ex10_25 Regions Bank Agreement


    Exhibit
      10.25

    


    
      	 	
              Regions
                Bank

            
	
              Floor
                Plan Financing Agreement

            	
              41-1621676

            
	 	 
	
              Borrower’s
                Name

            	
              Tax
                I.D. number

            
	
              Featherlite,
                Inc.

            	 
	 	 
	
              Address:

            	 
	
              13380
                US Hwy 63 & 9, Cresco, IA 52136

            	 


    

    


    
      	
              Aggregate
                amount of line of credit

               

            	
              Date
                of Agreement

               

            	
              Place
                of Agreement

               

            
	
              $2,000,000.00

               

            	
              December
                19, 2005

               

            	
              Birmingham,
                AL

               

            


    

    


     

    In
      this
      Agreement, we,
      us,
      and
our
      mean
      Regions Bank. You
      and
your
      mean the
      Borrower. This Agreement
      means
      the Floor Plan Financing Agreement. Capitalized terms used in this Agreement
      and
      not otherwise defined are used with the meanings set forth in Schedule
      I.
      Any
      undefined terms shall have the meaning as set forth in the Alabama Uniform
      Commercial Code.

    


    SECTION  I

    LINE
      OF CREDIT COMMITMENT

    


     1.1 Your
      line of credit.
      You have
      received a line of credit from us in the aggregate amount shown. Under the
      conditions stated below, we will advance money to you, or on your behalf, up
      to
      the amount of your line of credit. In return, you promise to perform all of
      your
      Obligations under this Agreement and to pay to our order the amount of all
      advances we have made, plus interest and other charges due under this
      Agreement.

    


    1.2 Payments
      by you.
      You
      agree to make monthly payments to us of all accrued interest, beginning on
      the
      15th
      day of
      the first month immediately following the date of this Agreement as set forth
      above, and on the same day of each month thereafter. You also agree to make
      principal payments as described below. If we request, you agree to sign at
      any
      time a Note payable to our order for the amount outstanding under your line
      of
      credit.

    


    1.3 Future
      advances, line of credit.
      It is
      expressly understood that this Agreement is intended to and does secure not
      only
      the line of credit, but also future advances and any and all present and future
      Indebtedness, Obligations and liabilities, direct or contingent, of you to
      us,
      whether now existing or hereafter arising, and any and all extensions, renewals,
      modifications and refinancing of same, or any part thereof, existing at any
      time
      before actual cancellation of this Agreement.

    1.4 Purpose
      of line of credit.
      You have
      obtained this line of credit in order to finance your purchase of Goods for
      resale at retail unless otherwise agreed to by us in writing.

    1.5 Allocation
      of line of credit.
      Your
      line of credit is allocated as follows:

    
      	a.  	
              New
                Goods.

            


    

    Supplier            Available
      Credit

    [
      ]
 Advances
      for new Goods requested through                _______________________________________ $0.00

    ACH.
      If
      checked, we will make advances to the Supplier        
_______________________________________ $0.00

    or
      Suppliers shown at the right.                         _______________________________________ $0.00

    (i)     We
      may
      make advances to the Supplier or Suppliers, or any other persons whom they
      designate, when we receive electronic requests through the Automated Clearing
      House(ACH) from a Supplier for Goods delivered or sold to you. The amount of
      the
      advance that we make on your behalf to the Supplier will be for the amount
      indicated on the electronic payment request. You agree that we may, at our
      option, make these advances even though the electronic payment requests are
      not
      accompanied or preceded by the original invoices. We are not obligated to accept
      and pay any electronic payment request when the amount you owe us, including
      interest, exceeds the available credit or when honoring the payment request
      will
      exceed your available credit.

    [
      ]
 Advances
      for new Goods requested                         _______________________________________ $0.00

    by
      draft.
      If
      checked, we will make advances                 _______________________________________ $0.00

    to
      the
      Supplier or Suppliers shown at the right                   _______________________________________ $0.00

     

    
      	 	
              (ii)

            	
              We
                may make advances to the Supplier or Suppliers, or any other person
                whom
                they designate, when we receive sight or cash drafts from a Supplier
                for
                Goods delivered or sold to you. The amount of the advance that we
                make on
                your behalf to the Supplier will be for the amount of the invoice.
                You
                agree that we may, at our option, make these advances even though
                the
                drafts are not accompanied by the original invoices. We are not obligated
                to accept and pay any draft when the amount you owe us, including
                interest, exceeds the available credit or when honoring the payment
                request will exceed your available
                credit.

            


    

    [X]
       Advances
      for new Goods not requested by draft.
      If
      checked, we will make advances up to an aggregate amount of $2,000,000.00
      for the
      amount of your purchase price of new Goods, when requested directly by you
      and
      accompanied by the bill of sale and other evidence of your ownership (such
      as a
      certificate of title for a vehicle), satisfactory to us, free and clear of
      all
      liens and encumbrances, satisfactory to us, for the Goods purchased. At our
      option, you may supply us with copies of these documents. If no figure is listed
      above, the credit limit under this section is the available credit. We are
      not
      obligated to accept and pay any draft when the amount you owe us, including
      interest, exceeds the available credit or when honoring the payment request
      will
      exceed your available credit.

     

    b. Used
      Goods.

     

    [
      ] Advances
      for used Goods.
      If
      checked, we will make advances for your purchase of used Goods limited to
$0.00.
      If no
      figure is listed, the credit limit is the aggregate amount of your line of
      credit less the amount of credit already extended for your purchase of new
      Goods, if any. We will make these advances under the following
      conditions:

     

    
      	 	
              (i)

            	
              You
                agree to request an advance by supplying us with the bill of sale
                and
                other evidence of your ownership (such as certificate of title for
                a
                vehicle), satisfactory to us, for the Goods being purchased. At our
                option, you may supply us with copies of these
                documents.

            


    

     

    
      	 	
              (ii)

            	
              We
                are not obligated to make advances for more than 0.00%
                of
                the N/A
                trade-in value of the Goods as determined by the N/A
                publication for the month in which such advance is requested, if
                the Goods
                are vehicles, or that percentage of your purchase price if the Goods
                are
                not vehicles.

            


    

     

    
      	 	
              (iii)

            	
              You
                have not exceeded your available line of credit and when honoring
                the
                payment request will not exceed your available
                credit.

            


    

     

    
      	 	
              (iv)
                

            	
              If
                the goods are used vehicles, the vehicles cannot be used as demonstrators
                and must fall within the following model years N/A

            


    

     

    1.6 Demonstrators
      and daily rentals.
      We agree
      that the Goods may be used as demonstrators and/or daily rentals in our sole
      discretion and upon our prior consent. We may, at any time, revoke our consent
      to the use of any and/or all Goods as demonstrators and/or daily
      rentals.

    1.7 Interest.
      You
      agree to pay us interest on the amount of the outstanding balance that you
      owe
      us. Interest on all amounts advanced pursuant to this Agreement is
      calculated:

    [X]
      on
      the basis of the actual number of days outstanding divided by 360.

    1.8 Your
      interest rate. For
      advances for New Goods, your interest rate is equal to the Commercial
      Base Rate
      index
      rate (the “Index”) plus 50
      basis
      points and for advances for Used Goods, your interest rate is equal to the
      Index
plus N/A
      basis
      points. When the Index changes, your interest rate will increase or decrease
      correspondingly. Such rate change may occur each day.

    1.9 Reduction
      of outstanding amounts.
      You
      agree to pay us the amount we have advanced on your line of credit for the
      purchase of Goods as follows:

     

    a. New
      Goods.
      If you
      have not sold New Goods within 270
      days of
      the date we made an advance for the purchase of those Goods, you agree to make
      an immediate principal payment of 5.00
      percent
      of the amount of the advance, due and payable by the 15th
      day of
      the month immediately following the month end. You agree to make additional
      principal payments of 10.00
      percent
      of the amount of the advance 95
      days
      thereafter. If you have not sold New Goods within 540
      days of
      the date we made an advance for the purchase of those Goods, you agree to pay
      us
      immediately in full the balance you owe on that advance. At our option, if
      you
      have not sold New Goods on or before April 1 of the year immediately following
      the model year of the New Goods, you agree to make additional principal payments
      sufficient to curtail the amount you owe us, on the advance for the purchase
      of
      those Goods, down to 100% of clean NADA
      value
      for such Goods, and such Goods will then be treated as “Used Goods” subject to
      the principal reduction requirements of Section 1.9b. hereinafter.

     

    b. Used
      Goods.
      If you
      have not sold used Goods within N/A
      days of
      the date we made an advance for the purchase of those Goods, you agree to make
      an immediate principal payment of 0.00
      percent
      of the amount of the advance, due and payable by the 15th
      day of
      the month immediately following the month end. You agree to make additional
      principal payments of 0.00
      percent
      of the amount of the advance every N/A
      days
      thereafter until the Goods are sold. If the Goods have not been sold within
      N/A
      days of
      the date we made an advance for the purchase of those Goods, you agree to pay
      us
      immediately in full the balance that you owe on that advance.

     

    c. Repayment
      upon sale.
      Upon the
      sale of Goods for which we made an advance for the purchase of such Goods,
      you
      agree, on the first to occur of seven (7) Calendar Days after the sale or
      forty-eight (48) hours after the collection of the sale proceeds, to make an
      immediate payment of principal sufficient to pay, in full, the proportion of
      the
      advance allocable to the Goods sold, as determined by us and in our sole
      discretion.

     

    d. Accounting
      for unsold units after audit. Within
      five (5) Business Days after any audit, all Goods unaccounted for during the
      audit must be presented to us for inspection or, alternatively, you shall pay
      us
      for such Goods in the amount and pursuant to the schedule set forth in Paragraph
      1.9(c) above.

     

    1.10 Security
      for your line of credit. As
      security for all of your Obligations and for all of your other present or future
      Indebtedness to us, including indirect and contingent Obligations, you grant
      us
      a security interest in the Collateral, including, but not limited to, the Goods.
      In addition, you grant us a security interest in all Documents relating to
      the
      Collateral, any after-acquired similar property, any returned or unearned
      premiums on insurance insuring the Goods; any deposit now or in the future
      held
      by us in which you have an interest, and any property, securing any non-consumer
      loans you have with us. Any other security agreement that you have entered
      with
      us will continue to be in effect. You also assign to us all of your rights
      in
      any and all factory repurchase agreements. Any prior security interest that
      you
      have granted to us will continue to be in effect. Notwithstanding anything
      to
      the contrary contained herein, Regions Bank explicitly excludes consumer loans
      from the security interest granted pursuant to this provision.

     

    1.11 Previous
      agreements.
      If you
      have an existing floor plan line of credit agreement with us that has an
      outstanding balance, that agreement will continue in effect until you have
      paid
      all sums that you owe us under that agreement for advances, interest, and other
      charges. The available amount of credit that you have under this Agreement
      will
      be reduced by the amount of your outstanding balance under the earlier
      agreement.

     

    1.12 Crediting
      of payments.
      Payments
      received before 1 p.m. Central Time on a Business Day will be credited to your
      account no later than the next Business Day. Posting of payments may be delayed
      up to five (5) Business Days if the payment is not accompanied by the payment
      coupon (if provided), the payment is not made by check or money order, the
      payment is not received in the envelope (if provided), or if the payment is
      not
      mailed to the location designated by us for payment. Checks or money orders
      drawn on non-US banks shall not be accepted.

     

    1.13 Returned
      item charges.
      You
      agree that if you submit a check, draft, negotiable order of withdrawal or
      like
      instrument in payment of an amount owing on your account and the instrument
      is
      not paid or is dishonored , you will pay a returned item charge in such amount
      as allowed by Law. You agree that we may re-present, by electronic means or
      otherwise, an instrument for payment. You will still be responsible for the
      return item charge even if, upon re-presentation, the instrument is paid. All
      returned item charges will be added to the principal amount owing under your
      account and will accrue finance charges at the interest rate set forth in
      Section 1.7 until paid in full. You
      agree that we may, in our discretion, add the amount of the return item charge
      to the electronic re-presentation of the instrument that was
      unpaid.

     


      1.14 Late
        charge.  You
        will pay a late charge of five percent (5%) on any amount due to be paid
        to us
        under this Agreement, if your payment is not received by
        the
        15th
        day of
        each month.


     

    SECTION  II

    WARRANTIES,
      REPRESENTATIONS AND COVENANTS

    


    2.1 Warranty
      of title.
      You
      warrant that you have good and absolute title to all existing Goods, and have
      good right, full power and lawful authority to sell, convey, and grant a
      security interest that the same is free and clear of all grants, reservations,
      security interests, liens, charges, and encumbrances whatsoever, including
      conditional sales contracts, security agreements, financing statements, and
      anything of a similar nature, and that you shall and will warrant and forever
      defend the title thereto and the quiet use and enjoyment thereof unto us, our
      successors and assigns, against the lawful claims of all Persons
      whomsoever.

    


    2.2 Formation
      and qualification.
      You
      warrant that each Loan Party which is a corporation is duly incorporated,
      validly existing and in good standing under the Laws of the jurisdiction of
      its
      incorporation and is duly qualified to do business in all states in which the
      Loan Parties transact business. Each Loan Party which is a partnership, limited
      liability company, trust or other entity is duly formed and validly existing
      under the Laws of the jurisdiction of its formation and is duly registered
      in
      all jurisdictions where it engages in any form of business transaction. Each
      Loan Party which is a corporation, limited partnership or limited liability
      company is in good standing in all states in which such Loan Party transacts
      business and each Loan Party has all requisite power and authority to conduct
      its business.

    


    2.3 Loan
      documents.
      The
      execution, delivery and performance of the Loan Documents by each Loan Party
      are
      within such Loan Party’s power and authority, have been duly authorized by all
      necessary action and do not and will not (a) require any Authorization which
      has
      not been obtained, (b) contravene the Charter Documents of any Loan Party,
      any
      applicable Laws or Other Requirements or any agreement or restriction binding
      on
      or affecting any Loan Party, or (c) result in or require the creation or
      imposition of any Lien upon or with respect to any property now or in the future
      owned by any Loan Party, including the Goods (other than Liens in favor of
      us).
      No Authorization which has not been obtained is required for the creation of
      the
      Liens or the enforcement by us of our Remedies under the Loan Documents. Each
      Loan Document, when executed and delivered, will constitute the legal, valid
      and
      binding obligation of each Loan Party which is a party to or bound by such
      Loan
      Document, enforceable against such Loan Party in accordance with its terms,
      except as enforcement may be limited by bankruptcy, insolvency or other similar
      Laws affecting the rights of creditors generally.

    


    2.4 Financial
      information.
      The
      Financial Statements of each Loan Party which have been furnished to us fairly
      present such Loan Party’s financial condition as of the dates of such Financial
      Statements and the results of operations for the periods covered by such
      Financial Statements in accordance with generally accepted accounting principles
      consistently applied (or such other method of preparation approved by us in
      writing), and since the respective dates of such Financial Statements, there
      has
      been no material adverse change in the financial condition, operations,
      properties or prospects of such Loan Parties. Each Loan Party has filed all
      tax
      returns required to be filed by it, and has paid all taxes due pursuant to
      such
      returns or in respect of any of its properties (except for any such taxes which
      are being actively contested in good faith by appropriate proceedings), and
      to
      the best knowledge of each Loan Party, no basis exists for additional
      assessments which have not been adequately reserved against in the Financial
      Statements referred to above or otherwise disclosed in writing to
      us.

     

    2.5 Your
      corporate resolution.
      If a
      corporation, you agree, before requesting your initial advance and as a
      condition to our issuing such advance, to provide us with a corporate resolution
      duly signed by a person or persons with appropriate authority evidencing the
      authority of your officers or agents to request advances or otherwise transact
      business with us in connection with this Agreement. Such corporate resolution
      must be signed by your secretary or assistant secretary, include duly adopted
      resolutions of your Board of Directors so authorizing such officers and certify
      that each such officer holds the office beside his or her name.

     

    2.6 Litigation
      and other matters.
      You
      acknowledge that, except as otherwise disclosed in writing to us: (a) no actions
      or other proceedings affecting or relating to the Goods are pending or, to
      the
      best knowledge of each Loan Party, threatened, (b) no actions or other
      proceedings are pending or, to the best knowledge of each Loan Party, threatened
      against or affecting any Loan Party or any property of any Loan Party which,
      if
      determined adversely to such Loan Party, could materially impair the financial
      condition, operations, properties or prospects of such Loan Party or the ability
      of such Loan Party to perform its Obligations under the Loan Documents, and
      (c)
      you have given notice to us of any other matters which you are required to
      disclose to us under this Agreement.
      See Schedule 2.6.

     

    2.7 Performance.
      You
      agree to perform, observe and comply with all provisions hereof and of all
      other
      Loan Documents and you agree to duly and punctually pay to us the sum of money
      expressed in this Agreement with interest thereon, and all other sums required
      to be paid by you pursuant to the provisions of this Agreement and the other
      Loan Documents.

     

    2.8 Compliance
      with laws and other requirements.
      You
      shall comply in all material respects with all applicable Laws relating to
      the
      Goods and shall obtain and maintain all authorizations, consents, approvals,
      orders, licenses, permits, exemptions or other action by or from, or any filing,
      registration or qualification required in connection with the
      Goods.

     

    2.9 Your
      obligations regarding the Goods.
      You
      agree to keep the Goods free and clear from any debt, lien, security interest,
      encumbrance or claim, except those stated in Schedule II,
      if any;
      which are the only debts, liens, security interests, encumbrances or claims
      on
      the Goods.

     

    2.10 Documents
      from you.
      You
      agree to supply us with copies of any present or future agreements you have
      with
      your Suppliers. You agree to deliver to us original title Documents (e.g.,
      certificates of title, manufacturer’s statements of origin, bills of sale) on
      the Goods whenever we request. You agree to deliver these Documents to us
      promptly.

     

    2.11 Books
      and records.
      You
      shall at all times maintain (a) full and complete books of account and other
      records with respect to the Goods and your business and operations, and (b)
      complete copies of all Authorizations issued in connection with the Goods,
      and
      shall permit us and our agents, upon request from time to time, to inspect
      and
      copy any of such books, records and other documents.

     

    2.12 Estoppel
      affidavits.
      You
      shall, within ten (10) days after written request from us, furnish a written
      statement, duly acknowledged, setting forth the unpaid principal of and interest
      on the line of credit and any other Indebtedness owed by you to us and whether
      or not any offsets or defenses exist against any principal and interest owed.
      You shall, within ten (10) days after written request from us, furnish a written
      estoppel certificate from your landlord, in form and substance acceptable to
      us,
      duly acknowledged, setting forth any defaults, offsets or defenses under the
      lease between the landlord and you and stating the nature of any such defaults,
      offsets or defenses.

     

    2.13 Landlord’s lien
      waiver.
      You
      shall, within ten (10) days after written request from us, furnish a written
      statement, duly acknowledged, from your landlord waiving all of the landlord’s
      lien rights in the Goods.

     

    2.14 Reporting
      requirements. You
      shall
      cause to be delivered to us, in form and detail satisfactory to us:

     

    a. Promptly
      after discovery by you, notice of (i) any dispute between you and any agency
      or
      Person relating to any of the Goods, the adverse determination of which could
      adversely affect the Goods in any material respect, (ii) any material adverse
      change in the financial condition, operations, properties or prospects of any
      Loan Party to the Agreement, including, but not limited to, any and all
      Guarantors, (iii) any event which has or may have a material adverse impact
      on
      the Goods, and (iv) the occurrence of any Event of Default or event which,
      with
      the giving of notice and/or the passage of time, could become an Event of
      Default;

     

    b. Within
      ninety (90) days after the end of each fiscal year of each Loan Party, audited
      Financial Statements for such Loan Party for and as at the end of such fiscal
      year, and upon request by us from time to time, quarterly audited Financial
      Statements for each Loan Party and copies of any audited Financial Statements
      prepared for each Loan Party, in each case certified in a manner acceptable
      to
      us and updated periodically at our sole discretion; and

     

    c. Within
      thirty (30) days after the end of each calendar month, monthly unaudited
      Financial Statements pertaining to you and your business which business is
      the
      subject of this Agreement.

     

    d. Such
      other Documents or information relating to any Loan Party, the Goods or the
      transactions contemplated by this Agreement as we may reasonably request from
      time to time. We are authorized at any time and from time to time to directly
      contact any Person or agency to verify any information provided by you or for
      any other purpose relating to any Loan Party, the line of credit, the Goods
      or
      the transactions contemplated by this Agreement or the Loan Documents executed
      in connection with this Agreement.

     

    2.15 Documents
      and other information.
      All
      Documents and other information delivered to us pursuant to any of the Loan
      Documents are and will be complete and correct in all material respects at
      the
      time of delivery to us.

     

    2.16 Power
      of attorney.
      You
      grant us a power of attorney to execute in your name any Documents we believe
      are necessary or helpful to perfect or protect our security interest or to
      sell
      or transfer any of the Goods. You agree that this power cannot be canceled
      as
      long as you are indebted to us.

     

    2.17 Other
      creditors.
      You
      agree to give us ten (10) days written notice before obtaining floor plan
      financing from any other creditor. You also agree to give us copies of any
      agreements you have with other creditors.

     

    2.18 Location
      of the security.
      You
      agree not to change the location or use of the Goods without obtaining our
      written permission in advance. See
      Schedule 2.18.

     

    2.19 Disposing
      of the security.
      You
      agree not to sell, transfer, or dispose of the Goods except in the ordinary
      course of business, without our prior written permission. You also agree to
      let
      us receive, endorse and apply any payments resulting from transfer or disposal
      of the Goods. You agree not to release any of the Goods (including inventory)
      without our prior written permission.

     

    2.20 Inspection
      rights and easements.
      In
      addition to other inspection rights, you shall and hereby do grant and convey
      to
      us, our agents, representatives, contractors, and employees, to be exercised
      by
      us, periodically as deemed necessary by us and in our sole discretion, an
      easement and license to enter on the Premises, at any time and from time to
      time, for the purpose of making such audits, tests, inspections, and
      examinations, as we, in our sole discretion, deem necessary, convenient, or
      proper to determine the condition and use of the Goods, to make an inventory
      of
      the Goods, and to determine whether the ownership, use and operation of the
      Goods are in compliance with all federal, state, and local laws, ordinances,
      rules, and regulations, including, without limitation, environmental laws,
      health and public accommodation laws, the ADA and the Rehabilitation Act, as
      applicable, and ordinances, rules and regulations relating thereto.
      Notwithstanding the grant of the above easement and license to us, we shall
      have
      no obligation to perform any such inspections, or to take any remedial action.
      All the costs and expenses incurred by us with respect to any inspections which
      we may conduct or take pursuant to this paragraph, including, without
      limitation, the fees of any engineers, laboratories, and contractors, shall
      be
      repaid by you, with interest, and shall be secured by this Agreement and the
      other Documents executed in connection with this Agreement. Further, any audit
      or examination conducted by us is for our sole use and benefit, and is not
      for
      your benefit. Our inspection rights, audits and examinations are for our
      business purposes, and may not be relied upon by you for your business purposes
      apart from the requirements of this Agreement.

     

    2.21 Demonstrators.
      If you
      plan to use any of the Goods as a demonstration model, you must first give
      us
      notice in writing of your intention to do so and provide us with a written
      description of the Goods to be so used.

     

    2.22 Taxes
      and liens.
      You
      agree to pay promptly, when and as due, and, if requested, will exhibit promptly
      to us, receipts for the payment of all taxes and other expenses incurred and
      impositions of every nature whatsoever imposed, levied or assessed or to be
      imposed, levied or assessed upon or against the Goods or any charge which,
      if
      unpaid, would become a lien or charge upon the Goods. You will not allow any
      statutory or other lien to be created or to remain outstanding upon any of
      the
      Goods.

     

    2.23 Property
      insurance.

     

    a. You
      shall
      procure for, deliver to, and maintain for the benefit of us during the term
      of
      this Agreement, insurance policies in an aggregate amount not less than the
      aggregate amount of the advances outstanding on your line of credit (or such
      greater amount as we may specify from time to time) combined
      single limit in
      such
      amounts as we shall require, insuring the Goods, while in transit and otherwise,
      against fire, extended coverage, and such other insurable hazards, casualties
      and contingencies as we may require. The form of such policies and the companies
      issuing them shall be acceptable to us, and, unless otherwise agreed by us
      in
      writing, shall provide for coverage without coinsurance or deductibles. All
      policies shall contain a New York standard, non-contributory
      endorsement making losses payable to us. At least fifteen (15) days prior to
      the
      expiration date of all such policies, renewals thereof satisfactory to us shall
      be delivered to us. You shall deliver to us receipts evidencing the payment
      of
      all such insurance policies and renewals.

     

    b. We
      hereby
      are authorized and empowered, at our option, to adjust or compromise any loss
      under any insurance policies on the Goods, and to collect and receive the
      proceeds from any such policy or policies. Each insurance company hereby is
      authorized and directed to make payment for all such losses directly to us
      instead of to you and us jointly. After deducting from said insurance proceeds
      any expenses incurred by us in the collection or handling of said funds, we
      may
      apply the net proceeds, at our option, either toward repairing or restoring
      the
      Goods, or as a credit on any portion of your Indebtedness selected by us,
      whether then matured or to mature in the future, or at our option, such sums
      either wholly or in part may be used to repair the Goods or for any other
      purpose and in a manner satisfactory to us, all without affecting the Lien
      of
      this Agreement for the full amount secured hereby before such payment took
      place. We shall not be liable to you or otherwise responsible for any failure
      to
      collect any insurance proceeds due under the terms of any policy regardless
      of
      the cause of such failure, nor shall we bear any risk of loss as to the
      Goods.

     

    c. If
      required by us, you shall pay on the first day of each month, in addition to
      any
      regular installment of principal and interest and other charges with respect
      to
      the Indebtedness secured hereby, one-twelfth (1/12th) of the yearly premiums
      for
      insurance maintained pursuant to the provisions of this paragraph. Such amount
      shall be used by us to pay such insurance premiums when due. Such added payments
      shall not be, nor be deemed to be, trust funds, but may be commingled with
      the
      general funds of ours, and no interest shall be payable in respect thereof.
      Upon
      our demand, you agree to deliver to us such additional moneys as are necessary
      to make up any deficiencies in the amounts deposited by you with us pursuant
      to
      this paragraph to enable us to pay such insurance premiums when due. In the
      event of an Event of Default hereunder or of a default by you under any of
      the
      Documents executed in connection with this Agreement, we may apply such sums
      to
      the reduction of the Indebtedness secured hereby in any manner selected by
      us.

     

    2.24 If
      we buy insurance.
      If you
      do not or cannot insure the Goods, we have the right to buy coverage insuring
      only our interest or insuring both your and our interest. In either case, we
      may
      demand reimbursement from you or make an advance to pay the cost. However,
      we
      have no obligation to acquire, maintain or replace any policy.

     

    2.25 Care
      of the Goods.
      You
      will preserve and maintain the Goods in good condition and repair, and shall
      not
      commit or suffer any waste. If the Goods or any part thereof are damaged by
      fire
      or any other cause, you shall give immediate written notice of the same to
      us.
      We hereby are authorized to enter upon the Premises and inspect the Goods,
      and
      to inspect your or your agent’s records with respect to the ownership, use,
      management and operation of the Goods, at any time during normal business
      hours.

     

    2.26 Information
      about sales.
      At our
      request, you agree to tell us the name and address of any person who buys or
      has
      bought any of the Goods. You also agree to deliver to us all of the Documents
      you have concerning any sale. You agree to give us this information and these
      Documents promptly.

     

    2.27 Your
      warranty on advances.
      You
      agree that you will not request an advance or cause a request to be made on
      your
      behalf unless you are in strict compliance with all of the terms of this
      Agreement. You agree that each request by you for an advance will constitute
      your new promise and representation that you are in strict compliance with
      all
      terms of this Agreement.

     

    2.28 Security
      documents and costs.
      You
      agree to sign at any time any Documents we request in order to perfect or
      protect our security interest. You agree to pay reasonable costs related to
      perfecting or protecting our security interest, including filing fees and
      reasonable attorney’s fees. A reproduction of this signed Agreement or a signed
      financing statement is sufficient as a financing statement. You authorize us
      to
      add any information to this Agreement which would be necessary to make it an
      effective financing statement.

     

    2.29 List
      of Goods.
      We may
      from time to time give you a listing of the Goods for which we have made an
      advance or a listing of the amount of the outstanding balance on your line
      of
      credit. You agree to examine this list within three (3) Business Days of when
      you receive it and notify us immediately in writing if you claim any of the
      information is wrong. If you fail to notify us, you agree that you may not
      question or dispute the accuracy of any information on the list.

     

    2.30 Our
      rights to the security.
      You may
      not take any action that would give someone else a security interest in the
      Goods unless we agree in writing. You agree that our claims to the Goods take
      precedence over any other claims, except those listed above. You agree that
      we
      may at any reasonable time inspect and audit the Goods and inspect, audit and
      photocopy any Documents relating to the Goods.

     

    2.31 Further
      assurances; after-acquired property.

     

    a. At
      any
      time, and from time to time, upon our request, you at your expense, will make,
      execute and deliver or cause to be made, executed and delivered to us and,
      where
      appropriate, cause to be recorded and/or filed and from time to time thereafter
      to be re-recorded and/or re-filed at such time and in such offices and places
      as
      shall be deemed desirable by us any and all such other and further instruments
      of further assurance, certificates and other Documents as may, in our opinion
      be
      necessary or desirable in order to effectuate, complete, or perfect, or to
      continue and preserve your Obligations, and the priority of this Agreement
      as a
      first and prior lien upon all of the Goods, whether now owned or hereafter
      acquired by you. Pursuant to Paragraph 2.16, we may make, execute, and record
      any and all such instruments, certificates, and Documents for and in your name,
      and you hereby irrevocably appoint us as your agent and attorney-in-fact so
      to
      do. The lien and rights hereunder automatically will attach, without further
      act, to all after-acquired Goods.

     

    b. Without
      limitation to the generality of the other provisions of this Agreement,
      including subparagraph (a) of this paragraph, it hereby expressly is covenanted,
      agreed and acknowledged that the Lien and rights hereunder automatically will
      attach to any further, greater, additional, or different estate, rights, titles
      or interests in or to any of the Goods at any time acquired by you by whatsoever
      means. In consideration of our making the Loan, and to secure the line of
      credit, the future Indebtedness and Obligations set forth above, you hereby
      grant, bargain, sell and convey to us, on the same terms as set forth in this
      Agreement and intended to be a part hereof, all such after-acquired property
      and
      estates.

     

    c. You
      shall
      appear in and defend all actions and other proceedings purporting to affect
      any
      of the Goods or our rights or interests under the Loan Documents (and we may,
      at
      your expense, appear in and defend any such action or other proceeding as we
      may
      determine), and you shall take or cause to be taken such further action and
      execute and deliver or cause to be executed and delivered such further documents
      as we from time to time may reasonably require to maintain, perfect, protect,
      assure and confirm our rights and interests (including rights and interests
      in
      the Goods), your Obligations and the intention of the Loan Parties.

     

    2.32 Notice
      of shipment or receipt of Goods.
      At our
      request, you agree to give us notice of the shipment or your receipt, or both,
      of any Goods for which we have made an advance.

     

    2.33 Credit
      information.
      In
      addition to any credit reports that we usually make in the ordinary course
      of
      business, you authorize us to give any information we have about this line
      of
      credit and you to any of your present or future suppliers and other
      creditors.  

     

    2.34 Notices.
      We will
      send any notices to you at the address you have given us in this Agreement
      unless you have requested that we send notices to you at a different address.
      You agree that we do not have to honor any request to send notices to a
      different address if you do not make that request in writing. We will have
      a
      reasonable time to change our records after we receive your request and may
      continue to send notices to your previous address until our records are changed.
      Until our records are changed, you agree that any notices addressed to your
      prior address shall be binding upon you. You agree that we have given you notice
      when we have deposited in the mail, postage prepaid, the notice addressed to
      you. You agree that any notice to us must be in writing, mailed to the address
      under “Place of Agreement’’ above and that it is not effective until we actually
      receive it.

     

    2.35 Credit
      limit.
      You
      agree not to request or cause a request to be made for advances which would
      exceed your available aggregate line of credit. If your aggregate line of credit
      is apportioned among different Suppliers or among new or used Goods, you also
      agree not to request or cause a request to be made for advances which would
      exceed the amount available under the applicable separate limit on your line
      of
      credit. We do not have to make any advance that would exceed any limit on all
      or
      part of your line of credit. We may, in our discretion, allow advances exceeding
      your available line of credit, in the aggregate or as apportioned; however,
      this
      exercise of discretion shall not constitute an agreement by us to increase
      the
      agreed upon line of credit as set forth in this Agreement. We do not have to
      allow advances exceeding your available line of credit even if we have done
      so
      on previous occasions. In the event we allow advances exceeding your available
      line of credit as apportioned, your available aggregate line of credit shall,
      nevertheless, be reduced by the total advance, including the excess amount
      over
      the apportioned line of credit.

     

    2.36 Reduction
      of line of credit.
      We can
      lower the amount of your line of credit whenever we reasonably believe that
      your
      ability to repay us all or part of the amount of your line of credit has changed
      or that the value of our security interest has changed. If we choose to reduce
      all or part of your line of credit (but not call your entire balance due
      immediately), we will notify you that your line of credit has been reduced.
      If
      you owe us an amount in excess of the reduced line of credit, you will not
      have
      any available line of credit for advances and must immediately pay us the amount
      in excess of the reduced line of credit.

     

    2.37 Cancellation
      of line of credit.
      This
      Agreement may be canceled, with or without cause, as to future advances by
      either party giving the other party written notice. The Agreement will continue
      in effect for all advances incurred before the effective date of
      cancellation.

     

    2.38 Reevaluation
      of line of credit.
      We may
      reevaluate your line of credit at any time. You agree to supply us with any
      information we request relating to your creditworthiness or financial condition
      and the security for this Agreement. If you fail to respond promptly or
      completely, we may immediately and without notice obtain this information
      elsewhere, or reduce or terminate your line of credit.

     

    2.39 Change
      of terms.
      You
      agree that we may change any term or condition of this Agreement by giving
      you
      at least thirty (30) days prior written notice. You expressly agree and
      understand that any such change shall be applicable to the balance outstanding
      as of the effective date of the change. You may refuse to accept such change
      and
      terminate your line of credit by notifying us in writing at least one (1) day
      prior to the effective date of the change and paying off your balance under
      the
      existing terms of this Agreement.

     

    2.40 Waiver
      of your rights.
      To the
      extent permitted by Law, the Loan Parties waive all rights of exemption in
      the
      Goods under the Laws of this or any other state; notice of the acceptance of
      the
      Guaranty; and demand, presentment, notice of dishonor, protest, and
      suit.

     

    2.41 Your
      compliance.
      You
      agree that if we do not insist upon strict compliance with the terms of this
      Agreement, we will not have waived or otherwise given up our right to insist
      upon your strict compliance at a later date.

     

    2.42 Additional
      representations, warranties and covenants.
      The Loan
      Parties agree to the further and additional representations, warranties and
      covenants as are expressly set forth in Schedule
      III,
      if
      any.

     

    SECTION
      III

    EVENTS
      OF DEFAULT; REMEDIES

    


    3.1 Events
      of default.
      We may,
      to the extent permitted by Law or this Agreement, call your entire account
      immediately due and payable if you are in default. You will be in default,
      if:

     

    a. you
      do
      not make a payment due even if we have previously allowed you to make late
      payments;

     

    b. you
      fail
      to perform one or more of your Obligations or covenants to us, under this
      Agreement;

     

    c. any
      Loan
      Party misrepresented a fact in requesting this or any other Loan with
      us;

     

    d. you
      default on any obligation to us under any other agreement or to any other
      creditor;

     

    e. there
      is
      a change in the financial affairs of any Loan Party that we believe will
      increase our risk of not being repaid;

     

    f. a
      material portion of the Goods is lost, stolen, damaged, destroyed, sold,
      encumbered, seized, or attached;

     

    g. we
      reasonably believe that you will be unable to repay us or that our security
      interest is unsafe;

     

    h. any
      Loan
      Party dies or ceases to exist;

     

    i. any
      Loan
      Party changes its legal name without obtaining our prior written authorization,
      ceases doing business, is dissolved, merged or consolidated;

     

    j. an
      Event
      of Default shall occur under the Note;

     

    k. any
      representations and warranties from you set forth herein and all other
      representations, warranties and certifications to us in the Loan Documents
      or in
      any other Document delivered under or in connection with the Loan Documents
      proves to have been incorrect in any material respect when made;

     

    l. you
      are
      enjoined by any court or other governmental agency from performing any
      Obligations;

     

    m. you
      engage in wholesale floor planning, in excess of that which, in our sole
      opinion, occurs in the normal course of a retail automobile business, without
      our prior written consent;

     

    n. after
      receiving our written approval to engage in wholesale floor planning at a
      certain percentage and/or volume, you increase the percentage and/or volume
      of
      your business engaged in wholesale floor planning without obtaining our prior
      written approval;

     

    o. any
      Loan
      Party is dissolved or liquidated or merged with or into any other Person; or
      for
      any period of more than ten (10) days any Loan Party which is a corporation,
      partnership, limited liability company, trust or other entity ceases to exist
      in
      its present form and (where applicable) in good standing and duly qualified
      under the Laws of the jurisdiction of its incorporation or formation and any
      other state where it transacts business; or all or substantially all of the
      assets of any Loan Party are sold or otherwise transferred;

     

    p. any
      Loan
      Party ceases to be managed and controlled by the Person or Persons who managed
      and controlled such Loan Party as of the date of this Agreement, or any Loan
      Party assigns or attempts to assign any rights or interests under any Loan
      Document without our prior written consent; or any Loan Document becomes or
      is
      claimed by any Loan Party to be unenforceable against any Loan Party;
      or

     

    q. any
      Loan
      Party is subject to an order for relief by the bankruptcy court, or is unable
      or
      admits in writing its inability to pay its debts as they mature or makes an
      assignment for the benefit of creditors; or any Loan Party applies for or
      consents to the appointment of any receiver, trustee or similar official for
      it
      or for all or any part of its property (or any such appointment is made without
      its consent and the appointment continues undischarged and unstayed for sixty
      (60) days); or any Loan Party institutes or consents to any bankruptcy,
      insolvency, reorganization, arrangement, readjustment of debt, dissolution,
      custodianship, conservatorship, liquidation, rehabilitation or similar
      proceeding relating to it or to all or any part of its property under the Laws
      of any jurisdiction (or any such proceeding is instituted without its consent
      and continues undismissed and unstayed for sixty (60) days); or any judgment,
      writ, warrant of attachment or execution, garnishment or similar process is
      issued or levied against any of the Goods or any other property of any Loan
      Party and is not released, vacated or fully bonded within sixty (60) days after
      its issue or levy.

     

    3.2 Sales
      subsequent to event of default.
      You
      agree that, upon the occurrence of an Event of Default, you shall not sell,
      lease, dispose of or otherwise convey any interest to any third party in any
      of
      the Goods without our prior written consent.

     

    3.3 Remedies.
      Notwithstanding any language in this Agreement to the contrary, upon the
      occurrence of any Event of Default, we may, without notice to or demand upon
      you, which are expressly waived by you (except for notices or demands otherwise
      required by applicable Laws to the extent not effectively waived by you and
      any
      notices or demands specified in the Loan Documents), exercise any one or more
      of
      the following Remedies as we may determine.

     

    a. we
      may
      declare the unpaid principal of the line of credit and the Note and all accrued
      interest and other amounts payable under the Loan Documents to be immediately
      due and payable and we may set off any deposits or securities of any Loan Party
      held by us toward the payment of the Indebtedness;

     

    b. we
      may
      perform any of your Obligations in such manner as we may determine;

     

    c. we
      may
      proceed to protect, exercise and enforce any and all other Remedies provided
      under the Loan Documents, any other agreements between you and us, or by
      applicable Laws;

     

    d. we
      may
      take possession of the Goods without judicial process and enter upon any
      Premises for the purpose of taking possession of, securing, removing and/or
      disposing of the Goods including, but not limited to, the placement of a
      designated representative on the Premises, without interference from you and
      without any liability for rent, storage, utilities or other sums;

    


    e. we
      may
      post notifications on all Goods, in form and substance acceptable to us,
      notifying any and all third parties of our lien and security interest in the
      Goods and of your default under this Agreement;

     

    f. we
      may
      sell, lease or otherwise dispose of any or all of the Goods, whether in its
      then
      condition or after further processing or preparation, at public or private
      sale;
      and unless the Goods threaten to decline speedily in value or are of a type
      customarily sold on a recognized market, we shall give to you at least ten
      (10)
      days’ prior notice of the time and place of any public sale of the Goods or of
      the time after which any private sale or other intended disposition of the
      Goods
      is to be made, all of which you agree shall be reasonable notice of any sale
      or
      disposition of the Goods;

     

    g. we
      may
      permit you to sell all or part of the Goods in which event all
      sale proceeds
      shall be
      paid to us and we shall apply the sale proceeds first to pay, in full, the
      proportion of the advance allocable to the Goods sold and second to satisfy
      all
      of your other outstanding Indebtedness to us, however occurring, all in our
      sole
      discretion.

     

    h. we
      may
      increase your interest rate by up to three percent (3%) during the pendency
      of
      any Event of Default.

     

    All
      our
      costs, expenses and charges in exercising any such Remedies shall be payable
      by
      you to us in accordance with this Agreement.

     

    Each
      of
      our Remedies provided in the Loan Documents is cumulative and not exclusive
      of,
      and shall not prejudice, any other Remedy provided in the Loan Documents or
      by
      applicable Laws. Each Remedy may be exercised from time to time as often as
      deemed necessary by us, and in such order and manner as we may determine. No
      failure or delay on our part in exercising any Remedy shall operate as a waiver
      of such Remedy; nor shall any single or partial exercise of any Remedy preclude
      any other or further exercise of such Remedy or of any other Remedy. No
      application of payments, or any advances or other action by us, will cure or
      waive any Event of Default or prevent acceleration, or continued acceleration,
      of amounts payable under the Loan Documents or prevent the exercise, or
      continued exercise, of any Remedies of ours. Notwithstanding anything to the
      contrary, the exercise by us of any Remedy shall not obligate us or cause us
      to
      be deemed to have taken possession of, managed or operated your business nor
      shall we be liable for any business losses incurred during the exercise of
      any
      Remedy.

     

    3.4 Indemnification.
      You
      shall indemnify, defend and save and hold us harmless from and against, and
      shall pay on demand, any and all losses, liabilities, damages, costs, expenses
      and charges (including the reasonable fees, charges and disbursements of
      internal and external legal counsel) suffered or incurred by us as a result
      of
      (a) any failure of you to perform any of your Obligations under any Loan
      Document, (b) any failure of any representation or warranty by you to be correct
      in all respects when made, (c) any claim, demand or cause of action, or any
      action or other proceeding, whether meritorious or not, brought or asserted
      against any Indemnitee which relates to or arises out of the Loan Documents,
      the
      Loan, the Goods or any transaction contemplated by, or the relationship between
      you and us or any action or inaction by us under, the Loan Documents;
provided
      that no
      Indemnitee shall be entitled to indemnification for matters caused solely by
      such Indemnitee’s gross negligence or willful misconduct. Any obligation of
      yours under this paragraph shall survive the making and repayment of the Loan,
      the expiration or termination of this Agreement, and shall be secured by any
      agreements now or in the future securing the Loan or any Guaranty.

     

    3.5 Collection
      costs, attorney’s fees and other expenses.
      If you
      are in default and we have to refer your account to an attorney to sue or take
      other steps to collect or secure amounts advanced pursuant to this Agreement
      you
      and your Guarantor(s) agree to pay our reasonable costs, including a reasonable
      attorney’s fee. You agree to bear sole responsibility for and promptly pay or
      cause to be paid all costs and expenses relating to the performance of your
      Obligations or the delivery to us of any Documents or other items or information
      under or in connection with any of the Loan Documents, and any taxes (other
      than
      income or gross receipts taxes generally applicable to banks), costs, expenses,
      fees or charges payable or determined to be payable in connection with the
      execution, delivery, filing or recording of, or otherwise with respect to,
      any
      Loan Document or any other Document delivered under or in connection with any
      Loan Document.

     

    You
      shall
      pay to us on demand all costs, expenses and charges of ours in connection with
      the approval of the Loan by us and the negotiation, preparation, execution,
      delivery, administration, supplement, modification, amendment, waiver and
      enforcement of, and any other action taken by us under or otherwise to protect
      or defend its rights and interests in respect of, any Loan Document, and any
      litigation, dispute, action or other proceeding (including, without limitation,
      bankruptcy proceedings) relating thereto, including, without limitation,
      recording fees, filing fees, search fees, the reasonable fees and disbursements
      of our legal counsel and other out-of-pocket expenses, and the charges of our
      internal legal counsel.

    


    SECTION  IV

    MISCELLANEOUS

    


    4.1 Alternative
      dispute resolution.

    


    a. Agreement
      to Arbitrate.
      In
      mutual consideration of the line of credit, you for yourself, your heirs,
      successors and assigns (“the Borrower”) and we (the “Lender” and all of its
      directors, officers, employees, agents, parent corporations, subsidiary
      corporations, corporations affiliated with Lender by direct or indirect common
      ownership, and the assignee of this contract) agree with limited exceptions,
      that any and all disputes, claims, or controversies of any kind and nature
      between us arising out of or relating to the relationship between us will be
      resolved through mandatory, binding arbitration. This agreement to arbitrate
      covers claims that (a) arise out of or relate to this Agreement; (b) arise
      out
      of or relate to any past transactions or dealings between us; (c) arise out
      of
      or relate to any future transactions or dealings between us; and (d) disputes
      about whether any claims, controversies, or disputes between us are subject
      to
      arbitration to the extent permitted by federal law. Because you and we have
      agreed to arbitration, both
      of us are waiving our rights to have disputes resolved in court by a judge
      or
      jury except as set forth below.

     

    Exceptions
      to Arbitration.
      Notwithstanding any language in this Agreement to the contrary, in the event
      of
      a Default in payment under the line of credit, the Lender may seek its remedies
      in an action at law or in any permitted non-judicial manner (such as, but not
      limited to, the right of self-help repossession under Article 9A of the Uniform
      Commercial Code; and, its decision to do so shall not be deemed to be a waiver
      of its right thereafter to insist upon and seek specific enforcement of its
      rights under this Agreement, in the event that the Borrower shall assert a
      counterclaim or right of setoff in such judicial or non-judicial
      action.

     

    Arbitration
      to Be Conducted by an Arbitration Administrator.
      The
      party seeking arbitration shall select one of the following two arbitration
      administrators: National Arbitration Forum or JAMS/Endispute. Except as modified
      hereby, the arbitration shall be conducted according to the rules and procedures
      of the selected Administrator. We will obtain a copy of the Administrator’s
      rules and procedures for you at your request.

     

    Law
      Applicable to Arbitration Proceedings.
      The
      arbitrator is required to follow all substantive law applicable to any dispute,
      including the statute of limitations. The arbitrator will be bound by the
      Federal Rules of Evidence, and must respect any applicable attorney-client
      privilege, attorney work-product privilege, and any other applicable privilege.
      The arbitrator is required to issue a written decision setting forth the
      decision and the reasons for that decision. You and we agree that the
      arbitrator’s decision will be final, binding, and enforceable in any court of
      competent jurisdiction.

     

    Judicial
      Review of Arbitrator’s Decision.
      You and
      we agree that the arbitrator’s decision CANNOT
      BE APPEALED.
      The
      arbitrator’s decision is subject to judicial review only on the grounds set
      forth in Title 9, Section 10 of the United States Code, as well as on the ground
      that the decision, findings, or rationale of the decision is manifestly
      inconsistent with the terms of this Agreement, any loan agreement, or the
      governing law.

     

    No
      Class Actions or Joinder of Additional Parties.
      You
      agree that you will not serve as a class representative or participate as a
      class member in an arbitration proceeding, that only your claims will be
      addressed in the arbitration proceeding, and that additional parties cannot
      be
      added to the arbitration proceeding unless you and we agree in writing before
      the arbitration. A dispute between us that is required to be arbitrated under
      this Agreement, will be arbitrated only between us, even if there are additional
      parties to the dispute or even if you make allegations that your dispute should
      be handled as a class action.

     

    Severability
      and Reformation.
      If it is
      ever determined that some portion of this section is void, voidable, or
      unenforceable, or if the inclusion of some provision in this section would
      render the Agreement unenforceable, you and we agree that the void, voidable,
      or
      unenforceable provision or the provision that renders the section unenforceable
      will be severed from the remainder of the Agreement, leaving the remainder
      of
      the Agreement enforceable. You and we further agree that a court may reform
      any
      portion of this Agreement found to be void, voidable, or unenforceable, or
      the
      inclusion of which would render this Agreement unenforceable.

     

    Replacement
      of Existing Arbitration Agreements.
      You and
      we agree that this Alternative Dispute Resolution Agreement supersedes and
      replaces any prior Alternative Dispute Resolution Agreement between
      us.

     

    Federal
      Arbitration Act Applies. The
      parties understand and agree that this arbitration agreement is made pursuant
      to
      a transaction involving interstate commerce and shall be governed by the Federal
      Arbitration Act.

     

    b. THE
      PARTIES UNDERSTAND AND AGREE (i) THAT THIS ARBITRATION AGREEMENT IS MADE
      PURSUANT TO A TRANSACTION INVOLVING INTERSTATE COMMERCE AND SHALL BE GOVERNED
      BY
      THE FEDERAL ARBITRATION ACT, 9 U.S.C. SECTION 1-16 (THE “FAA”); (ii) THAT THE
      ARBITRATOR SHALL APPLY APPLICABLE SUBSTANTIVE LAW CONSISTENT WITH THE FAA;
      (iii)
      THAT EACH OF THEM IS WAIVING RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE
      RIGHT TO A JURY TRIAL; (iv) THAT PRE-ARBITRATION DISCOVERY IN ARBITRATION
      PROCEEDINGS IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDINGS;
      (v) THAT THE ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR
      LEGAL REASONING, AND (vi) EITHER PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION
      OF RULINGS BY THE ARBITRATORS, IS STRICTLY LIMITED TO APPEALS PERMITTED BY
      THE
      FAA.

    


    c. THE
      VENUE
      FOR ARBITRATION UNDER THIS PARAGRAPH SHALL BE IN THE CITY OF BIRMINGHAM, STATE
      OF ALABAMA.

    


    4.2 Waiver
      of trial by jury.  In
      the
      event that the foregoing alternative dispute resolution is deemed unenforceable
      by a court of competent jurisdiction, then, the parties to this Agreement desire
      to avoid the additional time and expense related to a jury trial of any dispute
      arising hereunder. Therefore, it is mutually agreed by and between the parties
      hereto, and for their successors and assigns, that they shall and hereby do
      waive trial by jury of any claim, counterclaim, or third-party claim, including
      any and all claims of injury or damages, brought by either party against the
      other arising out of or in any way connected with this Agreement and the
      relationship which arises here from. The
      parties acknowledge and agree that this waiver is knowingly, freely, and
      voluntarily given, is desired by the parties, and is in the best interest of
      the
      parties.

     

    4.3 Missing
      / incomplete information.
      In the
      event we and you fail to complete any of the blanks requiring information to
      be
      included within the first page of this Agreement, you agree that we may supply
      the missing information based upon our standard and customary credit
      policies.

     

    4.4 Beneficiary.
      No third
      party shall have any legally enforceable rights in this Agreement. Nothing
      contained in this Agreement shall create any contractual relationship between
      Regions Bank and any person or entity other than you.

     

    4.5 General
      deposits.
      Nothing
      in this Agreement shall be construed to create a written agreement between
      you
      and us which would require that monies advanced pursuant to this Agreement
      be
      paid only to a particular identified or identifiable person or that any such
      advances be made and payable only for a specific or particular purpose. Any
      deposits of advances pursuant to the terms of this Agreement shall constitute
      general deposits and shall not constitute special deposits or deposits in escrow
      or trust. The parties hereto expressly disclaim the creation of any fiduciary
      or
      trust relationship between them, or with any third party.

     

    4.6 Unenforceable
      provisions.
      If any
      section of this Agreement is not enforceable, that will not affect the validity
      of any other section. However, if the enactment or expiration of any applicable
      Law has the effect of rendering any provision of this Agreement unenforceable
      according to its terms, at our option, we may choose to declare your account
      due
      at once.

     

    4.7 Damages
      limited.
      You
      agree that we are not liable for incidental or consequential damages, including
      without limitation, lost sales or lost profits, arising from our breach of
      this
      Agreement or our failure to make advances.

     

    4.8 Waiver.
      You
      agree that our failure, in any one or more instances, to insist on the
      performance of any of the terms of this Agreement or to exercise any right
      or
      privilege conferred herein or the waiver of any breach of any terms of this
      Agreement shall not thereafter be construed as a waiver of such terms, which
      shall continue in force as if such waiver had not occurred.

     

     4.9 Choice
      of law.
      You and
      we agree that the terms of this Agreement including, without limitation,
      available rates of interest, shall be governed by applicable federal law and
      the
      law of the State of Alabama.

     

     4.10 Entire
      agreement.
      You
      agree that this written Agreement plus any other Documents that you signed
      when
      you signed this Agreement contain the entire agreement between you and us.
      We
      have not made any promises or representations to you that are not stated in
      this
      Agreement or those other Documents.

     

    4.11 Signatures.
      You
      agree
      that you sign this Agreement under seal, and you agree to all the terms of
      this
      Agreement. You also acknowledge that we have given you a completed copy of
      this
      Agreement.

     

     

    
      	 	 	 	 
	/s/ Rod
              Bandy            	 	 	/s/ Tracy
              J.
              Clement
	
              

            	 	 	
              

            
	
              Rod
                Bandy

              Dealer
                Credit Wholesale VO
REGIONS BANK

            	 	 	
              Tracy
                J. Clement
Vice President

              Borrower:
                FEATHERLITE, INC.

            


    

    


    


    SCHEDULE
      I

    DEFINITIONS
      AND ACCOUNTING TERMS

     

    Certain
      defined terms.
      When
      used in this Agreement, the following terms have the following
      meanings.

     

    “Additional
      Collateral Agreements”
means
      agreements pledging collateral or granting a security interest and any
      assignments or other agreements now or in the future securing the Loan or any
      Guaranty.

     

     

    “Affiliate”
means,
      as to any Person, any other Person that directly or indirectly controls or
      is
      controlled by or under common control with the Person specified.

     

    “Asset
      Shrinkage Factor”
means
      the amount of dealer Total Trust Position as defined expressed as a percentage
      of liquid or near liquid assets. This factor is calculated as follows: 1) Cash
      on hand or in the Bank plus; 2) Contracts in transit plus; 3) Accounts
      receivable -Vehicles plus; 4) New and used inventory minus; 5) New and used
      floor plan liability divided by; 6) The sum of items 1 through 4
      above.

     

    “Authorization”
means
      any authorization, consent, approval, order, license, permit, exemption or
      other
      action by or from, or any filing, registration or qualification with, any
      governmental agency or other Person.

    “Business
      Day”
means
      any day not a Saturday, Sunday or legal holiday in the State of
      Alabama.

     

    “Charter
      Documents”
means
      (a) in the case of a corporation, its articles of incorporation and bylaws,
      (b)
      in the case of a partnership, its partnership agreement and any certificate
      or
      statement of partnership, (c) in the case of a limited liability company, its
      articles of organization and operating agreement, and (d) in the case of a
      trust
      or any other entity, its formation documents, in each case as amended from
      time
      to time.

     

    “Collateral”
means
      the Goods and all products and proceeds derived from the Goods.

     

    “Contracts
      in Transit”
means
      very short term receivables, these are receivables from the finance companies
      that contracted the sale of inventories; however, cash has not yet been
      received. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Cost
      of Goods Sold”
means
      the cost at which the dealer paid to acquire the inventories or services sold.
      (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Current
      Ratio”
means
      Current Assets divided by Current Liabilities. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the Agreement.)
      Current
      Liabilities shall exclude the $1.5 million subordinated promissory note and
      any
      portion of the U.S. Bank term notes not due within 12 months as per note
      amortization schedule.

    


    “Documents”
means
      written documents and materials, including agreements, approvals, certificates,
      consents, instruments, financing statements, reports, budgets, forecasts and
      opinions.

     

    “Events
      of Default”
means
      the events set forth in the Events of Default paragraph of the
      Agreement.

     

      “Financial
      Statements”
means
      balance sheets and income statements.

     

    “Goods”
means
      the inventory and all replacements, accessories and accessions and substitutions
      thereof and therefrom, held for sale and financed under this Agreement, which
      constitutes a part of the Collateral. (SEE
      ATTACHED EXHIBIT A)

    


    “Gross
      Margin”
means
      Gross Profit divided by Total Sales. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Gross
      Profit”
means
      Total Sales minus Cost of Goods Sold. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Guarantor”
means
      any Person who has executed or is required to execute a Guaranty and such
      Person’s successors and assigns.

     

    “Guaranty”
means
      any Guaranty executed in favor of Regions Bank in connection with the
      Agreement.

     

    “Indebtedness”
means,
      with respect to any Person, all indebtedness, obligations and liabilities,
      including (a) all liabilities which would be reflected on a balance sheet
      prepared in accordance with generally accepted accounting principles, (b) all
      obligations in respect of any guaranty, (c) all obligations in respect to any
      capital lease, (d) all obligations, indebtedness and liabilities secured by
      any
      lien or security interest on any property or assets of such Person, and (e)
      all
      redeemable preferred stock of such Person.

     

    “Indemnitees”
means
      Regions Bank and its Affiliates, and the respective directors, officers, agents,
      attorneys, employees, participants, successors and assigns of each.

     

      “Index”
means
      the Index set forth in Paragraph 1.8.

     

    “Intangible
      Assets”
means
      any nonphysical asset, such as trademarks, trade names, copyrights, goodwill,
      blue sky, or owner receivables which presume to give the firm a better position
      in the marketplace. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Laws”
means
      all federal, state and local laws, rules, regulations, ordinances and
      codes.

     

    “Lien”
means
      any lien, mortgage, deed of trust, pledge, security interest or other charge
      or
      encumbrance.

     

    “Leverage
      Ratio”
means
      Total Liabilities divided by Tangible Net Worth. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Loan”
means
      the loan to be made by Regions Bank to the Borrower in the form of a line of
      credit, pursuant to this Agreement and in an amount not to exceed the amount
      set
      forth in the Agreement.

     

    “Loan
      Documents”
means
      this Agreement, the Note, if any, the Guaranty, if any, and any Additional
      Collateral Agreements.

     

    “Loan
      Party”
means
      (a) the Borrower, (b) any Guarantor which at the time has or may have any
      obligation or liability (whether fixed, contingent or otherwise) under any
      Guaranty executed or to be executed by it, (c) any Person executing any
      Additional Collateral Agreements, and (d) in the case of any Loan Party which
      is
      a partnership, any general partner of such Loan Party.

     

    “Net
      Margin”
means
      Net Profit divided by Total Sales. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Net
      Profit”
means
      profit remaining after considering all operating, selling, administrative,
      financing, and other expenses. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “New
      Days Supply”
means
      New Car Inventories divided by Cost of Goods Sold multiplied by the number
      of
      calendar days in the statement period. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Note”
means
      the note, if any, executed by the Borrower in favor of Regions Bank to further
      evidence the Loan.

     

    “Obligations”
means
      all covenants and obligations of the Loan Parties of every nature under the
      Loan
      Documents.

     

    “Other
      Requirements”
means
      the terms, conditions and requirements of all Authorizations relating to the
      Goods and all other Documents, agreements and restrictions relating to, binding
      on or affecting the Goods.

     

    “Person”
means
      any person or entity, whether an individual, trustee, corporation, partnership,
      joint stock company, trust, unincorporated organization, bank, business
      association or firm, joint venture, governmental agency or
      otherwise.

     

      “Premises”
means
      the physical location of the Goods.

    


      “Remedy”
means
      any right, power or remedy.

     

    “Retained
      Earnings”
means
      an equity account, it’s the sum of profits retained since the Borrower’s
      inception. (This
      definition is not referenced in any other place in the
      Agreement.)

     

      “Supplier”
means
      those persons identified in Section I, paragraph 1.5.

     

    “Tangible
      Net Worth”
means
      Total Assets minus Intangible Assets minus Total Liabilities.
      (This definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Total
      Assets”
means
      Current Assets plus Capital Assets plus All Other Assets which is all assets
      held by the Borrower. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Total
      Cash and Contracts”
means
      all cash items held internally and externally. Contracts refers to contracts
      in
      transit (a type of a very short term receivable where the inventory has been
      sold and contracted with a financial institution however, cash has not yet
      been
      received). (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Total
      Liabilities”
means
      Current Liabilities plus Long-Term Liabilities which is all Indebtedness of
      the
      Borrower. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Total
      Net Worth”
means
      Total Assets minus Total Liabilities which is assets in excess of debt.
(This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Total
      Sales”
means
      the sum of proceeds from the sale of Goods and services from all of the
      departments of the Borrower. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Total
      Trust Position”
means
      Cash plus Contracts in Transit plus Accounts Receivable Vehicles plus New
      Vehicle Inventories plus Used Vehicle Inventories minus New Vehicle Flooring
      Liability minus Used Vehicle Flooring Liability. (This
      definition is only referenced in the definitions section as part of the
      definition of other terms and is not referenced in the text of the
      Agreement.)

     

    “Used
      Days Supply”
means
      Used Vehicle Inventories divided by Cost of Goods Sold multiplied by the number
      of calendar days in the statement period. (This
      definition is not referenced in any other place in the
      Agreement.)

     

    “Working
      Capital”
means
      Current Assets minus Current Liabilities. (This
      definition is not referenced in any other place in the
      Agreement.)


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    SCHEDULE
      II

     

    DEBTS,
      LIENS, SECURITY INTERESTS, ENCUMBRANCES OR CLAIMS

     

    None,
      except as described below

     

    By
      acknowledging the above statement, you are stating that none of the above items
      exist on the aforementioned property pledged as security to Regions Bank. If,
      in
      fact, any items as listed above under Schedule II exist, this may be construed
      as a breach of contract unless otherwise stated.

     

    


     

    
      	1.  	
              Amended
                and restated loan agreement with U.S. Bank, including asset-based
                revolving line of credit commitment of $14 million on receivables
                and
                inventory and $7.2 million in term loans on real estate and
                equipment.

            


    

     

    
      	2.  	
              Wholesale
                Finance Agreement with GE Commercial Distribution Finance in amount
                of $25
                million to finance new and used coaches held in
                inventory.

            


    

     

    
      	3.  	
              Term
                note in amount of $2.9 million with First Source Bank secured by
                Beechjet
                400 aircraft.

            


    

     

    
      	4.  	
              Consignment
                agreements with Prevost Car Company for coach shells with payment
                due when
                the four (4) month consignment term expires or when the completed
                coach is
                financed by GE or sold, if sooner.

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      III

     

    ADDITIONAL
      REPRESENTATIONS, WARRANTIES AND COVENANTS

     

    (SEE
      PARAGRAPH 2.42)