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                                                                   EXHIBIT 10.49


            SECOND EXTENSION AGREEMENT FOR AMENDMENT AND FORBEARANCE
                   AGREEMENT DATED JUNE 20, 2001, AS AMENDED

         Second Extension Agreement dated as of December 31, 2001 ("Second
Extension Agreement") for Amendment and Forbearance Agreement dated June 20,
2001 as amended under the Extension Agreement dated as of September 1, 2001 (as
amended, the "Forbearance Agreement") among Standard Federal Bank ("Standard
Federal" or "Lender"), McClain Industries, Inc. ("Industries"), McClain E-Z
Pack, Inc. ("E-Z Pack"), McClain Galion, Inc. ("Galion"), Shelby Steel
Processing Company ("Shelby"), McClain Tube Company d/b/a Quality Tube ("Tube"),
McClain International FSC ("International"), McClain Southland Co.
("Southland"), and McClain Group Leasing, Inc. ("Leasing"). Industries, E-Z
Pack, Galion, Shelby, Tube, International, Southland and Leasing are identified
collectively as the "Borrowers" and individually as a "Borrower"; Industries, in
its capacity as guarantor, is identified as the "Guarantor"; and the Borrowers
and the Guarantor are identified collectively as the "Obligated Parties" and
individually as an "Obligated Party".

                                    RECITALS

         A. The Forbearance Period expired October 31, 2001. Standard Federal
has been forbearing day to day from further efforts to collect the Loans.
Borrowers have requested an extension to January 31, 2002 of the Forbearance
Period to permit Borrowers additional time to stabilize their financial
situation.

         B. Capitalized terms used but not defined in this Agreement have the
same meanings given to those terms in the Forbearance Agreement and the Loan
Documents.

         C. Each Obligated Party reaffirms, ratifies, confirms and approves its
obligations and duties under the Forbearance Agreement and the Loan Documents
(including the Guarantor Loan Documents) as modified by this Extension
Agreement. Future administration of the Obligations and the financing
arrangements among Standard Federal and the Obligated Parties shall continue to
be governed by the covenants, terms and conditions of the Forbearance Agreement
and the Loan Documents, which are ratified and confirmed and are incorporated by
this reference, except to the extent the Forbearance Agreement or the Loan
Documents are superseded, amended, modified or supplemented by this Extension
Agreement or are inconsistent with this Extension Agreement, then this Extension
Agreement will govern.

         D. Other than the Specified Defaults each Obligated Party represents
and warrants, after due inquiry and investigation, that it is not aware of any
other Events of Default or defaults, or of any event that, with the passage of
time, notice, or both, would become an Event of Default or a default under the
Forbearance Agreement, Loan Documents or this Extension Agreement.

         E. Each Obligated Party acknowledges and agrees that (i) Standard
Federal has fully performed all of its obligations under the Forbearance
Agreement and the Loan Documents; (ii) Standard Federal has no obligation to
continue to lend to Borrowers; (iii) Standard Federal has no obligation to
forbear from enforcing its rights and remedies other than as set forth in this
Agreement; (iv) any loans made after the date of this Extension Agreement will
continue to be made in Standard Federal's sole discretion; (v) Standard Federal
has made no representations of



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any nature or kind that funding in any amount will continue; and (vi) Standard
Federal has made no representations of any nature or kind that the Forbearance
Period will again be extended beyond its extended expiration.

         F. Each Obligated Party further acknowledges and agrees that the
actions taken by Standard Federal to date in furtherance of the Forbearance
Agreement and the Loan Documents are reasonable and appropriate under the
circumstances and are within Standard Federal's rights under the Loan Documents
and applicable law.

         G. Each Obligated Party represents and warrants to Standard Federal
that it received direct and substantial economic benefit from all of the
Obligations and that it will continue to receive direct and substantial economic
benefit from the Obligations, and from any other loans made or that may be made
in the future.

         H. Subject to the terms and conditions of this Agreement, and in
reliance on the Obligated Parties' agreements, acknowledgments, representations,
and warranties in the Forbearance Agreement, Standard Federal has agreed to
extend the Forbearance Period as set forth below.

                                    AGREEMENT

         Based on the foregoing Recitals (which are incorporated herein as
agreements, representations, warranties, and covenants of the Obligated
Parties), Standard Federal and each Obligated Party agree as follows:

         1. Forbearance. Subject to the condition that Standard Federal
receives, on or before December 28, 2001, a fully executed copy of this Second
Extension Agreement, acknowledged by each of the Obligated Parties as provided
below, together with fully executed copies of all Exhibits hereto that require
signature, and there being no default under the Forbearance Agreement, Standard
Federal agrees that the Forbearance Period is extended through January 31, 2002.


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         2. Line of Credit Cap. Effective immediately, the Line of Credit Cap
under the Amended and Restated Loan Agreement dated July 9, 1999, as amended,
among Borrowers (all except Leasing) and Lender, is $22,000,000.

         3. Interest. Beginning as of December 4, 2001, interest on the Loans
has accrued at the default rate of Lender's prime rate from time to time in
effect plus two and one-half percentage points (2-1/2%). Interest shall continue
to accrue on the Loans at that default rate.

         4. Inventory Cap. Effective immediately, the cap on the maximum amount
of Qualified Inventory included in the Line of Credit Limit under the Amended
and Restated Loan Agreement dated July 9, 1999, as amended, is reduced from
$15,000,000 to $13,500,000, and shall be further reduced to $12,000,000 as of
December 31, 2001.

         5. Container Sales. Borrowers have delivered to Standard Federal an
e-mail acknowledgment from Waste Management of acceptance by that customer of
Borrowers' invoices for the sale of containers to the customer for a total sale
price of not less than $3,700,000, and on or before December 31, 2001, Borrowers
shall deliver to Bank in the form received payment in full of the foregoing
invoices. Without limitation, failure by Borrowers to deliver timely the payment
shall be a default under this Second Extension Agreement.

         6. Consultant. The consultant previously retained by Borrowers or its
counsel is no longer providing services at the request of Borrowers. The
Borrowers have advised Standard Federal that Borrowers have retained another
business consultant, BBK Ltd., under an engagement letter dated December 17,
2001, a copy of which Borrowers have provided to Standard Federal. That
consultant is agreeable to Standard Federal. The terms of the engagement must
also include a provision that the consultant's reports of its review of the
business of the Borrowers will be made available to the Borrowers and Standard
Federal not later than January 31, 2002.

         7. Leasing Credit Limit. Effective immediately, the definition of
Credit Limit under the Amended and Restated Loan Agreement between Standard
Federal and Leasing dated June 20, 2001 shall mean the lesser of (a) $19,500,000
through January 15, 2002 or $19,000,000 from January 16, 2002 through January
30, 2002, or (b) an amount equal to the Borrowing Base (as defined in that Loan
Agreement).



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         8. Dominion of Funds. Borrowers (all except Leasing) acknowledge and
agree they shall hold in express trust for Standard Federal and immediately
surrender in the form received all of their cash inflows to Standard Federal by
depositing such inflows into account #1054400337 maintained at Standard Federal
("Cash Collateral Account"). One hundred percent of Borrowers' (all except
Leasing) cash inflows will be applied to those Borrowers' Line of Credit Loan.
Subject to maintaining an advisory Line of Credit Limit equal to or greater than
the balance owing on the Line of Credit Loan made available by Standard Federal
to Borrowers (all except Leasing), and provided there are no further defaults
under the terms of the Forbearance Agreement, as amended, and no further
defaults under the Loan Documents, Bank may, in its sole discretion, continue to
advance to those Borrowers under the Line of Credit Loan, in accordance with the
Loan Documents and the Forbearance Agreement, as amended, through January 30,
2002. In the event the balance on the Line of Credit Loan exceeds the then
applicable Line of Credit Limit at any time, no advances will be allowed. Each
borrowing request or accounts receivable collection must be accompanied by a
borrowing base report, in form satisfactory to Standard Federal, with a minimum
of one report per week.

         9. No Further Forbearance Implied. Each Obligated Party acknowledges
that Standard Federal has no obligation to continue making loans; again extend
the term of the Forbearance Period; or forbear from enforcing its rights and
remedies after the Forbearance Period, and nothing contained herein or otherwise
is intended to be or is a promise or agreement to continue making loans; or
extend the term of the Forbearance Period beyond the extended expiration
thereof. Furthermore, no future agreement by Standard Federal to continue making
loans; or to extend the term of the Forbearance Period beyond the expiration
thereof, or any other agreement, is valid or enforceable unless it is contained
in a written agreement signed by Standard Federal.

         10. RELEASE. AS OF THE DATE OF EXECUTION OF THIS SECOND EXTENSION
AGREEMENT BY THE OBLIGATED PARTIES, EACH OBLIGATED PARTY REPRESENTS AND WARRANTS
THAT THEY ARE AWARE OF, AND POSSESS, NO CLAIMS OR CAUSES OF ACTION AGAINST
STANDARD FEDERAL, NATIONAL BANK OF CANADA ("NBC"), FIFTH THIRD BANK, SUCCESSOR
TO OLD KENT BANK BY REASON OF MERGER, ("FIFTH THIRD"), OR NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS ("NCB") (NBC, FIFTH THIRD AND NCB TOGETHER, THE
"PARTICIPANTS") ALL OF WHICH ARE PARTICIPATING BANKS IN THE LOANS TO THE
OBLIGATED PARTIES. NOTWITHSTANDING THIS REPRESENTATION AND AS FURTHER
CONSIDERATION FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, EACH OBLIGATED PARTY
INDIVIDUALLY, JOINTLY, SEVERALLY, AND JOINTLY AND SEVERALLY, IN EVERY CAPACITY,
INCLUDING BUT NOT LIMITED TO, AS SHAREHOLDERS, OFFICERS, PARTNERS, DIRECTORS,
INVESTORS, OR CREDITORS OF ANY ONE OR MORE OF THE OBLIGATED PARTIES, EACH OF ITS
EMPLOYEES, AGENTS, EXECUTORS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES STANDARD
FEDERAL, NBC, FIFTH THIRD AND NCB AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS
FROM ANY LIABILITY, CLAIM, RIGHT OR CAUSE OF ACTION THAT NOW EXISTS, OR
HEREAFTER ARISES, WHETHER KNOWN OR UNKNOWN, ARISING FROM OR IN ANY WAY RELATED
TO FACTS IN EXISTENCE AS OF THE DATE OF EXECUTION OF THIS SECOND EXTENSION
AGREEMENT BY THE OBLIGATED PARTIES. BY WAY OF EXAMPLE AND NOT LIMITATION, THE
FORGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO ACTIONS TAKEN OR OMITTED TO
BE TAKEN BY STANDARD FEDERAL,



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NBC , FIFTH THIRD, NCB, OR ANY OR ALL OF THEM, UNDER THE LOAN DOCUMENTS, THE
GUARANTOR LOAN DOCUMENTS, THE BUSINESS RELATIONSHIP WITH STANDARD FEDERAL, NBC,
FIFTH THIRD, NCB OR ANY OR ALL OF THEM AND ALL OTHER OBLIGATIONS OF ANY NATURE
OR KIND OF ANY ONE OR MORE OF THE PARTIES, ANY ORAL AGREEMENTS OR UNDERSTANDINGS
(ACTUAL OR ALLEGED), ANY BANKING RELATIONSHIPS THAT ANY ONE OR MORE OF THE
PARTIES HAS OR MAY HAVE HAD WITH STANDARD FEDERAL, NBC, FIFTH THIRD, NCB OR ANY
OR ALL OF THEM AT ANY TIME AND FOR ANY REASON INCLUDING, BUT NOT LIMITED TO,
DEMAND DEPOSIT ACCOUNTS, OR OTHERWISE.

         11. Waiver of jury trial and bond; submission to jurisdiction: and
acknowledgment.

                  (A) 1. Any judicial proceeding against any Obligated Party
         brought by Lender with respect to any term or condition of this Second
         Extension Agreement, the Forbearance Agreement or the Loan Documents,
         or any other present or future agreement between any Obligated Party
         and Lender and/or any other matter of any kind whatsoever may be
         brought by Lender in a court of competent jurisdiction in the State of
         Michigan, United States of America, and the parties each hereby
         irrevocably consents and submits itself to jurisdiction in any such
         court; and, by execution and delivery of this Agreement, each of the
         Obligated Parties and Lender accept for themselves and in connection
         with their respective properties, generally and unconditionally, the
         nonexclusive jurisdiction of the aforesaid courts, and irrevocably
         agree to be bound by any final judgment rendered thereby in connection
         with this agreement, or any other present and future agreement between
         any of the Obligated Parties and Lender and/or any other matter of any
         kind whatsoever.

         2. Each of the Obligated Parties waives personal service of any and all
         process upon it, and consents that all such service of process may be
         made by first-class mail or messenger directed to it at its address set
         forth in the Forbearance Agreement. Each of the parties waives any bond
         or surety or security upon such bond or surety that might, but for this
         waiver, be required of Lender.

         3. Nothing contained in this section affects or limits the right of
         Lender to serve legal process in any other manner permitted by law or
         affects Lender's right to bring any action or proceeding against any
         Obligated Party or their property in the courts of any other
         jurisdiction selected by lender in its sole and absolute discretion.

         4. Any judicial proceeding by any Obligated Party against Lender and/or
         any person or entity related to or affiliated with Lender involving,
         directly or indirectly, any matter or claim in any way arising out of,
         related to or connected with this agreement or any present or future
         agreement between any Obligated Party and Lender and/or any other
         matter of any kind whatsoever, may be brought only in a court located
         in the state of Michigan, county of Oakland (which court shall have
         sole and exclusive jurisdiction to hear such matters).

         5. Each of the Obligated Parties waives any objection to jurisdiction
         and venue of any action instituted hereunder or in connection herewith
         and may not assert any defense based in any way on lack of jurisdiction
         or venue or based upon forum non conveniens.




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                  (B) each Obligated Party acknowledges that (1) it has fully
         read all of this Extension Agreement and has been given the opportunity
         to consult with counsel and other advisors of its choice, and after
         consulting with such counsel or advisors (or having had the opportunity
         to do so), knowingly, voluntarily and without duress, coercion,
         unlawful restraint, intimidation or compulsion, enter into this Second
         Extension Agreement, based upon such advice and counsel (if any) and in
         the exercise of its business judgment, (2) this Second Extension
         Agreement has been entered into in exchange for good and valuable
         consideration, receipt of which the Obligated Party hereto
         acknowledges, (3) it has carefully and completely read all of the terms
         and provisions of this agreement and is not relying on the opinions or
         advice of Lender or its agents or representatives in entering into this
         Second Extension Agreement.

                  (C) the Obligated Parties and Lender acknowledge that the
         right to a trial by jury is a constitutional right, but that the right
         may be waived. Each of the Obligated Parties and Lender each knowingly,
         voluntarily, irrevocably, and after the opportunity to consult with
         their respective counsel, without coercion, waive any and all rights to
         trial by jury of all disputes between them including, without
         limitation, any claims and/or defenses asserted in any judicial
         proceeding described herein. Neither Lender nor any of the Obligated
         Parties will be deemed to have given up this waiver of jury trial
         unless the Obligated Party claiming that this waiver has been
         relinquished has a written instrument signed by the other Obligated
         Parties and Lender stating that this waiver has been given up.

                  (D) the Obligated Parties or Lender may file an original
         counterpart or a copy of this Second Extension Agreement with any court
         as written evidence of the waivers and consents contained herein.

                                             STANDARD FEDERAL BANK


                                             By:________________________________

                                             Its:_______________________________


This Second Extension Agreement is executed by each of the Obligated Parties on
December __, 2001.

McCLAIN INDUSTRIES, INC.                    McCLAIN E-Z PACK, INC.



By: /s/ Mark S. Mikelait                    By: /s/ Mark S. Mikelait
   --------------------------------            ---------------------------------

Its: Treasurer                              Its: Treasurer
   --------------------------------            ---------------------------------



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McCLAIN GALION, INC.                        SHELBY STEEL PROCESSING
                                            COMPANY


By: /s/ Mark S. Mikelait                    By: /s/ Mark S. Mikelait
   --------------------------------            ---------------------------------

Its: Treasurer                              Its: Treasurer
   --------------------------------            ---------------------------------



McCLAIN TUBE COMPANY                        McCLAIN INTERNATIONAL FSC
d/b/a Quality Tube



By: /s/ Mark S. Mikelait                    By: /s/ Mark S. Mikelait
   --------------------------------            ---------------------------------

Its: Treasurer                              Its:
   --------------------------------            ---------------------------------



McCLAIN SOUTHLAND CO.                       McCLAIN GROUP LEASING, INC.

By: /s/ Mark S. Mikelait                    By: /s/ Mark S. Mikelait
   --------------------------------            ---------------------------------

Its: Treasurer                              Its: Treasurer
   --------------------------------            ---------------------------------



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