**                                                                                                                                                      Exhibit10.7**

** **

**FIRSTAMENDMENT TO AMENDED AND RESTATEDCREDIT AGREEMENT**

** **

THIS FIRST AMENDMENT TOAMENDED AND RESTATED CREDIT AGREEMENT is entered into as of April 30, 2002by and among MONACO COACH CORPORATION, a Delaware corporation, ROYALE COACH BYMONACO, INC., an Indiana corporation, MCC ACQUISITION CORPORATION, a Delawarecorporation, the Lenders and U.S. BANK NATIONAL ASSOCIATION as theAdministrative Lender.

**RECITALS**

Borrowers, AdministrativeLender and Lenders are parties to that certain Amended and Restated CreditAgreement dated September 28, 2001 (the “Agreement”).  In order to permit Borrowers to utilizeAdministrative Lender’s cash management products, Borrowers and Lenders desireto amend the Agreement to remove the Swing Loan as a subfacility of theRevolving Loans without changing the economic terms of the existing Agreement.

NOW, THEREFORE, inconsideration of the mutual covenants and promises of the parties containedherein, Administrative Lender, Lenders and Borrowers hereby agree as follows:

**1.             Definitions.**   All capitalized terms used herein and not otherwise defined herein shallhave the meaning attributed to them in the Agreement.

**2.             Amendmentto Section 1.1.**

(a)           The following defined terms areamended in their entirety to read as follows:

“**Available Credit**” means, atany time before the Revolver Maturity Date, the amount by which (i) thelesser of (A) the total of the Revolving Loan Commitments or (B) theBorrowing Base is greater than (ii) the total of the outstanding principalamount of the Revolving Loans, the Letter of Credit Obligations and SwingLoans, and on and after the Revolver Maturity Date, Available Credit shall bezero.

“**Ratable Portion**” means, withrespect to any Lender: (i) with respect to Revolving Loans, the quotientobtained by dividing the total of such Lender’s Revolving Loan Commitment bythe total Revolving Loan Commitments of all Lenders; (ii) with respect toTerm Loans, the quotient obtained by dividing the total of such Lender’s TermLoan Commitment by the total Term Loan Commitments of all Lenders;(iii) with respect to all Loans, the quotient obtained by dividing thetotal of 

 

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such Lender’sRevolving Loan Commitment, Term Loan Commitment and Swing Loan Commitment bythe Total Commitments.  At all timeswhen the Total Commitments are zero, all references in the preceding sentenceto “Commitments” shall mean Commitments existing immediately before the TotalCommitments became zero.

“**Total Commitments**” means thetotal of all Revolving Loan Commitments, Swing Loan Commitment and Term LoanCommitments.

(b)           The following additional definedterms are added to Section 1.1:

“**Swing Loan Balance Amount**”means, at any time, the amount that the outstanding balance of the Swing Loanswould need to be so that Swingline Lender’s percentage of the aggregateRevolving Loans and Swing Loans equals the True-Up Percentage.

“**Swing Loan Commitment**” meansthe amount set opposite the Swingline Lender’s name on Schedule Ias its “Swing Loan Commitment,” as such amount may be adjusted from time totime pursuant to this Agreement.

“**True-Up Event**” means theoccurrence of both: (i) any of the following: (A) the aggregateoutstanding balance of the Swing Loans exceeds the Swing Loan Balance Amount byat least $4,000,000 for ten consecutive Business Days; (B) at any timeduring the continuation of a Default the balance of the Swing Loans does notequal the Swing Loan Balance Amount; or (C) at any time the balance of theSwing Loans exceeds the Swing Loan Balance Amount and Swingline Lender, bynotice to the Administrative Lender, requests that the amount of the SwingLoans be reduced; and (ii) receipt by Administrative Lender before9:00 AM (Portland time) on a Business Day of a request from a Lender for asettlement under Section 3.2(b).

“**True-Up Percentage**” means,with respect to any Lender, the quotient obtained by dividing the total of suchLender’s Revolving Loan Commitment and Swing Loan Commitment by the total ofthe Revolving Loan Commitments and Swing Loan Commitments of all Lenders.  At all times when the Total Commitments arezero, all references in the preceding sentence to “Commitments” shall meanCommitments existing immediately before the Total Commitments became zero.

(c)           The term “**Swing Loan Available Credit**”is deleted.

**3.             Amendmentof Section 3.2.**  Section 3.2 is amended in its entirety toread as follows:

## **3.2  SWING LOANS**

(a)           On the terms and subject to theconditions contained in this Agreement, Swingline Lender agrees to make loans(each a “Swing Loan”) to 

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Borrowers fromtime to time until the Revolver Maturity Date in an aggregate amount not toexceed at any time outstanding the Swing Loan Commitment; provided, however,Swingline Lender, in its sole discretion, may elect not to make a Swing Loan atany time that the Available Credit is negative or would become negative uponthe making of such Swing Loan.  EachSwing Loan shall be made and prepaid upon such notice as the Swingline Lenderand Borrowers’ Agent shall agree; provided that in the absence of a writtenagreement to the contrary, Swingline Lender must receive each request for aSwing Loan not later than 2:00 PM (Portland time) on the Business Day ofborrowing and any prepayment made after 2:00 PM (Portland time) shall becredited on the next Business Day. Further, Swingline Lender may make Swing Loans without notice fromBorrowers’ Agent or any Borrower (A) automatically pursuant to cashmanagement arrangements, if any, made from time to time by Borrowers withAdministrative Lender and/or (B) to allow Administrative Lender to payeach Lender its share of fees, interest and other amounts due hereunder to theextent such fees, interest and other amounts are then due and payable.  All Swing Loans shall be evidenced by a Notepayable to the order of the Swingline Lender. Subject to all the limitations, terms and conditions contained herein,Borrowers may from time to time borrow, partially or wholly repay outstandingSwing Loans and reborrow Swing Loans. Borrower shall repay the outstanding principal balance of the SwingLoans, together with all accrued and unpaid interest and related fees on theRevolver Maturity Date.  All interestdue on the Swing Loans shall be payable to the Swingline Lender.  After receipt of payment of principal orinterest on the Swing Loans, Administrative Lender will promptly distribute thesame to the Swingline Lender at its Applicable Lending Office.

(b)           On the Business Day that a True-UpEvent occurs, regardless of whether the conditions in Section 7.2 existand without notice or other action by any Borrower, the balance of eachLender’s Revolving Loans shall be increased/decreased and the balance of theSwing Loans decreased/increased by that amount that results in the Swing Loansequaling the Swing Loan Balance Amount. Administrative Lender, by not later than 11:00 AM (Portland time)on such Business Day, shall notify each Lender whose Loans are increasing ofthe principal amount of such increase, and each such Lender shall, before2:00 PM (Portland time) on such Business Day, make available toAdministrative Lender, in immediately available funds, the amount of suchincrease.  Administrative Lender shalluse such funds to repay the principal amount of the Loans being reduced.  If Lenders are prohibited by the BankruptcyCode or any other Governmental Rule from making the adjustment required by thefirst sentence of this Section, each Lender shall purchase such participationinterest in the Loans of the other Lenders as is necessary to effect the sameresult among the Lenders as the adjustment required by the first sentence ofthis Section.

**4.             Amendmentof Section 3.5(d).**  Section 3.5(d) is amendedin its entirety to read as follows:

 

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(d)           **Unused Line Fee**.  On the last day of each calendar quarterbeginning September 30, 2001 and on the Revolver Maturity Date, Borrowersshall pay to Administrative Lender, for the ratable benefit of Lenders, an unusedline fee equal to (i) the amount by which the Revolving Loan Commitmentsare greater than the total of the average daily outstanding balance of theRevolving Loans and the average daily face amount of outstanding Letters ofCredit for such quarter or period multiplied by (ii) a per annumrate equal to the Fee Percentage.  Onthe last day of each calendar quarter beginning June 30, 2002 and on theRevolver Maturity Date, Borrowers shall pay to Administrative Lender, for thebenefit of the Swingline Lender, an unused line fee equal to (i) theamount by which the Swing Loan Commitment is greater than the total of theaverage daily outstanding balance of the Swing Loans for such quarter or periodmultiplied by (ii) a per annum rate equal to the Fee Percentage.

**5.             ScheduleI. **Schedule I is amended in its entirety to read asSchedule I attached hereto.

**6.             EffectiveData. **This First Amendment shall be effectiveas of May 6, 2002.

**7.             Ratification.** Except as otherwise provided in this First Amendment, all of theprovisions of the Agreement are hereby ratified and confirmed and shall remainin full force and effect.

**8.             OneAgreement. **The Agreement, as modified by theprovisions of this First Amendment, shall be construed as one agreement.

**9.             Counterparts.** This First Amendment may be executed in any number of counterparts, eachof which when executed and delivered shall be deemed to be an original, and allof which when taken together shall constitute one and the same agreement.  Delivery of an executed signature page ofthis First Amendment by facsimile transmission shall be effective as deliveryof a manually executed counterpart hereof.

**10.          StatutoryNotice.**

**ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTENDCREDIT OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDERWASHINGTON LAW.**

**IN WITNESS WHEREOF**, this First Amendment to Amended and Restated CreditAgreement has been duly executed as of the date first written above.

 

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|                                                                                  |           | MONACO COACH CORPORATION

 

By: /s/ Marty Daley                                    |
|---------------------------------------------------------------------------------------|----------------|------------------------------------------------------------------------------------------|
|                                                                                  |           | Title:  VP and CFO                                                                  |
|  

ROYALE COACH BY MONACO,  INC.

 

By:  /s/ Marty Daley              |  

  |  

MCC ACQUISITION CORPORATION

 

By:  /s/ Marty Daley                   |
| Title:   Treasurer                                                               |           | Title:   Treasurer                                                                  |
|  

DEUTSCHE FINANCIAL SERVICES CORPORATION

 

  By:  /s/ Timothy Wass |  

  |  

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

By:  /s/ Kathy Inman Lucier |
| Title:  Vice President                                                           |           | Title:  Vice  President                                                             |
|  

UNION BANK OF CALIFORNIA, N.A.

 

By:  /s/ Thomas Marks            |  

  |  

BANK OF AMERICA, N.A.

 

By:  /s/ Robert A. Davison                   |
| Title:  Vice President                                                           |           | Title:   Senior Vice President                                                      |
|  

WASHINGTON MUTUAL BANK

 

By:  /s/ Bruce Kendrex                   |  

  |  

U.S. BANK NATIONAL ASSOCIATION

 

By:  /s/  Caron Carlyon             |
| Title:  Vice President                                                           |           | Title:   Managing Director                                                          |

 

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**SCHEDULEI**

**1.  Revolving Loan Commitments:**
| U.S. Bank National  Association  —  $14,181,818.18     (23.636363633%)                                                                                                                                                                                                                     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Deutsche Financial  Services Corporation  —  $7,636,363.64     (12.727272733%)                                                                                                                                                                                                             |
| Washington Mutual  Bank  —  $10,818,181.82      (18.030303033%)                                                                                                                                                                                                                            |
| Wells Fargo Bank,  National Association  —  $10,818,181.82     (18.030303033%)

Union Bank of  California, N.A.  —  $8,909,090.90     (14.848484833%)

Bank of America,  N.A.  —  $7,636,363.64      (12.727272733%) |

**2.  Term Loan Commitments:**
| U.S. Bank National  Association  —  $13,818,181.82     (34.54545455%)                                                                                                                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Deutsche Financial  Services Corporation  —  $4,363,636.36     (10.90909091%)                                                                                                                                                                                                          |
| Washington Mutual  Bank  —  $6,181,818.18      (15.45454545%)                                                                                                                                                                                                                          |
| Wells Fargo Bank,  National Association  —  $6,181,818.18     (15.45454545%)

Union Bank of  California, N.A.  —  $5,090,909.09     (12.72727273%)

Bank of America,  N.A.  —  $4,363,636.36      (10.90909091%) |

 

**3.  Swing Loan Commitment:**
| U.S. Bank National  Association  —  $10,000,000     (100%) |
|-----------------------------------------------------------------------------------------------|

 

**4. Applicable Lending Office and Address for Notices for each Lender:**

 
| U.S. Bank  National Association  Oregon Commercial Banking  800 Willamette Street, 3rd Floor  PO Box 10553  Eugene, Oregon  97440  Attn:  Ken Carson  Telephone:  (541) 465-4127  Fax:  (541) 342-6712  Email: kenneth.carson@usbank.com

  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

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|  

Deutsche  Financial Services Corporation  2625 S. Plaza Drive, Suite 201  Tempe, AZ  85282  Attn: Timothy Wass, Vice President  Telephone:  (480) 449-7124  Fax:  (480) 829-3963  Email: timothy.wass@db.com

Wells Fargo  Bank, National Association  99 E. Broadway, 2nd Floor  Eugene, OR  97440  Attn: Kathy Lucier, Vice President  Telephone:  (541) 465-5965  Fax:  (541) 465-5764  Email: lucierki@wellsfargo.com

Washington  Mutual Bank  1201 Third Avenue, WMT 1445  Seattle, WA  98101  Attn: Bruce Kendrex, Vice President  Telephone:  (206) 377-3888  Fax:  (206) 377-3812  Email: bruce.kendrex@wamu.net

Union Bank of  California, N.A.  407 SW Broadway  Portland, OR  97205  Attn:  Tom Marks, Vice President  Telephone:  (503) 225-3693  Fax:  (503) 225-2846  Email: thomas.marks@uboc.com

Bank of America,  N.A.  121 SW Morrison, #1700  Portland, OR  97204  Attn: Robert Davison, Senior Vice President  Telephone:  (503) 279-2809  Fax:  (503) 275-1391  Email: robert.a.davison@bankofamerica.com |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

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