SUBORDINATION AGREEMENT

     THIS SUBORDINATION AGREEMENT ("Agreement"),  dated as of December 12, 2000,
entered into between Kelly L. Rose and G. Ray Stults (collectively,  "Creditor")
and Foothill Capital Corporation ("Lender").

                               W I T N E S S E T H

     WHEREAS,  Creditor is financially interested in Starcraft  Corporation,  an
Indiana  corporation,  Starcraft Automotive Group, Inc., an Indiana corporation,
Imperial  Automotive Group,  Inc., an Indiana  corporation and National Mobility
Corporation,  an Indiana  corporation (the  "Companies"),  in that Companies are
indebted  to  Creditor  pursuant  to the  terms  of that  certain  Reimbursement
Agreement  executed  by each  Company in favor of  Creditor  (the  "Subordinated
Agreement"), a copy of which is attached hereto as Exhibit A;

     WHEREAS, the obligations of the Companies under the Subordinated  Agreement
are  secured by a security  interest in  substantially  all of the assets of the
Companies  as  described  in the  Security  Agreement  among the  Companies  and
Creditor attached hereto as Exhibit B (the "Security Agreement");

     WHEREAS,  the  Companies  are  indebted  to Lender in  connection  with the
advances of monies and other financial arrangements by Lender to the Companies;

     WHEREAS,  such  advances  of monies and other  financial  arrangements  are
evidenced by various agreements,  instruments and documents,  including, without
limitation,  that certain Loan and Security  Agreement  dated as of December 12,
2000 between Companies and Lender (the "Loan Agreement");

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged by Creditor, Creditor hereby agrees
with Lender as hereinafter set forth.

     1. Standby; Subordination;  Subrogation. Creditor will not ask, demand, sue
for, take or, except as provided in Section 2 below, receive from any Company or
any other  party,  by setoff or in any other manner the whole or any part of any
indebtedness, obligations and liabilities which may now or hereafter be owing by
any  Company,  or any  successor or assign of any  Company,  including,  without
limitation,  a receiver,  trustee or debtor in  possession  (the term  "Company"
hereinafter  shall include any such  successor and assign of such  Company),  to
Creditor (all such  indebtedness,  obligations and liabilities being hereinafter
referred  to as the  "Subordinated  Debt")  unless  and until  all  obligations,
liabilities,  and indebtedness of the Companies to Lender,  whether now existing
or  hereafter  arising  directly  between any  Company  and Lender,  or acquired
outright,  conditionally or as collateral security from another by Lender, shall
have been fully paid and  satisfied in cash with  interest,  including,  without
limitation,   any  interest   accruing  after  the  commencement  of  insolvency
proceedings with respect to any Company, whether or not such interest is allowed
as  a  claim  in  such  proceeding  (all  such  obligations,   indebtedness  and
liabilities  of any  Company  to Lender  being  hereinafter  referred  to as the
"Senior  Debt") and all  financing  arrangements  between any Company and Lender
have been terminated.  All liens and security interests of Creditor, whether now
or hereafter arising and howsoever existing, in any assets of any Company or any
assets  securing  the Senior  Debt shall be and hereby are  subordinated  to the
rights and interests of Lender in those assets  irrespective of whether Lender's
liens  and  security  interests  have  been  perfected,  or the time or order of
attachment or perfection of liens or security  interests,  or the time of filing
or  recording  of  financing  statements,   mortgages  or  other  agreements  or
documents,  or the time of giving or failure to give  notice of  acquisition  of
purchase money or other security interests or liens; Creditor shall not have any
right to possession of any such assets, to notify account debtors of any Company
or to  foreclose  upon or exercise any other right or remedy with respect to any
such assets,  whether by judicial  action or otherwise,  unless and until all of
the  Senior  Debt  shall  have been  fully  paid and  satisfied  in cash and all
financing  arrangements  among the  Companies  and Lender have been  terminated.
Creditor also hereby agrees that the Senior Debt shall include all  obligations,
indebtedness  and  liabilities  of each Company to Lender,  notwithstanding  the
invalidity  or  unenforceability  of all or any part of the Senior Debt,  or any
right or power of any Company or any other  entity or  individual  to assert any
claim  or  defense  as  to  the  invalidity  or  unenforceability  of  any  such
obligation,  indebtedness or liability and no such claim or defense shall affect
or impair the agreements and obligations of Creditor hereunder.

     2.  Amendments.  Each Company and Creditor hereby agree and understand that
the terms of the  Subordinated  Debt,  Subordinated  Agreement  and the Security
Agreement may not be modified or amended without Lender's prior written consent.

     3.  Subordinated  Debt  Owed  Only  to  Creditor.   Creditor  warrants  and
represents that Creditor has not previously assigned or transferred any interest
in  the  Subordinated  Debt,  that  no  other  party  owns  an  interest  in the
Subordinated  Debt other than Creditor and that the entire  Subordinated Debt is
owing only to Creditor and  covenants  that the entire  Subordinated  Debt shall
continue to be owing only to Creditor unless assigned or transferred  subject to
the terms of this  Agreement.  Creditor  will  not,  without  the prior  written
consent of Lender:  (a) cancel,  waive,  forgive,  or  subordinate  to any other
indebtedness  of  any  Company  (other  than  the  Senior  Debt),   any  of  the
Subordinated  Debt or any rights in respect  thereof;  or (b) commence,  or join
with any  other  creditor  in  commencing,  any  bankruptcy,  reorganization  or
insolvency proceedings with respect to any Company.

     4.  Lender  Priority;  Grant of  Authority  to Lender.  In the event of any
distribution,  division  or  application,  partial  or  complete,  voluntary  or
involuntary,  by operation of law or otherwise, of all or any part of the assets
of any Company or the  proceeds  thereof to the  creditors  of the  Companies or
readjustment  of the obligations  and  indebtedness  of any Company,  whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit  of  creditors  or  any  other  action  or   proceeding   involving  the
readjustment of all or any part of the Subordinated  Debt, or the application of
the assets of any Company to the  payment or  liquidation  thereof,  or upon the
dissolution,  liquidation,  cessation  or  other  winding  up of  any  Company's
business,  or upon the sale of all or substantially all of any Company's assets,
then, and in any such event,  (i) Lender shall be entitled to receive payment in
cash in full of any and all of the Senior  Debt then owing  prior to the payment
of all or any part of the Subordinated Debt and (ii) any payment or distribution
of any kind or character,  whether in cash, securities or other property,  which
shall  be  payable  or  deliverable  upon or with  respect  to any or all of the
Subordinated Debt shall be paid or delivered  directly to Lender for application
on any of the Senior  Debt,  due or not due,  until such  Senior Debt shall have
first  been  fully  paid and  satisfied  in cash.  Lender is hereby  irrevocably
authorized  and  empowered,  in its  discretion,  to make and present for and on
behalf of Creditor  such proofs of claim  against each Company on account of the
Subordinated Debt as Lender may deem expedient or proper and to vote such proofs
of claim in any such proceeding and to receive and collect any and all dividends
or other payments or disbursements made thereon in whatever form the same may be
paid or  issued  and to apply the same on  account  of any of the  Senior  Debt.
Creditor irrevocably  authorizes and empowers Lender to demand, sue for, collect
and  receive  each  of  the  aforesaid   payments  and  distributions  and  give
acquaintance  therefor  and to file  claims  and take  such  other  actions,  in
Lender's  own name or in the name of Creditor or  otherwise,  as Lender may deem
necessary or advisable for the enforcement of this Agreement;  and Creditor will
execute and deliver to Lender such  powers of  attorney,  assignments  and other
instruments or documents,  including  notes  (together with such  assignments or
endorsements  as Lender shall deem necessary or appropriate) as may be requested
by Lender in order to enable  Lender to enforce  any and all claims upon or with
respect to any or all of the  Subordinated  Debt and to collect  and receive any
and all payments and  distributions  which may be payable or  deliverable at any
time  upon or with  respect  to the  Subordinated  Debt,  all for  Lender's  own
benefit. Following payment in full of the Senior Debt in cash, Lender will remit
to Creditor,  to the extent of  Creditor's  interest  therein,  all dividends or
other  payments  or  distributions  paid to and held by  Lender in excess of the
Senior Debt.

     5.  Payments  Received  by  Creditor.  Should  any  payment,  distribution,
security or instrument, or any proceeds thereof, be received by Creditor upon or
with respect to the  Subordinated  Debt prior to the  satisfaction of all of the
Senior Debt in cash and  termination  of all  financing  arrangements  among the
Companies  and Lender,  Creditor  shall  receive and hold the same in trust,  as
trustee,  for the  benefit of Lender  and shall  forthwith  deliver  the same to
Lender in precisely the form received  (except for the endorsement or assignment
by Creditor where necessary),  for application on any of the Senior Debt, due or
not due, and, until so delivered, the same shall be held in trust by Creditor as
the property of Lender. In the event of the failure of Creditor to make any such
endorsement  or  assignment  to  Lender,  Lender,  or  any of  its  officers  or
employees, is hereby irrevocably authorized to make the same.

     6. Instrument Legend;  Amendments. Any instrument or certificate evidencing
any of the Subordinated  Debt, or any portion thereof,  will be inscribed with a
legend  conspicuously  indicating  that payment  thereof is  subordinated to the
claims of Lender  pursuant to the terms of this  Agreement,  and a copy  thereof
will be delivered to Lender. Any instrument or certificate evidencing any of the
Subordinated  Debt, or any portion thereof,  which is hereafter  executed by any
Company will, on the date thereof,  be inscribed with the aforesaid legend and a
copy thereof will be delivered to Lender on the date of its  execution or within
five (5) business days thereafter and the original  thereof will be delivered as
and when described hereinabove.

     7. Continuing Nature of Subordination; Subrogation. This Agreement shall be
irrevocable and shall continue to be effective  (notwithstanding the insolvency,
liquidation or dissolution of any Company) until the Senior Debt shall have been
paid in cash in full and all  financing  arrangements  among  each  Company  and
Lender have been terminated. This is a continuing agreement of subordination and
Lender may  continue,  at any time and  without  notice to  Creditor,  to extend
credit or other financial  accommodations  and loan monies to or for the benefit
of each  Company  on the faith  hereof.  This  Agreement  shall  continue  to be
effective  or be  reinstated,  as the case may be, if at any time any payment of
any of the Senior Debt is rescinded or must  otherwise be returned by any holder
of Senior Debt,  all as though such payment had not been made.  Upon the payment
in full in cash of all Senior Debt and termination of all financing arrangements
among the  Companies and Lender,  Creditor  shall be subrogated to the extent of
the payments or distributions  made to Lender,  or otherwise  applied to payment
of, the Senior Debt pursuant to the provisions of this Agreement.

     8. Additional  Agreements  Among  Companies and Lender.  Lender may, at any
time  and from  time to time,  without  notice  to  Creditor,  enter  into  such
agreement or agreements  with each Company as Lender may deem proper,  extending
the time of payment of or renewing or otherwise altering, amending, modifying or
supplementing the terms of the Loan Agreement, other agreements, instruments and
documents  evidencing  the  Senior  Debt  or all or any of the  Senior  Debt  or
affecting  the  collateral or any guaranty  underlying  any or all of the Senior
Debt, and may exchange, sell, release, surrender or otherwise deal with any such
security or guaranties,  without in any way thereby  impairing or affecting this
Agreement.

     9.  Creditor's  Waivers.  Creditor  expressly  waives all notice of (i) the
existence  or creation or  non-payment  of all or any portion of the Senior Debt
and (ii) the acceptance by Lender of the  subordination  and other provisions of
this  Agreement and all the notices not  specifically  required  pursuant to the
terms of this Agreement  whatsoever and Creditor  expressly  waives  reliance by
Lender upon the  subordination  and other  agreements as herein  provided.  This
Agreement  shall remain valid and effective and the provisions of this Agreement
shall apply to Creditor and Lender regardless of the validity, enforceability or
priority  of the Senior Debt or any liens  securing  the Senior  Debt.  Creditor
agrees that Lender has made no warranties or representations with respect to the
due execution,  legality,  validity,  completeness or enforceability of the Loan
Agreement,  or the  collectibility  of the Senior  Debt,  that  Lender  shall be
entitled to manage and supervise its  financial  arrangements  with each Company
without  affecting the validity or  enforceability of this Agreement and without
regard to the existence of any rights that Creditor may now or hereafter have in
or to any of the assets of each Company, and that Lender shall have no liability
to Creditor for, and waives any claim which  Creditor may now or hereafter  have
against,  Lender  arising out of (i) any and all actions  which  Lender takes or
omits to take  (including,  without  limitation,  actions  with  respect  to the
creation,  perfection  or  continuation  of liens or security  interests  in any
existing or future  collateral for the Senior Debt (the  "Collateral"),  actions
with  respect to the  occurrence  of an Event of Default (as defined in the Loan
Agreement),  actions with respect to the foreclosure  upon,  sale,  release,  or
depreciation  of, or failure to realize upon,  any of the Collateral and actions
with  respect to the  collection  of any claim for all or any part of the Senior
Debt from any account debtor,  guarantor or any other party) with respect to the
Loan Agreement or any other  agreement  related  thereto or to the collection of
the Senior Debt or the valuation,  use, protection or release of the Collateral,
(ii) Lender's election,  in any proceeding  instituted under Chapter 11 of Title
11 of the  United  States  Code (11 U.S.C.  ss.  101 et seq.)  (the  "Bankruptcy
Code"),  of the application of Section  1111(b)(2) of the Bankruptcy Code and/or
(iii) any use of cash collateral under Section 363 of the Bankruptcy Code or any
borrowing or grant of a security  interest  under Section 364 of the  Bankruptcy
Code by any Company,  as debtor in possession.  In that regard,  Creditor agrees
that (A) if any Company desires to use cash collateral  under Section 363 of the
Bankruptcy  Code and Lender  consent to such use,  Creditor will also consent to
such use without  asserting any objection of any kind (including an objection on
the grounds of failure to provide adequate protection for Creditor's junior lien
on such Collateral), and (B) if any Company desires to obtain credit from Lender
under  Section  364 of the  Bankruptcy  Code to be  secured  by the  Collateral,
Creditor will consent to such credit without asserting any objection of any kind
(including an objection on the grounds of failure to provide adequate protection
for such  Creditor's  junior  lien on such  Collateral).  Without  limiting  the
generality of the foregoing, Creditor waives the right to assert the doctrine of
marshalling with respect to any of the Collateral,  and consents and agrees that
Lender may proceed  against any or all of the Collateral in such order as Lender
shall determine in its sole discretion.

     10. Lender's Waivers. No waiver shall be deemed to be made by Lender of any
of its rights hereunder, unless the same shall be in a writing, and each waiver,
if any,  shall be a waiver only with respect to the specific  instance  involved
and shall in no way impair the rights of Lender or the  obligations  of Creditor
to Lender in any other respect at any other time. No delay on the part of Lender
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by Lender of any right or remedy shall preclude other
or further exercise thereof or the exercise of any other right or remedy.

     11. Information  Concerning Financial Condition of the Companies.  Creditor
hereby  assumes  responsibility  for keeping  itself  informed of the  financial
condition of each Company,  any and all endorsers and any and all  guarantors of
the Senior  Debt  and/or the  Subordinated  Debt and of all other  circumstances
bearing upon the risk of nonpayment of the Senior Debt and/or  Subordinated Debt
that diligent inquiry would reveal, and Creditor hereby agrees that Lender shall
have no duty to advise  Creditor of information  known to Lender  regarding such
condition  or  any  such  circumstances.  In  the  event  Lender,  in  its  sole
discretion,  undertakes,  at any time or from time to time,  to provide any such
information to Creditor,  Lender shall be under no obligation (i) to provide any
such information to Creditor on any subsequent occasion or (ii) to undertake any
investigation  not a part of its regular  business routine and shall be under no
obligation to disclose any information which, pursuant to accepted or reasonable
commercial finance practices,  Lender wishes to maintain confidential.  Creditor
hereby agrees that all payments received by Lender may be applied, reversed, and
reapplied, in whole or in part, to any of the Senior Debt, without affecting the
validity or  enforceability  of this  Agreement  and assents to any extension or
postponement  of  the  time  of  payment  of the  Senior  Debt  or to any  other
indulgence with respect thereto, to any substitution, exchange or release of all
or any of the  Collateral  and to the  addition or release of any other party or
person primarily or secondarily liable therefor.

     12.  No  Offset.  In the  event  Creditor  at any time is  indebted  to any
Company,  Creditor hereby irrevocably agrees that Creditor shall not deduct from
or setoff  against  any  amounts  owing by  Creditor  to any Company any amounts
Creditor claims are due to Creditor with respect to the Subordinated Debt.

     13. GOVERNING LAW; CONSENT TO JURISDICTION;  WAIVERS.  THIS AGREEMENT SHALL
BE DEEMED TO HAVE BEEN MADE IN THE STATE OF ILLINOIS AND SHALL BE INTERPRETED IN
ACCORDANCE WITH THE INTERNAL LAWS OF ILLINOIS AND NOT THE CONFLICT OF LAWS RULES
OF THE STATE OF ILLINOIS  GOVERNING  CONTRACTS TO BE PERFORMED  ENTIRELY  WITHIN
SUCH STATE. CREDITOR HEREBY AGREES TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL  COURT LOCATED  WITHIN THE COUNTY OF COOK,  STATE OF ILLINOIS OR, AT THE
SOLE OPTION OF LENDER,  IN ANY OTHER COURT IN WHICH LENDER SHALL  INITIATE LEGAL
OR EQUITABLE  PROCEEDINGS  AND WHICH HAS SUBJECT  MATTER  JURISDICTION  OVER THE
MATTER IN CONTROVERSY. CREDITOR WAIVES ANY OBJECTION OF FORUM NON CONVENIENS AND
VENUE.  Lender AND creditor  EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON,  ARISING OUT OF, OR IN ANY WAY RELATING TO THIS
AGREEMENT, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

     14.  Section  Titles;  Gender;  No Prejudice of Rights.  The section titles
contained  in this  Agreement  are and shall be without  substantive  meaning or
content of any kind  whatsoever and are not a part of the agreement  between the
parties  hereto.  The  singular  form of any word used in this  Agreement  shall
include the plural  form and the neuter form of any word used in this  Agreement
shall include the masculine and feminine forms, and vice versa. Lender shall not
be prejudiced in its rights under this Agreement by any act or failure to act of
any Company or Creditor,  or any  noncompliance  of any Company or Creditor with
any agreement or  obligation,  regardless of any knowledge  thereof which Lender
may have or with which Lender may be charged;  and no action of Lender permitted
hereunder  shall in any way  affect or  impair  the  rights  of  Lender  and the
obligations of Creditor under this Agreement.

     15.  Notices.  Any  notice  required  hereunder  shall  be in  writing  and
addressed to the party to be notified as follows:

                  If to Lender, at:     Foothill Capital Corporation
                                        2450 Colorado Avenue
                                        Suite 3000 West
                                        Santa Monica, California 90404
                                        Attn: Business Finance Division Manager

                  If to Creditor, at:   2703 College Avenue
                                        Goshen, Indiana 46526
                                        Attn: Kelly Rose

or to such  other  address  as each  party may  designate  for itself by notice.
Notice  shall be deemed to have been duly given (i) if delivered  personally  or
otherwise actually received,  (ii) if sent by overnight delivery service,  (iii)
if mailed by first class United  States mail,  postage  prepaid,  registered  or
certified,  with return  receipt  requested  or (iv) if sent by telex with telex
confirmation  of receipt  (with  duplicate  notice sent by United States mail as
provided  above).  Notice  mailed as  provided  in clause  (iii)  above shall be
effective  upon the  expiration  of three (3) business days after its deposit in
the United  States  mail.  Notice  given in any other  manner  described in this
paragraph  shall be effective upon receipt by the addressee  thereof;  provided,
however,  that if any notice is tendered to an addressee and delivery thereof is
refused by such addressee, such notice shall be effective upon such tender.

     16.  Successors and Assigns.  This Agreement shall be binding upon Creditor
and Creditor's successors and assigns and inure to the benefit of Lender and its
successors and assigns.

     17. Refinancing.  Creditor hereby agrees that any party that refinances the
Senior  Debt  may  rely on and  enforce  this  Agreement  as if it were  Lender.
Creditor  further  hereby agrees that it will,  at the request of Lender,  enter
into an agreement,  in the form  substantially  identical to this Agreement,  to
subordinate  any security  interests or liens it now or hereafter has in or upon
the Collateral,  to the same extent as provided herein, to the party refinancing
all or a portion of the Senior Debt;  provided,  that the failure of Creditor to
execute  such an agreement  shall not affect such  party's  right to rely on and
enforce the terms of this Agreement.


<PAGE>



     IN WITNESS  WHEREOF,  this  Agreement  has been signed as of the date first
above written.

                                  /s/ Kelly L. Rose
                                 -----------------------------------------------
                                 Kelly L. Rose

                                  /s/ S. Ray Stults
                                 -----------------------------------------------
                                 G. Ray Stults

                                 FOOTHILL CAPITAL CORPORATION


                                 By /s/ Michael P. McGinn
                                   ---------------------------------------------
                                 Its  Vice President
                                    --------------------------------------------

<PAGE>



Each of the undersigned  hereby consents to, and acknowledges  receipt of a copy
of,  the  foregoing  Subordination  Agreement  this 12th day of December,  2000,
and agrees  that it will not pay any of the  Subordinated  Debt until the Senior
Debt shall have been paid in full in cash and all financing  arrangements  among
each  Company  and Lender have been  terminated.  In the event of payment by any
Company to Creditor in violation of the foregoing Agreement or such other breach
by any Company of any of the  provisions  herein or of the foregoing  Agreement,
all of the Senior Debt shall, without presentment,  demand, protest or notice of
any kind, at the election of Lender, become immediately due and payable.

                              STARCRAFT AUTOMOTIVE GROUP, INC.


                              By /s/ Michael H. Schoeffler
                                -----------------------------------------------
                              Its   President
                                 ----------------------------------------------


                              NATIONAL MOBILITY CORPORATION


                              By /s/ Michael H. Schoeffler
                                -----------------------------------------------
                              Its  Senior Vice President
                                 ----------------------------------------------


                              IMPERIAL AUTOMOTIVE GROUP, INC.


                              By /s/ Michael H. Schoeffler
                                -----------------------------------------------
                              Its  Senior Vice President
                                 ----------------------------------------------


                              STARCRAFT CORPORATION

                              By /s/ Michael H. Schoeffler
                                -----------------------------------------------
                              Its   President
                                 ----------------------------------------------