**Exhibit10.1**

 

**ProgramAgreement**

 

This Program Agreement (“Agreement”)is entered into by and between **Monaco Coach Corporation**(“Monaco”) and **GE Commercial DistributionFinance Corporation** (“CDF”).

 

WITNESSETH:

 

WHEREAS, Monaco desiresthat CDF provide the Program to certain Dealers;

 

WHEREAS, Monaco and CDFdesire to agree upon terms and conditions pursuant to which CDF will providethe Program to Dealers.

 

NOW, THEREFORE, for andin consideration of the premises and for other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, Monaco and CDFagree as follows:

 

1.             Definitions.

 

“Business Day”means any day the Federal Reserve Bank of Chicago is open for the transactionof business

 

“Dealer”means any retail dealer of Inventory in the United States of America, includingRisk Pool Dealers.

 

“Guaranty”means the Guaranty by Monaco in Section 4 of this Agreement.

 

“Inventory”means goods consisting of recreational vehicles of any type sold by Monaco.

 

“Prime Rate”means for any calendar month the highest “prime rate” published in the “MoneyRates” column of the Wall Street Journal on the first Business Day ofsuch month.

 

“Program”means the financing program for Risk Pool Dealers as set forth in thisAgreement.

 

“Risk PoolFacilities” means Risk Pool A Facilities and Risk Pool B Facilities.

 

“Risk Pool AFacilities” means the credit facilities designated for Risk Pool A Dealers,provided by CDF to such Dealers and guaranteed by Monaco under this Agreement.

 

“Risk Pool A Dealers”means Dealers which have been identified in writing by Monaco and accepted byCDF for inclusion in a Risk Pool A Facility.

 

“Risk Pool AGuaranty Limit” means for each Risk Pool A Dealer, an amount which is thegreater of (a) One Hundred Thousand Dollars ($100,000), and (b) twenty-fivepercent (25%) of such Risk Pool A Dealer’s outstanding principal loan

 

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balance forInventory under a Risk Pool A Facility (subject to the limits on such loanbalance provided in Section 3.2 hereof).

 

“Risk Pool BFacilities” means the credit facilities designated for a Risk Pool BDealers, provided by CDF to such Dealers and guaranteed by Monaco under thisAgreement.

 

“Risk Pool BDealers” means Dealers which have been identified in writing by Monaco andaccepted by CDF for inclusion in a Risk Pool B Facility.

 

“Risk Pool BGuaranty Limit” means for each Risk Pool B Dealer, one hundred percent(100%) of the Risk Pool B Dealer’s outstanding principal loan balance for Inventoryunder a Risk Pool B Facility (subject to the limits on such loan balanceprovided in Section 3.3 hereof).

 

“Risk PoolDealers” means Dealers which are Risk Pool A Dealers or Risk Pool BDealers.

 

“Risk PoolInventory” means Inventory financed for a Risk Pool Dealer and allocated toa Risk Pool Facility.

 

“Terms Letter”means that certain Terms Letter, dated as of the date hereof, executed by CDFand acknowledged by Monaco.

 

2.             Financing Terms.

 

2.1           Program Terms. The terms for financing provided by CDF to Risk Pool Dealers shall be inaccordance with the terms set forth in the Terms Letter.

 

2.2           Credit Underwriting and Documentation. CDF will use its credit underwriting and documentation practices.  All decisions regarding the approval ofDealers for financing, credit facility amounts, documentation requirements andmanagement of the Dealers’ lending relationship with CDF will be solely thoseof CDF.

 

3.             Risk Pool Facilities.

 

3.1           General.  Theobligations of Risk Pool Dealers under the Risk Pool Facilities will beguaranteed by Monaco in an amount not to exceed the Risk Pool A Guaranty Limitor the Risk Pool B Guaranty Limit, as applicable.  These Dealers will be mutually agreed upon inwriting from time to time in the form of Exhibit A attached hereto or insome other mutually acceptable writing between the parties from time to time.

 

3.2           Risk Pool A Dealers. Without limiting the ability of CDF and Monaco to mutually agree ondesignating a Dealer as a Risk Pool A Dealer or the amount of the Dealer’sobligations to be guaranteed, the Risk Pool A Dealers will generally have thefollowing characteristics:  (a) need fora temporary increase in their CDF credit facility; (b) have satisfactoryexperience with Monaco or CDF; (c) have a minimum of two years RV salesexperience; and (d) have a CDF credit facility or obtain a primary creditfacility with CDF, subject to CDF’s credit underwriting approval and completedocumentation, prior to the Dealer’s designation as a Risk Pool A Dealer.  The amount of the credit facility dedicatedto financing Inventory

 

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for each Risk PoolA Dealer will not be more than $5,000,000, unless agreed by Monaco andCDF.  The total amount of Risk Pool AFacilities outstanding at any time with respect to Risk Pool A Dealers will notexceed $15,000,000, unless agreed by Monaco and CDF.

 

3.3           RiskPool B Dealers.  Without limiting theability of CDF and Monaco to mutually agree on designating a Dealer as a RiskPool B Dealer or the amount of the Dealer’s obligations to be guaranteed, theRisk Pool B Dealers will generally have the following characteristics:  (a) unable to obtain a credit facility in anamount desired by the Dealer; (b) have satisfactory experience with Monaco orCDF; (c) have a minimum of two years RV sales experience; and (d) may or maynot have a CDF credit facility, however, the Dealer must obtain a creditfacility with CDF, subject to CDF’s credit underwriting approval and completedocumentation, prior to the Dealer’s designation as a Risk Pool B Dealer.  The amount of the credit facility dedicatedto financing Inventory for each Risk Pool B Dealer will not be more than$2,000,000, unless agreed by Monaco and CDF. The total amount Risk Pool B Facilities outstanding at any time withrespect to Risk Pool B Dealers will not exceed $10,000,000, unless agreed byMonaco and CDF.

 

3.4           Risk Pool Inventory.

 

3.4.1        Purpose of Risk Pool Facilities. The purpose of establishing a credit facility for a Dealer under a RiskPool Facility is to permit the Dealer to obtain financing for greater amountsof Inventory that CDF would not otherwise provide without the guaranty ofMonaco.  A Dealer may have a creditfacility for Inventory which is not part of a Risk Pool Facility.

 

3.4.2        Identification of Risk Pool Inventory. Inventory sold to Risk Pool Dealers will be identified by Monaco as RiskPool Inventory on a good faith basis to accomplish the purposes of thisAgreement.  Such identification will bemade at the time that the approval for the financing of the Inventory isobtained.  In addition, Monaco willidentify the Risk Pool Inventory on the invoice, provided, that the failure tomake such designation will not reduce Monaco’s obligations.

 

3.4.3        Term in Risk Pool. Inventory financed under Risk Pool A Facilities will generally remainfinanced under Risk Pool A Facilities for 180 days from the original invoicedate and after such period, at CDF’s discretion, Inventory in Risk Pool AFacilities will be transferred from Risk Pool A Facilities to the Dealer’scredit facility outside of a Risk Pool A Facility.  Inventory financed under Risk Pool BFacilities will remain in Risk Pool B Facilities until the Dealer has paid CDFindefeasibly in full.

 

4.             Guaranty of Risk Dealers.  Monaco guarantees the full and punctual payment andperformance when due, whether upon demand, at maturity or earlier by reason ofacceleration or otherwise, and at all times thereafter, of the outstandingprincipal amount of the indebtedness of each Risk Pool Dealer to CDF for theRisk Pool Inventory, whether such indebtedness is direct, indirect, acquired,joint and/or several, existing, future, arising before or after a bankruptcy ofa Risk Pool Dealer, contingent or otherwise in an amount not to exceed: (a) theRisk Pool A Guaranty Limit with respect to Risk Pool A Dealers; and (b) theRisk Pool B Guaranty Limit with respect to Risk Pool B Dealer (collectively,the “Liabilities”).

 

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This Guaranty is a guarantee ofpayment and not of collection.  Subjectat all times to the Risk Pool A Guaranty Limit and the Risk Pool B GuarantyLimit, Monaco agrees that the obligations of Monaco under this Guaranty shallbe unconditional irrespective of, at any time, (1) the invalidity orunenforceability of the Liabilities or any agreement or instrument relating toany of the Liabilities (collectively, the “Transaction Documents”), (2)any law, regulation or order in effect in any jurisdiction affecting any of theterms or the rights of CDF with respect to the Liabilities or the TransactionDocuments, (3) any change in the time, manner or place of payment of, or in anyother term of, all or any of the Liabilities, or any other amendment or waiverof or any consent to departure from any Transaction Document, (4) the absenceof any attempt to collect the Liabilities from any Risk Pool Dealer or from anyother person primarily or secondarily liable with respect to the Liabilities orof any attempt to realize upon any collateral (whether securing theLiabilities, this Guaranty or otherwise), (5) any exchange, release,non-perfection or other impairment of any collateral or other security, whetherrelating to any Risk Pool Dealer, Monaco, another guarantor or otherwise, (6)any release of or settlement with any person (including, without limitation,any Risk Pool Dealer and any other guarantor) liable in whole or in part, orany release or amendment or waiver of or consent to departure from any otherguaranty, for all or any of the Liabilities, (7) CDF’s acceptance at any timeof any additional collateral, guarantees or other credit support relating tothe Liabilities or this Guaranty, (8) any dispute between CDF and any Risk PoolDealer, or any termination of credit of any Risk Pool Dealer or modification ofthe terms thereof, (9) the disallowance in bankruptcy or other proceedings ofall or any part of CDF’s claim against any Risk Pool Dealer or any other personliable for any Liabilities, and (10) any other circumstance which mightotherwise constitute a defense available to, or a discharge of, any Risk PoolDealer, a guarantor or a surety.

 

Without limiting the foregoing,but at all times subject to the Risk Pool A Guaranty Limit and the Risk Pool BGuaranty Limit, CDF is hereby authorized, without notice (which is herebywaived by Monaco) and without limiting or otherwise impairing the liability ofMonaco hereunder, from time to time to (1) renew, extend, accelerate orotherwise change the time, place or manner for payment of, or other terms relatingto, the Liabilities, or otherwise modify, amend, change or waive compliancewith the terms of the Liabilities or any of the Transaction Documents, (2)accept partial payments on the Liabilities, (3) take collateral for theLiabilities and the obligations of any other person primarily or secondarilyliable on the Liabilities, and exchange, release, realize upon or institute anyproceeding to realize upon or liquidate any such collateral, (4) apply suchcollateral and direct the order or manner of sale thereof as CDF may determinein its discretion, (5) release or compromise, in any manner, or collect orinitiate any proceeding to collect the Liabilities or any portion thereof, (6)extend additional loans, credit and financial accommodations and otherwisecreate additional Liabilities, and (7) enforce or institute any proceeding toenforce any other Guaranty of the Liabilities or release, or compromise in anymanner the obligations of, any other person primarily or secondarily liable onthe Liabilities.

 

Upon a default under anyTransaction Document, CDF may proceed directly and at once against Monaco tocollect the full amount of all or any portion of the liability of Monacohereunder, without notice and without first proceeding against any Risk Pool Dealeror any other person primarily or secondarily liable on the Liabilities.  CDF shall have the exclusive right todetermine the application of payments and credits, if any, from Monaco, anyRisk Pool Dealer, or any other person primarily or secondarily liable on theLiabilities.

 

Until the Liabilities and otherobligations of any Risk Pool Dealer to CDF shall have been indefeasibly paidand discharged in full and all Transaction Documents (including any commitmentswith respect to any Liabilities) have been terminated, Monaco’s claims againstany Risk Pool Dealer or any other person primarily or secondarily liable on theLiabilities with respect to or on account of any payment which Monaco may makeon account of its obligations

 

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under this Guaranty, includingwithout limitation, any right of subrogation, contribution or indemnificationor other reimbursement right will be subordinate to CDF’s claims.  Nothing herein shall waive, and Monacoexpressly reserves, all rights of subrogation with respect to CDF’s rights andremedies under the Risk Pool A Facilities and the Risk Pool B Facilities at alltimes after satisfaction in full of the Liabilities and other obligations ofany Risk Pool Dealer to CDF.

 

Monaco waives all right of setoff and all notices, presentments, protests and demands of any kind withrespect to the Liabilities and this Guaranty (including without limitationdemands for performance, notices of non-payment or non-performance, notices ofprotest, notices of dishonor and notices of acceptance of this Guaranty) andpromptness and diligence with respect to the Liabilities.

 

Monaco agrees that the sale ofinventory collateral by CDF to a person who is liable to CDF under a guaranty,endorsement, repurchase agreement or the like shall not be deemed to be atransfer subject to Section 9-618 of the Uniform Commercial Code as in effectin any applicable jurisdiction or any similar provision of any other applicablelaw, and Monaco waives any provision to the contrary of such laws.  Monaco shall be liable to CDF for anydeficiency resulting from CDF’s disposition, regardless of the subsequentdisposition of the inventory by the purchaser. Any notice of a dispositionshall be deemed reasonable and properly given if given to Monaco at least 10days before such disposition in accordance with the notice provision below.

 

Anytermination of the Agreement shall not affect the liability of Monaco underthis Guaranty with respect to Liabilities created or incurred prior to theeffective date of such termination. Without limiting the foregoing, any such termination shall not relate toany approval for Risk Pool Facilities given by CDF to or for the benefit of anyRisk Pool Dealer prior to the effective date of such termination and upon anysuch termination, Monaco shall nevertheless remain liable with respect to allLiabilities, and the performance of all duties, created or arising theretoforeor based on a commitment theretofore entered into or any approval theretoforegiven to or for the benefit of any Risk Pool Dealer (the “Prior Obligations”)to the full extent of Monaco’s liability therefor as provided herein; providedthat once such Prior Obligations as to any Risk Pool Dealer have been repaid,Monaco’s liability with respect to the Guaranty of the obligations of such RiskPool Dealer shall be terminated in full, and CDF shall not extend furthercredit to such Risk Pool Dealer under the Risk Pool Facilities .

 

To theextent that Monaco or any Risk Pool Dealer makes a payment or payments to CDFor CDF enforces its security interests or exercises its rights of setoff, andsuch payment or payments or the proceeds of such enforcement or setoff or anypart thereof are subsequently invalidated, declared to be fraudulent orpreferential, set aside and/or required to be repaid to a trustee, receiver orany other party under any bankruptcy law, state or federal law, common law orequitable cause, then to the extent of such recovery, the obligation or partthereof originally intended to be satisfied shall be revived and continued infull force and effect as if such payment had not been made or such enforcementor setoff had not occurred.

 

Notwithstandinganything in this Guaranty to the contrary, the right of recovery against Monacounder this Guaranty is limited to the extent it is judicially determined withrespect to Monaco that entering into this Guaranty would violate Section 548 ofthe United States Bankruptcy Code or any comparable federal, state or otherlaws relating to fraudulent transfers or the like, in which case Monaco shallbe liable under this Guaranty only for amounts aggregating up to the largestamount that would not render Monaco’s obligations under this Guaranty subjectto avoidance under Section 548 of the United States Bankruptcy Code or any suchcomparable laws.

 

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Monacohas made an independent investigation of the financial condition of each RiskPool Dealer and gives this Guaranty based on that investigation and not uponany representation made by CDF.  Monacohas access to current and future to the financial information of each Risk PoolA Dealer and Risk Pool B Dealer which enables Monaco to remain continuously informedthe financial condition of each Risk Pool A Dealer and Risk Pool B Dealer.

 

5.             Repurchase Agreement. All Inventory, whether financed for Dealers under the Program orotherwise, remains subject to the terms of the Floorplan Agreement dated May14, 1993, as amended (“Repurchase Agreement”), and the Terms Letter, inaddition to the Guaranty.  Inventoryfinanced under Risk Pool Facilities will be subject to the Repurchase Agreementand the Terms Letter and CDF will not request repurchase of the Risk PoolInventory separately from all other Inventory that is subject to the RepurchaseAgreement and the Terms Letter.

 

6.             Trademark/Name License.

 

6.1           Monaco Marks.  Subject to the provisions of this Agreement,Monaco hereby grants CDF a limited, nonexclusive license to use those marks,tradestyles, trademarks, service marks, logos or similar proprietarydesignations of Monaco as from time to time permitted in writing by Monaco (the“Monaco Marks”) in connection with the establishment, administration andoperation of the Program and financing programs provided under the RepurchaseAgreement.  Monaco represents andwarrants to CDF that Monaco has the right to grant the foregoing license.  CDF shall only use the Monaco Marks inconnection with the administration, marketing and promotion of the Program andfinancing programs provided under the Repurchase Agreement.  As between the parties, Monaco owns allrights in the Monaco Marks, and CDF shall not contest Monaco’s rights in theMonaco Marks, either during the term of this Agreement or thereafter.  CDF’s use of the Monaco Marks, and thegoodwill associated with such use, shall inure to the sole and exclusivebenefit of Monaco.  CDF’s use of theMonaco Marks shall be limited to the materials necessary to CDF’sadministration of the Program and financing programs provided under theRepurchase Agreement, as well as to printed, electronic and broadcast matteradvertising and promotion of the Program and financing programs provided underthe Repurchase Agreement (collectively, “Program Materials”).  Use of the Monaco Marks in connection withany Program Materials shall be subject to Monaco’s prior written approval,which such approval shall not be unreasonably withheld, and such ProgramMaterials shall be used by CDF in all material respects as approved by Monaco; provided,that once such approval is received, and in the absence of a materialalteration thereto by CDF, no further review or approval shall be required forthe continued use (including re-printing and re-distribution) of such ProgramMaterials by CDF.  The partiesacknowledge and agree that the quality control necessary to support the licensegranted hereby is found in the terms and conditions of this Agreement.  Anything in the foregoing to the contrary notwithstanding, CDF shall cease use of Monaco Marks upon the termination of thisAgreement.  The foregoing to the contrarynotwithstanding, CDF may refer in any promotional materials or advertisementsto “Monaco,” “Monaco Coach” or “Monaco Coach Corporation” in a nominative senseand to the extent necessary to make any disclosures in connection therewith andany such use shall not constitute a use of Monaco’s name or logo type otherwiseprohibited hereby.

 

6.2           CDF Name.  Monaco may not, without CDF’s prior writtenconsent, use CDF’s name or logo type (or the name or logo type of any Affiliateof CDF) in any advertisement, press release or promotional materials.  The foregoing to the contrarynotwithstanding, Monaco may refer in any promotional materials or advertisementsto “GE,” “GE CDF” or “GE Commercial Distribution Finance” in a nominative senseand to the extent

 

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necessary to make anydisclosures in connection therewith and any such use shall not constitute a useof CDF’s name or logo type otherwise prohibited hereby.

 

7.             Termination/Exclusivity. This Agreement shall be for an initial term commencing on the date ofthis Agreement and ending on August 1, 2007, and for successive two (2) yearterms thereafter, unless at least 180 days prior to the last day of the initialor any renewal term, either party gives notice to the other of the terminationof the Agreement to be effective on the last day of the then current term.  During the term of this Agreement, Monacoshall not enter into any agreement or arrangement with any other financialinstitution to offer any financing program to any Dealer which is as favorableor more favorable to the Dealers than the Program (other than existingfloorplan financing arrangements for specific Dealers and extensions, renewalsor refinancing thereof); provided, however, if CDF is unable toprovide financing to a particular Dealer in an amount satisfactory to theDealer, Monaco may enter into agreements or arrangements with another financialinstitution to assist that Dealer to obtain the financing in an amountexceeding that made available by CDF to such Dealer.  Monaco agrees to identify CDF as Monaco’s “preferredfinancial source,” or other similar designation as mutually agreed upon, inMonaco’s advertisements and other Dealer communications.

 

8.             Confidentiality. The proprietary business information provided by one party to the otherregarding the implementation of this Agreement and the financing programsprovided under the Repurchase Agreement (together, the “ConfidentialInformation”) is intended to be confidential and shall not be madeavailable to third parties; provided, however, Monaco and CDF mayprovide the Confidential Information to their respective agents,representatives, employees, officers, directors, attorneys, accountants oradvisers (“Agents”) and to their respective corporate affiliates ortheir Agents as may be necessary to evaluate the Confidential Information.  The term “Confidential Information” does notinclude information which: (a) becomes generally available to the public, otherthan a result of an unauthorized disclosure by either party; (b) becomesavailable to either party on a non-confidential basis from a source (other thanthe parties to this Agreement) which is to such party’s knowledge entitled todisclose it; or (c) is either known by the disclosing party prior to the dateof this Agreement (other than solely as a result of the negotiations withrespect to this Agreement) or is developed by the disclosing party independentof the Confidential Information.  Nothingherein shall be construed to prohibit either party from disclosing theConfidential Information pursuant to any court or governmental order, decree,regulation or statute.

 

Each party agrees thatthe terms and conditions, but not the existence, of this Agreement shall betreated as the other’s Confidential Information and that no reference to theterms and conditions of this Agreement may be made in any manner without theprior written consent of the other party; provided, however, that each partymay disclose the terms and conditions of this Agreement:  (i) as required by any court or othergovernmental body; (ii) as otherwise required by law; (iii) to legal counsel ofthe parties; (iv) in connection with a securities filing (provided that Monacowill consult with CDF to redact terms that CDF reasonably determines to besensitive to CDF’s business); (v) in confidence, in connection with theenforcement of this Agreement or rights under this Agreement; (vi) inconfidence, in connection with a merger or acquisition or proposed merger oracquisition, or the like; or (vii) consisting of the program rates set forthherein to Dealers.

 

9.             Default/Remedies. The occurrence of any of the following events shall be deemed a “Default”under this Agreement:  (a) any party’sfailure to pay when due any amount owed to another party hereunder or under anyother agreement between CDF and Monaco within ten (10) days after receipt ofnotice from the other party of such default; (b) any party’s failure to performor observe any material covenant, term or provision hereunder, and, if suchdefault is capable of cure, such party fails to make effect a cure of thedefault within thirty (30)

 

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days after receipt ofnotice from the other party of such default; (c) termination of the Guaranty orthe Repurchase Agreement; (d) any party shall cease existence; (e) any partyceases or suspends all or a all or substantially all of its business to whichthis Agreement relates; (f) any party makes a general assignment for thebenefit of creditors; (g) any party becomes voluntarily or involuntarily filesa petition for bankruptcy under the Federal Bankruptcy Code, any state, federalor provincial insolvency law or any similar law; (h) any receiver is appointedfor all or substantially all of the assets of any party; or (i) there is anymaterial adverse change in any party’s financial condition.  Upon the occurrence of any Default, any partyshall have the right, at its option, to immediately exercise one or more of thefollowing remedies: (a) in the case of CDF, refuse to extend any furtherfinancing to Dealers; (b) terminate this Agreement; or (c) exercise any otherrights it may have under the laws of the state governing this Agreement.

 

10.           Amendment, Changes and Modification. This Agreement may be amended, changed or modified only as may be agreedupon in writing by Monaco and CDF from time to time.  The express terms of this Agreement will notbe modified by any course of dealing, usage of trade, or custom of trade whichmay deviate from the terms hereof.

 

11.           Binding Effect. This Agreement will be binding upon the parties, their successors andassigns, provided, however, that Monaco shall not assign or attempt to assignthis Agreement, any other agreement or any of its interests under thisAgreement, without the prior written consent of CDF, which consent will not beunreasonably withheld.

 

12.           Entire Agreement. This Agreement and the Terms Letter embodies the entire agreement of theparties relating to the subject matter contained herein.  There are no promises, terms, conditions,obligations or warranties other than those contained in this Agreement and theTerms Letter.  This Agreement and theTerms Letter supersede all prior communications, representations or agreements,verbal or written, between the parties relating to this Agreement.

 

13.           Headings.  The headingsto the sections of this Agreement are included only for the convenience of theparties and will not have the effect of defining, diminishing or enlarging therights of the parties or affecting the construction or interpretation of anyportion of this Agreement.

 

14.           Interpretation. For the purpose of construing this Agreement, unless the context otherwiserequires, words in the singular will be deemed to include words in the plural,and vice versa.

 

15.           Notices.  Any noticeunder the Agreement, will be in writing. Any notice to be given or document to be delivered under the Agreementwill be deemed to have been duly given upon delivery, if delivered in person orby any expedited delivery service which provides proof of delivery, upon testedtelex or facsimile transmission, or on the fifth Business Day after mailing, ifmailed by certified mail, return receipt requested, postage prepaid mail,addressed to CDF or Monaco at the appropriate addresses.  The addresses for notices are those set forthbelow or such other addresses as may be hereafter specified by written noticeby the parties:

 
| to CDF |   | GE Commercial  Distribution Finance Corporation |
|--------|--------|-------------------------------------------------|
|   |   | 2625 South Plaza Drive                          |
|   |   | Suite 201                                       |
|   |   | Tempe, Arizona 85282                            |
|   |   | Attention: Leonard  Buchan                      |
|   |   | Facsimile No.: (480)  829-3963                  |

 

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| with a copy to: |   | GE Commercial Distribution  Finance Corporation |
|-----------------|--------|-------------------------------------------------|
|            |   | 5595 Trillium Boulevard                         |
|            |   | Hoffman Estates,  Illinois 60192                |
|            |   | Attention: General  Counsel                     |
|            |   | Facsimile No.: (847)  747-7455                  |
|            |   |                                            |
| to Monaco:      |   | Monaco Coach  Corporation                       |
|            |   | 91320 Industrial Way                            |
|            |   | Coburg, Oregon 97408                            |
|            |   | Attention: Chief  Financial Officer             |
|            |   | Facsimile No.: (541)  681-8039                  |

 

16.           No Third Party Beneficiary Rights andReliance.  No person or entity not a party to thisAgreement, including any Dealer, will have any benefit under this Agreement norhave third-party beneficiary rights as a result of any of this Agreement, norwill any party be entitled to rely on any actions or inactions of CDF or Monacoor their agents, respectively, all of which are done for the sole benefit andprotection of CDF or Monaco, respectively.

 

17.           Relationship of the Parties. Neither CDF on the one hand nor Monaco on the other hand will be deemeda partner, joint venturer or related entity of the other by reason of thisAgreement.

 

18.           Severability. If any provision of this Agreement (either generally, or as to aspecific application to a set of facts) will be held to be invalid, illegal orunenforceable, such invalidity, illegality or unenforceability will not affectany other provision of this Agreement (either in its entirety, or as to or theapplication of such provision to any other set of facts), but this Agreementwill be construed as if such invalid, illegal or unenforceable provision neverhad been included in this Agreement.

 

19.           Counterparts. This Agreement may be executed in any number of counterparts, all ofwhich taken together shall constitute one and the same instrument, and theparties hereto may execute this Agreement by signing any such counterpart.

 

20.           **BINDING ARBITRATION**. Any controversy or claim arising out of or relating to this Agreement,the relationship resulting in or from this Agreement, the breach of any dutieshereunder or any other relationship, transaction or dealing between the parties(collectively “Disputes”) will be settled by binding arbitration in accordancewith the Commercial Arbitration Rules of the American Arbitration Association (“AAA”).  Any arbitration proceeding must beinstituted, with respect to any Dispute, within two (2) years after the datethe incident giving rise thereto occurred, whether or not any damage wassustained or capable of ascertainment or either party knew of suchincident.  Failure to institute anarbitration proceeding within such period will constitute an absolute bar andwaiver to the institution of any proceeding, whether arbitration or a courtproceeding, with respect to such Dispute. Notwithstanding the foregoing, this limitations provision will besuspended temporarily as of the date any of the following events occur withrespect to Dealer or either party hereto and will not resume until the date theDealer or either party hereto is no longer subject to:  (i) bankruptcy, (ii) receivership, (iii) anyproceeding regarding an assignment for the benefit of creditors, or (iv) anylegal proceeding, civil or criminal, which prohibits either party fromforeclosing any interest it might have in the collateral of the Dealer.  Arbitration claims may be filed in any AAAoffice.  Notwithstanding the foregoing, theparties agree that either party may pursue claims against the other that do notexceed Fifteen Thousand Dollars ($15,000) in the aggregate in a court ofcompetent jurisdiction.  Except asotherwise stated herein, all notices, arbitration claims, responses, requestsand documents will be sufficiently given or served if mailed or delivered: (a)to CDF at 5595 Trillium

 

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Boulevard, HoffmanEstates, Illinois. 60192, Attention: General Counsel; and (b) to any other party at the address specifiedherein; or such other address as the parties may specify from time to time inwriting.  The parties agree that allarbitrators selected will be attorneys with at least five (5) years securedtransactions experience.  A panel ofthree arbitrators shall hear all claims exceeding One Million Dollars($1,000,000), exclusive of interest, costs and attorneys’ fees.  Each party hereby consents to a documentaryhearing for all arbitration claims, by submitting the dispute to thearbitrator(s) by written briefs and affidavits, along with relevant documents.  However, arbitration claims will be submittedby way of an oral hearing, if any party requests an oral hearing within forty(40) days after service of the claim, and that party remits the appropriatedeposit for AAA’s fees and arbitrator compensation within ten (10) days ofmaking the request.  Each party agreesthat failure to timely pay all fees and arbitrator compensation billed to theparty requesting the oral hearing will be deemed such party’s consent tosubmitting the Dispute to the arbitrator on documents and such party’s waiverof its request for oral hearing. The site of all oral arbitration hearings willbe in the Division of the Federal Judicial District in which AAA maintains aregional office that is closest to Monaco. Any award rendered by the arbitrator(s) may be entered as a judgment ororder and confirmed or enforced by either party in any state or federal courthaving competent jurisdiction thereof. Nothing herein will be construed to prevent CDF’s or Monaco’s use ofbankruptcy, receivership, injunction, repossession, replevin, claim anddelivery, sequestration, seizure, attachment, foreclosure, and/or any otherprejudgment or provisional action or remedy relating to any Inventory for anycurrent or future debt owed by either party to the other.  Any such action or remedy will not waive CDF’sor Monaco’s right to compel arbitration of any Dispute.  The non-prevailing party will pay all of thecosts and expenses (including, without limitation, reasonable attorneys’ fees)incurred by the prevailing party in any arbitration proceeding.  If either party brings or appeals anyjudicial action to vacate or modify any award rendered pursuant to arbitrationor opposes the confirmation of such award and the party bringing or appealingsuch action or opposing confirmation of such award does not prevail, such partywill pay all of the costs and expenses (including, without limitation, courtcosts, arbitrators fees and expenses and attorneys’ fees) incurred by the otherparty in defending such action. Additionally, if either party brings any action for judicial relief inthe first instance without pursuing arbitration prior thereto, the partybringing such action for judicial relief will be liable for and will immediatelypay to the other party all of the other party’s costs and expenses (including,without limitation, court costs and attorneys’ fees) to stay or dismiss suchjudicial action and/or remove it to arbitration.  The failure of either party to exercise anyrights granted hereunder shall not operate as a waiver of any of thoserights.  This Agreement concernstransactions involving commerce among the several states.  The arbitrators will not be empowered toaward exemplary or punitive damages.  Thearbitrator(s) will decide if any inconsistency exists between the rules of theapplicable arbitral forum and the arbitration provisions contained herein.  If such inconsistency exists, the arbitrationprovisions contained herein will control and supersede such rules. Theagreement to arbitrate will survive termination of this Agreement.

 

21.**           JURYTRIAL WAIVER; CONSENT TO JURISDICTION; PUNITIVE DAMAGE WAIVER. IF THISAGREEMENT IS FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING WITHRESPECT TO ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY AJUDGE WITHOUT A JURY.  MONACO AND CDFWAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING. SIMILARLY, IF THISAGREEMENT OR A PARTICULAR DISPUTE HEREUNDER IS NOT SUBJECT TO ARBITRATION,MONACO HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTLOCATED WITHIN ILLINOIS AND WAIVES ANY OBJECTION WHICH MONACO MAY HAVE BASED ONIMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY ACTION ORPROCEEDING IN ANY SUCH COURT. THE PARTIES HEREBY WAIVE ANY RIGHT TO PUNITIVEDAMAGES OF ANY**

 

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**KIND AGAINST THE OTHER IN ANYPROCEEDING OR AWARD, WHETHER IN ARBITRATION OR LITIGATION.**

 

22.           Governing Law. The laws of the state of Illinois willgovern this agreement and all transactions hereunder as to interpretation,enforcement, validity, construction, effect and in all other respects;provided, however, that the Federal Arbitration Act (“FAA”), to theextent inconsistent, will supersede the laws of such state and govern all arbitrationproceedings hereunder.

 

IN WITNESS WHEREOF, theparties have, by their duly authorized officers, executed this Agreement as ofthe 28th day of June, 2005.

 

**THIS AGREEMENT CONTAINS BINDINGARBITRATION, JURY WAIVER AND PUNITIVE DAMAGES WAIVER PROVISIONS**

 

 

MONACO COACH CORPORATION

 

 
| By:                                             | /s/: John W. Nepute    |   |
|-------------------------------------------------|------------------------|--------|
|                                            |
| Print Name: John W.  Nepute                     |
|                                            |
| Title: President                                |
|                                            |
|                                            |
| GE COMMERCIAL  DISTRIBUTION FINANCE CORPORATION |
|                                            |
|                                            |
| By:                                             | /s/: Leonard F. Buchan |   |
|                                            |
| Print Name: Leonard F.  Buchan                  |
|                                            |
| Title: President, RV Group                      |
|                                                 |                        |        |  |

 

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**Exhibit A**

 

**Risk PoolDesignation**

 

Dealer Name: 

 

Pursuant to the ProgramAgreement between Monaco Coach Corporation and GE Commercial DistributionFinance Corporation, Dealer is placed in (check ý****the applicable option):

 

ý                 RiskPool A

 

ý                 RiskPool B

 

The amount of Dealer’scredit facility for the indicated Risk Pool is $

 

Date:                      ,20

 

 
| MONACO COACH  CORPORATION | GE COMMERCIAL  DISTRIBUTION |
|---------------------------|-----------------------------|
|                      | FINANCE CORPORATION         |
|                      |                        |
| By:                       |                        |   | By: |   |   |
|                      |                        |
| Print Name:               |                        |   | Print Name: |   |   |
|                      |                        |
| Title:                    |                        |   | Title: |   |   |
|                           |                             |  |  |  |  |  |  |  |  |  |

 

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