**Exhibit 10.8**

 

 

**JointVenture Agreement**

**Between**

**InternationalTruck and Engine Corporation,**

**InternationalTruck and Engine Investments Corporation**

**and**

**MonacoCoach Corporation**

**Dated effective as of January 24, 2007**

** **

**The Member Interests of the Company(the “Member Interests”) are subject to the restrictions on transfer and otherterms and conditions set forth in this Agreement.**

**The Member Interests have beenacquired for investment only and have not been registered under (a) the FederalSecurities Act of 1933, as amended or (b) any other state securities law.  The Member Interests may not be offered forsale, pledged, hypothecated, sold, assigned, or transferred, except incompliance with (i) such laws and (ii) the terms and conditions of thisAgreement.**

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**Table of Contents**
| ** **                                                      | **Page** |
|-----------------------------------------------------------------|----------|
| **ARTICLE I Definitions and Rules of Construction**             | 2        |
|                                                            | 1.1      |   | Certain Defined Terms | 2 |
|                                                            | 1.2      |   | Rules of Construction | 2 |
|                                                            | 1.3      |   | Joint and Several Liability | 2 |
|                                                            |     |   |   |   |
| **ARTICLE II Establishment of the Company**                     | 2        |
|                                                            | 2.1      |   | Establishment of the Company | 2 |
|                                                            | 2.2      |   | Name | 2 |
|                                                            | 2.3      |   | Term | 2 |
|                                                            | 2.4      |   | Representations and Warranties | 2 |
|                                                            | 2.5      |   | Covenants Pending Closing | 3 |
|                                                            | 2.6      |   | Closing Conditions and Termination | 3 |
|                                                            | 2.7      |   | Place and Time of Closing | 3 |
|                                                            | 2.8      |   | Closing Deliveries | 3 |
|                                                            | 2.9      |   | Initial Member Interests | 4 |
|                                                            | 2.10     |   | Company Obligations & Rights | 5 |
|                                                            |     |   |   |   |
| **ARTICLE III Capital Contributions**                           | 5        |
|                                                            | 3.1      |   | Initial Capital Contributions | 5 |
|                                                            | 3.2      |   | Additional Capital Contributions and Member Loans | 5 |
|                                                            | 3.3      |   | Failure of a Member to Make Additional Capital Contribution  or Member Loan | 6 |
|                                                            | 3.4      |   | No Withdrawal of or Payment of Interest on Capital | 7 |
|                                                            |     |   |   |   |
| **ARTICLE IV Allocation of Profits and Losses;  Distributions** | 7        |
|                                                            | 4.1      |   | Shares of Profits and Losses | 7 |
|                                                            | 4.2      |   | Distributions | 7 |
|                                                            | 4.3      |   | No Priority | 7 |
|                                                            | 4.4      |   | Other Distribution Rules | 7 |
|                                                            | 4.5      |   | Liquidating Distribution Provisions | 7 |
|                                                            | 4.6      |   | Limitation upon Distributions | 9 |
|                                                            |     |   |   |   |
| **ARTICLE V Management and Employees**                          | 9        |
|                                                            | 5.1      |   | Board of Directors | 9 |
|                                                            | 5.2      |   | Board of Directors Meetings | 10 |
|                                                            | 5.3      |   | Voting of Directors; Quorum | 11 |
|                                                            | 5.4      |   | Actions Requiring Approval of the Board of Directors | 11 |
|                                                            | 5.5      |   | General Manufacturing Manager. | 13 |
|                                                            | 5.6      |   | Employees | 14 |
|                                                            | 5.7      |   | Business Plan | 14 |
|                                                            | 5.8      |   | Dispute Resolution Procedures | 15 |
|                                                            | 5.9      |   | Standard of Conduct | 16 |
|                                                            | 5.10     |   | Directors and Officers—Exculpation | 17 |
|                                                                 |          |  |  |  |  |

 

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|                                                           | 5.11   |   | Directors and Officers—Indemnification             | 17     |
|-----------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|
|                                                      | 5.12   |   | Average Cost Savings.                                   | 19     |
|                                                      |   |   |                                                    |   |
| **ARTICLE VI Transfer Restrictions on Member  Interests** | 20     |
|                                                      | 6.1    |   | Restrictions on Transfer of Member Interests            | 20     |
|                                                      | 6.2    |   | Effect of Non-compliance                                | 21     |
|                                                      |   |   |                                                    |   |
| **ARTICLE VII Termination**                               | 21     |
|                                                      | 7.1    |   | Termination Generally                                   | 21     |
|                                                      | 7.2    |   | Termination for Default                                 | 22     |
|                                                      | 7.3    |   | Remedies—Upon Default by One Member                | 24     |
|                                                      | 7.4    |   | Remedies if Both Members are Defaulting Members         | 24     |
|                                                      | 7.5    |   | Post-Termination Supply Arrangements                    | 25     |
|                                                      |   |   |                                                    |   |
| **ARTICLE VIII Dissolution**                              | 25     |
|                                                      | 8.1    |   | Generally                                               | 25     |
|                                                      | 8.2    |   | Liquidation Procedures                                  | 25     |
|                                                      | 8.3    |   | Certified Liquidation Statement                         | 25     |
|                                                      |   |   |                                                    |   |
| **ARTICLE IX Reporting and Accounting Provisions**        | 26     |
|                                                      | 9.1    |   | Books and Records                                       | 26     |
|                                                      | 9.2    |   | Other Accounting and Tax Provisions                     | 26     |
|                                                      | 9.3    |   | Distribution of Financial Statements and Other  Reports | 26     |
|                                                      | 9.4    |   | Right of Inspection and Examination                     | 27     |
|                                                      | 9.5    |   | Auditors                                                | 27     |
|                                                      |   |   |                                                    |   |
| **ARTICLE X Dispute Resolution**                          | 27     |
|                                                      | 10.1   |   | Generally                                               | 27     |
|                                                      | 10.2   |   | Dispute Resolution Procedures                           | 27     |
|                                                      |   |   |                                                    |   |
| **ARTICLE XI Indemnification**                            | 29     |
|                                                      | 11.1   |   | Survival; Effect of Knowledge; Other                    | 29     |
|                                                      | 11.2   |   | Indemnification—By International                   | 29     |
|                                                      | 11.3   |   | Indemnification—By Monaco                          | 29     |
|                                                      | 11.4   |   | Limitations on Indemnification Amount                   | 30     |
|                                                      | 11.5   |   | Time Limitations                                        | 30     |
|                                                      | 11.6   |   | Procedure for Indemnification—Third Party Claims   | 30     |
|                                                      | 11.7   |   | Procedure for Indemnification—Other Claims         | 31     |
|                                                      | 11.8   |   | Satisfaction of Indemnification Obligations             | 31     |
|                                                      | 11.9   |   | Exclusiveness of Remedies                               | 31     |
|                                                      |   |   |                                                    |   |
| **ARTICLE XII Competition**                               | 32     |
|                                                      | 12.1   |   | Competition                                             | 32     |
|                                                      | 12.2   |   | Independent Agreements                                  | 33     |
|                                                      | 12.3   |   | Scope of Restrictions                                   | 33     |
|                                                      |   |   |                                                    |   |
| **ARTICLE XIII Confidentiality**                          | 33     |

 

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|                               | 13.1   |   | Confidentiality—Confidential Information  | 33     |
|-------------------------------|--------|--------|------------------------------------------------|--------|
|                          | 13.2   |   | Confidentiality—Company Information       | 34     |
|                          | 13.3   |   | Definitions—Company Information and Other | 34     |
|                          | 13.4   |   | Certain Exceptions                             | 35     |
|                          | 13.5   |   | Permitted Disclosure to Representatives        | 36     |
|                          | 13.6   |   | Disclosure to Non-Representatives              | 36     |
|                          | 13.7   |   | Continuing Protection of Trade Secrets         | 36     |
|                          | 13.8   |   | Remedies                                       | 36     |
|                          | 13.9   |   | Attorney-Client Privilege                      | 36     |
|                          | 13.10  |   | Continuing Obligations                         | 37     |
|                          | 13.11  |   | No Limitation on Other Agreements              | 37     |
|                          |   |   |                                           |   |
| **ARTICLE XIV Miscellaneous** | 37     |
|                          | 14.1   |   | Further Assurances                             | 37     |
|                          | 14.2   |   | Notices                                        | 37     |
|                          | 14.3   |   | Jurisdiction; Service of Process               | 39     |
|                          | 14.4   |   | Waiver                                         | 39     |
|                          | 14.5   |   | Entire Agreement and Modification              | 39     |
|                          | 14.6   |   | Assignments, Successors                        | 39     |
|                          | 14.7   |   | No Third Party Rights                          | 39     |
|                          | 14.8   |   | Severability                                   | 39     |
|                          | 14.9   |   | Time is of the Essence; Computation of Time    | 40     |
|                          | 14.10  |   | Expenses                                       | 40     |
|                          | 14.11  |   | Governing Law                                  | 40     |
|                          | 14.12  |   | Counterparts                                   | 40     |

 

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**Joint Venture Agreement**

This Joint Venture Agreement (together with allAttachments and Exhibits and amendments to it, this “Agreement”), isexecuted as of January 24, 2007, by and among International Truck and EngineCorporation, a Delaware corporation (“ITEC”), International Truck andEngine Investments Corporation, a Delaware corporation and wholly-ownedsubsidiary of ITEC (“Investments” and, together with ITEC, “International”),and Monaco Coach Corporation, a Delaware corporation (“Monaco”).

**RECITALS**

**WHEREAS**, ITEC’swholly owned indirect subsidiary, Workhorse Custom Chassis, LLC, an Illinoislimited liability company (“Workhorse”), is a manufacturer of strippedchassis products (i.e., a rolling chassis including power-train but excludingcab) for recreational vehicles, buses and step vans;

**WHEREAS**, Monaco isa manufacturer of premium recreational vehicles, including Class A, B and Cmotor coaches, as well as rear engine diesel stripped chassis products; and

**WHEREAS**,International and Monaco desire to form a joint venture as a Delaware limitedliability company (the “Company”) to be the exclusive manufacturer andsupplier of (i) all of Workhorse’s production requirements for its current andfuture portfolio of rear engine diesel recreational vehicle and low-floor busstripped chassis products (excluding the “Whirlaway” platform) and (ii) all ofMonaco’s production requirements for all of its current and future rear enginediesel stripped chassis (such supply and manufacturing operations, the “Business”).

**NOW, THEREFORE**, inconsideration of the premises and mutual promises contained in this Agreement(the mutuality, adequacy and sufficiency of which are hereby acknowledged), theparties hereto agree as follows:

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# **ARTICLE IDefinitions and Rules of Construction**

**1.1Certain Defined Terms**.  Capitalized terms used in this Agreement havethe meanings indicated in Attachment 1.1.

**1.2Rules of Construction**.  Attachment 1.2 contains rules ofconstruction relating to this Agreement.

**1.3Joint and Several Liability**.  All obligations of ITEC and Investments under this Agreement shall be joint and several,whether or not such obligation is stated as an obligation of a Member or theholder of Member Interests.

# **ARTICLEIIEstablishment of the Company**

**2.1Establishment of the Company.**

*(a)*Generally.  At theClosing (as defined in Section 2.7), the Members will establish theCompany pursuant to the Delaware Limited Liability Company Act, Del. Code Ann.tit. 6, § 18—101 et seq. (1992) (the “DLLCA”).

*(b )* Applicability of the DLLCA.  To theextent that a Member’s rights and obligations with respect to, and procedureswith respect to the administration, dissolution, liquidation and terminationof, the Company are not set forth in this Agreement, which constitutes theCompany’s limited liability company agreement, they will be governed by theDLLCA.  To the extent that this Agreementcontains a provision contrary to a DLLCA provision that permits its beingoverridden by a limited liability company agreement, that DLLCA provision is overriddenby such contrary provision in this Agreement whether or not specific referenceis made to the overridden provision of the DLLCA.

**2.2Name**.  The name of the Company is “Custom ChassisProducts, LLC.”

**2.3Term**.  The Company will continue for a fixed term of10 years commencing on the Closing Date; provided that, at the end of theinitial term (and any renewal term), the Company will be continued for anadditional four year renewal term unless either Member shall have given writtennotice to the other at least one year prior to the end of such term statingthat the term of the Company will not be so renewed.

**2.4Representations and Warranties**.  International makes the representations andwarranties set forth in Attachment 2.4-A, and Monaco makes the representationsand warranties set forth in Attachment 2.4-B.   MONACO ACKNOWLEDGES AND AGREES THAT THE ONLYREPRESENTATIONS AND WARRANTIES MADE BY INTERNATIONAL ARE THE REPRESENTATIONSAND WARRANTIES SET FORTH IN ATTACHMENT 2.4-A, AND MONACO HAS NOT RELIED UPONANY OTHER REPRESENTATIONS, WARRANTIES OR OTHER INFORMATION MADE OR SUPPLIED BYOR ON BEHALF

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**OF INTERNATIONAL OR BY ANYAFFILIATE OR REPRESENTATIVE OF INTERNATIONAL.  INTERNATIONAL ACKNOWLEDGES AND AGREES THAT THE ONLY REPRESENTATIONS ANDWARRANTIES MADE BY MONACO ARE THE REPRESENTATIONS AND WARRANTIES SET FORTH INATTACHMENT 2.4-B, AND INTERNATIONAL HAS NOT RELIED UPON ANY OTHERREPRESENTATIONS, WARRANTIES OR OTHER INFORMATION MADE OR SUPPLIED BY OR ONBEHALF OF MONACO OR BY ANY AFFILIATE OR REPRESENTATIVE OF MONACO.**

**2.5Covenants Pending Closing**.  Until the Closing, International and Monacowill comply with the covenants set forth in Attachment 2.5.

**2.6Closing Conditions and Termination**.  The conditions toInternational’s obligation to close and, if not satisfied, the right toterminate are set forth in Attachment 2.6-A.  The conditions to Monaco’s obligation toclose and, if not satisfied, the right to terminate are set forth in Attachment2.6-B.

**2.7Place and Time of Closing**.  The completion of the Formation Transactions(the “Closing”) will occur at the offices of Kirkland & Ellis LLP,Chicago, Illinois, commencing at 10:00 a.m. (local time) on (a) February 9,2007 or, if later, the second Business Day following the satisfaction of theconditions to the Closing set forth in Attachment 2.6-A and Attachment2.6-B and effective as of the opening of business on such day, or (b) atsuch other date, time and place as the parties may agree (the date of theClosing, the “Closing Date”).

**2.8 ClosingDeliveries**.  At the Closing:

*(a) Deliveries By International*. International will deliver:

#### (i)            to Monaco and the Company, eachRelated Agreement to which International or any of its Affiliates is a party;

#### (ii)           to Monaco and the Company, acertificate executed by an authorized representative of International to theeffect that, except as otherwise stated in such certificate, each ofInternational’s representations and warranties pursuant to Section 2.4is accurate in all material respects as of the date of this Agreement and as ofthe date of the Closing as if made on the date of the Closing, except for thoserepresentations and warranties given as of a specified date, which shall beaccurate in all material respects as of such specified date (in each case,without giving effect to any exceptions made in such certificate);

#### (iii)          to Monaco, such other documents asMonaco may reasonably request for the purpose of (A) evidencing the accuracy ofany of International’s representations and warranties, (B) evidencing the performanceby International of, or the compliance by International with, any covenant orobligation required to be performed or complied with by International, (C)evidencing the satisfaction of any condition referred to in Attachment 2.6-B,or (D) otherwise facilitating the consummation or performance of any of thetransactions contemplated by this Agreement; and

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#### (iv)          to the Company its capitalcontribution, consisting of (A) cash in an amount to be agreed upon by theparties to this Agreement and (B) the assets to be agreed upon by the partiesto this Agreement that International will transfer by the transfer documents inform and substance reasonably agreed by the parties, together with any permitsand/or licenses required in connection with such assets.

*(b) Deliveries By Monaco*.  Monaco willdeliver:

#### (i)            to International and the Company,each Related Agreement to which Monaco or any of its Affiliates is a party;

#### (ii)           to International and the Company, acertificate executed by an authorized representative of Monaco to the effectthat, except as otherwise stated in such certificate, each of Monaco’srepresentations and warranties pursuant to Section 2.4 is accurate inall material respects as of the date of this Agreement and as of the date ofthe Closing as if made on the date of the Closing, except for thoserepresentations and warranties given as of a specified date, which shall beaccurate in all material respects as of such specified date (in each case,without giving effect to any exceptions made in such certificate);

#### (iii)          to International, such other documentsas International may reasonably request for the purpose of (A) evidencing theaccuracy of any of Monaco’s representations and warranties, (B) evidencing theperformance by Monaco of, or the compliance by Monaco with, any covenant orobligation required to be performed or complied with by Monaco, (C) evidencingthe satisfaction of any condition referred to in Attachment 2.6-A, or(D) otherwise facilitating the consummation or performance of any of thetransactions contemplated by this Agreement; and

#### (iv)          to the Company its capitalcontribution, consisting of (A) cash in an amount to be agreed upon by theparties to this Agreement and (B) the assets to be agreed upon by the partiesto this Agreement that Monaco will transfer by the transfer documents transferdocuments in form and substance reasonably agreed by the parties, together withany permits and/or licenses required in connection with such assets.

**2.9 Initial MemberInterests.**

*(a) Generally.  The respective initial interests of theMembers in the capital, net profits, net losses and distributions of theCompany as represented by their Member Interests are as follows:*

| Name        | ** ** | **Member Interest** |
|-------------|------------|---------------------|
| Investments |       | 51.0%               |
| Monaco      |       | 49.0%               |
| Total       |       | 100.0%              |

 

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*Such percentages will change only(i) by amendment to this Agreement, (ii) by an assignment of a Member Interestpermitted by this Agreement, (iii) by the issuance of additional Units inaccordance with the terms of this Agreement, or (iv) to reflectadditional capital contributions pursuant to Section 3.2.  Such changes will be effective upon theeffective date of the amendment, assignment, issuance or additional capitalcontribution, and the Company’s books will be closed as of such effective dateso that allocations and distributions in accordance with Article IV can be madeto reflect such change in Member Interests.  The percentages set forth above, as sochanged, apply in all circumstances where relevant to determining the extent ofeach Member’s interest in the Company, including its rights to profits andlosses, right to vote on, consent to or otherwise participate in any decisionor action to be taken by the Members under this Agreement or the DLLCA.*

*(b) Units*.  Each Member’sMember Interest may be stated in terms of “Units.” For such purposes, initiallyeach Member has Units equal to its initial Member Interest percentage (so that,for example, Investments has 51 Units at the date of this Agreement).

**2.10 Company Obligations& Rights.**

*(a) Generally*.  The Memberswill cause the Company to fulfill its obligations pursuant to thisAgreement.  The Company may, as a thirdparty beneficiary or otherwise, independently enforce its rights under thisAgreement, including those under Article XI and Article XII.

# **ARTICLEIIICapital Contributions**

**3.1 Initial CapitalContributions.**  Immediately after the completion of theClosing, the Book Capital Account of each Member shall be as agreed upon by theparties hereto.

**3.2  Additional Capital Contributions and MemberLoans.**

*(a) Mandatory Only If Included in Business Plan*.  Each Memberwill make additional capital contributions (“Additional CapitalContributions”) or loans (“Member Loans”) to the Company, but onlyin the amounts and at the times set forth in the Business Plan as it may beamended from time to time.  NeitherMember is otherwise required to make Additional Capital Contributions or makeMember Loans to the Company.

*(b) Procedure*.

#### (i)            *Generally*.  All requirements or requests for AdditionalCapital Contributions or Member Loans will (A) be in a notice delivered to eachMember by the Company stating explicitly whether such requirement or requestrelates to an Additional Capital Contribution or a Member Loan, and statingthat such Additional Capital Contribution or Member Loan, as applicable, hasbeen approved by the Board of Directors in accordance with Section 5.4or pursuant to the Business Plan; (B) state the aggregate amount of AdditionalCapital Contributions or Member Loans, as applicable,

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#### and the amountof each Member’s share of such Additional Capital Contribution or Member Loan(which shall in all cases be allocated on a pro rata basis between theMembers); and (C) specify the date that the Additional Capital Contribution orMember Loan, as applicable, is to be made, which will not be sooner than twenty(20) Business Days following each Member’s receipt of the notice.  Except as set forth in the last sentence of Section3.3, any amounts paid to the Company pursuant to a notice delivered inaccordance with this Section 3.2(b) shall be characterized as anAdditional Capital Contribution or Member Loan based on how the relatedrequirement or request is characterized in such notice.

#### (ii)           *AccompanyingCertificate*.  Each Member willdeliver certificates to the Company and to each other, dated as of the date theAdditional Capital Contribution or Member Loan, as applicable, is to be made,that contain customary representations and warranties relating to authorization,title and such other matters with respect to capital contributions in the formof property (other than cash) as the Members shall reasonably agree.  In addition, if Additional CapitalContributions are to consist of property other than cash, such certificate willcontain customary representations and warranties as to the ownership andcondition of any such property.

*(c) Member Loans*.  Each MemberLoan will be evidenced by a promissory note bearing interest at afluctuating rate equal to six percentage points over the Prime Rate, butnot in excess of any legally permitted rate of interest (the “SpecifiedInterest Rate”).  “Prime Rate” meansthe prime rate as published in the “Money Rates” table of The Wall StreetJournal on the first publication day of the calendar quarter in which the loanwas made and as adjusted as of the first publication day of each subsequentcalendar quarter until paid.  Each MemberLoan will (i) be for such term and subject to such security, if any, asdetermined by the Board of Directors, (ii) if necessary to secure financing forthe Company, be subordinated to any other indebtedness of the Company or aportion of it, (iii) become due and payable in the event the Company isdissolved, (iv) rank pari passu with any and all other Member Loans and (v) benon-recourse as to the other Member.

**3.3 Failure of a Memberto Make Additional Capital Contribution or Member Loan.**  If a Member(the “Non-Contributing Member”) fails to make all or a portion of arequired Additional Capital Contribution or Member Loan within thirty (30) daysof when such Additional Capital Contribution or Member Loan is due, the otherMember (the “Other Member”) may lend an amount equal to such shortfallto the Non-Contributing Member (a “Shortfall Loan”), which amount shallconstitute an Additional Capital Contribution or Member Loan by theNon-Contributing Member and shall be secured by the Non-Contributing Member’sMember Interest.  Until all accruedinterest and principal on the Shortfall Loan is repaid in full (i) theNon-Contributing Member will be liable to the Other Member for the amount ofsuch Shortfall Loan, plus all expenses incurred by the Other Member and theCompany in connection with such Shortfall Loan, to be repaid in 20 equalquarterly installments (minus any applicable Shortfall Distributions (asdefined below)) plus interest at the Specified Interest Rate; and (ii) anydistributions from the Company otherwise due to the Non-Contributing Memberwill be paid directly to the Other Member and be applied to the interest andprincipal of the Shortfall Loan (“Shortfall Distributions”).  In addition to the foregoing, any Memberproviding a Shortfall Loan 

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**to another Member shall beentitled, in its sole discretion, to recharacterize the Additional CapitalContributions as Member Loans.**

**3.4No Withdrawal of or Payment of Interest on Capital**.  No Memberwill have any right to withdraw or make a demand for withdrawal of all or anyportion of its Book Capital Account.  Nointerest or additional share of profits will be paid or credited to the Memberson their Book Capital Accounts.

# **ARTICLE IV****Allocation of Profits and Losses; Distributions**

**4.1Shares of Profits and Losses**.  Except as otherwise provided in Sections4.3 and 4.4 of Attachment 9, each Member will share in theCompany’s book profits and book losses in accordance with its MemberInterest.  A Member’s share of thetaxable income or loss or other tax items of the Company will be determined inaccordance with Sections 4.1 and 4.2 of Attachment 9.

**4.2Distributions**.  Distributions shall be made as follows:

*(a) Distribution of Tax Amount*.  No laterthan sixty-five (65) days after the end of the Company’s Fiscal Year, theCompany will distribute to each Member its share (based on expected allocationsof taxable income for the Fiscal Year to which such distribution relates) ofthe Tax Amount estimated by the Company to have accrued through the end of theFiscal Year.  To the extent that eachMember’s actual allocation of taxable income for the Fiscal Year is laterdetermined to be different than was estimated for purposes of thesedistributions, such differences will be adjusted against the amounts computedand distributed to each Member for the next Fiscal Year.

### (b)   OtherDistributions.  All otherdistributions shall be made at such times and in such amounts as shall bedetermined by the Board of Directors in accordance with Section 5.4(a).

**4.3No Priority**.  Except as otherwise provided in this Agreement,no Member will have priority over any other Member as to the return of capital,allocation of income or losses, or any distribution.

**4.4Other Distribution Rules**.  Except as provided in Section 4.5below, (a) no Member will have the right to demand and receive property otherthan cash in payment for its share of any distribution and (b) distribution ofnon-cash property may be made with the consent of both Members.  The preceding sentence expressly overrides thecontrary provisions of DLLCA § 18—605 as to non-cash distributions.

**4.5Liquidating Distribution Provisions**.  Distributions made uponliquidation of any Member Interest will be made in accordance with the positiveBook Capital Account balance of the Member. These balances will be determined after taking into account all BookCapital Account adjustments for the Company’s Fiscal Year during which theliquidation occurs.  In the 

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**event of a liquidation of theCompany, distributions of the positive Book Capital Account Balance of eachMember, if any, will be made as follows:**

### (a)   Except as otherwise agreed in writing bythe parties, each non-cash operating asset of the Company contributed to theCompany at Closing (as well each non-cash operating asset subsequentlypurchased by the Company to replace a contributed asset) (each, a “ContributedOperating Asset”) shall be distributed to the Member that contributed suchasset, or the asset it replaced as applicable, to the Company. Each non-cashoperating asset of the Company that is not a Contributed Operating Asset (each,an “Other Operating Asset” and, together with the Contributed OperatingAssets, the “Operating Assets”) shall be distributed to the Member that,as of the date of such distribution, purchases at least 60% of the productsmanufactured using such Other Operating Asset or, in the case of inventory,uses such Other Operating Asset (such Member, the “Principal Customer”of such Other Operating Asset), in all cases irrespective of whether or not theaggregate fair market value of the Operating Assets distributed to such Memberexceeds such Member’s Book Capital Account Balance; provided, however,that in the event that there is no Principal Customer with respect to an OtherOperating Asset, such Other Operating Asset shall be distributed pursuant tothe determination of the Board of Directors;

### (b)    To the extent the fair market value of theOperating Assets allocated to a Member pursuant to Section 4.5(a) hereofexceeds such Member’s Book Capital Account Balance (such excess, if any, the “ExcessDistribution Amount”), such Member will, except as otherwise agreed by theMembers, (i) contribute an amount of cash to the Company equal to the ExcessDistribution Amount, (ii) assume additional accrued liabilities of the Companyin an amount equal to the Excess Distribution Amount or (iii) contribute cashand assume accrued liabilities such that the total amount of the cashcontribution and accrued liabilities assumed equals the Excess DistributionAmount.

**TheMembers shall cooperate reasonably in order to determine the fair market valueof the Operating Assets required to be distributed pursuant to this Section4.5.  In the event that the Memberscannot agree on the fair market value for one or more Operating Assets, eachMember shall, within thirty (30) days of any election or event resulting indissolution, select a valuation expert (each, an “Initial Valuation Expert”)and cause such expert to deliver a valuation report that sets forth such expert’sdetermination of the fair market value, together with an analysis of how itdetermined that fair market value (any such report, a “Valuation Report”).  In the event that the Members cannot agree ona fair market value within ten days of the receipt of the Initial ValuationReports, the two Initial Valuation Experts shall subsequently select a thirdvaluation expert (the “Final Valuation Expert”).  Within sixty (60) days after the appointmentof the Final Valuation Expert, the Members will cause the Final ValuationExpert to deliver to each Member a final valuation report that sets out suchvaluation expert’s determination of the fair market value, together with ananalysis of how it determined that fair market value (the “Final ValuationReport”); provided, however, that the fair market value determined by theFinal Valuation Expert may in no event (i) be less than the lowest value or(ii) be more than the highest value attributed by the Initial ValuationExperts.  Each Member will pay the feesand expenses of the Initial Valuation Expert it appoints. The fees and expensesof the Final Valuation Expert shall be borne by the Members in directproportion to the ratio of (A) the difference between (x) the fair**

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**market value set out in the InitialValuation Report prepared by the Initial Valuation Expert appointed by suchMember and (y) the fair market value set out in the Final Valuation Report over(B) the difference between the fair market values set out in the two InitialValuation Reports.**

If the Company isprohibited by Applicable Law from effecting a liquidating distribution inaccordance with the provisions of this Section 4.5, then the Membersagree that they will cooperate reasonably to effect the sale by the Company ofthe Operating Assets to each Member in a manner consistent with the allocationset forth in this Section 4.5 (including, without limitation, byproviding guarantees from their respective parent companies to creditors of theCompany).

**4.6Limitation upon Distributions**.  No distribution will be made to Members ifprohibited by DLLCA § 18—607 or other Applicable Law.

# **ARTICLE VManagement and Employees**

**5.1 Board of Directors.**

*(a) Board of Directors*.  The businessand affairs of the Company will be managed exclusively by or under thedirection of a Board of Directors (the “Board of Directors”) consistingof five individuals (each, a “Director”).  The Board of Directors shall be the Manager(the “Manager”) of the Company. The foregoing expressly override the contrary provisions of DLLCA § 18—407.

*(b) Initial Appointment; Replacement*.  Internationalwill appoint three Directors (each, an “International Director”) andMonaco will appoint two Directors (each, a “Monaco Director”).  The initial appointments by each Member areas follows:

| International                                                   | ** ** | **Monaco**                                                                          |
|-----------------------------------------------------------------|------------|-------------------------------------------------------------------------------------|
| ** **                                                      | ** ** | ** **                                                                          |
| President, Workhorse  (Dave Olsen)                              |       | Corporate Controller,  Monaco  (Charlie Kimball)                                    |
| Vice President,  Purchasing  and Logistics- ITEC  (Tom Akers)   |       | Vice President and  Director of  Oregon Manufacturing  Operations  (Marty Garriott) |
|                                                            |       |                                                                                |
| Vice President,  Finance,  Truck Group - ITEC  (Rich Tarapchak) |       |                                                                                |
|                                                            |       |                                                                                |

 

By written notice to the other Member and Directors, aMember may, in its sole discretion, remove and replace with or without causeany of its appointed Directors with other individuals.  A Director may be an officer or employee of aMember or of an Affiliate of a Member. Each Director will serve on the Board of Directors until his successoris appointed or until his earlier death, resignation or removal.

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*(c) Compensation and Expenses of Directors*.  Each Memberwill pay the compensation and expenses of the Directors it appoints.

*(d) Right to Rely on Certificate ofManufacturing Manager*.  Any Person dealing with the Company may rely(without duty of further inquiry) upon a certificate signed by the ManufacturingManager as to (i) the identity of any Officer, Member or employee of theCompany, (ii) the existence or nonexistence of any fact or facts thatconstitute a condition precedent to acts by the Board of Directors or that arein any other manner germane to the affairs of the Company or (iii) the Personswho are authorized to execute and deliver any instrument or document of theCompany.

*(c) Signing on Behalf of the Company*.  Except asotherwise provided in Section 5.5(c) or as required by law, the signatureof any individual to whom the Board of Directors has delegated appropriateauthority is sufficient to constitute execution of a document on behalf of theCompany.  A copy or extract of thisAgreement may be shown to the relevant parties in order to confirm suchauthority.

*(f) No Authority of Members to Act on Behalf ofthe Company*.  Except as otherwise specifically provided inthis Agreement, no Member will act for, deal on behalf of or bind the Companyin any way other than through its representatives on the Board of Directors(acting as members of a board of directors). Neither party shall take any action as a Member other than in accordancewith this Agreement.

**5.2 Board of DirectorsMeetings.**

*(a) Meetings*.  The Board ofDirectors will hold regular meetings (at least quarterly) at such time andplace as it determines.  Any Director orthe Chair may call a special meeting of the Board of Directors by giving thenotice specified in Section 5.2(g).

*(b) Chair*  Thechairperson of the Board of Directors (“Chair”) will be one of the threeInternational Directors.  The initialChair shall be the President of Workhorse. The Chair will preside at all meetings of the Board of Directors but willhave no other special rights. Notwithstanding the foregoing, the Chair shall be responsible forpreparing and circulating the agenda for each meeting of the Board ofDirectors, although other directors shall be entitled to supplement the agendawith additional items.

*(c) Participation*.  Directorsmay participate in a meeting of the Board of Directors in person or byconference video or telephone or similar communications equipment by means ofwhich all persons participating in the meeting can hear each other.

*(d) Written Consent*.  Any actionrequired or permitted to be taken at any meeting of the Board of Directors maybe taken without a meeting upon the unanimous written consent of theDirectors.  Each Director will be given acopy of the written consent promptly after the last required signature isobtained.  A copy of the consent will befiled with the minutes of Board of Directors meetings.

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### (e)   Minutes*. *The Board of Directors will keep written minutes of all of itsmeetings.  Copies of the minutes will beprovided to each Director.

### (f)    Delegation*. *Each Director has the right to appoint, by written notice to the otherDirectors, any individual as his delegate. That delegate may attend meetings of the Board of Directors on hisbehalf and exercise all of such Director’s authority for all purposes until theappointment is revoked.

### (g)   Notice*. *Written notice of each meeting of the Board of Directors will be givento each Director at least five Business Days before the meeting and willidentify the items of business to be conducted at the meeting.  No business other than those items listed inthe notice may be conducted at any meeting, unless otherwise expressly agreedby all of the Directors.  The noticeprovisions of this Section may be waived in writing and will be waived by aDirector’s attendance at the meeting, unless the Director at the beginning ofthe meeting or promptly upon his arrival objects to holding the meeting ortransacting business at the meeting and does not thereafter vote for or assentto action taken at the meeting.

## **5.3  Voting of Directors; Quorum.**

### (a)   Generally*. *Each Director will have one vote. Except as otherwise provided in Section 5.4, all actions by theBoard of Directors will require the approval of a majority of the Directorspresent at a meeting at which a quorum exists.

### (b)   Quorum*. *Two Directors will constitute a quorum for the transaction of business,provided that at least one International Director and at least one MonacoDirector is in attendance.

## **5.4  Actions Requiring Approval of the Board ofDirectors.**

### (a)   Supermajority Approval Required.  The following actions require the approval ofat least one International Director and one Monaco Director:

#### (i)            approvalof any new Business Plan or material modification of an existing Business Plan(for this purpose, any change by $50,000 or more during any Fiscal Year of anyline item in the budget that is included in the Business Plan shall constitutea material modification of the Business Plan);

#### (ii)           tothe extent not provided for in any Business Plan, the approval of:

####                 a.     any capital and other expenditures in excess of $50,000;

####                 b.     any acquisition or lease of real property in excess of $50,000,including the exercise of extension options under the Lease;

####                 c.     the incurrence of debt, borrowings, guarantees or indemnities inexcess of $50,000;

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##### d.     anypledge or encumbrance of assets in excess of $50,000;

##### e.     theextension of credit in excess of $50,000, other than trade receivables in theordinary course of business;

##### f.      thesale of assets of the Company in excess of $50,000, or otherwise outside theordinary course of business;

##### g.     engagingin any single transaction outside of the ordinary course of business involvingaggregate consideration in excess of $50,000; or

#### (iii)          anymaterial change in product designs, programs or offerings;

#### (iv)          anyincrease in (or material change in the terms of) the funding obligations of anyMember (whether in the form of capital contributions, loans, guarantees orotherwise);

#### (v)           any change inthe distribution strategy of the Company or the distribution rights of theMembers set forth in this Agreement, including any determination pursuant to Section4.5(a);

#### (vi)          theentry by the Company into new markets or businesses;

#### (vii)         anyissuance of additional Units;

#### (viii)        (A) theestablishment of a subsidiary, (B) the acquisition of assets or shares of anyother Person in excess of $100,000 in any single transaction or series ofrelated transactions, other than inventory purchased in the ordinary course ofbusiness, (C) entering into any joint venture, collaboration or similararrangement, (D) the acquisition of an interest in any entity or (E) the makingof loans to any Person.

#### (ix)           appointmentand removal of key officers, other than the Manufacturing Manager;

#### (x)            anychange in the compensation of officers or employees of the Company, other thanincreases in the compensation of employees in the ordinary course of businessas contemplated by the Business Plan;

#### (xi)           entry intoor material change in the terms of any transaction or agreement between theCompany and any Member or Affiliate of a Member, or any director or Affiliateof a director, including, without limitation, any agreement with Monaco andInternational for the provision of services or the supply of product to theCompany;

#### (xii)          anydistributions of cash or property other than those pursuant to Sections4.3(a) and 4.5 hereof;

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#### (xiii)         anyaction affecting the Members in a manner disproportionate to their pro rataownership of Units of the Company;

#### (xiv)        approvalof the calculation of the Average Cost Savings pursuant to Section 5.12hereof;

#### (xv)         anyliquidation of the Company, winding-up of the Company’s business or the filingof an Insolvency Proceeding by the Company;

#### (xvi)        anymerger, consolidation, conversion, transfer or other reorganization of theCompany;

#### (xvii)       any issuance or redemption of securities bythe Company;

#### (xviii)      anyproposed sale of products manufactured by the Company to any entity other thanMonaco or Workhorse; or

#### (xix)         anyadjustment to the Average Cost Savings Target pursuant to Section 5.12(e)hereto.

### (b)   Majority Approval Required. Except as otherwise provided in Section 5.4(a), and except foractions within the authority of the Manufacturing Manager, all actions by theCompany shall require the approval of a simple majority of the Directorspresent at a meeting at which a quorum exists.

## **5.5  General Manufacturing Manager.**

### (a)   Appointment.  The initial general manufacturing manager (“ManufacturingManager”) and subsequent Manufacturing Managers will be appointed byMonaco, subject to the prior written consent of International, not to beunreasonably withheld or delayed; provided, however, that priorto any such appointment, International shall have had reasonable opportunity to(i) interview the candidate and (ii) consult with Monaco for a reasonableperiod both before and after such interview regarding the candidate and the appointmentprocess.  The Manufacturing Manager maybe an officer or employee of a Member or its Affiliate.

### (b)   Term*. *The Manufacturing Manager will hold office until his resignation,removal or death.  The Board of Directorsmay remove the Manufacturing Manager at any time with or without cause.

### (c)   Authority.  Subject to (1) the power and authority of theBoard of Directors to revoke or modify the following or to direct the actionsof the Manufacturing Manager and (2) the then-current Business Plan, the ManufacturingManager has responsibility and authority for:

#### (i)            operatingand managing the day-to-day business and affairs of the Company in a mannerconsistent with the Business Plan and then-current budgets;

#### (ii)           hiringand removal of Company employees;

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#### (iii)          purchaseof services from the Members up to an annual aggregate of $50,000 in excess ofthe then-current Business Plan;

#### (iv)          proposingrevisions to the Business Plan or budget for submission to the Board ofDirectors for consideration;

#### (v)           implementingthe Business Plan and budget as approved by the Board of Directors;

#### (vi)          appointingand removal of the Company’s appointee to the Purchasing Committee;

#### (vii)         makingany non-material changes to or taking actions that would constitute anon-material deviation from the Business Plan or budget; and

#### (viii)        executingcontracts or other instruments on behalf of the Company (subject to the receiptof any necessary approvals of the Board of Directors)*.*

The Manufacturing Manager shall keep the Board ofDirectors reasonably informed of his actions.

## **5.6  Employees**. All employees will be leased to the Company by Monaco pursuant to theServices Agreement.  Subject to theBusiness Plan, leased employees shall include, but not be limited to, materialsadministrators, purchasing/scheduling administrator(s), finance manager(s),IE(s), design engineer(s) and administrative and support personnel.  Appointment and removal of the chiefaccounting officer and his or her staff shall be subject to the prior approvalof the Board of Directors.  Other than asset forth in the Business Plan, material changes to staffing levels shallrequire approval by the Board of Directors.

## **5.7  Business Plan.**

### (a)   Initial Business Plan*. *The initial business plan (“Business Plan”) to be agreed upon bythe parties hereto shall cover the first five years of the Company’s proposedoperations.  The Business Plan willinclude a budget prepared in accordance with Section 5.7(b).  The Members intend that the Business Plan bereviewed or modified, as applicable, at least annually.  At least 120 days before the beginning ofeach Fiscal Year, the Manufacturing Manager will deliver to the Board ofDirectors any proposed modifications in the Business Plan.

### (b)   Budget Contents*. *The budget will include:

#### (i)            aprojected income statement, balance sheet and operational and capitalexpenditure budgets for the forthcoming Fiscal Year;

#### (ii)           aprojected cash flow statement showing in reasonable detail: (A) theprojected receipts, disbursements and distributions; (B) the amounts of anycorresponding projected cash deficiencies or surpluses; and (C) the amounts anddue 

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#### dates of all projected calls for Additional Capital Contributions forthe forthcoming Fiscal Year;

#### (iii)          marketstrategies, product cycle plan, manufacturing and distribution strategies, anda proposed organization chart; and

#### (iv)          suchother items requested by the Board of Directors.

### (c)   Consideration of Proposed Plans.  Each proposal to continue ormodify a Business Plan will be considered for approval by the Board ofDirectors at least forty-five (45) days before the beginning of the Fiscal Yearto which it pertains.  The Board ofDirectors may revise the proposed Business Plan or direct the ManufacturingManager to submit revisions to the Board of Directors for consideration.

### (d)   Continuation of Existing Business Plan*. *Until a revised Business Plan is approved,the Company will be managed in a manner consistent with the last Business Planapproved by the Board of Directors, adjusted as necessary to reflect theCompany’s contractual obligations and other changes that result from thepassage of time or the occurrence of events beyond the control of the Company.

### (e)   Strategic Plan.  In addition to the foregoing, the Membersshall use reasonable best efforts to complete, within six (6) months of thedate hereof, a long-term strategic plan for the Company, which plan shall beupdated on an annual basis.

## **5.8  Dispute Resolution Procedures.**

### (a)   Failure to Approve Certain Actions.  If (i) the Board of Directors has disagreedregarding (A) material modifications to the then-current Business Plan and thedisagreement has not been resolved at least ten Business Days before thebeginning of the next Fiscal Year or (B) any other action listed in Section5.4(a) when properly submitted to it for a vote, (ii) the Board ofDirectors approves any resolution or votes to take any action as to which oneor both Monaco Directors casts a “no” vote or (iii) (A) a duly called meetingis adjourned because none of the Directors appointed by a Member attends thatmeeting, (B) none of the Directors appointed by that Member attends a meetingduly called as to the same items of business of the adjourned meeting withinthirty (30) days after the adjournment of that first meeting and (C) notice ofboth meetings complied with Section 5.2(g) (any of which, a “BusinessDispute”), then the Directors will consult and negotiate with each other ingood faith to find a mutually agreeable solution.  Notwithstanding the foregoing, in no eventshall any decision of the Board of Directors to adjust or refrain fromadjusting an Average Cost Savings Target pursuant to Section 5.12(e)hereof, whether or not in connection with discussions of the Board of Directorsrelating to the Business Plan, be the basis for a Business Dispute.  If the Directors do not reach a solutionwithin ten Business Days from the date the Directors receive notice of suchBusiness Dispute and the failure to reach a solution, in a Member’s judgment,adversely affects the Company or such Member’s interest in the Company (otherthan immaterial effects), then either Member may initiate the escalationprocedures under this Section.  No actionof the Board of Directors which is the subject of a Business Dispute shall beeffective until resolved pursuant to this Section 5.8.

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### (b)   Consideration by Management Representatives.  Upon the initiative of either Member, inaccordance with Section 5.8(a), the Business Dispute will be referred by theDirectors to the Vice President and General Manager, Medium Truck VehicleCenter of International and the President of Monaco (the “DesignatedRepresentatives”).  The DesignatedRepresentatives will meet, consult and negotiate with each other in goodfaith.  If they are unable to agreewithin twenty Business Days of the date of such referral, then they willadjourn such attempts for a further period of five Business Days during whichno meeting will be held.  On the firstBusiness Day following such period, the Designated Representatives will meetagain in an effort to resolve the Business Dispute.  If the Designated Representatives are unableto resolve the Business Dispute within 48 hours after the time at which theirlast meeting occurred, then Section 5.8(c) will apply.

### (c)   Mediation.  If theDesignated Members are unable to resolve the Business Dispute within the 48hour period set forth in Section 5.8(b), either Member may provide theother Member with a notice for mediation. After delivery of that notice, the Members will attempt in good faith tosettle the matter by mediation administered by the CPR Institute for DisputeResolution under its CPR Mediation Procedure. If within 60 days after receiptof the notice for mediation, the mediation does not result in resolution of theBusiness Dispute, then Section 7.1(a) will apply.

## **5.9  Standard of Conduct.**

### (a)   Generally*.*

#### (i)            ADirector and each Officer, in managing the business or affairs of the Company,will discharge his duties:

##### a.     ina manner he believes in good faith to be in the best interests of the Company;

##### b.     ina manner he believes in good faith to represent the care an ordinarily prudentperson in a like position would exercise under similar circumstances;

##### c.     ingood faith reliance on the provisions of this Agreement;

##### d.     withoutintentional misconduct or a knowing violation of law; and

##### e.     withoutengaging in any transaction for which he receives a personal benefit (orbenefit for the Member that appointed him) in violation or breach of anyprovision of this Agreement.

#### (ii)           Exceptas otherwise set forth herein and for the implied contractual covenant of goodfaith and fair dealing under applicable Delaware law, no Director or Officerhas any other duty to the Company, any Member or any other Person.

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### (b)   Limitations.  Notwithstanding the foregoing Subsection (a),a Director or Officer (i) does not violate a duty or obligation under thisAgreement or under Applicable Law because the Director’s or Officer’s conductfurthers the interest of a Member (including in the case of a Director, theMember that designated the Director, the Members each acknowledging that eachMember has appointed a Director with the expectation that such Director willrepresent and serve the interest of the Member appointing him) and (ii) withoutlimiting the foregoing clause (i), has no duty or obligation to consider anyinterest of or affecting the Company, any Member or any other Person.

### (c)   No Duty of Members.  No Member has any duty to the Company or anyMember solely by reason of acting in its capacity as a Member, except torefrain from (i) any act or omission that constitutes a bad faith violation ofthe implied contractual covenant of good faith and fair dealing and (ii) anytransaction in which the Member receives a personal benefit in violation orbreach of any provision of this Agreement. Without limiting the foregoing, a Member (A) does not violate any dutyor obligation under this Agreement or under Applicable Law because the Member’sconduct furthers its interest and (B) has no duty or obligation to consider anyinterest of or effect on the Company or any other Person.

### (d)   Override*. *The provisions of this Agreement (including this Section 5.9 andSections 5.10 and 5.11) replace, eliminate and otherwise supplantthose duties (including fiduciary duties) that a Member, Manager, Director orOfficer might otherwise have under Applicable Law.

## **5.10                       ****Directors and Officers—Exculpation**.  No Director or Officer will bepersonally liable to the Company, any Member or any other Person for monetarydamages for any act or omission, including breach of contract or breach ofduties (including fiduciary duties) of a Director or Officer to the Company,any Member or any other Person, except (a) for any act or omission thatconstitutes a bad faith violation of the implied contractual covenant of goodfaith and fair dealing or (b) for any transaction for which the Director orOfficer received a personal benefit in violation or breach of any provision ofthis Agreement.

## **5.11                        Directorsand Officers—Indemnification.**

### (a)   Generally.  The Company will indemnify, defend and holdharmless each Director and Officer (each, a “Company Indemnified Person”)in connection with the management of the Company or any entity in which theCompany has an interest to the fullest extent permitted under the DLLCA andApplicable Law; provided, however, that the foregoing obligations will notapply (i) unless the Company Indemnified Person (A) acted in good faith and ina manner the person reasonably believed to be in or not opposed to the bestinterest of the Company and (B) with respect to a criminal action orproceeding, had no reasonable cause to believe his or her conduct was unlawfulor (ii) to the extent that the act or omission of the Company IndemnifiedPerson involved either (x) any act or omission that constitutes a bad faithviolation of the implied contractual covenant of good faith and fair dealing or(y) any transaction for which the Company Indemnified Person received apersonal benefit (or benefit for the Member that appointed him) in violation orbreach of any provision of this Agreement. The sole source of indemnity under this Section 5.11(a) shall bethe assets of the Company, and no Member shall be required to make anyadditional capital contribution, loan or guarantee (or 

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provide any other form of financing or credit support)to the Company in order to fund any indemnity obligation pursuant hereto.

### (b)   Procedure.  If a Company Indemnified Person requestsindemnification pursuant to this Agreement, the Board of Directors will cause adetermination to be made as to whether indemnification of the CompanyIndemnified Person is proper in the circumstances.  Upon any such determination that indemnificationis proper, the Company will make indemnification payments of liability, cost,payment or expense asserted against, or paid or incurred by, the CompanyIndemnified Person to the maximum extent permitted by the DLLCA and ApplicableLaw.

### (c)   Defense Counsel*.*

#### (i)            TheCompany shall be entitled to assume and control the defense of a claim againsta Company Indemnified Person. If the Company elects to assume and control thedefense, Company Indemnified Person shall have the right to employ counsel separatefrom counsel employed by the Company in any such action and to participate inthe defense thereof, but the fees and expenses of such counsel employed by theCompany Indemnified Person shall be at the expense of the Company IndemnifiedPerson unless (A) the employment thereof has been specifically authorizedby the Company in writing, or (B) the Company has been advised by counselthat a reasonable likelihood exists of a conflict of interest between theCompany and the Company Indemnified Party.

#### (ii)           Ifthe Company shall control the defense of any such claim, the Company shallobtain the prior written consent of the Company Indemnified Party (which shallnot be unreasonably withheld or delayed) before entering into any settlement ofa claim or ceasing to defend such claim if, pursuant to or as a result of suchsettlement or cessation, injunction or other equitable relief will be imposedagainst any Company Indemnified Person or if such settlement does not expresslyunconditionally release each Company Indemnified Person from all liabilitieswith respect to such claim and all other claims arising out of the same orsimilar facts and circumstances, with prejudice.

### (d)   Non-Exclusive.  The rights accruing to each CompanyIndemnified Person under this Section will not exclude any other right to whichhe may be lawfully entitled.

### (e)   Subsequent Amendment.  No amendment, termination or otherelimination of this Section or of any relevant provisions of the DLLCA or ofany other Applicable Law will affect or diminish in any way the rights toindemnification under this Section with respect to any action, suit orproceeding arising out of, or relating to, any event or act or omissionoccurring or fact or circumstance existing before the amendment, termination orother elimination.

### (f)    Continuation of Right to Indemnification.  Allrights to indemnification under this Section will continue as to a person whohas ceased to be a Director or Officer, will inure to the benefit of the heirs,executors, administrators and the estate of that person, and will be deemed tobe a contract between the Company and each such person.  This Section shall be binding upon anysuccessor to the Company, whether by way of merger, consolidation, liquidation,dissolution or otherwise.

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### (g)   Savings Clause.  If this Section or any portion of it isinvalidated on any ground by any court of competent jurisdiction, then theCompany will nevertheless indemnify persons specified in this Section to thefull extent permitted by any applicable portion of this Section that has notbeen invalidated.

## **5.12                        Average Cost Savings.**

### (a)   Purchasing Committee. The Company will establish a steering committee (the “PurchasingCommittee”) designed to (i) manage purchasing decisions on behalf of theCompany and (ii) report to the Board of Directors on the Company’s progress inrealizing on cost savings objectives set forth in this Section 5.12 andthe Business Plan.  Each of the Company,International and Monaco shall appoint one member of the PurchasingCommittee.  The initial appointments byeach Member shall be director-level appointees of such Member.

### (b)   Efforts by the Members. The Members shall use their commercially reasonable efforts to achievethe Average Cost Savings sufficient to meet the periodic targets set forth in Section5.12(e) below.

### (c)   Purchasing Efforts by International.  International shall use its commerciallyreasonable efforts to permit the Company to be entitled to make purchases onthe same prices and terms as International and its Affiliates under supplyagreements entered into by International (or its Affiliates) relating to thesupply of component parts used by the Business.   International shall also use itscommercially reasonable efforts to specifically address the purchasing needs ofthe Company in its future negotiations with suppliers of component parts.

### (d)   Measurement of Average Cost Savings.  As soon as reasonably practicable, but in noevent more than 10 Business Days, after each Measurement Date, the PurchasingCommittee shall submit to the Board of Directors (i) its determination of theActual Per Unit Cost for each chassis and (ii) its calculation of the AverageCost Savings as of such Measurement Date. For avoidance of doubt, any calculation of the Average Cost Savingsshall be made according to the procedures and methodologies which shall be agreed by theparties in writing.  TheBoard of Directors shall use its commercially reasonable efforts to approve afinal measurement of the Average Cost Savings as soon as practicable after itsreceipt of the calculation of the Purchasing Committee.  If the Board of Directors approves themeasurement of the Average Cost Savings pursuant to Section 5.4(a), thecalculation of the Average Cost Savings with respect to such Measurement Dateshall be final for all purposes related to this Agreement.

### (e)   Average Cost Savings Targets.  In the event that Monaco notifiesInternational that it believes in good faith that the Average Cost Savings wasless than as mutually agreed upon by the parties for (i) the first MeasurementDate or (ii) for any subsequent Measurement Date ((i) or (ii), as applicable,as adjusted from time to time after the twenty-four-month anniversary of theClosing by the Board of Directors in accordance with Section 5.4(a) hereof, the“Goal”) as of any Measurement Date, the Members shall consult with eachother as to commercially reasonable actions which they or the Company shouldconsider to address the situation. Without limiting the foregoing, International shall consider, dependingupon the results achieved from earlier actions and such other factors thatInternational considers relevant, whether it will take one or more of thefollowing actions:

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#### (i)            convenemeetings with suppliers in order to seek further price concessions related tocomponents used by the Company;

#### (ii)           deliverwritten communications to suppliers, where applicable, regarding consolidationefforts / expectations of support and/or denote suppliers’ lack of support,where applicable, on supplier score cards;

#### (iii)          initiateand prioritize (at International’s expense) a VAVE effort with respect to theproduction processes of the Company; and/or

#### (iv)          discussthe possibility of changing the prices at which International would agree tosell engines to the Company.

In the event thatthe Company achieves Average Cost Savings of less than Goal as of (A) eachMeasurement Date during the nine (9) months following the date on which Monacoprovided notice pursuant to Section 5.12(e) (such period, the “CurePeriod”) and (B) the date on which the Cure Period ends, Monaco shall havethe right to dissolve the Company pursuant to Section 7.1(b).  The calculation of the Average Cost Savingsat the end of the Cure Period shall be subject to the dispute resolutionprocedures set forth in Section 5.8.

### (f)    Limitation. Dissolution of the Company in accordance with Articles V and VII shallbe the sole remedy of the Parties in the event that any particular levels ofAverage Cost Savings are not realized. The Parties understand and acknowledge that (1) International is notgiving any guarantee or assurance as to its ability to extend its pricing andterms for component parts to the Company, (2) International shall not berequired to agree to higher pricing or less advantageous supply terms for itstruck, engine, chassis or other business units in order to include the Companyin its purchasing arrangements, or to sell engines to the Company at anyparticular pricing level, (3) neither International nor Monaco shall berequired to agree to any change in the design or manufacturing of its chassis(including any “make versus buy” decision) if it concludes in good faith thatstrategic, safety or other business considerations dictate otherwise, and (4)neither International nor Monaco is providing any indemnity, and neitherInternational nor Monaco shall be subject to any damages, in the event that theCompany does not achieve any particular level of Average Cost Savings.

# **ARTICLEVITransfer Restrictions on Member Interests**

## **6.1  Restrictions on Transfer of Member Interests. **Except to the extent specifically permittedor required by this Agreement, neither Member may transfer its Member Interestor any interest in it without the prior written consent of the other Member,which consent may be granted or withheld by such party in its sole discretion;provided, however, that if such transfer shall be to an entity that is whollyowned by such party, directly or indirectly (or, in the case of International,wholly owned directly or indirectly by Navistar International Corporation),then such consent may not be unreasonably withheld; provided, further, however,that the transferring Member (and in the case of International, ITEC) shallcontinue to be the primary obligor of the obligations under this Agreement.  For purposes of this Article, “Transfer” andits derivatives include all forms of direct or indirect transfer ordisposition, voluntary or involuntary, by 

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operation of law, by direct or indirect sale of stockor equity interests, or other direct or indirect change of control of theMember or otherwise, as well as the creation of any Encumbrance on all or anypart of a Member Interest; provided, however, that the change of control ofMonaco or Navistar International Corporation shall not be deemed a “Transfer”for purposes of this Agreement, unless such change of control constitutes aChange of Control under *Section 7.2(a)(vi)*.  The provisions of this Article VI replace,eliminate and otherwise supplant any contrary provisions in the DLLCA(including DLLCA § 18—702) that permit the assignment of a limited liabilitycompany interest.

## **6.2  Effect of Non-compliance.**

### (a)   Non-Permitted Transfers Null and Void*. *ANY ATTEMPTED TRANSFER NOT STRICTLY INACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE WILL BE VOID AB INITIO AND OF NOFORCE OR EFFECT WHATSOEVER.

### (b)   Other.  Without limiting the foregoing, if any MemberInterest or certificate representing it is purported to be transferred in wholeor in part in contravention of this Article, the Person to whom the transfer ismade will not be entitled to any rights as a Member, including any rights:

#### (i)            toparticipate in the management, business or affairs of the Company,

#### (ii)           toaccess to information concerning Company transactions,

#### (iii)          toinspect or copy the Company’s books or records,

#### (iv)          toreceive distributions to which the transferor would otherwise be entitled, or

#### (v)           toreceive upon the dissolution and winding up of the Company the net amountotherwise distributable to the transferor.

# **ARTICLEVIITermination**

## **7.1 ****TerminationGenerally**.

### (a)     Unresolved Business Disputes. EitherMember may elect to effect the dissolution of the Company in accordance withArticle VIII upon the occurrence of a Business Dispute that remains unresolvedfollowing the exhaustion of all procedures set forth in Section 5.8.

### (b)   Failure to Achieve AverageCost Savings*. *Monaco may elect to effect the dissolution of the Company in accordancewith Article VIII by written notice to International within thirty (30) daysafter the expiration of any Cure Period during which International has failedto achieve Average Cost Savings equal to or in excess of Goal pursuant to Section5.12(e).

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### (c)   Non-Renewal*. *A Member may terminate this Agreement, andeffect the dissolution of the Company in accordance with Article VIII, at thetimes and on the terms set forth in Section 2.3.

## **7.2  Termination for Default. **This Article applies only if (a) only oneMember is a Defaulting Member, in which case the Non-Defaulting Member mayelect to terminate the Company in accordance with Section 7.3, or (b)both Members are Defaulting Members, in which case Section 7.4 willapply.

### (a)   Definitions—DefaultingMember and Non-Defaulting Member and Default Event**.  “**Defaulting Member” is a Member with respectto which any Default Event has occurred. A “Non-Defaulting Member” is a Member with respect to which no DefaultEvent has occurred.  Each of thefollowing is a “Default Event”:

*(i)           *Material Default.  Any materialdefault by the Member in the performance of any covenant in this Agreement orin the performance of any material provision of any Related Agreement, whichdefault continues for a period of 30 days after written notice thereof has beengiven by the Non-Defaulting Member to the Defaulting Member (each, a “MaterialDefault”).  Without limiting theforegoing, “Material Default” shall include any failure for at least thirty(30) days to make when due any payment required to be made in respect of anAdditional Capital Contribution or Member Loan pursuant to Section 3.3.

*(ii)          *Material Breach.  A breach ofany representation or warranty contained in Attachment 2.4-A or Attachment2.4-B that would reasonably be expected to have a material adverse effecton either the Company or on the Non-Defaulting Member’s rights or benefits tobe derived under this Agreement.

*(iii)         *VoluntaryTermination of Existence by a Member.  A Member commences any proceeding to wind up,dissolve or otherwise terminate its legal existence.

*(iv)         *Involuntary Termination of Existence by aMember. Any Proceeding commenced against a Member that seeks or requires thewinding up, dissolution or other termination of its legal existence; except ifthe Member defends or contests that Proceeding in good faith within 15 days ofits commencement and obtains a stay of that Proceeding within 90 days of itscommencement, a Default Event will not exist so long as the stay continues andthe Member pursues the defense or contest diligently thereafter or theProceeding is dismissed.

*(v)          *Prohibited Transfer.  The Memberconsummates any transaction that does, or agrees to any transaction that would,if consummated, breach or result in a default under Section 6.1.

*(vi)         *Change of Control.  There is aChange of Control of the Member or Person directly or indirectly controlling theMember, including a transfer prohibited by 

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Section 6.1(each, a “Target”).  A “Change ofControl” occurs when any of the following occurs:

##### a.     Changein Ownership.  Any Person that is aCompetitor or group of Persons acting in concert that includes a Competitoracquires or agrees to acquire, directly or indirectly, either (A) that percentof the ownership interests of the Target that will provide the acquirer with asufficient number of the Target’s ownership interests having general votingrights to elect a majority of the directors or corresponding governing body or(B) in the case of a Target that has a class of securities registered undersection 12 of the Securities Exchange Act of 1934, as amended, or that issubject to the periodic reporting requirements of that act by virtue of section15(d) of that act, more than 50% of the Target’s ownership interests havinggeneral voting rights for the election of directors or corresponding governingbody.

##### b.     BoardApproval of Acquisition.  The Target’sboard of directors or corresponding governing body recommends a tender offerfor 50% or more of the outstanding ownership interest of the Target by a Personthat is a Competitor or a group of Persons acting in concert that includes aCompetitor.

*(vii)        *InternationalAcquisition of a Monaco Competitor.  With respect to International, ifInternational or any Person directly or indirectly controlling International orany subsidiary or affiliate of the foregoing or any group of Persons acting inconcert that includes any of the foregoing, directly or indirectly, takes anyof the following actions:  (A) acquires or agrees to acquire beneficialownership of voting securities of a Monaco Competitor representing 15% or moreof the then outstanding voting securities of such Monaco Competitor; (B)announces or commences a tender or exchange offer to acquire voting securitiesof a Monaco Competitor which, if successful, would result in such Person orgroup owning, when combined with any other voting securities of such Monaco Competitorowned by such Person or group, 15% or more of the then outstanding votingsecurities of such Monaco Competitor; (C) enters into any merger, sale or otherbusiness combination transaction with a Monaco Competitor; or (D) acquires oragrees to acquire all or a substantial portion of a Monaco Competitor’s assets.

*(viii)       *InsolvencyProceeding.  If any of the following occurs: (A) theMember seeks relief in an Insolvency Proceeding or (B) the institution againstthe Member of an involuntary Insolvency Proceeding; provided, however, that ifthe Member defends or contests that Insolvency Proceeding in good faith within15 days of its commencement and obtains a stay of that Proceeding within 90days of its commencement, a Default Event will not exist so long as the staycontinues and the Member pursues the defense or contest diligently thereafteror the Proceeding is dismissed; (iii) the Member admits the materialallegations of a petition against the Member in any Insolvency Proceeding; or(iv) an order for relief (or similar order under non-U.S. law) is issued in anyInsolvency Proceeding.

*(ix)          *Appointment of a Receiver or Levy.  Either (A) aProceeding has been commenced to appoint a receiver, receiver-manager, trustee,custodian or the like 

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for all or a substantialpart of the business or assets of the Member or (B) any writ, judgment, warrantof attachment, warrant of execution, distress warrant, charging order or othersimilar process (each, a “*Levy*”) of anycourt is made or attaches to the Member’s Member Interest or a substantial partof the Member’s properties; provided, however, that if the Member defends orcontests that Proceeding or Levy in good faith within 15 days of itscommencement and obtains a stay of that Proceeding or Levy within 90 days ofits commencement, a Default Event will not exist so long as the stay continuesand it pursues the defense or contest diligently thereafter or the Proceedingis dismissed.

*(x)           *Assignment for the Benefit of Creditors.  The Membermakes a general assignment for the benefit of creditors, composition,marshalling of assets for creditors or other, similar arrangement in respect ofthe Member’s creditors generally or any substantial portion of those creditors.

## **7.3  Remedies—Upon Default by One Member.**

### (a)   By Non-Defaulting Member* *A Non-Defaulting Member may, within 90 daysof becoming aware of the occurrence of a Default Event, give notice of theDefault Event (a “Default Notice”) to the Defaulting Member, electing todissolve the Company in accordance with Article IX.

### (b)   Other Remedies*.*

#### (i)            *Generally*. The Non-Defaulting Member’s election to dissolve the Company under Section7.3(a) will not preclude its exercise of whatever rights it may also haveunder Article XI or at law.

#### (ii)           *Certain Other Rights*.  Notwithstanding the foregoing, no electionunder Section 7.3(a) will preclude either (A) recourse by either theDefaulting Member or the Non-Defaulting Member to whatever injunctive relief towhich it may otherwise be entitled under this Agreement or any RelatedAgreement or (B) the recourse by the Non-Defaulting Member under Section2.10 to recover amounts owing to the Company that are not specificallytaken into account in the determination of Fair Market Value.

#### (iii)          *Fees and Expenses*.  The Non-Defaulting Member’s legal fees andexpenses will be deducted from any distribution otherwise to be made to theDefaulting Member and will be paid to the Non-Defaulting Member or, if theNon-Defaulting Member elects, will be paid by the Defaulting Member to theNon-Defaulting Member.

### (c)   Effect of Notice.  Ifthe Non-Defaulting Member elects in its Default Notice the remedy in Section7.3(a), it will carry out that dissolution in accordance with Article IX.

## **7.4  Remedies if Both Members are DefaultingMembers**.  If both Members are, or become, DefaultingMembers, simultaneously or sequentially, then (a) the Members and the Managerwill proceed as expeditiously as possible to dissolve the Company in accordancewith Article IX as though such dissolution resulted from an election pursuantto Section 7.3(a), and 

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## (b) both Defaulting Memberswill thereafter have whatever rights and remedies available to them underArticle XI and under Applicable Law.

## **7.5  Post-Termination Supply Arrangements. **This Section 7.5 appliesirrespective of whether either Member is a Defaulting Member.  Should the Company be dissolved following atermination event pursuant to this Article VII, Monaco shall enter into asupply agreement to meet International’s demand for diesel rear engine chassisfor a period of twelve (12) months following such dissolution on commerciallyreasonable terms, (and shall include terms substantially similar terms to thosecontained in Sections 5 through 7 and Sections 9 through 12of the Supply Agreement, but shall not require that International use Monaco asthe exclusive supplier).

# **ARTICLEVIIIDissolution**

## **8.1  Generally. **Promptly after any election or event resultingin dissolution, liquidation or winding up of the Company, including anyelection to dissolve pursued under Section 7.3(a), the Board ofDirectors will proceed to wind up the affairs of the Company in the manner setforth in this Article.  After such noticeor other event, neither Member will be obligated to provide any additionalfunds that would otherwise be required by the Company except amounts owing bysuch Member pursuant to this Agreement or other contractual arrangements.

## **8.2  Liquidation Procedures.**  Promptlyafter any election or event resulting in dissolution, liquidation or winding upof the Company, including any election to dissolve pursued under Section7.3(a), the Board of Directors will apply the proceeds of the liquidationof the Company in the following order:

### (a)   to the payment of the expenses of liquidation;

### (b)   to the payment of the liabilities and obligations of the Company,other than those owing to a Member;

### (c)   to the payment of any principal and/or interest due in respect ofMember Loans; and

### (d)   thereafter in accordance with Section 4.5*.*

## **8.3  Certified Liquidation Statement. **The Members, or the Non-Defaulting Member,if the Company is dissolved pursuant to Section 7.3(a), will cause theCompany’s independent auditors to prepare a certified liquidation statement ofthe Company.  Each Member agrees toprepare its financial statements and to prepare and file all tax returnsrequired to be filed by it in accordance with that liquidation statement, whichwill contain:

### (a)   a summarized statement of receipts and disbursements (includingexpenses of dissolution);

### (b)   a determination of the Book Capital Account of each Member;

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### (c)   a statement of the liabilities of the Company owing to eachMember;

### (d)   an allocation between the Members of all gains or losses realizedon the liquidation of the assets of the Company; and

### (e)   an allocation of any tax attributes between the Members.

# **ARTICLEIXReporting and Accounting Provisions**

## **9.1  Books and Records. **The Company will make and keep books,records and accounts that, in reasonable detail, accurately and fairlyreflect in all material respects the assets, liabilities and operationsof the Company.  The Company will alsomaintain a system of internal accounting controls that complies with industrystandards and Applicable Law and that will provide reasonable assurance that:

### (a)   transactions are executed in accordance with the Board ofDirectors’ general or specific authorization;

### (b)   transactions are recorded as necessary (i) to permit preparationof financial statements in conformity with GAAP and (ii) to maintainaccountability for assets;

### (c)   access to assets is permitted only in accordance with the Board ofDirectors’ general or specific authorization; and

### (d)   the recorded accountability for assets is compared with existingassets at reasonable intervals and appropriate action is taken with respect toany differences*.*

## **9.2  Other Accounting and Tax Provisions. **Attachment 9 contains additional accounting and taxprovisions applicable to the Company.

## **9.3  Distribution of Financial Statements and OtherReports**.  The Company will distribute to each Member:

### (a)   Monthly Information*. *As soon as practical after the end of each of the first three quarterlyperiods in each calendar month and in any event within ten (10) Business Daysafter the end of each such calendar month, a balance sheet as of the end of themonth and statements of income and cash flow, both for the month and forthe year to date, which financial statements shall fairly present in allmaterial respects the Company’s financial position as of that date and theresults of its operations for those periods in accordance with GAAP (subject tonormal year-end adjustments and the furnishing of notes; provided, however,that notes will be furnished to the extent necessary to make the statements notmisleading);

### (b)   Annual Information*. *As soon as practical after the end of each Fiscal Year and in any eventwithin ten (10) Business Days thereafter:

#### (i)            abalance sheet as of the year-end and statements of income and cash flow,both for the fourth quarter and for the year; and

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#### (ii)           adraft of the Company’s tax return in accordance with Section 5.2(a) of Attachment9 hereto, and information that will be required to permit the Member toprepare its tax return.

The year-end balance sheet and the statements for theyear will be examined in accordance with generally accepted auditing standardsby the Company’s independent certified public accountants, who will rendertheir opinion on whether those statements fairly present in all materialrespects the Company’s financial position as of that date and the results ofits operations for those periods in accordance with GAAP.

## **9.4  Right of Inspection and Examination. **At all reasonable times, each Member,through its representatives, has the right to inspect and copy the records ofthe Company and to examine the employees of the Company with regard to itsactivities.  These rights may beexercised through any agent or employee of the Member designated by notice tothe Board of Directors.  The inspectingMember will bear all expenses incurred in the inspection or examination.

## **9.5  Auditors. **Theinitial auditors of the Company are KPMG LLP.

# **ARTICLE XDispute Resolution**

**10.1**        Generally.

### (a)   Applies Only to Legal Claims*. *This Article 10 governs only those disputesthat arise under this Agreement, the outcome of which depends solely on whetherthe Company, a Member or any of its Affiliates is in default of its contractualor other legal obligations (a “Legal Claim”).  “Legal Claims” include (i) disputes as toindemnification under Article XI or any of the Related Agreements and (ii) theformation, validity, binding effect, applicability, scope, interpretation,performance, breach or termination of this Agreement or any Related Agreement.

### (b)   Matters Specifically Not Subject to Article 10 DisputeResolution Procedures.  Without limiting**Section 10.1(a)*:*

#### (i)            BusinessDisputes: any Business Dispute (as defined in Section 5.8) is not considered aLegal Claim subject to resolution under Section 10.2 but will be subjectinstead to Section 5.8; and

#### (ii)           InjunctiveRelief: requests for injunctive or other equitable relief may be brought under Section10.2.

**10.2        Dispute Resolution Procedures**

### (a)   Negotiation.  EitherMember may give notice of a Legal Claim to the other Member.  For a period of 30 days from receipt of thenotice, the Members will consult with each other in a good faith effort toresolve the Legal Claim.

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*(b) Mediation*.  If theMembers do not settle the Legal Claim within the 30-day period set forth in Section10.2(a), either Member may provide the other Member with a notice formediation.  After delivery of thatnotice, the Members will attempt in good faith to settle the matter bymediation administered by the CPR Institute for Dispute Resolution under itsCPR Mediation Procedure.

*(c) Binding Arbitration*.  If within 30days after receipt of the notice for mediation, the mediation does not resultin settlement of the Legal Claim, then the Legal Claim will be finally resolvedby arbitration administered by the CPR Institute for Dispute Resolution, inaccordance with its Rules for Non-Administered Arbitration.  A Member may initiate arbitration by noticeto the other Member any time after expiration of 60 days from receipt of noticeof the Legal Claim provided for in Section 10.2(a), whether or notmediation has been initiated or completed unless the mediation was completed byagreement of the parties, as reflected in a written agreement.  Unless the Members agree otherwise,initiation of arbitration will not relieve any Member of its obligation toparticipate in any mediation initiated under Section 10.2(b).

*(d) Arbitration Terms*.  Anyarbitration will comply with the following terms:

#### (i)            *Formationof Tribunal*.  The arbitrationtribunal will consist of three arbitrators. One arbitrator will be appointed by each Member and the third will beappointed by the first two.  If the firsttwo arbitrators fail to agree on the third arbitrator within 30 days aftertheir appointment, the third arbitrator will be appointed by the AmericanArbitration Association.

The arbitrators will be familiar with the commercialand manufacturing practices of the industry.

#### (ii)           *Conductof Arbitration*.  Thearbitration will take place in and will exclude any right of application orappeal to any court in connection with any question of law or fact arising inthe course of the arbitration or with respect to any award made.  The United States Arbitration Act (9 U.S.C.§§ 1—16, 201—208, 301—302) will apply and the arbitrators will otherwise applythe law specified in Section 14.11.

#### (iii)          *Awards*.  The arbitration award will be final andbinding on the Members, will not be subject to judicial appeal, will notinclude any punitive damages and will allocate, as appropriate, the costs ofarbitration, including legal fees and all related matters.  Any monetary award will stipulate a rate ofinterest, deemed appropriate by the arbitrators, which will run from the datenotice of Legal Claim was given until the date when the award is fullysatisfied.  The arbitration award will bepromptly satisfied by the Member against whom it is granted, free of anydeduction or offset.  Any cost or feeincident to enforcing the award will, to the maximum extent permitted by law,be charged against the Member resisting enforcement.  Judgment upon the award rendered may beentered in any court having jurisdiction, or application may be made to thatcourt for a judicial recognition of the award or an order of enforcementthereof, as applicable.  The Company orany Member may bring an action to enforce any award granted under this Section10.2.

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# **ARTICLEXIIndemnification**

**11.1        Survival; Effect of Knowledge; Other.**

*(a) Survival*.  Eachrepresentation, warranty, covenant and agreement in this Agreement, and in anycertificate or document delivered pursuant to this Agreement, survives theClosing only (i) for the time periods specified in Section 11.4 and (ii)as to claims made within those time periods, until resolved.

*(b) Relation to Default Provisions*.  Except asset forth in Section 7.3(b), the fact that a party has anindemnification right under this Article XI will not preclude the exercise ofrights under Article VII.

*(c) Duty to Mitigate*.  A Membermust use its Best Efforts to mitigate its Damages for which it will seekindemnification or other recovery against the other Member.

**11.2        Indemnification—By International**.  Internationalwill indemnify and hold harmless and pay promptly to the Company the amount ofany Damages (as defined below) resulting from:

### (a)   Breachof Representations or Warranties: any breach of any representation or warrantyin this Agreement or in any certificate delivered pursuant to Section2.8(a)(ii) made by International in connection with the Closing, withoutgiving effect to any exceptions made in such certificate;

### (b)   Breachof Covenants: any breach by International in the performance of its covenantsor obligations in this Agreement; and

### (c)   ExcludedLiabilities of International: any liability, obligation, contractual commitmentor other commitment (whether known or unknown and whether absolute, accrued,contingent or otherwise) (“Liabilities”) that is not expressly assumedby the Company pursuant to this Agreement (“Excluded Liabilities”) ofInternational.

“Damages” means (A) any loss, whether in the nature ofa cost, damage, expense, payment, liability or obligation or otherwise, andrelated attorneys’, accountants’ and other professional advisors’ reasonablefees and expenses (including those as to investigation, prosecution or defenseof any claim or threatened claim), whether or not involving a third-partyclaim, and (B) special, incidental, consequential, punitive or any otherdamages, but only in the case of Excluded Liabilities and third party claims.

**11.3        Indemnification—By Monaco**.  Monaco willindemnify and hold harmless and pay promptly to the Company the amount of anyDamages resulting from:

### (a)           Breach ofRepresentations or Warranties: any breach of any representation or warranty inthis Agreement or in any certificate delivered pursuant to Section2.8(b)(ii) made by Monaco in connection with the Closing, without givingeffect to any exceptions made in such certificate;

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### (b)           Breach of Covenants:any breach by Monaco in the performance of its covenants or obligations in thisAgreement; and

### (c)   ExcludedLiabilities of Monaco: any Liability of Monaco that is an Excluded Liability.

**11.4        Limitations on Indemnification Amount**. International will not have any liability for indemnification withrespect to the matters described in Section 11.2(a) and Monaco will nothave any liability with respect to the matters described in Section 11.3(a)until the total of all Damages with respect to the matters for which the Memberis otherwise liable exceeds $50,000 and then only for the amount by which theDamages exceed $50,000.  This limitationwill not apply to any breaches of a party’s representations or warrantiesrelating to its authority or its title to any property contributed to theCompany.  Notwithstanding anything to thecontrary in this Agreement, no party shall be liable for any amount in excessof $1,000,000 in the aggregate with respect to the matters described in Section11.2(a) or 11.3(a) (as applicable). For avoidance of doubt, any indemnification in respect of ExcludedLiabilities shall not be subject to the limitations set forth in this Section11.4.

**11.5        Time Limitations**.  No partywill have any liability for indemnification under this Article XI unless thePerson claiming the right to be indemnified (the “Indemnified Person”)gives notice to the party from whom indemnification is being sought (the “IndemnifyingPerson”), on or before the one (1) year anniversary of the Closing, statingthat the Indemnified Person has paid or properly accrued for losses, orreasonably anticipates that it will incur liability for a loss for which theIndemnified Person is entitled to indemnification under this Agreement.  Notwithstanding the foregoing, no limitationsas to the time for making claims (and such claims shall survive the terminationof this Agreement) applies to (i) Excluded Liabilities, (ii) those involving aparty’s representations or warranties relating to its authority or its title toany property contributed to the Company or (iii) those involving any covenantto be performed and complied with after the Closing.

**11.6        Procedure for Indemnification—ThirdParty Claims.**

*(a) Notice*.  Promptly,and in any event no later than 10 Business Days after receipt by a Personentitled to indemnification of notice of the commencement of any Proceedingagainst it, the indemnified Person will, if a claim is to be made against anindemnifying party, give notice to the indemnifying party of the commencementof the claim; provided, however, that the failure to notify the indemnifyingparty will not relieve the indemnifying party of any liability that it may haveto any indemnified Person, except to the extent that the indemnifying partydemonstrates that the defense of the Proceeding is prejudiced by theindemnified Person’s failure to give the notice timely.

*(b) Participation*.  If any Proceedingreferred to in Section 11.6(a) is brought against an indemnified Personand the indemnified Person gives notice to the indemnifying party of thecommencement of the Proceeding, the indemnifying party may (i) participate inthe Proceeding and (ii) elect by notice to the indemnified Person to assume thedefense of the Proceeding with lawyers reasonably satisfactory to theindemnified Person unless (A) the indemnifying party is also a party to theProceeding and the indemnified Person determines in 

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*good faith that joint representationwould be inappropriate or (B) the indemnifying party fails to provide, promptlyafter giving notice to the indemnified Person, reasonable assurance to theindemnified Person of its financial capacity to defend the Proceeding andprovide indemnification with respect to the Proceeding.  If the indemnifying party assumes the defenseof the Proceeding, (1) the indemnifying party will not, as long as itdiligently conducts the defense, be liable to the indemnified Person under thisSection for any fees of other lawyers or any other expenses with respect to thedefense of the Proceeding subsequently incurred by the indemnified Person inconnection with the defense of the Proceeding, other than reasonable costs ofinvestigation and (2) no compromise or settlement of the claims may be effectedby the indemnifying party without the indemnified Person’s written consent(which consent will not be unreasonably withheld or delayed) unless (x) thereis no finding or admission of any violation of legal requirements or anyviolation of the rights of any Person and no effect on any other claims thatmay be made against the indemnified Person and (y) the sole relief provided ismonetary damages that are paid in full by the indemnifying party.*

*(c) Right of Indemnified Person to Defend*. Notwithstanding the foregoing, if an indemnified Person determines ingood faith that there is a reasonable probability that a Proceeding mayadversely affect it or its Affiliates other than as a result of monetarydamages for which it would be entitled to indemnification under this Agreement,the indemnified Person may, by notice to the indemnifying party, assume theexclusive right to defend, compromise, or settle the Proceeding, but theindemnifying party will not be bound by any determination of a Proceeding sodefended or any compromise or settlement effected without its consent (whichwill not be unreasonably withheld or delayed).

**11.7        Procedure for Indemnification—OtherClaims**.  A claim for indemnification for any matternot involving a third-party claim will be asserted by notice to the party**fromwhom indemnification is sought promptly after becoming aware of the acts oromissions or facts and circumstances on which the claim is based, but thefailure to notify the indemnifying party**will not relieve the indemnifyingparty**of any liability that it may have to any indemnifiedPerson, except to the extent that the indemnifying party**demonstratesthat it is prejudiced by the failure. That notice is notice of a Legal Claim for purposes of Section 10.1.

**11.8        Satisfaction of IndemnificationObligations.**

Subject to the terms and conditions of this Article XIand in accordance with the deadlines specified in the preceding subsections, anIndemnifying Person will satisfy its liability to the Company for indemnifiedDamages by paying the amount of the liability to the Company, and will satisfyits liability to any other Indemnified Person by paying the amount of theliability to such Indemnified Person. Payments pursuant to the foregoing will be by wire transfer or by check,as the recipient may direct.  In theabsence of directions within a reasonable period of time, payment may be madeby check.

**11.9        Exclusiveness of Remedies**.  Except (a)as provided in Section 7.3(b) and 11.1(b), (b) for fraud orwillful misconduct and (c) subject to the procedures set forth in Article 10,the remedies provided in this Article constitute the sole and exclusiveremedies available to the Company and the Indemnified Persons with respect tomatters covered in Sections 11.2 and 11.3.  Neither the foregoing nor anything else inthis Agreement will limit the right of a party**or

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**the Company to enforce theperformance of this Agreement or of any Contract, document or other instrumentexecuted and delivered pursuant to this Agreement by any remedy available to itin equity, including specific performance. The parties waive any requirement that the Person seeking equitablerelief post a bond or other security. For the avoidance of doubt, this Article XI shall not apply to claimsarising out of or relating to the performance of the Related Agreements.**

# **ARTICLEXIICompetition**

**12.1        Competition.**

*(a) Generally*.  Each Memberwill not, and will take all actions necessary to ensure that its Affiliates willnot, engage in the activities prohibited by this Section 12.1.  For purposes of this Section 12.1, the“Restricted Period” for a Member lasts for so long as it or any of itsAffiliates owns any interest in the Company, plus the shorter of (A) any periodthereafter during which a Member is obligated to supply chassis to the otherMember pursuant to this Agreement or the transactions contemplated by thisAgreement and (B) twelve (12) months.

*(b) Exclusive Supplier.  The Members agree that the Company shall bethe exclusive manufacturer and supplier of all of Workhorse’s productionrequirements for its current and future portfolio of rear engine dieselrecreational vehicle and low-floor bus stripped chassis products (excluding the“Whirlaway” platform) and the exclusive manufacturer and supplier of all ofMonaco’s production requirements for all of its current and future rear enginediesel stripped chassis products. The Company hereby grants to Workhorse andMonaco the exclusive right and license to (i) combine (or have third partiescombine) the chassis with vehicles bodies or any other components and (ii)resell (or have third parties resell) chassis and any complete vehicles uponwhich a chassis may be attached to third parties, subject to the terms and conditionsof this Agreement, provided that Monaco shall not be permitted to resellchassis to up-fitters (other than Burlington Specialty Vehicles), truckequipment manufacturers or other OEMs (excluding Swagman Motorhomes) but mayonly resell the chassis (and the associated body) through its dealer network.*

*(c) Member Activities*.  Monacoacknowledges and agrees that (i) Workhorse will re-sell the chassis itpurchases from the Company to manufacturers of diesel motorhomes and low floorbuses, including manufacturers which may compete with Monaco, and (ii) Monacowill use the chassis it purchases from the Company only in its internalproduction operations (and will not sell stripped chassis to any third party orresell chassis to up-fitters (other than Burlington Specialty Vehicles), truck equipmentmanufacturers or other OEMs (excludingSwagman Motorhomes), but may only resell the chassis (and the associated body)through its dealer network).  Workhorseacknowledges and agrees that Monaco’s finished products may compete withfinished products offered by manufacturers that purchase stripped chassis fromWorkhorse.

*(d) Restricted Activities*.  Neither theMember nor any of its Affiliates will:

#### (i)            Non-Competition: during theRestricted Period, carry on or be engaged, concerned or interested directly orindirectly whether as shareholder, partner,

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#### director,employee, member, agent or otherwise in carrying on any business similar to orcompeting with the Business anywhere in the United States (other than as aholder of not more than five percent of the issued voting securities of anycompany listed on any registered national securities exchange);

#### (ii)           Non-Solicitation of Employees: duringthe Restricted Period, either on its own account or in conjunction with or on behalfof any other Person, employ, solicit or entice away or attempt to employ,solicit or entice away from the Company or the other Member, any Person who isor will have been at the date of or within 24 months before any solicitation,enticement or attempt, an officer, Director, consultant or engineering,professional or administrative employee of the Company or of the other Member,whether or not that Person would commit a breach of contract by reason ofleaving employment; provided, however, that the foregoing does not restrict aMember from employing any such person who was an employee of that Member while(A) serving as a Director or (B) providing services to the Company (whether asan employee, consultant or otherwise) nor does it restrict a Member’s generaladvertisements with respect to a position that are not specifically directed toofficers, Directors, consultants or engineering, professional or administrativeemployees of the Company, and provided, further, that the Members may agreefrom time to time that this Section does not apply to specified persons; and

#### (iii)          Restriction on Use of Trademark andTrade name: at any time hereafter use as a company name, trademark or servicemark the word “Custom Chassis Products “ or any similar word in a way likely tobe confused with the name of the Company.

**12.2        Independent Agreements**.  Theagreements set forth in Section 12.1 are, will be deemed, and will beconstrued as separate and independent agreements.  If any agreement or any part of theagreements is held invalid, void or unenforceable by any court of competentjurisdiction, then such invalidity, voidness or unenforceability will in no wayrender invalid, void or unenforceable any other part of the agreements; and Section12.1 will in that case be construed as if the void, invalid orunenforceable provisions were omitted.

**12.3        Scope of Restrictions**.  While therestrictions contained in Sections 12.1 and 12.2 are consideredby the Members to be reasonable in all the circumstances, it is recognized thatrestrictions of the nature in question may not be enforced as written by acourt.  Accordingly, if any of thoserestrictions are determined to be void as going beyond what is reasonable inall the circumstances for the protection of the interest of the Members, butwould be valid if restrictive periods were reduced or if the range ofactivities or area dealt with were reduced in scope, then the periods,activities or area will apply with the modifications as are necessary to makethem enforceable.

# **ARTICLEXIIIConfidentiality**

**13.1        Confidentiality—Confidential Information**.  Except asotherwise expressly permitted by this Article XIII, each Member and the Companywill keep confidential, will not

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**disclose and will otherwise retainin strictest confidence any Confidential Information (as defined in Section13.3), unless disclosure is (a) approved by both Members or (b) expresslypermitted by this Article XIII.**

**13.2        Confidentiality—Company Information**.  Except asotherwise expressly permitted by this Article XIII:

*(a) Obligations of the Members*.  Each Memberwill keep confidential, will not disclose, will not use, and will otherwiseretain in strictest confidence the Company Information.  Without limiting the foregoing, each Memberwill use no less than the same degree of care, and no less than a reasonabledegree of care, to protect the Company Information as it uses to protect itsown trade secrets and confidential information.

*(b) Obligations of the Company*.  The Companywill keep confidential, will not disclose, and will otherwise retain instrictest confidence the Company Information. The foregoing permits the Company to use the Company Information, butthe Company will adopt procedures in connection with its use of CompanyInformation that are reasonably expected to prevent that information frombecoming publicly available.  Theforegoing does not limit the Company’s obligations otherwise set forth in thisArticle XIII, including those in Section 13.5 and Section 13.6.

**13.3        Definitions—Company Information and Other.**

*(a) Company Information*.  “CompanyInformation” means all information (whether written, oral or in another form)that consists of, or includes, (i) Trade Secrets of the Company or any Memberor (ii) Confidential Information.

*(b) Trade Secrets*.  “TradeSecrets” means trade secrets under applicable trade secret or other law; andincludes, however documented, concepts, ideas, designs, know-how, methods,data, processes, formulae, compositions, improvements, inventions, discoveries,product specifications, past, current and planned research and development andmanufacturing or distribution methods and processes, lists of actual orpotential customers or suppliers, current and anticipated customerrequirements, price lists, market studies, business plans, computer softwareand programs (including object code and source code), computer software anddatabase technologies, systems, structures and architectures, and any otherinformation that is a trade secret within the meaning of Applicable Law.

*(c) Confidential Information*.  “ConfidentialInformation” means written or other information concerning the Company or anyMember, other than Trade Secrets; and, to the extent consistent with theforegoing definition, includes historical financial statements, financial projectionsand budgets, historical and projected sales, capital spending budgets andplans, information regarding dealer and customer distribution networks, theterms of this Agreement, the terms of the Business Plan, the terms of anyexecuted confidentiality agreement and any information that is marked “confidential”or in some comparable manner.

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**13.4        Certain Exceptions**.  Theprohibitions in Sections 13.1 and 13.2 will not apply only to theextent that:

*(a) Previously in Possession*.  Thedisclosing Person (i) demonstrates through written records that the sameCompany Information was in its possession before disclosure to it and (ii) thedisclosing Person provided the Company and each Member with written notice ofprior possession either (A) before the execution and delivery of this Agreementor (B) if the disclosing Person later becomes aware of (through disclosure bythe Company or otherwise) some aspect of the Company Information as to which ithad prior possession, promptly upon its becoming aware of the CompanyInformation;

### (b)   ExistingProduct Business.  (i) Where Monacois the disclosing Person, the Company Information or Confidential Information,as the case may be, relates to Monaco’s Product Business or the MonacoContributed Assets or (ii) where International is the disclosing Person, theCompany Information or Confidential Information, as the case may be, relates toInternational’s Product Business or the International Contributed Assets.

*(c) Becomes Public*.  Thedisclosing Person demonstrates (i) that the same information is currentlypublicly available or has become publicly available and (ii) that such publicavailability does not result from (A) the misappropriation or improperdisclosure of such Company Information by the disclosing Person or (B) theobtaining of such Company Information by improper means of the disclosingPerson;

*(d) Independently Developed*.  Thedisclosing Person demonstrates that the same information was developedindependently by the disclosing Person without the use of the CompanyInformation;

*(e) Legal Obligation to Disclose*.  Thedisclosing Person demonstrates that Applicable Law requires it to disclose theCompany Information, but then only (i) to the extent disclosure is required and(ii) after giving the Company and each Member notice of the obligation so thatit may seek a protective order or other similar or appropriate relief.  In the absence of an order or relief, thedisclosing Person must use reasonable efforts to have the disclosed informationtreated confidentially consistent with this Article;

*(f) Enforcement of Agreement*.  Thedisclosing Person demonstrates that it is reasonably necessary for thedisclosing Person to make the disclosure to enforce this Agreement, and thenonly if the disclosing Person undertakes in good faith to limit the manner andextent of that disclosure to the extent practical including obtainingprotective orders from the court or arbitrator from whom enforcement is sought;or

*(g) Stock Exchange Rules and Securities Laws*.  Thedisclosing Person has determined, in good faith after consultation with outsidecounsel to the disclosing Person, that disclosure is necessary or desirable inorder to comply with applicable stock exchange rules or federal or statesecurities laws.

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**13.5        Permitted Disclosure to Representatives**. Notwithstanding the prohibitions of this Article, each Member and theCompany may disclose the terms of this Agreement and Company Information to itsRepresentatives directly involved with the Company but:

### (a)   onlyto the extent necessary for the Representative to accomplish his assigned tasksand otherwise strictly on a need to know basis; and

### (b)   onlyif the Representative (i) is provided a copy of this Article and (ii) isadvised in writing by the disclosing Person (A) that he is obligated to keepconfidential, not disclose and retain in strictest confidence the terms of thisAgreement and the Company Information strictly in accordance with terms of thisArticle and (B) that the Company or any Member may directly enforce the obligation.

“Representatives” means a Person’s directors,officers, employees, agents, consultants, advisors or other representatives,including lawyers, accountants and financial advisors.  In the case of a Member, “Representatives”includes the Representatives of that Member’s Affiliates.

**13.6        Disclosure to Non-Representatives**.  Anydisclosure of the terms of this Agreement or any Company Information may bemade to a non-Representative only if the receiving Person executes and deliversa confidentiality agreement in form and substance approved by the Board ofDirectors.

**13.7        Continuing Protection of Trade Secrets**.  Any TradeSecrets of the Company will also be entitled to all of the protections andbenefits under Applicable Law.  If acourt of competent jurisdiction determines that any Company Information thatthe Company deems to be a Trade Secret is not a Trade Secret, or ceases to be aTrade Secret under Applicable Law, then the Company Information will beconsidered Confidential Information for purposes of this Article.

**13.8        Remedies**.  Each Memberrecognizes that the activities proscribed by this Article will result inirreparable damage and harm to the Company and the Members and that the Companyand Members and their Affiliates may be without an adequate remedy at law inthe event of any such activities. Therefore, if any of the foregoing Sections of this Article is breachedor is threatened to be breached, the Company, each Member, and each of theirAffiliates may: (a) obtain specific performance; (b) enjoin any Person that hasbreached or threatens to breach from engaging in any activity proscribed bythis Article; and (c) pursue any one or more of the foregoing or any otherremedy available to it under Applicable Law, including actual and/or punitive damagesand set-off rights.  A Person seeking orobtaining any such relief will not be deemed to be precluded from obtaining anyother relief to which that Person may be entitled.  Each Member waives on behalf of itself andeach of its Affiliates any requirement that a Person seeking to enforce thisArticle submit proof of the economic value of any Trade Secret or post any bondor other security in connection therewith.

**13.9        Attorney-Client Privilege**.  To theextent that any Company Information includes materials subject to theattorney-client privilege, the Company is not waiving and will not be deemed tohave waived or diminished its attorney work-product protections,attorney-client privileges or similar protections and privileges as a result ofdisclosing any Company 

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**Information (including CompanyInformation related to pending or threatened litigation) to a Member, whetheror not the Company has asserted, or is or may be entitled to assert, thoseprivileges and protections.  The Companyand the Members: (a) share a common legal and commercial interest in all suchCompany Information that is subject to such privileges and protections; (b) areor may become joint defendants in proceedings to which such Company Informationcovered by those protections and privileges relates; and (c) intend that thoseprivileges and protections remain intact if the Company or any Member becomessubject to any actual or threatened proceeding to which such CompanyInformation covered by such protections and privileges relates.  In furtherance of the foregoing, no Membershall claim or contend, in proceedings involving the Company or any Member,that the Company waived its attorney work-product protections, attorney-clientprivileges or similar protections and privileges as a result of disclosing anyCompany Information (including Company Information related to pending orthreatened litigation) to the Member.**

**13.10      Continuing Obligations**.  Theobligations in this Article will be effective from the date of this Agreementand will bind (a) the Company indefinitely and (b) each Member (i) with respectto the Confidential Information of the Company, for so long as that Member isbound by the non-competition provisions of Article XII and (ii) with respect tothe Trade Secrets of the Company, for as long as those Trade Secrets remaintrade secrets under Applicable Law.

**13.11      No Limitation on Other Agreements**.  Theprohibitions in this Article are in addition to, and will be interpreted asseparate and independent from, any similar prohibitions in any agreementbetween the Company and any of its Representatives that limits the use ordisclosure of information concerning the Company.

# **ARTICLEXIVMiscellaneous**

**14.1        Further Assurances.**

*(a) Generally*.  The Memberswill (i) furnish upon request to each other further information, (ii) executeand deliver to each other documents, and (iii) do other acts and things, all asthe other Member may reasonably request for the purpose of carrying out theintent of this Agreement and the documents referred to in this Agreement.

*(b) Transition*.  Inconnection with and for a reasonable time following a permitted purchase of aMember’s Member Interest, the selling Member will cooperate in connection withany reasonable requests of the Company or the other Member to effect thepurchase, but the selling Member will be entitled to be reimbursed the actualout-of-pocket expenses it incurs in complying with the request.

**14.2        Notices**.  Ordinarycourse business communications in connection with the performance of thisAgreement may be given electronically, by fax, by mail or any other comparablemeans, but any such communication will be deemed received only upon actualreceipt.  Any other notice, communicationand delivery under this Agreement (including one of default or termination):(a) will be made in writing signed by the Person making it; (b) will specifythe Section to which it relates; (c) will be delivered only (i) in person, (ii)by nationally

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**recognized next Business Daydelivery service electing, and being timely delivered to such service for, nextBusiness Day delivery, or (iii) by fax and with a confirming copy sent by anationally recognized next Business Day delivery service electing, and beingtimely delivered to such service for, next Business Day delivery; (d) unlessgiven in person, will be given to the address specified below; (e) will bedeemed given (i) if delivered in person, on the date of personal delivery, (ii)if sent by nationally recognized next Business Day delivery service electing,and being timely delivered to such service for, next Business Day delivery, onthe first Business Day after so sent, or (iii) if sent by fax with a copy sentby a nationally recognized Business Day delivery service electing, and beingtimely delivered to such service for, next Business Day delivery, on the firstBusiness Day after so sent; and (f) will be deemed received (i) if delivered inperson, on the date of personal delivery, (ii) if sent by nationally recognizednext Business Day delivery service electing, and being timely delivered to suchservice for, next Business Day delivery, on the first Business Day after sosent, and (iii) if sent by fax and with a confirming copy sent by a nationallyrecognized next Business Day delivery service electing, and being timelydelivered to such service for, next Business Day delivery, on the firstBusiness Day after so sent.  The Persongiving the notice will pay all delivery costs. The addresses and the requirements for copies are as follows:**
| If to International, to:                                                                                                                                                                                      |   | with a copy to:                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                          |   |                                                                                                                                  |
| International  Truck and Engine Investments Corporation and International Truck and  Engine Corporation  4201 Winfield Road Warrenville,  Illinois 60555  Attention: VP & GM Medium Truck  Vehicle Center |   | International Truck and Engine Corporation  4201 Winfield Road  Warrenville, Illinois 60555  Attention: Office of the General Counsel |
|                                                                                                                                                                                                          |   |                                                                                                                                  |
| If to Monaco,  to:                                                                                                                                                                                            |   | with copies to:                                                                                                                       |
|                                                                                                                                                                                                          |   |                                                                                                                                  |
| Monaco Coach  Corporation  91320 Industrial Way                                                                                                                                                               |   | Monaco Coach Corporation  606 Nelson’s Parkway                                                                                   |
| Coburg, Oregon  97408                                                                                                                                                                                         |   | Wakarusa, Indiana 46573                                                                                                               |
| Attention:  President                                                                                                                                                                                         |   | Attention: General Counsel                                                                                                            |
|                                                                                                                                                                                                          |   |                                                                                                                                  |
|                                                                                                                                                                                                          |   | Wilson Sonsini Goodrich & Rosati  Professional Corporation                                                                        |
|                                                                                                                                                                                                          |   | 650 Page Mill Road  Palo Alto, CA 95304                                                                                               |
|                                                                                                                                                                                                          |   | Attention:                                                                                                                            | Henry P. Massey |
|                                                                                                                                                                                                          |   | Robert T. Ishii                                                                                                                       |

 

Notice will be given to such other representatives orat such other addresses as a Person may furnish to the other Persons entitledto notice pursuant to the foregoing.  Ifnotice is given pursuant to this Section of a permitted successor or assign ofa Person, then notice will thereafter be given as set forth above also to suchsuccessor or assign of such Person.

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**14.3        Jurisdiction; Service of Process**.  All actionsor Proceedings relating to this Agreement (whether to enforce a right orobligation or obtain a remedy or otherwise) that are not subject to Article XIwill be brought solely in the state or federal courts located in or for theState of Indiana.  Each Member herebyunconditionally and irrevocably consents to the jurisdiction of those courtsand waives its rights to bring any action or Proceeding against the otherMember except in those courts.  Processin any action or Proceeding referred to in the preceding sentence may be servedon any Member anywhere in the world. Each Member irrevocably waives any right to a jury trial with respect toany matter arising out of or in connection with this Agreement.  If any Member seeks to enforce its rightsunder this Agreement by joining another Person to a Proceeding before a jury inwhich the third party is a party, the parties will request the court to try theclaims between the Members without submitting the matter to the jury.

**14.4        Waiver**.  Neither thefailure nor any delay by any Person in exercising any right, power or privilegeunder this Agreement or the documents referred to in this Agreement willoperate as a waiver of the right, power or privilege, and no single or partialexercise of any right, power or privilege will preclude any other or furtherexercise of the right, power or privilege or the exercise of any other right,power or privilege.  To the extentpermitted by Applicable Law: (a) no claim or right arising out of thisAgreement or the documents referred to in this Agreement can be discharged byone Person, in whole or in part, by a waiver or renunciation of the claim orright unless in writing signed by the other Person; (b) no waiver that may begiven by a Person will be applicable except in the specific instance for whichit is given; and (c) no notice to or demand on one Person will be deemed to bea waiver of any obligation of that Person or of the right of the Person givingthe notice or demand to take further action without notice or demand asprovided in this Agreement or the documents referred to in this Agreement.

**14.5        Entire Agreement and Modification**.  ThisAgreement and the Related Agreements (a) supersede all prior agreements betweenthe parties with respect to their subject matter and (b) constitute a completeand exclusive statement of the terms of the agreement between the parties withrespect to their subject matter.  ThisAgreement may not be amended except by a written agreement executed by theMembers.

**14.6        Assignments, Successors**.  Except asexpressly provided in this Agreement, neither Member may assign any of itsrights under this Agreement without the prior written consent of the otherMember.  Any such assignment without theother parties’ prior written consent shall be null and void.

**14.7        No Third Party Rights**.  Other thanthe rights provided under Section 5.11 hereof, nothing expressed orreferred to in this Agreement will be construed to give any Person other thanthe Members (and the Company) any legal or equitable right, remedy or claimunder or with respect to this Agreement or any provision of this Agreement.  This Agreement and all of its provisions andconditions are for the sole and exclusive benefit of the Members (and theCompany) and their successors and assigns.

**14.8        Severability.**  If anyprovision of this Agreement not essential to accomplishing its purposes is heldinvalid or unenforceable by any court of competent jurisdiction, the otherprovisions of this Agreement will remain in full force and effect.  Any provision of this

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**Agreement held invalid orunenforceable only in part or degree will remain in full force and effect tothe extent not held invalid or unenforceable.**

**14.9        Time is of the Essence; Computation ofTime**.  Time is of the essence of each and everyprovision of this Agreement.  If the lastday for the exercise of any privilege or the discharge of any duty under thisAgreement falls on a day that is not a Business Day, then the Person havingsuch privilege or duty will have until 5:00 p.m. (its local time) on the nextsucceeding Business Day to exercise its privilege or to discharge its duty.

**14.10      Expenses.**  Each Memberwill bear its own expenses incurred in connection with the negotiation,drafting, implementation and performance of this Agreement except as providedin Section 7.3(b)(iii).

**14.11      Governing Law**.  Except forthe application of the United States Arbitration Act (9 U.S.C. §§ 1—16) todispute resolution as provided in this Agreement, this Agreement, includingissues arising out of or related to this Agreement, will be governed by thelaws of the State of Indiana.

**14.12      Counterparts**.  ThisAgreement may be executed in one or more counterparts, each of which will bedeemed to be an original copy of this Agreement and all of which, when takentogether, will be deemed to constitute one and the same agreement.

*Signaturepage follows.*

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                IN WITNESS WHEREOF, the partieshereto have duly executed this Agreement as of the date first written above.
|            | ** ** | **INTERNATIONAL TRUCK AND ENGINE CORPORATION**              |
|------------|------------|-------------------------------------------------------------|
| ** ** | ** ** | ** **                                                  |
|       |       | By:                                                         | /s/ Daniel C. Ustian |
|       |       | Name:                                                       | Daniel C. Ustian |
|       |       | Title:                                                      | Chairman, President and CEO |
|       |       |                                                        |
| ** ** | ** ** | **INTERNATIONAL TRUCK AND ENGINE INVESTMENTS  CORPORATION** |
| ** ** | ** ** | ** **                                                  |
|       |       | By:                                                         | /s/ Daniel C. Ustian |
|       |       | Name:                                                       | Daniel C. Ustian |
|       |       | Title:                                                      | Chairman, President and CEO |
|       |       |                                                        |
| ** ** | ** ** | **MONACO COACH CORPORATION**                                |
| ** ** | ** ** | ** **                                                  |
|       |       | By:                                                         | /s/ Kay L. Toolson |
|       |       | Name:                                                       | Kay L. Toolson |
|       |       | Title:                                                      | Chief Executive Officer |
|            |            |                                                             |  |  |

 

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**Attachment 1.1Definitions and Certain Rules of Construction**

**Part One: Definitions**

“Actual Chassis Cost”means, with respect to each chassis manufactured by the Company, the product of(i) the Actual Per Unit Cost for such chassis and (ii) the applicable ChassisVolume.

“Actual Per Unit Cost”means, with respect to each chassis manufactured by the Company, the actualcurrent materials cost for such chassis.

“Additional Capital Contributions” has themeaning given in Section 3.2(a).

“Affiliate” of a Person means:  (a) a director, officer, partner, member,manager, executor or trustee of a Person and (b) any Person directly orindirectly controlling, controlled by, or under common control with, thatPerson, provided, however, no party to this Agreement will be considered anaffiliate of any other party solely by reason of its participation in theCompany. For purposes of this definition,*“control,”“controlling,”* and*“controlled”*meanhaving the right to elect a majority of the board of directors or other comparablebody responsible for management and direction of a Person by contract, byvirtue of share ownership or otherwise.

“Aggregate Actual Cost” means the sum of theActual Chassis Costs for all chassis manufactured by the Company.

“Aggregate Baseline Cost”means the sum of the Baseline Chassis Costs for all chassis manufactured by theCompany.

“Aggregate Chassis Volume”means the sum of the Chassis Volumes for all chassis manufactured by theCompany.

“Agreement” has the meaning given in theopening paragraph.

“Applicable Law” means each applicableprovision of any constitution, statute, law, ordinance, code, rule, regulation,order, decree, judgment, award or injunction.

“Average Cost Savings”means, with respect to any Measurement Date, (i) the difference between theAggregate Baseline Cost and the Aggregate Actual Cost divided by (ii) theAggregate Chassis Volume.

“Baseline Assessment” has the meaning givenin the Lease.

“Baseline Chassis Cost” means, with respectto each chassis manufactured by the Company, the product of (i) the BaselinePer Unit Cost for such chassis and (ii) the applicable Chassis Volume.

“BaselinePer Unit Cost” means the material costs for such chassis as the parties tothe Agreement may agree.

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“BestEfforts” means the efforts that a prudent Person who wants to obtain aresult would use in similar circumstances to attempt to obtain thatresult.  An obligation to use BestEfforts under this Agreement does not require a Person to take actions thatwould result in a materially adverse change in the benefits of this Agreementand the Formation Transactions to that Person.

“Board of Directors”has the meaning given in Section 5.1(a).

“Book Capital Account”has the meaning given in Section 3.1 of Attachment 9.

“Business” has themeaning given in the Recitals.

“Business Day” meansany day other than Saturday, Sunday or any public or legal holiday, whetherfederal or state, in the place in which a duty or obligation is to beperformed.

“Business Dispute”has the meaning given in Section 5.8(a).

“Business Plan” hasthe meaning given in Section 5.7(a).

“Chair” has the meaninggiven in Section 5.2(b).

“Change of Control”has the meaning given in Section7.2(a)(vi).

“Chassis Volume” means, with respect to eachchassis manufactured by the Company, the projected manufacturing volume forsuch chassis as set forth in the Business Plan with respect to the 12-monthperiod ending on the relevant Measurement Date.

“Cleanup” means any investigation, remediationor other response action required by any Governmental Body with applicablejurisdiction pursuant to applicable Environmental Laws.

“Closing”has the meaning given in Section 2.7.

“ClosingDate” has the meaning given in Section 2.7.

“Company”has the meaning given in the Recitals.

“CompanyIndemnified Person” has the meaning given in Section 5.11(a).

“CompanyInformation” has the meaning given in Section 13.3(a).

“ConfidentialInformation” has the meaning given in Section 14.3(c).

“Contract” meansany binding contract, agreement, commitment, arrangement, undertaking or understandingof any kind whatsoever, together with all related amendments, modifications,supplements, waivers and consents.

“ContributedOperating Asset” has the meaning given in Section 4.5(a).

“Cumulative NetTaxable Income” means, as of the end of each Fiscal Year of the Company forwhich a Tax Amount is to be determined, the sum of all taxable income for thecurrent and all prior Fiscal Years reduced by the sum of all taxable losses forthe current and all prior Fiscal Years.

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“Cure Period” has themeaning given in Section 5.12(e).

“Damages” has themeaning given in Section 11.2.

“Default Event” hasthe meaning given in Section 7.2(a).

“Default Notice” hasthe meaning given in Section 7.3(a).

“Defaulting Member”has the meaning given in Section 7.2(a).

“DesignatedRepresentatives” has the meaning given in Section 5.8(b).

“Director” has themeaning given in Section 5.1(a).

“DLLCA” has themeaning given in Section 2.1(a).

“Dispute Notice” has the meaning given in Section5.8(a).

“Effective Tax Rate” means the highest U.S.corporate income tax rate for that year plus the federal tax-effected state andlocal income tax rate in effect at the principal office of the Company.

“Encumbrance” means any charge, claim,condition, equitable interest, lien, option, pledge, security interest, rightof refusal or restriction of any kind, including any restriction on use,voting, transfer, receipt of income or exercise of any other attribute ofownership.

“Enforceability Exceptions” means applicablebankruptcy, insolvency or similar laws affecting the enforcement of creditors’rights generally or by equitable principles relating to enforceability.

“Environment” means soil, land surface orsubsurface strata, surface waters (including navigable waters, ocean waters,streams, ponds, drainage basins, and wetlands), ground waters, drinking watersupply, stream sediments, ambient air (including indoor air), plant and animallife.

“EnvironmentalLaws” means any Applicable Law relating to pollution or protection of humanhealth, as it relates to exposure to Hazardous Materials, environment andnatural resources, including those relating to the management, Release orthreatened release of Hazardous Materials into the Environment or into anybuilding or structure and the clean-up thereof.

“Environmental Permits”has the meaning given in Section 8.1 of Attachment 2.4-A.

“Excess DistributionAmount” has the meaning given in Section 4.5(b).

“Excluded Liabilities”has the meaning given in Section 11.2(c).

“Facility” means the factory at the Premisesand related assets to be operated by the Company for the research, development,manufacturing and distribution of products to be manufactured by the Company.

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“FairMarket/Statutory Value” has the meaning given in Section 1 of Attachment9.

“Fiscal Year”means the twelve month period beginning November 1st of each year and ending October 31st of thefollowing year.

“Formation Transactions” means all of thetransactions contemplated by this Agreement, including the formation of the Companyand the actions to be taken by the Members at the Closing.

“GAAP” means U.S. generally acceptedaccounting principles, applied on a consistent basis.

“GAAP Accounts and Statements” has themeaning given in Section 2.1 of Attachment 9.

“Goal” has the meaning given in Section5.12(e).

“Governmental Authorization” means anyconsent, license, permit or other authorization issued, granted, given orotherwise made available by or under the authority of any Governmental Body orpursuant to any Applicable Law, but excluding consents, licenses, permits orother authorizations issued pursuant to Environmental Laws, which are coveredunder “Environmental Permits.”

“Governmental Body” means any governmental orquasi-governmental body exercising, or entitled to exercise, anyadministrative, executive, judicial, legislative, police, regulatory or taxingauthority or power.

“Hazardous Materials” means any waste,material, substance or pollutant that has been designated by any GovernmentalBody to be hazardous or toxic (including petroleum products, polychlorinatedbiphenyls (“PCBs”), friable asbestos or asbestos-containing materials andradioactive materials).

“Insolvency Proceeding” means any Proceedingrelating to bankruptcy, reorganization, insolvency, liquidation, receivership,dissolution, winding-up or relief of debtors.

“International” has the meaning given in theopening paragraph of this Agreement.

“International Contributed Assets” has themeaning given in Section 2.8(a)(iv).

“International Director” has the meaninggiven in Section 5.1(b).

“International Disclosure Schedule” means thedisclosure schedules delivered by International pursuant to this Agreement.

“International Indemnified Person” has themeaning given in Section 12.4(ii).

“International’sProduct Business” has the meaning given in Section 1 of Attachment2.4-A.

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“IRC” has the meaninggiven in Section 1 of Attachment 9.

“Knowledge”, with respect to an individual,means *“Knowledge”* of a particularfact or other matter if that individual is actually aware of that fact or othermatter.  A Person (other than anindividual) will be deemed to have*“Knowledge”*of a particular fact or other matter if any individual who isserving as a director or executive officer of such Person has, at the time withrespect to which the term is used, *“Knowledge”*of such fact or other matter as set forth in the preceding sentence.

“Lease”means the real property lease among Monaco, the Company and ITEC.

“LegalClaim” has the meaning given in Section 10.1(a).

“Levy”has the meaning given in Section 7.2(a)(viii).

“Liabilities”has the meaning given in Section 11.2(c).

“Liquidationof the Company” has the meaning given in Section 1 of Attachment9.

“Liquidationof a Member’s Interest” has the meaning given in Section 1 of Attachment9.

“Manager”has the meaning given in Section 5.1(a).

“ManufacturingCost Amount” has that meaning as provided in the Supply Agreement.

“ManufacturingManager” has the meaning given in Section 5.5(a).

“MaterialInternational Consents” has the meaning given in Section 1.3 of Attachment2.6-A.

“MaterialMonaco Consents” has the meaning given in Section 1.3 of Attachment2.6-B.

“MaterialDefault” has the meaning given in Section 7.2(a)(i).

“Measurement Date”shall mean the first Business Day following each of (i) the nine-month anniversaryof the Closing, (ii) the twelve-month anniversary of the Closing, (iii) eachsix-month anniversary of the Closing thereafter and (iv) the final day of anyCure Period during which the Average Cost Savings has not otherwise beendetermined to have equaled or exceeded Goal.

“Member” means a Person who is a Member asprovided in this Agreement, each permitted successor or assign of a Member,and, when appropriate to effect the binding nature of this Agreement for thebenefit of another party, any other successor or assign of a Member.

“MemberInterest” means all of a Member’s interest in the Company, including theMember’s economic interest and all management and other rights.  The interest is generally expressed as apercentage of all interests in the Company as determined in accordance withthis Agreement.

“MemberLoans” has the meaning given in Section 3.2(a).

“Monaco”has the meaning given in the opening paragraph of this Agreement.

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“Monaco Contributed Assets” has the meaninggiven in Section 2.8(b)(iv).

“Monaco Director” has the meaning given in Section5.1(b).

“Monaco Disclosure Schedule” means thedisclosure schedules delivered by Monaco pursuant to this Agreement.

“MonacoGovernmental Authorization” has the meaning given in Section 6.2 of Attachment2.4-B.

“Monaco’s Product Business” has the meaninggiven in Section 1 of Attachment 2.4-B.

“Non-Contributing Member” has the meaninggiven in Section 3.3.

“Non-Defaulting Member” has the meaning givenin Section 7.2(a).

“Officer” means any officer of the Companyappointed pursuant to Section 5.4(a)(ix), and includes, for allapplicable purposes in the Agreement, the Manufacturing Manager.

“Operating Asset” has the meaning given in Section4.5(a).

“Order” means any award, order, injunction,judgment, ruling or verdict entered, issued, made or rendered by anyGovernmental Body or by any arbitrator.

“Ordinary Course of Business” means an actiontaken by a Person only if it is consistent with the past practices of thatPerson and is taken in the ordinary course of the normal day-to-day operationsof that Person; and, if undertaken by the Company, does not require approval bythe Board of Directors or the Members.

“Organizational Documents” means:  (a) the articles or certificate ofincorporation and the bylaws of a corporation; (b) the partnership agreementand any statement of partnership of a general partnership; (c) the limitedpartnership agreement and the certificate of limited partnership of a limitedpartnership; (d) the limited liability company agreement or operating agreementand the certificate of formation of a limited liability company; (e) anycharter or similar document adopted or filed in connection with the creation,formation, or organization of a Person; and (f) any amendment to any of theforegoing.

“Other Member” has the meaning given in Section3.3.

“Party or Parties” means each or all, asapplicable, of the entities who have executed and delivered this Agreement,each permitted successor or assign of a party and, when appropriate to effectthe binding nature of this Agreement for the benefit of another party, anyother successor or assign of a party.

“Permitted Encumbrances” has the meaninggiven in Section 1.4(b)(ii) of Attachment 2.6-A and Section1.4(b)(ii) of Attachment 2.6-B.

“Person”means any person or entity of every kind and is to be construed as broadly aspossible.

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“Pre-contribution Gain”has the meaning given in Section 4.2(d) of Attachment 9.

“Pre-contributionLoss” has the meaning given in Section 4.2(d) of Attachment 9.

“Premises” has themeaning given in the Lease.

“Prime Rate” has themeaning given in Section 3.2(c).

“Principal Customer”has the meaning given in Section 4.5(a).

“Proceeding” meansany action, arbitration, audit, litigation or suit (whether civil, criminal,administrative or investigative) commenced by or before, or otherwiseinvolving, any Governmental Body or arbitrator.

“PPI”means the Producer Price Index for Commodities in the “Transportation EquipmentGroup,” Series ID: WPU14, as measured by the U.S. Department of Labor, Bureauof Labor Statistics.

“PurchasingCommittee” has the meaning given in Section 5.12(a).

“Regulatory Allocations”has the meaning given in Section 4.4 of Attachment 9.

“Related Agreements” include, without limitation,the Joint Venture Supply Agreement, the Workhorse Services Agreement, theMonaco Services Agreement, and the Lease, each entered into as of the datehereof.

“Release” shall have the same meaning as underthe Comprehensive Environmental Response Compensation & Liability Act of1980.

“Representatives”has the meaning given in Section 13.5.

“RestrictedPeriod” has the meaning given in Section 12.1.

“ShortfallDistributions” has the meaning given in Section 3.3(b).

“ShortfallLoan” has the meaning given in Section 3.3(b).

“SpecifiedInterest Rate” has the meaning given in Section 3.2(c).

“Target”has the meaning given in Section 7.2(a)(vi).

“Tax” means anytax or other similar charge, whether based on income, the ownership of property,the happening of an event or otherwise (including penalties, interest oradditions to tax related thereto), assessed by or under the authority of anyGovernmental Body or payable pursuant to any Contract relating to the sharingof the payment of any such tax or charge.

“TaxAmount” means the product of (i) the Effective Tax Rate and (ii) theCompany’s Cumulative Net Taxable Income. The Tax Amount will not be in excess of the product of (A) the EffectiveTax Rate and (B) the Company’s taxable income for the Fiscal Year of the determination.

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“Tax Regulations”has the meaning given in Section 1 of Attachment 9.

“Tax Return” means any return or other documentrequired to be submitted to any Governmental Body in connection with any Tax.

“TradeSecrets” has the meaning given in Section 13.3(b).

“Transfer”has the meaning given in Section 6.1.

“Unit”has the meaning given in Section 2.9(b).

“Workhorse”has the meaning given in the Recitals.

 

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**Attachment 1.2 to Joint Venture AgreementCertain Rules of Construction**

Forpurposes of this Agreement:

1.               Thephrase “breach of a representation” includes a misrepresentation and thefailure of a representation to be accurate.

2.               “Including”and any other words or phrases of inclusion will not be construed as terms oflimitation, so that references to “included” matters will be regarded asnon-exclusive, non-characterizing illustrations.

3.               “Copy”or “copies” means that the copy or copies of the material to which it relatesare true, correct and complete.

4.               When“Article,” “Section,” “Exhibit,” or “Attachment” is capitalized in thisAgreement, it refers to an article, section, exhibit or attachment to thisAgreement.

5.               “Will”has the same meaning as “shall” and, thus, connotes an obligation and animperative and not a futurity.

6.               Titlesand captions of or in this Agreement, the cover sheet and table of contents ofthis Agreement are inserted only as a matter of convenience and in no waydefine, limit, extend or describe the scope of this Agreement or the intent ofany of its provisions.

7.               Wheneverthe context requires, the singular includes the plural and the plural includesthe singular, and the gender of any pronoun includes the other genders.

8.               Eachexhibit and schedule referred to in this Agreement and each attachment to anyof them or this Agreement is hereby incorporated by reference into thisAgreement and is made a part of this Agreement as if set out in full in thefirst place that reference is made to it.

9.               Anyreference to any statutory provision includes each successor provision and allApplicable Laws as to that provision.

10.         Acknowledgingthat the parties have participated jointly in the negotiation and drafting ofthis Agreement, if an ambiguity or question of intent or interpretation arisesas to any aspect of this Agreement, then it will be construed as if draftedjointly by the parties and no presumption or burden of proof will arisefavoring or disfavoring any party by virtue of the authorship of any provisionof this Agreement.

 

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**Attachment 2.4-A to Joint Venture Agreement Representations and Warranties of International**

1.                                       Organizationand Good Standing. International is a corporation duly organized, validlyexisting and in good standing under the laws of Delaware, with full corporatepower and authority (a) to conduct its business as it is now being conducted tothe extent related to the Business (“International’s Product Business”),the International Contributed Assets, or its participation in, including itssatisfying its obligations to, the Company, and (b) to perform all itsobligations under this Agreement and the Related Agreements.  International is duly qualified to dobusiness as a foreign corporation and is in good standing under the laws ofeach state or other jurisdiction where such qualification is required.

2.                                       Authority;No Conflict

2.1                                 Enforceability.This Agreement and the Related Agreements constitute the legal, valid, andbinding obligations of International, enforceable against International inaccordance with their respective terms, subject to the EnforceabilityExceptions. International has the absolute and unrestricted right, power,authority, and capacity to execute and deliver this Agreement and the RelatedAgreements and to perform its obligations under this Agreement and the RelatedAgreements.

2.2                                 NoConflict, etc. Except as would not reasonably be expected to have amaterial adverse effect on International’s ability to complete the transactionscontemplated by, or satisfy its obligations under, this Agreement, neither theexecution and delivery of this Agreement or the Related Agreements nor theconsummation or performance of any of the transactions contemplated thereunderwill, directly or indirectly (with or without notice or lapse of time):

(a)                                  contravene,conflict with, or result in a violation of (i) any provision of theOrganizational Documents of International or (ii) any resolution adopted by theboard of directors or the stockholders of International;

(b)                                 contravene,conflict with, or result in a violation of, or give any Governmental Body orother Person the right to challenge any of the transactions contemplated bythis Agreement or the Related Agreements or to exercise any remedy or obtainany relief under any Applicable Law or any Order to which International, or anyof the International Contributed Assets, may be subject;

(c)                                  contravene,conflict with, or result in a violation of any of the terms or requirements of,or give any Governmental Body the right to revoke, withdraw, suspend, cancel,terminate, or modify, any Governmental Authorization that is held byInternational and that otherwise relates to International’s Product Business orthe ownership or use of any of the International Contributed Assets;

(d)                                 contravene,conflict with, or result in a violation or breach of any provision of, or giveany Person the right to declare a default or exercise any remedy under, or toaccelerate the maturity or performance of, or to cancel, terminate, or modify,any contract (i) under which International has or may

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acquire any rights, (ii)under which International has or may become subject to any obligations orliability, or (iii) by which International or any of the assets owned or usedby it is or may become bound; or

(e)                                  resultin the imposition or creation of any Encumbrance upon or with respect to any ofthe International Contributed Assets.

3.                                       Consentsand Notices. International is not required to give any notice to or obtainany approval, consent, ratification, waiver or other authorization of any Person(including any Governmental Authorization) in connection with the execution anddelivery of this Agreement or the consummation or performance of any of thetransactions contemplated by this Agreement or the Related Agreements.

4.                                       Titleto Properties; Encumbrances. International owns all the tangible personalproperties and assets that constitute the International ContributedAssets.  All of the InternationalContributed Assets are free and clear of all Encumbrances (other than PermittedEncumbrances) except, with respect to all those properties and assets, (a)security interests listed in the International Disclosure Schedule as securingspecified liabilities or obligations, with respect to which no default (orevent that, with notice or lapse of time or both, would constitute a default)exists, (b) liens for current taxes not yet due, and (c) certain toolingincluded in the International Contributed Assets that is in the possession ofsuppliers.

5.                                       Condition.Except as would not reasonably be expected to have a material adverse effect onInternational’s ability to complete the transactions contemplated by, orsatisfy its obligations under, this Agreement, (i) the equipment comprising theInternational Contributed Assets is in reasonable operating condition andrepair, and is adequate for the uses to which it is currently being put, and(ii) none of that equipment is in need of maintenance or repairs except forordinary, routine maintenance and repairs that are not material in nature orcost.

6.                                       Compliancewith Applicable Laws; Governmental Authorizations.

(a)                                  International’sProduct Business and the International Contributed Assets are, and at all timessince December 31, 2006 have been, in compliance in all material respects witheach Applicable Law that is or was applicable to it or to the conduct oroperation of International’s Product Business or the ownership or use of any ofthe International Contributed Assets, including the possession of all requiredGovernmental Authorizations;

(b)                                 Noevent has occurred or circumstance exists that (with or without notice or lapseof time) would reasonably be expected to result in a material violation byInternational of, or a material failure on the part of International to complywith, any Applicable Law with respect to International’s Product Business orthe International Contributed Assets, including the requirements of allrequired material Governmental Authorizations, or may give rise to anyobligation on the part of International to undertake, or to bear all or anyportion of the cost of, any material remedial action of any nature with respectto International’s Product Business or the International Contributed Assets;and

(c)                                  Internationalhas not received, at any time since December 31, 2006, any written notice orother communication from any Governmental Body or any other Person regardingany actual, alleged, or potential material violation of, or material failure

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tocomply with, any Applicable Law with respect to International’s ProductBusiness or the International Contributed Assets, or any actual, alleged, orpotential obligation on the part of International to undertake, or to bear allor any portion of the cost of, any material remedial action of any nature withrespect to International’s Product Business or the International ContributedAssets.

7.                                       LegalProceedings. There is no Proceeding pending or, to International’sKnowledge, threatened, except as would not be material to International’sProduct Business or the International Contributed Assets, taken as a whole:

(a)                                  thathas been commenced by or against International that is reasonably expected torelate to International’s Product Business or any of the InternationalContributed Assets; or

(b)                                 thatchallenges, or that may have the effect of preventing, delaying, makingillegal, or otherwise interfering with, any of the transactions contemplated bythis Agreement or the Related Agreements.

8.                                       Orders.

(a)                                  Thereis no Order to which International is subject that is reasonably expected torelate to International’s Product Business or any of the InternationalContributed Assets in any material respect;

(b)                                 Tothe Knowledge of International, no officer, director, agent, or employee ofInternational is subject to any Order that prohibits that officer, director,agent, or employee from engaging in or continuing any material conduct,activity, or practice relating to International’s Product Business;

(c)                                  Internationalis, and at all times since December 31, 2006 has been, in material compliancewith all of the terms and requirements of each Order to which it is or has beensubject that relates to or affects International’s Product Business or to whichany of the International Contributed Assets is or has been subject, in eachcase in any material respect;

(d)                                 Noevent has occurred or circumstance exists that could reasonably be expected toresult in (with or without notice or lapse of time) a material violation of orfailure to comply with any term or requirement of any Order to whichInternational is or has been subject that is reasonably expected to relate toInternational’s Product Business or to which any of the InternationalContributed Assets is subject; and

(e)                                  Internationalhas not received, at any time since December 31, 2006, any written notice orother communication from any Governmental Body or any other Person regardingany actual, alleged, possible, or potential material violation of, or failureto comply with, any material term or requirement of any Order to whichInternational is or has been subject that is reasonably expected to relate toInternational’s Product Business or as to which any of the InternationalContributed Assets is or has been subject.

9.                                       Brokersor Finders. International and its agents have incurred no obligation orliability, contingent or otherwise, for brokerage or finders’ fees or agents’commissions or other similar payment in connection with this Agreement or thetransactions contemplated hereby.

 

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**Attachment 2.4-B to Joint Venture AgreementRepresentations and Warranties of Monaco**

1. Organization and Good Standing. Monaco is acorporation duly organized, validly existing, and in good standing under thelaws of Delaware, with full corporate power and authority (a) to conduct itsbusiness as it is now being conducted to the extent related to the Business (“Monaco’sProduct Business”), the Monaco Contributed Assets, or its participation in,including its satisfying its obligations to, the Company, and (b) to performall its obligations under this Agreement and the Related Agreements.  Monaco is duly qualified to do business as aforeign corporation and is in good standing under the laws of each state orother jurisdiction where such qualification is required.

2. Authority; No Conflict. 

2.1                   Enforceability. ThisAgreement and the Related Agreements constitute the legal, valid, and bindingobligations of Monaco, enforceable against Monaco in accordance with theirrespective terms, subject to the Enforceability Exceptions.  Monaco has the absolute and unrestrictedright, power, authority, and capacity to execute and deliver this Agreement andthe Related Agreements and to perform its obligations under this Agreement andthe Related Agreements.

2.2                   No Conflict, etc. Except aswould not reasonably be expected to have a material adverse effect on Monaco’sability to complete the transactions contemplated by, or satisfy itsobligations under, this Agreement, neither the execution and delivery of thisAgreement or the Related Agreements nor the consummation or performance of anyof the transactions contemplated thereunder will, directly or indirectly (withor without notice or lapse of time):

(a) contravene, conflict with, or result in a violation of(i) any provision of the Organizational Documents of Monaco or (ii) anyresolution adopted by the board of directors or the stockholders of Monaco;

(b) contravene, conflict with, or result in a violation of,or give any Governmental Body or other Person the right to challenge any of thetransactions contemplated by this Agreement or the Related Agreements or toexercise any remedy or obtain any relief under any Applicable Law or any Orderto which Monaco, or any of the Monaco Contributed Assets, may be subject;

(c) contravene, conflict with, or result in a violation ofany of the terms or requirements of, or give any Governmental Body the right torevoke, withdraw, suspend, cancel, terminate, or modify, any GovernmentalAuthorization that is held by Monaco and that otherwise relates to Monaco’sProduct Business or the ownership or use of any of the Monaco ContributedAssets;

(d) contravene, conflict with, or result in a violation orbreach of any provision of, or give any Person the right to declare a defaultor exercise any remedy under, or to accelerate the maturity or performance of,or to cancel, terminate, or modify, any contract (i) under which Monaco has ormay acquire any rights, (ii) under which Monaco has or may become subject toany obligations or liability, or (iii) by which Monaco or any of the assetsowned or used by it is or may become bound;

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or

(e) result in the imposition or creation of any Encumbranceupon or with respect to any of the Monaco Contributed Assets.

3. Consents and Notices.  Monaco is not required to give any notice toor obtain any approval, consent, ratification, waiver or other authorization ofany Person (including any Governmental Authorization) in connection with theexecution and delivery of this Agreement or the consummation or performance ofany of the transactions contemplated by this Agreement or the RelatedAgreements.

4. Title to Properties; Encumbrances. Monaco owns allthe tangible personal properties and assets that constitute the MonacoContributed Assets and owns fee title to the Premises.  All of the Monaco Contributed Assets and thePremises are free and clear of all Encumbrances (other than PermittedEncumbrances) and are not, in the case of real property, subject to any rightsof way, building use restrictions, exceptions, variances, reservations, orlimitations of any nature except, with respect to all those properties andassets, (a) mortgages or security interests listed in the Monaco DisclosureSchedule as securing specified liabilities or obligations, with respect to whichno default (or event that, with notice or lapse of time or both, wouldconstitute a default) exists, (b) liens for current taxes and assessments notyet delinquent, (c) with respect to real property, (i) imperfections of titleand encumbrances, if any, none of which materially impairs the use of theproperty subject thereto, and (ii) zoning laws and other land use restrictionsthat do not impair the present or anticipated use of the property subjectthereto and (d) certain tooling included in the Monaco Contributed Assets thatis in the possession of suppliers. The Premises does not encroach upon theproperty of, or otherwise conflict with the property rights of, any otherPerson.

5. Condition. Except as would not reasonably beexpected to have a material adverse effect on Monaco’s ability to complete thetransactions contemplated by, or satisfy its obligations under, this Agreement,(i) the equipment comprising the Monaco Contributed Assets is in reasonableoperating condition and repair, and is adequate for the uses to which it iscurrently being put, and (ii) none of that equipment is in need of maintenanceor repairs except for ordinary, routine maintenance and repairs that are notmaterial in nature or cost.

6. Compliance with Applicable Laws; GovernmentalAuthorizations.

6.1       Generally.

(a) Monaco’s Product Business, the Monaco Contributed Assetsare, and at all times since December 31, 2006 have been, in material compliancewith each Applicable Law that is or was applicable to it or to the conduct or operationof Monaco’s Product Business or the ownership or use of any of the MonacoContributed Assets, including the possession of all required GovernmentalAuthorizations;

(b) No event has occurred or circumstance exists that (withor without notice or lapse of time) would be reasonably expected to result in amaterial violation by Monaco of, or a failure on the part of Monaco to complywith, any Applicable Law with respect to Monaco’s Product Business, the MonacoContributed Assets, including the requirements of all required materialGovernmental Authorizations, or may give rise to any obligation on the part ofMonaco to undertake, or to bear all or any portion of the cost of, any materialremedial action of any nature with respect

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to Monaco’s Product Business, the Monaco ContributedAssets; and

(c) Monaco has not received, at any time since December 31,2006, any written notice or other communication from any Governmental Body orany other Person regarding any actual, alleged, or potential material violationof, or material failure to comply with, any Applicable Law with respect toMonaco’s Product Business, the Monaco Contributed Assets or the Premises, orany actual, alleged, or potential obligation on the part of Monaco toundertake, or to bear all or any portion of the cost of, any material remedialaction of any nature with respect to Monaco’s Product Business, the MonacoContributed Assets or the Premises.

6.2                              GovernmentalAuthorizations. Each material Governmental Authorization held byMonaco that pertains to Monaco’s Product Business, the Monaco ContributedAssets (each, a “Monaco Governmental Authorization”) is valid and infull force and effect. Except as set forth in the Monaco Disclosure Schedule,and except as would not reasonably be expected to have a material adverseeffect on (x) the Company or its expected operations or (y) Monaco’s ability toconsummate the transactions contemplated by, or satisfy its obligations under,this Agreement:

(a) Monaco has not received, at any time since December 31,2006, any written notice regarding any actual, alleged or potential violationof or failure to comply with any term or requirement of any Monaco GovernmentalAuthorization with respect to Monaco’s Product Business, the Premises or any ofthe Monaco Contributed Assets, or any actual, proposed or potential revocation,withdrawal, suspension, cancellation, termination of, or modification to anysuch Monaco Governmental Authorization; and

(b) all applications required to have been filed for therenewal of the Monaco Governmental Authorizations have been duly filed on atimely basis with the appropriate Governmental Bodies, and all other filingsrequired to have been made with respect to those Monaco GovernmentalAuthorizations have been duly made on a timely basis with the appropriateGovernmental Bodies.

The Monaco GovernmentalAuthorizations collectively constitute all of the material GovernmentalAuthorizations necessary to permit Monaco to lawfully conduct and operateMonaco’s Product Business in the manner Monaco currently conducts and operatesMonaco’s Product Business and to permit Monaco to own and use the MonacoContributed Assets in the manner in which it currently owns and uses the MonacoContributed Assets.

 7. LegalProceedings; Orders.

    7.1       Generally. There is no Proceedingpending or, to Monaco’s Knowledge, threatened:

(a) thathas been commenced by or against Monaco that is reasonably expected to relateto Monaco’s Product Business, the Premises or any of the Monaco ContributedAssets; or

(b) thatchallenges, or that may have the effect of preventing, delaying, makingillegal, or otherwise interfering with, any of the transactions contemplated bythis Agreement or the Related Agreements.

 

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                7.2           Orders.

                (a)There is no Order to which Monaco is subject that is reasonably expected torelate to Monaco’s Product Business, the Premises or any of the MonacoContributed Assets in any material respect;

                (b) Tothe Knowledge of Monaco, no officer, director, agent, or employee of Monaco issubject to any Order that prohibits that officer, director, agent, or employeefrom engaging in or continuing any conduct, activity, or practice relating toMonaco’s Product Business;

                (c)Monaco is, and at all times since December 31, 2006 has been, in materialcompliance with all of the terms and requirements of each Order to which it isor has been subject that relates to or affects Monaco’s Product Business or towhich the Premises or any of the Monaco Contributed Assets is or has beensubject, in each case in any material respect;

                (d) Noevent has occurred or circumstance exists that would reasonably be expected toresult in (with or without notice or lapse of time) a material violation of orfailure to comply with any term or requirement of any Order to which Monaco isor has been subject that is reasonably expected to relate to Monaco’s ProductBusiness or to which the Premises or any of the Monaco Contributed Assets issubject; and

                (e)Monaco has not received, at any time since December 31, 2006, any written noticeor other communication from any Governmental Body or any other Person regardingany actual, alleged, possible, or potential material violation of, or failureto comply with, any material term or requirement of any Order to which Monacois or has been subject that is reasonably expected to relate to Monaco’sProduct Business or as to which the Premises or any of the Monaco ContributedAssets is or has been subject.

8. Environmental.

8.1                   Compliance.  Except as disclosed in the Monaco DisclosureSchedule, with respect to the Premises: (a) there are no pending or, to the knowledge of Monaco, threatenedclaims with respect to the Premises alleging non-compliance with EnvironmentalLaw or release or threatened release of Hazardous Materials; (b) to the knowledgeof Monaco, there are no other unresolved violations of any Environmental Lawwith respect to the Premises; and (c) all material governmental approvals,authorizations, permits and consents required, if any, under any EnvironmentalLaw (“Environmental Permits”) are valid and in full force and effect.

8.2                 ThreatenedClaim. There are no pending or, to the Knowledge of Monaco, threatened claimsresulting from any violation of Environmental Law, in connection with theoperation of Monaco’s Product Business or with respect to or affecting thePremises.

8.3                 Presenceof Hazardous Materials. To theknowledge of Monaco and except as would not reasonably be expected to result ina material liability to Monaco, no Hazardous Materials are present on thePremises that would require Cleanup.

8.4                 Releases. To the knowledge of Monaco, there has been no Release ordisposal or arrangement for disposal of, or exposure to, any HazardousMaterials at or from the Premises or at any other locations where any HazardousMaterials were generated,

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manufactured, refined,transferred, produced, imported, used or processed by Monaco in connection withthe operation of Monaco’s Product Business which would give rise to any currentor future material or potentially material liability or corrective or remedialobligation under any Environmental Law.

8.5                 CertainCopies. Monaco has delivered toInternational true and complete copies and results of any Phase 1 or Phase 2environmental Premises assessment reports relating to the Premises in itspossession, custody or control.

8.6                 EnvironmentalRepresentations.Notwithstanding anything to the contrary elsewhere in this Agreement, therepresentations and warranties in this Section 8 are the only representationsand warranties Monaco is making that pertain or relate to the Environment,Hazardous Materials, Environmental Laws or Environmental Permits.

9. Labor Relations. Monaco has not been and is not aparty to any collective bargaining or other labor Contract that covers any ofthe employees who are employed in the operation of Monaco’s Product Business.Since December 31, 2006, there has not been, there is not presently pending orexisting, and to Monaco’s Knowledge there is not threatened:  (a) any strike, slowdown, picketing, workstoppage, or employee grievance process that covers any of the employees whoare employed in the operation of Monaco’s Product Business; (b) any Proceedingagainst or affecting Monaco that covers any of the employees who are employedin the operation of Monaco’s Product Business relating to the alleged violationof any Applicable Law pertaining to labor relations or employment matters,including any charge or complaint filed by an employee or union with theNational Labor Relations Board, the Equal Employment Opportunity Commission, orany comparable Governmental Body, organizational activity, or other labor oremployment dispute against or affecting Monaco’s Product Business or any of theMonaco Contributed Assets; or (c) any application for certification of a collectivebargaining agent affecting any of the employees who are employed in Monaco’sProduct Business.

10. Employee Benefits. Neither the Company norInternational shall be liable for or required to pay or accrue any salaries,employee benefits of any kind, or other compensation of or to any of theemployees who are employed in Monaco’s Product Business with respect toservices rendered to Monaco or any of its Affiliates (other than the Company)prior to the Closing.

11. Brokers or Finders. Monaco and its agents haveincurred no obligation or liability, contingent or otherwise, for brokerage orfinders’ fees or agents’ commissions or other similar payment in connectionwith this Agreement or the transactions contemplated hereby.

 

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**Attachment 2.5 to Joint Venture Agreement Covenants of International and Monaco Prior to Closing Date**

This sets forth agreementsof the Members between the date of this Agreement and the Closing.

1.                                       Accessand Investigation. International and Monaco will each, for the purpose ofconsummating the transactions contemplated by this Agreement and provided thatsuch access and investigation shall not cause either party to breach itsexisting obligations, (a) grant to the other and its employees, agents and representatives,upon reasonable prior notice and during such reasonable times as they agreeupon, access to each other’s personnel, properties, contracts, books andrecords, and other documents and data pertaining to the assets to becontributed to, and liabilities and obligations to be assumed by, the Company, (b)furnish to each other copies of all such contracts, books and records, andother documents and data as may reasonably be requested, and (c) furnish eachother with such additional financial, operating, and other data and informationas may reasonably be requested pertaining to the assets to be contributed to,and liabilities and obligations to be assumed by, the Company.  Any access to the properties of either Membershall be subject to such Member’s reasonable security measures.

2.                                       BestEfforts. Neither International nor Monaco will, without the prior consentof the other, take any affirmative action, or fail to take any reasonableaction within its control, as a result of which it is reasonably likely that acondition of Closing will not be fulfilled, and each will use its Best Effortsto cause the conditions of Closing to be fulfilled.

3.                                       RequiredApprovals, Consents and Filings. International and Monaco will each useBest Efforts to obtain all consents and approvals that it is required to obtainor to cause to be obtained in order to consummate the transactions contemplatedby this Agreement.  Without limiting thegenerality of the foregoing, as promptly as practicable after the date of thisAgreement, International and Monaco will make all filings required to be madeby them in order to consummate the transactions contemplated by this Agreement.International and Monaco will cooperate with respect to all filings that theymay mutually elect to make or that either of them is required by Applicable Lawto make in connection with the transactions contemplated by this Agreement.

4.                                       Notification.  International and Monaco (a) will eachpromptly notify the other in writing if it becomes aware of any fact orcondition that causes or constitutes a breach of any of the representations andwarranties made by such party as of the date of this Agreement or as of theClosing (to the extent such breach would result in any of the conditions ofSection 2.6 and its Attachments not being satisfied) and (b) will provide theother with a supplement to the International Disclosure Schedule or the MonacoDisclosure Schedule (as applicable) setting out such fact or condition and therequired amendment to the representations and warranties. Each party willpromptly notify the other of any breach of any covenant of this Attachment orof the occurrence of any event that would result in any of the conditions of Section2.6 and its Attachments not being satisfied.

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5.                                       MaintainOrdinary Course of Business. International and Monaco will each use itsBest Efforts to (a) ensure that the International Contributed Assets and theMonaco Contributed Assets, as applicable, are maintained in accordance withpast practices (except for cutbacks in personnel to be undertaken in connectionwith the formation of the Company and with respect to which each party agreesto keep the other fully advised), (b) conduct the existing International’sProduct Business and Monaco’s Product Business, as applicable, of each partyonly in the Ordinary Course of Business, and (c) not incur any materialliabilities or commitments that affect or form a part of the InternationalContributed Assets or the Monaco Contributed Assets, as applicable, that arenot in the Ordinary Course of Business.

 

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**Attachment 2.6-A to Joint Venture AgreementConditions Precedent to International’s Obligationsto Close and Right to Terminate Prior to Closing**

International’s obligation to contribute assets to the Company inaccordance with Article 2 of the Agreement and to take the other actionsrequired to be taken by International at the Closing is subject to thesatisfaction, at or before the Closing, of each of the following conditions(any of which may be waived by International, in whole or in part):

1.Conditions Precedent.

1.1       Accuracyof Representations.

(a)             Allof Monaco’s representations and warranties in this Agreement (consideredcollectively), and each of those representations and warranties (consideredindividually), shall have been accurate in all material respects as of the dateof this Agreement and shall be accurate in all material respects as of the timeof the Closing as if then made, except for those representations and warrantiesgiven as of a specified date, which shall be accurate in all material respectsas of such specified date (in each case, without giving effect to anyexceptions made in such certificate).

(b)            Eachof the representations and warranties in this Agreement that contains anexpress materiality qualification shall have been accurate in all respects asof the date of this Agreement and shall be accurate in all respects as of thetime of the Closing as if then made, except for those representations andwarranties given as of a specified date that contain an express materialityqualifier, which shall be accurate in all respects as of such specified date(in each case, without giving effect to any exceptions made in suchcertificate).

1.2                                 Monaco’s Performance.All of the covenants and obligations (including the covenants in Section 2.6and its Attachment) that Monaco is required to perform or to comply withpursuant to this Agreement at or before the Closing (considered collectively),and each of those covenants and obligations (considered individually), musthave been duly performed and complied with in all material respects.

1.3                                 Consents. Each ofthe Consents identified in the Monaco Disclosure Schedule (the “MaterialMonaco Consents”) must have been obtained and must be in full force andeffect.

1.4                                Additional Documents.Monaco shall have caused the documents and instruments required by Section2.8(b) and the following documents to be delivered (or tendered subjectonly to Closing) to International:

(a)             As to each material Monaco Contributed Asset that issubject to an Encumbrance other than a Permitted Encumbrance:

(i)               astatement from the holder of each note and security interest, if any, dated theClosing Date that (1) sets forth the principal amount then outstanding on theindebtedness represented by such note or secured by such

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                          instrument, and the interest rate thereon and (2) contains astatement to the effect that Monaco, as obligor under such note or instrument,is not in default under any of its provisions; and

(ii)            arelease of all Encumbrances on such Monaco Contributed Assets, other thanEncumbrances that do not have a material adverse effect on the use or value ofsuch Monaco Contributed Assets (“Permitted Encumbrances”).

1.5                   No Proceedings. Since thedate of this Agreement, there has not been commenced or threatened againstInternational or Monaco, or against any Affiliate of International or Monaco,any Proceeding (a) involving any challenge to, or seeking damages or otherrelief in connection with, any of the Formation Transactions or (b) thatcreates a reasonable likelihood of preventing, substantially delaying or makingillegal any of the Formation Transactions.

1.6       Related Agreements**.** The relevant Persons shall have entered into the Related Agreements.

2.Termination Before Closing**.**

2.1                   TerminationEvents**.**  This Agreement may, by noticegiven before or at the Closing, be terminated by International:

                                  (a) if a material breach of any provision of Attachment2.5 has not, to the extent curable, been cured within 30 days afterdelivery of notice of such breach by International to Monaco and has not beenwaived by International; or

                                  (b) if theClosing has not occurred on or beforeMarch 30, 2007, or such later date as the parties may agree upon, unlessInternational is in material breach of this Agreement.

ThisAgreement may also be terminated before Closing by mutual consent of Monaco andInternational.

2.2                Effect ofTermination. International’s right of termination under Section 2.1 is inaddition to any other rights it may have under this Agreement or otherwise, andthe exercise of such right of termination will not be an election ofremedies.  If this Agreement isterminated pursuant to Section 2.1, all further obligations ofInternational under this Agreement will terminate, except that the obligationsof the parties in Section 14.10 will survive;*provided, however*, that if this Agreement is terminated byInternational because of a willful breach of this Agreement by Monaco,International’s right to pursue all legal and equitable remedies will survivethe termination unimpaired.

 

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**Attachment 2.6-B to Joint Venture AgreementConditions Precedent to Monaco’s Obligations to Closeand Right to Terminate Prior to Closing**

Monaco’sobligation to contribute assets to the Company in accordance with Article 2 ofthe Agreement and to take the other actions required to be taken by Monaco atthe Closing is subject to the satisfaction, at or before the Closing, of eachof the following conditions (any of which may be waived by Monaco, in whole orin part):

1.     Conditions Precedent.

1.1                              Accuracy ofRepresentations.

a.     All of International’s representations andwarranties in this Agreement (considered collectively), and each of theserepresentations and warranties (considered individually), shall have beenaccurate in all material respects as of the date of this Agreement and shall beaccurate in all material respects as of the time of the Closing as if thenmade, except for those representations and warranties given as of a specifieddate, which shall be accurate in all material respects as of such specifieddate (in each case, without giving effect to any exceptions made in suchcertificate).

b.     Each of the representations and warrantiesin this Agreement that contains an express materiality qualification shall havebeen accurate in all respects as of the date of this Agreement and shall beaccurate in all respects as of the time of the Closing as if then made, exceptfor those representations and warranties given as of a specified date thatcontain an express materiality qualifier, which shall be accurate in allrespects as of such specified date (in each case, without giving effect to anyexceptions made in such certificate).

1.2                              International’sPerformance. All of the covenants and obligations (includingthe covenants in Section 2.6 and its Attachment) thatInternational is required to perform or to comply with pursuant to thisAgreement at or before the Closing (considered collectively), and each of thosecovenants and obligations (considered individually), must have been dulyperformed and complied with in all material respects.

1.3                              Consents. Each ofthe Consents identified in the International Disclosure Schedule (the “MaterialInternational Consents”) must have been obtained and must be in full forceand effect.

1.4                              AdditionalDocuments. International shall have caused the documents andinstruments required by Section 2.8(a) and the following documents to bedelivered (or tendered subject only to Closing) to Monaco:

a.             As to eachmaterial International Contributed Asset that is subject to an Encumbrance,other than a Permitted Encumbrance:

(i)                   a statement from the holder of eachnote and security interest, if any, dated the Closing Date, that (1) sets forththe principal amount then outstanding on the indebtedness represented by suchnote or secured by such instrument, and

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the interest rate thereon and (2) contains a statement to theeffect that International, as obligor under such note or instrument, is not indefault under any of its provisions; and

(ii)              a release of all Encumbrances on suchInternational Contributed Assets, other than Encumbrances that do not have amaterial adverse effect on the use or value of such International ContributedAssets (“Permitted Encumbrances”);

1.5                              No Proceedings. Since thedate of this Agreement, there has not been commenced or threatened againstMonaco or International, or against any Affiliate of Monaco or International,any Proceeding (a) involving any challenge to, or seeking damages or otherrelief in connection with, any of the Formation Transactions, or (b) thatcreates a reasonable likelihood of preventing, substantially delaying or makingillegal any of the Formation Transactions.

1.6                              RelatedAgreements. The relevant Persons shall have entered into theRelated Agreements.

2.            TerminationBefore Closing.

2.1                              TerminationEvents. This Agreement may, by notice given before or at the Closing, beterminated by Monaco:

a.     if a material breach of any provision of Attachment2.5 , has not, to the extent curable, been cured within 30 days afterdelivery of notice of such breach by Monaco to International and has not beenwaived by Monaco; or

b.     if the Closing has notoccurred on or before March 30, 2007, or such later date as the parties mayagree upon, unless Monaco is in material breach of this Agreement.

ThisAgreement may also be terminated before Closing by mutual consent ofInternational and Monaco.

2.2                               Effect ofTermination.  Monaco’sright of termination under Section 2.1 is in addition to any otherrights it may have under this Agreement or otherwise, and the exercise of suchright of termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section2.1, all further obligations of Monaco under this Agreement will terminate,except that the obligations of the parties in Section 14.10 (Expenses)will survive;*provided*,*however*, that if this Agreement isterminated by Monaco because of a willful breach of this Agreement byInternational, Monaco’s right to pursue all legal and equitable remedies willsurvive the termination unimpaired.

 

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**Attachment9 to Joint Venture AgreementAccounting and Tax Matters**

1.               Definitions.

“Fair Market / StatutoryValue” of an item of Company property means the greater of (a) the fairmarket value of such property or (b) the amount of any nonrecourse indebtednessto which such property is subject within the meaning of IRC **§** 7701(g). For purposes of this definition,the fair market value shall be determined in accordance with the procedures setforth in Section 4.5(b) of the Agreement.

“Liquidation” of aMember’s interest in the Company occurs upon the earlier of:  (a) the date upon which there is aliquidation of the Company; or (b) the date upon which there is a liquidationof the Member’s interest in the Company under paragraph (d) of Tax Regulations **§**1.761-1.

“Liquidation” of theCompany occurs upon the earlier of:  (a)the date upon which the Company is terminated under IRC **§** 708(b)(1); or (b) the date upon which theCompany ceases to be a going concern (even though it may continue in existencefor the purpose of winding up its affairs, paying its debts, and distributingany remaining balance to its Members).

“Pre-contributionGain or Loss Property” is defined in Section 4.2.

“TaxRegulations” means the regulations issued under the Internal Revenue Codeof 1986 (“IRC”).

2.               GAAP, Book and TaxAccounting.

2.1                               GAAP Accounts and Statements**.**  The Company will establish and maintainaccounts and will prepare and distribute financial statements in accordancewith GAAP (the “GAAP Accounts and Statements”).

2.2                               Book Accounts and Statements**.**  Book accounts will be maintained inaccordance with Section 3 below. To the extent the value of assetscontributed to the Company differs from their GAAP values or to the extent thisAgreement requires that items of operational income or expense be recordeddifferently from GAAP principles, the Company will maintain adequate records toreflect such differences.

2.3                               Tax Accounts and Statements.The Company will establish and maintain accounts and will prepare anddistribute statements, returns and other documents as are necessary to prepareand file the Company’s tax records and reports.

2.4                               Reconciliation. TheCompany will prepare annually and distribute to the Members a schedulereconciling the GAAP, book and tax statements.

2.5                               GAAP. If GAAPprinciples permit a transaction to be accounted for in more than one way, theCompany will follow the principle adopted by International.

3.               Book Accounts.

3.1                              Book CapitalAccount. The Company will establish and maintain a capital account for eachMember (the “Book Capital Account”).

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(a)   Each Member’s Book Capital Account isincreased by:

(i)            the amount of money contributed bythe Member to the Company;

(ii)                  the fair market value of propertycontributed by the Member to the Company (net of liabilities secured by suchcontributed property that the Company assumes);

(iii)               allocations to the Member of Companybook income and gain;

(iv)              upon the revaluation of Company propertypursuant to Section 3.3, the book gain (if any) that would have been allocatedto the Member if such Company property had been sold at its Fair Market Valueimmediately before the event that requires the revaluation; and

(v)                 upon distribution of Company property toa Member, if the Company property is not revalued pursuant to Section 3.3,the book gain (if any) that would have been allocated to such Member if suchCompany property had been sold at its Fair Market Value immediately before thedistribution;

(b)   and is decreased by:

(i)                     the amount of money distributed to it bythe Company;

(ii)                  the fair market value of propertydistributed to it by the Company (net of liabilities secured by suchdistributed property which the Member assumes);

(iii)               allocations of Companybook loss;

(iv)              upon the revaluation of Company propertypursuant to Section 3.3, the book loss (if any) that would have beenallocated to the Member if such Company property had been sold at its FairMarket Value immediately before the event that requires the revaluation; and

(v)                 upon distribution of Company property toa Member, if the Company property is not revalued pursuant to Section 3.3,the book loss (if any) that would have been allocated to such Member if suchCompany property had been sold at its Fair Market Value immediately before thedistribution;

and shall be otherwise adjusted in accordancewith the additional rules set forth in the Tax Regulations. Company book incomeand book loss shall be determined on the same basis as partnership income,gain, deduction, and loss is determined for purposes of maintaining capitalaccounts under the rules set forth in Section 1.704-1(b)(2)(iv) of the TaxRegulations. The Company may (if the Members so determine), upon the occurrenceof the events specified in Section 1.704-1(b)(2)(iv)*(f)*of the Tax Regulations, increase or decrease the BookCapital Accounts of the Members in accordance with the rules of such regulationand Section 1.704-1(b)(2)(iv)*(g)*of the Tax Regulations to reflect a revaluation of Company property.

3.2                              LiabilityAssumption. For purposes of Section 3.1(b) a liabilityis “assumed” by the Company or a Member only to the extent that the assumingparty is thereby subjected to personal liability with respect to suchobligation, the obligee is aware of the assumption and can directly enforce theassuming party’s obligation, and, as between 

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the assuming party and theparty from whom the liability is assumed, the assuming party is ultimatelyliable.

3.3                              RevaluationWhen Interest Is Acquired from or Relinquished to Company.

(a)   Inconnection with:

(i)                   a contribution of money or otherproperty to the Company by a new or existing Member as consideration for aninterest in the Company;

(ii)                the distribution of money or otherproperty by the Company to a retiring or continuing Member as consideration foran interest in the Company; and

(iii)               the liquidation of theCompany;

the Company will increase ordecrease the book value of its property to its Fair Market Value.

(b)   The Company will adjust the Book Capital Accounts to reflect suchrevaluation in the manner in which the unrealized income, gain, loss, ordeduction inherent in such property would be allocated if there were a taxabledisposition on such property for its fair market value on the date ofrevaluation.

3.4                               Transfer. Upon the transferof all or a part of an interest in the Company, the Book Capital Account of thetransferor that is attributable to the transferred interest shall carry over tothe transferee.

4. Tax Accounting.

4.1                              Members’ Sharesof Taxable Income, Etc**.**  The Company will allocate the Company’staxable income or loss and of its separately stated items of income, gain,loss, deduction and credit among the members in accordance with the allocationof such income, gains, losses, and deductions among the Members for computingtheir Book Capital Accounts, provided that, if any such allocation is notpermitted by the Tax Regulations or other applicable law, the Company’ssubsequent income, gains, losses, deductions and credits will be allocatedamong the Members so as to reflect as nearly as possible the allocation setforth herein in computing their Book Capital Accounts.

4.2                              Allocationswith respect to property contributed or deemed contributed to the Company withPre-Contribution Gain or Loss**.**

(a)          Depreciation deductions withrespect to Pre-contribution Gain or Loss Property (based on the Company’s basistherein), to the extent possible, shall be allocated first to thenon-contributing Member in an amount equal to the book depreciation oramortization expense allocated to that Member, and the balance of thededuction, if any, shall be allocated to the contributing Member.

(b)         The total income, gain, lossor deduction allocated to the Members for a taxable year with respect toPre-contribution Gain or Loss Property cannot exceed the total income, gain,loss or deduction of the Company with respect to that property for the taxableyear.

(c)          If the Company sells or exchangesPre-contribution Gain or Loss Property, solely 

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for tax purposes the adjusted Pre-Contribution Gain or Loss shall beallocated to the contributing Member.

(d)         “Pre-contribution Gain” isthe excess of a property’s value, as reflected in the Member’s Book CapitalAccount at the time of contribution, over the contributing Member’s adjustedtax basis in the property at the time of contribution.  “Precontribution Loss” is the excess of thecontributing Member’s adjusted tax basis in a property at the time ofcontribution over the property’s value, as reflected in the Member’s BookCapital Account at the time of contribution. “Precontribution Gain or Loss Property” is property that has beencontributed to the Company which has Pre-contribution Gain or Pre-contributionLoss.

(e)          If the value of any Companyasset as reflected in the Member’s Book Capital Accounts is adjusted pursuantto the requirements of Section 1.704-1(b)(2)(iv)*(e)*or *(f)* ofthe Tax Regulations, subsequent allocations of items of taxable income, gain,loss and deduction with respect to such asset shall take account of anyvariation between the adjusted basis of such asset for federal income taxpurposes and its book value as reflected in the Member’s Book Capital Accountsin the same manner as described above in paragraphs (a) through (d) of this Section4.2 as though such variation constituted Pre-Contribution Gain orPre-Contribution Loss.

(f)            Allocations pursuant to Section4.1 and this Section 4.2 are solely for purposes of federal, stateand local taxes and shall not affect, or in any way be taken into account incomputing, any Member’s Book Capital Account or share of book profits, booklosses distributions or other Company items pursuant to any provision of thisAgreement.

4.3                                 SpecialAllocations. 

(a)          *CompanyMinimum Gain Chargeback.* Notwithstanding any other provision of this Agreement, except asotherwise provided in Tax Regulation **§**1.704-2(f), if there is a net decrease in Company minimum gain during anyFiscal Year, each Member will be specially allocated items of Company incomeand gain for the Fiscal Year (and, if necessary, subsequent Fiscal Years) in anamount equal to such Member’s share of the net decrease in Company minimumgain, determined in accordance with Tax Regulations **§** 1.704-2(g). Allocations pursuant to the previous sentencewill be made in proportion to the respective amounts required to be allocatedto each Member pursuant thereto.  Theitems to be allocated shall be determined in accordance with Tax Regulations **§§** 1.704-(f)(6) and1.704-2(j)(2). Thisparagraph is intended to comply with the minimum gain chargeback requirement inTax Regulations § 1.704-2(f) and shall be interpreted consistently therewith.

(b)         *QualifiedIncome Offset*. In the event any Member unexpectedly receives anyadjustments, allocations or distributions described in Tax Regulations **§§** 1.704-1 (b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5)or 1.704-1(b)(2)(ii)(d)(6) of the Tax Regulations, then items of Company incomeand gain shall be specially allocated to that Member in an amount and mannersufficient to eliminate, to the extent required by the Tax Regulations, theadjusted capital account deficit of such

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Member asquickly as possible, but an allocation pursuant to this paragraph shall be madeonly if and to the extent that such Member would have an Adjusted CapitalAccount Deficit after all other allocations provided for in this Agreement havebeen tentatively made as if this paragraph were not in the Agreement.

(c)          *GrossIncome*Allocation. In the event any Member has a deficit Book Capital Accountat the end of any Fiscal Year that is in excess of the sum of (i) any amountsuch Member is obligated to restore pursuant to any provision of thisAgreement, and (ii) the amount such Member is deemed to be obligated to restorepursuant to the penultimate sentences of Tax Regulations **§§** 1.704-2(g)(1) and 1.704-2(i)(5), thenthat Member shall be specially allocated items of Company income and gain inthe amount of such excess as quickly as possible; but an allocation pursuant tothis paragraph shall be made only if and to the extent that such Member wouldhave a deficit Book Capital Account in excess of such sum after all otherallocations provided for in this Agreement have been made as if this Subsection4.3(c) and the preceding Subsection 4.3(b) were not in theAgreement.

(d)         *NonrecourseDeductions.* Nonrecourse deductions for any Fiscal Year shall beallocated to the Members*pro rata*in accordance with their Member Interests.

(e)          *IRC* §*754 Adjustment.*  To the extent an adjustment to the adjustedtax basis of any Company asset pursuant to IRC § 734(b) or IRC § 743(b) isrequired, pursuant to Tax Regulations § 1.704-1(b)(2)(iv)(m)(2) or § 1.704-1 (b)(2)(iv)(m)(4),to be taken into account in determining Book Capital Accounts as the result ofa distribution to a Member in complete liquidation of *its* interest in the Company, the amount ofsuch adjustment to the Book Capital Accounts shall be treated as an item ofgain (if the adjustment increases the basis of the asset) or loss (if theadjustment decreases such basis) and such gain or loss shall be speciallyallocated to the Members in accordance with their interests in the Company inthe event Tax Regulation § 1.704-1 (b)(2)(iv)(m)(2) applies, or to the Membersto whom such distribution was made in the event Tax Regulation § 1.704-1 (b)(2)(iv)(m)(4)applies.

4.4                              RegulatoryAllocations**.**  The allocations set forth in Section 4.3(the “Regulatory Allocations”) are intended to comply with certain requirementsof the Tax Regulations.  It is the intentof the Members that, to the extent possible, all Regulatory Allocations shallbe offset either with other Regulatory Allocations, or with special allocationsof other items of Company income, gain, loss or deduction pursuant to this Section.However, offsetting special allocations of Company income, gain, loss ordeduction shall be made, in whatever manner the Members deem appropriate, sothat, after such offsetting allocations are made, each Member’s Book CapitalAccount balance is, to the extent possible, equal to the Book Capital Accountbalance such Member would have had if the Regulatory Allocations were not partof this Agreement and all Company items were allocated pursuant to thisAgreement without regard to the Regulatory Allocations.  In exercising their discretion under this Section,the Members will take into account future Regulatory Allocations under Section4.3 that, although not yet made, are likely to offset other RegulatoryAllocations previously made under Section 4.3.

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4.5                              IRC § 754 Election.  If requested by a Member, the Company willmake the election under IRC § 754 to adjust the basis of Company propertypursuant to IRC **§§** 734 and 743.

5. Tax Matters Member.

5.1                              Designation**.**  International will be the TaxMatters Member of the Company.

5.2                              Duties**.**  The duties of the Tax MattersMember include the following:

(a)          to cause the preparation ofthe Company’s tax returns by an independent certified public accountantreasonably acceptable to each Member, which tax returns shall be timely filedby the due date (including extensions) for filing; *provided,* that a draft of each income or franchise taxreturn shall be provided to each of the Members for review and comment no laterthan 60 days after the end of the Company’s Fiscal Year, and a draft of eachother material tax return shall be provided to each of the Members for reviewand comment  at least twenty (20) daysprior to the due date (including extensions) for filing, and no such tax returnshall be filed without the unanimous consent of the Members, which consentshall not be unreasonably withheld, conditioned or delayed;

(a)          to represent the Company inall administrative proceedings with all federal and state taxing authorities;and

(b)         to settle, compromise,litigate or pursue any course of action with respect to any dispute withrespect to any tax issue; except that the Tax Matters Member shall not take anyof the foregoing actions without the unanimous consent of the Members.

The Members shall cooperate in good faith toresolve any disputes with respect to the matters set forth in this Section5.2. If any such dispute cannot be resolved within fifteen (15) days ofnotice of such dispute, it shall be referred for resolution to an independentcertified accountant reasonably acceptable to each Member (which shall not bethe accountant referred to in Section 5.2(a) hereof).

5.3                              Giving Notice**.**  The Tax Matters Member shalltake all reasonable steps necessary to keep all Members informed as to thestatus of any action, audit, hearing, settlement, litigation or other taxmatter.  The Tax Matters Member shallprovide each Member with a copy of all written communications between anytaxing authority and the Tax Matters Member.

5.4                              Effective TaxRate Calculation**.**  The Tax Matters Member shall, from time totime, as necessary due to the effects of changes in federal or state incometaxes or changes in the Company’s operations, cause the Effective Tax Rate tobe recalculated and updated.

5.5                              Rights ofMembers**.** Notwithstanding anything inthis Section 5, each Member shall have the right to participate in anyadministrative or judicial proceeding to the extent provided by the IRC.

5.6                              PartnershipClassification for Tax Purposes**.**  The Company is intended to be a partnershipfor U.S. federal, state and local income tax purposes and the Tax Matters

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Member shall cause to be filedwith the appropriate tax authorities any elections or other documents necessaryto give due legal effect to such position, if any.  No Member shall file (and each Member herebyrepresents that it has not filed) any income tax election or other documentthat is inconsistent with the Company’s position regarding its classificationas a “partnership” for applicable Federal, State and local income tax purposes.

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**International Disclosure Schedule**

None.

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**Monaco Disclosure Schedule**

None.

 

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