STARCRAFT CORP /IN/
STOCK OPTIONS TO PURCHASE SHARES OF COMMON STOCK
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>STOCK OPTIONS TO PURCHASE SHARES OF COMMON STOCK
<TEXT>


No. of Shares:  250,000                                   Stock Option No. 00-2




                            STOCK OPTIONS TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                              STARCRAFT CORPORATION

                            Dated: December 12, 2000











<PAGE>



                                TABLE OF CONTENTS
                                                                          Page

SECTION 1.  DEFINITIONS.....................................................1

SECTION 2.  EXERCISE OF STOCK OPTIONS.......................................2
         2.1.  Exercise Generally...........................................2
         2.2.  Shareholder Approval; Alternative Cash Award Upon Exercise...3
         2.3.  Expenses of Exercise.........................................3

SECTION 3.  ANTI-DILUTION...................................................3

SECTION 4.  RESERVATIONS....................................................3

SECTION 5.  CHANGE OF CONTROL; REORGANIZATIONS..............................3

SECTION 6.  DISSOLUTION OR LIQUIDATION......................................4

SECTION 7.  NOTICE OF DIVIDENDS.............................................5

SECTION 8.  FRACTIONAL SHARES...............................................5

SECTION 9.  FULLY PAID STOCK; VOTING RIGHTS UPON EXERCISE; TAXES............5

SECTION 10.  CLOSING OF TRANSFER BOOKS......................................5

SECTION 11.  REGISTRATION RIGHTS............................................5
         Section 11.1  Piggyback Registration...............................5
         Section 11.2.  Registration Procedures.............................6
         Section 11.3.  Information to be Furnished by Holders..............8
         Section 11.4.  Expenses of Registration............................8
         Section 11.5.  Indemnification and Contribution....................8
         Section 11.6.  Underwriting Agreement.............................10
         Section 11.7. Future Registration Rights..........................10

SECTION 12.  LOST, STOLEN STOCK OPTIONS, ETC...............................10

SECTION 13.  SEVERABILITY..................................................11

SECTION 14.  MISCELLANEOUS.................................................11
         14.1.  Notices....................................................11
         14.2.  Successors and Assigns.....................................11
         14.3.  Amendments.................................................11
         14.4.  Headings...................................................11
         14.5.  Governing Law..............................................11
         14.6.  Exclusive Jurisdiction.  ..................................11

EXHIBIT A.................................................................A-1



<PAGE>

   No. of Shares:  250,000*                              Stock Option No. 00-2
(*subject toss.2.2 of this Stock Option)

                            Dated: December 12, 2000

                            STOCK OPTIONS TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                              STARCRAFT CORPORATION

         THIS  IS TO  CERTIFY  that,  for  value  received  and  subject  to the
provisions hereinafter set forth,

                                G. Raymond Stults

                                   or assigns

is entitled upon the due exercise  hereof at any time during the Exercise Period
(as  hereinafter  defined) to purchase from  Starcraft  Corporation,  an Indiana
corporation  (the  "Company"),   up  to  250,000  shares  of  Common  Stock  (as
hereinafter defined and subject to adjustment as provided herein) of the Company
at the  Exercise  Price (as  hereinafter  defined and subject to  adjustment  as
provided herein) for each share of Common Stock so purchased and to exercise the
other rights, powers and privileges  hereinafter provided,  all on the terms and
conditions and pursuant to the provisions hereinafter set forth.

Attest:                                        STARCRAFT CORPORATION


/s/ Richard J. Mullin                          By: /s/ Michael H. Schoeffler
-----------------------                           ------------------------------
Secretary                                         President

                    Additional provisions follow on the next
                      15 pages and are incorporated in this
                   Stock Option as if set forth on this page.


<PAGE>

SECTION 1.  DEFINITIONS.

         In addition to the terms defined  elsewhere in this Stock  Option,  the
following terms have the following respective meanings:

         "Business Day" shall mean any day except  Saturday,  Sunday and any day
which shall be a Federal legal holiday or a day on which banking institutions in
the State of Indiana  are  authorized  or  required  by law or other  government
actions to close.

         A "Change of Control"  shall be deemed to have  occurred if during,  or
following the consummation of, a stock purchase program,  tender offer, exchange
offer,  merger,  consolidation,  sale  of  assets,  contested  election,  or any
combination  of the  foregoing  transactions,  any  person,  entity  or group of
persons acting in concert,  directly or indirectly (1) acquires ownership of the
power to vote in excess  of 50% of the  voting  securities  of  Company,  or (2)
otherwise  acquires,  directly or  indirectly,  the power to direct or cause the
direction of the management and policies of the Company.

         "Common  Stock"  shall mean the  Company's  Common  Stock,  without par
value.

         "Commission" shall mean the Securities and Exchange Commission,  or any
other federal agency at the time administering the Securities Act.

         "Company" shall mean Starcraft Corporation, an Indiana corporation, and
any  successor  to all or  substantially  all of the assets and business of such
corporation.

         "Exercise  Period" shall mean the period  commencing on the date hereof
and terminating on the Expiration Date.

         "Exercise  Price" shall mean $3.00 per share,  which is the fair market
value per share of the  Underlying  Shares on the date of issuance of this Stock
Option, adjustable as set forth in ss. 3.

         "Expiration Date" shall mean December 13, 2005.

         "Holder" shall mean the registered holder of this Stock Option, and, if
the context so indicates, the holder of Stock Option Shares.

         "NASD" shall mean the National Association of Securities Dealers, Inc.

         "Person" shall mean an  individual,  partnership,  corporation,  trust,
unincorporated  organization or any other entity,  and a government or agency or
political subdivision thereof.

         "Registration  Expenses"  shall  mean  all  expenses  incident  to  the
Company's  performance  of  or  compliance  with  ss.  11,  including,   without
limitation,  all  registration,  filing and NASD fees,  all fees and expenses of
complying  with  state  securities  or  blue  sky  laws,  all  word  processing,
duplicating and printing expenses, messenger and delivery expenses, the fees and
disbursements  of  counsel  for  the  Company  and  of  its  independent  public
accountants,  including  the  expenses of any special  audits or "cold  comfort"
letters required by or incident to such performance and compliance, the fees and
disbursements of counsel and accountants  retained by the Holder with respect to
Underlying Shares or Stock Option Shares being registered, all fees and expenses
incurred in complying with the Company's indemnification  obligations,  premiums
and other costs of policies of insurance against  liabilities arising out of the
public  offering  of  such  securities  and  any  fees  and   disbursements   of
underwriters customarily paid by issuers or sellers of securities.

         "Securities Act" shall mean the Securities Act of 1933, as amended,  or
any similar  federal  statute,  and the rules and  regulations of the Commission
thereunder, all as the same shall be in effect at the time.

         "Underlying  Shares"  shall  mean the  shares  of  Common  Stock of the
Company issuable upon exercise of this Stock Option.

         "Stock  Option" or "this Stock  Option" as used herein  shall mean this
Stock Option and any stock option  hereafter  issued in exchange or substitution
for this Stock Option.

         "Stock  Option  Shares"  shall mean the  shares of Common  Stock of the
Company issued upon the exercise of this Stock Option.

SECTION 2.  EXERCISE OF STOCK OPTION.

         2.1. Exercise  Generally.  The rights  represented by this Stock Option
are issued as an inducement to the initial Holder to provide a limited  guaranty
of the payment to Foothill Capital Corporation ("Foothill") of up to $750,000 of
the principal amount of certain indebtedness owed by Starcraft Automotive Group,
Inc. and National Mobility  Corporation,  both of which are Indiana corporations
and wholly-owned subsidiaries of the Company (collectively, the "Borrowers"), in
connection  with certain  refinancing  transactions  (the  "Refinancing")  to be
entered into between the Company and Foothill Capital Corporation ("Foothill").

         Subject to the conditions  hereinafter set forth, this Stock Option may
be exercised in whole or in part (but not as to any  fractional  share of Common
Stock), during the Exercise Period, but in no event subsequent to the end of the
Exercise Period, by the surrender of this Stock Option (with the exercise notice
at the end  hereof  duly  completed  and  executed)  at the  office  of any duly
appointed  transfer agent for the Common Stock or at the principal office of the
Company in Goshen,  Indiana, and upon payment to the Company, or for the account
of the Company, of the Exercise Price. Payment of the Exercise Price may be made
by cash in immediately available funds or by certified check or bank draft. This
Stock Option and all rights and options hereunder shall expire at the Expiration
Date,  and shall be wholly null and void to the extent this Stock  Option is not
exercised  before that time.  The Company  agrees that the Stock  Option  Shares
shall be and shall be deemed to be  issued to the  Holder  hereof as the  record
owner of such Stock  Option  Shares as of the close of  business  on the date on
which this Stock  Option shall have been  surrendered  and payment made for such
shares as aforesaid. Certificates for the Stock Option Shares shall be delivered
to the Holder hereof within a reasonable  time,  not exceeding 30 Business Days,
after the Stock  Option  shall have been so  exercised,  and,  unless this Stock
Option has expired,  a new Stock Option  representing  the number of  Underlying
Shares, if any, with respect to which this Stock Option shall not then have been
exercised shall also be issued to the Holder hereof within such time.

         2.2.  Expenses of Exercise.  The Company shall pay all expenses,  taxes
and other charges  payable in  connection  with the  preparation,  execution and
delivery of stock certificates under this ss. 2, regardless of the name or names
in which such stock certificates shall be registered.

SECTION 3.  ANTI-DILUTION.

         The  Underlying  Shares shall be subject to change or adjustment as set
forth in Exhibit A to this Stock Option.

SECTION 4.  RESERVATIONS.

         The Company shall at all times reserve and keep  available  such number
of  authorized  shares of its Common  Stock,  solely for the purpose of issuance
upon the exercise of the rights  represented by this Stock Option, as may at any
time be issuable upon the exercise of this Stock Option.

SECTION 5.  CHANGE OF CONTROL; REORGANIZATIONS.

         If,  in   connection   with  any  Change  of   Control,   any   capital
reorganization  or  reclassification  of the capital  stock of the Company,  any
other  change  of  outstanding   shares  of  Common  Stock,  or  any  merger  or
consolidation of the Company with or into another Person,  or in the case of any
sale or  conveyance  to another  Person of the  property  of the  Company as, or
materially  as, an entirety (a  "Reorganization"),  the Company shall cause such
Reorganization  to be effected in such a way that  holders of Common Stock shall
be  entitled  to  receive  stock,  securities  or assets  with  respect to or in
exchange for Common  Stock,  then,  as a condition of such  Reorganization,  the
Company  shall cause  effective  provision  to be made  whereby the Holder shall
thereafter  have the  right to  receive,  upon the  basis and upon the terms and
conditions  specified  in this Stock  Option,  and in lieu of the  Common  Stock
immediately  theretofore receivable upon the exercise of this Stock Option, such
shares of stock,  securities  or  assets as would  have been (by  virtue of such
Reorganization) issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of Common Stock
immediately  theretofore  receivable  upon the  exercise  of this Stock  Option,
assuming such exercise had taken place immediately prior to such Reorganization.
In any such case, appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the  provisions  hereof  (including,
without limitation, provisions for adjustments of the number of shares of Common
Stock  receivable  upon  exercise  of this Stock  Option)  shall  thereafter  be
applicable,  as nearly as may be, in relation to any shares of stock, securities
or assets  thereafter  receivable  upon the exercise of this Stock  Option.  The
Company  shall  not  effect  any  such  Reorganization,   unless,  prior  to  or
simultaneously  with the  consummation  thereof,  the successor entity (if other
than the  Company)  resulting  from such  transaction  shall  assume by  written
instrument,  executed and mailed or delivered to the Holder,  the  obligation to
deliver  to the  Holder  such  shares of  stock,  securities  or  assets  as, in
accordance with the foregoing provisions, the Holder may be entitled to receive.
Notice  of any  proposed  Reorganization  shall be given by the  Company  to the
Holder as promptly as practicable  after such transaction  appears likely but in
no  event  less  than  30  Business  Days  prior  to  the  consummation  of  the
Reorganization.

SECTION 6.  DISSOLUTION OR LIQUIDATION.

         Upon  any  proposed  distribution  of  the  assets  of the  Company  in
dissolution  or  liquidation  (except  under  circumstances  when ss. 5 shall be
applicable),  the Company shall mail notice thereof to the Holder and shall make
no  distribution  to its  shareholders  until the expiration of 30 days from the
date of mailing of such notice and, in any such event,  the Holder of this Stock
Option may exercise the purchase rights with respect to this Stock Option within
30 days from the date of mailing such notice.  All rights herein  granted not so
exercised within such 30-day period shall thereafter become null and void.

SECTION 7.  NOTICE OF DIVIDENDS.

         If the Board of Directors of the Company  shall declare any dividend or
other distribution on its Common Stock, the Company shall mail notice thereof to
the Holder not less than 30 days prior to the record date fixed for  determining
shareholders entitled to participate in such dividend or other distribution, and
the Holder shall not  participate in such dividend or other  distribution  or be
entitled  to any  rights on  account  or as a result  thereof  unless and to the
extent  that this Stock  Option is  exercised  prior to such  record  date or as
otherwise  provided by this Stock Option.  The  provisions of this section shall
not apply to distributions  made in connection with transactions  covered by ss.
5.

SECTION 8.  FRACTIONAL SHARES.

         The  Company  shall  not be  required  to issue  or cause to be  issued
fractional  shares on the exercise of this Stock Option and any such  fractional
share otherwise issuable shall be rounded down to the nearest whole share.

SECTION 9.  FULLY PAID STOCK; VOTING RIGHTS UPON EXERCISE; TAXES.

         (a) The  Company  covenants  and  agrees  that the shares of its Common
Stock  represented  by each  certificate to be delivered on the exercise of this
Stock  Option  shall,  at the  time of such  delivery,  be  validly  issued  and
outstanding,  and be fully paid and  nonassessable.  The Company  covenants  and
agrees that, upon issuance of the Underlying Shares, the Underlying Shares shall
have voting rights equivalent to those of other shares of Common Stock.

         (b) The Company  covenants  and agrees that it shall pay,  when due and
payable,  any and all federal and state  issuance or transfer  taxes that may be
payable  in respect of this  Stock  Option or any Common  Stock or  certificates
issued  hereunder.  The Company shall not,  however,  be required to pay any tax
which may be payable in respect of any  transfer  involved in the  transfer  and
delivery of stock  certificates  in the name other than that of the Holder,  and
any such tax shall be paid by the Holder at the time of presentation.

SECTION 10.  CLOSING OF TRANSFER BOOKS.

         The right to exercise  this Stock Option shall not be suspended  during
any period that the stock transfer books of the Company for its Common Stock may
be  closed.  The  Company  shall not be  required,  however,  to  deliver  stock
certificates  upon  such  exercise  while  such  books are duly  closed  for any
purpose,  but the Company may postpone the delivery of such  certificates  until
the opening of such books.  In such case,  the  certificates  shall be delivered
promptly after the books are opened.

SECTION 11.  REGISTRATION RIGHTS.

         Section  11.1  Piggyback  Registration.  If at  any  time  the  Company
proposes for any reason to register  (including  for this purpose a registration
effected by the Company for securityholders  other than the Holders of the Stock
Options  or Stock  Option  Shares)  securities  under  the  Securities  Act (not
including  securities proposed to be registered pursuant to an employee benefits
plan on Form S-8 or  pursuant  to a  reorganization,  exchange  offer or similar
transaction  on Form S-4), it shall,  each such time,  promptly (but in no event
less than 30 days prior to the proposed  date of the filing of the  registration
statement  relating  thereto)  give  written  notice to the Holders of the Stock
Options and Stock Option Shares  (collectively  the "Eligible  Securities") then
outstanding  of its  intention to do so, and,  upon the written  request,  given
within 20 days after receipt of any such notice,  of a Holder to register any of
his Eligible  Securities,  the Company shall cause all Eligible  Securities with
respect to which Holders shall have so requested  registration  to be registered
under the  Securities  Act promptly upon receipt of the written  request of such
Holders for such registration.

         In the event that any registration  pursuant to this ss. 11.1 shall be,
in whole or in part,  an  underwritten  public  offering  of  securities  of the
Company  registered  under the Securities Act, the Company shall arrange for the
Eligible  Securities  requested to be registered pursuant to this ss. 11.1 to be
included in the underwriting.  The inclusion of the Eligible  Securities will be
on the same terms and conditions as the comparable securities, if any, otherwise
being  sold  through  underwriters  under  such  registration,  or on terms  and
conditions  comparable  to  those  normally  applicable  to  offerings  of  such
securities in reasonably  similar  circumstances in the event that no securities
comparable to the Eligible Securities are being sold through  underwriters under
such registration.

         If the Company proposes to include in such underwritten public offering
any  securities  owned  by any  shareholder  of the  Company  (such  securities,
"Additional  Securities") and the managing underwriter reasonably determines and
advises in writing that the  inclusion in the offering of all of the  securities
to be sold for the Company's  account,  the Eligible  Securities  covered by the
requests  for  registration  made  under  this  ss.  11.1,  and  the  Additional
Securities would interfere with the successful marketing of the securities to be
sold  for the  Company's  account,  then  (i)  there  shall  first  be  excluded
Additional Securities proposed to be included and then (ii) the requisite number
of  Eligible  Securities  and other  securities  the  holders of which have been
granted  registration  rights by the Company on terms similar to those  provided
herein which are proposed to be included shall be excluded from the underwritten
portion of the  public  offering,  on a basis pro rata among the  holders of the
Eligible  Securities and such other holders  requesting such  registration,  and
such  excluded  eligible  Securities  shall be  withheld  from the market by the
holders  thereof  for  a  period  which  the  managing  underwriter   reasonably
determines  is  necessary  in order to effect  the  underwritten  portion of the
public offering.

         Section 11.2. Registration  Procedures.  If and whenever the Company is
under an  obligation  pursuant  to the  provisions  of ss.  11.1 to use its best
efforts to effect the  registration  of any  Eligible  Securities,  the  Company
shall, as expeditiously as practicable:

                  (i)      prepare and file with the  Commission a  registration
                           statement  with respect to such  Eligible  Securities
                           and use its best  efforts to cause such  registration
                           statement to become  effective  and remain  effective
                           and current in compliance with the Securities Act for
                           a period of 90 days for a piggyback registration;

                  (ii)     prepare and file with the Commission  such amendments
                           and  supplements to such  registration  statement and
                           the prospectus used in connection therewith as may be
                           necessary   to  keep  such   registration   statement
                           effective   and  current  in   compliance   with  the
                           Securities Act for the applicable period specified in
                           clause (i) of this ss. 11.2;

                  (iii)    furnish to each selling  stockholder  such numbers of
                           copies of each prospectus (including each preliminary
                           prospectus) in conformity  with the  requirements  of
                           the  Securities  Act, and such other  documents  such
                           selling  shareholders  shall reasonably  request,  to
                           facilitate  the  public  offering  of their  Eligible
                           Securities;

                  (iv)     register or qualify the Eligible  Securities  covered
                           by such  registration  statement under the securities
                           or blue sky laws of such  jurisdictions  as each such
                           seller shall  reasonably  request  (provided that the
                           Company  shall  not  be  required  to  qualify  to do
                           business  or file a general  consent  to  service  of
                           process  in any  jurisdiction  where  it is not  then
                           qualified to do  business);  and do any and all other
                           acts or things which may be  reasonably  necessary or
                           advisable  to enable  such seller to  consummate  the
                           public   sale   or   other    disposition   in   such
                           jurisdictions  of such Eligible  Securities until the
                           sale or other disposition of all Eligible  Securities
                           covered by such registration statement;

                  (v)      notify each selling shareholder any time a prospectus
                           is required to be delivered  under the Securities Act
                           within the appropriate period mentioned in clause (i)
                           of  thisss.11.2,  of the  happening of any event as a
                           result  of  which  the  prospectus  included  in such
                           registration  statement,  as then in effect, includes
                           or may include an untrue  statement of material  fact
                           or omits  to state a  material  fact  required  to be
                           stated  therein or necessary  to make the  statements
                           therein  not  misleading,  and at the  request of any
                           such  seller,  prepare  and  furnish to such seller a
                           reasonable  number of copies of a supplement to or an
                           amendment of such  prospectus  as may be necessary so
                           that,  as thereafter  delivered to the  purchasers of
                           such Eligible  Securities,  such prospectus shall not
                           include an untrue  statement of a material  fact omit
                           to  state  a  material  fact  required  to be  stated
                           therein or necessary to make the  statements  therein
                           not misleading; and


                  (vi)     furnish,  at the  request  of any  Holder or  Holders
                           requesting registration pursuant to the terms hereof,
                           on or about the date that any Eligible Securities are
                           delivered to the  underwriters  for sale  pursuant to
                           such registration or, if such Eligible Securities are
                           not being sold through underwriters, on the date that
                           the  registration  statement  with  respect  to  such
                           Eligible   Securities  becomes   effective:   (a)  an
                           opinion, dated such date, of the counsel representing
                           the  Company for the  purposes of such  registration,
                           addressed  to the  underwriters,  if any,  and to the
                           Holder or Holders  making such  request,  in form and
                           substance as is customarily  given in an underwritten
                           public offering;  and (b) a letter,  dated such date,
                           from the independent  certified public accountants of
                           the Company  (the  "Accountants"),  addressed  to the
                           underwriters,  if any,  and to the  Holder or Holders
                           making  such  request,  in form and  substance  as is
                           customarily  given by  independent  certified  public
                           accountants to underwriters in an underwritten public
                           offering.

         Section  11.3.  Information  to be Furnished  by Holders.  Prior to the
Company being obligated to register a particular  prospective  seller's Eligible
Securities pursuant to this Section 11, such seller shall furnish to the Company
such  information and execute such documents  regarding the Eligible  Securities
held by such  seller  and the  intended  method of  disposition  thereof  as the
Company shall  reasonably  request in connection  with the action to be taken by
the Company.

         Section  11.4.  Expenses of  Registration.  The  Company  shall pay all
Registration Expenses in connection with each registration pursuant toss.11.1.

         Section 11.5.  Indemnification and Contribution.  (a) The Company shall
indemnify  and hold  harmless  each  Holder,  each of its  officers,  directors,
partners,  agents,  employees and controlling persons (within the meaning of the
Securities  Act)  and  each  person  who   participates  as  an  underwriter  or
controlling person of an underwriter  (within the meaning of the Securities Act)
with  respect to a  registration  statement  pursuant  to ss.  11.1  against any
losses,  claims, damages or liabilities (or actions in respect thereof) to which
any of them may become subject under the Securities Act or otherwise  insofar as
such losses,  claims,  damages or  liabilities  (or actions in respect  thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of  a  material  fact  in  a  registration   statement  including  any  Eligible
Securities, any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement  thereto,  or in any  application  or other document
(such   applications   and  documents  are   hereinafter   collectively   called
"Applications") filed in any jurisdiction in order to qualify all or part of the
Eligible  Securities  under  the  securities  laws  thereof  or  filed  with the
Commission  or the  NASD,  or arise  out of or are based  upon the  omission  or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the statements  therein not misleading,  and will reimburse
any of them for any legal or other expenses  reasonably  incurred by any of them
in connection  with  investigating  or defending any such loss,  claim,  damage,
liability or action;  provided,  however,  that the Company  shall not be liable
hereunder in any such case if any such loss, claim,  damage, or liability arises
out of or is based upon any such untrue  statement or allegedly untrue statement
or such  omission  or  alleged  omission  made in such  registration  statement,
prospectus or amendment or supplement  thereto or in any Application in reliance
upon and in conformity with written information furnished to the Company by such
Holder for inclusion therein;  provided,  however,  that the indemnity agreement
contained in this  paragraph of this ss. 11.5 shall not apply to amounts paid in
settlement of any loss, claim,  damage,  liability,  action or violation if such
settlement is effected  without the consent of the Company  (which consent shall
not be unreasonably withheld).

         (b)  To the  extent  permitted  by  law,  each  Holder  whose  Eligible
Securities are registered on any registration  statement of the Company pursuant
to ss. 11.1 shall indemnify and hold harmless the Company, each of its officers,
directors,  partners,  agents,  employees and  controlling  persons  (within the
meaning of the Securities Act) with respect to a registration statement pursuant
to ss. 11.1 against any losses,  claims,  damages or liabilities  (or actions in
respect  thereof) to which any of them may become  subject under the  Securities
Act or otherwise  insofar as such losses,  claims,  damages or  liabilities  (or
actions in respect  thereof) arise out of or are based upon any untrue statement
or alleged untrue  statement of a material fact, or omission or alleged omission
of a  material  fact  required  to be stated  therein or  necessary  to make the
statements  therein not misleading,  made in such  registration  statement,  any
preliminary  prospectus or final prospectus  contained therein, or any amendment
or supplement thereto or in any Application,  in reliance upon and in conformity
with written  information  furnished to the Company by such Holder for inclusion
therein,  and  will  reimburse  any of them  for any  legal  or  other  expenses
reasonably  incurred by them in connection with investigation or defending,  any
such loss, claim, damage,  liability or action,  provided that the obligation of
each Holder  under this ss. 11.5 shall be limited to an amount  equal to the net
proceeds  to such  Holder  of the  Eligible  Securities  sold  pursuant  to such
registration  statement,   provided,   however,  that  the  indemnity  agreement
contained in this  paragraph of this ss. 11.5 shall not apply to amounts paid in
settlement of any loss, claim,  damage,  liability,  action or violation if such
settlement is effected  without the Holder's consent (which consent shall not be
unreasonably withheld).

         (c) Promptly after receipt by an indemnified  party under this ss. 11.5
of notice of the commencement of any action,  such indemnified  party will, if a
claim in respect thereof is to be made against an indemnifying party, notify the
indemnifying  party in writing of the commencement  thereof and the indemnifying
party shall have the right to participate  in and to assume the defense  thereof
at its expense with counsel mutually satisfactory to the parties. The failure to
notify an indemnifying party promptly of the commencement of any such action, if
prejudicial   to  the  ability  to  defend  such  action,   shall  relieve  such
indemnifying  party of any  liability  to the  indemnified  party under this ss.
11.5, but the omission so to notify the indemnifying party will not relieve such
party of any liability that such party may have to any  indemnified  party other
than under this ss. 11.5.

         (d) If the indemnification provided for in this ss. 11.5 is unavailable
to or insufficient to hold harmless an indemnified  party under  subsections (a)
and (b) above in respect of any losses, claims, damages, liabilities or expenses
(or actions or proceedings in respect  thereof)  referred to therein,  then each
indemnifying  party  shall  contribute  to the  amount  paid or  payable by such
indemnified party as a result of such losses,  claims,  damages,  liabilities or
expenses (or actions or proceedings in respect thereof) in such proportion as is
appropriate  to reflect the relative  benefits and relative fault of the Company
on the one hand and the Holder on the other in connection with the statements or
omissions  which  resulted  in such  losses,  claims,  damages,  liabilities  or
expenses (or actions or  proceedings in respect  thereof),  as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the  Holder on the  other  shall be deemed to be in the same
proportion  as the  total  net  proceeds  from the  offering  (before  deducting
expenses) received by the Company bear to the total net proceeds received by the
Holder.  The relative  fault shall be  determined  by reference  to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the  Company  on the one hand or the  Holder  on the  other and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent such statement or omission.

         The  Company  and the  Holder  agree  that  it  would  not be just  and
equitable if contribution pursuant to this ss. 11(d) were determined by pro rata
allocation  (even if all Holders were treated as one entity for such purpose) or
by any other method of  allocation  which does not take account of the equitable
considerations  referred to above in this ss. 11(d).  The amount paid or payable
by an indemnified party as a result of the losses, claims, damages,  liabilities
or expenses (or actions or proceedings in respect thereto)  referred to above in
this ss. 11(d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such  action or  claim.  No person  guilty of  fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

         Section 11.6.  Underwriting Agreement. If Eligible Securities are to be
sold pursuant to a registration  statement in an underwritten  offering pursuant
to ss.  11.1,  the  Company  agrees  to  enter  into an  underwriting  agreement
containing customary representations and warranties with respect to the business
and  operations of an issuer of the  securities  being  registered and customary
covenants  and  agreements  to be performed by such issuer,  including,  without
limiting the generality of the foregoing,  customary  provisions with respect to
indemnification by the Company of the underwriters of such offering.

         Section 11.7. Future  Registration  Rights.  If, subsequent to the date
hereof,  the  Company  grants  piggyback   registration  rights  to  holders  or
prospective  holders  of its  securities  to  include  their  securities  on any
registration  statement proposed to be filed by the Company at the demand of the
Holders made under this  Agreement,  such  piggyback  registration  rights shall
provide for the  exclusion of such  holders'  securities  from the  registration
statement if the managing underwriter of the offering proposed to be made of the
Eligible  Securities  determines that the inclusion of such holders'  securities
would be seriously detrimental to the offering of the Eligible Securities or, if
all or part of the offering of Eligible  Securities  is not to be  underwritten,
the Holders of more than 50% of the  Eligible  Securities  to be included in the
registration statement so determine.

         If,   subsequent  to  the  date  hereof,   the  Company  grants  demand
registration  rights to holders or  prospective  holders  of its  securities  to
demand  that the  Company  register  any  securities  of the  Company  under the
Securities  Act,  such demand  registration  rights  shall be granted  under and
subject to the  piggyback  registration  right of the  Holders to include all or
part of their  Eligible  Securities  in any such  registration  on the terms and
conditions of ss. 11.1.

SECTION 12.  LOST, STOLEN STOCK OPTIONS, ETC.

         If this Stock Option shall be mutilated, lost, stolen or destroyed, the
Company shall issue a new Stock Option of like date,  tenor and denomination and
deliver  the  same in  exchange  and  substitution  for and upon  surrender  and
cancellation of the mutilated Stock Option, or in lieu of the Stock Option lost,
stolen or destroyed, upon receipt of evidence satisfactory to the Company of the
loss,  theft or destruction of such Stock Option,  and upon receipt of indemnity
satisfactory to the Company.

SECTION 13.  SEVERABILITY.

         Should  any  part of this  Stock  Option  for any  reason  be  declared
invalid,  such decision shall not affect the validity of any remaining  portion,
which shall remain in force and effect as if this Stock Option had been executed
with the invalid portion thereof eliminated. It is hereby declared the intention
of the parties  hereto that they would have  executed and accepted the remaining
portion of this Stock Option without  including  therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid.

SECTION 14.  MISCELLANEOUS.

         14.1.  Notices.  Any notice,  demand or delivery to be made pursuant to
the  provisions of this Stock Option shall be in writing and (a) shall be deemed
to have been given or made one day after the date sent (i) if by the Company, by
prepaid  overnight  delivery,  addressed to the Holder at his last known address
appearing on the books of the Company  maintained for such purpose or (ii) if by
the Holder, by prepaid overnight delivery, addressed to the Company at P. O. Box
1903, 2703 College Avenue,  Goshen,  Indiana 46526; and (b) if given by courier,
confirmed telegram, confirmed facsimile transmission or confirmed telex shall be
deemed to have been made or given when received.  The Holder and the Company may
each designate a different address by notice to the other in the manner provided
in this ss. 14.1.

         14.2.  Successors  and  Assigns.  This  Stock  Option  and  the  rights
evidenced  hereby  shall  inure  to  the  benefit  of and be  binding  upon  the
successors and permitted  assigns of the Company and the Holder.  The provisions
of this Stock  Option are  intended  to be for the benefit of the Holder of this
Stock Option or the Stock Option Shares and shall be enforceable by the Holder.

         14.3. Amendments. This Stock Option may not be modified,  supplemented,
varied or amended  except by an instrument in writing  signed by the Company and
the Holder.

         14.4.  Headings.  The index and the descriptive headings of sections of
this Stock Option are provided  solely for  convenience  of reference  and shall
not, for any purpose, be deemed a part of this Stock Option.

         14.5.  Governing Law. THIS STOCK OPTION AND ALL MATTERS CONCERNING THIS
STOCK OPTION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF INDIANA FOR CONTRACTS
ENTERED INTO AND TO BE PERFORMED IN SUCH STATE  WITHOUT  REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.

         14.6. Exclusive Jurisdiction.  Each party, and each express beneficiary
of this Stock  Option as a condition of its right to enforce or defend any right
under or in connection  with this Stock Option,  (1) agrees that any action with
respect  to this  Stock  Option or any  transaction  contemplated  by this Stock
Option shall be brought exclusively in the courts of the State of Indiana,  City
of Goshen or of the United  States of America  sitting in the State of  Indiana,
City of Goshen, (2) accepts for itself and in respect of its property, generally
and  unconditionally,  the jurisdiction of those courts, (3) agrees that service
of process may be made on such party, or such express  beneficiary,  as the case
may be, by prepaid  certified mail with a proof of mailing receipt  validated by
the United States Postal Service  constituting  evidence of valid  service,  and
that  service  made  pursuant to this clause (3) shall have the same legal force
and effect as if served upon such person personally within the State of Indiana,
and (4) irrevocably waives any objection,  including,  without  limitation,  any
objection  to the  laying  of  venue  or  based  on the  grounds  of  forum  non
conveniens,  which it may now or  hereafter  have to the  bringing  of any legal
action in those jurisdictions;  provided,  however, that any party may assert in
an action in any other  jurisdiction  or venue each  mandatory  defense,  third-
party claim or similar  claim  that,  if not so  asserted  in such  action,  may
thereafter  not be asserted  by such party in an  original  action in the courts
referred to in clause (1) above.

                                   * * * * * *
<PAGE>
                                                                      EXHIBIT A

                            ANTI-DILUTION PROVISIONS

         1. Anti-Dilution Provisions.  The Underlying Shares shall be subject to
change or adjustment as follows:

                  (a) Common Stock Dividends, Subdivisions, Combinations. If the
Company shall (i) pay or make a dividend or other distribution to all holders of
its Common Stock in shares of Common Stock, (ii) subdivide,  split or reclassify
the  outstanding  shares of its Common Stock into a larger number of shares,  or
(iii) combine or reclassify  the  outstanding  shares of its Common Stock into a
smaller number of shares,  then in each such case the Underlying Shares shall be
adjusted  to equal the  number of such  shares to which the Holder of this Stock
Option would have been entitled upon the occurrence of such event had this Stock
Option been  exercised  immediately  prior to the happening of such event or, in
the case of a stock dividend or other distribution, prior to the record date for
determination of such Shareholder  entitled thereto. An adjustment made pursuant
to this paragraph 1 shall become effective  immediately  after such record date,
in the case of a dividend or distribution,  and immediately  after the effective
date, in the case of a subdivision, split, combination or reclassification.

                  (b) Reorganization or Reclassification. In case of any capital
reorganization  or any  reclassification  of the  Common  Stock  of the  Company
(whether pursuant to a merger of consolidation or otherwise),  this Stock Option
shall  thereafter  be  exercisable  for the  number  of shares of stock or other
securities  or  property   receivable  upon  such  capital   reorganization   or
reclassification  of Common Stock, as the case may be, by a holder of the number
of  shares of  Common  Stock  into  which  this  Stock  Option  was  exercisable
immediately prior to such capital  reorganization or  reclassification of Common
Stock; and, in any case, appropriate adjustment shall be made in the application
of the  provisions  herein  set forth with  respect to the rights and  interests
thereafter of the Holder of this Stock Option to the end that the provisions set
forth herein shall thereafter be applicable,  as nearly as reasonably may be, in
relation  to any  shares of stock or other  securities  or  property  thereafter
deliverable upon the exercise of this Stock Option.

                  (c)  Distributions  of Assets or Securities  Other Than Common
Stock.  In case the Company shall,  by dividend or otherwise,  distribute to all
holders of its Common  Stock  shares of any of its  capital  stock  (other  than
Common Stock), rights or Stock Options to purchase any of its securities,  cash,
other  assets  or  evidences  of its  indebtedness,  then in each  such case the
Underlying  Shares  shall be  adjusted  by  multiplying  the  Underlying  Shares
immediately prior to the date of such dividend or distribution by a fraction, of
which the numerator  shall be the fair market value per share of Common Stock at
the record  date for  determining  shareholders  entitled  to such  dividend  or
distribution,  and of which the denominator  shall be such fair market value per
share less the fair market  value (as  determined  in good faith by the Board of
Directors  of the  Company) of the portion of the  securities,  cash,  assets or
evidences  of  indebtedness  so  distributed  applicable  to one share of Common
Stock.  An  adjustment  made  pursuant  to this  subparagraph  (c) shall  become
effective immediately after such distribution date.

                  (d) No  Impairment.  The Company shall not,  without the prior
consent of the Holder,  by amendment of its Articles of Incorporation or through
any reorganization,  transfer of the assets, consolidation, merger, dissolution,
issue or sale of  securities  or any other  voluntary  action,  avoid or seek to
avoid  the  observance  or  performance  of any of the terms to be  observed  or
performed hereunder by the Company,  but shall at all times in good faith assist
in the carrying out of all the  provisions of this paragraph 1 and in the taking
of all such action as may be  necessary or  appropriate  in order to protect the
exercise rights of the Holder against impairment.

                  (e)  Readjustment.  Upon  the  termination  of  any  right  of
conversion or exchange of any securities  convertible  into or exchangeable  for
Common Stock, or upon the expiration of any rights or options to purchase Common
Stock  (other  than this Stock  Option) or any  securities  convertible  into or
exchangeable  for  Common  Stock,  or upon any change in the number of shares of
Common  Stock  issuable  upon  exercise,  conversion  or  exchange  of any  such
securities,  rights or  options,  the  Underlying  Shares  then in effect  shall
forthwith be readjusted to such  Underlying  Shares as would have been in effect
had the adjustments made upon the issuance or sale of such securities, rights or
options been made upon the basis of the issuance of only the number of shares of
Common Stock  actually  issued or to be issued upon the exercise,  conversion or
exchange or such securities, rights or options.

         2.  Notice of  Certain  Corporation  Transactions.  The  Company  shall
promptly  mail  to the  Holder  a  notice  of  any  proposed  dividend,  merger,
dissolution,  liquidation  or winding up of the  Company,  stating the  proposed
record  date (if any) or  effective  date for any such  transaction  and briefly
describing the transaction.

         3. Certificate of Adjustment. Upon the occurrence of each adjustment or
readjustment  pursuant to this Exhibit A, the Company  (acting through its Board
of  Directors  in the exercise of its  reasonable  discretion),  at its expense,
shall as promptly as  practicable  compute such  adjustment or  readjustment  in
accordance with the provisions of this Exhibit A, and prepare and furnish to the
Holder a certificate  setting forth such adjustment or readjustment  and showing
in reasonable  detail the facts upon which such  adjustment or  readjustment  in
based.

         4.  Information to be Furnished  Upon Request.  Upon the request at any
time of the Holder,  the Company  shall as  promptly as  practicable  furnish or
cause to be furnished,  to the Holder, at his address set forth in such request,
a  certificate  setting  forth the number of shares of Common  Stock that at the
time would be received  upon the  exercise of the Stock  Option and the Exercise
Price thereof.

<PAGE>


                                 EXERCISE NOTICE

TO STARCRAFT CORPORATION:

         The  undersigned  registered  holder of the within Stock Option  hereby
irrevocably  exercises the Stock Option,  purchases thereunder 250,000 shares of
the Common Stock of the Company,  herewith makes payment of $3.000 therefor, and
requests  that the  certificate(s)  for such shares be issued in the name of the
undersigned Holder or its nominee and delivered to it at Holder's address on the
books of the Company.

                                      Signature: _____________________________

                                      Printed Name: __________________________

                                      Dated:  ______________________________



ASSIGNMENT

         FOR VALUE  RECEIVED,  the undersigned  registered  Holder of the within
Stock Option hereby sells,  assigns and transfers  unto  __________________  the
Stock Option and all rights evidenced  thereby and does  irrevocably  constitute
and appoint _________________ attorney to transfer the Stock Option on the books
of the Company.

                                      Signature: _____________________________

                                      Printed Name: __________________________

                                      Dated: ________________________________


</TEXT>
</DOCUMENT>
