**Exhibit 10.8**

** **

**SECONDAMENDMENT TO AMENDED AND RESTATEDCREDIT AGREEMENT**

** **

THIS SECOND AMENDMENT TOAMENDED AND RESTATED CREDIT AGREEMENT is entered into as of November 272002 by and among MONACO COACH CORPORATION, a Delaware corporation, ROYALECOACH BY MONACO, INC., an Indiana corporation, MCC ACQUISITION CORPORATION, aDelaware corporation (“MCC”), the Lenders and U.S. BANK NATIONAL ASSOCIATION asthe Administrative Lender.

**RECITALS**

Borrowers, AdministrativeLender and Lenders are parties to that certain Amended and Restated CreditAgreement dated September 28, 2001 (as previously amended, the“Agreement”).  In order to permit theacquisition of ORN, ORLV and ORMCC, Borrowers, Administrative Lender andLenders desire to amend the Agreement in the manner set forth below.

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:

“**Borrower**” shall mean each ofMonaco Coach Corporation, Royale Coach by Monaco, Inc., MCC AcquisitionCorporation, ORN, ORLV and ORMCC.

“**Collateral**” means all ofBorrowers’ assets (except real property), including, without limitation,(a) all Accounts, Rights to Payment, General Intangibles, Records, goods,fixtures, inventory, equipment, money, letter of credit rights, supportingobligations, instruments, chattel paper, deposit accounts, documents,investment property, and commercial tort claims; (b) all products,proceeds, rents and profits of the foregoing; and (c) all of theforegoing, whether now owned or existing or hereafter acquired or arising or inwhich Borrower now has or hereafter acquires any rights.

 

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“**Disclosure Letter**” means theDisclosure Letter from Borrowers’ Agent to Administrative Lender dated theClosing Date, as amended with Lenders consent by amendments dated as of January31, 2002 and November 27, 2002.

“**Fixed Rate Term**” means aperiod of one, two, three or six months, as designated by Borrowers’ Agent,during which a Loan bears interest determined in relation to LIBOR; provided,however, that no Fixed Rate Term for a Revolving Loan may extend beyond theRevolver Maturity Date, no Fixed Rate Term for a Term Loan or a Term Loan IImay extend beyond the Maturity Date, and if the last day of a Fixed Rate Termis not a Business Day, such term shall be extended to the next succeedingBusiness Day, or if the next succeeding Business Day falls in another calendarmonth, such term shall end on the next preceding Business Day.

“**Loan**” means an advance madeby a Lender to Borrowers pursuant to any one of Sections 3.1, 3.2, 3.3 or3.3A.

“**Note**” means any of (i) amaster promissory note executed by Borrowers in favor of Administrative Lenderfor the ratable benefit of Lenders evidencing Revolving Loans, (ii) amaster promissory note executed by Borrowers in favor of Administrative Lenderfor the ratable benefit of Lenders evidencing Term Loans, (iii) a masterpromissory note executed by Borrowers in favor of Administrative Lender for theratable benefit of Lenders evidencing Term Loans II or (iv) apromissory note executed by Borrowers in favor of Swingline Lender evidencingthe Swing Loans, each substantially in the form of one of the forms attached asExhibit B.

“**Ratable Portion**” means, withrespect to any Lender:  (i) withrespect to Revolving Loans, the quotient obtained by dividing the total of suchLender’s Revolving Loan Commitment by the total Revolving Loan Commitments ofall Lenders; (ii) with respect to Term Loans, the quotient obtained bydividing the total of such Lender’s Term Loan Commitment by the total Term LoanCommitments of all Lenders; (iii) with respect to Term Loans II, thequotient obtained by dividing the total of such Lender’s Term Loan IICommitment by the total Term Loan II Commitments of all Lenders; and(iv) with respect to all Loans, the quotient obtained by dividing thetotal of such Lender’s Revolving Loan Commitment, Term Loan Commitment, TermLoan II Commitment and Swing Loan Commitment by the TotalCommitments.  At all times when theTotal Commitments are zero, all references in the preceding sentence to“Commitments” shall mean Commitments existing immediately before the TotalCommitments became zero.

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

(b)           The definition of “**PermittedLiens**” is revised by deleting “and” before item (n) and addingthe following immediately before the period: “; and (o) the Liens 

 

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affecting the realproperty of ORLV, ORMCC and ORN at the time of the closing of the ORAAcquisition that are described on Exhibit B to the Second Amendmenthereto.”

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

“**ORA Acquisition**” means thetransactions contemplated by the following agreements:  (i) Stock Purchase Agreement dated asof November 27, 2002 by and among Parent, MCC, ORA and ORLV;(ii) Stock Purchase Agreement dated as of November 27, 2002 by andamong Parent, MCC, ORA and ORN; and (iii) Stock Purchase Agreement datedas of November 27, 2002 by and among Parent, MCC, ORA and ORMCC.

“**ORLV**” means Outdoor Resortsof Las Vegas, Inc., a Nevada corporation.

“**ORMCC**” means Outdoor ResortsMotorcoach Country Club, Inc., a California corporation.

“**ORN**” means Outdoor Resorts ofNaples, Inc., a Florida corporation.

“**Term Loan II**” means a Loanmade by a Lender to Borrowers pursuant to Section 3.3A.

“**Term Loan II Commitment**”means, as to any Lender, the amount set opposite such Lender’s name on Schedule Ias its “Term Loan II Commitment,” as such amount may be reduced from timeto time pursuant to this Agreement or as such amount may be adjusted pursuantto Section 13.5(c).

**3.             Section3.3(b)(iii). **Section 3.3(b)(iii) is amended inits entirety to read as follows:

(iii)          if as of the end of any fiscal quarterof Parent the net book value of Borrowers’ property, plant and equipment(exclusive of the property, plant and equipment acquired by Borrowers from ORA)is less than the total of (A) $120,942,000, less (B) the sumof all principal payments made on the Term Loans and less(C) $5,000,000,  Borrowers, within60 days after the end of such quarter (110 days if the quarter is Parent’sfourth fiscal quarter), shall prepay the outstanding principal amount of theTerms Loans by an amount equal to such difference;

**4.             Additionof Section 3.3A.**  Section 3.3A is added to the Agreementto read as follows:

## **3.3A       TERMLOAN II**

(a)           On the terms and subject to theconditions contained in this Agreement, each Lender agrees to make  a term loan (each a “Term Loan II”) ina single advance on the effective date of the Second Amendment hereto to Borrowersin 

 

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the amount of suchLender’s Term Loan II Commitment. Contemporaneously with the closing of the ORA Acquisition, Borrowersshall use proceeds of Term Loans II to repay all of ORN’s, ORLV’s andORMCC’s then outstanding indebtedness for borrowed money owed to a Person otherthan a Borrower.  The Term Loans IIshall be evidenced by a Note.

(b)           On the Maturity Date, Borrowers shallrepay the unpaid principal amount of each Term Loan II, and prior thereto:

(i)            Borrowers shall, on the last day ofeach calendar quarter, beginning December 31, 2002, repay the outstandingprincipal balance of the Term Loans II by making a payment in theaggregate amount of $1,833,333, provided that if on or before such day aprincipal payment has been made pursuant to any of items (iii), (iv) or(v) below, then the required principal payment due on such day shall be theamount resulting from dividing the then outstanding principal balance of TermLoans II by the number equal to one plus the number of full calendar quartersremaining after such day through the Maturity Date;

(ii)           Borrowers may, from time to time onany Business Day, make a voluntary prepayment, in whole or in part, of theoutstanding principal amount of the Term Loans II; provided, however, that(A) no such prepayment of any LIBOR Loan may be made on any day other thanthe last day of the Fixed Rate Term for such Loan; (B) all such voluntaryprepayments shall require at least three but no more than five Business Daysprior written notice to Administrative Lender; and (C) all such voluntarypartial prepayments shall be in an aggregate minimum amount of $1,000,000 andan integral multiple of $100,000;

(iii)          upon the sale of all or substantiallyall of the real property located in Naples, FL owned by ORN, Borrowers shallprepay the outstanding principal amount of the Term Loans II by$3,000,000;

(iv)          upon the sale of all or substantiallyall of the real property located in Las Vegas, NV owned by ORLV, Borrowersshall prepay the outstanding principal amount of the Term Loans II by anamount equal to $10,000,000 less 45.45% of the amount of all payments madepursuant to Section 3.3A(b)(i); and

(v)           upon the sale of all or substantiallyall of the real property located in Indio, CA owned by ORMCC, Borrowers shall prepaythe outstanding principal amount of the Term Loans II by an amount equalto $9,000,000 less 40.9% of the amount of all payments made pursuant toSection 3.3A(b)(i).

 

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Each prepayment of TermLoans II made pursuant to any of clauses (ii) through (v) shall beapplied in the inverse order of the scheduled repayments of Term Loans IIset forth in clause (i) and shall be applied ratably among the TermLoans II.  Each prepayment of TermLoans II made pursuant to this Section shall be without premium orpenalty, except for any funding loss indemnification required bySection 3.12.  No amounts paid orprepaid with respect to a Term Loan II may be reborrowed.

**5.             Additionof Section 8.20. **Section 8.20 is added to theAgreement to read as follows:

## **8.20        LIENIN REAL PROPERTY**

Promptly uponAdministrative Lender’s request, Borrower shall execute and deliver toAdministrative Lender such mortgages, deeds of trust and other agreements anddocuments, and take such actions, as Administrative Lender determines to bereasonably necessary to grant Administrative Lender a first priority Lien(subject only to Permitted Liens) in Borrower’s real property.

**6.             Amendmentof Section 9.1.**  Section 9.1 is amended inits entirety to read as follows:

Create or sufferto exist, or permit any Subsidiary to create or suffer to exist, any Lien uponor with respect to any of its properties (including, without limitation anyreal property), whether now owned or hereafter acquired, or assign any right toreceive income, except Permitted Liens and Liens subordinated to theAdministrative Lender’s Liens by Section 9.2(h).

**7.             Amendmentof Section 9.2(h).** Section 9.2(h) is amended in its entirety to read as follows:

(h)           Debt of any Borrower to anotherBorrower, and each Borrower hereby agrees that if it has or hereafter acquiresa Lien in any Collateral in which Administrative Lender has or hereafteracquires a perfected Lien, then Borrower’s Lien shall be junior in priority toAdministrative Lender’s Lien, notwithstanding the date, manner or order ofperfection of Borrower’s Lien and Administrative Lender’s Lien;

**8.             Amendmentof Section 9.4.**  The introductory clause toSection 9.4 is amended in its entirety to read as follows:

Except aspermitted in Sections 9.5(h) and 9.5 (i) and except for (1) theORA Acquisition and (2) the sale by ORLV, ORMCC and ORN of their realproperty assets:

**9.             Amendmentof Section 9.6.**  Section 9.6 is amended inits entirety to read as follows:

 

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Directlyor indirectly engage, or permit any Subsidiary to directly or indirectlyengage, in any business activity other than (a) the type of businessactivities in which Borrowers, other than ORLV, ORMCC and ORN, are engaged onthe Closing Date, (b) with respect to ORLV, ORMCC and ORN only, the typeof business activities in which ORLV, ORMCC and ORN are engaged on the closingof the ORA Acquisition and (c) activities reasonably related thereto.

**10.          Amendmentof Section 9.8.**  Section 9.8 is amended inits entirety to read as follows:

Cancel, or permitany Subsidiary to cancel, any claim or Indebtedness owed to it except forlegitimate business purposes in the reasonable judgment of Borrowers and in theordinary course of business, provided that Parent may cancel any Indebtednessowed to it by any of ORLV, ORMCC and ORN.

**11.          Amendmentof Section 10.1. **Section 10.1 is amended in itsentirety to read as follows:

As of the end of eachfiscal quarter ending in 2001 and 2002, Parent shall maintain a Leverage Rationot greater than 2.00:1.  As of the endof each fiscal quarter ending after 2002 and before July 1, 2003, Parentshall maintain a Leverage Ratio not greater than 1.75:1.  As of the end of each fiscal quarter endingafter June 30, 2003, Parent shall maintain a Leverage Ratio not greaterthan 1.50:1.

**12.          Amendmentof Section 13.4.**  The second sentence of Section 13.4 isamended in its entirety to read as follows:

The foregoingnotwithstanding, any increase or decrease in the Ratable Portion of any Lenderand any increase in the Revolving Loan Commitment, Term Loan Commitment or TermLoan II Commitment of any Lender must be in writing and signed by suchLender.

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

**14.          Schedule II. **Schedule II is amended in its entirety to read asSchedule II attached hereto.

**15.          Exhibit B. **Exhibit B is amended to add the Note attachedhereto as Exhibit A to Second Amendment

**16.          Exhibit E. **Exhibit E is amended in its entirety to read asExhibit E attached hereto.

 

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**17.          ORADelinquent Taxes and Mechanics Liens. **Lendershereby consent to the continuing existence for a period of sixty (60) daysafter the closing of the ORA Acquisition of delinquent taxes and delinquentmechanics liens (whether such liens have been perfected or not as of theclosing of the ORA Acquisition) by ORLV, ORMCC and ORN to the extent suchdelinquent taxes and delinquent mechanics liens are with respect to obligationsincurred before the closing of the ORA Acquisition.

**18.          Solvency. **Lenders acknowledge and consent to the circumstancethat the representation in Section 6.18 of the Agreement is correct withrespect to ORLV, ORMCC and ORN only if the obligations of such Borrowers toParent are disregarded and, for a period of sixty (60) days after the closingof the ORA Acquisition, if $3,000,000 of trade accounts payable of suchBorrowers are disregarded.

**19.          AmendmentFee. **Contemporaneously with the execution ofthis Second Amendment, Borrower shall pay to Administrative Lender, for theratable benefit of Lenders, an amendment fee of $55,000.

**20.          EffectiveDate. **This Second Amendment shall be effectiveas of November 27, 2002 upon the payment of the amendment fee andexecution and delivery of the Term Loan II Promissory Note.

**21.          NoDefault.**  Borrowers represent and warrant to Lendersthat (i) no Default exists and (ii) no Default will arise as a resultof consummation of the ORA Acquisition.

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

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

**24.          Counterparts.** This Second Amendment may be executed in any number of counterparts,each of which when executed and delivered shall be deemed to be an original,and all of which when taken together shall constitute one and the sameagreement.  Delivery of an executedsignature page of this Second Amendment by facsimile transmission shall beeffective as delivery of a manually executed counterpart hereof.

**25.          StatutoryNotice.**

**UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTSMADE BY LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDITEXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECUREDSOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATIONAND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.**

 

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**IN WITNESS WHEREOF**, this Second Amendment to Amended andRestated Credit Agreement has been duly executed as of the date first writtenabove.

 
|                                            |                          | MONACO COACH  CORPORATION               |
|-------------------------------------------------|-------------------------------|-----------------------------------------|
|                                            |                          |                                    |
|                                            |                          | By:                                     | /s/ John W. Nepute |
|                                            |                          | Title:                                  | President |
|                                            |                          |                                    |
|                                            |                          |                                    |
| ROYALE COACH BY MONACO,  INC.                   |                          | MCC ACQUISITION  CORPORATION            |
|                                            |                          |                                    |
| By:                                             | /s/ John W. Nepute            |                                    | By: | /s/ John W. Nepute |
| Title:                                          | Vice President and  Treasurer |                                    | Title: | Vice President |
|                                            |                          |                                    |
|                                            |                          |                                    |
| GE COMMERCIAL  DISTRIBUTION FINANCE CORPORATION |                          | WELLS FARGO BANK,  NATIONAL ASSOCIATION |
|                                            |                          |                                    |
| By:                                             | /s/ Timothy Wass              |                                    | By: | /s/ Kathy Inman Lucier |
| Title:                                          | Director of  Underwriting     |                                    | Title: | Vice President |
|                                            |                          |                                    |
|                                            |                          |                                    |
| UNION BANK OF  CALIFORNIA, N.A.                 |                          | BANK OF AMERICA, N.A.                   |
|                                            |                          |                                    |
| By:                                             | /s/ Thomas Marks              |                                    | By: | /s/ Robert Davison |
| Title:                                          | Vice President                |                                    | Title: | Senior Vice President |
|                                            |                          |                                    |
|                                            |                          |                                    |
| WASHINGTON MUTUAL BANK                          |                          | U.S. BANK NATIONAL  ASSOCIATION         |
|                                            |                          |                                    |
| By:                                             | /s/ Bruce Kendrex             |                                    | By: | /s/ Kenneth S. Carson |
| Title:                                          | Vice President                |                                    | Title: | Vice President |

** **

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** **

**JOINDER OF PARTIES**

 

For good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged,each of the undersigned hereby becomes a “Borrower” under the above referencedAmended and Restated Credit Agreement, as amended, with the same force andeffect as if the undersigned had executed and delivered the original Amendedand Restated Credit Agreement at the same time as Monaco Coach Corporation, RoyaleCoach by Monaco, Inc. and MCC Acquisition Corporation.

Dated as ofNovember 27, 2002.

 
| OUTDOOR RESORTS OF  NAPLES, INC.               |               | OUTDOOR RESORTS OF LAS  VEGAS, INC. |
|------------------------------------------------|--------------------|-------------------------------------|
|                                           |               |                                |
| By:                                            | /s/ John W. Nepute |                                | By: | /s/ John W. Nepute |
| Title:                                         | President          |                                | Title: | President |
|                                           |               |                                |
|                                           |               |                                |
| OUTDOOR RESORTS  MOTORCOACH COUNTRY CLUB, INC. |               |                                |
|                                           |               |                                |
| By:                                            | /s/ John W. Nepute |                                |   |   |
| Title:                                         | President          |                                |   |   |

 

 

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**SCHEDULE1**

 

**1.             RevolvingLoan Commitments:**

U.S. Bank NationalAssociation  —  $14,181,818.18     (23.636363633%)

GE CommercialDistribution Finance Corporation  —  $7,636,363.64     (12.727272733%)

Washington MutualBank  — $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.             TermLoan Commitments:**

U.S. Bank NationalAssociation  —  $13,818,181.82    (34.54545455%)

GE CommercialDistribution Finance Corporation  —  $4,363,636.36     (10.90909091%)

Washington MutualBank  — $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.             TermLoan II Commitments:**

U.S. Bank NationalAssociation  —  $7,600,000.00    (34.54545455%)

GE CommercialDistribution Finance Corporation  —  $2,400,000.00     (10.90909091%)

Washington MutualBank  — $3,400,000.00     (15.45454545%)

Wells Fargo Bank,National Association  —  $3,400,000.00     (15.45454545%)

Union Bank of California,N.A.  — $2,800,000.00     (12.72727273%)

Bank of America,N.A.  — $2,400,000.00     (10.90909091%)

**4.             SwingLoan Commitment:**

U.S. Bank NationalAssociation  —  $10,000,000     (100%)

 

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**5.             ApplicableLending Office and Address for Notices for each Lender:**

 

U.S. Bank NationalAssociationOregon Commercial Banking800 Willamette Street, 3rd FloorPO Box 10553Eugene, Oregon  97440Attn:  Ken CarsonTelephone:  (541) 465-4127Fax:  (541) 342-6712Email: kenneth.carson@usbank.com

 

GE CommercialDistribution Finance Corporation2625 S. Plaza Drive, Suite 201Tempe, AZ  85282Attn: Timothy Wass, Vice PresidentTelephone:  (480) 449-7124Fax:  (480) 829-3963Email: timothy.wass@db.com

 

Wells Fargo Bank,National Association99 E. Broadway, 2nd FloorEugene, OR  97440Attn: Kathy Lucier, Vice PresidentTelephone:  (541) 465-5965Fax:  (541) 465-5764Email: lucierki@wellsfargo.com

 

Washington MutualBank1201 Third Avenue, WMT 1445Seattle, WA  98101Attn: Bruce Kendrex, Vice PresidentTelephone:  (206) 377-3888Fax:  (206) 377-3812Email: bruce.kendrex@wamu.net

 

Union Bank ofCalifornia, N.A.407 SW BroadwayPortland, OR  97205Attn:  Tom Marks, Vice PresidentTelephone:  (503) 225-3693Fax:  (503) 225-2846Email: thomas.marks@uboc.com

 

 

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

 

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**SCHEDULE II**

**PricingSchedule**

 

|                                                   |   | **Level I** |   | **Level II** |   | **Level III** |   | **Level IV** |   |
|--------------------------------------------------------|--------|-------------|--------|--------------|--------|---------------|--------|--------------|--------|
| LIBOR Margin —  Revolving Loans                   |   | 125         |   | 150          |   | 175           |   | 200          |   |
| Prime Margin —  Revolving Loans                   |   | 0           |   | 0            |   | 0             |   | 25           |   |
| LIBOR Margin —  Term Loans and Term Loans II |   | 150         |   | 175          |   | 200           |   | 225          |   |
| Prime Margin —  Term Loans and Term Loans II |   | 0           |   | 0            |   | 0             |   | 25           |   |
| Fee Percentage                                         |   | 25          |   | 25           |   | 37.5          |   | 50           |   |

For purposes of this Pricing Schedule, the following terms have thefollowing meanings:

“**Level I**”applies on any day if, on such day, the applicable Leverage Ratio is less than1.00:1.

“**Level II**”applies on any day if, on such day, the applicable Leverage Ratio is equal toor greater than 1.00:1 and less than 1.25:1.

“**LevelIII**” applies on any day if, on such day, the applicable LeverageRatio is equal to or greater than 1.25:1 and less than 1.50:1.

“**Level IV**”applies on any day if, on such day, the applicable Leverage Ratio is 1.50:1 orgreater.

For purposes of this Pricing Schedule, the Leverage Ratio shall becalculated once every quarter based on the financial information most recentlyreported by Borrowers’ Agent pursuant to Section 8.3 of the Agreement; provided,however, that the Leverage Ratio shall not be computed on the financialinformation most recently reported by Borrowers’ Agent until the later of thefirst day of the month after receipt of such information or five Business Daysafter the receipt thereof, and if the most recent report required pursuant toSection 8.3 has not been delivered, or if Administrative Lender reasonablyobjects to the accuracy of such report within five Business Days after the receiptthereof, the next higher Level from the Level then in effect shall apply untilsuch time as the delinquent report is delivered or Administrative Lender’sobjections are resolved to Administrative Lender’s reasonable satisfaction.

 

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**EXHIBIT A to SECOND AMENDMENT**

**TermLoans II Promissory Note**

 

| $22,000,000 |   | November 27,  2002 |
|-------------|--------|-------------------------|

 

FOR VALUE RECEIVED, the undersigned, MONACO COACH CORPORATION, aDelaware corporation, ROYALE COACH BY MONACO, INC., an Indiana corporation, MCCACQUISITION CORPORATION, a Delaware corporation, OUTDOOR RESORTS OF NAPLES,INC., a Florida corporation, OUTDOOR RESORTS OF LAS VEGAS, INC., a Nevadacorporation and OUTDOOR RESORTS MOTORCOACH COUNTRY CLUB, INC., a Californiacorporation (each individually referred to as “Borrower” and all collectivelyreferred to as “Borrowers”) hereby jointly and severally promise to pay to theorder of U.S. BANK NATIONAL ASSOCIATION as Administrative Lender for theratable benefit of the Lenders (“Administrative Lender”) in the manner and atthe times provided in that certain Amended and Restated Credit Agreement amongBorrowers, U.S. Bank National Association (as Administrative Lender) and thelenders named therein dated as of September 28, 2001, (as amended,modified or supplemented from time to time, the “Credit Agreement”), theprincipal sum of Twenty-Two Million Dollars ($22,000,000).

This promissory note is one of the promissory notes referred to in, andsubject to the terms of, the Credit Agreement. Capitalized terms used herein shall have the respective meaningsassigned to them in the Credit Agreement.

Borrower further promises to pay interest on the outstanding principalbalance hereof at the interest rates, and payable on the dates, set forth inthe Credit Agreement.  All payments ofprincipal and interest hereunder shall be made to Administrative Lender inlawful money of the United States and in same day or immediately availablefunds.

Administrative Lender is authorized but not required to record the dateand amount of each payment of principal and interest hereunder, and theresulting unpaid principal balance hereof, in Administrative Lender’s internalrecords, and any such recordation shall be prima facie evidence of the accuracyof the information so recorded; provided however, that Administrative Lender’sfailure to so record such amounts shall not limit or otherwise affectBorrower’s obligations hereunder and under the Credit Agreement to repay theprincipal hereof and interest hereon.

Borrowers shall pay all costs of collection, including reasonableattorneys’ fees (whether incurred at the trial or appellate level, in anarbitration or administrative proceeding, in bankruptcy (including, withoutlimitation, any adversary proceeding, contested matter or motion) orotherwise).  No delay or failure on thepart of Administrative Lender to exercise 

 

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any of its rightshereunder shall be deemed a waiver of such rights or any other right of AdministrativeLender nor shall any delay, omission or waiver on any one occasion be deemed abar to or waiver of such rights or any other right on any future occasion.  Borrowers and every surety, indorser andguarantor of this Note waive presentment, demand, protest, notice of intentionto accelerate, notice of acceleration, notice of nonpayment and all othernotices of every kind, and agree that their liability under this Note shall notbe affected by any renewal, postponement or extension in the time of paymenthereof, by any indulgence granted by any holder hereof with respect hereto, orby any release or change in any security for the payment of this Note, and theyhereby consent to any and all renewals, extensions, indulgences, releases orchanges, regardless of the number of such renewals, extensions, indulgences,releases or changes.

The Credit Agreement provides, among other things, for acceleration(which in certain cases shall be automatic) of the maturity hereof upon theoccurrence and during the continuation of certain stated events, in each casewithout presentment, demand, protest or further notice of any kind, all ofwhich are hereby expressly waived by Borrowers.

Borrowers’ obligations evidenced by this promissory note are secured bythe collateral described in the Loan Documents.  The Loan Documents describe the rights of Administrative Lenderwith respect to the collateral.

In the event of any conflict between the terms of this promissory noteand the terms of the Credit Agreement, the terms of the Credit Agreement shallcontrol.

This promissory note shall be governed by and construed in accordancewith the laws of the State of Oregon.

**UNDEROREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY ANY LENDER ORADMINISTRATIVE LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHERCREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES ORSECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESSCONSIDERATION AND BE SIGNED BY SUCH LENDER OR ADMINISTRATIVE LENDER TO BEENFORCEABLE.**

 

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| MONACO COACH  CORPORATION                      |            | ROYALE COACH BY MONACO,  INC.       |
|------------------------------------------------|-----------------|-------------------------------------|
|                                           |            |                                |
| By:                                            | /s/ Marty Daley |                                | By: | /s/ Marty Daley |
| Title:                                         | VP and CFO      |                                | Title: | VP |
|                                           |            |                                |
|                                           |            |                                |
| OUTDOOR RESORTS  MOTORCOACH COUNTRY CLUB, INC. |            | MCC ACQUISITION  CORPORATION        |
|                                           |            |                                |
| By:                                            | /s/ Marty Daley |                                | By: | /s/ Marty Daley |
| Title:                                         | Treasurer       |                                | Title: | VP |
|                                           |            |                                |
|                                           |            |                                |
| OUTDOOR RESORTS OF  NAPLES, INC.               |            | OUTDOOR RESORTS OF LAS  VEGAS, INC. |
|                                           |            |                                |
| By:                                            | /s/ Marty Daley |                                | By: | /s/ Marty Daley |
| Title:                                         | Treasurer       |                                | Title: | Treasurer |

 

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**EXHIBIT B to SECONDAMENDMENT**

** **

**Additional Permitted Liens**

 

1.             The Deed of Trustrecorded as Document No. 02830 of the records of the Office of County Recorderof Clark County, Nevada encumbering ORLV’s real property for the benefit ofParent.

2.             The Deed of Trustrecorded as Instrument No. 2001-569395 of the records of the Office of theRecorder of Riverside County, California encumbering ORMCC’s real property forthe benefit of Parent.

3.             The Deed of Trustrecorded in Book 2905, Page 743 of the records of the Office of the Recorder ofCollier County, Florida encumbering ORN’s real property for the benefit ofParent to secure ORN’s indebtedness to Parent.

** **

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** **

**EXHIBIT E**

**Noticeof Conversion or Continuation**

 

U.S. Bank National AssociationAgency Services Group1420 Fifth Ave., 9th FloorP.O. Box 720Seattle, WA.  98111-0720Attn:  Young HahnFax:  (206) 587-7022

Reference is made to that certain Amended and Restated Credit Agreementamong Monaco Coach Corporation, Royale Coach By Monaco, Inc., MCC AcquisitionCorporation, Outdoor Resorts of Naples, Inc., Outdoor Resorts ofLas Vegas, Inc. and Outdoor Resorts Motorcoach Country Club, Inc. (eachindividually referred to as a “Borrower” and all collectively referred to as“Borrowers”), U.S. Bank National Association (as Administrative Lender) and thelenders named therein dated as of September 28, 2001, (as amended,modified or supplemented from time to time, the “Credit Agreement”).  Capitalized terms used herein shall have therespective meanings assigned to them in the Credit Agreement.

1.             Pursuant toSection 3.6 of the Credit Agreement, Borrowers’ Agent, on behalf ofBorrowers, hereby requests [the continuation of all or part of outstandingLIBOR Loans with Fixed Rate Terms ending on                          ][the conversion of all or part of its outstanding Prime Rate Loans], asfollows:

(a)           TheLoans to which this Notice applies are$                 of Revolving Loans,$              of Term Loans and$                   of Term Loans II.

(b)           Theeffective date of continuation and/or conversion is to be                    .

(c)           Theaggregate amount of [said outstanding LIBOR Loans that are Revolving Loans tobe continued as] [said outstanding Prime Rate Loans that are Revolving Loans tobe converted to] LIBOR Loans, and each requested Fixed Rate Term, are:

 

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| **Amount** |   | **Fixed Rate Term** |   |
|------------|--------|---------------------|--------|
|       |   |                |   |   |   |
| $          |   |                |   | months |   |
|       |   |                |   |   |   |
| $          |   |                |   | months |   |

(d)           Theaggregate amount of said outstanding LIBOR Loans that are Revolving Loans to becontinued as Prime Rate Loans is$              .

(e)           Theaggregate amount of [said outstanding LIBOR Loans that are Term Loans to becontinued as] [said outstanding Prime Rate Loans that are Term Loans to beconverted to] LIBOR Loans, and each requested Fixed Rate Term, are:

 
| **Amount** |   | **Fixed Rate Term** |   |
|------------|--------|---------------------|--------|
|       |   |                |   |   |   |
| $          |   |                |   | months |   |
|       |   |                |   |   |   |
| $          |   |                |   | months |   |

(f)            Theaggregate amount of said outstanding LIBOR Loans that are Term Loans to becontinued as Prime Rate Loans is$                  .

(g)           Theaggregate amount of [said outstanding LIBOR Loans that are Term Loans IIto be continued as] [said outstanding Prime Rate Loans that are Term Loans IIto be converted to] LIBOR Loans, and each requested Fixed Rate Term, are:

 
| **Amount** |   | **Fixed Rate Term** |   |
|------------|--------|---------------------|--------|
|       |   |                |   |   |   |
| $          |   |                |   | months |   |
|       |   |                |   |   |   |
| $          |   |                |   | months |   |

(h)           Theaggregate amount of said outstanding LIBOR Loans that are Term Loans II tobe continued as Prime Rate Loans is$                   .

2.             Borrowers’ Agent,on behalf of Borrowers, hereby certifies to Administrative Lender and Lendersthat, on the date of this Notice of Conversion or Continuation, no Default hasoccurred and is continuing.

 

 

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The party signing belowon behalf of Borrowers’ Agent is an Authorized Representative and has causedthis Notice of Conversion or Continuation to be duly executed on behalf ofBorrowers as of                             .

 

 
|   |   | MONACO COACH  CORPORATION |
|--------|--------|---------------------------|
|   |   |                      |
|   |   |                      | By: |   |
|   |   |                      | Title: |   |

 

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