**Exhibit 10.12**

** **

**Third Amendment to the Amended andRestated Credit Agreement dated May 29, 2003 with U.S. Bank NationalAssociation.**

 

**THIRD AMENDMENT TOAMENDED AND RESTATEDCREDIT AGREEMENT**

** **

THIS THIRD AMENDMENT TOAMENDED AND RESTATED CREDIT AGREEMENT is entered into as of May 29, 2003,by and among MONACO COACH CORPORATION, a Delaware corporation; ROYALE COACH BYMONACO, INC., an Indiana corporation; MCC ACQUISITION CORPORATION, a Delawarecorporation; OUTDOOR RESORTS OF NAPLES, INC., a Florida corporation; OUTDOORRESORTS OF LAS VEGAS, INC., a Nevada corporation; OUTDOOR RESORTS MOTORCOACHCOUNTRY CLUB, INC., a California corporation; Lenders; GE COMMERCIALDISTRIBUTION FINANCE CORPORATION, WELLS FARGO BANK, NATIONAL ASSOCIATION andBANK OF AMERICA, N.A., as Co-Documentation Agents; and U.S. BANK NATIONALASSOCIATION as Administrative Lender.

 

**RECITALS**

** **

Borrowers,Administrative Lender and Lenders are parties to that certain Amended andRestated Credit Agreement dated September 28, 2001 (as previously amended,the “Agreement”).  In order to increasethe amount and extend the maturity date of the Revolving Loan Commitments,modify the financial covenants contained in the Agreement and change certainother provisions thereof, Borrowers, Administrative Lender and Lenders desireto amend the Agreement in the manner set forth below.

 

NOW,THEREFORE, in consideration of the mutual covenants and promises of the partiescontained herein, Administrative Lender, Lenders and Borrowers hereby agree asfollows:

 

**1.****                                      Definitions.**  All capitalized terms used, and nototherwise defined, herein shall have the respective meanings attributed to themin the Agreement.

 

**2.****                                      Amendmentto Section 1.1.**

 

Thefollowing defined term is amended in its entirety to read as follows:

 

“**Debt**”of any Person means, without duplication, (a) all obligations of such Personfor borrowed money and all obligations of such Person evidenced by bonds,debentures, notes, bills or other similar instruments; (b) all obligations,contingent or otherwise, relative to the face amount of all letters of credit,whether or not drawn, and banker’s acceptances issued for such Person’saccount; (c) all Capitalized Lease Obligations and Other Lease obligations ofsuch Person; (d) whether or not so

 

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included as liabilities in accordance with GAAP, allobligations of such Person to pay the deferred purchase price of property orservices, and indebtedness (excluding prepaid interest thereon) secured by aLien on property owned or being purchased by such Person (includingindebtedness arising under conditional sales or other title retentionagreements), whether or not such indebtedness shall have been assumed by suchPerson or is limited in recourse; (e) all Contingent Obligations of such Personin respect of any of the foregoing, other than Contingent Obligations inconnection with an Approved Dealer Financing Agreement; and, with respect toParent and its Subsidiaries collectively, (f) the amount by which anyoutstanding book overdrafts exceed $10,000,000.  For purposes of determining the amount of Debt in a circumstancewhen the creditor has recourse only to specified assets, the amount shall bethe lesser of (i) the amount of such obligation or (ii) the fair market valueof such assets.

 

“**RevolverMaturity Date**” means the earlier of June 30, 2005 or the duedate pursuant to Section 11.2.

 

**3.****                                      Section3.3(b)(i). **Section 3.3(b)(i)is amended in its entirety to read as follows:

 

(i)                                     Borrowersshall, on the first Business Day of each fiscal quarter, repay the outstandingprincipal balance of the Term Loans by making a payment in the aggregate amountof $2,500,000;

 

**4.****                                      Section3.3A(b)(i). **Section 3.3A(b)(i)is amended in its entirety to read as follows:

 

(i)                                     Borrowersshall, on the first Business Day of each fiscal quarter, repay the outstandingprincipal balance of the Term Loans II by making a payment in the aggregateamount of $1,833,333, provided that if on or before such day a principalpayment has been made pursuant to any of items (iii), (iv) or (v) below,then the required principal payment due on such day shall be the amountresulting from dividing the then outstanding principal balance of TermLoans II by the number equal to one plus the number of full fiscalquarters remaining after such day (excluding the fiscal quarter of which suchday is the first Business Day) through the Maturity Date;

 

**5.****                                      Amendmentof Section 10.1. **Section 10.1is amended in its entirety to read as follows:

 

As of the end ofeach of the second, third and fourth fiscal quarters of its 2003 fiscal yearand as of the end of each fiscal quarter of its 2004 fiscal year, Parent shallmaintain a Leverage Ratio not greater than 2.25:1.  As of the end of each fiscal quarter of its 2005 fiscal year andthereafter, Parent shall maintain a Leverage Ratio not greater than 1.75:1.

 

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**6.****                                      Amendmentof Section 10.3. **Section 10.3is amended in its entirety to read as follows:

 

As of the end ofeach fiscal quarter of its 2003 fiscal year, Parent shall maintain a FixedCharge Coverage Ratio not less than 1.25:1. As of the end of each fiscal quarter of its 2004 fiscal year andthereafter, Parent shall maintain a Fixed Charge Coverage Ratio not less than1.50:1.

 

**7.****                                      Additionof Section 10.5. **Section 10.5is added to the Agreement to read as follows:

 

## **10.5**                        INVENTORYLEVELS

## ** **

Parent will notpermit the total consolidated inventory of Borrowers (excluding inventoryacquired pursuant to the ORA Acquisition), valued at the lower of cost(determined on a “first in, first out” basis) and market value, as of the endof any fiscal quarter to exceed (i) $224,831,000 for the second fiscal quarterof its 2003 fiscal year, (ii) $205,025,000 for the third fiscal quarter of its2003 fiscal year, and (iii) $185,000,000 for the fourth fiscal quarter of its2003 fiscal year.

 

**8.****                                      Additionof Section 12.7. **Section 12.7is added to the Agreement to read as follows:

 

## **12.7**                        DOCUMENTATIONAGENTS

## ** **

No Lenderidentified as a “Co-Documentation Agent” or “Documentation Agent” herein shallhave any right, power, obligation, liability, responsibility or duty under thisAgreement in such capacity.  Each Lenderacknowledges that it has not relied on and will not rely on any Lenderidentified as a “Documentation Agent” in deciding to enter into this Agreementor in taking or not taking any action hereunder.

 

**9.****                                      Schedule I. **Schedule I is amended in itsentirety to read as Schedule I attached hereto.

 

**10.****                               Schedule II. **Schedule II is amended in itsentirety to read as Schedule II attached hereto.

 

**11.****                               AmendmentFee. **Contemporaneously with theexecution of this Third Amendment, Borrowers shall pay to AdministrativeLender, for the ratable benefit of Lenders, a fee in the amount of $235,416.67in consideration of Lenders’ execution and delivery of this Third Amendment andthe increased Total Commitments.

 

**12.****                               AdministrativeLender’s Fee. **Contemporaneouslywith the execution of this Third Amendment, Borrowers shall pay toAdministrative Lender, for Administrative Lender’s own account, the fees setforth in that certain fee letter from U.S. Bank to Borrowers’ Agent of evendate herewith.

 

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**13.****                               EffectiveDate. **This Third Amendmentshall be effective as of May 29, 2003, upon the payment of the feesdescribed in Paragraphs 11 and 12 and execution and delivery hereof.

 

**14.****                               Ratification.**  Except as otherwise provided in this ThirdAmendment, all of the provisions of the Agreement are hereby ratified andconfirmed and shall remain in full force and effect.

 

**15.****                               OneAgreement. **The Agreement, asmodified by the provisions of this Third Amendment, shall be construed as oneagreement.

 

**16.****                               Counterparts.**  This Third Amendment may be executed in anynumber of counterparts, each of which when executed and delivered shall bedeemed to be an original, and all of which when taken together shall constituteone and the same agreement.  Delivery ofan executed signature page of this Third Amendment by facsimile transmissionshall be effective as delivery of a manually executed counterpart hereof.

 

**17.****                               StatutoryNotice.**

 

**UNDER OREGON LAW, MOST AGREEMENTS,PROMISES AND COMMITMENTS MADE BY LENDER AFTER OCTOBER 3, 1989 CONCERNINGLOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY ORHOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE INWRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.**

 

 

[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK]

 

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**IN WITNESS WHEREOF**,this Third Amendment to Amended and Restated Credit Agreement has been dulyexecuted as of the date first written above.

** **
| MONACO COACH CORPORATION                          | ROYALE COACH BY MONACO, INC.                     |
|---------------------------------------------------|--------------------------------------------------|
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/ John W. Nepute                               |   | By: | /s/ John W. Nepute |   |
| Title:   President                           | Title:  Vice  President                     |
|                                              |                                             |
| MCC  ACQUISITION CORPORATION                      | OUTDOOR  RESORTS OF NAPLES, INC.                 |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/ John W. Nepute                               |   | By: | /s/ John W. Nepute |   |
| Title:  Vice President                       | Title:  President                           |
|                                              |                                             |
| OUTDOOR  RESORTS OF LAS VEGAS, INC.               | OUTDOOR  RESORTS MOTORCOACH   COUNTRY CLUB, INC. |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/ John W. Nepute                               |   | By: | /s/ John W. Nepute |   |
| Title:  President                            | Title:  President                           |
|                                              |                                             |
| GE  COMMERCIAL DISTRIBUTION   FINANCE CORPORATION | WELLS  FARGO BANK, NATIONAL   ASSOCIATION        |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/  Timothy Wass                                |   | By: | /s/  Kathy Inman Lucier |   |
| Title:  Director of Underwriting             | Title:  Vice President                      |
|                                              |                                             |
| UNION  BANK OF CALIFORNIA, N.A.                   | BANK  OF AMERICA, N.A.                           |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/  Thmos Marks                                 |   | By: | /s/  Brad DeSpain |   |
| Title:  Vice President                       | Title:  Senior Vice President               |
|                                              |                                             |
| WASHINGTON  MUTUAL BANK                           | U.S.  BANK NATIONAL ASSOCIATION                  |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/  Elizabeth Records                           |   | By: | /s/  Caron Carlyon |   |
| Title:  A.V.P., Credit Manager               | Title:  Managing Director                   |
|                                              |                                             |
| NATIONAL  CITY BANK OF INDIANA                    |                                             |
|                                              |                                             |
|                                              |                                             |
| By:                                               | /s/  Mike Callas                                 |   |   |   |
| Title:  Vice President                       |                                             |
|                                                   |                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |

** **

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** **

**SCHEDULE I**

** **

**1.****                                      RevolvingLoan Commitments:**

 

U.S. Bank NationalAssociation  -  $19,308,146.44   (22.715466396%)

 

Wells Fargo Bank,National Association  -  $14,250,295.16    (16.765053131%)

 

Bank of America,N.A.  - $11,666,174.72    (13.724911440%)

 

GE CommercialDistribution Finance Corporation  -  $11,666,174.72    (13.724911440%)

 

Washington MutualBank  - $11,600,944.53    (13.648170030%)

 

Union Bank ofCalifornia, N.A.  -  $10,547,225.50    (12.408500585%)

 

National City Bankof Indiana  -  $5,961,038.93   (7.012986977%)

 

**2.****                                      TermLoan I Commitments:**

 

U.S. Bank NationalAssociation  -  $5,678,866.60   (22.715466396%)

 

Wells Fargo Bank,National Association  -   $4,191,263.28    (16.765053131%)

 

Bank of America,N.A.  - 3,431,227.86    (13.724911440%)

 

GE CommercialDistribution Finance Corporation  -  $3,431,227.86    (13.724911440%)

 

Washington MutualBank  - $3,412,042.51    (13.648170030%)

 

Union Bank ofCalifornia, N.A.  -  $3,102,125.15    (12.408500585%)

 

National City Bankof Indiana  -  $1,753,246.74   (7.012986977%)

 

**3.****                                      TermLoan II Commitments:**

 

U.S. Bank NationalAssociation  -  $4,164,502.32   (22.715466396%)

 

Wells Fargo Bank,National Association  -  $3,073,593.19   (16.765053131%)

 

Bank of America,N.A.  - $2,516,233.86    (13.724911440%)

 

GE CommercialDistribution Finance Corporation  -  $2,516,233.86    (13.724911440%)

 

Washington MutualBank  - $2,502,164.60    (13.648170030%)

 

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Union Bank ofCalifornia, N.A.  -  $2,274,891.86    (12.408500585%)

 

National City Bankof Indiana  -  $1,285,714.33   (7.012986977%)

 

**4.****                                      SwingLoan Commitment:**

 

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

 

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

 

U.S. BankNational AssociationOregon Commercial Banking800 Willamette Street, 3rd FloorPO Box 10553Eugene, Oregon  97440Attn:  Brett GermanTelephone:  (541) 465-4104Fax:  (541) 342-6712Email:  brett.german@usbank.com

 

GECommercial Distribution Finance Corporation2625 S. Plaza Drive, Suite 201Tempe, AZ  85282Attn: Timothy Wass, Director of UnderwritingTelephone:  (480) 449-7124Fax:  (480) 829-3963Email:  timothy.wass@ge.com

 

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

 

WashingtonMutual Bank1201 Third Avenue, WMT 1445Seattle, WA  98101Attn: Bruce Kendrex, Vice PresidentTelephone:  (206) 377-3888Fax:  (206) 377-3812Email:  bruce.kendrex@wamu.net

 

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

 

Bankof America, N.A.121 SW Morrison, #1700Portland, OR  97204Attn: Brad DeSpain, Senior Vice PresidentTelephone:  (503) 275-1573Fax:  (503) 275-1377Email:  brad.w.despain@bankofamerica.com

 

NationalCity Bank of Indiana

1National City Center, Suite 200 E

Indianapolis,Indiana  46255

Attn:Mike Callas

Telephone:  (317) 267-7443

Fax:  (317) 267-7441

Email:  mike.callas@nationalcity.com

 

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**SCHEDULEII**

** **

**Pricing Schedule**

** **

 
|                                                   |   | **Level I** |   | **Level II** |   | **Level III** |   | **Level IV** |   | **Level V** |   |
|--------------------------------------------------------|--------|-------------|--------|--------------|--------|---------------|--------|--------------|--------|-------------|--------|
| LIBOR  Margin – Revolving Loans                   |   | 125         |   | 150          |   | 175           |   | 200          |   | 225         |   |
| Prime  Margin – Revolving Loans                   |   | 0           |   | 0            |   | 0             |   | 25           |   | 50          |   |
| LIBOR  Margin – Term Loans and Term Loans II |   | 150         |   | 175          |   | 200           |   | 225          |   | 250         |   |
| Prime  Margin – Term Loans and Term Loans II |   | 0           |   | 0            |   | 0             |   | 25           |   | 50          |   |
| Fee  Percentage                                        |   | 25          |   | 25           |   | 37.5          |   | 50           |   | 50          |   |

 

Forpurposes of this Pricing Schedule, the following terms have the followingmeanings:

 

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

 

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

 

“**Level III**”applies on any day if, on such day, the applicable Leverage Ratio is equal toor greater than 1.25:1 and less than 1.50:1.

 

“**Level IV**”applies on any day if, on such day, the applicable Leverage Ratio is equal toor greater than 1.50:1 and less than 2.00:1.

 

“**Level V**”applies on any day if, on such day, the applicable Leverage Ratio is 2.00:1 orgreater.

 

Forpurposes of this Pricing Schedule, the Leverage Ratio shall be calculated onceevery quarter based on the financial information most recently reported byBorrowers’ Agent pursuant to Section 8.3 of the Agreement; provided,however, that the Leverage Ratio shall not be computed on the financialinformation most recently reported by Borrowers’ Agent until the later of thefirst day of the month after receipt of such information or five Business Daysafter the receipt thereof, and if the most recent report required pursuant toSection 8.3 has not been delivered, or if Administrative Lender reasonablyobjects to the accuracy of such report within five Business Days after thereceipt thereof, the next higher Level from the Level then in effect shallapply until such time as the delinquent report is delivered or AdministrativeLender’s objections are resolved to Administrative Lender’s reasonablesatisfaction.

 

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