
         December 31, 1998 (Commission File No. 0-24690) and
         incorporated herein by reference)

*10(f)   Amendment No. 2 to Employment Agreement dated May 14,        n/a
         1999 between the Company and R. Townley Rose, Jr. (filed
         as exhibit to Form 10-QSB for the quarter ended September
         30, 1999 (Commission File No. 0-24690) and incorporated
         herein by reference)

*10(g)   Settlement Agreement and Mutual Release dated August 23,     n/a
         1999 between the Company and R. Townley Rose, Jr. (filed
         as exhibit to Form 10-QSB for the quarter ended September
         30, 1999 (Commission File No. 0-24690) and incorporated
         herein by reference)

*10(h)   Employment Agreement, dated October 29, 1998, between        n/a
         the Company and Robert W. Martin (filed as exhibit to
         Form 10-KSB for the year ended December 31, 1998
         (Commission File No. 0-24690) and incorporated herein by
         reference)

*10(i)   Employment Agreement, dated January 1, 1999, between the     n/a
         Company and Jack D. Rutherford (filed as exhibit to Form
         10-KSB for the year ended December 31, 1998 (Commission
         File No. 0-24690) and incorporated herein by reference)

*10(j)   Employment Agreement, dated March 1, 1999, between           197
         Clarion Plastics Technologies, Inc., Clarion
         Technologies, Inc. and William Beckman

 21      Subsidiaries of the Registrant                               208

 27      Financial Data Schedule                                      n/a














                                  -47-

<PAGE>
<EX-3>
                                                             EXHIBIT  3(b)
                       CERTIFICATE OF AMENDMENT
                                  OF
                     CERTIFICATE OF INCORPORATION
                                  OF
                      CLARION TECHNOLOGIES, INC.

     Clarion Technologies, Inc., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that:

      I.  The amendment to the Corporation's Certificate of Incorporation
set forth below was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware by
written consent of the Board of Directors and consented to in writing by
the majority stockholders of the Corporation, in accordance with Section
228 of the General Corporation Law of the State of Delaware.

     II.  Article IV of the Corporation's Certificate of Incorporation is
amended to read in its entirety as follows:

                              "ARTICLE IV
                        Authorized Capital Stock

     This corporation is authorized to issue two classes of shares
     designated respectively "Common Stock" and "Preferred Stock" and
     referred to herein as Common Stock or Common Shares and Preferred
     Stock or Preferred Shares, respectively.  The total number of
     shares of Common Stock this corporation is authorized to issue is
     40,000,000 and each such share shall have a par value of $.001,
     and the total number of shares of Preferred Stock this corporation
     is authorized to issue is 3,000,000 and each such share shall have
     a par value of $.001.  The Preferred Shares may be issued from
     time to time in one or more series.  The Board of Directors is
     authorized to fix the number of shares of any series of Preferred
     Shares and to determine the designation of any such series.
     The Board of Directors is also authorized to determine or alter
     the rights, preferences, privileges and restrictions granted to or
     imposed upon any wholly unissued series of Preferred Shares and,
     within the limits and restrictions stated in any resolution or
     resolutions of the Board of Directors originally fixing the number
     of shares constituting any series, to increase or decrease (but
     not below the number of shares of any such series then
     outstanding) the number of shares of any series subsequent to the
     issue of shares of that series."








                                  -48-


      IN WITNESS WHEREOF, the undersigned hereby duly executes this
Certificate of Amendment hereby declaring and certifying under penalty of
perjury that this is the act and deed of the Corporation and the facts
herein stated are true, this 10th day of February, 2000.

                             CLARION TECHNOLOGIES, INC.



                             By: /s/ David W. Selvius
                                -----------------------------------------
                                David W. Selvius, Chief Financial Officer








































                                  -49-

<PAGE>
<EX-4>
                                                             EXHIBIT  4(b)
                      CERTIFICATE OF DESIGNATIONS
                                  OF
                       CLARION TECHNOLOGIES, INC.
                         A Delaware Corporation

     The undersigned, William Beckman and David W. Selvius, hereby certify
that:
     1.   They are the duly elected and acting President and Secretary,
respectively, of Clarion Technologies, Inc., a Delaware corporation (the
"Corporation").

     2.   The Corporation, in its Certificate of Incorporation, has
authorized 3,000,000 shares of preferred stock.  By resolution, the Board
of Directors of the Corporation has designated 2,500,000 shares of
preferred stock authorized by the Certificate of Incorporation as
Convertible Preferred Stock.  No shares of Convertible Preferred Stock have
been issued.

     3.   Pursuant to authority given by the Corporation's Certificate of
Incorporation, the Board of Directors of the Corporation has duly adopted
substantially the following recital and resolution:

               WHEREAS, Article IV of the Certificate of Incorporation of
the Corporation authorizes this Corporation to issue 3,000,000 shares of
preferred stock, $.001 par value per share, issuable from time to time in
one or more series (the "Preferred Stock").

               RESOLVED, the Board of Directors hereby determines that it
is in the best interests of this Corporation to designate 2,500,000 shares
of Convertible Preferred Stock upon the following terms and conditions:

          Section 1.  Dividends.

          1A.  General Obligation.  When and as declared by the
Corporation's Board of Directors and to the extent permitted under the
General Corporation Law of Delaware, the Corporation shall pay preferential
dividends in cash to the holders of the Convertible Preferred Stock (the
"Convertible Preferred") as provided in this Section 1.  Dividends on each
share of the Convertible Preferred (a "Share") shall accrue on a daily
basis at the rate of 14% per annum of the sum of the Liquidation Value
thereof plus all accumulated and unpaid dividends thereon from and
including the date of issuance of such Share to and including the first to
occur of (i) the date on which the Liquidation Value of such Share (plus
all accrued and unpaid dividends thereon) is paid to the holder thereof in
connection with the liquidation of the Corporation or the redemption of
such Share by the Corporation, (ii) the date on which such Share is
converted into shares of Conversion Stock hereunder or (iii) the date on
which such share is otherwise acquired by the Corporation.  Such dividends
shall accrue whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Corporation legally


                                  -50-


available for the payment of dividends, and such dividends shall be
cumulative such that all accrued and unpaid dividends shall be fully paid
or declared with funds irrevocably set apart for payment before any
dividends, distributions, redemptions or other payments may be made with
respect to any Junior Securities.  The date on which the Corporation
initially issues any Share shall be deemed to be its "date of issuance"
regardless of the number of times transfer of such Share is made on the
stock records maintained by or for the Corporation and regardless of the
number of certificates which may be issued to evidence such Share.

          1B.  Dividend Reference Dates.  To the extent not paid on March
31, June 30, September 30 and December 31 of each year, beginning September
30, 1999 (the "Dividend Reference Dates"), all dividends which have accrued
on each Share outstanding during the three-month period (or other period in
the case of the initial Dividend Reference Date) ending upon each such
Dividend Reference Date shall be accumulated and shall remain accumulated
dividends with respect to such Share until paid to the holder thereof.

          1C.  Distribution of Partial Dividend Payments.  Except as
otherwise provided herein, if at any time the Corporation pays less than
the total amount of dividends then accrued with respect to the Convertible
Preferred, such payment shall be distributed pro rata among the holders
thereof based upon the aggregate accrued but unpaid dividends on the Shares
held by each such holder.

          1D.  Participating Dividends.  In the event that the Corporation
declares or pays any dividends upon the Common Stock (whether payable in
cash, securities or other property) other than dividends payable solely in
shares of Common Stock, the Corporation shall also declare and pay to the
holders of the Convertible Preferred at the same time that it declares and
pays such dividends to the holders of the Common Stock, the dividends which
would have been declared and paid with respect to the Common Stock issuable
upon conversion of the Convertible Preferred had all of the outstanding
Convertible Preferred been converted immediately prior to the record date
for such dividend, or if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividends are to be
determined.

          Section 2.  Liquidation.

          Upon any liquidation, dissolution or winding up of the
Corporation (whether voluntary or involuntary), each holder of Convertible
Preferred shall be entitled to be paid, before any distribution or payment
is made upon any Junior Securities, an amount in cash equal to the greater
of (i) aggregate Redemption Price of all Shares held by such holder (plus
all accrued and unpaid dividends thereon), and (ii) the amount which would
be distributable to such holder if such holder, along with all other
holders of Convertible Preferred, converted all Shares of Convertible
Preferred into Common Stock in accordance with paragraph 6A immediately
prior to such liquidation, dissolution or winding up, and the holders of


                                  -51-


Convertible Preferred shall not be entitled to any further payment.  If
upon any such liquidation, dissolution or winding up of the Corporation the
Corporation's assets to be distributed among the holders of the Convertible
Preferred are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this Section 2,
then the entire assets available to be distributed to the Corporation's
stockholders shall be distributed pro rata among such holders based upon
the aggregate Redemption Price (plus all accrued and unpaid dividends) of
the Convertible Preferred held by each such holder.  Not less than 30 days
prior to the payment date stated therein, the Corporation shall mail
written notice of any such liquidation, dissolution or winding up to each
record holder of Convertible Preferred, setting forth in reasonable detail
the amount of proceeds to be paid with respect to each Share and each share
of Common Stock in connection with such liquidation, dissolution or winding
up.  Neither the consolidation or merger of the Corporation into or with
any other entity or entities (whether or not the Corporation is the
surviving entity), nor the sale or transfer by the Corporation of all or
any part of its assets, nor the reduction of the capital stock of the
Corporation nor any other form of recapitalization or reorganization
affecting the Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation within the meaning of this Section 2.
Nothing herein shall limit or restrict each holder of Convertible
Preferred's right to convert such holder's Shares into Common Stock
pursuant to paragraph 6A prior to any such event.

          Section 3.  Priority of Convertible Preferred on Dividends and
Redemptions.

          So long as any Convertible Preferred remains outstanding, without
the prior written consent of the holders of a majority of the outstanding
shares of Convertible Preferred, the Corporation shall not, nor shall it
permit any Subsidiary to, redeem, purchase or otherwise acquire directly or
indirectly any Junior Securities, nor shall the Corporation directly or
indirectly pay or declare any dividend or make any distribution upon any
Junior Securities; provided that the Corporation may repurchase shares of
Common Stock from present or former employees of the Corporation and its
Subsidiaries so long as no Event of Noncompliance is in existence at the
time of or immediately after such repurchase or would be caused by such
repurchase.

          Section 4.  Redemptions.

          4A.  Optional Redemptions.  The Corporation may at any time and
from time to time redeem all or any portion of the Shares of Convertible
Preferred then outstanding.  Upon any such redemption, the Corporation
shall pay a price per Share equal to the Redemption Price thereof (plus all
accrued and unpaid dividends thereon).  The Corporation shall use its
reasonable best efforts to redeem the Convertible Preferred as soon as
possible consistent with prudent business judgment.



                                  -52-


          4B.  Redemption With Equity Proceeds.  The Corporation shall
apply all net cash proceeds from any issuances of equity securities to the
extent such net proceeds exceed $20,000,000 in the aggregate following the
first issuance of Convertible Preferred remaining after deduction of all
discounts, underwriters' commissions and other reasonable expenses to
redeem Shares of Convertible Preferred at a price per Share equal to the
Redemption Price thereof (plus all accrued and unpaid dividends thereon).
Such redemption shall take place on a date fixed by the Corporation by
written notice to the holders of Convertible Preferred not less than 30
days prior to the effective date of such redemption, which date shall be
not more than ten days after the Corporation's receipt of such proceeds.

          4C.  Redemption Payments.  For each Share which is to be redeemed
hereunder, the Corporation shall be obligated on the Redemption Date to pay
to the holder thereof (upon surrender by such holder at the Corporation's
principal office of the certificate representing such Share) an amount in
cash equal to the Redemption Price of such Share (plus all accrued and
unpaid dividends thereon.  If the funds of the Corporation legally
available for redemption of Shares on any Redemption Date are insufficient
to redeem the total number of Shares to be redeemed on such date, those
funds which are legally available shall be used to redeem the maximum
possible number of Shares pro rata among the holders of the Shares to be
redeemed based upon the aggregate Redemption Price of such Shares held by
each such holder (plus all accrued and unpaid dividends thereon).  At any
time thereafter when additional funds of the Corporation are legally
available for the redemption of Shares, such funds shall immediately be
used to redeem the balance of the Shares which the Corporation has become
obligated to redeem on any Redemption Date but which it has not redeemed.

          4D.  Notice of Redemption.  Except as otherwise provided herein,
the Corporation shall mail written notice of each redemption of any
Convertible Preferred (other than a redemption at the request of a holder
or holders of Convertible Preferred) to each record holder thereof not more
than 60 nor less than 30 days prior to the date on which such redemption is
to be made.  Upon mailing any notice of redemption which relates to a
redemption at the Corporation's option, the Corporation shall become
obligated to redeem the total number of Shares specified in such notice at
the time of redemption specified therein.  In case fewer than the total
number of Shares represented by any certificate are redeemed, a new
certificate representing the number of unredeemed Shares shall be issued to
the holder thereof without cost to such holder within five business days
after surrender of the certificate representing the redeemed Shares.

          4E.  Determination of the Number of Each Holder's Shares to be
Redeemed.  Subject to the rights of the holders of Convertible Preferred
set forth in paragraph 4I below, the number of Shares of Convertible
Preferred to be redeemed from each holder thereof in redemptions by the
Corporation under this Section 4 shall be the number of Shares determined
by multiplying the total number of Shares of Convertible Preferred to be



                                  -53-


redeemed times a fraction, the numerator of which shall be the total number
of Shares and Offset Shares (as defined below) then held by such holder and
the denominator of which shall be the total number of Shares and Offset
Shares then outstanding.  If the application of this paragraph 4E has
caused the number of Shares to be redeemed from any holder to exceed the
number of Shares then held by such holder, such holder shall be deemed
(solely for purposes of this paragraph) to have applied a number of Offset
Shares equal to such excess to reduce the number of Shares to be redeemed
from such holder.

          4F.  Dividends After Redemption Date.  No Share shall be entitled
to any dividends accruing after the date on which the Redemption Price of
such Share (plus all accrued and unpaid dividends thereon) is paid to the
holder of such Share.  On such date, all rights of the holder of such Share
shall cease, and such Share shall no longer be deemed to be issued and
outstanding.

          4G.  Redeemed or Otherwise Acquired Shares.  Any Shares which are
redeemed or otherwise acquired by the Corporation shall be canceled and
retired to authorized but unissued shares and shall not be reissued, sold
or transferred.

          4H.  Other Redemptions or Acquisitions.  The Corporation shall
not, nor shall it permit any Subsidiary to, redeem or otherwise acquire any
Shares of Convertible Preferred, except as expressly authorized herein or
pursuant to a purchase offer made pro rata to all holders of Convertible
Preferred on the basis of the number of Shares owned by each such holder.

          4I.  Right of Offset.

               (i) Upon the receipt of any notice of redemption under this
Section 4, any holder of Convertible Preferred shall have the right
(exercisable by notifying the Corporation in writing prior to the date
specified for redemption in the redemption notice) to reduce the number of
Shares to be redeemed from such holder at such time by a number of Shares
not exceeding the number of Offset Shares (as defined below) held by such
holder at the time of such redemption.  If any holder of Convertible
Preferred has converted Shares of Convertible Preferred after receipt of
any notice of redemption under this Section 4 but on or prior to the
Redemption Date for such redemption, such holder shall be deemed to have
elected (and shall not be required to deliver notice of such election) to
reduce the number of Shares to be redeemed from such holder in such
redemption by the number of Shares so converted.

               (ii) A holder of Convertible Preferred shall be deemed to
hold one Offset Share for each Share converted by such holder pursuant to
Section 6 hereof at any time prior to such Share's Scheduled Redemption
Date and for each Share otherwise acquired by the Corporation from such
holder other than in a Scheduled Redemption, and an Offset Share shall



                                  -54-


cease to be an Offset Share when it has been applied to reduce the number
of Shares to be redeemed in any redemption.  When any holder transfers any
portion of such holder's outstanding Shares to any other Person, the
transferor shall be deemed to have transferred to the transferee a pro rata
portion of the transferor's Offset Shares based upon the number of Shares
transferred to such holder, unless the parties to such transaction
otherwise agree in a writing delivered to the secretary of the Corporation
in connection with such transfer.

          4J.  Special Redemptions.  If a Change in Ownership has occurred
or the Corporation obtains knowledge that a Change in Ownership is proposed
to occur, the Corporation shall give prompt written notice of such Change
in Ownership describing in reasonable detail the material terms and date of
consummation thereof to each holder of Convertible Preferred, but in any
event such notice shall not be given later than five days after the
occurrence of such Change in Ownership, and the Corporation shall give each
holder of Convertible Preferred prompt written notice of any material
change in the terms or timing of such transaction.  Any holder of
Convertible Preferred may require the Corporation to redeem all or any
portion of the Convertible Preferred owned by such holder at a price per
Share equal to the Redemption Price thereof (plus all accrued and unpaid
dividends thereon) by giving written notice to the Corporation of such
election prior to the later of (a) 21 days after receipt of the
Corporation's notice and (b) five days prior to the consummation of the
Change in Ownership (the "Expiration Date").  The Corporation shall give
prompt written notice of any such election to all other holders of
Convertible Preferred within five days after the receipt thereof, and each
such holder shall have until the later of (a) the Expiration Date or (b)
ten days after receipt of such second notice to request redemption
hereunder (by giving written notice to the Corporation) of all or any
portion of the Convertible Preferred owned by such holder.

          Upon receipt of such election(s), the Corporation shall be
obligated to redeem the aggregate number of Shares specified therein on the
later of (a) the occurrence of the Change in Ownership or (b) five days
after the Corporation's receipt of such election(s).  If any proposed
Change in Ownership does not occur, all requests for redemption in
connection therewith shall be automatically rescinded, or if there has been
a material change in the terms or the timing of the transaction, any holder
of Convertible Preferred may rescind such holder's request for redemption
by giving written notice of such rescission to the Corporation.

          The term "Change in Ownership" means any sale, transfer or
issuance or series of sales, transfers and/or issuances of Common Stock by
the Corporation or any holders thereof which results in any Person or group
of Persons (as the term "group" is used under the Securities Exchange Act
of 1934), other than the holders of Common Stock and Convertible Preferred
as of the date of the Purchase Agreement, owning more than 50% of the
Common Stock outstanding at the time of such sale, transfer or issuance or
series of sales, transfers and/or issuances.


                                  -55-


               (i) If a Fundamental Change is proposed to occur, the
Corporation shall give written notice of such Fundamental Change describing
in reasonable detail the material terms and date of consummation thereof to
each holder of Convertible Preferred not more than 45 days nor less than 20
days prior to the consummation of such Fundamental Change, and the
Corporation shall give each holder of Convertible Preferred prompt written
notice of any material change in the terms or timing of such transaction.
Any holder of Convertible Preferred may require the Corporation to redeem
all or any portion of the Convertible Preferred owned by such holder at a
price per Share equal to the Redemption Price thereof (plus all accrued and
unpaid dividends thereon) by giving written notice to the Corporation of
such election prior to the later of (a) ten days prior to the consummation
of the Fundamental Change or (b) ten days after receipt of notice from the
Corporation.  The Corporation shall give prompt written notice of such
election to all other holders of Convertible Preferred (but in any event
within five days prior to the consummation of the Fundamental Change), and
each such holder shall have until two days after the receipt of such notice
to request redemption (by written notice given to the Corporation) of all
or any portion of the Convertible Preferred owned by such holder.

          Upon receipt of such election(s), the Corporation shall be
obligated to redeem the aggregate number of Shares specified therein upon
the consummation of such Fundamental Change.  If any proposed Fundamental
Change does not occur, all requests for redemption in connection therewith
shall be automatically rescinded, or if there has been a material change in
the terms or the timing of the transaction, any holder of Convertible
Preferred may rescind such holder's request for redemption by delivering
written notice thereof to the Corporation prior to the consummation of the
transaction.

          The term "Fundamental Change" means (a) any sale or transfer of
more than 50% of the assets of the Corporation and its Subsidiaries on a
consolidated basis (measured either by book value in accordance with
generally accepted accounting principles consistently applied or by fair
market value determined in the reasonable good faith judgment of the
Corporation's Board of Directors) in any transaction or series of
transactions (other than sales in the ordinary course of business) and
(b) any merger or consolidation to which the Corporation is a party, except
for a merger in which the Corporation is the surviving corporation, the
terms of the Convertible Preferred are not changed and the Convertible
Preferred is not exchanged for cash, securities or other property, and
after giving effect to such merger, the holders of the Corporation's
outstanding capital stock possessing a majority of the voting power (under
ordinary circumstances) to elect a majority of the Corporation's Board of
Directors immediately prior to the merger shall continue to own the
Corporation's outstanding capital stock possessing the voting power (under
ordinary circumstances) to elect a majority of the Corporation's Board of
Directors.




                                  -56-


          Section 5.  Voting Rights.  The holders of the Convertible
Preferred shall be entitled to notice of all stockholders meetings in
accordance with the Corporation's bylaws, and the holders of the
Convertible Preferred shall be entitled to vote on all matters submitted to
the stockholders for a vote together with the holders of the Common Stock
voting together as a single class with each share of Common Stock entitled
to one vote per share and each Share of Convertible Preferred entitled to
one vote for each share of Common Stock issuable upon conversion of the
Convertible Preferred as of the record date for such vote or, if no record
date is specified, as of the date of such vote.

          Section 6.  Conversion.


          6A.Conversion Procedure.

          (i) At any time and from time to time, any holder of Convertible
Preferred may convert all or any portion of the Convertible Preferred
(including any fraction of a Share) held by such holder into a number of
shares of Conversion Stock computed by multiplying the number of Shares to
be converted by $8.00 and dividing the result by the Conversion Price then
in effect.

          (ii) Except as otherwise provided herein, each conversion of
Convertible Preferred shall be deemed to have been effected as of the close
of business on the date on which the certificate or certificates
representing the Convertible Preferred to be converted have been
surrendered for conversion at the principal office of the Corporation.  At
the time any such conversion has been effected, the rights of the holder of
the Shares converted as a holder of Convertible Preferred shall cease and
the Person or Persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such
conversion shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.

          (iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof the Redemption Price
for such Share (plus all accrued and unpaid dividends thereon and any
premium payable with respect thereto).

          (iv) Notwithstanding any other provision hereof, if a conversion
of Convertible Preferred is to be made in connection with a Public
Offering, a Change in Ownership, a Fundamental Change or other transaction
affecting the Corporation, the conversion of any Shares of Convertible
Preferred may, at the election of the holder thereof, be conditioned upon
the consummation of such transaction, in which case such conversion shall
not be deemed to be effective until such transaction has been consummated.




                                  -57-


          (v) As soon as possible after a conversion has been effected (but
in any event within five business days in the case of subparagraph (a)
below), the Corporation shall deliver to the converting holder:

               (a) a certificate or certificates representing the number of
shares of Conversion Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
               (b) payment in an amount equal to all accrued dividends with
respect to each Share converted which have not been paid prior thereto; and
               (c) a certificate representing any Shares of Convertible
Preferred which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but which
were not converted.

          (vi) The Corporation shall declare the payment of all dividends
payable under subparagraph (v)(b) above.  If the Corporation is not
permitted under applicable law to pay any portion of the accrued and unpaid
dividends on the Convertible Preferred being converted, the Corporation
shall pay such dividends to the converting holder as soon thereafter as
funds of the Corporation are legally available for such payment.  At the
request of any such converting holder, the Corporation shall provide such
holder with written evidence of its obligation to such holder.
Notwithstanding the foregoing, for any reason the Corporation is unable to
pay any portion of the accrued and unpaid dividends on Convertible
Preferred being converted, such dividends may, at the converting holder's
option, be converted into an additional number of shares of Conversion
Stock determined by dividing the amount of the unpaid dividends to be
applied for such purpose, by the Conversion Price then in effect.

          (vii) The issuance of certificates for shares of Conversion Stock
upon conversion of Convertible Preferred shall be made without charge to
the holders of such Convertible Preferred for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Conversion Stock.  Upon
conversion of each Share of Convertible Preferred, the Corporation shall
take all such actions as are necessary in order to insure that the
Conversion Stock issuable with respect to such conversion shall be validly
issued, fully paid and nonassessable, free and clear of all taxes, liens,
charges and encumbrances with respect to the issuance thereof.

          (viii) The Corporation shall not close its books against the
transfer of Convertible Preferred or of Conversion Stock issued or issuable
upon conversion of Convertible Preferred in any manner which interferes
with the timely conversion of Convertible Preferred.  The Corporation shall
assist and cooperate with any holder of Shares required to make any
governmental filings or obtain any governmental approval prior to or in
connection with any conversion of Shares hereunder (including, without
limitation, making any filings required to be made by the Corporation).



                                  -58-


          (ix) The Corporation shall at all times reserve  and  keep
available  out  of its authorized but unissued shares of Conversion Stock,
solely for the purpose of issuance upon the conversion of the Convertible
Preferred, such number of shares of Conversion Stock issuable upon the
conversion of all outstanding Convertible Preferred.  All shares of
Conversion Stock which are so issuable shall, when issued, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens
and charges.  The Corporation shall take all such actions as may be
necessary to assure that all such shares of Conversion Stock may be so
issued without violation of any applicable law or governmental regulation
or any requirements of any domestic securities exchange upon which shares
of Conversion Stock may be listed (except for official notice of issuance
which shall be immediately delivered by the Corporation upon each such
issuance).  The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Conversion Stock to be less
than the number of such shares required to be reserved hereunder for
issuance upon conversion of the Convertible Preferred.

          6B. Conversion Price.

          The initial Conversion Price shall be $4.00.  The Conversion
Price shall be subject to adjustment from time to time pursuant to this
paragraph 6B, and shall be subject to the special adjustment provision of
paragraph 6E.

          6C. Subdivision or Combination of Common Stock.  If the
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Conversion
Price in effect immediately prior to such subdivision shall be
proportionately reduced, and if the Corporation at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such combination shall be
proportionately increased.

       6D. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets or
other transaction, in each case which is effected in such a manner that the
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock, is referred to herein as an "Organic Change".
Prior to the consummation of any Organic Change, the Corporation shall make
appropriate provisions (in form and substance satisfactory to the holders
of a majority of the Convertible Preferred then outstanding) to insure that
each of the holders of Convertible Preferred shall thereafter have the
right to acquire and receive, in lieu of or in addition to (as the case may
be) the shares of Conversion Stock immediately theretofore acquirable and



                                  -59-


receivable upon the conversion of such holder's Convertible Preferred, such
shares of stock, securities or assets as such holder would have received in
connection with such Organic Change if such holder had converted its
Convertible Preferred immediately prior to such Organic Change.  In each
such case, the Corporation shall also make appropriate provisions (in form
and substance satisfactory to the holders of a majority of the Convertible
Preferred then outstanding) to insure that the provisions of this Section 6
and Sections 7 and 8 hereof shall thereafter be applicable to the
Convertible Preferred (including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is other
than the Corporation, an immediate adjustment of the Conversion Price to
the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate adjustment in
the number of shares of Conversion Stock acquirable and receivable upon
conversion of Convertible Preferred, if the value so reflected is less than
the Conversion Price in effect immediately prior to such consolidation,
merger or sale).  The Corporation shall not effect any such consolidation,
merger or sale, unless prior to the consummation thereof, the successor
entity (if other than the Corporation) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument
(in form and substance satisfactory to the holders of a majority of the
Convertible Preferred then outstanding), the obligation to deliver to each
such holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to acquire.

          6E. Special Adjustment to Conversion Price.  If, as of the end of
the Corporation's 2000 fiscal year, any Convertible Stock remains
outstanding, then as part of the preparation of the Corporation's audited
financial statements for such fiscal year after eliminating the effects of
any gain or loss from divestitures or sales or from write-downs or write-
offs outside the ordinary course of business, the Corporation shall cause
its independent accounts to determine the Corporation's earnings before
interest, taxes, depreciation and amortization for such fiscal year ("Year
2000 EBITDA") and an alternative Conversion Price (the "Alternative
Conversion Price").  The Corporation shall cause copies of such audited
financial statements and such determinations to be delivered to each holder
of Convertible Preferred promptly following receipt thereof, but in any
event no later than 100 days following the end of such fiscal year.

          (i) The Alternative Conversion Price shall be determined in
accordance with the following formula:

                              (A x B) - C + D
                              ---------------
                                     E







                                  -60-


     where:

     A = the "Multiplier" (as defined below)
     B = Year 2000 EBITDA
     C = the aggregate amount of  all indebtedness for borrowed money,
         together with all accrued and unpaid interest thereon.
     D = the exercise price for all options and warrants exercisable for
         Common Stock.
     E = the number of shares of Common Stock outstanding on a fully-
         diluted basis.

          (ii) The "Multiplier" shall equal 4 if Year 2000 EBITDA equals or
exceeds $12,000,000, and shall equal 2.5 if Year 2000 EBITDA is below
$12,000,000.

          (iii) In the event that the Alternative Conversion Price is less
than the Conversion Price then in effect, then the Alternative Conversion
Price shall be thereafter be the Conversion Price for all purposes herein.

          6F. Notices.

          (i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Convertible
Preferred, setting forth in reasonable detail and certifying the
calculation of such adjustment.

          (ii) The Corporation shall give written notice to all holders of
Convertible Preferred at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any
dividend or distribution upon Common Stock, (b) with respect to any pro
rata subscription offer to holders of Common Stock or (c) for determining
rights to vote with respect to any Fundamental Change, Change in Ownership,
dissolution or liquidation.

          (iii) The Corporation shall also give written notice to the
holders of Convertible Preferred at least 20 days prior to the date on
which any Fundamental Change or Change in Ownership shall take place.

          Section 7. Purchase Rights.

          If at any time the Corporation grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase Rights"), then each holder of Convertible
Preferred shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Conversion Stock
acquirable upon conversion of such holder's Convertible Preferred




                                  -61-


immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or if no such record is taken,
the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.

          Section 8. Registration of Transfer.

          The Corporation shall keep at its principal office a register for
the registration of Convertible Preferred.  Upon the surrender of any
certificate representing Convertible Preferred at such place, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number
of Shares represented by the surrendered certificate.  Each such new
certificate shall be registered in such name and shall represent such
number of Shares as is requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate, and dividends shall accrue on the Convertible Preferred
represented by such new certificate from the date to which dividends have
been fully paid on such Convertible Preferred  represented by the
surrendered certificate.

          Section 9.  Replacement.

          Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing Shares of Convertible Preferred, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of
such certificate, the Corporation shall (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind
representing the number of Shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate, and dividends shall accrue on
the Convertible Preferred represented by such new certificate from the date
to which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.

          Section 10.  Definitions.

          "Change in Ownership" has the meaning set forth in paragraph 4J
hereof.

          "Common Stock" means, collectively, the Corporation's Common
Stock and any capital stock of any class of the Corporation hereafter
authorized which is not limited to a fixed sum or percentage of par or



                                  -62-


stated value in respect to the rights of the holders thereof to participate
in dividends or in the distribution of assets upon any liquidation,
dissolution or winding up of the Corporation.

          "Conversion Stock" means shares of the Corporation's Common Stock
par value; provided that if there is a change such that the securities
issuable upon conversion of the Convertible Preferred are issued by an
entity other than the Corporation or there is a change in the type or class
of securities so issuable, then the term "Conversion Stock" shall mean one
share of the security issuable upon conversion of the Convertible Preferred
if such security is issuable in shares, or shall mean the smallest unit in
which such security is issuable if such security is not issuable in shares.

          "Convertible Securities" means any stock or securities directly
or indirectly convertible into or exchangeable for Common Stock.

          "Fundamental Change" has the meaning set forth in paragraph 4J
hereof.

          "Junior Securities" means any capital stock or other equity
securities of the Corporation, except for the Convertible Preferred.

          "Liquidation Value" of any Share as of any particular date shall
be equal to $8.00.

          "Options" means any rights, warrants or options to subscribe for
or purchase Common Stock or Convertible Securities.

          "Person" means an individual, a partnership, a corporation, a
limited liability company, a limited liability, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization and
a governmental entity or any department, agency or political subdivision
thereof.

          "Public Offering" means any offering by the Corporation of its
capital stock or equity securities to the public pursuant to an effective
registration statement under the Securities Act of 1933, as then in effect,
or any comparable statement under any similar federal statute then in
force.

          "Purchase Agreement" means the Purchase Agreement, dated as of
August 31, 1999 by and among the Corporation and certain investors, as such
agreement may from time to time be amended in accordance with its terms.

          "Redemption Price" means $10.00 per Share, plus all accrued and
unpaid dividends thereon.

          "Redemption Date" as to any Share means the date specified in the
notice of any redemption at the Corporation's option or at the holder's



                                  -63-


option or the applicable date specified herein in the case of any other
redemption; provided that no such date shall be a Redemption Date unless
the Redemption Price of such Share (plus all accrued and unpaid dividends
thereon and any required premium with respect thereto) is actually paid in
full on such date, and if not so paid in full, the Redemption Date shall be
the date on which such amount is fully paid.

          "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business
entity of which (i) if a corporation, a majority of the total voting power
of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the partnership
interests, limited liability company units or interests or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that person or a
combination thereof.  For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability
company, partnership, association or other business entity if such Person
or Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall
be or control the managing general partner, managing member, manager or
similar controlling Person of such limited liability company, partnership,
association or other business entity.

          Section 11.  Amendment and Waiver.

          No amendment, modification or waiver shall be binding or
effective with respect to any provision of Sections 1 to 12 hereof without
the prior written consent of the holders of a majority of the Convertible
Preferred outstanding at the time such action is taken; provided that no
such action shall change (a) the rate at which or the manner in which
dividends on the Convertible Preferred accrue or the times at which such
dividends become payable or the amount payable on redemption of the
Convertible Preferred or the times at which redemption of Convertible
Preferred is to occur, without the prior written consent of the holders of
at least 80% of the Convertible Preferred then outstanding, (b) the
Conversion Price of the Convertible Preferred or the number of shares or
class of stock into which the Convertible Preferred is convertible, without
the prior written consent of the holder of at least 80% of the Convertible
Preferred then outstanding or (c) the percentage required to approve any
change described in clauses (a) and (b) above, without the prior written
consent of the holders of at least 80% of the Convertible Preferred then
outstanding; and provided further that no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation has obtained the prior written
consent of the holders of the applicable percentage of the Convertible
Preferred then outstanding.

                                  -64-


          Section 12.  Notices.

          Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be delivered by registered
or certified mail, return receipt requested and postage prepaid, or by
reputable overnight courier service, charges prepaid, and shall be deemed
to have been given when so mailed or sent (i) to the Corporation, at its
principal executive offices and (ii) to any stockholder, at such holder's
address as it appears in the stock records of the Corporation (unless
otherwise indicated by any such holder).

          The undersigned, William Beckman and David W. Selvius, President
and Secretary of Clarion Technologies, Inc., respectively, hereby declare
and certify under penalty of perjury that the foregoing Certificate is the
act and deed of the Corporation and that the facts herein stated are true.

          Executed at Holland, Michigan on February 10, 2000.


                                            /s/ William Beckman
                                           ----------------------------
                                           WILLIAM BECKMAN
                                           President


                                            /s/ David Selvius
                                           ----------------------------
                                           DAVID W. SELVIUS
                                           Secretary























                                  -65-

<PAGE>
<EX-10>
                                                             EXHIBIT 10(a)








                            CREDIT AGREEMENT

                      dated as of February 29, 2000

                                  among

            CLARION TECHNOLOGIES, INC. AND ITS SUBSIDIARIES,
                         jointly and severally,

                     VARIOUS FINANCIAL INSTITUTIONS,

                    BANK ONE MICHIGAN (as "Co-Agent")

                                   and

             LASALLE BANK NATIONAL ASSOCIATION (as "Agent")




























                                    -66-



                                TABLE OF CONTENTS


SECTION 1         DEFINITIONS..................................................1
         1.1  Definitions......................................................1
         1.2  Other Interpretive Provisions...................................17

SECTION 2         COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND
                  LETTER OF CREDIT PROCEDURES.................................18
         2.1  Commitments.....................................................18
                  2.1.1  Revolving Loan Commitment............................18
                  2.1.2  Term Loan A Commitment...............................18
                  2.1.3  Term Loan B Commitment...............................19
                  2.1.4  L/C Commitment.......................................19
         2.2  Loan Procedures.................................................19
                  2.2.1  Various Types of Loans...............................19
                  2.2.2  Borrowing Procedures.................................20
                  2.2.3  Conversion and Continuation Procedures...............20
         2.3  Letter of Credit Procedures.....................................21
                  2.3.1  L/C Applications.....................................21
                  2.3.2  Participations in Letters of Credit..................21
                  2.3.3  Reimbursement Obligations............................22
                  2.3.4  Limitation on Obligations of Issuing Bank............22
                  2.3.5  Funding by Banks to Issuing Bank.....................22
         2.4  Commitments Several.............................................23
         2.5  Certain Conditions..............................................23

SECTION 3         NOTES EVIDENCING LOANS......................................23
         3.1  Revolving Notes.................................................23
         3.2  Term Notes......................................................23
                  3.2.1  Term Note A..........................................23
                  3.2.2  Term Note B..........................................23
         3.3  Recordkeeping...................................................24

SECTION 4         INTEREST....................................................24
         4.1  Interest Rates..................................................24
         4.2  Interest Payment Dates..........................................24
         4.3  Setting and Notice of LIBOR Rates...............................24
         4.4  Computation of Interest.........................................25

SECTION 5         FEES AND LOCK-BOX...........................................25
         5.1  Non-Use Fee.....................................................25
         5.2  Letter of Credit Fees...........................................25
         5.3  Upfront Fees....................................................25
         5.4  Agent's Fees....................................................25










                                       -67-



SECTION 6         REDUCTION OR TERMINATION OF THE REVOLVING
                  COMMITMENT AMOUNT; PREPAYMENTS..............................26
         6.1  Reduction or Termination of the Revolving Commitment Amount.....26
                  6.1.1  Voluntary Reduction or Termination of the
                         Revolving Commitment Amount..........................26
                  6.1.2  Mandatory Reductions of Revolving Commitment Amount..26
                  6.1.3  All Reductions of the Revolving Commitment Amount....27
         6.2  Prepayments.....................................................27
                  6.2.1  Voluntary Prepayments of Term Loan A.................27
                  6.2.2  Mandatory Prepayments................................27
         6.3  All Prepayments.................................................28

SECTION 7         MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.............28
         7.1  Making of Payments..............................................28
         7.2  Application of Certain Payments.................................28
         7.3  Due Date Extension..............................................29
         7.4  Setoff..........................................................29
         7.5  Proration of Payments...........................................29
         7.6  Taxes...........................................................29
         7.7  Automatic Debit.................................................30

SECTION 8         INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.........30
         8.1  Increased Costs.................................................30
         8.2  Basis for Determining Interest Rate Inadequate or Unfair........31
         8.3  Changes in Law Rendering LIBOR Loans Unlawful...................32
         8.4  Funding Losses..................................................32
         8.5  Right of Banks to Fund through Other Offices....................33
         8.6  Discretion of Banks as to Manner of Funding.....................33
         8.7  Mitigation of Circumstances; Replacement of Banks...............33
         8.8  Conclusiveness of Statements; Survival of Provisions............34

SECTION 9         REPRESENTATIONS AND WARRANTIES..............................34
         9.1  Organization....................................................34
         9.2  Authorization; No Conflict......................................34
         9.3  Validity and Binding Nature.....................................34
         9.4  Financial Condition.............................................34
         9.5  No Material Adverse Change......................................35
         9.6  Litigation and Contingent Liabilities...........................35
         9.7  Ownership of Properties; Liens..................................35
         9.8  Subsidiaries....................................................35
         9.9  Pension Plans...................................................35
         9.10  Investment Company Act.........................................36
         9.11  Public Utility Holding Company Act.............................36
         9.12  Regulation U...................................................36
         9.13  Taxes..........................................................36
         9.14  Solvency, etc..................................................36









                                       -68-



         9.15  Environmental Matters..........................................36
         9.16  Reserved.......................................................37
         9.17  Insurance......................................................37
         9.18  Real Property..................................................38
         9.19  Information....................................................38
         9.20  Intellectual Property..........................................38
         9.21  Burdensome Obligations.........................................38
         9.22  Labor Matters..................................................38
         9.23  No Default.....................................................38
         9.24  Purchase Agreement, etc........................................38

SECTION 10        COVENANTS...................................................39
         10.1  Reports, Certificates and Other Information....................40
                  10.1.1  Annual Report.......................................40
                  10.1.2  Interim Reports.....................................40
                  10.1.3  Compliance Certificates.............................41
                  10.1.4  Reports to the SEC and to Shareholders..............41
                  10.1.5  Notice of Default, Litigation and ERISA Matters.....41
                  10.1.6  Borrowing Base Certificates.........................42
                  10.1.7  Management Reports..................................42
                  10.1.8  Projections.........................................42
                  10.1.9  Subordinated Debt Notices...........................42
                  10.1.10  Other Information..................................42
         10.2  Books, Records and Inspections.................................43
         10.3  Maintenance of Property; Insurance.............................43
         10.4  Compliance with Laws; Payment of Taxes and Liabilities.........44
         10.5  Maintenance of Existence, etc..................................44
         10.6  Financial Covenants............................................44
                  10.6.1  Fixed Charge Coverage Ratio.........................44
                  10.6.2  Leverage Ratio......................................45
                  10.6.3  Tangible Net Worth..................................45
                  10.6.4  EBITDA..............................................45
                  10.6.5  Capital Expenditures................................45
         10.7  Limitations on Debt............................................45
         10.8  Liens..........................................................46
         10.9  Operating Leases...............................................47
         10.10  Restricted Payments...........................................47
         10.11  Mergers, Consolidations, Sales................................47
         10.12  Modification of Organizational Documents......................48
         10.13  Use of Proceeds...............................................48
         10.14  Further Assurances............................................48
         10.15  Transactions with Affiliates..................................48
         10.16  Employee Benefit Plans........................................48
         10.17  Environmental Matters.........................................48
         10.18  Unconditional Purchase Obligations............................48
         10.19  Inconsistent Agreements.......................................49









                                       -69-



         10.20  Business Activities...........................................49
         10.21  Investments...................................................49
         10.22  Restriction of Amendments to Certain Documents................50
         10.23  Fiscal Year...................................................50
         10.24  Cancellation of Debt..........................................50

SECTION 11        EFFECTIVENESS; CONDITIONS OF LENDING, ETC...................50
         11.1  Initial Credit Extension.......................................50
                  11.1.1  Notes...............................................50
                  11.1.2  Resolutions.........................................50
                  11.1.3  Consents, etc.......................................51
                  11.1.4  Incumbency and Signature Certificates...............51
                  11.1.5  Guaranty and Supporting Letter of Credit............51
                  11.1.6  Pledge of Certificate of Deposit....................51
                  11.1.7  Security Agreement..................................51
                  11.1.8  Pledge Agreement....................................51
                  11.1.9  Real Estate Documents...............................51
                  11.1.10  Purchase Agreement Assignment......................52
                  11.1.11  Subordination Agreements...........................52
                  11.1.12  Opinions of Counsel................................52
                  11.1.13  Insurance..........................................52
                  11.1.14  Copies of Purchase Documents.......................52
                  11.1.15  Payment of Fees....................................52
                  11.1.16  Solvency Certificate...............................53
                  11.1.17  Pro Forma..........................................53
                  11.1.18  Search Results; Lien Terminations..................53
                  11.1.19  Filings, Registrations and Recordings..............53
                  11.1.20  Closing Certificate................................53
                  11.1.21  Borrowing Base Certificate.........................53
                  11.1.22  Purchase Certificate, Consents and Permits.........53
                  11.1.23  Other..............................................54
         11.2  Conditions.....................................................54
                  11.2.1  Compliance with Warranties, No Default, etc.........54
                  11.2.2  Confirmatory Certificate............................54

SECTION 12        EVENTS OF DEFAULT AND THEIR EFFECT..........................54
         12.1  Events of Default..............................................54
                  12.1.1  Non-Payment of the Loans, etc.......................54
                  12.1.2  Non-Payment of Other Debt...........................54
                  12.1.3  Other Material Obligations..........................55
                  12.1.4  Bankruptcy, Insolvency, etc.........................55
                  12.1.5  Non-Compliance with Loan Documents..................55
                  12.1.6  Warranties..........................................55
                  12.1.7  Pension Plans.......................................55
                  12.1.8  Judgments...........................................56
                  12.1.9  Invalidity of Guaranty, etc.........................56









                                       -70-



                  12.1.10  Invalidity of Collateral Documents, etc............56
                  12.1.11  Invalidity of Subordination Provisions, etc........56
                  12.1.12  Change of Control..................................56
                  12.1.13  Material Adverse Effect............................56
         12.2  Effect of Event of Default.....................................56

SECTION 13        THE AGENT...................................................57
         13.1  Appointment and Authorization..................................57
         13.2  Delegation of Duties...........................................57
         13.3  Liability of Agent.............................................58
         13.4  Reliance by Agent..............................................58
         13.5  Notice of Default..............................................58
         13.6  Credit Decision................................................58
         13.7  Indemnification................................................59
         13.8  Agent in Individual Capacity...................................59
         13.9  Successor Agent................................................60
         13.10  Collateral Matters............................................60

SECTION 14        GENERAL.....................................................60
         14.1  Waiver; Amendments.............................................60
         14.2  Confirmations..................................................61
         14.3  Notices........................................................61
         14.4  Computations...................................................61
         14.5  Regulation U...................................................61
         14.6  Costs, Expenses and Taxes......................................62
         14.7  Subsidiary References..........................................62
         14.8  Captions.......................................................62
         14.9  Assignments; Participations....................................62
                  14.9.1  Assignments.........................................62
                  14.9.2  Participations......................................64
         14.10  Governing Law.................................................64
         14.11  Counterparts..................................................64
         14.12  Successors and Assigns........................................64
         14.13  Indemnification by the Loan Parties...........................64
         14.14  Nonliability of Lenders.......................................65
         14.15  FORUM SELECTION AND CONSENT TO JURISDICTION...................65
         14.16  WAIVER OF JURY TRIAL..........................................66
         14.17  Reimbursement Among Loan Parties..............................66
         14.18  Guaranty......................................................66
         14.19  Joint and Several Liability...................................67
         14.20  Interrelationship Among the Loan Parties......................67














                                       -71-



                                    SCHEDULES


SCHEDULE 1.1                   Montpelier Equipment
SCHEDULE 2.1                   Banks and Pro Rata Shares
SCHEDULE 3.1                   Term Loan Installments
SCHEDULE 9.6                   Litigation and Contingent Liabilities
SCHEDULE 9.8                   Subsidiaries
SCHEDULE 9.15                  Environmental Matters
SCHEDULE 9.17                  Insurance
SCHEDULE 9.18                  Real Property
SCHEDULE 9.22                  Labor Matters
SCHEDULE 10.7                  Existing Debt
SCHEDULE 10.8                  Existing Liens
SCHEDULE 10.21                 Investments
SCHEDULE 11.1                  Debt to be Repaid
SCHEDULE 11.1.8                Mortgaged Real Property
SCHEDULE 12.1.12               Key Executives
SCHEDULE 14.3                  Addresses for Notices




































                                       -72-



                                    EXHIBITS

EXHIBIT A                      Pricing Schedule
EXHIBIT B                      Form of Revolving Note
EXHIBIT C                      Form of Term Note A
EXHIBIT D                      Form of Term Note B
EXHIBIT E                      Form of Compliance Certificate
EXHIBIT F                      Form of Borrowing Base Certificate
EXHIBIT G                      Form of Assignment Agreement














































                                       -73-



                                 CREDIT AGREEMENT


     THIS CREDIT  AGREEMENT dated as of February 29, 2000 (this  "Agreement") is
entered into by and among  CLARION  TECHNOLOGIES,  INC., a Delaware  corporation
(the  "Company"),  and  its  subsidiaries  party  hereto  (the  Company  and its
subsidiaries  are collectively  referred to as the "Loan Parties"),  jointly and
severally,  the financial  institutions that are or may from time to time become
parties hereto  (together  with their  respective  successors  and assigns,  the
"Banks"),  LASALLE BANK NATIONAL ASSOCIATION, a national banking association (in
its individual  capacity,  "LaSalle"),  as agent on behalf of the Banks (in such
capacity,  the "Agent"),  and BANK ONE MICHIGAN,  a Michigan banking corporation
(in its individual  capacity,  "Bank One"),  as co- agent for the Banks (in such
capacity, the "Co-Agent").

     WHEREAS,  the Banks have agreed to make  available to the Loan Parties term
loans and a revolving  credit facility  (which includes  letters of credit) upon
the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:

SECTION 1   DEFINITIONS.

     1.1  Definitions.  When used  herein  the  following  terms  shall have the
following meanings:

     Account Debtor means any Person who is obligated to any Loan Party under an
Account Receivable.

     Account  Receivable  means,  with respect to any Person,  any right of such
Person to payment for goods sold or leased or for services rendered,  whether or
not evidenced by an instrument or chattel paper and whether or not yet earned by
performance.

     Adjusted Working Capital means the remainder of:

          (a) (i) the consolidated  current assets of the Loan Parties less (ii)
     the  amount  of cash and cash  equivalents  included  in such  consolidated
     current assets;

minus

          (b) (i) consolidated current liabilities of the Loan Parties less (ii)
     the amount of short-term  Debt (including  current  maturities of long-term
     Debt) of the Company  and its  Subsidiaries  included in such  consolidated
     current liabilities.








                                       -74-



     Affected Loan - see Section 8.3.

     Affiliate  of any Person  means (i) any other  Person  which,  directly  or
indirectly,  controls or is controlled  by or is under common  control with such
Person and (ii) any officer or director of such Person. A Person shall be deemed
to be  "controlled  by" any other Person if such Person  possesses,  directly or
indirectly,  power to vote  10% or more of the  securities  (on a fully  diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the  direction of the  management  and policies of such
Person whether by contract or otherwise.

     Agent means  LaSalle in its capacity as agent for the Banks  hereunder  and
any successor thereto in such capacity.

     Agreement - see the Preamble.

     Asset Sale means the sale,  lease,  assignment or other  transfer for value
(each a  "Disposition")  by any Loan Party to any Person  (other  than any other
Loan  Party)  of any  asset  or  right  of any  Loan  Party  other  than (a) the
Disposition  of any  asset  which is to be  replaced,  and is in fact  replaced,
within 30 days with another asset performing the same or a similar function, (b)
the sale or lease of inventory in the ordinary course of business.

     Assignment Agreement - see Section 14.9.1.

     Attorney Costs means,  with respect to any Person,  all reasonable fees and
charges of any  counsel  to such  Person,  including,  but not  limited  to, all
reasonable  disbursements  of  internal  legal  counsel  and all court costs and
similar legal expenses.

     Available Cash - see Section 10.1.6.

     Bank - see the  Preamble.  References  to the  "Banks"  shall  include  the
Issuing Bank; for purposes of clarification only, to the extent that LaSalle (or
any successor  Issuing Bank) may have any rights or  obligations  in addition to
those of the other Banks due to its status as Issuing  Bank,  its status as such
will be specifically referenced.

     Bank One - see the Preamble.

     Base Rate means at any time the greater of (a) the Federal  Funds Rate plus
0.5% and (b) the Prime Rate.

     Base Rate Loan means any Loan which bears  interest at or by  reference  to
the Base Rate.

     Base Rate Margin - see the Pricing Schedule attached hereto as Exhibit A.








                                       -75-



     Borrowing  Base  means an  amount  equal to the  lesser of the total of (a)
eighty  percent (80%) of the unpaid amount (net of such reserves and  allowances
as the Agent deems  necessary  in its  reasonable  discretion)  of all  Eligible
Accounts  Receivable  plus (b) fifty  percent (50%) of the value of all Eligible
Inventory  valued  at the  lower of cost or  market  (net of such  reserves  and
allowances as the Agent deems necessary in its reasonable  discretion)  plus (c)
thirty-five  percent (35%) of the value of Eligible Work in Progress  Inventory;
provided,  however,  that the  aggregate  amount of  advances  for (i)  Eligible
Inventory shall not exceed Four Million  Dollars  ($4,000,000) at any time, (ii)
Tooling  Receivables  shall not exceed Five Million Dollars  ($5,000,000) at any
time and (iii) Eligible Work in Progress Inventory shall not exceed Five Hundred
Thousand Dollars ($500,000) at any time.

     Borrowing Base Certificate means a certificate substantially in the form of
Exhibit F.

     Business  Day means any day on which Agent is open for  commercial  banking
business in Chicago,  Illinois  and, in the case of a Business Day which relates
to a LIBOR  Loan,  on which  dealings  are  carried on in the  London  interbank
eurodollar market.

     Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated  balance sheet
of the Loan Parties,  but  excluding  expenditures  made in connection  with the
replacement,  substitution  or restoration of assets to the extent  financed (i)
from  insurance  proceeds (or other similar  recoveries)  paid on account of the
loss of or damage to the assets  being  replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.

     Capital  Lease means,  with  respect to any Person,  any lease of (or other
agreement  conveying  the right to use) any real or  personal  property  by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.

     Cash  Collateralize  means to deliver cash  collateral to the Agent,  to be
held  as  cash  collateral  for  outstanding  Letters  of  Credit,  pursuant  to
documentation   satisfactory  to  the  Agent.  Derivatives  of  such  term  have
corresponding meanings.

     Cash  Equivalent  Investment  means, at any time, (a) any evidence of Debt,
maturing  not more than one year after such time,  issued or  guaranteed  by the
United States Government or any agency thereof,  (b) commercial paper,  maturing
not more than one year from the date of issue,  or corporate  demand  notes,  in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by Moody's Investors  Service,  Inc., (c)
any certificate of deposit (or time deposits represented by such certificates of
deposit)  or  banker's  acceptance,  maturing  not more than one year after such
time,  or overnight  Federal Funds  transactions  that are issued or sold by any
Bank or its holding  company or by a commercial  banking  institution  that is a
member of the Federal Reserve System and has a combined  capital and surplus and
undivided profits of not less than $500,000,000 and (d) any repurchase



                                       -76-



agreement entered into with any Bank (or other commercial banking institution of
the stature referred to in clause (c)) which (i) is secured by a fully perfected
security  interest in any obligation of the type described in any of clauses (a)
through (c) and (ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such Bank (or
other commercial banking institution) thereunder.

     CERCLA - see Section 9.15.

     Clarion-Drake Acquisition means Clarion-Drake Acquisition, Inc., a Michigan
corporation.

     Closing Date - see Section 11.1.

     Co-Agent means Bank One Michigan in its capacity as Co-Agent for the Banks.

     Code means the Internal Revenue Code of 1986.

     Collateral  means  each of the  items  of a  collateral  set  forth in each
Collateral Document.

     Collateral  Access  Agreement  means an  agreement  in form  and  substance
reasonably  satisfactory to the Agent pursuant to which a mortgagee or lessor of
real  property  on  which  collateral  is  stored  or  otherwise  located,  or a
warehouseman,  processor or other bailee of Inventory, acknowledges the Liens of
the Agent and waives any Liens held by such Person on such property, and, in the
case of any such agreement with a mortgagee or lessor,  permits the Agent access
to and use of such real property for a reasonable  amount of time  following the
occurrence  and during  the  continuance  of an Event of  Default  to  assemble,
complete and sell any collateral stored or otherwise located thereon.

     Collateral  Documents means the Security Agreement,  the Purchase Agreement
Assignment,   each  Mortgage,   each  Pledge  Agreement,   each  Guaranty,  each
Subordination  Agreement,   each  Collateral  Access  Agreement  and  any  other
agreement  or  instrument  pursuant to which any Loan Party or any other  Person
grants collateral to the Agent for the benefit of the Banks.

     Commitment means, as to any Bank, such Bank's commitment to make Loans, and
to issue or participate in Letters of Credit, under this Agreement.  The initial
amount of each Bank's Pro Rata Share of the Revolving  Commitment  Amount and of
the aggregate amount of the Term Loans is set forth on Schedule 2.1.

     Company - see the Preamble.

     Computation  Period means each period of four  consecutive  Fiscal Quarters
ending on the last day of a Fiscal Quarter.









                                       -77-



     Consolidated Net Income means, with respect to Loan Parties for any period,
the net income (or loss) of the Loan  Parties  for such  period,  excluding  any
gains from Asset Sales, any extraordinary  gains and any gains from discontinued
operations.

     Controlled  Group means all members of a controlled  group of  corporations
and all members of a controlled  group of trades or  businesses  (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.

     Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, whether or not evidenced by bonds, debentures,  notes
or similar  instruments,  (b) all  obligations  of such  Person as lessee  under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person in accordance with GAAP, (c) all obligations of such Person
to pay the  deferred  purchase  price of property or services  (excluding  trade
accounts  payable in the  ordinary  course of  business),  (d) all  indebtedness
secured  by a Lien  on  the  property  of  such  Person,  whether  or  not  such
indebtedness  shall  have been  assumed  by such  Person,  (e) all  obligations,
contingent  or  otherwise,  with  respect to the face  amount of all  letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person  (including the Letters of Credit),  (f) all Hedging  Obligations of
such Person and (g) all Suretyship  Liabilities of such Person,  (h) all Debt of
any partnership of which such Person is a general partner.

     Debt  Service  Coverage  Ratio means as of any date of  determination,  the
ratio of (i)  principal  and  interest  payments  on all Debt to (ii)  quarterly
EBITDA as determined in accordance with GAAP.

     Debt to be Repaid means Debt listed on Schedule 11.1.

     Default Rate see the Pricing Schedule attached hereto as Exhibit A.

     Designated Proceeds - see Section 6.2.2(a).

     Disposal - see the definition of "Release".

     Dollar and the sign "$" mean lawful money of the United States of America.

     Drake Products means Drake Products Corporation, a Michigan corporation.

     EBITDA means, for any period, Consolidated Net Income for such period plus,
to the extent deducted in determining  such  Consolidated  Net Income,  Interest
Expense, income tax expense, depreciation and amortization for such period.











                                       -78-



     Eligible Account  Receivable means an Account  Receivable owing to any Loan
Party which meets each of the following requirements:

          (1) it arises from the sale of goods or the  rendering  of services by
     the  applicable  Loan Party;  and if it arises from the sale of goods,  (i)
     such goods comply with such Account  Debtor's  specifications  (if any) and
     have been  delivered to such Account  Debtor and (ii) the  applicable  Loan
     Party has  possession of, or if requested by the Agent has delivered to the
     Agent, delivery receipts evidencing such delivery;

          (2) it (a) is  subject to a  perfected  Lien in favor of the Agent and
     (b) is not subject to any other assignment, claim or Lien;

          (3) it is a valid, legally enforceable and unconditional obligation of
     the Account Debtor with respect thereto, and is not subject to any off-set,
     counterclaim,  credit,  allowance,  discount,  rebate or  adjustment by the
     Account Debtor with respect thereto, or to any claim by such Account Debtor
     denying  liability  thereunder in whole or in part  (provided,  that in the
     event any off-set, counterclaim, credit, allowance, rebate or adjustment is
     asserted,  or  discount is granted,  the Account  Receivable  shall only be
     ineligible pursuant to this clause (3) to the extent of the same);

          (4) there is no bankruptcy, insolvency or liquidation proceeding by or
     against the Account Debtor with respect thereto;

          (5) the Account  Debtor with respect  thereto is a resident or citizen
     of, and is located within, the United States ("U.S.  Account"),  unless the
     sale of goods or services  giving  rise to such  Account  Receivable  is on
     letter  of  credit,  banker's  acceptance  or other  credit  support  terms
     reasonably  satisfactory to the Agent;  provided,  however, for purposes of
     determining  Eligible  Accounts  hereunder,   Accounts  Receivable  of  the
     Canadian  Subsidiaries of Lear  Corporation,  Johnson Controls Inc., Delphi
     Automotive Systems Corporation,  Magna  International,  Inc. and such other
     Accounts  Receivable  approved  in writing by Agent and  Co-Agent  shall be
     deemed U.S. Accounts;

          (6) it is not an Account Receivable arising from a "sale on approval,"
     "sale or return,"  "consignment" or "bill and hold" or subject to any other
     repurchase or return agreement;

          (7) it is not an Account  Receivable with respect to which  possession
     and/or control of the goods sold giving rise thereto is held, maintained or
     retained by any Loan Party (or by any agent or custodian of any Loan Party)
     for the account of or subject to further  and/or future  direction from the
     Account Debtor with respect thereto;

          (8) it arises in the ordinary course of business of the Loan Parties;








                                       -79-



          (9) if the  Account  Debtor is the  United  States or any  department,
     agency or instrumentality  thereof,  the applicable Loan Party has assigned
     its right to payment of such Account  Receivable  to the Agent  pursuant to
     the Assignment of Claims Act of 1940;

          (10) if such  Loan  Party  maintains  a credit  limit  for an  Account
     Debtor,  the aggregate  dollar amount of Accounts  Receivable due from such
     Account  Debtor,  including such Account  Receivable,  does not exceed such
     credit limit;

          (11) if the Account  Receivable  is evidenced  by chattel  paper or an
     instrument,  the originals of such chattel  paper or instrument  shall have
     been  endorsed  and/or  assigned  and  delivered  to the  Agent in a manner
     satisfactory to the Agent;

          (12)  such  Account  Receivable  is not  more  than 90 days  past  the
     original invoice date thereof, according to the original terms of sale;

          (13) it is not an Account Receivable with respect to an Account Debtor
     that is located in any  jurisdiction  which has  adopted a statute or other
     requirement  with  respect to which any Person that obtains  business  from
     within such jurisdiction  must file a notice of business  activities report
     or make any other  required  filings in a timely manner in order to enforce
     its claims in such  jurisdiction's  courts  unless  such notice of business
     activities  report  has been duly and  timely  filed or such Loan  Party is
     exempt from filing such report and has provided the Agent with satisfactory
     evidence of such exemption;

          (14) the Account Debtor with respect thereto is not a Loan Party or an
     Affiliate of a Loan Party;

          (15) it is not owed by an Account  Debtor with respect to which 25% or
     more of the aggregate  amount of outstanding  Accounts  Receivable  owed at
     such time by such Account  Debtor is classified as ineligible  under clause
     (12) of this definition; and

          (16) if the aggregate  amount of all Accounts  Receivable  owed by the
     Account Debtor thereon exceeds 35% of the aggregate  amount of all Accounts
     Receivable at such time, then all Accounts  Receivable owed by such Account
     Debtor in excess of such amount shall be deemed ineligible.

An Account Receivable which is at any time an Eligible Account  Receivable,  but
which  subsequently  fails  to meet  any of the  foregoing  requirements,  shall
forthwith cease to be an Eligible Account Receivable.  Further,  with respect to
any Account Receivable, if the Agent or the Required Banks at any time hereafter
determine in their discretion that the prospect of payment or performance by the
Account  Debtor  with  respect  thereto is  materially  impaired  for any reason
whatsoever,  such  Account  Receivable  shall  cease to be an  Eligible  Account
Receivable after notice of such determination is given to the Representative.






                                       -80-



     Eligible  Inventory means all raw materials and finished goods Inventory of
each Loan Party which meets each of the following requirements:

          (1) it (a) is  subject to a  perfected  Lien in favor of the Agent and
     (b) is not subject to any other assignment, claim or Lien;

          (2) it is salable;

          (3) it is in the  possession and control of the Loan Parties and it is
     stored  and  held in  facilities  owned  by the Loan  Parties  or,  if such
     facilities  are not so owned,  the Agent is in  possession  of a Collateral
     Access Agreement with respect thereto;

          (4) it is not  Inventory  produced  in  violation  of the  Fair  Labor
     Standards Act and subject to the "hot goods" provisions  contained in Title
     29 U.S.C. ss.215;

          (5) it is not  subject  to any  agreement  which  would  restrict  the
     Agent's ability to sell or otherwise dispose of such Inventory;

          (6) it is  located  in  the  United  States  or in  any  territory  or
     possession of the United  States that has adopted  Article 9 of the Uniform
     Commercial Code;

          (7) it is not "in transit" to any Loan Party or held by any Loan Party
     on consignment; and

          (8) the Agent shall not have  determined in its discretion  that it is
     unacceptable due to age, type, category, quality, quantity and/or any other
     reason whatsoever.

Inventory which is at any time Eligible  Inventory but which  subsequently fails
to meet any of the foregoing  requirements  shall forthwith cease to be Eligible
Inventory.

     Eligible  Work in  Progress  Inventory  means  all Work in  Progress  which
otherwise meets all of the  requirements of Eligible  Inventory set forth in the
definition of Eligible Inventory.

     Elsa Prince Trust means the Elsa D. Prince Living Trust Dated 1/27/76,  the
trustee of which is Elsa D. Prince.

     Environmental   Claims  means  all  claims,   however   asserted,   by  any
governmental,   regulatory  or  judicial  authority  or  other  Person  alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.

     Environmental  Laws  means all  present or future  federal,  state or local
laws, statutes,  common law duties,  rules,  regulations,  ordinances and codes,
together with all administrative





                                       -81-



orders, directed duties, requests, licenses,  authorizations and permits of, and
agreements  with,  any  governmental   authority,   in  each  case  relating  to
Environmental Matters.

     Environmental Matters means any matter arising out of or relating to health
and  safety,  or  pollution  or  protection  of the  environment  or  workplace,
including  any of the  foregoing  relating  to the  presence,  use,  production,
generation,  handling, transport,  treatment,  storage, disposal,  distribution,
discharge, release, control or cleanup of any Hazardous Substance.

     ERISA means the Employee Retirement Income Security Act of 1974.

     Eurocurrency  Reserve  Percentage means, with respect to any LIBOR Loan for
any Interest  Period,  a percentage  (expressed as a decimal) equal to the daily
average  during such Interest  Period of the percentage in effect on each day of
such Interest  Period,  as prescribed by the FRB, for  determining the aggregate
maximum reserve requirements  applicable to "Eurocurrency  Liabilities" pursuant
to  Regulation  D or any  other  then  applicable  regulation  of the FRB  which
prescribes  reserve  requirements  applicable to  "Eurocurrency  Liabilities" as
presently defined in Regulation D.

     Event of Default means any of the events described in Section 12.1.

     Excess Cash Flow means, for any period, the remainder of

          (a) EBITDA for such period,

     less

          (b) the sum, without duplication, of

               (i)  scheduled  repayments of principal of Term Loans made during
          such period,

     plus

               (ii) voluntary  prepayments of the Term Loans pursuant to Section
          6.2.1 during such period,
     plus

               (iii) cash  payments  made in such period with respect to Capital
          Expenditures,

     plus

               (iv) all federal,  state,  local and foreign income taxes paid in
          cash by the Company and its Subsidiaries during such period,








                                       -82-



     plus

               (v) cash Interest Expense of the Loan Parties during such period,

     plus

               (vi) any net  increase in Adjusted  Working  Capital  during such
          period,

     plus

               (vii) all dividend payments on the Preferred Stock.

     Federal  Funds Rate  means,  for any day,  the rate set forth in the weekly
statistical  release  designated  as H.15(519),  or any  successor  publication,
published by the Federal  Reserve Bank of New York (including any such successor
publication,  "H.15(519)")  on the  preceding  Business Day opposite the caption
"Federal  Funds  (Effective)";  or, if for any  relevant day such rate is not so
published on any such preceding  Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight  Federal funds  arranged prior to 9:00 A.M. (New York City time) on
that day by each of three leading  brokers of Federal funds  transactions in New
York City selected by the Agent.

     Fiscal Quarter means a fiscal quarter of a Fiscal Year.

     Fiscal Year means the fiscal year of the Loan  Parties,  which period shall
be the  12-month  period  ending on  December 31 of each year.  References  to a
Fiscal Year with a number corresponding to any calendar year (e.g., "Fiscal Year
2000") refer to the Fiscal Year ending on December 31 of such calendar year.

     Fixed  Charge  Coverage  Ratio  means,  as of any  date  of  determination,
measured on a rolling  twelve-month  basis,  the ratio of (a) the total for such
period of Rolling  Twelve Month EBITDA minus the sum of all income taxes paid by
the Loan Parties and all Capital  Expenditures to (b) the sum for such period of
(i)  Interest  Expense plus (ii)  required  payments of principal of Funded Debt
(including  the Term Loans but  excluding  the  Revolving  Loans) plus (iii) all
dividend payments on the Preferred Stock.

     FRB means the  Board of  Governors  of the  Federal  Reserve  System or any
successor thereto.

     Funded Debt means,  as to any Person,  all Debt of such Person that matures
more than one year from the date of its creation (or is renewable or extendible,
at the option of such Person, to a date more than one year from such date).










                                       -83-



     GAAP means generally accepted accounting  principles set forth from time to
time in the opinions and  pronouncements of the Accounting  Principles Board and
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the Financial  Accounting  Standards  Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession),  which  are  applicable  to the  circumstances  as of the  date  of
determination.

     Group - see Section 2.2.1.

     Guarantor Distributions - see Section 10.10.

     Guarantors means each of James R. Workman,  Jack D.  Rutherford,  Craig and
Emilie Wierda, William Beckman and the Elsa Prince Trust.

     Guaranty means each guaranty of even date herewith  executed by each of the
Guarantors  in favor of Agent,  as amended,  modified  or restated  from time to
time.

     Hazardous Substances - see Section 9.15.

     Hedging  Agreement  means any interest  rate,  currency or  commodity  swap
agreement,  cap  agreement  or  collar  agreement,  and any other  agreement  or
arrangement  designed to protect any Loan Party against fluctuations in interest
rates,  currency exchange rates or commodity prices,  which agreements shall (to
the extent entered into with a Bank),  be secured by the  collateral  granted to
the Banks under the Collateral Documents.

     Hedging  Obligation means, with respect to any Loan Party, any liability of
such Loan Party under any Hedging Agreement.

     Interest Expense means for any period the consolidated  interest expense of
the Loan  Parties for such  period  (including  all imputed  interest on Capital
Leases).

         Interest Period means,  as to any LIBOR Loan, the period  commencing on
the date such Loan is borrowed or continued as, or converted  into, a LIBOR Loan
and ending on the date one, two,  three or six months  thereafter as selected by
the  Representative  pursuant  to  Section  2.2.2 or 2.2.3,  as the case may be;
provided that:

          (i) if any Interest  Period would otherwise end on a day that is not a
     Business  Day,  such  Interest  Period  shall be extended to the  following
     Business  Day unless the  result of such  extension  would be to carry such
     Interest  Period into another  calendar month, in which event such Interest
     Period shall end on the preceding Business Day;

          (ii) any  Interest  Period  that begins on a day for which there is no
     numerically  corresponding  day in the  calendar  month  at the end of such
     Interest Period shall end on the last Business Day of the calendar month at
     the end of such Interest Period;




                                       -84-



          (iii) the  Representative  may not  select any  Interest  Period for a
     Revolving  Loan which would extend beyond the scheduled  Termination  Date;
     and

          (iv) the  Representative  may not select any  Interest  Period for any
     Term  Loan  if,  after  giving  effect  to such  selection,  the  aggregate
     principal amount of all Term Loans having Interest Periods ending after any
     date on which an  installment  of the Term Loans is  scheduled to be repaid
     would exceed the aggregate  principal amount of the Term Loans scheduled to
     be outstanding after giving effect to such repayment.

     Inventory has the meaning  assigned to such term in the Uniform  Commercial
Code as in effect in the State of Illinois on the date hereof.

     Investment means, relative to any Person, any investment in another Person,
whether by  acquisition  of any debt or equity  security,  by making any loan or
advance or by becoming  obligated  with  respect to a  Suretyship  Liability  in
respect of  obligations  of such other  Person  (other  than  travel and similar
advances to employees in the ordinary course of business).

     Issuing Bank means Agent in its capacity as the issuer of Letters of Credit
hereunder and its successors and assigns in such capacity.

     LaSalle - see the Preamble.

     L/C  Application  means,  with respect to any request for the issuance of a
Letter of Credit,  a letter of credit  application in the form being used by the
Issuing  Bank at the time of such  request  for the  type of  letter  of  credit
requested.

     L/C Fee Rate - see the Pricing Schedule attached hereto as Exhibit A.

     Letter of Credit - see Section 2.1.3.

     Leverage  Ratio  means,  as of the last day of any month,  the ratio of (i)
Senior Debt as of such day to (ii)  Rolling  Twelve  Month  EBITDA for the month
ending on such day.

     LIBOR Loan means any Loan which  bears  interest  at a rate  determined  by
reference to the LIBOR Rate (Reserve Adjusted).

     LIBOR Margin - see the Pricing Schedule attached hereto as Exhibit A.

     LIBOR  Office  means with respect to any Bank the office or offices of such
Bank  which  shall be  making  or  maintaining  the  LIBOR  Loans  of such  Bank
hereunder. A LIBOR Office of any Bank may be, at the option of such Bank, either
a domestic or foreign office.








                                       -85-



     LIBOR Rate means, with respect to any LIBOR Loan for any Interest Period, a
rate per annum  equal to the offered  rate for  deposits in Dollars for a period
equal or comparable to such Interest  Period which appears on Telerate page 3750
as of 11:00 A.M.  (London time) two Business Days prior to the first day of such
Interest  Period.  "Telerate  Page 3750 " means the display  designated as "Page
3750" on the  Telerate  Service (or such other page as may replace  page 3750 on
that service or such other  service as may be nominated by the British  Bankers'
Association  as the  information  vendor for the purpose of  displaying  British
Bankers' Association Interest Settlement Rates for Dollar deposits).

     LIBOR Rate (Reserve Adjusted) means, with respect to any LIBOR Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16th of 1%) determined pursuant to the following formula:

                  LIBOR Rat=                  LIBOR Rate
                  (Reserve Adjusted)          1-Eurocurrency
                                              Reserve Percentage

     Lien means, with respect to any Person, any interest granted by such Person
in any real or personal property,  asset or other right owned or being purchased
or  acquired  by  such  Person  which  secures  payment  or  performance  of any
obligation and shall include any mortgage,  lien,  encumbrance,  charge or other
security interest of any kind, whether arising by contract,  as a matter of law,
by judicial process or otherwise.

     Loan Documents means this  Agreement,  the Notes,  the Guaranties,  the L/C
Applications and the Collateral Documents.

     Loan Party means the Company and each Subsidiary thereof.

     Loans means, collectively, the Revolving Loans and the Term Loans.

     Mandatory Prepayment Event - see Section 6.2.2(a).

     Margin Stock means any "margin stock" as defined in Regulation U.

     Material  Adverse  Effect  means (a) a  material  adverse  change  in, or a
material  adverse  effect upon,  the financial  condition,  operations,  assets,
business,  properties or prospects of the Loan Parties  taken as a whole,  (b) a
material  impairment  of the  ability of the Loan  Parties to perform any of its
obligations  under any Loan Document or (c) a material  adverse  effect upon any
substantial portion of the collateral under the Collateral Documents or upon the
legality,  validity,  binding effect or enforceability against any Loan Party of
any Loan Document.











                                       -86-



     Montpelier Equipment means all Equipment of the Loan Parties located at the
Montpelier, Ohio facility set forth on Schedule 1.1 hereto.

     Mortgage  means a mortgage,  deed of trust,  leasehold  mortgage or similar
instrument  granting the Agent a Lien on real property of any Loan Party, as the
same may be amended, modified or restated from time to time.

     Multiemployer  Pension  Plan  means a  multiemployer  plan,  as  defined in
Section  4001(a)(3)  of  ERISA,  to which  any Loan  Party or any  member of the
Controlled Group may have any liability.

     Net Cash Proceeds means:

          (a) with  respect  to any  Asset  Sale  the  aggregate  cash  proceeds
     (including cash proceeds  received by way of deferred  payment of principal
     pursuant to a note,  installment  receivable or otherwise,  but only as and
     when  received)  received by any Loan Party pursuant to such Asset Sale net
     of  (i)  the  direct  costs  relating  to  such  sale,  transfer  or  other
     disposition   (including  sales  commissions  and  legal,   accounting  and
     investment  banking fees),  (ii) taxes paid or reasonably  estimated by any
     Loan Party to be payable as a result thereof (after taking into account any
     available tax credits or deductions and any tax sharing  arrangements)  and
     (iii)  amounts  required to be applied to the repayment of any Debt secured
     by a Lien on the asset  subject to such Asset Sale  (other than the Loans);
     and

          (b) with respect to any issuance of equity  securities,  the aggregate
     cash proceeds received by any Loan Party pursuant to such issuance,  net of
     the  direct  costs   relating  to  such  issuance   (including   sales  and
     underwriter's commission); and

          (c) with respect to any issuance of Debt,  the aggregate cash proceeds
     received  by any Loan Party  pursuant to such  issuance,  net of the direct
     costs of such issuance (including up-front fees and placement fees).

     Non-Use Fee Rate - see the Pricing Schedule attached hereto as Exhibit A.

     Notes means,  collectively,  the Revolving Notes, Term Note A and Term Note
B.

     Operating Lease means any lease of (or other agreement  conveying the right
to use) any real or  personal  property  by the  Company or any  Subsidiary,  as
lessee, other than any Capital Lease.

     PBGC  means  the  Pension  Benefit  Guaranty  Corporation  and  any  entity
succeeding to any or all of its functions under ERISA.









                                       -87-



     Pension  Plan  means a "pension  plan",  as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan),  and to which the Company or any member of the  Controlled  Group
may have any  liability,  including  any  liability  by reason of having  been a
substantial  employer  within the  meaning of Section  4063 of ERISA at any time
during  the  preceding  five  years,  or  by  reason  of  being  deemed  to be a
contributing sponsor under Section 4069 of ERISA.

     Person means any natural person, corporation,  partnership,  trust, limited
liability  company,  association,  governmental  authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.

     Pledge Agreement means the Pledge Agreement of even date herewith  executed
by the  Company  in favor of  Agent,  as the same may be  amended,  modified  or
restated from time to time.

     Preferred  Stock means that certain  Preferred  Stock,  $.001 par value per
share, of the Company.

     Pro Rata Share means,  with respect to any Bank, the  percentage  specified
opposite such Bank's name on Schedule 2.1 hereto,  as adjusted from time to time
in accordance with the terms hereof.

     Prime Rate means,  for any day, the rate of interest in effect for such day
as publicly announced from time to time by LaSalle as its prime rate (whether or
not such rate is  actually  charged  by  LaSalle).  Any change in the Prime Rate
announced  by LaSalle  shall take  effect at the  opening of business on the day
specified in the public announcement of such change.

     Purchase  means the  purchase of  substantially  all of the assets of Drake
Products by the Company pursuant to the terms of the Purchase Agreement.

     Purchase  Agreement means that certain Asset Purchase Agreement dated as of
January 27,  2000,  as amended,  among the Company,  Clarion-Drake  Acquisition,
Drake Products and the Selling Shareholders.

     Purchase  Agreement   Assignment  means  that  certain  Purchase  Agreement
Assignment of even date herewith  executed by the Company in favor of Agent,  as
amended, modified or restated from time to time.

     RCRA - see Section 9.15.

     Regulation D means Regulation D of the FRB.

     Regulation U means Regulation U of the FRB.










                                       -88-



     Release has the meaning  specified  in CERCLA and the term  "Disposal"  (or
"Disposed") has the meaning specified in RCRA; provided that in the event either
CERCLA or RCRA is  amended  so as to broaden  the  meaning  of any term  defined
thereby,  such  broader  meaning  shall apply as of the  effective  date of such
amendment;  and provided,  further,  that to the extent that the laws of a state
wherein  any  affected  property  lies  establish  a meaning  for  "Release"  or
"Disposal"  which is broader than is specified  in either  CERCLA or RCRA,  such
broader meaning shall apply.

     Release Price means  $4,063,400  representing  the aggregate  amount of the
release  price and all of the  Montpelier  Equipment  set forth on Schedule  1.1
hereto.

     Representative - see Section 2.1.5.

     Required Banks means Banks having Pro Rata Shares aggregating 51% or more.

     Revolving Commitment Amount means Fifteen Million Dollars ($15,000,000), as
reduced from time to time pursuant to Section 6.1.

     Revolving Credit Commitment - See Section 2.1.1.

     Revolving Loans - see Section 2.1.1.

     Revolving Note - see Section 3.1.

     Revolving  Outstandings  means,  at any time,  the sum of (a) the aggregate
principal amount of all outstanding  Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.

     Rolling  Twelve Month EBITDA means,  as of any date,  EBITDA  measured on a
rolling  twelve (12) month  basis,  taking into account the month just ended and
the prior eleven (11) months.

     SEC means the Securities and Exchange  Commission or any other governmental
authority succeeding to any of the principal functions thereof.

     Security  Agreement  means the  Security  Agreement  of even date  herewith
executed  by each Loan  Party in favor of the Agent,  as  amended,  modified  or
restated from time to time.

     Seller Notes means (i) that certain  Subordinated  Promissory Note dated as
of  February  29,  2000  payable  by  each  of  the  Company  and  Clarion-Drake
Acquisition  to Drake Products in the original  principal  amount of $5,000,000,
(ii) that  certain  Subordinated  Promissory  Note dated as of February 29, 2000
payable by each of the Company and  Clarion-Drake  Acquisition to Drake Products
in  the  original   principal  amount  of  $135,000,   and  (iii)  that  certain
Subordinated  Promissory  Note dated as of February  29, 2000 payable by each of
the  Company and  Clarion-Drake  Acquisition  to Ruth Ann Drake in the  original
principal  amount of  $1,000,000,  each as may be amended,  modified or restated
from time to time.




                                       -89-



     Selling  Shareholders  means  each of  Jeffrey W.  Anonick  and  Michael C.
Miller.

     Senior  Debt means all Debt of the Loan  Parties  other  than  Subordinated
Debt.

     Stated  Amount  means,  with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under  any  and  all  circumstances   plus  (b)  the  aggregate  amount  of  all
unreimbursed payments and disbursements under such Letter of Credit.

     Subordination  Agreements means each  Subordination  Agreement  executed by
each holder of Subordinated Debt, in each case in form and substance  acceptable
to the Agent.

     Subordinated  Debt  means (i) each of the  Seller  Notes and (ii) any other
unsecured  Debt of the Loan Parties which has  subordination  terms,  covenants,
pricing  and other terms  which have been  approved  in writing by the  Required
Banks.

     Subsidiary means,  with respect to any Person, a corporation,  partnership,
limited  liability  company or other entity  which such Person  and/or its other
Subsidiaries own, directly or indirectly,  such number of outstanding  shares or
other ownership interests as have more than 50% of the ordinary voting power for
the election of directors or other  managers of such  corporation,  partnership,
limited  liability  company  or  other  entity.  Unless  the  context  otherwise
requires,  each  reference  to  Subsidiaries  herein  shall  be a  reference  to
Subsidiaries of each Loan Party.

     Suretyship  Liability  means any  agreement,  undertaking or arrangement by
which any Person  guarantees,  endorses or otherwise  becomes or is contingently
liable  upon (by direct or  indirect  agreement,  contingent  or  otherwise,  to
provide  funds for  payment,  to  supply  funds to or  otherwise  to invest in a
debtor,  or  otherwise  to assure a  creditor  against  loss) any  indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other  distributions  upon the shares of any other Person.  The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal  amount of the debt,
obligation or other liability supported thereby.

     Tangible Net Worth means,  at any time, net worth  determined in accordance
with GAAP plus Subordinated  Debt after subtracting  therefrom the amount of any
General  Intangibles  (as  defined  in the UCC),  amounts  due from  Affiliates,
pre-paid expenses,  pre-paid Tooling expenses, deferred taxes, deferred charges,
advances  from  shareholders,  and the  amount  of other  assets  classified  as
intangible by Agent in the exercise of its reasonable discretion.

     Term Loan A - see Section 2.1.2.

     Term Loan A Commitment - see Section 2.1.2.




                                       -90-



     Term Loan B - see Section 2.1.3.

     Term Loan B Commitment - see Section 2.1.3.

     Term Loans means, collectively, Term Loan A and Term Loan B.

     Termination Date means the earlier to occur of (a) February 28, 2003 or (b)
such other date on which the Commitments terminate pursuant to Section 6 or 12.

     Term Note A - see Section 3.2.1.

     Term Note B - see Section 3.2.2.

     Tooling  Receivables  means all Eligible  Account  Receivables of Borrowers
which arise from the sale of tooling.

     Total Debt means all Debt of the Loan Parties, determined on a consolidated
basis, excluding (i) contingent obligations in respect of Suretyship Liabilities
(except to the extent constituting  Suretyship Liabilities in respect of Debt of
a Person other than a Loan Party), (ii) Hedging Obligations of the Loan Parties,
(iii)  Debt of any Loan  Party  to  another  Loan  Party,  and  (iv)  contingent
obligations in respect of undrawn letters of credit.

     Type of Loan or  Borrowing  - see  Section  2.2.1.  The  types  of Loans or
borrowings  under this  Agreement are as follows:  Base Rate Loans or borrowings
and LIBOR Loans or borrowings.

     Unmatured  Event of Default means any event that, if it continues  uncured,
will, with lapse of time or notice or both, constitute an Event of Default.

     Work In Progress means all tooling  Inventory located at one or more of the
Loan Parties' facilities.

     1.2 Other  Interpretive  Provisions.

          (a) The  meanings  of  defined  terms are  equally  applicable  to the
     singular and plural forms of the defined terms.

          (b) Section,  Schedule and Exhibit  references  are to this  Agreement
     unless otherwise specified.

          (c) The term "including" is not limiting and means "including  without
     limitation."

          (d) In the  computation  of periods of time from a specified date to a
     later specified date, the word "from" means "from and including"; the words
     "to" and "until" each mean "to but excluding", and the word "through" means
     "to and including."







                                       -91-



          (e) Unless  otherwise  expressly  provided  herein,  (i) references to
     agreements  (including  this Agreement) and other  contractual  instruments
     shall  be  deemed  to  include   all   subsequent   amendments   and  other
     modifications  thereto,  but only to the extent such  amendments  and other
     modifications  are not  prohibited by the terms of any Loan  Document,  and
     (ii)  references  to any  statute  or  regulation  shall  be  construed  as
     including all  statutory and  regulatory  provisions  amending,  replacing,
     supplementing or interpreting such statute or regulation.

          (f) This  Agreement  and the  other  Loan  Documents  may use  several
     different  limitations,  tests  or  measurements  to  regulate  the same or
     similar  matters.   All  such  limitations,   tests  and  measurements  are
     cumulative and each shall be performed in accordance with its terms.

          (g) This  Agreement  and the other  Loan  Documents  are the result of
     negotiations among and have been reviewed by counsel to the Agent, the Loan
     Parties,  the Banks and the other  parties  thereto and are the products of
     all parties.  Accordingly, they shall not be construed against the Agent or
     the Banks  merely  because of the  Agent's or Banks'  involvement  in their
     preparation.

     1.3 Revised  Article 9. It is the intention of the parties  hereto that the
priorities and agreements herein contained continue to apply after the enactment
by the  various  States  of  Revised  Article  9  --Secured  Transactions  (with
conforming  amendments  to  Articles  1, 2, 2a,  4, 5, 6, 7 and 8) to the UCC as
approved by The American Law Institute in 1998 and approved and  recommended for
enactment  in all the States by the National  Conference  of  Commissioners  for
Uniform  State  Laws in 1998  ("Revised  Article  9") and the  effectiveness  of
Revised Article 9 in any State.  After the effectiveness of Revised Article 9 in
any State governing perfection and the effect of perfection or non-perfection of
a security interest in any collateral, as to such State and such collateral, (i)
all section  references herein to, and all defined terms used herein defined in,
Article  9 of the UCC as  currently  in  effect  shall  be  deemed  to be to any
corresponding  Section  or  definition  of  Revised  Article  9, and (ii) if any
definition  used herein by  reference  to Revised  Article 9 is broader than the
corresponding  definition  used in current  Article 9 of the UCC,  such  broader
definition will apply herein.

SECTION 2      COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND
               LETTER OF CREDIT PROCEDURES.

     2.1  Commitments.  On and  subject  to the  terms  and  conditions  of this
Agreement,  each of the Banks,  severally and for itself  alone,  agrees to make
loans to, and to issue or  participate  in letters of credit for the account of,
the Loan Parties as follows:










                                       -92-



     2.1.1 Revolving Loan  Commitment.  Each Bank will make loans on a revolving
basis  ("Revolving  Loans") from time to time until the Termination Date in such
Bank's  Pro Rata  Share of such  aggregate  amounts  as the  Representative  may
request  from  all  Banks  on  behalf  of the Loan  Parties;  provided  that the
Revolving  Outstandings  will  not at any  time  exceed  the  lesser  of (x) the
Revolving  Commitment  Amount and (y) the Borrowing Base (the "Revolving  Credit
Commitment").

     2.1.2 Term Loan A  Commitment.  Each Bank agrees to make a term loan to the
Loan  Parties  (each such loan,  a "Term  Loan A") on the  Closing  Date in such
Bank's Pro Rata Share of Twenty Six  Million  Dollars  ($26,000,000)  (the "Term
Loan A  Commitment").  The  commitments  of the  Banks to make Term Loan A shall
expire concurrently with the making of Term Loan A on the Closing Date.

     2.1.3 Term Loan B  Commitment.  Each Bank agrees to make a term loan to the
Loan  Parties  (each such loan,  a "Term  Loan B") on the  Closing  Date in such
Bank's Pro Rata Share of Twelve Million Dollars  ($12,000,000) (the "Term Loan B
Commitment").  The  commitments  of the Banks to make  Term Loan B shall  expire
concurrently with the making of Term Loan B on the Closing Date.

     2.1.4 L/C  Commitment.  (a) The Issuing Bank will issue standby  letters of
credit under the Revolving Credit Commitment, in each case containing such terms
and   conditions  as  are  permitted  by  this   Agreement  and  are  reasonably
satisfactory to the Issuing Bank (each a "Letter of Credit"),  at the request of
and for the account of the Loan  Parties from time to time before the date which
is 30 days  prior to the  Termination  Date and (b) as more  fully  set forth in
Section 2.3.2,  each Bank agrees to purchase a participation in each such Letter
of Credit;  provided  that (i) the  aggregate  Stated  Amount of all  Letters of
Credit  shall  not at any time  exceed  the  lesser of (i) One  Million  Dollars
($1,000,000)  and (ii) the aggregate  amount  available for borrowing  under the
Revolving Credit Commitment.

     2.1.5 Representative.  Notwithstanding anything contained in this Agreement
to  the   contrary,   the  Loan   Parties   hereby   appoint  the  Company  (the
"Representative")  to act as their sole and exclusive  representative under this
Agreement  for all purposes,  including,  without  limitation,  to receive funds
advanced hereunder,  to receive notices and other  communications from the Agent
or Co-Agent  hereunder,  to make requests for advances of funds hereunder and to
amend, modify or supplement this Agreement on behalf of each Loan Party. Neither
the Agent nor Co-Agent  shall have (i) any  obligation to  communicate  with any
Loan Party other than the Representative  concerning this Agreement, any note or
any other  matter  related to the  obligations  of the Loan Parties and (ii) any
responsibility  with respect to the  allocation  among Loan Parties of the funds
advanced  hereunder.  It is  understood  and agreed that all of the Loan Parties
have obtained all necessary  corporate approvals to effectuate the provisions of
this Section 2.1.5.









                                       -93-



     2.2 Loan Procedures.

     2.2.1 Various Types of Loans.  Each  Revolving Loan shall be, and each Term
Loan may be divided into  tranches  which are either a Base Rate Loan or a LIBOR
Loan (each a "type" of Loan), as the Representative shall specify in the related
notice of  borrowing or  conversion  pursuant to Section  2.2.2 or 2.2.3.  LIBOR
Loans  having  the same  Interest  Period  are  sometimes  called a  "Group"  or
collectively "Groups". Base Rate Loans and LIBOR Loans may be outstanding at the
same time, provided that not more than three (3) different Groups of LIBOR Loans
shall be outstanding at any one time. All borrowings, conversions and repayments
of  Revolving  Loans  shall be  effected  so that each Bank will have a pro rata
share  (according  to its Pro Rata  Share)  of all  types  and  Groups of Loans.
Notwithstanding  the  foregoing or any other  provision of this  Agreement,  the
Company may not select any Interest Period for a LIBOR Loan which is longer than
one month prior to the earlier of (x) 60 days after the Closing Date and (y) the
date that the Agent  notifies  the  Company  that it has  completed  its primary
syndication of the Loans and the Commitments.

     2.2.2 Borrowing Procedures. The Representative shall give written notice or
telephonic notice (followed  immediately by written confirmation thereof) to the
Agent of each  proposed  borrowing not later than (a) in the case of a Base Rate
borrowing, 11:00 A.M., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a LIBOR borrowing,  11:00 A.M.,  Chicago time, at least three
Business  Days prior to the proposed  date of such  borrowing.  Each such notice
shall be effective upon receipt by the Agent,  shall be  irrevocable,  and shall
specify  the date,  amount  and type of  borrowing  and,  in the case of a LIBOR
borrowing,  the initial  Interest Period  therefor.  Each written notice of each
borrowing  shall be  accompanied  by a current  Borrowing  Base  Certificate  in
accordance  with the terms of  Section  10.1.6.  Promptly  upon  receipt of such
notice,  the Agent  shall  advise each Bank  thereof.  Not later than 1:00 P.M.,
Chicago time, on the date of a proposed  borrowing,  each Bank shall provide the
Agent at the office  specified  by the Agent with  immediately  available  funds
covering such Bank's Pro Rata Share of such  borrowing and, so long as the Agent
has not  received  written  notice that the  conditions  precedent  set forth in
Section 11 with respect to such  borrowing  have not been  satisfied,  the Agent
shall pay over the funds  received  by the  Agent to the  Representative  on the
requested  borrowing date. Each borrowing shall be on a Business Day. Each LIBOR
borrowing  shall be in an  aggregate  amount of at least  Five  Million  Dollars
($5,000,000) and an integral  multiple of at least Five Hundred Thousand Dollars
($500,000).

     2.2.3 Conversion and Continuation Procedures.

          (a) Subject to Section 2.2.1, the Representative may, upon irrevocable
     written notice to the Agent in accordance with clause (b) below:

               (i) elect,  as of any Business  Day, to convert any Loans (or any
          part thereof in an aggregate  amount not less than  $5,000,000  or any
          higher integral multiple of $500,000) into Loans of the other type; or






                                       -94-



               (ii) elect, as of the last day of the applicable Interest Period,
          to continue any LIBOR Loans having Interest  Periods  expiring on such
          day  (or any  part  thereof  in an  aggregate  amount  not  less  than
          $5,000,000  or a  higher  integral  multiple  of  $500,000)  for a new
          Interest Period;

provided that after giving effect to any prepayment, conversion or continuation,
the  aggregate  principal  amount of each Group of LIBOR Loans shall be at least
$5,000,000 and an integral multiple of $500,000.

          (b) The  Representative  shall give  written or  telephonic  (followed
     immediately by written  confirmation  thereof)  notice to the Agent of each
     proposed  conversion  or  continuation  not  later  than (i) in the case of
     conversion into Base Rate Loans,  11:00 A.M., Chicago time, on the proposed
     date  of  such  conversion  and  (ii) in the  case  of  conversion  into or
     continuation  of LIBOR  Loans,  11:00 A.M.,  Chicago  time,  at least three
     Business   Days  prior  to  the  proposed   date  of  such   conversion  or
     continuation, specifying in each case:

               (i) the proposed date of conversion or continuation;

               (ii) the aggregate amount of Loans to be converted or continued;

               (iii) the type of Loans resulting from the proposed conversion or
          continuation; and

               (iv) in the case of conversion  into, or  continuation  of, LIBOR
          Loans, the duration of the requested Interest Period therefor.

          (c) If upon the expiration of any Interest Period  applicable to LIBOR
     Loans, the Representative has failed to select timely a new Interest Period
     to be applicable to such LIBOR Loans, the Representative shall be deemed to
     have elected to convert such LIBOR Loans into Base Rate Loans  effective on
     the last day of such Interest Period.

          (d) The Agent  will  promptly  notify  each Bank of its  receipt  of a
     notice of conversion or continuation  pursuant to this Section 2.2.3 or, if
     no timely notice is provided by the  Representative,  of the details of any
     automatic conversion.

          (e) Any conversion of a LIBOR Loan on a day other than the last day of
     an Interest Period therefor shall be subject to Section 8.4.


     2.3 Letter of Credit Procedures.










                                       -95-



     2.3.1 L/C Applications.  The Representative  shall give notice to the Agent
and the  Issuing  Bank of the  proposed  issuance  of each Letter of Credit on a
Business  Day which is at least three  Business  Days (or such lesser  number of
days as the Agent and the Issuing Bank shall agree in any particular instance in
their sole discretion)  prior to the proposed date of issuance of such Letter of
Credit.  Each such  notice  shall be  accompanied  by an L/C  Application,  duly
executed by the Representative and in all respects satisfactory to the Agent and
the Issuing  Bank,  together with such other  documentation  as the Agent or the
Issuing Bank may request in support  thereof,  it being understood that each L/C
Application  shall specify,  among other things,  the date on which the proposed
Letter of Credit is to be issued,  the expiration  date of such Letter of Credit
(which  shall not be later  than the  earlier to occur of (x) one year after the
date of issuance thereof and (y) thirty days prior to the scheduled  Termination
Date) and  whether  such Letter of Credit is to be  transferable  in whole or in
part.  Upon  approval  of the  Issuing  Bank  and  satisfaction  of  each of the
conditions  precedent  set forth in Section 11 with  respect to the  issuance of
such Letter of Credit, the Issuing Bank shall issue such Letter of Credit on the
requested issuance date. The Issuing Bank shall promptly advise the Agent of the
issuance  of each  Letter  of Credit  and of any  amendment  thereto,  extension
thereof or event or  circumstance  changing  the amount  available  for  drawing
thereunder.  In the  event of any  inconsistency  between  the  terms of any L/C
Application and the terms of this  Agreement,  the terms of this Agreement shall
control.

     2.3.2  Participations in Letters of Credit.  Concurrently with the issuance
of each  Letter of  Credit,  the  Issuing  Bank shall be deemed to have sold and
transferred to each other Bank, and each other Bank shall be deemed  irrevocably
and  unconditionally  to have  purchased  and  received  from the Issuing  Bank,
without recourse or warranty,  an undivided interest and  participation,  to the
extent of such other  Bank's Pro Rata  Share,  in such  Letter of Credit and the
applicable Loan Party's reimbursement  obligations with respect thereto. For the
purposes of this Agreement,  the unparticipated portion of each Letter of Credit
shall be deemed to be the Issuing Bank's  "participation"  therein.  The Issuing
Bank hereby  agrees,  upon  request of the Agent or any Bank,  to deliver to the
Agent or such Bank a list of all  outstanding  Letters  of Credit  issued by the
Issuing Bank,  together with such  information  related  thereto as the Agent or
such Bank may reasonably request.

     2.3.3 Reimbursement  Obligations.  The Loan Parties hereby  unconditionally
and  irrevocably  agree to  reimburse  the  Issuing  Bank for  each  payment  or
disbursement  made by the Issuing  Bank under any Letter of Credit  honoring any
demand for payment made by the beneficiary thereunder,  in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such  payment  or  disbursement  shall  bear  interest  from the date of such
payment or  disbursement  to the date that the Issuing Bank is reimbursed by the
Loan Parties therefor,  payable on demand, at a rate per annum equal to the Base
Rate from time to time in effect  plus the Base Rate Margin from time to time in
effect plus,  beginning on the third  Business Day after  receipt of notice from
the Issuing  Bank of such  payment or  disbursement,  3%. The Issuing Bank shall
notify the  Representative and the Agent whenever any demand for payment is made
under any  Letter of Credit by the  beneficiary  thereunder;  provided  that the
failure of the Issuing Bank to so notify the Representative shall not affect the
rights of the Issuing Bank or the Banks in any manner whatsoever.


                                       -96-



     2.3.4 Limitation on Obligations of Issuing Bank. In determining  whether to
pay under any Letter of Credit,  the Issuing Bank shall not have any  obligation
to any Loan Party or any Bank other than to confirm that any documents  required
to be delivered  under such Letter of Credit  appear to have been  delivered and
appear to comply on their face with the  requirements  of such Letter of Credit.
Any  action  taken  or  omitted  to be  taken by the  Issuing  Bank  under or in
connection  with any  Letter of Credit,  if taken or  omitted in the  absence of
gross negligence or willful  misconduct,  shall not impose upon the Issuing Bank
any  liability  to any Loan Party or any Bank and shall not reduce or impair any
Loan  Party's  reimbursement  obligations  set  forth  in  Section  2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.

     2.3.5  Funding  by Banks to Issuing  Bank.  If the  Issuing  Bank makes any
payment or disbursement under any Letter of Credit and the Loan Parties have not
reimbursed  the Issuing Bank in full for such payment or  disbursement  by 11:00
A.M.,  Chicago  time,  on the date of such  payment or  disbursement,  or if any
reimbursement  received by the Issuing Bank from the Loan Parties are or must be
returned or rescinded  upon or during any  bankruptcy or  reorganization  of any
Loan Party or otherwise,  each other Bank shall be obligated to pay to the Agent
for the account of the Issuing Bank, in full or partial  payment of the purchase
price of its participation in such Letter of Credit,  its Pro Rata Share of such
payment or  disbursement  (but no such payment shall diminish the obligations of
the Loan Parties under Section  2.3.3),  and, upon notice from the Issuing Bank,
the Agent  shall  promptly  notify  each  other  Bank  thereof.  Each other Bank
irrevocably  and  unconditionally  agrees to so pay to the Agent in  immediately
available  funds for the Issuing  Bank's account the amount of such other Bank's
Percentage of such payment or disbursement.  If and to the extent any Bank shall
not have made such amount available to the Agent by 2:00 P.M.,  Chicago time, on
the  Business  Day on which  such Bank  receives  notice  from the Agent of such
payment or disbursement (it being understood that any such notice received after
noon, Chicago time, on any Business Day shall be deemed to have been received on
the next  following  Business  Day),  such Bank  agrees to pay  interest on such
amount to the Agent for the Issuing Bank's account forthwith on demand, for each
day from the date such  amount  was to have been  delivered  to the Agent to the
date such  amount is paid,  at a rate per annum equal to (a) for the first three
days after  demand,  the Federal  Funds Rate from time to time in effect and (b)
thereafter,  the Base Rate from time to time in effect.  Any  Bank's  failure to
make  available  to the  Agent  its  Pro  Rata  Share  of any  such  payment  or
disbursement  shall not relieve any other Bank of its  obligation  hereunder  to
make  available to the Agent such other  Bank's Pro Rata Share of such  payment,
but no Bank  shall be  responsible  for the  failure  of any other  Bank to make
available  to the Agent such other  Bank's Pro Rata Share of any such payment or
disbursement.

     2.4 Commitments  Several.  The failure of any Bank to make a requested Loan
on any date shall not relieve any other Bank of its  obligation (if any) to make
a Loan on such date,  but no Bank shall be  responsible  for the  failure of any
other Bank to make any Loan to be made by such other Bank.

     2.5  Certain  Conditions.  Notwithstanding  any  other  provision  of  this
Agreement,  no Bank shall have an  obligation to make any Loan, or to permit the
continuation  of or any  conversion  into any LIBOR Loan,  and the Issuing  Bank
shall not have any  obligation  to issue any  Letter of  Credit,  if an Event of
Default or Unmatured Event of Default exists.

                                       -97-



SECTION 3         NOTES EVIDENCING LOANS.

     3.1  Revolving  Notes.  The  Revolving  Loans  made by each Bank  under the
Revolving   Credit   Commitment  shall  be  evidenced  by  the  Revolving  Notes
substantially in the form set forth in Exhibit B, with  appropriate  insertions,
dated the date  hereof,  payable  to the order of each such Bank in a  principal
amount not to exceed  each such  Bank's Pro Rata Share of the  Revolving  Credit
Commitment.  The  unpaid  principal  amount of the  Revolving  Loans  shall bear
interest and be due and payable as provided in this  Agreement and the Revolving
Notes.  Payments to be made by the Loan Parties under the Revolving  Notes shall
be made at the time,  in the  amounts  and upon the terms set forth  herein  and
therein.

     3.2 Term Notes.

     3.2.1  Term Note A.  Term  Loan A made by each  Bank  under the Term Loan A
Credit  Commitment  shall be evidenced by the Term Note A  substantially  in the
form set forth in Exhibit C, with appropriate insertions, dated the date hereof,
payable to the order of each such Bank in a principal  amount not to exceed each
such Bank's Pro Rata Share of the Term Loan A Commitment.  The unpaid  principal
amount of Term Loan A shall bear  interest and be due and payable as provided in
this  Agreement  and each Term Note A.  Payments to be made by the Loan  Parties
under each Term Note A shall be made at the time,  in the  amounts  and upon the
terms set forth herein and therein.

     3.2.2  Term Note B.  Term  Loan B made by each  Bank  under the Term Loan B
Commitment shall be evidenced by Term Note B substantially in the form set forth
in Exhibit D, with appropriate insertions, dated the date hereof, payable to the
order of each such Bank in a principal amount not to exceed each such Bank's Pro
Rata Share of the Term Note B Commitment.  The unpaid  principal  amount of each
Term Note B shall  bear  interest  and be due and  payable as  provided  in this
Agreement  and each Term Note B.  Payments to be made by the Loan Parties  under
each Term Note B shall be made at the time,  in the  amounts  and upon the terms
set forth herein and therein.

     3.3 Recordkeeping.  Each Bank shall record in its records, or at its option
on any schedule  attached to its Note,  the date and amount of each Loan made by
such Bank,  each repayment or conversion  thereof and, in the case of each LIBOR
Loan, the dates on which each Interest Period for such Loan shall begin and end.
The  aggregate   unpaid   principal  amount  so  recorded  shall  be  rebuttable
presumptive  evidence of the principal amount owing and unpaid on such Note. The
failure  to so record  any such  amount or any  error in so  recording  any such
amount shall not, however, limit or otherwise affect the obligations of the Loan
Parties  hereunder or under any Note to repay the principal  amount of the Loans
evidenced by such Note together with all interest accruing thereon.










                                       -98-



SECTION 4         INTEREST.

     4.1 Interest Rates.  The Loan Parties promise to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:

          (a) at all times  while such Loan is a Base Rate  Loan,  at a rate per
     annum  equal to the sum of the Base Rate  from time to time in effect  plus
     the Base Rate Margin from time to time in effect; and

          (b) at all times while such Loan is a LIBOR Loan,  at a rate per annum
     equal to the sum of the LIBOR Rate  (Reserve  Adjusted)  applicable to each
     Interest  Period for such Loan plus the LIBOR  Margin  from time to time in
     effect;

provided  that at any time an Event  of  Default  exists,  if  requested  by the
Required Banks,  the interest rate applicable to each Loan shall be increased by
3% per annum.

     4.2 Interest  Payment Dates.  Accrued interest on each Base Rate Loan shall
be payable in arrears on the last day of each  calendar  month and at  maturity.
Accrued  interest  on each  LIBOR  Loan shall be payable on the last day of each
Interest  Period  relating to such Loan (and, in the case of a LIBOR Loan with a
six-month  Interest Period,  on the three-month  anniversary of the first day of
such Interest Period) and at maturity.  After maturity,  accrued interest on all
Loans shall be payable on demand.

     4.3 Setting and Notice of LIBOR Rates.  The applicable  LIBOR Rate for each
Interest  Period shall be determined by the Agent,  and notice  thereof shall be
given  by  the  Agent  promptly  to  the  Representative  and  each  Bank.  Each
determination  of the applicable LIBOR Rate by the Agent shall be conclusive and
binding upon the parties hereto, in the absence of demonstrable error. The Agent
shall,  upon  written  request  of  Representative  or  any  Bank,   deliver  to
Representative  or such Bank a statement  showing the  computations  used by the
Agent in determining any applicable LIBOR Rate hereunder.

     4.4  Computation  of  Interest.  Interest  shall be computed for the actual
number  of days  elapsed  on the  basis of a year of 360  days.  The  applicable
interest  rate for each Base Rate Loan  shall  change  simultaneously  with each
change in the Base Rate.















                                       -99-


SECTION 5         FEES AND LOCK-BOX.

     5.1 Non-Use Fee. The Loan Parties agree to pay to the Agent for the account
of each  Bank a  non-use  fee,  for the  period  from  the  Closing  Date to the
Termination  Date,  at the  Non-Use Fee Rate in effect from time to time of such
Bank's Pro Rata Share (as  adjusted  from time to time) of the unused  amount of
the Revolving  Commitment  Amount.  For purposes of calculating usage under this
Section,  the Revolving  Commitment Amount shall be deemed used to the extent of
the  aggregate  principal  amount of all  outstanding  Revolving  Loans plus the
Stated  Amount of all  Letters of Credit.  Such  non-use fee shall be payable in
arrears on the last day of each calendar quarter and on the Termination Date for
any period then ending for which such non-use fee shall not have previously been
paid. The non-use fee shall be computed for the actual number of days elapsed on
the basis of a year of 360 days.

     5.2 Letter of Credit Fees.

          (a) The Loan Parties agree to pay to the Agent for the account of each
     Bank a letter of credit fee for each Letter of Credit  equal to the L/C Fee
     Rate in effect from time to time of such Bank's Pro Rata Share (as adjusted
     from time to time) of the undrawn amount of each Letter of Credit (computed
     for the actual  number of days elapsed on the basis of a year of 360 days);
     provided that, if requested by the Required  Banks,  the rate applicable to
     each Letter of Credit shall be increased by 3% at any time that an Event of
     Default  exists.  Such  letter of credit fee shall be payable  annually  in
     advance  within five (5) days of the first  Business  Day of each  calendar
     year for the period from the date of the  issuance of each Letter of Credit
     (or the last day on which the  letter of credit  fee was paid with  respect
     thereto) to the date such payment is due or, if earlier,  the date on which
     such Letter of Credit expired or was terminated.

          (b) In  addition,  with  respect to each  Letter of  Credit,  the Loan
     Parties  agree to pay to the Issuing  Bank,  for its own account,  (i) such
     fees and expenses as the Issuing Bank  customarily  requires in  connection
     with the issuance, negotiation, processing and/or administration of letters
     of credit in similar situations and (ii) a letter of credit fronting fee in
     the amount of 0.125% on the face amount of each Letter of Credit.

     5.3  Upfront  Fees.  The Loan  Parties  agree to pay to the  Agent  for the
account of each Bank on the Closing Date an upfront fee in the amount previously
agreed to between  the  Representative  and the Agent  (and the Agent  agrees to
promptly  forward  to each  Bank a portion  of such  upfront  fee in the  amount
previously agreed to between the Agent and such Bank).

     5.4 Agent's Fees.  The Loan Parties agree to pay to Agent such agent's fees
as are mutually agreed to from time to time by the Representative and Agent.










                                       -100-



     5.5 Lock-Box and Blocked  Account.  Each Loan Party shall  establish a lock
box and cash collateral depository account (collectively, the "Blocked Account")
in such Loan  Party's  name with  Agent  and/or  Co-Agent  to which all  Account
Debtors shall directly remit all payments on Accounts  Receivable and collateral
and in which each Loan Party will  immediately  deposit  all  payments  made for
services rendered or other payments  constituting  proceeds of collateral in the
identical  form in which such  payment was made,  whether by cash or check.  All
payments made to the Blocked Account shall be the sole and exclusive property of
Agent and/or Co-Agent (for the account of the Banks) and no persons shall have a
right to setoff  against  the  Blocked  Account.  Agent  and/or  Co-  Agent,  as
applicable,  will apply against the  Commitments two (2) Business Days after the
date  of  receipt,  if  received  in  the  Blocked  Account  and by  Agent's  or
Co-Agent's,  as applicable,  commercial note teller prior to 2:00 p.m.,  Chicago
time,  all  payments   received  thereon,   including  cash,   solvent  credits,
collections  of  Accounts  Receivable,  proceeds  of  collateral  and any  other
amounts;  provided that (a) Agent or Co-Agent, as applicable,  shall charge back
to the Loan  Parties  any  payments  that may be  required to be returned to the
entity making such payment and the Loan Parties  shall  continue to pay interest
on the amount  charged back from the date that such payment was applied  against
the  Commitments;  and (b) Agent or  Co-Agent,  as  applicable,  shall  have the
exclusive  right to determine how, when and in what amounts  application of such
payments  and  such  credits  shall  be  made  on  the  Commitments,   and  such
determination shall be conclusive upon Banks and the Loan Parties.


SECTION 6         REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT
                  AMOUNT; PREPAYMENTS.

     6.1 Reduction or Termination of the Revolving Commitment Amount.

     6.1.1  Voluntary  Reduction  or  Termination  of the  Revolving  Commitment
Amount.  The Loan Parties may from time to time on at least five Business  Days'
prior written  notice  received by the Agent (which shall  promptly  advise each
Bank thereof)  permanently  reduce the Revolving  Commitment Amount to an amount
not less than the  Revolving  Outstandings.  Any such  reduction  shall be in an
amount not less than  $1,000,000 or a higher  integral  multiple of  $1,000,000.
Concurrently with any reduction of the Revolving  Commitment Amount to zero, the
Loan Parties shall pay all interest on the Revolving Loans, all non-use fees and
all letter of credit fees and shall Cash  Collateralize  in full all obligations
arising with respect to the Letters of Credit.

     6.1.2 Mandatory  Reductions of Revolving  Commitment Amount. On the date of
any  Mandatory  Prepayment  Event,  the  Revolving  Commitment  Amount  shall be
permanently  reduced by an amount (if any) equal to the  Designated  Proceeds of
such Mandatory  Prepayment Event over the amount (if any) applied to prepay Term
Loans pursuant to Section 6.2.2.

     6.1.3 All Reductions of the Revolving  Commitment Amount. All reductions of
the Revolving  Commitment Amount shall reduce the Commitments pro rata among the
Banks according to their respective Pro Rata Shares.





                                       -101-



     6.2 Prepayments.

     6.2.1 Voluntary  Prepayments of Term Loan A. The Loan Parties may from time
to time prepay Term Loan A in whole or in part;  provided that the Company shall
give the Agent (which shall promptly  advise each Bank) notice thereof not later
than 11:00 A.M.,  Chicago time, on the day of such prepayment  (which shall be a
Business  Day),  specifying  the Loans to be prepaid  and the date and amount of
prepayment.  Any  such  partial  prepayment  shall  be in  an  amount  equal  to
$1,000,000 or a higher integral multiple of $1,000,000.

     6.2.2 Mandatory  Prepayments.

          (a) The Loan  Parties  shall make a  prepayment  of the Loans upon the
     occurrence of any of the following (each a "Mandatory Prepayment Event") at
     the following times and in the following  amounts (such applicable  amounts
     being referred to as "Designated Proceeds"):

               (i)  Concurrently  with the  receipt by any Loan Party of any Net
          Cash  Proceeds from any Asset Sale, in an amount equal to 100% of such
          Net Cash Proceeds.

               (ii)  Concurrently  with the receipt by any Loan Party of any Net
          Cash Proceeds from any issuance of equity securities of any Loan Party
          (excluding (x) any issuance of shares of capital stock pursuant to any
          employee  or  director   stock   option   program,   benefit  plan  or
          compensation  program and (y) any  issuance by a Loan Party to another
          Loan Party), in an amount equal to 100% of such Net Cash Proceeds.

               (iii)  Concurrently with the receipt by any Loan Party of any Net
          Cash  Proceeds  from  any  issuance  of any  Debt  of any  Loan  Party
          (excluding Debt permitted by clauses (a) through (g) of Section 10.7),
          in an amount equal to 100% of such Net Cash Proceeds.

               (iv)  Within  ninety  (90) days after the end of each Fiscal Year
          (commencing  with  Fiscal Year  2000),  in an amount  equal to 100% of
          Excess Cash Flow for such Fiscal Year.

          (b) If on any day the  Revolving  Outstandings  exceed  the  Borrowing
     Base, the Loan Parties shall immediately prepay Revolving Loans and/or Cash
     Collateralize the outstanding Letters of Credit, or do a combination of the
     foregoing, in an amount sufficient to eliminate such excess.

          (c) If on any day on which the Revolving  Commitment Amount is reduced
     pursuant to Section 6.1.2 the Revolving  Outstandings  exceed the Revolving
     Commitment  Amount,  the Loan Parties shall  immediately  prepay  Revolving
     Loans or Cash  Collateralize  the  outstanding  Letters of Credit,  or do a
     combination  of the  foregoing,  in an amount  sufficient to eliminate such
     excess.







                                       -102-



          (d) All Mandatory Prepayments shall be applied as follows:

                        (i)    to the  extent  any  Loan  Party  enters into any
                               sale-leaseback    transaction    involving    the
                               Montpelier Equipment, the aggregate amount of the
                               proceeds received by the Loan Parties,  up to the
                               amount of the Release Price,  shall be applied to
                               reduce  Term  Loan  A and the  remainder  of such
                               proceeds,  if any,  shall  be used to reduce Term
                               Loan B;

                       (ii)    to the extent any Loan  Party raises any proceeds
                               from the issuance of any  equity  or Debt  (other
                               than a sale-leaseback of the Montpelier Equipment
                               detailed  above),  the  first  $6,000,000  of the
                               proceeds  of any such  issuance  will be  applied
                               to Term Loan B,  with  the  remainder  applied to
                               Term Loan A.  Following repayment of Term Loan A,
                               all  remaining  proceeds  will  be applied to the
                               Revolving Credit  Commitment  until paid in full,
                               with the remaining  proceeds,  if any, applied to
                               the principal amount of Term Loan B; and

                      (iii)    all  other Mandatory Prepayments shall be applied
                               as follows:
                               (A)  first to the outstanding amount of principal
                                    and interest under Term Loan A;
                               (B)  second   to   the   outstanding   amount  of
                                    principal  and  interest under the Revolving
                                    Credit Commitment; and
                               (C)  third to the remaining outstanding principal
                                    amount of Term Loan B.

     6.3 All  Prepayments.  Each voluntary  partial  prepayment of the Revolving
Credit  Commitment and Term Loan A shall be in a principal  amount of $1,000,000
or a higher integral multiple of $1,000,000.  Any partial  prepayment of a Group
of LIBOR  Loans  shall be  subject  to the  proviso  to  Section  2.2.3(a).  Any
prepayment  of a LIBOR  Loan on a day  other  than the  last day of an  Interest
Period therefor shall include  interest on the principal amount being repaid and
shall be subject to Section 8.4. All prepayments of Term Loan A shall be applied
pro rata in the inverse order of maturity to the remaining installments thereof.
Notwithstanding  the  foregoing,  Term  Loan B may  not be  voluntarily  prepaid
without the prior written consent of the Banks.












                                       -103-



SECTION 7         MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

     7.1 Making of  Payments.  All  payments of  principal of or interest on the
Notes,  and of all  fees,  shall be made by the  Loan  Parties  to the  Agent in
immediately  available funds at the office specified by the Agent not later than
noon, Chicago time, on the date due; and funds received after that hour shall be
deemed to have been  received by the Agent on the  following  Business  Day. The
Agent shall promptly remit to each Bank its share of all such payments  received
in collected funds by the Agent for the account of such Bank. All payments under
Section  8.1 shall be made by the Loan  Parties  directly  to the Bank  entitled
thereto.

     7.2  Application of Certain  Payments.  Each payment of principal  shall be
applied  to such  Loans as the  Representative  shall  direct  by  notice  to be
received  by the Agent on or before the date of such  payment or, in the absence
of such notice,  as the Agent shall  determine in its  discretion.  Concurrently
with each  remittance  to any Bank of its share of any such  payment,  the Agent
shall advise such Bank as to the application of such payment.

     7.3 Due Date  Extension.  If any  payment of  principal  or  interest  with
respect to any of the Loans,  or of any fees,  falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately  following
Business Day and, in the case of principal, additional interest shall accrue and
be payable for the period of any such extension.

     7.4 Setoff.  The Loan  Parties  agree that the Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable  law, and in addition
thereto,  the Loan Parties  agree that at any time any Event of Default  exists,
the Agent and each Bank may apply to the payment of any  obligations of the Loan
Parties  hereunder,  whether  or not then due,  any and all  balances,  credits,
deposits,  accounts or moneys of the Loan Parties then or thereafter  with Agent
or such Bank.

     7.5  Proration of  Payments.  If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but  excluding  any  payment  pursuant  to Section  8.7 or 14.9 and  payments of
interest on any  Affected  Loan) on account of  principal  of or interest on any
Loan (or on account of its  participation  in any Letter of Credit) in excess of
its pro rata share of  payments  and other  recoveries  obtained by all Banks on
account of principal of and interest on the Loans (or such  participation)  then
held by them, such Bank shall purchase from the other Banks such  participations
in the Loans (or  sub-participations in Letters of Credit) held by them as shall
be necessary to cause such  purchasing Bank to share the excess payment or other
recovery  ratably with each of them;  provided that if all or any portion of the
excess  payment or other recovery is thereafter  recovered from such  purchasing
Bank,  the purchase  shall be rescinded and the purchase  price  restored to the
extent of such recovery.








                                       -104-



     7.6 Taxes. All payments of principal of, and interest on, the Loans and all
other  amounts  payable  hereunder  shall be made free and clear of and  without
deduction for any present or future income, excise, stamp or franchise taxes and
other  taxes,  fees,  duties,  withholdings  or  other  charges  of  any  nature
whatsoever imposed by any taxing authority,  excluding franchise taxes and taxes
imposed on or measured by any Bank's net income or  receipts  (all  non-excluded
items being called "Taxes"),  unless required by any law, rule or regulation. If
any  withholding  or  deduction  from any  payment  to be made by any Loan Party
hereunder is required in respect of any Taxes  pursuant to any  applicable  law,
rule or regulation, then the Loan Parties will:

          (a) pay directly to the relevant authority the full amount required to
     be so withheld or deducted;

          (b)  promptly  forward  to the  Agent  an  official  receipt  or other
     documentation  satisfactory  to the Agent  evidencing  such payment to such
     authority; and

          (c) pay to the Agent for the  account  of the  Banks  such  additional
     amount or amounts as is  necessary  to ensure that the net amount  actually
     received  by each Bank will  equal the full  amount  such Bank  would  have
     received had no such withholding or deduction been required.

Moreover,  if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment  received by the Agent or such Bank hereunder,  the Agent
or such Bank may pay such  Taxes and the Loan  Parties  will  promptly  pay such
additional amounts (including any penalty,  interest or expense) as is necessary
in order that the net amount  received by such Person  after the payment of such
Taxes  (including  any Taxes on such  additional  amount) shall equal the amount
such Person would have received had such Taxes not been asserted.

     If the Loan  Parties  fail to pay any  Taxes  when  due to the  appropriate
taxing  authority  or  fails  to  remit to the  Agent,  for the  account  of the
respective Banks, the required receipts or other required documentary  evidence,
the Loan Parties shall indemnify the Banks for any incremental  Taxes,  interest
or  penalties  that may  become  payable  by any  Bank as a  result  of any such
failure. For purposes of this Section 7.6, a distribution hereunder by the Agent
or any Bank to or for the  account  of any Bank shall be deemed a payment by the
Loan Parties.

     Each Bank that (a) is organized under the laws of a jurisdiction other than
the United States of America and (b)(i) is a party hereto on the Closing Date or
(ii)  becomes an assignee  of an interest  under this  Agreement  under  Section
14.9.1 after the Closing  Date  (unless  such Bank was already a Bank  hereunder
immediately  prior to such  assignment)  shall  execute  and deliver to the Loan
Parties  and the  Agent  one or more  (as the  Loan  Parties  or the  Agent  may
reasonably  request) United States Internal  Revenue Service Forms 4224 or Forms
1001 or such  other  forms  or  documents,  appropriately  completed,  as may be
applicable to establish  that such Bank is exempt from  withholding or deduction
of Taxes.  The Loan Parties shall not be required to pay  additional  amounts to
any Bank  pursuant to this Section 7.6 to the extent that the  obligation to pay
such  additional  amounts would not have arisen but for the failure of such Bank
to comply with this paragraph.


                                       -105-



     7.7 Automatic  Debit.  In order to cause timely payment to be made to Agent
of all of the Loan  Parties'  obligations  hereunder as and when due,  each Loan
Party hereby  authorizes  and directs the Agent to debit the amount of such Loan
Parties'  obligations  hereunder  to any  ordinary  deposit  account of the Loan
Parties (including,  without limitation, by increasing the principal balance due
under the Revolving Credit Commitment).


SECTION 8         INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

     8.1 Increased Costs.

          (a) If, after the date hereof,  the adoption of, or any change in, any
     applicable law, rule or regulation,  or any change in the interpretation or
     administration   of  any   applicable   law,  rule  or  regulation  by  any
     governmental authority,  central bank or comparable agency charged with the
     interpretation or administration thereof, or compliance by any Bank (or any
     LIBOR  Office of such Bank) with any request or  directive  (whether or not
     having the force of law) of any such authority,  central bank or comparable
     agency

               (i) shall  subject any Bank (or any LIBOR Office of such Bank) to
          any tax,  duty or other charge with  respect to its LIBOR  Loans,  any
          Note or its obligation to make LIBOR Loans,  or shall change the basis
          of taxation of payments to any Bank of the principal of or interest on
          its LIBOR  Loans or any other  amounts  due under  this  Agreement  in
          respect  of its LIBOR  Loans or its  obligation  to make  LIBOR  Loans
          (except  for  changes in the rate of tax on the  overall net income of
          such Bank or its LIBOR  Office  imposed by the  jurisdiction  in which
          such Bank's principal executive office or LIBOR Office is located);

               (ii)  shall  impose,   modify  or  deem  applicable  any  reserve
          (including  any reserve  imposed by the FRB, but excluding any reserve
          included in the  determination  of interest  rates pursuant to Section
          4), special deposit or similar requirement against assets of, deposits
          with or for the  account  of, or credit  extended  by any Bank (or any
          LIBOR Office of such Bank); or

               (iii)  shall  impose on any Bank (or its LIBOR  Office) any other
          condition  affecting  its LIBOR Loans,  any Note or its  obligation to
          make LIBOR Loans;

and the result of any of the  foregoing is to increase the cost to (or to impose
a cost on) such Bank (or any LIBOR Office of such Bank) of making or maintaining
any LIBOR Loan,  or to reduce the amount of any sum  received or  receivable  by
such Bank (or its LIBOR  Office)  under  this  Agreement  or under any Note with
respect  thereto,  then  upon  demand  by  such  Bank  (which  demand  shall  be
accompanied  by a  statement  setting  forth  the basis  for such  demand  and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent),  the Loan Parties  shall pay directly to such Bank such
additional  amount as will  compensate such Bank for such increased cost or such
reduction.



                                       -106-



          (b) If any Bank  shall  reasonably  determine  that any change in, the
     adoption or phase-in of, any applicable  law, rule or regulation  regarding
     capital  adequacy,  or any change in the  interpretation  or administration
     thereof by any governmental  authority,  central bank or comparable  agency
     charged with the interpretation or administration thereof, or compliance by
     any Bank or any Person  controlling such Bank with any request or directive
     regarding  capital adequacy (whether or not having the force of law) of any
     such authority,  central bank or comparable  agency,  has or would have the
     effect of reducing  the rate of return on such  Bank's or such  controlling
     Person's capital as a consequence of such Bank's  obligations  hereunder or
     under any  Letter of Credit to a level  below  that which such Bank or such
     controlling  Person  could have  achieved  but for such  change,  adoption,
     phase-in  or  compliance  (taking  into  consideration  such Bank's or such
     controlling  Person's  policies  with  respect to capital  adequacy)  by an
     amount deemed by such Bank or such controlling Person to be material,  then
     from  time to  time,  upon  demand  by such  Bank  (which  demand  shall be
     accompanied  by a statement  setting  forth the basis for such demand and a
     calculation  of the amount  thereof in reasonable  detail,  a copy of which
     shall be furnished to the Agent),  the Loan Parties  shall pay to such Bank
     such additional  amount as will  compensate  such Bank or such  controlling
     Person for such reduction.

     8.2 Basis for  Determining  Interest Rate  Inadequate  or Unfair.  If, with
respect to any Interest Period,:

          (a)  deposits in Dollars  (in the  applicable  amounts)  are not being
     offered to the Agent in the interbank  eurodollar  market for such Interest
     Period,  or the Agent  otherwise  reasonably  determines  that by reason of
     circumstances  affecting  the  interbank  eurodollar  market  adequate  and
     reasonable  means do not exist for  ascertaining the applicable LIBOR Rate;
     or

          (b) Banks having  aggregate  Pro Rata Shares of 25% or more advise the
     Agent that the LIBOR Rate  (Reserve  Adjusted) as  determined  by the Agent
     will  not  adequately  and  fairly  reflect  the  cost  to  such  Banks  of
     maintaining  or funding LIBOR Loans for such Interest  Period  (taking into
     account any amount to which such Banks may be entitled  under  Section 8.1)
     or that the making or funding of LIBOR Loans has become  impracticable as a
     result of an event  occurring after the date of this Agreement which in the
     opinion of such Banks materially affects such Loans;

then the Agent shall promptly  notify the other parties  thereof and, so long as
such circumstances shall continue,  (i) no Bank shall be under any obligation to
make or  convert  into  LIBOR  Loans  and (ii) on the  last  day of the  current
Interest  Period for each LIBOR  Loan,  such Loan  shall,  unless then repaid in
full, automatically convert to a Base Rate Loan.









                                       -107-



     8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the
adoption of any new, law or regulation,  or any change in the  interpretation of
any applicable law or regulation by any  governmental  or other  regulatory body
charged with the  administration  thereof,  should make it (or in the good faith
judgment of any Bank cause a substantial  question as to whether it is) unlawful
for any Bank to make,  maintain  or fund  LIBOR  Loans,  then  such  Bank  shall
promptly  notify  each  of the  other  parties  hereto  and,  so  long  as  such
circumstances shall continue,  (a) such Bank shall have no obligation to make or
convert into LIBOR Loans (but shall make Base Rate Loans  concurrently  with the
making of or conversion into LIBOR Loans by the Banks which are not so affected,
in each case in an amount equal to the amount of LIBOR Loans which would be made
or  converted   into  by  such  Bank  at  such  time  in  the  absence  of  such
circumstances)  and (b) on the last day of the current  Interest Period for each
LIBOR  Loan of such Bank  (or,  in any  event,  on such  earlier  date as may be
required by the relevant  law,  regulation or  interpretation),  such LIBOR Loan
shall,  unless then repaid in full,  automatically  convert to a Base Rate Loan.
Each Base Rate Loan made by a Bank which, but for the circumstances described in
the foregoing sentence,  would be a LIBOR Loan (an "Affected Loan") shall remain
outstanding  for the same  period  as the  Group of  LIBOR  Loans of which  such
Affected Loan would be a part absent such circumstances.

     8.4 Funding  Losses.  The Loan Parties hereby agree that upon demand by any
Bank (which demand shall be accompanied  by a statement  setting forth the basis
for the amount being claimed,  a copy of which shall be furnished to Agent), the
Loan Parties will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur  (including any net loss or expense incurred by reason
of the  liquidation or  reemployment of deposits or other funds acquired by such
Bank to fund or maintain any LIBOR Loan), as reasonably determined by such Bank,
as a result of (a) any payment,  prepayment  or  conversion of any LIBOR Loan of
such Bank on a date other than the last day of an Interest  Period for such Loan
(including  any  conversion  pursuant to Section  8.3) or (b) any failure of the
Loan  Parties  to  borrow,  convert  or  continue  any Loan on a date  specified
therefor in a notice of borrowing,  conversion or continuation  pursuant to this
Agreement. For this purpose, all notices to the Agent pursuant to this Agreement
shall be deemed to be irrevocable.

     8.5 Right of Banks to Fund through Other  Offices.  Each Bank may, if it so
elects,  fulfill its commitment as to any LIBOR Loan by causing a foreign branch
or Affiliate of such Bank to make such Loan; provided that in such event for the
purposes of this  Agreement  such Loan shall be deemed to have been made by such
Bank  and  the  obligation  of  the  Loan  Parties  to  repay  such  Loan  shall
nevertheless  be to such Bank and shall be deemed  held by it, to the  extent of
such Loan, for the account of such branch or Affiliate.

     8.6  Discretion  of Banks as to  Manner  of  Funding.  Notwithstanding  any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and  maintain  its funding of all or any part of its Loans in any manner it sees
fit in  accordance  with the  terms  of this  Agreement,  it  being  understood,
however,  that for the purposes of this Agreement all  determinations  hereunder
shall be made as if such Bank had actually funded and maintained each LIBOR Loan
during  each  Interest  Period for such Loan  through  the  purchase of deposits
having a maturity  corresponding to such Interest Period and bearing an interest
rate equal to the LIBOR Rate for such Interest Period.


                                       -108-



     8.7 Mitigation of Circumstances;  Replacement of Banks.

          (a) Each Bank shall promptly notify the  Representative  and the Agent
     of any event of which it has  knowledge  which will result in, and will use
     reasonable commercial efforts available to it (and not, in such Bank's sole
     judgment, otherwise disadvantageous to such Bank) to mitigate or avoid, (i)
     any  obligation  by the Loan Parties to pay any amount  pursuant to Section
     7.6 or 8.1 or (ii) the occurrence of any circumstances described in Section
     8.2 or 8.3 (and,  if any Bank has given notice of any such event  described
     in clause (i) or (ii) above and thereafter such event ceases to exist, such
     Bank shall promptly so notify the Loan Parties and Agent). Without limiting
     the foregoing,  each Bank will designate a different funding office if such
     designation  will  avoid (or reduce  the cost to the Loan  Parties  of) any
     event  described in clause (i) or (ii) of the  preceding  sentence and such
     designation   will  not,  in  such  Bank's  sole  judgment,   be  otherwise
     disadvantageous to such Bank.

          (b) If the Loan Parties become obligated to pay additional  amounts to
     any Bank  pursuant to Section  7.6 or 8.1, or any Bank gives  notice of the
     occurrence  of any  circumstances  described  in  Section  8.2 or 8.3,  the
     Representative  may designate another bank which is acceptable to the Agent
     and the Issuing Bank in their reasonable  discretion (such other bank being
     called a  "Replacement  Bank") to purchase  the Loans of such Bank and such
     Bank's rights hereunder, without recourse to or warranty by, or expense to,
     such Bank, for a purchase price equal to the outstanding  principal  amount
     of the Loans  payable to such Bank plus any accrued but unpaid  interest on
     such Loans and all  accrued but unpaid fees owed to such Bank and any other
     amounts  payable to such Bank under this  Agreement,  and to assume all the
     obligations of such Bank hereunder,  and, upon such purchase and assumption
     (pursuant to an Assignment Agreement), such Bank shall no longer be a party
     hereto or have any rights  hereunder  (other than  rights  with  respect to
     indemnities and similar rights applicable to such Bank prior to the date of
     such purchase and assumption) and shall be relieved from all obligations to
     the Loan Parties  hereunder,  and the Replacement Bank shall succeed to the
     rights and obligations of such Bank hereunder.

     8.8  Conclusiveness of Statements;  Survival of Provisions.  Determinations
and  statements  of any Bank  pursuant to Section 8.1,  8.2, 8.3 or 8.4 shall be
conclusive absent  demonstrable  error.  Banks may use reasonable  averaging and
attribution methods in determining  compensation under Sections 8.1 and 8.4, and
the  provisions  of  such  Sections  shall  survive   repayment  of  the  Loans,
cancellation  of the Notes,  expiration or  termination of the Letters of Credit
and termination of this Agreement.


SECTION 9         REPRESENTATIONS AND WARRANTIES.

     To  induce  the Agent and the  Banks to enter  into this  Agreement  and to
induce  the Banks to make Loans and issue and  participate  in Letters of Credit
hereunder,  the Loan Parties,  jointly and  severally,  represent and warrant to
Agent, Co-Agent and the Banks as follows, after giving effect to the Purchase:




                                       -109-



     9.1  Organization.  Each Loan Party is a corporation  or limited  liability
company validly existing and in good standing under the laws of the state of its
incorporation or formation,  as applicable;  each Subsidiary is validly existing
and in good standing under the laws of the jurisdiction of its organization; and
each Loan Party and each  Subsidiary  is duly  qualified  to do business in each
jurisdiction where, because of the nature of its activities or properties,  such
qualification is required, except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect.

     9.2  Authorization;  No  Conflict.  Each Loan Party is duly  authorized  to
execute and deliver each Loan  Document to which it is a party,  each Loan Party
is duly  authorized  to borrow  monies  hereunder  and each  Loan  Party is duly
authorized to perform its obligations  under each Loan Document to which it is a
party.  The  execution,  delivery  and  performance  by each Loan  Party of this
Agreement and each Loan Document to which it is a party,  and the  borrowings by
the Loan  Parties  hereunder,  do not and will not (a)  require  any  consent or
approval  of any  governmental  agency or  authority  (other than any consent or
approval which has been obtained and is in full force and effect),  (b) conflict
with (i) any  provision of law,  (ii) the  charter,  by-laws,  certification  of
formation,  operating  agreement or other  organizational  documents of any Loan
Party or (iii) any agreement,  indenture,  instrument or other document,  or any
judgment,  order or decree, which is binding upon any Loan Party or any of their
respective  properties or (c) require,  or result in, the creation or imposition
of any Lien on any asset of any Loan  Party  (other  than  Liens in favor of the
Agent created pursuant to the Collateral Documents).

     9.3 Validity and Binding Nature. Each of this Agreement and each other Loan
Document  to which any Loan  Party is a party is the  legal,  valid and  binding
obligation of such Person,  enforceable  against such Person in accordance  with
its terms,  subject to  bankruptcy,  insolvency  and similar laws  affecting the
enforceability  of  creditors'  rights  generally  and to general  principles of
equity.

     9.4 Financial Condition.  The audited consolidated  financial statements of
the Loan Parties as at December 31, 1998, the unaudited  consolidated  financial
statements  of the Loan  Parties  as at  December  31,  1999  and the  unaudited
consolidated  financial  statements  of Drake  Products as at December 31, 1999,
copies of each of which have been  delivered  to each  Bank,  were  prepared  in
accordance with GAAP (subject, in the case of such unaudited statements,  to the
absence of footnotes and to normal year-end  adjustments) and present fairly the
consolidated  financial  condition  of the Loan Parties as at such dates and the
results of their operations for the periods then ended.

     9.5 No Material Adverse Change.  Since December 31, 1998, there has been no
material  adverse  change  in  the  financial  condition,   operations,  assets,
business,  properties or prospects of the Loan Parties  taken as a whole,  other
than as set forth in unaudited  consolidated  financial  statements  of the Loan
Parties as at December 31, 1999.







                                       -110-



     9.6  Litigation  and  Contingent  Liabilities.   No  litigation  (including
derivative  actions),  arbitration  proceeding or governmental  investigation or
proceeding is pending or, to any Loan Party's knowledge,  threatened against any
Loan Party which might reasonably be expected to have a Material Adverse Effect,
except as set forth in Schedule 9.6.  Other than any liability  incident to such
litigation or proceedings, no Loan Party has any material contingent liabilities
not listed on Schedule 9.6 or permitted by Section 10.7.

     9.7 Ownership of Properties;  Liens.  Each Loan Party owns good and, in the
case of real  property,  marketable  title to all of its  properties and assets,
real and personal,  tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights),  free and clear
of all Liens, charges and claims (including  infringement claims with respect to
patents, trademarks, service marks, copyrights and the like) except as permitted
by Section 10.8.

     9.8  Subsidiaries.   As  of  the  Closing  Date,  no  Loan  Party  has  any
Subsidiaries  other  than  those  listed on  Schedule  9.8.  Neither  of Clarion
Specialty  Products,  Inc.,  an Ohio  corporation,  Clarion  Sourcing,  Inc., an
Illinois  corporation,  or  Rose &  Associates,  Inc.,  a  Delaware  corporation
(collectively,  the "Dormant  Subsidiaries"),  conducts  business of any kind or
owns any assets.  The Loan Parties agree to notify the Agent  immediately in the
event any Dormant Subsidiary begins conducting business of any kind.

     9.9 Pension Plans.

          (a) During the  twelve-consecutive-month  period  prior to the date of
     the execution  and delivery of this  Agreement or the making of any Loan or
     the  issuance  of any  Letter of  Credit,  (i) no steps  have been taken to
     terminate  any Pension Plan and (ii) no  contribution  failure has occurred
     with  respect to any Pension Plan  sufficient  to give rise to a Lien under
     Section 302(f) of ERISA.  No condition  exists or event or transaction  has
     occurred  with  respect  to any  Pension  Plan  which  could  result in the
     incurrence by any Loan Party of any material liability, fine or penalty.

          (b) All  contributions  (if any) have  been made to any  Multiemployer
     Pension  Plan that are  required to be made by each Loan Party or any other
     member  of the  Controlled  Group  under  the  terms  of the plan or of any
     collective bargaining agreement or by applicable law; no Loan Party nor any
     member of the  Controlled  Group has withdrawn or partially  withdrawn from
     any  Multiemployer  Pension Plan,  incurred any  withdrawal  liability with
     respect  to any such plan or  received  notice  of any claim or demand  for
     withdrawal  liability or partial  withdrawal  liability from any such plan,
     and no  condition  has  occurred  which,  if  continued,  might result in a
     withdrawal or partial  withdrawal from any such plan; and no Loan Party nor
     any  member  of the  Controlled  Group has  received  any  notice  that any
     Multiemployer   Pension   Plan  is  in   reorganization,   that   increased
     contributions  may be required to avoid a reduction in plan benefits or the
     imposition of any excise tax, that any such plan is or has been funded at a
     rate less than that required  under Section 412 of the Code,  that any such
     plan  is or may be  terminated,  or that  any  such  plan is or may  become
     insolvent.



                                       -111-



     9.10 Investment Company Act. No Loan Party is an "investment  company" or a
company  "controlled"  by an  "investment  company,"  within the  meaning of the
Investment Company Act of 1940.

     9.11  Public  Utility  Holding  Company  Act.  No Loan  Party is a "holding
company", or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary  company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935.

     9.12 Regulation U. No Loan Party is engaged  principally,  or as one of its
important  activities,  in the business of  extending  credit for the purpose of
purchasing or carrying Margin Stock.

     9.13 Taxes.  Each Loan Party has filed all tax returns and reports required
by law to have been filed by it and has paid all taxes and governmental  charges
thereby  shown to be owing,  except any such  taxes or  charges  which are being
diligently  contested  in good faith by  appropriate  proceedings  and for which
adequate  reserves  in  accordance  with GAAP  shall  have been set aside on its
books.

     9.14 Solvency, etc. On the Closing Date, and immediately prior to and after
giving  effect to the  issuance  of each  Letter of  Credit  and each  borrowing
hereunder and the use of the proceeds thereof, (a) each Loan Party's assets will
exceed its liabilities and (b) each Loan Party will be solvent,  will be able to
pay its debts as they mature, will own property with fair saleable value greater
than the amount  required to pay its debts and will have capital  sufficient  to
carry on its business as then constituted.

     9.15 Environmental Matters.

          (a) No  Violations.  Except as set  forth on  Schedule  9.15,  no Loan
     Party, nor any operator of any Loan Party's properties, is in violation, or
     alleged violation,  of any judgment,  decree, order, law, permit,  license,
     rule or regulation  pertaining to  environmental  matters,  including those
     arising  under the Resource  Conservation  and Recovery Act  ("RCRA"),  the
     Comprehensive  Environmental  Response,  Compensation  and Liability Act of
     1980 ("CERCLA"),  the Superfund  Amendments and Reauthorization Act of 1986
     or any other  Environmental  Law  which  individually  or in the  aggregate
     otherwise might reasonably be expected to have a Material Adverse Effect.

          (b)  Notices.  Except as set forth on  Schedule  9.15 and for  matters
     arising  after the Closing Date, in each case none of which could singly or
     in the  aggregate be expected to have a Material  Adverse  Effect,  no Loan
     Party has  received  notice from any third  party,  including  any Federal,
     state or local  governmental  authority:  (a) that any one of them has been
     identified  by the U.S.  Environmental  Protection  Agency as a potentially
     responsible  party  under  CERCLA  with  respect  to a site  listed  on the
     National  Priorities  List,  40 C.F.R.  Part 300  Appendix  B; (b) that any
     hazardous  waste,  as  defined  by  42  U.S.C.  ss.6903(5),  any  hazardous
     substance as defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant
     as  defined  by 42  U.S.C.  ss.9601(33)  or  any  toxic  substance,  oil or
     hazardous  material  or  other  chemical  or  substance  regulated  by  any
     Environmental Law (all of the foregoing,  "Hazardous Substances") which any


                                       -112-



     one of them has generated, transported or disposed of has been found at any
     site at which a Federal,  state or local  agency or other  third  party has
     conducted  a  remedial  investigation,  removal  or other  response  action
     pursuant to any  Environmental  Law; (c) that any Loan Party must conduct a
     remedial investigation, removal, response action or other activity pursuant
     to any Environmental Law; or (d) of any Environmental Claim.

          (c) Handling of Hazardous Substances.  Except as set forth on Schedule
     9.15, (i) no portion of the real property or other assets of any Loan Party
     has  been  used  for the  handling,  processing,  storage  or  disposal  of
     Hazardous  Substances  except in accordance  in all material  respects with
     applicable Environmental Laws; and no underground tank or other underground
     storage receptacle for Hazardous  Substances is located on such properties;
     (ii) in the  course of any  activities  conducted  by any Loan Party or the
     operators of any real property of any Loan Party,  no Hazardous  Substances
     have  been  generated  or are  being  used on  such  properties  except  in
     accordance in all material respects  with  applicable  Environmental  Laws;
     (iii)  there have been no Releases  or  threatened  Releases  of  Hazardous
     Substances on, upon, into or from any real  property or other assets of any
     Loan Party,  which  Releases  singly or in the aggregate  might  reasonably
     be expected  to  have a material  adverse  effect on the value of such real
     property  or  assets;  (iv) there  have been no  Releases  on,  upon,  from
     or into any real  property  in the vicinity of the real  property  or other
     assets of any Loan Party  which, through soil or groundwater contamination,
     may have come to be located  on, and  which might reasonably be expected to
     have a Material Adverse  Effect on the value of, the real property or other
     assets of any Loan Party; and (v)any Hazardous  Substances generated by any
     Loan Party have been transported offsite only by properly licensed carriers
     and delivered only to treatment or disposal facilities   maintaining  valid
     permits as required under applicable Environmental Laws, which transporters
     and facilities have  been  and  are operating in compliance in all material
     respects with such permits and applicable Environmental Laws.

     9.16 Reserved.

     9.17  Insurance.  Set forth on  Schedule  9.17 is a complete  and  accurate
summary of the property and casualty  insurance program of each Loan Party as of
the  Closing  Date  (including  the  names  of  all  insurers,  policy  numbers,
expiration dates,  amounts and types of coverage,  annual premiums,  exclusions,
deductibles,  self-insured retention,  and a description in reasonable detail of
any self-insurance  program,  retrospective rating plan, fronting arrangement or
other risk assumption arrangement involving each Loan Party).

     9.18 Real  Property.  Set forth on Schedule 9.18 is a complete and accurate
list,  as of the  Closing  Date,  of the address of all real  property  owned or
leased by the Loan Parties,  together with, in the case of leased property,  the
name and mailing address of the lessor of such property.








                                       -113-



     9.19 Information.  All information heretofore or contemporaneously herewith
furnished  in writing by each Loan Party or any other Loan Party to the Agent or
any  Bank  for  purposes  of  or in  connection  with  this  Agreement  and  the
transactions  contemplated  hereby is,  and all  written  information  hereafter
furnished  by or on behalf of any Loan  Party to the Agent or any Bank  pursuant
hereto or in connection  herewith  will be, true and accurate in every  material
respect on the date as of which such information is dated or certified, and none
of such  information  is or will be incomplete by omitting to state any material
fact  necessary  to  make  such  information  not  misleading  in  light  of the
circumstances  under which made (it being  recognized by the Agent and the Banks
that any  projections  and  forecasts  provided by the Loan Parties are based on
good  faith  estimates  and  assumptions  believed  by the  Loan  Parties  to be
reasonable as of the date of the applicable  projections or assumptions and that
actual results during the period or periods covered by any such  projections and
forecasts may differ from projected or forecasted results).

     9.20  Intellectual  Property.  The Loan  Parties  own and possess or have a
license or other right to use all patents, patent rights, trademarks,  trademark
rights,  trade names, trade name rights,  service marks, service mark rights and
copyrights as are necessary for the conduct of the business of the Loan Parties,
without  any  infringement  upon  rights of others  which  could  reasonably  be
expected to have a Material Adverse Effect.

     9.21 Burdensome  Obligations.  No Loan Party is a party to any agreement or
contract or subject to any  corporate  or  partnership  restriction  which might
reasonably be expected to have a Material Adverse Effect.

     9.22 Labor Matters.  Except as set forth on Schedule 9.22, no Loan Party is
subject to any labor or collective bargaining  agreement.  There are no existing
or threatened strikes, lockouts or other labor disputes involving any Loan Party
that singly or in the aggregate could  reasonably be expected to have a Material
Adverse  Effect.  Hours  worked by and  payment  made to  employees  of the Loan
Parties  are not in  violation  of the Fair  Labor  Standards  Act or any  other
applicable law, rule or regulation dealing with such matters.

     9.23 No Default.  No Event of Default or Unmatured  Event of Default exists
or would result from the  incurring  by any Loan Party of any Debt  hereunder or
under any other Loan Document.

     9.24 Purchase Agreement, etc.

          (a) The Loan Parties have  heretofore  furnished  the Agent a true and
     correct copy of the Purchase Agreement.

          (b)  Clarion-Drake  Acquisition  and, to each Loan Parties'  knowledge
     (such knowledge based on the  representations,  warranties and covenants of
     Drake  Products  and  each of the  Selling  Shareholders  contained  in the
     Purchase Agreement),  each other party to the Purchase Agreement,  has duly
     taken all necessary corporate,  partnership or other organizational  action
     to  authorize  the  execution,  delivery  and  performance  of the Purchase
     Agreement and the consummation of transactions contemplated thereby.




                                       -114-



          (c) The Purchase will comply with all applicable  legal  requirements,
     and all necessary governmental,  regulatory, creditor, shareholder, partner
     and other  material  consents,  approvals  and  exemptions  required  to be
     obtained by Clarion-Drake  Acquisition and, to each Loan Parties' knowledge
     (such knowledge based on the  representations,  warranties and covenants of
     Drake  Products  and  each of the  Selling  Shareholders  contained  in the
     Purchase  Agreement),  each  other  party  to  the  Purchase  Agreement  in
     connection  with  the  Purchase  will  be,  prior  to  consummation  of the
     Purchase,  duly  obtained  and will be in full force and effect.  As of the
     date of the Purchase Agreement, all applicable waiting periods with respect
     to the  Purchase  will have  expired  without any action being taken by any
     competent  governmental  authority  which  restrains,  prevents  or imposes
     material adverse conditions upon the consummation of the Purchase.

          (d) The execution and delivery of the Purchase  Agreement did not, and
     the  consummation  of  the  Purchase  will  not,  violate  any  statute  or
     regulation of the United States  (including any  securities  law) or of any
     state or other applicable jurisdiction, or any order, judgment or decree of
     any court or governmental body binding on Clarion-Drake  Acquisition or, to
     each Loan Parties' knowledge (such knowledge based on the  representations,
     warranties  and  covenants  of  Drake  Products  and  each  of the  Selling
     Shareholders  contained in the Purchase Agreement),  any other party to the
     Purchase  Agreement,  or result in a breach  of,  or  constitute  a default
     under, any material agreement,  indenture, instrument or other document, or
     any judgment,  order or decree,  to which  Clarion-Drake  Acquisition  is a
     party or by which the  Clarion-Drake  Acquisition is bound or, to each Loan
     Parties' knowledge, to which any other party to the Purchase Agreement is a
     party or by which any such party is bound.
          (e) No statement or representation  made in the Purchase  Agreement by
     Clarion-  Drake  Acquisition  or, to each  Loan  Parties'  knowledge  (such
     knowledge based on the  representations,  warranties and covenants of Drake
     Products  and each of the Selling  Shareholders  contained  in the Purchase
     Agreement),  any other Person,  contains any untrue statement of a material
     fact or omits to state any material fact  required to be stated  therein or
     necessary in order to make the  statements  made  therein,  in light of the
     circumstances under which they are made, not misleading.


SECTION 10        COVENANTS.

     Until the expiration or termination of the Commitments and thereafter until
all obligations of the Loan Parties hereunder and under the other Loan Documents
are paid in full and all Letters of Credit have been terminated, each Loan Party
agrees that,  unless at any time the Required  Banks shall  otherwise  expressly
consent in writing, it will:

     10.1 Reports,  Certificates  and Other  Information.  Furnish to the Agent,
Co-Agent and each Bank:







                                       -115-



     10.1.1 Annual Report. As soon as available,  copies of the Form 10-K Annual
Report or comparable  successor report filed by the Company and its Subsidiaries
with the Securities and Exchange  Commission or any successor agency;  provided,
that if such report is not made available  within ninety (90) days after the end
of each fiscal year of the Company,  a consolidated  and  consolidating  balance
sheet and the related  statements of consolidated and consolidating net earnings
and stockholders'  equity and consolidated and consolidating  statements of cash
flows of the Company  and its  Subsidiaries  as of the end of such fiscal  year,
fairly and accurately  presenting the financial condition of the Company and its
Subsidiaries  as at such date and the results of  operations  of the Company and
its  Subsidiaries  for such  fiscal  year  and  setting  forth  in each  case in
comparative form the corresponding  figures for the corresponding  period of the
preceding  fiscal year, all in reasonable  detail,  prepared in accordance  with
GAAP  consistently   applied,  and  audited  by  independent   certified  public
accountants  acceptable to the Required Banks, together with a written statement
from such accountants to the effect that in making the examination necessary for
the signing of such annual  audit  report by such  accountants,  nothing came to
their  attention  that  caused  them to  believe  that  the  Company  was not in
compliance  with any  provision  of Section  10.6,  10.7,  10.9 or 10.10 of this
Agreement  insofar  as such  provision  relates  to  accounting  matters  or, if
something  has come to their  attention  that  caused  them to believe  that the
Company  was  not  in  compliance  with  any  such  provision,  describing  such
non-compliance in reasonable detail.

     10.1.2 Interim  Reports.  (a) as soon as available,  copies of the periodic
Form 10-Q quarterly  report or comparable  successor report filed by the Company
with the Securities and Exchange  Commission or any successor agency;  provided,
that if such report is not made available within  forty-five (45) days after the
end of each of the first three quarterly  accounting periods in each fiscal year
of the Company  beginning  with the quarter  ending March 31, 2000,  the Company
shall immediately deliver to each Bank an  internally-prepared  balance sheet of
the Company and its Subsidiaries on a consolidated and consolidating basis as at
the end of such quarter and the related  statements of operations and statements
of  cash  flows  of the  Company  and its  Subsidiaries  on a  consolidated  and
consolidating  basis for such  quarter  and for the  portion of the fiscal  year
ended at the end of such quarter, setting forth in each case in comparative form
the figures for the corresponding  quarter and the corresponding  portion of the
previous fiscal year, all in reasonable detail and certified  (subject to normal
year-end  adjustments) as to fairness of  presentation,  in accordance with GAAP
(other than footnotes  thereto),  by a Chief Financial Officer or Controller (if
such  Controller is a corporate  officer) of the Company;  and (b) promptly when
available  and in any  event  within  30  days  after  the  end of  each  month,
consolidated   and   consolidating   balance  sheets  of  the  Company  and  its
Subsidiaries  as of the  end of  such  month,  together  with  consolidated  and
consolidating  statements of earnings and a consolidated statement of cash flows
for such month and for the period  beginning  with the first day of such  Fiscal
Year and ending on the last day of such month,  together with a comparison  with
the  corresponding  period of the previous Fiscal Year and a comparison with the
budget  for such  period of the  current  Fiscal  Year,  certified  by the Chief
Financial Officer or the Controller (if such Controller is an executive officer)
of the Company.




                                       -116-



     10.1.3 Compliance Certificates.  Contemporaneously with the furnishing of a
copy of each annual  audit  report  pursuant  to Section  10.1.1 and each set of
monthly and quarterly  statements  pursuant to Section 10.1.2,  a duly completed
compliance  certificate in the form of Exhibit E, with  appropriate  insertions,
dated the date of such annual  report or such monthly  statements  and signed by
the  Chief  Financial  Officer  or the  Controller  (if  such  Controller  is an
executive  officer) of the Company,  containing (i) a computation of each of the
financial  ratios and  restrictions  set forth in Section 10.6 and to the effect
that such  officer  has not become  aware of any Event of  Default or  Unmatured
Event of Default that has occurred  and is  continuing  or, if there is any such
event,  describing it and the steps,  if any,  being taken to cure it and (ii) a
written statement of the Company's  management setting forth a discussion of the
Loan Parties' financial condition, changes in financial condition and results of
operations.

     10.1.4 Reports to the SEC and to Shareholders.  Promptly upon the filing or
sending thereof, copies of all other regular, periodic or special reports of the
Loan Parties filed with the SEC;  copies of all  registration  statements of the
Loan  Parties  filed  with the SEC (other  than on Form S-8);  and copies of all
proxy statements or other communications made to security holders generally.

     10.1.5  Notice of Default,  Litigation  and ERISA  Matters.  Promptly  upon
becoming aware of any of the following,  written notice  describing the same and
the steps being taken by the Loan Parties affected thereby with respect thereto:

          (a) the  occurrence  of an Event of Default or an  Unmatured  Event of
     Default;

          (b) any  litigation,  arbitration  or  governmental  investigation  or
     proceeding not previously  disclosed by the Loan Parties to the Banks which
     has been instituted or, to the knowledge of the Loan Parties, is threatened
     against any Loan Party or to which any of the  properties of any thereof is
     subject  which might  reasonably  be  expected  to have a Material  Adverse
     Effect;

          (c) the institution of any steps by any member of the Controlled Group
     or any other Person to terminate  any Pension  Plan,  or the failure of any
     member  of the  Controlled  Group to make a  required  contribution  to any
     Pension  Plan (if such failure is  sufficient  to give rise to a Lien under
     Section  302(f) of  ERISA) or to any  Multiemployer  Pension  Plan,  or the
     taking of any action with  respect to a Pension  Plan which could result in
     the requirement that any Loan Party furnish a bond or other security to the
     PBGC or such Pension Plan,  or the  occurrence of any event with respect to
     any Pension  Plan or  Multiemployer  Pension Plan which could result in the
     incurrence by any member of the Controlled Group of any material liability,
     fine or penalty (including any claim or demand for withdrawal  liability or
     partial  withdrawal from any  Multiemployer  Pension Plan), or any material
     increase in the contingent  liability of any Loan Party with respect to any
     post-retirement  welfare plan benefit, or any notice that any Multiemployer
     Pension Plan is in  reorganization,  that  increased  contributions  may be
     required to avoid a reduction  in plan  benefits  or the  imposition  of an
     excise  tax,  that any such plan is or has been  funded at a rate less than
     that required  under Section 412 of the Code,  that any such plan is or may
     be terminated, or that any such plan is or may become insolvent;

                                       -117-



          (d) any cancellation or material change in any insurance maintained by
     any Loan Party; or

          (e) any other event (including (i) any violation of any  Environmental
     Law or the  assertion of any  Environmental  Claim or (ii) the enactment or
     effectiveness  of any law, rule or  regulation)  which might  reasonably be
     expected to have a Material Adverse Effect.

     10.1.6  Borrowing  Base  Certificates.  Within  30  days of the end of each
month, a Borrowing Base  Certificate  dated as of the end of such month executed
by the Chief  Financial  Officer or the  Controller  (if such  Controller  is an
executive  officer) of the Loan Parties on behalf of the Loan Parties  (provided
that Agent may require the Loan Parties to deliver  Borrowing Base  Certificates
more frequently at Agent's discretion); together with a supporting Inventory and
Accounts Receivable aging report, in each case in form and substance  acceptable
to the Required  Banks.  Notwithstanding  the  foregoing,  in the event the Loan
Parties'  available  cash  (including  all cash  reserves  and excess  borrowing
availability  under the Revolving  Credit  Commitment  pursuant to the Borrowing
Base)  ("Available   Cash")  is  less  than  $2,500,000,   such  Borrowing  Base
Certificates  will be  delivered  to Agent on a weekly  basis  within  three (3)
Business Days of the end of each week until such times as Available Cash exceeds
$2,500,000 for four (4)  consecutive  weeks. In the event that the Loan Parties'
Available  Cash is  less  than  $1,000,000  at any  time,  such  Borrowing  Base
Certificates  shall be delivered on a daily basis until such time as Agent shall
require, in its sole discretion.

     10.1.7  Management  Reports.  Promptly upon the request of the Agent or any
Bank, copies of all detailed  financial and management  reports submitted to any
Loan Party by  independent  auditors in  connection  with each annual or interim
audit made by such auditors of the books of any Loan Party.
     10.1.8 Projections. As soon as practicable, and in any event within 30 days
prior to the  commencement  of each Fiscal  Year,  (a) a business  plan for such
Fiscal  Year (in form and  substance  acceptable  to  Agent)  and (b)  financial
projections  for the Loan Parties for such Fiscal Year  (including  an operating
budget  and a cash  flow  budget)  prepared  in a  manner  consistent  with  the
projections delivered by the Loan Parties to the Banks prior to the Closing Date
or otherwise in a manner reasonably satisfactory to the Agent,  accompanied by a
certificate of the Chief Financial Officer or the Controller (if such Controller
is an executive  officer) of the Representative on behalf of the Loan Parties to
the effect that (i) such  projections  were prepared by the Loan Parties in good
faith,  (ii)  the Loan  Parties  have a  reasonable  basis  for the  assumptions
contained in such  projections and (iii) such  projections have been prepared in
accordance with such assumptions.

     10.1.9 Subordinated Debt Notices. Promptly from time to time, copies of any
notices (including notices of default or acceleration)  received from any holder
or trustee of, under or with respect to any Subordinated Debt.

     10.1.10  Other  Information.   Promptly  from  time  to  time,  such  other
information  concerning  the Loan Parties as any Bank, the Agent or Co-Agent may
reasonably request.




                                       -118-



     10.2  Books,  Records  and  Inspections.  Keep its  books  and  records  in
accordance with sound business practices  sufficient to allow the preparation of
financial  statements  in  accordance  with GAAP;  permit  any Bank,  the Agent,
Co-Agent or any representative  thereof to inspect the properties and operations
of each Loan Party; and permit at any reasonable time and with reasonable notice
(or at any time without  notice if an Event of Default  exists),  any Bank,  the
Agent,  Co-Agent  or  any  representative  thereof  to  visit  any or all of its
offices,  to discuss its financial matters with its officers and its independent
auditors (and each Loan Party hereby  authorizes  such  independent  auditors to
discuss  such  financial  matters  with any Bank,  the  Agent,  Co-Agent  or any
representative  thereof),  and to  examine  (and,  at the  expense  of the  Loan
Parties,  photocopy extracts from) any of its books or other records; and permit
the Agent, Co-Agent and their representatives to inspect the Inventory and other
tangible assets of the Loan Parties,  to perform  appraisals of the equipment of
each Loan Party,  and to inspect,  audit,  check and make copies of and extracts
from the books,  records,  computer data, computer programs,  journals,  orders,
receipts,   correspondence  and  other  data  relating  to  Inventory,  Accounts
Receivable and any other collateral. All such inspections or audits by the Agent
or Co-Agent shall be at the Loan Parties'  expense,  provided that so long as no
Event of Default or Unmatured  Event of Default  exists,  the Agent and Co-Agent
shall not conduct field audits of any Loan Party more  frequently than once each
Fiscal Year.

     10.3 Maintenance of Property; Insurance.

          (a) Keep, and cause each  Subsidiary to keep, all property  useful and
     necessary in the  business of the Loan  Parties in good  working  order and
     condition, ordinary wear and tear excepted.

          (b) Maintain with responsible  insurance companies,  such insurance as
     may be required by any law or  governmental  regulation  or court decree or
     order applicable to it and such other insurance, to such extent and against
     such hazards and  liabilities,  as is  customarily  maintained by companies
     similarly   situated,   but  which  shall  insure  against  all  risks  and
     liabilities of the type  identified on Schedule 9.17 and shall have insured
     amounts no less than, and  deductibles  no higher than,  those set forth on
     such schedule;  and, upon request of the Agent or any Bank,  furnish to the
     Agent or such Bank a certificate  setting  forth in  reasonable  detail the
     nature and extent of all insurance maintained by the Loan Parties. The Loan
     Parties shall cause each issuer of an insurance policy to provide the Agent
     with an  endorsement  (i) showing loss payable to the Agent with respect to
     each policy of property or casualty insurance and naming the Agent and each
     Bank as an additional  insured with respect to each policy of insurance for
     liability for personal  injury or property  damage,  (ii) providing that 30
     days'  notice  will be given to the  Agent  prior to any  cancellation  of,
     material  reduction  or change in coverage  provided  by or other  material
     modification  to such policy and (iii)  reasonably  acceptable in all other
     respects to the Agent.







                                       -119-



          (c) UNLESS THE LOAN  PARTIES  PROVIDE  THE AGENT WITH  EVIDENCE OF THE
     INSURANCE  COVERAGE  REQUIRED  BY THIS  AGREEMENT,  THE AGENT MAY  PURCHASE
     INSURANCE  AT THE LOAN  PARTIES'  EXPENSE TO PROTECT  THE  AGENT'S  AND THE
     BANKS'  INTERESTS  IN THE  COLLATERAL.  THIS  INSURANCE  MAY, BUT NEED NOT,
     PROTECT THE LOAN PARTIES' INTERESTS.  THE COVERAGE THAT THE AGENT PURCHASES
     MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST THE LOAN  PARTIES IN  CONNECTION
     WITH THE  COLLATERAL.  THE LOAN  PARTIES  MAY LATER  CANCEL  ANY  INSURANCE
     PURCHASED BY THE AGENT,  BUT ONLY AFTER  PROVIDING  THE AGENT WITH EVIDENCE
     THAT  THE  LOAN  PARTIES  HAVE  OBTAINED  INSURANCE  AS  REQUIRED  BY  THIS
     AGREEMENT.  IF THE AGENT PURCHASES  INSURANCE FOR THE COLLATERAL,  THE LOAN
     PARTIES  WILL BE  RESPONSIBLE  FOR THE COSTS OF THAT  INSURANCE,  INCLUDING
     INTEREST AND ANY OTHER  CHARGES  THAT MAY BE IMPOSED WITH THE  PLACEMENT OF
     THE INSURANCE,  UNTIL THE EFFECTIVE DATE OF THE  CANCELLATION OR EXPIRATION
     OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TO THE PRINCIPAL
     AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE
     THAN THE COST OF THE  INSURANCE  THE LOAN  PARTIES MAY BE ABLE TO OBTAIN ON
     THEIR OWN.

     10.4 Compliance with Laws; Payment of Taxes and Liabilities.  (a) Comply in
all material  respects with all applicable laws,  rules,  regulations,  decrees,
orders,  judgments,  licenses and permits,  except where failure to comply would
not have a Material Adverse Effect; and (b) pay prior to delinquency,  all taxes
and other  governmental  charges  against it or any of its property,  as well as
claims of any kind which, if unpaid, might become a Lien on any of its property;
provided that the foregoing shall not require any Loan Party to pay any such tax
or charge so long as it shall  contest  the  validity  thereof  in good faith by
appropriate  proceedings and shall set aside on its books adequate reserves with
respect thereto in accordance with GAAP.
     10.5  Maintenance  of  Existence,  etc.  Maintain  and  preserve,  (a)  its
existence and good standing in the  jurisdiction of its organization and (b) its
qualification  to do business and good standing in each  jurisdiction  where the
nature of its  business  makes  such  qualification  necessary  (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect).

     10.6 Financial Covenants.

     10.6.1 Fixed Charge  Coverage  Ratio.  Not permit the Fixed Charge Coverage
Ratio for any month to be less than the applicable  ratio during the periods set
forth below, as determined in accordance with GAAP:

                                              Fixed Charge
                Period                       Coverage Ratio
                ------                       --------------
     December 31, 2000 - June 30, 2001           1.05x
     July 1, 2001 - December 31, 2001            1.10x
     January 1, 2002 and thereafter              1.25x








                                       -120-



     10.6.2 Leverage Ratio.  Not permit the Leverage Ratio as of the last day of
each month to exceed the applicable ratio set forth below during the periods set
forth below, as determined in accordance with GAAP:

                                              Senior Debt to
                Period                         EBITDA Ratio
                ------                         ------------
     December 31, 2000 - June 30, 2001            4.0x
     July 1, 2001 - December 31, 2001             3.75x
     January 1, 2002 and thereafter               3.50x


     10.6.3  Tangible  Net Worth.  Not permit the  Tangible Net Worth to be less
than the amounts set forth below at any time for the periods set forth below:

                Period                       Tangible Net Worth
                ------                       ------------------
     Closing Date - July 31, 2000               $1,500,000
     August 1, 2000 - November 30, 2000         $2,000,000
     December 1, 2000 - December 31, 2001       $3,000,000
     January 1, 2002 and thereafter             $5,000,000


     10.6.4 EBITDA.  Not permit  quarterly EBITDA to be less than the applicable
amount set forth below for each quarter set forth below:

       Period Ending                              EBITDA
       -------------                              ------
     March 31, 2000                                $1,500,000
     June 30, 2000                                 $3,000,000
     September 30, 2000                            $3,000,000


     10.6.5 Capital Expenditures. Not permit the aggregate amount of all Capital
Expenditures made by the Loan Parties in any Fiscal Year to exceed $4,000,000.

     10.7  Limitations on Debt. Not create incur,  assume or suffer to exist any
Debt, except:

          (a) obligations under this Agreement and the other Loan Documents;

          (b)  Debt  secured  by  Liens  permitted  by  Section   10.8(d),   and
     extensions,  renewals and refinancings thereof; provided that the aggregate
     amount  of  all  such  Debt  at  any  time  outstanding  shall  not  exceed
     $1,000,000;

          (c) unsecured inter-company Debt between one or more Loan Parties;

          (d) Subordinated Debt;

          (e) Hedging  Obligations  incurred for bona fide hedging  purposes and
     not for speculation;



                                       -121-



          (f) Debt  described  on Schedule  10.7 and any  extension,  renewal or
     refinancing  thereof  so  long  as  the  principal  amount  thereof  is not
     increased; and

          (g) the Debt to be  Repaid  (so  long as such  Debt is  repaid  on the
     Closing Date with the proceeds of the initial Loans hereunder).

     10.8  Liens.  Not  create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature (whether now owned or
hereafter acquired), except:

          (a)  Liens  for taxes or other  governmental  charges  not at the time
     delinquent or thereafter payable without penalty or being contested in good
     faith by appropriate  proceedings and, in each case, for which it maintains
     adequate reserves;

          (b) Liens  arising in the  ordinary  course of  business  (such as (i)
     Liens of  carriers,  warehousemen,  mechanics  and  materialmen  and  other
     similar  Liens imposed by law and (ii) Liens  incurred in  connection  with
     worker's compensation,  unemployment compensation and other types of social
     security (excluding Liens arising under ERISA) or in connection with surety
     bonds,  bids,  performance  bonds  and  similar  obligations)  for sums not
     overdue or being contested in good faith by appropriate proceedings and not
     involving  any  deposits  or advances  or  borrowed  money or the  deferred
     purchase  price of  property or  services  and, in each case,  for which it
     maintains adequate reserves);

          (c) Liens described on Schedule 10.8;

          (d) subject to the limitation set forth in Section 10.7(b),  (i) Liens
     arising in  connection  with  Capital  Leases  (and  attaching  only to the
     property being leased),  (ii) Liens existing on property at the time of the
     acquisition  thereof by any Loan Party (and not created in contemplation of
     such  acquisition) and (iii) Liens that constitute  purchase money security
     interests  on any  property  securing  debt  incurred  for the  purpose  of
     financing all or any part of the cost of acquiring such property,  provided
     that  any  such  Lien  attaches  to  such  property  within  60 days of the
     acquisition thereof and attaches solely to the property so acquired;

          (e) attachments,  appeal bonds, judgments and other similar Liens, for
     sums not exceeding  $100,000 arising in connection with court  proceedings,
     provided the execution or other  enforcement  of such Liens is  effectively
     stayed and the claims secured thereby are being actively  contested in good
     faith and by appropriate proceedings;

          (f)  easements,   rights  of  way,  restrictions,   minor  defects  or
     irregularities  in title and other  similar  Liens not  interfering  in any
     material  respect  with the  ordinary  conduct of the  business of the Loan
     Parties; and

          (g) Liens arising under the Loan Documents.




                                       -122-



     10.9  Operating  Leases.  Not  permit  the  aggregate  amount of all rental
payments  under  Operating  Leases  made (or  scheduled  to be made) by the Loan
Parties (on a consolidated basis) to exceed $3,000,000 in any Fiscal Year.

     10.10 Restricted Payments.  Not, and not permit any Subsidiary to, (a) make
any  distribution  or pay any dividends of any kind to any of its  stockholders,
except for certain  distributions  to (i) James R. Workman not to exceed $20,000
on a monthly basis; (ii) each of Jack D. Rutherford, Craig and Emilie Wierda and
William  Beckman in an  aggregate  amount not to exceed  one  percent  (1%) on a
monthly  basis of the  aggregate  amount  of each of the  foregoing  Guarantor's
liability under each Guarantor's  respective Guaranty; and (iii) the Elsa Prince
Trust in an aggregate  amount not to exceed two percent (2%) on a monthly  basis
of the  maximum  aggregate  amount of the  liability  of the Elsa  Prince  Trust
outstanding at the time of each distribution  under its Guaranty  (collectively,
the  "Guarantor  Distributions"),  which  distributions  (A) shall be subject to
Subordination  Agreements at all times in form and  substance  acceptable to the
Agent,  and (B)  shall  terminate  upon  the  termination  of  each  Guarantor's
respective  Guaranty,  (b) purchase or redeem any of its capital  stock or other
equity  interests or any warrants,  options or other rights in respect  thereof,
(c) pay any management  fees or similar fees to any of its  stockholders  or any
Affiliate thereof, (d) make any payment, redemption, defeasance or repurchase of
any  Subordinated  Debt (except in accordance with the terms and conditions of a
subordination  agreement in form and  substance  acceptable to Agent) or (e) set
aside funds for any of the foregoing.  Notwithstanding  the  foregoing,  (i) any
Loan  Party  (other  than  the   Company)  may  pay   dividends  or  make  other
distributions  to the Company and (ii) the Company may make  quarterly  dividend
payments to the holders of its Preferred  Stock, in accordance with the terms of
that certain Certificate of Designations of Clarion Technologies,  Inc. dated as
of February 10, 2000 in an amount not to exceed $2,300,000 in any Fiscal Year of
the  Company so long as (a) no Event of Default  or  Unmatured  Event of Default
exists  immediately prior to such dividend payment,  and (b) no Event of Default
or Unmatured  Event of Default would be caused by such dividend  payment and (c)
the  Company's  Debt Service  Coverage  Ratio is not less than  1.25:1.0 for the
quarter immediately preceding each dividend payment; provided, however, that the
Company may make the  quarterly  dividend  payment on the  Preferred  Stock thru
April 1, 2000  regardless  of the level of the Company's  Debt Service  Coverage
Ratio  provided  (a) no Event of Default or  Unmatured  Event of Default  exists
immediately  prior to such  dividend  payment,  and (b) no Event of  Default  or
Unmatured Event of Default would be caused by such dividend payment.

     10.11  Mergers,  Consolidations,  Sales.  Not be a party to any  merger  or
consolidation,  or purchase or otherwise acquire all or substantially all of the
assets  or any  stock of any  class  of,  or any  partnership  or joint  venture
interest  in,  any  other  Person,  or,  except  in the  ordinary  course of its
business,  sell,  transfer,  convey or lease all or any substantial  part of its
assets,  or sell or assign with or without recourse any receivables,  except for
(a) any  such  merger,  consolidation,  sale,  transfer,  conveyance,  lease  or
assignment  of or by any Loan Party (other than the  Company)  into another Loan
Party;  (b) any such  purchase  or other  acquisition  by any Loan  Party of the
assets or stock of any other Loan Party (other than the Company);  and (c) sales
and  dispositions of assets for at least fair market value (as determined by the
Board of  Directors  of the  Loan  Party)  so long as the net book  value of all
assets  sold or  otherwise  disposed  of in any  Fiscal  Year  does  not  exceed
$1,000,000.

                                       -123-



     10.12 Modification of Organizational  Documents. Not permit the Certificate
or  Articles  of   Incorporation,   By-Laws,   Operating   Agreement   or  other
organizational  documents of any Loan Party to be amended or modified in any way
which is expected to materially adversely affect the interests of the Banks.

     10.13 Use of Proceeds.  Use the  proceeds of the Loans,  and the Letters of
Credit,  solely to finance  the  Purchase,  for  working  capital,  for  Capital
Expenditures and for other general corporate purposes; and not use or permit any
proceeds of any Loan to be used, either directly or indirectly, for the purpose,
whether  immediate,  incidental  or ultimate,  of  "purchasing  or carrying" any
Margin Stock.

     10.14  Further  Assurances.  Take such  actions as are  necessary or as the
Agent or the Required Banks may reasonably  request from time to time (including
the  execution  and  delivery  of  guaranties,   security   agreements,   pledge
agreements, mortgages, deeds of trust, financing statements and other documents,
the filing or  recording  of any of the  foregoing,  and the  delivery  of stock
certificates  and other  collateral with respect to which perfection is obtained
by possession) to ensure that the obligations of the Loan Parties  hereunder and
under the other Loan Documents are secured by substantially all of the assets of
the Loan Parties (including,  promptly upon the acquisition or creation thereof,
any Subsidiary of any Loan Party acquired or created after the date hereof) .

     10.15  Transactions  with Affiliates.  Not enter into, or cause,  suffer or
permit to exist any  transaction,  arrangement or contract with any of its other
Affiliates  (other  than the Loan  Parties)  which  is on terms  which  are less
favorable  than  are  obtainable  from  any  Person  which  is  not  one  of its
Affiliates.

     10.16  Employee  Benefit  Plans.  Maintain each Pension Plan in substantial
compliance with all applicable requirements of law and regulations.

     10.17  Environmental  Matters.

          (a) If any Release or Disposal of Hazardous  Substances shall occur or
     shall have  occurred on any real  property or any other  assets of any Loan
     Party, such Loan Party shall, or shall cause the applicable  Subsidiary to,
     cause the prompt  containment and removal of such Hazardous  Substances and
     the  remediation  of such real  property or other  assets as  necessary  to
     comply with all  Environmental  Laws and to preserve the value of such real
     property or other assets. Without limiting the generality of the foregoing,
     each Loan Party shall,  and shall cause each Subsidiary to, comply with any
     valid  Federal or state  judicial or  administrative  order  requiring  the
     performance  at any real  property of each Loan Party or any  Subsidiary of
     activities in response to the Release or threatened  Release of a Hazardous
     Substance.

          (b) To the extent  that the  transportation  of  "hazardous  waste" as
     defined by RCRA is permitted by this Agreement, the Loan Parties shall, and
     shall cause their  Subsidiaries to, dispose of such hazardous waste only at
     licensed  disposal  facilities  operating in compliance with  Environmental
     Laws.



                                       -124-



     10.18 Unconditional  Purchase Obligations.  Not enter into or be a party to
any  contract  for the  purchase of  materials,  supplies  or other  property or
services if such  contract  requires  that payment be made by it  regardless  of
whether  delivery is ever made of such materials,  supplies or other property or
services.

     10.19 Inconsistent Agreements.  Not enter into any agreement containing any
provision  which would (a) be violated or breached by any  borrowing by any Loan
Party hereunder or by the performance by any Loan Party or any Subsidiary of any
of its obligations hereunder or under any other Loan Document,  (b) prohibit any
Loan Party or any Subsidiary from granting to the Agent,  for the benefit of the
Banks,  a Lien on any of its  assets or (c)  create or permit to exist or become
effective any  encumbrance  or  restriction  on the ability of any Loan Party or
Subsidiary  to (i) pay dividends or make other  distributions  to the Company or
any other applicable  Subsidiary,  or pay any Debt owed to any Loan Party or any
other Subsidiary (other than as set forth in this Agreement), (ii) make loans or
advances to any Loan Party or (iii)  transfer any of its assets or properties to
the Company.

     10.20 Business Activities. Not, and not permit any Subsidiary to, engage in
any line of business other than the businesses engaged in on the date hereof and
businesses reasonably related thereto.

     10.21 Investments.  Not make or permit to exist any Investment in any other
Person, except (without duplication) the following:

          (a)  contributions  by  the  Company  to  the  capital  of  any of its
     Subsidiaries,  or by  any  such  Subsidiary  to the  capital  of any of its
     Subsidiaries;

          (b) in the ordinary course of business,  Investments by the Company in
     any Subsidiary or by any Subsidiary in the Company,  by way of intercompany
     loans, advances or guaranties, all to the extent permitted by Section 10.7;

          (c) Suretyship Liabilities permitted by Section 10.7;

          (d) Cash Equivalent Investments;

          (e) bank deposits in with any bank other than Agent or Co-Agent;

          (f) Investments in securities of account debtors received  pursuant to
     any plan of  reorganization  or similar  arrangement upon the bankruptcy or
     insolvency of such account debtors.

provided that (x) any Investment  which when made complies with the requirements
of the definition of the term "Cash  Equivalent  Investment"  may continue to be
held  notwithstanding  that such Investment if made thereafter  would not comply
with such requirements;  (y) no Investment  otherwise permitted by clause (b) or
(c), shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured Event of Default exists.





                                       -125-



     10.22  Restriction  of  Amendments  to  Certain  Documents.  Not  amend  or
otherwise  modify,  or waive any rights under,  (i) any document,  instrument or
agreement  evidencing or executed in connection  with any  Subordinated  Debt or
(ii)  any  terms  of the  Preferred  Stock  if,  in any  case,  such  amendment,
modification or waiver could be adverse to the interests of the Banks.

     10.23 Fiscal Year. Not change its Fiscal Year.

     10.24  Cancellation  of Debt.  Not  cancel  any claim or debt  owing to it,
except for reasonable consideration or in the ordinary course of business.

     10.25  Minimum  Hedging  Obligation.  Hedge  at  least  $20,000,000  of the
principal  amount of the Loans then outstanding at all times pursuant to Hedging
Agreements in form and substance acceptable to the Agent,  provided such Hedging
Agreements are executed within sixty (60) days of the Closing Date.


SECTION 11        EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

     The  obligation  of each Bank to make its Loans and of the Issuing  Bank to
issue Letters of Credit is subject to the following conditions precedent:

     11.1 Initial  Credit  Extension.  The  obligation  of the Banks to make the
initial Loans and the obligation of the Issuing Bank to issue its initial Letter
of Credit  (whichever first occurs) is, in addition to the conditions  precedent
specified in Section 11.2, subject to the conditions precedent that (1) all Debt
to be Repaid has been (or concurrently  with the initial borrowing will be) paid
in full, and that all agreements and instruments governing the Debt to be Repaid
and that all Liens  securing  such Debt to be Repaid have been (or  concurrently
with the  initial  borrowing  will be)  terminated  and (2) the Agent shall have
received  (a)  evidence,  reasonably  satisfactory  to the Agent,  that the Loan
Parties  have  completed,  or  concurrently  with the initial  credit  extension
hereunder  will  complete,  the  Purchase  in  accordance  with the terms of the
Purchase  Agreement  (without any amendment  thereto or waiver thereunder unless
consented to by the Required  Banks);  and (b) all of the  following,  each duly
executed  and  dated  the  Closing  Date  (or  such  earlier  date as  shall  be
satisfactory to the Agent), in form and substance satisfactory to the Agent (and
the date on which all such conditions precedent have been satisfied or waived in
writing by the Agent and the Required Banks is called the "Closing Date"):

     11.1.1 Notes. Executed originals of each of the Notes.

     11.1.2  Resolutions.  Certified  copies  of  resolutions  of the  Board  of
Directors  of  the  Loan  Parties   authorizing  the  execution,   delivery  and
performance by each Loan Party of this  Agreement,  the Notes and the other Loan
Documents  to which  each  Loan  Party  is a  party;  and  certified  copies  of
resolutions of the Board of Directors of each other Loan Party  authorizing  the
execution,  delivery and performance by such Loan Party of each Loan Document to
which such entity is a party.






                                       -126-



     11.1.3  Consents,  etc.  Certified  copies of all documents  evidencing any
necessary   corporate  or  limited  liability   company  action,   consents  and
governmental  approvals  (if  any)  required  for the  execution,  delivery  and
performance by each Loan Party of the documents referred to in this Section 11.

     11.1.4  Incumbency  and  Signature  Certificates.   A  certificate  of  the
Secretary or an Assistant  Secretary (or other  appropriate  representative)  of
each Loan Party  certifying  the names of the officer or officers of such entity
authorized to sign the Loan Documents to which such entity is a party,  together
with a sample of the true  signature of each such  officer (it being  understood
that the  Agent  and each Bank may  conclusively  rely on each such  certificate
until formally advised by a like certificate of any changes therein).

     11.1.5  Guaranty and  Supporting  Letter of Credit.  A  counterpart  of the
Guaranty executed by (i) James R. Workman in the amount of $3,000,000; (ii) Jack
D.  Rutherford in the amount of $1,000,000;  (iii) William Beckman in the amount
of $1,000,000; (iv) Craig and Emilie Wierda in the amount of $1,000,000; and (v)
The Elsa Prince  Trust in the amount of  $6,000,000,  together  with a letter of
credit  (in  form  and  substance   acceptable  to  Agent)  which  secures  each
Guarantor's obligations under each Guaranty (other than the Elsa Prince Trust).

     11.1.6 Pledge of  Certificate  of Deposit.  A Pledge  Agreement in favor of
Agent with respect to the  $6,000,000  Certificate of Deposit held at LaSalle in
the name of the Elsa Prince Trust.

     11.1.7 Security Agreement. A counterpart of the Security Agreement executed
by each Loan Party.

     11.1.8 Pledge Agreement.  Pledge Agreement executed by the Company pledging
100% of the capital stock of each  Subsidiary,  together with all items required
to be delivered in connection therewith.
     11.1.9 Real Estate Documents.  With respect to each parcel of real property
owned by each Loan Party as set forth on Schedule 11.1.9 (other than 201 Lovejoy
Street, South Haven,  Michigan),  a duly executed Mortgage providing for a fully
perfected Lien, in favor of the Agent, in all right,  title and interest of each
Loan Party in such real property, together with:

          (a)  an  ALTA  Loan  Title  Insurance  Policy,  issued  by an  insurer
     acceptable  to the Agent,  insuring the Agent's Lien on such real  property
     and containing such  endorsements  as the Agent may reasonably  require (it
     being  understood  that the amount of coverage,  exceptions to coverage and
     status of title set forth in such policy shall be acceptable to the Agent);

          (b) copies of all documents of record concerning such real property as
     shown on the commitment for the ALTA Loan Title  Insurance  Policy referred
     to above;

          (c) original or certified copies of all insurance policies required to
     be  maintained  with respect to such real property by this  Agreement,  the
     applicable Mortgage or any other Loan Document;





                                       -127-



          (d) an ALTA survey  certified to the Agent  meeting such  standards as
     the Agent may reasonably establish and otherwise reasonably satisfactory to
     the Agent;

          (e) a flood insurance policy concerning such real property, reasonably
     satisfactory to the Agent, if required by the Flood Disaster Protection Act
     of 1973; and

          (f)  an  appraisal,   satisfactory  to  the  Agent,   prepared  by  an
     independent  appraiser  engaged directly by the Agent or Co-Agent,  of such
     parcel of real property or interest in real property, in form and substance
     acceptable to Agent.

     Additionally,  in the case of any leased real property,  a consent, in form
and substance  satisfactory to the Agent,  from the owner waiving any landlord's
Lien in respect of personal property kept at the premises subject to such lease.

     11.1.10 Purchase  Agreement  Assignment.  A Purchase  Agreement  Assignment
executed by the Loan Parties and each of the Selling Shareholders.

     11.1.11 Subordination  Agreements.  Subordination Agreement executed by (i)
Drake Products and the Selling Shareholders with respect to the Seller Notes and
(ii) the Guarantors with respect to the Guarantor Distributions.

     11.1.12 Opinions of Counsel.  (a) The opinions of (1) Loan Parties' counsel
and (2) local  counsel  with respect to each  jurisdiction  where each parcel of
real  property  subject  to each  Mortgage  is  located,  and  (b) all  opinions
delivered  in  connection  with the  closing of the  Purchase  Agreement  (which
opinions shall state, or be accompanied by letters which state,  that the Agent,
Co-Agent and the Banks may rely thereon).

     11.1.13 Insurance.  Evidence  satisfactory to the Agent of the existence of
insurance required to be maintained  pursuant to Section 10.3(b),  together with
evidence  that  the  Agent  has been  named  as a  lender's  loss  payee  and an
additional insured on all related insurance policies.

     11.1.14 Copies of Purchase Documents. Copies, certified by the Secretary of
the Company of a true and correct copy of the Purchase Agreement.

     11.1.15  Payment of Fees.  Evidence  of payment by the Loan  Parties of all
accrued and unpaid  fees,  costs and expenses to the extent then due and payable
on the Closing Date,  together with all Attorney Costs of the Agent and Co-Agent
to the extent invoiced prior to the Closing Date,  plus such additional  amounts
of Attorney  Costs as shall  constitute  the Agent's and  Co-Agent's  reasonable
estimate of Attorney  Costs incurred or to be incurred by the Agent and Co-Agent
through  the  closing  proceedings   (provided  that  such  estimate  shall  not
thereafter  preclude final settling of accounts between the Loan Parties and the
Agent and Co-Agent).

     11.1.16 Solvency Certificate.  A solvency certificate executed by the Chief
Financial Officer of the Loan Parties.




                                       -128-



     11.1.17  Pro Forma.  A  consolidated  pro forma  balance  sheet of the Loan
Parties as at the Closing Date,  adjusted to give effect to the  consummation of
the Purchase and the financings  contemplated hereby as if such transactions had
occurred on such date,  consistent in all material respects with the sources and
uses of cash as previously  described to the Banks and the forecasts  previously
provided to the Banks.

     11.1.18 Search  Results;  Lien  Terminations.  Certified  copies of Uniform
Commercial Code Requests for  Information or Copies (Form UCC-11),  or a similar
search  report  certified  by a  party  acceptable  to the  Agent,  dated a date
reasonably near to the Closing Date, listing all effective financing  statements
which name the Loan Parties  (under their present names and any previous  names)
as debtors and which are filed in the  jurisdictions  in which filings are to be
made  pursuant to the  Collateral  Documents,  together  with (i) copies of such
financing  statements,  (ii) executed  copies of proper Uniform  Commercial Code
Form UCC-3 termination  statements,  if any,  necessary to release all Liens and
other  rights  of any  Person  in any  collateral  described  in the  Collateral
Documents  previously  granted by any Person  (other  than  Liens  permitted  by
Section  10.8)  and  (iii)  such  other  Uniform   Commercial  Code  Form  UCC-3
termination statements as the Agent may reasonably request.

     11.1.19  Filings,  Registrations  and  Recordings.  The  Agent  shall  have
received each document (including Uniform Commercial Code financing  statements)
required by the Collateral Documents or under law or reasonably requested by the
Agent to be filed,  registered  or  recorded  in order to create in favor of the
Agent,  for the  benefit  of the  Banks,  a  perfected  Lien  on the  collateral
described  therein,  prior and superior to any other Person,  in proper form for
filing, registration or recording.

     11.1.20 Closing  Certificate.  A certificate signed by an executive officer
of each Loan Party dated as of the Closing Date, affirming the matters set forth
in Section 11.2.1 as of the Closing Date.

     11.1.21 Borrowing Base  Certificate.  A Borrowing Base Certificate dated as
of the Closing Date showing Available Cash of no less than $2,500,000.

     11.1.22 Purchase Certificate,  Consents and Permits. A certificate executed
by an executive officer of the Company on behalf of the Loan Parties  certifying
the  occurrence  of the closing of the  Purchase  and that such closing has been
consummated  in  accordance  with the terms of the  Purchase  Agreement  without
waiver of any material condition thereof; together with evidence satisfactory to
the  Agent  that  (i)  all   necessary   governmental,   regulatory,   creditor,
shareholder,  partner and other  material  consents,  approvals  and  exemptions
required to be obtained by the Loan Parties in connection with the Purchase have
been duly  obtained  and are in full  force  and  effect  and (ii) all  material
permits necessary for the operation of the acquired business have been obtained.

     11.1.23 Other. Such other documents as the Agent,  Co-Agent or any Bank may
reasonably request.






                                       -129-



     11.2 Conditions.  The obligation (a) of each Bank to make each Loan and (b)
of the Issuing  Bank to issue each Letter of Credit is subject to the  following
further conditions precedent that:

     11.2.1 Compliance with Warranties,  No Default,  etc. Both before and after
giving  effect to any  borrowing  and the issuance of any Letter of Credit,  the
following statements shall be true and correct:

          (a) the representations and warranties of each Loan Party set forth in
     this  Agreement and the other Loan  Documents  shall be true and correct in
     all material  respects  with the same effect as if then made (except to the
     extent  stated to relate to a  specific  earlier  date,  in which case such
     representations and warranties shall be true and correct as of such earlier
     date); and

          (b) no Event of Default or Unmatured  Event of Default shall have then
     occurred and be continuing.

     11.2.2 Confirmatory Certificate. If requested by the Agent, Co-Agent or any
Bank, the Agent shall have received (in sufficient  counterparts  to provide one
to each Bank) a certificate  dated the date of such  requested Loan or Letter of
Credit and signed by a duly authorized  representative of the  Representative as
to the matters set out in Section 11.2.1 (it being  understood that each request
by the  Representative  for the making of a Loan or the  issuance of a Letter of
Credit  shall be deemed to  constitute  a warranty by the Loan  Parties that the
conditions  precedent set forth in Section  11.2.1 will be satisfied at the time
of the making of such Loan or the  issuance of such Letter of Credit),  together
with such other  documents  as the Agent,  Co-Agent  or any Bank may  reasonably
request in support thereof.


SECTION 12        EVENTS OF DEFAULT AND THEIR EFFECT.

     12.1 Events of Default.  Each of the following shall constitute an Event of
Default under this Agreement:

     12.1.1  Non-Payment of the Loans,  etc.  Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest, fee, reimbursement obligation with respect
to any Letter of Credit or other amount payable by the Loan Parties hereunder or
under any other Loan Document.

     12.1.2  Non-Payment  of Other Debt. Any default shall occur under the terms
applicable  to any Debt of the Loan  Parties or any  Subsidiary  in an aggregate
amount (for all such Debt so affected)  exceeding $50,000 and such default shall
(a) consist of the failure to pay such Debt when due, whether by acceleration or
otherwise,  or (b)  accelerate the maturity of such Debt or permit the holder or
holders  thereof,  or any trustee or agent for such holder or holders,  to cause
such  Debt to  become  due and  payable  (or  require  the Loan  Parties  or any
Subsidiary to purchase or redeem such Debt) prior to its expressed maturity.





                                       -130-



     12.1.3 Other Material  Obligations.  Default in the payment when due, or in
the  performance  or  observance  of, any material  obligation  of, or condition
agreed to by, the Loan  Parties or any  Subsidiary  with respect to any material
purchase  or lease of goods or  services  where such  default,  singly or in the
aggregate with all other such defaults, has a Material Adverse Effect.

     12.1.4 Bankruptcy, Insolvency, etc. Any Loan Party or any Guarantor becomes
insolvent  or  generally  fails to pay,  or admits in writing its  inability  or
refusal to pay,  debts as they become  due;  or any Loan Party or any  Guarantor
applies  for,  consents  to, or  acquiesces  in the  appointment  of a  trustee,
receiver or other  custodian for any Loan Party or any Guarantor or any property
thereof, or makes a general assignment for the benefit of creditors;  or, in the
absence of such  application,  consent or acquiescence,  a trustee,  receiver or
other  custodian  is  appointed  for any Loan  Party or any  Guarantor  or for a
substantial  part of the  property of any thereof and is not  discharged  within
sixty (60) days; or any bankruptcy,  reorganization,  debt arrangement, or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation  proceeding,  is  commenced  in  respect  of any  Loan  Party or any
Guarantor,  and if such case or  proceeding is not commenced by the Loan Parties
or any  Guarantor,  it is consented to or acquiesced in by any Loan Party or any
Guarantor, or remains for forty-five (45) days undismissed; or any Loan Party or
any Guarantor  takes any action to authorize,  or in furtherance  of, any of the
foregoing.

     12.1.5 Non-Compliance with Loan Documents. (a) Failure by any Loan Party to
comply with or to perform any  covenant  set forth in Sections  10.1.5(a),  10.5
through  10.15,  and 10.20  through  10.22;  or (b) failure by any Loan Party to
comply with or to perform any other  provision  of this  Agreement  or any other
Loan  Document  (and not  constituting  an  Event of  Default  under  any  other
provision of this Section 12) and continuance of such failure  described in this
clause (b) for fifteen (15) days.

     12.1.6 Warranties.  Any warranty made by any Loan Party herein or any other
Loan Document is breached or is false or misleading in any material respect,  or
any schedule, certificate,  financial statement, report, notice or other writing
furnished  by any Loan Party to the Agent,  Co- Agent or any Bank in  connection
herewith is false or misleading in any material  respect on the date as of which
the facts therein set forth are stated or certified.

     12.1.7 Pension Plans. (i) Institution of any steps by any Loan Party or any
other Person to terminate a Pension Plan if as a result of such  termination any
Loan Party could be required to make a  contribution  to such Pension  Plan,  or
could  incur a  liability  or  obligation  to such  Pension  Plan,  in excess of
$500,000;  (ii) a  contribution  failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA;  or (iii) there
shall occur any withdrawal or partial  withdrawal from a  Multiemployer  Pension
Plan and the withdrawal  liability (without unaccrued interest) to Multiemployer
Pension  Plans  as a  result  of  such  withdrawal  (including  any  outstanding
withdrawal  liability that any Loan Party and the Controlled Group have incurred
on the date of such withdrawal) exceeds $500,000.





                                       -131-



     12.1.8  Judgments.  Final  judgments  which exceed an aggregate of $250,000
shall be  rendered  against  any Loan  Party  and  shall  not  have  been  paid,
discharged or vacated or had execution  thereof  stayed pending appeal within 30
days after entry or filing of such judgments.

     12.1.9 Invalidity of Guaranty,  etc. Any Guaranty shall cease to be in full
force and effect with respect to any Guarantor;  or any Guarantor (or any Person
by,  through  or on behalf of such  Guarantor)  shall  contest in any manner the
validity,  binding nature or enforceability of any Guaranty with respect to such
Guarantor.

     12.1.10 Invalidity of Collateral  Documents,  etc. Any Collateral  Document
shall cease to be in full force and effect; or any Loan Party (or any Person by,
through or on behalf of any Loan Party or any  Subsidiary)  shall contest in any
manner  the  validity,  binding  nature  or  enforceability  of  any  Collateral
Document.

     12.1.11  Invalidity of  Subordination  Provisions,  etc. Any  subordination
provision in any document or instrument governing Subordinated Debt, shall cease
to be in full force and effect, or any Loan Party or any other Person (including
the holder of any applicable  Subordinated Debt) shall contest in any manner the
validity, binding nature or enforceability of any such provision.

     12.1.12 Change of Control.  (a) Any Person or group of Persons  (within the
meaning  of  Section  13 or 14 of  the  Securities  Exchange  Act of  1934,  but
excluding any  Specified  Person (as defined  below))  shall acquire  beneficial
ownership  (within the meaning of Rule 13d-3 promulgated under such Act) of more
than 20% (or, if greater,  the percentage owned by the Specified  Persons of the
outstanding  securities  (on a fully  diluted  basis and taking into account any
securities or contract  rights  exercisable,  exchangeable  or convertible  into
equity  securities)  of the  Company  having  voting  rights in the  election of
directors  under normal  circumstances;  or (b) a period of 30 consecutive  days
shall have  elapsed  during which any two of the  individuals  named in Schedule
12.1.12  shall have ceased to hold  executive  offices with the Company at least
equal in seniority and responsibility to such individual's present office[s], as
set out in such Schedule  12.1.12,  excluding any such  individual  who has been
replaced by another  individual or individuals  reasonably  satisfactory  to the
Required Banks (it being understood that any such  replacement  individual shall
be deemed  added to  Schedule  12.1.12  on the date of  approval  thereof by the
Required Banks).  For purposes hereof,  "Specified  Person" means Emilie Wierda,
Craig Wierda, Elsa Prince, Bryan Cressey,  Terry Graunke,  Troy Wiseman and Jack
Rutherford.

     12.1.13  Material  Adverse  Effect.  The  occurrence  of any event having a
Material Adverse Effect.










                                       -132-



     12.2  Effect of Event of  Default.  If any Event of  Default  described  in
Section  12.1.4  shall  occur,  the  Commitments  (if they have not  theretofore
terminated) shall immediately  terminate and the Loans and all other obligations
hereunder  shall become  immediately  due and payable and the Loan Parties shall
become  immediately  obligated to Cash  Collateralize all Letters of Credit, all
without  presentment,  demand,  protest or notice of any kind; and, if any other
Event of Default shall occur and be continuing,  the Agent (upon written request
of the  Required  Banks)  shall  declare  the  Commitments  (if  they  have  not
theretofore  terminated) to be terminated and/or declare all Loans and all other
obligations  hereunder to be due and payable and/or demand that the Loan Parties
immediately Cash Collateralize all Letters of Credit,  whereupon the Commitments
(if they have not theretofore terminated) shall immediately terminate and/or all
Loans and all other  obligations  hereunder  shall  become  immediately  due and
payable  and/or the Loan  Parties  shall  immediately  become  obligated to Cash
Collateralize all Letters of Credit, all without presentment, demand, protest or
notice of any kind. The Agent shall promptly  advise the  Representative  of any
such  declaration,  but  failure  to do so shall not  impair  the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event  described  in Section  12.1.1 or Section  12.1.4 may be waived by the
written  concurrence of all of the Banks,  and the effect as an Event of Default
of any other  event  described  in this  Section 12 may be waived by the written
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the Agent  (without  liability  for interest  thereon) and applied to
obligations  arising in  connection  with any drawing  under a Letter of Credit.
After  the  expiration  or  termination  of all  Letters  of  Credit,  such cash
collateral shall be applied by the Agent to any remaining  obligations hereunder
and any excess shall be delivered to the Loan Parties or as a court of competent
jurisdiction may elect.


SECTION 13        THE AGENT.

     13.1 Appointment and Authorization.

          (a) Each Bank hereby  irrevocably  (subject to Section 13.9) appoints,
     designates and authorizes the Agent to take such action on its behalf under
     the  provisions  of this  Agreement  and each  other Loan  Document  and to
     exercise such powers and perform such duties as are expressly  delegated to
     it by the terms of this Agreement or any other Loan Document, together with
     such  powers as are  reasonably  incidental  thereto.  Notwithstanding  any
     provision to the contrary  contained  elsewhere in this Agreement or in any
     other Loan  Document,  the Agent shall not have any duty or  responsibility
     except those  expressly  set forth  herein,  nor shall the Agent have or be
     deemed to have any  fiduciary  relationship  with any Bank,  and no implied
     covenants, functions, responsibilities,  duties, obligations or liabilities
     shall be read into this  Agreement or any other Loan  Document or otherwise
     exist against the Agent.  The Co-Agent  shall have no duties or liabilities
     in acting in such capacity hereunder.







                                       -133-



          (b) The Issuing  Bank shall act on behalf of the Banks with respect to
     any Letters of Credit issued by it and the documents associated  therewith.
     The Issuing Bank shall have all of the benefits and immunities (i) provided
     to the Agent in this Section 13 with respect to any acts taken or omissions
     suffered by the Issuing Bank in connection with Letters of Credit issued by
     it or proposed to be issued by it and the  applications  and agreements for
     letters of credit  pertaining  to such Letters of Credit as fully as if the
     term  "Agent",  as used in this Section 13,  included the Issuing Bank with
     respect to such acts or omissions and (ii) as additionally provided in this
     Agreement with respect to the Issuing Bank.

     13.2  Delegation  of Duties.  The Agent may execute any of its duties under
this  Agreement or any other Loan  Document by or through  agents,  employees or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence or misconduct of any agent or  attorney-in-fact  that it selects with
reasonable care.

     13.3  Liability  of  Agent.  None of the  Agent  nor any of its  directors,
officers,  employees  or  agents  shall (i) be liable  for any  action  taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions  contemplated hereby (except for its
own gross  negligence  or willful  misconduct),  or (ii) be  responsible  in any
manner  to any of the  Banks  for  any  recital,  statement,  representation  or
warranty  made by any Loan Party,  or any  officer  thereof,  contained  in this
Agreement  or in  any  other  Loan  Document,  or in  any  certificate,  report,
statement or other  document  referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness,  genuineness, enforceability or sufficiency of this
Agreement  or any other Loan  Document,  or for any failure of any Loan Party or
any other party to any Loan  Document to perform its  obligations  hereunder  or
thereunder. The Agent shall not be under any obligation to any Bank to ascertain
or to inquire  as to the  observance  or  performance  of any of the  agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the  properties,  books or records of each Loan Party or any of the Loan
Parties' Subsidiaries or Affiliates.

     13.4 Reliance by Agent.  The Agent shall be entitled to rely,  and shall be
fully  protected in relying,  upon any  writing,  resolution,  notice,  consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement  or other  document or  conversation  believed by it to be genuine and
correct and to have been signed,  sent or made by the proper  Person or Persons,
and upon advice and statements of legal counsel  (including  counsel to the Loan
Parties),  independent  accountants and other experts selected by the Agent. The
Agent shall be fully  justified  in failing or refusing to take any action under
this  Agreement or any other Loan  Document  unless it shall first  receive such
advice or concurrence of the Required Banks as it deems  appropriate  and, if it
so requests,  confirmation  from the Banks of their  obligation to indemnify the
Agent  against any and all  liability and expense which may be incurred by it by
reason of taking or continuing  to take any such action.  The Agent shall in all
cases be fully  protected in acting,  or in refraining  from acting,  under this
Agreement or any other Loan Document in accordance  with a request or consent of
the  Required  Banks and such  request  and any  action  taken or failure to act
pursuant thereto shall be binding upon all of the Banks.

                                       -134-



     13.5 Notice of Default.  The Agent shall not be deemed to have knowledge or
notice of the  occurrence of any Event of Default or Unmatured  Event of Default
except with respect to defaults in the payment of  principal,  interest and fees
required to be paid to the Agent for the account of the Banks,  unless the Agent
shall have received written notice from a Bank or the Loan Parties  referring to
this  Agreement,  describing such Event of Default or Unmatured Event of Default
and stating that such notice is a "notice of default". The Agent will notify the
Banks of its receipt of any such  notice.  The Agent shall take such action with
respect  to such  Event of  Default  or  Unmatured  Event of  Default  as may be
requested by the Required  Banks in  accordance  with Section 12;  provided that
unless and until the Agent has  received  any such  request,  the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default or Unmatured  Event of Default as it shall
deem advisable or in the best interest of the Banks.

     13.6 Credit Decision.  Each Bank  acknowledges  that the Agent has not made
any  representation  or warranty  to it, and that no act by the Agent  hereafter
taken, including any review of the affairs of any Loan Party, shall be deemed to
constitute any  representation  or warranty by the Agent to any Bank.  Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent and based on such documents and information as it has deemed  appropriate,
made  its own  appraisal  of and  investigation  into the  business,  prospects,
operations, property, financial and other condition and creditworthiness of each
Loan Party, and made its own decision to enter into this Agreement and to extend
credit to the Loan Parties  hereunder.  Each Bank also  represents that it will,
independently  and without  reliance upon the Agent and based on such  documents
and information as it shall deem  appropriate at the time,  continue to make its
own credit  analysis,  appraisals  and  decisions in taking or not taking action
under  this  Agreement  and  the  other  Loan   Documents,   and  to  make  such
investigations  as it deems  necessary  to  inform  itself  as to the  business,
prospects,   operations,   property,   financial   and   other   condition   and
creditworthiness  of each Loan  Party.  Except for  notices,  reports  and other
documents  expressly  herein required to be furnished to the Banks by the Agent,
the Agent shall not have any duty or responsibility to provide any Bank with any
credit or other  information  concerning  the business,  prospects,  operations,
property,  financial or other condition or  creditworthiness  of each Loan Party
which may come into the possession of the Agent.

     13.7 Indemnification.  Whether or not the transactions  contemplated hereby
are  consummated,  the  Banks  shall  indemnify  upon  demand  the Agent and its
directors, officers, employees and agents (to the extent not reimbursed by or on
behalf of the Loan Parties and without limiting the obligation of any Loan Party
to do so),  pro rata,  from and  against  any and all  Indemnified  Liabilities;
provided  that no Bank shall be liable for any payment to any such Person of any
portion  of the  Indemnified  Liabilities  resulting  from such  Person's  gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall  reimburse  the Agent upon  demand for its  ratable  share of any costs or
out-of-pocket  expenses  (including  Attorney  Costs)  incurred  by the Agent in
connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or




                                       -135-



responsibilities under, this Agreement, any other Loan Document, or any document
contemplated  by or  referred  to herein,  to the  extent  that the Agent is not
reimbursed  for  such  expenses  by  or on  behalf  of  the  Loan  Parties.  The
undertaking in this Section shall survive  repayment of the Loans,  cancellation
of  the  Notes,  expiration  or  termination  of  the  Letters  of  Credit,  any
foreclosure  under, or modification,  release or discharge of, any or all of the
Collateral  Documents,  termination  of this  Agreement and the  resignation  or
replacement of the Agent.

     13.8 Agent in  Individual  Capacity.  LaSalle and its  Affiliates  may make
loans to,  issue  letters of credit for the account of,  accept  deposits  from,
acquire equity interests in and generally engage in any kind of banking,  trust,
financial advisory,  underwriting or other business with each Loan Party and its
Subsidiaries  and Affiliates as though LaSalle were not the Agent or the Issuing
Bank  hereunder  and  without  notice  to or  consent  of the  Banks.  The Banks
acknowledge  that,  pursuant to such  activities,  LaSalle or its Affiliates may
receive  information  regarding  the Loan Parties or its  Affiliates  (including
information that may be subject to  confidentiality  obligations in favor of the
Loan Parties or such Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such  information to them. With respect to their Loans (if
any),  LaSalle and its  Affiliates  shall have the same rights and powers  under
this  Agreement as any other Bank and may  exercise  the same as though  LaSalle
were not the Agent  and the  Issuing  Bank,  and the terms  "Bank"  and  "Banks"
include  LaSalle  and  its  Affiliates,  to  the  extent  applicable,  in  their
individual capacities.

     13.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice to
the Banks. If the Agent resigns under this Agreement,  the Co-Agent shall assume
the role as successor  Agent.  To the extent  Co-Agent  declines such role,  the
Required Banks shall,  with (so long as no Event of Default  exists) the consent
of the Loan  Parties  (which  shall not be  unreasonably  withheld or  delayed),
appoint  from  among the Banks a  successor  agent for the  Banks.  If  Co-Agent
declines to act as successor  Agent and no successor agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Loan Parties, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder, such
successor  agent  shall  succeed  to all the  rights,  powers  and duties of the
retiring  Agent and the term "Agent" shall mean such  successor  agent,  and the
retiring  Agent's  appointment,  powers and duties as Agent shall be terminated.
After any retiring  Agent's  resignation  hereunder as Agent,  the provisions of
this Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any
actions  taken or  omitted  to be taken by it  while  it was  Agent  under  this
Agreement.  If no successor agent has accepted  appointment as Agent by the date
which is 30 days  following  a  retiring  Agent's  notice  of  resignation,  the
retiring Agent's  resignation shall nevertheless  thereupon become effective and
the Banks  shall  perform  all of the duties of the Agent  hereunder  until such
time, if any, as the Required  Banks  appoint a successor  agent as provided for
above.







                                       -136-



     13.10 Collateral Matters. The Banks irrevocably authorize the Agent, at its
option and in its discretion,  (a) to release any Lien granted to or held by the
Agent under any Collateral  Document (i) upon termination of the Commitments and
payment  in full of all  Loans  and all other  obligations  of the Loan  Parties
hereunder  and the  expiration  or  termination  of all Letters of Credit;  (ii)
constituting  property  sold  or to be  sold  or  disposed  of as  part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
14.1, if approved,  authorized or ratified in writing by the Required  Banks; or
(b) to  subordinate  its interest in any  collateral  to any holder of a Lien on
such collateral  which is permitted by clause (d)(i) or (d)(iii) of Section 10.8
(it being understood that the Agent may conclusively  rely on a certificate from
the  Representative in determining  whether the Debt secured by any such Lien is
permitted by Section 10.7(b)).  Upon request by the Agent at any time, the Banks
will confirm in writing the Agent's  authority to release,  or  subordinate  its
interest in,  particular  types or items of collateral  pursuant to this Section
13.10.


SECTION 14        GENERAL.

     14.1 Waiver;  Amendments.  No delay on the part of the Agent or any Bank in
the exercise of any right,  power or remedy shall  operate as a waiver  thereof,
nor shall any single or partial  exercise by any of them of any right,  power or
remedy preclude other or further exercise thereof,  or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any  provision of this  Agreement or the Notes shall in any event be
effective  unless the same shall be in writing and signed and delivered by Banks
having an aggregate Pro Rata Share of not less than the aggregate Pro Rata Share
expressly  designated  herein  with  respect  thereto or, in the absence of such
designation as to any provision of this Agreement or the Notes,  by the Required
Banks,  and then any such  amendment,  modification,  waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
given. No amendment,  modification,  waiver or consent shall change the Pro Rata
Share of any Bank without the consent of such Bank. No amendment,  modification,
waiver or consent  shall (i)  increase the  Revolving  Commitment  Amount,  (ii)
extend the date for payment of any  principal of or interest on the Loans or any
fees payable hereunder,  (iii) reduce the principal amount of any Loan, the rate
of interest thereon or any fees payable hereunder,  (iv) release any Guaranty or
all or any  substantial  part of the  collateral  granted  under the  Collateral
Documents  or (v) reduce the  aggregate  Pro Rata  Share  required  to effect an
amendment, modification, waiver or consent without, in each case, the consent of
all Banks.  No  provision  of Section 13 or other  provision  of this  Agreement
affecting the Agent in its capacity as such shall be amended, modified or waived
without the consent of Agent.  No  provision of this  Agreement  relating to the
rights or duties of the Issuing  Bank in its  capacity as such shall be amended,
modified or waived without the consent of the Issuing Bank.

     14.2  Confirmations.  The Loan Parties and each holder of a Note agree from
time to time, upon written request  received by it from the other, to confirm to
the other in writing  (with a copy of each such  confirmation  to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.




                                       -137-



     14.3 Notices. Except as otherwise provided in Sections 2.2.2 and 2.2.3, all
notices  hereunder shall be in writing  (including  facsimile  transmission) and
shall be sent to the  applicable  party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties,  have  designated  as its address  for such  purpose.  Notices  sent by
facsimile  transmission  shall be deemed to have been given  when sent;  notices
sent by mail shall be deemed to have been given  three  Business  Days after the
date when sent by registered or certified  mail,  postage  prepaid;  and notices
sent by hand delivery or overnight  courier service shall be deemed to have been
given when received.  For purposes of Sections 2.2.2 and 2.2.3,  the Agent shall
be entitled to rely on telephonic instructions from any person that the Agent in
good faith believes is an authorized officer or employee of the  Representative,
and the Loan Parties  shall hold the Agent and each other Bank harmless from any
loss, cost or expense resulting from any such reliance.

     14.4 Computations.  Where the character or amount of any asset or liability
or item of income or expense is required to be determined,  or any consolidation
or other accounting  computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise  specified in this  Agreement,  be made in  accordance  with
GAAP,  consistently  applied;  provided that if the Representative  notifies the
Agent  that the  Representative  wishes to amend any  covenant  in Section 10 to
eliminate  or to take  into  account  the  effect  of any  change in GAAP on the
operation of such covenant (or if the Agent notifies the Representative that the
Required  Banks  wish to  amend  Section  10 for  such  purpose),  then the Loan
Parties'  compliance with such covenant shall be determined on the basis of GAAP
in effect immediately before the relevant change in GAAP became effective, until
either  such  notice  is  withdrawn  or such  covenant  is  amended  in a manner
satisfactory to the Loan Parties and the Required Banks.

     14.5  Regulation  U.  Each  Bank  represents  that it in good  faith is not
relying,  either  directly or  indirectly,  upon any Margin Stock as  collateral
security for the extension or  maintenance  by it of any credit  provided for in
this Agreement.

     14.6 Costs, Expenses and Taxes. The Loan Parties agree to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent and Co-Agent (including
Attorney  Costs) in connection  with the  preparation,  execution,  syndication,
delivery and administration of this Agreement,  the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection  herewith  (including any  amendment,  supplement or waiver to any
Loan Document),  and all reasonable  out-of-pocket costs and expenses (including
Attorney Costs) incurred by the Agent,  Co-Agent and each Bank after an Event of
Default in connection  with the  enforcement of this  Agreement,  the other Loan
Documents or any such other documents.  In addition,  the Loan Parties agrees to
pay, and to save the Agent,  Co-Agent and the Banks  harmless from all liability
for, (a) any stamp or other taxes  (excluding  income taxes and franchise  taxes
based on net income) which may be payable in  connection  with the execution and
delivery of this Agreement,  the borrowings hereunder, the issuance of the Notes
or the execution  and delivery of any other Loan Document or any other  document
provided for herein or delivered or to be delivered  hereunder or in  connection




                                       -138-



herewith and (b) any fees of the Loan Parties'  auditors in connection  with any
reasonable  exercise  by the  Agent,  Co-Agent  and the  Banks of  their  rights
pursuant to Section  10.2.  All  obligations  provided  for in this Section 14.6
shall survive repayment of the Loans,  cancellation of the Notes,  expiration or
termination of the Letters of Credit and termination of this Agreement. In order
to cause timely payment to be made by the Loan Parties of all costs and expenses
incurred  hereunder by Agent and Co-Agent,  as the case may be, the Loan Parties
hereby  authorize  and  direct  Agent to debit such  amount due to any  ordinary
deposit account of the Loan Parties, or increase the principal balance due under
the Revolving Loans.

     14.7 Subsidiary  References.  The provisions of this Agreement  relating to
Subsidiaries  shall apply only during such times as the Loan Parties have one or
more Subsidiaries.

     14.8 Captions.  Section captions used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.

     14.9 Assignments; Participations.

     14.9.1  Assignments.  Any Bank may, with the prior  written  consent of the
Issuing Bank,  Agent,  Co-Agent and (so long as no Event of Default  exists) the
Loan Parties (which consents shall not be unreasonably  delayed or withheld and,
in any event,  shall not be required for an  assignment  by a Bank to one of its
Affiliates),  at any time assign and delegate to one or more commercial banks or
other  Persons (any Person to whom such an  assignment  and  delegation is to be
made being herein called an "Assignee") all or any fraction of such Bank's Loans
and Commitment (which assignment and delegation shall be of a constant,  and not
a varying,  percentage of all the assigning  Bank's Loans and  Commitment)  in a
minimum  aggregate amount equal to the lesser of (i) the amount of the assigning
Bank's Pro Rata Share of the Revolving  Commitment Amount plus the unpaid amount
of such Bank's Term Loans and (ii)  $5,000,000;  provided that (a) no assignment
and delegation may be made to any Person if, at the time of such  assignment and
delegation,  the Loan Parties would be obligated to pay any greater amount under
Section  7.6 or  Section  8 to the  Assignee  than  the  Loan  Parties  are then
obligated  to pay  to  the  assigning  Bank  under  such  Sections  (and  if any
assignment is made in violation of the  foregoing,  the Loan Parties will not be
required to pay the  incremental  amounts)  and (b) the  Representative  and the
Agent shall be entitled to continue to deal solely and  directly  with such Bank
in connection  with the interests so assigned and delegated to an Assignee until
the date when all of the following conditions shall have been met:

          (x) five Business Days (or such lesser period of time as the Agent and
     the assigning  Bank shall agree) shall have passed after written  notice of
     such  assignment  and  delegation,   together  with  payment  instructions,
     addresses and related information with respect to such Assignee, shall have
     been given to the  Representative  and the Agent by such assigning Bank and
     the Assignee,







                                       -139-



          (y) the  assigning  Bank and the  Assignee  shall  have  executed  and
     delivered  to the  Loan  Parties  and the  Agent  an  assignment  agreement
     substantially  in  the  form  of  Exhibit  G (an  "Assignment  Agreement"),
     together  with any  documents  required to be delivered  thereunder,  which
     Assignment Agreement shall have been accepted by the Agent, and

          (z)  except  in the  case  of an  assignment  by a Bank  to one of its
     Affiliates,  the assigning Bank or the Assignee shall have paid the Agent a
     processing fee of $3,500.

From and after the date on which the conditions  described  above have been met,
(x) such Assignee  shall be deemed  automatically  to have become a party hereto
and, to the extent that rights and obligations  hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and  obligations of a Bank  hereunder and (y) the assigning  Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder.  Within five Business Days after  effectiveness of any assignment and
delegation,  the Loan  Parties  shall  execute  and  deliver  to the Agent  (for
delivery to the  Assignee and the  Assignor,  as  applicable)  a new Note in the
principal  amount of the Assignee's  Pro Rata Share of the Revolving  Commitment
Amount plus the principal amount of the Assignee's Term Loans, as applicable, if
the assigning Bank has retained a Commitment  hereunder,  a replacement  Note in
the principal  amount of the Pro Rata Share of the Revolving  Commitment  Amount
retained  by the  assigning  Bank  plus the  principal  amount of such Term Loan
retained  by the  assigning  Bank (such Note to be in exchange  for,  but not in
payment of, the predecessor  Note held by such assigning  Bank).  Each such Note
shall be dated the effective date of such  assignment.  The assigning Bank shall
mark the  predecessor  Note  "exchanged"  and  deliver  it to the Loan  Parties.
Accrued  interest on that part of the  predecessor  Note being assigned shall be
paid as provided in the Assignment Agreement.  Accrued interest and fees on that
part of the  predecessor  Note not being assigned shall be paid to the assigning
Bank.  Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Any attempted assignment
and delegation not made in accordance with this Section 14.9.1 shall be null and
void.

     Notwithstanding  the  foregoing  provisions  of this Section  14.9.1 or any
other  provision of this  Agreement,  any Bank may at any time assign all or any
portion  of its  Loans  and its  Notes to a  Federal  Reserve  Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).

     14.9.2  Participations.  Any  Bank  may at any  time  sell  to one or  more
commercial banks or other Persons  participating  interests in any Loan owing to
such Bank,  the Note held by such Bank,  the Commitment of such Bank, the direct
or  participation  interest  of such  Bank in any  Letter of Credit or any other
interest of such Bank  hereunder (any Person  purchasing any such  participating
interest being herein called a "Participant").  In the event of a sale by a Bank
of a  participating  interest to a  Participant,  (x) such Bank shall remain the
holder of its Notes for all purposes of this Agreement, (y) the Loan Parties and
the  Agent  shall  continue  to deal  solely  and  directly  with  such  Bank in
connection with such Bank's rights and obligations hereunder and (z) all amounts



                                       -140-



payable by the Loan  Parties  shall be  determined  as if such Bank had not sold
such participation and shall be paid directly to such Bank. No Participant shall
have any direct or indirect voting rights  hereunder  except with respect to any
of the events described in the fourth sentence of Section 14.1. Each Bank agrees
to  incorporate   the   requirements   of  the  preceding   sentence  into  each
participation  agreement which such Bank enters into with any  Participant.  The
Loan Parties  agree that if amounts  outstanding  under this  Agreement  and the
Notes are due and  payable  (as a result of  acceleration  or  otherwise),  each
Participant  shall be  deemed to have the  right of  setoff  in  respect  of its
participating interest in amounts owing under this Agreement,  any Note and with
respect  to any  Letter  of Credit  to the same  extent as if the  amount of its
participating  interest were owing directly to it as a Bank under this Agreement
or such  Note;  provided  that such  right of  setoff  shall be  subject  to the
obligation of each  Participant to share with the Banks,  and the Banks agree to
share with each  Participant,  as provided in Section 7.5. The Loan Parties also
agree that each Participant shall be entitled to the benefits of Section 7.6 and
Section 8 as if it were a Bank (provided  that no Participant  shall receive any
greater  compensation  pursuant to Section 7.6 or Section 8 than would have been
paid to the participating Bank if no participation had been sold).

     14.10  Governing Law. This Agreement and each Note shall be a contract made
under and governed by the internal  laws of the State of Illinois  applicable to
contracts made and to be performed entirely within such State. Whenever possible
each  provision of this  Agreement  shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under  applicable law, such provision shall be
ineffective  to  the  extent  of  such   prohibition   or  invalidity,   without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.  All  obligations of the Loan Parties and rights of the Agent and the
Banks expressed herein or in any other Loan Document shall be in addition to and
not in limitation of those provided by applicable law.

     14.11  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts  and by the different  parties hereto on separate  counterparts and
each  such  counterpart  shall  be  deemed  to  be an  original,  but  all  such
counterparts shall together constitute but one and the same Agreement.

     14.12  Successors and Assigns.  This  Agreement  shall be binding upon each
Loan Party, the Banks and the Agent and their respective successors and assigns,
and shall inure to the  benefit of each Loan Party,  the Banks and the Agent and
the successors and assigns of the Banks and the Agent.

     14.13  Indemnification  by  the  Loan  Parties.  In  consideration  of  the
execution  and  delivery  of this  Agreement  by the Agent and the Banks and the
agreement to extend the Commitments provided hereunder,  the Loan Parties hereby
agree to  indemnify,  exonerate  and hold the  Agent,  each Bank and each of the
officers, directors, employees, Affiliates and agents of the Agent and each Bank
(each a "Bank  Party") free and  harmless  from and against any and all actions,
causes of action, suits, losses,  liabilities,  damages and expenses,  including
Attorney Costs (collectively,  the "Indemnified  Liabilities"),  incurred by the
Bank  Parties or any of them as a result of, or arising  out of, or  relating to
(i) any tender offer, merger,  purchase of stock,  purchase of assets (including



                                       -141-



the Purchase) or other similar  transaction  financed or proposed to be financed
in whole or in part,  directly or  indirectly,  with the  proceeds of any of the
Loans, (ii) the use, handling,  release,  emission,  discharge,  transportation,
storage,  treatment or disposal of any hazardous substance at any property owned
or leased  by any Loan  Party or any  Subsidiary,  (iii)  any  violation  of any
Environmental Laws with respect to conditions at any property owned or leased by
any Loan Party or any Subsidiary or the operations  conducted thereon,  (iv) the
investigation,  cleanup or  remediation  of offsite  locations at which any Loan
Party or any  Subsidiary or their  respective  predecessors  are alleged to have
directly or indirectly  disposed of hazardous  substances or (v) the  execution,
delivery,  performance  or  enforcement  of this  Agreement  or any  other  Loan
Document by any of the Bank Parties, except for any such Indemnified Liabilities
arising on account of the  applicable  Bank Party's gross  negligence or willful
misconduct.  If  and  to  the  extent  that  the  foregoing  undertaking  may be
unenforceable for any reason,  the Loan Parties hereby agree to make the maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities which is permissible under applicable law. All obligations  provided
for in this Section 14.13 shall survive repayment of the Loans,  cancellation of
the Notes,  expiration or termination of the Letters of Credit,  any foreclosure
under,  or  any  modification,  release  or  discharge  of,  any  or  all of the
Collateral Documents and termination of this Agreement.

     14.14 Nonliability of Lenders. The relationship between the Loan Parties on
the one hand and the Banks and the Agent on the other hand shall be solely  that
of borrower and lender.  Neither the Agent nor any Bank shall have any fiduciary
responsibility to any Loan Party.  Neither the Agent nor any Bank undertakes any
responsibility  to the Loan  Parties to review or inform the Loan Parties or any
matter in connection with any phase of the Loan Parties' business or operations.
The Loan Parties agree that neither the Agent nor any Bank shall have  liability
to the Loan Parties (whether sounding in tort, contract or otherwise) for losses
suffered  by any Loan Party in  connection  with,  arising out of, or in any way
related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith,
unless  it is  determined  in a final  non-appealable  judgment  by a  court  of
competent  jurisdiction  that such losses resulted from the gross  negligence or
willful misconduct of the party from which recovery is sought. Neither the Agent
nor any Bank shall have any  liability  with  respect  to, and the Loan  Parties
hereby  waive,  release  and  agree not to sue for,  any  special,  indirect  or
consequential damages suffered by any Loan Party in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.

     14.15 FORUM  SELECTION AND CONSENT TO  JURISDICTION.  ANY LITIGATION  BASED
HEREON,  OR ARISING OUT OF, UNDER,  OR IN CONNECTION  WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT,  SHALL BE BROUGHT AND MAINTAINED  EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS;  PROVIDED  THAT ANY SUIT SEEKING  ENFORCEMENT  AGAINST ANY
COLLATERAL  OR OTHER  PROPERTY  MAY BE BROUGHT,  AT THE AGENT'S  OPTION,  IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY  SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES  DISTRICT COURT FOR




                                       -142-



THE NORTHERN  DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH  ABOVE.  EACH LOAN PARTY  FURTHER  IRREVOCABLY  CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL,  POSTAGE  PREPAID,  OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS.  EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH  LITIGATION  BROUGHT IN ANY
SUCH COURT  REFERRED  TO ABOVE AND ANY CLAIM THAT ANY SUCH  LITIGATION  HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

     14.16 WAIVER OF JURY TRIAL.  EACH LOAN PARTY, THE AGENT,  CO-AGENT AND EACH
BANK HEREBY  WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR  PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS  UNDER  THIS  AGREEMENT,  ANY NOTE,  ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE  DELIVERED IN  CONNECTION  HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP  EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING  SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

     14.17  Reimbursement  Among Loan Parties. To the extent that any Loan Party
shall be  required  to pay a  portion  of the  obligations  created  under  this
Agreement  of any other  Loan  Party  which  shall  exceed  the amount of loans,
advances or other  extensions of credit  received by any such Loan Party and all
interest, costs, fees and expenses attributable to such loans, advances or other
extensions of credit, then such Loan Party shall be reimbursed by the other Loan
Parties for the amount of such excess pro rata,  based on their  respective  net
worths as of the date hereof.  This Section 14.17 is intended only to define the
relative rights of the Loan Parties among the Loan Parties and nothing set forth
in this  Section  14.17 is intended to or shall impair the  obligations  of Loan
Parties,  jointly and severally,  to pay the  obligations of the Loan Parties to
the Banks as and when the same shall become due and payable in  accordance  with
the terms hereof.

     14.18  Guaranty.  The effect of the joint and several  obligations  of Loan
Parties hereunder is that each Loan Party hereby  unconditionally and absolutely
guarantees  to  the  Banks,   irrespective   of  the  validity,   regularity  or
enforceability  of this  Agreement or any other  agreement,  the full and prompt
payment in full to the Lenders at maturity  of all the  obligations  of the Loan
Parties.  The guaranty set forth in this Section  14.18 shall in all respects be
continuing,  absolute  and  unconditional,  and shall  remain in full  force and
effect until the  obligations  of the Loan Parties have been fully  repaid.  The
guaranty  set  forth in this  Section  14.18 is an  absolute  and  unconditional
guaranty of payment and not of collectibility. THE GUARANTY OBLIGATION SET FORTH
IN THIS SECTION 14.18 SHALL IN ALL RESPECTS BE IN  FURTHERANCE,  AND SHALL IN NO
EVENT BE DEEMED IN LIMITATION,  OF THE OBLIGATIONS OF EACH LOAN PARTY UNDER THIS
AGREEMENT.

     14.19 Joint and Several Liability. Except as specifically set forth herein,
the liability of each Loan Party under this  Agreement and the other  agreements
in general  shall be joint and several,  and each  reference  herein to the Loan
Parties shall be deemed to refer to each such Loan Party. In furtherance and not
in limitation of each Bank's rights and remedies  hereunder or at law, the Banks




                                       -143-



may proceed  under this  Agreement and the other  agreements  against any one or
more of the Loan Parties in their  absolute and sole  discretion  for any of the
obligations of the Loan Parties or any other liability or obligation of the Loan
Parties arising hereunder.

     14.20   Interrelationship   Among  the  Loan   Parties.   Each  Loan  Party
acknowledges   that  (a)  the  business   operations  of  each  Loan  Party  are
interrelated  and compliment  one another,  and that such entities have a common
business purpose;  (b) to permit their  uninterrupted and continuous  operations
and  consummation  of the Purchase,  such entities now require various funds and
other credit  accommodations  from the Banks;  and (c) certain funds obtained by
the  Loan  Parties  under  this  Agreement  will  be  used  by the  Company  and
Clarion-Drake Acquisition for the Purchase.










































                                       -144-



                               [SIGNATURES FOLLOW]

                  (Signature Page to Credit Agreement (cont.))

                      (Signature Page to Credit Agreement)

     IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Credit  Agreement  at  Chicago,  Illinois,  as of the day and year  first  above
written.


CLARION TECHNOLOGIES, INC.


By: __________________________
    Its: _____________________


CLARION PLASTICS TECHNOLOGIES, INC.


By: __________________________
     Its: ____________________


CLARION REAL ESTATE, LLC

By:      CLARION TECHNOLOGIES, INC.,
         its Member

By:  _______________________
      Its:  ________________


DOUBLE "J" MOLDING, INC.


By: _________________________
      Its:___________________


CLARION-DRAKE ACQUISITION, INC.


By: _________________________
      Its: __________________


MITO PLASTICS, INC.


By: _________________________
       Its:__________________


                                       -145-



                  (Signature Page to Credit Agreement (cont.))


WAMAR PRODUCTS, INC.


By: ________________________
      Its: _________________


WAMAR TOOL & MACHINE CO.


By: ________________________
      Its:__________________


LASALLE BANK NATIONAL
ASSOCIATION, for itself and as Agent


By: ________________________
      Its:__________________


BANK ONE MICHIGAN, for itself and as
Co-Agent


By: _________________________
      Its: __________________
























                                       -146-



                                    EXHIBIT A
                                       to
                                Credit Agreement

                                PRICING SCHEDULE


     The LIBOR  Margin,  the Base Rate Margin,  the Non-Use Fee Rate and the L/C
Fee Rate for each Loan shall be determined as set forth below.

A. Term Loan B. The  Applicable  interest  rate for Term Loan B shall be, at the
Loan Parties option, (a) the Base Rate or (b) the LIBOR Rate plus 1.00%.

B. Term Loan A and Revolving Loans.

         (i)      Before February 28, 2001.  Prior to February 28, 2001, for all
                  Revolving  Loans and Term Loan A, the  LIBOR  Margin  shall be
                  3.50%  per  annum,  the Base  Rate  Margin  shall be 1.00% per
                  annum,  the  Non-Use Fee Rate shall be 0.50% per annum and the
                  L/C Fee Rate shall be 3.00% per annum.

         (ii)     February 28, 2001 and Thereafter.

          (a) Revolving Loans. On and after February 28, 2001, the LIBOR Margin,
     the Base Rate  Margin,  the  Non-Use  Fee Rate and the L/C Fee Rate for all
     Revolving  Loans shall be equal to the applicable  rate per annum set forth
     in the table below opposite the applicable Leverage Ratio:


                                  LIBOR     Base Rate    Non-Use     L/C Fee
Leverage Ratio                    Margin      Margin     Fee Rate      Rate
----------------------------------------------------------------------------
Greater than or equal to 4.00x     3.00%      1.00%        0.50%       3.00%

Greater than or equal to 3.25
  but less than 4.00x              2.75%      0.75%        0.40%       2.75%

Greater than or equal to 2.75x
  but less than 3.25x              2.25%      0.50%        0.30%       2.25%

Less than 2.75x                    1.75%         0%        0.25%       1.75%


          (b) Term Loan A. On or after  February  28,  2001,  the  corresponding
     LIBOR  Margin  and Base Rate  Margin  for Term Loan A shall be set at 0.50%
     above each of the respective levels in the table set forth above.









                                       -147-



The LIBOR  Margin,  the Base Rate  Margin,  the Non-Use Fee Rate and the L/C Fee
Rate shall be adjusted, to the extent applicable,  on the 45th day after the end
of each quarter based on the Leverage  Ratio as of the last day of such quarter;
it being  understood  that if the Loan  Parties  fail to deliver  the  financial
statements required by Section 10.1.1 or 10.1.2, as applicable,  and the related
Compliance  Certificate,  required by Section  10.1.3 by the 45th day after each
calendar  quarter or 90th day after each  Fiscal Year End,  as  applicable,  the
LIBOR  Margin shall be 3.00%,  the Base Rate Margin shall be 1.00%,  the Non-Use
Fee Rate shall be 0.50% and the L/C Fee Rate shall be 3.00% until such financial
statements  and  Compliance  Certificate  are  delivered.   Notwithstanding  the
foregoing,  no reduction  to the  foregoing  interest  rate margins or fee rates
shall become  effective at any time when an Event of Default or Unmatured  Event
of  Default  has  occurred  and is  continuing.  Upon an Event of  Default,  all
interest rate margins and fee rates shall  automatically  convert to the highest
levels set forth in the table above, plus 3% (the "Default Rate").








































                                       -148-



                                    EXHIBIT B
                                       to
                                Credit Agreement

                             FORM OF REVOLVING NOTE

                                                  $___________ Chicago, Illinois
                                                               February 29, 2000

     FOR VALUE RECEIVED,  on or before February 28, 2003 (or, if such day is not
a Business Day, on the next following  Business Day), the  undersigned,  CLARION
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and the subsidiaries
of the Company  signatory  hereto  (herein,  together with their  successors and
assigns,  called the "Loan Parties"),  jointly and severally,  promise to pay to
the order of  ________________________,  a national banking association (herein,
together  with its  successors  and  assigns,  called the  "Bank"),  the maximum
principal  sum  available  of  _____________________________and  00/100  Dollars
($__________)  or,  if  less,  the  aggregate  unpaid  principal  amount  of all
Revolving  Loans made by the Bank to the  undersigned  pursuant to that  certain
Credit Agreement of even date herewith between the Loan Parties, Banks, Co-Agent
and Agent (herein,  as the same may be amended,  modified or  supplemented  from
time to time, called the "Credit Agreement") as shown in the Bank's records.

     The Loan Parties  further  promise to pay to the order of the Bank interest
on the aggregate  unpaid  principal  amount hereof from time to time outstanding
from the date hereof until paid in full at such rates and at such times as shall
be determined in accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit Agreement.

     Payments of both  principal and interest are to be made in the lawful money
of the United States of America in  immediately  available  funds at the Agent's
principal office at 135 South LaSalle Street,  Chicago,  Illinois,  60603, or at
such  other  place  as may be  designated  by the Bank to the  Loan  Parties  in
writing.

     This  Note is a  Revolving  Note  referred  to in,  evidences  indebtedness
incurred  under,  and is  subject  to the terms and  provisions  of,  the Credit
Agreement.  The Credit Agreement,  to which reference is hereby made, sets forth
said terms and provisions, including, but not limited to, those under which this
Note may or must be paid prior to its due date, may have the principal amount of
the commitment reduced or may have its due date accelerated.  Terms used but not
otherwise  defined  herein are used  herein as defined in the Credit  Agreement.
This Note is secured by the personal  property  described in and pursuant to the
Credit  Agreement  and various  other Loan  Documents  referred to therein,  and
reference  is made  thereto  for a  statement  of terms and  provisions  of such
collateral  security,  a description of collateral and the rights of the Bank in
respect thereof.








                                       -149-



     In addition to, and not in limitation  of, the foregoing and the provisions
of the Credit Agreement hereinabove referred to, the Loan Parties further agree,
subject  only to any  limitation  imposed  by  applicable  law and to the extent
provided in the Credit  Agreement,  to pay all  expenses,  including  reasonable
attorneys' fees and expenses,  incurred by the holder of this Note in seeking to
collect any amounts payable  hereunder  which are not paid when due,  whether by
acceleration or otherwise.

     All parties hereto,  whether as makers,  endorsers or otherwise,  severally
waive  presentment,  demand,  protest and notice of dishonor in connection  with
this Note.

     The  liability of each Loan Party under this Note in general shall be joint
and several,  and each  reference  herein to the Loan Parties shall be deemed to
refer to each such Loan Party.  In  furtherance  and not in limitation of Bank's
rights  and  remedies  hereunder  or at law,  Bank may  proceed  under this Note
against any one or more of the Loan Parties in its absolute and sole  discretion
for any Loan  Parties'  obligations  under  the  Credit  Agreement  or any other
liability or obligation of the Loan Parties arising hereunder.

     This Note is binding upon the  undersigned  and its successors and assigns,
and shall inure to the benefit of the Bank and its successors and assigns.  This
Note is made under and  governed  by the laws of the State of  Illinois  without
regard to conflict of laws principles.


                            [SIGNATURES ON NEXT PAGE]




























                                       -150-



                       (Signature Page to Revolving Note)

     IN WITNESS WHEREOF,  the Loan Parties have executed this Note as of the day
and year first above written.


CLARION TECHNOLOGIES, INC.

By:  ______________________
      Its: ________________


CLARION PLASTICS TECHNOLOGIES, INC.

By: _______________________
      Its: ________________


CLARION REAL ESTATE, LLC

By: _______________________
      Its: ________________


DOUBLE "J" MOLDING, INC.

By: _______________________
      Its: ________________


CLARION-DRAKE ACQUISITION, INC.

By: _______________________
      Its: ________________


MITO PLASTICS, INC.

By: ______________________
     Its: ________________


WAMAR PRODUCTS, INC.

By: ______________________
      Its: _______________


WAMAR TOOL & MACHINE CO.

By: _____________________
      Its: ______________



                                       -151-



                                    EXHIBIT C
                                       to
                                Credit Agreement

                               FORM OF TERM NOTE A

                                                    $_________ Chicago, Illinois
                                                               February 29, 2000

     FOR VALUE RECEIVED, the undersigned, CLARION TECHNOLOGIES, INC., a Delaware
corporation  (the  "Company"),  and the  subsidiaries  of the Company  signatory
hereto (herein, together with their successors and assigns, the "Loan Parties"),
jointly  and  severally,  promise  to pay to the  order of  ________________,  a
national banking association (herein,  together with its successors and assigns,
called the "Bank"),  the  principal sum of ________  MILLION and 00/100  DOLLARS
($__________),  payable in monthly  principal  installments on the last Business
Day of each month commencing March 31, 2000, in the amounts and on the dates set
forth on Schedule I attached hereto and incorporated by reference herein through
January 31, 2003,  plus interest,  with a final payment of the entire  principal
balance outstanding, plus accrued and unpaid interest, hereunder due on February
28, 2003.  This Note is made pursuant to that certain  Credit  Agreement of even
date  herewith  among the Loan  Parties,  Agent,  Co-Agent  and the Banks  party
thereto (herein, as the same may be amended,  modified or supplemented from time
to time, called the "Credit Agreement").

     The Loan Parties  further  promise to pay to the order of Bank  interest on
the aggregate  unpaid principal amount hereof from time to time outstanding from
the date  hereof  until paid in full at such rates and at such times as shall be
determined in accordance  with the provisions of the Credit  Agreement.  Accrued
interest shall be payable on the dates specified in the Credit Agreement.

     Payments of both  principal and interest are to be made in the lawful money
of the  United  States of  America  in  immediately  available  funds at Agent's
principal  office at 135 South LaSalle  Street,  Chicago,  Illinois 60603, or at
such other place as may be designated by Bank to the Loan Parties in writing.

     This  Note  is the  Term  Note A  referred  to in,  evidences  indebtedness
incurred  under,  and is  subject  to the terms and  provisions  of,  the Credit
Agreement.  The Credit Agreement,  to which reference is hereby made, sets forth
said terms and provisions, including, but not limited to, those under which this
Note  may or must be  paid  prior  to its due  date  or may  have  its due  date
accelerated.  Terms used but not  otherwise  defined  herein are used  herein as
defined in the Credit  Agreement.  This Note is secured by the personal property
described  in and  pursuant  to the  Credit  Agreement  and  various  other Loan
Documents referred to therein,  and reference is made thereto for a statement of
terms and provisions of such  collateral  security,  a description of collateral
and the rights of Bank in respect thereof.








                                       -152-



     In addition to, and not in limitation  of, the foregoing and the provisions
of the Credit Agreement hereinabove referred to, the Loan Parties further agree,
subject only to any limitation  imposed by applicable  law, to pay all expenses,
including  attorneys' fees and expenses,  incurred by the holder of this Note in
seeking to collect any amounts  payable  hereunder  which are not paid when due,
whether by acceleration or otherwise.

     All parties hereto,  whether as makers,  endorsers or otherwise,  severally
waive  presentment,  demand,  protest and notice of dishonor in connection  with
this Note.

     The  liability of each Loan Party under this Note in general shall be joint
and several,  and each  reference  herein to the Loan Parties shall be deemed to
refer to each such Loan Party.  In  furtherance  and not in limitation of Bank's
rights  and  remedies  hereunder  or at law,  Bank may  proceed  under this Note
against any one or more of the Loan Parties in its absolute and sole  discretion
for any Loan  Parties'  obligations  under  the  Credit  Agreement  or any other
liability or obligation of the Loan Parties arising hereunder.

     This Note is binding upon each Loan Party and its  successors  and assigns,
and shall inure to the benefit of Bank and its successors and assigns. This Note
is made under and governed by the laws of the State of Illinois  without  regard
to conflict of laws principles.


                            [SIGNATURES ON NEXT PAGE]





























                                       -153-



                          (Signature Page to Term Note)

     IN WITNESS WHEREOF, the Loan Parties have executed this Term Note as of the
day and year first above written.



CLARION TECHNOLOGIES, INC.

By: ________________________
      Its: _________________


CLARION PLASTICS TECHNOLOGIES, INC.

By: ________________________
      Its: _________________


CLARION REAL ESTATE, LLC

By: ________________________
      Its: _________________


DOUBLE "J" MOLDING, INC.

By: ________________________
      Its: _________________


CLARION-DRAKE ACQUISITION, INC.

By: ________________________
       Its: ________________


MITO PLASTICS, INC.

By: ________________________
      Its: _________________


WAMAR PRODUCTS, INC.

By: ________________________
      Its: _________________


WAMAR TOOL & MACHINE CO.

By: ________________________
     Its: __________________


                                       -154-



                            Schedule I to Term Note A

Monthly Principal  Payments for Term Loan A Commitment to be allocated among the
Banks


   Period                   Monthly Payments                 Total Payment
   ------                   ----------------                 -------------
March 31, 2000 -              $250,000.00                    $3,000,000.00
February 28, 2001
(12-month period)

March 1, 2001 -               $333,333.33                    $4,000,000.00
February 28, 2002
(12-month period)

March 1, 2002 -               $416,666.67                    $4,583,333.37
January 31, 2003
(11-month period)

Termination Date                  ---                       $14,416,666.63
                                                            --------------
                         Total                              $26,000,000.00
                                                            ==============































                                       -155-



                                    EXHIBIT D
                                       to
                                Credit Agreement

                               FORM OF TERM NOTE B


                                                 $____________ Chicago, Illinois
                                                               February 29, 2000

     FOR VALUE RECEIVED, the undersigned, CLARION TECHNOLOGIES, INC., a Delaware
corporation  (the  "Company"),  and the  Subsidiaries  of the Company  signatory
hereto (herein, together with their successors and assigns, the "Loan Parties"),
jointly  and  severally,  promise  to pay to the  order of  ________________,  a
national banking association (herein,  together with its successors and assigns,
called the  "Bank"),  the  principal  sum of  ____________  and  00/100  DOLLARS
($_______________), plus interest, with the entire principal amount plus accrued
interest due on February 28, 2003,  pursuant to that certain Credit Agreement of
even date herewith among the Loan Parties,  Agent,  Co-Agent and the Banks party
thereto (herein, as the same may be amended,  modified or supplemented from time
to time, called the "Credit Agreement").

     The Loan Parties  further  promise to pay to the order of Bank  interest on
the aggregate  unpaid principal amount hereof from time to time outstanding from
the date  hereof  until paid in full at such rates and at such times as shall be
determined in accordance  with the provisions of the Credit  Agreement.  Accrued
interest shall be payable on the dates specified in the Credit Agreement.

     Payments of both  principal and interest are to be made in the lawful money
of the  United  States of  America  in  immediately  available  funds at Agent's
principal office at [135 South LaSalle Street,  Chicago,  Illinois 60603], or at
such other place as may be designated by Bank to the Loan Parties in writing.

     This  Note  is the  Term  Note B  referred  to in,  evidences  indebtedness
incurred  under,  and is  subject  to the terms and  provisions  of,  the Credit
Agreement.  The Credit Agreement,  to which reference is hereby made, sets forth
said terms and provisions, including, but not limited to, those under which this
Note  may or must be  paid  prior  to its due  date  or may  have  its due  date
accelerated.  Terms used but not  otherwise  defined  herein are used  herein as
defined in the Credit  Agreement.  This Note is secured by the personal property
described  in and  pursuant  to the  Credit  Agreement  and  various  other Loan
Documents referred to therein,  and reference is made thereto for a statement of
terms and provisions of such  collateral  security,  a description of collateral
and the rights of Bank in respect thereof.











                                       -156-



     In addition to, and not in limitation  of, the foregoing and the provisions
of the Credit Agreement hereinabove referred to, the Loan Parties further agree,
subject only to any limitation  imposed by applicable  law, to pay all expenses,
including  attorneys' fees and expenses,  incurred by the holder of this Note in
seeking to collect any amounts  payable  hereunder  which are not paid when due,
whether by acceleration or otherwise.

     All parties hereto,  whether as makers,  endorsers or otherwise,  severally
waive  presentment,  demand,  protest and notice of dishonor in connection  with
this Note.

     The  liability of each Loan Party under this Note in general shall be joint
and several,  and each  reference  herein to the Loan Parties shall be deemed to
refer to each such Loan Party.  In  furtherance  and not in limitation of Bank's
rights  and  remedies  hereunder  or at law,  Bank may  proceed  under this Note
against any one or more of the Loan Parties in its absolute and sole  discretion
for any Loan  Parties'  obligations  under  the  Credit  Agreement  or any other
liability or obligation of the Loan Parties arising hereunder.

     This Note is binding upon each Loan Party and its  successors  and assigns,
and shall inure to the benefit of Bank and its successors and assigns. This Note
is made under and governed by the laws of the State of Illinois  without  regard
to conflict of laws principles.


                            [SIGNATURES ON NEXT PAGE]





























                                       -157-



                      (Signature Page to Form of Term Note)

     IN WITNESS WHEREOF, the Loan Parties have executed this Term Note as of the
day and year first above written.


CLARION TECHNOLOGIES, INC.

By: ________________________
      Its: _________________


CLARION PLASTICS TECHNOLOGIES, INC.

By: ________________________
      Its: _________________


CLARION REAL ESTATE, LLC

By: ________________________
      Its: _________________



DOUBLE "J" MOLDING, INC.

By:_________________________
      Its:__________________


CLARION-DRAKE ACQUISITION, INC.

By: ________________________
      Its:__________________


MITO PLASTICS, INC.

By:_________________________
      Its:__________________


WAMAR PRODUCTS, INC.

By: ________________________
      Its:__________________


WAMAR TOOL & MACHINE CO.

By: ________________________
      Its:__________________


                                       -158-



                                    EXHIBIT E
                                       to
                                Credit Agreement

                         FORM OF COMPLIANCE CERTIFICATE

To:  LaSalle Bank National Association, as Agent

     Please  refer to the Credit  Agreement  dated as of  February  29, 2000 (as
amended or otherwise  modified from time to time, the "Credit  Agreement") among
Clarion  Technologies,  Inc. (the  "Company"),  the  subsidiaries of the Company
party thereto,  various financial institutions and each of LaSalle Bank National
Association,  as agent, and Bank One Michigan,  as co-agent.  Terms used but not
otherwise defined herein are used herein as defined in the Credit Agreement.

I.       Reports.    Enclosed    herewith    is   a   copy   of   the    [annual
         audited/quarterly/monthly]   report   of  the   Loan   Parties   as  at
         _____________,  ____ (the  "Computation  Date"),  which  report  fairly
         presents in all material  respects the financial  condition and results
         of  operations  [(subject  to the  absence of  footnotes  and to normal
         year-end  adjustments)]  of the Loan Parties as of the Computation Date
         and has been prepared in accordance with GAAP consistently applied.

II.      Financial  Tests.  The Loan Parties  hereby  certify and warrant to you
         that  the  following  is a  true  and  correct  computation  as at  the
         Computation Date of the following ratios and/or financial  restrictions
         contained in the Credit Agreement:


A.       Section 10.6.1 - Minimum Fixed Charge Coverage Ratio

1.  Consolidated Net Income                                            $

2.  Plus:  Interest Expense                                            $
                  income tax expense                                   $
                  depreciation                                         $
                  amortization                                         $
3.  Total (EBITDA)                                                     $

4.  Income taxes paid                                                  $

5.  Capital Expenditures                                               $

6.  Sum of (4) and (5)                                                 $

7.  Remainder of (3) minus (6)                                         $

8.  Interest Expense                                                   $

9.  Required payments of principal of Funded Debt
     (including Term Loans but excluding Revolving
     Loans)                                                            $



                                       -159-



10.  Sum of (8) and (9)                                                $

11.  Ratio of (7) to (10)                                        _____ to 1

12.  Minimum Required                                            _____ to 1

B.       Section 10.6.2 - Leverage Ratio

1.  Senior Debt                                                        $

2.  Rolling Twelve Month EBITDA (from Item A(3)
      above)                                                           $

3.  Ratio of (1) to (2)                                          _____ to 1

4.  Maximum allowed                                              _____ to 1

C.       Section 10.6.3 - Tangible Net Worth

1.  Net Worth                                                          $

2.  Subordinated Debt                                                  $

3. Less:                                                               $

4.  Tangible Net Worth                                                 $

5.  Minimum Required                                                   $

D.       Section 10.6.4 - Minimum EBITDA

1.  EBITDA (for Quarter Ended _____)                                   $

2.  Minimum required

E.       Section 10.6.5 - Capital Expenditures


1.  Capital Expenditures for the Fiscal Year                           $

2.  Maximum Permitted Capital Expenditures                             $

F.       Debt Service Coverage Ratio

1.  Principal and Interest on all Debt                                 $

2.  Quarterly EBITDA                                                   $

3.  Ratio of (1) to (2)                                            _____ to 1






                                       -160-



     The Loan  Parties  further  certify  to you that no  Event  of  Default  or
Unmatured Event of Default has occurred and is continuing.

     IN WITNESS  WHEREOF,  the  undersigned  have caused this  Certificate to be
executed and delivered by its duly authorized officer on _________, ____.


         CLARION TECHNOLOGIES, INC., as
         Representative of, and intending to legally
         bind, each of the Loan Parties


         By: _____________________________________
         Title: __________________________________









































                                       -161-



                                    EXHIBIT F
                                       to
                                Credit Agreement

                       FORM OF BORROWING BASE CERTIFICATE

To:      LaSalle Bank National Association, as Agent
         135 South LaSalle Street
         Chicago, Illinois  60603
         Attention:  Bernardo Lacayo

Ladies and Gentlemen:

     Please  refer to the Credit  Agreement  dated as of  February  29, 2000 (as
amended or otherwise  modified from time to time, the "Credit  Agreement") among
Clarion  Technologies,  Inc.  and  its  Subsidiaries  (collectively,  the  "Loan
Parties"), various financial institutions, LaSalle Bank National Association (as
"Agent")  and  Bank  One  Michigan  (as  "Co-Agent").   This  certificate  (this
"Certificate"),  together  with  supporting  calculations  attached  hereto,  is
delivered  to you  pursuant  to the terms of the Credit  Agreement.  Capitalized
terms used but not otherwise  defined herein shall have the same meanings herein
as in the Credit Agreement.

     The Loan Parties hereby certify and warrant to the Agent and the Banks that
at the close of business on ______________,  ____ (the "Calculation  Date"), the
Borrowing  Base  was  $_____________,  computed  as set  forth  on the  schedule
attached hereto.

     IN WITNESS  WHEREOF,  the Loan Parties have caused this  Certificate  to be
executed and delivered by its officer  thereunto duly authorized on ___________,
______.

         CLARION TECHNOLOGIES, INC., as
         Representative of, and intending to legally
         bind, each of the Loan Parties


         By: ____________________________________
         Title:__________________________________
















                                       -162-



                     SCHEDULE TO BORROWING BASE CERTIFICATE
                         Dated as of [_________________]


A.  Accounts Receivable
     1.  Gross Accounts Receivable (excluding
         Tooling Receivables)                                                  $

     2.  Less Ineligibles
         -    Agent's Lien Not Perfected                   $
         -    Subject to other Lien                        $
         -    Subject to Offset, etc.                      $
         -    Account Debtor not in U.S.                   $
         -    Sale on Approval, Sale or Return,
              Bill and Hold or Consignment                 $
         -    Over 90 days past invoice date               $
         -    Affiliate Receivables                        $
         -    Other                                        $
         -    Total                                                            $

     3.  Eligible Accounts Receivable [Item 1
         minus Item 2]                                                         $

     4.  Item 3 times 80%                                                      $

     5.  Tooling Receivables                                                   $

     6.  Item A.5 x 80%                                                        $

     7.  Lesser of Item A.6 and Tooling Cap
         ($5,000,000)                                                          $
























                                       -163-



B.  Inventory
     1.  Gross Inventory                                                       $

     2.  Less Ineligibles
         -    Agent's Lien Not Perfected                   $
         -    Subject to other Lien                        $
         -    Not Salable                                  $
         -    Located off-site and no Collateral
              Access Agreement                             $
         -    Not located in U.S.                          $
         -    Other                                        $
         -    Total                                                            $

     3.  Eligible Inventory [Item 1 minus Item 2]                              $

     4.  Item 3 times 50%                                                      $

     5.  Lesser of Item B.4 and the Inventory
         Cap ($4,000,000)                                                      $

     6.  Work in Progress                                                      $

     7.  Less Ineligibles:

     8.  Eligible Work in Progress [Item 6 minus
         Item 7]                                                               $

     9.  Item 8 times 35%                                                      $

     10. Lesser of Item B.9 and Work in Progress
         Cap ($500,000)                                                        $

C.   Availability

     1.  Borrowing Base [Item A.4 plus Item A.7
         plus Item B.5 plus Item B.10]                                         $

     2.  Lesser of Item C.1 and the Revolving
         Commitment Amount ($15,000,000)                                       $

     3.  Revolving Outstandings (plus all Letters
         of Credit)                                                            $

     4.  Net Availability
         [Excess of Item C.2 over Item C.3]                                    $

     5.  Required Prepayment                                                   $
         [Excess of Item C.3 over Item C.2]







                                       -164-



                                    EXHIBIT G
                                       to
                                Credit Agreement

                          FORM OF ASSIGNMENT AGREEMENT

     This Assignment  Agreement (this "Assignment  Agreement") between _________
(the   Assignor)  and   _______________   (the   "Assignee")   is  dated  as  of
_____________, _____. The parties hereto agree as follows:

SECTION 15 PRELIMINARY STATEMENT.  The Assignor is a party to a Credit Agreement
          (which, as it may be amended,  modified, renewed or extended from time
          to time is herein called the "Credit  Agreement")  described in Item 1
          of Schedule 1 attached hereto  ("Schedule 1").  Capitalized terms used
          herein  and not  otherwise  defined  herein  shall  have the  meanings
          attributed to them in the Credit Agreement.

SECTION 16 ASSIGNMENT AND ASSUMPTION.  The Assignor  hereby sells and assigns to
          the Assignee,  and the Assignee hereby  purchases and assumes from the
          Assignor,  an interest in and to the Assignor's rights and obligations
          under the  Credit  Agreement  such that  after  giving  effect to such
          assignment  the  Assignee  shall  have  purchased   pursuant  to  this
          Assignment  Agreement the percentage  interest  specified in Item 3 of
          Schedule 1 of all outstanding  rights and obligations under the Credit
          Agreement  relating to the  facilities  listed in Item 3 of Schedule 1
          and the other Loan Documents.  The aggregate  Commitment (or Loans, if
          the  applicable  Commitment  has  been  terminated)  purchased  by the
          Assignee hereunder is set forth in Item 4 of Schedule 1.

SECTION 17 EFFECTIVE DATE. The effective date of this Assignment  Agreement (the
          "Effective  Date") shall be the later of the date  specified in Item 5
          of Schedule 1 or two Business  Days (or such shorter  period agreed to
          by the Agent) after a Notice of Assignment  substantially  in the form
          of Appendix I (attached  hereto) has been delivered to the Agent. Such
          Notice of Assignment must include the consents, if any, required to be
          delivered  to the Agent and the Loan  Parties by  Section  14.9 of the
          Credit  Agreement.  In no event will the  Effective  Date occur if the
          payments  required to be made by the  Assignee to the  Assignor on the
          Effective  Date  under  Sections  4 and 5  hereof  are not made on the
          proposed  Effective Date. The Assignor will notify the Assignee of the
          proposed  Effective  Date no later than the  Business Day prior to the
          proposed  Effective  Date. As of the Effective  Date, (i) the Assignee
          shall  have  the  rights  and  obligations  of a Bank  under  the Loan
          Documents with respect to the rights and  obligations  assigned to the
          Assignee  hereunder and (ii) the Assignor shall  relinquish its rights
          and be  released  from its  corresponding  obligations  under the Loan
          Documents with respect to the rights and  obligations  assigned to the
          Assignee hereunder.







                                       -165-



SECTION 18 PAYMENTS OBLIGATIONS.  On and after the Effective  Date, the Assignee
          shall be entitled to receive from the Agent all payments of principal,
          interest and fees with respect to the interest  assigned  hereby.  The
          Assignee shall advance funds directly to the Agent with respect to all
          Loans and  reimbursement  payments made on or after the Effective Date
          with respect to the interest  assigned hereby.  [In  consideration for
          the sale and assignment of Loans hereunder, (i) the Assignee shall pay
          the Assignor,  on the Effective Date, an amount equal to the principal
          amount of the portion of all Base Rate Loans  assigned to the Assignee
          hereunder  and  (ii)  with  respect  to each  LIBOR  Loan  made by the
          Assignor and assigned to the Assignee  hereunder  which is outstanding
          on the  Effective  Date,  (a) on the last day of the  Interest  Period
          therefor or (b) on such earlier date agreed to by the Assignor and the
          Assignee  or (c) on the  date on  which  any such  LIBOR  Loan  either
          becomes due (by  acceleration or otherwise) or is prepaid (the date as
          described in the foregoing  clauses (a), (b) or (c) being  hereinafter
          referred  to as the  "Payment  Date"),  the  Assignee  shall  pay  the
          Assignor  an amount  equal to the  principal  amount of the portion of
          such LIBOR Loan assigned to the Assignee  which is  outstanding on the
          Payment Date. If the Assignor and the Assignee  agree that the Payment
          Date for such LIBOR Loan shall be the Effective Date, they shall agree
          to the interest  rate  applicable to the portion of such Loan assigned
          hereunder  for the period  from the  Effective  Date to the end of the
          existing  Interest  Period  applicable to such LIBOR Loan (the "Agreed
          Interest Rate") and any interest received by the Assignee in excess of
          the Agreed  Interest  Rate shall be remitted to the  Assignor.  In the
          event  interest  for the  period  from the  Effective  Date to but not
          including  the Payment Date is not paid by the  applicable  Loan Party
          with  respect to any LIBOR Loan sold by the  Assignor to the  Assignee
          hereunder,  the Assignee  shall pay to the Assignor  interest for such
          period on the  portion of such LIBOR Loan sold by the  Assignor to the
          Assignee  hereunder  at the  applicable  rate  provided  by the Credit
          Agreement.  In the  event a  prepayment  of any  LIBOR  Loan  which is
          existing  on the  Payment  Date and  assigned  by the  Assignor to the
          Assignee hereunder occurs after the Payment Date but before the end of
          the Interest Period  applicable to such LIBOR Loan, the Assignee shall
          remit to the Assignor the excess of the  prepayment  penalty paid with
          respect to the  portion of such LIBOR Loan  assigned  to the  Assignee
          hereunder  over  the  amount  which  would  have  been  paid  if  such
          prepayment  penalty was calculated  based on the Agreed Interest Rate.
          The  Assignee  will  also  promptly  remit  to the  Assignor  (i)  any
          principal  payments  received  from the Agent  with  respect  to LIBOR
          Loans,  prior to the Payment  Date and (ii) any amounts of interest on
          Loans and fees  received from the Agent which relate to the portion of
          the Loans assigned to the Assignee  hereunder for periods prior to the
          Effective Date, in the case of Base Rate Loans or fees, or the Payment
          Date,  in the  case of LIBOR  Loans,  and not  previously  paid by the
          Assignee  to the  Assignor.1  In the event that  either  party  hereto
          receives any payment to which

__________________________

          1 Each Assignor may insert its standard payment provisions in lieu of
            the payment terms included in this Exhibit.

                                       -166-



          the other party hereto is entitled  under this  Assignment  Agreement,
          then the party  receiving  such amount shall  promptly remit it to the
          other party hereto.

SECTION 19 FEES PAYABLE BY THE ASSIGNEE. The [Assignee shall pay to the Assignor
          a fee on each day on which a payment of interest or commitment fees is
          made under the Credit  Agreement with respect to the amounts  assigned
          to the  Assignee  hereunder  (other  than a  payment  of  interest  or
          commitment  fees for the period prior to the Effective Date or, in the
          case of LIBOR Loans, the Payment Date, which the Assignee is obligated
          to deliver to the Assignor  pursuant to Section 4 hereof).  The amount
          of such fee shall be the  difference  between (i) the interest or fee,
          as  applicable,  paid with  respect  to the  amounts  assigned  to the
          Assignee hereunder and (ii) the interest or fee, as applicable,  which
          would  have been paid with  respect  to the  amounts  assigned  to the
          Assignee  hereunder if each  interest rate was ___ of 1% less than the
          interest rate paid by any Loan Party or if the  commitment  fee was of
          ___ 1% less  than  the  commitment  fee  paid by any  Loan  Party,  as
          applicable.  In addition,  the] [Assignee]  [Assignor] agrees to pay a
          $3,500  processing  fee required to be paid to the Agent in connection
          with this Assignment Agreement.2

SECTION 20 REPRESENTATIONS  OF  THE  ASSIGNOR;  LIMITATIONS  ON  THE  ASSIGNOR'S
          LIABILITY.  The Assignor  represents and warrants that it is the legal
          and  beneficial  owner of the interest  being assigned by it hereunder
          and that such  interest is free and clear of any adverse claim created
          by the Assignor.  It is understood  and agreed that the assignment and
          assumption  hereunder  are made  without  recourse to the Assignor and
          that the  Assignor  makes no other  representation  or warranty of any
          kind to the Assignee.  Neither the Assignor,  the Agent, nor any other
          Bank,  nor  any of  its  officers,  directors,  employees,  agents  or
          attorneys  shall be responsible  for (i) the due execution,  legality,
          validity, enforceability,  genuineness,  sufficiency or collectibility
          of any Loan Document, including without limitation, documents granting
          the Assignor,  Agent and the other Banks a security interest in assets
          of any Loan Party, (ii) any representation, warranty or statement made
          in or in  connection  with  any  of  the  Loan  Documents,  (iii)  the
          financial  condition or  creditworthiness  of any Loan Party, (iv) the
          performance  of or  compliance  with any of the terms or provisions of
          any of the Loan Documents,  (v) inspecting any of the property,  books
          or  records  of any Loan  Party,  (vi) the  validity,  enforceability,
          perfection,   priority,   condition,   value  or  sufficiency  of  any
          collateral  securing  or  purporting  to secure the Loans or (vii) any
          mistake,  error of judgment, or action taken or omitted to be taken in
          connection with the Loans or the Loan Documents.

__________________________

          2 Assignor and Assignee to insert applicable payment terms.






                                       -167-



SECTION 21 REPRESENTATIONS  OF  THE ASSIGNEE.  The Assignee (i) confirms that it
          has received a copy of the Credit  Agreement,  together with copies of
          the  financial statements requested by the  Assignee  and  such  other
          documents and information as it has deemed appropriate to make its own
          credit analysis and decision to enter into this Assignment  Agreement,
          (ii) agrees that it will,  independently and without reliance upon the
          Agent,  the Assignor or any other Bank and based on such documents and
          information at it shall deem appropriate at the time, continue to make
          its own credit decisions in taking or not taking action under the Loan
          Documents, (iii) appoints and authorizes the Agent to take such action
          as agent on its  behalf and to  exercise  such  powers  under the Loan
          Documents as are delegated to the Agent by the terms thereof, together
          with such powers as are  reasonably  incidental  thereto,  (iv) agrees
          that it  will  perform  in  accordance  with  their  terms  all of the
          obligations  which by the terms of the Loan  Documents are required to
          be performed by it as a Bank, (v) agrees that its payment instructions
          and notice instructions are as set forth in the attachment to Schedule
          1, (vi)  confirms  that  none of the  funds,  monies,  assets or other
          consideration being used to make the purchase and assumption hereunder
          are "plan assets" as defined under ERISA and that its rights, benefits
          and  interests  in and  under  the  Loan  Documents  will not be "plan
          assets" under ERISA,  [and (vii) attaches the forms  prescribed by the
          Internal  Revenue  Service of the United  States  certifying  that the
          Assignee  is  entitled to receive  payments  under the Loan  Documents
          without  deduction or  withholding of any United States federal income
          taxes].3

SECTION 22 INDEMNITY. The  Assignee  agrees to  indemnify  and hold the Assignor
          harmless  against any and all losses,  costs and expenses  (including,
          without  limitation,   reasonable  attorneys'  fees)  and  liabilities
          incurred by the Assignor in  connection  with or arising in any manner
          from the Assignee's  non-performance of the obligations  assumed under
          this Assignment Agreement.

SECTION 23 SUBSEQUENT ASSIGNMENTS.  After the Effective Date, the Assignee shall
          have the right  pursuant to Section  14.9 of the Credit  Agreement  to
          assign the rights which are assigned to the Assignee  hereunder to any
          entity or person,  provided  that (i) any such  subsequent  assignment
          does not violate any of the terms and conditions of the Loan Documents
          or any law, rule,  regulation,  order, writ,  judgment,  injunction or
          decree  and that any  consent  required  under  the  terms of the Loan
          Documents has been obtained and (ii) unless the prior written  consent
          of the Assignor is obtained, the Assignee is not thereby released from
          its obligations to the Assignor hereunder,  if any remain unsatisfied,
          including,  without limitation, its obligations under Section 4, 5 and
          8 hereof.

__________________________

          3 To be inserted if the Assignee is not incorporated under the laws of
            the United States, or a state thereof.




                                       -168-



SECTION 24 REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the aggregate
          Commitment  occurs between the date of this  Assignment  Agreement and
          the Effective  Date,  the percentage  interest  specified in Item 3 of
          Schedule 1 shall  remain the same,  but the  dollar  amount  purchased
          shall be recalculated based on the reduced aggregate Commitment.

SECTION 25 ENTIRE AGREEMENT.  This  Assignment Agreement and the attached Notice
          of Assignment  embody the entire agreement and  understanding  between
          the   parties   hereto   and   supersede  all   prior  agreements  and
          understandings between the parties  hereto  relating  to  the  subject
          matter hereof.

SECTION 26 GOVERNING LAW.  This  Assignment  Agreement  shall be governed by and
          interpreted and enforced in accordance with the internal laws (without
          regard to conflicts of law provisions) of the State of Illinois.

SECTION 27 NOTICES.  Notices  shall  be given under this Assignment Agreement in
          the manner set forth in the Credit Agreement.  For the purpose hereof,
          the addresses  of  the  parties  hereto  (until  notice  of  a  change
          is delivered)  shall  be  the  address  set  forth  in the  attachment
          to Schedule 1.


                               [SIGNATURES FOLLOW]































                                       -169-



     IN WITNESS  WHEREOF,  the parties  hereto  have  executed  this  Assignment
Agreement by their duly authorized officers as of the date first above written.

                                       [NAME OF ASSIGNOR]


                                       By: _____________________________
                                           Name: _______________________
                                           Title: ______________________


                                       [NAME OF ASSIGNEE]


                                       By: _____________________________
                                           Name: _______________________
                                           Title: ______________________






































                                       -170-



                                   SCHEDULE 1
                             to Assignment Agreement

1.       Description and Date of Credit Agreement:

         Credit  Agreement  dated as of February  29, 2000 by and among  Clarion
         Technologies,  Inc., a Delaware  corporation,  its  subsidiaries  party
         thereto (collectively,  the "Loan Parties"), the financial institutions
         that are or may  from  time to time  become  party  thereto  ("Banks"),
         LaSalle Bank  National  Association,  as Agent and Bank One Michigan as
         Co-Agent.

2.       Date of Assignment Agreement:  ______________, ___

3.       Amounts to be Assigned (As of Date of Item 2 above):


                                            Term Loan   Term Loan      L/C
                             Revolving          A           B       Commitment
                           Loan Facility    Facility    Facility     Facility
------------------------------------------------------------------------------
Total of Commitments
(Loans) Under the
Credit Agreement            $_______        $_______   $_______     $_______

Assignees Percentage of
Each Facility Purchased
under the Assignment
Agreement                       ___%            ___%       ___%         ___%

Amount of Assigned Share
Each Facility Under the
Assignment Agreement        $_______        $_______   $_______     $_______
==============================================================================

4.     Assignee's Aggregate (Loan Amount)**
       Commitment Amount Purchased Hereunder:       $_______
5.     Proposed Effective Date:                     _____________ ___, _______

       Accepted and Agreed:
[NAME OF ASSIGNOR]                                 [NAME OF ASSIGNEE]


By: _______________________                        By: ______________________
     Name:_________________                            Name: ________________
     Title:________________                            Title: _______________









                                       -171-



                Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

         Attach Assignor's Administrative Information Sheet, which must
            include notice address for the Assignor and the Assignee



















































                                       -172-



                                   APPENDIX I
                             to Assignment Agreement

                                     NOTICE
                                  OF ASSIGNMENT


                                           ________________________, ___________

To:      LaSalle Bank National Association, as Agent
         135 South LaSalle Street, Suite 306
         Chicago, Illinois  60603
         Attention:  Bernardo Lacayo, Assistant Vice President
         Telephone:  (312) 904-2786
         Facsimile:  (312) 904-6225

         LOAN PARTIES
         c/o Clarion Technologies, Inc.
         235 Central Avenue
         Holland, Michigan  49423
         Attention:  David Selvius
         Telephone:  (616) 494-8885
         Facsimile:   (616) 494-8888


         With a copy to:

         Oppenheimer, Wolff & Donnelly, LLP
         500 Newport Center Drive, Suite 700
         Newport Beach, California 92660
         Attention:   Marc Indeglia, Esq.
         Telephone:  (949) 823-6047
         Facsimile:   (949) 823-6100


From:    [NAME OF ASSIGNOR] (the "Assignor")

         [NAME OF ASSIGNEE] (the "Assignee")

     1. We refer to that Credit Agreement (the "Credit Agreement")  described in
Item 1 of Schedule 1 attached  hereto  ("Schedule  1").  Capitalized  terms used
herein and not otherwise  defined  herein shall have the meanings  attributed to
them in the Credit Agreement.

     2. This Notice of Assignment  (this "Notice") is given and delivered to the
Loan Parties and the Agent pursuant to Section 14.9 of the Credit Agreement.









                                       -173-



     3. The Assignor and the Assignee have entered into an Assignment Agreement,
dated as of  ____________,  ____ (the  "Assignment"),  pursuant to which,  among
other things, the Assignor has sold, assigned,  delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the Assignor
the percentage  interest  specified in Item 3 of Schedule 1 of all outstandings,
rights and  obligations  under the Credit  Agreement  relating to the facilities
listed in Item 3 of Schedule 1. The Effective  Date of the  Assignment  shall be
the later of the date specified in Item 5 of Schedule 1 or two Business Days (or
such shorter  period as agreed to by the Agent) after this Notice of  Assignment
and any consents and fees required by Section 14.9 of the Credit  Agreement have
been delivered to the Agent, provided that the Effective Date shall not occur if
any condition  precedent agreed to by the Assignor and the Assignee has not been
satisfied.

     4. The Assignor  and the  Assignee  hereby give to the Loan Parties and the
Agent notice of the assignment and delegation  referred to herein.  The Assignor
will confer with the Agent before the date  specified in Item 5 of Schedule 1 to
determine  if the  Assignment  Agreement  will  become  effective  on such  date
pursuant to Section 3 hereof,  and will confer with the Agent to  determine  the
Effective  Date  pursuant  to  Section  3 hereof if it  occurs  thereafter.  The
Assignor  shall  notify the Agent if the  Assignment  Agreement  does not become
effective on any proposed  Effective  Date as a result of the failure to satisfy
the  conditions  precedent  agreed to by the Assignor and the  Assignee.  At the
request of the Agent,  the Assignor will give the Agent written  confirmation of
the satisfaction of the conditions precedent.

     5. The  Assignor  or the  Assignee  shall pay to the Agent on or before the
Effective  Date the  processing  fee of $3,500  required by Section  14.9 of the
Credit Agreement.
     6. If Notes are  outstanding  on the Effective  Date,  the Assignor and the
Assignee request and direct that the Agent prepare and cause the applicable Loan
Parties to execute and deliver new Notes or, as appropriate, replacements notes,
to the Assignor and the Assignee. The Assignor and, if applicable,  the Assignee
each agree to deliver to the Agent the  original  Note  received by it from such
Loan Parties upon its receipt of a new Note in the appropriate amount.

     7. The Assignee advises the Agent that notice and payment  instructions are
set forth in the attachment to Schedule 1.

     8. The Assignee  hereby  represents  and  warrants  that none of the funds,
monies,  assets or other  consideration being used to make the purchase pursuant
to the  Assignment are "plan assets" as defined under ERISA and that its rights,
benefits,  and  interests  in and  under  the Loan  Documents  will not be "plan
assets" under ERISA.











                                       -174-



     9. The  Assignee  authorizes  the Agent to act as its agent  under the Loan
Documents in accordance with the terms thereof.  The Assignee  acknowledges that
the Agent has no duty to supply  information  with  respect to any Loan Party or
the Loan  Documents  to the Assignee  until the Assignee  becomes a party to the
Credit Agreement.


[NAME OF ASSIGNOR]                          [NAME OF ASSIGNEE]

By: ________________________                By: _________________________
Name: ______________________                Name: _______________________
Title: _____________________                Title: ______________________


ACKNOWLEDGED AND CONSENTED TO:


LASALLE BANK NATIONAL ASSOCIATION, As Agent

By: _______________________________
     Name: ________________________
     Title: _______________________





CLARION TECHNOLOGIES, INC.

By: ____________________________
     Its: ______________________


CLARION PLASTICS TECHNOLOGIES, INC.

By: ____________________________
     Its: ______________________


CLARION REAL ESTATE, LLC

By: _____________________________
     Its: _______________________


DOUBLE "J" MOLDING, INC.

By: _____________________________
     Its: _______________________

CLARION-DRAKE ACQUISITION, INC.

By: _____________________________
     Its: _______________________

                                       -175-



MITO PLASTICS, INC.

By: _____________________________
     Its: _______________________


WAMAR PRODUCTS, INC.

By: _____________________________
     Its: _______________________


WAMAR TOOL & MACHINE CO.

By: _____________________________
     Its: _______________________

                 [Attach photocopy of Schedule 1 to Assignment]





































                                       -176-




                                  SCHEDULE 1.1

                              MONTPELIER EQUIPMENT



















































                                       -177-



                                  SCHEDULE 2.1

                            BANKS AND PRO RATA SHARES



                         Pro Rata Share
                           of Revolving     Amount of     Amount of   Pro Rata
Bank                  Commitment Amount   Term Loan A   Term Loan B      Share
-----                 -----------------   -----------   -----------   --------
LaSalle Bank
National Association         $7,500,000   $13,000,000    $6,000,000     50.0%

Bank One Michigan            $7,500,000   $13,000,000    $6,000,000     50.0%

TOTALS                      $15,000,000   $26,000,000   $12,000,000      100%







































                                       -178-


                                  SCHEDULE 14.3

                              ADDRESSES FOR NOTICES

                                  LOAN PARTIES
                         c/o Clarion Technologies, Inc.
                               235 Central Avenue
                             Holland, Michigan 49423
                            Attention: David Selvius
                            Telephone: (616) 494-8885
                            Facsimile: (616) 494-8888

                                 With a copy to:
                       Oppenheimer, Wolff & Donnelly, LLP
                       500 Newport Center Drive, Suite 700
                         Newport Beach, California 92660
                         Attention: Marc Indeglia, Esq.
                            Telephone: (949) 823-6000
                            Facsimile: (949) 823-6100

      LASALLE BANK NATIONAL ASSOCIATION, as Agent, Issuing Bank and a Bank

  Notices of Borrowing, Conversion, Continuation and Letter of Credit Issuance

                            135 South LaSalle Street
                             Chicago, Illinois 60603
                           Attention: Rennee Deluzen,
                          Commercial Loan Syndications
                            Telephone: (312) 904-9004
                            Facsimile: (312) 904-4448

                               All Other Notices:
                            135 South LaSalle Street
                             Chicago, Illinois 60603
                         Attention: Mr. Bernardo Lacayo
                            Telephone: (312) 904-2786
                            Facsimile: (312) 904-6225

                                 With a copy to:
                        Vedder, Price, Kaufman & Kammholz
                      222 North LaSalle Street, Suite 2600
                             Chicago, Illinois 60601
                      Attention: Michael A. Nemeroff, Esq.
                            Telephone: (312) 609-7858
                            Facsimile: (312) 609-5005


                    Bank One Michigan, as Co-Agent and a Bank
                                Bank One Michigan
                             200 Ottawa Avenue N.W.
                        Grand Rapids, Michigan 49503-2468
                          Attention: Mr. Kevin M. Paul
                            Telephone: (616) 771-7231
                            Facsimile: (616) 771-7440


                                       -179-

<EX-10>
                                                            EXHIBIT 10(c)
                       CLARION TECHNOLOGIES, INC.
                       1999 STOCK INCENTIVE PLAN


1.   Purpose of Plan.

     The purpose of the Clarion Technologies, Inc. 1999 Stock Incentive
Plan (the "Plan") is to advance the interests of Clarion Technologies, Inc.
(the "Company") and its shareholders by enabling the Company and its
Subsidiaries to attract and retain persons of ability to perform services
for the Company and its Subsidiaries by providing an incentive to such
individuals through equity participation in the Company and by rewarding
such individuals who contribute to the achievement by the Company of its
economic objectives.

2.   Definitions.
     The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

     2.1  "Board" means the Board of Directors of the Company.

     2.2  "Broker Exercise Notice" means a written notice pursuant to which
a Participant, upon exercise of an Option, irrevocably instructs a broker
or dealer to sell a sufficient number of shares or loan a sufficient amount
of money to pay all or a portion of the exercise price of the Option and/or
any related withholding tax obligations and remit such sums to the Company
and directs the Company to deliver stock certificates to be issued upon
such exercise directly to such broker or dealer.

     2.3  "Change in Control" means an event described in Section 13.1 of
the Plan.

     2.4  "Code" means the Internal Revenue Code of 1986, as amended.

     2.5  "Committee" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.

     2.6  "Common Stock" means the common stock of the Company, $.001 par
value, or the number and kind of shares of stock or other securities into
which such common stock may be changed in accordance with Section 4.3 of
the Plan.

     2.7  "Disability" means the disability of the Participant such as
would entitle the Participant to receive disability income benefits
pursuant to the long-term disability plan of the Company or Subsidiary then
covering the Participant or, if no such plan exists or is applicable to the
Participant, the permanent and total disability of the Participant within
the meaning of Section 22(e)(3) of the Code.



                                 -180-



     2.8  "Eligible Recipients" means all employees of the Company or any
Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.

     2.9  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

     2.10 "Fair Market Value" means, with respect to the Common Stock, as
of any date (or, if no shares were traded or quoted on such date, as of the
next preceding date on which there was such a trade or quote) (a) the
average between the reported high and low sale prices of the Common Stock
if the Common Stock is listed, admitted to unlisted trading privileges or
reported on any foreign or national securities exchange or on the NASDAQ
National Market or an equivalent foreign market on which sale prices are
reported; (b) if the Common Stock is not so listed, admitted to unlisted
trading privileges or reported, the closing bid price as reported by the
NASDAQ SmallCap Market, OTC Bulletin Board or the National Quotation
Bureau, Inc. or other comparable service; or (c) if the Common Stock is not
so listed or reported, such price as the Committee determines in good faith
in the exercise of its reasonable discretion.

     2.11 "Incentive Award"  means an Option, Stock Appreciation Right,
Restricted Stock Award, Performance Unit or Stock Bonus granted to an
Eligible Recipient pursuant to the Plan.

     2.12 "Incentive Stock Option" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422
of the Code.

     2.13 "Non-Statutory Stock Option" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan
that does not qualify as an Incentive Stock Option.

     2.14 "Option" means an Incentive Stock Option or a Non-Statutory Stock
Option.

     2.15 "Participant" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.

     2.16 "Performance Unit" means a right granted to an Eligible Recipient
pursuant to Section 9 of the Plan to receive a payment from the Company, in
the form of stock, cash or a combination of both, upon the achievement of
established employment, service, performance or other goals.

     2.17 "Previously Acquired Shares" means shares of Common Stock that
are already owned by the Participant or, with respect to any Incentive
Award, that are to be issued upon the grant, exercise or vesting of such
Incentive Award.


                                 -181-



     2.18 "Restricted Stock Award" means an award of Common Stock granted
to an Eligible Recipient pursuant to Section 8 of the Plan that is subject
to the restrictions on transferability and the risk of forfeiture imposed
by the provisions of such Section 8.

     2.19 "Retirement" means termination of employment or service pursuant
to and in accordance with the regular (or, if approved by the Board for
purposes of the Plan, early) retirement/pension plan or practice of the
Company or Subsidiary then covering the Participant, provided that if the
Participant is not covered by any such plan or practice, the Participant
will be deemed to be covered by the Company's plan or practice for purposes
of this determination.

     2.20 "Securities Act" means the Securities Act of 1933, as amended.

     2.21 "Stock Appreciation Right" means a right granted to an Eligible
Recipient pursuant to Section 7 of the Plan to receive a payment from the
Company, in the form of stock, cash or a combination of both, equal to the
difference between the Fair Market Value of one or more shares of Common
Stock and the exercise price of such shares under the terms of such Stock
Appreciation Right.

     2.22 "Stock Bonus" means an award of Common Stock granted to an
Eligible Recipient pursuant to Section 10 of the Plan.

     2.23 "Subsidiary" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a
significant equity interest, as determined by the Committee.

     2.24 "Tax Date" means the date any withholding tax obligation arises
under the Code or other applicable tax statute for a Participant with
respect to an Incentive Award.

3.   Plan Administration.

     3.1  The Committee.  The Plan will be administered by the Board or by
a committee of the Board.  So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the
Board who are "non-employee directors" within the meaning of Rule 16b-3
under the Exchange Act and, if the Board so determines in its sole
discretion, who are "outside directors" within the meaning of Section
162(m) of the Code.  Such a committee, if established, will act by majority
approval of the members (but may also take action with the written consent
of all of the members of such committee), and a majority of the members of
such a committee will constitute a quorum.  As used in the Plan,
"Committee" will refer to the Board or to such a committee, if established.
To the extent consistent with corporate law, the Committee may delegate to



                                 -182-



any officers of the Company the duties, power and authority of the
Committee under the Plan pursuant to such conditions or limitations as the
Committee may establish; provided, however, that only the Committee may
exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act.  The
Committee may exercise its duties, power and authority under the Plan in
its sole and absolute discretion without the consent of any Participant or
other party, unless the Plan specifically provides otherwise.  Each
determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be final, conclusive
and binding for all purposes and on all persons, including, without
limitation, the Company, the shareholders of the Company, the participants
and their respective successors-in-interest.  No member of the Committee
will be liable for any action or determination made in good faith with
respect to the Plan or any Incentive Award granted under the Plan.

     3.2  Authority of the Committee.
          (a)  In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all provisions of
Incentive Awards as the Committee may deem necessary or desirable and as
consistent with the terms of the Plan, including, without limitation, the
following: (i) the Eligible Recipients to be selected as Participants; (ii)
the nature and extent of the Incentive Awards to be made to each
Participant (including the number of shares of Common Stock to be subject
to each Incentive Award, any exercise price, the manner in which Incentive
Awards will vest or become exercisable and whether Incentive Awards will be
granted in tandem with other Incentive Awards) and the form of written
agreement, if any, evidencing such Incentive Award; (iii) the time or times
when Incentive Awards will be granted; (iv) the duration of each Incentive
Award; and (v) the restrictions and other conditions to which the payment
or vesting of Incentive Awards may be subject.  In addition, the Committee
will have the authority under the Plan in its sole discretion to pay the
economic value of any Incentive Award in the form of cash, Common Stock or
any combination of both.

     (b)  The Committee will have the authority under the Plan to amend or
modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of shares
or other terms and conditions of an Incentive Award, extend the term of an
Incentive Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award, accept the
surrender of any outstanding Incentive Award or, to the extent not
previously exercised or vested, authorize the grant of new Incentive Awards
in substitution for surrendered Incentive Awards; provided, however that
the amended or modified terms are permitted by the Plan as then in effect
and that any Participant adversely affected by such amended or modified
terms has consented to such amendment or modification.  No amendment or
modification to an Incentive Award, however, whether pursuant to this
Section 3.2 or any other provisions of the Plan, will be deemed to be a re-
grant of such Incentive Award for purposes of this Plan.

                                 -183-



     (c)  In the event of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in corporate
structure or shares, (ii) any purchase, acquisition, sale or disposition of
a significant amount of assets or a significant business, (iii) any change
in accounting principles or practices, or (iv) any other similar change, in
each case with respect to the Company or any other entity whose performance
is relevant to the grant or vesting of an Incentive Award, the Committee
(or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) may,
without the consent of any affected Participant, amend or modify the
vesting criteria of any outstanding Incentive Award that is based in whole
or in part on the financial performance of the Company (or any Subsidiary
or division thereof) or such other entity so as equitably to reflect such
event, with the desired result that the criteria for evaluating such
financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event as
prior to such event; provided, however, that the amended or modified terms
are permitted by the Plan as then in effect.

4.   Shares Available for Issuance.

     4.1  Maximum Number of Shares Available.  Subject to adjustment as
provided in Section 4.3 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 1,000,000
shares of Common Stock, plus any shares of Common Stock which, as of the
date the Plan is approved by the shareholders of the Company, are reserved
for issuance under the Company's 1998 Stock Option Plan and which are not
thereafter issued or which have been issued but are subsequently forfeited
and which would otherwise have been available for further issuance under
such plan.  Notwithstanding any other provisions of the Plan to the
contrary, no Participant in the Plan may be granted, during the term of the
Plan, any Options or Stock Appreciation Rights, or any other Incentive
Awards with a value based solely on an increase in the value of the Common
Stock after the date of grant, relating to more than 100,000 shares of
Common Stock (subject to adjustment as provided in Section 4.3 of the
Plan); provided, however, that a Participant who, during the term of the
Plan, is first appointed or elected as an officer, hired as an employee or
retained as a consultant by the Company or who receives a promotion that
results in an increase in responsibilities or duties may be granted, during
the term of the Plan, Options or Stock Appreciation Rights, or such other
Incentive Awards, relating to up to 200,000 shares of Common Stock (subject
to adjustment as provided in Section 4.3 of the Plan).






                                 -184-



     4.2  Accounting for Incentive Awards.  Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards
will be applied to reduce the maximum number of shares of Common Stock
remaining available for issuance under the Plan.  Any shares of Common
Stock that are subject to an Incentive Award that lapses, expires, is
forfeited or for any reason is terminated unexercised or unvested and any
shares of Common Stock that are subject to an Incentive Award that is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan.  Any
shares of Common Stock that constitute the forfeited portion of a
Restricted Stock Award, however, will not become available for further
issuance under the Plan.

     4.3  Adjustments to Shares and Incentive Awards.  In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares,
rights offering, divestiture or extraordinary dividend (including a spin-
off) or any other change in the corporate structure or shares of the
Company, the Committee (or, if the Company is not the surviving corporation
in any such transaction, the board of directors of the surviving
corporation) will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property
(including cash) available for issuance or payment under the Plan and, in
order to prevent dilution or enlargement of the rights of Participants, (a)
the number and kind of securities or other property (including cash)
subject to outstanding Options, and (b) the exercise price of outstanding
Options.

5.   Participation.

     Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are
expected to contribute to the achievement of economic objectives of the
Company or its Subsidiaries.  Eligible Recipients may be granted from time
to time one or more Incentive Awards, singly or in combination or in tandem
with other Incentive Awards, as may be determined by the Committee in its
sole discretion.  Incentive Awards will be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date will be
the date of any related agreement with the Participant.

6.   Options.

     6.1  Grant.  An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion.  The Committee may
designate whether an Option is to be considered an Incentive Stock Option




                                 -185-



or a Non-Statutory Stock Option.  To the extent that any Incentive Stock
Option granted under the Plan ceases for any reason to qualify as an
"incentive stock option" for purposes of Section 422 of the Code, such
Incentive Stock Option will continue to be outstanding for purposes of the
Plan but will thereafter be deemed to be a Non-Statutory Stock Option.

     6.2  Exercise Price.  The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its
discretion at the time of the Option grant; provided, however, that (a)
such price will not be less than 100% of the Fair Market Value of one share
of Common Stock on the date of grant with respect to an Incentive Stock
Option (110% of the Fair Market Value if, at the time the Incentive Stock
Option is granted, the Participant owns, directly or indirectly, more than
10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation of the Company), and (b)
such price will not be less than 85% of the Fair Market Value of one share
of Common Stock on the date of grant with respect to a Non-Statutory Stock
Option.

     6.3  Exercisability and Duration.  An Option will become exercisable
at such times and in such installments as may be determined by the
Committee in its sole discretion at the time of grant; provided, however,
that no Option may be exercisable prior to six months from its date of
grant (other than in connection with a Participant's death or Disability)
and no Incentive Stock Option may be exercisable after ten years from its
date of grant (five years from its date of grant if, at the time the
Incentive Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the
Company).

     6.4  Payment of Exercise Price.  The total purchase price of the
shares to be purchased upon exercise of an Option will be paid entirely in
cash (including check, bank draft or money order); provided, however, that
the Committee, in its sole discretion and upon terms and conditions
established by the Committee, may allow such payments to be made, in whole
or in part, by tender of a Broker Exercise Notice, Previously Acquired
Shares, a promissory note (on terms acceptable to the Committee in its sole
discretion) or by a combination of such methods.

     6.5  Manner of Exercise.  An Option may be exercised by a Participant
in whole or in part from time to time, subject to the conditions contained
in the Plan and in the agreement evidencing such Option, by delivery in
person, by facsimile or electronic transmission or through the mail of
written notice of exercise to the Company at its principal executive office
in Schaumburg, Illinois and by paying in full the total exercise price for
the shares of Common Stock to be purchased in accordance with Section 6.4
of the Plan.



                                 -186-



     6.6  Aggregate Limitation of Stock Subject to Incentive Stock Options.
To the extent that the aggregate Fair Market Value (determined as of the
date an Incentive Stock Option is granted) of the shares of Common Stock
with respect to which incentive stock options (within the meaning of
Section 422 of the Code) are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other
incentive stock option plans of the Company or any subsidiary or parent
corporation of the Company (within the meaning of the Code)) exceeds
$100,000 (or such other amount as may be prescribed by the Code from time
to time), such excess Options will be treated as Non-Statutory Stock
Options.  The determination will be made by taking incentive stock options
into account in the order in which they were granted.  If such excess only
applies to a portion of an Incentive Stock Option, the Committee, in its
discretion, will designate which shares will be treated as shares to be
acquired upon exercise of an Incentive Stock Option.

7.   Stock Appreciation Rights.

     7.1  Grant.  An Eligible Recipient may be granted one or more Stock
Appreciation Rights under the Plan, and such Stock Appreciation Rights will
be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole
discretion.  The Committee will have the sole discretion to determine the
form in which payment of the economic value of Stock Appreciation Rights
will be made to a Participant (i.e., cash, Common Stock or any combination
thereof) or to consent to or disapprove the election by a Participant of
the form of such payment.

     7.2  Exercise Price.  The exercise price of a Stock Appreciation Right
will be determined by the Committee, in its discretion, at the date of
grant but may not be less than 100% of the Fair Market Value of one share
of Common Stock on the date of grant.

     7.3  Exercisability and Duration.  A Stock Appreciation Right will
become exercisable at such time and in such installments as may be
determined by the Committee in its sole discretion at the time of grant;
provided, however, that no Stock Appreciation Right may be exercisable
prior to six months from its date of grant (other than in connection with a
Participant's death or Disability) or after ten years from its date of
grant.  A Stock Appreciation Right will be exercised by giving notice in
the same manner as for Options, as set forth in Section 6.5 of the Plan.

8.   Restricted Stock Awards.

     8.1  Grant.  An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock Awards
will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole
discretion.  The Committee may impose such restrictions or conditions, not


                                 -187-



inconsistent with the provisions of the Plan, to the vesting of such
Restricted Stock Awards as it deems appropriate, including, without
limitation, that the Participant remain in the continuous employ or service
of the Company or a Subsidiary for a certain period or that the Participant
or the Company (or any Subsidiary or division thereof) satisfy certain
performance goals or criteria; provided, however, that no Restricted Stock
Award may vest prior to six months from its date of grant other than in
connection with a Participant's death or Disability.

     8.2  Rights as a Stockholder; Transferability.  Except as provided in
Sections 8.1, 8.3 and 14.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common
Stock issued to the Participant as a Restricted Stock Award under this
Section 8 upon the Participant becoming the holder of record of such shares
as if such Participant were a holder of record of shares of unrestricted
Common Stock.

     8.3  Dividends and Distributions.  Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant
of the Restricted Stock Award), any dividends or distributions (including
regular quarterly cash dividends) paid with respect to shares of Common
Stock subject to the unvested portion of a Restricted Stock Award will be
subject to the same restrictions as the shares to which such dividends or
distributions relate.  In the event the Committee determines not to pay
dividends or distributions currently, the Committee will determine in its
sole discretion whether any interest will be paid on such dividends or
distributions.  In addition, the Committee in its sole discretion may
require such dividends and distributions to be reinvested (and in such case
the Participant consents to such reinvestment) in shares of Common Stock
that will be subject to the same restrictions as the shares to which such
dividends or distributions relate.

     8.4  Enforcement of Restrictions.  To enforce the restrictions
referred to in this Section 8, the Committee may place a legend on the
stock certificates referring to such restrictions and may require the
Participant, until the restrictions have lapsed, to keep the stock
certificates, together with duly endorsed stock powers, in the custody of
the Company or its transfer agent or to maintain evidence of stock
ownership, together with duly endorsed stock powers, in a certificateless
book-entry stock account with the Company's transfer agent.

9.   Performance Units.

     An Eligible Recipient may be granted one or more Performance Units
under the Plan, and such Performance Units will be subject to such terms
and conditions, consistent with the other provisions of the Plan, as may be




                                 -188-



determined by the Committee in its sole discretion.  The Committee may
impose such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Performance Units as it
deems appropriate, including, without limitation, that the Participant
remain in the continuous employ or service of the Company or any Subsidiary
for a certain period or that the Participant or the Company (or any
Subsidiary or division thereof) satisfy certain performance goals or
criteria; provided, however, that no Performance Unit may vest prior to six
months from its date of grant other than in connection with a Participant's
death or Disability.  The Committee will have the sole discretion to
determine the form in which payment of the economic value of Performance
Units will be made to a Participant (i.e., cash, Common Stock or any
combination thereof) or to consent to or disapprove the election by a
Participant of the form of such payment.

10.  Stock Bonuses.

     An Eligible Recipient may be granted one or more Stock Bonuses under
the Plan, and such Stock Bonuses will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee.  The Participant will have all voting,
dividend, liquidation and other rights with respect to the shares of Common
Stock issued to a Participant as a Stock Bonus under this Section 10 upon
the Participant becoming the holder of record of such shares; provided,
however, that the Committee may impose such restrictions on the assignment
or transfer of a Stock Bonus as it deems appropriate.

11.  Effect of Termination of Employment or Other Service.

     11.1 Termination Due to Death, Disability or Retirement.  Unless
otherwise provided by the Committee in its sole discretion in the agreement
evidencing an Incentive Award:

          (a)  In the event a Participant's employment or other service
with the Company and all Subsidiaries is terminated by reason of death or
Disability:

               (i)   All outstanding Options and Stock Appreciation Rights
          then held by the Participant will remain exercisable, to the
          extent exercisable as of the date of such termination, for a
          period of three (3) months after such termination (but in no
          event after the expiration date of any such Option or Stock
          Appreciation Right);

               (ii)  All Restricted Stock Awards then held by the
          Participant will become fully vested; and





                                 -189-



               (iii) All Performance Units and Stock Bonuses then held by
          the Participant will vest and/or continue to vest in the manner
          determined by the Committee and set forth in the agreement
          evidencing such Performance Units or Stock Bonuses.

          (b)  In the event a Participant's employment or other service
with the Company and all Subsidiaries is terminated by reason of
Retirement:

               (i)   All outstanding Options and Stock Appreciation Rights
          then held by the Participant will remain exercisable, to the
          extent exercisable as of the date of such termination, for a
          period of one (1) year after such termination (but in no event
          after the expiration date of any such Option or Stock
          Appreciation Right);

               (ii)  All Restricted Stock Awards then held by the
          Participant will become fully vested; and

               (iii) All Performance Units and Stock Bonuses then held by
          the Participant will vest and/or continue to vest in the manner
          determined by the Committee and set forth in the agreement
          evidencing such Performance Units or Stock Bonuses.

     11.2 Termination for Reasons Other than Death, Disability or
Retirement.

          (a)  Unless otherwise provided by the Committee in its sole
discretion in the agreement evidencing an Incentive Award, in the event a
Participant's employment or other service is terminated with the Company
and all Subsidiaries for any reason other than death, Disability or
Retirement, or a Participant is in the employ or service of a Subsidiary
and the Subsidiary ceases to be a Subsidiary of the Company (unless the
Participant continues in the employ or service of the Company or another
Subsidiary), all rights of the Participant under the Plan and any
agreements evidencing an Incentive Award will immediately terminate without
notice of any kind, and no Options or Stock Appreciation Rights then held
by the Participant will thereafter be exercisable, all Restricted Stock
Awards then held by the Participant that have not vested will be terminated
and forfeited, and all Performance Units and Stock Bonuses then held by the
Participant will vest and/or continue to vest in the manner determined by
the Committee and set forth in the agreement evidencing such Performance
Units or Stock Bonuses; provided, however, that if such termination is due
to any reason other than voluntary termination by the Participant or
termination by the Company or any Subsidiary for "cause," all outstanding
Options and Stock Appreciation Rights then held by such Participant will
remain exercisable, to the extent exercisable as of such termination, for a
period of thirty (30) days after such termination (but in no event after
the expiration date of any such Option or Stock Appreciation Right).


                                 -190-



     (b)  For purposes of this Section 11.2, "cause" (as determined by the
Committee) will be as defined in any employment or other agreement or
policy applicable to the Participant or, if no such agreement or policy
exists, will mean (i) dishonesty, fraud, misrepresentation, embezzlement or
deliberate injury or attempted injury, in each case related to the Company
or any Subsidiary, (ii) any unlawful or criminal activity of a serious
nature, (iii) any intentional and deliberate breach of a duty or duties
that, individually or in the aggregate, are material in relation to the
Participant's overall duties, or (iv) any material breach of any
employment, service, confidentiality or non-compete agreement entered into
with the Company or any Subsidiary.

     11.3 Modification of Rights Upon Termination.  Notwithstanding the
other provisions of this Section 11, upon a Participant's termination of
employment or other service with the Company and all Subsidiaries, the
Committee may, in its sole discretion (which may be exercised at any time
on or after the date of grant, including following such termination), cause
Options and Stock Appreciation Rights (or any part thereof) then held by
such Participant to become or continue to become exercisable and/or remain
exercisable following such termination of employment or service and
Restricted Stock Awards, Performance Units and Stock Bonuses then held by
such Participant to vest and/or continue to vest or become free of transfer
restrictions, as the case may be, following such termination of employment
or service, in each case in the manner determined by the Committee;
provided, however, that no Incentive Award may become exercisable or vest
prior to six months from its date of grant (other than in connection with a
Participant's death or Disability) or remain exercisable or continue to
vest beyond its expiration date.

     11.4 Exercise of Incentive Stock Options Following Termination.  Any
Incentive Stock Option that remains unexercised more than one year
following termination of employment by reason of Disability or more than
three months following termination for any reason other than death or
Disability will thereafter be deemed to be a Non-Statutory Stock Option.

     11.5 Date of Termination of Employment or Other Service.  Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to
have terminated on the date recorded on the personnel or other records of
the Company or the Subsidiary for which the Participant provides employment
or other service, as determined by the Committee in its sole discretion
based upon such records.

12.  Payment of Withholding Taxes.

     12.1 General Rules.  The Company is entitled to (a) withhold and
deduct from future wages of the Participant (or from other amounts that may
be due and owing to the Participant from the Company or a Subsidiary), or
make other arrangements for the collection of, all legally required amounts


                                 -191-



necessary to satisfy any and all foreign, federal, state and local
withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Incentive Award or
a disqualifying disposition of stock received upon exercise of an Incentive
Stock Option, or (b) require the Participant promptly to remit the amount
of such withholding to the Company before taking any action, including
issuing any shares of Common Stock, with respect to an Incentive Award.

     12.2 Special Rules.  The Committee may, in its sole discretion and
upon terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or employment-
related tax obligation described in Section 12.1 of the Plan by electing to
tender Previously Acquired Shares, a Broker Exercise Notice or a promissory
note (on terms acceptable to the Committee in its sole discretion), or by a
combination of such methods.

13.  Change in Control.

     13.1 Change in Control.  For purposes of this Section 13, a "Change in
Control" of the Company will mean the following:

          (a)  the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a person or entity
that is not controlled by the Company;

          (b)  the approval by the shareholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company;

          (c)  any person becomes after the effective date of the Plan the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of (i) 20% or more, but not 50% or more, of the
combined voting power of the Company's outstanding securities ordinarily
having the right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the Continuity
Directors (as defined in Section 13.2 below), or (ii) 50% or more of the
combined voting power of the Company's outstanding securities ordinarily
having the right to vote at elections of directors (regardless of any
approval by the Continuity Directors);

          (d)  a merger or consolidation to which the Company is a party if
the shareholders of the Company immediately prior to the effective date of
such merger or consolidation have "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act), immediately following the effective
date of such merger or consolidation, of securities of the surviving





                                 -192-



corporation representing (i) more than 50%, but less than 80%, of the
combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of directors,
unless such merger or consolidation has been approved in advance by the
Continuity Directors, or (ii) 50% or less of the combined voting power of
the surviving corporation's then outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval by
the Continuity Directors);

          (e)  the Continuity Directors cease for any reason to constitute
at least a majority of the Board; or

          (f)  any other change in control of the Company of a nature that
would be required to be reported pursuant to Section 13 or 15(d) of the
Exchange Act, whether or not the Company is then subject to such reporting
requirement.

     13.2 Continuity Directors.  For purposes of this Section 13,
"Continuity Directors" of the Company will mean any individuals who are
members of the Board on the effective date of the Plan and any individual
who subsequently becomes a member of the Board whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the Continuity Directors (either by specific
vote or by approval of the Company's proxy statement in which such
individual is named as a nominee for director without objection to such
nomination).

     13.3 Acceleration of Vesting.  Without limiting the authority of the
Committee under Sections 3.2 and 4.3 of the Plan, if a Change in Control of
the Company occurs, then, unless otherwise provided by the Committee in its
sole discretion either in the agreement evidencing an Incentive Award at
the time of grant or at any time after the grant of an Incentive Award, (a)
all Options and Stock Appreciation Rights that have been outstanding for at
least six months will become immediately exercisable in full and will
remain exercisable for the remainder of their terms, regardless of whether
the Participant to whom such Options or Stock Appreciation Rights have been
granted remains in the employ or service of the Company or any Subsidiary;
(b) all Restricted Stock Awards and Performance Units that have been
outstanding for at least six months will become immediately fully vested
and non-forfeitable; and (c) all outstanding Stock Bonuses then held by the
Participant will vest and/or continue to vest in the manner determined by
the Committee and set forth in the agreement evidencing such Stock Bonuses.

     13.4 Cash Payment for Options.  If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee in its sole
discretion either in an agreement evidencing an Incentive Award at the time
of grant or at any time after the grant of an Incentive Award, and without
the consent of any Participant effected thereby, may determine that some or



                                 -193-



all Participants holding outstanding Options will receive, with respect to
some or all of the shares of Common Stock subject to such Options, as of
the effective date of any such Change in Control of the Company, cash in an
amount equal to the excess of the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control of the
Company over the exercise price per share of such Options.

     13.5 Limitation on Change in Control Payments.  Notwithstanding
anything in Section 13.3 or 13.4 of the Plan to the contrary, if, with
respect to a Participant, the acceleration of the vesting of an Incentive
Award as provided in Section 13.3 or the payment of cash in exchange for
all or part of an Incentive Award as provided in Section 13.4 (which
acceleration or payment could be deemed a "payment" within the meaning of
Section 280G(b)(2) of the Code), together with any other "payments" that
such Participant has the right to receive from the Company or any
corporation that is a member of an "affiliated group" (as defined in
Section 1504(a) of the Code without regard to Section 1504(b) of the Code)
of which the Company is a member, would constitute a "parachute payment"
(as defined in Section 280G(b)(2) of the Code), then the "payments" to such
Participant pursuant to Section 13.3 or 13.4 of the Plan will be reduced to
the largest amount as will result in no portion of such "payments" being
subject to the excise tax imposed by Section 4999 of the Code; provided,
however, that if a Participant is subject to a separate agreement with the
Company or a Subsidiary that expressly addresses the potential application
of Sections 280G or 4999 of the Code (including, without limitation, that
"payments" under such agreement or otherwise will be reduced, that the
Participant will have the discretion to determine which "payments" will be
reduced, that such "payments" will not be reduced or that such "payments"
will be "grossed up" for tax purposes), then this Section 13.5 will not
apply, and any "payments" to a Participant pursuant to Section 13.3 or 13.4
of the Plan will be treated as "payments" arising under such separate
agreement.

14.  Rights of Eligible Recipients and Participants; Transferability.

     14.1 Employment or Service.  Nothing in the Plan will interfere with
or limit in any way the right of the Company or any Subsidiary to terminate
the employment or service of any Eligible Recipient or Participant at any
time, nor confer upon any Eligible Recipient or Participant any right to
continue in the employ or service of the Company or any Subsidiary.

     14.2 Rights as a Shareholder.  As a holder of Incentive Awards (other
than Restricted Stock Awards and Stock Bonuses), a Participant will have no
rights as a stockholder unless and until such Incentive Awards are
exercised for, or paid in the form of, shares of Common Stock and the
Participant becomes the holder of record of such shares.  Except as
otherwise provided in the Plan, no adjustment will be made for dividends or
distributions with respect to such Incentive Awards as to which there is a
record date preceding the date the Participant becomes the holder of record
of such shares, except as the Committee may determine in its discretion.

                                 -194-



     14.3 Restrictions on Transfer.  Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly permitted
by the Plan, unless approved by the Committee in its sole discretion, no
right or interest of any Participant in an Incentive Award prior to the
exercise or vesting of such Incentive Award will be assignable or
transferable, or subjected to any lien, during the lifetime of the
Participant, either voluntarily or involuntarily, directly or indirectly,
by operation of law or otherwise.  A Participant will, however, be entitled
to designate a beneficiary to receive an Incentive Award upon such
Participant's death, and in the event of a Participant's death, payment of
any amounts due under the Plan will be made to, and exercise of any Options
(to the extent permitted pursuant to Section 11 of the Plan) may be made
by, the Participant's legal representatives, heirs and legatees.

     14.4 Breach of Confidentiality or Non-Compete Agreements.
Notwithstanding anything in the Plan to the contrary, in the event that a
Participant materially breaches the terms of any confidentiality or non-
compete agreement entered into with the Company or any Subsidiary, whether
such breach occurs before or after termination of such Participant's
employment or other service with the Company or any Subsidiary, the
Committee in its sole discretion may immediately terminate all rights of
the Participant under the Plan and any agreements evidencing an Incentive
Award then held by the Participant without notice of any kind.

     14.5 Non-Exclusivity of the Plan.  Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority
of the Board to adopt such additional or other compensation arrangements as
the Board may deem necessary or desirable.

15.  Securities Law and Other Restrictions.

     Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to
issue any shares of Common Stock under this Plan, and a Participant may not
sell, assign, transfer or otherwise dispose of shares of Common Stock
issued pursuant to Incentive Awards granted under the Plan, unless
(a) there is in effect with respect to such shares a registration statement
under the Securities Act and any applicable state or foreign securities
laws or an exemption from such registration under the Securities Act and
applicable state or foreign securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory
body which the Committee, in its sole discretion, deems necessary or
advisable.  The Company may condition such issuance, sale or transfer upon
the receipt of any representations or agreements from the parties involved,
and the placement of any legends on certificates representing shares of
Common Stock, as may be deemed necessary or advisable by the Company in
order to comply with such securities law or other restrictions.



                                 -195-



16.  Plan Amendment, Modification and Termination.

     The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the
Board may deem advisable in order that Incentive Awards under the Plan will
conform to any change in applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company;
provided, however, that no amendments to the Plan will be effective without
approval of the shareholders of the Company if stockholder approval of the
amendment is then required pursuant to Section 422 of the Code or the rules
of any stock exchange or NASDAQ or similar regulatory body.  No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected
Participant; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Sections 3.2, 4.3 and 13 of the Plan.

17.  Effective Date and Duration of the Plan.

     The Plan is effective as of May 24, 1999, the date it was adopted by
the Board.  The Plan will terminate at midnight on May 23, 2009, and may be
terminated prior to such time to by Board action, and no Incentive Award
will be granted after such termination.  Incentive Awards outstanding upon
termination of the Plan may continue to be exercised, or become free of
restrictions, in accordance with their terms.

18.  Miscellaneous.

     18.1 Governing Law.  The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and
actions relating to the Plan will be governed by and construed exclusively
in accordance with the laws of the State of Delaware, notwithstanding the
conflicts of laws principles of any jurisdictions.

     18.2 Successors and Assigns.  The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the Company and
the Participants.














                                 -196-

<EX-10>
                                                            EXHIBIT  10(j)

                         EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of this 1st day of March, 1999, by and between CLARION PLASTICS
TECHNOLOGIES, INC., an Ohio corporation ("Company") and WILLIAM BECKMAN
("Employee").  CLARION TECHNOLOGIES, INC., a Delaware corporation
("Clarion"), the parent company of the Company, joins as an additional
party to this Agreement for purposes of the stock compensation provided in
Section 4 hereof.

                               RECITALS

     A.   The Company is engaged in the business of custom injection
molding, assembly, tooling, product design, advanced engineering and
program management (the "Business").

     B.   The Company wishes to employ Employee, and Employee agrees to
serve, as Chief Executive Officer of the Company subject to the terms and
conditions set forth below.

     C.   The Company is a wholly-owned subsidiary of Clarion.

                               AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is hereby
agreed as follows:

1.   Recitals.  The recitals set forth above shall constitute and shall be
deemed to be an integral part of this Agreement.

2.   Duties.  Employee shall serve in the capacity of Chief Executive
Officer of the Company.  Employee's principal duties and responsibilities
shall consist of prin1ary responsibility for: (i) identifying potential
sources of new business or new customers for the Company and coordinating
and supervising all activities reasonably necessary for the initiation and
continuation of sales of product by the Company to such new customers; (ii)
subject to criteria from time to time established by Clarion or the
Company's Board of Directors, identifying potential acquisition
opportunities and coordinating and supervising all activities reasonably
necessary in order to further the Company's best interests in connection
therewith; and (iii) coordinating and supervising all activities reasonably
necessary for the establishment by the Company of improved financial and
operating control systems.  Employee shall perform such other services and
duties as may from time to time be assigned to Employee by the Company's
Board of Directors provided that such other services and duties are not
inconsistent with any other term of this Agreement.  Except during vacation
periods or in accordance with the Company's personnel policies covering

                                 -197-



executive leaves and reasonable periods of illness or other incapacitation,
Employee shall devote his services to the Company's Business and interests
in a manner consistent with Employee's title and office and the Company's
needs for his services.  Employee agrees to perform his duties pursuant to
this Agreement in good faith and in a manner which he honestly believes to
be in the best interests of the Company, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would
use under similar circumstances.  Employee agrees to observe a duty of
loyalty to the Company placing the interests of the Company ahead of his
own.  Such duties shall be rendered at such place or places as the Company
shall require in accordance with the best interests, needs, business and
opportunities of the Company.  However, in no event, shall the Company
require Employee to move his principal residence.  Employee shall at all
times be subject to and shall observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as may be established
from time to time by the Company.

3.   Limitations on Other Employment.  Throughout the Term (as defined
below) of Employee's employment under this Agreement, Employee shall not
enter into the services of or be employed in any capacity or for any
purposes whatsoever, whether directly or indirectly, by any person, firm,
corporation or entity other than the Company, and will not, during said
period of time, be engaged in any business, enterprise or undertaking other
than employment by the Company except for such other activities that do not
detract from the full discharge of Employee's duties hereunder or as
otherwise consented to in writing by the Company.

4.   Compensation and Benefits.

     4.1  Base Salary.  Subject to adjustment as hereinafter provided, in
consideration of Employee's performance of all of his duties and
responsibilities hereunder and his observance of all of the covenants,
conditions and restrictions contained herein, Employee shall be entitled to
receive a base salary of One Hundred Fifty Thousand Dollars ($150,000) per
annum for the first Contract Year and Two Hundred Fifty Thousand Dollars
($250,000) per annum for the second Contract Year, payable in periodic
insta11ments in accordance with the Company's payroll procedures in effect
from time to time.  The base salary has been expressed in terms of a gross
amount, and the Company is or may be required to withhold from such gross
amount deductions in respect of federal, state or local income taxes, FICA
and the like.  The term "Contract Year" shall mean the twelve month periods
commencing on the first day of the term hereof and on each succeeding
yearly anniversary date thereof.

     4.2  Bonus Provisions.
          A.   As used herein, the term "New Sales" shall mean all
automotive industry sales procured solely or substantially through the
efforts of Employee during the Term of this Agreement.



                                 -198-



          B.   Company shall pay Employee a one-time bonus in the amount of
One Hundred Thousand Dollars ($100,000) if during the first Contract Year
hereunder Employee (i) procures New Sales in an amount equal to or greater
than Ten Million Dol1ars ($10,000,000) and (ii) the net operating profit
margin on such New Sales (inclusive of all compensation to Employee),
determined in accordance with the Company's established accounting
principles, equals or exceeds five percent (5%).

          C.   Company shall pay Employee an additional one-time bonus in
the amount of One Hundred Thousand Dollars ($100,000) if during the first
Contract Year hereunder Employee (i) procures New Sales in an amount equal
to or greater than Twenty Million Dollars ($20,000,000) and (ii) the net
operating profit margin on such New Sales (inclusive of all compensation to
Employee) determined in accordance with the Company's established
accounting principles, equals or exceeds five percent (5%).

     4.3  Compensation Review.  Prior to commencement of the second
Contract Year with respect to bonus compensation and prior to commencement
of the third Contract Year and each Contract Year thereafter with respect
to base salary and bonus compensation, the Company's Board of Directors, in
consultation with Clarion's Compensation Committee, shall review Employee's
compensation hereunder and shall make such modifications in Employee's
compensation as the Board of Directors determines, in its sole and absolute
discretion, to be appropriate.  Any modification of compensation shall
become effective on the later of the first day the next Contract Year or
thirty (30) days after notice to Employee of a modification of his
compensation.

     4.4  Options.  Upon the commencement of Employee's employment Term,
Employee shall be granted options to purchase an aggregate of Four Hundred
Fifty Thousand (450,000) shares of Clarion's $.001 par value common stock
("Common Stock"), at an exercise price of Three Dollars and Twenty Five
Cents ($3.25) per share (the "Options") vesting in accordance with the
following schedule: (i) Options to purchase One Hundred Fifty Thousand
(150,000) shares of Common Stock shall vest immediately upon commencement
of the Term hereof; and (ii) Options to purchase an additional Sixty
Thousand (60,000) shares of Common Stock shall vest on the first day of
each of the next five (5) Contract Years hereunder.  The Options shall
expire on the earlier of five (5) years from the date of vesting or ten
(10) years from the date of grant.  The Options shall be issued as
incentive stock options pursuant to the Clarion's 1998 Stock Option Plan
and shall be subject to termination upon the termination of Employee's
Employment with the Company in accordance with the terms thereof.

     4.5  Medical and Dental Insurance, Vacation.  Throughout the term of
Employee's employment under this Agreement, Employee shall be entitled to
receive Company paid medical insurance and dental insurance.  Employee
shall be entitled to three weeks per Contract Year of paid vacation (to be
taken at such time or times as is reasonably convenient to the Company).


                                 -199-



     4.6  Expenses.  Employee may incur reasonable expenses in performing
his services hereunder which shall be reimbursed by the Company, in
accordance with the Company's standard expense reimbursement policies for
approved expenses, upon presentation by Employee of supporting
documentation (e.g., receipts and vouchers) for such expenditures which
meet IRS guidelines.

     4.7  Life and Disability Insurance and 401(k) Plan.  Employee shall
also be entitled to Short Term Disability, Long Term Disability and Life
Insurance and a 401(k) plan in accordance with policies from time to time
established by the Company and subject to the review and approval of the
Board of Directors.

     4.8  Other Fringe Benefits.  Employee shall also be entitled to all
other employee benefits generally provided by the Company.

5.   Term of Employment.  The Company hereby employs Employee, and Employee
hereby accepts employment with the Company, for a period of six (6) years
commencing February 1, 1999 ("Term"); provided that this Agreement shall be
automatically renewed for successive one (1) year terms unless either party
elects not to renew this Agreement by delivering written notice of its
election to the other party no later than sixty (60) days prior to the end
of the current term.  Notwithstanding anything in this Section 5 to the
contrary, this Agreement may be terminated at any time in accordance with
Section 6.

6.   Termination.

     6.1  By the Company for Cause.  Employee's employment under this
Agreement may be terminated immediately by the Company upon the occurrence
of one or more of the following causes:

          A.   Employee's conviction of any criminal act involving moral
turpitude or which otherwise tends to bring disrepute upon the Company;

          B.   The commission by Employee of any act of dishonesty in
connection with the performance of any of Employee's duties hereunder
(including, but not limited to falsification of Company records, making
false statements of material facts to third parties regarding the Company's
Business, fraud and misappropriation or embezzlement against the Company or
any of its customers or suppliers);

          C.   Any willful material breach by Employee of any of the
covenants, conditions or restrictions set forth in this Agreement,
including, but not limited to, the restrictions set forth in Sections 7, 8
or 9 of this Agreement;





                                 -200-



          D.   The material failure to perform Employee's duties, and/or to
observe the written rules, regulations, policies, directions or
restrictions adopted by the Company from time to time to the extent such
rules, regulations, policies, directions or restrictions are not
inconsistent with the terms of this Agreement, provided that such failure
shall not have been cured within ten (10) days after Employee is given
specific notice and an opportunity to cure such failure;

          E.   If Employee dies or becomes disabled (Employee shall be
deemed "disabled" for purposes of this Agreement if he is unable, by reason
of illness, accident, or other physical or mental incapacity, to perform
substantially all of his regular duties for a continuous period of one
hundred twenty (120) days); and

          F.   Repeated abuse of alcohol or illegal narcotics which results
in the failure of Employee to perform his duties hereunder.

     6.2  By the Company Without Cause.  The Company may terminate
Employee's employment hereunder on sixty (60) days written notice to
Employee.

     6.3  By Employee Upon Breach by the Company.  Upon a breach by the
Company of the terms of this Agreement, Employee shall have the right to
terminate his employment hereunder, provided that the Company has first
been afforded thirty (30) days written notice and an opportunity to cure
such breach.

     6.4  By Employee Without Cause.  Employee may voluntarily terminate
his employment hereunder on sixty (60) days written notice to the Company.

     6.5  Effect of Termination.  Upon termination of Employee's employment
by the Company under Section 6.1, except for a termination resulting from
the disability of Employee, or by Employee under Section 6.4, Employee
shall be entitled to all compensation accrued but unpaid to the date of
termination, but Employee shall have no further rights to any base salary,
benefits or other compensation of any kind or nature.

          Upon termination of Employee's employment by the Company under
Section 6.2, by the Company under Section 6.1 as a result of the disability
of Employee or by Employee under Section 6.3, Employee shall be entitled to
continue to receive all base salary for a period of two (2) months
following termination and an amount each month equal to the amount which
the Company is then paying for health insurance for Employee on the same
dates that he would have received such base salary had such termination of
employment not occurred, less any sums which Employee receives from
disability insurance maintained by the Company.





                                 -201-



          Upon any termination of Employee's employment pursuant to Section
6.1, 6.2, 6.3 or 6.4, Employee shall be entitled to compensation for any
accrued and unused vacation hours as provided by applicable law and to any
rights under COBRA or other comparable rights as provided by law.

7.   Disclosure or Use of Confidential Information.

     7.1  Confidentiality and Appropriation of Confidential Information.
During the term of Employee's employment under this Agreement and
thereafter, Employee will keep confidential and will not directly or
indirectly reveal, divulge or make known in any manner to any person or
entity (except as required by applicable 1aw or in connection with the
performance of his duties and responsibilities as an employee hereunder)
nor use or otherwise appropriate for Employee's own benefit, or on behalf
of any other person or entity by whom Employee might subsequently be
employed or otherwise associated or affiliated with, all Confidential
Information (as hereinafter defined).  Confidential Information shall
include information (not readily compiled from publicly available sources)
which is made available to Employee or obtained by Employee during the
course of his employment relating or pertaining to the Company's business
and franchise operations, including trade secrets, business and financial
information, operations information, projects, products, customers,
supplier names, addresses and pricing policies, company pricing policies,
computer programs and software or unpublished know-how, whether patented or
unpatented.  Employee agrees to cooperate with the Company to maintain the
secrecy of and limit the use of such Confidential Information.  Employee
further agrees that he is under no obligation to any former employer which
is in any way inconsistent with this Agreement or which imposes any
restriction on the Company.

     7.2  Prevention of Unauthorized Release of Company Information.
Employee agrees to promptly advise the Company of any knowledge which he
may have of any unauthorized release or use of any Confidential
Information, and shall take reasonable measures to prevent unauthorized
persons or entities from having access to, obtaining or being furnished
with any Confidential Information.

     7.3  Restrictive Covenants.

          A.   The Company and the Employee acknowledge and agree that the
Employee's duties are of a special and unique character which have a unique
value to the Company, the loss of which cannot be adequately compensated by
damages in an action at law and, if used in competition with the Company,
could cause serious and irreparable harm to the Company.  Accordingly, the
Employee covenants that during the course of the Employee's employment and
for a period of two (2) years thereafter (except in the event of
termination pursuant to Section 6.2 or 6.3, the Employee shall not directly
or indirectly solicit, divert or appropriate or attempt to solicit, divert



                                 -202-



or appropriate any clients, vendors, customers, or accounts of the Company
which are or were active clients, vendors, customers, or any customers or
accounts or persons or entities which were clients, vendors, customers or
accounts of the Company during the two year period preceding the Employee's
termination of employment, for himself or on behalf of any person,
corporation, partnership or other business entity which, engages in
business activities which are competitive with the Business of the Company.
In addition, for a two (2) year period following termination of this
Agreement for any reason (except in the event of termination pursuant to
Section 6.2 or 6.3, the Employee shall not be employed by or affiliated in
any way with any person or entity engaged in a business which is
competitive with the Business of the Company in the geographical area in
which the Company conducts its business.  The Employee acknowledges that
the Company is or shall be engaged in business on a national as well as
international basis and that, accordingly, geographical limitations on the
aforesaid restrictive covenant other than those set forth herein are
neither practical nor reasonable.

          B.   The Employee shall not, on his own behalf or on behalf of
others, solicit, divert or hire away, or attempt to solicit, divert or hire
away, any person employed by the Company, whether or not such employee is a
full-time employee or a temporary employee of the Company and whether or
not such employment is pursuant to a written agreement or is at will, at
any time during the term hereof and for a period of two (2) years after the
Employee ceases to be employed by the Company.

          C.   Compliance with the restrictive covenants of this Agreement
is a condition precedent to the Company's obligation to make any payments
of any nature to the Employee whether under this Agreement or otherwise.
Nothing in this Agreement shall be construed as prohibiting the Company
from pursuing any other remedies available to it for a breach or threatened
breach of this Agreement.

          D.   As used in this Section 7.3, "clients", "vendors",
"customers" or "accounts" shall include any person or entity that directly
or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with any such "clients",
"vendors", "customers" or "accounts".

          E.   The Employee agrees that each of such covenants is separate,
distinct and severable not only from the other of such covenants but also
from the remaining provisions of this Agreement; that the unenforceability
of any such covenant or agreement shall not affect the validity or
enforceability of any other such covenant or agreements or any other
provision or provisions of this Agreement; and that, in the event any court
of competent jurisdiction determines, rules or holds that any such
provision, covenant or agreement hereof is overly broad or against the
public policy of the state, then said court is specifically authorized to
reform and narrow said provision, covenant or agreement to the extent
necessary to make it valid and enforceable.

                                 -203-



8.   Proprietary Rights and Materials.  All documents, memoranda, reports,
notebooks, correspondence, files, lists and other records, and the like,
designs, drawings, specifications, computer software and computer
equipment, computer printouts, computer disks, arid all photocopies or
other reproductions thereof, affecting or relating to the business of the
Company, which Employee shall prepare, use, construct, observe, posses or
control ("Company Materials"), shall be and remain the sole property of the
Company. Upon termination of this Agreement, Employee shall deliver
promptly to the Company all such Company Materials.

9.   Inventions and Discoveries.  Employee hereby assigns to the Company
all of Employee's rights, title and interest in and to all inventions,
discoveries, processes, standards, procedures, designs and other
intellectual property related to the business of the Company hereinafter
collectively referred to as the "Inventions", and all improvements on
existing Inventions made or discovered by Employee during the Term of
Employee's employment hereunder.  Promptly upon the making of any such
Invention or improvement thereon, Employee shall disclose the same to
Company and shall execute and deliver to Company such reasonable documents
as Company may request to confirm the assignment of Employee's rights
therein and, if requested by Company, shall assist Company in applying for
and prosecuting any patents which may be available in respect thereof.
Inventions originated by Employee shall be considered by the Board of
Directors in determining compensation modifications hereunder.

10.  Remedies.

     10.1 Injunctive Relief.  The Company and Employee recognize and
acknowledge that Employee is employed under this Agreement as an employee
in a position where Employee will be rendering personal services of a
special, unique, unusual and extraordinary character requiring
extraordinary ingenuity and effort by Employee.  Employee hereby
acknowledges that compliance with the provisions of Sections 7,8 and 9 of
this Agreement (which shall survive the termination of this Agreement in
all respects) is necessary to protect the goodwill and other proprietary
interests of the Company and that the Company would suffer continuing and
irreparable injury which injury is not adequately compensable in monetary
damages or at law.  Accordingly, Employee agrees that the Company, its
successors and assigns may obtain injunctive relief against the breach or
threatened breach of the foregoing provisions, in addition to any other
legal remedies which may be available to it under this Agreement (including
money damages), and that any such breach or threatened breach may be
preliminarily enjoined by the Company without bond.








                                 -204-



     10.2 Other Remedies.  No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise.  The election of anyone or
more remedies by the Company shall not constitute a waiver of the right to
pursue other available remedies.

     10.3 Accounting for Profits.  Employee covenants and agrees that if he
violates the provisions of Sections 7, 8 or 9, the Company shall be
entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration or other benefits that Employee has realized and
may realize as a result of or in connection with any such violation.  These
remedies shall be in addition and not in limitation of any injunctive
relief or other rights or remedies to which the Company is or may be
entitled at law, in equity or under this Agreement.

     10.4 Attorneys' Fees.  If litigation arises under this Agreement
between Company and Employee, the prevailing party in such litigation shall
be entitled to recover its reasonable attorneys' and paralegal's fees,
court costs and out-of-pocket litigation expenses from the non-prevailing
party.

     10.5 Arbitration.  Any controversy or claim arising out of, or
relating to this Agreement, except Sections 7, 8 and 9, shall be resolved
by arbitration in accordance with the Commercial Rules of the American
Arbitration Association then in effect.  The decision of the arbitrator
shall be final and binding upon the parties hereto, and judgment upon the
award rendered by the arbitrator maybe entered in any court of competent
jurisdiction.  There shall be a single arbitrator, the situs of the
arbitration shall be in the County of Williams, State of Ohio, and the
prevailing party (or parties) shall also recover from the losing party (or
parties) reasonable attorneys' fees and the costs of arbitration as part of
the judgment rendered.

     10.6 Cumulative Remedies.  The remedies described in this Section 10
are in addition to and not in substitution for any other remedies available
under the law.

11.  Severability.  It is the desire of the parties that the provisions and
restrictions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies in each jurisdiction in
which enforcement might be sought.  Thus, whenever possible, each provision
or restriction of this Agreement shall be interpreted in such manner as to
be effective under applicable law.  If any section or portion of this
Agreement or the application thereof to any party or circumstance shall be
prohibited by or invalid under applicable law, the invalidity or
unenforceability of that section or portion of this Agreement shall not



                                 -205-



invalidate any other section or portion, nor sha11 it affect the
application of such section or portion to other parties or other
circumstances.  If in any judicial proceeding, a court sha11 refuse to
enforce this Agreement, whether because the time limit is too long or
because the restrictions contained herein are more extensive (whether as to
geographic area, scope of business or otherwise) than is necessary to
protect the business and goodwill of the Company, it is expressly
understood and agreed between the parties hereto that this Agreement is
deemed modified to the extent necessary to permit this Agreement to be
enforced in any such proceedings.

12.  Continuing Obligations.  Employee's obligations pursuant to Sections
7, 8 and 9 of this Agreement and the rights and remedies of the Company
hereunder shall continue in effect beyond the term of this Agreement.

13.  Waiver or Modification.  No waiver or modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be
valid unless in writing and duly executed by the party to be charged
therewith.  Furthermore, no evidence of any modification or waiver shall be
offered or received as evidence in any litigation between the parties
arising out of or affecting this Agreement or the rights or obligations of
any party hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid.  The provisions of this Section may not be waived
except as herein set forth.

14.  Entire Agreement.  This written Agreement contains the sole and entire
agreement between the parties as to the matters contained herein, and
supersedes any and all other agreements between them.  The parties
acknowledge and agree that neither of them has made any representation with
respect to such matters of this Agreement or any representations except as
are specifically set forth herein, and each party acknowledges that he or
it has relied on his or its own judgment in entering into this Agreement
The parties further acknowledge that statements or representations that may
have been heretofore made by either of them to the other are void and of no
effect and that neither of them has relied thereon in connection with his
or its dealing with the other.

15.  Choice of Law.  This Agreement and the performance hereunder and all
suits arid special proceedings hereunder sha11 be construed in accordance
with the laws of the State of Illinois.

16.  Binding Effect of Agreement; Assignment; Merger; Dissolution.  This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their heirs, successors, assigns and legal representatives.
This Agreement shall be construed as a contract for personal services by
Employee to the Company and shall not be assignable by Employee.  In the
event of the sale, merger or consolidation of the Company, Employee agrees
that the Company may assign its rights and obligations hereunder to its
successor or purchaser.


                                  -206-



17.  Notices.  All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand or when mailed by certified
registered mail, return receipt requested, with postage prepaid to their
current address or to such other address as they request in writing.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above.


                             "Company"

                             CLARION PLASTICS TECHNOLOGIES, INC.,
                             an Ohio corporation


                             By: /s/ Robert W. Martin
                                ----------------------------------
                                Robert W. Martin,
                                Chief Financial Officer


                             "Employee"

                              /s/ William Beckman
                             -------------------------------------
                             WILLIAM BECKMAN


                             "Clarion"

                             CLARION TECHNOLOGIES, INC.,
                             a Delaware corporation


                             By:
                                ----------------------------------
                                Jack D. Rutherford,
                                Chairman & Chief Executive Officer












                                  -207-

<EX-21>
                                                               EXHIBIT 21


                    SUBSIDIARIES OF THE REGISTRANT


                                                           State of
                 Name                                    Incorporation
  -----------------------------------                    -------------
  Clarion Plastics Technologies, Inc.                         Ohio
  Clarion Specialty Products, Inc.                            Ohio
  Clarion Sourcing, Inc.                                    Illinois
  Rose & Associates                                         Delaware
  Mito Plastics, Inc.                                       Michigan
  Wamar Products, Inc.                                      Michigan
  Wamar Tool & Machine Co.                                  Michigan
  Double "J" Molding, Inc.                                  Michigan
  Clarion Real Estate LLC                                   Michigan
  201 Lovejoy LLC                                           Michigan
  Clarion-Drake Acquisition, Inc.                           Michigan
































                                  -208-