INTERCREDITOR AGREEMENT



      THIS INTERCREDITOR  AGREEMENT is entered into as of June ____, 1997 by and
among UNITED STATES NATIONAL BANK OF OREGON ("US"),  WELLS FARGO BANK,  NATIONAL
ASSOCIATION ("WF") and the following corporations (each individually referred to
as a  "Borrower"  and all  collectively  referred to as  "Borrowers"):  WILLIAMS
CONTROLS,   INC.  a  Delaware   corporation,   AJAY  SPORTS,  INC.,  a  Delaware
corporation,  LEISURE LIFE,  INC., a Tennessee  corporation,  PALM SPRINGS GOLF,
INC.,  a  Colorado  corporation,   AJAY  LEISURE  PRODUCTS,   INC.,  a  Delaware
corporation,  AGROTEC WILLIAMS,  INC., a Delaware  corporation,  APTEK WILLIAMS,
INC., a Delaware  corporation,  GEOFOCUS,  INC., a Florida  corporation,  HARDEE
WILLIAMS,  INC.,  a  Delaware  corporation,  KENCO/WILLIAMS,  INC.,  a  Delaware
corporation,  NESC  WILLIAMS,  INC.,  a Delaware  corporation,  PREMIER  PLASTIC
TECHNOLOGIES,  INC., a Delaware  corporation,  WACCAMAW WHEEL WILLIAMS,  INC., a
Delaware   corporation,   WILLIAMS   CONTROLS   INDUSTRIES,   INC.,  a  Delaware
corporation, WILLIAMS TECHNOLOGIES, INC., a Delaware corporation, WILLIAMS WORLD
TRADE,  INC.,  a Delaware  corporation,  WILLIAMS  AUTOMOTIVE,  INC., a Delaware
corporation, TECHWOOD WILLIAMS, INC., a Delaware corporation.

                                 RECITALS

      US has advanced certain credit to Borrowers  secured by substantially  all
of Borrowers' personal property.  WF is prepared to advance credit to Borrowers,
some of the proceeds of which will repay Borrowers' existing  obligations to US,
except for the Junior Debt which will remain as an  obligation  of Ajay  Sports,
Inc.  [guaranteed by  _______________________  and secured by the Kenco Assets].
[Except for a security  interest in the Kenco  Assets,] US will have no security
interest or other interest in the assets of any Borrower.

      NOW,  THEREFORE,  in consideration of the mutual covenants and promises of
the parties contained herein, US, WF and Borrowers hereby agree as follows:

      Section 1.  Definitions.

      The following terms shall have the meanings set forth below (with all such
meanings to be equally  applicable  to both the singular and plural forms of the
terms defined):

      "Credit  Agreement" means the Credit Agreement of even date herewith among
WF and Borrowers,  as such  Agreement may be amended or otherwise  modified from
time to time.

      "Default" means an "Event of Default" (as defined in the Credit Agreement)
or an event or condition which with the giving of notice or the passage of time,
or both, would constitute an Event of Default.

      "Investment  Account"  means any account  maintained by US with respect to
any investment property owned by any Borrower.

      "Junior Debt" means the obligations of Ajay Sports, Inc. evidenced
by the Promissory Note attached hereto as Exhibit A [and the obligations
of all Borrowers with respect to the repayment of such indebtedness].

      "Kenco Assets" means all of the assets of Kenco/Williams, Inc., a
Delaware corporation.

      "Lock  Box  Accounts"  means  all  accounts  maintained  by US into  which
remittances  payable to a Borrower,  collections of any account  receivable of a
Borrower or other payments due to a Borrower are deposited,  including,  without
limitation, Account Nos. _____________________ and
---------------------.

      "Senior  Debt" means all of the payment  obligations  of  Borrowers  to WF
pursuant to the Credit Agreement and any refinancing or replacement financing of
any of such obligations.

      "US" means United  States  National Bank of Oregon and any other holder of
all or any part of the Junior Debt.

      "WF" means Wells Fargo Bank, National  Association and any other holder of
all or any part of the Senior Debt.

      "WF Revolver"  means that portion of any revolving  loans  included in the
Senior Debt based on the Kenco Assets.

      "WF Term Loan" means that portion of any term loan  included in the Senior
Debt based on the Kenco Assets.

      "WF Term Loan II" means the  $1,000,000  term loan  defined  in the Credit
Agreement as "Term Loan II."

      Section 2.  Priority of Interests.

      2.1 US  hereby  represents  to WF  that  it has no  security  interest  or
mortgage interest in any of Borrowers' assets,  except for its security interest
in the Kenco Assets. US hereby subordinates any interest it has in the assets of
any of the Borrowers to the interest therein of WF.

      2.2 Until the Senior Debt is paid in full in cash,  US shall not  exercise
any of its enforcement or other rights with respect to the Kenco Assets,  except
for the  filing of such  continuation  statements  as may be  necessary  in US's
judgment to continue  UCC  financing  statements  existing as of the date hereof
perfecting US's interest in the Kenco Assets.

      2.3 Upon the prior consent of WF, Borrowers may sell or otherwise  dispose
of all or any part of the Kenco Assets free and clear of the  interests  therein
of US and WF at any time or times until the Senior Debt is paid in full in cash.

      Section 3.  Repayment of Junior Debt.

      3.1 Except as otherwise provided herein, (a) US shall not ask for, demand,
sue for, take or receive,  and no Borrower shall make, any payment on account of
the Junior Debt, including, without limitation, any payment by way of setoff and
(b) any money or other  property  received by US for  application  on the Junior
Debt  before the Senior Debt is paid in full in cash will be held by US in trust
for WF and promptly upon receipt delivered by US to WF.

      3.2 So long as no Default is continuing, [describe regular interest and/or
principal payments US permitted to receive on Junior Debt].

      3.3 Upon the sale or other  disposition  of any of the Kenco  Assets,  the
proceeds thereof will be applied as follows:

            (i)   first, to the repayment in full of the WF Term Loan;

            (ii)  second, to the repayment in full of the WF Revolver;

            (iii) third, to the repayment in full of the WF Term Loan II;
      and

            (iv)  finally, to the repayment in full of the Junior Debt.

      3.4  Upon  any   distribution   of  the  assets  or  readjustment  of  the
indebtedness  of any Borrower,  whether by reason of  liquidation,  composition,
bankruptcy, arrangement,  receivership,  assignment for the benefit of creditors
or any other action or proceeding  involving the  readjustment  of all or any of
the Junior Debt, or the application of the assets of any Borrower to the payment
or  liquidation  of any of the  Junior  Debt,  WF shall be  entitled  to receive
payment  in full in cash of the Senior  Debt prior to the  payment of any of the
Junior Debt.  Accordingly,  any payment or distribution of assets of one or more
Borrowers of any kind or  character,  whether in cash,  property or  securities,
which  would  otherwise  have  been  made to US but for the  provisions  of this
Section 3.4, shall instead be made by Borrower or Borrowers or by the trustee in
bankruptcy,  receiver,  liquidating trustee, custodian, assignee, agent or other
person making payment or  distribution  of assets of such Borrower or Borrowers,
directly  to WF for  application  to the  payment of all Senior  Debt  remaining
unpaid to the  extent  necessary  to pay all  Senior  Debt in full in cash after
giving effect to any concurrent payment or distribution to or for the benefit of
WF. If,  notwithstanding the foregoing,  US receives any payment or distribution
of assets of one or more  Borrowers,  before all amounts due or to become due on
or in  respect  of all  Senior  Debt has been  paid in full in cash,  then  such
payment or distribution  shall be received in trust for WF and shall be promptly
paid over or delivered by US to WF for  application to the payment of all Senior
Debt remaining unpaid.

      Section 4.  Rights in Furtherance of Subordination.

      4.1 US and each holder of the Junior Debt by its acceptance thereof agrees
not to sell,  assign or  transfer  all or any part of the Junior  Debt while any
Senior Debt  remains  unpaid  unless such sale,  assignment  or transfer is made
expressly subject to the terms of this  Intercreditor  Agreement.  US represents
that no other  subordination  of the  Junior  Debt is in  existence  on the date
hereof  and  agrees  that  the  Junior  Debt  will  not be  subordinated  to any
indebtedness owed to any person other than WF.

      4.2 US and each other holder of the Junior Debt by its acceptance  thereof
consents  and agrees  that all Senior  Debt shall be deemed to have been made or
incurred in reliance upon the  subordination of the Junior Debt pursuant to this
Intercreditor Agreement.

      4.3 Until the Senior  Debt has been paid in full in cash,  US will not (i)
commence  any action or  proceeding  against any  Borrower to recover all or any
part of the Junior  Debt unless WF has  commenced  such an action  against  such
Borrower or (ii) join with any creditor in bringing any  proceeding  against any
Borrower  under Title 11 of the United States Code or any other state or federal
insolvency statute unless WF has joined in bringing such a proceeding.

      4.4 Subject to the payment in full in cash of all Senior Debt, US shall be
subrogated,  to the extent of the payments or distributions  made to WF pursuant
to the provisions of this Agreement, to the rights of WF to receive payments and
distributions  of property  applicable to the Senior Debt until the principal of
and  interest  on the  Junior  Debt  is  paid  in  full.  For  purposes  of such
subrogation, no payment or distribution to WF of cash or property which US would
be entitled to receive but for the provisions of this Agreement, shall, as among
the Borrowers, their creditors (other than WF) and US, be deemed to be a payment
or distribution by any Borrower to or on account of the Senior Debt.

      4.5 US may file such proofs of claim and other  papers or documents as may
be necessary  or  advisable in order to have its claims  allowed in any judicial
proceeding  relative to any Borrower,  its creditors or its property.  If US has
not filed a proof of claim or other necessary  claim in such  proceeding  within
ten business days before the deadline for filing such a claim,  WF may file such
a claim on behalf of US. Until the Senior Debt has been paid in full in cash, US
will not  discharge  all or any portion of the  obligations  of the Borrowers in
respect of the Junior Debt, whether by forgiveness,  receipt of capital stock or
otherwise, without the prior written consent of WF.

      4.6 WF shall be deemed to be the  "holder" of all claims in respect of the
Junior  Debt in any  proceeding  of the type  described  in Section  3.4 (each a
"bankruptcy  proceeding").  To the extent  not deemed to be "not in good  faith"
within the meaning of 11 U.S.C.  ss.1126(e),  US agrees to vote to accept a plan
of  reorganization  or dissolution in respect of one or more Borrowers  which WF
has accepted or has notified US of its intent to accept.  If such  acceptance by
US would not be in good faith pursuant to 11 U.S.C. ss.1126(e), US agrees not to
vote against a plan of  reorganization  or dissolution  which WF has accepted or
has notified US of its intent to accept.  The foregoing  shall be enforceable by
WF against US regardless of whether such plan allows a class subordinated to the
claims of the Junior  Debt to retain an  interest  in one or more  Borrowers  or
whether US will  receive  or retain  under such plan on account of its claims in
respect of the Junior Debt  property  having  value less than the amount that US
would receive or retain if the bankruptcy proceeding were under Chapter 7 of the
Bankruptcy Code.

      Section 5. Lock Boxes.  On each business  day, US shall  transfer to WF by
wire  transfer in  accordance  with WF's wire  instructions  amount equal to the
ledger  balance  in the Lock Box  Accounts.  The Lock Box  Accounts  will not be
subject to deduction,  setoff,  banker's lien or any other  similar  right.  All
service charges and other expenses for the  establishment and maintenance of the
Lock Box Accounts and for US's services in connection therewith shall be charged
by US directly to
-----------------------.

      Section 6.  Indemnification.  WF shall indemnify and hold US harmless from
and against and will promptly  reimburse US for any  liability,  loss or expense
arising out of the dishonor of, or failure of US to collect,  any check or other
instrument  delivered to US constituting part of the collections  credited by US
to Borrowers'  accounts in connection with the payoff of Borrowers'  obligations
(other than the Junior Debt)  contemporaneously  with the execution by Borrowers
of the  Credit  Agreement  and with  respect  to any  check or other  instrument
deposited  into the Lock Box Accounts and  constituting  any part of the amounts
wire transferred to WF pursuant to Section 5 above,  provided US gives WF notice
of each such event within 30 days after the occurrence thereof.

      Section 7. Investment Account.  From time to time, Borrowers deposit funds
with US in the Investment  Account.  Borrower has granted WF a security interest
in all of Borrowers'  investment property,  including,  without limitation,  all
amounts deposited in the Investment  Account.  In order to perfect WF's interest
in the Investment  Account, US hereby agrees that it will comply with all orders
and directions given to it by WF with respect to the Investment  Account without
further consent by any Borrower.

      Section 8.  Continuing  Subordination.  This is a continuing  agreement of
subordination  and WF may  continue,  without  notice to US, to extend credit or
other accommodations or benefit and lend monies to or for the account of any one
or more of the Borrowers on the faith hereof,  and may at any time, in WF's sole
discretion, renew or extend the time of payment of all or any existing or future
obligations  of Borrower to US or waive or release any  collateral  which may be
held therefor at any time without in any manner being deemed to have impaired or
affected  WF's  rights  and US's  obligations  hereunder.  US  waives  notice of
acceptance by WF of the subordination and other provisions of this Agreement and
reliance by WF upon the subordination and other agreements set forth herein.

      Section 9.    Miscellaneous.

      9.1 All notices,  requests and demands  which any party is required or may
desire to give to any other party under any provision of this  Agreement must be
in writing delivered to each party at the following address:

      BORROWERS:        Williams Controls, Inc.
                        14100 SW 72nd Avenue
                        Portland, OR  97224
                         Attn: Thomas W. Itin, Chairman
                          Telecopy No.: (248) 851-9080

      US:               United States National Bank of Oregon
                        111 S.W. Fifth Avenue
                        Portland, OR  97204
                       Attn: ____________________________
                       Telecopy No.: ____________________

      WF:               Wells Fargo Bank, National Association
                           Commercial Finance Division
                        245 S. Los Robles Ave., Ste. 600
                               Pasadena, CA 91101
                             Attn: Angelo Samperisi
                          Telecopy No.: (626) 884-9063

or to such other  address as any party may  designate  by written  notice to all
other  parties.  Each such  notice,  request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery,  upon  delivery;  (b) if sent by
mail, upon the earlier of the date of receipt or three days after deposit in the
U.S. mail,  first class and postage prepaid;  and (c) if sent by telecopy,  upon
receipt  and the sender  will  endeavor  to send a hard copy of such  telecopied
notice to the recipient by mail.

      9.2 No delay,  failure or  discontinuance  of US or WF in  exercising  any
right,  power or remedy  hereunder  shall  affect or operate as a waiver of such
right,  power or remedy,  nor shall any single or partial  exercise  of any such
right,  power or remedy  preclude,  waive or otherwise  affect any other further
exercise  thereof or the  exercise  of any other  right,  power or  remedy.  Any
waiver, permit, consent or approval of any kind by either US or WF of any breach
of or  default  under  any  provision  hereof  must be in  writing  and shall be
effective only to the extent set forth in such writing.

      9.3 Any provision of this  Agreement may be amended or waived if, but only
if, such  amendment  or waiver is in writing and is signed by the party  against
whom enforcement is sought.

      9.4 Except as provided in Section 3, the  provisions of this Agreement are
intended solely for the purpose of defining the relative rights of US on the one
hand and WF on the other.  It is the intent of the parties  that this  Agreement
shall constitute a present assignment by US of its rights to receive payments or
distributions  of cash and other  property  of one or more  Borrowers  otherwise
payable  to US in the  circumstances  described  in  Section 3  hereof.  Nothing
contained in this Agreement except as set forth in Section 3 shall (i) impair or
affect,  as among the  Borrowers,  their  creditors  (other than WF) and US, the
obligation of Ajay Sports, Inc., which is absolute and unconditional,  to pay to
US the  principal of and interest on the Junior Debt as such amounts  become due
and  payable in  accordance  with its terms or (ii) affect the  relative  rights
against the Borrowers of US and the creditors of the Borrowers (other than WF).

      9.5 The  provisions of this  Agreement  shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

      9.6 This Agreement  shall be governed by and construed in accordance  with
the laws of the State of Oregon.

      9.7 If legal  action is required  to enforce the terms of this  Agreement,
the prevailing  party shall be entitled to reasonable  attorneys' fees and costs
incurred  therein,  whether incurred at arbitration,  at trial, on appeal,  in a
bankruptcy proceeding or otherwise.

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
executed as of the day and year first written above.


WELLS FARGO BANK, NATIONAL             UNITED STATES NATIONAL BANK OF OREGON
ASSOCIATION
                                       By:
By:
                                     Title:
Title:

WILLIAMS CONTROLS, INC.                AJAY SPORTS, INC.

By:                                    By:
Title:                                 Title:

LEISURE LIFE, INC.                     PALM SPRINGS GOLF, INC.

By:                                    By:
Title:                                 Title:

AJAY LEISURE PRODUCTS, INC.            AGROTEC WILLIAMS, INC.

By:                                    By:
Title:                                 Title:

APTEK WILLIAMS, INC.                   GEOFOCUS, INC.

By:                                    By:
Title:                                 Title:

HARDEE WILLIAMS, INC.                  KENCO/WILLIAMS, INC.

By:                                    By:
Title:                                 Title:

NESC WILLIAMS, INC.                    PREMIER PLASTIC TECHNOLOGIES, INC.

By:                                    By:
Title:                                 Title:

WACCAMAW WHEEL WILLIAMS, INC.          WILLIAMS CONTROLS INDUSTRIES, INC.

By:                                    By:
Title:                                 Title:


<PAGE>

WILLIAMS TECHNOLOGIES, INC.            WILLIAMS WORLD TRADE, INC.

By:                                    By:

Title:                                 Title:


WILLIAMS AUTOMOTIVE, INC.              TECHWOOD WILLIAMS, INC.

By:                                    By:

Title:                                 Title: