Document:

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
                                 ----------------------------------------------WAIVER, CONSENT AND SECOND AMENDMENT TO LOAN AGREEMENT

     THIS WAIVER,  CONSENT AND SECOND  AMENDMENT  (this  "Amendment") is entered
into as of December 12, 2000, among Starcraft Automotive Group, Inc. ("SAG"), an
Indiana   corporation,   National  Mobility   Corporation  ("NMC"),  an  Indiana
corporation,  Starcraft Corporation ("SC"), an Indiana corporation, and Imperial
Automotive Group, Inc. ("IAG"),  an Indiana  corporation,  (SAG, NMC, SC and IAG
are each individually a "Company", and collectively  "Companies"),  and Foothill
Capital Corporation, a California corporation ("Lender").

     WHEREAS,  Companies and Lender are parties to a Loan and Security Agreement
dated as of  November  20,  1998  (as  amended  from  time to  time,  the  "Loan
Agreement"); and

     WHEREAS,  Companies  have requested that Lender (i) waive certain Events of
Default under the Loan Agreement,  (ii) consent to (A) the incurrence by SC of a
loan in an amount not to exceed $1,500,000 in favor of Tecstar,  LLC pursuant to
that certain subordinated note dated December 12, 2000 (the "Subordinated Note")
executed by SC in favor of Tecstar,  LLC (the "Tecstar  Loan") and (B) the grant
by SC to Tecstar,  LLC of a first priority security interest in two and one half
(2.5) units of  Tecstar,  LLC to secure the Tecstar  Loan (the  "Tecstar  Lien")
pursuant to that  certain  pledge  agreement  dated as of December 12, 2000 (the
"Tecstar Pledge  Agreement")  executed by SC in favor of Tecstar,  LLC and (iii)
amend the Loan  Agreement,  and  Lender has agreed to do so subject to the terms
and conditions contained herein;

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

     1. Defined Terms.  Unless otherwise defined herein,  capitalized terms used
herein shall have the meanings ascribed to such terms in the Loan Agreement.

     2. Waivers.  Borrowers  have notified  Lender that  Borrowers have breached
Section  7.20(a) of the Loan  Agreement for the fiscal  quarter ended October 1,
2000 and Section  7.20(b) for the fiscal quarters ended July 2, 2000 and October
1,  2000,  resulting  in  Events of  Default  under  subsection  8.2 of the Loan
Agreement (the "Existing Events of Default").

     In reliance upon the  representations and warranties of Borrowers set forth
in section 7 below and subject to the  satisfaction  of the conditions set forth
in section 6 below,  Lender hereby waives the Existing Events of Default and any
rights and remedies that are available to Lender under the Loan  Agreement,  the
other Loan Documents or applicable law in respect  thereof.  Except as set forth
hereinabove,  the foregoing  waiver shall not constitute  (a) a modification  or
alteration of the terms,  conditions  or covenants of the Loan  Agreement or any
other Loan Document,  (b) a waiver of any other breach of, or any other Event of
Default  under,  the Loan  Agreement or any other Loan Document or (c) a waiver,
release or  limitation  upon the  exercise  by the Lender of any of its  rights,
legal or  equitable,  under the Loan  Agreement,  the other Loan  Documents  and
applicable law, all of which are hereby reserved.

     3. Consent. Subject to the conditions to effectiveness set forth in Section
6 below,  Lender hereby consents to the incurrence by SC of the Tecstar Loan and
the  granting  by SC of the Tecstar  Lien,  provided,  that the Tecstar  Loan is
subordinated to the Obligations on terms and conditions  satisfactory to Lender.
This consent shall not constitute (a) a modification or alteration of the terms,
conditions  or covenants of the Loan  Agreement or any document  entered into in
connection therewith,  or (b) a waiver,  release or limitation upon the exercise
by Lender of any of its rights, legal or equitable,  hereunder, except as to the
matters to which Lender herein expressly  consents.  Except as set forth herein,
Lender  reserves  any and all rights and  remedies  which it has had, has or may
have under the Loan Agreement.

     4.  Amendments  to  Loan  Agreement.  Subject  to the  satisfaction  of the
conditions  set forth in Section 6 hereof,  the Loan Agreement is hereby amended
as follows:

     (a) The definition of the term "Change of Control" contained in Section 1.1
of the Loan  Agreement  is hereby  amended  and  restated  in its  entirety,  as
follows:

                  "Change of Control"  shall be deemed to have  occurred at such
         time as (i) a "person" or "group,  other than Kelly  Rose"  (within the
         meaning of Sections 13(d) and 14(d)(2) of the  Securities  Exchange Act
         of 1934),  excluding  Kelly Rose,  becomes the  "beneficial  owner" (as
         defined  in Rule  13d-3  under the  Securities  Exchange  Act of 1934),
         directly or  indirectly,  of more than 20% of the total voting power of
         all classes of stock then  outstanding of any Company  entitled to vote
         in the election of directors; or (ii) a "person" or "group" (within the
         meaning of Sections 13(d) and 14(d)(2) of the  Securities  Exchange Act
         of 1934) which includes Kelly Rose becomes the  "beneficial  owner" (as
         defined  in Rule  13d-3  under the  Securities  Exchange  Act of 1934),
         directly or  indirectly,  of more than 49% of the total voting power of
         all classes of stock then  outstanding of any Company  entitled to vote
         in the election of directors.

     (b) A new definition of the term  "Collateral  Letters of Credit" is hereby
inserted into Section 1.1 of the Loan Agreement, in the appropriate alphabetical
order, as follows:

                  "Collateral  Letters of Credit" means those certain letters of
         credit,  each in the face  amount of not less than  $750,000  issued in
         favor of Lender by an issuer  satisfactory to Lender,  substantially in
         the form of Exhibit L-1.

     (c) The  definition  of the term  "EBITDA"  contained in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety, as follows:

                  "EBITDA" means, for any period, the consolidated net income of
         SC (including Tecstar, LLC) for such period (exclusive of extraordinary
         gains and losses), plus interest,  taxes, depreciation and amortization
         deducted in determining such net income for such period.

     (d) The  definition of the term  "Maximum  Revolving  Amount"  contained in
Section  1.1 of the  Loan  Agreement  is  hereby  amended  and  restated  in its
entirety, as follows:

                  "Maximum   Revolving   Amount"  means   $14,000,000  less  the
         outstanding principal amount of the Term Loan.

     (e) The  definition  of the term  "Tecstar  Loan  Agreement"  contained  in
Section  1.1 of the  Loan  Agreement  is  hereby  amended  and  restated  in its
entirety, as follows:

                  "Tecstar Loan Agreement"  means that certain Loan and Security
         Agreement  dated as of  December  12,  2000  between  Tecstar,  LLC and
         Foothill.

     (f) Section  2.1(a) of the Loan Agreement is hereby amended and restated in
its entirety, as follows:

               (a)  Subject  to the  terms  and  conditions  of this  Agreement,
          Foothill  agrees to make  advances  ("Advances")  to  Borrowers  in an
          amount outstanding not to exceed at any one time the lesser of (i) the
          Maximum  Revolving Amount less the outstanding  balance of all undrawn
          or unreimbursed Letters of Credit, or (ii) the Borrowing Base less (A)
          the aggregate amount of all undrawn or unreimbursed Letters of Credit.
          For purposes of this  Agreement,  "Borrowing  Base", as of any date of
          determination, shall mean the result of:

                    (v) the lesser of (i) 85% of Eligible Accounts of Borrowers,
               less the amount,  if any, of the  Dilution  Reserve,  and (ii) an
               amount equal to Borrowers'  Collections  with respect to Accounts
               of Borrowers for the immediately preceding 60 day period, plus

                    (w) the lower of (i) $6,000,000, and (ii) the sum of (A) the
               lower  of  (1)  75%  of  the  value  of  the  Eligible  Inventory
               consisting   of  uncut  chassis  owned  by  a  Borrower  and  (2)
               $3,000,000,  and (B) the  lower  of (1) 75% of the  value  of the
               Eligible  Inventory  consisting of finished goods, and (2) 80% of
               the orderly  liquidation value (as determined by an appraiser and
               an appraisal methodology  acceptable to Foothill) of the Eligible
               Inventory consisting of finished goods, plus

                    (x) the lowest of (i) $3,000,000, (ii) the sum of 35% of the
               value of the Eligible  Inventory  consisting of raw materials and
               10% of the Additional Raw Material Availability Amount, and (iii)
               80%  of  the  orderly  liquidation  value  (as  determined  by an
               appraiser and an appraisal methodology acceptable to Foothill) of
               the Eligible Inventory consisting of raw materials, plus

                    (y) the  aggregate  undrawn  face  amount of the  Collateral
               Letters of Credit not to exceed $1,500,000, minus

                    (z) the aggregate amount of reserves, if any, established by
               Foothill under Section 2.1(b);

         provided,  that the aggregate  Advances  outstanding  predicated on the
         availability  described  in clauses  (w) and (x) above shall not exceed
         160% of the amount of  availability  created  under clause (v) above at
         any time.

     (g) A new Section 2.1(e) is added to the Loan Agreement as follows:

               (e) Foothill may draw upon the Collateral  Letters of Credit upon
          the  earlier of (A) the  occurrence  of an Event of Default and (B) at
          any  time  within  60 days of the  expiration  date of the  Collateral
          Letters of Credit.  All proceeds in respect of the Collateral  Letters
          of Credit may be applied by Foothill to the  Obligations in such order
          and manner as Foothill  shall elect.  At the request of the Borrowers,
          Foothill  shall return the  Collateral  Letters of Credit to Borrowers
          provided,  that (A) no  Event of  Default  exists  or would be  caused
          thereby and (B) after the return of the Collateral  Letters of Credit,
          Excess Availability shall be not less than $500,000.

     (h)  Section  2.6(d)  of the Loan  Agreement  is hereby  amended  to delete
reference to "7%" in the first sentence  thereof,  and to substitute  therefor a
reference to "6%."

     (i) Section 3.4 of the Loan Agreement is hereby amended and restated in its
entirety, as follows:

          3.4  Term; Automatic Renewal.

                           This  Agreement  shall  become   effective  upon  the
         execution  and  delivery  hereof by  Borrowers  and  Foothill and shall
         continue  in full force and  effect for a term  ending on the date (the
         "Renewal   Date")  that  is  five  years  from  the  Closing  Date  and
         automatically   shall  be  renewed  for  successive  one  year  periods
         thereafter,  unless  sooner  terminated  pursuant to the terms  hereof.
         Either Borrowers or Foothill may terminate this Agreement  effective on
         the Renewal Date or on any one year  anniversary of the Renewal Date by
         giving  the  other  parties  at least  90 days  prior  written  notice;
         provided,  that  Borrowers  may not  terminate  this  Agreement  unless
         contemporaneously  therewith the Tecstar Loan  Agreement is terminated.
         The  foregoing  notwithstanding,  Foothill  shall  have  the  right  to
         terminate its obligations under this Agreement  immediately and without
         notice upon the occurrence and during the  continuation  of an Event of
         Default.

     (j) Section 3.6 of the Loan Agreement is hereby amended and restated in its
entirety, as follows:

          3.6  Early Termination by Borrowers.

               The  provisions  of Section  3.4 that allow  termination  of this
          Agreement  by   Borrowers   only  on  the  Renewal  Date  and  certain
          anniversaries thereof  notwithstanding,  Borrowers have the option, at
          any time upon 90 days prior written  notice to Foothill,  to terminate
          this  Agreement  by  paying  to  Foothill,  in cash,  the  Obligations
          (including  an  amount  equal  to 102% of the  undrawn  amount  of the
          Letters of  Credit),  in full,  together  with a premium  (the  "Early
          Termination  Premium")  equal to (a) 2% of the Maximum  Amount if such
          termination  occurs on or before  the fourth  anniversary  of the date
          hereof,  and (b) 1% of the Maximum Amount if such  termination  occurs
          after the fourth  anniversary  of the date hereof but on or before the
          fifth anniversary of the date hereof or 1% after the fifth anniversary
          of the date hereof but before the end of any renewal term.

     (k) The first  sentence  of Section  5.12 of the Loan  Agreement  is hereby
amended and restated in its entirety, as follows:

          Each Company (other than IAG and NMC) is Solvent.

     (l) Section 7.20 of the Loan  Agreement  is hereby  amended and restated in
its entirety, as follows:

     7.20 Financial Covenants.

          Fail to maintain:

          (A)  Tangible  Net Worth.  Tangible Net Worth of at least (i) negative
     $3,200,000  as of the last day of the fiscal  quarter  ending on the Sunday
     closest to December 31, 2000,  (ii) negative  $1,500,000 as of the last day
     of the fiscal quarter ending on the Sunday closest to March 31, 2001, (iii)
     $600,000  as of the last day of the  fiscal  quarter  ending on the  Sunday
     closest to June 30,  2001,  and (iv)  $1,200,000  as of the last day of the
     fiscal quarter ending on the Sunday closest to September 30, 2001. For each
     fiscal  quarter  ending  after the Sunday  closest to  September  30, 2001,
     Companies shall maintain  Tangible Net Worth at a level to be determined by
     Foothill,  which level will be based on Companies'  projections  (but in no
     event will Tangible Net Worth as of the last day of any such fiscal quarter
     be less than $1,200,000);

          (B) EBITDA.  EBITDA of at least (i)  negative  $500,000 for the fiscal
     quarter ending on the Sunday closest to December 31, 2000;  (ii) $2,400,000
     for the  fiscal  quarter  ending on the Sunday  closest to March 31,  2001;
     (iii)  $2,900,000  for the fiscal  quarter  ending on the Sunday closest to
     June 30, 2001;  and (iv)  $1,300,000  for the fiscal  quarter ending on the
     Sunday  closest to September 30, 2001. For each fiscal quarter ending after
     the Sunday closest to September 30, 2001,  Companies  shall maintain EBITDA
     at a level to be  determined  by  Foothill,  which  level  will be based on
     Companies' projections (but in no event shall EBITDA for any fiscal quarter
     be less than the  level of EBITDA  required  for the  corresponding  fiscal
     quarter in the immediate preceding fiscal year).

     Companies  agree to deliver to  Foothill  projections  for each fiscal year
     prior to the beginning of such fiscal year and such projections shall be in
     form and substance acceptable to Foothill.

     (m) The Loan  Agreement is hereby amended by adding Exhibit L-1 in the form
attached hereto.

     5. Ratification.  This Amendment, subject to satisfaction of the conditions
provided below, shall constitute  amendment to the Loan Agreement and all of the
Loan Documents as appropriate to express the agreements contained herein. In all
other respects, the Loan Agreement and the Loan Documents shall remain unchanged
and in full force and effect in accordance with their original terms.

     6. Condition to Effectiveness.  Subject to Section 7 below, the consent and
amendments  to the Loan  Agreement  set  forth in this  Amendment  shall  become
effective  as of the date of this  Amendment  and upon the  satisfaction  of the
following conditions precedent in form and substance satisfactory to Lender:

          (a)  Amendment.   Execution  by  the  Companies  and  Lender  of  this
               Amendment and delivery thereof to Lender;

          (b)  Letter of Credit. The issuance of the Collateral Letter of Credit
               in favor of Lender;

          (c)  Tecstar  Loan.  Evidence of receipt by SC of the  proceeds of the
               Tecstar Loan together  with delivery to Lender of fully  executed
               copies of the Subordinated Note and Tecstar Pledge Agreement;

          (d)  Subordination  Agreement.  The execution and delivery by Tecstar,
               LLC and SC of a  subordination  agreement in favor of Lender with
               respect to the Tecstar Loan; and

          (e)  No Default.  No Event of Default or event which,  with the giving
               of notice or the passage of time, or both,  would become an Event
               of Default,  shall have occurred and be  continuing,  and,  after
               giving effect to the  amendments  contained  herein,  no Event of
               Default or event which,  with the giving of notice or the passage
               of time,  or both,  would become an Event of Default,  shall have
               occurred and be continuing.

     7. Miscellaneous.

     (a) Warranties and Absence of Defaults.  In order to induce Lender to enter
into this  Amendment,  each Company  hereby  warrants to Lender,  as of the date
hereof, that:

          (i)  The warranties of each Company  contained in the Loan  Agreement,
               as herein amended,  are true and correct as of the date hereof as
               if made on the date hereof.

          (ii) All  information,  reports and other  papers and data  heretofore
               furnished  to  Lender by each  Company  in  connection  with this
               Amendment,  the Loan  Agreement and the other Loan  Documents are
               accurate  and  correct  in all  material  respects  and  complete
               insofar as may be  necessary  to give  Lender  true and  accurate
               knowledge  of  the  subject  matter  thereof.  Each  Company  has
               disclosed  to Lender  every fact of which it is aware which would
               reasonably  be expected to materially  and  adversely  affect the
               business,  operations  or financial  condition of such Company or
               the ability of such Company to perform its obligations under this
               Amendment,  the Loan  Agreement  or under any of the  other  Loan
               Documents.  None of the information  furnished to Lender by or on
               behalf of each Company  contained  any material  misstatement  of
               fact or omitted to state a material fact or any fact necessary to
               make the  statements  contained  herein or therein not materially
               misleading.

          (iii)No Event of Default or event which,  with giving of notice or the
               passage of time, or both would become an Event of Default, exists
               as of the date hereof.

     (b)  Expenses.  Each Company  agrees to jointly and severally pay on demand
all costs and expenses of Lender  (including the reasonable fees and expenses of
outside  counsel for Lender) in connection  with the  preparation,  negotiation,
execution,   delivery  and  administration  of  this  Amendment  and  all  other
instruments  or  documents  provided  for herein or delivered or to be delivered
hereunder or in connection herewith. In addition, each Company agrees to jointly
and severally pay, and save Lender harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery of
this Amendment or the Loan Agreement,  as amended hereby,  and the execution and
delivery of any instruments or documents  provided for herein or delivered or to
be delivered hereunder or in connection  herewith.  All obligations  provided in
this Section 7 (b) shall survive any  termination of this Amendment and the Loan
Agreement as amended hereby.

     (c)  Governing  Law.  This  Amendment  shall be a  contract  made under and
governed by the internal laws of the State of Illinois.

     (d)  Counterparts.  This  Amendment  may  be  executed  in  any  number  of
counterparts,  and by the parties  hereto on the same or separate  counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same Amendment.

     (e)  Reference to Loan  Agreement.  On and after the  effectiveness  of the
amendment to the Loan Agreement  accomplished hereby, each reference in the Loan
Agreement to "this Agreement,"  "hereunder," "hereof," "herein" or words of like
import, and each reference to the Loan Agreement in any Loan Documents, or other
agreements,  documents or other instruments  executed and delivered  pursuant to
the Loan  Agreement,  shall mean and be a reference  to the Loan  Agreement,  as
amended by this Amendment.

     (f) Successors.  This Amendment shall be binding upon each Company,  Lender
and their respective  successors and assigns,  and shall inure to the benefit of
each Company, Lender and their respective successors and assigns.

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
executed by their respective officers thereunto duly authorized and delivered as
of the date first above written.

                             STARCRAFT AUTOMOTIVE GROUP, INC.,
                             an Indiana corporation

                              By /s/ Richard J. Mullin
                                 -----------------------------------------------
                              Title  Senior Vice President
                                   ---------------------------------------------

                             NATIONAL MOBILITY CORPORATION,
                             an Indiana corporation

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

                             IMPERIAL AUTOMOTIVE GROUP, INC.,
                             an Indiana corporation

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

                             STARCRAFT CORPORATION,
                             an Indiana corporation

                               By /s/ Richard J. Mullin
                                 -----------------------------------------------
                               Title  Senior Vice President
                                    --------------------------------------------

                             FOOTHILL CAPITAL CORPORATION,
                             a California corporation

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

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