WORKOUT AGREEMENT
                                -----------------



     This  Agreement,  dated  as of June 1, 2001, is entered into by (1) each of
NATIONAL  MANUFACTURING  TECHNOLOGIES,  INC., a California corporation ("NMTI"),
I-PAC  MANUFACTURING,  INC.,  a  California  corporation  ("Electronics"), I-PAC
PRECISION  MACHINING,  INC.,  a  California  corporation  ("Sheet  Metal"),  and
NATIONAL  METAL TECHNOLOGIES, a California corporation ("NMT" and, together with
Electronics  and  Sheet  Metal,  the  "Borrowers"),  and  (2)  CELTIC  CAPITAL
CORPORATION,  a  California  corporation  ("Celtic").


                                    Recitals
                                    --------

A.     NMTI  and  Celtic  have  entered  into a Loan and Security Agreement
dated  as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement  dated  December  15,  1999,  a  Second Amendment to Loan and Security
Agreement  dated  August  14,  2000,  a  Third  Amendment  to  Loan and Security
Agreement  dated  effective  October 16, 2000 and a Fourth Amendment to Loan and
Security  Agreement  dated  effective  March  5,  2001.

B.     Electronics  and  Celtic  have entered into a Loan and Security Agreement
dated  as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement  dated  December  15,  1999,  a  Second Amendment to Loan and Security
Agreement  dated  effective June 9, 2000, a Third Amendment to Loan and Security
Agreement  dated  August  14,  2000,  a  Fourth  Amendment  to Loan and Security
Agreement  dated  effective  October  16, 2000 and a Fifth Amendment to Loan and
Security  Agreement dated effective March 5, 2001 (said Agreement, as so amended
and  as it may hereafter be amended, restated or otherwise modified from time to
time,  herein  called  the  "Electronics  Loan  Agreement").

C.     Sheet  Metal  and  Celtic have entered into a Loan and Security Agreement
dated  as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement  dated  December  15,  1999,  a  Second Amendment to Loan and Security
Agreement  dated  effective June 9, 2000, a Third Amendment to Loan and Security
Agreement  dated  August  14,  2000,  a  Fourth  Amendment  to Loan and Security
Agreement  dated  effective  October  16, 2000 and a Fifth Amendment to Loan and
Security  Agreement dated effective March 5, 2001 (said Agreement, as so amended
and  as it may hereafter be amended, restated or otherwise modified from time to
time,  herein  called  the  "Sheet  Metal  Loan  Agreement").

D.     NMT  and  Celtic have entered into a Loan and Security Agreement dated as
of June 18, 1999, as amended by a First Amendment to Loan and Security Agreement
dated December 15, 1999, a Second Amendment to Loan and Security Agreement dated
effective  June  9, 2000, a Third Amendment to Loan and Security Agreement dated
August  14,  2000,  a  Fourth  Amendment  to  Loan  and Security Agreement dated
effective  October 16, 2000 and a Fifth Amendment to Loan and Security Agreement
dated  effective  March  5,  2001  (said  Agreement, as so amended and as it may
hereafter  be  amended, restated or otherwise modified from time to time, herein
called  the  "NMT  Loan  Agreement").

E.     The  Electronics  Loan  Agreement, the Sheet Metal Loan Agreement and the
NMT  Loan  Agreement  are sometimes referred to herein as the "Loan Agreements."

F.     Each of NMTI, Electronics, Sheet Metal and NMT (the "Credit Parties") has
executed  a  separate  Guaranty  dated  as  of  June 18, 1999 in favor of Celtic
(together  the  "Guaranties"),  whereby  such Credit Party guaranteed all of the
obligations  of  the  other  Credit  Parties  to  Celtic.

G.     It  is the intention of the parties hereto that the Borrowers repay their
indebtedness  to  Celtic under the Loan Agreements pursuant to the terms of this
Agreement  and  the other rights and remedies of Celtic, in order to obviate the
need  for  a  liquidation  or  reorganization  of the Borrowers under the United
States Bankruptcy Code.  Accordingly, the Credit Parties and Celtic hereby agree
as  set  forth  below.


     Section  1.  Acknowledgments.
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       Each  of  the  Credit  Parties hereby acknowledges and agrees as follows:

(a)  the facts set forth above in the recitals to this Agreement are correct and
complete  with  respect  to  the subject matter thereof; (b) each Borrower is in
default  under  its Loan Agreement, pursuant to Sections 10.1.1, 10.1.2, 10.1.3,
10.1.4, 10.1.5, 10.1.7 and 10.1.9 thereof; (c) as of the date of this Agreement,
there  is a principal balance due, owing and unpaid from each Borrower to Celtic
as  set  forth  in  Schedule  1 attached hereto, in addition to accrued interest
thereon and other fees and charges in respect thereof; (d) Celtic has no further
obligation  to advance funds or otherwise extend credit to any Credit Party; (e)
Celtic  has  not waived or agreed to waive any Credit Party's defaults under its
Loan  Agreement  or  Guaranty  or  any  of  the rights and remedies of Celtic in
respect  thereof;  (f) none of the Loan Agreements has been amended or otherwise
modified,  except  as  described in the recitals to this Agreement; (g) the Loan
Agreements,  the  Guaranties  and  the  other  documentation  entered  into  in
connection  therewith  were duly authorized and constitute legal, valid, binding
and  continuing  obligations  of  the  Credit  Parties to Celtic, enforceable in
accordance  with  the  respective  terms  of  such  documentation, except as the
enforceability  thereof  may  be  limited by bankruptcy, insolvency, moratorium,
reorganization  or other similar laws affecting creditors' rights generally; and

(h)  as  of  the  date  of  this  Agreement,  no  Credit  Party  has  any claim,
counterclaim,  cross-claim, right of setoff or defense of any kind that would in
any  way reduce or offset any of such Credit Party's obligations to Celtic under
the  Loan  Agreements, the Guaranties or any other documentation entered into in
connection  therewith.

     Section  2.  Component  Transactions.
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       The  Credit Parties will enter into, and will use commercially reasonable
efforts  to  procure that Comtel Holdings, Inc., a Delaware corporation ("Comtel
Holdings"),  and  Alton Diversified Technologies, Inc., a California corporation
("Alton"),  enter  into, as applicable, each of the transactions described below
(the "Component Transactions") as soon as practicable but in any event not later
than  __________, 2001 (the date on which all of the Component Transactions have
been  entered  into  and, in the case of the Component Transactions described in
Sections  2(a)  and  (e),  consummated  herein  called  the  "Closing  Date").

     (a)     Asset  Purchase  Agreement.
       Electronics,  Sheet  Metal,  Alton  and  NMTI  will  enter  into an Asset
Purchase  Agreement (the "Asset Purchase Agreement") whereby Alton will purchase
from  Electronics  and  Sheet  Metal all of their equipment and inventory for an
aggregate  purchase price of $__________, allocated as follows:  (i) $454,730.00
for  the  equipment  of  Electronics;  (ii)  $__________  for  the  inventory of
Electronics;  (iii)  $1,546,900.00  for  the  equipment of Sheet Metal; and (iv)
$__________  for  the  inventory  of  Sheet  Metal.

     (b)     Equipment  Notes.
       Alton  will  execute (i) a promissory note in favor of Electronics in the
principal  amount  of  $454,730.00 (the "Electronics Equipment Note") and (ii) a
promissory note in favor of Sheet Metal in the principal amount of $1,546,900.00
(the  "Sheet Metal Equipment Note").  Each of the Electronics Equipment Note and
the  Sheet  Metal Equipment Note shall bear interest at the rate of interest per
annum  announced  by Wells Fargo Bank, N.A. at its head office in San Francisco,
California  from  time  to time as its "prime rate" or "reference rate" plus one
and  one-quarter  percent  (1.25%)  per  annum,  shall  provide for repayment of
principal  in  36  substantially  equal  monthly  installments,  commencing  on
September  3, 2001, and shall otherwise be in form and substance satisfactory to
Celtic.

     (c)     Inventory  Notes.
       Alton  will  execute (i) a promissory note in favor of Electronics in the
principal  amount  of  $__________ (the "Electronics Inventory Note") and (ii) a
promissory  note  in favor of Sheet Metal in the principal amount of $__________
(the  "Sheet Metal Inventory Note").  Each of the Electronics Inventory Note and
the  Sheet  Metal Inventory Note shall bear interest at the rate of interest per
annum  announced  by Wells Fargo Bank, N.A. at its head office in San Francisco,
California  from  time  to time as its "prime rate" or "reference rate" plus one
and  one-quarter  percent  (1.25%)  per  annum,  shall  provide for repayment of
principal in monthly installments, commencing on ________ and ending on _______,
and  shall  otherwise  be  in  form  and  substance  satisfactory  to  Celtic.

     (d)     Equipment  Security  Agreement.
       Alton will execute a security agreement in favor of Electronics and Sheet
Metal,  in  form  and  substance satisfactory to Celtic (the "Equipment Security
Agreement"),  encumbering  the equipment purchased by Alton from Electronics and
Sheet  Metal  and  securing  the  Electronics Equipment Note and the Sheet Metal
Equipment  Note.

     (e)     Landlord  Agreements.
       Cabot  Industrial  Properties,  L.P.,  a  Delaware  limited  partnership
("Cabot"),  Alton  and  Electronics  will execute an agreement (the "Electronics
Landlord  Agreement")  substantially  in  the form of the Landlord's Consent and
Waiver  dated  as  of  August  23, 1999 among Cabot, Electronics and Celtic; and
Square  One  Development  Corporation,  a California corporation ("Square One"),
Alton  and  Sheet  Metal  will  execute  an agreement (the "Sheet Metal Landlord
Agreement") substantially in the form of the Agreement with Landlord dated as of
August  16,  2000  among  Square  One,  Sheet  Metal  and  Celtic.

     (f)     Assignments  to  Celtic.
  Electronics  will  irrevocably  assign  to  Celtic,  on  terms  and conditions
satisfactory  to  Celtic  and  with  the  consent  of  Alton  and  Cabot, all of
Electronics' right, title and interest in and to the Electronics Equipment Note,
the  Electronics  Inventory  Note,  the  Equipment  Security  Agreement  and the
Electronics  Landlord  Agreement,  and  Sheet  Metal  will irrevocably assign to
Celtic,  on  terms and conditions satisfactory to Celtic and with the consent of
Alton  and  Square One, all of Sheet Metal's right, title and interest in and to
the  Sheet  Metal  Equipment Note, the Sheet Metal Inventory Note, the Equipment
Security  Agreement  and  the  Sheet  Metal Landlord Agreement (such assignments
herein  called  the  "Celtic  Assignments").

     (g)     Agreement  to  Pursue  Receivables.
       Each  of  NMTI,  Electronics, Sheet Metal, NMT, Comtel Holdings and Alton
will  enter  into  a  letter agreement in favor of Celtic, in form and substance
satisfactory  to  Celtic,  whereby  NMTI,  Electronics, Sheet Metal, NMT, Comtel
Holdings  and  Alton  will  agree  to  act  in  good  faith and use commercially
reasonable  efforts  (but  without incurring material cost or expense) to assist
Celtic  in pursuing the payment of the accounts receivable of Electronics, Sheet
Metal  and  NMT  (the  "Receivables  Letter  Agreement").

     (h)     NMT  Auction.
       Pursuant  to  documentation in form and substance satisfactory to Celtic,
NMT  will  enter  into an agreement with an auctioneer acceptable to Celtic (the
"Auction  Agreement")  to  sell  all of the equipment of NMT at an auction to be
held  not  later than October 31, 2001; provided, however, that NMT shall not be
required  to  proceed with such auction if, on or before September 30, 2001, the
Credit  Parties  have paid Celtic at least $4,000,000 in principal amount of the
indebtedness  to Celtic under the Loan Agreements, together with all accrued and
unpaid  interest  thereon;  further  provided,  however,  that  NMT will proceed
immediately  with such auction, regardless of the date, if NMT fails at any time
to make a payment of rent when due under its lease dated as of December 18, 1998
with  Touchstone Calle Platino LLC, a California limited liability company, with
respect to the real property commonly known as 4040 Calle Platino in the City of
Oceanside,  County  of  San  Diego,  State  of  California.

     Section  3.  Debt  Repayment.
       In  consideration  of the Credit Parties' entering into and consummating,
and  procuring  Alton's and Comtel Holdings' entering into and consummating, the
Component Transactions as described in Section 2, Celtic will (a) consent to the
sale  of  the  equipment  and  inventory of Electronics and Sheet Metal to Alton
pursuant  to  the  Asset  Purchase  Agreement,  such  consent to be evidenced by
Celtic's  execution  of  UCC  releases  with  respect  to  its existing security
interest  in  such  equipment  and  inventory,  and  (b)  credit  against  the
indebtedness  of  Electronics  and Sheet Metal to Celtic, on a dollar-for-dollar
basis,  all amounts received by Celtic under the Electronics Equipment Note, the
Sheet  Metal  Equipment  Note,  the  Electronics Inventory Note, the Sheet Metal
Inventory  Note and the Equipment Security Agreement and provide Electronics and
Sheet  Metal  a  monthly  accounting  of  such  payments.  Notwithstanding  the
foregoing,  nothing  in  this  Agreement  shall diminish or alter the rights and
remedies  of  Celtic  to  proceed independently against any or all of the Credit
Parties  for  amounts  unpaid  under  the  Loan  Agreements,  the  Guaranties or
otherwise.  Celtic shall at all times retain the right to exercise all available
remedies  under the Loan Agreements, the Guaranties or otherwise both before and
after  the  Closing  Date.

     Section  4.  Conditions  Precedent.
       It  shall be a condition precedent to the effectiveness of this Agreement
that  the  following documents, in form and substance satisfactory to Celtic, be
delivered  to  Celtic:

     (a)     a  copy  of  the  executed  Asset Purchase Agreement, including all
documents  delivered  by  the parties pursuant thereto, certified by Electronics
and  Sheet  Metal  to  be  correct  and  complete  and in full force and effect;

     (b)     the  originals  of  the Electronics Equipment Note, the Sheet Metal
Equipment  Note,  the  Electronics  Inventory Note and the Sheet Metal Inventory
Note,  each duly executed by Alton and duly endorsed to Celtic by Electronics or
Sheet  Metal,  as  appropriate;

     (c)     originals  of  the  executed  Equipment  Security  Agreement,  the
executed  Electronics  Landlord  Agreement and the executed Sheet Metal Landlord
Agreement,  certified  by Electronics and Sheet Metal to be correct and complete
and  in  full force and effect, together with (i) UCC-1 financing statements for
filing  in  the  State  of  California,  duly  executed  by  Alton  in  favor of
Electronics and Sheet Metal and duly assigned to Celtic by Electronics and Sheet
Metal,  and  (ii)  to  the extent required by Celtic, UCC termination statements
with  respect  to  any  UCC-1  financing  statements  previously  executed  by
Electronics  or Sheet Metal in favor of any Person (other than Celtic) and filed
in  the  State  of  California,  duly  executed  by  such  Person;

     (d)     the  Celtic  Assignments,  duly  executed  by Electronics and Sheet
Metal  and  consented  to  by  Alton,  Cabot  and  Square  One;

     (e)     the  Receivables  Letter  Agreement,  duly  executed  by  NMTI,
Electronics,  Sheet  Metal,  NMT  and  Comtel  Holdings;

     (f)     a copy of the Auction Agreement, certified by NMT to be correct and
complete  and  in  full  force  and  effect;  and

     (g)     such  other  approvals,  opinions, evidence and documents as Celtic
may  reasonably  require.

     Section  5.  Release  of  Claims  Against  Celtic.

     (a)     Terms  of  Release.
       As  additional  consideration  for  Celtic's  performance  under  this
Agreement,  the  Credit  Parties  do, for themselves and their heirs, executors,
administrators,  employees,  representatives,  shareholders,  predecessors,
subsidiaries, affiliates, parents, successors-in-interest, transferees, assigns,
officers,  directors,  managers,  servants,  employees,  insurers, underwriters,
attorneys  and  agents,  now  and  in the future, and for all persons acting by,
through,  under  or  in  concert  with  them,  and each of them, hereby release,
discharge  and  hold harmless Celtic and its respective past, present and future
administrators,  affiliates,  agents,  assigns, attorneys, directors, employees,
executors,  heirs,  officers,  parents, partners, predecessors, representatives,
parents,  shareholders,  subsidiaries  and successors, and each of them, and all
persons  acting  by,  through, under or in concert with one or more of them (the
"Released  Parties"),  from  and  against  any  and  all  liabilities,  claims,
obligations,  counterclaims,  security  arrangements,  controversies,  damages,
judgments,  awards,  actions  and  causes of action whatsoever, whether known or
unknown,  liquidated  or  unliquidated, fixed or contingent, direct or indirect,
that  the  Credit  Parties  ever  had,  now have or claim or could claim to have
arising  out  of,  related  to  or  in  any  way  connected with any of the Loan
Agreements,  any  of  the  Guaranties,  any of the documents, instruments and/or
agreements  executed  in  connection therewith, the existing indebtedness and/or
any  of the Credit Parties' credit relationships with Celtic, from the beginning
of  time  through  and  including  the  Closing  Date  (the "Released Matters").

     (b)     Waiver  of  Civil  Code  Section  1542.
       The  Credit  Parties  understand,  and have been advised by legal counsel
concerning,  the  provisions of Section 1542 of the California Civil Code, which
provides  as  follows:

"A general release does not extend to claims which the creditor does not know or
suspect  to  exist  in  his favor at the time of executing the release, which if
known  by  him  must  have  materially affected his settlement with the debtor."

The  Credit  Parties  understand  and  hereby waive the provisions of California
Civil  Code  Section  1542  and  any  statutory  or  common-law concepts similar
thereto, and they declare that they realize they may have damages they presently
know  nothing  about  and  that such damages have been released pursuant to this
release.  The Credit Parties also declare that they understand that Celtic would
not have agreed to enter into this Agreement if the release provisions contained
in  this  Section  5  did not cover damages and their results, which may not yet
have  manifested  themselves or may be unknown or not anticipated at the present
time.

     (c)     Sole  Ownership.
       The  Credit  Parties represent and warrant that they alone are the owners
of  the  claims released in Section 6(a) above and that they have not heretofore
assigned  or  transferred,  or purported to assign or transfer, to any person or
entity  (each  a  "Person")  any  of  the  Released Matters.  The Credit Parties
further  agree  to  defend,  indemnify  and  hold  harmless Celtic and all other
Released  Parties  from  and  against  all  liability, claims, demands, damages,
costs, expenses and attorneys' fees incurred by them as a result of any Person's
asserting  any  such assignment or transfer of any rights or claims.  The Credit
Parties  also represent and warrant that none of the Released Matters is subject
to  any  purported or actual lien, security interest, encumbrance or contractual
or  other  right  of  any  third  party, and the Credit Parties agree to defend,
indemnify  and  hold  harmless  Celtic  and  all other Released Parties from and
against  all liability, claims, demands, damages, costs, expenses and attorneys'
fees incurred by them as a result of any Person's asserting the existence of any
of  the  foregoing.  This agreement to defend, indemnify and hold harmless shall
survive  termination,  amendment  or  expiration  of  the  Loan  Agreements, the
Guaranties,  this  Agreement,  each  other  document,  contract  and  instrument
heretofore  or  hereafter delivered hereunder or thereunder and any relationship
between  any  of  the  Credit  Parties  and  Celtic.

     Section  6.  Representations  and  Warranties.
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       Each  Credit  Party hereby represents and warrants as set forth below for
the  benefit  of  Celtic.

     (a)     Legal  Authority.
       Such  Credit  Party has taken all legal action necessary to authorize and
approve  the execution, delivery and performance of this Agreement and the other
documentation  contemplated  hereby.  Such  Credit Party has the legal power and
authority to execute this Agreement and perform the Component Transactions.  The
execution,  delivery  and  performance  of  this  Agreement  and  the  other
documentation  contemplated hereby do not require the consent or approval of any
governmental  authority  or other Person[, other than the consent of UPS Capital
Corp. with respect to the Equipment Security Agreement].  This Agreement and the
other  documentation  executed  by  such Credit Party as contemplated hereby are
legal,  valid  and  binding obligations of such Credit Party and are enforceable
against  such  Credit Party in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization  or  other  similar  laws  affecting creditors' rights generally.

     (b)     No  Conflict.
       The  execution,  delivery and performance of this Agreement and the other
documentation  contemplated  hereby do not contravene or conflict with any other
agreement,  indenture,  document, instrument or undertaking to which such Credit
Party  is  a  party or by which such Credit Party or any of the property thereof
may  be  bound  or  affected.

     (c)     Litigation.
       There is no litigation or other proceeding currently pending against such
Credit  Party.

     (d)     Orders.
       Such  Credit  Party  is  not  in default with respect to any order, writ,
injunction,  decree  or  demand  of  any  court or other governmental authority.

     (e)     Contractual  Obligations.
       Such  Credit  Party  is  not  in  default  of or bound by any contractual
obligation  that could reasonably be expected to adversely affect the ability of
such  Credit  Party  to  perform  its  obligations  under  this Agreement or any
documentation  contemplated  hereby.

     (f)     Information.
       No  representation,  warranty,  information  or  report furnished by such
Credit  Party  to  Celtic in connection with this Agreement or any documentation
entered  into  in connection herewith contains any material misstatement of fact
or  omits  to state a material fact or any fact necessary to make the statements
contained  therein, in light of the circumstances in which made, not misleading.

     (g)     Organization.
       Such  Credit  Party is a corporation duly organized, validly existing and
in  good  standing  under  the  laws  of  the State of California and is in good
standing in each jurisdiction in which it is required to qualify to do business.

     (h)     Insolvency.
       The  execution,  delivery and performance of this Agreement and the other
documentation  to  be  entered  into by such Credit Party in connection herewith
will not (i) render such Credit Party insolvent as that term is defined pursuant
to  generally  accepted  accounting  principles  or  render  such  Credit  Party
Insolvent,  as defined below, (ii) leave such Credit Party with remaining assets
that  constitute  unreasonably small capital given the nature of its business or
(iii)  result in the incurrence of Debts (as defined below) by such Credit Party
beyond  such  Credit  Party's  ability  to  pay them when and as they mature and
become  due  and  payable.  For purposes of this Section 6(h), "Insolvent" means
that  the present fair salable value of assets is less than the amount that will
be  required  to  pay  the  probable  liability on existing Debts as they become
absolute  and  matured,  and "Debts" means any legal liability for indebtedness,
whether  matured  or unmatured, liquidated or unliquidated, fixed or contingent,
direct  or  indirect.  Such  Credit  Party  has  derived  or expects to derive a
financial  or  other  benefit or advantage from this Agreement and the Component
Transactions.

     Section  7.  Covenant  to  Pursue  Claim.
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       From  and after the Closing Date, so long as any obligation of any Credit
Party  to  Celtic  under  any  Loan Agreement, any Guaranty or otherwise remains
outstanding  and  unpaid,  NMT  will,  and  NMTI  will  cause NMT to, diligently
prosecute  its  claim  against Alliant Techsystems Inc., a Delaware corporation,
for  payment  for  goods  sold  thereto,  together  with  punitive  damages  as
appropriate  in  connection  therewith,  and  will  promptly  pay  to Celtic all
proceeds  received  from  such  prosecution;  provided,  however, that if, on or
before  June  30,  2001,  the  Credit  Parties  have  not  paid  Celtic at least
$4,000,000  in  principal  amount  of  the indebtedness to Celtic under the Loan
Agreements, together with all accrued and unpaid interest thereon, NMT will, and
NMTI will cause NMT to, execute such documentation and take such other action as
Celtic may require in order to assign to Celtic all of NMT's rights with respect
to  such  claim.

     Section  8.  Miscellaneous  Provisions.
     -----------

     (a)     No  Commitment  for  Future  Extensions.
       Each Credit Party acknowledges that Celtic has made no promise, agreement
or  commitment  to  extend  the  maturity  date  of  any  Borrower's  repayment
obligations  under  its  Loan  Agreement  or  to consider any further workout or
restructure  proposal  made  by  any  Credit  Party.

     (b)     Payment  of  Expenses.
     .  On  the  Closing  Date,  the  Credit  Parties  will  pay  to  Celtic all
reasonable  fees  and  expenses  incurred  by  Celtic  in  connection  with  the
negotiation and documentation of this Agreement, the Component Transactions, and
all agreements and documents contemplated hereby and thereby, including, without
limitation,  reasonable  attorneys'  fees  and  any  other  applicable  fees and
charges.

     (c)     Financial  Reporting.
       The  Credit  Parties  will  continue  to provide financial information to
Celtic  as  required  by  the  Loan  Agreements.

     (d)     Governing  Law.
       THIS  AGREEMENT  AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT  SHALL  BE  GOVERNED  BY,  AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH,  THE  LAWS  OF  THE  STATE  OF CALIFORNIA (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS  OF  LAW).

     (e)     Successors  and  Assigns.
       This Agreement shall be binding on and inure to the benefit of all of the
parties  hereto  and  upon  the  heirs,  executors,  administrators,  legal
representatives, successors and assigns of the parties hereto, and each of them.
The  terms and provisions of this Agreement are for the exclusive benefit of the
Credit  Parties  and  Celtic  and may not be transferred, assigned, pledged, set
over  or  negotiated  to any Person without the prior express written consent of
Celtic.  Notwithstanding any other provisions contained herein, Celtic may sell,
transfer,  negotiate,  assign or grant participations in all or a portion of its
rights under this Agreement, the Component Transactions, the Loan Agreements and
the  Guaranties to any Person without prior notice to any of the Credit Parties.

     (f)     Integration.
       This  Agreement,  together  with  the  other  documentation  contemplated
hereby,  represents  the  entire agreement of the Credit Parties and Celtic with
respect  to  the subject matter hereof, and there are no promises, undertakings,
representations  or  warranties  by Celtic relative to the subject matter hereof
that  are  not  expressly  set  forth  or  referred  to  in the above-referenced
documents.

     (g)     Execution  in  Counterparts.
       This  Agreement  and  the  other documentation contemplated hereby may be
executed  in  counterparts,  each of which shall be deemed to be an original for
all  purposes  hereunder.  Any facsimile signatures shall be treated as original
for all purposes hereof.  All of such counterparts shall together constitute one
and  the  same  instrument.  In  making  proof  of  this Agreement and the other
documentation  contemplated  hereby,  it  shall  not  be necessary to produce or
account  for more than one such counterpart signed by each of the parties hereto
or  a  facsimile  copy  thereof.

     (h)     Headings.
       All headings contained herein are for convenience purposes only and shall
not  be  considered  when  interpreting  this  Agreement.

     (i)     Continuing  Cooperation.
       The Credit Parties and Celtic shall cooperate with each other in carrying
out  the  terms  and  intent  of  this  Agreement  and  the  other documentation
contemplated  hereby and in executing all documents, pleadings and agreements as
are reasonably required to effectuate the terms and intent of this Agreement and
such  other  documentation.

     (j)     Consultation  with  Counsel.
       Each  of the Credit Parties acknowledges that (i) it has been represented
by  counsel of its own choice at each stage in the negotiation of this Agreement
and  the  other  documentation  contemplated  hereby, (ii) it has relied on such
counsel's advice throughout the negotiations that preceded the execution of this
Agreement  and  such  other documentation and in connection with the preparation
and execution of this Agreement and such other documentation, (iii) such counsel
has  read  and  approved  this Agreement and such other documentation, (iv) such
counsel  has advised such Credit Party concerning the validity and effectiveness
of  this  Agreement  and  such  other  documentation, and the transactions to be
consummated  in  accordance herewith and therewith, and (v) such Credit Party is
freely  and  voluntarily  entering  into  this  Agreement  and  such  other
documentation.

<PAGE>
IN  WITNESS  WHEREOF, this Agreement has been duly executed on behalf of each of
the  parties  hereto,  as  of  the  day  and  in  the  year first written above.


NATIONAL  MANUFACTURING  TECHNOLOGIES  INC.


By: /S/ Patrick W. Moore
    ----------------------
Name: Patrick W. Moore
Title: Chief Executive Officer


I-PAC  MANUFACTURING,  INC.


By: /S/ Patrick W. Moore
    ----------------------
Name: Patrick W. Moore
Title: Chief Executive Officer


IPAC  PRECISION  MACHINING,  INC.


By: /S/ Patrick W. Moore
    ----------------------
Name: Patrick W. Moore
Title: Chief Executive Officer


NATIONAL  METAL  TECHNOLOGIES


By: /S/ Patrick W. Moore
    ----------------------
Name: Patrick W. Moore
Title: Chief Executive Officer

CELTIC  CAPITAL  CORPORATION


By:  /S/ Mark Hafner
     --------------
     Mark  Hafner
     President


                                                                      SCHEDULE 1
                                                            to Workout Agreement


                          OUTSTANDING PRINCIPAL AMOUNTS
                          -----------------------------



Borrower                                Loan  Type     Balance
--------                                ----------     -------


I-PAC  Manufacturing,  Inc.             A/R            $2,365,424.19
                                        INV               348,307.85

I-PAC  Precision  Machining,  Inc.     A/R                 43,352.61
                                       INV                 58,122.29
                                       EQ                 766,800.00

National  Metal  Technologies          A/R                611,427.01
                                       INV                 60,980.16
                                       EQ                 670,800.00


Total                                                  $4,925,214.11