================================================================================
                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1997

{   } TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ........ to .........

Commission file number: 0-22268

                          NATIONAL R.V. HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                       Delaware                                   33-0371079
           (State or other jurisdiction of                     (I.R.S. Employer
            incorporation or organization)                   Identification No.)

                              3411 N. Perris Blvd.
                            Perris, California 92571
                                                    (909) 943-6007
                            (Address,  including zip code, and telephone number,
                               including  area code, of  Registrant's  principal
                               executive offices)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

YES X    NO__

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

Class                                             Outstanding at August 12, 1997
-----                                             ------------------------------
Common stock, par value                              6,247,533
$.01 per share

                                      -1-

<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.

                                      INDEX

                                                                          PAGE
                             PART 1 - FINANCIAL INFORMATION

Item 1.    Consolidated Balance Sheet -
           June 30, 1997 and December 31, 1996                              3

           Consolidated Statement of Income -
           Three and Six Months Ended June 30, 1997 and 1996                4

           Consolidated Statement of Cash Flows -
           Six Months Ended June 30, 1997 and 1996                          5

           Consolidated Statement of Changes in Stockholders' Equity        6

           Notes to Consolidated Financial Statements                       7

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations                  8 - 9

                               PART II - OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K                                10

           Signature                                                       11

                                      -2-

<PAGE>

                     NATIONAL R.V. HOLDINGS, INC.
                      CONSOLIDATED BALANCE SHEET
                            (In thousands)
                              (Unaudited)
                                                June 30,     December 31,
                                                  1997          1996
                    ASSETS
Current Assets:
    Cash                                         $    891      $    819
    Trade receivables, less allowance for
       doubtful accounts of $177,000                9,088         5,522
    Inventories                                    35,991        34,015
    Deferred income taxes                           1,665         1,384
    Prepaid expenses                                1,425         1,232
                                                ----------   -----------
       Total current assets                        49,060        42,972
Goodwill                                            7,985         8,191
Restricted funds                                        -         1,210
Property, plant and equipment, net                 18,738        15,542
Other                                                 270           135
                                                ----------   -----------
                                                 $ 76,053      $ 68,050
                                                ==========   ===========
     LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
    Line of credit                               $    -        $  1,400
    Current portion of long-term debt                 545           545
    Accounts payable                                9,652         7,736
    Accrued expenses                                5,550         3,738
                                                ----------   -----------
       Total current liabilities                   15,747        13,419
Deferred income taxes                               1,827         1,827
Long-term debt                                      7,130         7,272
Commitments and contingencies
Stockholders' equity:
    Preferred stock - $.01 par value; 5,000 shares
       authorized, 4,000 issued and outstanding         -             -
    Common stock - $.01 par value; 10,000,000 shares
       authorized                                      63            62
Additional paid-in capital                         34,652        34,344
Accumulated earnings                               16,634        11,126
                                                ----------   -----------
    Total stockholders' equity                     51,349        45,532
                                                ----------   -----------
                                                 $ 76,053      $ 68,050
                                                ==========   ===========

              See Notes to Consolidated Financial Statements

                                      -3-

<PAGE>

                                 NATIONAL R.V. HOLDINGS, INC.
                               CONSOLIDATED STATEMENT OF INCOME
                             (In thousands except per share data)
                                         (Unaudited)
                                       Three Months          Six Months
                                      Ended June 30,        Ended June 30,
                                     1997      1996        1997       1996
Net sales                           $ 69,191 $ 32,686   $ 127,787   $ 67,819
Cost of goods sold                    60,084   28,307     111,077     58,761
                                    -------- --------   ---------   --------
       Gross profit                    9,107    4,379      16,710      9,058
Selling expenses                       2,110      774       4,227      1,648
General and administrative expenses    1,522      636       2,783      1,185
Amortization of intangibles              104       -          207         -
                                    -------- --------   ---------   --------
       Operating income                5,371    2,969       9,493      6,225
Other expense (income):
    Interest expense                     101       77         150        195
    Interest income                      (37)     (65)        (70)      (136)
    Other financing related costs         42       37          61         77
                                    -------- --------   ---------   --------
       Income before income taxes      5,265    2,920       9,352      6,089
    Provision for income taxes         2,146    1,183       3,844      2,466
                                    -------- --------   ---------   --------
Net income                          $  3,119 $  1,737   $   5,508   $  3,623
Earnings per common share and
  common equivalent shares:
    Primary                         $   0.46 $   0.34   $    0.82   $   0.73
    Fully diluted                   $   0.46 $   0.34   $    0.81   $   0.71
Weighted average number of shares:
    Primary                            6,733    5,106       6,724      4,961
    Fully diluted                      6,802    5,120       6,759      5,082



                 See Notes to Consolidated Financial Statements

                                      -4-

<PAGE>

                        NATIONAL R.V. HOLDINGS, INC.
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                               (In thousands)
                                 (Unaudited)
                                                            Six Months
                                                           Ended June 30,
                                                         1997          1996
 Cash flows from operating activities:
     Net income                                        $ 5,508       $ 3,623
     Adjustments to reconcile net income to net
        cash provided by operating activities:
          Depreciation expense                             584           238
          Amortization of intangibles                      206             -
          (Increase) decrease in trade receivables      (3,566)        1,916
          Increase in inventories                       (1,976)       (1,553)
          Increase in prepaid expenses                    (193)         (133)
          Increase (decrease) in accounts payable        1,916          (262)
          Increase in accrued expenses                   1,812           958
          Increase in deferred income taxes               (281)         (299)
                                                      --------     ---------
            Net cash  provided by  operating
              activities                                 4,010         4,488
 Cash flows from investing activities:
     Purchases of property, plant and equipment         (3,780)       (2,498)
                                                      --------     ---------
            Net cash used by investing activities       (3,780)       (2,498)
 Cash flows from financing activities:
     Net payments under line of credit                  (1,400)       (1,900)
     Increase in other assets                             (135)
     Decrease in restricted funds                        1,210         2,079
     Principal payments on long-term debt                 (142)          (73)
     Proceeds from issuance of common stock                309         1,377
     Purchase of treasury stock                                         (289)
                                                      --------     ---------
            Net cash (used) provided by financing
               activities                                 (158)        1,194
                                                      --------     ---------
 Net increase in cash                                       72         3,184
 Cash beginning of period                                  819            73
                                                      --------     ---------
 Cash end of period                                    $   891       $ 3,257


              See Notes to Consolidated Financial Statements

                                      -5-

<PAGE>

                        NATIONAL R.V. HOLDINGS, INC.
         CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                       (In thousands except shares)
                             (Unaudited)

                            Preferred  Common Stock   Paid-in Accumulated
                              Stock   Shares   Amount Capital  Earnings  Total
                              --------------------------------------------------
Balance, December 31, 1996    $ -   6,193,579  $ 62  $ 34,344 $ 11,126  $ 45,532
     Common Stock issued upon
       exercise of warrants           37,500     1        230                231
     Common Stock issued under
       option plan                    16,304     -         78                 78
     Net income                                                  5,508     5,508
                              --------------------------------------------------
Balance, June 30, 1997        $ -   6,247,383  $ 63   $ 34,652$ 16,634  $ 51,349





               See Notes to Consolidated Financial Statements

                                      -6-

<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART I, ITEM 1

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)

NOTE 1 - GENERAL

     In the opinion of National  R.V.  Holdings,  Inc.  (collectively,  with its
subsidiaries  National R.V., Inc., and Country Coach, Inc. referred to herein as
the "Company"),  the accompanying  unaudited  consolidated  financial statements
contain  all  adjustments,  consisting  only of  normal  recurring  adjustments,
necessary  for the fair  presentation  of the  financial  position,  results  of
operations  and cash flows for all  periods  presented.  Results for the interim
periods are not necessarily indicative of the results for an entire year and the
financial  statements  do  not  include  all of the  information  and  footnotes
required by generally accepted accounting principles. These financial statements
should be read in  conjunction  with the financial  statements and notes thereto
contained in the Company's latest annual report on Form 10-K.

NOTE 2 - INVENTORIES

   Inventories consist of the following:

                                             June 30,          December 31,
                                               1997                1996
                                           ------------        ------------
Finished goods                             $  9,035,000        $  8,116,000
Work-in-process                              12,887,000          11,000,000
Raw materials                                 9,403,000           7,987,000
Chassis                                       4,666,000           6,912,000
                                           ------------        ------------
                                           $ 35,991,000        $ 34,015,000
                                           ============        ============

                                      -7-

<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources
-------------------------------
   At June 30, 1997, the Company had working  capital of $33.3 million  compared
to $29.6 million at December 31, 1996. Net cash provided by operating activities
was $4.0  million  for the six months  ended  June 30,  1997,  compared  to $4.5
million for the same period in 1996. An increase in net income, accounts payable
and accrued  expenses was offset somewhat by an increase in accounts  receivable
and inventories.

   Cash used by investing  activities was $3.8 million  compared to $2.5 million
for the  comparable  period last year.  The  increase was  primarily  due to the
construction of a new 154,000 square foot building.

   Cash used by  financing  activities  was $0.2  million  compared  to net cash
provided of $1.2  million for the  comparable  period last year.  The change was
primarily  due to a lessor  amount of common stock issued and  restricted  funds
required for the new building this year as compared to last year.

   The Company  believes that the  combination  of internally  generated  funds,
existing capital and funds available from its existing credit facility,  will be
sufficient to meet the Company's  planned capital and  operational  requirements
for at least the next 24 months.

Results of Operations
---------------------
   Net sales for the second quarter of 1997 increased by $36.5 million or 111.7%
from the  comparable  period last year.  For the first half of 1997, the Company
reported sales of $127.8  million,  88.4% higher than sales of $67.8 million for
the first half of last year. This increase  resulted  primarily from the sale of
205  motorhomes at the Company's  Country  Coach  subsidiary  with no comparable
sales for last year. The Company's National RV subsidiary shipped 104 more Class
A motorhomes than last year and 387 more higher priced motorhomes with slide-out
rooms were shipped than the same period last year.  There was a 1 unit  decrease
in the sales of fifth-wheel products.

   Cost of goods sold of $60.1  million for the second  quarter of 1997 resulted
in a gross  margin  of 13.2%  compared  to a gross  margin of 13.4% for the same
period  last year.  Cost of goods sold of $111.1  million  for the first half of
1997 resulted in a gross margin of 13.1% compared to a gross margin of 13.4% for
the same  period last year.  The gross  margin  decrease  was due  primarily  to
start-up costs related to the new manufacturing facility.

   Selling  expense for the second  quarter of 1997 increased to $2.1 million or
3.0% of net sales,  compared  to $0.8  million or 2.4% of net sales for the same
period last year.  Selling  expense for the first half of 1997 increased to $4.2
million or 3.3% of net sales,  compared to $1.6 million or 2.4% of net sales for
the same period last year.  The  increase was due  primarily  to higher  selling
expenses at Country Coach which are typical in the Highline market.

                             -8-

<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

   General and  administrative  expense for the second quarter of 1997 increased
to $1.5  million or 2.2% of net sales,  compared to $0.6  million or 1.9% of net
sales for the same period last year. General and administrative  expense for the
first half of 1997  increased to $2.8 million or 2.2% of net sales,  compared to
$1.2  million or 1.7% of net sales for the same period last year.  The  increase
was due primarily to the general and administrative expenses of Country Coach.

   Amortization of intangibles  increased $0.1 million for the second quarter of
1997 and $0.2  million  for the  first  half of 1997  due to the  Country  Coach
acquisition.

   As a result of the foregoing, operating income for the second quarter of 1997
increased  80.9% to $5.4 million or 7.8% of net sales,  compared to $3.0 million
or 9.1% of net sales for the same  period  last year.  Operating  income for the
first  half of  1997  increased  52.5%  to $9.5  million  or 7.4% of net  sales,
compared to $6.2 million or 9.2% of net sales for the same period last year.

   Net interest expense and other financing  related costs for the first half of
1997 increased $5,000.

   As a result of the  foregoing,  income  before  income  taxes for the  second
quarter of 1997 increased to $5.3 million or 7.6% of net sales, compared to $3.0
million or 8.9% of net sales for the same period last year. Income before income
taxes for the first half of 1997 increased to $9.4 million or 7.3% of net sales,
compared to $6.1 million or 9.0% of net sales for the same period last year.

   Provision  for income  taxes for the second  quarter of fiscal  1997 was $2.1
million  compared to $1.2 million for the same period last year.  Provision  for
income  taxes  for the  first  half of 1997 was $3.8  million  compared  to $2.5
million for the same period last year. The effective tax rate for the first half
of 1997 was 41.1%  compared to 40.5% for the same period last year. The increase
was due primarily to a one-time tax adjustment related to the Company's deferred
compensation plan and non-deductibility of goodwill.

   As a result of the  foregoing,  net  income  for the  second  quarter of 1997
increased to $3.1 million or 4.5% of net sales, compared to $1.7 million or 5.3%
of net sales for the same  period  last  year.  Net income for the first half of
1997 increased to $5.5 million or 4.3% of net sales, compared to $3.6 million or
5.3% of net sales for the same period last year.

                                      -9-

<PAGE>

PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On  May  28,  1977,  the  Company  held  its  1997  Annual  Meeting  of
stockholders  (the  "Annual  Meeting")  . The  matters  voted upon at the Annual
Meeting and the votes cast for such matters were as follows:

         1.       The Company's stockholders elected Gary L. Fuhrman and Neil H.
                  Koffler as Class III  Directors to serve until the 2000 Annual
                  Meeting.  Voting for the nominees for director was as follows;
                  Gary  L.  Fuhrman.  4,933,492  shares  FOR  and  6,720  shares
                  WITHHELD; and Neil H. Koffler;  4,933,367 shares FOR and 6,845
                  shares WITHHELD.

         2.       The  Company   stockholders   approved  the  adoption  of  the
                  Company's 1996 Stock Option Plan. For the approval of the 1996
                  Stock Option Plan, the vote was 2,603,646  shares FOR; 218,705
                  shares  AGAINST;  and 13,350 shares  ABSTAINING (and 2,104,511
                  broker not votes).

         3.       The Company's  stockholders  approved the appointment of Price
                  Waterhouse  LLP,  as the  Company's  auditor  for the  current
                  fiscal year. For the  appointment  of Price  Waterhouse LLP as
                  the  Company's  auditor,  the vote was  4,887,192  shares FOR;
                  2,100 shares AGAINST; and 920 shares ABSTAINING.

ITEM 5.  OTHER INFORMATION.

                On  July  28,  1997,  National  R.V.  Holdings,   Inc.  and  its
subsidiaries  entered into two separate revolving credit facilities  aggregating
$40 million with Union Bank of California.  National R.V. Holdings,  $20 million
credit facility will be available to finance  potential  acquisitions.  National
R.V. Holdings' two subsidiaries,  National RV and Country Coach, jointly entered
into a separate $20 million credit  facility which will be available for general
corporate and working capital needs and capital  expenditures.  Amounts borrowed
under the credit  facilities will bear interest at the Bank's prime rate or at a
LIBOR-based rate. Both credit facilities are secured by substantially all of the
assets of the Company and its subsidiaries and contain,  among other provisions,
certain financial covenants, including net worth and debt covenants.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.  Exhibits

10.1     Revolving  Credit  Agreement,  dated as of July 28,  1997,  between the
         Company and Union Bank of California, N.A.
10.2     Revolving Credit  Agreement,  dated as of July 28, 1997, among National
         R.V., Inc., Country Coach, Inc.
         and Union Bank of California, N.A.
99       Forward Looking Statements

B.  Reports on Form 8-K

      None
                                     -10-

<PAGE>

                                   SIGNATURES

   Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                     NATIONAL R.V. HOLDINGS, INC.
                                       (Registrant)

         Date: August 12, 1997       By /s/ KENNETH W. ASHLEY

                                     Kenneth W. Ashley
                                     Senior Vice President and Chief Financial
                                      Officer (Principal Accounting and Finance
                                      Officer)


                                     -11-

<PAGE>
                                                           EXHIBIT 10.1

                          REVOLVING CREDIT AGREEMENT

                                   dated as of

                                   July 28, 1997

                                     between

                          NATIONAL R.V. HOLDINGS, INC.
                                  ("Borrower")

                                       and

                         UNION BANK OF CALIFORNIA, N.A.
                                    ("Bank")

                                  $20,000,000

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page(s)
                                 ARTICLE I
                DEFINITIONS AND INTERPRETATIONS...........................  1

1.1  Definitions..........................................................  1
     ADA..................................................................  1
     Affiliate............................................................  1
     Agreement............................................................  1
     Asset................................................................  1
     Asset Sale...........................................................  1
     Bank.................................................................  1
     Bank Expenses........................................................  2
     Bankruptcy Code......................................................  2
     Base LIBOR...........................................................  2
     Borrower.............................................................  2
     Borrowing............................................................  3
     Business Day.........................................................  3
     Capital Expenditures.................................................  3
     Capital Lease........................................................  3
     Capital Lease Obligations............................................  3
     Change of Control....................................................  3
     Closing Date.........................................................  3
     Consolidated Cash Interest Expense...................................  3
     Consolidated EBITDA..................................................  3
     Consolidated Net Income..............................................  4
     Consolidated Tangible Net Worth......................................  4
     Country Coach........................................................  4
     Country Coach/NRV Credit Agreement...................................  4
     Credit Document(s)...................................................  4
     Debt.................................................................  5
     Debt Service.........................................................  5
     Dollars..............................................................  5
     ERISA................................................................  5
     ERISA Event..........................................................  5
     ERISA Group..........................................................  5
     Event of Default.....................................................  6
     Facility Fee.........................................................  6
     Financial Statement(s)...............................................  6
     GAAP.................................................................  6
     Governing Documents..................................................  6
     Governmental Authority...............................................  6
     Guarantor(s).........................................................  6
     Guaranty.............................................................  6
     Guarantees...........................................................  6
     Hazardous Materials..................................................  7
     Indemnified Person(s)................................................  7
                                        i

<PAGE>

     Insolvency Proceeding................................................  7
     Interest Payment Date................................................  7
     Interest Period......................................................  7
     Internal Revenue Code................................................  8
     Investment and Distribution Basket...................................  8
     knowledge of Borrower................................................  8
     Lending Office.......................................................  8
     LIBOR Business Day...................................................  8
     LIBOR Lending Rate...................................................  8
     LIBOR Lending Rate Portion...........................................  8
     LIBOR Reserve Percentage.............................................  8
     Lien.................................................................  9
     Loan(s)..............................................................  9
     Material Adverse Effect..............................................  9
     Maturity Date........................................................  9
     Multiemployer Plan...................................................  9
     NRV..................................................................  9
     Note.................................................................  9
     Notice of Borrowing..................................................  9
     Notice of Conversion or Continuation.................................  9
     Obligations.......................................................... 10
     Operating Lease...................................................... 10
     Participant.......................................................... 10
     PBGC................................................................. 10
     Permitted Debt....................................................... 10
     Permitted Investments................................................ 10
     Permitted Liens...................................................... 11
     Person............................................................... 12
     Plan................................................................. 12
     Purchase Money Lien.................................................. 12
     Quarterly Compliance Certificate..................................... 12
     Real Estate Leases................................................... 12
     Reference Lending Rate............................................... 12
     Reference Lending Rate Portion....................................... 12
     Reference Rate....................................................... 12
     Regulation D......................................................... 12
     Reportable Event..................................................... 13
     Responsible Officer.................................................. 13
     Retiree Health Plan.................................................. 13
     Revolving Credit Commitment.......................................... 13
     Revolving Loans...................................................... 13
     Revolving Loans Daily Balances....................................... 13
     Security Agreement (Borrower)........................................ 13
     Security Agreement (Guarantor)....................................... 13
     Solvent.............................................................. 13
     Stock Pledge Agreement............................................... 14
     Subsidiary........................................................... 14
     Swaps................................................................ 14
     Taxes................................................................ 14
     Transferee........................................................... 14
                                       ii

<PAGE>

     Unfunded Liabilities................................................. 14
     Unmatured Event of Default........................................... 14
     Working Capital...................................................... 15
1.2  Accounting Terms and Determinations.................................. 15
1.3  Computation of Time Periods.......................................... 15
1.4  Construction......................................................... 15
1.5  Exhibits and Schedules............................................... 15
1.6  No Presumption Against Any Party..................................... 15
1.7  Independence of Provisions........................................... 15

                           ARTICLE II
             TERMS OF THE CREDIT FACILITIES............................... 16
2.1  [Intentionally Omitted].............................................. 16
2.2  Revolving Loans...................................................... 16
2.3  [Intentionally Omitted].............................................. 16
2.4  Interest Rates; Payments of Interest................................. 16
2.5  Notice of Borrowing Requirements..................................... 18
2.6  Conversion or Continuation Requirements.............................. 18
2.7  LIBOR Costs.......................................................... 19
2.8  Illegality; Impossibility............................................ 20
2.9  Disaster............................................................. 21
2.10 Increased Risk-Based Capital Cost.................................... 21
2.11 Note; Statements of Obligations...................................... 22
2.12 Holidays............................................................. 22
2.13 Time and Place of Payments........................................... 22
2.14 Facility Fee......................................................... 23
2.15 Maturity Date........................................................ 23

                                   ARTICLE III

                   CONDITIONS PRECEDENT................................... 23
3.1  Conditions to Initial Loan........................................... 23
3.2  Conditions to all Loans.............................................. 25

                                   ARTICLE IV
                   REPRESENTATIONS AND WARRANTIES......................... 25
4.1  Legal Status......................................................... 26
4.2  No Violation; Compliance............................................. 26
4.3  Authorization; Enforceability........................................ 26
4.4  Approvals; Consents.................................................. 26
4.5  Liens................................................................ 26
4.6  Debt................................................................. 26
4.7  Litigation........................................................... 27
4.8  No Default........................................................... 27
4.9  Subsidiaries......................................................... 27
4.10 Taxes................................................................ 27
4.11 Correctness of Financial Statements.................................. 27
4.12 ERISA................................................................ 27
                                       iii

<PAGE>

4.13 Other Obligations..................................................... 28
4.14 Public Utility Holding Company Act.................................... 28
4.15 Investment Company Act................................................ 28
4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc....... 28
4.17 Environmental Condition............................................... 28
4.18 Compliance With ADA................................................... 29

                                    ARTICLE V
                   AFFIRMATIVE COVENANTS................................... 29

5.1  Punctual Payments..................................................... 29
5.2  Books and Records..................................................... 29
5.3  Financial Statements.................................................. 29
5.4  Existence; Compliance with Law........................................ 30
5.5  Insurance............................................................. 31
5.6  Assets................................................................ 32
5.7  Taxes and Other Liabilities........................................... 32
5.8  Financial Condition................................................... 32
5.9  Notice to Bank........................................................ 32
5.10 Employee Benefits..................................................... 33
5.11 Further Assurances.................................................... 34
5.12 Real Estate Leases.................................................... 34
5.13 Environment........................................................... 34
5.14 ADA................................................................... 34

                                   ARTICLE VI
                   NEGATIVE COVENANTS...................................... 35

6.1  Use of Funds; Margin Regulation....................................... 35
6.2  Debt.................................................................. 35
6.3  Liens................................................................. 35
6.4  Merger, Consolidation, Transfer of Assets............................. 35
6.5  Equipment Leases...................................................... 36
6.6  Sales and Leasebacks.................................................. 36
6.7  Asset Sales........................................................... 36
6.8  Investments; New Subsidiaries......................................... 37
6.9  Character of Business................................................. 40
6.10 Distributions......................................................... 40
6.11 Guaranty.............................................................. 41
6.12 Capital Expenditures.................................................. 41
6.13 Transactions with Affiliates.......................................... 41
6.14 Change of Control..................................................... 41
6.15 Transactions Under ERISA.............................................. 41

                                   ARTICLE VII
                   EVENTS OF DEFAULT AND REMEDIES.......................... 42
7.1  Events of Default..................................................... 42
7.2  Remedies.............................................................. 44
                                       iv

<PAGE>

7.3  Remedies Cumulative................................................... 45

                                  ARTICLE VIII
                   TAXES................................................... 45

8.1  Taxes on Payments..................................................... 45
8.2  Indemnification For Taxes............................................. 45
8.3  Evidence of Payment................................................... 45

                                   ARTICLE IX
                   MISCELLANEOUS........................................... 46

9.1  Notices............................................................... 46
9.2  No Waivers............................................................ 46
9.3  Bank Expenses; Documentary Taxes; Indemnification..................... 46
9.4  Amendments and Waivers................................................ 47
9.5  Successors and Assigns; Participations; Disclosure.................... 47
9.6  Counterparts; Effectiveness; Integration.............................. 48
9.7  Severability.......................................................... 48
9.8  GOVERNING LAW......................................................... 48
9.9  Dispute Resolution.................................................... 49
9.10 Confidentiality....................................................... 49
                                        v

<PAGE>

                             EXHIBITS AND SCHEDULES


Exhibit 1.1G        -             Form of Continuing Guaranty

Exhibit 1.1S-1      -             Form of Security Agreement (Guarantor)

Exhibit 1.1S-2      -             Form of Stock Pledge Agreement

Exhibit 2.5(b)      -             Form of Notice of Borrowing

Exhibit 2.6(b)      -             Form of Notice of Conversion or Continuation

Exhibit 3.1(b)      -             Form of Opinions of Borrower's Counsel

Exhibit 5.3(c)      -             Form of Quarterly Compliance Certificate

Schedule 1.1P       -             Permitted Debt

Schedule 4.9        -             Subsidiaries

Schedule 4.12       -             Employee Benefit Plans
                                       vi

<PAGE>

                           REVOLVING CREDIT AGREEMENT

   This REVOLVING CREDIT  AGREEMENT,  dated as of July 28, 1997, is entered into
between Borrower and Bank.

                             The parties hereto hereby agree as follows:

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATIONS

1.1 Definitions.  The following terms, as used herein,  shall have the following
meanings:

                            "ADA" means the Americans with Disabilities Act,
42 U.S.C. ss. 12101, et. seq., and all applicable rules and regulations
promulgated thereunder.

                            "Affiliate" means any Person (i) that, directly or
indirectly,  controls, is controlled by or is under common control with Borrower
or any Subsidiary of Borrower;  (ii) which  directly or indirectly  beneficially
owns or  controls  five  percent  (5%) or more of any class of  voting  stock of
Borrower or any  Subsidiary  of Borrower;  or (iii) five percent (5%) or more of
the voting stock of which is directly or indirectly  beneficially  owned or held
by  Borrower or any  Subsidiary  of  Borrower.  For  purposes of the  foregoing,
"control" (including "controlled by" and "under common control with") shall mean
the  possession,  directly  or  indirectly,  of the power to direct or cause the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities, by contract or otherwise.

                           "Agreement" means this Revolving Credit Agreement,
together with any concurrent or subsequent rider, amendment, schedule or exhibit
to this Revolving Credit Agreement.

                           "Asset" means any interest of a Person in any kind of
property or asset,  whether  real,  personal,  or mixed real and  personal,  and
whether tangible or intangible.

                            "Asset Sale" means any sale, transfer or other
disposition of any of Borrower's or any of its Subsidiary's businesses or Assets
now  owned or  hereafter  acquired  (other  than  any  sale,  transfer  or other
disposition of inventory in the ordinary course of business),  including  shares
of  stock  and  indebtedness  of  any  Subsidiary,   receivables  and  leasehold
interests.

<PAGE>

                            "Bank" means Union Bank of California, N.A.

                            "Bank Expenses" means (i) all reasonable expenses of
Bank paid or incurred in connection with Bank's due diligence and  investigation
of Borrower, including appraisal, filing, recording, documentation,  publication
and search fees and other such expenses,  and all reasonable attorneys' fees and
expenses  (including  attorneys' fees incurred  pursuant to proceedings  arising
under the Bankruptcy  Code and including the allocated  cost of Bank's  in-house
legal  counsel  and   professional   staff)  incurred  in  connection  with  the
structuring,  negotiation, drafting, preparation, execution and delivery of this
Agreement,  the Credit Documents,  and any and all other documents,  instruments
and agreements entered into in connection herewith; (ii) all reasonable expenses
of Bank,  including  attorneys'  fees and expenses  (including  attorneys'  fees
incurred pursuant to proceedings arising under the Bankruptcy Code and including
the allocated cost of Bank's in-house legal counsel and professional staff) paid
or incurred in  connection  with the  negotiation,  preparation,  execution  and
delivery  of any waiver,  forbearance,  consent,  amendment  or addition to this
Agreement or any Credit Document,  or the termination hereof and thereof;  (iii)
all reasonable  costs or expenses paid or advanced by Bank which are required to
be paid by Borrower  under this  Agreement  or the Credit  Documents,  including
taxes and insurance premiums of every nature and kind of Borrowers;  and (iv) if
an Event of Default  occurs,  all reasonable  expenses paid or incurred by Bank,
including  attorneys'  fees and expenses  (including  attorneys'  fees  incurred
pursuant to  proceedings  arising  under the  Bankruptcy  Code and including the
allocated cost of Bank's in-house legal counsel and professional  staff),  costs
of  collection,  suit,  arbitration,  judicial  reference and other  enforcement
proceedings,  and  any  other  reasonable  out-of-pocket  expenses  incurred  in
connection therewith or resulting therefrom,  whether or not suit is brought, or
in connection with any refinancing or  restructuring  of the Obligations and the
liabilities of Borrower under this Agreement,  any of the Credit  Documents,  or
any other document,  instrument or agreement entered into in connection herewith
in the nature of a "workout."

                            "Bankruptcy Code" means The Bankruptcy Reform Act of
1978  (Pub.  L. No.  95-598;  11 U.S.C.  ss.ss.  101 et  seq.),  as  amended  or
supplemented from time to time, or any successor statute,  and any and all rules
and regulations issued or promulgated in connection therewith.

                            "Base LIBOR" applicable to any Interest Period for a
LIBOR Lending Rate Portion means the offered rate per annum  (rounded  upward to
the nearest  one-hundredth of one percent (.01%)),  if any, to first-class banks
in the LIBOR market quoted by Bank at 11:00 a.m.  California time, two (2) LIBOR
Business Days prior to the first day of such Interest Period for Dollar deposits

<PAGE>

of an amount  comparable  to the  principal  amount of the  LIBOR  Lending  Rate
Portion for which the LIBOR Lending Portion is being  determined with maturities
comparable to the Interest Period for which such LIBOR Lending Rate will apply.

                             "Borrower" means National R.V. Holdings, Inc., a
Delaware corporation.

                             "Borrowing" means a borrowing of a Revolving Loan
pursuant to the terms hereof.

                           "Business Day" means any day other than a Saturday, a
Sunday,  or a day on  which  commercial  banks  in  the  City  of  Los  Angeles,
California  are  authorized  or required by law or executive  order or decree to
close.

                             "Capital Expenditures" means expenditures made and
liabilities incurred by any Person for the acquisition,
construction or maintenance of any fixed Assets or
improvements,  replacements,  substitutions,  or  additions  thereto that have a
useful  life of more  than  one (1)  year,  including  the  direct  or  indirect
acquisition  of such  Assets by way of  increased  product or  service  charges,
offset items, or otherwise, including the current expense portion of all Capital
Leases and Operating Leases,  but excluding the current portion of any Debt used
to finance such Capital Expenditures, calculated in accordance with GAAP.

               "Capital Lease" means any lease of an Asset by a Person as lessee
which would,  in  conformity  with GAAP,  be required to be  accounted  for as a
capital lease on the balance sheet of that Person.

                 "Capital Lease Obligations" of a Person means the amount of the
obligations  of such Person  under all Capital  Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

            "Change of Control" shall be deemed to have occurred at such time as
a "person" or "group"  (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934), other than any Affiliates of Siegler,  Collery
& Co.,  becomes  the  "beneficial  owner" (as  defined  in Rule 13d-3  under the
Securities  Exchange Act of 1934),  directly or indirectly,  of more than 25% of
the total  voting  power of all  classes of stock then  outstanding  of Borrower
normally entitled to vote in the election of directors.

           "Closing Date" means the date when all of the conditions set forth in
Section 3.1 have been fulfilled to the satisfaction of Bank and its counsel.

            "Consolidated Cash Interest Expense" means the consolidated interest
payable in cash accrued for the immediately  preceding  twelve (12) month period
on Borrower's and its  Subsidiaries  consolidated  Debt,  including the interest
portion  of  Borrower's  and  its  Subsidiaries'   consolidated   Capital  Lease
Obligations, prepared on a consolidated basis in accordance with GAAP.

            "Consolidated EBITDA" means, as of the date of determination for the
prior twelve (12) month  period,  the amount  calculated as the sum (but without
duplication) of (a)  Consolidated  Net Income,  (b)  Consolidated  Cash Interest
Expense, (c) actual taxes paid in cash by Borrower on a consolidated basis which
reduced Consolidated Net Income,

<PAGE>

(d) total  depreciation  expense,  (e)  total  amortization  expense,  (f) other
non-cash  items  reducing  Consolidated  Net  Income,  and  (g)  whether  or not
otherwise  includable as a separate  item in the statement of such  Consolidated
Net Income for such period,  losses on sales of Assets less the amounts for such
period of non-cash  items  increasing  Consolidated  Net Income,  whether or not
otherwise  includable for such period,  gains on the sale of Assets,  all of the
foregoing  prepared on a consolidated basis for Borrower and its Subsidiaries in
accordance with GAAP.

             "Consolidated Net Income" means, with respect to any fiscal period,
the  consolidated  net income of  Borrower  and its  Subsidiaries  reflected  on
Borrower's Financial Statement for such period, prepared on a consolidated basis
in accordance with GAAP.

                      "Consolidated Tangible Net Worth" means, as of the date of
determination,  Borrower's  and its  Subsidiaries'  consolidated  net  worth (i)
excluding  patents,  licenses,  trademarks,  trade  names,  goodwill  and  other
intangible  Assets,  organizational  expenses  and  monies  due from  Affiliates
(including  officers,  shareholders  and  directors),  but  (ii)  including  the
aggregate principal amount of any subordinated Debt issued by Borrower which has
been approved in writing by Bank; all of the foregoing  calculated in accordance
with GAAP.

               "Country Coach" means Country Coach, Inc., an Oregon corporation.

               "Country  Coach/NRV Credit  Agreement" means that certain Amended
and Restated Revolving Credit Agreement,  dated as of even date herewith,  among
Country Coach/NRV and Bank, as amended or restated from time to time.

               "Credit  Document(s)"  means  each  of the  following  documents,
instruments,  and  agreements  individually  or  collectively,  as  the  context
requires,   and   any   amendments,   replacements,   substitutions,   renewals,
refinancings or restatements thereto or thereof:

               (i)   the Note;

               (ii)  the Security Agreement (Borrower);

               (iii) the Guaranties;

               (iv)  the Security Agreements (Guarantor);

               (v)   the Stock Pledge Agreements; and

<PAGE>

               (vi) such other documents, instruments, and agreements (including
               financing  statements and fixture filings) as Bank may reasonably
               request  in  connection   with  the   transactions   contemplated
               hereunder  or to  perfect  or  protect  the  liens  and  security
               interests granted to Bank in connection herewith.

             "Debt" means, as of the date of determination, the sum, but without
duplication,  of any and  all of a  Person's:  (i)  indebtedness  heretofore  or
hereafter  created,  issued,  incurred  or assumed by such Person  (directly  or
indirectly) for or in respect of money borrowed; (ii) Capital Lease Obligations;
(iii)  obligations  evidenced  by bonds,  debentures,  notes,  or other  similar
instruments;  (iv)  obligations  for the deferred  purchase price of property or
services  (including trade  obligations);  (v) current liabilities in respect of
unfunded  vested  benefits  under any Plan;  (vi)  obligations  under letters of
credit; (vii) obligations under acceptance facilities;  (viii) obligations under
all  guaranties,  endorsements  (other  than for  collection  or  deposit in the
ordinary course of business),  and other contingent  obligations to purchase, to
provide  funds for payment,  or supply funds to invest in any other  Person,  or
otherwise to assure a creditor  against loss;  (ix)  obligations  secured by any
Lien, whether or not such obligations have been assumed; and (x) Swaps.

             "Debt Service" means, as of the date of determination for the prior
twelve (12) month  period,  (i) all payments of principal due and payable on the
current  portion of  Borrower's  long-term  Debt  during such  period,  (ii) the
Consolidated Cash Interest Expense due and payable during such period, including
all  interest  payments due and payable  during such period  pursuant to Section
2.4(e),  (iii) Borrower's  Capital Lease Obligations due and payable during such
period,  and (iv)  Borrower's  federal,  state and local  taxes due and  payable
during such period.

             "Dollars" or "$" means lawful currency of the United States of
America.

             "ERISA" means the Employee  Retirement Income Security Act of 1974,
as  amended  from  time  to  time,  or any  successor  statute,  and any and all
regulations thereunder.

             "ERISA  Event" means (a) a Reportable  Event with respect to a Plan
or Multiemployer  Plan, (b) the withdrawal of a member of the ERISA Group from a
Plan during a plan year in which it was a "substantial  employer" (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate
a Plan in a distress termination (as described in Section 4041(c) of ERISA), (d)
the institution by the PBGC of proceedings to terminate a Plan or  Multiemployer
Plan,  (e) any  event or  condition  (i) that  provides  a basis  under  Section
4042(a)(1),  (2), or (3) of ERISA for the termination of or the appointment of a
trustee to administer,  any Plan or Multiemployer  Plan, of (ii) that may result
in termination of a Multiemployer  Plan pursuant to Section 4041A of ERISA,  (f)
the partial or complete  withdrawal within the meaning of Sections 4203 and 4205
of ERISA of a member of the

<PAGE>

ERISA Group from a Multiemployer Plan, or (g) providing any security to any Plan
under Section 401(a)(29) of the IRC by a member of the ERISA Group.

             "ERISA Group" means Borrower and all members of a controlled  group
of corporations and all trades or business (whether or not  incorporated)  under
common  control which,  together with Borrower are treated as a single  employer
under Section 414 of the Internal Revenue Code.

             "Event of Default" has the meaning set forth in Section 7.1.

             "Facility Fee" has the meaning set forth in Section 2.14.

           "Financial Statement(s)" means, with respect to any accounting period
of any Person,  statements of income and statements of cash flows of such Person
for such period, and balance sheets of such Person as of the end of such period,
setting  forth in each case in  comparative  form figures for the  corresponding
period in the  preceding  fiscal year or, if such period is a full fiscal  year,
corresponding   figures  from  the  preceding  annual  audit,  all  prepared  in
reasonable detail and in accordance with GAAP,  subject to year-end  adjustments
in the case of monthly or quarterly Financial Statements. Financial Statement(s)
shall include the schedules  thereto and annual Financial  Statements shall also
include the footnotes thereto.

             "GAAP" means generally accepted accounting principles in the United
States of America,  consistently applied,  which are in effect as of the date of
this Agreement.  If any changes in accounting principles from those in effect on
the date hereof are hereafter occasioned by promulgation of rules,  regulations,
pronouncements  or  opinions  by or are  otherwise  required  by  the  Financial
Accounting  Standards  Board  or the  American  Institute  of  Certified  Public
Accountants (or successors thereto or agencies with similar functions),  and any
of such changes  results in a change in the method of calculation of, or affects
the results of such calculation of, any of the financial covenants, standards or
terms found herein,  then the parties  hereto agree to enter into and diligently
pursue  negotiations  in order to amend such financial  covenants,  standards or
terms so as to equitably reflect such changes,  with the desired result that the
criteria  for  evaluating  financial  condition  and  results of  operations  of
Borrower  and the  Subsidiaries  shall be the same after such changes as if such
changes had not been made.

              "Governing   Documents"  means  the  certificate  or  articles  of
incorporation,  by-laws,  or other  organizational or governing documents of any
Person.

              "Governmental  Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority or subdivision thereof,  domestic
or  foreign,  exercising  executive,   legislative,   judicial,   regulatory  or
administrative functions of or pertaining to government.

<PAGE>

              "Guarantor(s)" means, individually or collectively, as the context
requires,  Country Coach, NRV, all hereafter formed or acquired  Subsidiaries of
Borrower,  and every other  Person who now or  hereafter  executes a Guaranty in
favor of Bank with respect to the Obligations.

          "Guaranty" and "Guarantees" means, individually or collectively as the
context requires, each certain Continuing Guaranty, now or hereafter executed by
a Guarantor in favor of Bank, substantially in the form of Exhibit 1.1G.

             "Hazardous  Materials"  means  all or any  of  the  following:  (a)
substances that are defined or listed in, or otherwise  classified  pursuant to,
any  applicable  laws  or  regulations  as  "hazardous  substances,"  "hazardous
materials,"  "hazardous  wastes," "toxic  substances," or any other  formulation
intended  to define,  list,  or  classify  substances  by reason of  deleterious
properties  such  as  ignitability,  corrosivity,  reactivity,  carcinogenicity,
reproductive  toxicity,  or "EP  toxicity" or are  otherwise  regulated  for the
protection  of persons,  property or the  environment;  (b) oil,  petroleum,  or
petroleum derived substances,  natural gas, natural gas liquids,  synthetic gas,
drilling  fluids,   produced  waters,  and  other  wastes  associated  with  the
exploration, development, or production of crude oil, natural gas, or geothermal
resources;  (c)  any  flammable  substances  or  explosives  or any  radioactive
materials;  and (d) asbestos in any form or electrical  equipment which contains
any oil or dielectric fluid containing  levels of  polychlorinated  biphenyls in
excess of fifty (50) parts per million.

              "Indemnified Person(s)" has the meaning given to such term in
Section 9.3(c).

              "Insolvency  Proceeding"  means  any  proceeding  commenced  by or
against any Person,  under any  provision of the  Bankruptcy  Code, or under any
other bankruptcy or insolvency law,  including,  but not limited to, assignments
for the benefit of creditors, formal or informal moratoriums,  compositions,  or
extensions with some or all creditors.

             "Interest Payment Date" means:  the last Business Day of each and
every month and the Maturity Date.

             "Interest  Period"  means,  with respect to each LIBOR Lending Rate
Portion,  the period  commencing  on the date of such LIBOR Lending Rate Portion
and ending on the numerically  corresponding  day one (1), two (2), three (3) or
six (6) months  thereafter  as Borrower  may elect  pursuant  to the  applicable
Notice of Borrowing or Notice of Conversion or Continuation;  provided, however,
that:

            (a) any Interest  Period which would otherwise end on a day which is
not a LIBOR Business Day shall be extended to the next succeeding LIBOR Business
Day

<PAGE>

unless such LIBOR  Business  Day falls in another  calendar  month in which case
such Interest Period shall end on the immediately preceding LIBOR Business Day;

             (b) any Interest Period which begins on the last LIBOR Business Day
of  the  calendar  month  (or  on a  day  for  which  there  is  no  numerically
corresponding  day in the  calendar  month at the end of such  Interest  Period)
shall end on the last LIBOR Business Day of the calendar month in which it would
have ended if there were a numerically corresponding day in such calendar month;
and

             (c) no Interest Period may extend beyond the Maturity Date.

             "Internal Revenue Code" means the Internal Revenue Code of 1986, as
supplemented  and amended from time to time, or any successor  statute,  and any
and all regulations and rules promulgated thereunder.

             "Investment and Distribution  Basket" shall mean the sum of (i) Ten
Million  Dollars  ($10,000,000),  plus (ii) an  amount  equal to 100% of the net
amount of all additional equity  contributions in Borrower on a cumulative basis
from the  Closing  Date,  plus  (iii)  all Debt  included  in item  (iii) of the
definition of "Permitted Debt."

             "knowledge of Borrower" means the actual knowledge of a Responsible
Officer of Borrower.

             "Lending  Office"  means Bank's  office  located at its address set
forth on the  signature  pages  hereof,  or such other  office of Bank as it may
hereafter designate as its Lending Office by notice to Borrower.

             "LIBOR  Business  Day"  means  any  Business  Day  on  which  major
commercial  banks are open for  international  business  (including  dealings in
Dollar deposits) in Los Angeles, California and London, England.

             "LIBOR  Lending  Rate" means,  with respect to a LIBOR Lending Rate
Portion,  the rate per annum (rounded  upwards if necessary to the nearest whole
one-hundredth of one percent (.01%)), determined as the sum of: (a) the quotient
of: (i) Base LIBOR for the relevant  Interest  Period of such LIBOR Lending Rate
Portion;  divided by (ii) the number equal to one hundred  percent  (100%) minus
the LIBOR Reserve Percentage with respect to such Interest Period;  plus (b) one
and  one-quarter  (1.25)  percentage  points.  The LIBOR  Lending  Rate shall be
adjusted  automatically on the effective date of any change in the LIBOR Reserve
Percentage, such adjustment to affect any LIBOR Lending Rate Portion outstanding
on such  effective  date to the extent such change is applied  retroactively  to
eurocurrency  funding  of a member  bank in the  Federal  Reserve  System.  Each
determination  of a LIBOR Lending Rate by Bank,  including,  but not limited to,
any  determination  as to the  applicability  or  allocability  of  reserves  to
eurocurrency liabilities or

<PAGE>

as to the amount of such reserves, shall be conclusive and final in the absence
of manifest error.

             "LIBOR  Lending  Rate  Portion"  means  any  portion  of  any  Loan
designated by Borrower as bearing interest at the LIBOR Lending Rate pursuant to
Section 2.5 or 2.6.

             "LIBOR Reserve  Percentage"  means,  for any Interest Period of any
LIBOR  Lending  Rate  Portion,  the daily  average  of the stated  maximum  rate
(rounded  upward  to the  nearest  one-hundredth  of  one  percent  (.01%)),  as
determined by Bank in accordance with its usual procedures (which  determination
shall be conclusive  in the absence of manifest  error),  at which  reserves are
required to be maintained during such Interest Period  (including  supplemental,
marginal,   and  emergency   reserves)  under   Regulation  D  by  Bank  against
"Eurocurrency  liabilities"  (as such term is  defined  in  Regulation  D),  but
without  benefit  or credit of  proration,  exemptions,  or  offsets  that might
otherwise  be available  to Bank from time to time under  Regulation  D. Without
limiting the  generality of the  foregoing,  "LIBOR  Reserve  Percentage"  shall
include any other  reserves  required to be  maintained  by Bank against (i) any
category of liabilities  that includes  deposits by reference to which the LIBOR
Lending Rate for a LIBOR Lending Rate Portion is being  determined  and (ii) any
category of extension of credit or other assets that includes LIBOR Lending Rate
Portion.
             "Lien"  means  any  mortgage,   deed  of  trust,  pledge,  security
interest,  hypothecation,  assignment, deposit arrangement or other preferential
arrangement,  lien,  charge or encumbrance  (including,  any conditional sale or
other title retention agreement, or finance lease) of any kind.

             "Loan(s)" means the Revolving Loans.

            "Material Adverse Effect" means a material adverse effect on (i) the
business, Assets, condition (financial or otherwise),  results of operations, or
reasonably  foreseeable  business  prospects of Borrower,  the  Subsidiaries  of
Borrower  and  Guarantors,  taken as a whole,  (ii) the  ability of  Borrower to
perform its obligations  under this Agreement  (including,  without  limitation,
repayment of the  Obligations as they come due), or the ability of any Guarantor
to perform its  obligations  under the Guaranty to which it is a party, or (iii)
the validity or enforceability of this Agreement,  the Credit Documents,  or the
rights or remedies of Bank hereunder and thereunder.

             "Maturity Date" means July 28, 1999.

             "Multiemployer Plan" means a "multiemployer plan" as defined in
ss.  4001(a)(3)  of ERISA or ss. 3(37) of ERISA to which any member of the ERISA
Group has contributed, or was obligated to contribute,  within the preceding six
plan years (while a

<PAGE>

member of such ERISA Group) including for these purposes any Person which ceased
to be a member of the ERISA Group during such six year period.

             "NRV" means National R.V., Inc., a California corporation.

             "Note" means that certain Secured Promissory Note, dated as of even
date  herewith,  executed  by  Borrower  to the order of Bank,  in the amount of
Twenty Million Dollars ($20,000,000) to evidence the Loans

             "Notice of Borrowing" means an irrevocable  notice from Borrower to
Bank of Borrower's request for a Borrowing pursuant to the terms of Section 2.5,
substantially in the form of Exhibit 2.5(b).

             "Notice of Conversion or Continuation" means a written notice given
pursuant to the terms of Section  2.6(b),  substantially  in the form of Exhibit
2.6(b).

             "Obligations"  means any and all debt and  obligations  of Borrower
owing to Bank and to its successors and assigns,  previously,  now, or hereafter
incurred,  and  howsoever  evidenced,  whether  direct or indirect,  absolute or
contingent,   joint  or  several,  liquidated  or  unliquidated,   voluntary  or
involuntary,  due or not  due,  legal or  equitable,  whether  incurred  before,
during, or after any Insolvency  Proceeding,  and whether recovery thereof is or
becomes  barred  by  a  statute  of  limitations  or  is  or  becomes  otherwise
unenforceable  or unallowable as claims in any Insolvency  Proceeding,  together
with all interest thereupon (including all interest accruing during the pendency
of an Insolvency  Proceeding).  The Obligations shall include,  without limiting
the  generality of the  foregoing,  all  principal and interest  owing under the
Loans,  all Bank  Expenses,  the  Facility  Fee, any other fees and expenses due
hereunder,  and all other  indebtedness  evidenced by this Agreement  and/or the
Note.

            "Operating  Lease" means any lease of an Asset by a Person which, in
conformity with GAAP, is not a Capital Lease.

            "Participant" has the meaning set forth in Section 9.5(d).

            "PBGC" means the Pension Benefit Guaranty  Corporation or any entity
succeeding to any or all of its functions under ERISA.

            "Permitted Debt" means (i) Debt owing to Bank in accordance with the
terms of this  Agreement  and the Credit  Documents  and the  Country  Coach/NRV
Credit  Agreement,  (ii) Debt in the  maximum  principal  amount of One  Hundred
Thousand Dollars ($100,000) secured by Purchase Money Liens, (iii) Debt which is
approved  in  writing  by Bank and  which  is  subordinated  to the  Obligations
pursuant to a  subordination  agreement in form and  substance  satisfactory  to
Bank, (iv) Debt approved in writing by Bank and listed on

<PAGE>

Schedule  1.1P,  (v) Debt owing by any  Subsidiary to Borrower or by Borrower to
any  Subsidiary in accordance  with Section  6.8(d) of this Agreement or Section
6.8(b) of the Country Coach/NRV Credit  Agreement,  and (vi) any Debt assumed in
connection with any acquisition  effected  pursuant to Section 6.8(c),  provided
that after giving effect to such  acquisition,  no Event of Default has occurred
or will result therefrom.

             "Permitted  Investments"  means  any of the  following  investments
denominated  and payable in Dollars,  maturing  within one year from the date of
acquisition,  selected by Borrower:  (i) marketable direct obligations issued or
unconditionally  guaranteed  by the United  States  government  or issued by any
agency  thereof  and backed by the full  faith and credit of the United  States;
(ii) marketable direct  obligations  issued by any state of the United States or
any  political  subdivision  of any  such  state or any  public  instrumentality
thereof  and,  at the time of  acquisition,  having the  highest  credit  rating
obtainable  from  either  Standard  &  Poor's  Corporation  ("S&P")  or  Moody's
Investors  Service,  Inc.  ("Moody's");  (iii)  commercial  paper  or  corporate
promissory  notes bearing at the time of  acquisition  the highest credit rating
either of S&P or Moody's issued by United States, Canadian, European or Japanese
bank holding companies or industrial or financial  companies;  (iv) certificates
of deposit issued by and bankers  acceptances of and interest  bearing  deposits
with Bank;  and (v) money  market funds  organized  under the laws of the United
States or any state  thereof that invest  predominantly  in any of the foregoing
investments permitted under clauses (i), (ii), (iii) and (iv).

             "Permitted Liens" means (i) Liens for current taxes, assessments or
other  governmental  charges which are not delinquent or remain payable  without
any penalty or are being contested in good faith and adequate reserves have been
set aside with respect thereto as required by GAAP and, by reason of nonpayment,
no material  property is subject to a material risk of loss or forfeiture,  (ii)
Liens  in  favor  of  Bank,   (iii)   statutory   Liens,   such  as  mechanics',
materialmen's,  landlord's,  warehousemen's,  and  carriers'  liens,  and  other
similar liens,  other than those  described in clause (i) above,  arising in the
ordinary course of business with respect to obligations which are not delinquent
or are being contested in good faith by appropriate proceedings,  provided that,
if  delinquent,  adequate  reserves have been set aside with respect  thereto as
required by GAAP and, by reason of nonpayment,  no material  property is subject
to a material risk of loss or  forfeiture,  (iv) Purchase  Money Liens  securing
Debt  described  in clause  (ii) of the  definition  of  Permitted  Debt in this
Agreement, (v) judgment and other similar Liens arising in connection with court
proceedings (not otherwise an Event of Default), provided the execution or other
enforcement of such Liens is effectively  stayed and the claims secured  thereby
are being  contested in good faith and by  appropriate  proceedings,  (vi) Liens
(other than Liens created or imposed  under ERISA)  incurred or deposits made in
the  ordinary  course of  business in  connection  with  workers'  compensation,
unemployment  insurance  and other  types of social  security,  or to secure the
performance of tenders,  statutory  obligations,  surety and appeal bonds, bids,
leases,  government  contracts,  performance and return-of-money bonds and other
similar obligations (exclusive in any case of obligations incurred in connection
with the borrowing of money or

<PAGE>

the obtaining of advances or credit), (vii) easements,  licenses,  rights-of-way
and other rights and  privileges  in the nature of easements  and similar  Liens
incidental to the ownership of property,  which are necessary for the conduct of
the activities of Borrower and its  Subsidiaries or which  customarily  exist on
properties of corporations  engaged in similar activities and similarly situated
and not incurred in  connection  with the borrowing of money or the obtaining of
advances or credit and (viii) in the case of any Person which hereafter  becomes
a  Subsidiary  pursuant to Section  6.8(b),  any Lien in respect of its property
existing  at the time such  Person  becomes a  Subsidiary  which is  approved in
writing by Bank,  provided that (x) in the case of an acquisition of Assets of a
Person becoming a Subsidiary, such Lien was not created in contemplation of such
event,  and (y) no such Lien  shall at any time  extend to or cover any Asset of
Borrower  or any  Subsidiary  other  than the  acquired  Assets  on which it was
originally  imposed and improvements  thereto and proceeds thereof,  and (ix) in
the case of any Person which hereafter becomes a Subsidiary  pursuant to Section
6.8(c) or in the case of an  acquisition of Assets  pursuant to Section  6.8(c),
any Lien in respect of the Subsidiary's property at the time such Person becomes
a Subsidiary or such Assets, as the case may be, provided that (x) such Lien was
not  created  in  contemplation  of such event and (y) no such Lien shall at any
time extend to or cover any Asset of Borrower or any  Subsidiary  other than the
Assets on which it was originally imposed and improvements  thereto and proceeds
thereof.

          "Person" means and includes  natural  persons,  corporations,  limited
partnerships,   general  partnerships,   limited  liability  companies,  limited
liability  partnerships,  joint stock companies,  joint ventures,  associations,
companies,  trusts,  banks,  trust companies,  land trusts,  business trusts, or
other  organizations,  irrespective  of  whether  they are legal  entities,  and
governments and agencies and political subdivisions thereof.

         "Plan" means an "employee benefit plan" as defined in ss. 3(3) of ERISA
in which any  personnel  of any member of the ERISA  Group  participate  or from
which any such personnel may derive a benefit, excluding any Multiemployer Plan,
but  including  any plan either  established  or maintained by any member of the
ERISA  Group or to which such Person  contributes  under the laws of any foreign
country.

                   "Purchase  Money Lien" means a Lien on any Asset  acquired by
Borrower or any of its  Subsidiaries  after the Closing Date;  provided that (i)
such Lien  attaches  only to the Asset being  acquired;  (ii) in the case of any
individual Asset whose fair market value or cost exceeds $25,000,  a description
of the Asset being acquired is furnished to Bank; and (iii) the Debt incurred in
connection with such  acquisition  does not exceed one hundred percent (100%) of
the purchase price of such Asset.

            "Quarterly Compliance Certificate" means a certificate of compliance
to be delivered  quarterly in accordance with Section 5.3(c),  substantially  in
the form of Exhibit 5.3(c).

<PAGE>

       "Real Estate Leases" means all of the leases with respect to any interest
in real  property now or  hereinafter  entered into by Borrower as a tenant,  or
which have been, or are in the future,  being  purchased,  assigned or sublet to
Borrower as a tenant.

           "Reference Lending Rate" means the Reference Rate.

           "Reference  Lending  Rate  Portion"  means  any  portion  of any Loan
designated  by  Borrower  as bearing  interest  at the  Reference  Lending  Rate
pursuant to Section 2.5 or 2.6.

           "Reference Rate" means the rate of interest  announced by Bank at its
corporate  headquarters as its reference rate and which serves as the basis upon
which  effective  rates of  interest  are  calculated  for  those  loans  making
reference thereto. The Reference Rate is determined by Bank from time to time as
a means of pricing credit  extensions to some customers and is neither  directly
tied to some external rate of interest or index nor  necessarily the lowest rate
of  interest  charged  by Bank at any  given  time for any  particular  class of
customers or credit extensions.

           "Regulation  D" means  Regulation  D of the Board of Governors of the
Federal Reserve System,  as such regulation may be amended or supplemented  from
time to time.

           "Reportable  Event"  means any of the  events  described  in  Section
4043(c) of ERISA other than a Reportable  Event as to which the  provision of 30
days notice to the PBGC is waived under applicable regulations.

           "Responsible Officer" means either the president, the chief financial
officer or any vice president of a Person, or such other officer,  employee,  or
agent of such Person designated by a Responsible  Officer in a writing delivered
to Bank.

           "Retiree Health Plan" means an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA that provides benefits to individuals after
termination of their employment, other than as required by Section 601 of ERISA.

           "Revolving Credit Commitment" means Twenty Million Dollars
($20,000,000).

           "Revolving  Loans" means the revolving loans made by Bank to Borrower
pursuant to Section 2.2.

           "Revolving  Loans  Daily  Balances"  means the amount  determined  by
taking  the amount of the  obligations  owed  under the  Revolving  Loans at the
beginning of a given day, adding any new Revolving Loans advanced or incurred on
such date, and

<PAGE>

subtracting  any payments or collections on the Revolving Loans which are deemed
to be paid on that date under the provisions of this Agreement.

           "Security   Agreement   (Borrower)"   means  that  certain   Security
Agreement, dated as of even date herewith, between Borrower and Bank.

           "Security   Agreement   (Guarantor)"   means  each  certain  Security
Agreement  now or hereafter  entered into between a Guarantor,  on the one hand,
and Bank, on the other hand, substantially in the form of Exhibit 1.1S-1.

     "Solvent" means,  with respect to any Person on the date any  determination
thereof is to be made,  that on such date: (a) the present fair valuation of the
property  and  assets of such  Person is  greater  than such  Person's  probable
liability in respect of existing debts;  (b) such Person does not intend to, and
does not believe that it will,  incur debts beyond such Person's  ability to pay
as such  debts  mature;  and (c) such  Person is not  engaged in  business  or a
transaction,  and is not about to engage in  business  or a  transaction,  which
would  leave  such  Person  with  property  and  assets  remaining  which  would
constitute  unreasonably  small capital after giving effect to the nature of the
particular  business or  transaction.  For purposes of this  definition  (i) the
"fair valuation" of any property or assets means the amount  realizable within a
reasonable time, either through collection or sale of such property or assets at
their  regular  market  value,  which is the amount  obtainable by a capable and
diligent  Person from an  interested  buyer willing to purchase such property or
assets within a reasonable time under ordinary circumstances;  and (ii) the term
"debts"  includes  any payment  obligation,  whether or not reduced to judgment,
equitable or legal, matured or unmatured,  liquidated or unliquidated,  disputed
or undisputed, secured or unsecured, absolute, fixed or contingent.

            "Stock  Pledge  Agreement"  means each certain  Security  Agreement-
Stock  Pledge  now  or  hereafter   entered  into  between  Borrower  and  Bank,
substantially in the form of Exhibit 1.1S-2.

            "Subsidiary"  means  any  corporation,  limited  liability  company,
partnership,  trust or other entity (whether now existing or hereafter organized
or acquired) of which a Person or one or more Subsidiaries of such Person at the
time owns or controls  directly or  indirectly  more than fifty percent (50%) of
the shares of stock, membership,  partnership or other ownership interest having
general  voting power under  ordinary  circumstances  to elect a majority of the
board of directors, managers or trustees or otherwise exercising control of such
corporation,  limited  liability  company,  partnership,  trust or other  entity
(irrespective of whether at the time stock or any other form of ownership of any
other class or classes  shall have or might have  voting  power by reason of the
happening of any contingency).

<PAGE>

          "Swaps" means payment obligations with respect to interest rate swaps,
currency  swaps and similar  obligations  obligating a Person to make  payments,
whether periodically or upon the happening of a contingency. For the purposes of
this Agreement,  the amount of the obligation under any Swap shall be the amount
determined,  in respect  thereof as of the end of the then most  recently  ended
fiscal  quarter  of  Borrower,  based  on the  assumption  that  such  Swap  had
terminated at the end of such fiscal quarter,  and in making such determination,
if any  agreement  relating  to such Swap  provides  for the  netting of amounts
payable by and to each party thereto or if any such  agreement  provides for the
simultaneous  payment of amounts by and to each  party,  then in each such case,
the amount of such obligation shall be the net amount so determined.

          "Taxes" has the meaning set forth in Section 8.1.

          "Transferee" has the meaning set forth in Section 9.5(e).

         "Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present  value of all benefits  under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions),  all determined as of the then
most  recent  valuation  date for such Plan,  but only to the  extent  that such
excess  represents  a potential  liability of a member of the ERISA Group to the
PBGC or an appointed trustee under Title IV of ERISA.

           "Unmatured  Event of  Default"  means any  condition  or event  which
constitutes  an Event of  Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.

           "Working  Capital" means,  for any period for any Person,  the amount
calculated as current  assets minus current  liabilities  (excluding the current
portion of any long-term Debt) for such period,  all as determined in accordance
with GAAP.

        1.2 Accounting  Terms and  Determinations.  Unless  otherwise  specified
herein,  all accounting  terms used herein shall be interpreted,  all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP.

        1.3 Computation of Time Periods. In this Agreement,  with respect to the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" each
mean "to but excluding."  Periods of days referred to in this Agreement shall be
counted in calendar days unless otherwise stated.

        1.4 Construction.  Unless the context of this Agreement clearly requires
otherwise,  references  to the plural  include the  singular and to the singular
include the plural,

<PAGE>

references to any gender include any other gender,  the part includes the whole,
the term  "including"  is not  limiting,  and the term  "or" has,  except  where
otherwise  indicated,  the inclusive meaning represented by the phrase "and/or."
References  in this  Agreement  to  "determination"  by Bank  include good faith
estimates by Bank (in the case of quantitative  determinations),  and good faith
beliefs by Bank (in the case of qualitative determinations). The words "hereof,"
"herein,"  "hereby,"  "hereunder,"  and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Article,  section,  subsection,  clause,  exhibit and schedule references are to
this Agreement, unless otherwise specified.

       1.5 Exhibits and  Schedules.  All of the exhibits and schedules  attached
hereto shall be deemed incorporated herein by reference.

       1.6 No Presumption Against Any Party. Neither this Agreement,  any of the
Credit Documents,  any other document,  agreement, or instrument entered into in
connection herewith, nor any uncertainty or ambiguity herein or therein shall be
construed or resolved using any  presumption  against any party hereto,  whether
under any rule of  construction or otherwise.  On the contrary,  this Agreement,
the Credit  Documents,  and the other  documents,  instruments,  and  agreements
entered into in  connection  herewith  have been reviewed by each of the parties
and their  counsel  and shall be  construed  and  interpreted  according  to the
ordinary  meanings of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

       1.7 Independence of Provisions.  All agreements and covenants  hereunder,
under the Credit Documents, and the other documents, instruments, and agreements
entered into in connection  herewith shall be given independent effect such that
if a  particular  action or  condition  is  prohibited  by the terms of any such
agreement or covenant, the fact that such action or condition would be permitted
within the  limitations of another  agreement or covenant shall not be construed
as allowing such action to be taken or condition to exist.

                                     ARTICLE

                         TERMS OF THE CREDIT FACILITIES

       2.1 [Intentionally Omitted].

       2.2 Revolving Loans. Provided that no Event of Default or Unmatured Event
of Default has occurred,  and subject to the other terms and conditions  hereof,
Bank agrees to make revolving loans ("Revolving Loans") to Borrower, upon notice
in accordance with Section 2.5(b), from the Closing Date up to but not including
the  Maturity  Date,  the  proceeds of which shall be used only for the purposes
allowed in Section 6.1(b), subject to the following conditions and limitations:

<PAGE>

            (a) the aggregate  principal  amount of Revolving Loans  outstanding
after giving effect to any proposed Borrowing shall not exceed the amount of the
Revolving Credit Commitment;

            (b) Borrower shall not be permitted to borrow, and Bank shall not be
obligated to make, any Revolving Loans to Borrower,  unless and until all of the
conditions  for a  Borrowing  set  forth in  Section  3.2,  have been met to the
satisfaction of Bank in its sole and absolute discretion; and

            (c)  Borrowings  shall be in  minimum  amounts  each of One  Hundred
Thousand Dollars ($100,000), plus increments of One Hundred Thousand Dollars
($100,000) in excess of such minimum amount.

Borrower may repay and,  subject to the terms and  conditions  hereof,  reborrow
Revolving  Loans. All such repayments shall be without penalty or premium except
as otherwise required by Section 2.7 with respect to repayments of LIBOR Lending
Rate  Portions.  Borrower  shall give Bank at least one (1) Business Days' prior
notice of any repayment of a Reference Lending Rate Portion and at least one (1)
LIBOR  Business  Days' prior  notice of any  repayment  of a LIBOR  Lending Rate
Portion.

       2.3 [Intentionally Omitted].

       2.4 Interest Rates; Payments of Interest.

           (a) Interest Rate Options. Borrower shall from time to time designate
one or both of the following two options in accordance  with Sections 2.5(b) and
2.6(b) to apply to all or any  portion  of the unpaid  principal  balance of the
Loans: (i) the Reference Lending Rate; or (ii) the LIBOR Lending Rate; provided,
however,  there  shall be no more than  three (3) LIBOR  Lending  Rate  Portions
outstanding at any time.

           (b)  Default  Rate.  If any payment of  principal  or interest on the
Loans due hereunder shall not be paid when due (whether at the stated  maturity,
by acceleration or otherwise),  in addition to and not in substitution of any of
Bank's  other rights and remedies  with respect to such  nonpayment,  the entire
unpaid principal balance of the Loans shall bear interest at a rate equal to the
otherwise  applicable rate plus three (3) percentage  points (300 basis points),
effective on the day following the date of nonpayment and continuing  until such
overdue payment is paid in full. In addition, interest, Bank Expenses, and other
amounts due  hereunder  not paid when due shall bear  interest at the  Reference
Lending Rate plus three (3) percentage  points (300 basis points),  effective on
the day  following  the date of  nonpayment  and  continuing  until such overdue
payment is paid in full.

<PAGE>

           (c)  Computation  of  Interest.  All  computations  of interest  with
respect to LIBOR  Lending Rate  Portion,  shall be  calculated on the basis of a
year of three  hundred  sixty  (360)  days for the actual  days  elapsed in such
period.  All  computations  of interest  with respect to Reference  Lending Rate
Portions shall be calculated on the basis of a year of three hundred  sixty-five
(365) (except in a leap year, in which case, three hundred sixty-six (366)) days
for the actual days elapsed in such period. In the event that the Reference Rate
announced  is, from time to time,  changed,  adjustment  in the rate of interest
payable  hereunder on all outstanding  Reference  Lending Rate Portions shall be
made as of 12:01 a.m.  (California  time) on the effective date of the change in
the Base Rate.  Interest shall accrue from the first day of the making of a Loan
to the date of repayment of such Loan in accordance  with the provisions of this
Agreement; provided, however, if a Loan is repaid on the same day on which it is
made,  then  one (1)  day's  interest  shall be paid on that  Loan.  Any and all
interest  not paid when due shall  thereafter  be deemed to be a Revolving  Loan
made under  Section 2.2 and shall bear  interest  thereafter  as provided for in
Section 2.4(b).

           (d) Maximum  Interest  Rate.  In no event shall the interest rate and
other charges  hereunder exceed the highest rate permissible under any law which
a  court  of  competent  jurisdiction  shall,  in a  final  determination,  deem
applicable  hereto.  In the  event  that such a court  determines  that Bank has
received  interest  and other  charges  hereunder  in excess of the highest rate
applicable hereto, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations, other than interest, in the
inverse order of maturity,  and the provisions hereof shall be deemed amended to
provide  for  the  highest   permissible  rate.  If  there  are  no  Obligations
outstanding, Bank shall refund to Borrower such excess.

           (e)Payments  of  Interest.  All  accrued  but unpaid  interest on the
Loans, calculated in accordance with this Section 2.4, shall be due and payable,
in arrears, on each and every Interest Payment Date.

       2.5 Notice of Borrowing Requirements.

           (a) Each Borrowing of a Reference  Lending Rate Portion shall be made
on a Business Day and each  Borrowing of a LIBOR  Lending Rate Portion  shall be
made on a LIBOR Business Day.

           (b) Each Borrowing  shall be made upon  telephonic  notice given by a
Responsible  Officer of Borrower,  followed by a Notice of  Borrowing,  given by
facsimile or personal service, delivered to Bank at the address set forth in the
Notice of  Borrowing.  If for a Reference  Lending Rate  Portion,  Bank shall be
given such notice no later than 11:00 a.m.,  California  time,  one (1) Business
Day prior to the day on which such Borrowing is to be made,  and, if for a LIBOR
Lending  Rate  Portion,  Bank shall be given  notice no later  than 11:00  a.m.,
California time, two (2) LIBOR Business Days prior to the day on which

<PAGE>

such  Borrowing is to be made,  and such notice  shall state the amount  thereof
(subject to the provisions of Section 2.2).

           (c) Bank shall not incur any liability to Borrower in acting upon any
telephonic  notice  which  Bank  believes  in good faith to have been given by a
Responsible  Officer of Borrower,  or for  otherwise  acting in good faith under
this Section 2.5, and in making any Loans pursuant to telephonic notice.

           (d) So long as all of the  conditions  for a Borrowing  of a Loan set
forth  herein  have been  satisfied,  Bank shall make the  proceeds of such Loan
available to Borrower on the applicable  Borrowing date by transferring same day
funds, equal to the amount of such Loan, in accordance with written disbursement
instructions  given by Borrower to Bank, in form and substance  satisfactory  to
Bank and otherwise consistent with Section 6.1.

       2.6 Conversion or Continuation Requirements.

           (a)Borrower  shall have the option to: (i) convert,  at any time, all
or any portion of any of the  outstanding  Loans,  in integral  multiples of One
Hundred Thousand Dollars  ($100,000),  from a portion bearing interest at one of
the interest rate options  available  pursuant to Section 2.4(a) to another;  or
(ii) upon the  expiration of any Interest  Period  applicable to a LIBOR Lending
Rate Portion,  to continue all or any portion of such LIBOR Lending Rate Portion
as a LIBOR Lending Rate Portion with the succeeding  Interest  Period(s) of such
continued  LIBOR Lending Rate Portion  commencing on the expiration  date of the
Interest Period previously applicable thereto;  provided,  however, that a LIBOR
Lending Rate  Portion may only be converted to a Reference  Lending Rate Portion
or continued  as a LIBOR  Lending  Rate  Portion on the  expiration  date of the
Interest  Period  applicable  thereto;   provided  further,   however,  that  no
outstanding Loan, or portion thereof, may be continued as, or be converted into,
a LIBOR  Lending Rate  Portion in the event that,  on the earlier of the date of
the  delivery of the Notice of  Conversion  or  Continuation  or the  telephonic
notice in respect thereof, any Event of Default or Unmatured Event of Default is
continuing;  provided  further,  however,  that if Borrower fails to deliver the
appropriate  Notice of Conversion or  Continuation  or the telephonic  notice in
respect thereof  pursuant to the required notice period before the expiration of
the Interest  Period of a LIBOR  Lending Rate  Portion,  such LIBOR Lending Rate
Portion shall  automatically  be converted to a Reference  Lending Rate Portion;
provided  further,  however,  that  no  outstanding  portion  of a  Loan  may be
continued  as, or be converted  into, a LIBOR  Lending Rate Portion in the event
that, after giving effect to any such conversion or continuation, there would be
more than three (3) LIBOR Lending Rate Portions outstanding.

           (b)   Borrower   shall  give   telephonic   notice  of  any  proposed
continuation or conversion  pursuant to this Section 2.6 followed by a Notice of
Conversion or Continuation, given by facsimile or personal service, delivered to
Bank at the address set

<PAGE>

forth in the Notice of  Conversion  or  Continuation,  no later than 11:00 a.m.,
California  time, on the Business Day which is the proposed  conversion date (in
the case of a conversion to a Reference  Lending Rate Portion) and no later than
11:00  a.m.  California  time,  two (2) LIBOR  Business  Days in  advance of the
proposed  conversion or continuation  date (in the case of a conversion to, or a
continuation of, a LIBOR Lending Rate Portion).  If such Notice of Conversion or
Continuation is received by Bank not later than 11:00 a.m.,  California time, on
a LIBOR  Business Day, such day shall be treated as the first LIBOR Business Day
of the required notice period.  In any other event,  such notice will be treated
as having been  received  at the opening of business of the next LIBOR  Business
Day. A Notice of  Conversion or  Continuation  shall  specify:  (1) the proposed
conversion  or  continuation  date  (which  shall be a  Business  Day or a LIBOR
Business  Day,  as  applicable);  (2) the  amount  of the  Revolving  Loan to be
converted  or  continued;   (3)  the  nature  of  the  proposed   conversion  or
continuation;  and (4) in the case of a conversion to or continuation of a LIBOR
Lending Rate Portion, the requested Interest Period.

           (c) Bank shall not incur any liability to Borrower in acting upon any
telephonic  notice  referred to above which Bank  believes in good faith to have
been given by a Responsible  Officer of Borrower or for otherwise acting in good
faith under this Section  2.6.  Any Notice of  Conversion  or  Continuation  (or
telephonic notice in respect thereof) shall be irrevocable and Borrower shall be
bound to convert or continue in accordance therewith.

       2.8 LIBOR Costs. Borrower shall reimburse Bank for any increase in Bank's
costs  (which  shall  include,  but not be limited to,  taxes,  other than taxes
imposed  on the  overall  net  income of Bank fees or  charges),  or any loss or
expense (including,  without limitation,  any loss or expense incurred by reason
of the liquidation or  re-employment of deposits or other funds acquired by Bank
to fund or maintain  outstanding the principal  amount of the Loans) incurred by
it directly or  indirectly  resulting  from the making of any LIBOR Lending Rate
Portion due to: (a) the modification,  adoption,  or enactment of any law, rule,
regulation or treaty or the interpretation  thereof by any governmental or other
authority (whether or not having the force of law) which becomes effective after
the date hereof; (b) the modification or new application of any law,  regulation
or treaty or the  interpretation  thereof by any governmental or other authority
(whether or not having the force of law) which becomes  effective after the date
hereof;  (c)  compliance  by Bank with any request or directive  (whether or not
having the force of law) of any  monetary or fiscal  agency or  authority  which
becomes effective after the date hereof; (d) violations by Borrower of the terms
of this Agreement;  or (e) any prepayment of a LIBOR Lending Rate Portion at any
time prior to the end of the applicable  Interest Period,  including pursuant to
Section 7.2(a).

               The amount of such costs, losses, or expenses shall be determined
solely by Bank based upon the  assumption  that Bank funded one hundred  percent
(100%) of each LIBOR  Lending Rate Portion in the LIBOR market.  In  attributing
Bank's general costs relating to its eurocurrency  operations to any transaction
under this Agreement or averaging any costs over a period of time,  Bank may use
any reasonable attribution or averaging

<PAGE>

methods which it deems appropriate and practical.  Bank shall notify Borrower of
the amount due Bank pursuant to this Section 2.7 in respect of any LIBOR Lending
Rate Portion as soon as practicable but in any event within forty-five (45) days
after the last day of the Interest  Period of such LIBOR  Lending Rate  Portion,
and  Borrower  shall pay to Bank the amount due within  fifteen (15) days of its
receipt of such notice.  A certificate as to the amounts payable pursuant to the
foregoing sentence together with whatever detail is reasonably available to Bank
shall  be  submitted  by Bank to  Borrower.  Such  determination  shall,  if not
objected to within ten (10) days, be conclusive and binding upon Borrower in the
absence of manifest error.  If Bank claims  increased  costs,  loss, or expenses
pursuant to this Section  2.7,  then Bank,  if requested by Borrower,  shall use
reasonable  efforts  to take  such  steps  that  Borrower  reasonably  requests,
including  designating  different Lending Offices,  as would eliminate or reduce
the amount of such increased costs, losses, or expenses,  so long as taking such
steps  would  not,  in  the   reasonable   judgment   of  Bank,   otherwise   be
disadvantageous  to Bank.  Any recovery by Bank or its Lending Office of amounts
previously  borne by  Borrower  pursuant  to this  Section 2.7 shall be promptly
remitted,  without  interest  (unless Bank received  interest on such  recovered
amounts), to Borrower by Bank.

     2.8  Illegality;  Impossibility.  Notwithstanding  anything  herein  to the
contrary,  if Bank determines (which determination shall be conclusive) that any
law, rule, regulation, treaty or directive, or any change therein, or any change
in the interpretation or administration  thereof by any Governmental  Authority,
central  bank  or  comparable   agency  charged  with  the   interpretation   or
administration  thereof,  or compliance by Bank (or its Lending Office) with any
request  or  directive  (whether  or not  having  the  force of law) of any such
authority,  central  bank  or  comparable  agency  shall  make  it  unlawful  or
impossible for Bank (or its Lending  Office) to fund or maintain a LIBOR Lending
Rate  Portion in the LIBOR market or to continue  such  funding or  maintaining,
then Bank shall give notice of such  circumstances  to  Borrower  and (a) in the
case of each and every LIBOR Lending Rate Portion which is outstanding, Borrower
shall,  if requested by Bank,  prepay such LIBOR  Lending Rate  Portion(s) on or
before the date  specified  in such  request,  together  with  interest  accrued
thereon,  and the date so  specified  shall be  deemed to be the last day of the
Interest Period of that LIBOR Lending Rate Portion, and concurrent with any such
prepayment,  Bank shall make a Reference Lending Rate Portion to Borrower in the
principal  amount  equal to the  principal  amount  of the  LIBOR  Lending  Rate
Portions so  prepaid,  and (b) Bank shall not be  obligated  to make any further
LIBOR Lending Rate  Portions  until Bank  determines  that it would no longer be
unlawful or impossible to do so.

       2.9 Disaster.  Notwithstanding  anything herein to the contrary,  if Bank
determines (which  determination shall be conclusive) that (a) Bank is unable to
determine  the LIBOR  Lending  Rate with  respect to any Notice of  Borrowing or
Notice of  Conversion or  Continuation  selecting the LIBOR Lending Rate because
quotations of interest rates for the relevant deposits are not being provided in
the relevant  amounts or for the relative  maturities  or (b) the LIBOR  Lending
Rate will not  adequately  reflect  the cost to Bank of making or funding  LIBOR
Lending Rate Portions, then (i) the right of Borrower to select the LIBOR

<PAGE>

Lending  Rate  shall  be  suspended  until  Bank  notifies   Borrower  that  the
circumstances  causing such suspension no longer exist,  and (ii) Borrower shall
repay in full the then outstanding  principal  balance of all LIBOR Lending Rate
Portions,  together  with  interest  accrued  thereon,  on the  last  day of the
Interest  Period  applicable  to each  such  LIBOR  Lending  Rate  Portion,  and
concurrent  with any such  repayment,  Bank shall make a Reference  Lending Rate
Portion to Borrower in the principal amount equal to the principal amount of the
LIBOR Lending Rate Portions so repaid.

      2.10 Increased  Risk-Based Capital Cost. If the amount of capital required
or expected to be maintained by Bank or any Person directly or indirectly owning
or controlling Bank (each a "Control Person"), shall be affected by:

           (a) the introduction or phasing in of any law, rule or regulation
after the date hereof,

           (b) any change  after the date  hereof in the  interpretation  of any
existing law, rule or regulation by any central bank or United States or foreign
governmental authority charged with the administration thereof, or

           (c)  compliance  by Bank or such Control  Person with any  directive,
guideline  or  request  from  any  central  bank or  United  States  or  foreign
governmental  authority  (whether or not having the force of law) promulgated or
made after the date hereof,

and Bank shall have reasonably  determined that such  introduction,  phasing in,
change  or  compliance  shall  have had or will  thereafter  have the  effect of
reducing (x) the rate of return on Bank's or such Control Person's  capital,  or
(y) the  asset  value  to  Bank or such  Control  Person  of the  Loans  made or
maintained  by Bank,  in either  case to a level  below  that which Bank or such
Control  Person could have  achieved or would  thereafter be able to achieve but
for such  introduction,  phasing in,  change or  compliance  (after  taking into
account Bank's or such Control Person's policies regarding  capital),  in either
case by an amount which Bank in its reasonable judgment deems material, then, if
such costs are or will be charged to all  similarly  situated  customers  of the
Bank generally, within ten (10) days after demand by Bank, Borrower shall either
(i) pay to Bank or such  Control  Person  such  additional  amount or amounts as
shall be sufficient to compensate Bank or such Control  Person,  as the case may
be, for such reduction to the extent the Bank  reasonably  determines  that such
additional  amount is  allocable  to the Loans  made or  maintained  by the Bank
hereunder or (ii) Borrower shall repay in full the outstanding principal balance
of the  Loans,  together  with  all  interest  accrued  and  unpaid  thereon.  A
certificate as to the such additional amounts setting forth in reasonable detail
the  calculations  used in  determining  such  amounts,  shall be  submitted  to
Borrower by the Bank,  and shall be  conclusive  and  binding,  absent  manifest
error.

      2.11 Note; Statements of Obligations.  The Loans and Borrower's obligation
to repay the same shall be evidenced by the Note, this Agreement and the books
and records

<PAGE>

of Bank.  Borrower hereby  authorizes Bank to record in its books and records or
on the Schedule  annexed to the Note the date, type and amount of each Loan, and
of each  continuation,  conversion or payment of principal  received by Bank for
the  account of the  applicable  Lending  Office on account of the Loans,  which
notations  shall,  in the absence of manifest  error,  be  conclusive  as to the
matters so noted;  provided,  however, any failure by Bank to make such notation
with respect to any Loan or  continuation,  conversion or payment  thereof shall
not limit or  otherwise  affect  Borrower's  obligations  hereunder or under the
Note. Bank shall render monthly  statements of the Loans to Borrower,  including
statements of all principal  and interest  owing on the Loans,  and the Facility
Fee and Bank  Expenses  owing,  and such  statements  shall be presumed,  absent
manifest  error,  to be correct and accurate and  constitute  an account  stated
between Borrower and Bank unless,  within thirty (30) days after receipt thereof
by  Borrower,  Borrower  delivers to Bank,  at Bank's  Lending  Office,  written
objection thereof  specifying the error or errors, if any, contained in any such
statement.

      2.12  Holidays.  Any  principal or interest in respect of the Loans (other
than in respect of a LIBOR Lending Rate Portion)  which would  otherwise  become
due on a day other than a Business  Day,  shall  instead  become due on the next
succeeding   Business  Day  and  such  adjustment  shall  be  reflected  in  the
computation of interest; provided, however, that in the event that such due date
shall, subsequent to the specification thereof by Bank, for any reason no longer
constitute a Business Day, Bank may change such specified due date in accordance
with this Section 2.12.

      2.13 Time and Place of Payments.

           (a) All payments  due  hereunder  shall be made  available to Bank in
immediately  available Dollars,  not later than 12:00 p.m., Los Angeles time, on
the day of payment,  to the following  address or such other address as Bank may
from time to time specify by notice to Borrower,  for account of the  applicable
Lending Office:

                 UNION BANK OF CALIFORNIA, N.A.
                 392 Commercial Note Center
                 1980 Saturn Street
                 Monterey Park, California  91754
                 Attention:  Supervisor
                 Facsimile:  (800) 738-2329
                 Telephone:  (800) 618-6466

           (b) Bank  shall have the right to charge any  account  maintained  by
Borrower  with Bank for the  amount of any  payment  due or past due  hereunder,
including  principal and interest  owing on the Loans,  the Facility Fee and all
Bank Expenses.

<PAGE>

           (c) In  addition,  Borrower  hereby  authorizes  Bank at its  option,
without  prior notice to Borrower,  to advance a Revolving  Loan for any payment
due or past due hereunder,  including principal and interest owing on the Loans,
the  Facility  Fee and  all  Bank  Expenses,  and to pay  the  proceeds  of such
Revolving Loan to Bank for application toward such due or past due payment. Such
Revolving Loan shall bear interest at the Reference Lending Rate until converted
by Borrower in accordance with Section 2.6.

      2.14 Facility Fee. On or before the Closing  Date,  Borrower  shall pay to
Bank a fully earned,  non-refundable  facility fee (the  "Facility  Fee") in the
amount of Thirty Thousand Dollars ($30,000).

      2.15 Maturity Date. On the Maturity  Date,  Borrower shall pay to Bank the
entire  unpaid  principal  balance of the Loans  together  with all  accrued but
unpaid interest  thereon,  all Bank Expenses then unpaid and all other costs and
expenses due to Bank pursuant to this Agreement and the Credit  Documents  which
have not been paid by such date.

                                     ARTICLE

                              CONDITIONS PRECEDENT

     3.1 Conditions to Initial Loan. The obligations of Bank to make the initial
Loan is subject to and contingent  upon the fulfillment of each of the following
conditions to the satisfaction of Bank and its counsel:

           (a)  receipt  by Bank of this  Agreement  and  each of the  following
Credit Documents,  all duly executed,  acknowledged where required,  and in form
and substance satisfactory to Bank in its sole and absolute discretion:

               (i)   the Note;

               (ii) the Security Agreement  (Borrower)  together with such UCC-1
financing  statements  and fixture  filings as Bank shall  require  with respect
thereto;

               (iii) a Stock Pledge  Agreement with respect to the capital stock
of Country Coach and NRV;

               (iv) a Guaranty and a Security Agreement (Guarantor) from Country
Coach together with such UCC-1 financing  statements and fixture filings as Bank
shall require with respect thereto; and

               (v) a Guaranty  and a Security  Agreement  (Guarantor)  from NRV,
together with such UCC-1 financing  statements and fixture filings as Bank shall
require with respect thereto;

<PAGE>

           (b) receipt by Bank of a duly executed opinion of Borrower's counsel,
dated as of the Closing Date,  covering the matters set forth in Exhibit  3.1(b)
and  otherwise  in form  and  substance  satisfactory  to Bank in its  sole  and
absolute discretion;

           (c) receipt by Bank of a  Certificate  of the  Secretary of Borrower,
dated as of the Closing Date,  certifying  (i) the  incumbency and signatures of
the  Responsible  Officers of Borrower  who are  executing on behalf of Borrower
this Agreement and the Credit  Documents to which Borrower is a party,  (ii) the
bylaws of Borrower and all  amendments  thereto as being true and correct and in
full force and effect,  and (iii) the  resolutions  of the board of directors of
Borrower as being true and correct and in full force and effect, authorizing the
execution  and  delivery of this  Agreement  and the Credit  Documents  to which
Borrower is a party, and authorizing the transactions contemplated hereunder and
thereunder, and authorizing specific Responsible Officers of Borrower to execute
the same on behalf of Borrower.

           (d)  receipt by Bank of  certificates  of  corporate  status and good
standing  for  Borrower,  dated as of a recent  date prior to the  Closing  Date
showing  that  Borrower is in good  standing  under the laws of the state of its
organization;

           (e) receipt by Bank of Borrower's  Certificate of  Incorporation  and
all amendments thereto,  certified by the Secretary of State of its organization
and dated as of recent date prior to the Closing Date;

           (f) receipt by Bank of certificates of foreign qualification and good
standing  with  respect  for  Borrower,  dated as of a recent  date prior to the
Closing  Date,  showing  that  Borrower  is in good  standing  under the laws of
California;

           (g) receipt by Bank of a certificate signed by the President or Chief
Financial Officer of Borrower,  dated as of the Closing Date, certifying to Bank
that (i) both  immediately  before and  immediately  after giving  effect to the
transactions  contemplated by this Agreement and the Credit Documents,  Borrower
is and will be Solvent;  (ii) the  representations  and  warranties  of Borrower
contained in this  Agreement  and the Credit  Documents are true and correct and
(iii)  both  immediately  before  and  immediately  after  giving  effect to the
transactions  contemplated by this Agreement and the Credit Documents,  no Event
of Default or Unmatured Event of Default is continuing or shall occur;

           (h) receipt by Bank of the Facility Fee and all Bank Expenses owing
on the Closing Date;

           (i)  receipt  by Bank of  Uniform  Commercial  Code and other  public
record  searches  with respect to Borrower,  Country Coach and NRV, in each case
satisfactory to Bank in its sole and absolute discretion;

<PAGE>

           (j)  receipt  by Bank of copies of  insurance  binders  or  insurance
certificates  evidencing Borrower's having obtained insurance in accordance with
Section 5.5,  including  the lender's loss payee  endorsements  required by such
Section;

           (k) no Material Adverse Effect shall have occurred;

           (l) all of the  conditions  set forth in Section  3.1 of the  Country
Coach/NRV  Credit  Agreement  shall have been fulfilled to the  satisfaction  of
Bank;

           (m)  receipt by Bank of any other  documents  which  Bank  reasonably
requests relating to the transactions contemplated hereby; and

           (n) the Closing Date shall have occurred on or before July 31,
1997;

       3.2  Conditions  to all Loans.  Bank's  obligation  hereunder to make any
Loans to  Borrower  (including  the  initial  Loan) is  further  subject  to and
contingent  upon the  fulfillment  of each of the  following  conditions  to the
satisfaction of Bank:

           (a) receipt by Bank of a Notice of  Borrowing  as required by Section
2.4(b) and written  disbursement  instructions  to Bank  consistent with Section
6.1;

           (b) immediately before and after such Borrowing,  no Event of Default
or Unmatured Event of Default shall have occurred; and

           (c) the  representations and warranties of Borrower contained in this
Agreement shall be true and correct on and as of the date of such Borrowing.

                                     ARTICLE

                         REPRESENTATIONS AND WARRANTIES

       In order to induce Bank to enter into this Agreement and to make Loans to
Borrower,  Borrower makes the following  representations and warranties to Bank,
which  representations  and warranties  shall be true and correct on the Closing
Date and on the date of each Borrowing.

       4.1 Legal Status.  Borrower is a corporation  duly organized and existing
under the laws of Delaware.  Borrower and each of its Subsidiaries has the power
and  authority to own its own Assets and to transact the business in which it is
engaged, and is properly licensed, qualified to do business and in good standing
in every  jurisdiction in which it is doing business where failure to so qualify
could have a Material Adverse Effect.

<PAGE>

       4.2 No Violation;  Compliance. The execution, delivery and performance of
this Agreement and the Credit  Documents to which Borrower is a party are within
Borrower's powers, are not in conflict with the terms of the Governing Documents
of Borrower,  and do not result in a breach of or constitute a default under any
contract, obligation, indenture or other instrument to which Borrower is a party
or by which  Borrower is bound or affected.  There is no law, rule or regulation
(including Regulations G, T, U and X of the Federal Reserve Board), nor is there
any judgment,  decree or order of any court or Governmental Authority binding on
Borrower which would be contravened by the execution,  delivery,  performance or
enforcement  of this  Agreement and the Credit  Documents to which Borrower is a
party.

     4.3 Authorization;  Enforceability. Borrower has taken all corporate action
necessary to authorize  the  execution  and delivery of this  Agreement  and the
Credit  Documents  to which  Borrower is a party,  and the  consummation  of the
transactions  contemplated hereby and thereby. Upon their execution and delivery
in accordance with the terms hereof,  this Agreement and the Credit Documents to
which Borrower is a party will constitute  legal,  valid and binding  agreements
and  obligations of Borrower  enforceable  against  Borrower in accordance  with
their respective terms,  except as enforceability  may be limited by bankruptcy,
insolvency,  and similar laws and equitable principles affecting the enforcement
of creditors' rights  generally,  and except to the extent any applicable law or
any underlying contract, agreement, instrument or other documents relating to or
governing  any item of  collateral  secured by Bank  prohibits  the grant of any
security interest or collateral assignment contemplated thereby.

       4.4 Approvals;  Consents. No approval, consent, exemption or other action
by, or notice to or filing  with,  any  Governmental  Authority  is necessary in
connection  with the  execution,  delivery,  performance  or enforcement of this
Agreement or the Credit  Documents  other than such filings  required to perfect
the security interests created by the Credit Documents.

       4.5 Liens.  Borrower and each of its Subsidiaries has good and marketable
title to, or valid leasehold  interests in, all of its Assets, free and clear of
all Liens or rights of others, except for Permitted Liens.

       4.6 Debt.  Borrower and each of its  Subsidiaries  has no Debt other than
Permitted Debt.

    4.7 Litigation. There are no suits, proceedings,  claims or disputes pending
or, to the knowledge of Borrower,  threatened,  against or affecting Borrower or
any of its Assets,  or any  Subsidiary  of Borrower or any of such  Subsidiary's
Assets,  which are not fully covered by applicable  insurance and as to which no
reservation of rights has been taken by the insurer thereunder.

<PAGE>

       4.8 No  Default.  No Event of  Default or  Unmatured  Event of Default is
continuing or would result from the incurring of  obligations  by Borrower under
this Agreement or the Credit Documents.

    4.9 Subsidiaries.  Set forth in Schedule 4.9 is a complete and accurate list
of Borrower's  Subsidiaries,  showing the  jurisdiction of incorporation of each
and showing the percentage of Borrower's  ownership of the outstanding  stock of
each  Subsidiary.  All of the  outstanding  capital stock of each Subsidiary has
been validly issued, is fully paid and  nonassessable,  and is owned by Borrower
free and clear of all Liens except Permitted Liens.

     4.10 Taxes.  All tax returns  required to be filed by Borrower  and each of
its  Subsidiaries in any  jurisdiction  have in fact been filed,  and all taxes,
assessments,  fees and other governmental  charges upon Borrower and each of its
Subsidiaries  or upon any of their Assets,  income or franchises,  which are due
and  payable  have been paid  other  than (i) those  presently  payable  without
penalty or interest and those being  contested in good faith by appropriate  and
timely actions or proceedings  diligently pursued with respect to which adequate
reserves  have been  established  in  accordance  with  GAAP  and,  by reason of
nonpayment,  no  material  property  is subject  to a  material  risk of loss or
forfeiture,  and (ii) those the non-payment or non-filing of which, individually
or in the aggregate, do not, and are not reasonably expected to, have a Material
Adverse  Effect.  The  provisions for taxes on the books of Borrower and each of
its Subsidiaries are adequate for all open years, and for Borrower's and each of
its Subsidiaries' current fiscal period.

      4.11 Correctness of Financial Statements.  Borrower's consolidated audited
Financial  Statements  as of the fiscal year ended  December 31,  1996,  and all
information and data furnished by Borrower to Bank in connection therewith,  are
complete and correct and accurately  and fairly present the financial  condition
and  results  of  operations  of  Borrower  and  its  Subsidiaries  as of  their
respective  dates.  Any forecasts of future financial  performance  delivered by
Borrower  to Bank  have been  made in good  faith  and are  based on  reasonable
assumptions and  investigations by Borrower.  Said audited Financial  Statements
have been prepared in accordance  with GAAP.  Since such dates there has been no
change in  Borrower's  or its  Subsidiaries'  financial  condition or results of
operations  sufficient  to have a  Material  Adverse  Effect.  Borrower  and its
Subsidiaries  have no  contingent  obligations,  liabilities  for taxes or other
outstanding financial obligations which are material in the aggregate, except as
disclosed in such statements, information and data.

      4.12 ERISA.  Neither  Borrower nor any member of the ERISA Group maintains
or contributes  to any Plan or  Multiemployer  Plan,  other than those listed on
Schedule  4.12.  Borrower and each member of the ERISA Group have  satisfied the
minimum funding standards of ERISA and the Internal Revenue Code with respect to
each Plan and  Multiemployer  Plan to which it is  obligated to  contribute.  No
ERISA Event has occurred not has any other event  occurred that may result in an
ERISA Event that  reasonably  could be expected to result in a Material  Adverse
Effect. None of Borrower, any member of the

<PAGE>

ERISA Group,  or any  fiduciary of any Plan is subject to any direct or indirect
liability  with  respect to any Plan  (other  than to make  regularly  scheduled
required  contributions and to pay Plan benefits in the normal course) under any
applicable law, treaty, rule, regulation, or agreement. Neither Borrower nor any
member of the ERISA  Group is  required  to provide  security  to any Plan under
Section  401(a)(29)  of the  Internal  Revenue  Code.  Each Plan will be able to
fulfill its benefit  obligations  as they come due in  accordance  with the Plan
documents and under GAAP.

      4.13 Other  Obligations.  Borrower and each of its  Subsidiaries is not in
default on any Debt, and Borrower and each of its Subsidiaries is not in default
on any other lease, commitment, contract, instrument or obligation which default
reasonably could be expected to have a Material Adverse Effect.

      4.14  Public  Utility  Holding  Company  Act.  Borrower  is not a "holding
company," or an "affiliate" of a "holding company" or a "subsidiary  company" of
a "holding  company,"  within the meaning of the Public Utility  Holding Company
Act of 1935, as amended.

      4.15 Investment Company Act. Borrower is not an "investment company," or a
company  "controlled"  by an  "investment  company,"  within the  meaning of the
Investment Company Act of 1940, as amended.

      4.16 Patents,  Trademarks,  Copyrights,  and Intellectual  Property,  etc.
Borrower and each  Subsidiary  of Borrower has all  necessary,  patents,  patent
rights, licenses, trademarks,  trademark rights, trade names, trade name rights,
copyrights,  permits, and franchises in order for it to conduct its business and
to operate its Assets,  without known conflict with the rights of third Persons,
and all of same are valid and subsisting.  The  consummation of the transactions
contemplated  by this  Agreement  will not alter or impair any of such rights of
Borrower or any Subsidiary of Borrower. Borrower and each Subsidiary of Borrower
has not been charged or, to the best of Borrower's  knowledge,  threatened to be
charged  with  any  infringement  or  infringed  on  any,  unexpired  trademark,
trademark registration,  trade name, patent, copyright,  copyright registration,
or other proprietary right of any Person.

      4.17  Environmental  Condition.  None of  Borrower's  or its  Subsidiary's
Assets has ever been used by Borrower or, to the best of  Borrower's  knowledge,
by previous  owners or  operators  in the  disposal  of, or to  produce,  store,
handle,  treat,  release, or transport,  any Hazardous Materials in violation of
applicable  laws,  rules or regulations.  None of Borrower's or its Subsidiary's
Assets has ever been  designated  or  identified  in any manner  pursuant to any
environmental  protection  statute as a Hazardous  Materials disposal site, or a
candidate for closure pursuant to any environmental  protection  statute. To the
best of Borrower's knowledge, no Lien arising under any environmental protection
statute has attached to any revenues or to any real or personal  property  owned
or operated by Borrower

<PAGE>

or any Subsidiary of Borrower.  Neither  Borrower nor any Subsidiary of Borrower
has received a summons,  citation,  notice,  or directive from the Environmental
Protection Agency or any other federal or state  governmental  agency concerning
any action or omission by Borrower or any  Subsidiary  of Borrower  resulting in
the releasing or disposing of Hazardous Materials into the environment.

      4.18 Compliance With ADA.  Borrower and its Subsidiaries  have received no
notice or complaint  regarding any noncompliance  with the ADA of their premises
or of Borrower's or its  Subsidiary's  employment  practices and, to the best of
Borrower's knowledge,  there has been no threatened litigation alleging any such
noncompliance by Borrower or its Subsidiaries or their premises.

                                     ARTICLE

                              AFFIRMATIVE COVENANTS

   Borrower covenants and agrees that from the Closing Date and thereafter until
the  indefeasible   payment,   performance  and  satisfaction  in  full  of  the
Obligations and Bank has terminated the Revolving Credit Commitment,  and all of
Bank's other obligations to Borrower have been terminated, Borrower shall:

       5.1 Punctual  Payments.  Punctually pay the interest and principal on the
Loans, the Facility Fee and all Bank Expenses, and any other fees or liabilities
due under this Agreement and the Credit Documents, at the times and place and in
the manner specified in this Agreement or the Credit Documents.

       5.2 Books and Records.  Maintain,  and cause each of its  Subsidiaries to
maintain,  adequate  books and records in accordance  with GAAP,  and permit any
officer,  employee or agent of Bank, at any reasonable time and, unless an Event
of Default has occurred,  upon reasonable advance notice, to inspect,  audit and
examine such books and records, and to make copies of the same.

       5.3 Financial Statements.  Deliver to Bank the following, all in form and
detail satisfactory to Bank and in such number of copies as Bank may request:

           (a)as soon as available but not later than forty-five (45) days after
and  as of the  close  of  each  quarterly  accounting  period,  a  consolidated
Financial Statement for Borrower and its Subsidiaries prepared by Borrower which
shall include Borrower's and its Subsidiaries'  balance sheet as of the close of
such period, Borrower's and its Subsidiaries'  consolidated statement of income,
operations,  and retained  income of such period and year to date,  certified by
the Chief Financial Officer of Borrower as being complete and correct and fairly
presenting  Borrower's and its Subsidiaries'  financial condition and results of
operations;

<PAGE>

           (b) as soon as available but not later than one hundred  twenty (120)
days after and as of the close of each of its fiscal  years,  a complete copy of
Borrower's and its Subsidiaries' consolidated audited Financial Statement, which
shall include at least Borrower's and its Subsidiaries'  balance sheet as of the
close of such fiscal year,  and Borrower's  and its  Subsidiaries'  statement of
income and retained  earnings  and  statement of cash flow for such fiscal year,
certified  by Price  Waterhouse,  LLP or  another  certified  public  accountant
selected by Borrower and  reasonably  satisfactory  to Bank,  which  certificate
shall  not be  qualified  in any  manner  whatsoever,  and shall  include  or be
accompanied  by a  statement  (which  may be in the form of a  footnote  to such
audited Financial  Statement  similar to the disclosure  contained in Borrower's
audited  Financial  Statements  for the year ended  December 31, 1996) from such
accountant  that during the  examination,  solely with respect to accounting and
auditing  matters  herein,  there was  observed no Event of Default or Unmatured
Event of Default,  or a statement of such Event of Default or Unmatured Event of
Default  if any is found  and the  actions  taken or to be  taken  with  respect
thereto;

           (c)as soon as available but not later than forty-five (45) days after
and as of the end of each fiscal  quarter,  a Quarterly  Compliance  Certificate
from the Chief Financial Officer or President of Borrower,  stating, among other
things,  that he has reviewed the  provisions  of this  Agreement and the Credit
Documents  and that  there  exists no Event of  Default  or  Unmatured  Event of
Default,  and  containing  the  calculations  and  other  details  necessary  to
demonstrate  compliance with Sections 5.8 and 6.12 and providing information for
the most recently completed twelve (12) month period;

           (d) as soon as available,  any other Financial Statement for Borrower
and  its  Subsidiaries,   including  any  Financial   Statement  which  contains
consolidated or consolidating information;

           (e) promptly upon receipt by Borrower,  copies of any and all reports
and management  letters  submitted to Borrower or any of its Subsidiaries by any
certified public  accountant in connection with any examination of Borrower's or
any of its Subsidiaries' financial records made by such accountant; and

           (f) from time to time such other  information  as Bank may reasonably
request.

       5.4 Existence; Compliance with Law. Preserve and maintain, and cause each
of its Subsidiaries to preserve and maintain,  its corporate  existence and good
standing in the state of its  organization,  qualify and remain  qualified,  and
cause each of its  Subsidiaries  to qualify and remain  qualified,  as a foreign
corporation  in  every  jurisdiction  where  the  failure  to  be  so  qualified
reasonably  could be expected to have a Material  Adverse Effect;  and preserve,
and cause each of its  Subsidiaries to preserve,  all of its licenses,  permits,
governmental  approvals,  rights,  privileges  and franchises  required,  in the
Borrower's reasonable determination,  for its operations;  and comply, and cause
each of its Subsidiaries

<PAGE>

to comply, with the provisions of its Governing Documents; and comply, and cause
each of its  Subsidiaries  to comply,  with the  requirements  of all applicable
laws, rules, regulations,  orders of any Governmental Authority having authority
or  jurisdiction  over it, and  comply,  and cause each of the  Subsidiaries  to
comply,  with all requirements  for the maintenance of its business,  insurance,
licenses,  permits,  governmental approvals,  rights,  privileges and franchises
where  failure  to so comply  reasonably  could be  expected  to have a Material
Adverse Effect.

       5.5 Insurance.

           (a) Maintain and keep in force, and cause each of its Subsidiaries to
maintain and keep in force,  insurance  of the types and in amounts  customarily
carried  by  companies  engaged in the same or similar  business,  or  similarly
situated,   including  fire,  extended  coverage,  public  liability,   business
interruption,  property damage and workers' compensation insurance,  and deliver
to Bank  from  time to  time at  Bank's  request  schedules  setting  forth  all
insurance  then in effect.  All  insurance  required  herein shall be written by
companies  which  are  authorized  to do  insurance  business  in the  State  of
California. All hazard insurance and such other insurance as Bank shall specify,
shall  contain a  California  Form 438BFU  (NS)  endorsement,  or an  equivalent
endorsement  satisfactory to Bank, showing Bank as sole loss payee thereof,  and
shall contain a waiver of warranties.  Every policy of insurance  referred to in
this  Section 5.5 shall  contain an  agreement  by the insurer  that it will not
cancel such policy  except after 30 days prior  written  notice to Bank and that
any  loss  payable  thereunder  shall  be  payable  notwithstanding  any  act or
negligence of Borrower or Bank which might,  absent such agreement,  result in a
forfeiture of all or a part of such insurance payment.

           (b) Original  policies or certificates  thereof  satisfactory to Bank
evidencing  such insurance  shall be delivered to Bank at least 30 days prior to
the expiration of the existing or preceding  policies.  Borrower shall give Bank
prompt  notice of any loss  covered by such  insurance  in excess of One Hundred
Thousand Dollars ($100,000), and Bank shall have the right to adjust any loss in
excess of One Hundred Thousand Dollars ($100,000). Bank shall have the exclusive
right to adjust all losses in excess of One Hundred Thousand Dollars  ($100,000)
payable  under any such  insurance  policies  without any  liability to Borrower
whatsoever in respect of such  adjustments.  Any monies  received as payment for
any loss under any insurance policy,  including the insurance policies mentioned
above,  which  are  less  than  One  Hundred  Thousand  Dollars  ($100,000)  per
occurrence or Five Hundred Thousand  Dollars  ($500,000) in the aggregate in any
fiscal year of Borrower,  shall be paid to Borrower,  and any monies received in
excess of such amounts shall be paid over to Bank to be applied at the option of
Bank either to the prepayment of the Obligations  without premium, in such order
or manner as Bank may elect,  or shall be  disbursed  to  Borrower  under  stage
payment terms  reasonably  satisfactory  to Bank for  application to the cost of
repairs,   replacements,   or  restorations.   All  repairs,   replacements,  or
restorations  shall be effected  with  reasonable  promptness  and shall be of a
value at least equal to the value of the

<PAGE>

items or  property  destroyed  prior to such  damage  or  destruction.  Upon the
occurrence  of an Event of  Default,  Bank  shall  have the  right to apply  all
prepaid premiums to the payment of the Obligations in such order or form as Bank
shall determine.  Borrower shall,  concurrently  with the financial  information
required to be  delivered  by Borrower  pursuant to Section  5.3(b),  deliver to
Bank, as Bank may request,  copies of  certificates  describing all insurance of
Borrower then in effect.

    5.6 Assets.  Maintain, keep and preserve, and cause each of its Subsidiaries
to maintain, keep and preserve, all of its Assets (tangible or intangible) which
in Borrower's  reasonable  determination are useful or necessary to its business
in good  repair and  condition,  and from time to time make  necessary  repairs,
renewals  and  replacements  thereto  so that  such  Assets  shall be fully  and
efficiently preserved and maintained.

       5.7 Taxes and Other  Liabilities.  Pay and discharge  when due, and cause
each of its  Subsidiaries to pay and discharge when due, any and all assessments
and taxes,  both real or personal and including  federal and state income taxes,
and any and all other Permitted Debt,  except where the same are being contested
in good faith and adequate  reserves have been set aside with respect thereto as
required by GAAP and, by reason of nonpayment,  no material  property is subject
to a material risk of loss or forfeiture.

       5.8 Financial Condition.  Maintain:

           (a) a  Consolidated  Tangible  Net  Worth  as of the last day of each
fiscal quarter of not less than the sum of $33,000,000, plus (i) an amount equal
to 50% of Borrower's Consolidated Net Income on a cumulative basis from April 1,
1997,  plus (ii) an  amount  equal to 100% of the net  amount of all  additional
equity contributions in Borrower on a cumulative basis from the Closing Date.

           (b) a ratio of its Debt  (excluding  Debt owing under the  Continuing
Guaranty  executed by Borrower in favor of Bank with respect to the  obligations
owing under the NRV/Country  Coach Agreement) to its  Consolidated  Tangible Net
Worth at all times not greater than 1.75:1.0.

           (c) a ratio of Consolidated EBITDA to Debt Service as of the last day
of each fiscal year not less than 1.20:1.0.

           (d) its Working Capital at all times not less than $17,000,000.

       5.9 Notice to Bank. Promptly,  upon Borrower acquiring knowledge thereof,
give written notice to Bank of:

           (a) all litigation affecting Borrower where the amount claimed is
in excess of applicable insurance;

<PAGE>

           (b) any  dispute  which  may  exist  between  Borrower  or any of its
Subsidiaries, on the one hand, and any Governmental Authority or law enforcement
authority,  on the other,  if the  determination  of such  dispute  could have a
Material Adverse Effect;

           (c) any labor controversy resulting in or threatening to result in a
strike against Borrower or any of its Subsidiaries;

           (d) any  proposal  by any public  authority  received  by Borrower to
acquire the Assets or business of Borrower or any of its Subsidiaries;

           (e) all notices or claims which may be received by Borrower or any of
its  Subsidiaries  and  involving  claims  made by any Person as to any  alleged
noncompliance of Borrower's or such Subsidiary's  premises with the requirements
of the ADA;

           (f) any Change of Control;

           (g) any Event of Default or Unmatured Event of Default; and

           (h) any  other  matter  which has  resulted  or  reasonably  could be
expected to result in a Material Adverse Effect.

      5.10 Employee Benefits.

           (a)(i)  Promptly,  and in any event  within 10  Business  Days  after
Borrower  or any of the  Subsidiaries  knows or has reason to know that an ERISA
Event has  occurred  that  reasonably  could be expected to result in a Material
Adverse  Effect,  deliver or cause to be  delivered a written  statement  of the
Chief Financial  Officer of Borrower  describing such ERISA Event and any action
that is being taken with respect thereto by Borrower,  any such  Subsidiary,  or
member  of the ERISA  Group,  and any  action  taken or  threatened  by the IRS,
Department of Labor, or PBGC. Borrower or such Subsidiary, as applicable,  shall
be deemed to know all facts known by the  administrator  of any Plan of which it
is the plan sponsor; (ii) promptly and in any event within 3 Business Days after
the filing  thereof with the IRS,  deliver a copy of each funding waiver request
filed with respect to any Plan and all communications  received by Borrower, any
member of the ERISA Group with respect to such request;  and (iii)  promptly and
in any event  within 3 Business  Days  after  receipt  by  Borrower,  any of its
Subsidiaries or, to the knowledge of Borrower, any member of the ERISA Group, of
the PBGC's  intention  to  terminate  a Plan or to have a trustee  appointed  to
administer a Plan, deliver copies of each such notice.

           (b) Cause to be delivered to Bank, upon Bank's  request,  each of the
following:  (i) a copy of each Plan (or,  where any such plan is not in writing,
complete  description  thereof) (and if applicable,  related trust agreements of
other   funding   instruments)   and  all   amendments   thereto,   all  written
interpretations thereof and written descriptions thereof

<PAGE>

that have been  distributed to employees or former  employees of Borrower or its
Subsidiaries;  (ii) the most recent  determination letter issued by the IRS with
respect to each Plan; (iii) for the three most recent plan years, annual reports
on Form 5500 Series required to be filed with any  governmental  agency for each
Plan; (iv) all actuarial reports prepared for the last three plan years for each
Plan; (v) a listing of all Multiemployer Plans, with the aggregate amount of the
most recent annual  contributions  required to be made by Borrower or any member
of the ERISA  Group to each such plan and  copies of the  collective  bargaining
agreements  requiring such  contributions;  (vi) any  information  that has been
provided  to  Borrower  or any member of the ERISA  Group  regarding  withdrawal
liability under any  Multiemployer  Plan; and (vii) the aggregate  amount of the
most  recent  annual  payments  made to  former  employees  of  Borrower  or its
Subsidiaries under any Retiree Health Plan.

      5.11 Further Assurances.  Execute and deliver, or cause to be executed and
delivered,  upon the request of Bank and at Borrower's expense,  such additional
documents,  instruments  and agreements as Bank may  reasonably  determine to be
necessary or advisable to carry out the  provisions  of this  Agreement  and the
Credit Documents,  and the transactions and actions  contemplated  hereunder and
thereunder.

      5.12 Real Estate Leases. Perform all of its material obligations under all
of the Real  Estate  Leases and deliver to Bank a copy of all notices of default
or breach under any Real Estate  Lease  within  three (3) days of receiving  the
same.

      5.13  Environment.  Be and remain,  and cause each of its Subsidiaries and
each operator of any of Borrower's or any of its Subsidiaries'  Assets to be and
remain,  in  compliance  with the  provisions  of all  federal,  state and local
environmental,  health and safety laws, codes and ordinances,  and all rules and
regulations  issued  thereunder except where any such  noncompliance  reasonably
would not be expected to have a Material Adverse Effect; notify Bank immediately
of any notice of a hazardous discharge or environmental  complaint received from
any Governmental  Authority or any other Person;  notify Bank immediately of any
hazardous  discharge  from or  affecting  its premises  not in  compliance  with
applicable laws; immediately contain and remove the same, in compliance with all
applicable  laws;  promptly  pay any  fine or  penalty  assessed  in  connection
therewith unless it is being contested in good faith and adequate  reserves have
been set aside  with  respect  thereto  as  required  by GAAP and,  by reason of
nonpayment,  no  material  property  is subject  to a  material  risk of loss or
forfeiture;  permit Bank to inspect the  premises  at any  reasonable  time and,
unless an Event of Default has occurred,  upon  reasonable  advance  notice,  to
conduct tests  thereon,  and to inspect all books,  correspondence,  and records
pertaining thereto; and at Bank's reasonable request, and at Borrower's expense,
provide a report of a qualified environmental engineer,  reasonably satisfactory
in scope,  form and  content  to Bank,  and such  other and  further  assurances
reasonably satisfactory to Bank that the condition has been corrected.

           5.14 ADA.  Observe and comply,  and cause each of its Subsidiaries to
observe  and  comply,   in  all  material  respects  with  all  obligations  and
requirements of the ADA

<PAGE>

as it  applies to their  premises,  which  shall  include,  without  limitation,
installing  or  constructing  all  improvements  or  alterations  which  may  be
necessary to cause such  premises to be  accessible to all persons if the use of
such premises or any part thereof becomes a "public  accommodation,"  as defined
in the ADA,  or in the  event  additional  building  improvements  are  added or
incorporated  into  the  existing   improvements,   and  making  any  reasonable
accommodations  which may be necessary to accommodate  the needs or requirements
of any  existing  or future  employee  of  Borrower  and such  Subsidiaries,  as
applicable.

                                     ARTICLE

                               NEGATIVE COVENANTS

       Borrower  further  covenants  and agrees that from the  Closing  Date and
thereafter until the indefeasible payment,  performance and satisfaction in full
of the Obligations and the termination of the Revolving Credit  Commitment,  and
all of Bank's other obligations to Borrower have been terminated, Borrower shall
not without the prior written consent of Bank:

       6.1 Use of Funds; Margin Regulation.

           (a) Use any  proceeds of the  Revolving  Loans for any purpose  other
than to finance corporate acquisitions, subject to Section 6.8(b);

           (b) Use any portion of the  proceeds of the Loans in any manner which
might  cause  the  Loans,  the  application  of  the  proceeds  thereof,  or the
transactions  contemplated by this Agreement to violate Regulation G, T, U, or X
of the Board of Governors of the Federal Reserve System, or any other regulation
of such board, or to violate the Securities and Exchange Act of 1934, as amended
or supplemented.

       6.2 Debt. Create,  incur, assume or suffer to exist, or permit any of its
Subsidiaries  to  create,  incur,  assume or suffer  to exist,  any Debt  except
Permitted Debt.

       6.3 Liens. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create,  incur,  assume or suffer to exist,  any Lien (including
the lien of an attachment,  judgment or execution) on any of its Assets, whether
now owned or hereafter  acquired,  except  Permitted  Liens; or sign or file, or
permit any of its  Subsidiaries  to sign or file,  under the Uniform  Commercial
Code as adopted in any jurisdiction,  a financing statement which names Borrower
or  any  of  its  Subsidiaries  as a  debtor,  or  sign,  or  permit  any of its
Subsidiaries  to sign,  any security  agreement  authorizing  any secured  party
thereunder to file such a financing statement,  except with respect to Permitted
Liens.

<PAGE>

       6.4 Merger,  Consolidation,  Transfer of Assets.  Wind up,  liquidate  or
dissolve,  reorganize,  merge or consolidate  with or into any other Person,  or
acquire  all or  substantially  all of the Assets or the  Business  of any other
Person, or permit any of its Subsidiaries to do so, except that,  subject in any
event to compliance with the last paragraph of this Section:

           (a) Borrower may effect an acquisition in compliance with Section
               6.8;

           (b) any Subsidiary may (i) consolidate with or merge into Borrower or
               any  Subsidiary  if  Borrower  or such  Subsidiary  shall  be the
               continuing or surviving  corporation or (ii) consolidate or merge
               with  any  other  corporation  if such  Subsidiary  shall  be the
               continuing or surviving corporation;

           (c) any Subsidiary may sell, lease, transfer, contribute or otherwise
               dispose  of its  assets  in whole or in part to  Borrower  or any
               Subsidiary,  and may,  following any such  disposition  in whole,
               liquidate and dissolve; and

           (d) Borrower may  consolidate or merge with any other  corporation if
               Borrower shall be the continuing or surviving corporation.

Provided,  however, in all events within thirty (30) days after the consummation
of any  transaction  described in this Section 6.4,  Borrower or such Subsidiary
shall execute and deliver such additional agreements,  instruments and documents
as Bank shall reasonably request, in form and substance satisfactory to Bank, in
order to  maintain  Bank's  first  priority  security  interest in all Assets of
Borrower or such Subsidiary  after giving effect to the  transactions  described
above. No consolidation,  merger, sale, lease,  transfer,  contribution or other
disposition  referred to in clauses (a)  through  (d) of this  Section  shall be
permitted under this Section unless at the time of and immediately  after giving
effect  to any such  transaction,  no  Unmatured  Event of  Default  or Event of
Default shall have occurred and be continuing.

      6.5 Equipment Leases.  Create, incur, assume or suffer to exist, or permit
any of its  Subsidiaries  to  create,  incur,  assume or  suffer  to exist,  any
obligation  as a lessee for the rental or hire of  equipment  or other  personal
property,  other  than (i)  leases  that have been or should be  capitalized  in
accordance  with GAAP and (ii) leases (other than Capital Leases) that do not in
the aggregate  require Borrower and its Subsidiaries on a consolidated  basis to
make payments  (including taxes,  insurance,  maintenance,  and similar expenses
which  Borrower  or any  Subsidiary  is  required  to pay under the terms of any
lease) in excess of Fifty  Thousand  Dollars  ($50,000)  in any  fiscal  year of
Borrower.

<PAGE>

     6.6 Sales and  Leasebacks.  Sell,  transfer,  or  otherwise  dispose of, or
permit any of its Subsidiaries to sell,  transfer,  or otherwise dispose of, any
real or personal property to any Person,  and thereafter  directly or indirectly
leaseback the same or similar property.

     6.7 Asset Sales.  Conduct any Asset Sale, or permit any of its Subsidiaries
to do so, other than (i)  dispositions  of Assets in an aggregate value of up to
One Hundred  Thousand Dollars  ($100,000) per fiscal year, (ii)  dispositions of
equipment  or other  Assets  which have become  obsolete or  otherwise no longer
useful  or  required  for  the  conduct  of its  business,  provided  that  such
dispositions do not, individually or in the aggregate,  constitute a liquidation
of all or  substantially  all of Borrower's or any  Subsidiary's  Assets,  (iii)
liquidations of Permitted  Investments in the ordinary  course of business,  and
(iv) dispositions of any publicly-traded securities acquired pursuant to Section
6.8(c) so long as both before and after giving effect to such  dispositions,  no
Event of Default is continuing or would result therefrom. Bank agrees to release
any security  interest it may have in any Assets which  Borrower is permitted to
dispose of in accordance  with this Section 6.7,  promptly  upon such  permitted
disposition.

       6.8 Investments; New Subsidiaries.

           (a) Except as otherwise  permitted under Sections 6.8(b), (c), (d) or
(e), make, or permit any of its  Subsidiaries to make, any loans or advances to,
or any investment in, any Person except Permitted  Investments;  or acquire,  or
permit  any  of  its  Subsidiaries  to  acquire,   any  capital  stock,  Assets,
obligations,  or other  securities  of, make any  contribution  to, or otherwise
acquire any  interest in any  Person;  or acquire or form,  or permit any of its
Subsidiaries to acquire or form, any new Subsidiary;  or participate,  or permit
any of its Subsidiaries to participate,  as a partner or joint venturer with any
other Person.

           (b)  Notwithstanding  the terms of Section 6.8(a),  Borrower shall be
permitted to acquire or form a new  Subsidiary  with the proceeds of a Revolving
Loan provided that all of the  following  conditions  have first been met to the
satisfaction of Bank in its sole and absolute discretion:

               (i)  such Subsidiary shall be a corporation, wholly-owned
by Borrower;

               (ii)  concurrent  with  the  acquisition  or  formation  of  such
Subsidiary,  Bank shall have received  following Credit  Documents,  in form and
substance satisfactory to Bank in its sole and absolute discretion:

                    a) a Guaranty duly executed by such Subsidiary;

<PAGE>

                    b) a Security Agreement (Guarantor) duly executed
by such Subsidiary;

                    c) a Stock Pledge Agreement with respect to the
capital stock of such Subsidiary, duly executed by Borrower and acknowledged by
such Subsidiary;

                    d) such UCC-1 financing statements and/or fixture filings as
Bank shall reasonably require in connection with the foregoing Credit Documents,
duly executed by Borrower or such Subsidiary, as applicable;

                    e) such assignments or collateral  assignments as Bank shall
reasonably  require  with  respect  to any  asset or stock  purchase  agreements
entered into by Borrower with respect to such Subsidiary,  in form and substance
satisfactory to Bank in its sole and absolute discretion;

               (iii)  receipt by Bank of a duly  executed  opinion of Borrower's
counsel,  dated as of the dated of the proposed  acquisition  or formation,  and
otherwise satisfactory to Bank in its sole and absolute discretion;

               (iv) receipt by Bank of  replacement  Schedules to this Agreement
and the Credit Documents, as appropriate,  in form and substance satisfactory to
Bank in its sole and absolute discretion;

               (v) receipt by Bank of a  Certificate  of the  Secretary  of such
Subsidiary dated as of the date of its acquisition or formation,  certifying (i)
the incumbency and signatures of the Responsible Officers of such Subsidiary who
are executing the Credit Documents on behalf of such Subsidiary, (ii) the bylaws
of such  Subsidiary and all amendments  thereto as being true and correct and in
full force and effect,  and (iii) the  resolutions  of the board of directors of
such  Subsidiary  as being  true  and  correct  and in full  force  and  effect,
authorizing the execution and delivery of the Credit  Documents to which it is a
party, and authorizing the transactions contemplated thereunder, and authorizing
the  Responsible  Officers of such  Subsidiary  to execute the same on behalf of
such Subsidiary;

               (vi)  receipt by Bank of the  Articles of  Incorporation  and all
amendments  thereto of such  Subsidiary,  certified by the Secretary of State of
the state of its organization;

               (vii) receipt by Bank of  certificates  of foreign  qualification
and good standing with respect to the applicable  Subsidiary,  showing that such
Subsidiary is qualified to do business and is in good standing under the laws of
each state where the failure to be so  qualified  would have a Material  Adverse
Effect;

<PAGE>

               (viii)receipt  by Bank of a  certificate  signed by a Responsible
Officer  of  such  Subsidiary,  dated  as  of  the  date  of  its  formation  or
acquisition, certifying to Bank that (i) both immediately before and immediately
after giving effect to the transactions  contemplated by the Credit Documents to
which such Subsidiary is a party,  such Subsidiary is and will be Solvent,  (ii)
to  the  best  of  their   knowledge  after  due  and  diligent   inquiry,   the
representations  and  warranties  of such  Subsidiary  contained  in the  Credit
Documents  are true and correct and (iii) to the best of their  knowledge  after
due and diligent inquiry,  both immediately  before and immediately after giving
effect to the  transactions  contemplated by the Credit  Documents,  no Event of
Default or Unmatured Event of Default is continuing or shall occur;

               (xi) receipt by Bank of all Bank Expenses  incurred in connection
with Bank's due diligence and  documentation of the Credit Documents  associated
with such Subsidiary;

               (x) receipt by Bank of copies of  insurance  binders or insurance
certificates  evidencing  Borrower's  having caused to be obtained  insurance in
accordance  with Section 5.5,  including  the lender's  loss payee  endorsements
required by such Section;

               (xi) receipt by Bank of Uniform  Commercial Code and other public
record  searches  with respect to such  Subsidiary,  indicating  that Bank has a
first priority,  perfected  security interest in the Assets and capital stock of
such  Subsidiary  and  otherwise  satisfactory  to Bank in its sole and absolute
discretion;

               (xii) satisfaction of the conditions set forth in Section 3.2;
and

               (xiii)receipt by Bank of such other  agreements,  instruments and
documents as Bank may reasonably  require in connection with such acquisition or
formation of a new Subsidiary,  including UCC termination statements and/or real
estate lien releases, all in form and substance satisfactory to Bank in its sole
and absolute discretion.

           (c)  Notwithstanding  the terms of Section 6.8(a),  Borrower shall be
permitted  to take any of the actions  described in Section  6.8(a)  without the
proceeds of a Revolving Loan provided that all of the following  conditions have
been met to the satisfaction of Bank in its sole and absolute discretion:

               (i) the aggregate of all monies or consideration paid or invested
by Borrower for all loans, advances, investments, acquisitions and other actions
taken or made pursuant to this Section  6.8(c) during the term of this Agreement
plus the aggregate of all distributions,  dividends,  redemptions,  acquisitions
and other  expenditures  made  under  Section  6.10(b)  during  the term of this
Agreement shall not exceed the Investment and Distribution Basket;

<PAGE>

               (ii)  Bank  shall  have  received  a  certificate   signed  by  a
Responsible  Officer of  Borrower,  dated as of the date of such loan,  advance,
investment, acquisition or other action, certifying to Bank that both before and
after giving  effect to such loan,  advance,  investment,  acquisition  or other
action, no Event of Default has occurred or will result therefrom; and

               (iii)Bank  shall have a first priority  security  interest in any
and all securities,  debt  instruments  and/or other Assets acquired by Borrower
pursuant to this Section 6.8(c),  subject only to Permitted  Liens,  pursuant to
such duly executed security  agreements,  stock pledge agreements and/or control
agreements as Bank shall reasonably require,  together with such UCC-1 financing
statements,  as Bank shall reasonably  require with respect hereto,  all in form
and substance  reasonably  satisfactory to Bank, which Borrower shall deliver to
Bank  within  thirty  (30)  days  following  such  loan,  advance,   investment,
acquisition or other action,  and Borrower shall deliver physical  possession to
Bank of any and all promissory notes, debt instruments,  stock  certificates and
any other  possessory  collateral  which  Borrower may acquire  pursuant to this
Section  6.8(c),  duly  endorsed  to Bank or in  blank  as Bank  shall  require;
provided however, that in connection with any such action, if Borrower is unable
to grant a first priority security interest as a result of a prior existing Lien
or a  prohibition  on such grant of a Lien to Bank,  Borrower  will use its best
efforts  to  provide  Bank with a second  priority  Lien or such  other  form of
security as is reasonable given the specific circumstances.

               (d)  Notwithstanding  the terms of Section  6.8(a),  Borrower may
advance or loan working  capital to any Subsidiary so long as (i) Borrower gives
Bank prior  written  notice of any  advances  or loans in excess of One  Hundred
Thousand  Dollars  ($100,000)  in the  aggregate in any fiscal year of Borrower,
(ii) both before and after giving effect to such loans or advances,  no Event of
Default has occurred or will result therefrom, and (iii) such loan or advance is
evidenced by a demand promissory note duly endorsed to Bank, and, except for any
such loans or advances made to Country Coach,  NRV or any other  Subsidiary with
respect  to which  Bank has  received  the  documentation  specified  in Section
6.8(b)(ii),  shall be secured by a Security  Agreement in the form of a Security
Agreement  (Guarantor),  and Bank shall have first received the originals of all
of the foregoing  documents,  duly executed and in form and substance reasonably
satisfactory to Bank, together with such UCC-1 and UCC-2 financing statements as
Bank shall  reasonably  require  in  connection  therewith,  duly  executed  and
delivered by the applicable Subsidiary.

       6.9  Character  of  Business.   Engage  in  any  business  activities  or
operations  which,  in the  reasonable  determination  of  Borrower's  Board  of
Directors,  are not  complementary  or are  unrelated  to its  present  business
activities and operations, or permit any of its Subsidiaries to do so.

      6.10 Distributions.
           (a) Except as expressly permitted by Section 6.10(b),  declare or pay
any cash dividends or cash distributions on its capital stock; or purchase,

<PAGE>

redeem,  retire,  or otherwise acquire for value any of its capital stock now or
hereafter  outstanding;  or make any distribution of Assets to its shareholders,
whether in cash, Assets, or in obligations of Borrower; or allocate or otherwise
set apart any sum for the payment of any  distribution  on, or for the purchase,
redemption  or  retirement  of,  any of its  capital  stock;  or make any  other
distribution  by  reduction  of  capital or  otherwise  in respect of any of its
capital  stock;  or permit any of its  Subsidiaries  to  purchase  or  otherwise
acquire for value any capital stock of Borrower or any other Subsidiary.

           (b)  Notwithstanding  the  terms of  Section  6.10(a),  Borrower  may
declare and pay cash  dividends and  distributions  on its capital stock or take
any of the  other  actions  described  in  Section  6.10(a)  so  long as (i) the
aggregate of all such dividends,  distributions,  redemptions,  acquisitions and
other  expenditures  during  the  term  of this  Agreement  plus  the  aggregate
consideration   paid  by  Borrower   for  all  loans,   advances,   investments,
acquisitions  and other actions  taken or made under  Section  6.8(c) during the
term of this Agreement does not exceed the Investment and  Distribution  Basket,
and (ii) both before and after giving effect to such  dividends,  distributions,
redemptions,  acquisitions  and  other  expenditures,  no Event of  Default  has
occurred or will result therefrom.

      6.11  Guaranty.  Assume,  guaranty,  endorse (other than checks and drafts
received by Borrower in the  ordinary  course of business so long as an Event of
Default has not occurred),  or otherwise be or become  directly or  contingently
responsible or liable,  or permit any of its  Subsidiaries to assume,  guaranty,
endorse,  or  otherwise be or become  directly or  contingently  responsible  or
liable  (including,  any agreement to purchase any  obligation,  stock,  Assets,
goods,  or  services  or to supply or  advance  any  funds,  Assets,  goods,  or
services,  or any  agreement  to maintain or cause such  Person to  maintain,  a
minimum  working  capital or net worth,  or otherwise to assure the creditors of
any  Person  against  loss)  for the  obligations  of any  Person;  or pledge or
hypothecate, or permit any of its Subsidiaries to pledge or hypothecate,  any of
its Assets as security for any  liabilities  or obligations of any other Person;
provided,  however,  notwithstanding the foregoing,  any of its Subsidiaries may
execute a  Guaranty  and a Security  Agreement  (Guarantor);  provided  further,
however,  this Section 6.11 shall not restrict Borrower or its Subsidiaries from
assuming  obligations for contingent  liabilities arising pursuant to repurchase
agreements  entered into in the ordinary  course of business in connection  with
sales of recreational vehicles.

     6.12 Capital Expenditures.  Make any Capital Expenditures in excess of Five
Hundred Thousand Dollars ($500,000) in any fiscal year.

   6.13 Transactions with Affiliates. Enter into any transaction,  including the
purchase,  sale, or exchange of property or the  rendering of any service,  with
any Affiliate, or permit any Subsidiary to enter into any transaction, including
the  purchase,  sale,  or exchange of property or the  rendering of any service,
with any Affiliate unless such transaction or arrangement is entered into in the
ordinary course of and pursuant to the

<PAGE>

reasonable  requirements  of Borrower's or such  Subsidiary's  business and upon
terms that are fair and  reasonable  and no less  favorable  to Borrower or such
Subsidiary,  as the case may be,  than those which might be obtained at the time
on an arm's-length basis from any Person which is not such an Affiliate.

      6.14 Change of Control.  Cause, permit or suffer,  directly or indirectly,
any Change of  Control,  without  Bank's  consent,  which  consent  shall not be
unreasonably withheld or delayed.

      6.15 Transactions Under ERISA. Directly or indirectly:

           (a) engage,  or permit any  Subsidiary of Borrower to engage,  in any
prohibited  transaction  which is reasonably likely to result in a civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code for which a statutory  or class  exemption  is not  available  or a private
exemption has not been previously obtained from the Department of Labor;

           (b) permit to exist with respect to any Plan any accumulated  funding
deficiency (as defined in Sections 302 of ERISA and 412 of the Internal  Revenue
Code), whether or not waived;

           (c) fail, or permit any Subsidiary of Borrower to fail, to pay timely
required  contributions  or installments  due with respect to any waived funding
deficiency to any Plan;

           (d) terminate, or permit any Subsidiary of Borrower to terminate, any
Plan where such event would  result in any  liability  of  Borrower,  any of its
Subsidiaries or any member of ERISA Group under Title IV of ERISA;

           (e) fail,  or permit any  Subsidiary of Borrower to fail, to make any
required contribution or payment to any Multiemployer Plan;

           (f) fail,  or permit any  Subsidiary of Borrower to fail, to pay to a
Plan or  Multiemployer  Plan  any  required  installment  or any  other  payment
required  under  Section 412 of the  Internal  Revenue Code on or before the due
date for such installment or other payment;

           (g) amend,  or permit any  Subsidiary  of Borrower  to amend,  a Plan
resulting in an increase in current liability for the plan year such that either
of Borrower,  any Subsidiary of Borrower or any the member of the ERISA Group is
required  to provide  security  to such Plan  under  Section  401(a)(29)  of the
Internal Revenue Code; or

<PAGE>

           (h) withdraw, or permit any Subsidiary of Borrower to withdraw,  from
any  Multiemployer  Plan where such withdrawal is reasonably likely to result in
any liability of any such entity under Title IV of ERISA;

which,  individually  or in the  aggregate,  results in or  reasonably  would be
expected  to result in a claim  against or  liability  of  Borrower,  any of its
Subsidiaries or any member of the ERISA Group in excess of $500,000.

                                     ARTICLE

                         EVENTS OF DEFAULT AND REMEDIES

      7.1 Events of Default.  The occurrence of any one or more of the following
events,  acts or occurrences  shall constitute an event of default (an "Event of
Default") hereunder:

           (a)  Borrower  fails to pay on or before  the due date  thereof,  any
payment of principal or interest due on the Loans,  any Fees, Bank Expenses,  or
any other amount payable hereunder;

           (b)  Borrower  fails to observe or perform any of the  covenants  and
agreements set forth in Sections 5.8, 5.9(f) or 5.9(g), or in Article VI and, in
the latter case,  such failure  shall not be cured within 15 days after the date
of such failure (if capable of cure);

           (c)  Borrower  fails to observe or perform any  covenant or agreement
set forth in this Agreement and the Credit Documents (other than those covenants
and  agreements  described  in  Sections  7.1(a) and  7.1(b),  and such  failure
continues  for thirty (30) days after the earlier to occur of (i) a  Responsible
Officer of Borrower  obtaining  actual  knowledge of such failure or (ii) Bank's
dispatch of notice to Borrower of such failure; or

           (d) Any representation, warranty or certification made by Borrower or
any Guarantor,  or any officer or employee of Borrower or any Guarantor, in this
Agreement,  in any certificate,  financial statement or other document delivered
pursuant to this Agreement or any Credit  Document proves to have been incorrect
in any material respect when made;

           (e)  Borrower  or any  Guarantor  fails to pay when due or within any
applicable  grace period any payment in respect of Debt or other  extensions  of
credit or financial  arrangements (other than under this Agreement) in excess of
$500,000 in the aggregate;

<PAGE>

         (f) Any event or condition occurs that: (i) results in the acceleration
of the  maturity of Debt of Borrower or any  Guarantor  in excess of $500,000 in
the  aggregate;  or (ii) permits (or, with the giving of notice or lapse of time
or both,  would  permit) the holder or holders of such Debt or any Person acting
on behalf of such holder or holders to accelerate the maturity thereof;

         (g)  Borrower  or  any  Guarantor  commences  a  voluntary   Insolvency
Proceeding seeking  liquidation,  reorganization or other relief with respect to
itself  or  its  Debt  or  seeking  the  appointment  of  a  trustee,  receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property,  or consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary Insolvency Proceeding or fails
generally  to pay its Debt as it becomes  due, or takes any action to  authorize
any of the foregoing;

         (h) An involuntary  Insolvency Proceeding is commenced against Borrower
or any  Guarantor  seeking  liquidation,  reorganization  or other  relief  with
respect to it or its Debt or seeking  the  appointment  of a trustee,  receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property and any of the following events occur: (i) the petition  commencing
the  Insolvency  Proceeding  is  not  timely  controverted;  (ii)  the  petition
commencing the Insolvency Proceeding is not dismissed within sixty (60) calendar
days of the date of the filing thereof; (iii) an interim trustee is appointed to
take possession of all or a substantial  portion of the Assets of, or to operate
all or any  substantial  portion  of the  business  of,  such  Borrower  or such
Guarantor;  or (iv) an order  for  relief  shall  have been  issued  or  entered
therein;

         (i)  Borrower or any  Guarantor  suffers (i) a final money  judgment in
excess of $500,000 in the aggregate or (ii) a final writ, warrant of attachment,
or similar process involving  obligations in excess of $500,000 in the aggregate
and within 60 days of the entry of such judgment,  writ, warrant,  attachment or
similar  process,  it is not bonded or  discharged  or execution  thereof is not
stayed pending appeal,  or within 60 days after the expiration of any such stay,
it is not discharged;

         (j) A judgment creditor obtains possession of Assets with a fair market
value in excess of $500,000 in the aggregate of Borrower or any Guarantor by any
means, including levy, distraint, replevin, or self-help, or any order, judgment
or decree is entered decreeing the dissolution of Borrower;

         (k) Any of the  Credit  Documents  fails to be in full force and effect
for any reason,  or Bank fails to have a perfected,  first  priority Lien in and
upon all of the collateral assigned or pledged to Bank thereunder,  or a default
or event of default occurs under any Credit  Document,  or the obligation of any
Guarantor  is  limited or  terminated  by  operation  of law or by the action or
inaction of such Guarantor, or any Guarantor attempts to revoke or terminate its
Guaranty;

<PAGE>

         (l) An Event of Default occurs under the Country Coach/NRV
Credit Agreement;

         (m)  Wayne  Mertes  fails  for any  reason  to  serve  actively  as the
President and Chief Executive  Officer of Borrower,  whether by reason of death,
disability,  resignation,  action by the Board of Directors or  shareholders  of
Borrower,  or  otherwise,  unless a successor  reasonably  acceptable to Bank is
hired and actively  serving in such capacity within six (6) months form the date
of such failure; or

         (n) Any other Material Adverse Effect occurs.

       7.2 Remedies.

           (a)  Acceleration.  Upon  the  occurrence  of any  Event  of  Default
described in Section 7.1(g) or 7.1(h),  the Obligations shall become immediately
due and  payable  without  any  election  or action on the part of Bank  without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly  waives.  Upon the  occurrence  and  continuance of any other Event of
Default, Bank may, at its election,  by written notice to Borrower,  immediately
declare the Obligations to be due and payable,  whereupon the Obligations  shall
become  immediately due and payable,  without  presentment,  demand,  protest or
notice of any kind, all of which Borrower hereby expressly waives.

           (b) Termination of Revolving Credit  Commitment.  Upon the occurrence
of any Unmatured Event of Default or Event of Default,  Bank may, at its option,
terminate the Revolving  Credit  Commitment and cease making  Revolving Loans to
Borrower.

           (c) Remedies  Cumulative.  The rights and remedies of Bank herein and
in the Credit  Documents  are  cumulative,  and are not  exclusive  of any other
rights, powers,  privileges,  or remedies, now or hereafter existing, at law, in
equity or otherwise.

                                     ARTICLE

                                      TAXES

       8.1 Taxes on Payments.  All payments in respect of the Obligations  shall
be made free and clear of and without any  deduction  or  withholding  for or on
account of any present and future taxes, levies, imposts,  deductions,  charges,
withholdings,  assessments or governmental  charges,  and all  liabilities  with
respect  thereto,  imposed by the United  States of  America,  or any  political
subdivision or taxing authority thereof or therein,  excluding any taxes imposed
on Bank under the  Internal  Revenue  Code or  similar  state and local laws and
determined by Bank's net income,  and any franchise taxes imposed on Bank by the
State  of  California   (or  any  political   subdivision   thereof)  (all  such
non-excluded  taxes,  levies,  imposts,   deductions,   charges,   withholdings,
assessments, charges and liabilities being hereinafter

<PAGE>

referred to as  "Taxes").  If any Taxes are  imposed  and  required by law to be
deducted or withheld from any amount  payable to Bank,  then Borrower  shall (i)
increase  the  amount of such  payment  so that Bank will  receive a net  amount
(after  deduction of all Taxes) equal to the amount due hereunder,  and (ii) pay
such Taxes to the appropriate  taxing authority for the account of Bank prior to
the  date on  which  penalties  attach  thereto  or  interest  accrues  thereon;
provided,  however, if any such penalties or interest shall become due, Borrower
shall make prompt payment thereof to the appropriate  taxing authority unless it
is being contested in good faith and adequate  reserves have been set aside with
respect  thereto as required by GAAP, and by reason of  nonpayment,  no material
property is subject to material risk of loss or forfeiture.

      8.2 Indemnification For Taxes.  Borrower shall indemnify Bank for the full
amount of Taxes (including penalties,  interest, expenses and Taxes arising from
or with  respect  to any  indemnification  payment)  arising  therefrom  or with
respect thereto, whether or not the Taxes were correctly or legally asserted.
This indemnification shall be made on demand.

     8.3 Evidence of Payment.  Within thirty (30) days after the date of payment
of any Taxes, Borrower shall furnish to Bank the original or a certified copy of
a receipt evidencing payment thereof.  If no Taxes are payable in respect of any
payment  due  hereunder  or under the Notes,  Borrower  shall  furnish to Bank a
certificate from each  appropriate  taxing  authority,  or an opinion of counsel
acceptable  to Bank,  in either case stating that such payment is exempt from or
not subject to Taxes.

                                     ARTICLE

                                  MISCELLANEOUS

       9.1 Notices. All notices,  requests and other communications to any party
hereunder  shall be in  writing  (including  facsimile  transmission  or similar
writing) and shall be given to such party at its address or facsimile number set
forth on the signature pages hereof or such other address or facsimile number as
such party may hereafter specify by notice to the other party in accordance with
this Section  9.1.  Each such notice,  request or other  communication  shall be
deemed given on the second  business  day after  mailing;  provided  that actual
notice,  however and from whomever given or received,  shall always be effective
on receipt;  provided  further that notices to Bank pursuant to Article II shall
not be  effective  until  received by a  Responsible  Officer of Bank;  provided
further that notices sent by Bank in  connection  with  Sections 9504 or 9505 of
the California  Uniform  Commercial Code shall be deemed given when deposited in
the mail or personally  delivered,  or, where  permitted by law,  transmitted by
facsimile.

       9.2 No Waivers.  No failure or delay by Bank in exercising any right,
power or privilege hereunder or under any Credit Document shall operate as a
waiver thereof

<PAGE>

nor shall any single or partial  exercise  thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

       9.3 Bank Expenses; Documentary Taxes; Indemnification.

           (a) Borrower shall pay all Bank Expenses on demand.

           (b)  Borrower  shall pay all and  indemnify  Bank against any and all
transfer  taxes,  documentary  taxes,  assessments,   or  charges  made  by  any
Governmental  Authority  and imposed by reason of the  execution and delivery of
this Agreement,  any of the Credit Documents, or any other document,  instrument
or agreement entered into in connection herewith.

           (c) Borrower  shall and hereby agrees to indemnify,  protect,  defend
and hold  harmless  Bank and its  directors,  officers,  agents,  employees  and
attorneys  (collectively,   the  "Indemnified  Persons"  and  individually,   an
"Indemnified Person") from and against (i) any and all losses, claims,  damages,
liabilities,  deficiencies,  judgments, reasonable costs and expenses (including
attorneys'  fees and attorneys'  fees incurred  pursuant to proceedings  arising
under the  Bankruptcy  Code) incurred by any  Indemnified  Person (except to the
extent that it is finally judicially  determined to have resulted from the gross
negligence or willful misconduct of any Indemnified Person) arising out of or by
reason  of any  litigations,  investigations,  claims  or  proceedings  (whether
administrative, judicial or otherwise), including discovery, whether or not Bank
is designated a party  thereto,  which arise out of or are in any way related to
(1) a breach by Borrower or any Subsidiary of its representations and warranties
under this Agreement or any Credit  Document,  or (2) any actual or proposed use
by Borrower of the proceeds of the Loans; (ii) any such losses, claims, damages,
liabilities,  deficiencies,  judgments,  costs and expenses arising out of or by
reason  of the  use,  generation,  manufacture,  production,  storage,  release,
threatened  release,  discharge,   disposal  or  presence  on,  under  or  about
Borrower's  operations  or  property  or  property  leased  by  Borrower  of any
material,  substance  or  waste  which is or  becomes  designated  as  Hazardous
Materials;   and  (iii)  any  such   losses,   claims,   damages,   liabilities,
deficiencies,  judgments,  costs and expenses  incurred in  connection  with any
remedial or other action taken by Borrower or Bank in connection with compliance
by Borrower with any federal,  state or local  environmental  laws, acts, rules,
regulations,  orders, directions,  ordinances, criteria or guidelines (except to
the extent that it is finally  judicially  determined  to have resulted from the
gross negligence or willful misconduct of any Indemnified Person). If and to the
extent that the  obligations  of Borrower  hereunder are  unenforceable  for any
reason,  Borrower hereby agrees to make the maximum  contribution to the payment
and  satisfaction  of  such  obligations  of Bank  which  is  permissible  under
applicable law.

           (d) Borrower's  obligations  under this Section 9.3 and under Section
8.2 shall survive any termination of this Agreement and the Credit Documents and

<PAGE>

the  payment  in full of the  Obligations,  and are in  addition  to, and not in
substitution of, any other of its obligations set forth in this Agreement.

       9.4 Amendments and Waivers. Any provision of this Agreement or any of the
Credit  Documents to which  Borrower is a party may be amended or waived if, but
only if,  such  amendment  or  waiver is in  writing  and is signed by the party
asserted  to be bound  thereby,  and then  such  amendment  or  waiver  shall be
effective only in the specific instance and specific purpose for which given.

       9.5 Successors and Assigns; Participations; Disclosure.

           (a) This Agreement  shall be binding upon and inure to the benefit of
the parties  hereto and their  respective  successors  and assigns,  except that
Borrower may not assign or transfer any of its rights or obligations  under this
Agreement  without  the prior  written  consent of Bank and any such  prohibited
assignment or transfer by Borrower shall be void.

           (b) Bank may make,  carry or  transfer  the  Loans and the  Revolving
Credit Commitment at, to or for the account of, any of its branch offices or the
office of an  Affiliate  of Bank or to any  Federal  Reserve  Bank,  all without
Borrower's consent.

           (c) Upon written  notice to  Borrower,  Bank may, at its own expense,
assign to one or more banks or other financial  institutions all or a portion of
its rights  (including  voting rights) and obligations  under this Agreement and
the Credit  Documents.  In the event of any such  assignment by Bank pursuant to
this Section 9.5(c),  Bank's  obligations under this Agreement arising after the
effective date of such assignment shall be released and concurrently  therewith,
transferred to and assumed by Bank's  assignee to the extent provided for in the
document evidencing such assignment.

           (d) Bank may at any time sell to one or more banks or other financial
institutions  (each a  "Participant")  participating  interests in the Revolving
Credit  Commitment,  the Loans, and in any other interest of Bank hereunder.  In
the event of any such sale by Bank of a participating interest to a Participant,
Bank's  obligations  under this  Agreement  shall remain  unchanged,  Bank shall
remain  solely  responsible  for the  performance  thereof,  and Borrower  shall
continue to deal solely and directly with Bank in connection  with Bank's rights
and  obligations  under this Agreement.  Borrower  agrees that each  Participant
shall, to the extent provided in its participation agreement, be entitled to the
benefits of Article VIII with respect to its participating  interest. Bank shall
give prompt notice to Borrower of the grant of any such participation.

           (e) Subject to Section 9.10,  Borrower authorizes Bank to disclose to
any assignee under Section 9.5(c) or any  Participant  (either,  a "Transferee")
and any  prospective  Transferee  any and all  financial  information  in Bank's
possession concerning

<PAGE>

Borrower which has been delivered to Bank by Borrower or any of its  Responsible
Officers  pursuant  to this  Agreement  or which has been  delivered  to Bank by
Borrower or any of its  Responsible  Officers in  connection  with Bank's credit
evaluation prior to entering into this Agreement.

           (f) With Borrower's  prior written  consent,  Bank may use Borrower's
name in  advertising  and  promotional  materials and in  conjunction  therewith
disclose the general terms of this Agreement.

       9.6  Counterparts;  Effectiveness;  Integration.  This  Agreement  may be
signed in any number of counterparts,  each of which shall be an original,  with
the same  effect as if the  signatures  thereto  and  hereto  were upon the same
instrument.  This  Agreement  shall be  effective  when  executed by each of the
parties   hereto.   This  Agreement   constitutes   the  entire   agreement  and
understanding  among  the  parties  hereto  and  supersedes  any and  all  prior
agreements and understandings,  oral or written,  relating to the subject matter
hereof.

       9.7  Severability.  The provisions of this  Agreement are severable.  The
invalidity,  in whole or in part, of any provision of this  Agreement  shall not
affect the validity or enforceability of any other of its provisions.  If one or
more provisions hereof shall be declared invalid or unenforceable, the remaining
provisions  shall  remain in full force and effect and shall be construed in the
broadest possible manner to effectuate the purposes hereof.

       9.8 GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED
TO HAVE BEEN MADE IN THE STATE OF  CALIFORNIA  AND THE  VALIDITY,  CONSTRUCTION,
INTERPRETATION,  AND ENFORCEMENT  HEREOF,  AND THE RIGHTS OF THE PARTIES HERETO,
SHALL BE DETERMINED  UNDER,  GOVERNED BY, AND  CONSTRUED IN ACCORDANCE  WITH THE
INTERNAL  LAWS OF THE  STATE OF  CALIFORNIA,  WITHOUT  REGARD TO  PRINCIPLES  OF
CONFLICTS OF LAW.

       9.9  Dispute  Resolution.  This  Agreement  is  subject  to that  certain
Alternative  Dispute  Resolution  Agreement,  dated  as of even  date  herewith,
between Borrower and Bank.

     9.10 Confidentiality. In connection with the negotiation and administration
of this Agreement and the other Credit  Documents,  Borrower and Guarantors have
furnished and will, from time to time, furnish to Bank written information (such
information,  other than any such information which (i) was publicly  available,
or otherwise known to Bank, at the time of disclosure, (ii) subsequently becomes
publicly  available  other than  through  any act or  omission  by Bank or (iii)
otherwise  subsequently  becomes  known to Bank other than through a Person whom
Bank knows to be acting in  violation of his or its  obligations  to Borrower or
Guarantors, being hereinafter referred to as "Confidential Information"). Bank

<PAGE>

will treat  confidentially any Confidential  Information in accordance with such
procedures  as Bank applies  generally  to  information  of that  nature.  It is
understood,  however,  that the foregoing  will not restrict  Bank's  ability to
freely exchange such  Confidential  Information  with (i) directors,  employees,
auditors,  accountants  or  counsel  of Bank or any  Affiliate  of Bank and (ii)
actual or prospective  Transferees,  but in the case of prospective Transferees,
Bank's ability to so exchange Confidential Information shall be conditioned upon
any such prospective Transferees' agreement to be bound by this Section 9.10. It
is further understood that the foregoing will not prohibit the disclosure of any
or all Confidential Information if and to the extent that such disclosure may be
required  (i)  by a  regulatory  agency  or  otherwise  in  connection  with  an
examination of Bank's records by appropriate authorities, (ii) pursuant to court
order,  subpoena or other  legal  process or in  connection  with any pending or
threatened  litigation,  (iii)  pursuant  to any  order,  regulation  or  ruling
applicable  to  Bank  or at  the  express  direction  of  any  other  authorized
governmental  agency,  (iv) as may be  required  or  appropriate  in any report,
statement or testimony  submitted to any municipal,  state or Federal regulatory
body having or claiming to have jurisdiction over Bank or to the Federal Reserve
Board or the FDIC or similar  organizations  (whether  in the  United  States or
elsewhere) or their successors,  (v) otherwise as required by law, (vi) in order
to protect its interests or its rights or remedies  hereunder or under the other
Credit Documents, or (vii) except as expressly contemplated by this Agreement or
the Credit  Documents.  In the event of any required  disclosure  under  clauses
(ii), (iii),  (iv), (v) or (vii) above, Bank agrees to use reasonable efforts to
inform  Borrower as promptly as practicable  prior to the disclosure of any such
Confidential Information.

                [Remainder of this page intentionally left blank]

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective  authorized officers as of the day and year
first above written.

BORROWER:                           NATIONAL R.V. HOLDINGS, INC.


                                    By

                                    Title:

                                    Address for Notices:

                                    National R.V. Holdings, Inc.
                                    3411 N. Perris Boulevard
                                    Perris, CA 92571
                                    Attn:  Mr. Kenneth W. Ashley
                                    Facsimile:  (909) 657-8598


BANK:                               UNION BANK OF CALIFORNIA, N.A.


                                    By

                                    Title:

                                    Address for Notices and Lending Office:

                                    Union Bank of California
                                    Commercial Portfolio Administration
                                    Attn:          Catherine Abe, Vice President
                                    Allison W. Berry, Assistant Vice President
                                    445 South Figueroa Street
                                    16th Floor
                                    Los Angeles, California 90071
                                    Facsimile: (213) 236-76352

<PAGE>
                                                           EXHIBIT 10.2

                           REVOLVING CREDIT AGREEMENT

                                   dated as of


                                  July 28, 1997


                                      among


                  NATIONAL R.V., INC., and COUNTRY COACH, INC.
                                  ("Borrowers")

                                       and

                         UNION BANK OF CALIFORNIA, N.A.
                                    ("Bank")



                                   $20,000,000

<PAGE>

                                TABLE OF CONTENTS


                                                                        Page(s)

                                    ARTICLE I
                           DEFINITIONS AND INTERPRETATIONS.................  1

1.1  Definitions...........................................................  1
     ADA...................................................................  1
     Additional Loan Stated Amount.........................................  1
     Affiliate.............................................................  1
     Agreement.............................................................  1
     Asset.................................................................  1
     Asset Sale............................................................  1
     Bank..................................................................  2
     Bank Expenses.........................................................  2
     Bankruptcy Code.......................................................  2
     Base LIBOR............................................................  2
     Borrower(s)...........................................................  3
     Borrowing.............................................................  3
     Business Day..........................................................  3
     Capital Expenditures..................................................  3
     Capital Lease.........................................................  3
     Capital Lease Obligations.............................................  3
     Cash Interest Expense.................................................  3
     Change of Control.....................................................  3
     Closing Date..........................................................  3
     Country Coach.........................................................  3
     Credit Document(s)....................................................  4
     Debt..................................................................  4
     Debt Service..........................................................  4
     Dollars...............................................................  5
     EBITDA................................................................  5
     ERISA.................................................................  5
     ERISA Event...........................................................  5
     ERISA Group...........................................................  5
     Event of Default......................................................  5
     Financial Statement(s)................................................  5
     GAAP..................................................................  6
     Governing Documents...................................................  6
     Governmental Authority................................................  6
     Guarantor.............................................................  6
     Guaranty..............................................................  6
     Hazardous Materials...................................................  6
     Holdings..............................................................  7
     Holdings Credit Agreement.............................................  7
     Indemnified Person(s).................................................  7
     Insolvency Proceeding.................................................  7
     Interest Payment Date.................................................  7

<PAGE>

     Interest Period.......................................................  7
     Internal Revenue Code.................................................  7
     Lending Office........................................................  8
     Letter(s) of Credit...................................................  8
     Letter of Credit and Reimbursement Agreement..........................  8
     Letter of Credit Application..........................................  8
     Letter of Credit Fees.................................................  8
     Letter of Credit Sublimit.............................................  8
     Letter of Credit Usage................................................  8
     LIBOR Business Day....................................................  8
     LIBOR Lending Rate....................................................  8
     LIBOR Lending Rate Portion............................................  9
     LIBOR Reserve Percentage..............................................  9
     Lien..................................................................  9
     Loan(s)...............................................................  9
     Material Adverse Effect...............................................  9
     Maturity Date.........................................................  9
     Multiemployer Plan....................................................  9
     Net Income............................................................ 10
     NRV................................................................... 10
     Note.................................................................. 10
     Notice of Borrowing................................................... 10
     Notice of Conversion or Continuation.................................. 10
     Obligations........................................................... 10
     Operating Lease....................................................... 10
     Old Lender............................................................ 10
     Participant........................................................... 10
     Pay-Off Letter........................................................ 10
     PBGC.................................................................. 10
     Permitted Debt........................................................ 11
     Permitted Investments................................................. 11
     Permitted Liens....................................................... 11
     Person................................................................ 12
     Plan.................................................................. 12
     Property.............................................................. 12
     Purchase Money Lien................................................... 12
     Quarterly Compliance Certificate...................................... 12
     Real Estate Leases.................................................... 12
     Reference Lending Rate................................................ 13
     Reference Lending Rate Portion........................................ 13
     Reference Rate........................................................ 13
     Revolving Credit Commitment........................................... 13
     Regulation D.......................................................... 13
     Reimbursement Agreement............................................... 13
     Reportable Event...................................................... 13
     Responsible Officer................................................... 13
     Retiree Health Plan................................................... 13
     Revolving Loans....................................................... 13
     Revolving Loans Daily Balances........................................ 13
     Security Agreement (Country Coach).................................... 14

<PAGE>

     Security Agreement (NRV).............................................. 14
     Security Agreement (Guarantor)........................................ 14
     Solvent............................................................... 14
     Stock Pledge Agreement................................................ 14
     Subsidiary............................................................ 14
     Swaps................................................................. 15
     Tangible Net Worth.................................................... 15
     Taxes................................................................. 15
     Trademark Security Agreement.......................................... 15
     Transferee............................................................ 15
     Unfunded Liabilities.................................................. 15
     Unmatured Event of Default............................................ 15
     Working Capital....................................................... 15
1.2  Accounting Terms and Determinations................................... 15
1.3  Computation of Time Periods........................................... 16
1.4  Construction.......................................................... 16
1.5  Exhibits and Schedules................................................ 16
1.6  No Presumption Against Any Party...................................... 16
1.7  Independence of Provisions............................................ 16

                                   ARTICLE II
                       TERMS OF THE CREDIT FACILITIES...................... 16

2.1  [Intentionally Omitted]............................................... 16
2.2  Revolving Loans....................................................... 17
2.3  Letters of Credit..................................................... 17
2.4  Interest Rates; Payments of Interest.................................. 18
2.5  Notice of Borrowing Requirements...................................... 19
2.6  Conversion or Continuation Requirements............................... 20
2.7  LIBOR Costs........................................................... 21
2.8  Illegality; Impossibility............................................. 22
2.9  Disaster.............................................................. 22
2.10 Increased Risk-Based Capital Cost..................................... 23
2.11 Note; Statements of Obligations....................................... 24
2.12 Holidays.............................................................. 24
2.13 Time and Place of Payments............................................ 24
2.14 Maturity Date......................................................... 25

                                  ARTICLE III
                       CONDITIONS PRECEDENT................................ 25

3.1  Conditions to Initial Loan and/or Letter of Credit.................... 25
3.2  Conditions to all Loans and Letters of Credit......................... 27

                                   ARTICLE IV
                       REPRESENTATIONS AND WARRANTIES...................... 28

4.1  Legal Status.......................................................... 28
4.2  No Violation; Compliance.............................................. 28

                                       iii

<PAGE>

4.3  Authorization; Enforceability......................................... 28
4.4  Approvals; Consents................................................... 28
4.5  Liens................................................................. 29
4.6  Debt.................................................................. 29
4.7  Litigation............................................................ 29
4.8  No Default............................................................ 29
4.9  Subsidiaries.......................................................... 29
4.10 Taxes................................................................. 29
4.11 Correctness of Financial Statements................................... 29
4.12 ERISA................................................................. 30
4.13 Other Obligations..................................................... 30
4.14 Public Utility Holding Company Act.................................... 30
4.15 Investment Company Act................................................ 30
4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc....... 30
4.17 Environmental Condition............................................... 31
4.18 Compliance With ADA................................................... 31

                                    ARTICLE V
                       AFFIRMATIVE COVENANTS............................... 31

5.1  Punctual Payments..................................................... 31
5.2  Books and Records..................................................... 31
5.3  Financial Statements.................................................. 32
5.4  Existence; Compliance with Law........................................ 32
5.5  Insurance............................................................. 33
5.6  Assets................................................................ 34
5.7  Taxes and Other Liabilities........................................... 34
5.8  Financial Condition................................................... 34
5.9  Notice to Bank........................................................ 35
5.11 Further Assurances.................................................... 37
5.12 Real Estate Leases.................................................... 37
5.13 Environment........................................................... 37
5.14 ADA................................................................... 37

                                   ARTICLE VI
                       NEGATIVE COVENANTS.................................. 38

6.1  Use of Funds; Margin Regulation....................................... 38
6.2  Debt.................................................................. 38
6.3  Liens................................................................. 38
6.4  Merger, Consolidation, Transfer of Assets............................. 38
6.5  Equipment Leases...................................................... 39
6.6  Sales and Leasebacks.................................................. 39
6.7  Asset Sales........................................................... 39
6.8  Investments........................................................... 39
6.9  Character of Business................................................. 40
6.10 Distributions......................................................... 40
6.11 Guaranty.............................................................. 40
6.12 Capital Expenditures.................................................. 41

                                   iv

<PAGE>

6.13 Transactions with Affiliates.......................................... 41
6.14 Change of Control..................................................... 41
6.15 Transactions Under ERISA.............................................. 41

                                  ARTICLE VII
                       EVENTS OF DEFAULT AND REMEDIES...................... 42

7.1  Events of Default..................................................... 42
7.2  Remedies.............................................................. 44
7.3  Remedies Cumulative................................................... 44

                                  ARTICLE VIII
                       TAXES............................................... 45

8.1  Taxes on Payments..................................................... 45
8.2  Indemnification For Taxes............................................. 45
8.3  Evidence of Payment................................................... 45

                                   ARTICLE IX
                       MISCELLANEOUS....................................... 45

9.1  Notices............................................................... 45
9.2  No Waivers............................................................ 46
9.3  Bank Expenses; Documentary Taxes; Indemnification..................... 46
9.4  Amendments and Waivers................................................ 47
9.5  Successors and Assigns; Participations; Disclosure.................... 47
9.6  Counterparts; Effectiveness; Integration.............................. 48
9.7  Severability.......................................................... 48
9.8  GOVERNING LAW......................................................... 48
9.9  Dispute Resolution.................................................... 48
9.10 Confidentiality....................................................... 48

                                    ARTICLE X
                       JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT.... 49

10.1 Joint and Several Liability........................................... 49
10.2 Primary Obligation; Waiver of Marshalling............................. 49
10.3 Financial Condition of Borrowers...................................... 50
10.4 Continuing Liability.................................................. 50
10.5 Additional Waivers.................................................... 50
10.6 Settlements or Releases............................................... 53
10.7 No Election........................................................... 54
10.8 Indefeasible Payment.................................................. 54
10.9 Single Loan Account................................................... 54
10.10Apportionment of Proceeds of Loans.................................... 55
10.11Bank Held Harmless.................................................... 55
10.12Borrowers' Integrated Operations...................................... 55

                                       v

<PAGE>

                             EXHIBITS AND SCHEDULES


Exhibit 2.5(b) - Form of Notice of Borrowing

Exhibit 2.6(b) - Form of Notice of Conversion or Continuation

Exhibit 3.1(b) - Form of Opinions of Borrower's Counsel

Exhibit 5.3(b) - Form of Quarterly Compliance Certificate

Schedule 1.1P  - Permitted Debt

Schedule 4.9   - Subsidiaries

Schedule 4.12  - Employee Benefit Plans

                                     vi

<PAGE>

                           REVOLVING CREDIT AGREEMENT


       This REVOLVING CREDIT AGREEMENT, dated as of July 28, 1997,
is entered into among Borrowers and Bank.

       The parties hereto hereby agree as follows:

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATIONS

       1.1 Definitions.  The following terms, as used herein,
shall have the following meanings:

             "ADA" means the Americans with Disabilities Act, 42
U.S.C. ss. 12101, et. seq., and all applicable rules and regulations
promulgated thereunder.

             "Additional Loan Stated Amount" has the meaning given
to such term in the Reimbursement Agreement.

             "Affiliate" means any Person (i) that, directly or
indirectly,  controls,  is controlled by or is under common  control with either
Borrower or any Subsidiary of either Borrower; (ii) which directly or indirectly
beneficially  owns or controls  five percent (5%) or more of any class of voting
stock of either  Borrower or any  Subsidiary of either  Borrower;  or (iii) five
percent  (5%) or more of the voting  stock of which is  directly  or  indirectly
beneficially  owned or held by  either  Borrower  or any  Subsidiary  of  either
Borrower.  For purposes of the foregoing,  "control" (including  "controlled by"
and  "under  common  control  with")  shall  mean the  possession,  directly  or
indirectly,  of the power to direct or cause the direction of the management and
policies of a Person,  whether  through the ownership of voting  securities,  by
contract or otherwise.

             "Agreement" means this Revolving Credit Agreement,
together with any concurrent or subsequent rider, amendment, schedule or exhibit
to this Revolving Credit Agreement.

             "Asset" means any interest of a Person in any kind of
property or asset,  whether  real,  personal,  or mixed real and  personal,  and
whether tangible or intangible.

             "Asset Sale" means any sale, transfer or other
disposition of any of either Borrower's or any of its Subsidiary's businesses or
Assets now owned or hereafter  acquired (other than any sale,  transfer or other
disposition of inventory in the

<PAGE>

ordinary course of business),  including shares of stock and indebtedness of any
Subsidiary, receivables and leasehold interests.

             "Bank" means Union Bank of California, N.A.

             "Bank Expenses" means (i) all reasonable expenses of
Bank paid or incurred in connection with Bank's due diligence and  investigation
of Borrowers, including appraisal, filing, recording, documentation, publication
and search fees and other such expenses,  and all reasonable attorneys' fees and
expenses  (including  attorneys' fees incurred  pursuant to proceedings  arising
under the Bankruptcy  Code and including the allocated  cost of Bank's  in-house
legal  counsel  and   professional   staff)  incurred  in  connection  with  the
structuring,  negotiation, drafting, preparation, execution and delivery of this
Agreement,  the Credit Documents,  the Letters of Credit,  and any and all other
documents,  instruments  and agreements  entered into in connection  herewith or
therewith;  (ii) all reasonable expenses of Bank,  including attorneys' fees and
expenses  (including  attorneys' fees incurred  pursuant to proceedings  arising
under the Bankruptcy  Code and including the allocated  cost of Bank's  in-house
legal counsel and  professional  staff) paid or incurred in connection  with the
negotiation,  preparation,  execution  and delivery of any waiver,  forbearance,
consent,  amendment or addition to this Agreement,  any Credit Document,  or any
Letter of Credit, or
the termination hereof and thereof;  (iii) all reasonable costs or expenses paid
or  advanced  by Bank  which are  required  to be paid by  Borrowers  under this
Agreement,  the Credit Documents,  or any Letter of Credit,  including taxes and
insurance  premiums of every nature and kind of Borrowers;  and (iv) if an Event
of Default occurs, all reasonable  expenses paid or incurred by Bank,  including
attorneys' fees and expenses  (including  attorneys'  fees incurred  pursuant to
proceedings  arising under the Bankruptcy  Code and including the allocated cost
of Bank's in-house legal counsel and professional  staff),  costs of collection,
suit, arbitration, judicial reference and other enforcement proceedings, and any
other  reasonable  out-of-pocket  expenses  incurred in connection  therewith or
resulting  therefrom,  whether or not suit is brought, or in connection with any
refinancing or restructuring of the Obligations and the liabilities of Borrowers
under this Agreement,  any of the Credit Documents,  or any Letter of Credit, or
any other document,  instrument or agreement entered into in connection herewith
in the nature of a "workout."

             "Bankruptcy Code" means The Bankruptcy Reform Act of 1978
(Pub. L. No. 95-598;  11 U.S.C.  ss.ss. 101 et seq.), as amended or supplemented
from  time to  time,  or any  successor  statute,  and any  and  all  rules  and
regulations issued or promulgated in connection therewith.

             "Base LIBOR" applicable to any Interest Period for a LIBOR Lending
Rate  Portion  means the offered rate per annum  (rounded  upward to the nearest
one-hundredth of one percent (.01%)),  if any, to first-class banks in the LIBOR
market quoted by Bank at 11:00 a.m. California time, two (2) LIBOR Business Days
prior to the first day of such Interest  Period for Dollar deposits of an amount
comparable to the principal amount of the

<PAGE>

LIBOR  Lending  Rate  Portion  for  which  the LIBOR  Lending  Portion  is being
determined  with  maturities  comparable  to the Interest  Period for which such
LIBOR Lending Rate will apply.

             "Borrower(s)" means individually or collectively as the context
requires, Country Coach and NRV.

             "Borrowing" means a borrowing of a Revolving Loan pursuant to the
terms hereof.

             "Business Day" means any day other than a Saturday, a Sunday, or a
day on  which  commercial  banks  in the  City of Los  Angeles,  California  are
authorized or required by law or executive order or decree to close.

         "Capital Expenditures" means expenditures made and liabilities incurred
by any Person for the  acquisition,  construction  or  maintenance  of any fixed
Assets or improvements,  replacements,  substitutions, or additions thereto that
have a useful life of more than one (1) year,  including  the direct or indirect
acquisition  of such  Assets by way of  increased  product or  service  charges,
offset items, or otherwise, including the current expense portion of all Capital
Leases and Operating Leases,  but excluding the current portion of any Debt used
to finance such Capital Expenditures, calculated in accordance with GAAP.

             "Capital Lease" means any lease of an Asset by a Person as lessee
which would,  in  conformity  with GAAP,  be required to be  accounted  for as a
capital lease on the balance sheet of that Person.

             "Capital Lease Obligations" of a Person means the amount of the
obligations  of such Person  under all Capital  Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

         "Cash Interest Expense" means, with respect to a Borrower, the interest
payable in cash accrued for the immediately  preceding  twelve (12) month period
on such  Borrowers'  Debt,  including  the interest  portion of such  Borrowers'
Capital Lease Obligations, prepared in accordance with GAAP.

             "Change of Control" shall be deemed to have occurred at such time 
as a "person" or "group"  (within the meaning of Sections  13(d) and 14(d)(2) of
the Securities  Exchange Act of 1934) becomes the "beneficial owner" (as defined
in  Rule  13d-3  under  the  Securities  Exchange  Act  of  1934),  directly  or
indirectly,  of more than 10% of the total  voting power of all classes of stock
then outstanding of either Borrower normally entitled to vote in the election of
directors.

           "Closing Date" means the date when all of the conditions set forth in
Section 3.1 have been fulfilled to the satisfaction of Bank and its counsel.

<PAGE>

             "Country Coach" means Country Coach, Inc., an Oregon corporation.

             "Credit Document(s)" means each of the following documents,
instruments,  and  agreements  individually  or  collectively,  as  the  context
requires,   and   any   amendments,   replacements,   substitutions,   renewals,
refinancings or restatements thereto or thereof:

                              the Note;

                              the Security Agreement (NRV);

                              the Security Agreement (Country Coach);

                              the Guaranty;

                              the Security Agreement (Guarantor);

                              the Stock Pledge Agreements;

                              the Trademark Security Agreements;

                             the Letter of Credit Applications; and

     such other  documents,  instruments,  and agreements  (including  financing
statements  and fixture  filings) as Bank may  reasonably  request in connection
with the transactions  contemplated hereunder or to perfect or protect the liens
and security interests granted to Bank in connection herewith.

             "Debt" means, as of the date of determination, the sum, but without
duplication,  of any and  all of a  Person's:  (i)  indebtedness  heretofore  or
hereafter  created,  issued,  incurred  or assumed by such Person  (directly  or
indirectly) for or in respect of money borrowed; (ii) Capital Lease Obligations;
(iii)  obligations  evidenced  by bonds,  debentures,  notes,  or other  similar
instruments;  (iv)  obligations  for the deferred  purchase price of property or
services  (including trade  obligations);  (v) current liabilities in respect of
unfunded  vested  benefits  under any Plan;  (vi)  obligations  under letters of
credit; (vii) obligations under acceptance facilities;  (viii) obligations under
all  guaranties,  endorsements  (other  than for  collection  or  deposit in the
ordinary course of business),  and other contingent  obligations to purchase, to
provide  funds for payment,  or supply funds to invest in any other  Person,  or
otherwise to assure a creditor  against loss;  (ix)  obligations  secured by any
Lien, whether or not such obligations have been assumed; and (x) Swaps.

             "Debt Service" means, with respect to a Borrower, as of the date of
determination for the prior twelve (12) month period, (i) all payments of
principal due and

<PAGE>

payable on the current  portion of such  Borrower's  long-term  Debt during such
period,  (ii) the Cash  Interest  Expense  due and payable  during such  period,
including all interest  payments due and payable during such period  pursuant to
Section 2.4(e),  (iii) such Borrower's Capital Lease Obligations due and payable
during such period, and (iv) such Borrower's federal,  state and local taxes due
and payable during such period.

             "Dollars" or "$" means lawful currency of the United States of
America.

             "EBITDA" means, with respect to a Borrower, as of the date of
determination  for the prior twelve (12) month period,  the amount calculated as
the sum (but without  duplication) of (a) such  Borrower's Net Income,  (b) such
Borrower's Cash Interest Expense, (c) actual taxes paid in cash by such Borrower
which reduced such Borrower's Net Income, (d) such Borrower's total depreciation
expense,  (e) such Borrower's  total  amortization  expense,  (f) other non-cash
items  reducing  such  Borrower's  Net Income,  and (g) whether or not otherwise
includable as a separate item in the statement of such Borrower's Net Income for
such  period,  losses on sales of Assets  less the  amounts  for such  period of
non-cash items  increasing such Borrower's Net Income,  whether or not otherwise
includable  for such period,  gains on the sale of Assets,  all of the foregoing
prepared in accordance with GAAP.

             "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any  successor  statute,  and any and all
regulations thereunder.

             "ERISA Event" means (a) a Reportable Event with respect to a Plan
or Multiemployer  Plan, (b) the withdrawal of a member of the ERISA Group from a
Plan during a plan year in which it was a "substantial  employer" (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate
a Plan in a distress termination (as described in Section 4041(c) of ERISA), (d)
the institution by the PBGC of proceedings to terminate a Plan or  Multiemployer
Plan,  (e) any  event or  condition  (i) that  provides  a basis  under  Section
4042(a)(1),  (2), or (3) of ERISA for the termination of or the appointment of a
trustee to administer,  any Plan or Multiemployer  Plan, of (ii) that may result
in termination of a Multiemployer  Plan pursuant to Section 4041A of ERISA,  (f)
the partial or complete  withdrawal within the meaning of Sections 4203 and 4205
of ERISA of a member  of the  ERISA  Group  from a  Multiemployer  Plan,  or (g)
providing  any  security to any Plan under  Section  401(a)(29)  of the IRC by a
member of the ERISA Group.

             "ERISA Group" means Borrowers and all members of a controlled
group of corporations and all trades or business  (whether or not  incorporated)
under common  control  which,  together  with  Borrowers are treated as a single
employer under Section 414 of the Internal Revenue Code.

<PAGE>

             "Event of Default" has the meaning set forth in Section 7.1.

          "Financial Statement(s)" means, with respect to any accounting period
of any Person,  statements of income and statements of cash flows of such Person
for such period, and balance sheets of such Person as of the end of such period,
setting  forth in each case in  comparative  form figures for the  corresponding
period in the  preceding  fiscal year or, if such period is a full fiscal  year,
corresponding  figures from the preceding annual accounting period, all prepared
in  reasonable  detail  and  in  accordance  with  GAAP,   subject  to  year-end
adjustments in the case of monthly or quarterly Financial Statements.  Financial
Statement(s) shall include the schedules thereto and annual Financial Statements
shall also include the footnotes thereto.

             "GAAP" means generally accepted accounting principles in the United
States of America,  consistently applied,  which are in effect as of the date of
this Agreement.  If any changes in accounting principles from those in effect on
the date hereof are hereafter occasioned by promulgation of rules,  regulations,
pronouncements  or  opinions  by or are  otherwise  required  by  the  Financial
Accounting  Standards  Board  or the  American  Institute  of  Certified  Public
Accountants (or successors thereto or agencies with similar functions),  and any
of such changes  results in a change in the method of calculation of, or affects
the results of such calculation of, any of the financial covenants, standards or
terms found herein,  then the parties  hereto agree to enter into and diligently
pursue  negotiations  in order to amend such financial  covenants,  standards or
terms so as to equitably reflect such changes,  with the desired result that the
criteria  for  evaluating  financial  condition  and  results of  operations  of
Borrower  and the  Subsidiaries  shall be the same after such changes as if such
changes had not been made.

             "Governing Documents" means the certificate or articles of
incorporation, by-laws, or other organizational or governing documents of any
Person.

             "Governmental Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority or subdivision thereof,  domestic
or  foreign,  exercising  executive,   legislative,   judicial,   regulatory  or
administrative functions of or pertaining to government.

             "Guarantor" means Holdings.

             "Guaranty" means that certain Continuing Guaranty dated as of even
date herewith, executed by Guarantor in favor of Bank.

             "Hazardous Materials" means all or any of the following:
(a) substances that are defined or listed in, or otherwise  classified  pursuant
to, any applicable  laws or regulations  as "hazardous  substances,"  "hazardous
materials," "hazardous wastes,"

<PAGE>

"toxic  substances,"  or any other  formulation  intended  to define,  list,  or
classify  substances by reason of deleterious  properties such as  ignitability,
corrosivity,   reactivity,   carcinogenicity,   reproductive  toxicity,  or  "EP
toxicity" or are otherwise regulated for the protection of persons,  property or
the environment;  (b) oil, petroleum,  or petroleum derived substances,  natural
gas, natural gas liquids,  synthetic gas, drilling fluids,  produced waters, and
other wastes  associated  with the  exploration,  development,  or production of
crude oil, natural gas, or geothermal resources; (c) any flammable substances or
explosives  or any  radioactive  materials;  and  (d)  asbestos  in any  form or
electrical  equipment  which  contains any oil or  dielectric  fluid  containing
levels of polychlorinated biphenyls in excess of fifty (50) parts per million.

             "Holdings" means National R.V. Holdings, Inc., a Delaware
corporation.

             "Holdings Credit Agreement" means that certain Revolving Credit
Agreement, dated as of even date herewith, between Holdings and Bank, as amended
or restated from time to time.

             "Indemnified Person(s)" has the meaning given to such term in
Section 9.3(c).

             "Insolvency Proceeding" means any proceeding commenced by or
against any Person,  under any  provision of the  Bankruptcy  Code, or under any
other bankruptcy or insolvency law,  including,  but not limited to, assignments
for the benefit of creditors, formal or informal moratoriums,  compositions,  or
extensions with some or all creditors.

           "Interest Payment Date" means the last Business Day of each and every
month, and the Maturity Date.

             "Interest Period" means, with respect to each LIBOR Lending Rate
Portion,  the period  commencing  on the date of such LIBOR Lending Rate Portion
and ending on the numerically  corresponding  day one (1), two (2), three (3) or
six (6) months  thereafter  as Borrower  may elect  pursuant  to the  applicable
Notice of Borrowing or Notice of Conversion or Continuation;  provided, however,
that:

             (a) any Interest Period which would otherwise end on a day which
is not a LIBOR  Business  Day shall be  extended  to the next  succeeding  LIBOR
Business Day unless such LIBOR  Business Day falls in another  calendar month in
which case such Interest  Period shall end on the  immediately  preceding  LIBOR
Business Day;

             (b) any Interest Period which begins on the last LIBOR Business
Day of the calendar month (or on a day for which there is no numerically
corresponding day

<PAGE>

in the calendar month at the end of such Interest  Period) shall end on the last
LIBOR  Business Day of the calendar  month in which it would have ended if there
were a numerically corresponding day in such calendar month; and

             (c) no Interest Period may extend beyond the Maturity Date.

             "Internal Revenue Code" means the Internal Revenue Code of 1986,
as supplemented and amended from time to time, or any successor statute, and any
and all regulations and rules promulgated thereunder.

             "knowledge of Borrowers" means the actual knowledge of a
Responsible Officer of either Borrower.

           "Lending Office" means Bank's office located at its address set forth
on the signature pages hereof,  or such other office of Bank as it may hereafter
designate as its Lending Office by notice to Borrower.

           "Letter(s) of Credit" means any standby letter(s) of credit issued by
Bank pursuant to Section 2.3.

             "Letter of Credit and Reimbursement Agreement" means that certain
Letter of Credit and  Reimbursement  Agreement,  dated as of  December  1, 1985,
between NRV and Bank, as amended or restated from time to time.

            "Letter of Credit Application" means Bank's standard Application for
Irrevocable Standby Letter of Credit and Standby Letter of Credit Agreement,  as
the same may be from time to time amended or modified.

           "Letter of Credit Fees" has the meaning given to such term in Section
2.3(c).

             "Letter of Credit Sublimit" means One Million Five Hundred Thousand
Dollars ($1,500,000).

             "Letter of Credit Usage" means, on any date of determination, the
aggregate maximum amounts available to be drawn under all outstanding Letters of
Credit, without regard to whether any conditions to drawing could then be met.

             "LIBOR Business Day" means any Business Day on which major
commercial  banks are open for  international  business  (including  dealings in
Dollar deposits) in Los Angeles, California and London, England.

<PAGE>

             "LIBOR Lending Rate" means, with respect to a LIBOR Lending Rate
Portion,  the rate per annum (rounded  upwards if necessary to the nearest whole
one-hundredth of one percent (.01%)), determined as the sum of: (a) the quotient
of: (i) Base LIBOR for the relevant  Interest  Period of such LIBOR Lending Rate
Portion;  divided by (ii) the number equal to one hundred  percent  (100%) minus
the LIBOR Reserve Percentage with respect to such Interest Period;  plus (b) one
and  one-quarter  (1.25)  percentage  points.  The LIBOR  Lending  Rate shall be
adjusted  automatically on the effective date of any change in the LIBOR Reserve
Percentage, such adjustment to affect any LIBOR Lending Rate Portion outstanding
on such  effective  date to the extent such change is applied  retroactively  to
eurocurrency  funding  of a member  bank in the  Federal  Reserve  System.  Each
determination  of a LIBOR Lending Rate by Bank,  including,  but not limited to,
any  determination  as to the  applicability  or  allocability  of  reserves  to
eurocurrency  liabilities  or as to  the  amount  of  such  reserves,  shall  be
conclusive and final in the absence of manifest error.

             "LIBOR Lending Rate Portion" means any portion of any Loan
designated  by Borrowers as bearing  interest at the LIBOR Lending Rate pursuant
to Section 2.5 or 2.6.

             "LIBOR Reserve Percentage" means, for any Interest Period of any
LIBOR  Lending  Rate  Portion,  the daily  average  of the stated  maximum  rate
(rounded  upward  to the  nearest  one-hundredth  of  one  percent  (.01%)),  as
determined by Bank in accordance with its usual procedures (which  determination
shall be conclusive  in the absence of manifest  error),  at which  reserves are
required to be maintained during such Interest Period  (including  supplemental,
marginal,   and  emergency   reserves)  under   Regulation  D  by  Bank  against
"Eurocurrency  liabilities"  (as such term is  defined  in  Regulation  D),  but
without  benefit  or credit of  proration,  exemptions,  or  offsets  that might
otherwise  be available  to Bank from time to time under  Regulation  D. Without
limiting the  generality of the  foregoing,  "LIBOR  Reserve  Percentage"  shall
include any other  reserves  required to be  maintained  by Bank against (i) any
category of liabilities  that includes  deposits by reference to which the LIBOR
Lending Rate for a LIBOR Lending Rate Portion is being  determined  and (ii) any
category of extension of credit or other assets that includes LIBOR Lending Rate
Portion.

             "Lien" means any mortgage, deed of trust, pledge, security 
interest,  hypothecation,  assignment, deposit arrangement or other preferential
arrangement,  lien,  charge or encumbrance  (including,  any conditional sale or
other title retention agreement, or finance lease) of any kind.

             "Loan(s)" means the Revolving Loans.

             "Material Adverse Effect" means a material adverse effect on (i) 
the business, Assets, condition (financial or otherwise), results of operations,
or reasonably  foreseeable  business  prospects of Borrowers,  any Subsidiary of
either Borrower, and

<PAGE>

Guarantor,  taken as a whole,  (ii) the ability of  Borrowers  to perform  their
obligations under this Agreement  (including,  without limitation,  repayment of
the  Obligations  as they come due),  or the ability of Guarantor to perform its
obligations under the Guaranty,  or (iii) the validity or enforceability of this
Agreement, the Credit Documents, or the rights or remedies of Bank hereunder and
thereunder.

             "Maturity Date" means July 28, 1999.

             "Multiemployer Plan" means a "multiemployer plan" as defined in
ss.  4001(a)(3)  of ERISA or ss. 3(37) of ERISA to which any member of the ERISA
Group has contributed, or was obligated to contribute,  within the preceding six
plan years (while a member of such ERISA Group) including for these purposes any
Person  which  ceased  to be a member of the ERISA  Group  during  such six year
period.

             "Net Income" means, with respect to any fiscal period of a 
Borrower, the net income of such Borrower reflected on such Borrower's Financial
Statements for such period, prepared in accordance with GAAP.

             "NRV" means National R.V., Inc., a California corporation.

             "Note" means that certain Secured Promissory Note, dated as of even
date herewith, executed by Borrowers to the order of Bank, in the amount of
Twenty Million Dollars ($20,000,000) to evidence the Loans

             "Notice of Borrowing" means an irrevocable notice from Borrowers
to Bank of Borrowers' request for a Borrowing pursuant to the terms of
Section 2.5, substantially in the form of Exhibit 2.5(b).

             "Notice of Conversion or Continuation" means a written notice given
pursuant to the terms of Section 2.6(b), substantially in the form of 
Exhibit 2.6(b).

             "Obligations" means any and all debt and obligations of Borrowers
owing to Bank and to its successors and assigns,  previously,  now, or hereafter
incurred,  and  howsoever  evidenced,  whether  direct or indirect,  absolute or
contingent,   joint  or  several,  liquidated  or  unliquidated,   voluntary  or
involuntary,  due or not  due,  legal or  equitable,  whether  incurred  before,
during, or after any Insolvency  Proceeding,  and whether recovery thereof is or
becomes  barred  by  a  statute  of  limitations  or  is  or  becomes  otherwise
unenforceable  or unallowable as claims in any Insolvency  Proceeding,  together
with all interest thereupon (including all interest accruing during the pendency
of an Insolvency  Proceeding).  The Obligations shall include,  without limiting
the  generality of the  foregoing,  all  principal and interest  owing under the
Loans and Letter of Credit Applications, all Bank Expenses, the Letter of Credit
Fees and any other fees and expenses due hereunder,  and all other  indebtedness
evidenced by this Agreement and/or the Note.

<PAGE>

             "Operating Lease" means any lease of an Asset by a Person which, in
conformity with GAAP, is not a Capital Lease.

             "Old Lender" means United States National Bank of Oregon.

             "Participant" has the meaning set forth in Section 9.5(d).

             "Pay-Off Letter" means those certain letters, in form and substance
reasonably satisfactory to Bank, from Old Lender respecting the amount necessary
to repay in full all of the obligations of Country Coach owing to Old Lender and
obtain a  termination  or release of all of the Liens  existing  in favor of Old
Lender in and to the Assets of Country Coach.

             "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

            "Permitted Debt" means (i) Debt owing to Bank in accordance with the
terms of this  Agreement  and the Credit  Documents,  and (ii) Debt in a maximum
principal amount of Two Million Dollars  ($2,000,000)  secured by Purchase Money
Liens; (iii) Debt owing to the Industrial Development Authority of the County of
Riverside,  California pursuant to the "Loan Agreement" as defined in the Letter
of Credit and Reimbursement Agreement,  but no voluntary prepayments,  renewals,
extensions or refinancing  thereof,  (iv) Debt owing to the California  Economic
Development  Financing  Authority pursuant to the "Loan Agreement" as defined in
the Reimbursement Agreement, but no voluntary prepayments,  renewals, extensions
or  refinancing  thereof,  (v) any  obligations  of Borrowers  or Guarantor  for
contingent liabilities arising pursuant to repurchase agreements entered into in
the  ordinary  course of  business  in  connection  with  sales of  recreational
vehicles,  (vi)  Debt  owing by either  Borrower  to the  other  Borrower  or to
Guarantor in accordance with Section 6.8(b),  and (vii) Debt approved in writing
by Bank and listed on Schedule 1.1P.

             "Permitted Investments" means any of the following investments
denominated  and payable in Dollars,  maturing  within one year from the date of
acquisition,  selected by Borrowers: (i) marketable direct obligations issued or
unconditionally  guaranteed  by the United  States  government  or issued by any
agency  thereof  and backed by the full  faith and credit of the United  States;
(ii) marketable direct  obligations  issued by any state of the United States or
any  political  subdivision  of any  such  state or any  public  instrumentality
thereof  and,  at the time of  acquisition,  having the  highest  credit  rating
obtainable  from  either  Standard  &  Poor's  Corporation  ("S&P")  or  Moody's
Investors  Service,  Inc.  ("Moody's");  (iii)  commercial  paper  or  corporate
promissory  notes bearing at the time of  acquisition  the highest credit rating
either of S&P or Moody's issued by United States, Canadian, European or Japanese
bank holding companies or industrial or financial  companies;  (iv) certificates
of deposit issued by and bankers  acceptances of and interest  bearing  deposits
with Bank;  and (v) money  market funds  organized  under the laws of the United
States or any state thereof

<PAGE>

that invest  predominantly in any of the foregoing  investments  permitted under
clauses (i), (ii), (iii) and (iv).

             "Permitted Liens" means (i) Liens for current taxes, assessments or
other  governmental  charges which are not delinquent or remain payable  without
any penalty or are being contested in good faith and adequate reserves have been
set aside with respect thereto as required by GAAP and, by reason of nonpayment,
no material  property is subject to a material risk of loss or forfeiture,  (ii)
Liens  in  favor  of  Bank,   (iii)   statutory   Liens,   such  as  mechanics',
materialmen's,  landlord's,  warehousemen's,  and  carriers'  liens,  and  other
similar liens,  other than those  described in clause (i) above,  arising in the
ordinary course of business with respect to obligations which are not delinquent
or are being contested in good faith by appropriate proceedings,  provided that,
if  delinquent,  adequate  reserves have been set aside with respect  thereto as
required by GAAP and, by reason of nonpayment,  no material  property is subject
to a material risk of loss or  forfeiture,  (iv) Purchase  Money Liens  securing
Debt  described  in clause  (ii) of the  definition  of  Permitted  Debt in this
Agreement, (v) judgment and other similar Liens arising in connection with court
proceedings (not otherwise an Event of Default), provided the execution or other
enforcement of such Liens is effectively  stayed and the claims secured  thereby
are being  contested in good faith and by  appropriate  proceedings,  (vi) Liens
(other than Liens created or imposed  under ERISA)  incurred or deposits made in
the  ordinary  course of  business in  connection  with  workers'  compensation,
unemployment  insurance  and other  types of social  security,  or to secure the
performance of tenders,  statutory  obligations,  surety and appeal bonds, bids,
leases,  government  contracts,  performance and return-of-money bonds and other
similar obligations (exclusive in any case of obligations incurred in connection
with the borrowing of money or the  obtaining of advances or credit),  and (vii)
easements, licenses, rights-of-way and other rights and privileges in the nature
of easements  and similar Liens  incidental to the ownership of property,  which
are  necessary  for  the  conduct  of the  activities  of  Borrowers  and  their
Subsidiaries or which customarily exist on properties of corporations engaged in
similar  activities and similarly  situated and not incurred in connection  with
the borrowing of money or the obtaining of advances of credit.

             "Person" means and includes natural persons, corporations, limited
partnerships,   general  partnerships,   limited  liability  companies,  limited
liability  partnerships,  joint stock companies,  joint ventures,  associations,
companies,  trusts,  banks,  trust companies,  land trusts,  business trusts, or
other  organizations,  irrespective  of  whether  they are legal  entities,  and
governments and agencies and political subdivisions thereof.

         "Plan" means an "employee benefit plan" as defined in ss. 3(3) of ERISA
in which any  personnel  of any member of the ERISA  Group  participate  or from
which any such personnel may derive a benefit, excluding any Multiemployer Plan,
but  including  any plan either  established  or maintained by any member of the
ERISA  Group or to which such Person  contributes  under the laws of any foreign
country.

<PAGE>

             "Property" has the meaning given to such term in the Reimbursement
Agreement.

             "Purchase Money Lien" means a Lien on any Asset acquired by either
Borrower or any of their Subsidiaries; provided that (i) such Lien attaches only
to the Asset being acquired; (ii) in the case of any individual Asset whose fair
market value or cost exceeds $25,000,  a description of the Asset being acquired
is  furnished  to Bank;  and (iii) the Debt  incurred  in  connection  with such
acquisition  does not exceed one hundred percent (100%) of the purchase price of
such Asset.

     "Quarterly Compliance  Certificate" means a certificate of compliance to be
delivered quarterly in accordance with Section 5.3(b), substantially in the form
of Exhibit 5.3(b).

        Real Estate Leases" means all of the leases with respect to any interest
in real property now or hereinafter entered into by either Borrower as a tenant,
or which have been, or are in the future, being purchased, assigned or sublet to
either Borrower as a tenant.

             "Reference Lending Rate" means the Reference Rate.

             "Reference Lending Rate Portion" means any portion of any Loan
designated  by  Borrower  as bearing  interest  at the  Reference  Lending  Rate
pursuant to Section 2.5 or 2.6.

            "Reference Rate" means the rate of interest announced by Bank at its
corporate  headquarters as its reference rate and which serves as the basis upon
which  effective  rates of  interest  are  calculated  for  those  loans  making
reference thereto. The Reference Rate is determined by Bank from time to time as
a means of pricing credit  extensions to some customers and is neither  directly
tied to some external rate of interest or index nor  necessarily the lowest rate
of  interest  charged  by Bank at any  given  time for any  particular  class of
customers or credit extensions.

             "Revolving Credit Commitment" means the difference of (i) Twenty
Million Dollars ($20,000,000), minus (ii) the Additional Loan Stated Amount, and
minus (iii) a reserve  equal to the amount by which NRV's  obligations  owing to
Bank under the Reimbursement  Agreement exceed seventy-five percent (75%) of the
value  of the  Property,  as  determined  by  Bank  in its  reasonable  business
judgment.

             "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System,  as such regulation may be amended or supplemented  from
time to time.

<PAGE>

             "Reimbursement Agreement" means that certain Reimbursement
Agreement,  dated as of  December 1, 1995,  between NRV and Bank,  as amended or
restated from time to time.

             "Reportable Event" means any of the events described in
Section 4043(c) of ERISA other than a Reportable Event as to which the provision
of 30 days notice to the PBGC is waived under applicable regulations.

     "Responsible  Officer" means either the president,  chief financial officer
or any vice president of a Person, or such other officer,  employee, or agent of
such Person designated by a Responsible Officer in a writing delivered to Bank.

           "Retiree Health Plan" means an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA that provides benefits to individuals after
termination of their employment, other than as required by Section 601 of ERISA.

             "Revolving Loans" means the revolving loans made by Bank to
Borrowers pursuant to Section 2.2.

             "Revolving Loans Daily Balances" means the amount determined by
taking  the amount of the  obligations  owed  under the  Revolving  Loans at the
beginning of a given day, adding any new Revolving Loans advanced or incurred on
such date, and  subtracting  any payments or collections on the Revolving  Loans
which are deemed to be paid on that date under the provisions of this Agreement.

             "Security Agreement (Country Coach)" means that certain Security
Agreement, dated as of even date herewith, between Country Coach and Bank.

             "Security Agreement (NRV)" means that certain Security Agreement,
dated as of even date herewith, between NRV and Bank.

             "Security Agreement (Guarantor)" means that certain Security
Agreement, dated as of even date herewith, between Guarantor and Bank.

             "Solvent" means, with respect to any Person on the date any
determination  thereof is to be made,  that on such date:  (a) the present  fair
valuation  of the  property  and  assets  of such  Person is  greater  than such
Person's  probable  liability in respect of existing debts; (b) such Person does
not  intend to, and does not  believe  that it will,  incur  debts  beyond  such
Person's ability to pay as such debts mature; and (c) such Person is not engaged
in  business  or a  transaction,  and is not about to engage  in  business  or a
transaction,  which would leave such Person with  property and assets  remaining
which would  constitute  unreasonably  small  capital after giving effect to the
nature of the particular business or transaction.  For purposes of this
definition (i) the "fair valuation" of any property or assets means

<PAGE>

the amount  realizable  within a reasonable time,  either through  collection or
sale of such  property or assets at their  regular  market  value,  which is the
amount  obtainable  by a capable and diligent  Person from an  interested  buyer
willing to purchase  such  property  or assets  within a  reasonable  time under
ordinary  circumstances;   and  (ii)  the  term  "debts"  includes  any  payment
obligation,  whether or not reduced to judgment,  equitable or legal, matured or
unmatured,  liquidated  or  unliquidated,  disputed  or  undisputed,  secured or
unsecured, absolute, fixed or contingent.

             "Stock Pledge Agreement" means each certain Security Agreement-
Stock  Pledge  now  or  hereafter  entered  into  between  Guarantor  and  Bank,
substantially in the form of Exhibit 1.1S-2 to the Holdings Credit Agreement.

             "Subsidiary" means any corporation, limited liability company,
partnership,  trust or other entity (whether now existing or hereafter organized
or acquired) of which a Person or one or more Subsidiaries of such Person at the
time owns or controls  directly or  indirectly  more than fifty percent (50%) of
the shares of stock, membership,  partnership or other ownership interest having
general  voting power under  ordinary  circumstances  to elect a majority of the
board of directors, managers or trustees or otherwise exercising control of such
corporation,  limited  liability  company,  partnership,  trust or other  entity
(irrespective of whether at the time stock or any other form of ownership of any
other class or classes  shall have or might have  voting  power by reason of the
happening of any contingency).

             "Swaps" means payment obligations with respect to interest rate 
swaps,  currency  swaps  and  similar  obligations  obligating  a Person to make
payments,  whether periodically or upon the happening of a contingency.  For the
purposes of this Agreement, the amount of the obligation under any Swap shall be
the  amount  determined,  in  respect  thereof  as of the end of the  then  most
recently  ended fiscal quarter of Borrowers,  based on the assumption  that such
Swap had  terminated  at the end of such  fiscal  quarter,  and in  making  such
determination,  if any agreement  relating to such Swap provides for the netting
of  amounts  payable  by and to each  party  thereto  or if any  such  agreement
provides for the simultaneous  payment of amounts by and to each party,  then in
each  such  case,  the  amount  of such  obligation  shall be the net  amount so
determined.

     "Tangible Net Worth" means,  with respect to a Borrower,  as of the date of
determination,   such   Borrower's  net  worth  excluding   patents,   licenses,
trademarks,  trade names,  goodwill and other intangible Assets,  organizational
expenses and monies due from its Affiliates  (including  officers,  shareholders
and directors), calculated in accordance with GAAP.

             "Taxes" has the meaning set forth in Section 8.1.

<PAGE>

             "Trademark Security Agreement" means each certain Trademark
Security Agreement now or hereafter entered into between either Borrower, on the
one hand, and Bank on the other hand.

             "Transferee" has the meaning set forth in Section 9.5(e).

         "Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present  value of all benefits  under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions),  all determined as of the then
most  recent  valuation  date for such Plan,  but only to the  extent  that such
excess  represents  a potential  liability of a member of the ERISA Group to the
PBGC or an appointed trustee under Title IV of ERISA.

             "Unmatured Event of Default" means any condition or event which
constitutes  an Event of  Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.

             "Working Capital" means, for any period for any Person, the amount
calculated as current  assets minus current  liabilities  (excluding the current
portion of any long-term Debt) for such period,  all as determined in accordance
with GAAP.

       1.2 Accounting Terms and Determinations.  Unless otherwise specified
herein,  all accounting  terms used herein shall be interpreted,  all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP.

       1.3 Computation of Time Periods.  In this Agreement, with respect to the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" each
mean "to but excluding."  Periods of days referred to in this Agreement shall be
counted in calendar days unless otherwise stated.

       1.4 Construction.  Unless the context of this Agreement clearly requires
otherwise,  references  to the plural  include the  singular and to the singular
include the plural,  references to any gender include any other gender, the part
includes the whole, the term "including" is not limiting, and the term "or" has,
except where  otherwise  indicated,  the inclusive  meaning  represented  by the
phrase "and/or." References in this Agreement to "determination" by Bank include
good faith estimates by Bank (in the case of quantitative  determinations),  and
good faith  beliefs  by Bank (in the case of  qualitative  determinations).  The
words  "hereof,"  "herein,"  "hereby,"  "hereunder,"  and similar  terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement.  Article, section,  subsection,  clause, exhibit and schedule
references are to this Agreement, unless otherwise specified.

<PAGE>

       1.5 Exhibits and Schedules.  All of the exhibits and schedules attached
hereto shall be deemed incorporated herein by reference.

       1.6 No Presumption Against Any Party.  Neither this Agreement, any of
the Credit Documents, any other document,  agreement, or instrument entered into
in connection herewith, nor any uncertainty or ambiguity herein or therein shall
be construed or resolved using any presumption against any party hereto, whether
under any rule of  construction or otherwise.  On the contrary,  this Agreement,
the Credit  Documents,  and the other  documents,  instruments,  and  agreements
entered into in  connection  herewith  have been reviewed by each of the parties
and their  counsel  and shall be  construed  and  interpreted  according  to the
ordinary  meanings of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

       1.7 Independence of Provisions.  All agreements and covenants hereunder,
under the Credit Documents, and the other documents, instruments, and agreements
entered into in connection  herewith shall be given independent effect such that
if a  particular  action or  condition  is  prohibited  by the terms of any such
agreement or covenant, the fact that such action or condition would be permitted
within the  limitations of another  agreement or covenant shall not be construed
as allowing such action to be taken or condition to exist.

                                     ARTICLE

                         TERMS OF THE CREDIT FACILITIES

       2.1 [Intentionally Omitted].

       2.2 Revolving Loans.  Provided that no Event of Default or Unmatured
Event of Default has  occurred,  and  subject to the other terms and  conditions
hereof,  Bank agrees to make revolving loans  ("Revolving  Loans") to Borrowers,
upon notice in accordance with Section  2.5(b),  from the Closing Date up to but
not  including the Maturity  Date,  the proceeds of which shall be used only for
the purposes allowed in Section 6.1(b),  subject to the following conditions and
limitations:

           (a) the aggregate principal amount of Revolving Loans outstanding
after giving effect to any proposed Borrowing plus the Letter of Credit Usage on
such date shall not exceed the amount of the Revolving Credit Commitment;

           (b) Borrowers shall not be permitted to borrow, and Bank shall not
be obligated to make, any Revolving Loans to Borrowers,  unless and until all of
the  conditions  for a Borrowing  set forth in Section 3.2, have been met to the
satisfaction of Bank in its sole and absolute discretion; and

<PAGE>

           (c) Borrowings shall be in minimum amounts each of One Hundred
Thousand  Dollars  ($100,000),  plus increments of One Hundred  Thousand Dollars
($100,000) in excess of such minimum amount.

Borrowers may repay and,  subject to the terms and conditions  hereof,  reborrow
Revolving  Loans. All such repayments shall be without penalty or premium except
as otherwise required by Section 2.7 with respect to repayments of LIBOR Lending
Rate Portions.  Borrowers  shall give Bank at least one (1) Business Day's prior
notice of any repayment of a Reference Lending Rate Portion and at least one (1)
LIBOR  Business  Day's prior  notice of any  repayment  of a LIBOR  Lending Rate
Portion.

       2.3 Letters of Credit.

           (a) Subject to the terms and conditions hereof, Borrowers may
request Bank to issue Letters of Credit for the account of  Borrowers,  subject,
in each case, to the satisfaction of each of the following conditions:

             (i) The face amount of the Letter of Credit  requested  if and when
issued must not cause the sum of the aggregate principal amount outstanding of
all Revolving Loans plus the Letter of Credit Usage to exceed the Revolving
Credit  Commitment then in effect;

             (ii) The face amount of the Letter of Credit  requested  if and
when issued must not cause the Letter of Credit  Usage to exceed  the Letter of
Credit  Sublimit;

             (iii) The Letter of Credit may not have an expiry date or draw
period which extends beyond the date which is thirty (30) days after the
Maturity Date;

             (iv) The conditions specified in Section 3.2(c) and (d) have been
satisfied on the date of issuance of such Letter of Credit; and

             (v)  Borrowers  shall have  submitted a Letter of Credit
Application, and executed such other  documents,  instruments  and  agreements
as may be required by Bank, all in form and substance satisfactory to Bank;
provided,  however, that the execution,  delivery and performance of such Letter
of Credit  Application and other documents,  instruments and agreements must not
constitute  an  Unmatured  Event of Default or an Event of Default  and,  in the
event of any conflict  between the  provisions  hereof and such Letter of Credit
Application and other  documents,  instruments  and  agreements,  the provisions
hereof shall control.

<PAGE>

           (b) Borrower shall pay to Bank a fee in the amount of one percent
(1%) of the face  amount of each  Letter of Credit upon  issuance  thereof,  and
again on each and every  anniversary  of the  issuance  thereof,  and all of the
standard  fees with respect to each Letter of Credit in the amounts set forth in
the applicable Letter of Credit Application (collectively, the "Letter of Credit
Fees").

           (c) In determining whether to pay under any Letter of Credit, only
Bank shall be responsible  for determining  that the documents and  certificates
required to be delivered under the Letter of Credit have been delivered and that
they comply on their face with the requirements of such Letter of Credit.

           (d) With respect to all Letters of Credit outstanding upon the
occurrence of an Unmatured Event of Default or Event of Default,  Borrower shall
either replace such Letters of Credit, whereupon such Letters of Credit shall be
canceled,  with letters of credit  issued by another  issuer  acceptable  to the
beneficiary  of such Letter of Credit,  or provide  Bank,  as security  for such
Letters  of  Credit,  with a cash  deposit  in an amount  equal to the Letter of
Credit Usage for so long as such Letters of Credit remain outstanding during the
continuance of such Unmatured Event of Default or Event of Default.

           (e) Any and all amounts paid by Bank under any Letter of Credit
shall constitute a Borrowing of a Revolving Loan as a Base Lending Rate Portion.

       2.4 Interest  Rates;  Payments of Interest.
           (a) Interest Rate Options.  Borrowers shall from time to time
designate  one or both of the  following  two  options in  accordance  with
Sections  2.5(b)  and  2.6(b)  to  apply  to all or any  portion  of the  unpaid
principal  balance of the Loans:  (i) the  Reference  Lending  Rate; or (ii) the
LIBOR Lending  Rate;  provided,  however,  there shall be no more than three (3)
LIBOR Lending Rate Portions outstanding at any time.

           (b) Default Rate. If any payment of principal or interest
on the Loans due  hereunder  shall  not be paid  when due  (whether  at the
stated  maturity,  by  acceleration  or  otherwise),  in  addition to and not in
substitution  of any of Bank's other  rights and  remedies  with respect to such
nonpayment, the entire unpaid principal balance of the Loans shall bear interest
at a rate  equal to the  otherwise  applicable  rate plus  three (3)  percentage
points (300 basis points), effective on the day following the date of nonpayment
and  continuing  until  such  overdue  payment  is paid in  full.  In  addition,
interest, the Fees, and other amounts due hereunder not paid when due shall bear
interest at the  Reference  Lending Rate plus three (3)  percentage  points (300
basis  points),  effective  on the day  following  the  date of  nonpayment  and
continuing until such overdue payment is paid in full.

           (c) Computation of Interest. All computations of interest with
respect to LIBOR Lending Rate Portion, shall be calculated on the basis of a
year of three

<PAGE>

hundred  sixty  (360)  days for the actual  days  elapsed  in such  period.  All
computations  of interest with respect to Reference  Lending Rate Portions shall
be calculated on the basis of a year of three hundred  sixty-five  (365) (except
in a leap year,  in which  case,  three  hundred  sixty-six  (366)) days for the
actual  days  elapsed  in such  period.  In the event  that the  Reference  Rate
announced  is, from time to time,  changed,  adjustment  in the rate of interest
payable  hereunder on all outstanding  Reference  Lending Rate Portions shall be
made as of 12:01 a.m.  (California  time) on the effective date of the change in
the Base Rate.  Interest shall accrue from the first day of the making of a Loan
to the date of repayment of such Loan in accordance  with the provisions of this
Agreement; provided, however, if a Loan is repaid on the same day on which it is
made,  then  one (1)  day's  interest  shall be paid on that  Loan.  Any and all
interest  not paid when due shall  thereafter  be deemed to be a Revolving  Loan
made under  Section 2.2 and shall bear  interest  thereafter  as provided for in
Section 2.4(b).

           (d) Maximum Interest Rate. In no event shall the interest rate and
other charges  hereunder exceed the highest rate permissible under any law which
a  court  of  competent  jurisdiction  shall,  in a  final  determination,  deem
applicable  hereto.  In the  event  that such a court  determines  that Bank has
received  interest  and other  charges  hereunder  in excess of the highest rate
applicable hereto, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations, other than interest, in the
inverse order of maturity,  and the provisions hereof shall be deemed amended to
provide  for  the  highest   permissible  rate.  If  there  are  no  Obligations
outstanding, Bank shall refund to Borrowers such excess.

           (e) Payments of Interest. All accrued but unpaid interest on the
Loans, calculated in accordance with this Section 2.4, shall be due and payable,
in arrears, on each and every Interest Payment Date.

       2.5 Notice of Borrowing Requirements.

           (a) Each Borrowing of a Reference Lending Rate Portion shall be
made on a Business Day and each  Borrowing of a LIBOR Lending Rate Portion shall
be made on a LIBOR Business Day.

           (b) Each Borrowing shall be made upon telephonic notice given by
a Responsible Officer of each Borrower, followed by a Notice of Borrowing, given
by facsimile or personal service,  delivered to Bank at the address set forth in
the Notice of Borrowing.  If for a Reference Lending Rate Portion, Bank shall be
given such notice no later than 11:00 a.m.,  California  time,  one (1) Business
Day prior to the day on which such Borrowing is to be made,  and, if for a LIBOR
Lending  Rate  Portion,  Bank shall be given  notice no later  than 11:00  a.m.,
California  time,  two (2) LIBOR  Business  Days  prior to the day on which such
Borrowing is to be made, and such notice shall state the amount thereof (subject
to the provisions of Section 2.2).

<PAGE>

           (c) Bank shall not incur any liability to Borrowers in acting upon
any telephonic  notice which Bank believes in good faith to have been given by a
Responsible  Officer of each  Borrower,  or for  otherwise  acting in good faith
under this Section 2.5, and in making any Loans pursuant to telephonic notice.

           (d) So long as all of the conditions for a Borrowing of a Loan set
forth  herein  have been  satisfied,  Bank shall make the  proceeds of such Loan
available to Borrowers on the applicable Borrowing date by transferring same day
funds, equal to the amount of such Loan, in accordance with written disbursement
instructions  given by Borrowers to Bank, in form and substance  satisfactory to
Bank and otherwise consistent with Section 6.1.

       2.6 Conversion or Continuation Requirements.

           (a) Borrowers shall have the option to: (i) convert, at any time, all
or any portion of any of the  outstanding  Loans,  in integral  multiples of One
Hundred Thousand Dollars  ($100,000),  from a portion bearing interest at one of
the interest rate options  available  pursuant to Section 2.4(a) to another;  or
(ii) upon the  expiration of any Interest  Period  applicable to a LIBOR Lending
Rate Portion,  to continue all or any portion of such LIBOR Lending Rate Portion
as a LIBOR Lending Rate Portion with the succeeding  Interest  Period(s) of such
continued  LIBOR Lending Rate Portion  commencing on the expiration  date of the
Interest Period previously applicable thereto;  provided,  however, that a LIBOR
Lending Rate  Portion may only be converted to a Reference  Lending Rate Portion
or continued  as a LIBOR  Lending  Rate  Portion on the  expiration  date of the
Interest  Period  applicable  thereto;   provided  further,   however,  that  no
outstanding Loan, or portion thereof, may be continued as, or be converted into,
a LIBOR  Lending Rate  Portion in the event that,  on the earlier of the date of
the  delivery of the Notice of  Conversion  or  Continuation  or the  telephonic
notice in respect thereof, any Event of Default or Unmatured Event of Default is
continuing;  provided  further,  however,  that if Borrowers fail to deliver the
appropriate  Notice of Conversion or  Continuation  or the telephonic  notice in
respect thereof  pursuant to the required notice period before the expiration of
the Interest  Period of a LIBOR  Lending Rate  Portion,  such LIBOR Lending Rate
Portion shall  automatically  be converted to a Reference  Lending Rate Portion;
provided  further,  however,  that  no  outstanding  portion  of a  Loan  may be
continued  as, or be converted  into, a LIBOR  Lending Rate Portion in the event
that, after giving effect to any such conversion or continuation, there would be
more than three (3) LIBOR Lending Rate Portions outstanding.

             (b) Borrowers shall give telephonic notice of any proposed
continuation or conversion  pursuant to this Section 2.6 followed by a Notice of
Conversion or Continuation, given by facsimile or personal service, delivered to
Bank at the address set forth in the Notice of  Conversion or  Continuation,  no
later  than  11:00  a.m.,  California  time,  on the  Business  Day which is the
proposed  conversion  date (in the case of a conversion  to a Reference  Lending
Rate Portion) and no later than 11:00 a.m. California time, two (2)

<PAGE>

LIBOR Business Days in advance of the proposed  conversion or continuation  date
(in the case of a  conversion  to, or a  continuation  of, a LIBOR  Lending Rate
Portion).  If such Notice of Conversion or  Continuation is received by Bank not
later than 11:00 a.m.,  California time, on a LIBOR Business Day, such day shall
be treated as the first LIBOR Business Day of the required notice period. In any
other event,  such notice will be treated as having been received at the opening
of  business  of the  next  LIBOR  Business  Day.  A  Notice  of  Conversion  or
Continuation  shall specify:  (1) the proposed  conversion or continuation  date
(which shall be a Business Day or a LIBOR Business Day, as applicable);  (2) the
amount of the Revolving Loan to be converted or continued; (3) the nature of the
proposed  conversion or continuation;  and (4) in the case of a conversion to or
continuation of a LIBOR Lending Rate Portion, the requested Interest Period.

           (c) Bank shall not incur any liability to Borrowers in acting upon
any  telephonic  notice  referred to above which Bank  believes in good faith to
have been given by a Responsible  Officer of Borrower or for otherwise acting in
good faith under this Section 2.6. Any Notice of Conversion or Continuation  (or
telephonic notice in respect thereof) shall be irrevocable and Borrower shall be
bound to convert or continue in accordance therewith.

       2.7 LIBOR Costs.  Borrowers shall reimburse Bank for any increase in
Bank's costs  (which shall  include,  but not be limited to,  taxes,  other than
taxes imposed on the overall net income of Bank fees or charges), or any loss or
expense (including,  without limitation,  any loss or expense incurred by reason
of the liquidation or  re-employment of deposits or other funds acquired by Bank
to fund or maintain  outstanding the principal  amount of the Loans) incurred by
it directly or  indirectly  resulting  from the making of any LIBOR Lending Rate
Portion due to: (a) the modification,  adoption,  or enactment of any law, rule,
regulation or treaty or the interpretation  thereof by any governmental or other
authority (whether or not having the force of law) which becomes effective after
the date hereof; (b) the modification or new application of any law,  regulation
or treaty or the  interpretation  thereof by any governmental or other authority
(whether or not having the force of law) which becomes  effective after the date
hereof;  (c)  compliance  by Bank with any request or directive  (whether or not
having the force of law) of any  monetary or fiscal  agency or  authority  which
becomes  effective  after the date hereof;  (d)  violations  by Borrowers of the
terms of this  Agreement;  or (e) any prepayment of a LIBOR Lending Rate Portion
at any  time  prior  to the end of the  applicable  Interest  Period,  including
pursuant to Section 7.2(a).

           The amount of such costs, losses, or expenses shall be determined
solely by Bank based upon the  assumption  that Bank funded one hundred  percent
(100%) of each LIBOR  Lending Rate Portion in the LIBOR market.  In  attributing
Bank's general costs relating to its eurocurrency  operations to any transaction
under this Agreement or averaging any costs over a period of time,  Bank may use
any reasonable  attribution or averaging  methods which it deems appropriate and
practical.  Bank shall notify  Borrowers of the amount due Bank pursuant to this
Section 2.7 in respect of any LIBOR Lending Rate Portion as soon as  practicable
but in any event within forty-five (45) days after the last day of the

<PAGE>

Interest  Period of such LIBOR Lending Rate Portion,  and Borrowers shall pay to
Bank the amount due within  fifteen (15) days of its receipt of such  notice.  A
certificate  as to  the  amounts  payable  pursuant  to the  foregoing  sentence
together with whatever detail is reasonably available to Bank shall be submitted
by Bank to Borrowers.  Such  determination  shall, if not objected to within ten
(10) days, be conclusive  and binding upon  Borrowers in the absence of manifest
error.  If Bank claims  increased  costs,  loss,  or  expenses  pursuant to this
Section 2.7, then Bank, if requested by Borrowers,  shall use reasonable efforts
to take such steps that  Borrowers  reasonably  request,  including  designating
different  Lending  Offices,  as would  eliminate  or reduce  the amount of such
increased costs, losses, or expenses, so long as taking such steps would not, in
the  reasonable  judgment of Bank,  otherwise be  disadvantageous  to Bank.  Any
recovery by Bank or its Lending Office of amounts  previously borne by Borrowers
pursuant  to this  Section  2.7 shall be  promptly  remitted,  without  interest
(unless Bank received interest on such recovered amounts), to Borrowers by Bank.

       2.8 Illegality; Impossibility.  Notwithstanding anything herein to the
contrary,  if Bank determines (which determination shall be conclusive) that any
law, rule, regulation, treaty or directive, or any change therein, or any change
in the interpretation or administration  thereof by any Governmental  Authority,
central  bank  or  comparable   agency  charged  with  the   interpretation   or
administration  thereof,  or compliance by Bank (or its Lending Office) with any
request  or  directive  (whether  or not  having  the  force of law) of any such
authority,  central  bank  or  comparable  agency  shall  make  it  unlawful  or
impossible for Bank (or its Lending  Office) to fund or maintain a LIBOR Lending
Rate Portion in the LIBOR market or to continue such funding or maintaining,
then Bank shall give noticeof such circumstances to Borrowers and (a) in the
case of each and every LIBOR  Lending  Rate Portion  which is  outstanding,
Borrowers shall, if requested by Bank, prepay such LIBOR Lending Rate Portion(s)
on or before the date specified in such request,  together with interest accrued
thereon,  and the date so  specified  shall be  deemed to be the last day of the
Interest Period of that LIBOR Lending Rate Portion, and concurrent with any such
prepayment, Bank shall make a Reference Lending Rate Portion to Borrowers in the
principal  amount  equal to the  principal  amount  of the  LIBOR  Lending  Rate
Portions so  prepaid,  and (b) Bank shall not be  obligated  to make any further
LIBOR Lending Rate  Portions  until Bank  determines  that it would no longer be
unlawful or impossible to do so.

       2.9 Disaster.  Notwithstanding anything herein to the contrary, if Bank
determines (which  determination shall be conclusive) that (a) Bank is unable to
determine  the LIBOR  Lending  Rate with  respect to any Notice of  Borrowing or
Notice of  Conversion or  Continuation  selecting the LIBOR Lending Rate because
quotations of interest rates for the relevant deposits are not being provided in
the relevant  amounts or for the relative  maturities  or (b) the LIBOR  Lending
Rate will not  adequately  reflect  the cost to Bank of making or funding  LIBOR
Lending  Rate  Portions,  then (i) the right of  Borrowers  to select  the LIBOR
Lending  Rate  shall  be  suspended  until  Bank  notifies  Borrowers  that  the
circumstances  causing such suspension no longer exist, and (ii) Borrowers shall
repay in full the then outstanding  principal  balance of all LIBOR Lending Rate
Portions, together with interest accrued thereon,

<PAGE>

on the last day of the Interest  Period  applicable  to each such LIBOR  Lending
Rate  Portion,  and  concurrent  with  any such  repayment,  Bank  shall  make a
Reference Lending Rate Portion to Borrowers in the principal amount equal to the
principal amount of the LIBOR Lending Rate Portions so repaid.

      2.10 Increased Risk-Based Capital Cost.  If the amount of capital required
or expected to be maintained by Bank or any Person directly or indirectly owning
or controlling Bank (each a "Control Person"), shall be affected by:

           (a) the introduction or phasing in of any law, rule or regulation
after the date hereof,

           (b) any change after the date hereof in the interpretation of any
existing law, rule or regulation by any central bank or United States or foreign
governmental authority charged with the administration thereof, or

           (c) compliance by Bank or such Control Person with any directive,
guideline  or  request  from  any  central  bank or  United  States  or  foreign
governmental  authority  (whether or not having the force of law) promulgated or
made after the date hereof,

and Bank shall have reasonably  determined that such  introduction,  phasing in,
change  or  compliance  shall  have had or will  thereafter  have the  effect of
reducing (x) the rate of return on Bank's or such Control Person's  capital,  or
(y) the  asset  value  to  Bank or such  Control  Person  of the  Loans  made or
maintained  by Bank,  in either  case to a level  below  that which Bank or such
Control  Person could have  achieved or would  thereafter be able to achieve but
for such  introduction,  phasing in,  change or  compliance  (after  taking into
account Bank's or such Control Person's policies regarding  capital),  in either
case by an amount which Bank in its reasonable judgment deems material, then, if
such costs are or will be charged to all  similarly  situated  customers of Bank
generally, within ten (10) days after demand by Bank, Borrowers shall either (i)
pay to Bank or such Control Person such additional amount or amounts as shall be
sufficient to compensate  Bank or such Control  Person,  as the case may be, for
such reduction to the extent the Bank reasonably determines that such additional
amount is allocable  to the Loans made or  maintained  by the Bank  hereunder or
(ii)  Borrowers  shall repay in full the  outstanding  principal  balance of the
Loans,  together with all interest accrued and unpaid thereon.  A certificate as
to  the  such  additional   amounts  setting  forth  in  reasonable  detail  the
calculations  used in determining such amounts,  shall be submitted to Borrowers
by Bank, and shall be conclusive and binding, absent manifest error.

      2.11 Note; Statements of Obligations.  The Loans and Borrowers' obligation
to repay the same shall be evidenced by the Note,  this  Agreement and the books
and records of Bank.  Borrowers hereby authorize Bank to record in its books and
records or on the Schedule annexed to the Note the date, type and amount of each
Loan, and of each  continuation,  conversion or payment of principal received by
Bank for the account of the

<PAGE>

applicable Lending Office on account of the Loans, which notations shall, in the
absence of manifest error,  be conclusive as to the matters so noted;  provided,
however,  any failure by Bank to make such  notation with respect to any Loan or
continuation,  conversion or payment thereof shall not limit or otherwise affect
Borrowers'  obligations  hereunder or under the Note.  Bank shall render monthly
statements of the Loans to Borrowers,  including statements of all principal and
interest  owing on the Loans,  and the Letter of Credit  Fees and Bank  Expenses
owing,  and such  statements  shall be presumed,  absent  manifest  error, to be
correct and accurate and constitute an account stated between Borrowers and Bank
unless,  within thirty (30) days after receipt  thereof by Borrowers,  Borrowers
deliver to Bank, at Bank's Lending Office,  written objection thereof specifying
the error or errors, if any, contained in any such statement.

       2.12 Holidays.  Any principal or interest in respect of the Loans (other
than in respect of a LIBOR  Lending  Rate  Portion)  which would  otherwise
become due on a day other than a Business Day,  shall instead  become due on the
next  succeeding  Business  Day and such  adjustment  shall be  reflected in the
computation of interest; provided, however, that in the event that such due date
shall, subsequent to the specification thereof by Bank, for any reason no longer
constitute a Business Day, Bank may change such specified due date in accordance
with this Section 2.12.

       2.13 Time and Place of Payments.

           (a) All payments due hereunder shall be made available to Bank in
immediately  available Dollars,  not later than 12:00 p.m., Los Angeles time, on
the day of payment,  to the following  address or such other address as Bank may
from time to time specify by notice to Borrower,  for account of the  applicable
Lending Office:

           UNION BANK OF CALIFORNIA, N.A.
           392 Commercial Note Center
           1980 Saturn Street
           Monterey Park, California  91754
           Attention:                                 Supervisor
           Facsimile:                                 (800) 738-2329
           Telephone:                                 (800) 618-6466

           (b) Bank shall have the right to charge any account maintained by
either  Borrower  with  Bank  for the  amount  of any  payment  due or past  due
hereunder,  including  principal and interest owing on the Loans,  the Letter of
Credit Fees and all Bank Expenses.

           (c) In addition, Borrowers hereby authorize Bank at its option,
without prior notice to Borrowers,  to advance a Revolving  Loan for any payment
due or past due hereunder,  including principal and interest owing on the Loans,
the Letter of Credit Fees

<PAGE>

and all Bank  Expenses,  and to pay the proceeds of such  Revolving Loan to Bank
for application  toward such due or past due payment.  Such Revolving Loan shall
bear  interest at the  Reference  Lending  Rate until  converted by Borrowers in
accordance with Section 2.6.

           2.14 Maturity Date.  On the Maturity Date, Borrowers shall pay to
Bank the entire  unpaid  principal  balance of the Loans  together with all
accrued but unpaid interest thereon, all Bank Expenses and Letter of Credit Fees
then  unpaid  and all other  costs and  expenses  due to Bank  pursuant  to this
Agreement and the Credit Documents which have not been paid by such date.

                                     ARTICLE

                              CONDITIONS PRECEDENT

       3.1 Conditions to Initial Loan and/or Letter of Credit.  The obligations
of Bank to make the initial Loan and/or issue the initial  Letter of Credit
is subject  to and  contingent  upon the  fulfillment  of each of the  following
conditions to the satisfaction of Bank and its counsel:

           (a) receipt by Bank of this Agreement and each of the following
Credit Documents,  all duly executed,  acknowledged where required,  and in form
and substance satisfactory to Bank in its sole and absolute discretion:

             (i)   the Note;

             (ii)  the Security Agreement (Country Coach) and the
Security  Agreement  (NRV)  together with such UCC-1  financing  statements  and
fixture filings as Bank shall require with respect thereto;

             (iii) a Trademark Security Agreement with respect to the
trademarks owned by Country Coach;

             (iv)  a Trademark Security Agreement with respect to the
trademarks owned by NRV;

             (v)   a Stock Pledge Agreement with respect to the capital
stock of Country Coach and NRV;

             (vi)  the Guaranty; and

             (vii) the Security Agreement (Guarantor) together with such
UCC-1 financing statements and fixture filings as Bank shall require with 
respect thereto;

<PAGE>

           (b) receipt by Bank of a duly executed opinion of Borrower's
counsel, dated as of the Closing Date, covering the matters set forth in Exhibit
3.1(b) and otherwise in form and substance  satisfactory to Bank in its sole and
absolute discretion;

           (c) receipt by Bank of a Certificate of the Secretary of each
Borrower,  dated as of the  Closing  Date,  certifying  (i) the  incumbency  and
signatures  of the  Responsible  Officers of such  Borrower who are executing on
behalf of such  Borrower this  Agreement and the Credit  Documents to which such
Borrower is a party, (ii) the bylaws of such Borrower and all amendments thereto
as  being  true  and  correct  and in full  force  and  effect,  and  (iii)  the
resolutions of the board of directors of such Borrower as being true and correct
and in full force and effect,  authorizing  the  execution  and delivery of this
Agreement  and the Credit  Documents  to which  such  Borrower  is a party,  and
authorizing  the  transactions   contemplated  hereunder  and  thereunder,   and
authorizing  specific  Responsible Officers of such Borrower to execute the same
on behalf of such Borrower.

           (d) receipt by Bank of certificates of corporate status and good
standing for each Borrower,  dated as of a recent date prior to the Closing Date
showing that such  Borrower is in good  standing  under the laws of the state of
its organization;

           (e) receipt by Bank of each Borrower's Articles of Incorporation
and all amendments thereto, certified by the Secretary of State of its
organization and dated as of recent date prior to the Closing Date;

           (f) receipt by Bank of a certificate signed by the President or Chief
Financial Officer of each Borrower,  dated as of the Closing Date, certifying to
Bank that (i) both immediately before and immediately after giving effect to the
transactions  contemplated  by this  Agreement  and the Credit  Documents,  such
Borrower is and will be Solvent; (ii) the representations and warranties of such
Borrower  contained  in this  Agreement  and the Credit  Documents  are true and
correct and (iii) both immediately before and immediately after giving effect to
the  transactions  contemplated by this Agreement and the Credit  Documents,  no
Event of Default or Unmatured Event of Default is continuing or shall occur;

           (g) receipt by Bank of the all Bank Expenses owing on the Closing
Date;

           (h) receipt by Bank of the Pay-Off Letter from the Old Lender and
such UCC-2 Termination Statements and other Lien releases as Bank shall require,
duly  executed  by Old  Lender,  all of the  foregoing  in  form  and  substance
satisfactory to Bank;

           (i) receipt by Bank of Uniform Commercial Code and other public
record searches with respect to Borrowers and Guarantor, in each case
satisfactory to Bank in its sole and absolute discretion;

<PAGE>

           (j) receipt by Bank of copies of insurance binders or insurance
certificates  evidencing Borrowers' having obtained insurance in accordance with
Section 5.5,  including  the lender's loss payee  endorsements  required by such
Section;

           (k) Bank shall have received landlord waivers with respect to all
written  Real Estate  Leases of each  Borrower,  in each case duly  executed and
acknowledged,  and in form for recording in the appropriate recording office and
otherwise in form and substance satisfactory to Bank and its counsel;

           (l) no Material Adverse Effect shall have occurred;

           (m) all of the conditions set forth in Section 3.1 of the Holdings
Credit Agreement shall have been fulfilled to the satisfaction of Bank and its
counsel;

           (n) receipt by Bank of any other documents which Bank reasonably
requests relating to the transactions contemplated hereby; and

           (o) the Closing Date shall have occurred on or before July 31,
1997.

       3.2 Conditions to all Loans and Letters of Credit.  Bank's obligation
hereunder to make any Loans to Borrowers  (including  the initial Loan) or issue
any  Letters  of Credit  (including  the  initial  Letter of  Credit) is further
subject  to and  contingent  upon  the  fulfillment  of  each  of the  following
conditions to the satisfaction of Bank:

           (a) in the case of a Borrowing, receipt by Bank of a Notice of
Borrowing as required by Section 2.4(b) and written disbursement instructions to
Bank consistent with Section 6.1;

           (b) in the case of a Borrowing or Letter of Credit Application, the
fact that,  immediately before and after such Borrowing or issuance of Letter of
Credit,  as the case may be, no Event of Default or  Unmatured  Event of Default
shall have occurred; and

           (c) in the case of a Borrowing or Letter of Credit Application, the
fact that the  representations  and  warranties  of Borrower  contained  in this
Agreement shall be true on and as of the date of such Borrowing,  or issuance of
Letter of Credit, as the case may be.

<PAGE>

                                     ARTICLE

                         REPRESENTATIONS AND WARRANTIES

       In order to induce Bank to enter into this Agreement and to make Loans to
Borrowers  and/or  issue any  Letters of Credit,  Borrowers  make the  following
representations  and warranties to Bank,  which  representations  and warranties
shall be true and correct on the Closing Date and on the date of each  Borrowing
or issuance of a Letter of Credit.

       4.1 Legal Status.  Country Coach is a corporation duly organized and
existing  under the laws of Oregon.  NRV is a  corporation  duly  organized  and
existing  under  the  laws of  California.  Each  Borrower  and  each  of  their
Subsidiaries  has the power and  authority to own its own Assets and to transact
the business in which it is engaged,  and is properly licensed,  qualified to do
business  and in good  standing  in  every  jurisdiction  in  which  it is doing
business where failure to so qualify could have a Material Adverse Effect.

       4.2 No Violation; Compliance.  The execution, delivery and performance
of this  Agreement and the Credit  Documents to which  Borrowers are a party are
within  Borrowers'  powers,  are not in conflict with the terms of the Governing
Documents of either  Borrower,  and do not result in a breach of or constitute a
default under any contract,  obligation,  indenture or other instrument to which
either  Borrower is a party or by which Borrower is bound or affected.  There is
no law, rule or regulation  (including  Regulations G, T, U and X of the Federal
Reserve  Board),  nor is there  any  judgment,  decree  or order of any court or
Governmental  Authority binding on either Borrower which would be contravened by
the  execution,  delivery,  performance or enforcement of this Agreement and the
Credit Documents to which either Borrower is a party.

       4.3 Authorization; Enforceability.  Each Borrower has taken all corporate
action  necessary to authorize the execution and delivery of this  Agreement and
the Credit  Documents to which such Borrower is a party, and the consummation of
the  transactions  contemplated  hereby and thereby.  Upon their  execution  and
delivery in  accordance  with the terms  hereof,  this  Agreement and the Credit
Documents to which either Borrower is a party will constitute  legal,  valid and
binding  agreements and  obligations of such Borrower  enforceable  against such
Borrower in accordance with their respective terms, except as enforceability may
be limited by bankruptcy,  insolvency, and similar laws and equitable principles
affecting the  enforcement  of creditors'  rights  generally,  and except to the
extent any applicable law or any underlying contract,  agreement,  instrument or
other documents  relating to or governing any item of collateral secured by Bank
prohibits  the  grant  of  any  security   interest  or  collateral   assignment
contemplated thereby.

       4.4 Approvals; Consents.  No approval, consent, exemption or other action
by, or notice to or filing  with,  any  Governmental  Authority  is necessary in
connection  with the  execution,  delivery,  performance  or enforcement of this
Agreement or the Credit

<PAGE>

Documents  other than such filings  required to perfect the  security  interests
created by the Credit Documents.

       4.5 Liens.  Borrowers and their Subsidiaries have good and marketable 
title to, or valid leasehold  interests in, all of their Assets,  free and clear
of all Liens or rights of others, except for Permitted Liens.

       4.6 Debt.  Borrowers and their Subsidiaries have no Debt other than
Permitted Debt.

       4.7 Litigation.  There are no suits, proceedings, claims or disputes 
pending or, to the  knowledge  of  Borrowers,  threatened,  against or affecting
either  Borrower or any of its Assets,  or any Subsidiary of either  Borrower or
any of such  Subsidiary's  Assets,  which are not fully  covered  by  applicable
insurance and as to which no reservation of rights has been taken by the insurer
thereunder.

       4.8 No Default.  No Event of Default or Unmatured Event of Default is
continuing or would result from the incurring of obligations by Borrowers  under
this Agreement or the Credit Documents.

       4.9 Subsidiaries.  Set forth in Schedule 4.9 is a complete and accurate
list of Borrowers' Subsidiaries,  showing the jurisdiction of incorporation
of each and showing the  percentage of Borrowers'  ownership of the  outstanding
stock of each Subsidiary.  All of the outstanding  capital stock of each of such
Subsidiaries has been validly issued,  is fully paid and  nonassessable,  and is
owned by the  Borrower  indicated  in  Schedule  4.9 free and clear of all Liens
except Permitted Liens.

       4.10 Taxes.  All tax returns required to be filed by each Borrower and
each  Subsidiary  of each  Borrower in any  jurisdiction  have in fact been
filed, and all taxes, assessments, fees and other governmental charges upon each
Borrower  and each  Subsidiary  of each  Borrower  or upon any of their  Assets,
income or  franchises,  which are due and payable  have been paid other than (i)
those presently payable without penalty or interest and those being contested in
good faith by appropriate and timely actions or proceedings  diligently  pursued
with respect to which adequate reserves have been established in accordance with
GAAP and by reason of nonpayment,  no material property is subject to a material
risk of loss or  forfeiture,  and (ii) those the  non-payment  or  non-filing of
which, individually or in the aggregate, do not, and are not reasonably expected
to, have a Material  Adverse  Effect.  The  provisions for taxes on the books of
each  Borrower and each  Subsidiary  of each  Borrower are adequate for all open
years, and for each Borrower's and its Subsidiaries' current fiscal period.

       4.11 Correctness of Financial Statements.  Borrowers' Financial
Statements as of the fiscal year ended December 31, 1996, and all information
and data furnished by

<PAGE>

Borrowers  to Bank  in  connection  therewith,  are  complete  and  correct  and
accurately and fairly present the financial  condition and results of operations
of Borrowers and their  Subsidiaries as of their respective dates. Any forecasts
of future financial performance delivered by Borrowers to Bank have been made in
good  faith  and are  based on  reasonable  assumptions  and  investigations  by
Borrowers. Said Financial Statements have been prepared in accordance with GAAP.
Since such dates there has been no change in Borrowers'  or their  Subsidiaries'
financial  condition  or results  of  operations  sufficient  to have a Material
Adverse  Effect.   Each  Borrower  and  its  Subsidiaries   have  no  contingent
obligations,  liabilities for taxes or other outstanding  financial  obligations
which are material in the  aggregate,  except as  disclosed in such  statements,
information and data.

       4.12 ERISA.  Neither Borrower nor any member of the ERISA Group
maintains or contributes  to any Plan or  Multiemployer  Plan,  other than those
listed on  Schedule  4.12.  Borrowers  and each  member of the ERISA  Group have
satisfied the minimum funding  standards of ERISA and the Internal  Revenue Code
with  respect to each Plan and  Multiemployer  Plan to which it is  obligated to
contribute.  No ERISA Event has occurred not has any other event  occurred  that
may result in an ERISA  Event that  reasonably  could be expected to result in a
Material  Adverse Effect.  None of Borrowers,  any member of the ERISA Group, or
any  fiduciary of any Plan is subject to any direct or indirect  liability  with
respect  to  any  Plan  (other  than  to  make  regularly   scheduled   required
contributions  and  to pay  Plan  benefits  in  the  normal  course)  under  any
applicable law, treaty, rule, regulation, or agreement. Neither Borrower nor any
member of the ERISA  Group is  required  to provide  security  to any Plan under
Section  401(a)(29)  of the  Internal  Revenue  Code.  Each Plan will be able to
fulfill its benefit  obligations  as they come due in  accordance  with the Plan
documents and under GAAP.

       4.13 Other Obligations.  Each Borrower and its Subsidiaries is not in
default on any Debt, and each Borrower and its Subsidiaries is not in default on
any other lease,  commitment,  contract,  instrument or obligation which default
reasonably could be expected to have a Material Adverse Effect.

       4.14 Public Utility Holding Company Act.  Neither Borrower is a "holding
company," or an "affiliate" of a "holding company" or a "subsidiary  company" of
a "holding  company,"  within the meaning of the Public Utility  Holding Company
Act of 1935, as amended.

       4.15 Investment Company Act.  Neither Borrower is an "investment
company,"  or a company  "controlled"  by an  "investment  company,"  within the
meaning of the Investment Company Act of 1940, as amended.

       4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc.
Each Borrower and each  Subsidiary of each Borrower has all necessary,  patents,
patent rights, licenses,  trademarks,  trademark rights, trade names, trade name
rights, copyrights, permits,

<PAGE>

and  franchises  in order for it to conduct  its  business  and to  operate  its
Assets, without known conflict with the rights of third Persons, and all of same
are valid and subsisting.  The consummation of the transactions  contemplated by
this Agreement will not alter or impair any of such rights of either Borrower or
any  Subsidiary of either  Borrower.  Each Borrower and each  Subsidiary of each
Borrower  has  not  been  charged  or,  to the  best  of  Borrowers'  knowledge,
threatened to be charged with any  infringement  or infringed on any,  unexpired
trademark,  trademark  registration,  trade name, patent,  copyright,  copyright
registration, or other proprietary right of any Person.

       4.17 Environmental Condition.  None of either Borrower's or its
Subsidiary's  Assets  has ever  been  used by such  Borrower  or, to the best of
Borrowers' knowledge,  by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials in
violation of applicable laws, rules or regulations. None of either Borrower's or
its  Subsidiary's  Assets has ever been  designated  or identified in any manner
pursuant  to any  environmental  protection  statute  as a  Hazardous  Materials
disposal  site,  or a  candidate  for  closure  pursuant  to  any  environmental
protection statute. To the best of Borrowers'  knowledge,  no Lien arising under
any environmental protection statute has attached to any revenues or to any real
or personal  property owned or operated by either  Borrower or any Subsidiary of
either  Borrower.  Neither  Borrower nor any  Subsidiary of either  Borrower has
received  a summons,  citation,  notice,  or  directive  from the  Environmental
Protection Agency or any other federal or state  governmental  agency concerning
any action or omission by either  Borrower or any Subsidiary of either  Borrower
resulting  in the  releasing  or  disposing  of  Hazardous  Materials  into  the
environment.

       4.18 Compliance With ADA.  Each Borrower and its Subsidiaries has
received no notice or  complaint  regarding  any  noncompliance  with the ADA of
their premises or of either Borrower's or its Subsidiary's  employment practices
and,  to the  best  of  Borrowers'  knowledge,  there  has  been  no  threatened
litigation   alleging  any  such   noncompliance   by  either  Borrower  or  its
Subsidiaries or their premises.

                                     ARTICLE

                              AFFIRMATIVE COVENANTS

       Borrowers covenant and agree that from the Closing Date and thereafter
until the  indefeasible  payment,  performance  and  satisfaction in full of the
Obligations and Bank has terminated the Revolving Credit Commitment,  and all of
Bank's other obligations to Borrowers have been terminated, each Borrower shall:

       5.1 Punctual Payments.  Punctually pay the interest and principal on the
Loans,  the Letter of Credit Fees and all Bank  Expenses,  and any other fees or
liabilities due under this Agreement and the Credit Documents,  at the times and
place and in the manner specified in this Agreement or the Credit Documents.

<PAGE>

       5.2 Books and Records.  Maintain, and cause each of its Subsidiaries to
maintain,  adequate  books and records in accordance  with GAAP,  and permit any
officer,  employee or agent of Bank,  at any  reasonable  time and so long as an
Event of Default has not occurred upon reasonable  advance request,  to inspect,
audit and examine such books and records, and to make copies of the same.

       5.3 Financial Statements.  Deliver to Bank the following, all in form and
detail satisfactory to Bank and in such number of copies as Bank may request:

          (a) as soon as available but not later than forty-five (45) days after
and as of the close of each quarterly  accounting period, a Financial  Statement
for such Borrower and its  Subsidiaries  prepared by such  Borrower  which shall
include such Borrower's and its  Subsidiaries'  balance sheet as of the close of
such  period,  such  Borrower's  and  its  Subsidiaries'  statement  of  income,
operations,  and retained  income of such period and year to date,  certified by
the Chief  Financial  Officer of such Borrower as being complete and correct and
fairly presenting such Borrower's and its Subsidiaries'  financial condition and
results of operations;

           (b)as soon as available but not later than forty-five (45) days after
and as of the end of each fiscal  quarter,  a Quarterly  Compliance  Certificate
from the Chief Financial Officer of such Borrower,  stating, among other things,
that he has reviewed the provisions of this  Agreement and the Credit  Documents
and that there  exists no Event of Default or  Unmatured  Event of Default,  and
containing  the  calculations   and  other  details   necessary  to  demonstrate
compliance  with  Sections 5.8 and 6.12 and providing  information  for the most
recently completed twelve (12) month period;

           (c)as soon as available, any other Financial Statement for such
Borrower and its Subsidiaries, including any Financial Statement which contains
consolidated or consolidating information;

           (d) promptly upon receipt by such Borrower, copies of any and all
reports  and  management  letters  submitted  to  such  Borrower  or  any of its
Subsidiaries  by  any  certified  public   accountant  in  connection  with  any
examination of such  Borrower's or its  Subsidiary's  financial  records made by
such accountant; and

           (e) from time to time such other information as Bank may
reasonably request.

       5.4 Existence; Compliance with Law.  Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain,  its corporate  existence and
good standing in the state of its  organization,  qualify and remain  qualified,
and cause each of its Subsidiaries to qualify and remain qualified, as a foreign
corporation  in  every  jurisdiction  where  the  failure  to  be  so  qualified
reasonably could be expected to have a Material Adverse Effect; and

<PAGE>

preserve,  and cause each of its Subsidiaries to preserve,  all of its licenses,
permits,  governmental approvals, rights, privileges and franchises required, in
such Borrower's reasonable  determination,  for its operations;  and comply, and
cause each of its  Subsidiaries to comply,  with the provisions of its Governing
Documents;  and comply,  and cause each of its Subsidiaries to comply,  with the
requirements  of  all  applicable  laws,  rules,  regulations,   orders  of  any
Governmental Authority having authority or jurisdiction over it, and comply, and
cause  each  of the  Subsidiaries  to  comply,  with  all  requirements  for the
maintenance  of  its  business,   insurance,   licenses,  permits,  governmental
approvals,  rights,  privileges  and  franchises  where  failure  to  so  comply
reasonably could be expected to have a Material Adverse Effect.

       5.5 Insurance.

           (a) Maintain and keep in force, and cause each of its Subsidiaries to
maintain and keep in force,  insurance  of the types and in amounts  customarily
carried  by  companies  engaged in the same or similar  business,  or  similarly
situated,   including  fire,  extended  coverage,  public  liability,   business
interruption,  property damage and workers' compensation insurance,  and deliver
to Bank  from  time to  time at  Bank's  request  schedules  setting  forth  all
insurance  then in effect.  All  insurance  required  herein shall be written by
companies  which  are  authorized  to do  insurance  business  in the  State  of
California. All hazard insurance and such other insurance as Bank shall specify,
shall  contain a  California  Form 438BFU  (NS)  endorsement,  or an  equivalent
endorsement  satisfactory to Bank, showing Bank as sole loss payee thereof,  and
shall contain a waiver of warranties.  Every policy of insurance  referred to in
this  Section 5.5 shall  contain an  agreement  by the insurer  that it will not
cancel such policy  except after 30 days prior  written  notice to Bank and that
any  loss  payable  thereunder  shall  be  payable  notwithstanding  any  act or
negligence of Borrower or Bank which might,  absent such agreement,  result in a
forfeiture of all or a part of such insurance payment.

           (b) Original policies or certificates thereof satisfactory to Bank
evidencing  such insurance  shall be delivered to Bank at least 30 days prior to
the expiration of the existing or preceding policies.  Borrowers shall give Bank
prompt  notice of any loss  covered by such  insurance  in excess of One Hundred
Thousand Dollars ($100,000), and Bank shall have the right to adjust any loss in
excess of One Hundred Thousand Dollars ($100,000). Bank shall have the exclusive
right to adjust all losses in excess of One Hundred Thousand Dollars  ($100,000)
payable  under any such  insurance  policies  without any liability to Borrowers
whatsoever in respect of such  adjustments.  Any monies  received as payment for
any loss under any insurance policy,  including the insurance policies mentioned
above,  which  are  less  than  One  Hundred  Thousand  Dollars  ($100,000)  per
occurrence or Five Hundred Thousand  Dollars  ($500,000) in the aggregate in any
fiscal year of Borrowers, shall be paid to Borrowers, and all monies received in
excess of such amounts shall be paid over to Bank to be applied at the option of
Bank either to the prepayment of the Obligations  without premium, in such order
or manner as Bank may elect, or shall be disbursed to

<PAGE>

Borrowers  under  stage  payment  terms  reasonably  satisfactory  to  Bank  for
application to the cost of repairs,  replacements, or restorations. All repairs,
replacements,  or restorations shall be effected with reasonable  promptness and
shall be of a value  at  least  equal  to the  value  of the  items or  property
destroyed prior to such damage or  destruction.  Upon the occurrence of an Event
of  Default,  Bank shall  have the right to apply all  prepaid  premiums  to the
payment  of the  Obligations  in such  order  or form as Bank  shall  determine.
Borrower  shall,  concurrently  with the  financial  information  required to be
delivered by Borrower  pursuant to Section 5.3(b),  deliver to Bank, as Bank may
request,  copies of  certificates  describing  all insurance of Borrower then in
effect.  Notwithstanding  Section 9.8, the following  warning is hereby given to
Country Coach pursuant to Section 746.201 of the Oregon Revised Statutes:

                                  WARNING

           Unless Borrowers provide Bank with evidence of the insurance coverage
as required by this Agreement, Bank may purchase insurance at Borrower's expense
to protect  Bank's  interest.  This  insurance  may, but need not,  also protect
Borrowers'  interest.  If the  collateral  becomes  damaged,  the coverage  Bank
purchases  may not pay any claim  Country  Coach makes or any claim made against
Country  Coach.  Borrowers may later cancel this coverage by providing  evidence
that Country Coach has obtained property coverage elsewhere.

           Borrowers are responsible for the cost of any insurance purchased by
Bank.  The  cost  of this  insurance  may be  added  to  this  Agreement  or the
Obligations.  If the cost is added to this  Agreement  or the  Obligations,  the
interest  rate on the  Revolving  Loans  will apply to this  added  amount.  The
effective date of coverage may be the date Country Coach's prior coverage lapsed
or the date Country Coach failed to provide proof of coverage.

           The coverage Bank purchases may be considerably more expensive than
insurance  Borrowers  can obtain on their own and may not  satisfy  any need for
property  damage  coverage or any  mandatory  liability  insurance  requirements
imposed by applicable law.

       5.6 Assets.  Maintain, keep and preserve, and cause each of its
Subsidiaries  to maintain,  keep and  preserve,  all of its Assets  (tangible or
intangible) which in such Borrower's  reasonable business judgment are useful or
necessary  to its business in good repair and  condition,  and from time to time
make necessary  repairs,  renewals and replacements  thereto so that such Assets
shall be fully and efficiently preserved and maintained.

       5.7 Taxes and Other Liabilities.  Pay and discharge when due, and cause
each of its  Subsidiaries to pay and discharge when due, any and all assessments
and taxes,  both real or personal and including  federal and state income taxes,
and any and all other Permitted Debt,

<PAGE>

except where the same are being  contested  in good faith and adequate  reserves
have been set aside with  respect  thereto as required by GAAP and, by reason of
nonpayment,  no  material  property  is subject  to a  material  risk of loss or
forfeiture.

       5.8 Financial Condition.  Maintain:

           (a) (1) in the case of Country Coach, a Tangible Net Worth as of the
last day of each fiscal quarter of not less than the sum of $2,000,000, plus (i)
an amount  equal to 50% of Country  Coach's Net Income for such fiscal  quarter,
plus (ii) an amount  equal to 100% of the net  amount of all  additional  equity
contributions in Country Coach on a cumulative basis from the Closing Date.

               (2)in the case of NRV, a Tangible Net Worth as of the last day of
each fiscal quarter of not less than the sum of $22,000,000,  plus (i) an amount
equal to 50% of NRV's Net Income for such  fiscal  quarter,  plus (ii) an amount
equal to 100% of the net amount of all additional equity contributions in NRV on
a cumulative basis from the Closing Date.

           (b) (1) in the case of Country Coach, a ratio of its Debt (excluding
(i) the Debt  evidenced  by the  Guaranty  to  which it is a party  and (ii) any
obligations for contingent liabilities arising pursuant to repurchase agreements
entered  into in the  ordinary  course of business in  connection  with sales of
recreational  vehicles)  to its Tangible Net Worth at all times not greater than
12.0:1.0.

               (2) in the case of NRV, a ratio of its Debt (excluding (i) the
Debt  evidenced by the Guaranty to which it is a party and (ii) any  obligations
for contingent  liabilities  arising pursuant to repurchase  agreements  entered
into in the ordinary course of business in connection with sales of recreational
vehicles) to its Tangible Net Worth at all times not greater than 1.75:1.0.

           (c) (1) in the case of Country Coach, a ratio of EBITDA to Debt
Service as of the last day of each fiscal year not less than 1.20:1.0.

               (2) in the case of NRV, a ratio of EBITDA to Debt Service as of
the last day of each fiscal year not less than 1.20:1.0.

           (d) (1) in the case of Country Coach, its Working Capital at all
times not less than $2,000,000.

               (2) in the case of NRV, its Working Capital at all times not
less than $15,000,000.

Notwithstanding the joint and several nature of the Obligations,  the reasonable
determination  of the Chief  Financial  Officer of Guarantor with respect to the
allocation between Borrowers of Debt

<PAGE>

incurred  by  Borrowers  pursuant to this  Agreement  shall  control  solely for
purposes of this  Section 5.8 so as to avoid  duplication  of amounts of Debt in
connection with the financial covenant ratios set forth in this Section.

       5.9 Notice to Bank.  Promptly, upon such Borrower acquiring knowledge
thereof, give written notice to Bank of:

           (a) all litigation affecting such Borrower where the amount claimed
is in excess of applicable insurance;

           (b) any dispute which may exist between such Borrower or any of its
Subsidiaries, on the one hand, and any Governmental Authority or law enforcement
authority,  on the other,  if the  determination  of such  dispute  could have a
Material Adverse Effect;

           (c) any labor controversy resulting in or threatening to result in a
strike against such Borrower or any of its Subsidiaries;

           (d) any proposal by any public authority received by such Borrower to
acquire the Assets or business of such Borrower or any of its Subsidiaries;

           (e) all notices or claims which may be received by such Borrower or
any of its  Subsidiaries  and  involving  claims  made by any  Person  as to any
alleged  noncompliance of such Borrower's or such Subsidiary's premises with the
requirements of the ADA;

           (f) any Event of Default or Unmatured Event of Default; and

           (g) any other matter which has resulted or reasonably could be
expected to result in a Material Adverse Effect.

       5.10 Employee Benefits.

           (a)(i) Promptly, and in any event within 10 Business Days after such
Borrower  or any of its  Subsidiaries  knows or has reason to know that an ERISA
Event has  occurred  that  reasonably  could be expected to result in a Material
Adverse  Effect,  deliver or cause to be  delivered a written  statement  of the
Chief  Financial  Officer of such Borrower  describing  such ERISA Event and any
action  that is being  taken with  respect  thereto by such  Borrower,  any such
Subsidiary,  or member of the ERISA Group, and any action taken or threatened by
the IRS,  Department of Labor,  or PBGC.  Each Borrower or such  Subsidiary,  as
applicable,  shall be deemed to know all facts known by the administrator of any
Plan of which it is the plan  sponsor;  (ii)  promptly and in any event within 3
Business  Days after the  filing  thereof  with the IRS,  deliver a copy of each
funding  waiver  request  filed with respect to any Plan and all  communications
received by such  Borrower,  any member of the ERISA Group with  respect to such
request;  and (iii)  promptly  and in any event  within 3  Business  Days  after
receipt by such Borrower, any of its

<PAGE>

Subsidiaries  or, to the  knowledge  of such  Borrower,  any member of the ERISA
Group,  of the  PBGC's  intention  to  terminate  a Plan  or to  have a  trustee
appointed to administer a Plan, deliver copies of each such notice.

           (b) Cause to be delivered to Bank, upon Bank's request, each of the
following:  (i) a copy of each Plan (or,  where any such plan is not in writing,
complete  description  thereof) (and if applicable,  related trust agreements of
other   funding   instruments)   and  all   amendments   thereto,   all  written
interpretations   thereof  and  written  descriptions  thereof  that  have  been
distributed  to  employees  or  former  employees  of  either  Borrower  or  its
Subsidiaries;  (ii) the most recent  determination letter issued by the IRS with
respect to each Plan; (iii) for the three most recent plan years, annual reports
on Form 5500 Series required to be filed with any  governmental  agency for each
Plan; (iv) all actuarial reports prepared for the last three plan years for each
Plan; (v) a listing of all Multiemployer Plans, with the aggregate amount of the
most recent  annual  contributions  required to be made by such  Borrower or any
member  of the  ERISA  Group to each  such  plan and  copies  of the  collective
bargaining  agreements  requiring such contributions;  (vi) any information that
has been  provided to such  Borrower or any member of the ERISA Group  regarding
withdrawal  liability  under any  Multiemployer  Plan;  and (vii) the  aggregate
amount of the most  recent  annual  payments  made to former  employees  of such
Borrower or its Subsidiaries under any Retiree Health Plan.

       5.11 Further Assurances.  Execute and deliver, or cause to be executed
and delivered, upon the request of Bank and at Borrowers' expense,  such
additional  documents,   instruments  and  agreements  as  Bank  may  reasonably
determine  to be necessary  or  advisable  to carry out the  provisions  of this
Agreement  and  the  Credit   Documents,   and  the   transactions  and  actions
contemplated hereunder and thereunder.

       5.12 Real Estate Leases.  Perform all of its material obligations under
all of the Real  Estate  Leases  and  deliver  to Bank a copy of all  notices of
default or breach under any Real Estate Lease within three (3) days of receiving
the same.

       5.13 Environment.  Be and remain, and cause each of its Subsidiaries and
each operator of any of such Borrower's or any of its Subsidiaries  Assets to be
and remain,  in compliance  with the provisions of all federal,  state and local
environmental,  health and safety laws, codes and ordinances,  and all rules and
regulations  issued  thereunder except where any such  noncompliance  reasonably
would not be expected to have a Material Adverse Effect; notify Bank immediately
of any notice of a hazardous discharge or environmental  complaint received from
any Governmental  Authority or any other Person;  notify Bank immediately of any
hazardous  discharge  from or  affecting  its premises  not in  compliance  with
applicable laws; immediately contain and remove the same, in compliance with all
applicable  laws;  promptly  pay any  fine or  penalty  assessed  in  connection
therewith unless it is being contested in good faith and adequate  reserves have
been set  aside  with  respect  thereto  as  required  by GAAP and by  reason of
nonpayment,  no  material  property  is subject  to a  material  risk of loss or
forfeiture;  permit Bank to inspect the  premises  at any  reasonable  time and,
unless an Event of Default has occurred, upon reasonable

<PAGE>

advance   notice,   to  conduct  tests  thereon,   and  to  inspect  all  books,
correspondence,  and  records  pertaining  thereto;  and  at  Bank's  reasonable
request,  and at such  Borrower's  expense,  provide  a  report  of a  qualified
environmental  engineer,  reasonably  satisfactory in scope, form and content to
Bank, and such other and further assurances reasonably satisfactory to Bank that
the condition has been corrected.

       5.14 ADA.  Observe and comply, and cause each of its Subsidiaries to
observe  and  comply,   in  all  material  respects  with  all  obligations  and
requirements  of the ADA as it applies to their  premises,  which shall include,
without  limitation,  installing or constructing all improvements or alterations
which may be necessary to cause such premises to be accessible to all persons if
the use of such premises or any part thereof  becomes a "public  accommodation,"
as defined in the ADA,  or in the event  additional  building  improvements  are
added or incorporated into the existing improvements,  and making any reasonable
accommodations  which may be necessary to accommodate  the needs or requirements
of any existing or future  employee of such  Borrower and its  Subsidiaries,  as
applicable.

                                 ARTICLE

                            NEGATIVE COVENANTS

       Borrowers further covenant and agree that from the Closing Date and
thereafter until the indefeasible payment,  performance and satisfaction in full
of the Obligations and the termination of the Revolving Credit  Commitment,  and
all of Bank's other  obligations  to  Borrowers  have been  terminated,  neither
Borrower shall without the prior written consent of Bank:

       6.1 Use of Funds; Margin Regulation.

           (a) Use any proceeds of the Revolving Loans for any purpose other
than (i) to pay in full  all  Debt  owing by  Country  Coach  to Old  Lender  in
accordance with the Payoff Letter and (ii) for such Borrower's general corporate
and working capital needs and Capital Expenditures, subject to Section 6.12; or

           (b) Use any portion of the proceeds of the Loans in any manner which
might  cause  the  Loans,  the  application  of  the  proceeds  thereof,  or the
transactions  contemplated by this Agreement to violate Regulation G, T, U, or X
of the Board of Governors of the Federal Reserve System, or any other regulation
of such board, or to violate the Securities and Exchange Act of 1934, as amended
or supplemented.

       6.2 Debt.  Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries  to  create,  incur,  assume or suffer  to exist,  any Debt  except
Permitted Debt.

<PAGE>

       6.3 Liens.  Create, incur, assume or suffer to exist, or permit any of
its  Subsidiaries  to  create,  incur,  assume  or  suffer  to  exist,  any Lien
(including  the lien of an  attachment,  judgment  or  execution)  on any of its
Assets, whether now owned or hereafter acquired, except Permitted Liens; or sign
or file, or permit any of its  Subsidiaries  to sign or file,  under the Uniform
Commercial  Code as adopted in any  jurisdiction,  a financing  statement  which
names such Borrower or any of its  Subsidiaries as a debtor,  or sign, or permit
any of its Subsidiaries to sign, any security agreement  authorizing any secured
party  thereunder  to file such a financing  statement,  except with  respect to
Permitted Liens.

       6.4 Merger, Consolidation, Transfer of Assets.  Wind up, liquidate or
dissolve,  reorganize,  merge or consolidate  with or into any other Person,  or
acquire  all or  substantially  all of the Assets or the  Business  of any other
Person, or permit any of its Subsidiaries to do so, except that,  subject in any
event to compliance  with the last  paragraph of this Section,  upon thirty (30)
days' prior written notice to Bank:

           (a) any Subsidiary  may (i)  consolidate  with or merge into either
Borrower or any  Subsidiary  if such  Borrower or such  Subsidiary  shall be the
continuing  or surviving  cor-  poration or (ii)  consolidate  or merge with any
other corporation if such Subsidiary shall be the continuing or surviving
corporation;

           (b) any Subsidiary may sell, lease, transfer, contribute or otherwise
dispose of its Assets in whole or in part to either  Borrower or any Subsidiary,
and may, following any such disposition in whole, liquidate and dissolve; and

           (c) either Borrower may consolidate or merge with any other
corporation if such Borrower shall be the continuing or surviving corporation.

Provided,  however, in all events within thirty (30) days after the consummation
of any  transaction  described in this Section 6.4,  such Borrower or Subsidiary
shall execute and deliver such additional agreements,  instruments and documents
as Bank shall reasonably request, in form and substance satisfactory to Bank, in
order to maintain Bank's first priority  security interest in all Assets of such
Borrower or Subsidiary after giving effect to the transactions  described above.
No  consolidation,   merger,  sale,  lease,  transfer,   contribution  or  other
disposition  referred to in clauses (a)  through  (c) of this  Section  shall be
permitted under this Section unless at the time of and immediately  after giving
effect  to any such  transaction,  no  Unmatured  Event of  Default  or Event of
Default shall have occurred and be continuing.

       6.5 Equipment Leases.  Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create,  incur, assume or suffer to exist, any
obligation  as a lessee for the rental or hire of  equipment  or other  personal
property,  other  than (i)  leases  that have been or should be  capitalized  in
accordance  with GAAP and (ii) leases (other than Capital Leases) that do not in
the aggregate require such Borrower and its Subsidiaries on a consolidated basis
to make payments (including taxes, insurance,  maintenance, and similar expenses
which such Borrower or any

<PAGE>

Subsidiary  is  required to pay under the terms of any lease) in excess of Fifty
Thousand Dollars ($50,000) in any fiscal year of such Borrower.

       6.6 Sales and Leasebacks.  Sell, transfer, or otherwise dispose of, or
permit any of its Subsidiaries to sell,  transfer,  or otherwise dispose of, any
real or personal property to any Person,  and thereafter  directly or indirectly
leaseback the same or similar property.

       6.7 Asset Sales.  Conduct any Asset Sale, or permit any of its
Subsidiaries to do, other than (i)  dispositions of Assets in an aggregate value
of up  to  One  Hundred  Thousand  Dollars  ($100,000)  per  fiscal  year,  (ii)
dispositions  of  equipment  or other  Assets  which  have  become  obsolete  or
otherwise no longer useful or required for the conduct of its business, provided
that such  dispositions do not,  individually or in the aggregate,  constitute a
liquidation of all or  substantially  all of such Borrower's or any Subsidiary's
Assets and (iii) liquidations of Permitted Investments in the ordinary course of
business.

       6.8 Investments.

           (a) Make, or permit any of its Subsidiaries to make, any loans or
advances to, or any investment in, any Person,  except Permitted Investments and
except as expressly  permitted in Section 6.8(b);  or acquire,  or permit any of
its Subsidiaries to acquire,  any capital stock, Assets,  obligations,  or other
securities of, make any  contribution  to, or otherwise  acquire any interest in
any Person;  or acquire or form, or permit any of its Subsidiaries to acquire or
form, any new Subsidiary;  or participate,  or permit any of its Subsidiaries to
participate, as a partner or joint venturer with any other Person.

           (b) Notwithstanding the terms of Section 6.8(a), either Borrower may
advance  or loan  working  capital to the other  Borrower  or to  Guarantor  for
operating  expenses  and income tax  liabilities  so long as (i) both before and
after giving effect to such loans or advances,  no Event of Default has occurred
or will result therefrom, and (ii) such loan or advance is evidenced by a demand
promissory  note duly endorsed to Bank,  and Bank shall have first  received the
original  of such  note,  duly  executed  and in form and  substance  reasonably
satisfactory to Bank.

       6.9 Character of Business.  Engage in any business activities or
operations  which, in the reasonable  determination  of such Borrower's Board of
Directors, are substantially different from or unrelated to its present business
activities and operations, or permit any of its Subsidiaries to do so.


       6.10 Distributions.

           (a) Except as expressly permitted by Section 6.10(b), declare or pay
any  dividends or  distributions  on its capital  stock;  or  purchase,  redeem,
retire, or otherwise acquire for value any of its capital stock now or hereafter
outstanding; or make any distribution of Assets to its shareholders,  whether in
cash,  Assets, or in obligations of such Borrower;  or allocate or otherwise set
apart any sum for the payment of any distribution on, or for the

<PAGE>

purchase,  redemption or retirement  of, any of its capital  stock;  or make any
other distribution by reduction of capital or otherwise in respect of any of its
capital  stock;  or permit any of its  Subsidiaries  to  purchase  or  otherwise
acquire for value any capital stock of such Borrower or any other  Subsidiary of
such Borrower.

       (b) Notwithstanding Section 6.10(a), either Borrower may pay dividends
and  distributions  on its capital  stock to Holdings so long as both before and
after giving effect to such dividends or  distributions,  no Event of Default is
continuing or would result therefrom.

       6.11 Guaranty.  Assume, guaranty, endorse (other than checks and drafts
received by such Borrower in the ordinary course of business so long as an Event
of Default has not occurred), or otherwise be or become directly or contingently
responsible or liable,  or permit any of its  Subsidiaries to assume,  guaranty,
endorse,  or  otherwise be or become  directly or  contingently  responsible  or
liable  (including,  any agreement to purchase any  obligation,  stock,  Assets,
goods,  or  services  or to supply or  advance  any  funds,  Assets,  goods,  or
services,  or any  agreement  to maintain or cause such  Person to  maintain,  a
minimum  working  capital or net worth,  or otherwise to assure the creditors of
any  Person  against  loss)  for the  obligations  of any  Person;  or pledge or
hypothecate, or permit any of its Subsidiaries to pledge or hypothecate,  any of
its Assets as security for any  liabilities  or obligations of any other Person;
provided further,  however, this Section 6.11 shall not restrict either Borrower
or its Subsidiaries from assuming obligations for contingent liabilities arising
pursuant  to  repurchase  agreements  entered  into in the  ordinary  course  of
business in connection with sales of recreational vehicles.

       6.12 Capital Expenditures.  Make any Capital Expenditures in excess of
the  amounts  set  forth  in the  applicable  table  below  during  the  periods
specified:

                      Country Coach                    NRV
                         Maximum                     Maximum
  Year             Capital Expenditures       Capital Expenditures
  1997                 $2,000,000                   $6,000,000
  1998 and each
  year thereafter      $1,500,000                   $2,000,000

       6.13 Transactions with Affiliates.  Enter into any transaction, including
the  purchase,  sale,  or exchange of property or the  rendering of any service,
with any  Affiliate,  or permit any  Subsidiary  to enter into any  transaction,
including  the  purchase,  sale, or exchange of property or the rendering of any
service,  with any Affiliate  unless such  transaction or arrangement is entered
into in the ordinary  course of and pursuant to the reasonable  requirements  of
such Borrower's or such  Subsidiary's  business and upon terms that are fair and
reasonable  and no less  favorable to such Borrower or such  Subsidiary,  as the
case may be, than those  which might be obtained at the time on an  arm's-length
basis from any Person which is not such an Affiliate.

<PAGE>

       6.14 Change of Control.  Cause, permit or suffer, directly or indirectly,
any Change of Control.

       6.15 Transactions Under ERISA.  Directly or indirectly:

           (a) engage, or permit any Subsidiary of such Borrower to engage, in
any  prohibited  transaction  which is  reasonably  likely  to result in a civil
penalty or excise tax described in Sections 406 of ERISA or 4975 of the Internal
Revenue  Code for which a statutory  or class  exemption  is not  available or a
private exemption has not been previously obtained from the Department of Labor;

           (b) permit to exist with respect to any Plan any accumulated funding
deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue
Code), whether or not waived;

           (c) fail, or permit any Subsidiary of such Borrower to fail, to pay 
timely required  contributions  or  installments  due with respect to any waived
funding deficiency to any Plan;

           (d) terminate, or permit any Subsidiary of such Borrower to
terminate,  any Plan where  such event  would  result in any  liability  of such
Borrower, any of its Subsidiaries or any member of ERISA Group under Title IV of
ERISA;

           (c) fail, or permit any Subsidiary of such Borrower to fail, to make
any required contribution or payment to any Multiemployer Plan;

           (f) fail, or permit any Subsidiary of such Borrower to fail, to pay
to a Plan or  Multiemployer  Plan any required  installment or any other payment
required  under  Section 412 of the  Internal  Revenue Code on or before the due
date for such installment or other payment;

           (g) amend, or permit any Subsidiary of such Borrower to amend, a Plan
resulting in an increase in current liability for the plan year such that either
of Borrower,  any Subsidiary of Borrower or any the member of the ERISA Group is
required  to provide  security  to such Plan  under  Section  401(a)(29)  of the
Internal Revenue Code; or

           (h) withdraw, or permit any Subsidiary of such Borrower to withdraw,
from any Multiemployer Plan where such withdrawal is reasonably likely to result
in any liability of any such entity under Title IV of ERISA;

which,  individually  or in the  aggregate,  results in or  reasonably  would be
expected to result in a claim against or liability of such Borrower,  any of its
Subsidiaries or any member of the ERISA Group in excess of $500,000.

<PAGE>

                                 ARTICLE

                      EVENTS OF DEFAULT AND REMEDIES

       7.1 Events of Default.  The occurrence of any one or more of the
following  events,  acts or occurrences shall constitute an event of default (an
"Event of Default") hereunder:

           (a) Borrowers fail to pay on or before the due date thereof, any
payment of principal or interest due on the Loans, any Letter of Credit Fees any
Bank Expenses, or any other amount payable hereunder;

           (b) Borrowers fail to observe or perform any of the covenants and
agreements set forth in Sections 5.8, 5.9(f) or 5.9(g), or in Article VI, and in
the latter case,  such failure shall not be cured within fifteen (15) days after
the date of such failure (if capable of cure);

           (c) Borrowers fail to observe or perform any covenant or agreement
set forth in this Agreement and the Credit Documents (other than those covenants
and  agreements  described  in  Sections  7.1(a) and  7.1(b),  and such  failure
continues  for thirty (30) days after the earlier to occur of (i) a  Responsible
Officer of either Borrower  obtaining  actual  knowledge of such failure or (ii)
Bank's dispatch of notice to Borrowers of such failure; or

           (d) Any representation, warranty or certification made by either
Borrower  or  Guarantor,  or any  officer  or  employee  of either  Borrower  or
Guarantor, in this Agreement,  in any certificate,  financial statement or other
document  delivered  pursuant to this Agreement or any Credit Document proves to
have been incorrect in any material respect when made;

           (e) Either Borrower or Guarantor fails to pay when due or within any
applicable  grace period any payment in respect of its Debt or other  extensions
of credit or financial  arrangements (other than under this Agreement) in excess
of $500,000 in the aggregate;

           (f) Any event or condition occurs that: (i) results in the
acceleration  of the maturity of Debt of either  Borrower or Guarantor in excess
of $500,000 in the aggregate;  or (ii) permits (or, with the giving of notice or
lapse of time or both,  would  permit) the holder or holders of such Debt or any
Person  acting on behalf of such holder or holders to  accelerate  the  maturity
thereof;

           (g) Either Borrower or Guarantor commences a voluntary Insolvency
Proceeding seeking  liquidation,  reorganization or other relief with respect to
itself  or  its  Debt  or  seeking  the  appointment  of  a  trustee,  receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property,  or consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary Insolvency Proceeding or fails
generally  to pay its Debt as it becomes  due, or takes any action to  authorize
any of the foregoing;

<PAGE>

           (h) An involuntary Insolvency Proceeding is commenced against
either Borrower or Guarantor seeking liquidation, reorganization or other relief
with  respect  to it or its  Debt  or  seeking  the  appointment  of a  trustee,
receiver,  liquidator,  custodian  or  other  similar  official  of  it  or  any
substantial  part of its property and any of the following events occur: (i) the
petition commencing the Insolvency  Proceeding is not timely controverted;  (ii)
the petition commencing the Insolvency  Proceeding is not dismissed within sixty
(60) calendar days of the date of the filing  thereof;  (iii) an interim trustee
is appointed to take  possession of all or a  substantial  portion of the Assets
of, or to operate  all or any  substantial  portion  of the  business  of,  such
Borrower  or  Guarantor;  or (iv) an order for relief  shall have been issued or
entered therein;

           (i) Either Borrower or Guarantor suffers (i) a final money judgment
in  excess  of  $500,000  in the  aggregate  or (ii) a final  writ,  warrant  of
attachment,  or similar process  involving  obligations in excess of $500,000 in
the  aggregate and within sixty (60) days of the entry of such  judgment,  writ,
warrant,  attachment  or  similar  process,  it is not bonded or  discharged  or
execution  thereof is not stayed pending appeal, or within sixty (60) days after
the expiration of any such stay, it is not discharged;

           (j) A judgment creditor obtains possession of Assets with a fair
market  value in excess of  $500,000  in the  aggregate  of either  Borrower  or
Guarantor by any means,  including levy, distraint,  replevin, or self-help,  or
any order,  judgment or decree is entered  decreeing the  dissolution  of either
Borrower or Guarantor;

           (k) Any of the Credit Documents fails to be in full force and effect
for any reason,  or Bank fails to have a perfected,  first  priority Lien in and
upon all of the collateral assigned or pledged to Bank thereunder,  or a default
or event of default  occurs  under any Credit  Document,  or the  obligation  of
Guarantor  is  limited or  terminated  by  operation  of law or by the action or
inaction  of  Guarantor,  or  Guarantor  attempts  to  revoke or  terminate  its
Guaranty;

           (l) An "Event of Default" as defined in the Holdings Credit
Agreement occurs;

           (m) An "Event of Default" as defined in either the Letter of Credit
and Reimbursement Agreement or the Reimbursement Agreement occurs;

           (n) Wayne Mertes fails for any reason to serve actively as the
President  and  Chief  Executive  Officer  of NRV,  whether  by reason of death,
disability,  resignation,  action by the Board of Directors or  shareholders  of
NRV, or otherwise, unless a successor reasonably acceptable to Bank is hired and
actively  serving in such  capacity  within six (6) months form the date of such
failure; or

           (o) Any other Material Adverse Effect occurs.

<PAGE>

       7.2 Remedies.

             (a) Acceleration. Upon the occurrence of any Event of Default
described in Section 7.1(g) or 7.1(h),  the Obligations shall become immediately
due and  payable  without  any  election  or action on the part of Bank  without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly  waives.  Upon the  occurrence  and  continuance of any other Event of
Default, Bank may, at its election, by written notice to Borrowers,  immediately
declare the Obligations to be due and payable,  whereupon the Obligations  shall
become  immediately due and payable,  without  presentment,  demand,  protest or
notice of any kind, all of which Borrowers hereby expressly waive.

           (b) Termination of Revolving Credit Commitment.  Upon the
occurrence of any Unmatured  Event of Default or Event of Default,  Bank may, at
its option, terminate the Revolving Credit Commitment and cease making Revolving
Loans to Borrowers or issue any Letters of Credit.

       7.3 Remedies Cumulative.  The rights and remedies of Bank herein and in
the Credit Documents are cumulative,  and are not exclusive of any other rights,
powers, privileges, or remedies, now or hereafter existing, at law, in equity or
otherwise.

                                     ARTICLE

                                      TAXES

       8.1 Taxes on Payments.  All payments in respect of the Obligations shall
be made free and clear of and without any  deduction  or  withholding  for or on
account of any present and future taxes, levies, imposts,  deductions,  charges,
withholdings,  assessments or governmental  charges,  and all  liabilities  with
respect  thereto,  imposed by the United  States of  America,  or any  political
subdivision or taxing authority thereof or therein,  excluding any taxes imposed
on Bank under the  Internal  Revenue  Code or  similar  state and local laws and
determined by Bank's net income,  and any franchise taxes imposed on Bank by the
State  of  California   (or  any  political   subdivision   thereof)  (all  such
non-excluded  taxes,  levies,  imposts,   deductions,   charges,   withholdings,
assessments,  charges and liabilities being hereinafter referred to as "Taxes").
If any Taxes are imposed and required by law to be deducted or withheld from any
amount  payable to Bank,  then  Borrowers  shall (i) increase the amount of such
payment so that Bank will  receive a net amount  (after  deduction of all Taxes)
equal to the amount due  hereunder,  and (ii) pay such Taxes to the  appropriate
taxing  authority  for the account of Bank prior to the date on which  penalties
attach  thereto or interest  accrues  thereon;  provided,  however,  if any such
penalties or interest  shall  become due,  Borrowers  shall make prompt  payment
thereof to the appropriate taxing authority unless it is being contested in good
faith and adequate reserves have been set aside with respect thereto as required
by GAAP,  and by reason of  nonpayment  no  material  property  is  subject to a
material risk of loss or forfeiture.

<PAGE>

       8.2 Indemnification For Taxes.  Borrowers shall indemnify Bank for the
full amount of Taxes (including penalties,  interest, expenses and Taxes arising
from or with respect to any  indemnification  payment) arising therefrom or with
respect  thereto,  whether or not the Taxes were correctly or legally  asserted.
This indemnification shall be made on demand.

       8.3 Evidence of Payment.  Within thirty (30) days after the date of
payment  of any  Taxes,  Borrowers  shall  furnish  to Bank  the  original  or a
certified copy of a receipt evidencing payment thereof.  If no Taxes are payable
in respect of any  payment due  hereunder  or under the Notes,  Borrowers  shall
furnish to Bank a certificate  from each  appropriate  taxing  authority,  or an
opinion of counsel  acceptable to Bank, in either case stating that such payment
is exempt from or not subject to Taxes.

                                     ARTICLE

                                  MISCELLANEOUS

       9.1 Notices.  All notices, requests and other communications to any party
hereunder  shall be in  writing  (including  facsimile  transmission  or similar
writing) and shall be given to such party at its address or facsimile number set
forth on the signature pages hereof or such other address or facsimile number as
such party may hereafter specify by notice to the other party in accordance with
this Section  9.1.  Each such notice,  request or other  communication  shall be
deemed given on the second  business  day after  mailing;  provided  that actual
notice,  however and from whomever given or received,  shall always be effective
on receipt;  provided  further that notices to Bank pursuant to Article II shall
not be  effective  until  received by a  Responsible  Officer of Bank;  provided
further that notices sent by Bank in  connection  with  Sections 9504 or 9505 of
the California  Uniform  Commercial Code shall be deemed given when deposited in
the mail or personally  delivered,  or, where  permitted by law,  transmitted by
facsimile.

       9.2 No Waivers.  No failure or delay by Bank in exercising any right,
power or privilege  hereunder or under any Credit  Document  shall  operate as a
waiver  thereof nor shall any single or partial  exercise  thereof  preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege.

       9.3 Bank Expenses; Documentary Taxes; Indemnification.

             (a) Borrowers shall  pay all Bank Expenses on demand.

             (b) Borrowers shall pay all and indemnify Bank against any and all
transfer  taxes,  documentary  taxes,  assessments,   or  charges  made  by  any
Governmental  Authority  and imposed by reason of the  execution and delivery of
this Agreement, any of the

<PAGE>

Credit Documents, or any other document, instrument or agreement entered into in
connection herewith.

             (c) Borrowers shall and hereby agree to indemnify, protect, defend
and hold  harmless  Bank and its  directors,  officers,  agents,  employees  and
attorneys  (collectively,   the  "Indemnified  Persons"  and  individually,   an
"Indemnified Person") from and against (i) any and all losses, claims,  damages,
liabilities,  deficiencies,  judgments, reasonable costs and expenses (including
attorneys'  fees and attorneys'  fees incurred  pursuant to proceedings  arising
under the  Bankruptcy  Code) incurred by any  Indemnified  Person (except to the
extent that it is finally judicially  determined to have resulted from the gross
negligence or willful misconduct of any Indemnified Person) arising out of or by
reason  of any  litigations,  investigations,  claims  or  proceedings  (whether
administrative, judicial or otherwise), including discovery, whether or not Bank
is designated a party  thereto,  which arise out of or are in any way related to
(1) any  breach by either  Borrower,  any  Subsidiary  of  either  Borrower,  or
Guarantor of its  representations  and  warranties  under this  Agreement or any
Credit Agreement, or (2) any actual or proposed use by Borrowers of the proceeds
of the Loans; (ii) any such losses, claims, damages, liabilities,  deficiencies,
judgments,  costs  and  expenses  arising  out  of  or by  reason  of  the  use,
generation,  manufacture,  production,  storage,  release,  threatened  release,
discharge,  disposal or presence on,  under or about  Borrowers'  operations  or
property or property  leased by either  Borrower of any  material,  substance or
waste which is or becomes designated as Hazardous Materials;  and (iii) any such
losses,  claims,  damages,  liabilities,   deficiencies,  judgments,  costs  and
expenses  incurred in  connection  with any  remedial or other  action  taken by
either  Borrower or Bank in connection with compliance by such Borrower with any
federal,  state or local environmental laws, acts, rules,  regulations,  orders,
directions,  ordinances, criteria or guidelines (except to the extent that it is
finally  judicially  determined to have  resulted  from the gross  negligence or
willful  misconduct of any  Indemnified  Person).  If and to the extent that the
obligations of Borrowers  hereunder are unenforceable for any reason,  Borrowers
hereby agree to make the maximum contribution to the payment and satisfaction of
such obligations of Bank which is permissible under applicable law.

             (d) Borrowers' obligations under this Section 9.3 and under
Section  8.2 shall  survive any  termination  of this  Agreement  and the Credit
Documents  and the payment in full of the  Obligations,  and are in addition to,
and not in  substitution  of,  any  other of its  obligations  set forth in this
Agreement.

       9.4 Amendments and Waivers.  Any provision of this Agreement or any
of the Credit  Documents to which  either  Borrower is a party may be amended or
waived if, but only if, such  amendment or waiver is in writing and is signed by
the party asserted to be bound thereby,  and then such amendment or waiver shall
be effective only in the specific instance and specific purpose for which given.

<PAGE>

       9.5 Successors and Assigns; Participations; Disclosure.

             (a) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective  successors and assigns,  except that
Borrowers may not assign or transfer any of its rights or obligations under this
Agreement  without  the prior  written  consent of Bank and any such  prohibited
assignment or transfer by Borrower shall be void.

             (b) Bank may make, carry or transfer the Loans and the Revolving
Credit Commitment at, to or for the account of, any of its branch offices or the
office of an  Affiliate  of Bank or to any  Federal  Reserve  Bank,  all without
Borrowers' consent.

             (c) Upon written notice to Borrowers, Bank may, at its own
expense,  assign to one or more banks or other financial  institutions  all or a
portion of its rights  (including  voting  rights)  and  obligations  under this
Agreement and the Credit Documents.  In the event of any such assignment by Bank
pursuant to this Section 9.5(c), Bank's obligations under this Agreement arising
after the effective date of such assignment  shall be released and  concurrently
therewith,  transferred to and assumed by Bank's assignee to the extent provided
for in the document evidencing such assignment.

             (d) Bank may at any time sell to one or more banks or other
financial  institutions  (each a "Participant")  participating  interests in the
Revolving Credit  Commitment,  the Loans, the Letters of Credit and in any other
interest  of  Bank  hereunder.  In the  event  of any  such  sale  by  Bank of a
participating interest to a Participant, Bank's obligations under this Agreement
shall remain unchanged, Bank shall remain solely responsible for the performance
thereof,  and Borrowers  shall continue to deal solely and directly with Bank in
connection  with Bank's rights and obligations  under this Agreement.  Borrowers
agree that each Participant  shall, to the extent provided in its  participation
agreement,  be entitled  to the  benefits  of Article  VIII with  respect to its
participating  interest. Bank shall give prompt notice to Borrowers of the grant
of any such participation.

             (e) Subject to Section 9.10, Borrowers authorize Bank to disclose
to any assignee under Section 9.5(c) or any Participant (either, a "Transferee")
and any  prospective  Transferee  any and all  financial  information  in Bank's
possession concerning Borrowers which has been delivered to Bank by Borrowers or
any of their  Responsible  Officers pursuant to this Agreement or which has been
delivered  to  Bank  by  Borrowers  or  any of  their  Responsible  Officers  in
connection with Bank's credit evaluation prior to entering into this Agreement.

             (f) With Borrower's prior written consent, Bank may use
Borrowers'  names in advertising  and  promotional  materials and in conjunction
therewith disclose the general terms of this Agreement.

<PAGE>

       9.6 Counterparts; Effectiveness; Integration.  This Agreement may be
signed in any number of counterparts,  each of which shall be an original,  with
the same  effect as if the  signatures  thereto  and  hereto  were upon the same
instrument.  This  Agreement  shall be  effective  when  executed by each of the
parties   hereto.   This  Agreement   constitutes   the  entire   agreement  and
understanding  among  the  parties  hereto  and  supersedes  any and  all  prior
agreements and understandings,  oral or written,  relating to the subject matter
hereof.

       9.7 Severability.  The provisions of this Agreement are severable.  The
invalidity,  in whole or in part, of any provision of this  Agreement  shall not
affect the validity or enforceability of any other of its provisions.  If one or
more provisions hereof shall be declared invalid or unenforceable, the remaining
provisions  shall  remain in full force and effect and shall be construed in the
broadest possible manner to effectuate the purposes hereof.

       9.8 GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN
THE STATE OF CALIFORNIA  AND THE  VALIDITY,  CONSTRUCTION,  INTERPRETATION,  AND
ENFORCEMENT  HEREOF,  AND THE RIGHTS OF THE PARTIES HERETO,  SHALL BE DETERMINED
UNDER,  GOVERNED BY, AND CONSTRUED IN  ACCORDANCE  WITH THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

       9.9 Dispute Resolution.  This Agreement is subject to that certain
Alternative  Dispute  Resolution  Agreement,  dated  as of even  date  herewith,
between Borrowers and Bank.

       9.10 Confidentiality.  In connection with the negotiation and
administration of this Agreement and the other Credit  Documents,  Borrowers and
Guarantor  have furnished and will,  from time to time,  furnish to Bank written
information  (such  information,  other than any such information  which (i) was
publicly available, or otherwise known to Bank, at the time of disclosure,  (ii)
subsequently  becomes publicly  available other than through any act or omission
by Bank or (iii) otherwise subsequently becomes known to Bank other than through
a Person whom Bank knows to be acting in violation of his or its  obligations to
Borrowers  or  Guarantor,   being  hereinafter   referred  to  as  "Confidential
Information").  Bank will treat  confidentially any Confidential  Information in
accordance with such procedures as Bank applies generally to information of that
nature. It is understood,  however,  that the foregoing will not restrict Bank's
ability to freely  exchange such  Confidential  Information  with (i) directors,
employees, auditors, accountants or counsel of Bank or any Affiliate of Bank and
(ii)  actual  or  prospective  Transferees,  but  in  the  case  of  prospective
Transferees,  Bank's ability to so exchange  Confidential  Information  shall be
conditioned upon any such prospective Transferees' agreement to be bound by this
Section 9.10. It is further  understood that the foregoing will not prohibit the
disclosure of any or all Confidential Information if and to the extent that such
disclosure may be required (i) by a regulatory agency or otherwise in

<PAGE>

connection  with an examination  of Bank's  records by appropriate  authorities,
(ii)  pursuant to court order,  subpoena or other legal process or in connection
with  any  pending  or  threatened  litigation,  (iii)  pursuant  to any  order,
regulation or ruling applicable to Bank or at the express direction of any other
authorized  governmental  agency,  (iv) as may be required or appropriate in any
report,  statement or testimony  submitted  to any  municipal,  state or Federal
regulatory  body  having or claiming  to have  jurisdiction  over Bank or to the
Federal  Reserve  Board or the FDIC or  similar  organizations  (whether  in the
United States or elsewhere)  or their  successors,  (v) otherwise as required by
law, (vi) in order to protect its interests or its rights or remedies  hereunder
or under the other Credit Documents,  or (vii) except as expressly  contemplated
by  this  Agreement  or the  Credit  Documents.  In the  event  of any  required
disclosure under clauses (ii),  (iii),  (iv), (v) or (vii) above, Bank agrees to
use reasonable  efforts to inform Borrowers as promptly as practicable  prior to
the disclosure of any such Confidential Information.

                                     ARTICLE

                JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT

       10.1 Joint and Several Liability.  Each Borrower agrees that it is
jointly  and  severally,  directly  and  primarily  liable to Bank for  payment,
performance and  satisfaction in full of the Obligations and that such liability
is  independent  of the  duties,  obligations,  and  liabilities  of  the  other
Borrower.  Bank may bring a separate  action or actions on each,  any, or all of
the Obligations  against either Borrower,  whether action is brought against the
other  Borrower or whether the other  Borrower is joined in such action.  In the
event that either  Borrower  fails to make any payment of any  Obligations on or
before the due date thereof,  the other  Borrower  immediately  shall cause such
payment to be made or each of such Obligations to be performed,  kept, observed,
or fulfilled.

       10.2 Primary Obligation; Waiver of Marshalling.  This Agreement and the
Credit  Documents  to which  Borrowers  are a party are a primary  and  original
obligation of each Borrower, are not the creation of a surety relationship,  and
are  an  absolute,   unconditional,   and  continuing  promise  of  payment  and
performance  which  shall  remain in full  force and effect  without  respect to
future changes in  conditions,  including any change of law or any invalidity or
irregularity  with respect to this  Agreement  or the Credit  Documents to which
Borrowers  are a party.  Each  Borrower  agrees  that its  liability  under this
Agreement  and  the  Credit  Documents  which  Borrowers  are a party  shall  be
immediate and shall not be contingent  upon the exercise or  enforcement by Bank
of whatever remedies it may have against the other Borrowers, or the enforcement
of any lien or realization upon any security Bank may at any time possess.  Each
Borrower  consents and agrees that Bank shall be under no  obligation to marshal
any  assets  of  any  Borrower  against  or in  payment  of  any  or  all of the
Obligations.

<PAGE>

       10.3 Financial Condition of Borrowers.  Each Borrower acknowledges that
it is presently informed as to the financial condition of the other Borrower and
of all other  circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the  Obligations.  Each Borrower hereby covenants
that it will  continue to keep  informed as to the  financial  condition  of the
other Borrower, the status of the other Borrowers and of all circumstances which
bear upon the risk of nonpayment.  Absent a written request from any Borrower to
Bank for information, such Borrower hereby waives any and all rights it may have
to require Bank to disclose to such Borrower any information  which Bank may now
or hereafter  acquire  concerning  the condition or  circumstances  of the other
Borrower.

       10.4 Continuing Liability.  The liability of each Borrower under this
Agreement  and the Credit  Documents  to which  Borrowers  are a party  includes
Obligations  arising under  successive  transactions  continuing,  compromising,
extending,  increasing,  modifying,  releasing,  or  renewing  the  Obligations,
changing  the  interest  rate,  payment  terms,  or other  terms and  conditions
thereof, or creating new or additional  Obligations after prior Obligations have
been satisfied in whole or in part. To the maximum extent permitted by law, each
Borrower  hereby waives any right to revoke its liability  under this  Agreement
and Credit  Documents as to future  indebtedness,  and in connection  therewith,
each  Borrower  hereby  waives any rights it may have under  Section 2815 of the
California Civil Code.

       10.5 Additional Waivers.

           (a) Each Borrower absolutely, unconditionally, knowingly, and
expressly waives:

               (i) (1) notice of acceptance hereof; (2) notice of any Loans
               or other  financial  accommodations  made or extended  under this
               Agreement and the Credit Documents to which Borrowers are a party
               or the creation or existence  of any  Obligations;  (3) notice of
               the  amount  of  the  Obligations,   subject,  however,  to  each
               Borrower's  right to make inquiry of Bank to ascertain the amount
               of the  Obligations  at any  reasonable  time;  (4) notice of any
               adverse  change in the financial  condition of the other Borrower
               or of any other fact that might  increase  such  Borrower's  risk
               hereunder;   (5)  notice  of  presentment  for  payment,  demand,
               protest,  and  notice  thereof as to any  instruments  among this
               Agreement  and the  Credit  Documents  to which  Borrowers  are a
               party;  (6) notice of any Unmatured  Event of Default or Event of
               Default;  and (7) all other  notices  (except  if such  notice is
               specifically required to be given to Borrowers hereunder or under
               the Credit  Documents to which Borrowers are a party) and demands
               to which such Borrower might otherwise be entitled.

               (ii) its right, under Sections 2845 or 2850 of the California
               Civil Code,  or  otherwise,  to require  Bank to  institute  suit
               against,  or to exhaust any rights and remedies which Bank has or
               may have  against,  the other  Borrower  or any third  party,  or
               against any collateral for the Obligations provided by the other

<PAGE>

               Borrower,  or any third party.  Each Borrower  further waives any
               defense  arising  by reason of any  disability  or other  defense
               (other  than the  defense  that the  Obligations  shall have been
               fully and finally  performed and indefeasibly  paid) of the other
               Borrower or by reason of the cessation from any cause  whatsoever
               of the liability of the other Borrower in respect thereof.

               (iii) (1) any rights to assert against Bank any defense (legal
               or  equitable),   set-off,  counterclaim,  or  claim  which  such
               Borrower may now or at any time  hereafter have against the other
               Borrower  or any other  party  liable to Bank;  (2) any  defense,
               set-off,  counterclaim,  or claim, of any kind or nature, arising
               directly  or  indirectly  from  the  present  or  future  lack of
               perfection,  sufficiency,  validity,  or  enforceability  of  the
               Obligations  or any  security  therefor;  (3)  any  defense  such
               Borrower  has  to  performance  hereunder,  and  any  right  such
               Borrower has to be exonerated,  provided by Sections 2819,  2822,
               or 2825 of the  California  Civil Code, or otherwise,  arising by
               reason of:  the  impairment  or  suspension  of Bank's  rights or
               remedies  against the other  Borrower;  the alteration by Bank of
               the   Obligations;   any   discharge  of  the  other   Borrower's
               obligations  to Bank by  operation  of law as a result  of Bank's
               intervention  or omission;  or the acceptance by Bank of anything
               in partial  satisfaction of the Obligations;  and (4) the benefit
               of any statute of limitations affecting such Borrower's liability
               hereunder  or the  enforcement  thereof,  and any act which shall
               defer  or delay  the  operation  of any  statute  of  limitations
               applicable to the Obligations shall similarly operate to defer or
               delay the operation of such statute of limitations  applicable to
               such Borrower's liability hereunder.

           (b) Each Borrower absolutely, unconditionally, knowingly, and
expressly waives any defense arising by reason of or deriving from (i) any claim
or defense  based upon an election of  remedies  by Bank  including  any defense
based upon an  election of  remedies  by Bank under the  provisions  of Sections
580a,  580b,  580d,  and 726 of the  California  Code of Civil  Procedure or any
similar law of  California  or any other  jurisdiction;  or (ii) any election by
Bank under Section 1111(b) of the Bankruptcy Code to limit the amount of, or any
collateral  securing,  its claim against the  Borrowers.  Pursuant to California
Civil Code Section 2856(b):

                  Each Borrower waives all rights and defenses arising out of an
               election of remedies by the  creditor,  even though that election
               of remedies,  such as a nonjudicial  foreclosure  with respect to
               security  for  a  guaranteed   obligation,   has  destroyed  such
               Borrower's  rights of subrogation and  reimbursement  against the
               other  Borrowers  by  the  operation  of  Section  580(d)  of the
               California Code of Civil Procedure or otherwise.

                  Each Borrower waives all rights and defenses that such
               Borrower  may have  because the  Obligations  are secured by real
               property. This means, among other things:

<PAGE>

               1) Bank may collect from such Borrower without first
               foreclosing on any real or personal property collateral pledged
               by the other Borrower.

               2) If Bank forecloses on any real property collateral pledged by
                  the other Borrower:

                             a) The amount of the Obligations may be reduced
                             only by the price for which that collateral is sold
                             at the foreclosure  sale, even if the collateral is
                             worth more than the sale price.

                             b) Bank may collect from such Borrower even if
                             Bank,   by   foreclosing   on  the  real   property
                             collateral,  has  destroyed any right such Borrower
                             may have to collect from the other Borrower.

                   This is an unconditional and irrevocable waiver of any rights
               and defenses each Borrower may have because the  Obligations  are
               secured by real property.  These rights and defenses include, but
               are not  limited to, any rights or  defenses  based upon  Section
               580a,  580b,  580d,  or 726  of  the  California  Code  of  Civil
               Procedure.

If any of the Obligations at any time are secured by a mortgage or deed of trust
upon real property, Bank may elect, in its sole discretion,  upon a default with
respect  to the  Obligations,  to  foreclose  such  mortgage  or deed  of  trust
judicially  or  nonjudicially  in any manner  permitted by law,  before or after
enforcing  this  Agreement  and the Credit  Documents,  without  diminishing  or
affecting the liability of either  Borrower  hereunder  except to the extent the
Obligations  are repaid with the  proceeds of such  foreclosure.  Each  Borrower
understands  that (a) by virtue of the operation of California's  antideficiency
law applicable to nonjudicial foreclosures, an election by Bank nonjudicially to
foreclose  such a mortgage  or deed of trust  probably  would have the effect of
impairing or destroying rights of subrogation,  reimbursement,  contribution, or
indemnity of such  Borrower  against the other  Borrower or other  guarantors or
sureties,  and (b) absent the waiver  given by such  Borrower,  such an election
would prevent Bank from  enforcing  this  Agreement and the Credit  Documents to
which Borrowers are a party against such Borrower.  Understanding the foregoing,
and  understanding  that such Borrower is hereby  relinquishing a defense to the
enforceability of this Agreement and the Credit Documents to which Borrowers are
a party,  such  Borrower  hereby  waives  any right to assert  against  Bank any
defense to the  enforcement of this Agreement and the Credit  Documents to which
Borrowers are a party, whether denominated "estoppel" or otherwise,  based on or
arising from an election by Bank nonjudicially to foreclose any such mortgage or
deed of trust. Each Borrower understands that the effect of the foregoing waiver
may be that each Borrower may have liability  hereunder for amounts with respect
to which such Borrower may be left without rights of subrogation, reimbursement,
contribution,  or indemnity  against the other  Borrower or other  guarantors or
sureties. Each Borrower also agrees that the "fair market value" provisions of

<PAGE>

Section  580a  of  the  California   Code  of  Civil  Procedure  shall  have  no
applicability  with respect to the  determination  of such Borrower's  liability
under this Agreement and the Credit Documents to which Borrowers are a party.

           (c) Each Borrower hereby absolutely, unconditionally, knowingly,
and expressly waives: (i) any right of subrogation such Borrower has or may have
as against the other Borrower with respect to the Obligations; (ii) any right to
proceed  against the other Borrower or any other Person,  now or hereafter,  for
contribution,  indemnity,  reimbursement,  or any other  suretyship  rights  and
claims,  whether direct or indirect,  liquidated or contingent,  whether arising
under  express or implied  contract or by operation of law,  which such Borrower
may now have or hereafter have as against the other Borrower with respect to the
Obligations;  and (iii) any right to  proceed or seek  recourse  against or with
respect to any property or asset of the other Borrower.

           (d) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION  SET  FORTH  IN  THIS  AGREEMENT,  EACH  BORROWER  HEREBY  ABSOLUTELY,
KNOWINGLY,  UNCONDITIONALLY,  AND EXPRESSLY  WAIVES AND AGREES NOT TO ASSERT ANY
AND ALL BENEFITS OR DEFENSES  ARISING  DIRECTLY OR  INDIRECTLY  UNDER ANY ONE OR
MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820,
2821, 2822,  2825,  2839,  2845, 2848, 2849, AND 2850,  CALIFORNIA CODE OF CIVIL
PROCEDURE SECTIONS 580a, 580b, 580c, 580d, AND 726, AND CHAPTER 2 OF TITLE 14 OF
DIVISION 3 OF THE CALIFORNIA CIVIL CODE.

       10.6 Settlements or Releases.  Each Borrower consents and agrees that,
without  notice to or by such Borrower,  and without  affecting or impairing the
liability of such Borrower hereunder, Bank may, by action or inaction:

           (a) compromise, settle, extend the duration or the time for the
payment of, or discharge the  performance  of, or may refuse to or otherwise not
enforce this  Agreement  and the Credit  Documents,  or any part  thereof,  with
respect to the other Borrower or any Guarantor;

           (b) release the other Borrower or any Guarantor or grant other
indulgences to the other Borrower or any Guarantor in respect thereof;

           (c) amend or modify in any manner and at any time (or from time
to time) this Agreement or any of the Credit Documents; or

           (d) release or substitute any Guarantor, if any, of the Obligations,
or enforce, exchange,  release, or waive any security for the Obligations or any
other guaranty of the Obligations, or any portion thereof.

<PAGE>

       10.7 No Election.  Bank shall have the right to seek recourse against
each Borrower to the fullest extent provided for herein, and no election by Bank
to proceed in one form of action or proceeding,  or against any party, or on any
obligation,  shall  constitute  a waiver of Bank's right to proceed in any other
form of action or proceeding or against other parties  unless Bank has expressly
waived such right in writing.  Specifically, but without limiting the generality
of the  foregoing,  no action or proceeding by Bank under this Agreement and the
Credit  Documents  shall serve to diminish the  liability of any Borrower  under
this Agreement and the Credit Documents to which Borrowers are a party except to
the  extent  that  Bank  finally  and   unconditionally   shall  have   realized
indefeasible payment by such action or proceeding.

       10.8 Indefeasible Payment.  The Obligations shall not be considered
indefeasibly paid unless and until all payments to Bank are no longer subject to
any right on the part of any Person, including either Borrower,  either Borrower
as a debtor in possession,  or any trustee  (whether  appointed  pursuant to the
Bankruptcy Code, or otherwise) of either  Borrower's Assets to invalidate or set
aside such  payments  or to seek to recoup the  amount of such  payments  or any
portion thereof, or to declare same to be fraudulent or preferential.  Upon such
full and final  performance and indefeasible  payment of the  Obligations,  Bank
shall have no  obligation  whatsoever to transfer or assign its interest in this
Agreement and the Credit  Documents to either  Borrower.  In the event that, for
any  reason,  any  portion of such  payments  to Bank is set aside or  restored,
whether  voluntarily  or  involuntarily,  after  the  making  thereof,  then the
obligation  intended to be satisfied  thereby  shall be revived and continued in
full force and effect as if said payment or payments had not been made, and each
Borrower  shall be liable for the full amount Bank is required to repay plus any
and all  costs and  expenses  (including  attorneys'  fees and  attorneys'  fees
incurred  in  proceedings  brought  under the  Bankruptcy  Code) paid by Bank in
connection therewith.

       10.9 Single Loan Account.  At the request of Borrowers to facilitate and
expedite the administration and accounting  processes and procedures of the Term
Loan and their Borrowings, Bank has agreed, in lieu of maintaining separate loan
accounts  on Bank's  books in the name of each of the  Borrowers,  that Bank may
maintain a single  loan  account  under the name of all of both  Borrowers  (the
"Loan Account").  All Loans shall be made jointly and severally to Borrowers and
shall be charged  to the Loan  Account,  together  with all  interest  and other
charges as  permitted  under and  pursuant to this  Agreement.  The Loan Account
shall be credited with all repayments of Obligations received by Bank, on behalf
of Borrowers, from either Borrower pursuant to the terms of this Agreement.

       10.10 Apportionment of Proceeds of Loans.  Each Borrower expressly agrees
and  acknowledges  that Bank shall have no  responsibility  to inquire  into the
correctness of the  apportionment  or allocation of or any disposition by any of
Borrowers  of (a) the Loans or any  Borrowings,  or (b) any of the  expenses and
other items charged to the Loan Account  pursuant to this  Agreement.  The Loans
and all such Borrowings and such expenses and other items

<PAGE>

shall be made for the  collective,  joint,  and several account of Borrowers and
shall be charged to the Loan Account.

       10.11 Bank Held Harmless.  Each Borrower agrees and acknowledges that
the  administration  of this Agreement on a combined basis, as set forth herein,
is being done as an  accommodation  to Borrowers and at their request,  and that
Bank shall incur no liability to either of  Borrowers  as a result  thereof.  To
induce Bank to do so, and in  consideration  thereof,  each of Borrowers  hereby
agrees  to  indemnify  and  hold  Bank  harmless  from and  against  any and all
liability,  expense, loss, damage, claim of damage, or injury, made against Bank
by either  of  Borrowers  or by any other  person  or  entity,  arising  from or
incurred by reason of such administration of the Agreement.

       10.12 Borrowers' Integrated Operations.  Each Borrower represents and
warrants  to Bank  that  the  collective  administration  of the  Loans is being
undertaken by Bank pursuant to this Agreement  because  Borrowers are integrated
in  their  operation  and  administration  and  require  financing  on  a  basis
permitting  the  availability  of credit from time to time to each of Borrowers.
Each Borrower will derive benefit, directly and indirectly, from such collective
administration and credit availability  because the successful operation of each
Borrower is enhanced by the continued  successful  performance of the integrated
group.

                [Remainder of this page intentionally left blank]

<PAGE>

Notwithstanding  Section 9.8, the following  disclosure is made to Country Coach
pursuant to Section 41.580(3) of Oregon Revised Statutes:

               "Under Oregon law, most agreements, promises and commitments made
               by us after  October 3, 1989,  concerning  loans and other credit
               extensions  which  are  not for  personal,  family  or  household
               proposes or secured solely by the borrower's residence must be in
               writing,  express  consideration  and  be  signed  by  us  to  be
               enforceable."

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective  authorized officers as of the day and year
first above written.

BORROWERS:               COUNTRY COACH, INC.


                         By

                         Title:

                         Address for notices:

                         Country Coach, Inc.
                         135 East First Street
                         Junction City, Oregon 97448
                         Attn:  President
                         Facsimile:  (541) 998-6687


                         NATIONAL R.V., INC.


                         By

                         Title:

                         Address for notices:

                         National R.V., Inc.
                         3411 N. Perris Boulevard
                         Perris, CA 92571
                         Attn: Mr. Kenneth W. Ashley
                         Facsimile:  (909) 657-8598

<PAGE>

BANK:                    UNION BANK OF CALIFORNIA, N.A.


                         By

                         Title:

                         Address for notices and Lending Office:

                         Union Bank of California
                         Commercial Portfolio Administration
                         Attn: Catherine Abe, Vice President
                               Allison W. Berry, Assistant Vice President
                         445 South Figueroa Street
                         16th Floor
                         Los Angeles, California 90071
                         Facsimile: (213) 236-7635
<PAGE>
Exhibit 99

                           Forward Looking Statements

The  reports of  National  R.V.  Holdings,  Inc.,  a Delaware  corporation  (the
"Registrant"), under the Securities Exchange Act of 1934 contain forward-looking
statements which involve risks and  uncertainties.  The Company's actual results
may differ  significantly  from the  results  discussed  in the  forward-looking
statements.  Factors  that might cause such a  difference  include,  but are not
limited  to,  the  following  considerations:  (i) the  cyclical  nature  of the
recreational  vehicle  industry,  seasonality and potential  fluctuations in the
Registrant's  operating  results;  (ii) the  registrant's  dependence on chassis
suppliers;  (iii) the  integration by the Registrant of acquired  businesses and
the  management  of  growth;   (iv)  potential   liabilities   under  repurchase
agreements;   (v)  competition;   (vi)  government  regulation;   (vii)  product
liability;  (viii)  dependence  on key  personnel;  (ix)  dependence  on certain
dealers  and  concentration  of dealers in certain  regions;  (x)  expansion  of
manufacturing  facilities;  (xi) control by affiliates;  and (xii)  antitakeover
provisions.