Exhibit 10.27


                           THIRD AMENDMENT AND WAIVER

                  THIRD AMENDMENT AND WAIVER dated as of May 1, 2001 (the
"Amendment and Waiver") to the CREDIT AGREEMENT (as defined below), among MCII
HOLDINGS, INC., formerly known as Motor Coach Industries International, Inc.
(the "Parent"), MOTOR COACH INDUSTRIES INTERNATIONAL, INC., formerly known as
Transportation Manufacturing Operations, Inc. (the "Borrower"), the Guarantors
referred to in the Credit Agreement (the "Guarantors"), CANADIAN IMPERIAL BANK
OF COMMERCE, as a Lender and as Administrative Agent for the Lenders under the
Credit Agreement (in such capacity, the "Administrative Agent"), GENERAL
ELECTRIC CAPITAL CORPORATION, as a Lender and as Documentation Agent for the
Lenders under the Credit Agreement (in such capacity, the "Documentation
Agent"), THE BANK OF NOVA SCOTIA, as a Lender and as Syndication Agent for the
Lenders under the Credit Agreement (in such capacity, the "Syndication Agent"
and, together with the Administrative Agent and the Documentation Agent, the
"Agents") and the other Lenders (as defined below) parties hereto.

                                   WITNESSETH:


                  WHEREAS, the Parent, the Borrower, each of the financial
institutions from time to time party thereto as lenders (together with their
successors and assigns, the "Lenders") and the Agents are parties to that
certain Credit Agreement dated as of June 16, 1999, as amended by First
Amendment dated as of May 1, 2000 and by Second Amendment dated as of May 15,
2000 (as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"); and

                  WHEREAS, an Event of Default has occurred and is continuing
under Section 8 of the Credit Agreement as a result of the failure of the Parent
and the Borrower to comply with the covenant set forth in Section 6.1(a) of the
Credit Agreement in respect of the fiscal year ended December 31, 2001 (the
"Existing Event of Default"); and

                  WHEREAS, the Lenders have asserted that further Events of
Default have occurred and are continuing under Section 8 of the Credit Agreement
as a result of the failure by the Parent and the Borrower to comply with (i) the
financial condition covenants set forth in Section 7.1(a), (b), (c) and (d) of
the Credit Agreement during the fiscal quarter ended March 31, 2001 and (ii) the
requirement set forth in Section 6.7 to provide the Administrative Agent with
notice of the Events of Default specified in clause (i) hereof (all such Events
of Default, the "Asserted Events of Default"); and

                   WHEREAS,  the Borrower  has  contested  the  existence of the
Asserted Events of Default; and

                  WHEREAS, the Parent and the Borrower have requested that the
Lenders agree to waive the Existing Event of Default and the Asserted Events of
Default and to suspend compliance with certain covenants through December 31,
2001; and

                  WHEREAS, subject to the terms and conditions hereof, the
Lenders are willing to grant a waiver, but only upon the terms and conditions
set forth herein.

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1.        Definitions.  Unless otherwise defined herein,  all defined
terms that are defined in the Credit Agreement shall have the same meanings when
used herein.
<PAGE>

SECTION 2. Waiver. On the terms and subject to the conditions set forth in this
Agreement and Waiver, the Agents and the Required Lenders hereby waive (i)
permanently, the Existing Event of Default and the Asserted Events of Default
and (ii) temporarily, compliance by the Borrower with Section 7.1(a), (b), (c)
and (d), in each case commencing on the Effective Date (as hereinafter defined)
through December 31, 2001, or such later date as may be agreed upon by the
Administrative Agent and the Required Lenders (the "Waiver Termination Date");
provided that immediately following the Waiver Termination Date, all of the
covenants and provisions of the Credit Agreement, including the covenants
referred to in clause (ii) above, shall apply to and be effective against the
Loan Parties, and all rights, privileges and remedies of the Administrative
Agent and the Lenders relating thereto under the Credit Agreement or the other
Loan Documents shall be fully effective and enforceable, as if the waiver set
forth herein had never been granted.

SECTION 3.        Amendments to Credit Agreement.
                  ------------------------------

(A) Section 1.1 of the Credit Agreement is hereby amended by adding thereto in
the appropriate alphabetical order the following definitions:

                  "Adjusted Consolidated EBITDA": for any period, Consolidated
                  EBITDA for such period plus, without duplication and to the
                  extent reflected as a charge in the statement of Consolidated
                  Net Income for such period, the sum of the following charges:
                  (a) Inventory Reserves, (b) Warranty and Product Liability
                  Reserves, and (c) Receivables Reserves.

                  "Assignment  Agreement":  that certain Assignment  Agreement
                  dated as of May 1, 2001  between the Funding  Affiliate  and
                  the   Tranche  B  Lender,   as  the  same  may  be  amended,
                  supplemented,  modified,  renewed or  replaced  from time to
                  time.

                  "Consent and Acknowledgment": that certain Consent and
                  Acknowledgment dated as of May 1, 2001 among the Tranche B
                  Lender, the Administrative Agent, the Funding Affiliate and
                  the Note Purchaser, as the same may be amended, supplemented,
                  modified, renewed or replaced from time to time.

                  "Consolidated Free Cash Flow": for any period,  Consolidated
                  Net  Income  for  such   period,   plus  the  sum,   without
                  duplication, of

                    (i)  an amount equal to the amount of all  non-cash  charges
                         (including  depreciation and amortization)  deducted in
                         arriving at such Consolidated Net Income,

                    (ii) an amount equal to the  aggregate  net non-cash loss on
                         the  Disposition  of property by the  Borrower  and its
                         Subsidiaries  during  such  fiscal  period  (other than
                         sales of inventory in the ordinary course of business),
                         to the extent deducted in arriving at such Consolidated
                         Net Income,

                    (iii)the decreases in Consolidated  Working Capital for such
                         period,

                    (iv) the aggregate amount actually  received by the Borrower
                         and its Subsidiaries in cash on the account of sales of
                         fixed or capital assets,

                    (v)  the decreases in amounts for such period that would, in
                         conformity with GAAP, be set forth opposite the caption
                         "total  long term  assets"  (or any like  caption) on a
                         consolidated balance sheet other than decreases related
                         to  fixed  or   capital   assets  or   related  to  the
                         amortization  of goodwill  and other  related  non-cash
                         charges,

                    (vi) the increases in amounts for such period that would, in
                         conformity with GAAP, be set forth opposite the caption
                         "total long term  liabilities" (or any like caption) on
                         a  consolidated  balance  sheet  other than an increase
                         related to the  borrowing of  $32,000,000  of Revolving
                         Loans in January 2001,
<PAGE>


                   (vii) an amount equal to actual cash payments of Consolidated
                         Interest Expense,

                  (viii) an amount  equal to the  amount of cash  payments  on
                         account of taxes,

                    and minus the sum, without duplication, of


                    (i)  an amount equal to the amount of all  non-cash  credits
                         included in arriving at such Consolidated Net Income,

                    (ii) an amount equal to the  aggregate  net non-cash gain on
                         the  Disposition  of property by the  Borrower  and its
                         Subsidiaries  during such  period  (other than sales of
                         inventory in the ordinary  course of business),  to the
                         extent  included in arriving at such  Consolidated  Net
                         Income,

                   (iii) the increases in Consolidated  Working Capital for such
                         period,

                    (iv) an amount equal to cash receipts and refunds on account
                         of taxes,

                    (v)  the aggregate  amount actually paid by the Borrower and
                         its  Subsidiaries  in cash on the  account  of  Capital
                         Expenditures   (excluding   the  principal   amount  of
                         Indebtedness   Incurred   in   connection   with   such
                         expenditures), and

                    (ix) the increases in amounts for such period that would, in
                         conformity with GAAP, be set forth opposite the caption
                         "total  long term  assets"  (or any like  caption) on a
                         consolidated balance sheet other than increases related
                         to fixed or capital  assets or related to the  reversal
                         of amortization of goodwill and other related  non-cash
                         credits, and

                    (vi) decreases  in amounts for such  period  that would,  in
                         conformity with GAAP, be set forth opposite the caption
                         "total long term  liabilities" (or any like caption) on
                         a  consolidated  balance  sheet,  other than a decrease
                         that  arises  as a  result  of  the  repayment  of  the
                         $32,000,000 of Revolving  Loans on the Third  Amendment
                         Date.

                  "Deposit Pledge and Security Agreement": means the pledge
                  agreement, lock-box agreement and/or blocked account letter
                  agreement delivered pursuant to the Third Amendment to the
                  Administrative Agent granting a lien on, and dominion and
                  control over, the deposit accounts of the Borrower and its
                  Subsidiaries, as the same may be amended, supplemented,
                  modified, renewed and replaced from time to time.
<PAGE>

                  "Funding Affiliate": IWPTP, LLC.

                  "Inventory Reserves": for any period, the amounts charged in
                  the statement of Consolidated Net Income for such period that
                  (a) are required to reflect inventory at the lower of cost or
                  market value, and (b) result in an adjustment to the balance
                  sheet account "Inventory Reserve Provision".

                  "Note Purchase Agreement": that certain Note Purchase
                  Agreement dated as of May 1, 2001 between the Note Purchaser
                  and the Funding Affiliate, as the same may be amended,
                  supplemented, modified, renewed or replaced from time to time.

                  "Note Purchaser": Joseph Littlejohn & Levy III Fund, L.P.

                  "Receivables Reserves": for any period, the amounts charged in
                  the statement of Consolidated Net Income for such period that
                  (a) are required to reflect receivables at their estimated
                  recoverable value, and (b) result in an adjustment reflected
                  in the Borrower's consolidated balance sheet account
                  "Allowance for Doubtful Accounts".

                  "Subordination and Participation Agreement": that certain
                  Subordination and Participation Agreement dated as of May 1,
                  2001 among the Funding Affiliate (and other co-participants,
                  if any, acceptable to the Administrative Agent and the Tranche
                  B Lender, in their sole discretion), the Tranche B Lender, and
                  the Administrative Agent, as the same may be amended,
                  supplemented, modified, renewed or replaced from time to time.

                  "Third  Amendment": the Third Amendment and Waiver dated as of
                  May 1, 2001 to the Credit Agreement among MCII Holdings, Inc.,
                  Motor Coach  Industries  International,  Inc., the Guarantors,
                  Canadian Imperial Bank of Commerce, as  Administrative  Agent,
                  General Electric Capital Corporation, as Documentation  Agent,
                  The Bank of Nova Scotia, as Syndication  Agent and the other
                  Lenders parties thereto.

                  "Third Amendment Date": the Effective Date, as such term is
                  defined in the Third Amendment.

                  "Tranche B Borrowing Date": as defined in Section 2.6.

                  "Tranche B Commitment": as to the Tranche B Lender, the
                  obligation to make the Tranche B Loan to the Borrower
                  hereunder in a principal amount not to exceed $8,500,000.

                  "Tranche B Lender":  Canadian Imperial Bank of Commerce.

                  "Tranche B Loan": as defined in Section 2.6.

                  "Tranche B Maturity Date": as defined in Section 2.7.
<PAGE>


                  "Tranche B Commitment Termination Date": May 31, 2001.

                  "Warranty and Product Liability Reserves": for any period, the
                  amounts charged in the statement of Consolidated Net Income
                  for such period that (a) are accruals or reserves recorded in
                  anticipation of a cash disbursement to be made in a future
                  period on account of a warranty or product liability claim,
                  and (b) result in an adjustment to the Borrower's consolidated
                  balance sheet accounts "Warranty and Insurance Reserves -
                  Current" or "Warranty and Insurance Reserves - Long Term".

(B) The definition of "Applicable Margin" in Section 1.1 of the Credit Agreement
is hereby deleted in its entirety and replaced with the following:

                  "Applicable  Margin": for each Type of Loan the rate per annum
                  set forth under the relevant column heading below:

                                                ABR Loans    Eurodollar Loans
                    All Term Loans and
                    Revolving Loans               3.00%            4.00%
                    Tranche B Loan                 N/A             5.00%


(C) The definition of "Commitment" in Section 1.1 of the Credit Agreement is
hereby amended by inserting the phrase", Tranche B Commitment" after the phrase
"Term Commitment" on the first line thereof.

(D) The definition of "Consolidated EBITDA" in Section 1.1 of the Credit
Agreement is hereby amended by deleting the reference to "Section 7.6(c)(i)" in
the last line thereof and replacing it with the phrase "Section 7.6(b)(i);
provided, that the corporate overhead expenses referred to in this clause (d)
shall not be deducted in the calculation of Consolidated EBITDA in determining
compliance with the financial covenants set forth in Sections 7.1(e) and
7.1(f)."

(E) The definition of "Consolidated Interest Expense" in Section 1.1 of the
Credit Agreement is hereby amended by adding at the end thereof the following:

                  "; provided, that for purposes of calculating Consolidated
                  Interest Expense for any period of four consecutive fiscal
                  quarters (a "Calculation Period") to determine the
                  Consolidated Interest Coverage Ratio or the Consolidated Fixed
                  Charge Coverage Ratio, if during such Calculation Period any
                  Loan Party shall have made any payments permanently reducing
                  outstanding Loans, Consolidated Interest Expense shall be
                  calculated for such Calculation Period after giving pro forma
                  effect to such reductions as if such payments occurred on the
                  first day of such Calculation Period."

(F) The definitions of "Covenant Smoothing Date", "Covenant Smoothing Method"
and "Measurement Period" in Section 1.1 of the Credit Agreement are hereby
deleted in their entirety. In addition, each of the definitions of "Consolidated
Fixed Charge Coverage Ratio", "Consolidated Interest Coverage Ratio",
"Consolidated Senior Leverage Ratio" and "Consolidated Total Leverage Ratio" in
Section 1.1 of the Credit Agreement shall be amended by deleting therefrom the
following proviso at the end thereof:
<PAGE>

                  "; provided, that the Borrower shall have the option at one
                  time during the term of this Agreement to elect that during
                  the Measurement Period, Consolidated EBITDA for purposes of
                  determining compliance with the covenants contained in Section
                  7.1 be computed in accordance with the Covenant Smoothing
                  Method"

(G) The definition of "Facility" in Section 1.1 of the Credit Agreement is
hereby amended by adding the following at the end thereof:

                  "and (c) the Tranche B Commitments and the Tranche B Loans
                  made thereunder (the "Tranche B Facility")."

(H) The definition of "Interest Payment Date" in Section 1.1 of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:

                  "Interest Payment Date": means as to any Loan, the last
                  Business Day of each calendar month and the date of any
                  required or optional repayment or prepayment thereof, in all
                  cases without regard to the Interest Period selected.

(I) The definition of "Interest Period" in Section 1.1 of the Credit Agreement
is hereby deleted in its entirety and replaced with the following:

                  "Interest Period": means as to any Eurodollar Loan, (a)
                  initially, the period commencing on the borrowing or
                  conversion date, as the case may be, with respect to such
                  Eurodollar Loan and ending one or three months thereafter
                  (provided, that the two and six-month Interest Periods in
                  existence on the Third Amendment Date shall be permitted until
                  the expiration thereof), as selected by the Borrower in its
                  notice of borrowing or notice of conversion, as the case may
                  be, given with respect thereto; and (b) thereafter, each
                  period commencing on the last day of the next preceding
                  Interest Period applicable to such Eurodollar Loan and ending
                  one or three months thereafter, as selected by the Borrower by
                  irrevocable notice to the Administrative Agent not less than
                  three Business Days prior to the last day of the then current
                  Interest Period with respect thereto; provided that, all of
                  the foregoing provisions relating to the Interest Period are
                  subject to the following:

                    (i)  if any Interest Period would otherwise end on a day
                         that is not a Business Day, such Interest Period shall
                         be extended to the next succeeding Business Day unless
                         the result of such extension would be to carry such
                         Interest Period into another calendar month in which
                         event such Interest Period shall end on the immediately
                         preceding Business Day;

                    (ii) any Interest Period that would otherwise extend beyond
                         the Scheduled Revolving Termination Date or beyond the
                         date final payment is due on the Term Loans shall end
                         on the Revolving Termination Date or such due date, as
                         applicable;
<PAGE>


                   (iii) any Interest Period that begins on the last Business
                         Day of a calendar month (or on a day for which there is
                         no numerically corresponding day in the calendar month
                         at the end of such Interest Period) shall end on the
                         last Business Day of a calendar month; and

                    (iv) the Borrower shall select Interest Periods so as not to
                         require a payment or prepayment of any Eurodollar Loan
                         during an Interest Period for such Loan.

(J) The definition of "L/C Fee Payment Date" set forth in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following:

                  "L/C Fee Payment Date": means the last Business Day of each
                  calendar month and the last day of the Revolving Commitment
                  Period.

(K) The definition of "Majority Facility Lenders" set forth in Section 1.1 of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following:

                  "Majority Facility Lenders": with respect to any Facility, the
                  holders of more than 50% of the aggregate unpaid principal
                  amount of the Term Loans, the Tranche B Loan or the Total
                  Revolving Extensions of Credit, as the case may be,
                  outstanding under such Facility (or, in the case of the
                  Revolving Facility, prior to any termination of the Revolving
                  Commitments, the holders of more than 50% of the Total
                  Revolving Commitments).

(L) The definitions of "Refunded Swingline Loans", "Refunding Date", "Swingline
Commitment", "Swingline Lender", "Swingline Loans" and "Swingline Participation
Amount" set forth in Section 1.1 of the Credit Agreement are hereby deleted in
their entirety.

(M) The definition of "Responsible Officer" set forth in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following:

                  "Responsible Officer": means the chief executive officer,
                  president, chief financial officer, senior vice president of
                  finance of the Borrower, Mr. Steven Clough or Mr. Thomas
                  Sorrells, notwithstanding their respective titles or offices
                  with the Borrower, but only for so long as their employment
                  contracts remain in full force and effect.

(N)      Section 2.4 of the Credit Agreement is hereby amended by adding a new
sentence at the end thereof as follows:

                  "Notwithstanding anything to the contrary set forth in this
                  Agreement or the other Loan Documents, commencing on the Third
                  Amendment Date and continuing through and including the
                  Revolving Termination Date, the Total Revolving Commitments of
                  the Revolving Lenders shall be limited to $143,500,000 and the
                  remaining $8,500,000 of the Total Revolving Commitments shall
                  be unavailable to the Borrower without the prior written
                  consent of the Majority Revolving Facility Lenders. For so
                  long as such portion of the Total Revolving Commitment remains
                  unavailable, the Borrower shall have no right, and shall not
                  make any request, to borrow, and the Revolving Lenders shall
                  have no obligation whatsoever to make, Revolving Loans in
                  respect thereof. Such aggregate unavailable portion shall be
                  applied ratably to the Revolving Commitments of all Revolving
                  Lenders."
<PAGE>


(O) Sections 2.6 and 2.7 of the Credit Agreement are hereby deleted in their
entirety, the Swingline Commitment of the Swingline Lender is hereby terminated,
and all references in the Credit Agreement and the other Loan Documents to any
of the defined terms set forth in Section 3(L) above are hereby deleted. A new
Section 2.6 and Section 2.7 of the Credit Agreement are hereby inserted as
follows:

                  "2.6 Tranche B Commitments. Subject to the terms and
                  conditions hereof, the Tranche B Lender agrees to make a
                  single term loan (the "Tranche B Loan") to the Borrower on a
                  Business Day occurring on or before the Tranche B Commitment
                  Termination Date in an amount equal to the Tranche B
                  Commitment. The Tranche B Loan shall be a Eurodollar Loan and
                  shall bear interest at a rate per annum equal to the sum of
                  the Eurodollar Rate in effect from time to time and the
                  Applicable Margin for such Tranche B Loan. The Borrower shall
                  give the Administrative Agent irrevocable notice (which notice
                  must be received by the Administrative Agent prior to 10:00
                  a.m. New York City time, one Business Day prior to the
                  requested date of borrowing) requesting that the Tranche B
                  Lender make the Tranche B Loan on the date specified therein
                  (such date, the "Tranche B Borrowing Date"). Upon receipt of
                  such notice, the Administrative Agent shall promptly notify
                  the Tranche B Lender thereof. No later than 1:00 p.m., New
                  York City time, on the Tranche B Borrowing Date, the Tranche B
                  Lender shall make available to the Administrative Agent at the
                  Funding Office an amount in immediately available funds equal
                  to the Tranche B Loan; provided, that, on or before such time,
                  the Funding Affiliate shall have transferred, or caused to be
                  transferred, to the Administrative Agent for the account of
                  the Tranche B Lender, pursuant to the Subordination and
                  Participation Agreement, an amount in immediately available
                  funds equal to the Tranche B Commitment."

                  "2.7 Repayment of Tranche B Loans. The Tranche B Loan shall
                  mature on June 17, 2006 (the "Tranche B Maturity Date"), on
                  which date the entire outstanding principal balance of the
                  Tranche B Loan, together with all accreted interest thereon,
                  shall become due and payable."

(P)      Section 2.8(a) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

                  "2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to
                  the Administrative Agent for the account of each Revolving
                  Lender a commitment fee for the period from and including the
                  Closing Date to the last day of the Revolving Commitment
                  Period, computed at the Commitment Fee Rate on the average
                  daily amount of the Available Revolving Commitment of such
                  Revolving Lender (whether or not a portion of such Revolving
                  Lender's Commitment is unavailable to the Borrower as a result
                  of Section 2.4) during the period for which payment is made,
                  payable monthly in arrears on the last Business Day of each
                  calendar month and on the Revolving Termination Date,
                  commencing on the first of such dates to occur after the date
                  hereof."
<PAGE>

(Q)      Section 2.9 of the Credit Agreement is hereby amended by adding at the
end thereof the following new sentence:

                  "Any request by the Borrower to reduce the Revolving
                  Commitments may designate in the written notice to the
                  Administrative Agent to apply such reduction to the
                  unavailable portion of the Revolving Commitments described in
                  Section 2.4. Any such permanent reduction of all or any
                  portion of such unavailable Revolving Commitments shall reduce
                  the Available Revolving Commitment upon which the commitment
                  fee under Section 2.8 is calculated."

(R) Section 2.10 of the Credit Agreement is hereby amended by inserting in the
second line thereof after the word "Loans" the parenthetical phrase "(other than
the Tranche B Loan)" and inserting as a new second sentence, after the first
sentence thereof, the following:

                  "Notwithstanding anything herein to the contrary, neither the
                  outstanding principal balance of the Tranche B Loan nor any
                  accreted interest thereon may be repaid or prepaid prior to
                  the Tranche B Maturity Date."

(S) Section 2.11(d) of the Credit Agreement is hereby deleted in its entirety.

(T)      Section 2.14(d) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

                  "(d) Interest on all Loans (other than the Tranche B Loan)
                  shall be payable in arrears on each Interest Payment Date;
                  provided that interest accruing pursuant to paragraph (c) of
                  this Section 2.14 shall be payable from time to time on
                  demand. Interest on the Tranche B Loan shall not be paid in
                  cash, but rather shall be added to the principal balance of
                  the Tranche B Loan, quarterly, in arrears, on the last
                  Business Day of each calendar quarter and on the Tranche B
                  Maturity Date and paid on the Tranche B Maturity Date."

(U)      Section 2.17(a) of the Credit Agreement is hereby amended by adding at
the end thereof the following:

                  "; provided, that with respect to the Tranche B Loan, the
                  borrowing of the Tranche B Loan shall be funded by, and all
                  payments by the Borrower in respect thereof shall be made for
                  the account of, the Tranche B Lender only."

(V) Section 2.17(b) of the Credit Agreement is hereby amended by deleting the
second sentence thereof in its entirety and inserting a new second sentence as
follows:

                  "The amount of each principal prepayment of the Term Loans
                  shall be applied to reduce the then remaining installments of
                  the Term Loans in the inverse order of maturity."

(W) Section 3.3(a) of the Credit Agreement is hereby amended by deleting the
word "quarterly" in each place where such word appears in such Section 3.3(a)
and inserting in its place the word "monthly".
<PAGE>


(X)      Section 4.8 of the Credit Agreement is hereby amended to include the
following sentence at the end thereof:

                  "Schedule 4.8 sets forth the leasehold interests of real
                  property held by each Loan Party as of the Third Amendment
                  Date."

(Y)      Section 4.15 of the Credit Agreement is hereby amended by adding a new
sentence to the end thereof as follows:

                  "Schedule 4.15 also depicts an organizational chart of the
                  Loan Parties and all of the Subsidiaries of each such Loan
                  Party on and as of the Third Amendment Date."

(Z)      Section 4.16 of the Credit Agreement is hereby amended by adding a new
sentence to the end thereof as follows:

                  "The proceeds of the Tranche B Loan shall be used to satisfy
                  the scheduled interest payment due and payable on May 1, 2001
                  in respect of the Senior Subordinated Notes only and for no
                  other purpose; provided, that if the Borrower shall have paid
                  such scheduled interest payment prior to the Tranche B
                  Borrowing Date (as demonstrated to the reasonable satisfaction
                  of the Administrative Agent), such proceeds shall be retained
                  by the Borrower as reimbursement for such payment."

(AA)     Section 4.19 (a) of the Credit Agreement is hereby amended to include
the following sentence at the end thereof:

                  "Schedule 4.19(a) also sets forth the location of the books
                  and records of each Loan Party as of the Third Amendment
                  Date."

(BB)     A new Section 4.25 is hereby added to the end of Section 4 of the
Credit Agreement as follows:

                  "4.25 Material Contracts. The contracts and other agreements
                  listed on Schedule 4.25 constitute as of the Third Amendment
                  Date all of the material contracts and agreements to which any
                  Loan Party is a party, including without limitation, all
                  material union contracts and material collective bargaining
                  agreements."

(CC)     A new Section 4.26 is hereby added to the end of Section 4 of the
Credit Agreement as follows:

                  "4.26 Deposit Accounts. The deposit accounts listed on
                  Schedule 4.26 constitute as of the Third Amendment Date all of
                  the deposit accounts maintained by the Loan Parties."

(DD) Section 5.2 of the Credit Agreement is hereby amended by deleting the first
three lines thereof and replacing such language as follows:

                  "5.2 Conditions to Each Extension of Credit. The agreement of
                  each Lender to make any extension of credit requested to be
                  made by it on any date (including, without limitation, its
                  initial extension of credit) is subject to the receipt by the
                  Administrative Agent of a certificate of the Borrower executed
                  by a Responsible Officer certifying as follows:"
<PAGE>


(EE)     Section 5.2 of the Credit Agreement is further amended by deleting in
its entirety the last sentence thereof.

(FF)     A new Section 5.3 to the Credit Agreement is hereby added to the end of
Section 5.2 as follows:

                  "5.3 Conditions to Tranche B Loan. The agreement of the
                  Tranche B Lender to make the Tranche B Loan is subject only to
                  the receipt by the Administrative Agent of (a) the written
                  request for such Tranche B Loan from the Borrower, as provided
                  in Section 2.6, and (b) the entire $8,500,000 purchase price
                  for the participation of the Tranche B Loan from or on behalf
                  of the Funding Affiliate."

(GG)     Section 6.1(c) of the Credit Agreement is hereby amended by inserting
at the end thereof the following:

                  ", together with a statement of Consolidated EBITDA,
                  Consolidated Adjusted EBITDA and Consolidated Free Cash Flow
                  for the thirteen calendar week period ended as at the end of
                  such month; and"

(HH)     Section 6.1 of the Credit Agreement is hereby amended by adding at the
end thereof a new subsection (d):

                  "(d) notwithstanding the provisions of subsection (b) of this
                  Section 6.1 or of subsection (b) of Section 6.2, on or before
                  April 25, 2002, the financial statements described in
                  subsection (b) of this Section 6.1 and the related
                  certificates and reports described therein and of subsection
                  (b) in Section 6.2, in respect of the fiscal quarter ended
                  March 31, 2002 only."

(II)     Section 6.2(c) of the Credit Agreement is hereby amended by adding the
following phrase at the end thereof:

                  "; provided that notwithstanding the foregoing, the detailed
                  consolidated budget and Projections for fiscal year 2002 shall
                  be delivered on or before December 3, 2001;"

(JJ)     Section 6.2(g) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

                  "(g) promptly upon receipt thereof, copies of all management
                  letters received by the Parent, the Borrower or any of their
                  Subsidiaries from their independent certified public
                  accountants, together with copies of all written responses
                  thereto from management, within five days after such responses
                  are sent."
<PAGE>


(KK) Section 6.2 of the Credit Agreement is further amended hereby by adding at
the end thereof the following new subsections (i), (j) and (k):

                  "(i) simultaneously with the delivery of the financial
                  statements required to be delivered under Section 6.1, (i) a
                  certificate of a Responsible Officer stating that, to the best
                  of each such Responsible Officer's knowledge, each Loan Party
                  during such monthly period has observed and performed all of
                  its covenants and other agreements, and satisfied every
                  condition, contained in this Agreement and the other Loan
                  Documents to which it is a party to be observed, performed or
                  satisfied by it, and that such Responsible Officer has no
                  knowledge of any Default or Event of Default, except as
                  specified in such certificate and (ii) an additional
                  Certificate of a Responsible Officer setting forth all
                  information required to determine, and demonstrating in
                  reasonable detail, compliance by the Parent, the Borrower and
                  its Subsidiaries with the provisions of the financial
                  condition covenants set forth in Section 7.1(e), (f) and (g)
                  and Section 7.7; provided, that when delivered with the
                  monthly financial statements and reports to be furnished under
                  Section 6.1(c), the Certificate of a Responsible Officer
                  required under this clause (ii) need not certify or
                  demonstrate compliance with any of those financial condition
                  covenants described herein to the extent such covenants are
                  not measured or tested on a monthly basis;"

                  "(j) on or before September 15, 2001, a detailed business plan
                  (the "September Plan") for Borrower and its Subsidiaries
                  (together with all Projections through and including fiscal
                  year 2005); and"

                  "(k) on or before October 15, 2001, a detailed restructuring
                  plan for the operations and capital structure of the Borrower
                  and its Subsidiaries."

(LL) Section 6.9(b) of the Credit Agreement is hereby amended by deleting the
period at the end thereof and inserting the following proviso:

                  "; provided, that, with respect to such real property
                  interests having a value (together with improvements) of less
                  than $1,000,000, the Parent, the Borrower and/or the Domestic
                  Subsidiaries shall be entitled to own unencumbered, and shall
                  not be required to comply with the terms of this Section
                  6.9(b), one or more of such real property interests provided
                  the value of all such real property interests in the aggregate
                  does not exceed $5,000,000."

(MM) Section 6.10 of the Credit Agreement is hereby amended by deleting the
reference to "$10,000,000" on the second line thereof and replacing it with the
number of "$2,000,000".

(NN) A new Section 6.11 of the Credit Agreement is hereby added to the end of
Section 6.10:

                  "6.11 Books and Records. Keep and maintain and cause to be
                  kept and maintained, accurate books and records of the Loan
                  Parties at the respective locations identified for such in
                  Schedule 4.19(a) and shall not remove such books and records
                  or change such location without the prior written consent of
                  the Administrative Agent and furnishing to the Administrative
                  Agent a revised Schedule 4.19(a) showing such new location."

(OO) Section 7.1 of the Credit Agreement is hereby amended by adding at the end
thereof new subsections (e), (f) and (g) as follows:
<PAGE>


                  "(e) Minimum Consolidated EBITDA. Permit cumulative
                  Consolidated EBITDA for the period beginning January 1, 2001
                  and ending on the following dates to be less than the amounts
                  set forth opposite such dates:

                                                               Cumulative
                              Fiscal Quarter Ended          Consolidated EBITDA
                              --------------------          -------------------
                        March 31, 2001                            $6,300,000
                        June 30, 2001                            $22,100,000
                        September 30, 2001                      $ 32,000,000
                        December 31, 2001                       $ 52,200,000"

                  "(f) Minimum Consolidated Adjusted EBITDA. Permit cumulative
                  Consolidated Adjusted EBITDA for the period beginning January
                  1, 2001 and ending on the following dates to be less than the
                  amounts set forth opposite such dates:

                                                         Cumulative Consolidated
                              Fiscal Quarter Ended            Adjusted EBITDA
                              --------------------          -------------------
                         March 31, 2001                          $13,200,000
                         June 30, 2001                           $36,600,000
                         September 30, 2001                      $55,400,000
                         December 31, 2001                       $81,800,000"


                  "(g) Minimum Consolidated Free Cash Flow. Permit cumulative
                  Consolidated Free Cash Flow beginning January 1, 2001 and
                  ending on the following dates to be less than the amounts set
                  forth opposite such dates:"

                                                        Cumulative Consolidated
                              Fiscal Quarter Ended          Free Cash Flow
                              --------------------        -------------------
                         March 31, 2001                            $-0-
                         June 30, 2001                             $-0-
                         September 30, 2001                     $7,100,000
                         December 31, 2001                     $71,600,000


                  ; provided, that if such cumulative Consolidated Free Cash
                  Flow from January 1, 2001 is less than the minimum required
                  amount set forth above for any of the cumulative periods
                  terminating at the end of the fiscal quarters described above,
                  then, notwithstanding the terms of this sentence, the Borrower
                  and the Parent shall nevertheless be in compliance with this
                  Section 7.1(g) for such cumulative period if the cumulative
                  Consolidated Free Cash Flow for the period commencing January
                  1, 2001 and ending on the last day of the calendar month
                  immediately succeeding such fiscal quarter end equals or
                  exceeds the minimum required amount set forth opposite the
                  related month end date set forth below:
<PAGE>


                                                        Cumulative Consolidated
                              Cumulative Period Ended        Free Cash Flow
                              -----------------------        --------------
                              April 30, 2001                     $4,700,000
                              July 31, 2001                     $17,300,000
                              October 31, 2001                      $-0-
                              January 31, 2002                  $81,600,000


                  provided further, that the amounts set forth opposite the
                  fiscal quarters ended June 30, September 30 and December 31,
                  and the related months ended July 31, October 31 and January
                  31 set forth in the tables above in this Section 7.1(g) shall
                  each be reduced by the Adjustment Amount, if the Borrower or
                  one or more of its Subsidiaries shall fail to complete a sale
                  of receivables in an amount not less than $11,600,000 into a
                  Qualified Securitization Transaction after the Third Amendment
                  Date but prior to June 30, 2001 (such period, the "Receivables
                  Period"). The Borrower expressly acknowledges and agrees that
                  it shall demonstrate its compliance with the foregoing
                  Consolidated Free Cash Flow covenant in respect of each
                  applicable month-end by delivery of a Certificate of a
                  Responsible Officer within 30 days after the end of such month
                  in accordance with Section 6.2(i). For purposes hereof, the
                  "Adjustment Amount" shall mean the excess, if any, of the sum
                  of $11,600,000, less the aggregate amount of receivables sold
                  by the Borrower or one or more of its Subsidiaries into a
                  Qualified Securitization Transaction during the Receivables
                  Period."

(PP) Section 7.2(c) of the Credit Agreement is hereby amended by deleting the
reference to "$10,000,000" in the third line thereof and replacing it with
"$2,000,000".

(QQ) Section 7.2(i) of the Credit Agreement is hereby amended by deleting the
phrase "the sum of (i) $10,000,000 and (ii) the then unused Permitted
Expenditure Amount" in the third and fourth lines thereof and replacing such
phrase with "the sum of (i) $2,000,000, (ii) the Indebtedness for insurance
premium financing described on Schedule 7.2(i) and (iii) Indebtedness consisting
of residual interest guaranties and first loss indemnities entered into in
connection with customer financing, not to exceed $33,000,000 in the aggregate
outstanding at any time".

(RR) Section 7.7 of the Credit Agreement is hereby amended by deleting the
proviso at the end thereof in its entirety and replacing it with the following:"

                  ; provided, that if any amount of the permitted Base CapEx
                  Amount shown above for any fiscal year is not expended in the
                  fiscal year for which it is permitted, such unexpended amount
                  may be carried over for expenditure in the next succeeding
                  fiscal year only; provided further, that notwithstanding the
                  foregoing, with respect to Capital Expenditures during the
                  Borrower's fiscal year 2001, the Borrower will not make or
                  commit to make, or permit any Subsidiary to make or commit to
                  make, any Capital Expenditures otherwise permitted by the
                  terms of this Section 7.7, if the effect thereof would cause
                  the cumulative Capital Expenditures of the Borrower and its
                  Subsidiaries from January 1, 2001 as at the end of each fiscal
                  quarter set forth below to exceed the respective amounts set
                  forth opposite such dates:

<PAGE>

                                                            Cumulative Capital
                                Fiscal Quarter Ended           Expenditures
                                --------------------           ------------
                              March 31, 2001                    $3,600,000
                              June 30, 2001                     $6,300,000
                              September 30, 2001                $9,900,000
                              December 31, 2001                $11,000,000


(SS) Section 7.6 of the Credit Agreement is hereby amended by deleting in their
entirety subsections (b), (c) and (d) thereof and inserting the following as a
new subsection (b) at the end thereof:"

                  "(b) the Borrower may pay dividends to the Parent to permit
                  the Parent to (i) pay corporate overhead expenses incurred in
                  the ordinary course of business in an annual amount not to
                  exceed $1,000,000 in any fiscal year of the Borrower and (ii)
                  pay any taxes that are due and payable by the Parent and the
                  Borrower as part of a consolidated group and to make payments
                  under the Tax Sharing Agreement; provided, that for purposes
                  of calculating the amount of those dividends permitted under
                  this Section 7.6(b) during the Borrower's fiscal year 2001,
                  such calculation shall not take into account the amount of
                  dividends made by the Borrower to the Parent during such
                  fiscal year 2001 as set forth on Schedule 7.6(b) hereof."

(TT) Section 7.8 of the Credit Agreement is hereby amended by deleting
subsection (d) in its entirety and replacing it with the following:

                  "(d) loans and advances to employees of the Parent, the
                  Borrower or any of Borrower's Subsidiaries in connection with
                  the relocation, recruitment or retention of such employees in
                  the ordinary course of business, in an aggregate amount not to
                  exceed $2,000,000 at any one time outstanding, plus $50,000 at
                  any one time outstanding in the aggregate for employees in
                  Mexico;"

(UU) Section 7.8 of the Credit Agreement is further amended by (i) deleting in
subsection (k) thereof the phrase "$15,000,000 and the then unused Permitted
Expenditure Amount on the date upon which such Investment is made;" in the third
and fourth lines thereof and replacing it with "$2,000,000;" and (ii) adding as
a new subsection (l) the following:

                  "(l)  the Investments set forth in Schedule 7.8(l);"

(VV)     Section 7.8 is further amended by adding at the end thereof a new
subsection (m) as follows:

                  "(m) Investments existing as of the Third Amendment Date in
                  Motor Coach Industries Mexico S.A. de C.V. ("Autobuses") by
                  Motor Coach Industries Limited ("MCIL") arising as a result of
                  conversion of debt owing by Autobuses to MCIL into equity up
                  to but not exceeding U.S. $67,200,000; and
<PAGE>



(WW)     Section 7.8 is further amended by adding at the end thereof a new
subsection (n) as follows:

                  "(n) Loans by the Borrower to fund temporary cash shortfalls
                  in the collateral accounts established under the receivables
                  securitization financing (SPARC) referenced in Schedule
                  7.8(l), in an amount not to exceed $2,000,000 at any one time
                  outstanding; provided that any funding of such cash shortfall
                  (for any month) by the Borrower shall be permitted only to the
                  extent that (i) such funding relates to receivables which were
                  uncollected during such month and (ii) the Borrower shall have
                  provided the Administrative Agent with a Certificate of a
                  Responsible Officer setting forth the amounts of such funding
                  and the corresponding amount of the uncollected receivables in
                  respect of which such funding was made."

(XX) Section 7.8 of the Credit Agreement is further amended by adding at the end
thereof the following proviso modifying each of subsections (a) through (n)
thereof:

                  "provided, that except to the limited extent described in
                  subsection (n) only, nothing in this Section 7.8 shall permit,
                  or be construed to allow, directly or indirectly, any loan to
                  or Investment in the Parent or the Sponsor, which loans or
                  Investments are expressly prohibited hereby."

(YY) Section 7.10 of the Credit Agreement is hereby amended by deleting in its
entirety clause (b) in the second sentence thereof and inserting at the end of
such Section 7.10, the following:

                  "Notwithstanding anything herein to the contrary, the Parent,
                  the Borrower and the other Loan Parties agree that they shall
                  not pay, or cause or permit to be paid, directly or
                  indirectly, to the Sponsor or any of its Control Investment
                  Affiliates or other Persons involved in the management of the
                  Borrower any management or other fee pursuant to a management
                  agreement or otherwise."

(ZZ) Section 7 of the Credit Agreement is hereby further amended by adding a new
Section 7.17, after the end of Section 7.16, as follows:

                  "7.17 Deposit Accounts. Maintain or establish, or permit to be
                  maintained or established, any deposit accounts in the name or
                  on behalf of any Loan Party other than the deposit accounts
                  identified on Schedule 4.26, nor permit any payment received
                  or to be received by any Loan Party to be deposited into any
                  account other than one of the deposit accounts shown on
                  Schedule 4.26. The parties acknowledge and agree that the
                  Borrower may establish and maintain, or permit the other Loan
                  Parties to establish and maintain, other deposit accounts
                  provided such other deposit accounts are pledged and made
                  subject to the Deposit Pledge and Security Agreement and the
                  Borrower delivers a revised Schedule 4.26 identifying all such
                  other deposit accounts."

(AAA) Section 8 of the Credit Agreement is hereby amended by adding the word
"or" after the semicolon at the end of subsection (m) thereof and adding a new
subsection (n) as follows:

                  "(n) The Funding Affiliate shall fail to fund, or cause to be
                  funded, in accordance with the terms of the Subordination and
                  Participation Agreement, the purchase of a 100% participation
                  interest in the Tranche B Loan on or prior to May 31, 2001, or
                  if the Note Purchaser shall fail to keep or perform any
                  covenant or undertaking on its part to be kept or performed,
                  under or connection with the Note Purchase Agreement, the
                  Assignment Agreement or the Consent and Acknowledgment."
<PAGE>


(BBB) Section 8 of the Credit Agreement is further amended by deleting the
reference to "Supermajority Revolving Facility Lenders" in each place in
subclause (i) of clause (B) in the last full paragraph of Section 8 and
replacing it in each place with "Majority Revolving Facility Lenders".

(CCC) Section 11.1 of the Credit Agreement is hereby amended by deleting the
word "or" before the number "(vii)" on the ninth line from the bottom thereof
and inserting on the eighth line from the bottom after the phrase "Issuing
Lender" the following: "; or (viii) amend, modify or waive any provision of the
Tranche B Loans or Tranche B Obligations without the consent of the Tranche B
Lender".

(DDD) Section 11.5 of the Credit Agreement is hereby amended by (i) inserting on
the fifth line of subsection (a) thereof after the word "therewith," the phrase
"(including without limitation, the out-of-pocket costs and expenses incurred by
the Administrative Agent and the Tranche B Lender in preparing and executing the
Subordination and Participation Agreement)," (ii) inserting at the end of
subsection (b) thereof the phrase "and of the financial advisor to counsel to
the Administrative Agent," and (iii) inserting on the sixth line of subsection
(d) thereof after the phrase "Loan Documents" the phrase ", the Subordination
and Participation Agreement."

(EEE) Section 11.6(c) of the Credit Agreement is hereby amended by (i) deleting
in its entirety the last sentence thereof and (ii) deleting in its entirety the
first sentence thereof and replacing it with the following three sentences:

                  "Any Lender (an "Assignor") may, in accordance with applicable
                  law and with the consent of the Administrative Agent and, in
                  the case of a transfer by any Revolving Lender of all or any
                  part of its Revolving Commitment or Revolving Loans to a
                  Person other than a Lender, an affiliate thereof or any
                  Related Fund thereof, CIBC and, so long as the Securitization
                  L/C shall be outstanding, The Bank of Nova Scotia (which
                  consent shall not be unreasonably withheld or delayed), at any
                  time and from time to time assign to any Lender, any affiliate
                  thereof or any Related Fund thereof (any such party a "Related
                  Party") or to an additional bank, financial institution or
                  other entity (an "Assignee") all or any part of its rights and
                  obligations under this Agreement pursuant to an Assignment and
                  Acceptance, substantially in the form of Exhibit E, executed
                  by such Assignee, such Assignor and the Administrative Agent,
                  and delivered to the Administrative Agent for its acceptance
                  and recording in the Register; provided that no such
                  assignment to an Assignee (other than a Related Party) shall
                  be in an aggregate principal amount of less than $5,000,000
                  (other than in the case of an assignment of all of a Lender's
                  interests under this Agreement), unless otherwise agreed by
                  the Administrative Agent. Upon the Borrower's written request,
                  from time to time, the Administrative Agent shall provide to
                  Borrower a list identifying the identity of all Lenders shown
                  in the Register."
<PAGE>


(FFF) Section 11.6 of the Credit Agreement is hereby amended by adding new
third, fourth and fifth sentences in subsection (b) immediately after the second
sentence thereof as follows:

                  "Notwithstanding the foregoing, no Participant of all or any
                  portion of the Tranche B Loan shall have any right to approve
                  any amendment or waiver of any provision of any Loan Document,
                  or any consent to any departure therefrom by any Loan Party or
                  vote to exercise or to refrain from exercising any right,
                  remedy or privilege under any Loan Document. Nothing in this
                  Section 11.6(b) shall impair or affect the right of the
                  Tranche B Lender to approve any amendment or waiver or consent
                  in respect of the Tranche B Loan. The Tranche B Lender shall
                  have no obligation to consult with or obtain the consent or
                  approval of any Participant of all or any part of the Tranche
                  B Loan with respect to any matters concerning the Tranche B
                  Loan, it being expressly acknowledged and agreed that the
                  Tranche B Lender shall have the sole discretion to make all
                  decisions regarding or in respect of the Tranche B Loan."

(GGG) Section 11.6 of the Credit Agreement is hereby further amended by adding,
both in the fourteenth line from the bottom of subsection (b) immediately after
the word "Participant" and in the eighth line from the bottom of subsection (b)
after the word "Participant", the following parenthetical phrase:

                  "(other than a Participant of all or any portion of the
                  Tranche B Loan)"

(HHH)    Section 11.6(b) of the Credit Agreement is hereby further amended by
adding at the end thereof a new sentence follows:

                  "No Participant of all or any portion of the Tranche B Loan
                  shall be entitled (i) to have any right of setoff in respect
                  of its participating interests in the Tranche B Loan, or (ii)
                  to have any of the benefits of Section 2.18, 2.19 or 2.20."

SECTION 4.        Amendments to Annexes, Schedules and Exhibits.
                  ---------------------------------------------

(A) Annex A to the Credit Agreement is hereby amended to delete each of the four
columns in the table set forth thereon showing the range of Applicable Margins
for Revolving Loans and Term Loans and to delete all references to the
Applicable Margin in the paragraph shown under the table.

(B) Schedule 1.1.A to the Credit Agreement is hereby amended to add the
following table at the end thereof:


                         Tranche B Lender               Tranche B Commitment
                         ----------------               --------------------

         Canadian Imperial Bank of Commerce                  $8,500,000

(C)      A new Schedule 4.8 is hereby added to the Credit Agreement in the form
of Schedule 4.8 attached hereto.

(D)      Schedule 4.15 is hereby amended to add at the end thereof the chart
depicted on Schedule 4.15 hereto.

(E)      Schedule 4.19(a) is hereby amended to include the information shown on
the Form of Schedule 4.19(a) attached hereto.
<PAGE>


(F)      A new Schedule 4.25 is hereby added to the Credit Agreement in the form
of Schedule 4.25 attached hereto.

(G)      A new Schedule 4.26 is hereby added to the Credit Agreement in the form
of Schedule 4.26 attached hereto.

(H)      A new Schedule 7.6(b) is hereby added to the Credit Agreement in the
form of Schedule 7.6(b) attached hereto.

(I)      A new Schedule 7.2(i) is hereby added to the Credit Agreement in the
form of Schedule 7.2(i) attached hereto.

(J)      A new Schedule 7.8(l) is hereby added to the Credit Agreement in the
form of Schedule 7.8(l) attached hereto.

SECTION 5. Extension Fee. The Borrower hereby agrees to pay to the
Administrative Agent, for the ratable benefit of the Lenders which shall have
executed and delivered counterparts of this Amendment and Waiver by or before
5:00 p.m. (New York City time) on the fifth Business Day occurring after the
Effective Date (as hereinafter defined) (each such Lender, a "Consenting
Lender"), by wire transfer of immediately available funds, a non-refundable fee
(the "Extension Fee"). The Borrower agrees to pay to the Administrative Agent on
the Effective Date the sum of $4,550,556. The Administrative Agent shall
distribute the Extension Fee ratably to the Consenting Lenders in an amount for
each Consenting Lender equal to 1.00% of the sum of (i) the outstanding
principal balance of Term Loans held by such Consenting Lender and (ii) the
Revolving Commitment of such Consenting Lender. The Administrative Agent shall
return to the Borrower the excess, if any, of the Extension Fee paid less the
amounts distributed to the Consenting Lenders pursuant to the preceding
sentence, together with a list of all Consenting Lenders and the amount of the
Extension Fee distributed to each.

SECTION 6.        Representations and Warranties.  Each of the Loan Parties
represents and warrants to the Agents and the Lenders that:

(A) the execution, delivery and performance by the Loan Parties of this
Amendment and Waiver and the performance by the Loan Parties of the Credit
Agreement as modified by this Amendment and Waiver (i) have been duly authorized
by all requisite corporate action on the part of the Loan Parties; and (ii) will
not (x) violate (A) any provision of any statute, rule or regulation or the
Certificate of Incorporation or By-laws (or similar governing documents) of the
Loan Parties, (B) any applicable order of any court or any rule, regulation or
order of any other agency of government or (C) any indenture, agreement or other
instrument to which any of the Loan Parties is a party or by which any of the
Loan Parties or any of their respective property is bound and (y) be in conflict
with, result in a breach of or constitute (with notice or lapse of time or both)
a default under any such indenture, agreement or other instrument;

(B) upon the occurrence of the Effective Date (as hereinafter defined), this
Amendment and Waiver will constitute the legal, valid and binding obligation of
the Loan Parties, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law); and

(C) after giving effect to this Amendment and Waiver, (i) no Default or Event of
Default has occurred and is continuing; and (ii) all representations and
warranties by the Borrower and the Guarantors pursuant to the Credit Agreement
and the other Loan Documents to which each is a party are true, correct and
complete in all material respects on and as of the date hereof with the same
effect as if such representations and warranties had been made on and as of the
date hereof.
<PAGE>


SECTION 7.        Effective Date. This Amendment and Waiver shall not become
effective until the date (the "Effective  Date") on which the following
conditions precedent shall have been satisfied:

(A) The Agents shall have received fully executed counterparts of this Amendment
and Waiver executed by the Loan Parties, the Agents and the Required Lenders.

(B) The Administrative Agent shall have received, by wire transfer of
immediately available funds, for the ratable benefit of the Revolving Lenders, a
principal repayment of outstanding Revolving Loans in the amount of $32,000,000
together with all accrued and unpaid interest thereon and all amounts, if any,
payable pursuant to Section 2.20 of the Credit Agreement.

(C) The Administrative Agent shall have received, by wire transfer of
immediately available funds, for the ratable benefit of the Consenting Lenders,
the Extension Fee.

(D) The Administrative Agent shall have received a fully executed counterpart of
the amended and restated fee letter agreement from the Borrower (the "Amended
Fee Letter").

(E) The Administrative Agent shall have received, by wire transfer of
immediately available funds, all amounts payable to the Administrative Agent
under the Amended Fee Letter.

(F) The Administrative Agent shall have received copies of the fully executed
employment contracts between the Borrower and Mr. Steven Clough and Mr. Thomas
Sorrells, the terms of which shall be reasonably satisfactory to the
Administrative Agent.

(G) The Administrative Agent shall have received fully executed copies of all
existing Interest Rate Protection Agreements entered into by the Borrower.

(H) The Administrative Agent shall have received an executed copy of the
Engagement Letter for E&Y Capital Advisors in form and substance satisfactory to
the Administrative Agent.

(I) The Administrative Agent and the Tranche B Lender shall have received fully
executed counterparts of the Subordination and Participation Agreement.

(J) The Administrative Agent shall have received, in a sufficient number for
each Lender, the financial statements and related certificates and reports
(including, without limitation, the Compliance Certificate) required to be
delivered under Sections 6.1 and 6.2 of the Credit Agreement, including, without
limitation, an opinion from Borrower's auditors without a going concern or other
qualification (after giving effect to this Amendment and Waiver), and otherwise
in form and substance satisfactory to the Administrative Agent.

(K) The Agents, the Lenders, counsel for the Agents and the financial advisor to
such counsel shall have received, by wire transfer of immediately available
funds, the amounts invoiced to the Borrower and required to be paid to such
parties under Section 10 of this Amendment and Waiver.

(L) The Administrative Agent shall have received favorable written opinions from
counsel to the Loan Parties, the Funding Affiliate and the Note Purchaser, in
each case in form and substance satisfactory to counsel for the Administrative
Agent.
<PAGE>


(M) No Default or Event of Default (which has not been waived hereunder) shall
have occurred and be continuing.

(N) All representations and warranties contained in this Amendment and Waiver
shall be true and correct in all material respects.

(O) The Administrative Agent and the Tranche B Lender shall have received fully
executed counterparts of the Note Purchase Agreement, the Assignment Agreement
and the Consent and Acknowledgment, in each case in form and substance
satisfactory to the Administrative Agent and the Tranche B Lender.

(P) The Administrative Agent and its counsel shall have received such other
information, materials and documentation as either of the Administrative Agent
or its counsel may reasonably request, which information, materials and
documentation shall be satisfactory in form and substance to the Administrative
Agent and its counsel.

(Q) All legal matters incident to the effectiveness of this Amendment and Waiver
shall be satisfactory to the Administrative Agent and its counsel.

SECTION 8. Post Effective Date Conditions. Each of the following subsequent
conditions shall have been satisfied on or before the respective dates set forth
below, it being expressly acknowledged and agreed that any failure to keep,
perform and satisfy the undertaking specified below shall cause the waiver
granted in this Amendment and Waiver to cease to be in effect immediately, as
specified in Section 11 of this Amendment and Waiver:

(A) On or before June 15, 2001, and at such times thereafter as the
Administrative Agent may reasonably request, each Loan Party shall (i) execute
and deliver such UCC amendments and additional UCC-1 financing statements as the
Administrative Agent may request in order to continue to perfect the
Administrative Agent's security interest in the Collateral under the Uniform
Commercial Code (including revised Article 9).

(B) On or before June 15, 2001, a Mortgage, duly executed and delivered to a
title insurance company for recording, encumbering each of the facilities in
Louisville, Kentucky and Boggy Creek/Orlando, Florida, together with a marked
lender's title insurance policy, ALTA survey, evidence of property damage and
liability insurance coverage and information demonstrating the satisfactory
environmental status of such facilities, in each case in form and substance
reasonably satisfactory to the Administrative Agent;

(C) On or before May 21, 2001, duly executed Deposit Pledge and Security
Agreements encumbering each of the deposit accounts set forth on Schedule 4.26
and in form and substance reasonably satisfactory to the Administrative Agent;

(D) On or before June 1, 2001, an opinion of Mexican counsel as to the
perfection of the pledge and security interests granted under the Stock Pledge
Agreement dated July 31, 2000, together with a new dated authorization letter in
connection therewith, each in form and substance reasonably satisfactory to the
Administrative Agent;

(E) On or before June 1, 2001, the information requested in the letter dated as
of the date hereof from the Administrative Agent to the Borrower, in each case
in form and substance reasonably satisfactory to the Administrative Agent; and

(F) On or before May 8, 2001, updated and revised Schedules to the Credit
Agreement (other than those specifically amended or added pursuant to this
Amendment and Waiver) together with a Certificate of a Responsible Officer that
all of the information set forth on such updated and revised Schedules is true
and correct and that all relevant representations are true and correct as if
made on and as of the date of such Certificate, in each case in form and
substance reasonably satisfactory to the Administrative Agent.
<PAGE>


The parties hereto agree that any one or more of the dates specified in this
Section 8, by which the Borrower must perform or satisfy, or cause to be
performed or satisfied, the conditions subsequent described herein, may be
extended by the Administrative Agent, in its sole discretion, for an additional
period not exceeding ninety (90) days, at the written request of the Borrower,
without the affirmative vote or consent of the Lenders.

SECTION 9. Confirmation and Acknowledgement of the Obligations: Release. The
Borrower hereby (i) confirms and acknowledges to the Agents and the Lenders that
it is validly and justly indebted to the Agents and the Lenders for the payment
of all Obligations without offset, defense, cause of action or counterclaim of
any kind or nature whatsoever and (ii) reaffirms and admits the validity and
enforceability of the Credit Agreement and the Loan Documents and the Liens in
the Collateral which were granted pursuant to the Loan Documents or otherwise.
Each of the Sponsor and each Loan Party, on its own behalf and on behalf of its
successors and assigns, hereby waives, releases and discharges the Agents and
each Lender and all of the affiliates of the Agents and each Lender, and all of
the directors, officers, employees, attorneys, agents, successors and assigns of
each of the Agents, each Lender and such affiliates, from any and all claims,
demands, actions or causes of action (known and unknown) arising out of or in
any way relating to the Loan Documents and any documents, agreements, dealings
or other matters connected with any of the Loan Documents, in each case to the
extent arising (x) on or prior to the date hereof or (y) out of, or relating to,
actions, dealings or matters occurring on or prior to the date hereof. The
waivers, releases, and discharges in this Section 8 shall be effective
regardless of whether the conditions to this Amendment and Waiver are satisfied
and regardless of any other event that may occur or not occur after the date
hereof.

SECTION 10. Costs and Expenses. The Borrower agrees that its obligations set
forth in Section 11.5 of the Credit Agreement shall extend to the preparation,
execution and delivery of this Amendment and Waiver and any other documentation
contemplated hereby (whether or not this Amendment and Waiver becomes effective
or the transactions contemplated hereby are consummated), including, but not
limited to, the reasonable fees and disbursements of Clifford Chance Rogers &
Wells LLP, counsel for the Agents, and E&Y Capital Advisors LLC, financial
advisor to Clifford Chance Rogers & Wells LLP.

SECTION 11. Lapse of Waiver. The Borrower agrees that its failure to comply with
any provision of this Amendment and Waiver shall cause the waiver granted hereby
to cease to be in effect immediately, without the passage of any grace period
and without the requirement of any prior notice from or further action on the
part of any Lender or any Agent.

SECTION 12.       Limited Waiver; Ratification of Credit Agreement.

(A) Except to the extent hereby waived or modified, the Credit Agreement and
each of the Loan Documents remain in full force and effect and are hereby
ratified and affirmed.

(B) This Amendment and Waiver shall be limited precisely as written and shall
not be deemed (i) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein or a waiver of any other
Default or Event of Default under the Credit Agreement, whether or not known to

<PAGE>


any of the Agents or the Lenders or (ii) to prejudice any other right or rights
which the Agents or the Lenders may now have or have in the future under or in
connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Except to the extent hereby waived or modified, the Credit
Agreement and each of the Loan Documents shall continue in full force and effect
in accordance with the provisions thereof on the date hereof and the Credit
Agreement as heretofore amended or modified and as modified by this Amendment
and Waiver are hereby ratified and confirmed. As used in the Credit Agreement,
the terms "Credit Agreement, "this Agreement," "herein," "hereafter," "hereto,"
"hereof," and words of similar import, shall, unless the context otherwise
requires, mean the Credit Agreement as modified by this Amendment and Waiver.
Reference to the terms "Agreement" or "Credit Agreement" appearing in the
Exhibits or Schedules to the Credit Agreement or in the other Loan Documents
shall, unless the context otherwise requires, mean the Credit Agreement as
modified by this Amendment and Waiver.

SECTION 13. Counterparts. This Amendment and Waiver may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page of this
Amendment and Waiver by facsimile shall be effective as delivery of a manually
executed counterpart of this Amendment and Waiver.

SECTION 14. Loan Document. This Amendment and Waiver is a Loan Document pursuant
to the Credit Agreement and shall (unless expressly indicated herein) be
construed, administered, and applied in accordance with all of the terms and
provisions of the Credit Agreement.

SECTION 15.       GOVERNING  LAW. THIS  AMENDMENT AND WAIVER SHALL BE GOVERNED
BY, AND  CONSTRUED IN ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

SECTION 16.       Successors  and Assigns.  The provisions of this Amendment and
Waiver shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.

SECTION 17. Further Assurances. Each of the Loan Parties expressly acknowledges
and agrees (i) to enter into such other or further documents, and to take such
other or further actions that may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect, preserve or protect the liens and
security interests created under the Security Documents and (ii) to grant liens
on such other or further property or assets of the Loan Parties not currently
encumbered to secure the Obligations as the Administrative Agent may require
(including, but not limited to, the equity interests of any Inactive
Subsidiaries, any Securitization Entity, any other Domestic or Foreign
Subsidiary, foreign intellectual property, real property, chattel paper, and
assets having a certificate of title); provided, that no Loan Party shall have
any obligation to grant liens on any such other or further property to the
extent that such Loan Party can demonstrate, to the reasonable satisfaction of
the Administrative Agent, that the granting of such lien would have a material
and adverse tax consequence to the Loan Parties.

SECTION 18.       Acknowledgement and Consent.

(A) Each Guarantor hereby acknowledges that it has read this Amendment and
Waiver and consents to the terms hereof and further confirms and agrees that,
notwithstanding the effectiveness of this Amendment and Waiver, its obligations
under (i) the Guarantee and Collateral Agreement, in respect of the Subsidiary
Guarantors and (ii) Section 10 of the Credit Agreement, in respect of the
Parent, shall not be impaired or affected and shall continue to be, in full
force and effect and are hereby confirmed and ratified in all respects.
<PAGE>



(B) Each Guarantor hereby confirms and acknowledges that it is validly and
justly indebted to the Agents and the Lenders for the payment of all of the
Obligations which it has guaranteed, without offset, defense, cause of action or
counterclaim of any kind or nature whatsoever.

(C) Each Guarantor hereby reaffirms and admits the validity and enforceability
of the Credit Agreement and the Loan Documents and the Liens in the Collateral
which were granted pursuant to the Loan Documents or otherwise.

SECTION 19.       Headings.  The headings of this  Amendment and Waiver are for
the purposes of reference only and shall not affect the construction of, or be
taken into consideration in interpreting, this Amendment and Waiver.

SECTION 20. Integration. This Amendment and Waiver represents the entire
agreement of the parties hereto with respect to the amendment of the Credit
Agreement and the terms of any letters and other documentation entered into
between the parties prior to the execution of this Amendment and Waiver which
related to the amendment of the Credit Agreement shall be replaced by the terms
of this Amendment and Waiver.

SECTION 21. Consultation with Advisors. The Loan Parties acknowledge that they
have consulted with counsel and with such other experts and advisors as they
have deemed necessary in connection with the negotiation, execution and delivery
of this Amendment and Waiver. This Amendment and Waiver shall be construed
without regard to any presumption or rule requiring that it be construed against
the party causing this Amendment and Waiver or any part thereof to be drafted.

SECTION 22. Severability. If any provisions of this Amendment and Waiver shall
be held invalid or unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or enforceability without in any manner affecting the validity or
enforceability of such provision in any other jurisdiction or the remaining
provisions of this Amendment and Waiver in any jurisdiction.

SECTION 23. Survival. All representations, warranties, covenants, agreements,
undertakings, waivers and releases of each of the Loan Parties and the Sponsor
contained herein shall survive the Waiver Termination Date and the indefeasible
payment in full in cash of the Obligations.

SECTION 24. Amendment. No amendment, modification, rescission, waiver or release
of any provision of this Amendment and Waiver shall be effective unless the same
shall be in writing and signed by the Loan Parties, the Administrative Agent,
and the Required Lenders.

SECTION 25. Intercreditor Arrangement. If on or before May 1, 2002, an Event of
Default described in clauses (i) or (ii) of Section 8(f) of the Credit Agreement
occurs (such date, the "Insolvency Date"), then the Revolving Lenders agree
irrevocably to accept and purchase from the Term Lenders, and the Term Lenders
agree to sell to the Revolving Lenders, an undivided participating interest in
the outstanding Term Loans in an aggregate amount equal to the True-Up Amount
(as hereinafter defined). The purchase price to be paid by each Revolving Lender
shall be equal to such Revolving Lender's Revolving Percentage of the True-Up
Amount. The Term Lenders shall share ratably in the True-Up Amount paid by the
Revolving Lenders in accordance with the outstanding principal amount of the
Term Loans then owing to each. For purposes hereof, (x) the "True-Up Amount"
shall mean the product of the Proration Amount multiplied by the Revolving
Commitment Reduction, (y) the "Revolving Commitment Reduction" shall mean on the
Insolvency Date the amount of the Total Revolving Commitments then unavailable
pursuant to Section 2.4 or pursuant to a voluntary reduction by the Borrower
prior to the Insolvency Date, but in all events in an amount which shall not
exceed $8,500,000 in the aggregate, and (z) the "Proration Amount" shall mean

<PAGE>

the percentage (expressed as a decimal) that the aggregate outstanding Term
Loans on the Insolvency Date represent of the sum of (i) the aggregate
outstanding Term Loans on the Insolvency Date, plus (ii) the amount of the Total
Revolving Commitments on the Insolvency Date, less any portion thereof then
unavailable pursuant to Section 2.4.


              [The remainder of this page intentionally left blank]


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be duly executed as of the day and the year first above written.

                                  MCII HOLDINGS, INC.,
                                     as Parent and a Guarantor


                                      By:
                                         ---------------------------------------
                                      Name:
                                      Title:


                                  MOTOR COACH INDUSTRIES
                                    INTERNATIONAL, INC.,
                                     as the Borrower


                                  By:
                                    --------------------------------------------
                                      Name:
                                      Title:


                                  BUSLEASE, INC.,
                                     as a Guarantor


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:


                                  MCI SALES AND SERVICE, INC. (formerly known as
                                  Hausman Bus Sales, Inc.),
                                     as a Guarantor


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:


                                  MOTOR COACH INDUSTRIES, INC.,
                                     as a Guarantor


                                  By:
                                     -------------------------------------------
                                      Name:
                                     Title:

<PAGE>

                                  TRANSIT BUS INTERNATIONAL, INC.,
                                     as a Guarantor


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:


                                  MCI SERVICE PARTS, INC. (formerly known as
                                  Universal Coach Parts, Inc.),
                                     as a Guarantor


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:


                                  JOSEPH LITTLEJOHN & LEVY, INC.,
                                    as Sponsor, solely in respect of
                                    Section 9


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:


                                  MCII FINANCIAL SERVICES II, INC.


                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:



<PAGE>




                                  Schedule 4.8


                               Leasehold Interests


<PAGE>




                                  Schedule 4.15


                              Organizational Chart






<PAGE>




                                  Schedule 4.25

                               Material Contracts




<PAGE>



                                Schedule 4.19 (a)



<PAGE>




                                  Schedule 4.26

                                Deposit Accounts





      Name                          Account No.              Bank
      ----                          -----------              ----






<PAGE>




                                 Schedule 7.2(i)

                             Additional Indebtedness





       Indebtedness                      Purpose                        Amount
       ------------                      -------                        ------
AFCO Insurance Premium Loan    Annual Financing of Director           $2,055,000
                               and Officers Property & Casualty
                               and Other Insurance Premiums

                         Total Scheduled Additional Indebtedness      $2,055,000





<PAGE>




                                 Schedule 7.6(b)

                            2001 Dividends to Parent







<PAGE>




                                 Schedule 7.8(l)

                                Other Investments





Intercompany Account with MCI US Holdings Inc.


     Note Receivable related to Jim Bernacchi (Ex CEO)                $259,711
     Repurchase Equity of Former Officers Batchelder and Baker        $100,000
                                                                    ----------
     Total MCI US Holding Intercompany                                $359,711

     Structuring Fees                                               $2,500,000
     Membership Fee                                                     10,000
     Premium Letter                                                    209,499
     Legal Fees/Other                                                1,399,915
     Interest Caps                                                   1,015,200
     S&P                                                               100,000
                                                                    ----------
SPARC Fees                                                          $5,234,614
                                                                    ----------

  Total Other Investments                                           $5,594,325