Inventory Loan And Security Agreement

INVENTORY LOAN AND SECURITY AGREEMENT


THIS AGREEMENT is entered into by and between GENERAL MOTORS ACCEPTANCE CORPORATION ("GMAC") and STARCRAFT AUTOMOTIVE GROUP, INC. ("Manufacturer").


Manufacturer acquires chassis and/or vehicles manufactured by General Motors ("Inventory") for the purpose of upfitting or modifying with special bodies and/or equipment. Manufacturer has requested GMAC, and GMAC agrees, to finance Manufacturer's acquisition of such Inventory subject to the following terms and conditions;


1. Subject to the provisions of this Agreement, GMAC may make advances, upon
Manufacturer's request, up to a maximum amount of advances outstanding at
any one time not to exceed the amount of ($49,313,000.00) ("Maximum
Aggregate Advance") and Manufacturer has, concurrently with the execution
of this Agreement, executed and delivered to GMAC a demand promissory note
("Note") in the amount of such Maximum Aggregate Advance. The Note shall
bear interest on each advance from the date of each such advance to the
date of its repayment, at a rate designated by GMAC from time to time as
being then in effect under this Agreement.


The parties hereto intend to comply with applicable usury law and the Note
is to be construed in accordance with this intent. The parties acknowledge
that these laws may change from time to time. If acceleration or other
events cause the interest contracted for, charged or received to be in
excess of the lawful maximum, Manufacturer will receive credits so that the
interest will comply with the law and in no event will the interest
contracted for, charged or received exceed the legal maximum.


The amount owed by Manufacturer to GMAC shall at any time be the total
aggregate advances made hereunder plus interest and other amounts due
hereunder less all repayments thereof to GMAC by Manufacturer.


If the Maximum Aggregate Advance is increased at any time, Manufacturer
will deliver to GMAC a new demand promissory note in the amount of such
increase, which demand promissory note shall also bear interest as provided
in this Agreement and shall be subject to the provisions of this Agreement.


2. Advances by GMAC must be used exclusively for the purpose of holding or
acquiring Inventory as may be acceptable to GMAC. GMAC will advance funds
for such purpose in an amount not to exceed the Maximum Aggregate Advance
set forth in Paragraph 1, except as provided herein. GMAC may terminate
this Agreement or reduce the Maximum Aggregate Advance or suspend advances
hereunder (i) in the event of default as defined in Paragraph 5; (ii) if
GMAC in its judgment believes that advances are not justified due to
changes in Manufacturer's financial condition or other material change in
Manufacturer's business; or (iii) if GMAC, in its sole discretion, elects
to terminate this Agreement by


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providing Manufacturer with 90 days prior written notice of such
termination. All debts, obligations and remedies existent at the time of
any such termination shall continue in effect until discharged subject to
the terms of this Agreement.


3. To secure collectively the payment by Manufacturer of the amounts due or to
become due hereunder, and all other obligations of Manufacturer to GMAC,
now existing or hereafter arising, Manufacturer grants GMAC a security
interest in the following property, hereinafter referred to collectively as
"Collateral";


(a) All Inventory and all other inventory now owned or hereafter acquired
by Manufacturer, and any replacements, substitutions or accessions,
including returns and repossessions;


(b) All reserves or other accounts of Manufacturer now or hereafter held
by GMAC;


(c) Any amounts due or to become due to Manufacturer from any
manufacturer, distributor or other seller of inventory, including, but
not limited to factory holdbacks, warranty accounts, rebates,
incentives or discounts;


(d) All proceeds of Collateral described in (a), (b) and (c) above,
including, but not limited to, accounts, chattel paper or insurance
proceeds.


4. Manufacturer's possession of Inventory shall be for the purpose of
upfitting or modifying with special bodies and/or equipment. Manufacturer
shall maintain, protect, and secure Collateral and shall not use it
illegally, improperly or for hire. GMAC shall at all times have the rights
of access to and inspection of all such Collateral and the right to examine
Manufacturer's books and records pertaining to Collateral.


Manufacturer shall insure the Collateral against all risks in such amounts
and with a carrier and deductibles acceptable to GMAC. Any such policy
shall name GMAC as loss payee and shall be cancelable only upon 30 days
prior written notice to GMAC. Manufacturer shall furnish GMAC with proof of
such insurance promptly upon request by GMAC. The receipt by GMAC of any
insurance proceeds shall not release Manufacturer from payment of its
obligations hereunder, except to the extent of such proceeds.


Manufacturer agrees that as each item of Inventory is sold Manufacturer
will immediately remit to GMAC the amount advanced by it or which it became
obligated to advance on Manufacturer's behalf, together with accrued
interest thereon, and any other charges due GMAC. Should Manufacturer fail
to so remit any amount due, it shall immediately account to GMAC for all
proceeds of the sale and remit same to GMAC. The remittance of proceeds
shall not relieve Manufacturer of its obligation to pay the full amount due
on any item of Inventory.


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Manufacturer upon the reque ...