**Exhibit 10.1**

 

**LOAN MODIFICATION AGREEMENT NO. 2**

 

Preamble:  This Loan Modification Agreement (this “Agreement”),dated as of September 24, 2004 (the “Effective Date”), is madebetween UPS Capital Corporation, as lender (the “Lender”),  and each Person identified as “Borrower” onthe signature page(s) hereof, as borrower(s) (individually and collectively,the “Borrower”), for the purpose of amending or otherwise modifying theterms of that certain Loan and Security Agreement, dated as of August 28,2002, heretofore made between Lender and Borrower (which, as it has been todate, or hereafter may be, modified or amended, is called herein the “LoanAgreement”).  Now, therefore, inconsideration of the mutual promises contained herein and in the LoanAgreement, the receipt and sufficiency of which are hereby acknowledged, Lenderand Borrower, each intending to be legally bound, agrees as follows:

 

# 1.             Definitions. Capitalized terms used herein, but not expressly defined herein, shallhave the meanings given to such terms in the Loan Agreement.

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# 2.             Loan Modification.  Lender and Borrower agree to modify the LoanAgreement by deleting Section 7.2 (Capital Expenditures) of the LoanAgreement in its entirety and replacing it with the following:

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7.2           **Capital Expenditures.**  Holdings and its Consolidated Subsidiariesshall not expend, in Capital Expenditures, more than Four Million Dollars($4,000,000), in the aggregate, for all such expenditures in any one FiscalYear.  Notwithstanding the foregoing,Holdings and/or its Consolidated Subsidiaries may expend, in CapitalExpenditures, up to Ten Million Dollars ($10,000,000) in the aggregate, for allsuch expenditures in Fiscal Year 2004. In addition, in the event that Holdings and its ConsolidatedSubsidiaries expends, in Capital Expenditures, less than Ten Million Dollars($10,000,000) in the aggregate, for all such expenditures during Fiscal Year2004, then the difference between Ten Million Dollars ($10,000,000) and theactual amount of all such Capital Expenditures in Fiscal Year 2004 shall beadded to the Four Million Dollar ($4,000,000) limitation for CapitalExpenditures for Fiscal Year 2005, so that the maximum amount of permittedCapital Expenditures for Fiscal Year 2005 will be the sum of (i) FourMillion Dollars ($4,000.000), plus (ii) the difference between Ten MillionDollars ($10,000,000) and the actual amount of all Capital Expenditures ofHoldings and its Consolidated Subsidiaries for Fiscal Year 2004.  As used herein, “Capital Expenditures”shall mean all expenditures made in respect of the cost of any fixed asset orimprovement, or replacement, substitution, or addition thereto, having a usefullife of more than one (1) year, including, without limitation, thosearising in connection with the direct or indirect acquisition of such assets byway of increased product or service charges or offset items or in connectionwith Capital Leases.  Notwithstanding theforegoing, for purposes of measuring Holdings’ and its ConsolidatedSubsidiaries’ compliance with the limitations on Capital Expenditures in this Section 7.2,any cash proceeds received from the sale of fixed assets during any Fiscal Yearshall reduce and offset the amount of Capital Expenditures for Holdings and itsConsolidated Subsidiaries for that Fiscal Year. “Capital Leases” shall mean any leases of property that,

 

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in accordance withGAAP, should be reflected as liabilities on the balance sheet of a Person.

 

# 3.             Inducing Representations.  To induce Lender to enter into thisAgreement, Borrower hereby represents and warrants that: (i) Borrower isduly authorized to enter into this Agreement, and this Agreement, upon itsexecution by Borrower and Lender, will constitute Borrower’s legal, valid andbinding obligations enforceable in accordance with its terms against Borrower; (ii) aftergiving effect to this Agreement, no Event of Default exists; (iii) nopresent right of setoff, counterclaim, recoupment, claim or defense exists inBorrower’s favor in respect of its payment or performance of any Obligations;and (iv) except as modified by this Agreement, all terms of the LoanAgreement and each Loan Document shall remain in full force and effect.

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# 4.             Miscellaneous. Except as otherwise expressly provided herein, all modifications to theLoan Agreement set forth herein shall take effect on the Effective Date.  Each existing Loan Document (including,particularly, any Note) shall be deemed modified hereby as necessary to conformits terms to the terms of the Loan Agreement, as modified hereby.  This Agreement constitutes a Loan Document,and shall be governed and construed accordingly.  This Agreement constitutes the entireagreement between Lender and Borrower relative to the subject matter hereof,and supersedes and replaces any prior understandings and agreements, written ororal, in regard thereto.  This Agreementshall be binding on, and inure to the benefit of, the successors and assigns ofBorrower and Lender.  Borrower shall reimburseLender for all costs which Lender incurs, including reasonable attorneys’ fees,in the preparation, negotiation, execution and performance of this Agreement,and the recording of any Loan Documents in connection herewith.

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IN WITNESSWHEREOF, Lender and Borrower have executed this Agreement, by and through theirrespective authorized officers, as of the Effective Date.

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

 

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| NATIONAL R.V., INC. |                          |
|---------------------|-------------------------------|
|                |                          |
|                |                          |
| By:                 | */s/  Thomas J. Martini*      |   |   |
|                | Authorized Officer Treasurer  |   |
|                |                          |
|                |                          |
| COUNTRY COACH, INC. |                          |
|                |                          |
|                |                          |
| By:                 | */s/  Thomas J. Martini*      |   |   |
|                | Authorized Officer  Treasurer |   |
|                     |                               |  |  |  |  |

 

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