exhibit10_1.htm


     

    Exhibit 10.1


    


    


    


    MONACO
COACH CORPORATION

    


    and

    


    CERTAIN
OF ITS SUBSIDIARIES,

    


    as
Borrowers

    


    


    


    


    LOAN
AND SECURITY AGREEMENT

    


    Dated
as of November 6, 2008

    


    $80,000,000

    


    


    


    


    CERTAIN
FINANCIAL INSTITUTIONS,

    


    as
Lenders

    


    and

    


    BANK
OF AMERICA, N.A.,

    


    as
Agent, Lead Arranger and Book Manager

     

    


     

    


    


     

    



    
      
         

      

      
         


        
          

        

      

      
         

        
          TABLE OF CONTENTS

          


           

           

        

      

    


    
      	
               
      

            	
              SECTION 1. DEFINITIONS; RULES OF
      CONSTRUCTION

            


    

     

    
      	
               
      

            	
              1.1

            	
              Definitions 

            	
               

            


    

    
      	
               
      

            	
              1.2

            	
              Accounting Terms 

            	
               

            


    

    
      	
               
      

            	
              1.3

            	
              Uniform Commercial Code 

            	
               

            


    

    
      	
               
      

            	
              1.4

            	
              Certain Matters of Construction 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 2. CREDIT
  FACILITIES

            


    

     

    
      	
               
      

            	
              2.1

            	
              Revolver Commitment 

            	
               

            


    

    
      	
               
      

            	
              2.2

            	
              [Intentionally Deleted] 

            	
               

            


    

    
      	
               
      

            	
              2.3

            	
              Letter of Credit Facility 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 3. INTEREST, FEES AND
  CHARGES

            


    

     

    
      	
               
      

            	
              3.1

            	
              Interest 

            	
               

            


    

    
      	
               
      

            	
              3.2

            	
              Fees 

            	
               

            


    

    
      	
               
      

            	
              3.3

            	
              Computation of Interest, Fees, Yield
      Protection 

            	
               

            


    

    
      	
               
      

            	
              3.4

            	
              Reimbursement Obligations 

            	
               

            


    

    
      	
               
      

            	
              3.5

            	
              Illegality 

            	
               

            


    

    
      	
               
      

            	
              3.6

            	
              Inability to Determine Rates 

            	
               

            


    

    
      	
               
      

            	
              3.7

            	
              Increased Costs; Capital Adequacy 

            	
               

            


    

    
      	
               
      

            	
              3.8

            	
              Mitigation 

            	
               

            


    

    
      	
               
      

            	
              3.9

            	
              Funding Losses

            	
               

            


    

    
      	
               
      

            	
              3.10

            	
              Maximum Interest 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 4. LOAN
  ADMINISTRATION

            


    

     

    
      	
               
      

            	
              4.1

            	
              Manner of Borrowing and Funding Revolver
    Loans

            	
               

            


    

    
      	
               
      

            	
              4.2

            	
              Defaulting Lender

            	
               

            


    

    
      	
               
      

            	
              4.3

            	
              Number and Amount of LIBOR Revolver Loans; Determination of
      Rate 

            	
               

            


    

    
      	
               
      

            	
              4.4

            	
              Borrower Agent 

            	
               

            


    

    
      	
               
      

            	
              4.5

            	
              One Obligation 

            	
               

            


    

    
      	
               
      

            	
              4.6

            	
              Effect of Termination 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 5.
PAYMENTS

            


    

     

    
      	
               
      

            	
              5.1

            	
              General Payment Provisions 

            	
               

            


    

    
      	
               
      

            	
              5.2

            	
              Repayment of Revolver Loans 

            	
               

            


    

    
      	
               
      

            	
              5.3

            	
              [Intentionally Deleted] 

            	
               

            


    

    
      	
               
      

            	
              5.4

            	
              Payment of Other Obligations 

            	
               

            


    

    
      	
               
      

            	
              5.5

            	
              Marshaling; Payments Set Aside 

            	
               

            


    

    
      	
               
      

            	
              5.6

            	
              Post-Default Allocation of Payments 

            	
               

            


    

    
      	
               
      

            	
              5.7

            	
              Application of Payments 

            	
               

            


    

    
      	
               
      

            	
              5.8

            	
              Loan Account; Account Stated 

            	
               

            


    

    
      	
               
      

            	
              5.9

            	
              Taxes 

            	
               

            



      
        
           

        

        
           


          
            

          

        

        
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Contents

          
            TABLE
OF CONTENTS

            (continued)

             

             

          

        

      



    


    
      	
               
      

            	
              5.10

            	
              Foreign Lenders 

            	
               

            


    

    
      	
               
      

            	
              5.11

            	
              Nature and Extent of Each Borrower’s
      Liability 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 6. CONDITIONS
  PRECEDENT

            


    

     

    
      	
               
      

            	
              6.1

            	
              Conditions Precedent to Initial Revolver
      Loans 

            	
               

            


    

    
      	
               
      

            	
              6.2

            	
              Conditions Precedent to All Credit
      Extensions 

            	
               

            


    

    
      	
               
      

            	
              6.3

            	
              Limited Waiver of Conditions
    Precedent 

            	
               

            


    

    
      	
               
      

            	
              6.4

            	
              Conditions Subsequent to the Closing
      Date 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 7.
COLLATERAL

            


    

     

    
      	
               
      

            	
              7.1

            	
              Grant of Security Interest 

            	
               

            


    

    
      	
               
      

            	
              7.2

            	
              Lien on Deposit Accounts; Cash
      Collateral 

            	
               

            


    

    
      	
               
      

            	
              7.3

            	
              Real Estate Collateral 

            	
               

            


    

    
      	
               
      

            	
              7.4

            	
              Other Collateral 

            	
               

            


    

    
      	
               
      

            	
              7.5

            	
              No Assumption of Liability 

            	
               

            


    

    
      	
               
      

            	
              7.6

            	
              Further Assurances 

            	
               

            


    

    
      	
               
      

            	
              7.7

            	
              Foreign Subsidiary Stock 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 8. COLLATERAL
  ADMINISTRATION

            


    

     

    
      	
               
      

            	
              8.1

            	
              Borrowing Base Certificates 

            	
               

            


    

    
      	
               
      

            	
              8.2

            	
              Administration of Accounts 

            	
               

            


    

    
      	
               
      

            	
              8.3

            	
              Administration of Inventory 

            	
               

            


    

    
      	
               
      

            	
              8.4

            	
              Administration of Equipment 

            	
               

            


    

    
      	
               
      

            	
              8.5

            	
              Administration of Deposit Accounts 

            	
               

            


    

    
      	
               
      

            	
              8.6

            	
              General Provisions 

            	
               

            


    

    
      	
               
      

            	
              8.7

            	
              Power of Attorney 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 9. REPRESENTATIONS AND
    WARRANTIES

            


    

     

    
      	
               
      

            	
              9.1

            	
              General Representations and
    Warranties 

            	
               

            


    

    
      	
               
      

            	
              9.2

            	
              Complete Disclosure 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 10. COVENANTS AND CONTINUING
      AGREEMENTS

            


    

     

    
      	
               
      

            	
              10.1

            	
              Affirmative Covenants 

            	
               

            


    

    
      	
               
      

            	
              10.2

            	
              Negative Covenants 

            	
               

            


    

    
      	
               
      

            	
              10.3

            	
              Financial Covenants 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 11. EVENTS OF DEFAULT; REMEDIES ON
      DEFAULT

            


    

     

    
      	
               
      

            	
              11.1

            	
              Events of Default 

            	
               

            


    

    
      	
               
      

            	
              11.2

            	
              Remedies upon Default 

            	
               

            


    

    
      	
               
      

            	
              11.3

            	
              License 

            	
               

            



      
        
           

        

        
           


          
            

          

        

        
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            TABLE
OF CONTENTS

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              11.4

            	
              Setoff 

            	
               

            


    

    
      	
               
      

            	
              11.5

            	
              Remedies Cumulative; No Waiver 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 12.
AGENT

            


    

     

    
      	
               
      

            	
              12.1

            	
              Appointment, Authority and Duties of
      Agent 

            	
               

            


    

    
      	
               
      

            	
              12.2

            	
              Agreements Regarding Collateral and Field Examination
      Reports 

            	
               

            


    

    
      	
               
      

            	
              12.3

            	
              Reliance By Agent 

            	
               

            


    

    
      	
               
      

            	
              12.4

            	
              Action Upon Default 

            	
               

            


    

    
      	
               
      

            	
              12.5

            	
              Ratable Sharing 

            	
               

            


    

    
      	
               
      

            	
              12.6

            	
              Indemnification of Agent
Indemnitees 

            	
               

            


    

    
      	
               
      

            	
              12.7

            	
              Limitation on Responsibilities of
    Agent 

            	
               

            


    

    
      	
               
      

            	
              12.8

            	
              Successor Agent and Co-Agents 

            	
               

            


    

    
      	
               
      

            	
              12.9

            	
              Due Diligence and Non-Reliance 

            	
               

            


    

    
      	 	
              12.10

            	
              Replacement of Certain
Lenders

            


    

    
      	 	
              12.11

            	
              Remittance of Payments and
  Collections

            


    

    
      	 	
              12.12

            	
              Agent in its Individual
  Capacity

            


    

    
      	 	12.13	
              Agent Titles

            	
               

            


    

    
      	 	
              12.14  

            	
              No Third Party
Beneficiaries

            


    

     

     

    
      	
               
      

            	
              SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND
      PARTICIPATIONS

            


    

     

    
      	
               
      

            	
              13.1

            	
              Successors and Assigns 

            	
               

            


    

    
      	
               
      

            	
              13.2

            	
              Participations 

            	
               

            


    

    
      	
               
      

            	
              13.3

            	
              Assignments 

            	
               

            


    

     

     

    
      	
               
      

            	
              SECTION 14.
MISCELLANEOUS

            


    

     

    
      	
               
      

            	
              14.1

            	
              Consents, Amendments and Waivers 

            	
               

            


    

    
      	
               
      

            	
              14.2

            	
              Indemnity 

            	
               

            


    

    
      	
               
      

            	
              14.3

            	
              Notices and Communications 

            	
               

            


    

    
      	
               
      

            	
              14.4

            	
              Performance of Borrowers’
    Obligations 

            	
               

            


    

    
      	
               
      

            	
              14.5

            	
              Credit Inquiries 

            	
               

            


    

    
      	
               
      

            	
              14.6

            	
              Severability 

            	
               

            


    

    
      	
               
      

            	
              14.7

            	
              Cumulative Effect; Conflict of
Terms 

            	
               

            


    

    
      	
               
      

            	
              14.8

            	
              Counterparts 

            	
               

            


    

    
      	
               
      

            	
              14.9

            	
              Entire Agreement 

            	
               

            


    

    
      	 	
              14.10

            	
              Relationship with
Lenders

            


    

    
      	 	
              14.11

            	
              No Advisory or Fiduciary
  Responsibility

            


    

    
      	 	
              14.12  

            	
              Confidentiality

            


    

    
      	 	
              14.13  

            	
              [Intentionally
Deleted]

            


    

    
      	 	
              14.14  

            	
              GOVERNING LAW

            


    

    
      	 	
              14.15  

            	
              Consent to Forum;
Arbitration

            


    


    
      
         

      

      
         


        
          

        

      

      
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Contents

        
          TABLE
OF CONTENTS

          (continued)

           

           

        

      

    


    


    
      	 	
              14.16

            	
              Waivers by
Borrowers

            


    

    
      	 	
              14.17

            	
              Patriot Act
Notice

            


    

     

     

    LIST OF
EXHIBITS AND SCHEDULES

     

     

    


     

    
      	 Exhibit
      A	 	 Revolver
      Note
	 Exhibit
      B	 	 Assignment and
      Acceptance
	 Exhibit
      C	 	 Assignment
      Notice
	 Schedule 1.1	 	 Revolver Commitments of
  Lenders


    

     

     

    


    
      
        
           

        

        
           


          
            

          

        

        
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    LOAN
AND SECURITY AGREEMENT

     

    THIS LOAN
AND SECURITY AGREEMENT (this “Agreement”) is dated
as of November 6, 2008, among MONACO COACH CORPORATION, a
Delaware corporation (“Parent”) and certain
of Parent’s subsidiaries party hereto (each such subsidiary together with Parent
shall be individually referred to herein as a “Borrower” and
collectively as, the “Borrowers”), the
financial institutions party to this Agreement from time to time as lenders
(collectively, “Lenders”), and BANK OF AMERICA, N.A., a
national banking association, as agent for the Lenders (“Agent”).

     

    R E C I T A L
S:

     

    Borrowers
have requested that Lenders provide a credit facility to Borrowers to finance
their mutual and collective business enterprise.  Lenders are willing
to provide the credit facility on the terms and conditions set forth in this
Agreement.

     

    NOW, THEREFORE, for valuable
consideration hereby acknowledged, the parties agree as follows:

     

    SECTION
1. DEFINITIONS;
RULES OF CONSTRUCTION

     

    1.1 Definitions.  As used herein, the following terms
have the meanings set forth below:

     

    Account: as defined
in the UCC, including all rights to payment for goods sold or leased, or for
services rendered.

     

    Account Debtor: a
Person who is obligated under an Account, Chattel Paper or General
Intangible.

     

    Accounts Formula
Amount: the sum of up to 85% of the Value of Eligible Accounts; provided, however, that such
percentage shall be reduced by 1.0% for each whole percentage point (or portion
thereof) that the Dilution Percent exceeds 5.0%; provided, that (i) no Eligible
Flooring Accounts owed by a UK Approved Account Debtor may be included in the
Value of Eligible Accounts unless the floor financier for such UK Approved
Account Debtor has approved the transaction giving rise to such Account and has
agreed to finance the dealer’s purchase from a Borrower prior to the shipment of
goods by a Borrower to the UK Approved Account Debtor, (ii) no more than
$650,000 at any one time of Eligible Flooring Accounts owed by a UK Approved
Account Debtor may be included in the Value of Eligible Accounts; and (iii) no
more than $3,000,000 at any one time of Eligible Non-Flooring Accounts may be
included in the Value of Eligible Accounts.

     

    Affiliate: with
respect to any Person, another Person that directly, or indirectly through one
or more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled”
have correlative meanings.

     


    
      
         

      

      
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    Agent Indemnitees:
Agent and its officers, directors, employees, Affiliates, agents and
attorneys.

     

    Agent Professionals:
attorneys, accountants, appraisers, auditors, business valuation experts,
environmental engineers or consultants, turnaround consultants, and other
professionals and experts retained by Agent.

     

    Airplane Lease: that
certain Aircraft Lease Agreement, dated April 11, 2007 with Bank of
America, N.A., successor in interest to General Electric Capital Corporation,
for Gulf Stream Aerospace, Model G-IV Aircraft.

     

    Allocable Amount: as
defined in Section
5.11.3.

     

    Anti-Terrorism Laws:
any laws relating to terrorism or money laundering, including the Patriot
Act.

     

    Applicable Law: all
laws, rules, regulations and governmental guidelines applicable to the Person,
conduct, transaction, agreement or matter in question, including all applicable
statutory law, common law and equitable principles, and all provisions of
constitutions, treaties, statutes, rules, regulations, orders and decrees of
Governmental Authorities.

     

    Approved Consigned
Inventory:  Inventory sold by a Borrower on consignment to its
dealers; provided, that the aggregate Value of such Inventory shall at no time
exceed $1,000,000 and prior to delivery of such Inventory to its dealer, the
Borrower has provided evidence to Agent that it has taken the necessary steps
under Applicable Law to protect its ownership interest in such Inventory
(including but not limited to (x) evidence that Borrowers have filed a financing
statement with respect to such Inventory as required under the UCC, (y) evidence
that Borrowers have given notice to all other creditors of the dealer of such
consigned Inventory and (z) evidence that the dealer has entered into a
consignment agreement with the Borrowers), which evidence shall be in form and
substance satisfactory to Agent.

     

    Approved Dealer Financing
Agreement: agreements (including those agreements identified on Schedule 1.1M to the
Disclosure Letter) entered into by a Borrower with financial institutions
providing floor-plan financing to dealers who purchase finished goods Inventory
of Borrowers, and the terms of which agreements (including Repurchase
Obligations) are both customary in the recreational vehicle industry and are no
less favorable in all material respects to Borrowers than those in effect as of
the Closing Date.

     

    Approved Fund: any
Person (other than a natural person) that is engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in its ordinary course of activities, and is administered or managed by a
Lender, an entity that administers or manages a Lender, or an Affiliate of
either.

     

    Approved Sale: a sale
by Borrower to a dealer evidenced by an Account which has been approved for
payment by a financial institution in accordance with an Approved Dealer
Financing Agreement.

     

    Asset Disposition: a
sale, lease, license, consignment, transfer or other disposition of Property of
an Obligor, including a disposition of Property in connection with a
sale-leaseback transaction or synthetic lease.

     

    Assignment and
Acceptance: an assignment agreement between a Lender and Eligible
Assignee, in the form of Exhibit B.

     

    Availability: the
Borrowing Base minus the principal balance of all Revolver Loans.

     

    Availability Block:
$5,000,000.

     

    Availability Reserve:
the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and
Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) the
Temporary Reserve; (f) all accrued Royalties, whether or not then due and
payable by a Borrower; (g) the aggregate amount of liabilities secured by Liens
(other than Liens in favor of the Term Loan Agent securing Borrowers’
obligations under the Term Loan Documents) upon Collateral that are senior to
Agent’s Liens (but imposition of any such reserve shall not waive an Event of
Default arising therefrom); (h) the Availability Block; (i) the Repurchase
Demands and Other Guarantee Reserve; (j) the WIP Reserve; and (k) such
additional reserves, in such amounts and with respect to such matters, as Agent
in its discretion may elect to impose from time to time.

     

    Bank of America: Bank
of America, N.A., a national banking association, and its successors and
assigns.

     

    Bank of America
Indemnitees: Bank of America and its officers, directors, employees,
Affiliates, agents and attorneys.

     

    Bank Product: any of
the following products, services or facilities extended to any Borrower or
Subsidiary by Bank of America or
any of its Affiliates: (a) Cash Management Services; (b) products under Hedging
Agreements; (c) commercial credit card and merchant card services; and (d) other
banking products or services (other than the Airplane Lease) as may be requested
by any Borrower or Subsidiary, other than Letters of Credit.

     

    Bank Product Debt:
Debt and other obligations of an Obligor relating to Bank Products.

     

    Bank Product Reserve:
the aggregate amount of reserves established by Agent from time to time in its
discretion in respect of Bank Product Debt.

     

    Bankruptcy Code:
Title 11 of the United States Code.

     

    Base Rate: the rate
of interest announced by Bank of America from time to time as its prime
rate.  Such rate is a rate set by Bank of America based upon various
factors including its costs and desired return, general economic conditions and
other factors, and is used as a

     


    
      
         

      

      
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     reference
point for pricing some loans, which may be priced at, above or below such
announced rate.  Any change in such rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.

     

    Base Rate Revolver
Loan: a Revolver Loan that bears interest based on the Base
Rate.

     

    Bison:  Bison
Manufacturing, LLC, an Indiana limited liability company.

     

    Board of Governors:
the Board of Governors of the Federal Reserve System.

     

    Borrowed Money: with
respect to any Obligor, without duplication, its (a) Debt that (i) arises from
the lending of money by any Person to such Obligor, (ii) is evidenced by notes,
drafts, bonds, debentures, credit documents or similar instruments, (iii)
accrues interest or is a type upon which interest charges are customarily paid
(excluding trade payables owing in the Ordinary Course of Business), or (iv) was
issued or assumed as full or partial payment for Property; (b) Capital Leases;
(c) reimbursement obligations with respect to letters of credit; and (d)
guaranties of any Debt of the foregoing types owing by another
Person.

     

    Borrower Agent: as
defined in Section
4.4.

     

    Borrowing: a group of
Revolver Loans of one Type that are made on the same day or are converted into
Revolver Loans of one Type on the same day.

     

    Borrowing Base: on
any date of determination, an amount equal to the lesser of (a) the aggregate
amount of Revolver Commitments, minus the
Availability Reserve, or (b) the sum of the Accounts Formula Amount, plus the Inventory
Formula Amount, minus the
Availability Reserve.

     

    Borrowing Base
Certificate: a certificate, in form and substance satisfactory to Agent,
by which Borrowers certify calculation of the Borrowing Base.

     

    Business Day: any day
other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the laws of, or are in fact closed in, North Carolina
and California, and if such day relates to a LIBOR Revolver Loan, any such day
on which dealings in Dollar deposits are conducted between banks in the London
interbank Eurodollar market.

     

    CC
Resorts:  Outdoor Resorts Motorcoach Country Club, Inc., a
California corporation.

     

    Capital Expenditures:
all liabilities incurred and expenditures made by a Borrower or Subsidiary for
the acquisition of any fixed assets, or any improvements, replacements,
substitutions or additions thereto with a useful life of more than one year,
including the principal portion of Capital Leases.

     

    Capital Lease: any
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP.

     


    
      
         

      

      
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    Carryover Lenders:
U.S. Bank National Association, Wells Fargo Bank, National Association, Union
Bank of California, N.A., National City Bank of Indiana, and Bank of the
West.

     

    Cash Collateral:
cash, and any interest or other income earned thereon, that is delivered to
Agent to Cash Collateralize any Obligations.

     

    Cash Collateral
Account: a demand deposit, money market or other account established by
Agent at such financial institution as Agent may select in its discretion, which
account shall be subject to Agent’s Liens for the benefit of Secured
Parties.

     

    Cash Collateralize:
the delivery of cash to Agent, as security for the payment of Obligations, in an
amount equal to (a) with respect to LC Obligations, 105% of the aggregate LC
Obligations, and (b) with respect to any Obligations arising under Bank
Products, Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such
Obligations.  “Cash
Collateralization” has a correlative meaning.

     

    Cash Equivalents: (a)
marketable obligations issued or unconditionally guaranteed by, and backed by
the full faith and credit of, the United States government, maturing within 12
months of the date of acquisition; (b) certificates of deposit, time deposits
and bankers’ acceptances maturing within 12 months of the date of acquisition,
and overnight bank deposits, in each case which are issued by a commercial bank
organized under the laws of the United States or any state or district thereof,
rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of
acquisition, and (unless issued by a Lender) not subject to offset rights; (c)
repurchase obligations with a term of not more than 30 days for underlying
investments of the types described in clauses (a) and (b) entered into with any
bank meeting the qualifications specified in clause (b); (d) commercial paper
rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing
within nine months of the date of acquisition; and (e) shares of any money
market fund that has substantially all of its assets invested continuously in
the types of investments referred to above, has net assets of at least
$500,000,000 and has the highest rating obtainable from either Moody’s or
S&P.

     

    Cash Management
Services: any services provided from time to time by Bank of America or
any of its Affiliates to any Borrower or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository,
information reporting, lockbox and stop payment services.

     

    CERCLA: the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §
9601 et
seq.).

     

    Change in Law: the
occurrence, after the date hereof, of (a) the adoption or taking effect of any
law, rule, regulation or treaty; (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority; or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.

     


    
      
         

      

      
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    Change of Control:
(a) Parent ceases to directly own and control, beneficially and of record, all
Equity Interests in Signature Motorcoach and R-Vision Holdings; (b) Parent
ceases to directly own and control, beneficially and of record, at least 49% of
the Equity Interests of Custom Chassis; (c) R-Vision Holdings ceases to directly
own and control, beneficially and of record, all Equity Interests of R-Vision,
R-Vision Motorized, R-Vision Manufacturing, Bison, and Roadmaster; (d) Signature
Motorcoach ceases to directly own and control beneficially and of record, all
Equity Interests of Naples Motorcoach, Port of the Isles Motorcoach, LV Resorts,
CC Resorts, LaQuinta Motorcoach and Michigan Resorts; (e) the majority of the
seats (other than vacant seats) on the board of directors (or similar governing
body) of Parent cease to be occupied by Persons who either (i) were members of
the board of directors of Parent on the Closing Date or (ii) were nominated for
election by the board of directors of Parent, a majority of whom were directors
on the Closing Date or whose election or nomination for election was previously
approved by a majority of such directors or directors elected in accordance with
this clause (ii); or (f) all or substantially all of a Borrower’s assets are
sold or transferred, other than sale or transfer to another Borrower; provided
that none of the foregoing shall be deemed a Change of Control to the extent the
transaction is permitted pursuant to Sections 10.2.9 and 10.2.10.

     

    Claims: all
liabilities, obligations, losses, damages, penalties, judgments, proceedings,
interest, costs and expenses of any kind (including remedial response costs,
reasonable attorneys’ fees and Extraordinary Expenses) at any time (including
after Full Payment of the Obligations, resignation or replacement of Agent, or
replacement of any Lender) incurred by or asserted against any Indemnitee in any
way relating to (a) any Revolver Loans, Letters of Credit, Loan Documents, or
the use thereof or transactions relating thereto, (b) any action taken or
omitted to be taken by any Indemnitee in connection with any Loan Documents, (c)
the existence or perfection of any Liens, or realization upon any Collateral,
(d) exercise of any rights or remedies under any Loan Documents or Applicable
Law, or (e) failure by any Obligor to perform or observe any terms of any Loan
Document, in each case including all costs and expenses relating to any
investigation, litigation, arbitration or other proceeding (including an
Insolvency Proceeding or appellate proceedings), whether or not the applicable
Indemnitee is a party thereto.

     

    Closing Date: as
defined in Section
6.1.

     

    Code: the Internal
Revenue Code of 1986.

     

    Collateral: all
Property described in Section
7.1, all Property described in any Security Documents as security for any
Obligations, and all other Property that now or hereafter secures (or is
intended to secure) any Obligations.

     

    Commitment Termination
Date: the earliest to occur of (a) the Revolver Termination Date; (b) the
date on which Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4; or (c) the date
on which the Revolver Commitments are terminated pursuant to Section 11.2.

     

    Compliance
Certificate: a certificate, in form and substance satisfactory to Agent,
by which Borrower Agent certifies compliance with Sections 10.2.3 and 10.3, lists all outstanding
Bank
Products, and sets forth
the calculation of the financial covenants set forth in Sections 10.3.1 and 10.3.2.

     


    
      
         

      

      
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    Contingent
Obligation: any obligation of a Person arising from a guaranty, indemnity
or other assurance of payment or performance of any Debt, lease, dividend or
other obligation (“primary obligations”)
of another obligor (“primary obligor”) in
any manner, whether directly or indirectly, including any obligation of such
Person under any (a) guaranty, endorsement, co-making or sale with recourse of
an obligation of a primary obligor; (b) obligation to make take-or-pay or
similar payments regardless of nonperformance by any other party to an
agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof.  The
amount of any Contingent Obligation shall be deemed to be the stated or
determinable amount of the primary obligation (or, if less, the maximum amount
for which such Person may be liable under the instrument evidencing the
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto.

     

    Custom
Chassis:  Custom Chassis Products, LLC, a Delaware limited
liability company.

     

    Custom Chassis
Funding: Investments, loans or advances by Borrowers in Custom Chassis,
in an aggregate amount after the Closing Date not to exceed $5,000,000; provided
that no such Investment, loans or advances may be made by any Borrower prior to
June 30 2009 and may only be made thereafter if immediately before and after
giving effect to any such Investment, loan or advance (x) no Default or Event of
Default exists, and (y), Availability is greater than $40,000,000.

     

    CWA: the Clean Water
Act (33 U.S.C. §§ 1251 et seq.).

     

    Debt: as applied to
any Person, without duplication, (a) all items that would be included as
liabilities on a balance sheet in accordance with GAAP, including Capital
Leases, but excluding trade payables incurred and being paid in the Ordinary
Course of Business; (b) all Contingent Obligations; (c) all reimbursement
obligations in connection with letters of credit issued for the account of such
Person; and (d) in the case of a Borrower, the Obligations.  The Debt
of a Person shall include any recourse Debt of any partnership in which such
Person is a general partner or joint venturer.

     

    Default: an event or
condition that, with the lapse of time or giving of notice, would constitute an
Event of Default.

     

    Default Rate: for any
Obligation (including, to the extent permitted by law, interest not paid when
due), 2% plus the interest rate otherwise applicable thereto.

     

    Deposit Account Control
Agreements: the Deposit Account control agreements to be executed by each
institution maintaining a Deposit Account for a Borrower, in favor of Agent, for
the benefit of Secured Parties, as security for the Obligations; provided, that
such control agreements shall not be required with respect to any Excluded
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    Dilution Percent: the
percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad
debt write-downs or write-offs, discounts, returns, promotions, credits, credit
memos and other dilutive items with respect to Accounts arising from the sale of
Inventory, divided
by (b) gross sales.

     

    Disclosure
Letter:  the disclosure letter of Borrowers to Agent and the
Lenders with respect to this Agreement, dated the Closing Date, and in form and
substance satisfactory to Agent and the Lenders.

     

    Distribution: any
declaration or payment of a distribution, interest or dividend on any Equity
Interest (other than payment-in-kind); any distribution, advance or repayment of
Debt to a holder of Equity Interests; or any purchase, redemption, or other
acquisition or retirement for value of any Equity Interest.

     

    Dollars: lawful money
of the United States.

     

    Dominion Account: a
special account established by Borrowers at Bank of America or another bank
acceptable to Agent, over which Agent and Term Loan Agent have exclusive control
for withdrawal purposes.

     

    EBITDA: determined on
a consolidated basis for Borrowers and Subsidiaries, equal to net income; plus
(a) without duplication and to the extent deducted in the calculation of
net income:  (i) interest expense, (ii) Taxes, whether paid or
owed, (iii) depreciation, (iv) amortization, (v) losses arising
from the sale of capital assets, (vi) equity-based compensation expenses, (vii)
extraordinary non-cash losses and charges and other non-recurring non-cash
losses and charges; minus (b) without duplication and to the extent
deducted in the calculation of net income:  (i) gains arising from the
sale of capital assets, (ii) gains arising from the write-up of assets, and
(iii) any extraordinary gains.

     

    Eligible Account: any
Account which is an Eligible Flooring Account or an Eligible Non-Flooring
Account.

     

    Eligible Assignee: a
Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund;
(b) any other financial institution approved by Agent and Borrower Agent (which
approval by Borrower Agent shall not be unreasonably withheld or delayed, and
shall be deemed given if no objection is made within two Business Days after
notice of the proposed assignment), that is organized under the laws of the
United States or any state or district thereof, has total assets in excess of $5
billion, extends asset-based lending facilities in its ordinary course of
business and whose becoming an assignee would not constitute a prohibited
transaction under Section 4975 of the Code or any other Applicable Law; and (c)
during any Event of Default, any Person acceptable to Agent in its
discretion.

     

     


    
      
         

      

      
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      Eligible Flooring
Account: a Flooring Account owing to a Borrower that arises in the
Ordinary Course of Business from the sale of recreational vehicles or parts for
recreational vehicles,
is payable in Dollars and is deemed by Agent, in its discretion, to be an
Eligible Flooring Account.  Without limiting the foregoing, no
Flooring Account shall be an Eligible Flooring Account if (a) it is a Flooring
Account which remains outstanding more than 30 days after the date of the
Approved Sale; (b) 50% or more of the Accounts arising from the sale of
Inventory owing by such Account Debtor are not Eligible Accounts; (c) when
aggregated with other Flooring Accounts owing by the same Account Debtor, it
exceeds 15% of the aggregate Flooring Accounts (or such higher percentage as
Agent may establish for the Account Debtor from time to time); (d) it does not
conform with a covenant or representation herein; (e) it is owing by a creditor
or supplier, or is otherwise subject to a potential offset, counterclaim,
dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit
or allowance (but ineligibility shall be limited to the amount thereof); (f) an
Insolvency Proceeding has been commenced by or against the Account Debtor; or
the Account Debtor has failed, has suspended or ceased doing business, is
liquidating, dissolving or winding up its affairs, or is not Solvent; (g) the
Account Debtor (other than a UK Approved Account Debtor subject to the
limitations set forth in the proviso to the definition of Accounts Formula
Amount) is organized or has its principal offices or assets outside the United
States or Canada; (h) it is owing by a Government Authority, unless the Account
Debtor is the United States or any department, agency or instrumentality thereof
and the Account has been assigned to Agent in compliance with the Assignment of
Claims Act; (i) it is not subject to a duly perfected, first priority Lien in
favor of Agent, or is subject to any other Lien other than a Lien in favor of
the Term Loan Agent which is subject to the Intercreditor Agreement; (j) the
goods giving rise to it have not been delivered to the FOB point or are subject
to rejection by the Account Debtor, or it otherwise does not represent a final
sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; (l) its payment has been extended, the Account Debtor
has made a partial payment, or it arises from a sale on a cash-on-delivery
basis; (m) it arises from a sale to an Affiliate, or from a sale on a
bill-and-hold (provided that units held for factory-delivery to retail customers
shall not be deemed a sale on a bill-and hold basis), guaranteed sale, sale or
return, sale on approval, consignment, or other repurchase or return basis;
provided that no Account shall be excluded from this clause by reason of the
existence of a Repurchase Obligation with respect to such Account; (n) it
represents a progress billing or retainage or progress payment or partial
payment under an installment contract; (o) it includes a billing for interest,
fees or late charges, but ineligibility shall be limited to the extent thereof;
(p) it arises from a retail sale to a Person who is purchasing for personal,
family or household purposes; (q) it is a Flooring Account which arises from the
sale of Roadmaster trailer Inventory; or (r) it is owed by or on behalf of
Custom Chassis.  In calculating delinquent portions of Flooring
Accounts under clauses (a) and (b), credit balances more than 90 days old will
be excluded.

    

     

    Eligible Inventory:
Inventory owned by a Borrower that Agent, in its discretion deems to be Eligible
Inventory.  Without limiting the foregoing, no Inventory shall be
Eligible Inventory unless it (a) is finished goods or raw materials, or Work In
Process Motorized Inventory, or Work In Process Towable Inventory and not
packaging or shipping materials, labels, samples, display items, bags,
replacement parts or manufacturing supplies; (b) is not held on consignment
other than Approved Consigned Inventory, nor subject to any deposit or down
payment; (c) is in new and saleable condition and is not damaged, defective,
shopworn or otherwise unfit for sale; (d) is not slow-moving, obsolete or
unmerchantable, and does not constitute returned or repossessed goods (but
excluding (x) Inventory repurchased from retail customers and (y)

     


    
      
         

      

      
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    Inventory
repurchased subject to a Repurchase Obligation (which has been in the possession
of a Borrower less than 30 days), in each case subject to the limitations set
forth in the proviso to the definition of Inventory Formula Amount); (e) meets
all standards imposed by any Governmental Authority, and does not constitute
hazardous materials under any Environmental Law; (f) conforms with the covenants
and representations herein; (g) is subject to Agent’s duly perfected, first
priority Lien, and no other Lien other than a Lien in favor of the Term Loan
Agent which is subject to the Intercreditor Agreement; (h) is within the
continental United States or Canada, is not in transit except between locations
of Borrowers, and is not consigned to any Person (other than Approved Consigned
Inventory); (i) is not subject to any warehouse receipt or negotiable Document;
(j) is not subject to any License or other arrangement that restricts such
Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has
received an appropriate Lien Waiver; (k) is not located on leased premises or in
the possession of a warehouseman, processor, repairman, mechanic, shipper,
freight forwarder or other Person, unless the lessor or such Person has
delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been
established; and (l) is reflected in the details of a current inventory report
acceptable to Agent.

     

    Eligible Non-Flooring
Account: a Non-Flooring Account owing to a Borrower that arises in the
Ordinary Course of Business from the sale of recreational vehicles or parts for
recreational vehicles, is payable in Dollars and is deemed by Agent, in its
discretion, to be an Eligible Non-Flooring Account.  Without limiting
the foregoing, a Non-Flooring Account shall not be an Eligible Non-Flooring
Account if (a) it is unpaid for more than 60 days after the original due date,
or more than 90 days after the original invoice date; (b) 50% or more of the
Accounts arising from the sale of Inventory owing by the Account Debtor are not
Eligible Accounts; (c) when aggregated with other Non-Flooring Accounts owing by
the same Account Debtor, it exceeds the limits set forth in the Sublimit
Agreement with
respect to such Account Debtor (or such lower amount as Agent may establish for
the Account Debtor from time to time); (d) it does not conform with a covenant
or representation herein; (e) it is owing by a creditor or supplier, or is
otherwise subject to a potential offset, counterclaim, dispute, deduction,
discount, recoupment, reserve, defense, chargeback, credit or allowance (but
ineligibility shall be limited to the amount thereof); (f) an Insolvency
Proceeding has been commenced by or against the Account Debtor; or the Account
Debtor has failed, has suspended or ceased doing business, is liquidating,
dissolving or winding up its affairs, or is not Solvent; (g) the Account Debtor
is organized or has its principal offices or assets outside the United States or
Canada; (h) it is owing by a Government Authority, unless the Account Debtor is
the United States or any department, agency or instrumentality thereof and the
Account has been assigned to Agent in compliance with the Assignment of Claims
Act; (i) it is not subject to a duly perfected, first priority Lien in favor of
Agent, or is subject to any other Lien other than a Lien in favor of the Term
Loan Agent which is subject to the Intercreditor Agreement; (j) the goods giving
rise to it have not been delivered to the FOB delivery point or are subject to
rejection by the Account Debtor, or it otherwise does not represent a final
sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; (l) its payment has been extended, the Account Debtor
has made a partial payment, or it arises from a sale on a cash-on-delivery
basis; (m) it arises from a sale to an Affiliate, or from a sale on a
bill-and-hold (provided that units held for factory-delivery to retail customers
shall not be deemed a sale on a bill-and hold basis), guaranteed sale, sale or
return, sale on approval, consignment, or other repurchase or return basis;
provided that no Account

     


    
      
         

      

      
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    shall be
excluded from this clause by reason of the existence of a Repurchase Obligation
with respect to such Account; (n) it represents a progress billing or retainage
or progress payment or partial payment under an installment contract; (o) it
includes a billing for interest, fees or late charges, but ineligibility shall
be limited to the extent thereof; (p) it arises from a retail sale to a Person
who is purchasing for personal, family or household purposes; (q) it is a
Non-Flooring Account which arises from the sale of Roadmaster trailer Inventory;
(r) it is owed by or on behalf of Custom Chassis; (s) it represents a dealer
rebate or other sale program accrual; or (t) it is owed by an Account Debtor
other than those set forth in the Sublimit Agreement or otherwise approved by
Agent.  In calculating delinquent portions of Accounts under clauses
(a) and (b), credit balances more than 90 days old will be
excluded.

     

    Enforcement Action:
any action to enforce any Obligations or Loan Documents or to realize upon any
Collateral (whether by judicial action, self-help, notification of Account
Debtors, exercise of setoff or recoupment, or otherwise).

     

    Environmental
Action:  any complaint, summons, citation, notice, directive,
order, claim, litigation, investigation, judicial or administrative proceeding,
judgment, letter or other communication from any Person or Governmental
Authority alleging violations of Environmental Laws or Environmental Release of
Hazardous Materials in violation of Environmental Law, (a) from any assets,
properties or businesses owned or operated by any Borrower or any of its
Subsidiaries or any predecessor in interest; (b) from adjoining properties or
businesses; or (c) onto any facilities which received Hazardous Materials
generated by any Borrower or any of its Subsidiaries or any predecessor in
interest.

     

    Environmental Laws:
all Applicable Laws (including all programs, permits and guidance promulgated by
regulatory agencies), relating to public health (but excluding occupational
safety and health, to the extent regulated by OSHA) or the protection or
pollution of the environment, including CERCLA, RCRA and CWA.

     

    Environmental Liabilities
and Costs: all liabilities, monetary obligations, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of
counsel, experts and consultants and costs of investigations and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of any
claim or demand by any Governmental Authority or any third party against any
Borrower or any of its Subsidiaries, and which relate to any environmental
condition or an Environmental Release of Hazardous Materials from or onto (i)
any property presently or formerly owned by any Borrower or any of its
Subsidiaries or (ii) any facility which received Hazardous Materials generated
by any Borrower or any of its Subsidiaries.

     

    Environmental
Lien:  means any Lien (other than the Permitted Lien described
in Section 10.2.2(p)) in
favor of any Governmental Authority for Environmental Liabilities and
Costs.

     

    Environmental Notice:
a notice (whether written or oral) from any Governmental Authority or other
Person alleging any noncompliance with, investigation of a possible violation
of, litigation relating to, or potential fine or liability under any
Environmental Law, or with respect
to any Environmental Release, environmental pollution or hazardous materials,
including any complaint, summons, citation, order, claim, demand or request for
correction, remediation or otherwise.

     


    
      
         

      

      
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    Environmental
Release: any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Materials (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including without limitation,
the movement of Hazardous Materials through or in the ambient air, soil, surface
or ground water, or property.

     

    Equity Interest: the
interest of any (a) shareholder in a corporation; (b) partner in a partnership
(whether general, limited, limited liability or joint venture); (c) member in a
limited liability company; or (d) other Person having any other form of equity
security or ownership interest.

     

    ERISA: the Employee
Retirement Income Security Act of 1974.

     

    ERISA Affiliate: any
trade or business (whether or not incorporated) under common control with an
Obligor within the meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to Section 412 of
the Code).

     

    ERISA Event: (a) a
Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Obligor
or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal
by any Obligor or ERISA Affiliate from a Multiemployer Plan or notification that
a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) the failure by any Obligor
or ERISA Affiliate to meet any funding obligations with respect to any Pension
Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (g) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Obligor or
ERISA Affiliate.

     

    Event of Default: as
defined in Section
11.

     

    Excluded Deposit
Account: (i) Deposit Account exclusively used for payroll, payroll
taxes or employee benefits maintained by such Borrower, or (ii) an account
containing not more than $25,000 at any time; so long as the aggregate balance
of such accounts excluded pursuant to this clause (ii) at no time exceeds
$100,000.

     

     


    
      
         

      

      
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      Excluded Tax: with
respect to Agent, any Lender, Issuing Bank or any other recipient of a payment
to be made by or on account of any Obligation, (a) Taxes imposed on or measured
by its overall net income (however denominated), and franchise taxes imposed on
it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is
located or with which it has a present or former connection (other than any such
connection arising from having executed, delivered, performed its obligations or
received payment under, or enforced any Loan Document); (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which any Borrower is located; (c) any backup
withholding tax required by the Code to be withheld from amounts payable to a
Lender that has failed to comply with Section 5.10; and (d) in
the case of a Foreign Lender, any withholding tax that is (i) required
pursuant to laws in force at the time such Lender becomes a Lender (or
designates a new Lending Office) hereunder, or (ii) attributable to such Foreign
Lender’s failure or inability (other than as a result of a change in Applicable
Law after such Foreign Lender becomes a Lender) to comply with Section 5.10, except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding
tax.

    

     

    Existing Letters of
Credit: the letters of credit issued by U.S. Bank National Association
set forth on Schedule
1.1E of the Disclosure Letter which are outstanding on the Closing
Date.

     

    Extraordinary
Expenses: all costs, expenses or advances that Agent may incur during a
Default or Event of Default, or during the pendency of an Insolvency Proceeding
of an Obligor, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or
advertising for sale, sale, collection, or other preservation of or realization
upon any Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Obligor, any representative of
creditors of an Obligor or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit
or Obligations, including any lender liability or other Claims; (c) the
exercise, protection or enforcement of any rights or remedies of Agent in, or
the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of
any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement
Action; (f) negotiation and documentation of any modification, waiver, workout,
restructuring or forbearance with respect to any Loan Documents or Obligations;
and (g) Protective Advances.  Such costs, expenses and advances
include transfer fees, Other Taxes, storage fees, insurance costs, permit fees,
utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees
and commissions, auctioneers’ fees and commissions, accountants’ fees,
environmental study fees, wages and salaries paid to employees of any Obligor or
independent contractors in liquidating any Collateral, and travel
expenses.

     

    Fee Letter: the fee
letter agreement between Agent and Borrowers dated as of even date
herewith.

     

    Fiscal Quarter: each
period of three months, commencing on the first day of a Fiscal
Year.

     

    Fiscal Year: the
fiscal year of Parent and its Subsidiaries for accounting and tax purposes,
ending on the Saturday closest to December 31 of each year.

     


    
      
         

      

      
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    Fixed Charge Coverage
Ratio: the ratio, determined on a consolidated basis for Borrowers and
Subsidiaries for the most recent trailing 12 month period, of (a) the sum of (i)
EBITDA, plus (ii) non-cash portion of cost of goods sold related to the sale of
resort lots; to (b)
Fixed Charges.

     

    Fixed Charges: the
sum of interest expense (other than payment-in-kind), scheduled principal
payments made on Borrowed Money, Capital Expenditures (except those financed
with Borrowed Money other than Revolver Loans), cash taxes paid, Distributions
made (excluding any Distributions made by any Borrower to any other Borrower),
and all principal repayments of the Term Loans related to any resort Real Estate
lots sold.

     

    Flooring
Account:  an Account owing to a Borrower arising from an
Approved Sale.

     

    Flooring Lender
Obligation:  as of any measurement date, the sum of (i) the
aggregate amount of obligations owing by Borrowers to the financial institution
providing floor financing for the Borrowers’ dealers on account of demands made
by such financial institutions with respect to  Repurchase
Obligations, and (ii)  the aggregate amount of obligations owing by
the Borrowers on account of demands made pursuant to guarantees or risk pool
guarantees provided by any Borrower in favor of a financial institution
providing floor financing for the Borrowers’ dealers.

     

    FLSA: the Fair Labor
Standards Act of 1938.

     

    Foreign Lender: any
Lender that is organized under the laws of a jurisdiction other than the laws of
the United States, or any state or district thereof.

     

    Foreign Plan: any
employee benefit plan or arrangement (a) maintained or contributed to by any
Obligor or Subsidiary that is not subject to the laws of the United States; or
(b) mandated by a government other than the United States for employees of any
Obligor or Subsidiary.

     

    Foreign Subsidiary: a
Subsidiary that is a “controlled foreign corporation” under Section 957 of the
Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on
the assets of such Subsidiary to secure the Obligations would result in material
tax liability to Borrowers.

     

    Full Payment: with
respect to any Obligations, (a) the full and indefeasible cash payment thereof,
including any interest, fees and other charges accruing during an Insolvency
Proceeding (whether or not allowed in the proceeding); (b) if such Obligations
are LC Obligations or Bank Products, Cash Collateralization thereof (or delivery
of a standby letter of credit acceptable to Agent, the applicable Lender or the
Issuing Bank in its discretion, in the amount of required Cash Collateral); and
(c) a release of any Claims of Obligors against Agent, Lenders and Issuing Bank
arising on or before the payment date.  No Revolver Loans shall be
deemed to have been paid in full until all Revolver Commitments related to such
Revolver Loans have expired or been terminated.

     

    GAAP: generally
accepted accounting principles in effect in the United States from time to
time.

     


    
      
         

      

      
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    Governmental
Approvals: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.

     

    Governmental
Authority: any federal, state, municipal, foreign or other governmental
department, agency, commission, board, bureau, court, tribunal, instrumentality,
political subdivision, or other entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions for or pertaining
to any government or court, in each case whether associated with the United
States, a state, district or territory thereof, or a foreign entity or
government.

     

    Guarantor Payment: as
defined in Section
5.11.3.

     

    Guarantors: each
Person who guarantees payment or performance of any Obligations.

     

    Guaranty: each
guaranty agreement executed by a Guarantor in favor of Agent.

     

    Hazardous
Material:  means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined
products; (c) polychlorinated biphenyls; (d) friable asbestos;  (e)
any substance exhibiting a hazardous waste characteristic, including, without
limitation, corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials, and (f) any raw materials containing
hazardous substances listed or classified as such under Environmental
Laws.

     

    Hedging Agreement: an
agreement relating to any swap, cap, floor, collar, option, forward, cross right
or obligation, or combination thereof or similar transaction, with respect to
interest rate, foreign exchange, currency, commodity, credit or equity
risk.

     

    Indemnified Taxes:
Taxes other than Excluded Taxes.

     

    Indemnitees: Agent
Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America
Indemnitees.

     

    Insolvency
Proceeding: any case or proceeding commenced by or against a Person under
any state, federal or foreign law for, or any agreement of such Person to, (a)
the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.

     


    
      
         

      

      
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    Insurance Assignment:
each collateral assignment of insurance pursuant to which an Obligor assigns to
Agent, for the benefit of Secured Parties, such Obligor’s rights under business
interruption or other insurance policies as Agent deems appropriate, as security
for the Obligations.

     

    Intellectual
Property: all intellectual and similar Property of a Person, including
inventions, designs, patents, copyrights, trademarks, service marks, trade
names, trade secrets, confidential or proprietary information, customer lists,
know-how, software and databases; all embodiments or fixations thereof and all
related documentation, applications, registrations and franchises; all licenses
or other rights to use any of the foregoing; and all books and records relating
to the foregoing.

     

    Intellectual Property
Claim: any claim or assertion (whether in writing, by suit or by other
proceeding) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or
distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

     

    Intercreditor
Agreement: an intercreditor agreement between the Agent and Term Loan
Agent, in form and substance satisfactory to Agent.

     

    Interest Period: as
defined in Section
3.1.3.

     

    Interest Rate
Contract: any interest rate swap, collar or cap agreement, or other
agreement or arrangement by any Borrower or Subsidiary with Bank of America that
is designed to protect against fluctuations in interest rates.

     

    Inventory: as defined
in the UCC, including all goods intended for sale, lease, display or
demonstration; all work in process; and all raw materials, and other materials
and supplies of any kind that are or could be used in connection with the
manufacture, printing, packing, shipping, advertising, sale, lease or furnishing
of such goods, or otherwise used or consumed in a Borrower’s business (but
excluding Equipment).

     

    Inventory Formula
Amount: the sum of (1) up to 60% of the Value of Eligible Inventory
consisting of raw materials (but in no event more than 85% of the NOLV
Percentage of the Value of that type of Eligible Inventory), plus (2) up to 47.8%
of the Value of Eligible Inventory consisting of Work In Process Motorized
Inventory (but in no event more than 85% of the NOLV Percentage of the Value of
that type of Eligible Inventory), plus (3) up to 23% of
the Value of Eligible Inventory consisting of Work In Process Towable Inventory
(but in no event more than 85% of the NOLV Percentage of the Value of that type
of Eligible Inventory), plus (4) up to 80% of
the Value of Eligible Inventory consisting of chassis Inventory (but in no event
more than 85% of the NOLV Percentage of the Value of that type of Eligible
Inventory), plus (5) up to 60% of
the Value of Eligible Inventory consisting of finished units Inventory (but in
no event more than 85% of the NOLV Percentage of the Value of that type of
Eligible Inventory), provided, that (x) no more than $2,000,000 at any one time
of Eligible Inventory consisting of finished units repurchased from retail
customers may be included in the Value of Eligible Inventory, and (y) no more
than $3,000,000 at any one time of Eligible Inventory consisting of finished
units repurchased from dealers pursuant to a Repurchase Obligations may be
included in the Value of Eligible Inventory and the advance rate for such
repurchased Inventory shall at no time exceed 60% of the lower of the “curtailed
cost” or the actual repurchase price of such Inventory.

     


    
      
         

      

      
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    Inventory Reserve:
reserves established by Agent to reflect factors that may negatively impact the
Value of Inventory, including change in salability, obsolescence, seasonality,
theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor
chargebacks.

     

    Investment: any
acquisition of all or substantially all assets of a Person; any acquisition of
record or beneficial ownership of any Equity Interests of a Person; or any
advance or capital contribution to or other investment in a Person.

     

    IRS: the United
States Internal Revenue Service.

     

    Issuing Bank: Bank of
America or an Affiliate of Bank of America and solely with respect to the
Existing Letters of Credit, U.S. Bank National Association.

     

    Issuing Bank
Indemnitees: Issuing Bank and its officers, directors, employees,
Affiliates, agents and attorneys.

     

    La Quinta
Motorcoach:  La Quinta Motorcoach Resort, Inc., a California
corporation.

     

    LC Application: an
application by Borrower Agent to Issuing Bank for issuance of a Letter of
Credit, in form and substance satisfactory to Issuing Bank.

     

    LC Conditions: the
following conditions necessary for issuance of a Letter of Credit: (a) each of
the conditions set forth in Section 6; (b) after giving effect to such issuance,
total LC Obligations do not exceed the Letter of Credit Subline, no Overadvance
exists and, if no Revolver Loans are outstanding, the LC Obligations do not
exceed the Borrowing Base (without giving effect to the LC Reserve for purposes
of this calculation); (c) the expiration date of such Letter of Credit is (i) no
more than 365 days from issuance, in the case of standby Letters of Credit, (ii)
no more than 120 days from issuance, in the case of documentary Letters of
Credit, and (iii) at least 20 Business Days prior to the Revolver Termination
Date; (d) the Letter of Credit and payments thereunder are denominated in
Dollars; and (e) the purpose and form of the proposed Letter of Credit is
satisfactory to Agent and Issuing Bank in their discretion.

     

    LC Documents: all
documents, instruments and agreements (including LC Requests and LC
Applications) delivered by Borrowers or any other Person to Issuing Bank or
Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.

     

    LC Obligations: the
sum (without duplication) of (a) all amounts owing by Borrowers for any drawings
under Letters of Credit; (b) the stated amount of all outstanding Letters of
Credit; and (c) all fees and other amounts owing with respect to Letters of
Credit.

     

    LC Request: a request
for issuance of a Letter of Credit, to be provided by Borrower Agent to Issuing
Bank, in form satisfactory to Agent and Issuing Bank.

     


    
      
         

      

      
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    LC Reserve: the
aggregate of all LC Obligations, other than (a) those that have been Cash
Collateralized; and (b) if no Default or Event of Default exists, those
constituting charges owing to the Issuing Bank.

     

    Lender Indemnitees:
Lenders and their officers, directors, employees, Affiliates, agents and
attorneys.

     

    Lenders: as defined
in the preamble to this Agreement, including Agent in its capacity as a provider
of Swingline Loans and any other Person who hereafter becomes a “Lender” pursuant to
an Assignment and Acceptance.

     

    Lending Office: the
office designated as such by the applicable Lender at the time it becomes party
to this Agreement or thereafter by notice to Agent and Borrower
Agent.

     

    Letter of Credit: any
standby or documentary letter of credit (including the Existing Letters of
Credit) issued by Issuing Bank for the account of a Borrower, or any indemnity,
guarantee, exposure transmittal memorandum or similar form of credit support
issued or maintained by Agent or Issuing Bank for the benefit of a Borrower
pursuant to this Agreement.

     

    Letter of Credit
Subline: $10,000,000.

     

    LIBOR: for any
Interest Period with respect to a LIBOR Revolver Loan, the per annum rate of
interest (rounded upward, if necessary, to the nearest 1/8th of 1%), determined
by Agent at approximately 11:00 a.m. (London time) two Business Days prior to
commencement of such Interest Period, for a term comparable to such Interest
Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source designated by
Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate
at which Dollar deposits in the approximate amount of the LIBOR Revolver Loan
would be offered by Bank of America’s London branch to major banks in the London
interbank Eurodollar market.  If the Board of Governors imposes a
Reserve Percentage with respect to LIBOR deposits, then LIBOR shall be the
foregoing rate, divided by 1 minus the Reserve Percentage.

     

    LIBOR Benchmark: has
the meaning given in Section
3.1.1(a).

     

    LIBOR Revolver Loan:
each Revolver Loan that bears interest based on LIBOR and each set of LIBOR
Revolver Loans having a common length and commencement of Interest
Period.

     

    License: any license
or agreement under which an Obligor is authorized to use Intellectual Property
in connection with any manufacture, marketing, distribution or disposition of
Collateral, any use of Property or any other conduct of its
business.

     

    Licensor: any Person
from whom an Obligor obtains the right to use any Intellectual
Property.

     

    Lien: any Person’s
interest in Property securing an obligation owed to, or a claim by, such Person,
whether such interest is based on common law, statute or contract, including
liens, security
interests, pledges, hypothecations, statutory trusts, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting
Property.

     


    
      
         

      

      
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    Lien Waiver: an
agreement, in form and substance satisfactory to Agent, by which (a) for any
material Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit Agent
to enter upon the premises and remove the Collateral or to use the premises to
store or dispose of the Collateral; (b) for any Collateral held by a
warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any
Collateral held by a repairman, mechanic or bailee, such Person acknowledges
Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to Agent upon request; and (d) for any
Collateral subject to a Licensor’s Intellectual Property rights, the Licensor
grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens
with respect to the Collateral, including the right to dispose of it with the
benefit of the Intellectual Property, whether or not a default exists under any
applicable License.

     

    Loan Account: the
loan account established by each Lender on its books pursuant to Section 5.8.

     

    Loan Documents: this
Agreement, Other Agreements and Security Documents; provided, that in no
event shall Loan Documents include any documents or other agreements evidencing
the Flooring Lender Obligations or any other obligation of any Borrower to a
financial institution related to the floor financing provided by such financial
institution to a Borrowers’ dealer.

     

    Loan Year: each 12
month period commencing on the Closing Date and on each anniversary of the
Closing Date.

     

    LV
Resorts:  Outdoor Resorts of Las Vegas, Inc., a Nevada
corporation.

     

    Margin Stock: as
defined in Regulation U of the Board of Governors.

     

    Material Adverse
Effect: the effect of any event or circumstance that, taken alone or in
conjunction with other events or circumstances, (a) has or could be reasonably
expected to have a material adverse effect on the business, operations,
Properties or condition (financial or otherwise) of the Obligors, taken as a
whole, on the enforceability of any Loan Documents, or on the validity or
priority of Agent’s Liens on any Collateral; (b) materially impairs the ability
of any Obligor to perform any obligations under the Loan Documents, including
repayment of any Obligations; or (c) otherwise materially impairs the ability of
Agent or any Lender to enforce or collect any Obligations or to realize upon any
Collateral.

     

    Material Contract:
any agreement identified on Schedule 1.1M to the
Disclosure Letter or any other agreement or arrangement to which a Borrower or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract under any securities law applicable to such Obligor, including
the Securities Act of 1933; (b) for which breach, termination, nonperformance
or failure to renew could reasonably be expected to have a Material Adverse
Effect; or (c) that relates to Subordinated Debt, or Debt in an aggregate amount
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    Maximum Term
Obligations:  as of any date of determination, an amount equal
to the “Maximum Term Obligations” (as such term is defined in the Intercreditor
Agreement).

     

    Michigan
Resorts:  Signature Resorts of Michigan, Inc., a Michigan
corporation.

     

    Moody’s: Moody’s
Investors Service, Inc., and its successors.

     

    Mortgage: each
mortgage, deed of trust or deed to secure debt pursuant to which a Borrower
grants to Agent, for the benefit of Secured Parties, Liens upon the Real Estate
owned by such Borrower, as security for the Obligations.

     

    Multiemployer Plan:
any employee benefit plan of the type described in Section 4001(a)(3) of ERISA,
to which any Obligor or ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

     

    Naples
Motorcoach:  Naples Motorcoach Resort, Inc., a Florida
corporation.

     

    Net Proceeds: with
respect to an Asset Disposition, proceeds (including, when received, any
deferred or escrowed payments) received by a Borrower or Subsidiary in cash from
such disposition, net of (a) reasonable and customary costs and expenses
actually incurred in connection therewith, including title insurance, escrow
charges, legal fees and sales commissions; (b) amounts applied to repayment of
Debt secured by a Permitted Lien senior to Agent’s Liens on Collateral sold
including payments made to repay the Term Loan as set forth under the Term Loan
Documents as a result of a disposition of Term Loan Priority Collateral; (c)
Taxes applicable to such Asset Disposition; and (d) reserves for indemnities,
until such reserves are no longer needed.

     

    NOLV Percentage: the
net orderly liquidation value of Inventory, expressed as a percentage, expected
to be realized at an orderly, negotiated sale held within a reasonable period of
time, net of all liquidation expenses, as determined from the most recent
appraisal of Borrowers’ Inventory performed by an appraiser and on terms
satisfactory to Agent.

     

    Non-Flooring Account:
an Account owed to a Borrower other than a Flooring Account.

     

    Notes: each Revolver
Note or other promissory note executed by a Borrower to evidence any
Obligations.

     

    Notice of Borrowing:
a Notice of Borrowing to be provided by Borrower Agent to request a Borrowing of
Revolver Loans, in form satisfactory to Agent.

     


    
      
         

      

      
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    Notice of
Conversion/Continuation: a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any
Revolver Loans as LIBOR Revolver Loans, in form satisfactory to
Agent.

     

    Obligations: all (a)
principal of and premium, if any, on the Revolver Loans, (b) LC Obligations and
other obligations of Obligors with respect to Letters of Credit, (c) interest,
expenses, fees and other sums payable by Obligors under Loan Documents, (d)
obligations of Obligors under any indemnity for Claims, (e) Extraordinary
Expenses, (f) Bank Product Debt, and (g) other Debts, obligations and
liabilities of any kind owing by Obligors, in each case, pursuant to the Loan
Documents, whether now existing or hereafter arising, whether evidenced by a
note or other writing, whether allowed in any Insolvency Proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several.  Notwithstanding the above or anything stated to the contrary
in this Agreement, in no event shall Obligations include the Flooring Lender
Obligations or any other obligation of any Borrower to a financial institution
related to the floor financing provided by such financial institution to a
Borrowers’ dealer.

     

    Obligor: each
Borrower, Guarantor, or other Person that is liable for payment of any
Obligations or that has granted a Lien in favor of Agent on its assets to secure
any Obligations.

     

    Ordinary Course of
Business: the ordinary course of business of any Borrower or Subsidiary,
consistent with past practices and undertaken in good faith.

     

    Organic Documents:
with respect to any Person, its charter, certificate or articles of
incorporation, bylaws, articles of organization, limited liability agreement,
operating agreement, members agreement, shareholders agreement, partnership
agreement, certificate of partnership, certificate of formation, voting trust
agreement, or similar agreement or instrument governing the formation or
operation of such Person.

     

    OSHA: the
Occupational Safety and Hazard Act of 1970.

     

    Other Agreement: each
Note; LC Document; Fee Letter; Lien Waiver, Related Real Estate Document;
Borrowing Base Certificate, Compliance Certificate, Intercreditor Agreement; the
Disclosure Letter, the Sublimit Agreement, financial statement or report
delivered hereunder; or other document, instrument or agreement (other than this
Agreement or a Security Document) now or hereafter delivered by an Obligor or
other Person to Agent or a Lender in connection with any transactions relating
hereto.

     

    Other Taxes: all
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.

     

    Outdoor Resorts
Entity: Naples Motorcoach, Port of the Isles Motorcoach, LV Resorts, CC
Resorts, La Quinta Motorcoach and Michigan Resorts.

     


    
      
         

      

      
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    Overadvance: as
defined in Section
2.1.5.

     

    Overadvance Loan: a
Base Rate Revolver Loan made when an Overadvance exists or is caused by the
funding thereof.

     

    Participant: as
defined in Section
13.2.

     

    Patent Assignment:
each patent collateral assignment agreement pursuant to which an Obligor assigns
to Agent, for the benefit of Secured Parties, such Obligor’s interests in its
patents, as security for the Obligations.

     

    Patriot Act: the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272
(2001).

     

    Payment Item: each
check, draft or other item of payment payable to a Borrower, including those
constituting proceeds of any Collateral.

     

    PBGC: the Pension
Benefit Guaranty Corporation.

     

    Pension Plan: any
employee pension benefit plan (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by any Obligor or ERISA Affiliate or to which the
Obligor or ERISA Affiliate contributes or has an obligation to contribute, or in
the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the preceding five plan
years.

     

    Permitted Asset
Disposition: (A) as long as no Default or Event of Default exists and all
Net Proceeds are remitted to Agent or to the Term Loan Agent as set forth in the
Term Loan Documents with respect to Term Loan Priority Collateral (and in the
case of Term Loan Priority Collateral whether or not a Default or an Event of
Default exists), an Asset Disposition that is (a) a sale of Inventory or
consignment of Approved Consigned Inventory in the Ordinary Course of Business;
(b) a disposition of Equipment that, in the aggregate during any 12 month
period, has a fair market or book value (whichever is more) of $5,000,000 or
less; (c) a disposition of Inventory that is obsolete, unmerchantable or
otherwise unsalable in the Ordinary Course of Business; (d) leases or licenses
of real or personal Property in the Ordinary Course of Business; (e) termination
of a lease or license of real or personal Property that is not necessary for the
Ordinary Course of Business, could not reasonably be expected to have a Material
Adverse Effect and does not result from an Obligor’s default; (f) approved in
writing by Agent and Required Lenders; (g) a disposition of assets of an Outdoor
Resorts Entity made in the Ordinary Course of Business, including a disposition
to a homeowners association or Governmental Authority to the extent required in
connection with the development of a resort property; (h) a disposition of a
Real Estate no longer needed for the operation of Borrower’s business; (i) a
replacement of Equipment that is worn, damaged or obsolete with Equipment of
like function and value, if the replacement Equipment is acquired substantially
contemporaneously with such disposition and is free of Liens; or (j) a
disposition not otherwise permitted above, so long as all dispositions under
this clause (j) do not exceed $500,000 in any Fiscal Year and Borrower
has

     


    
      
         

      

      
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    given
written notice to Agent of such disposition at least 30 days prior to its
consummation; provided that in all cases any involuntary loss resulting from a
casualty event or condemnation shall constitute a Permitted Asset Disposition;
and (B) prior to the payment in full of the Term Loan and termination of the
Term Loan Documents, the sale or other disposition of assets consisting of Term
Loan Priority Collateral to the extent permitted under the Term Loan Documents
or other disposition of Term Loan Priority Collateral with the consent of the
requisite Term Lenders.

     

    Permitted Contingent
Obligations: Contingent Obligations (a) arising from endorsements of
Payment Items for collection or deposit in the Ordinary Course of Business; (b)
arising from Hedging Agreements permitted hereunder; (c) existing on the Closing
Date, and any extension or renewal thereof that does not increase the amount of
such Contingent Obligation when extended or renewed; (d) incurred in the
Ordinary Course of Business with respect to surety, appeal or performance bonds,
or other similar obligations, including the Repurchase Obligations; (e) arising
from customary indemnification obligations in favor of purchasers in connection
with Asset Dispositions permitted hereunder or in favor of counterparties to
contracts entered into by any Borrower in the Ordinary Course of Business; (f)
arising under the Loan Documents; or (g) not otherwise included above, which
shall not exceed in an aggregate amount of $100,000 at any time.

     

    Permitted Lien: as
defined in Section
10.2.2.

     

    Permitted Purchase Money
Debt: Purchase Money Debt of Borrowers and Subsidiaries that is unsecured
or secured only by a Purchase Money Lien, as long as the aggregate amount does
not exceed $2,500,000 at any time and its incurrence does not violate Section 10.2.3.

     

    Permitted Subsidiary Equity
Issuances: the sale by an Outdoor Resorts Entity of additional Equity
Interests to one or more Persons, so long as the Equity Interests held by
Persons other than Borrowers hereunder does not exceed 25% of the issued and
outstanding Equity Interests of such Outdoor Resorts Entity.

     

    Person: any
individual, corporation, limited liability company, partnership, joint venture,
joint stock company, land trust, business trust, unincorporated organization,
Governmental Authority or other entity.

     

    Plan: any employee
benefit plan (as such term is defined in Section 3(3) of ERISA) established by
an Obligor or, with respect to any such plan that is subject to Section 412 of
the Code or Title IV of ERISA, an ERISA Affiliate.

     

    Port of the Isles
Motorcoach:  Port of the Isles Motorcoach Resort, Inc., a
Florida corporation.

     

    Pro Rata: with
respect to any Lender, a percentage (carried out to the ninth decimal place)
determined (a) while Revolver Commitments are outstanding, by dividing the
amount of such Lender’s Revolver Commitment by the aggregate amount of all
Revolver Commitments; and (b) at any other time, by dividing the amount of such
Lender’s Revolver Loans and LC Obligations by the aggregate amount of all
outstanding Revolver Loans and LC Obligations.

     


    
      
         

      

      
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    Properly Contested:
with respect to any obligation of an Obligor, (a) the obligation is subject to a
bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the
obligation is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently pursued; (c) appropriate reserves have been
established in accordance with GAAP; (d) non-payment could not have a Material
Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor;
(e) no Lien is imposed on assets of the Obligor, unless bonded and stayed to the
satisfaction of Agent; and (f) if the obligation results from entry of a
judgment or other order, such judgment or order is stayed pending appeal or
other judicial review.

     

    Property: any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible.

     

    Protective Advances:
as defined in Section
2.1.6.

     

    Purchase Money Debt:
(a) Debt (other than the Obligations) for payment of any of the purchase price
of fixed assets; (b) Debt (other than the Obligations) incurred within 10 days
before or after acquisition of any fixed assets, for the purpose of financing
any of the purchase price thereof; and (c) any renewals, extensions or
refinancings (but not increases) thereof.

     

    Purchase Money Lien:
a Lien that secures Purchase Money Debt, encumbering only the fixed assets
acquired with such Debt and constituting a Capital Lease or a purchase money
security interest under the UCC.

     

    R-Vision:  R-Vision,
Inc., an Indiana corporation.

     

    R-Vision
Holdings:  R-Vision Holdings LLC, a Delaware limited liability
company.

     

    R-Vision
Manufacturing:  R-Vision Manufacturing, LLC, an Indiana limited
liability company.

     

    RCRA: the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

     

    Real Estate: all
right, title and interest (whether as owner, lessor or lessee) in any real
Property or any buildings, structures, parking areas or other improvements
thereon.

     

    Refinancing
Conditions: the following conditions for Refinancing Debt:  (a)
it is in an aggregate principal amount that does not exceed the principal amount
of the Debt being extended, renewed or refinanced; (b) it has a final maturity
no sooner than, a weighted average life no less than, and an interest rate no
greater than, the Debt being extended, renewed or refinanced; (c) it is
subordinated to the Obligations at least to the same extent as the Debt being
extended, renewed or refinanced; (d) the representations, covenants and defaults
applicable to it are no less favorable to Borrowers than those applicable to the
Debt being extended, renewed or refinanced; (e) no additional Lien is granted to
secure it; (f) no additional Person is obligated on such Debt; and (g) upon
giving effect to it, no Default or Event of Default exists.

     


    
      
         

      

      
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    Refinancing Debt:
Borrowed Money (other than the Term Loan) that is the result of an extension,
renewal or refinancing of Debt permitted under Section 10.2.1(b), (d) or
(f).

     

    Reimbursement Date:
as defined in Section
2.3.2.

     

    Related Real Estate
Documents: with respect to any Real Estate subject to a Mortgage, the
following, in form and substance satisfactory to Agent and received by Agent for
review prior to the effective date of the Mortgage:  (a) a mortgagee
title policy (or binder therefor) covering Agent’s interest under the Mortgage,
in a form and amount and by Chicago Title Company or another insurer acceptable
to Agent, which must be fully paid on such effective date; (b) such assignments
of leases, estoppel letters, attornment agreements, consents, waivers and
releases as Agent may require with respect to other Persons having an interest
in the Real Estate; (c) “extended coverage” title endorsement to the foregoing
title policy or a current, as-built survey of the Real Estate, containing a
metes-and-bounds property description and flood plain certification, and
certified by a licensed surveyor acceptable to Agent; (d) flood insurance in an
amount, with endorsements and by an insurer acceptable to Agent, if the Real
Estate is within a flood plain; (e) if required by Agent at least 10 days prior
to the effective date of the Mortgage, a current appraisal of the Real Estate,
prepared by an appraiser acceptable to Agent, and in form and substance
satisfactory to Required Lenders; and (f) if required by Agent at least 10 days
prior to the effective date of the Mortgage, an environmental assessment,
prepared by environmental engineers acceptable to Agent, and accompanied by such
reports, certificates, studies or data as Agent may reasonably require, which
shall all be in form and substance satisfactory to Required
Lenders.

     

    Remedial Action: all
actions taken to (a) clean up, remove, remediate, contain, treat, monitor,
assess, evaluate or in any other way address Hazardous Materials in the indoor
or outdoor environment; (b) prevent or minimize an Environmental Release or
threatened Environmental Release so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; (c)
perform pre-remedial studies and investigations and post-remedial operation and
maintenance activities; or (d) perform any other actions authorized by 42 U.S.C.
§9601.

     

    Rent and Charges
Reserve: the aggregate of (a) all past due rent and other amounts owing
by an Obligor to any landlord, warehouseman, processor, repairman, mechanic,
shipper, freight forwarder, broker or other Person who possesses any Collateral
or could assert a Lien on any Collateral; and (b) a reserve at least equal to
three months rent and other charges that could be payable to any such Person on
whose premises Collateral is located, unless it has executed a Lien
Waiver.

     

    Report: as defined in
Section
12.2.3.

     

    Reportable Event: any
of the events set forth in Section 4043(c) of ERISA, other than events for which
the 30 day notice period has been waived.

     

    Repurchase Demands and Other
Guarantee Reserve:  a reserve equal to the product of (i) the
sum of (a) the difference between the advance rate applicable to finished goods
Eligible Inventory
and the advance rate applicable to Eligible Accounts, plus (b) 5%, multiplied by (ii)
the Flooring Lender Obligation as of the measurement date.

     


    
      
         

      

      
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    Repurchase
Obligations: obligations of any Borrower incurred in connection with
Approved Dealer Financing Agreements to repurchase Inventory sold by a Borrower
to retail dealers.

     

    Required Lenders:
Lenders (subject to Section
4.2) having (a) Revolver Commitments in excess of 60% of the aggregate
Revolver Commitments; and (b) if the Revolver Commitments have terminated,
Revolver Loans in excess of 60% of all outstanding Revolver Loans; provided that at any
time there are 2 or more Lenders, Required Lenders must include at least 2
Lenders.

     

    Reserve Percentage:
the reserve percentage (expressed as a decimal, rounded upward to the nearest
1/8th of 1%) applicable to member banks under regulations issued from time to
time by the Board of Governors for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

     

    Restricted
Investment: any Investment by a Borrower or Subsidiary, other than (a)
Investments in another Borrower; (b) Cash Equivalents that are subject to
Agent’s Lien and control, pursuant to documentation in form and substance
satisfactory to Agent; (c) Custom Chassis Funding;  (d) loans and
advances permitted under Section 10.2.7, and (e)
Investments existing as of the Closing Date and set forth in Schedule 1.1R.

     

    Restrictive
Agreement: an agreement (other than a Loan Document) that conditions or
restricts the right of any Borrower, Subsidiary or other Obligor to incur or
repay Borrowed Money, to grant Liens on any assets, to declare or make
Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.

     

    Revolver Commitment:
for any Lender, its obligation to make Revolver Loans and to participate in LC
Obligations up to the maximum principal amount shown on Schedule 1.1, or as hereafter
determined pursuant to each Assignment and Acceptance to which it is a
party.  “Revolver Commitments” means the aggregate amount of such
commitments of all Lenders.

     

    Revolver Loan: a loan
made pursuant to Section
2.1, and any Swingline Loan, Overadvance Loan or Protective
Advance.

     

    Revolver Note: a
promissory note to be executed by Borrowers in favor of a Lender in the form of
Exhibit A, which shall
be in the amount of such Lender’s Revolver Commitment and shall evidence the
Revolver Loans made by such Lender.

     

    Revolver Termination
Date: November 6, 2011.

     

    Roadmaster:  Roadmaster
LLC, an Indiana limited liability company.

     

    Royalties: all
royalties, fees, expense reimbursement and other amounts payable by a Borrower
under a License.

     


    
      
         

      

      
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    S&P: Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.

     

    Secured Parties:
Agent, Issuing Bank, Lenders and providers of Bank Products.

     

    Security Documents:
the Guaranties, Mortgages, Patent Assignments, Trademark Security Agreements,
Insurance Assignments, Deposit Account Control Agreements, and all other
documents, instruments and agreements now or hereafter securing (or given with
the intent to secure) any Obligations.

     

    Senior Officer: the
chairman of the board, president, chief executive officer or chief financial
officer of a Borrower or, if the context requires, an Obligor.

     

    Settlement Report: a
report delivered by Agent to Lenders summarizing the Revolver Loans and
participations in LC Obligations outstanding as of a given settlement date,
allocated to Lenders on a Pro Rata basis in accordance with their Revolver
Commitments.

     

    Signature
Motorcoach:  Signature Motorcoach Resorts, Inc., a Delaware
corporation.

     

    Solvent: as to any
Person, such Person (a) owns Property whose fair salable value is greater than
the amount required to pay all of its debts (including contingent, subordinated,
unmatured and unliquidated liabilities); (b) owns Property whose present fair
salable value (as defined below) is greater than the probable total liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
such Person as they become absolute and matured; (c) is able to pay all of its
debts as they mature; (d) has capital that is not unreasonably small for its
business and is sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage; (e) is not “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by
way of assumption or otherwise) any obligations or liabilities (contingent or
otherwise) under any Loan Documents, or made any conveyance in connection
therewith, with actual intent to hinder, delay or defraud either present or
future creditors of such Person or any of its Affiliates.  “Fair salable value”
means the amount that could be obtained for assets within a reasonable time,
either through collection or through sale under ordinary selling conditions by a
capable and diligent seller to an interested buyer who is willing (but under no
compulsion) to purchase.

     

    Sublimit Agreement:
that certain side letter agreement between Agent and each Borrower setting forth
the advance rate sublimits for various Account Debtors owing Eligible
Non-Flooring Accounts.

     

    Subordinated Debt:
Debt incurred by a Borrower that is expressly subordinate and junior in right of
payment to Full Payment of all Obligations, and is on terms (including maturity,
interest, fees, repayment, covenants and subordination) satisfactory to
Agent.

     

    Subsidiary: any
entity at least 50% of whose voting securities or Equity Interests is owned by a
Borrower or any combination of Borrowers (including indirect ownership by a
Borrower through other entities in which the Borrower directly or indirectly
owns 50% of the voting securities or Equity Interests).

     


    
      
         

      

      
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    Swingline Loan: any
Borrowing of Base Rate Revolver Loans funded with Agent’s funds, until such
Borrowing is settled among Lenders pursuant to Section 4.1.3.

     

    Taxes: all present or
future taxes, levies, imposts, duties, deductions, withholdings, assessments,
fees or other charges imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable thereto.

     

    Temporary Reserve:
$2,500,000, or such lesser amount determined by Agent in its reasonable credit
discretion.

     

    Term Lenders: the
lenders from time to time party to the Term Loan Agreement.

     

    Term Loan: the term
loan provided to Borrowers pursuant to the Term Loan Agreement.

     

    Term Loan
Agent:  Abelco Finance LLC, a Delaware limited liability
company, and its successors and assigns.

     

    Term Loan
Agreement:  that certain Financing Agreement, dated as of even
date herewith, among the Term Loan Agent, various lenders party thereto, Parent
and certain of its subsidiaries as borrowers, and certain of Parent’s
subsidiaries as guarantors, as the same may be amended, modified, supplemented,
replaced, renewed or refinanced from time to time in accordance with the
Intercreditor Agreement or clause (i) of Section 10.2.1.

     

    Term Loan Cash Collateral
Account: a demand deposit, money market or other account established by
Term Loan Agent in accordance with the Term Loan Agreement at such financial
institution as Term Loan Agent may select in its discretion, which account shall
be under the control of Agent and Term Loan Agent.

     

    Term Loan Documents:
all documents related to the Term Loan Agreement, including the “Loan Documents”
as defined in the Term Loan Agreement.

     

    Term Loan Priority
Collateral: has the meaning specified for the term "Term Priority
Collateral" in the Intercreditor Agreement.

     

    Trademark Security
Agreement: each trademark security agreement pursuant to which an Obligor
grants to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s
interests in trademarks, as security for the Obligations.

     

    Transferee: any
actual or potential Eligible Assignee, Participant or other Person acquiring an
interest in any Obligations.

     

    Type: any type of a
Revolver Loan (i.e., Base Rate Revolver Loan or LIBOR Revolver Loan) that has
the same interest option and, in the case of LIBOR Revolver Loans, the same
Interest Period.

     


    
      
         

      

      
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    UCC: the Uniform
Commercial Code as in effect in the State of California or, when the laws of any
other jurisdiction govern the perfection or enforcement of any Lien, the Uniform
Commercial Code of such jurisdiction.

     

    UK Approved Account
Debtor:  a dealer for a Borrower which is located in the United
Kingdom (and approved by Agent) which is an Account Debtor with respect to a
Flooring Account that is subject to floor financing from a financial institution
located in the United States pursuant to an Approved Dealer Financing
Agreement.

     

    Unfunded Pension
Liability: the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

     

    Upstream Payment: a
Distribution by a Subsidiary of a Borrower to such Borrower.

     

    Value: (a) for
Inventory, its value determined on the basis of the lower of cost or market,
calculated on a specific identification basis, other than for raw materials,
which is calculated on a first-in, first out basis, and excluding any portion of
cost attributable to intercompany profit among Borrowers and their Affiliates;
and (b) for an Account, its face amount, net of unapplied cash and any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person.

     

    WIP Reserve: a
reserve with respect to Work In Process Motorized Inventory and Work In Process
Towable Inventory which reserve shall be in an amount determined  by
Agent in its reasonable credit discretion.

     

    Work In Process Motorized
Inventory: Inventory of any Borrower consisting of work in process
motorized recreational vehicles which is 95% complete and primarily requires the
application of paint and decals and final inspection to be considered finished
goods Inventory.

     

    Work In Process Towable
Inventory: Inventory of any Borrower consisting of work in process
towable recreational vehicles which is 95% complete and primarily requires the
application of paint and decals and final inspection to be considered finished
goods Inventory.

     

    1.2 Accounting Terms.  Under the Loan Documents
(except as otherwise specified herein), all accounting terms shall be
interpreted, all accounting determinations shall be made, and all financial
statements shall be prepared, in accordance with GAAP applied on a basis
consistent with the most recent audited financial statements of Borrowers
delivered to Agent before the Closing Date and using the same inventory
valuation method as used in such financial statements, except for any change
required or permitted by GAAP if Borrowers’ certified public accountants concur
in such change, the change is disclosed to Agent, and Section 10.3 is amended, if
necessary, in a manner satisfactory to Required Lenders to take into account the
effects of the change.

     


    
      
         

      

      
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    1.3 Uniform Commercial Code.  As used herein, the
following terms are defined in accordance with the UCC in effect in the State of
California from time to time:  “Chattel Paper,”
“Commercial Tort
Claim,” “Deposit Account,”
“Document,”
“Equipment,”
“General
Intangibles,” “Goods,” “Instrument,” “Investment Property,”
“Letter-of-Credit
Right” and “Supporting
Obligation.”

     

    1.4 Certain Matters of Construction.  The terms “herein,” “hereof,” “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular section, paragraph or subdivision.  Any pronoun used shall
be deemed to cover all genders.  In the computation of periods of time
from a specified date to a later specified date, “from” means “from and including,”
and “to” and
“until” each
mean “to but
excluding.”  The terms “including” and “include” shall mean
“including, without
limitation” and, for purposes of each Loan Document, the parties agree
that the rule of ejusdem generis shall not be applicable to limit any
provision.  Section titles appear as a matter of convenience only and
shall not affect the interpretation of any Loan Document.  All
references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any document,
instrument or agreement include any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted by the Loan Documents); (c) any
section mean, unless the context otherwise requires, a section of this
Agreement; (d) any exhibits or schedules mean, unless the context otherwise
requires, exhibits and schedules attached hereto, which are hereby incorporated
by reference; (e) any Person include successors and assigns; (f) time of day
mean time of day at Agent’s notice address under Section 14.3.1; or (g)
discretion of Agent, Issuing Bank or any Lender mean the sole and absolute
discretion of such Person.  All calculations of Value, fundings of
Revolver Loans, issuances of Letters of Credit and payments of Obligations shall
be in Dollars and, unless the context otherwise requires, all determinations
(including calculations of Borrowing Base and financial covenants) made from
time to time under the Loan Documents shall be made in light of the
circumstances existing at such time.  Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and
otherwise satisfactory to Agent (and not necessarily calculated in accordance
with GAAP).  Borrowers shall have the burden of establishing any
alleged negligence, misconduct or lack of good faith by Agent, Issuing Bank or
any Lender under any Loan Documents.  No provision of any Loan
Documents shall be construed against any party by reason of such party having,
or being deemed to have, drafted the provision.  Whenever the phrase
“to the best of
Borrowers’ knowledge” or words of similar import are used in any Loan
Documents, it means actual knowledge of a Senior Officer, or knowledge that a
Senior Officer would have obtained if he or she had engaged in good faith and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.

     

    SECTION
2. CREDIT
FACILITIES

     

    2.1 Revolver Commitment.

     

    
      2.1.1 Revolver
Loans.  Each Lender agrees, severally on a Pro Rata basis up to
its Revolver Commitment, on the terms set forth herein, to make Revolver Loans
to Borrowers from time to time through the Commitment Termination
Date.  The Revolver Loans may be repaid and reborrowed as provided
herein.  In no event shall Lenders have any obligation to honor a
request for a Revolver Loan if the unpaid balance of Revolver Loans outstanding
at such time (including the requested Revolver Loan) would exceed the Borrowing
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    2.1.2 Revolver
Notes.  The Revolver Loans made by each Lender and interest
accruing thereon shall be evidenced by the records of Agent and such
Lender.  At the request of any Lender, Borrowers shall deliver a
Revolver Note to such Lender.

     

    2.1.3 Use of
Proceeds.  The proceeds of Revolver Loans shall be used by
Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction
expenses associated with the closing of this credit facility; (c) to pay
Obligations in accordance with this Agreement; and (d) for working capital and
other lawful corporate purposes of Borrowers.

     

    2.1.4 Reduction or Termination of
Revolver Commitments.

     

    (a) The
Revolver Commitments shall terminate on the Revolver Termination Date, unless
sooner terminated in accordance with this Agreement.  Upon at least 20
days prior written notice to Agent (or such shorter period as may be agreed to
in writing by Agent in its discretion) at any time after the first Loan Year,
Borrowers may, at their option, terminate the Revolver Commitments and this
credit facility.  Any notice of termination given by Borrowers shall
be irrevocable (unless agreed in writing by Agent in its discretion that the
termination may be contingent on completion of the subsequent financing
transaction).  On the termination date, Borrowers shall make Full
Payment of all Obligations.

     

    (b) Borrowers
may permanently reduce the Revolver Commitments, on a Pro Rata basis for each
Lender, upon at least 20 days prior written notice to Agent delivered at any
time after the first Loan Year, which notice shall specify the amount of the
reduction and shall be irrevocable once given.  Each reduction shall
be in a minimum amount of $5,000,000, or an increment of $1,000,000 in excess
thereof.

     

    (c) Concurrently
with any reduction in or termination of the Revolver Commitments, for whatever
reason (including an Event of Default), Borrowers shall pay to Agent, for the
Pro Rata benefit of Lenders (other than the Carryover Lenders) and as liquidated
damages for loss of bargain (and not as a penalty), an amount equal to 0.50% of
the Revolver Commitments of such Lenders (other than the Carryover Lenders)
which are being reduced or terminated; if the reduction or termination occurs
during the first Loan Year.  No termination charge shall be payable if
termination occurs after the first Loan Year.

     

    (d) The
aggregate Revolver Commitments shall be reduced to $70,000,000 which reduction
shall be effective on the first day of the third Loan Year.  Upon such
reduction in the aggregate Revolver Commitments, the Revolver Commitment of each
Lender shall be reduced on a Pro Rata basis and Schedule 1.1 shall be deemed
amended to reflect such reduction.

     


    
      
         

      

      
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    2.1.5 Overadvances.  If
the aggregate Revolver Loans exceed the Borrowing Base (“Overadvance”) or the
aggregate Revolver Commitments at any time, the excess amount shall be payable
by Borrowers on demand
by Agent, but all such Revolver Loans shall nevertheless constitute Obligations
secured by the Collateral and entitled to all benefits of the Loan
Documents.  Unless its authority has been revoked in writing by
Required Lenders, Agent may require Lenders to honor requests for Overadvance
Loans and to forbear from requiring Borrowers to cure an Overadvance, (a) when
no other Event of Default is known to Agent, as long as (i) the Overadvance does
not continue for more than 30 consecutive days (and no Overadvance may exist for
at least five consecutive days thereafter before further Overadvance Loans are
required), and (ii) the Overadvance is not known by Agent to exceed 120% of the
Borrowing Base as set forth in the most recent Borrowing Base Certificate
delivered pursuant to Section
8.1; and (b) regardless of whether an Event of Default exists, if Agent
discovers an Overadvance not previously known by it to exist, as long as from
the date of such discovery the Overadvance (i) is not increased by more than 20%
of the Borrowing Base as set forth in the most recent Borrowing Base Certificate
delivered pursuant to Section
8.1, and (ii) does not continue for more than 30 consecutive
days.  In no event shall Overadvance Loans be required that would
cause the outstanding Revolver Loans and LC Obligations to exceed the aggregate
Revolver Commitments.  Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders
of the Event of Default caused thereby.  In no event shall any
Borrower or other Obligor be deemed a beneficiary of this Section nor authorized
to enforce any of its terms.

     

    2.1.6 Protective
Advances.  Agent shall be authorized, in its discretion, at any
time that any conditions in Section 6 are not satisfied, and without regard to
the aggregate Revolver Commitments, to make Base Rate Revolver Loans (“Protective Advances”)
(a) up to an aggregate amount of $10,000,000 outstanding at any time, if Agent
deems such Revolver Loans necessary or desirable to preserve or protect
Collateral, or to enhance the collectibility or repayment of Obligations; or (b)
to pay any other amounts chargeable to Obligors under any Loan Documents,
including costs, fees and expenses.  Each Lender shall participate in
each Protective Advance on a Pro Rata basis.  Required Lenders may at
any time revoke Agent’s authority to make further Protective Advances by written
notice to Agent.  Absent such revocation, Agent’s determination that
funding of a Protective Advance is appropriate shall be conclusive.

     

    2.2 [Intentionally
Deleted].

     

    2.3 Letter of Credit Facility.

     

    2.3.1 Issuance of Letters of
Credit.  Issuing Bank agrees to issue Letters of Credit from
time to time until 30 days prior to the Revolver Termination Date (or until the
Commitment Termination Date, if earlier), on the terms set forth herein,
including the following:

     


    
      
         

      

      
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    (a) Each
Borrower acknowledges that Issuing Bank’s willingness to issue any Letter of
Credit is conditioned upon Issuing Bank’s receipt of a LC Application with
respect to the requested Letter of Credit, as well as such other instruments and
agreements as Issuing Bank may customarily require for issuance of a letter of
credit of similar type and amount.  Issuing Bank shall have no
obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC
Request and LC Application at least three Business Days prior to the requested
date of issuance; and (ii) each LC Condition is satisfied.  If Issuing
Bank receives written notice from a Lender at least five Business Days before
issuance of a Letter of Credit that any LC Condition has not been satisfied,
Issuing Bank shall have no obligation to issue the requested Letter of Credit
(or any other) until such notice is withdrawn in writing by that Lender or until
Required Lenders have waived such condition in accordance with this
Agreement.  Prior to receipt of any such notice, Issuing Bank shall
not be deemed to have knowledge of any failure of LC Conditions.

     

    (b) Letters
of Credit may be requested by a Borrower only (i) to support obligations of such
Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes
as Agent and Lenders may approve from time to time in writing.  The
renewal or extension of any Letter of Credit shall be treated as the issuance of
a new Letter of Credit, except that delivery of a new LC Application shall be
required at the discretion of Issuing Bank.

     

    (c) Borrowers
assume (solely as between Borrowers, Agent, Lenders and the Issuing Bank) all
risks of the acts, omissions or misuses of any Letter of Credit by the
beneficiary.  In connection with issuance of any Letter of Credit,
none of Agent, Issuing Bank or any Lender shall be responsible for the
existence, character, quality, quantity, condition, packing, value or delivery
of any goods purported to be represented by any Documents; any differences or
variation in the character, quality, quantity, condition, packing, value or
delivery of any goods from that expressed in any Documents; the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Documents or of any
endorsements thereon; the time, place, manner or order in which shipment of
goods is made; partial or incomplete shipment of, or failure to ship, any goods
referred to in a Letter of Credit or Documents; any deviation from instructions,
delay, default or fraud by any shipper or other Person in connection with any
goods, shipment or delivery; any breach of contract between a shipper or vendor
and a Borrower; errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail,
telephone or otherwise; errors in interpretation of technical terms; the
misapplication by a beneficiary of any Letter of Credit or the proceeds thereof;
or any consequences arising from causes beyond the control of Issuing Bank,
Agent or any Lender, including any act or omission of a Governmental
Authority.  The rights and remedies of Issuing Bank under the Loan
Documents shall be cumulative.  Issuing Bank shall be fully subrogated
to the rights and remedies of each beneficiary whose claims against Borrowers
are discharged with proceeds of any Letter of Credit.

     

    
      
         

      

      
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      (d) In
connection with its administration of and enforcement of rights or remedies
under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to
act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by Issuing Bank, in
good faith, to be genuine and correct and to have been
signed, sent or made by a proper Person.  Issuing Bank may consult
with and employ legal counsel, accountants and other experts to advise it
concerning its obligations, rights and remedies, and shall be entitled to act
upon, and shall be fully protected in any action taken in good faith reliance
upon, any advice given by such experts.  Issuing Bank may employ
agents and attorneys-in-fact in connection with any matter relating to Letters
of Credit or LC Documents, and shall not be liable for the negligence or
misconduct of agents and attorneys-in-fact selected with reasonable
care.

    

     

    (e) All
Existing Letters of Credit shall be deemed to have been issued pursuant to this
Agreement, and from and after the Closing Date shall be subject to and governed
by the terms and conditions applicable to Letters of Credit set forth
herein.

     

    2.3.2 Reimbursement;
Participations.

     

    (a) If
Issuing Bank honors any request for payment under a Letter of Credit, Borrowers
shall pay to Issuing Bank, on the same day (“Reimbursement Date”),
the amount paid by Issuing Bank under such Letter of Credit, together with
interest at the interest rate for Base Rate Revolver Loans from the
Reimbursement Date until payment by Borrowers.  The obligation of
Borrowers to reimburse Issuing Bank for any payment made under a Letter of
Credit shall be absolute, unconditional, irrevocable, and joint and several, and
shall be paid without regard to any lack of validity or enforceability of any
Letter of Credit or the existence of any claim, setoff, defense or other right
that Borrowers may have at any time against the beneficiary.  Whether
or not Borrower Agent submits a Notice of Borrowing, Borrowers shall be deemed
to have requested a Borrowing of Base Rate Revolver Loans in an amount necessary
to pay all amounts due Issuing Bank on any Reimbursement Date and each Lender
agrees to fund its Pro Rata share of such Borrowing whether or not the Revolver
Commitments have terminated, an Overadvance exists or is created thereby, or the
conditions in Section 6 are satisfied.

     

    (b) Upon
issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably
and unconditionally purchased from Issuing Bank, without recourse or warranty,
an undivided Pro Rata interest and participation in all LC Obligations relating
to the Letter of Credit.  If Issuing Bank makes any payment under a
Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender’s Pro Rata share of such
payment.  Upon request by a Lender, Issuing Bank shall furnish copies
of any Letters of Credit and LC Documents in its possession at such
time.

     

    (c) The
obligation of each Lender to make payments to Agent for the account of Issuing
Bank in connection with Issuing Bank’s payment under a Letter of Credit shall be
absolute, unconditional and irrevocable, not subject to any counterclaim,
setoff, qualification or exception whatsoever, and shall be made in accordance
with this Agreement under all circumstances, irrespective of any lack of
validity or unenforceability of any Loan Documents; any draft, certificate or
other document presented under a Letter of Credit having been determined to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or the existence of any
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    any
Obligor may have with respect to any Obligations.  Issuing Bank does
not assume any responsibility for any failure or delay in performance or any
breach by any Borrower or other Person of any obligations under any LC
Documents.  Issuing Bank does not make to Lenders any express or
implied warranty, representation or guaranty with respect to the Collateral, LC
Documents or any Obligor.  Issuing Bank shall not be responsible to
any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectibility, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.

     

    (d) No
Issuing Bank Indemnitee shall be liable to any Lender or other Person for any
action taken or omitted to be taken in connection with any LC Documents except
as a result of its actual gross negligence or willful
misconduct.  Issuing Bank shall not have any liability to any Lender
if Issuing Bank refrains from any action under any Letter of Credit or LC
Documents until it receives written instructions from Required
Lenders.

     

    2.3.3 Cash
Collateral.  If any LC Obligations, whether or not then due or
payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that Availability is less than zero, (c) after the
Commitment Termination Date, or (d) within 20 Business Days prior to the
Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or Agent’s
request, Cash Collateralize the stated amount of all outstanding Letters of
Credit and pay to Issuing Bank the amount of all other LC
Obligations.  If Borrowers fail to provide Cash Collateral as required
herein, Lenders may (and shall upon direction of Agent) advance, as Revolver
Loans, the amount of the Cash Collateral required (whether or not the Revolver
Commitments have terminated, an Overadvance exists or the conditions in Section 6 are
satisfied).

     

    SECTION
3. INTEREST,
FEES AND CHARGES

     

    3.1 Interest.

     

    3.1.1 Rates and Payment of
Interest.

     

    (a) The
Obligations shall bear interest (i) if a Base Rate Revolver Loan, at the Base
Rate in effect from time to time, plus 3.50%; (ii) if a LIBOR Revolver Loan, at
LIBOR for the applicable Interest Period, plus 4.50%; and (iii) if any other
Obligation (including, to the extent permitted by law, interest not paid when
due), at the Base Rate in effect from time to time, plus
3.50%.  Interest shall accrue from the date the Revolver Loan is
advanced or the Obligation is incurred or payable, until paid by
Borrowers.  If a Revolver Loan is repaid on the same day made, one
day’s interest shall accrue.  Notwithstanding the foregoing, if on the
last day of any month the interest rate applicable to Base Rate Revolver Loans
is less than the sum of the interest rate applicable to LIBOR Revolver Loans
(for a 30 day Interest Period beginning on such date) (“LIBOR Benchmark”)
plus 0.25%, then the interest rate applicable to Base Rate Revolver Loans for
the next calendar month shall be increased to equal the sum of the LIBOR
Benchmark plus 0.25%.

     


    
      
         

      

      
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    (b) During an
Insolvency Proceeding with respect to any Borrower, or during any other Event of
Default if Agent or Required Lenders in their discretion so elect, Obligations
shall bear interest at the Default Rate (whether before or after any
judgment).  Each Borrower acknowledges that the cost and expense to
Agent and Lenders due to an Event of Default are difficult to ascertain and that
the Default Rate is a fair and reasonable estimate to compensate Agent and
Lenders for this.

     

    (c) Interest
accrued on the Revolver Loans shall be due and payable in arrears, (i) on the
first day of each month; (ii) on any date of prepayment, with respect to the
principal amount of Revolver Loans being prepaid; and (iii) on the Commitment
Termination Date.  Interest accrued on any other Obligations shall be
due and payable as provided in the Loan Documents and, if no payment date is
specified, shall be due and payable on demand.  Notwithstanding the
foregoing, interest accrued at the Default Rate shall be due and payable on
demand.

     

    3.1.2 Application of LIBOR to
Outstanding Revolver Loans.

     

    (a) Borrowers
may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Revolver
Loans to, or to continue any LIBOR Revolver Loan at the end of its Interest
Period as, a LIBOR Revolver Loan.  During any Default or Event of
Default, Agent may (and shall at the direction of Required Lenders) declare that
no Revolver Loan may be made, converted or continued as a LIBOR Revolver
Loan.

     

    (b) Whenever
Borrowers desire to convert or continue Revolver Loans as LIBOR Revolver Loans,
Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later
than 11:00 a.m. at least three Business Days before the requested conversion or
continuation date.  Promptly after receiving any such notice, Agent
shall notify each Lender thereof.  Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of
Revolver Loans to be converted or continued, the conversion or continuation date
(which shall be a Business Day), and the duration of the Interest Period (which
shall be deemed to be 30 days if not specified).  If, upon the
expiration of any Interest Period in respect of any LIBOR Revolver Loans,
Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they
shall be deemed to have elected to convert such Revolver Loans into Base Rate
Revolver Loans.

     

    3.1.3 Interest
Periods.  In connection with the making, conversion or
continuation of any LIBOR Revolver Loans, Borrowers shall select an interest
period (“Interest
Period”) to apply, which interest period shall be 30, 60, or 90 days;
provided, however, that:

     

    (a) the
Interest Period shall commence on the date the Revolver Loan is made or
continued as, or converted into, a LIBOR Revolver Loan, and shall expire on the
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    (b) if any
Interest Period commences on a day for which there is no corresponding day in
the calendar month at its end or if such corresponding day falls after the last
Business Day of such month, then the Interest Period shall expire on the last
Business Day of such month; and if any Interest Period would expire on a day
that is not a Business Day, the period shall expire on the next Business Day;
and

     

    (c) no
Interest Period shall extend beyond the Revolver Termination Date.

     

    3.1.4 Interest Rate Not
Ascertainable.  If Agent shall determine that on any date for
determining LIBOR, due to any circumstance affecting the London interbank
market, adequate and fair means do not exist for ascertaining such rate on the
basis provided herein, then Agent shall immediately notify Borrowers of such
determination.  Until Agent notifies Borrowers that such circumstance
no longer exists, the obligation of Lenders to make LIBOR Revolver Loans shall
be suspended, and no further Revolver Loans may be converted into or continued
as LIBOR Revolver Loans.

     

    3.2 Fees.

     

    3.2.1 Unused Line
Fee.  Borrowers shall pay to Agent, for the Pro Rata benefit of
Lenders, a fee equal to 0.50% per annum times the amount by which the Revolver
Commitments exceed the average daily balance of Revolver Loans and stated amount
of Letters of Credit during any month.  Such fee shall be payable in
arrears, on the first day of each month and on the Commitment Termination
Date.

     

    3.2.2 LC Facility
Fees.  Borrowers shall pay (a) to Agent, for the Pro Rata
benefit of Lenders, a fee equal to 4.50% times the average daily stated amount
of Letters of Credit, which fee shall be payable monthly in arrears, on the
first day of each month; (b) to Agent, for its own account, a fronting fee equal
to 0.125% per annum on the stated amount of each Letter of Credit, which fee
shall be payable monthly in arrears, on the first day of each month; and (c) to
Issuing Bank, for its own account, all customary charges associated with the
issuance, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred.  During an Event of Default, the fee payable under clause
(a) shall be increased by 2% per annum.

     

    3.2.3 Agent
Fees.  In consideration of Agent’s syndication of the Revolver
Commitments and service as Agent hereunder, Borrowers shall pay to Agent, for
its own account, the fees described in the Fee Letter.

     

    3.3 Computation of Interest, Fees, Yield
Protection.  All interest, as well as fees and other
charges calculated on a per annum basis, shall be computed for the actual days
elapsed, based on a year of 360 days.  Each determination by Agent of
any interest, fees or interest rate hereunder shall be final, conclusive and
binding for all purposes, absent manifest error.  All fees shall be
fully earned when due and shall not be subject to rebate, refund or
proration.  All fees payable under Section 3.2 are compensation
for services and are not, and shall not be deemed to be, interest or any other
charge for the use, forbearance or detention of money.  A certificate
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    to
amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or
5.9, setting forth the
calculation thereof in reasonable detail, submitted to Borrower Agent by Agent
or the affected Lender, as applicable, shall be final, conclusive and binding
for all purposes, absent manifest error, and Borrowers shall pay such amounts to
the appropriate party within 10 days following receipt of the certificate or may
be paid by Agent as set forth in Section 2.1.6(b).

     

    3.4 Reimbursement Obligations.  Borrowers shall
reimburse Agent for all Extraordinary Expenses.  Borrowers shall also
reimburse Agent for all legal, accounting, appraisal, consulting, and other
fees, costs and expenses incurred by it in connection with (a) negotiation and
preparation of any Loan Documents, including any amendment or other modification
thereof; (b) administration of and actions relating to any Collateral, Loan
Documents and transactions contemplated thereby, including any actions taken to
perfect or maintain priority of Agent’s Liens on any Collateral, to maintain any
insurance required hereunder or to verify Collateral; and (c) subject to the
limits of Section
10.1.1(b), each inspection, audit or appraisal with respect to any
Obligor or Collateral, whether prepared by Agent’s personnel or a third
party.  All legal, accounting and consulting fees shall be charged to
Borrowers by Agent’s professionals at their full hourly rates, regardless of any
reduced or alternative fee billing arrangements that Agent, any Lender or any of
their Affiliates may have with such professionals with respect to this or any
other transaction.  All amounts payable by Borrowers under this
Section shall be due on
demand.

     

    3.5 Illegality.  If any Lender determines that any
Applicable Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund LIBOR Revolver Loans, or to determine or charge interest
rates based upon LIBOR, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to Agent, any obligation of such Lender to make or continue LIBOR
Revolver Loans or to convert Base Rate Revolver Loans to LIBOR Revolver Loans
shall be suspended until such Lender notifies Agent that the circumstances
giving rise to such determination no longer exist.  Upon delivery of
such notice, Borrowers shall prepay or, if applicable, convert all LIBOR
Revolver Loans of such Lender to Base Rate Revolver Loans, either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such LIBOR Revolver Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such LIBOR Revolver Loans.  Upon
any such prepayment or conversion, Borrowers shall also pay accrued interest on
the amount so prepaid or converted.

     

    3.6 Inability to Determine Rates.  If Required Lenders
notify Agent for any reason in connection with a request for a Borrowing of, or
conversion to or continuation of, a LIBOR Revolver Loan that (a) Dollar deposits
are not being offered to banks in the London interbank Eurodollar market for the
applicable amount and Interest Period of such Revolver Loan, (b) adequate and
reasonable means do not exist for determining LIBOR for the requested Interest
Period, or (c) LIBOR for the requested Interest Period does not adequately and
fairly reflect the cost to such Lenders of funding such Revolver Loan, then
Agent will promptly so notify Borrower Agent and each
Lender.  Thereafter, the obligation of Lenders to make or maintain
LIBOR Revolver Loans shall be suspended until Agent (upon instruction by
Required Lenders) revokes
such notice.  Upon receipt of such notice, Borrower Agent may revoke
any pending request for a Borrowing of, conversion to or continuation of a LIBOR
Revolver Loan or, failing that, will be deemed to have submitted a request for a
Base Rate Revolver Loan.

     


    
      
         

      

      
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    3.7 Increased Costs; Capital Adequacy.

     

    3.7.1 Change in
Law.  If any Change in Law shall:

     

    (a) impose
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except any
reserve requirement reflected in LIBOR) or Issuing Bank;

     

    (b) subject
any Lender or Issuing Bank to any Tax with respect to any Revolver Loan, Loan
Document, Letter of Credit or participation in LC Obligations, or change the
basis of taxation of payments to such Lender or Issuing Bank in respect thereof
(except, in each case, for Indemnified Taxes or Other Taxes covered by Section 5.9 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender or
Issuing Bank); or

     

    (c) impose on
any Lender or Issuing Bank or the London interbank market any other condition,
cost or expense affecting any Revolver Loan, Loan Document, Letter of Credit or
participation in LC Obligations; and the result thereof shall be to increase the
cost to such Lender of making or maintaining any LIBOR Revolver Loan (or of
maintaining its obligation to make any such Revolver Loan), or to increase the
cost to such Lender or Issuing Bank of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or Issuing Bank hereunder (whether of principal,
interest or any other amount) then, upon request of such Lender or Issuing Bank
(which request shall be accompanied by a certificate of such Lender or Issuing
Bank setting forth in reasonable detail the amount or amounts necessary to
compensate such Lender or Issuing Bank and the basis therefor), Borrowers will
pay to such Lender or Issuing Bank, as applicable, such additional amount or
amounts as will compensate such Lender or Issuing Bank, as applicable, for such
additional costs incurred or reduction suffered.

     

    3.7.2 Capital
Adequacy.  If any Lender or Issuing Bank determines that any
Change in Law affecting such Lender or Issuing Bank or any Lending Office of
such Lender or such Lender’s or Issuing Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s, Issuing Bank’s or holding company’s capital as a
consequence of this Agreement, or such Lender’s or Issuing Bank’s Revolver
Commitments, Revolver Loans, Letters of Credit or participations in LC
Obligations, to a level below that which such Lender, Issuing Bank or holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s, Issuing Bank’s and holding company’s policies with
respect to capital adequacy), then from time to time upon the request of such
Lender or Issuing Bank (which request shall be accompanied by a certificate of
such Lender or Issuing Bank setting forth in reasonable detail the amount or
amounts necessary to compensate such Lender or Issuing Bank and the
basis therefor), Borrowers will pay to such Lender or Issuing Bank, as the case
may be, such additional amount or amounts as will compensate it or its holding
company for any such reduction suffered.

     


    
      
         

      

      
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    3.7.3 Compensation.  Failure
or delay on the part of any Lender or Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of its right to demand
such compensation, but Borrowers shall not be required to compensate a Lender or
Issuing Bank for any increased costs incurred or reductions suffered more than
nine months prior to the date that the Lender or Issuing Bank notifies Borrower
Agent of the Change in Law giving rise to such increased costs or reductions and
of such Lender’s or Issuing Bank’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

     

    3.8 Mitigation.  If any Lender gives a notice under
Section 3.5 or requests
compensation under Section
3.7, or if Borrowers are required to pay additional amounts with respect
to a Lender under Section
5.9, then such Lender shall use reasonable efforts to designate a
different Lending Office or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the judgment of such
Lender, such designation or assignment (a) would eliminate the need for such
notice or reduce amounts payable in the future, as applicable; and (b) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  Borrowers
agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

     

    3.9 Funding Losses.  If for any reason (other than
default by a Lender) (a) any Borrowing of, or conversion to or continuation of,
a LIBOR Revolver Loan does not occur on the date specified therefor in a Notice
of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn),
(b) any repayment or conversion of a LIBOR Revolver Loan occurs on a day other
than the end of its Interest Period, or (c) Borrowers fail to repay a LIBOR
Revolver Loan when required hereunder, then Borrowers shall pay to Agent its
customary administrative charge and to each Lender all losses and expenses that
it sustains as a consequence thereof, including loss of anticipated profits and
any loss or expense arising from liquidation or redeployment of funds or from
fees payable to terminate deposits of matching funds.  Lenders shall
not be required to purchase Dollar deposits in the London interbank market or
any other offshore Dollar market to fund any LIBOR Revolver Loan, but the
provisions hereof shall be deemed to apply as if each Lender had purchased such
deposits to fund its LIBOR Revolver Loans.

     

    3.10 Maximum Interest.  Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by Applicable Law (“maximum
rate”).  If Agent or any Lender shall receive interest in an
amount that exceeds the maximum rate, the excess interest shall be applied to
the principal of the Obligations or, if it exceeds such unpaid principal,
refunded to Borrowers.  In determining whether the interest contracted
for, charged or received by Agent or a Lender exceeds the maximum rate, such
Person may, to the extent
permitted by Applicable Law, (a) characterize any payment that is not principal
as an expense, fee or premium rather than interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) amortize, prorate, allocate and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.

     


    
      
         

      

      
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    SECTION
4. LOAN
ADMINISTRATION

     

    4.1 Manner of Borrowing and Funding Revolver Loans.

     

    4.1.1 Notice of
Borrowing.

     

    (a) Whenever
Borrowers desire funding of a Borrowing of Revolver Loans, Borrower Agent shall
give Agent a Notice of Borrowing.  Such notice must be received by
Agent no later than 11:00 a.m. (i) on the Business Day of the requested funding
date, in the case of Base Rate Revolver Loans, and (ii) at least three Business
Days prior to the requested funding date, in the case of LIBOR Revolver
Loans.  Notices received after 11:00 a.m. shall be deemed received on
the next Business Day.  Each Notice of Borrowing shall be irrevocable
and shall specify (A) the amount of the Borrowing, (B) the requested funding
date (which must be a Business Day), (C) whether the Borrowing is to be made as
Base Rate Revolver Loans or LIBOR Revolver Loans, and (D) in the case of LIBOR
Revolver Loans, the duration of the applicable Interest Period (which shall be
deemed to be 30 days if not specified).

     

    (b) Unless
payment is otherwise timely made by Borrowers, the becoming due of any
Obligations (whether principal, interest, fees or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt)
shall be deemed to be a request for Base Rate Revolver Loans on the due date, in
the amount of such Obligations.  The proceeds of such Revolver Loans
shall be disbursed as direct payment of the relevant Obligation.  In
addition, Agent may, at its option, charge such Obligations against any
operating, investment or other account of a Borrower maintained with Agent or
any of its Affiliates.

     

    (c) If
Borrowers establish a controlled disbursement account with Agent or any
Affiliate of Agent, then the presentation for payment of any check or other item
of payment drawn on such account at a time when there are insufficient funds to
cover it shall be deemed to be a request for Base Rate Revolver Loans on the
date of such presentation, in the amount of the check and items presented for
payment.  The proceeds of such Revolver Loans may be disbursed
directly to the controlled disbursement account or other appropriate
account.

     

    4.1.2 Fundings by
Lenders.  Each Lender shall timely honor its Revolver
Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans
that is properly requested hereunder.  Except for Borrowings to be
made as Swingline Loans, Agent shall endeavor to notify Lenders of each Notice
of Borrowing (or deemed request for a Borrowing) by 11:00 a.m. on the proposed
funding date for Base Rate Revolver Loans or by 3:00 p.m. at least two Business
Days before any proposed funding of LIBOR Revolver Loans.  Each Lender
shall fund to Agent such Lender’s Pro Rata share of the Borrowing to the account
specified by Agent in immediately available funds not later than 2:00 p.m. on
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    funding
date, unless Agent’s notice is received after the times provided above, in which
event Lender shall fund its Pro Rata share by 11:00 a.m. on the next Business
Day.  Subject to its receipt of such amounts from Lenders, Agent shall
disburse the proceeds of the Revolver Loans as directed by Borrower
Agent.  Unless Agent shall have received (in sufficient time to act)
written notice from a Lender that it does not intend to fund its Pro Rata share
of a Borrowing, Agent may assume that such Lender has deposited or promptly will
deposit its share with Agent, and Agent may disburse a corresponding amount to
Borrowers.  If a Lender’s share of any Borrowing is not in fact
received by Agent, then Borrowers agree to repay to Agent on demand the amount of such
share, together with interest thereon from the date disbursed until repaid, at
the rate applicable to such Borrowing.

     

    4.1.3 Swingline Loans;
Settlement.

     

    (a) Agent
may, but shall not be obligated to, advance Swingline Loans to Borrowers, up to
an aggregate outstanding amount of $15,000,000, unless the funding is
specifically required to be made by all Lenders hereunder.  Each
Swingline Loan shall constitute a Revolver Loan for all purposes, except that
payments thereon shall be made to Agent for its own account.  The
obligation of Borrowers to repay Swingline Loans shall be evidenced by the
records of Agent and need not be evidenced by any promissory note.

     

    (b) To
facilitate administration of the Revolver Loans, Lenders and Agent agree (which
agreement is solely among them, and not for the benefit of or enforceable by any
Borrower) that settlement among them with respect to Swingline Loans and other
Revolver Loans may take place periodically on a date determined from time to
time by Agent, which shall occur at least once each month.  On each
settlement date, settlement shall be made with each Lender in accordance with
the Settlement Report delivered by Agent to Lenders.  Between
settlement dates, Agent may in its discretion apply payments on Revolver Loans
to Swingline Loans, regardless of any designation by Borrower or any provision
herein to the contrary.  Each Lender’s obligation to make settlements
with Agent is absolute and unconditional, without offset, counterclaim or other
defense, and whether or not the Revolver Commitments have terminated, an
Overadvance exists or the conditions in Section 6 are satisfied.  If,
due to an Insolvency Proceeding with respect to a Borrower or otherwise, any
Swingline Loan may not be settled among Lenders hereunder, then each Lender
shall be deemed to have purchased from Agent a Pro Rata participation in each
unpaid Swingline Loan and shall transfer the amount of such participation to
Agent, in immediately available funds, within one Business Day after Agent’s
request therefor.

     

    4.1.4 Notices.  Each
Borrower authorizes Agent and Lenders to extend, convert or continue Revolver
Loans, effect selections of interest rates, and transfer funds to or on behalf
of Borrowers based on telephonic or e-mailed instructions.  Borrowers
shall confirm each such request by prompt delivery to Agent of a Notice of
Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs
in any material respect from the action taken by Agent or Lenders, the records
of Agent and Lenders shall govern.  Neither Agent nor any Lender shall
have any liability for any loss suffered by a Borrower as a result of Agent or
any Lender acting upon its understanding of telephonic or e-mailed instructions
from a person believed in good faith by Agent or any Lender to be a person
authorized to give such instructions on a Borrower’s behalf.

     


    
      
         

      

      
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    4.2 Defaulting Lender.  If a Lender fails to make any
payment to Agent that is required hereunder, Agent may (but shall not be
required to), in its discretion, retain payments that would otherwise be made to
such defaulting Lender hereunder, apply the payments to such Lender’s defaulted
obligations or readvance the funds to Borrowers in accordance with this
Agreement.  The failure of any Lender to fund a Revolver Loan or to
make a payment in respect of a LC Obligation shall not relieve any other Lender
of its obligations hereunder, and no Lender shall be responsible for default by
another Lender.  Lenders and Agent agree (which agreement is solely
among them, and not for the benefit of or enforceable by any Borrower) that,
solely for purposes of determining a defaulting Lender’s right to vote on
matters relating to the Loan Documents and to share in payments, fees and
Collateral proceeds thereunder, a defaulting Lender shall not be deemed to be a
“Lender” until
all its defaulted obligations have been cured.

     

    4.3 Number and Amount of LIBOR Revolver Loans; Determination of
Rate.  For ease of administration, all LIBOR Revolver Loans
having the same length and beginning date of their Interest Periods shall be
aggregated together, and such Borrowings shall be allocated among Lenders on a
Pro Rata basis.  No more than 5 Borrowings of LIBOR Revolver Loans may
be outstanding at any time, and each Borrowing of LIBOR Revolver Loans when made
shall be in a minimum amount of $1,000,000, or an increment of $1,000,000 in
excess thereof.  Upon determining LIBOR for any Interest Period
requested by Borrowers, Agent shall promptly notify Borrowers thereof by
telephone or electronically and, if requested by Borrowers, shall confirm any
telephonic notice in writing.

     

    4.4 Borrower Agent.  Each Borrower hereby designates
Parent (“Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for Revolver Loans and Letters of Credit,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base and financial reports, receipt and
payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender.  Borrower Agent hereby accepts such
appointment.  Agent and Lenders shall be entitled to rely upon, and
shall be fully protected in relying upon, any notice or communication (including
any notice of borrowing) delivered by Borrower Agent on behalf of any
Borrower.  Agent and Lenders may give any notice or communication with
a Borrower hereunder to Borrower Agent on behalf of such
Borrower.  Each of Agent, Issuing Bank and Lenders shall have the
right, in its discretion, to deal exclusively with Borrower Agent for any or all
purposes under the Loan Documents.  Each Borrower agrees that any
notice, election, communication, representation, agreement or undertaking made
on its behalf by Borrower Agent shall be binding upon and enforceable against
it.

     

    4.5 One Obligation.  The Revolver Loans, LC
Obligations and other Obligations shall constitute one general obligation of
Borrowers and (unless otherwise expressly provided in any Loan Document) shall
be secured by Agent’s Lien upon all Collateral; provided, however, that Agent
and each Lender shall be deemed to be a creditor of, and the holder of a
separate claim against, each Borrower to the extent of any Obligations jointly
or severally owed by such Borrower.

     


    
      
         

      

      
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    4.6 Effect of Termination.  On the effective date of
any termination of the Revolver Commitments, all Obligations shall be
immediately due and payable, and any Lender may terminate its and its
Affiliates’ Bank Products (including, only with the consent of Agent, any Cash
Management Services).  All undertakings of Borrowers contained in the
Loan Documents shall survive any termination, and Agent shall retain its Liens
in the Collateral and all of its rights and remedies under the Loan Documents
until Full Payment of the Obligations.  Notwithstanding Full Payment
of the Obligations, Agent shall not be required to terminate its Liens in any
Collateral unless, with respect to any damages Agent may incur as a result of
the dishonor or return of Payment Items applied to Obligations, Agent receives
(a) a written agreement, executed by Borrowers and any Person whose advances are
used in whole or in part to satisfy the Obligations, indemnifying Agent and
Lenders from any such damages; or (b) such Cash Collateral as Agent, in its
discretion, deems necessary to protect against any such damages.  The
provisions of Sections 2.3,
3.4, 3.6, 3.7, 3.9, 5.5, 5.9, 12, 14.2 and this Section, and the
obligation of each Obligor and Lender with respect to each indemnity given by it
in any Loan Document, shall survive Full Payment of the Obligations and any
release relating to this credit facility.

     

    SECTION
5. PAYMENTS

     

    5.1 General Payment Provisions.  All payments of
Obligations shall be made in Dollars, without offset, counterclaim or defense of
any kind, free of (and without deduction for) any Taxes (subject to Section 5.9), and in
immediately available funds, not later than 12:00 noon on the due
date.  Any payment after such time shall be deemed made on the next
Business Day.  If any payment under the Loan Documents shall be stated
to be due on a day other than a Business Day, the due date shall be extended to
the next Business Day and such extension of time shall be included in any
computation of interest and fees.  Any payment of a LIBOR Revolver
Loan prior to the end of its Interest Period shall be accompanied by all amounts
due under Section
3.9.  Any prepayment of Revolver Loans shall be applied first
to Base Rate Revolver Loans and then to LIBOR Revolver Loans; provided, however, that as long
as no Event of Default exists, prepayments of LIBOR Revolver Loans may, at the
option of Borrowers and Agent, be held by Agent as Cash Collateral and applied
to such Revolver Loans at the end of their Interest Periods.

     

    5.2 Repayment of Revolver Loans.  Revolver Loans shall
be due and payable in full on the Revolver Termination Date, unless payment is
sooner required hereunder.  Revolver Loans may be prepaid from time to
time, without penalty or premium.  If any Asset Disposition includes
the disposition of Accounts arising from the sale of Inventory or Inventory,
then Net Proceeds equal to the greater of (a) the net book value of such
Accounts and Inventory, or (b) the reduction in the Borrowing Base upon giving
effect to such disposition, shall be applied to the Revolver
Loans.  Notwithstanding anything herein to the contrary, if an
Overadvance exists, Borrowers shall, on the sooner of Agent’s demand or the
first Business Day after any Borrower has knowledge thereof, repay the
outstanding Revolver Loans in an amount sufficient to reduce the principal
balance of Revolver Loans to the Borrowing Base.

     


    
      
         

      

      
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    5.3 [Intentionally
Deleted]

     

    5.4 Payment of Other Obligations.  Obligations other
than Revolver Loans, including LC Obligations and Extraordinary Expenses, shall
be paid by Borrowers as provided in the Loan Documents or, if no payment date is
specified, on demand.

     

    5.5 Marshaling; Payments Set Aside.  None of Agent or
Lenders shall be under any obligation to marshal any assets in favor of any
Obligor or against any Obligations.  If any payment by or on behalf of
Borrowers is made to Agent, Issuing Bank or any Lender, or Agent, Issuing Bank
or any Lender exercises a right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Agent, Issuing Bank or such Lender in its discretion)
to be repaid to a trustee, receiver or any other Person, then to the extent of
such recovery, the Obligation originally intended to be satisfied, and all
Liens, rights and remedies relating thereto, shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred.

     

    5.6 Post-Default Allocation of Payments.

     

    5.6.1 Allocation.  Notwithstanding
anything herein to the contrary, during an Event of Default, monies to be
applied to the Obligations, whether arising from payments by Obligors,
realization on Collateral, setoff or otherwise, shall be allocated as
follows:

     

    (a) first, to all costs
and expenses, including Extraordinary Expenses, owing to Agent;

     

    (b) second, to all
amounts owing to Agent on Swingline Loans;

     

    (c) third, to all amounts
owing to Issuing Bank on LC Obligations;

     

    (d) fourth, to all
Obligations constituting fees (excluding amounts relating to Bank
Products);

     

    (e) fifth, to all
Obligations constituting interest (excluding amounts relating to Bank
Products);

     

    (f) sixth, to provide
Cash Collateral for outstanding Letters of Credit;

     

    (g) seventh, to all other
Obligations, other than Bank Product Debt; and

     

    (h) last, to Bank Product
Debt.

     

    Amounts
shall be applied to each category of Obligations set forth above until Full
Payment thereof and then to the next category.  If amounts are
insufficient to satisfy a category, they shall be applied on a pro rata basis
among the Obligations in the category.  The allocations set forth in


      this
Section are solely to determine the rights and priorities of Agent and Lenders
as among themselves, and may be changed by agreement among them without the
consent of any Obligor.  This Section is not for the benefit of or
enforceable by any Borrower.

    

     


    
      
         

      

      
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    5.6.2 Erroneous
Application.  Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been made shall be to recover the amount
from the Person that actually received it (and, if such amount was received by
any Lender, such Lender hereby agrees to return it).

     

    5.7 Application of Payments.  The ledger balance in
the main Dominion Account as of the end of a Business Day shall be applied to
the Obligations at the beginning of the next Business Day.  If, as a
result of such application, a credit balance exists, the balance shall not
accrue interest in favor of Borrowers and shall be made available to Borrowers
as long as no Default or Event of Default exists.  Each Borrower
irrevocably waives the right to direct the application of any payments or
Collateral proceeds, and agrees that Agent shall have the continuing, exclusive
right to apply and reapply same against the Obligations, in such manner as Agent
deems advisable, notwithstanding any entry by Agent in its records.

     

    5.8 Loan Account; Account Stated.

     

    5.8.1 Loan
Account.  Agent shall maintain in accordance with its usual and
customary practices an account or accounts (“Loan Account”)
evidencing the Debt of Borrowers resulting from each Revolver Loan or issuance
of a Letter of Credit from time to time.  Any failure of Agent to
record anything in the Loan Account, or any error in doing so, shall not limit
or otherwise affect the obligation of Borrowers to pay any amount owing
hereunder.  Agent may maintain a single Loan Account in the name of
Borrower Agent, and each Borrower confirms that such arrangement shall have no
effect on the joint and several character of its liability for the
Obligations.

     

    5.8.2 Entries
Binding.  Entries made in the Loan Account shall constitute
presumptive evidence of the information contained therein.  If any
information contained in the Loan Account is provided to or inspected by any
Person, then such information shall be conclusive and binding on such Person for
all purposes absent manifest error, except to the extent such Person notifies
Agent in writing within 30 days after receipt or inspection that specific
information is subject to dispute.

     

    5.8.3 Register.  Schedule 1.1 shall reflect the
names and addresses of the Lenders and the Commitment of each Lender pursuant to
the terms hereof from time to time (the “Register”).  Schedule 1.1 shall be updated
from time to time.

     

    5.9 Taxes.

     

    5.9.1 Payments Free of
Taxes.  Any and all payments by any Obligor on account of any
Obligations shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if an
Obligor shall be required by Applicable Law to deduct any Indemnified Taxes
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    such
payments, then (a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) Agent, Lender or Issuing Bank, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made; (b) the Obligor shall make such deductions; and (c)
Borrowers shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law.  Without limiting the
foregoing, Borrowers shall timely pay all Other Taxes to the relevant
Governmental Authorities.

     

    5.9.2 Payment.  Borrowers
shall indemnify, hold harmless and reimburse Agent, Lenders and Issuing Bank,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by
Agent, any Lender or Issuing Bank with respect to any Obligations, Letters of
Credit or Loan Documents, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to Borrower Agent by a Lender or Issuing Bank
(with a copy to Agent), or by Agent, shall be conclusive absent manifest
error.  As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by a Borrower, Borrower Agent shall deliver to Agent a receipt
issued by the Governmental Authority evidencing such payment or other evidence
of payment satisfactory to Agent.

     

    5.10 Foreign Lenders.

     

    5.10.1 Exemption.  Any
Foreign Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which an Obligor is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to
payments under any Loan Document shall deliver to Agent and Borrower Agent, at
the time or times prescribed by Applicable Law or reasonably requested by Agent
or Borrower Agent, such properly completed and executed documentation prescribed
by Applicable Law as will permit such payments to be made without withholding or
at a reduced rate of withholding.  In addition, any Lender, if
requested by Agent or Borrower Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by Agent or Borrower Agent
as will enable Agent and Borrower Agent to determine whether or not such Lender
is subject to backup withholding or information reporting
requirements.

     

    5.10.2 Documentation.  Without
limiting the generality of the foregoing, if a Borrower is resident for tax
purposes in the United States, a Foreign Lender shall deliver to Agent and
Borrower Agent (in such number of copies as shall be requested by the recipient)
on or prior to the date on which such Foreign Lender becomes a Lender hereunder
(and from time to time thereafter upon the request of Agent or Borrower Agent,
but only if such Foreign Lender is legally entitled to do so), (a) duly
completed copies of IRS Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States is a party; (b) duly completed
copies of IRS Form W-8ECI; (c) in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (i) a certificate to the effect that such Foreign Lender is not (A) a
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    881(c)(3)(A)
of the Code, (B) a “10 percent shareholder” of any Obligor within the meaning of
section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in section 881(c)(3)(C) of the Code, and (ii) duly completed copies of
IRS Form W-8BEN; or (d) any other form prescribed by Applicable Law as a basis
for claiming exemption from or a reduction in United States federal withholding
tax, duly completed together with such supplementary documentation as may be
prescribed by Applicable Law to permit Borrowers to determine the withholding or
deduction required to be made.

     

    5.10.3 Lender
Obligations.  Each Lender and Issuing Bank shall promptly
notify Borrowers and Agent of any change in circumstances that would change any
claimed exemption or reduction of withholding tax.  Each Lender and
Issuing Bank shall reimburse (within 10 days after demand therefor) Borrowers
and Agent for any Taxes as well as any penalties for the late payment of such
Taxes asserted against a Borrower or Agent by any Governmental Authority due to
such Lender’s or Issuing Bank’s failure to deliver, or inaccuracy or deficiency
in, any documentation required to be delivered by it pursuant to this
Section.  Each Lender and Issuing Bank authorizes Agent to set off any
amounts due to Agent under this Section against any amounts payable to such
Lender or Issuing Bank under any Loan Document.  If a Lender
determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to Section 5.9,
such Lender shall pay over such refund to the Borrowers (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrower under
Section 5.9 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Lender and without interest (other than any
interest paid by the relevant governmental authority with respect to such
refund), provided that the Borrowers, upon the request of such Lender, agree to
repay the amount paid over to the Borrowers (plus any penalties, interest or
other charges imposed by the relevant governmental authority) to such Lender in
the event such Lender is required to repay such refund to such governmental
authority.  This Section 5.10.3 shall not be
construed to require any Lender to make available its tax returns (or any other
information relating to its Taxes that it deems confidential) to the Borrower or
any other person.

     

    5.11 Nature and Extent of Each Borrower’s
Liability.

     

    5.11.1 Joint and Several
Liability.  Each Borrower agrees that it is jointly and
severally liable for, and absolutely and unconditionally guarantees to Agent and
Lenders the prompt payment and performance of, all Obligations and all
agreements under the Loan Documents.  Each Borrower agrees that its
guaranty obligations hereunder constitute a continuing guaranty of payment and
not of collection, that such obligations shall not be discharged until Full
Payment of the Obligations, and that such obligations are absolute and
unconditional, irrespective of (a) the genuineness, validity, regularity,
enforceability, subordination or any future modification of, or change in, any
Obligations or Loan Document, or any other document, instrument or agreement to
which any Obligor is or may become a party or be bound; (b) the absence of any
action to enforce this Agreement (including this Section) or any other Loan
Document, or any waiver, consent or indulgence of any kind by Agent or any
Lender with respect thereto; (c) the existence, value or condition of, or
failure to perfect a Lien or to preserve rights against, any security or
guaranty for the Obligations or any action, or the

     

    absence
of any action, by Agent or any Lender in respect thereof (including the release
of any security or guaranty); (d) the insolvency of any Obligor; (e) any
election by Agent or any Lender in an Insolvency Proceeding for the application
of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a
Lien by any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any
Lender against any Obligor for the repayment of any Obligations under Section
502 of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, except Full Payment of all
Obligations.

     

    5.11.2 Waivers.

     

    (a) Each
Borrower expressly waives all rights that it may have now or in the future under
any statute, at common law, in equity or otherwise, to compel Agent or Lenders
to marshal assets or to proceed against any Obligor, other Person or security
for the payment or performance of any Obligations before, or as a condition to,
proceeding against such Borrower.  Each Borrower waives all defenses
available to a surety, guarantor or accommodation co-obligor other than Full
Payment of all Obligations.  It is agreed among each Borrower, Agent
and Lenders that the provisions of this Section 5.11 are of the
essence of the transaction contemplated by the Loan Documents and that, but for
such provisions, Agent and Lenders would decline to make Revolver Loans and
issue Letters of Credit.  Each Borrower acknowledges that its guaranty
pursuant to this Section is necessary to the conduct and promotion of its
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      (b) Agent and
Lenders may, in their discretion, pursue such rights and remedies as they deem
appropriate, including realization upon Collateral or any Real Estate by
judicial foreclosure or non judicial sale or enforcement, without affecting any
rights and remedies under this Section 5.11.  If,
in taking any action in connection with the exercise of any rights or remedies,
Agent or any Lender shall forfeit any other rights or remedies, including the
right to enter a deficiency judgment against any Borrower or other Person,
whether because of any Applicable Laws pertaining to “election of remedies” or
otherwise, each Borrower consents to such action and waives any claim based upon
it, even if the action may result in loss of any rights of subrogation that any
Borrower might otherwise have had.  Any election of remedies that
results in denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations.  Each Borrower
waives all rights and defenses arising out of an election of remedies, such as
nonjudicial foreclosure with respect to any security for the Obligations, even
though that election of remedies destroys such Borrower’s rights of subrogation
against any other Person.  Agent may bid all or a portion of the
Obligations at any foreclosure or trustee’s sale or at any private sale, and the
amount of such bid need not be paid by Agent but shall be credited against the
Obligations.  The amount of the successful bid at any such sale,
whether Agent or any other Person is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral, and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 5.11, notwithstanding that any present or future law or court
decision
may have the effect of reducing the amount of any deficiency claim to which
Agent or any Lender might otherwise be entitled but for such bidding at any such
sale.

    

     

    5.11.3 Extent of Liability;
Contribution.

     

    (a) Notwithstanding
anything herein to the contrary, each Borrower’s liability under this Section 5.11 shall be limited
to the greater of (i) all amounts for which such Borrower is primarily liable,
as described below, and (ii) such Borrower’s Allocable Amount.

     

    (b) If any
Borrower makes a payment under this Section 5.11 of any
Obligations (other than amounts for which such Borrower is primarily liable) (a
“Guarantor
Payment”) that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The
“Allocable
Amount” for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this Section 5.11 without rendering
such payment voidable under Section 548 of the Bankruptcy Code or under any
applicable state fraudulent transfer or conveyance act, or similar statute or
common law.

     

    (c) Nothing
contained in this Section
5.11 shall limit the liability of any Borrower to pay Revolver Loans made
directly or indirectly to that Borrower (including Revolver Loans advanced to
any other Borrower and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower), LC Obligations relating to Letters of Credit issued
to support such Borrower’s business, and all accrued interest, fees, expenses
and other related Obligations with respect thereto, for which such Borrower
shall be primarily liable for all purposes hereunder.  Agent and
Lenders shall have the right, at any time in their discretion, to condition
Revolver Loans and Letters of Credit upon a separate calculation of borrowing
availability for each Borrower and to restrict the disbursement and use of such
Revolver Loans and Letters of Credit to such Borrower.

     

    5.11.4 Joint
Enterprise.  Each Borrower has requested that Agent and Lenders
make this credit facility available to Borrowers on a combined basis, in order
to finance Borrowers’ business most efficiently and
economically.  Borrowers’ business is a mutual and collective
enterprise, and Borrowers believe that consolidation of their credit facility
will enhance the borrowing power of each Borrower and ease the administration of
their relationship with Lenders, all to the mutual advantage of
Borrowers.  Borrowers acknowledge and agree that Agent’s and Lenders’
willingness to extend credit to Borrowers and to administer the Collateral on a
combined basis, as set forth herein, is done solely as an accommodation to
Borrowers and at Borrowers’ request.

     

    5.11.5 Subordination.  Each
Borrower hereby subordinates any claims, including any rights at law or in
equity to payment, subrogation, reimbursement, exoneration, contribution,
indemnification or set off, that it may have at any time against any other
Obligor, howsoever arising, to the Full Payment of all Obligations.

     


    
      
         

      

      
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    SECTION
6. CONDITIONS
PRECEDENT

     

    6.1 Conditions Precedent to Initial Revolver
Loans.  In addition to the conditions set forth in Section 6.2, Lenders shall not
be required to fund any requested Revolver Loan, issue any Letter of Credit, or
otherwise extend credit to Borrowers hereunder, until the date (“Closing Date”) that
each of the following conditions has been satisfied:

     

    (a) Notes
shall have been executed by Borrowers and delivered to each Lender that requests
issuance of a Note.  Each other Loan Document to be entered into as of
the Closing Date shall have been duly executed and delivered to Agent by each of
the signatories thereto, and each Obligor shall be in compliance with all terms
thereof.

     

    (b) Agent
shall have received acknowledgments of all filings or recordations required by
Agent to perfect its Liens in the Collateral (or title insurance as to
Mortgages), as well as UCC and Lien searches and other evidence satisfactory to
Agent that such Liens are the only Liens upon the Collateral, except Permitted
Liens.

     

    (c) Agent
shall have received the Related Real Estate Documents that Agent has requested
for all Real Estate subject to a Mortgage.

     

    (d) Agent
shall have received duly executed agreements establishing each Dominion Account
and related lockbox, in form and substance, and with financial institutions,
satisfactory to Agent.

     

    (e) Agent
shall have received certificates, in form and substance satisfactory to it, from
a knowledgeable Senior Officer of Borrower Agent certifying that, after giving
effect to the initial Revolver Loans and transactions hereunder, (i) each
Borrower is Solvent; (ii) no Default or Event of Default exists; (iii) the
representations and warranties set forth in Section 9 are true and
correct; and (iv) each Borrower has complied with all agreements and conditions
to be satisfied by it as of the Closing Date under the Loan
Documents.

     

    (f) Agent
shall have received a certificate of a duly authorized officer of each Obligor,
certifying (i) that attached copies of such Obligor’s Organic Documents are true
and complete, and in full force and effect, without amendment except as shown;
(ii) that an attached copy of resolutions authorizing execution and delivery of
the Loan Documents is true and complete, and that such resolutions are in full
force and effect, were duly adopted, have not been amended, modified or revoked,
and constitute all resolutions adopted with respect to this credit facility; and
(iii) to the title, name and signature of each Person authorized to sign the
Loan Documents.  Agent may conclusively rely on this certificate until
it is otherwise notified by the applicable Obligor in writing.

     

    (g) Agent
shall have received a written opinion of Wilson Sonsini Goodrich & Rosati,
P.C., as well as any local counsel to Borrowers or Agent, in form and substance
satisfactory to Agent.

     


    
      
         

      

      
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    (h) Agent
shall have received copies of the charter documents of each Obligor, certified
by the Secretary of State or other appropriate official of such Obligor’s
jurisdiction of organization.  Agent shall have received good standing
certificates for each Obligor, issued by the Secretary of State or other
appropriate official of such Obligor’s jurisdiction of organization and each
jurisdiction where such Obligor’s conduct of business or ownership of Property
necessitates qualification.

     

    (i) Agent
shall have received copies of policies or certificates of insurance for the
insurance policies carried by Borrowers, all in compliance with the Loan
Documents.

     

    (j) Agent
shall have completed its business, financial and legal due diligence of
Obligors, including a roll-forward of its previous field examination, with
results satisfactory to Agent.  Except as disclosed to Agent in
writing prior to the Closing Date, no material adverse change in the financial
condition of any Obligor or in the quality, quantity or value of any Collateral
shall have occurred since June 28, 2008.

     

    (k) Borrowers
shall have paid all fees and expenses to be paid to Agent and Lenders on the
Closing Date.

     

    (l) Agent
shall have received a Borrowing Base Certificate dated as of November 6,
2008.  Upon giving effect to the initial funding of Revolver Loans and
issuance of Letters of Credit, and the payment by Borrowers of all fees and
expenses incurred in connection herewith as well as any payables stretched
beyond their customary payment practices, Availability shall be at least
$9,000,000.

     

    (m) Agent
shall have received a complete and correct copy of the Term Loan Agreement and
all Term Loan Documents (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith), which shall be in each case
satisfactory to Agent in form and substance.

     

    (n) Agent
shall have received the proceeds of the Term Loan.

     

    6.2 Conditions Precedent to All Credit
Extensions.  Agent, Issuing Bank and Lenders shall not be
required to fund any Revolver Loans, arrange for issuance of any Letters of
Credit or grant any other accommodation to or for the benefit of Borrowers (in
each case, excluding the conversion or continuation of any Loan), unless the
following conditions are satisfied:

     

    (a) No
Default or Event of Default shall exist at the time of, or result from, such
funding, issuance or grant;

     

    (b) The
representations and warranties of each Obligor in the Loan Documents shall be
true and correct on the date of, and upon giving effect to, such funding,
issuance or grant (except for representations and warranties that expressly
relate to an earlier date);

     


    
      
         

      

      
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    (c) All
conditions precedent in any other Loan Document shall be satisfied;

     

    (d) No event
shall have occurred or circumstance exist that has or could reasonably be
expected to have a Material Adverse Effect; and

     

    (e) With
respect to issuance of a Letter of Credit, the LC Conditions shall be
satisfied.

     

    Each
request (or deemed request) by Borrowers for funding of a Revolver Loan,
issuance of a Letter of Credit or grant of an accommodation (in each case,
excluding the conversion or continuation of any Loan) shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or
grant.  As an additional condition to any funding, issuance or grant,
Agent shall have received such other information, documents, instruments and
agreements as it deems appropriate in connection therewith.

    


    6.3 Limited
Waiver of Conditions Precedent.  If Agent, Issuing Bank or
Lenders fund any Revolver Loans, arrange for issuance of any Letters of Credit
or grant any other accommodation when any conditions precedent are not satisfied
(regardless of whether the lack of satisfaction was known or unknown at the
time), it shall not operate as a waiver of (a) the right of Agent, Issuing Bank
and Lenders to insist upon satisfaction of all conditions precedent with respect
to any subsequent funding, issuance or grant; nor (b) any Default or Event of
Default due to such failure of conditions or otherwise.

     

    6.4 Conditions Subsequent to the Closing
Date.  Borrowers shall satisfy or cause each of the
following to be satisfied, in a manner satisfactory to Agent, within the time
periods set forth below (it being understood that (i) the failure by the
Borrowers to perform or cause to be performed any such condition subsequent on
or before the date applicable thereto shall constitute an Event of Default and
(ii) to the extent that the existence of any such condition subsequent would
otherwise cause any representation, warranty or covenant in this Agreement or
any other Loan Document to be breached, the Lenders hereby waive such breach for
the period from the Closing Date until the date on which such condition
subsequent is required to be fulfilled pursuant to this Section 6.4):

     

    (a) Cash Management/Deposit
Accounts/Deposit Account Control Agreements.  Within 30 days
after the Closing Date, (i) all cash management services provided to Borrowers
by any Person other than Bank shall be terminated by Borrowers and all Cash
Management Services shall be put in place; provided, that during
such 30 day period, all payments on Accounts arising from the sale of Inventory
received by any Borrower are held in trust for Agent and Term Loan Agent and
promptly (no later than the next Business Day) paid to Agent, (ii) all Deposit
Accounts of Borrowers (other than the Excluded Deposit Accounts and any Term
Loan Cash Collateral Account) which are maintained by a bank other than Bank of
America shall be closed, and (iii) Borrowers shall deliver fully executed
Deposit Account Control Agreements with respect to each of its Deposit Accounts
(other than the Excluded Deposit Accounts) to Agent.

     


    
      
         

      

      
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    (b) Flood
Insurance.  With respect to each Real Estate (upon which
material improvements are located) in an area identified by the Federal
Emergency Management Agency ("FEMA") as having
special flood hazards (including, without limitation, those areas designated as
"zone A" or "zone V"), as soon as possible, but in any event, within 60 days of
the Closing Date, the Agent shall have received, evidence that the Borrowers
have obtained insurance with respect to the replacement or rebuilding cost of
the relevant material improvements and contents located at any such Real Estate
in an amount and upon terms reasonably satisfactory to the Agent in its sole
discretion.

     

    SECTION
7. COLLATERAL

     

    7.1 Grant of Security Interest.  To secure the prompt
payment and performance of all Obligations, each Borrower hereby grants to
Agent, for the benefit of Secured Parties, a continuing security interest in and
Lien upon all Property of such Borrower, including all of the following
Property, whether now owned or hereafter acquired, and wherever
located:

     

    (a) all
Accounts;

     

    (b) all
Chattel Paper, including electronic chattel paper;

     

    (c) all
Commercial Tort Claims;

     

    (d) all
Deposit Accounts;

     

    (e) all
Documents;

     

    (f) all
General Intangibles, including Intellectual Property;

     

    (g) all
Goods, including Inventory, Equipment and fixtures;

     

    (h) all
Instruments;

     

    (i) all
Investment Property, including the Equity Interests owned by each Borrower in
the entities set forth on Schedule 7.1 to the Disclosure
Letter;

     

    (j) all
Letter-of-Credit Rights;

     

    (k) all
Supporting Obligations;

     

    (l) all
monies, whether or not in the possession or under the control of Agent, a
Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash
Collateral;

     

    (m) all
accessions to, substitutions for, and all replacements, products, and cash and
non-cash proceeds of the foregoing, including proceeds of and unearned premiums
with respect to insurance policies, and claims against any Person for loss,
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    (n) all books
and records (including customer lists, files, correspondence, tapes, computer
programs, print-outs and computer records) pertaining to the
foregoing.

     

    Notwithstanding
the foregoing, Agent shall not have a Lien on the following Property of any
Borrower:  (i) any contract or agreement to which a Borrower is a
party or any of its rights or interests thereunder if and for so long as the
grant of such security interest shall constitute or result in (A) the
unenforceability of any material right of the Borrower therein or (B) in a
breach or termination pursuant to the terms of, or a default under, any such
contract or agreement (in each case, other than to the extent that any such
restriction would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 or any other Section of the UCC); provided, however, that such
Lien shall attach immediately at such time as the condition causing such
restriction shall be remedied or is otherwise not in existence, and (ii)
Equipment (and any accessions, attachments, replacements or improvements
thereon) that is subject to a Lien that is otherwise permitted by Section 10.2.1, if under the
terms of the underlying lease or agreement, the grant of a security interest or
Lien to Agent is prohibited (other than to the extent that any such restriction
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
or any other Section of the UCC); provided, however, that such
Lien shall attach immediately at such time as the condition causing such
restriction shall be remedied or is otherwise not in existence.

     

    7.2 Lien on Deposit Accounts; Cash Collateral.

     

    7.2.1 Deposit
Accounts.  To further secure the prompt payment and performance
of all Obligations, each Borrower hereby grants to Agent, for the benefit of
Secured Parties, a continuing security interest in and Lien upon all amounts
credited to any Deposit Account of such Borrower, including any sums in any
blocked or lockbox accounts or in any accounts into which such sums are
swept.  Each Borrower authorizes and directs each bank or other
depository to deliver to Agent, on a daily basis, all balances in each Deposit
Account (other than any Excluded Deposit Account and the Term Loan Cash
Collateral Account) maintained by such Borrower with such depository for
application to the Obligations then outstanding.  Each Borrower
irrevocably appoints Agent as such Borrower’s attorney-in-fact to collect such
balances to the extent any such delivery is not so made.

     

    7.2.2 Cash
Collateral.  Any Cash Collateral may be invested, at Agent’s
discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement or course of dealing with any Borrower, and shall
have no responsibility for any investment or loss on such investments made in
Cash Equivalents.  Each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a security interest in all Cash Collateral held from
time to time and all proceeds thereof, as security for the Obligations, whether
such Cash Collateral is held in a Cash Collateral Account or
elsewhere.  Agent may apply Cash Collateral to the payment of any
Obligations, in such order as Agent may elect, as they become due and
payable.  Each Cash Collateral Account and all Cash Collateral shall
be under the sole dominion and control of Agent and Term Loan
Agent.  No Borrower or other Person claiming 

      through
or on behalf of any Borrower shall have any right to any Cash Collateral, until
Full Payment of all Obligations (other than inchoate indemnity obligations);
provided, that the Term Loan Agent has rights in any Cash Collateral to the
extent set forth in the Intercreditor Agreement and the Term Loan
Documents.

    

     


    
      
         

      

      
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    7.3 Real Estate
Collateral.

     

    7.3.1 Lien on Real
Estate.  The Obligations shall also be secured by Mortgages
upon all Real Estate owned by Borrowers, including the Real Estate described on
Schedule 7.3.1 to the
Disclosure Letter.  The Mortgages shall be duly recorded, at
Borrowers’ expense, in each office where such recording is required to
constitute a fully perfected Lien on the Real Estate covered
thereby.  If any Borrower acquires an interest in Real Estate
hereafter with a Current Value (as defined below) (x) in excess of $250,000 in
the case of a fee interest, or (y) requiring the payment of annual rent
exceeding in the aggregate $250,000 in the case of leasehold interest, such
Borrower shall immediately so notify the Agent, setting forth with specificity a
description of the interest acquired, the location of the Real Estate, any
structures or improvements thereon and, with respect to owned real property,
either an appraisal or such Borrower's good-faith estimate of the current value
of such Real Estate (for purposes of this Section, the "Current
Value").  The Agent shall notify such Borrower whether it
intends to require a Mortgage and the other documents referred to below, or in
the case of a leasehold, a Lien Waiver. Upon receipt of such notice requesting a
Mortgage, the Borrower that has acquired such interest shall promptly furnish to
Agent the Related Real Estate Documents with respect to such Real
Estate.

     

    7.3.2 Collateral Assignment of
Leases.  To further secure the prompt payment and performance
of all Obligations, each Borrower hereby grants to Agent a security interest in,
subject to the final paragraph of Section 7.1, for the benefit
of Secured Parties, all of such Borrower’s right, title and interest in, to and
under all now or hereafter existing leases of real Property to which such
Borrower is a party, whether as lessor or lessee, and all extensions, renewals,
modifications and proceeds thereof.

     

    7.4 Other Collateral.

     

    7.4.1 Commercial Tort
Claims.  Borrowers shall promptly notify Agent in writing if
any Borrower has a Commercial Tort Claim (other than, as long as no Default or
Event of Default exists, a Commercial Tort Claim for less than $100,000) and,
upon Agent’s request, shall promptly take such actions as Agent deems
appropriate to confer upon Agent (for the benefit of Secured Parties) a duly
perfected Lien upon such claim.

     

    7.4.2 Certain After-Acquired
Collateral.  Borrowers shall notify Agent in each Compliance
Certificate delivered after the Closing Date, if any Borrower obtains any
interest in any Collateral consisting of Deposit Accounts, Chattel Paper,
Documents, Instruments, Intellectual Property, Investment Property or
Letter-of-Credit Rights and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to effect Agent’s duly perfected Lien upon
such Collateral  (other than any Excluded Deposit Accounts), including
obtaining any appropriate possession, control agreement or Lien Waiver (to the
extent Agent is
permitted to obtain possession or control pursuant to the Intercreditor
Agreement).  If any Collateral is in the possession of a third party
(other than the Term Loan Agent), at Agent’s request, Borrowers shall obtain an
acknowledgment that such third party holds the Collateral for the benefit of
Agent and the Term Loan Agent.

     


    
      
         

      

      
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    7.5 No Assumption of Liability.  The Lien on
Collateral granted hereunder is given as security only and shall not subject
Agent or any Lender to, or in any way modify, any obligation or liability of
Borrowers relating to any Collateral.

     

    7.6 Further Assurances.  Promptly upon request,
Borrowers shall deliver such instruments, assignments, title certificates, or
other documents or agreements, and shall take such actions, as Agent deems
appropriate under Applicable Law to evidence or perfect its Lien on any
Collateral, or otherwise to give effect to the intent of this Agreement, in each
case, to the extent permitted pursuant to the Intercreditor
Agreement.  Each Borrower authorizes Agent to file any financing
statement that indicates the Collateral as “all assets” or “all personal
property” of such Borrower, or words to similar effect, and ratifies any
action taken by Agent before the Closing Date to effect or perfect its Lien on
any Collateral.

     

    7.7 Foreign Subsidiary Stock.  Notwithstanding Section 7.1, the Collateral
shall include only 65% of the voting stock of any Foreign
Subsidiary.

     

    SECTION
8. COLLATERAL
ADMINISTRATION

     

    8.1 Borrowing Base Certificates.  By the 2nd Business
Day of each week, Borrowers shall deliver to Agent (and Agent shall promptly
deliver same to Lenders) a Borrowing Base Certificate prepared as of the close
of business of the previous week, and at such other times as Agent may
request.  All calculations of Availability in any Borrowing Base
Certificate shall originally be made by Borrowers and certified by a Senior
Officer of Borrower Agent, provided that Agent may from time to time review and
adjust any such calculation (a) to reflect its reasonable estimate of declines
in value of any Accounts arising from the sale of Inventory or Inventory, due to
collections received in the Dominion Account or otherwise; (b) to adjust advance
rates to reflect changes in dilution, quality, mix and other factors affecting
Accounts arising from the sale of Inventory or Inventory; and (c) to the extent
the calculation is not made in accordance with this Agreement or does not
accurately reflect the Availability Reserve.

     

    8.2 Administration of Accounts.

     

    8.2.1 Records and Schedules of
Accounts.  Each Borrower shall keep accurate and complete
records of its Accounts, including all payments and collections thereon, and
shall submit to Agent sales, collection and other reports in form satisfactory
to Agent, on such periodic basis as Agent may request.  Each Borrower
shall also provide to Agent, (i) on or before the 2nd Business Day of each week,
a detailed aged report of all Accounts as of the end of the preceding week,
specifying each Account’s Account Debtor name, amount, invoice date, and payment
terms, and (ii) together with each financial statement delivered pursuant to
Section 10.1.2(b), a
report of reconciliations of Accounts and a summary aging report of Accounts,
and (iii) other information as Agent may reasonably request.  If
Accounts arising from the sale of Inventory in an aggregate face amount of
$500,000 or more cease to be Eligible Accounts, Borrowers shall notify Agent of
such occurrence promptly (and in any event within one Business Day) after any
Borrower has knowledge thereof.

     


    
      
         

      

      
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    8.2.2 Taxes.  If
an Account of any Borrower includes a charge against Borrower for any Taxes,
Agent is authorized, in its discretion, to pay the amount thereof to the proper
taxing authority for the account of such Borrower and to charge Borrowers
therefor; provided, however, that neither
Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers
or with respect to any Collateral.

     

    8.2.3 Account
Verification.  Whether or not a Default or Event of Default
exists, Agent shall have the right at any time, in the name of Agent, any
designee of Agent or any Borrower, to verify the validity, amount or any other
matter relating to any Accounts of Borrowers by mail, telephone or
otherwise.  Borrowers shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.

     

    8.2.4 Maintenance of Dominion
Account.  Borrowers shall maintain Dominion Accounts pursuant
to lockbox or other arrangements acceptable to Agent.  Borrowers shall
obtain an agreement (in form and substance satisfactory to Agent) from each
lockbox servicer and Dominion Account bank, establishing Agent’s and Term Loan
Agent’s control over and Lien in the lockbox or Dominion Account, requiring
immediate deposit of all remittances received in the lockbox to a Dominion
Account, and waiving offset rights of such servicer or bank, except for
customary administrative charges.  If a Dominion Account (other than
the Term Loan Cash Collateral Account) is not maintained with Bank of America,
Agent may require immediate transfer of all funds in such account to a Dominion
Account maintained with Bank of America.  Neither Agent nor Lenders
assume any responsibility to Borrowers for any lockbox arrangement or Dominion
Account, including any claim of accord and satisfaction or release with respect
to any Payment Items accepted by any bank.

     

    8.2.5 Proceeds of
Collateral.  Borrowers shall request in writing and otherwise
take all necessary steps to ensure that all payments on Accounts or otherwise
relating to Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account).  If any Borrower or Subsidiary
receives cash or Payment Items with respect to any Collateral, it shall hold
same in trust for Agent and Term Loan Agent and promptly (not later than the
next Business Day) deposit same into a Dominion Account.

     

    8.3 Administration of Inventory.

     

    8.3.1 Records and Reports of
Inventory.  Each Borrower shall keep accurate and complete
records of its Inventory consistent with historical practices, and shall submit
to Agent (i) weekly inventory reports in form satisfactory to Agent, by no later
than the 2nd Business Day of each week, and (ii) together with each financial
statement delivered pursuant to Section 10.1.2(b), monthly
Inventory reconciliation reports.  Each Borrower shall conduct a
physical inventory at least once per calendar year (and on a more frequent basis
if requested by Agent when an Event of Default exists) consistent with
historical practices, and shall
provide to Agent a report based on each such inventory promptly upon completion
thereof, together with such supporting information as Agent may
request.  Upon reasonable prior notice (which notice shall not be
necessary if a Default or Event of Default exists), Agent may participate in and
observe each physical count.

     


    
      
         

      

      
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    8.3.2 Returns of
Inventory.  No Borrower shall return any Inventory to a
supplier, vendor or other Person, whether for cash, credit or otherwise, unless
(a) such return is in the Ordinary Course of Business; (b) no Default, Event of
Default or Overadvance exists or would result therefrom; (c) Agent is promptly
notified if the aggregate Value of all Inventory returned in any month exceeds
$500,000; and (d) any payment received by a Borrower for a return is promptly
remitted to Agent for application to the Obligations.

     

    8.3.3 Acquisition, Sale and
Maintenance.  No Borrower shall acquire or accept any Inventory
on consignment or approval, and shall take all steps to assure that all
Inventory is produced materially in accordance with Applicable Law, including
the FLSA.  No Borrower shall sell any Inventory (other than Approved
Consigned Inventory) on consignment or approval or any other basis under which
the customer may return or require a Borrower to repurchase such Inventory
(other than as required under Applicable Law, the Repurchase Obligation or any
other repurchase obligation of any Borrower disclosed to the Lenders prior to
the Closing Date).  Borrowers shall use, store and maintain all
Inventory with reasonable care and caution, in accordance with applicable
standards of any insurance and in material conformity with all Applicable Law,
and shall make current rent payments (within applicable grace periods provided
for in leases and unless such rent payment is being Properly Contested) at all
leased locations where any Collateral is located.

     

    8.4 Administration of Equipment.

     

    8.4.1 Records and Schedules of
Equipment.  Each Borrower shall keep accurate and complete
records of its Equipment, including kind, quality, quantity, cost, acquisitions
and dispositions thereof, and shall submit to Agent, on such periodic basis as
Agent may request (but no more frequently than quarterly; or as frequently as
deemed necessary by Agent at any time during the existence of a Default or Event
of Default), a current schedule thereof, in form satisfactory to
Agent.  Promptly upon request, Borrowers shall deliver to Agent
evidence of Borrowers’ ownership or interests in any Equipment.

     

    8.4.2 Dispositions of
Equipment.  No Borrower shall sell, lease or otherwise dispose
of any Equipment, without the prior written consent of Agent, other than (a) a
Permitted Asset Disposition; (b) replacement of Equipment that is worn, damaged
or obsolete with Equipment of like function and value, if the replacement
Equipment is acquired substantially contemporaneously with such disposition and
is free of Liens and (c) as may be otherwise permitted under the Loan
Documents.

     

    8.4.3 Condition of
Equipment.  The Equipment is in good operating condition and
repair, and all necessary replacements and repairs have been made so that the
value and operating efficiency of the Equipment is preserved at all times,
reasonable wear and tear excepted.  Each Borrower shall ensure that
the Equipment is mechanically and structurally sound,
and capable of performing the functions for which it was designed, in accordance
with manufacturer specifications.  No Borrower shall permit any
Equipment to become affixed to real Property unless any landlord or mortgagee
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    8.5 Administration of Deposit Accounts.  Schedule 8.5 to the Disclosure
Letter sets forth all Deposit Accounts maintained by Borrowers, including all
Dominion Accounts.  Each Borrower shall take all actions necessary to
establish Agent’s and the Term Loan Agent’s control of each such Deposit Account
(other than any Excluded Deposit Account).  Each Borrower shall be the
sole account holder of each Deposit Account and shall not allow any other Person
(other than Agent or Term Loan Agent) to have control over a Deposit Account or
any Property deposited therein.  Each Borrower shall promptly notify
Agent of any opening or closing of a Deposit Account and, with the consent of
Agent, will amend Schedule
8.5 to the Disclosure Letter to reflect same.

     

    8.6 General Provisions.

     

    8.6.1 Location of
Collateral.  All tangible items of Collateral, other than
Inventory in transit, shall at all times be kept by Borrowers at the business
locations set forth in Schedule
8.6.1 to the Disclosure Letter, except that Borrowers may (a) make sales
or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move
Collateral to another location in the United States, upon 10 Business Days prior
written notice to Agent.

     

    8.6.2 Insurance of Collateral;
Condemnation Proceeds.

     

    (a) Each
Borrower shall maintain insurance with respect to the Collateral, covering
casualty, hazard, public liability, theft, malicious mischief and other risks,
in amounts, with endorsements and with insurers (with a Best Rating of at least
A7, unless otherwise approved by Agent) satisfactory to Agent.  Except
as set forth in the Intercreditor Agreement or, with respect to the Term
Priority Collateral, required to be paid to Term Loan Agent  or
reinvested by Borrowers pursuant to the Term Loan Documents, all proceeds under
each policy shall be payable to Agent.  From time to time upon
request, Borrowers shall deliver to Agent the originals or certified copies of
its insurance policies and updated flood plain searches.  Unless Agent
shall agree otherwise, each policy shall include satisfactory endorsements (i)
showing Agent as loss payee or additional insured, as appropriate; (ii)
requiring 30 days prior written notice to Agent in the event of cancellation of
the policy for any reason whatsoever; and (iii) specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of any Borrower
or the owner of the Property, nor by the occupation of the premises for purposes
more hazardous than are permitted by the policy.  If any Borrower
fails to provide and pay for any insurance, Agent may, at its option, but shall
not be required to, procure the insurance and charge Borrowers
therefor.  Each Borrower agrees to deliver to Agent, promptly, copies
of all reports made to insurance companies.  While no Event of Default
exists, Borrowers may settle, adjust or compromise any insurance claim, as long
as the proceeds are delivered to Agent (unless such proceeds are to be delivered
to the Term Loan Agent under the Term Loan Agreement).  Except as
otherwise set forth in the Intercreditor Agreement, if an Event of Default
exists, only Agent shall be authorized to settle, adjust and compromise such
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    (b) Except as
otherwise set forth in the Intercreditor Agreement or, with respect to the Term
Priority Collateral, required to be paid to Term Loan Agent or reinvested by
Borrowers pursuant to the Term Loan Documents, any proceeds of insurance (other
than proceeds from workers’ compensation, D&O insurance or liability
insurance) and any awards arising from condemnation of any Collateral shall be
paid to Agent.  Any such proceeds or awards that relate to Inventory
shall be applied to payment of the Revolver Loans, and then to any other
Obligations outstanding.  Subject to clause (c) below and except as
otherwise set forth in the Intercreditor Agreement or, with respect to the Term
Priority Collateral, required to be delivered to Term Loan Agent or reinvested
by Borrowers pursuant to the Term Loan Documents, any proceeds or awards that
relate to Equipment or Real Estate shall be applied first to Revolver Loans and
then to other Obligations.

     

    (c) Except as
otherwise set forth in the Intercreditor Agreement or, with respect to the Term
Priority Collateral, required to be delivered to Term Loan Agent or reinvested
by Borrowers pursuant to the Term Loan Documents, if requested by Borrowers in
writing within 15 days after Agent’s receipt of any insurance proceeds or
condemnation awards relating to any loss or destruction of Equipment or Real
Estate, Borrowers may use such proceeds or awards to repair or replace such
Equipment or Real Estate (and until so used, the proceeds shall be held by Agent
as Cash Collateral) as long as (i) no Default or Event of Default exists; (ii)
such repair or replacement is promptly undertaken and concluded, in accordance
with plans satisfactory to Agent; (iii) replacement buildings are constructed on
the sites of the original casualties and are of comparable size, quality and
utility to the destroyed buildings; (iv) the repaired or replaced Property is
free of Liens and Environmental Liens, other than Permitted Liens that are not
Purchase Money Liens; (v) Borrowers comply with disbursement procedures for such
repair or replacement as Agent may reasonably require; and (vi) the aggregate
amount of such proceeds or awards from any single casualty or condemnation does
not exceed $5,000,000.

     

    (d) If any
Borrower or any of its Subsidiaries receive any proceeds of business
interruption insurance up to $6,000,000 in the aggregate for all such events and
occurrences, Borrowers shall immediately pay (or cause the payment of) such
proceeds to Agent for application to the Obligations and, notwithstanding any
other provision to the contrary in this Agreement, such amounts shall be
available to the Borrowers to be reborrowed regardless of whether any Default or
Event of Default exists at the time such proceeds are applied to the Obligations
or whether the conditions in Section 6.2 can be satisfied; provided, that if, at
the time such proceeds are applied to the Obligations, any Revolver Advances
have previously been made to the Borrowers after the occurrence of the event
giving rise to the payment of any such insurance proceeds and in anticipation of
the receipt and application of such insurance proceeds, then any payments
applied to the Obligations with the proceeds of such insurance shall reimburse
the Lenders in the amount of such Revolver Advances and shall not be available
to be reborrowed if any Default or Event of Default exists at the time such
proceeds are applied to the Obligations or any condition set forth in Section
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    8.6.3 Protection of
Collateral.  All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping any Collateral, all Taxes payable
with respect to any Collateral (including any sale thereof), and all other
payments required to be made by Agent to any Person to realize upon any
Collateral, shall be borne and paid by Borrowers.  Agent shall not be
liable or responsible in any way for the safekeeping of any Collateral (except
for reasonable care of Collateral in Agent’s actual possession), for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
Agent’s actual possession), for any diminution in the value thereof, or for any
act or default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Borrowers’ sole risk.

     

    8.6.4 Defense of Title to
Collateral.  Each Borrower shall at all times defend its title
to Collateral and Agent’s Liens therein against all Persons, claims and demands
whatsoever, except Permitted Liens.

     

    8.7 Power of Attorney.  Each Borrower hereby
irrevocably constitutes and appoints Agent (and all Persons designated by Agent)
as such Borrower’s true and lawful attorney (and agent-in-fact) for the purposes
provided in this Section.  Agent, or Agent’s designee, may, without
notice and in either its or a Borrower’s name, but at the cost and expense of
Borrowers:

     

    (a) Endorse a
Borrower’s name on any Payment Item or other proceeds of Collateral (including
proceeds of insurance) that come into Agent’s possession or control;
and

     

    (b) Subject
to the provisions of the Intercreditor Agreement, during an Event of Default,
(i) notify any Account Debtors of the assignment of their Accounts, demand and
enforce payment of Accounts, by legal proceedings or otherwise, and generally
exercise any rights and remedies with respect to Accounts; (ii) settle, adjust,
modify, compromise, discharge or release any Accounts or other Collateral, or
any legal proceedings brought to collect Accounts or Collateral; (iii) sell or
assign any Accounts and other Collateral upon such terms, for such amounts and
at such times as Agent deems advisable; (iv) take control, in any manner, of any
proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof
of claim or other document in a bankruptcy of an Account Debtor, or to any
notice, assignment or satisfaction of Lien or similar document; (vi) receive,
open and dispose of mail addressed to a Borrower, and notify postal authorities
to change the address for delivery thereof to such address as Agent may
designate; (vii) endorse any Chattel Paper, Document, Instrument, invoice,
freight bill, bill of lading, or similar document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use a Borrower’s stationery and
sign its name to verifications of Accounts and notices to Account Debtors; (ix)
use the information recorded on or contained in any data processing equipment
and computer hardware and software relating to any Collateral; (x) make and
adjust claims under policies of insurance; (xi) take any action as may be
necessary or appropriate to obtain payment under any letter of credit or
banker’s acceptance for which a Borrower is a beneficiary; and (xii) take all
other actions as Agent deems appropriate to fulfill any Borrower’s obligations
under the Loan Documents.

     


    
      
         

      

      
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    SECTION
9. REPRESENTATIONS
AND WARRANTIES

     

    9.1 General Representations and Warranties.  To induce
Agent and Lenders to enter into this Agreement and to make available the
Revolver Commitments, Revolver Loans and Letters of Credit, each Borrower
represents and warrants that:

     

    9.1.1 Organization and
Qualification.  Each Borrower and Subsidiary is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization.  Each Borrower and Subsidiary is duly qualified,
authorized to do business and in good standing as a foreign corporation in each
jurisdiction where failure to be so qualified could reasonably be expected to
have a Material Adverse Effect.

     

    9.1.2 Power and
Authority.  Each Obligor is duly authorized to execute, deliver
and perform its Loan Documents.  The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of Equity
Interests of any Obligor, other than those already obtained; (b) contravene the
Organic Documents of any Obligor; (c) violate or cause a default under any
Applicable Law or Material Contract; or (d) result in or require the imposition
of any Lien (other than Permitted Liens) on any Property of any
Obligor.

     

    9.1.3 Enforceability.  Each
Loan Document is a legal, valid and binding obligation of each Obligor party
thereto, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law).

     

    9.1.4 Capital
Structure.  Schedule 9.1.4 to the
Disclosure Letter shows, for each Borrower and Subsidiary, its name, its
jurisdiction of organization, its authorized and issued Equity Interests, the
holders of its Equity Interests (except with respect to Parent), and all
agreements binding on such holders with respect to their Equity
Interests.  Each Borrower has good title to its Equity Interests in
its direct Subsidiaries, subject only to Agent’s Lien and Lien in favor of the
Term Loan Agent securing the Borrowers’ obligations under the Term Loan
Documents, and all such Equity Interests are duly issued, fully paid and
non-assessable.  There are no outstanding options to purchase,
warrants, subscription rights, agreements to issue or sell, convertible
interests, phantom rights or powers of attorney relating to any Equity Interests
of any Borrower (except with respect to Parent) or Subsidiary.  Each
Borrower shall promptly notify Agent of any changes to Schedule 9.1.4 of the
Disclosure Letter and, with the consent of Agent, will amend Schedule 9.1.4 to the
Disclosure Letter to reflect same.

     

    9.1.5 Corporate Names;
Locations.  During the five years preceding the Closing Date,
except as shown on Schedule
9.1.5 to the Disclosure Letter, no Borrower or Subsidiary has been known
as or used any corporate, fictitious or trade names, has been the surviving
corporation of a merger or combination, or has acquired any substantial part of
the assets of any Person.  The chief executive offices and other
places of business of Borrowers and Subsidiaries
are shown on Schedule 8.6.1
to the Disclosure Letter, as may be amended by any Borrower with the
prior consent of Agent to reflect changes to such schedule.  During
the five years preceding the Closing Date, except as shown on Schedule 8.6.1 to the
Disclosure Letter, no Borrower or Subsidiary has had any other office or place
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    9.1.6 Title to Properties;
Priority of Liens.  Each Borrower and Subsidiary has good and
marketable fee title to (or valid leasehold interests in) all of its Real
Estate, and good title to all of its personal Property, including all Property
reflected in any financial statements delivered to Agent or Lenders, in each
case free of Liens and Environmental Liens except Permitted
Liens.  Each Borrower and Subsidiary has paid and discharged all
lawful claims that, if unpaid, could become a Lien on its Properties, other than
Permitted Liens.  Assuming the proper filing of all applicable UCC
financing statements and recording of all applicable Mortgages, all Liens of
Agent in the Collateral are duly perfected Liens, subject only to Permitted
Liens that are expressly allowed to have priority over Agent’s Liens, to the
extent a Lien in such Collateral may be perfected by the filing of a financing
statement or recording of a Mortgage.

     

    9.1.7 Accounts.  Agent
may rely, in determining which Accounts are Eligible Accounts, on all statements
and representations made by Borrowers with respect thereto.  Borrowers
warrant, with respect to each Account at the time it is shown as an Eligible
Account in a Borrowing Base Certificate, that:

     

    (a) it is
genuine and in all respects what it purports to be, and is not evidenced by a
judgment;

     

    (b) it arises
out of a completed, bona fide sale and delivery of goods in the Ordinary Course
of Business, and substantially in accordance with any purchase order, contract
or other document relating thereto;

     

    (c) it is for
a sum certain, maturing as stated in the invoice covering such sale, a copy of
which has been furnished or is available to Agent on request;

     

    (d) it is not
subject to any offset, Lien (other than Agent’s Lien or a Lien in favor of Term
Loan Agent securing the Borrowers’ obligations under the Term Loan Documents),
deduction, defense, dispute, counterclaim or other adverse condition except as
arising in the Ordinary Course of Business and disclosed to Agent; and it is
absolutely owing by the Account Debtor, without contingency in any
respect;

     

    (e) no
purchase order, agreement, document or Applicable Law restricts assignment of
the Account to Agent (regardless of whether, under the UCC, the restriction is
ineffective), and the applicable Borrower is the sole payee or remittance party
shown on the invoice;

     

    (f) no
extension, compromise, settlement, modification, credit, deduction or return has
been authorized with respect to the Account, except discounts or allowances
granted in the Ordinary Course of Business for prompt payment that are reflected
on the face of the invoice related thereto and in the reports submitted to Agent
hereunder; and

     


    
      
         

      

      
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    (g) to the
best of Borrowers’ knowledge, (i) there are no facts or circumstances that are
reasonably likely to impair the enforceability or collectibility of such
Account; (ii) the Account Debtor had the capacity to contract when the Account
arose, continues to meet the applicable Borrower’s customary credit standards,
is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has
not failed, or suspended or ceased doing business; and (iii) there are no
proceedings or actions threatened or pending against any Account Debtor that
could reasonably be expected to have a material adverse effect on the Account
Debtor’s financial condition.

     

    9.1.8 Financial
Statements.  The consolidated and consolidating balance sheets,
and related statements of income, cash flow and shareholder’s equity, of
Borrowers and Subsidiaries that have been and are hereafter delivered to Agent
and Lenders, are prepared in accordance with GAAP (subject to changes from audit
and year end adjustments and the absence of footnotes in the case of unaudited
financial statements and the absence of amortization charges in the case of
monthly financial statements delivered pursuant to Section 6.1), and fairly
present the financial positions and results of operations of Borrowers and
Subsidiaries at the dates and for the periods indicated.  All
projections delivered from time to time to Agent and Lenders have been prepared
in good faith, based on reasonable assumptions in light of the circumstances at
such time.  Except as disclosed to Agent in writing prior to the
Closing Date, since June 28, 2008, there has been no change in the
condition, financial or otherwise, of any Borrower or Subsidiary that could
reasonably be expected to have a Material Adverse Effect.  No
financial statement delivered to Agent or Lenders at any time contains any
untrue statement of a material fact, nor fails to disclose any material fact
necessary to make such statement not materially misleading.  Each
Borrower and Subsidiary is Solvent as of the Closing Date and after giving
effect to the funding of each Revolver Loan hereunder.

     

    9.1.9 Surety
Obligations.  No Borrower or Subsidiary is obligated as surety
or indemnitor under any bond or other contract that assures payment or
performance of any obligation of any Person, except as permitted
hereunder.

     

    9.1.10 Taxes.  Each
Borrower and Subsidiary has filed, or obtained an extension for filing, all
federal, state and local tax returns and other reports that it is required by
law to file, and has paid, or made provision for the payment of, all Taxes upon
it, its income and its Properties that would otherwise be delinquent, except to
the extent being Properly Contested.  The provision for Taxes on the
books of each Borrower and Subsidiary has been established in accordance with
GAAP for all years not closed by applicable statutes, and for its current Fiscal
Year.

     

    9.1.11 Brokers.  There
are no brokerage commissions, finder’s fees or investment banking fees payable
in connection with any transactions contemplated by the Loan
Documents.

     

    9.1.12 Intellectual
Property.  Each Borrower and Subsidiary owns or has the lawful
right to use all Intellectual Property necessary for the conduct of its
business, without conflict
in any material respect with any rights of others.  There is no
pending or, to any Borrower’s knowledge, threatened Intellectual Property Claim
with respect to any Borrower, any Subsidiary or any of their Property (including
any Intellectual Property), which could reasonably be expected to have a
Material Adverse Effect.  Except as disclosed on Schedule 9.1.12 to the
Disclosure Letter, as may be amended by any Borrower with the prior consent of
Agent to reflect changes to such schedule, no Borrower or Subsidiary pays or
owes any Royalty or other compensation to any Person with respect to any
Intellectual Property, other than license fees with respect to commercially
available software.  All Intellectual Property (other than
commercially available software) owned, used or licensed by, or otherwise
subject to any interests of, any Borrower or Subsidiary is shown on Schedule 9.1.12 to the
Disclosure Letter or, to the extent acquired or created after the Closing Date,
on a Compliance Certificate in accordance with Section 7.4.2.

     


    
      
         

      

      
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    9.1.13 Governmental
Approvals.  Each Borrower and Subsidiary has, is in compliance
with, and is in good standing with respect to, all Governmental Approvals
necessary to conduct its business and to own, lease and operate its Properties
except, in each case, where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.  All necessary import,
export or other licenses, permits or certificates for the import or handling of
any goods or other Collateral have been procured and are in effect, and
Borrowers and Subsidiaries have complied with all foreign and domestic laws with
respect to the shipment and importation of any goods or Collateral, except where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

     

    9.1.14 Compliance with
Laws.  Each Borrower and Subsidiary has duly complied, and its
Properties and business operations are in compliance, in all material respects
with all Applicable Law, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.  Except as disclosed on
Schedule 9.1.15 to the
Disclosure Letter, there have been no citations, notices or orders of material
noncompliance issued to any Borrower or Subsidiary under any Applicable Law
which are unresolved and remain outstanding.  No Inventory has been
produced in violation of the FLSA.

     

    9.1.15 Compliance with
Environmental Laws.  Except as disclosed on Schedule 9.1.15 to the
Disclosure Letter, to Borrowers’ and Subsidiaries’ knowledge and except as would
not reasonably be expected to have a Material Adverse Effect, no Borrower’s or
Subsidiary’s past or present operations, Real Estate or other Properties are
subject to any federal, state or local investigation to determine whether any
remedial action is needed to address any environmental pollution, Hazardous
Material or environmental clean-up.  Except as would not reasonably be
expected to have a Material Adverse Effect, no Borrower or Subsidiary has
received any Environmental Notice which is unresolved and remains
outstanding.  Except as would not reasonably be expected to have a
Material Adverse Effect, no Borrower or Subsidiary has any liability with
respect to any Environmental Release, environmental pollution or Hazardous
Material on any Real Estate now or previously owned, leased or operated by
it.

     

    9.1.16 Burdensome
Contracts.  No Borrower or Subsidiary is a party or subject to
any contract, agreement or charter restriction that could reasonably be expected
to have a
Material Adverse Effect.  No Borrower or Subsidiary is party or
subject to any Restrictive Agreement, except as shown on Schedule 9.1.16 to the
Disclosure Letter or as otherwise permitted under this Agreement, none of which
prohibit the execution or delivery of any Loan Documents by an Obligor or the
performance by an Obligor of any obligations thereunder.

       

    

     


    
      
         

      

      
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    9.1.17 Litigation.  Except
as shown on Schedule 9.1.17
to the Disclosure Letter, there are no proceedings or investigations
pending or, to any Borrower’s knowledge, threatened in writing against any
Borrower or Subsidiary, or any of their businesses, or operations, Properties,
that (a) relate to any Loan Documents or transactions contemplated thereby; or
(b) could reasonably be expected to have a Material Adverse Effect to any
Borrower or Subsidiary.  No Borrower or Subsidiary is in default with
respect to any order, injunction or judgment of any Governmental
Authority.

     

    9.1.18 No
Defaults.  No event or circumstance has occurred or exists that
constitutes a Default or Event of Default.  Except as disclosed on
Schedule 9.1.18 to the
Disclosure Letter, no Borrower or Subsidiary is in default, and no event or
circumstance has occurred or exists that with the passage of time or giving of
notice would constitute a default, under any Material Contract or in the payment
of any Borrowed Money.  To the best of each Borrower’s knowledge,
there is no basis upon which any party (other than a Borrower or Subsidiary)
could terminate a Material Contract prior to its scheduled termination
date.

     

    9.1.19 ERISA.  Except
as disclosed on Schedule 9.1.19
to the Disclosure Letter:

     

    (a) Each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code, and other federal and state laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of Borrowers, nothing has occurred which would prevent, or cause the loss of,
such qualification.  Each Obligor and ERISA Affiliate has made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any
Plan.

     

    (b) There are
no pending or, to the knowledge of Borrowers, written threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan
that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted in or
could reasonably be expected to have a Material Adverse Effect.

     

    (c) (i) No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) no Obligor or ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) no Obligor or ERISA Affiliate has incurred,
or reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) no Obligor or ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of
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    (d) With
respect to any Foreign Plan, (i) all employer and employee contributions
required by law or by the terms of the Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal accounting practices; (ii) the
fair market value of the assets of each funded Foreign Plan, the liability of
each insurer for any Foreign Plan funded through insurance, or the book reserve
established for any Foreign Plan, together with any accrued contributions, is
sufficient to procure or provide for the accrued benefit obligations with
respect to all current and former participants in such Foreign Plan according to
the actuarial assumptions and valuations most recently used to account for such
obligations in accordance with applicable generally accepted accounting
principles; and (iii) it has been registered as required and has been maintained
in good standing with applicable regulatory authorities.

     

    9.1.20 Trade
Relations.  There exists no actual or threatened termination,
limitation or modification of any business relationship between any Borrower or
Subsidiary and any customer or supplier, or any group of customers or suppliers,
who individually or in the aggregate are material to the business of such
Borrower or Subsidiary.  There exists no condition or circumstance
that could reasonably be expected to impair the ability of any Borrower or
Subsidiary to conduct its business at any time hereafter in substantially the
same manner as conducted on the Closing Date.

     

    9.1.21 Labor
Relations.  Except as described on Schedule 9.1.21 to the
Disclosure Letter, no Borrower or Subsidiary is party to or bound by any
collective bargaining agreement, management agreement or consulting
agreement.  There are no material grievances, disputes or
controversies with any union or other organization of any Borrower’s or
Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or
threatened strikes, work stoppages or demands for collective
bargaining.

     

    9.1.22 Payable
Practices.  Except as otherwise approved by Agent, no Borrower
or Subsidiary has made any material change in its historical accounts payable
practices from those in effect on the Closing Date

     

    9.1.23 Not a Regulated
Entity.  No Obligor is (a) an “investment company” or a “person
directly or indirectly controlled by or acting on behalf of an investment
company” within the meaning of the Investment Company Act of 1940; or (b)
subject to regulation under the Federal Power Act, the Interstate Commerce Act,
any public utilities code or any other Applicable Law regarding its authority to
incur Debt.

     

    9.1.24 Margin
Stock.  No Borrower or Subsidiary is engaged, principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.  No Revolver Loan
proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or
to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock
or for any related purpose governed by Regulations T, U or X of the Board of
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    9.1.25 Term Loan
Documents. The Borrowers have
delivered to Agent a complete and correct copy of the Term Loan Agreement and
all Term Loan Documents (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith).  Each Borrower has the
corporate power and authority to incur the Term Loan
Obligations.  Each Borrower acknowledges that Agent and each Lender is
entering into this Agreement and extending the Revolver Commitments in reliance
upon the provisions of the Intercreditor Agreement and this Section 9.1.25.

     

    9.1.26 Disclosure
Letter.  All information provided in the Disclosure Letter are
true and correct in all material respects.

     

    9.2 Complete Disclosure.  No Loan Document contains
any untrue statement of a material fact, nor fails to disclose any material fact
necessary to make the statements contained therein not materially
misleading.  There is no fact or circumstance that any Obligor has
failed to disclose to Agent in writing that could reasonably be expected to have
a Material Adverse Effect.

     

    SECTION
10. COVENANTS
AND CONTINUING AGREEMENTS

     

    10.1 Affirmative Covenants.  As long as any Revolver
Commitments or Obligations are outstanding, each Borrower shall, and shall cause
each Subsidiary to:

     

    10.1.1 Inspections;
Appraisals.

     

    (a) Permit
Agent from time to time, subject (except when a Default or Event of Default
exists) to reasonable notice and normal business hours, to visit and inspect the
Properties of any Borrower or Subsidiary, inspect, audit and make extracts from
any Borrower’s or Subsidiary’s books and records, and discuss with its officers,
employees, agents, advisors and independent accountants such Borrower’s or
Subsidiary’s business, financial condition, assets, prospects and results of
operations.  Lenders may participate in any such visit or inspection,
at their own expense.  Neither Agent nor any Lender shall have any
duty to any Borrower to make any inspection, nor to share any results of any
inspection, appraisal or report with any Borrower.  Borrowers
acknowledge that all inspections, appraisals and reports are prepared by Agent
and Lenders for their purposes, and Borrowers shall not be entitled to rely upon
them.

     

    (b) Reimburse
Agent for all charges, costs and expenses of Agent in connection with (i)
examinations of any Obligor’s books and records or any other financial or
Collateral matters as Agent deems appropriate up to four times per Loan Year;
and (ii) one full field appraisal and three desktop appraisals of Inventory in
any Loan Year; provided, however, that if an
examination or appraisal including an appraisal of Equipment or Real Estate, is
initiated during a Default or Event of Default, all charges, costs and expenses
therefor shall be reimbursed by Borrowers without regard to such
limits.  Subject to and without limiting the foregoing, Borrowers
specifically agree to pay Agent’s then standard charges for each day that an
employee of Agent or its Affiliates is engaged in any examination activities,
and shall pay the standard charges of Agent’s internal appraisal
group.  This Section shall not be construed to limit Agent’s
right to conduct examinations or to obtain appraisals at any time in its
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    10.1.2 Financial and Other
Information.  Keep adequate records and books of account with
respect to its business activities, in which proper entries are made in
accordance with GAAP reflecting all financial transactions; and furnish to Agent
and Lenders:

     

    (a) as soon
as available, and in any event within 90 days after the close of each Fiscal
Year, a detailed internal financial report for Parent and its Subsidiaries
prepared by Parent in substantially the form set forth in Schedule 10.1.2, to the
Disclosure Letter, together with balance sheets as of the end of such Fiscal
Year and the related statements of income, cash flow and shareholders’ equity
for such Fiscal Year, on consolidated basis for Parent and its Subsidiaries,
which consolidated statements shall be audited and certified (without
qualification as to scope, “going concern” or
similar items) by a firm of independent certified public accountants of
recognized standing selected by Parent and acceptable to Agent, and shall set
forth in comparative form corresponding figures for the preceding Fiscal Year
and other information acceptable to Agent;

     

    (b) as soon
as available, and in any event within 35 days after the end of each month (but
within 45 days after the last month in a Fiscal Year), a detailed internal
financial report for Parent and its Subsidiaries prepared by Parent in
substantially the form set forth in Schedule 10.1.2, to the Disclosure Letter,
together with unaudited balance sheets
as of the end of such month and the related statements of income and cash flow
for such month and for the portion of the Fiscal Year then elapsed, on
consolidated basis for Parent and its Subsidiaries, setting forth in comparative
form corresponding figures for the preceding Fiscal Year and certified by the
chief financial officer of Borrower Agent as prepared in accordance with GAAP
and fairly presenting the financial position and results of operations for such
month and period, subject to normal year end adjustments and the absence of
footnotes;

     

    (c) concurrently
with delivery of financial statements under clauses (a) and (b) above, or more
frequently if requested by Agent while a Default or Event of Default exists, a
Compliance Certificate executed by the chief financial officer of Borrower
Agent;

     

    (d) concurrently
with delivery of financial statements under clause (a) above, copies of all
management letters and other material reports submitted to Borrowers by their
accountants in connection with such financial statements;

     

    (e) not later
than the end of each Fiscal Year, projections of Borrowers’ consolidated balance
sheets, results of operations, cash flow and Availability for the next Fiscal
Year, month by month and for the next three Fiscal Years, year by
year;

     

    (f) (x)
together with each financial statement delivered pursuant to Section 10.1.2(b), a summary aging report
of each Borrower’s accounts payable, in form and substance satisfactory to
Agent, and (y) together with each financial statement delivered pursuant to
Section 10.1.2(a), a
detailed aging report of each Borrower’s  accounts payable, in form
and substance satisfactory to Agent.

     


    
      
         

      

      
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    (g) promptly
after the sending or filing thereof, copies of any proxy statements, financial
statements or reports that any Borrower has made generally available to its
shareholders; copies of any regular, periodic and special reports or
registration statements or prospectuses that any Borrower files with the
Securities and Exchange Commission or any other Governmental Authority, or any
securities exchange; and copies of any press releases or other statements made
available by a Borrower to the public concerning material changes to or
developments in the business of such Borrower;

     

    (h) promptly
after the sending or filing thereof, copies of any annual report to be filed in
connection with each Plan or Foreign Plan;

     

    (i) such
other reports and information (financial or otherwise) as Agent may request from
time to time in connection with any Collateral or any Borrower’s, Subsidiary’s
or other Obligor’s financial condition or business; and

     

    (j) not later
than the 2nd
Business Day of each week a detailed report in form and substance satisfactory
to Agent setting forth (i) the outstanding Flooring Lender Obligations as of the
last day of the previous week, together with (ii) a detailed report of
repurchase demands paid and payments made on account of guarantees and risk pool
guarantees during the previous week, to the financial institutions providing
floor financing to the Borrowers’ dealers;

     

    (k) not later
than the 45th day of each Fiscal Quarter, a copy of the Borrower’s quarterly
compiled top dealer report; and

     

    (l) promptly
after obtaining knowledge thereof, notice of a material default by a dealer
under a dealer agreement with a Borrower.

     

    Simultaneously
with retaining accountants for their annual audit, Borrowers shall send a letter
to the accountants, with a copy to Agent and Lenders, notifying the accountants
that one of the primary purposes for retaining their services and obtaining
audited financial statements is for use by Agent and Lenders.  Agent
is authorized to send such notice if Borrowers fail to do so for any
reason.

     

    Documents
required to be delivered pursuant to Section 10.1.2(a), Section 10.1.2(b) or Section 10.1.2(g) (to the
extent such documents are included in materials otherwise filed with the
Securities and Exchange Commission) may be delivered electronically, shall be
deemed to have been delivered on the date on which such documents are posted on
Borrower Agent’s behalf on an Internet or intranet website, if any, to which
each Lender and the Agent have access (whether a commercial, third-party website
or whether sponsored by Agent); provided that Borrower Agent shall notify Agent
(by telecopier or electronic mail) of the posting of any such documents and
shall deliver paper copies of such documents to (i) Agent and (ii) any Lender
that requests such paper copies.

     


    
      
         

      

      
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      10.1.3 Notices.  Notify
Agent and Lenders in writing, promptly after a Borrower’s obtaining knowledge
thereof, of any of the following that affects an Obligor:  (a)
the
threat in writing or commencement of any proceeding or investigation, whether or
not covered by insurance, if an adverse determination could reasonably be
expected to have a Material Adverse Effect; (b) any material pending or
threatened labor dispute, strike or walkout, or the expiration of any material
labor contract; (c) any default under or termination of a Material Contract; (d)
the existence of any Default or Event of Default; (e) any judgment in an amount
exceeding $500,000 (net of any insurance coverage therefor acknowledged in
writing by the insurer); (f) the assertion of any Intellectual Property Claim,
if an adverse resolution could reasonably be expected have a Material Adverse
Effect; (g) any violation or asserted violation of any Applicable Law (including
ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could
reasonably be expected to have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased or occupied by an Obligor
if the Environmental Release could reasonably be expected to have a Material
Adverse Effect; or receipt of any Environmental Notice or notice of the filing
of an Environmental Lien, if an adverse resolution could reasonably be expected
to have a Material Adverse Effect; (i) the occurrence of any ERISA Event, if an
adverse resolution could reasonably be expected to have a Material Adverse
Effect; (j) the discharge of or any withdrawal or resignation by Borrowers’
independent accountants; or (k) any opening of a new office or place of
business, at least 30 days prior to such opening.

    

     

    10.1.4 Landlord and Storage
Agreements.  Upon request, provide Agent with copies of all
existing agreements, and promptly after execution thereof provide Agent with
copies of all future agreements, between an Obligor and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral may be kept or that otherwise may possess or handle any
Collateral.

     

    10.1.5 Compliance with
Laws.  Comply with all Applicable Laws, including ERISA,
Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain could not reasonably be expected to have a Material Adverse
Effect.  Without limiting the generality of the foregoing, if any
Environmental Release occurs at or on any Properties of any Borrower or
Subsidiary, and where such Environmental Release could reasonably be expected to
result in a Material Adverse Effect, it shall act promptly and diligently to
investigate and report to Agent and all appropriate Governmental Authorities the
extent of, and to make appropriate remedial action to eliminate, such
Environmental Release, whether or not directed to do so by any Governmental
Authority.

     

    10.1.6 Taxes.  Pay
and discharge all Taxes prior to the date on which they become delinquent or
penalties attach, unless such Taxes are being Properly Contested.

     

    10.1.7 Insurance.  In
addition to the insurance required hereunder with respect to Collateral,
maintain insurance with insurers (with a Best Rating of at least A7, unless
otherwise approved by Agent) satisfactory to Agent, (a) with respect to the
Properties and business of Borrowers and Subsidiaries of such type (including
product liability, workers’ compensation, larceny, embezzlement, or other
criminal misappropriation insurance), in such amounts,
and with such coverages and deductibles as are customary for companies similarly
situated; and (b) business interruption insurance in an amount not less than
$122,500,000, with deductibles and subject to an Insurance Assignment
satisfactory to Agent.

     


    
      
         

      

      
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    10.1.8 Licenses.  Keep
each License material to any Collateral (including the manufacture, distribution
or disposition of Inventory) or any other material Property of Borrowers and
Subsidiaries in full force and effect; promptly notify Agent of any proposed
material modification to any such License, or entry into any new material
License, in each case at least 30 days prior to its effective date; pay all
Royalties when due except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect; and notify Agent of any material
default or breach asserted by any Person to have occurred under any
License.

     

    10.1.9 Future
Subsidiaries.  Promptly notify Agent upon any Person becoming a
Subsidiary and, if such Person is not a Foreign Subsidiary, cause it to guaranty
the Obligations in a manner satisfactory to Agent, and to execute and deliver
such documents, instruments and agreements and to take such other actions as
Agent shall require to evidence and perfect a Lien in favor of Agent (for the
benefit of Secured Parties) on all assets of such Person, including delivery of
such legal opinions, in form and substance satisfactory to Agent, as it shall
deem appropriate.

     

    10.1.10 Interest Rate
Protection.  As promptly as practicable, and in any event
within 30 days after the Closing Date, enter into one or more Interest Rate
Contracts to fix or limit the interest rate risks of Borrowers with respect to
the Term Loan in a principal amount of $30,000,000 which amount shall be reduced
as set forth in such Interest Rate Contracts, on terms and with counterparties
satisfactory to Agent.

     

    10.2 Negative Covenants.  As long as any Revolver
Commitments or Obligations are outstanding, each Borrower shall not, and shall
cause each Subsidiary not to:

     

    10.2.1 Permitted
Debt.  Create, incur, guarantee or suffer to exist any Debt,
except:

     

    (a) the
Obligations;

     

    (b) Subordinated
Debt;

     

    (c) Permitted
Purchase Money Debt;

     

    (d) Debt and
Contingent Obligations set forth on Schedule 10.2.1 to the
Disclosure Letter (other than the Obligations, Subordinated Debt and Permitted
Purchase Money Debt), but only to the extent outstanding on the Closing Date and
not satisfied with proceeds of the initial Revolver Loans;

     

    (e) Bank
Product Debt;

     

    (f) Debt that
is in existence when a Person becomes a Subsidiary or that is secured by an
asset when acquired by a Borrower or Subsidiary, as long as such Debt was not
incurred in contemplation of such Person becoming a Subsidiary or such
acquisition, and does not exceed $500,000 in the aggregate at any
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    (g) Permitted
Contingent Obligations;

     

    (h) Refinancing
Debt as long as each Refinancing Condition is satisfied;

     

    (i) Debt
outstanding under the Term Loan Agreement and, to the extent permitted by the
Intercreditor Agreement, the extension of maturity refinancing or modification
of the terms of such Term Loan; provided, however that (i) such extension,
refinancing or modification is pursuant to terms and conditions that are not
less favorable to the Obligors and the Lenders than the terms of the Term Loan
Documents being extended, refinanced or modified (ii) after giving effect to
such extension, refinancing or modification, the maximum amount of such Debt is
not greater than the Maximum Term Obligations; and (iii) the lenders or lenders
party to such new term loan credit facility are reasonably acceptable to the
Agent;

     

    (j) Contingent
Obligations in connection with Approved Dealer Financing
Agreements;

     

    (k) liabilities
reflected on the financial statements of Parent related to the warrant issued by
Parent to an Affiliate of the Term Loan Agent; and

     

    (l) Other
liabilities incurred in the Ordinary Course of Business and  reflected
on the financial statements delivered to Agent pursuant to Section 10.1.2 and approved by
Agent.

     

    10.2.2 Permitted
Liens.  Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted
Liens”):

     

    (a) Liens in
favor of Agent;

     

    (b) Purchase
Money Liens securing Permitted Purchase Money Debt;

     

    (c) Liens for
Taxes that are not yet delinquent or that are being Properly
Contested;

     

    (d) statutory
Liens (other than Liens for Taxes or imposed under ERISA) arising in the
Ordinary Course of Business, but only if (i) payment of the obligations secured
thereby is not yet due or is being Properly Contested, and (ii) such Liens do
not materially impair the value or use of the Property or materially impair
operation of the business of any Borrower or Subsidiary;

     

    (e) Liens
incurred or deposits made in the Ordinary Course of Business to secure the
performance of tenders, bids, leases, contracts (except those relating to
Borrowed Money), statutory obligations and other similar obligations, or arising
as a result of progress payments under government contracts, as long as such
Liens are at all times junior to Agent’s Liens;

     


    
      
         

      

      
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    (f) Liens
arising in the Ordinary Course of Business that are subject to Lien
Waivers;

     

    (g) Liens
arising by virtue of a judgment or judicial order against any Borrower or
Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens
are (i) in existence for less than 20 consecutive days or being Properly
Contested, and (ii) at all times junior to Agent’s Liens;

     

    (h) easements,
rights-of-way, restrictions, covenants or other agreements of record, and other
similar charges or encumbrances on Real Estate, that do not secure any monetary
obligation and do not interfere with the Ordinary Course of
Business;

     

    (i) normal
and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of
collection;

     

    (j) Liens
incurred or deposits made in the Ordinary Course of Business in connection with
workers' compensation, unemployment insurance and other types of social
security;

     

    (k) the
interests of lessors or lessees, or sublessors or sublessees, of property leased
pursuant to leases permitted hereunder;

     

    (l) Liens on
chassis purchased by Borrower in the ordinary course of business;

     

    (m) a license
or agreement under which an Obligor authorizes any Person to use Intellectual
Property in the Ordinary Course of Business;

     

    (n) Liens in
favor of the Term Loan Agent securing the Borrowers’ obligations under the Term
Loan Agreement and Term Loan Documents which Liens are subject to the
Intercreditor Agreement;

     

    (o) existing
Liens shown on Schedule 10.2.2
to the Disclosure Letter; and

     

    (p) a deed
restriction on the real property located at 310 Steury Ave., Goshen, Indiana
requiring the long-term maintenance of an asphalt or concrete pavement,
restricting the property use to industrial purposes, and prohibiting the use of
on-site groundwater as described in the NXT Remediation Work Plan dated April
2006 (See report #64 listed on the Environmental Disclosure Schedule, p. 20,
23.).

     

    10.2.3 Capital
Expenditures.  Make Capital Expenditures in excess of
$6,000,000 (“Maximum Permitted Capital Expenditures Amount”) in the aggregate
during any Fiscal Year; provided that if the
Maximum Permitted Capital Expenditures Amount in any Fiscal Year is greater than
the actual amount of the Capital Expenditures in such Fiscal Year (the amount by
which the Maximum Permitted Capital Expenditures Amount exceeds the actual
amount of
the Capital Expenditures, the “Excess Amount”), then
100% of the Excess Amount (the “Carry-Over Amount”)
may be carried forward to the immediately succeeding Fiscal Year and added to
the Maximum Permitted Capital Expenditures Amount for such immediately
succeeding Fiscal Year; provided further that the
Carry-Over Amount may not be carried forward to any Fiscal Year beyond the
immediately succeeding Fiscal Year and the Carry-Over Amount shall not be
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    10.2.4 Distributions; Upstream
Payments.

     

    (a) Declare
or make any Distributions, except:

     

    (i)  Upstream
Payments;

     

    (ii) Acquisitions
of Equity Interests of Parent in connection with the exercise of stock options,
restricted stock units or stock appreciation rights by way of cashless exercise
or in connection with the satisfaction of withholding tax
obligations;

     

    (iii) Purchases
of fractional shares of the Equity Interests of Parent arising out of stock
dividends, splits or combinations or business combinations;

     

    (iv) Distributions
consisting solely of the Equity Interests of Parent of the redemption or other
retirement non-cash rights distributed in connection with any stockholder rights
plan;

     

    (v) In
connection with any acquisition permitted pursuant to Section 10.2.5, receive or
accept the return of Equity Interests of Parent or any of its Subsidiaries
constituting a portion of the purchase price consideration in settlement of
indemnification claims; or

     

    (vi) Advances
of Debt to a holder of Equity Interests that is otherwise permitted under
Section 10.2.7; or

     

    (b) create or
suffer to exist any encumbrance or restriction on the ability of a Subsidiary to
make any Upstream Payment, except for restrictions under the Loan Documents,
under Applicable Law or in effect on the Closing Date as shown on Schedule 9.1.16 to the
Disclosure Letter.

     

    10.2.5 Restricted
Investments.  Make any Restricted Investment.

     

    10.2.6 Disposition of
Assets.  Make any Asset Disposition, except (a) a Permitted
Asset Disposition, (b) a disposition of Equipment under Section 8.4.2, or (c) a
transfer of Property by a Subsidiary or Obligor to a Borrower.

     

    10.2.7 Loans.  Make
any loans or other advances of money to any Person, except (a) advances to an
officer or employee for salary, travel expenses, commissions and similar items
in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade
credit made in the Ordinary Course of Business; (c) deposits with financial
institutions permitted hereunder; and (d) as long as no Default or Event of
Default exists, intercompany loans by a Borrower to another Borrower; and (e)
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    10.2.8 Restrictions on Payment of
Certain Debt.  Make any payments (whether voluntary or
mandatory, or a prepayment, redemption, retirement, defeasance or acquisition)
with respect to any (a) Subordinated Debt, except regularly scheduled payments
of principal, interest and fees, but only to the extent permitted under any
subordination agreement relating to such Debt (and a Senior Officer of Borrower
Agent shall certify to Agent, not less than five Business Days prior to the date
of payment, that all conditions under such agreement have been satisfied); or
(b) Borrowed Money (other than the Obligations and other than the obligations
under the Term Loan Documents) prior to its due date under the agreements
evidencing such Debt as in effect on the Closing Date (or as amended thereafter
with the consent of Agent).

     

    10.2.9 Fundamental
Changes.  Merge, combine or consolidate with any Person, or
liquidate, wind up its affairs or dissolve itself, in each case whether in a
single transaction or in a series of related transactions, except for mergers or
consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary
or into a Borrower; change its name or conduct business under any fictitious
name without 30 days prior written notice to Agent; change its tax, charter or
other organizational identification number; or change its form or state of
organization.

     

    10.2.10 Subsidiaries.  Form
or acquire any Subsidiary after the Closing Date, except in accordance with
Sections 10.1.9 and
10.2.5; or permit any
existing Subsidiary to issue any additional Equity Interests except (a) to a
Borrower; (b) Permitted Subsidiary Equity Issuances; or (c) director’s
qualifying shares.

     

    10.2.11 Organic
Documents.  Amend, modify or otherwise change any of its
Organic Documents as in effect on the Closing Date without giving 30 days’ prior
written notice of such change to Agent.

     

    10.2.12 Tax
Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Borrowers and
Subsidiaries.

     

    10.2.13 Accounting
Changes.  Make any material change in accounting treatment or
reporting practices, except as required or permitted by GAAP and in accordance
with Section 1.2; or
change its Fiscal Year.

     

    10.2.14 Restrictive
Agreements.  Become a party to any Restrictive Agreement,
except (a) a Restrictive Agreement as in effect on the Closing Date and shown on
Schedule 9.1.16 to the
Disclosure Letter; (b) a Restrictive Agreement relating to secured Debt
permitted hereunder, if such restrictions apply only to the collateral for such
Debt; and (c) customary provisions in leases and other contracts restricting
assignment or encumbrance thereof.

     


    
      
         

      

      
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    10.2.15 Hedging
Agreements.  Enter into any Hedging Agreement, except to hedge
risks arising in the Ordinary Course of Business and not for speculative
purposes, other than as required under Section 10.1.10.

     

    10.2.16 Conduct of
Business.  Engage in any business, other than its business as
conducted on the Closing Date and any activities incidental
thereto.

     

    10.2.17 Affiliate
Transactions.  Enter into or be party to any transaction with
an Affiliate, except (a) transactions contemplated by the Loan Documents; (b)
payment of reasonable compensation to officers and employees for services
actually rendered, and loans and advances permitted by Section 10.2.7; (c) payment of
customary directors’ fees and indemnities; (d) transactions solely among
Borrowers; (e) transactions with Affiliates that were consummated prior to the
Closing Date, as shown on Schedule 10.2.17 to the
Disclosure Letter; and (f) transactions with Affiliates in the Ordinary Course
of Business, upon fair and reasonable terms fully disclosed to Agent and no less
favorable than would be obtained in a comparable arm’s-length transaction with a
non-Affiliate.

     

    10.2.18 Plans.  Become
party to any Multiemployer Plan or Foreign Plan, other than any in existence on
the Closing Date.

     

    10.2.19 Amendments to Subordinated
Debt.  Amend, supplement or otherwise modify any document,
instrument or agreement relating to any Subordinated Debt, if such modification
(a) increases the principal balance of such Debt, or increases any required
payment of principal or interest; (b) accelerates the date on which any
installment of principal or any interest is due, or adds any additional
redemption, put or prepayment provisions; (c) shortens the final maturity date
or otherwise accelerates amortization; (d) increases the interest rate; (e)
increases or adds any fees or charges; (f) modifies any covenant in a manner or
adds any representation, covenant or default that is more onerous or restrictive
in any material respect for any Borrower or Subsidiary, or that is otherwise
materially adverse to any Borrower, any Subsidiary or Lenders; or (g) results in
the Obligations not being fully benefited by the subordination provisions
thereof.

     

    10.2.20 Term Loan
Documents.  Amend, modify, alter, supplement, or change any of
the terms or conditions of any of the Term Loan Documents, except to the extent
permitted by the Intercreditor Agreement and Section 10.2.1(i).

     

    10.2.21 Guarantees and Risk Pool
Guarantees.  At any time after the Closing Date, enter into
guarantees or risk pool guarantees in favor of financial institutions providing
floor financing to the dealer for any Borrower.

     

    10.3 Financial Covenants.  As long as any Revolver
Commitments or Obligations are outstanding, Parent shall, on a consolidated
basis with each of its Subsidiaries: 

     

    10.3.1 EBITDA.

     


    
      
         

      

      
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    (a) During
the first Loan Year, maintain EBITDA of at least the amounts set forth opposite
each fiscal month below, measured from the month in which the Closing Date
occurs through the measurement date, on a cumulative basis:

     

    
      	
              Fiscal Month
      Ending

            	
              Minimum
      EBITDA

            
	 	 
	
              November
      22, 2008

            	
              ($5,500,000)

            
	
              January
      3, 2009

            	
              ($4,500,000)

            
	
              January
      31, 2009

            	
              ($6,200,000)

            
	
              February
      28, 2009

            	
              ($5,000,000)

            
	
              March
      28, 2009

            	
              $3,500,000

            
	
              April
      25, 2009

            	
              $3,000,000

            
	
              May
      30, 2009

            	
              $5,000,000

            
	
              June
      27, 2009

            	
              $11,000,000

            
	
              August
      1, 2009

            	
              $12,000,000

            
	
              August
      29, 2009

            	
              $14,000,000

            
	
              October
      3, 2009

            	
              $23,500,000

            
	
              October
      31, 2009

            	
              $21,000,000

            
	 
      	 
      


    

    (b) Maintain
EBITDA of at least negative $8,000,000, for the fiscal month ending October 25,
2008.

     

    10.3.2 Fixed Charge Coverage
Ratio.  Commencing on November 21, 2009, maintain a Fixed
Charge Coverage Ratio of at least 1.0 to 1.0, measured as at the end of each
fiscal month on a trailing 12-month basis.

     

    SECTION
11. EVENTS
OF DEFAULT; REMEDIES ON DEFAULT

     

    11.1 Events of Default.  Each of the following shall
be an “Event of
Default” hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of law or otherwise:

     

    (a) A
Borrower fails to pay any Obligations when due (whether at stated maturity, on
demand, upon acceleration or otherwise);

     

    (b) Any
representation, warranty or other written statement of an Obligor made in
connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;

     

    (c) A
Borrower breaches or fail to perform any covenant contained in Section 7.2, 7.3, 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2,
10.1.1, 10.1.2, 10.2 or 10.3;

     

    (d) An
Obligor breaches or fails to perform any other covenant contained in any Loan
Documents, and such breach or failure is not cured within 15 days after a Senior
Officer of such Obligor has knowledge thereof or receives notice thereof from
Agent, whichever is
sooner; provided, however, that such
notice and opportunity to cure shall not apply if the breach or failure to
perform is not capable of being cured within such period or is a willful breach
by an Obligor;

     


    
      
         

      

      
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    (e) A
Guarantor repudiates, revokes or attempts to revoke its Guaranty; an Obligor
denies or contests the validity or enforceability of any Loan Documents or
Obligations, or the perfection or priority of any Lien granted to Agent; or any
Loan Document ceases to be in full force or effect for any reason (other than a
waiver or release by Agent and Lenders);

     

    (f) Any (x)
“Event of Default” occurs under (and as defined in) the Term Loan Agreement or
any Term Loan Document, or (y) breach or default of an Obligor occurs under any
other document, instrument or agreement to which it is a party or by which it or
any of its Properties is bound, relating to any Debt (other than the
Obligations) in excess of $500,000, if the maturity of or any payment with
respect to such Debt may be accelerated or demanded due to such
breach;

     

    (g) Any
judgment or order for the payment of money is entered against an Obligor in an
amount that exceeds, individually or cumulatively with all unsatisfied judgments
or orders against all Obligors, $500,000 (net of any insurance coverage therefor
acknowledged in writing by the insurer), unless a stay of enforcement of such
judgment or order is in effect, by reason of a pending appeal or
otherwise;

     

    (h) A loss,
theft, damage or destruction occurs with respect to any Collateral if the amount
not covered by insurance exceeds $5,000,000;

     

    (i) An
Obligor is enjoined, restrained or in any way prevented by any Governmental
Authority from conducting any part of its business for any material period of
time and such business is material to Parent and its Subsidiaries on a
consolidated basis; an Obligor suffers the loss, revocation or termination of
any material license, permit, lease or agreement necessary to its business and
such business is material to Parent and its Subsidiaries on a consolidated
basis; there is a cessation of any material part of an Obligor’s business for a
material period of time and such business is material to Parent and its
Subsidiaries on a consolidated basis; any material Collateral or Property of an
Obligor is taken or impaired through condemnation; an Obligor agrees to or
commences any liquidation, dissolution or winding up of its affairs; or an
Obligor ceases to be Solvent;

     

    (j) An
Insolvency Proceeding is commenced by an Obligor; an Obligor makes an offer of
settlement, extension or composition to its unsecured creditors generally; a
trustee is appointed to take possession of any substantial Property of or to
operate any of the business of an Obligor; or an Insolvency Proceeding is
commenced against an Obligor and:  the Obligor consents to institution
of the proceeding, the petition commencing the proceeding is not timely
controverted by the Obligor, the petition is not dismissed within 30 days after
filing, or an order for relief is entered in the proceeding;

     

     


    
      
         

      

      
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      (k) An ERISA
Event occurs with respect to a Pension Plan or Multiemployer Plan that has
resulted or could reasonably be expected to result in liability of an Obligor to
a Pension
Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of
a trustee for or termination by the PBGC of any Pension Plan or Multiemployer
Plan; an Obligor or ERISA Affiliate fails to pay when due any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan; or any event similar to the foregoing occurs or
exists with respect to a Foreign Plan;

    

     

    (l) An
Obligor or any of its Senior Officers is criminally indicted or convicted (i) of
a felony committed in the conduct of the Obligor’s business, or (ii) for
violating any state or federal law (including the Controlled Substances Act,
Money Laundering Control Act of 1986 and Illegal Exportation of War Materials
Act) that could lead to forfeiture of any material Property or any
Collateral;

     

    (m) A Change
of Control occurs; or any event occurs or condition exists that has a Material
Adverse Effect; or

     

    (n) Any
default (without taking into account any waiver of such default) of an Obligor
occurs under any document, instrument or agreement to which it is a party or by
which it or any of its Properties is bound, relating to any Debt (other than the
Obligations) as a result of the Obligor’s failure to comply with the financial
covenants set forth in such document, instrument or agreement.

     

    11.2 Remedies upon Default.  If an Event of Default
described in Section
11.1(j) occurs with respect to any Borrower, then to the extent permitted
by Applicable Law, all Obligations shall become automatically due and payable
and all Revolver Commitments shall terminate, without any action by Agent or
notice of any kind.  In addition, or if any other Event of Default
exists, Agent may in its discretion (and shall upon written direction of
Required Lenders) do any one or more of the following from time to
time:

     

    (a) declare
any Obligations immediately due and payable, whereupon they shall be due and
payable without diligence, presentment, demand, protest or notice of any kind,
all of which are hereby waived by Borrowers to the fullest extent permitted by
law;

     

    (b) terminate,
reduce or condition any Revolver Commitment, or make any adjustment to the
Borrowing Base;

     

    (c) require
Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other
Obligations that are contingent or not yet due and payable, and, if Obligors
fail promptly to deposit such Cash Collateral, Agent may (and shall upon the
direction of Required Lenders) advance the required Cash Collateral as Revolver
Loans (whether or not an Overadvance exists or is created thereby, or the
conditions in Section 6
are satisfied); and

     

    (d) exercise
any other rights or remedies afforded under any agreement, by law, at equity or
otherwise, including the rights and remedies of a secured party under the
UCC.  Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require Borrowers to assemble Collateral, at
Borrowers’ expense, and make it available to Agent at a place designated by
Agent; (iii) enter any premises where Collateral is located and store Collateral
on such premises until sold (and if the premises are owned or leased by a
Borrower, Borrowers agree not to charge for such storage);

     


    
      
         

      

      
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    and (iv)
sell or otherwise dispose of any Collateral in its then condition, or after any
further manufacturing or processing thereof, at public or private sale, with
such notice as may be required by Applicable Law, in lots or in bulk, at such
locations, all as Agent, in its discretion, deems advisable.  Each
Borrower agrees that 10 days notice of any proposed sale or other disposition of
Collateral by Agent shall be reasonable.  Agent shall have the right
to conduct such sales on any Obligor’s premises, without charge, and such sales
may be adjourned from time to time in accordance with Applicable
Law.  Agent shall have the right to sell, lease or otherwise dispose
of any Collateral for cash, credit or any combination thereof, and Agent may
purchase any Collateral at public or, if permitted by law, private sale and, in
lieu of actual payment of the purchase price, may set off the amount of such
price against the Obligations.

     

    11.3 License.  For purposes of enabling Agent, during
the continuance of an Event of Default, to exercise the rights and remedies
under Section 11.2 at
such time as Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, Agent is hereby granted an irrevocable,
non-exclusive license or other right to use, license or sub-license (without
payment of royalty or other compensation to any Person) any or all Intellectual
Property of Borrowers, computer hardware and software, trade secrets, brochures,
customer lists, promotional and advertising materials, labels, packaging
materials and other Property, in advertising for sale, marketing, selling,
collecting, completing manufacture of, or otherwise exercising any rights or
remedies with respect to, any Collateral.  Each Borrower’s rights and
interests under Intellectual Property shall inure to Agent’s
benefit.

     

    11.4 Setoff.  At any time during an Event of Default,
Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the
fullest extent permitted by Applicable Law and to the extent permitted by the
provisions of the Intercreditor Agreement, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the
credit or the account of an Obligor against any Obligations, irrespective of
whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or are owed to a branch or
office of Agent, Issuing Bank, such Lender or such Affiliate different from the
branch or office holding such deposit or obligated on such
indebtedness.  The rights of Agent, Issuing Bank, each Lender and each
such Affiliate under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Person may have.

     

    11.5 Remedies Cumulative; No Waiver.

     

    11.5.1 Cumulative
Rights.  All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of Borrowers contained in the
Loan Documents are cumulative and not in derogation or substitution of each
other.  In particular, the rights and remedies of Agent and Lenders
are cumulative, may be exercised at any time and from time to time, concurrently
or in any order, and shall not be exclusive of any other rights or remedies that
Agent and Lenders may have, whether under any agreement, by law, at equity or
otherwise.

     


    
      
         

      

      
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    11.5.2 Waivers.  The
failure or delay of Agent or any Lender to require strict performance by
Borrowers with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise, shall not operate as a waiver
thereof nor as establishment of a course of dealing.  All rights and
remedies shall continue in full force and effect until Full Payment of all
Obligations.  No modification of any terms of any Loan Documents
(including any waiver thereof) shall be effective, unless such modification is
specifically provided in a writing directed to Borrowers and executed by Agent
or the requisite Lenders, and such modification shall be applicable only to the
matter specified.  No waiver of any Default or Event of Default shall
constitute a waiver of any other Default or Event of Default that may exist at
such time, unless expressly stated.  If Agent or any Lender accepts
performance by any Obligor under any Loan Documents in a manner other than that
specified therein, or during any Default or Event of Default, or if Agent or any
Lender shall delay or exercise any right or remedy under any Loan Documents,
such acceptance, delay or exercise shall not operate to waive any Default or
Event of Default nor to preclude exercise of any other right or
remedy.  It is expressly acknowledged by Borrowers that any failure to
satisfy a financial covenant on a measurement date shall not be cured or
remedied by satisfaction of such covenant on a subsequent date.

     

    SECTION
12. AGENT

     

    12.1 Appointment, Authority and Duties of Agent.

     

    12.1.1 Appointment and
Authority.  Each Lender appoints and designates Bank of America
as Agent hereunder.  Agent may, and each Lender authorizes Agent to,
enter into all Loan Documents to which Agent is intended to be a party and
accept all Security Documents, for Agent’s benefit and the Pro Rata benefit of
Lenders.  Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the provisions of the Loan Documents, and
the exercise by Agent or Required Lenders of any rights or remedies set forth
therein, together with all other powers reasonably incidental thereto, shall be
authorized by and binding upon all Lenders.  Without limiting the
generality of the foregoing, Agent shall have the sole and exclusive authority
to (a) act as the disbursing and collecting agent for Lenders with respect to
all payments and collections arising in connection with the Loan Documents; (b)
execute and deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties for
purposes of perfecting and administering Liens under the Loan Documents, and for
all other purposes stated therein; (d) manage, supervise or otherwise deal with
Collateral; and (e) take any Enforcement Action or otherwise exercise any rights
or remedies with respect to any Collateral under the Loan Documents, Applicable
Law or otherwise.  The duties of Agent shall be ministerial and
administrative in nature, and Agent shall not have a fiduciary relationship with
any Lender, Secured Party, Participant or other Person, by reason of any Loan
Document or any transaction relating thereto.  Agent alone shall be
authorized to determine whether any Accounts or Inventory constitute Eligible
Accounts or Eligible Inventory, or whether to impose or release any reserve,
which determinations and judgments, if exercised in good faith, shall exonerate
Agent from liability to any Lender or other Person for any error in
judgment.

     


    
      
         

      

      
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    12.1.2 Duties.  Agent
shall not have any duties except those expressly set forth in the Loan
Documents.  The conferral upon Agent of any right shall not imply a
duty on Agent’s part to exercise such right, unless instructed to do so by
Required Lenders in accordance with this Agreement.

     

    12.1.3 Agent
Professionals.  Agent may perform its duties through agents and
employees.  Agent may consult with and employ Agent Professionals, and
shall be entitled to act upon, and shall be fully protected in any action taken
in good faith reliance upon, any advice given by an Agent
Professional.  Agent shall not be responsible for the negligence or
misconduct of any agents, employees or Agent Professionals selected by it with
reasonable care.

     

    12.1.4 Instructions of Required
Lenders.  The rights and remedies conferred upon Agent under
the Loan Documents may be exercised without the necessity of joinder of any
other party, unless required by Applicable Law.  Agent may request
instructions from Required Lenders with respect to any act (including the
failure to act) in connection with any Loan Documents, and may seek assurances
to its satisfaction from Lenders of their indemnification obligations under
Section 12.6 against all
Claims that could be incurred by Agent in connection with any
act.  Agent shall be entitled to refrain from any act until it has
received such instructions or assurances, and Agent shall not incur liability to
any Person by reason of so refraining.  Instructions of Required
Lenders shall be binding upon all Lenders, and no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting in accordance with the instructions of Required
Lenders.  Notwithstanding the foregoing, instructions by and consent
of all Lenders shall be required in the circumstances described in Section 14.1.1, and in no
event shall Required Lenders, without the prior written consent of each Lender,
direct Agent to accelerate and demand payment of Revolver Loans held by one
Lender without accelerating and demanding payment of all other Revolver Loans,
nor to terminate the Revolver Commitments of one Lender without terminating the
Revolver Commitments of all Lenders.  In no event shall Agent be
required to take any action that, in its opinion, is contrary to Applicable Law
or any Loan Documents or could subject any Agent Indemnitee to personal
liability.

     

    12.2 Agreements Regarding Collateral and Field Examination
Reports.

     

    12.2.1 Lien Releases; Care of
Collateral.  Lenders authorize Agent to release any Lien with
respect to any Collateral (a) upon Full Payment of the Obligations (other than
inchoate indemnity obligations); (b) that is the subject of an Asset Disposition
which Borrowers certify in writing to Agent is a Permitted Asset Disposition or
a Lien which Borrowers certify is a Permitted Lien entitled to priority over
Agent’s Liens (and Agent may rely conclusively on any such certificate without
further inquiry); (c) that does not constitute a material part of the
Collateral; or (d) with the written consent of all Lenders.  Agent
shall have no obligation whatsoever to any Lenders to assure that any Collateral
exists or is owned by a Borrower, or is cared for, protected, insured or
encumbered, nor to assure that Agent’s Liens have been properly created,
perfected or enforced, or are entitled to any particular priority, nor to
exercise any duty of care with respect to any Collateral.

     


    
      
         

      

      
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    12.2.2 Possession of
Collateral.  Agent and Lenders appoint each other Lender as
agent (for the benefit of Secured Parties) for the purpose of perfecting Liens
in any Collateral held by such Lender, to the extent such Liens are perfected by
possession.  If any Lender obtains possession of any Collateral, it
shall notify Agent thereof and, promptly upon Agent’s request, deliver such
Collateral to Agent or otherwise deal with it in accordance with Agent’s
instructions.

     

    12.2.3 Reports.  Agent
shall promptly, upon receipt thereof, forward to each Lender copies of the
results of any field audit, examination or appraisal prepared by or on behalf of
Agent with respect to any Obligor or Collateral (“Report”).  Each
Lender agrees (a) that neither Bank of America nor Agent makes any
representation or warranty as to the accuracy or completeness of any Report, and
shall not be liable for any information contained in or omitted from any Report;
(b) that the Reports are not intended to be comprehensive audits or
examinations, and that Agent or any other Person performing any audit or
examination will inspect only specific information regarding Obligations or the
Collateral and will rely significantly upon Borrowers’ books and records as well
as upon representations of Borrowers’ officers and employees; and (c) to keep
all Reports confidential and strictly for such Lender’s internal use, and not to
distribute any Report (or the contents thereof) to any Person (except to such
Lender’s Participants, attorneys and accountants) or use any Report in any
manner other than administration of the Revolver Loans and other
Obligations.  Each Lender agrees to indemnify and hold harmless Agent
and any other Person preparing a Report from any action such Lender may take as
a result of or any conclusion it may draw from any Report, as well as any Claims
arising in connection with any third parties that obtain any part or contents of
a Report through such Lender.

     

    12.3 Reliance By Agent.  Agent shall be entitled to
rely, and shall be fully protected in relying, upon any certification, notice or
other communication (including those by telephone, telex, telegram, telecopy or
e-mail) believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and upon the advice and statements of Agent
Professionals.

     

    12.4 Action Upon Default.  Agent shall not be deemed
to have knowledge of any Default or Event of Default unless it has received
written notice from a Lender or Borrower specifying the occurrence and nature
thereof.  If any Lender acquires knowledge of a Default or Event of
Default, it shall promptly notify Agent and the other Lenders thereof in
writing.  Each Lender agrees that, except as otherwise provided in any
Loan Documents or with the written consent of Agent and Required Lenders, it
will not take any Enforcement Action, accelerate Obligations under any Loan
Documents, or exercise any right that it might otherwise have under Applicable
Law to credit bid at foreclosure sales, UCC sales or other similar dispositions
of Collateral.  Notwithstanding the foregoing, however, a Lender may
take action to preserve or enforce its rights against an Obligor where a
deadline or limitation period is applicable that would, absent such action, bar
enforcement of Obligations held by such Lender, including the filing of proofs
of claim in an Insolvency Proceeding.

     


    
      
         

      

      
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    12.5 Ratable Sharing.  If any Lender shall obtain any
payment or reduction of any Obligation, whether through set-off or otherwise, in
excess of its share of such Obligation, determined on a Pro Rata basis or in
accordance with Section
5.6.1, as applicable, such Lender shall forthwith purchase from Agent,
Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.6.1, as
applicable.  If any of such payment or reduction is thereafter
recovered from the purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without
interest.  No Lender shall set off against any Dominion Account
without the prior consent of Agent.  Notwithstanding anything
contained in this Agreement to the contrary, if any Lender who is providing
financing to Borrowers’ dealers pursuant to an Approved Dealer Financing
Agreement exercises a right of set-off with respect to any obligations of such
Lender to pay a Borrower for an Approved Sale against (i) any Repurchase
Obligation of a Borrower to such Lender, (ii) any obligations of a Borrower to
such Lender under a guaranty of a dealer’s obligations to such Lender or under a
risk pool between a Borrower and such Lender, or (iii) any obligation of a
Borrower to pay such Lender interest on behalf of a dealer, such
set-off  will not be applied to the Obligations, and will not be
subject to the ratable sharing provisions of this Section 12.5.

     

    12.6 Indemnification of Agent Indemnitees.  EACH LENDER SHALL INDEMNIFY AND HOLD
HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT
WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES TO OR ARISES
FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS
AGENT).  In Agent’s discretion, it may reserve for any such
Claims made against an Agent Indemnitee, and may satisfy any judgment, order or
settlement relating thereto, from proceeds of Collateral prior to making any
distribution of Collateral proceeds to Lenders.  If Agent is sued by
any receiver, bankruptcy trustee, debtor-in-possession or other Person for any
alleged preference or fraudulent transfer, then any monies paid by Agent in
settlement or satisfaction of such proceeding, together with all interest, costs
and expenses (including attorneys’ fees) incurred in the defense of same, shall
be promptly reimbursed to Agent by each Lender to the extent of its Pro Rata
share.

     

    12.7 Limitation on Responsibilities of Agent.  Agent
shall not be liable to Lenders for any action taken or omitted to be taken under
the Loan Documents, except for losses directly and solely caused by Agent’s
gross negligence or willful misconduct.  Agent does not assume any
responsibility for any failure or delay in performance or any breach by any
Obligor or Lender of any obligations under the Loan Documents.  Agent
does not make to Lenders any express or implied warranty, representation or
guarantee with respect to any Obligations, Collateral, Loan Documents or
Obligor.  No Agent Indemnitee shall be responsible to Lenders for any
recitals, statements, information, representations or warranties contained in
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    effectiveness
or enforceability of any Loan Documents;
the genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor.  No Agent Indemnitee shall have any obligation to any Lender
to ascertain or inquire into the existence of any Default or Event of Default,
the observance or performance by any Obligor of any terms of the Loan Documents,
or the satisfaction of any conditions precedent contained in any Loan
Documents.

     

    12.8 Successor Agent and Co-Agents.

     

    12.8.1 Resignation; Successor
Agent.  Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at
least 30 days written notice thereof to Lenders and Borrowers.  Upon
receipt of such notice, Required Lenders shall have the right to appoint a
successor Agent which shall be (a) a Lender or an Affiliate of a Lender; or (b)
a commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least
$200,000,000 and (provided no Default or Event of Default exists) is reasonably
acceptable to Borrowers.  If no successor agent is appointed prior to
the effective date of the resignation of Agent, then Agent may appoint a
successor agent from among Lenders.  Upon acceptance by a successor
Agent of an appointment to serve as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the powers and duties of the
retiring Agent without further act, and the retiring Agent shall be discharged
from its duties and obligations hereunder but shall continue to have the
benefits of the indemnification set forth in Sections 12.6 and 14.2.  Notwithstanding
any Agent’s resignation, the provisions of this Section 12 shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while Agent.  Any successor to Bank of America by merger or
acquisition of stock or this loan shall continue to be Agent hereunder without
further act on the part of the parties hereto, unless such successor resigns as
provided above.  Notwithstanding the foregoing, each of the Lenders
and each of the Borrowers acknowledge and agree that if the Agent resigns
pursuant to Section 3.4(g)(i)(G) of the Intercreditor Agreement in connection
with the purchase of the Obligations in accordance with Section 3.4(g) of the
Intercreditor Agreement, such resignation shall be effective immediately upon
consummation of such purchase and the Term Loan Agent, or such other Person as
the Eligible Term Purchasers (as such term is defined in the Intercreditor
Agreement) shall designate or be designated as the successor Agent.

     

    12.8.2 Separate Collateral
Agent.  It is the intent of the parties that there shall be no
violation of any Applicable Law denying or restricting the right of financial
institutions to transact business in any jurisdiction.  If Agent
believes that it may be limited in the exercise of any rights or remedies under
the Loan Documents due to any Applicable Law, Agent may appoint an additional
Person who is not so limited, as a separate collateral agent or co-collateral
agent.  If Agent so appoints a collateral agent or co-collateral
agent, each right and remedy intended to be available to Agent under the Loan
Documents shall also be vested in such separate agent.  Every covenant
and obligation necessary to the exercise thereof by such agent shall run to and
be enforceable by it as well as Agent.  Lenders shall execute and
deliver such documents as Agent deems appropriate to vest any rights or remedies
in such agent.  If any collateral
agent or co-collateral agent shall die or dissolve, become incapable of acting,
resign or be removed, then all the rights and remedies of such agent, to the
extent permitted by Applicable Law, shall vest in and be exercised by Agent
until appointment of a new agent.

     


    
      
         

      

      
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    12.9 Due Diligence and Non-Reliance.  Each Lender
acknowledges and agrees that it has, independently and without reliance upon
Agent or any other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund Revolver
Loans and participate in LC Obligations hereunder.  Each Lender has
made such inquiries concerning the Loan Documents, the Collateral and each
Obligor as such Lender feels necessary.  Each Lender further
acknowledges and agrees that the other Lenders and Agent have made no
representations or warranties concerning any Obligor, any Collateral or the
legality, validity, sufficiency or enforceability of any Loan Documents or
Obligations.  Each Lender will, independently and without reliance
upon the other Lenders or Agent, and based upon such financial statements,
documents and information as it deems appropriate at the time, continue to make
and rely upon its own credit decisions in making Revolver Loans and
participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents.  Except for notices, reports and other
information expressly requested by a Lender, Agent shall have no duty or
responsibility to provide any Lender with any notices, reports or certificates
furnished to Agent by any Obligor or any credit or other information concerning
the affairs, financial condition, business or Properties of any Obligor (or any
of its Affiliates) which may come into possession of Agent or any of Agent’s
Affiliates.

     

    12.10 Replacement of Certain Lenders.  If a Lender (a)
fails to fund its Pro Rata share of any Revolver Loan or LC Obligation
hereunder, and such failure is not cured within two Business Days, (b) defaults
in performing any of its obligations under the Loan Documents, or (c) fails to
give its consent to any amendment, waiver or action for which consent of all
Lenders was required and Required Lenders consented, then, in addition to any
other rights and remedies that any Person may have, Agent may, by notice to such
Lender within 120 days after such event, require such Lender to assign all of
its rights and obligations under the Loan Documents to Eligible Assignee(s)
specified by Agent, pursuant to appropriate Assignment and Acceptance(s) and
within 20 days after Agent’s notice.  Agent is irrevocably appointed
as attorney-in-fact to execute any such Assignment and Acceptance if the Lender
fails to execute same.  Such Lender shall be entitled to receive, in
cash, concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).

     

    12.11 Remittance of Payments and Collections.

     

    12.11.1 Remittances
Generally.  All payments by any Lender to Agent shall be made
by the time and on the day set forth in this Agreement, in immediately available
funds.  If no time for payment is specified or if payment is due on
demand by Agent and request for payment is made by Agent by 11:00 a.m. on a
Business Day, payment shall be made by Lender not later than 2:00 p.m. on such
day, and if request is made after 11:00 a.m., then payment shall be made by
11:00 a.m. on the next Business Day.  Payment by Agent to any Lender
shall be made by wire transfer, in the type of funds received by
Agent.  Any such payment shall be subject to Agent’s right of offset
for any amounts due from such Lender under the Loan Documents.

     


    
      
         

      

      
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    12.11.2 Failure to
Pay.  If any Lender fails to pay any amount when due by it to
Agent pursuant to the terms hereof, such amount shall bear interest from the due
date until paid at the rate determined by Agent as customary in the banking
industry for interbank compensation.  In no event shall Borrowers be
entitled to receive credit for any interest paid by a Lender to
Agent.

     

    12.11.3 Recovery of
Payments.  If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
each Lender that received it.  If Agent determines at any time that an
amount received under any Loan Document must be returned to an Obligor or paid
to any other Person pursuant to Applicable Law or otherwise, then,
notwithstanding any other term of any Loan Document, Agent shall not be required
to distribute such amount to any Lender.  If any amounts received and
applied by Agent to any Obligations are later required to be returned by Agent
pursuant to Applicable Law, each Lender shall pay to Agent, on demand, such Lender’s Pro
Rata share of the amounts required to be returned.

     

    12.12 Agent in its Individual Capacity.  As a Lender,
Bank of America shall have the same rights and remedies under the other Loan
Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or
any similar term shall include Bank of America in its capacity as a
Lender.  Each of Bank of America and its Affiliates may accept
deposits from, maintain deposits or credit balances for, invest in, lend money
to, provide Bank Products to, act as trustee under indentures of, serve as
financial or other advisor to, and generally engage in any kind of business
with, Obligors and their Affiliates, as if Bank of America were any other bank,
without any duty to account therefor (including any fees or other consideration
received in connection therewith) to the other Lenders.  In their
individual capacity, Bank of America and its Affiliates may receive information
regarding Obligors, their Affiliates and their Account Debtors (including
information subject to confidentiality obligations), and each Lender agrees that
Bank of America and its Affiliates shall be under no obligation to provide such
information to Lenders, if acquired in such individual capacity and not as Agent
hereunder.

     

    12.13 Agent Titles.  Each Lender, other than Bank of
America, that is designated (on the cover page of this Agreement or otherwise)
by Bank of America as an “Agent” or “Arranger” of any type
shall not have any right, power, responsibility or duty under any Loan Documents
other than those applicable to all Lenders, and shall in no event be deemed to
have any fiduciary relationship with any other Lender.

     

    12.14 No Third Party Beneficiaries.  This Section 12 is an agreement
solely among Lenders and Agent, and shall survive Full Payment of the
Obligations.  This Section 12 does not confer any
rights or benefits upon Borrowers or any other Person.  As between
Borrowers and Agent, any action that Agent may take under any Loan Documents or
with respect to any Obligations shall be conclusively presumed to have been
authorized and directed by Lenders.

     


    
      
         

      

      
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    12.15 Intercreditor Agreement.  Each Lender hereby
irrevocably appoints, designates and authorizes the Agent and all requisite
authority to enter into or otherwise become bound by the Intercreditor Agreement
on its behalf and to take such action on its behalf under the provisions
thereof.  Each Lender further agrees to be bound by the terms and
conditions of the Intercreditor Agreement and agrees that it shall not take any
action that is prohibited by or inconsistent with the terms of the Intercreditor
Agreement.  No further consent or approval on the part of any Lender
is or will be required in connection with the performance by the Agent of the
Intercreditor Agreement.  Each holder of the Obligations, by its
acceptance hereof, irrevocably agrees to be bound by the terms, conditions and
provisions of the Intercreditor Agreement.

     

    SECTION
13. BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

     

    13.1 Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of Borrowers, Agent, Lenders, and their
respective successors and assigns, except that (a) no Borrower shall have the
right to assign its rights or delegate its obligations under any Loan Documents;
and (b) any assignment by a Lender must be made in compliance with Section 13.3.  Agent
may treat the Person which made any Revolver Loan as the owner thereof for all
purposes until such Person makes an assignment in accordance with Section 13.3.  Any
authorization or consent of a Lender shall be conclusive and binding on any
subsequent transferee or assignee of such Lender.

     

    13.2 Participations.

     

    13.2.1 Permitted Participants;
Effect.  Any Lender may, in the ordinary course of its business
and in accordance with Applicable Law, at any time sell to a financial
institution (“Participant”) a
participating interest in the rights and obligations of such Lender under any
Loan Documents.  Despite any sale by a Lender of participating
interests to a Participant, such Lender’s obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for performance of such obligations, such Lender shall remain the
holder of its Loans and Revolver Commitments for all purposes, all amounts
payable by Borrowers shall be determined as if such Lender had not sold such
participating interests, and Borrowers and Agent shall continue to deal solely
and directly with such Lender in connection with the Loan
Documents.  Each Lender shall be solely responsible for notifying its
Participants of any matters under the Loan Documents, and Agent and the other
Lenders shall not have any obligation or liability to any such
Participant.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 5.9 unless Borrowers
agree otherwise in writing.

     

    13.2.2 Voting
Rights.  Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Revolver Loan or Revolver Commitment in which
such Participant has an interest, postpones the Commitment Termination Date or
any date fixed for any regularly scheduled payment of principal, interest or
fees on such Revolver Loan or Revolver Commitment, or releases any Borrower,
Guarantor or substantial portion of the Collateral other than in accordance with
Section
12.2.1.

     


    
      
         

      

      
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    13.2.3 Benefit of
Set-Off.  Borrowers agree that each Participant shall have a
right of set-off in respect of its participating interest to the same extent as
if such interest were owing directly to a Lender, and each Lender shall also
retain the right of set-off with respect to any participating interests sold by
it.  By exercising any right of set-off, a Participant agrees to share
with Lenders all amounts received through its set-off, in accordance with Section 12.5 as if such
Participant were a Lender.

     

    13.3 Assignments.

     

    13.3.1 Permitted
Assignments.  A Lender may assign to an Eligible Assignee any
of its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $5,000,000 (unless
otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the Revolver
Commitments retained by the transferor Lender is at least $5,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording,
an Assignment and Acceptance.  Nothing herein shall limit the right of
a Lender to pledge or assign any rights under the Loan Documents to (i) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, or (ii) counterparties to swap agreements
relating to any Revolver Loans; provided, however, that any payment by Borrowers
to the assigning Lender in respect of any Obligations assigned as described in
this sentence shall satisfy Borrowers’ obligations hereunder to the extent of
such payment, and no such assignment shall release the assigning Lender from its
obligations hereunder.

     

    13.3.2 Effect; Effective
Date.  Upon delivery to Agent of an assignment notice in the
form of Exhibit C and a
processing fee of $3,500 (unless otherwise agreed by Agent in its discretion),
the assignment shall become effective as specified in the notice, if it complies
with this Section
13.3.  From such effective date, the Eligible Assignee shall
for all purposes be a Lender under the Loan Documents, and shall have all rights
and obligations of a Lender thereunder.  Upon consummation of an
assignment, the transferor Lender, Agent and Borrowers shall make appropriate
arrangements for issuance of replacement and/or new Notes, as
applicable.  The transferee Lender shall comply with Section 5.10 and deliver, upon
request, an administrative questionnaire satisfactory to Agent.

     


    
      
         

      

      
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    SECTION
14. MISCELLANEOUS

     

    14.1 Consents, Amendments and Waivers.

     

    14.1.1 Amendment.  No
modification of any Loan Document, including any extension or amendment of a
Loan Document or any waiver of a Default or Event of Default, shall be effective
without the prior written agreement of Agent (with the consent of Required
Lenders) and each Obligor party to such Loan Document; provided, however,
that

     

    (a) without
the prior written consent of Agent, no modification shall be effective with
respect to any provision in a Loan Document that relates to any rights, duties
or discretion of Agent;

     

    (b) without
the prior written consent of Issuing Bank, no modification shall be effective
with respect to any LC Obligations or Section 2.3;

     

    (c) without
the prior written consent of each affected Lender, no modification shall be
effective that would (i) increase the Revolver Commitment of such Lender; or
(ii) reduce the amount of, or waive or delay payment of, any principal, interest
or fees payable to such Lender; and

     

    (d) without
the prior written consent of all Lenders (except a defaulting Lender as provided
in Section 4.2), no
modification shall be effective that would (i) extend the Revolver Termination
Date; (ii) alter Section 5.6,
7.1 (except to add Collateral) or 14.1.1; (iii) amend the
definitions of Borrowing Base (and the defined terms used in such definition),
Pro Rata or Required Lenders; (iv) increase any advance rate, decrease the
Availability Block or increase total Revolver Commitments; (vi) release
Collateral with a book value greater than $5,000,000 during any calendar year,
except as currently contemplated by the Loan Documents (including Section 12.2.1 hereof) or as
required under the Intercreditor Agreement; or (vii) release any Obligor from
liability for any Obligations, if such Obligor is Solvent at the time of the
release.

     

    14.1.2 Limitations.  The
agreement of Borrowers shall not be necessary to the effectiveness of any
modification of a Loan Document that deals solely with the rights and duties of
Lenders, Agent and/or Issuing Bank as among themselves.  Only the
consent of the parties to the Fee Letter, Intercreditor Agreement or any
agreement relating to a Bank Product shall be required for any modification of
such agreement, and no Affiliate of a Lender that is party to a Bank Product
agreement shall have any other right to consent to or participate in any manner
in modification of any other Loan Document.  The making of any
Revolver Loans during the existence of a Default or Event of Default shall not
be deemed to constitute a waiver of such Default or Event of Default, nor to
establish a course of dealing.  Any waiver or consent granted by
Lenders hereunder shall be effective only if in writing, and then only in the
specific instance and for the specific purpose for which it is
given.

     


    
      
         

      

      
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    14.1.3 Payment for
Consents.  No Borrower will, directly or indirectly, pay any
remuneration or other thing of value, whether by way of additional interest, fee
or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.

     

    14.2 Indemnity.  

     

    14.2.1 General
Indemnity.  EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN
INDEMNITEE.  In no event shall any party to a Loan Document have any
obligation thereunder to indemnify or hold harmless an Indemnitee with respect
to a Claim that is determined in a final, non-appealable judgment by a court of
competent jurisdiction to result from the gross negligence or willful misconduct
of such Indemnitee.

     

    14.2.2 Environmental
Indemnity. Without limiting Section 14.2.1 hereof, each
Borrower agrees to, jointly and severally, defend, indemnify, and hold harmless
the Indemnitees against any and all Environmental Liabilities and Costs and all
other claims, demands, penalties, fines, liability (including strict liability),
losses, damages, costs and expenses (including without limitation, reasonable
legal fees and expenses, consultant fees and laboratory fees), arising out of
(i) any Environmental Releases or threatened Environmental Releases (x) at any
property presently or formerly owned or operated by any Borrower  or
any Subsidiary, or any predecessor in interest, that may affect Agents' and
Lenders' rights and obligations under this Agreement or any of the other Loan
Documents or (y) of any Hazardous Materials generated and disposed of by any
Borrower or any Subsidiary, or any predecessor in interest; (ii) any violations
of Environmental Laws that may materially and adversely affect Agents' and
Lenders' rights and obligations under this Agreement or any of the other Loan
Documents; (iii) any Environmental Action against any Borrower or any
Subsidiary, or any predecessor in interest; (iv) any personal injury (including
wrongful death) or property damage (real or personal) arising out of exposure to
Hazardous Materials used, handled, generated, transported or disposed by any
Borrower or any Subsidiary, or any predecessor in interest; and (v) any breach
of any warranty or representation regarding environmental matters made by
Borrower or any Subsidiary in Section 9.1.15 or the breach
of a covenant solely with respect to Environmental Laws or Environmental
Releases made by Borrower or Subsidiary in Section
10.1.5.  Notwithstanding the foregoing, neither Borrower nor
any Subsidiary shall have any obligation to any Indemnitee under this Section 14.2.2 regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
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      14.2.3 Borrowers,
Agent and Lenders intend that to the extent that any Environmental Liabilities
and Costs for which Borrowers are liable under this Agreement are not
recoverable under California Code of Civil Procedure ("C.C.P.") § 736(a), such
Environmental Liabilities and Costs shall be recoverable under the law of the
State of California other than C.C.P. § 736 to the extent provided in C.C.P. §
736(d) and permitted by applicable law.  In addition, Agent and
Lenders may (a) pursue any remedies available under C.C.P. § 726.5 and C.C.P. §
736. Without limiting any other rights or remedies of Agent and Lenders, each
Borrower acknowledges and agrees that Sections 9.1.15, 10.1.5 and 14.2.2 of this
Agreement are “environmental provisions,” as that term is defined in C.C.P. §
736(f)(2).  Pursuant to C.C.P. § 736, Agent and/or Lenders' action for
the recovery of damages or enforcement of such Sections of this Agreement shall
not constitute an action within the meaning of C.C.P. § 726(a) or constitute a
money judgment for a deficiency or a deficiency judgment within the meaning of
C.C.P. § 580a, § 580b, or § 726.

    

     

    14.3 Notices and Communications.

     

    14.3.1 Notice
Address.  Subject to Section 4.1.4, all notices and
other communications by or to a party hereto shall be in writing and shall be
given to any Borrower, at Borrower Agent’s address shown on the signature pages
hereof, and to any other Person at its address shown on the signature pages
hereof (or, in the case of a Person who becomes a Lender after the Closing Date,
at the address shown on its Assignment and Acceptance), or at such other address
as a party may hereafter specify by notice in accordance with this Section 14.3.  Each
such notice or other communication shall be effective only (a) if given by
facsimile transmission, when transmitted to the applicable facsimile number, if
confirmation of receipt is received; (b) if given by mail, three Business Days
after deposit in the U.S. mail, with first-class postage pre-paid, addressed to
the applicable address; or (c) if given by personal delivery, when duly
delivered to the notice address with receipt
acknowledged.  Notwithstanding the foregoing, no notice to Agent
pursuant to Section 2.1.4, 2.3,
3.1.2, or 4.1.1
shall be effective until actually received by the individual to whose attention
at Agent such notice is required to be sent.  Any written notice or
other communication that is not sent in conformity with the foregoing provisions
shall nevertheless be effective on the date actually received by the noticed
party.  Any notice received by Borrower Agent shall be deemed received
by all Borrowers.

     

    14.3.2 Electronic Communications;
Voice Mail.  Electronic mail and internet websites may be used
only for routine communications, such as financial statements, Borrowing Base
Certificates and other information required by Section 10.1.2, administrative
matters, distribution of Loan Documents for execution, and matters permitted
under Section
4.1.4.  Agent and Lenders make no assurances as to the privacy
and security of electronic communications.  Electronic and voice mail
may not be used as effective notice under the Loan Documents.

     

    14.3.3 Non-Conforming
Communications.  Agent and Lenders may rely upon any notices
purportedly given by or on behalf of any Borrower even if such notices were not
made in a manner specified herein, were incomplete or were not confirmed, or if
the terms thereof, as understood by the recipient, varied from a later
confirmation.  Each Borrower shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
telephonic communication purportedly given by or on behalf of a
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    14.4 Performance of Borrowers’ Obligations.  Agent
may, in its discretion at any time and from time to time, at Borrowers’ expense,
pay any amount or do any act required of a Borrower under any Loan Documents or
otherwise lawfully requested by Agent in accordance with the Loan Documents to
(a) enforce any Loan Documents or collect any Obligations; (b) protect, insure,
maintain or realize upon any Collateral; or (c) defend or maintain the validity
or priority of Agent’s Liens in any Collateral, including any payment of a
judgment, insurance premium, warehouse charge, finishing or processing charge,
or landlord claim, or any discharge of a Lien.  All payments, costs
and expenses (including Extraordinary Expenses) of Agent under this Section
shall be reimbursed to Agent by Borrowers, on demand, with interest from
the date incurred to the date of payment thereof at the Default Rate applicable
to Base Rate Revolver Loans.  Any payment made or action taken by
Agent under this Section shall be without prejudice to any right to assert an
Event of Default or to exercise any other rights or remedies under the Loan
Documents.

     

    14.5 Credit Inquiries.  Each Borrower hereby
authorizes Agent and Lenders (but they shall have no obligation) to respond to
usual and customary credit inquiries from third parties concerning any Borrower
or Subsidiary.

     

    14.6 Severability.  Wherever possible, each provision
of the Loan Documents shall be interpreted in such manner as to be valid under
Applicable Law.  If any provision is found to be invalid under
Applicable Law, it shall be ineffective only to the extent of such invalidity
and the remaining provisions of the Loan Documents shall remain in full force
and effect.

     

    14.7 Cumulative Effect; Conflict of Terms.  The
provisions of the Loan Documents are cumulative.  The parties
acknowledge that the Loan Documents may use several limitations, tests or
measurements to regulate similar matters, and they agree that these are
cumulative and that each must be performed as provided.  Except as
otherwise provided in another Loan Document (other than the Intercreditor
Agreement) (by specific reference to the applicable provision of this
Agreement), if any provision contained herein is in direct conflict with any
provision in another Loan Document (other than the Intercreditor Agreement), the
provision herein shall govern and control.  It is expressly
acknowledged and agreed that Agent and Lenders’ rights and remedies hereunder
are subject to the terms and conditions of the Intercreditor Agreement, and in
the event of any conflict between the Loan Documents and the Intercreditor
Agreement, the Intercreditor Agreement shall control.

     

    14.8 Counterparts.  Any Loan Document may be executed
in counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This
Agreement shall become effective when Agent has received counterparts bearing
the signatures of all parties hereto.  Delivery of a signature page of
any Loan Document by telecopy shall be effective as delivery of a manually
executed counterpart of such agreement.

     

    14.9 Entire Agreement.  Time is of the essence of the
Loan Documents.  The Loan Documents constitute the entire contract
among the parties relating to the subject matter hereof, and supersede any and
all previous agreements and understandings, oral or written, relating to the
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    14.10 Relationship with Lenders.  The obligations of
each Lender hereunder are several, and no Lender shall be responsible for the
obligations or Revolver Commitments of any other Lender.  Amounts
payable hereunder to each Lender shall be a separate and independent debt, and
each Lender shall be entitled, to the extent not otherwise restricted hereunder,
to protect and enforce its rights arising out of the Loan
Documents.  It shall not be necessary for Agent or any other Lender to
be joined as an additional party in any proceeding for such
purposes.  Nothing in this Agreement and no action of Agent or Lenders
pursuant to the Loan Documents shall be deemed to constitute Agent and Lenders
to be a partnership, association, joint venture or any other kind of entity, nor
to constitute control of any Borrower.

     

    14.11 No Advisory or Fiduciary Responsibility.  In
connection with all aspects of each transaction contemplated by any Loan
Document, Borrowers acknowledge and agree that (a)(i) this credit facility and
any related arranging or other services by Agent, any Lender, any of their
Affiliates or any arranger are arm’s-length commercial transactions between
Borrowers and such Person; (ii) Borrowers have consulted their own legal,
accounting, regulatory and tax advisors to the extent they have deemed
appropriate; and (iii) Borrowers are capable of evaluating and understanding,
and do understand and accept, the terms, risks and conditions of the
transactions contemplated by the Loan Documents; (b) each of Agent, Lenders,
their Affiliates and any arranger is and has been acting solely as a principal
in connection with this credit facility, is not the financial advisor, agent or
fiduciary for Borrowers, any of their Affiliates or any other Person, and has no
obligation with respect to the transactions contemplated by the Loan Documents
except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates
and any arranger may be engaged in a broad range of transactions that involve
interests that differ from Borrowers and their Affiliates, and have no
obligation to disclose any of such interests to Borrowers or their
Affiliates.  To the fullest extent permitted by Applicable Law, each
Borrower hereby waives and releases any claims that it may have against Agent,
Lenders, their Affiliates and any arranger with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated by a Loan Document.

     

    14.12 Confidentiality.  Each of Agent, Lenders and
Issuing Bank agrees to maintain the confidentiality of all Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners); (c) to
the extent required by Applicable Law or by any subpoena or similar legal
process; (d) to any other party hereto; (e) in connection with the exercise of
any remedies, the enforcement of any rights, or any action or proceeding
relating to any Loan Documents; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any Transferee or
any actual or prospective party (or its advisors) to any Bank Product; (g) with
the consent of the Borrower; or (h) to the 

     


    
      
         

      

      
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    extent
such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to Agent, any Lender, Issuing Bank or any of their Affiliates
on a nonconfidential basis from a source other than
Borrowers.  Notwithstanding the foregoing, Agent and Lenders may issue
and disseminate to the public general information describing this credit
facility, including the names and addresses of Borrowers and a general
description of Borrowers’ businesses, and may use Borrowers’ names in
advertising and other promotional materials.  For purposes of this
Section, “Information” means
all information received from an Obligor or Subsidiary relating to it or its
business, other than any information that is available to Agent, any Lender or
Issuing Bank on a nonconfidential basis prior to disclosure by the Obligor or
Subsidiary.  Any Person required to maintain the confidentiality of
Information pursuant to this Section shall be considered to have complied with
its obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information, but in no event less than a reasonable degree
of care.  Each of Agent, Lenders and Issuing Bank acknowledges that
(i) Information may include material non-public information concerning an
Obligor or Subsidiary; (ii) it has developed compliance procedures regarding the
use of material non-public information; and (iii) it will handle such material
non-public information in accordance with Applicable Law, including federal and
state securities laws.

     

    14.13 [Intentionally
Deleted]

     

    14.14 GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES
(BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL
BANKS).

     

    14.15 Consent to Forum; Arbitration.

     

    14.15.1 Forum.  EACH BORROWER HEREBY CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH
JURISDICTION OVER LOS ANGELES, CALIFORNIA, IN ANY PROCEEDING OR DISPUTE RELATING
IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE
BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH BORROWER IRREVOCABLY
WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH
COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT
FORUM.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1.  Nothing
herein shall limit the right of Agent or any Lender to bring proceedings against
any Obligor in any other court, nor limit the right of any party to serve
process in any other manner permitted by Applicable Law.  Nothing in
this Agreement shall be deemed to preclude enforcement by Agent of any judgment
or order obtained in any forum or jurisdiction.

     


    
      
         

      

      
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    14.15.2 Arbitration.  Notwithstanding
any other provision of this Agreement to the contrary, any controversy or claim
among the parties relating in any way to any Obligations or Loan Documents,
including any alleged tort, shall at the request of any party hereto be
determined by binding arbitration conducted in accordance with the United States
Arbitration Act (Title 9 U.S. Code).  Arbitration proceedings will be
determined in accordance with the Act, the then-current rules and procedures for
the arbitration of financial services disputes of the American Arbitration
Association (“AAA”), and the terms
of this Section.  In the event of any inconsistency, the terms of this
Section shall control.  If AAA is unwilling or unable to serve as the
provider of arbitration or to enforce any provision of this Section, Agent may
designate another arbitration organization with similar procedures to serve as
the provider of arbitration.  The arbitration proceedings shall be
conducted in Los Angeles or Pasadena, California.  The arbitration
hearing shall commence within 90 days of the arbitration demand and close within
90 days thereafter.  The arbitration award must be issued within 30
days after close of the hearing (subject to extension by the arbitrator for up
to 60 days upon a showing of good cause), and shall include a concise written
statement of reasons for the award.  The arbitrator shall give effect
to applicable statutes of limitation in determining any controversy or claim,
and for these purposes, service on AAA under applicable AAA rules of a notice of
claim is the equivalent of the filing of a lawsuit.  Any dispute
concerning this Section or whether a controversy or claim is arbitrable shall be
determined by the arbitrator.  The arbitrator shall have the power to
award legal fees to the extent provided by this Agreement.  Judgment
upon an arbitration award may be entered in any court having
jurisdiction.  The institution and maintenance of an action for
judicial relief or pursuant to a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.  No controversy or claim shall be
submitted to arbitration without the consent of all parties if, at the time of
the proposed submission, such controversy or claim relates to an obligation
secured by Real Estate, but if all parties do not consent to submission of such
a controversy or claim to arbitration, it shall be determined as provided in the
next sentence.  At the request of any party, a controversy or claim
that is not submitted to arbitration as provided above shall be determined by
judicial reference; and if such an election is made, the parties shall designate
to the court a referee or referees selected under the auspices of the AAA in the
same manner as arbitrators are selected in AAA sponsored proceedings and the
presiding referee of the panel (or the referee if there is a single referee)
shall be an active attorney or retired judge; and judgment upon the award
rendered by such referee or referees shall be entered in the court in which
proceeding was commenced.  None of the foregoing provisions of this
Section shall limit the right of Agent or Lenders to exercise self-help
remedies, such as setoff, foreclosure or sale of any Collateral or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after or during any arbitration proceeding.  The exercise of a remedy
does not waive the right of any party to resort to arbitration or
reference.  At Agent’s option, foreclosure under a Mortgage may be
accomplished either by exercise of power of sale thereunder or by judicial
foreclosure.

     

    14.16 Waivers by Borrowers.  To the fullest extent permitted by
Applicable Law, each Borrower waives (a) the right to trial by jury (which Agent
and each Lender hereby also waives) in any proceeding or dispute of any kind
relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment,
demand, protest, notice of presentment, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any commercial paper, accounts,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which a Borrower may in any way be liable, and hereby ratifies anything Agent
may do in this regard; (c) notice prior to taking possession or control of any
Collateral; (d) any bond or security that might be required by a court prior to
allowing Agent to exercise any rights or remedies; (e) the benefit of all
valuation, appraisement and exemption laws; (f) any claim against Agent or any
Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any
way relating to any Enforcement Action, Obligations, Loan Documents or
transactions relating thereto; and (g) notice of acceptance
hereof.  Each Borrower acknowledges that the foregoing waivers
are a material inducement to Agent and Lenders entering into this Agreement and
that Agent and Lenders are relying upon the foregoing in their dealings with
Borrowers.  Each Borrower has reviewed the foregoing waivers with its
legal counsel and has knowingly and voluntarily waived its jury trial and other
rights following consultation with legal counsel.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

     


    
      
         

      

      
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    14.17 Patriot Act Notice.  Agent and Lenders hereby
notify Borrowers that pursuant to the requirements of the Patriot Act, Agent and
Lenders are required to obtain, verify and record information that identifies
each Borrower, including its legal name, address, tax ID number and other
information that will allow Agent and Lenders to identify it in accordance with
the Patriot Act.  Agent and Lenders will also require information
regarding each personal guarantor, if any, and may require information regarding
Borrowers’ management and owners, such as legal name, address, social security
number and date of birth.

     

    


     

    


     

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page]

     

    



    
      
         

      

      
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    IN WITNESS WHEREOF, this
Agreement has been executed and delivered as of the date set forth
above.

    
       

       

      
        	 
      	
                BORROWERS:

              
	 
      	 
      
	 
      	 
      
	 
      	
                MONACO
      COACH CORPORATION,

              
	 
      	
                a
      Delaware corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                SIGNATURE
      MOTORCOACH RESORTS, INC.,

              
	 
      	
                a
      Delaware corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                NAPLES
      MOTORCOACH RESORT, INC.,

              
	 
      	
                a
      Florida corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

       

       

    


    
      
        
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                PORT
      OF THE ISLES MOTORCOACH RESORT,

              
	 
      	
                INC.,
      a Florida corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                OUTDOOR
      RESORTS OF LAS VEGAS, INC.,

              
	 
      	
                a
      Nevada corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                OUTDOOR
      RESORTS MOTORCOACH

              
	 
      	
                COUNTRY
      CLUB, INC., a California corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      
      

    


    
      
        
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                SIGNATURE
      RESORTS OF MICHIGAN, INC.

              
	 
      	
                a
      Michigan corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                LA
      QUINTA MOTORCOACH RESORT, INC.,

              
	 
      	
                a
      California corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                R-VISION
      HOLDINGS LLC,

              
	 
      	
                a
      Delaware limited liability company

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      
 

    


    
      
        
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                R-VISION,
      INC., an Indiana corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                R-VISION
      MOTORIZED, LLC,

              
	 
      	
                an
      Indiana limited liability company

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


      


      
        	 
      	
                BISON
      MANUFACTURING, LLC,

              
	 
      	
                an
      Indiana limited liability company

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


                              

    

    



    
      
        
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                ROADMASTER,
      LLC,

              
	 
      	
                an
      Indiana limited liability company

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	
                Name:

              	
                P.
      Martin Daley

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                91320
      Coburg Industrial Way

              
	 
      	 
      	
                Coburg,
      Oregon, 97408

              
	 
      	
                Attn:

              	
                P.
      Martin Daley

              
	 
      	
                Telecopy:

              	
                541-681-8039

              


      

      


      


        
          
            
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                AGENT AND
      LENDERS:

              
	 
      	 
      
	 
      	 
      
	 
      	
                BANK OF AMERICA,
      N.A.,

              
	 
      	
                as
      Agent and Lender

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Todd Eggerton

              
	 
      	
                Name:

              	
                Todd
      Eggerton

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                55
      South Lake Avenue, Suite 900

              
	 
      	 
      	
                Pasadena,
      California  91101

              
	 
      	
                Attention:

              	
                Business
      Capital - Account Executive

              
	 
      	
                Telecopy
      No.:

              	
                (626)
      584-4602

              


      

      
 

    


    
      
        
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                U.S.
      BANK, NATIONAL ASSOCIATION

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/ Elizabeth C.
  Hengevold

              
	 
      	
                Name:

              	
                Elizabeth
      C. Hengevold

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                555
      S.W. Oak Street, Suite 505

              
	 
      	 
      	
                Portland,
      OR 97204

              
	 
      	
                Attn:

              	 
      
	 
      	
                Telecopy:

              	
                (503)
      275-5919

              


      

      
                                           

    


    
      
        
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                WELLS
      FARGO BANK, NATIONAL

              
	 
      	
                ASSOCIATION

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Mark Tatum

              
	 
      	
                Name:

              	
                Mark
      Tatum

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                1300
      Southwest Fifth Avenue

              
	 
      	 
      	
                Portland,
      OR 97201

              
	 
      	
                Attn:

              	 
      
	 
      	
                Telecopy:

              	
                503-886-4785

              


      

      




    
      
        
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                UNION
      BANK OF CALIFORNIA, N.A.

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/ Stephen Sloan

              
	 
      	
                Name:

              	
                Stephen
      Sloan

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                407
      SW Broadway

              
	 
      	 
      	
                Portland,
      OR 97205

              
	 
      	
                Attn:

              	 
      
	 
      	
                Telecopy:

              	
                (503)
      225-2846

              


      

      
                                                   

    


    
      
        
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                NATIONAL
      CITY BANK

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/ David McNeely

              
	 
      	
                Name:

              	
                David
      McNeely

              
	 
      	
                Title:

              	
                Senior
      Vice President

              
	 
      	
                Address:

              	
                110
      W. Berry Street, 8th
      Floor

              
	 
      	 
      	
                Fort
      Wayne, IN 46802

              
	 
      	
                Attn:

              	
                David
      McNeely

              
	 
      	
                Telecopy:

              	
                (260)
      461-6238

              


      

      


      
                                       

    


    
      
        
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                BANK
      OF THE WEST

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/ Brett German

              
	 
      	
                Name:

              	
                Brett
      German

              
	 
      	
                Title:

              	
                Vice
      President

              
	 
      	
                Address:

              	
                222  SW
      Columbia Street, Suite 1200

              
	 
      	 
      	
                Portland,
      OR 97201

              
	 
      	
                Attn:

              	
                Brett
      German

              
	 
      	
                Telecopy:

              	
                (503)
      223-2915

              


      

      


       

    

                                                    


    
      
        
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                GE
      COMMERCIAL DISTRIBUTION

              
	 
      	
                FINANCE

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Justin Wood

              
	 
      	
                Name:

              	
                Justin
      Wood

              
	 
      	
                Title:

              	
                Credit
      Director

              
	 
      	
                Address:

              	
                2625
      S. Plaza Drive, Suite 201

              
	 
      	 
      	
                Tempe,
      AZ 85282

              
	 
      	
                Attn:

              	 
      
	 
      	
                Telecopy:

              	 
      


      

      

 

    

    
      
        
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    SCHEDULE
1.1

     

    to

     

    Loan and Security
Agreement

     

    REVOLVER COMMITMENTS OF
LENDERS

     

    
      	
              Lender

            	
              Revolver Commitment

            	
              Pro Rata Share of Revolver
      Commitment

            
	 	 	 
	
              Bank
      of America, N.A.

            	
              $40,000,000

            	
              50.0000000%

            
	
              U.S.
      Bank, National Association

            	
              $13,333,333.33

            	
              16.6666667%

            
	
              Bank
      of the West

            	
              $2,083,333.33

            	
              2.6041667%

            
	
              Wells
      Fargo Bank, National Association

            	
              $4,791,666.67

            	
              5.9895833%

            
	
              Union
      Bank of California, N.A.

            	
              $2,708,333.33

            	
              3.3854167%

            
	
              National
      City Bank

            	
              $3,750,000

            	
              4.6875000%

            
	
              GE
      Commercial Distribution Finance

            	
              $13,333,333.33

            	
              16.6666667%

            
	
              Total

            	
              $80,000,000

            	
              100%

            


    

    


     

     

    Schedule
1.1