**Exhibit 10.10**

 

LOAN MODIFICATION AGREEMENT NO.3

 

Preamble: This Loan Modification Agreement(this “Agreement”), dated as of December 1, 2004 (the “Effective  Date”), is made between UPS CapitalCorporation, as lender (the “Lender”) and each Person identified as “Borrower”on the signature page(s) hereof, as borrower(s) (individually and collectively,the “Borrower”), for the purpose of amending or otherwise modifying the termsof that certain Loan and Security Agreement, dated as of August 28, 2002,heretofore made between Lender and Borrower (which, as it has been, orhereafter may be, modified or amended, is called herein the “Loan Agreement”). Now,therefore, in consideration of the mutual promises contained herein and in theLoan Agreement, the receipt and sufficiency of which are hereby acknowledged,Lender and Borrower, each intending to be legally bound, agree as follows:

 

1.  Definitions.  Capitalized terms used herein, but notexpressly defined themselves herein, shall have the meanings given to suchterms in the Loan Agreement.

 

2.  Loan Modifications.  Lender and Borrower agree to modify the Loan Agreementas follows:

 

2.1  LineIncrease.  For a 90 day period, beginningon the Effective Date and ending 90 days after the Effective Date (such latter dateherein called the “End Date”), the Maximum Amount shall be increased by $5,000,000,that is, from $15,000,000 to $20,000,000; provided, however, that total Borrowingsunder the Line of Credit shall continue to be tied to, and limited by, theBorrowing Base in effect from time to time. On the last Business Day of each ofthe three consecutive weeks prior to the week containing the End Date (eachsuch date herein called a “Reduction Date”), the Maximum Amount shall bereduced by $1,250,000 and, on the End Date, the Maximum Amount shall bereturned to, and remain at, $15,000,000.

 

2.2  AvailabilityIncrease.  In connection with theforegoing increase in the Maximum Amount, for the same said period; that is, fromthe Effective Date to, but not including, the End Date, the dollar limitation onBorrowings supported by Eligible Inventory (the “Inventory Cap”), as reflectedin the definition of the Borrowing Base, shall be increased from $7,500,000 to $10,000,000but shall reduce by $625,000 on each Reduction Date and shall return to$7,500,000 on the End Date.

 

2.3  ResultingPayment Obligation; Additional Collateral.  To the extent that, on any Reduction Date oron the End Date, as applicable, either (A) total Borrowings then exceedthe Maximum Amount, as so reduced on such date, and/or (B) totalBorrowings exceed the Borrowing Base, as so reduced by the reduction of the InventoryCap on such date, then, the Borrower shall be obliged to remit to the Lender onsuch Reduction Date or the End Date, as applicable, the entire amount of suchexcess (in either or each case); otherwise, without necessity of further noticefrom the Lender, an Event of Default shall automatically exist on such ReductionDate or the End Date, as applicable.

 

2.4  AmendmentFee.  There shall be due and payable tothe Lender on the Effective Date, in consideration of its entry into thisAgreement, a fully earned, non-refundable amendment fee equal in amount to$10,000.

 

3.  Inducing Representations.  To induce Lender to enter into this Agreement,Borrower hereby represents and warrants that: (i) Borrower is dulyauthorized to enter into this Agreement, and this Agreement, upon its executionby Borrower and Lender, will constitute Borrower’s legal, valid and binding obligations

 

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enforceable in accordance with its terms against Borrower; (ii) aftergiving effect to this Agreement, no Event of Default exists; (iii) nopresent right of set off, counterclaim, recoupment claim or defense exists inBorrower’s favor in respect of its payment or performance of any Obligations; and(iv) except as modified by this Agreement, all terms of the Loan Agreementand each Loan Document shall remain in full force and effect.

 

4.  Miscellaneous.  Except as otherwise expressly provided herein,all modifications to the Loan Agreement set forth herein shall take effect onthe Effective Date. Each existing Loan Document (including, particularly, anyNote) shall be deemed modified hereby as necessary to conform its terms to theterms of the Loan Agreement, as modified hereby. This Agreement constitutes aLoan Document, and shall be governed and construed accordingly. This Agreement constitutesthe entire agreement between Lender and Borrower relative to the subject matterhereof, and supersedes and replaces any prior understandings and agreements, writtenor oral, in regard thereto. This Agreement shall be binding on, and inure tothe benefit of, the successors and assigns of Borrower and Lender. Borrower shallreimburse Lender for all costs which Lender incurs, including reasonableattorneys fees, in the preparation, negotiation, execution and performance ofthis Agreement, and the recording of any Loan Documents in connection herewith.

 

5.  Conditions Precedent.  The following shall constitute expressconditions precedent to Lender having any obligations under this Agreement, regardlessof its execution hereof: (i) to the extent any fee or other sum is describedas owing to Lender and payable on the Effective Date in Section 2 hereof,then such fee or other sum shall have been paid to Lender; and (ii) ifrequired by Lender, the Borrower shall have delivered to Lender such additionalLoan Documents, including, particularly, any Notes, which Lender determines tobe necessary to give effect hereto. 2

 

IN WITNESS WHEREOF, Lender and Borrower haveexecuted this Agreement, by and through their respective authorized officers,as of the Effective Date.

 

 
| “Borrower”         | “Lender”            |
|------------------------------|-------------------------------|
|                         |                          |
| NATIONAL R.V. HOLDINGS, INC. | UPS CAPITAL CORPORATION       |
|                         |                          |
|                         |                          |
| By:                          | /S/ Thomas J. Martini         |   | By: | /S/ John P. Holloway |   |
|                         | Authorized  Officer Treasurer |   | Authorized Officer |
|                         |                          |   |   |
|                         |                          |   |   |
| NATIONAL R.V., INC.          |                          |   |
|                         |                          |   |   |
|                         |                          |   |   |
| By:                          | /S/ Thomas J. Martini         |   |   |   |
|                         | Authorized  Officer Treasurer |   |   |
|                         |                          |   |   |
| COUNTRY COACH, INC.          |                          |   |
|                         |                          |   |   |
| By:                          | /S/ Thomas J. Martini         |   |   |   |
|                         | Authorized  Officer Treasurer |   |   |

 

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