**AMENDED AND RESTATED CREDIT AGREEMENT**

** **

**among**

** **

**MONACO COACH CORPORATION**

**ROYALE COACH BY MONACO, INC.**

**and**

**MCC ACQUISITION CORPORATION**

**as Borrowers**

** **

**THE LENDERS NAMED HEREIN,**

**as Lenders**

** **

**U.S. BANK NATIONAL ASSOCIATION,**

**as Administrative Lender,**

**Swingline Lender, and**

**L/C Bank**

** **

**TOTAL COMMITMENT -- $110,000,000**

** **

**SEPTEMBER 28, 2001**

 

**CONTENTS**

 
| ARTICLE  I.   | DEFINITIONS                                                   |
|---------------|---------------------------------------------------------------|
| 1.1           | DEFINED TERMS                                                 |
| 1.2           | ACCOUNTING AND  FINANCIAL DETERMINATIONS                      |
| 1.3           | HEADINGS                                                      |
| 1.4           | ADDITIONAL DEFINITION  PROVISIONS                             |
|          |                                                          |
| ARTICLE  II.  | APPOINTMENT  OF BORROWERS' AGENT; JOINT AND SEVERAL LIABILITY |
| 2.1           | APPOINTMENT  OF AGENT                                         |
| 2.2           | AUTHORIZED REPRESENTATIVES                                    |
| 2.3           | JOINT  AND SEVERAL LIABILITY; RIGHTS OF CONTRIBUTION          |
|          |                                                          |
| ARTICLE  III. | THE  CREDITS                                                  |
| 3.1           | REVOLVING LOANS                                               |
| 3.2           | SWING LOANS                                                   |
| 3.3           | TERM LOAN                                                     |
| 3.4           | LETTER  OF CREDIT FACILITY                                    |
| 3.5           | INTEREST/FEES                                                 |
| 3.6           | INTEREST  OPTIONS                                             |
| 3.7           | OTHER  PAYMENT TERMS                                          |
| 3.8           | FUNDING                                                       |
| 3.9           | PRO RATA  TREATMENT                                           |
| 3.10          | CHANGE  OF CIRCUMSTANCES                                      |
| 3.11          | TAXES ON  PAYMENTS                                            |
| 3.12          | FUNDING LOSS  INDEMNIFICATION                                 |
|          |                                                          |
| ARTICLE IV.   | ADMINISTRATION                                                |
| 4.1           | STATEMENTS                                                    |
| 4.2           | PAYMENTS                                                      |
|          |                                                          |
| ARTICLE  V.   | SECURITY                                                      |
| 5.1           | GRANT OF SECURITY INTEREST                                    |
| 5.2           | PERFECTION;  DUTY OF CARE                                     |
|          |                                                          |
| ARTICLE VI.   | REPRESENTATIONS  AND WARRANTIES                               |
| 6.1           | LEGAL STATUS; SUBSIDIARIES                                    |
| 6.2           | DUE AUTHORIZATION; NO  VIOLATION                              |
| 6.3           | GOVERNMENT APPROVAL,  REGULATION                              |
| 6.4           | VALIDITY;  ENFORCEABILITY                                     |
| 6.5           | CORRECTNESS OF  FINANCIAL STATEMENTS                          |
| 6.6           | TAXES                                                         |
| 6.7           | LITIGATION,  LABOR CONTROVERSIES                              |
| 6.8           | TITLE TO  PROPERTY, LIENS                                     |
| 6.9           | ERISA                                                         |
| 6.10          | OTHER  OBLIGATIONS                                            |
| 6.11          | ENVIRONMENTAL  MATTERS                                        |
| 6.12          | NO BURDENSOME  RESTRICTIONS; NO DEFAULTS                      |
| 6.13          | NO OTHER  VENTURES                                            |
| 6.14          | INSURANCE                                                     |
| 6.15          | FORCE MAJEURE                                                 |
| 6.16          | INTELLECTUAL  PROPERTY                                        |
| 6.17          | CERTAIN  INDEBTEDNESS                                         |
| 6.18          | SOLVENCY                                                      |
| 6.19          | CHIEF  EXECUTIVE OFFICE AND OTHER LOCATIONS                   |
| 6.20          | FISCAL YEAR                                                   |
| 6.21          | COMPLIANCE  WITH LAW                                          |
| 6.22          | NO SUBORDINATION                                              |
| 6.23          | TRUTH,  ACCURACY OF INFORMATION                               |
|          |                                                          |
| ARTICLE  VII. | CONDITIONS                                                    |
| 7.1           | CONDITIONS OF  INITIAL EXTENSION OF CREDIT                    |
| 7.2           | CONDITIONS OF  EACH EXTENSION OF CREDIT                       |
|          |                                                          |
| ARTICLE VIII. | AFFIRMATIVE  COVENANTS                                        |
| 8.1           | PAYMENTS                                                      |
| 8.2           | ACCOUNTING  RECORDS                                           |
| 8.3           | INFORMATION  AND REPORTS                                      |
| 8.4           | COMPLIANCE                                                    |
| 8.5           | INSURANCE                                                     |
| 8.6           | FACILITIES                                                    |
| 8.7           | TAXES AND OTHER LIABILITIES                                   |
| 8.8           | LITIGATION                                                    |
| 8.9           | NOTICE TO  ADMINISTRATIVE LENDER                              |
| 8.10          | CONDUCT  OF BUSINESS                                          |
| 8.11          | PRESERVATION OF  CORPORATE EXISTENCE, ETC.                    |
| 8.12          | ACCESS                                                        |
| 8.13          | PERFORMANCE  AND COMPLIANCE WITH OTHER COVENANTS              |
| 8.14          | FISCAL YEAR;  ACCOUNTING PRACTICES                            |
| 8.15          | ENVIRONMENTAL                                                 |
| 8.16          | LIENS                                                         |
| 8.17          | FUTURE  SUBSIDIARIES                                          |
| 8.18          | USE OF PROCEEDS                                               |
| 8.19          | FURTHER  ASSURANCES                                           |
|          |                                                          |
| ARTICLE IX.   | NEGATIVE COVENANTS                                            |
| 9.1           | LIENS                                                         |
| 9.2           | INDEBTEDNESS                                                  |
| 9.3           | RESTRICTED  PAYMENTS, REDEMPTIONS                             |
| 9.4           | MERGERS,  STOCK ISSUANCES, SALE OF ASSETS, ETC.               |
| 9.5           | INVESTMENTS                                                   |
| 9.6           | CHANGE IN NATURE OF  BUSINESS                                 |
| 9.7           | PLANS                                                         |
| 9.8           | CANCELLATION OF  INDEBTEDNESS OWED TO IT                      |
| 9.9           | MARGIN  REGULATIONS                                           |
| 9.10          | ENVIRONMENTAL                                                 |
| 9.11          | TRANSACTIONS WITH  AFFILIATES                                 |
| 9.12          | NEW COLLATERAL  LOCATION; NAME CHANGE                         |
| 9.13          | NO SPECULATIVE TRANSACTIONS                                   |
|          |                                                          |
| ARTICLE X.    | FINANCIAL COVENANTS                                           |
| 10.1          | LEVERAGE RATIO                                                |
| 10.2          | CURRENT RATIO                                                 |
| 10.3          | FIXED CHARGE COVERAGE RATIO                                   |
| 10.4          | TANGIBLE  NET WORTH                                           |
|          |                                                          |
| ARTICLE XI.   | EVENTS OF DEFAULT                                             |
| 11.1          | EVENTS OF  DEFAULT                                            |
| 11.2          | REMEDIES                                                      |
| 11.3          | ADMINISTRATIVE  LENDER AS BORROWERS' ATTORNEY                 |
|          |                                                          |
| ARTICLE XII.  | ADMINISTRATIVE  LENDER                                        |
| 12.1          | ACTIONS                                                       |
| 12.2          | RELIANCE BY  ADMINISTRATIVE LENDER                            |
| 12.3          | EXCULPATION                                                   |
| 12.4          | SUCCESSOR                                                     |
| 12.5          | LOANS  BY ADMINISTRATIVE LENDER; OTHER ACTIONS                |
| 12.6          | CREDIT  DECISIONS                                             |
|          |                                                          |
| ARTICLE XIII. | MISCELLANEOUS                                                 |
| 13.1          | NOTICES                                                       |
| 13.2          | COSTS, EXPENSES,  ATTORNEYS' FEES                             |
| 13.3          | INDEMNIFICATION                                               |
| 13.4          | WAIVERS,  AMENDMENTS                                          |
| 13.5          | SUCCESSORS  AND ASSIGNS                                       |
| 13.6          | SETOFF                                                        |
| 13.7          | NO WAIVER; CUMULATIVE  REMEDIES                               |
| 13.8          | ENTIRE  AGREEMENT                                             |
| 13.9          | NO THIRD PARTY  BENEFICIARIES                                 |
| 13.10         | CONFIDENTIALITY                                               |
| 13.11         | TIME                                                          |
| 13.12         | SEVERABILITY OF PROVISIONS                                    |
| 13.13         | GOVERNING LAW                                                 |
| 13.14         | SUBMISSION TO JURISDICTION                                    |
| 13.15         | WAIVER  OF JURY TRIAL                                         |
| 13.16         | COUNTERPARTS                                                  |
| 13.17         | OREGON  STATUTORY NOTICE                                      |
|          |                                                          |
| SCHEDULES     |
| I             | Lenders                                                       |
| II            | Pricing Schedule                                              |
| III           | Existing  Letters of Credit                                   |
|          |                                                          |
| EXHIBITS      |
| A             | Borrowing Base Certificate                                    |
| B             | Note Forms                                                    |
| C             | Notice of Authorized Representatives                          |
| D             | Notice of Borrowing                                           |
| E             | Notice of Conversion or Continuation                          |
| F             | Form of Chief Financial Officer's  Certificate                |
| G             | Assignment Agreement                                          |

** **

**AMENDED ANDRESTATED CREDIT AGREEMENT**

** **

THIS AMENDED AND RESTATED CREDIT AGREEMENT is enteredinto as of September 28, 2001 by and among MONACO COACH CORPORATION, aDelaware corporation ("Parent"), ROYALE COACH BY MONACO, INC., anIndiana corporation, and MCC ACQUISITION CORPORATION, a Delaware corporation(each of the foregoing parties individually referred to as "Borrower"and all collectively referred to as "Borrowers"), each of thefinancial institutions from time to time listed on Schedule Iattached hereto, as amended from time to time, and U.S. BANK NATIONALASSOCIATION ("U.S. Bank"), as the administrator for the Lenders (insuch capacity, "Administrative Lender").

 

**RECITALS**

 

Borrowers, Administrative Lender and certain of theLenders are parties to that certain Credit Agreement dated January 12.2001 (as amended by that certain First Amendment to Credit Agreement dated asof August 6, 2001, the "Existing Credit Agreement").  The parties desire to make certain changesto the Existing Credit Agreement and have decided, for ease of reference, toamend and restate the Existing Credit Agreement in its entirety.

 

NOW, THEREFORE, in consideration of the mutualcovenants and promises of the parties contained herein, Administrative Lender,Lenders and Borrowers hereby agree as follows:

# ** **

# **ARTICLE I.                   DEFINITIONS**

## ** **

## **1.1                  DEFINEDTERMS**

 

All terms defined above shall have the meanings setforth above.  The following terms shallhave the meanings set forth below (with all such meanings to be equallyapplicable to both the singular and plural forms of the terms defined):

 

"**Accounts**" means (i) all"accounts" as defined in the Code and (ii) all presentlyexisting and hereafter arising rights to payment of a monetary obligation,whether or not earned by performance.

 

"**Administrative Lender's Office**" means(i) initially, Administrative Lender's office designated as such in Schedule Ihereto, and (ii) subsequently, such other office designated as such, fromtime to time, in writing by Administrative Lender to Lenders and Borrower.

 

"**Agreement**" means this Amended andRestated Credit Agreement as amended, modified or supplemented from time totime.

 

"**Applicable Lending Office**" means, withrespect to each Lender, (i) initially, its office designated as such in Schedule Ihereto, and (ii) subsequently, such other office designated as such fromtime to time in writing by such Lender to Administrative Lender.

 

"**Applicable Rate**" means, at any date,the lesser of (a) the Highest Lawful Rate or (b) the following:  (i) with respect to each Prime RateLoan (other than a Swing Loan), a per annum rate equal to the Prime Rate ineffect on such date plus the applicable Prime Margin; (ii) with respect toeach Swing Loan, a per annum rate equal to Daily LIBOR plus the applicableLIBOR Margin; and (iii) with respect to each LIBOR Loan, a per annum rateequal to the sum of LIBOR plus the applicable LIBOR Margin, both as determinedon the second Business Day before the first day of the applicable Fixed RateTerm.

 

"**Approved Dealer Financing Agreement**"means (i) agreements entered into by a Borrower in the ordinary course ofbusiness with financial institutions providing floor-plan financing tocustomers who purchase finished goods inventory of Borrowers, whichinstitutions have credit ratings of BBB or better from Standard & Poor'sCorporation, and the terms of which agreements (including repurchaseobligations) are both customary in the recreational vehicle industry and are noless favorable in all material respects to Borrowers that those in effect as ofthe Closing Date.

 

"**Approved Sale**" means a sale byBorrower to a customer evidenced by an account which has been approved forpayment by a lender in accordance with an Approved Dealer Financing Agreement.

 

"**Authorized Representative**" means aperson designated as such by Borrowers' Agent in a Notice of AuthorizedRepresentatives delivered to Administrative Lender.

 

"**Available Credit**" means, at any time,the amount by which (a) the lesser of (i) the total of the RevolvingLoan Commitments or (ii) the Borrowing Base is greater than (b) thetotal of the outstanding principal amount of the Revolving Loans, the Letter ofCredit Obligations and Swing Loans.

 

"**Bankruptcy Code**" means the BankruptcyReform Act, Title 11 of the United States Code, as amended or recodified fromtime to time, including (unless the context otherwise requires) any rules orregulations promulgated thereunder.

 

"**Borrowers' Agent**" means Parent in itscapacity as agent for the Borrowers.

 

"**Borrowing Base**" means, as of any dateof determination, an amount equal to the following amount:

 

(a)           85%of the outstanding Eligible Accounts;

 

(b)           plus50% of Eligible Inventory consisting of raw materials, valued at the lower ofcost (determined on a "first in, first out" basis) or market value;

 

(c)           plusthe lesser of $50,000,000 or 90% of Eligible Inventory consisting of finishedgoods, valued at the lower of cost (determined on a "first in, firstout" basis) or market value; and

 

(d)           lessthe outstanding balance of all accounts payable with respect to chassis whichare secured in whole or in part.

 

"**Borrowing Base Certificate**" means acertificate substantially in the form of Exhibit A attached hereto.

 

"**Business Day**" means (a) for allpurposes other than as covered by clause (b) below, any day other than aSaturday, Sunday or other day on which commercial banks are authorized or requiredto be closed in Portland, Oregon, Minneapolis, Minnesota or New York, New York,and (b) with respect to all notices, determinations, fundings and paymentsin connection with any LIBOR interest selection or LIBOR Loan, any day that isa Business Day described in clause (a) above and that also is a day fortrading by and between banks in U.S. Dollar deposits in the London interbankeurocurrency market.

 

"**Capitalized Lease**" means, as to anyPerson, any lease of property by such Person as lessee that would becapitalized on a balance sheet of such Person prepared in accordance with GAAP.

 

"**Capitalized Lease Obligations**" means,as to any Person, the capitalized amount of all obligations of such Person andits subsidiaries under Capitalized Leases, as determined on a consolidatedbasis in accordance with GAAP.

 

"**Cash Equivalent Investment**" means, atany time: (a) any evidence of indebtedness, maturing not more than oneyear after such time, issued or guaranteed by the United States government;(b) commercial paper, maturing not more than nine months from the date ofissue, which is issued by (i) a corporation (other than an affiliate ofany Obligor) organized under the laws of any state of the United States or ofthe District of Columbia and rated at least A–1 by Standard & Poor'sCorporation or P–1 by Moody's Investors Service, Inc.,or (ii) any Lender (or its holding company); (c) any certificateof deposit or bankers acceptance, maturing not more than one year after suchtime, which is issued by either (i) a commercial banking institution thatis a member of the Federal Reserve System and has a combined capital andsurplus and undivided profits of not less than $500,000,000, or (ii) anyLender; (d) any repurchase agreement entered into with any Lender (or othercommercial banking institution of the stature referred to inclause (c)(i)) which (i) is secured by a fully perfected securityinterest in any obligation of the type described in any of clauses (a) through(c), and (ii) has a market value at the time such repurchase agreement isentered into of not less than 100% of the repurchase obligation of such Lender(or other commercial banking institution) thereunder; (e) investmentspermitted under any investment policy adopted by Borrower and approved by AdministrativeLender; or (f) any mutual fund holding investments consisting of at least95% of the foregoing.

 

"**Change in Control**" means theacquisition by any Person, or two or more Persons acting in concert to acquiresecurities, of beneficial ownership (within the meaning of Rule 13d–3 ofthe Securities and Exchange Commission under the Securities Exchange Act of1934) of 35% or more of the outstanding shares of voting stock of Borrower.

 

"**Change of Law**" means the adoption ofany Governmental Rule, any change in any Governmental Rule or the applicationor requirements thereof (whether such change occurs in accordance with theterms of such Governmental Rule as enacted, as a result of amendment orotherwise), any change in the interpretation or administration of anyGovernmental Rule by any Governmental Authority, or compliance by any Lender(or any entity controlling a Lender) with any request, guideline or directive(whether or not having the force of law) of any Governmental Authority.

 

"**Closing Date**" means the date of thisAgreement.

 

"**Code**" means the Uniform CommercialCode of the State of Oregon, as amended from time to time (including, withoutlimitation, amendments to defined terms).

 

"**Collateral**" means all of Borrowers'assets, including, without limitation, (a) all Accounts, Rights toPayment, General Intangibles, Records, goods, fixtures, inventory, equipment,money, letter of credit rights, supporting obligations, instruments, chattelpaper, deposit accounts, documents, investment property, and commercial tortclaims; (b) all products, proceeds, rents and profits of the foregoing;and (c) all of the foregoing, whether now owned or existing or hereafteracquired or arising or in which Borrower now has or hereafter acquires anyrights.

 

"**Commitment**" means any obligation of aLender to extend credit or any other financial accommodation under any of theLoan Documents.

 

"**Commodity Contracts**" means commodityoptions, futures, swaps, and other similar agreements and arrangements designedto provide protection against fluctuations in commodity prices.

 

"**Contaminant**" means any pollutant,hazardous substance, toxic substance, hazardous waste or other substanceregulated or forming the basis of liability under any Environmental Law.

 

"**Contingent Obligation**" means, asapplied to any Person, any direct or indirect liability, contingent orotherwise, of such Person with respect to any Indebtedness or ContractualObligation of another Person, if the purpose or intent of such Person inincurring the Contingent Obligation is to provide assurance to the obligee ofsuch Indebtedness or Contractual Obligation that such Indebtedness orContractual Obligation will be paid or discharged, or that any agreemententered into by such other Person relating to such Indebtedness or ContractualObligation will be complied with, or that any holder of such Indebtedness orContractual Obligation will be protected against loss in respect thereof.  Contingent Obligations of a Person include,without limitation, (a) the direct or indirect guarantee, endorsement(other than for collection or deposit in the ordinary course of business),co-making, discounting with recourse or sale with recourse by such Person of anobligation of another Person, and (b) any liability of such Person for an obligationof another Person through any agreement (contingent or otherwise) (i) topurchase, repurchase or otherwise acquire such obligation or any securitytherefor, or to provide funds for the payment or discharge of such obligation(whether in the form of a loan, advance, stock purchase, capital contributionor otherwise), (ii) to maintain the solvency or any balance sheet item,level of income or financial condition of another Person, (iii) to maketake-or-pay or similar payments, if required, regardless of nonperformance byany other party or parties to an agreement, (iv) to purchase, sell orlease (as lessor or lessee) property, or to purchase or sell services,primarily for the purpose of enabling the debtor to make payment of suchobligation or to assure the holder of such obligation against loss, or(v) to supply funds to or in any other manner invest in such other Person(including, without limitation, to pay for property or services irrespective ofwhether such property is received or such services are rendered), if in thecase of any agreement or liability described under subclauses (i) through (v)of this sentence the primary purpose or intent thereof is as described in thepreceding sentence.  The amount of any ContingentObligation shall be equal to the lesser of (A) the amount payable undersuch Contingent Obligation (if quantifiable) or (B) the portion of theobligation so guaranteed or otherwise supported.

 

"**Contractual Obligation**" of any Personmeans any obligation, agreement, undertaking or similar provision of anysecurity issued by such Person or of any agreement, undertaking, contract,lease, indenture, mortgage, deed of trust or other instrument to which suchPerson is a party or by which it or any of its property is bound or to whichany of its property is subject.

 

"**Current Ratio**" means, as of the end ofa fiscal quarter, the ratio of (a) Parent's consolidated currentassets (exclusive of notes and receivables from a Subsidiary or any affiliate,shareholder, officer, director or employee of any Borrower or Subsidiary) to(b) the total of Parent's consolidated current liabilities and, withoutduplication, the outstanding principal balance of the Revolving Loans.

 

"**Daily LIBOR**" means a rate of interestfluctuating daily equal on each day to LIBOR that would be applicable on suchday for a LIBOR Loan with a Fixed Rate Term of one month beginning on such day.

 

"**Debt**" of any Person means, withoutduplication, (a) all obligations of such Person for borrowed money and allobligations of such Person evidenced by bonds, debentures, notes, bills orother similar instruments; (b) all obligations, contingent or otherwise,relative to the face amount of all letters of credit, whether or not drawn, andbanker's acceptances issued for such Person's account; (c) all CapitalizedLease Obligations and Other Lease obligations of such Person; (d) whether ornot so included as liabilities in accordance with GAAP, all obligations of suchPerson to pay the deferred purchase price of property or services, and indebtedness(excluding prepaid interest thereon) secured by a Lien on property owned orbeing purchased by such Person (including indebtedness arising underconditional sales or other title retention agreements), whether or not suchindebtedness shall have been assumed by such Person or is limited in recourse;and (e) all Contingent Obligations of such Person in respect of any of theforegoing, other than Contingent Obligations in connection with an ApprovedDealer Financing Agreement.  Forpurposes of determining the amount of Debt in a circumstance when the creditorhas recourse only to specified assets, the amount shall be the lesser of(i) the amount of such obligation or (ii) the fair market value ofsuch assets.

 

"**Default**" means (i) an Event ofDefault, (ii) an event or condition that with the giving of notice or thepassage of time, or both, would constitute an Event of Default, or(iii) the filing against Borrower of a petition commencing an involuntarycase under the Bankruptcy Code.

 

"**Disclosure Letter**" means theDisclosure Letter from Borrowers' Agent to Administrative Lender dated theClosing Date.

 

"**EBITDA**" means, as of the end of afiscal quarter, Parent's consolidated net income after taxes for the twelvemonths ending with such quarter plus (A) the sum of the amounts for suchtwelve month period included in determining such net income of(i) interest expense, (ii) income tax expense, (iii) depreciationexpense, (iv) amortization expense, and (v) extraordinary non–cashlosses and charges and other non–recurring non–cash losses andcharges; less (B) gains on sales of assets (excluding sales ofinventory in the ordinary course of business) and other extraordinary non–cashgains for such twelve month period.

 

"**ERISA**" means the Employee RetirementIncome Security Act of 1974, as amended or recodified from time to time,including (unless the context otherwise requires) any rules or regulationspromulgated thereunder.

 

"**Eligible Accounts**" means thoseAccounts that Administrative Lender determines in the Good Faith exercise ofits discretion to be eligible for inclusion in the Borrowing Base.  General criteria for Eligible Accounts maybe established and revised from time to time by Administrative Lender in GoodFaith.  Without limiting such discretionas to other Accounts, the following Accounts shall not be Eligible Accounts:

 

(i)            Accountsthat do not consist of ordinary trade accounts receivable owned by Borrower,payable in cash in United States Dollars and arising out of the final sale ofrecreational vehicles in the ordinary course of Borrower's business aspresently conducted by it;

 

(ii)           Accountswith respect to which Borrower failed to issue an original invoice at theagreed-upon purchase price to the account debtor promptly after delivering suchgoods to the account debtor;

 

(iii)          Accountswith respect to which more than 60 days have elapsed since the date of theoriginal invoice applicable thereto;

 

(iv)          Accountswith respect to which the account debtor is an affiliate of Borrower or anyofficer, employee, or agent of the account debtor is an officer, employee oragent of or affiliated with Borrower directly or indirectly by virtue of familymembership, ownership, control, management or otherwise;

 

(v)           Accountswith respect to which the account debtor is a Governmental Authority, exceptfor those Accounts as to which Borrower has assigned its right to paymentthereof to Administrative Lender, and the assignment has been acknowledged,pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.§ 3727);

 

(vi)          thechief executive office of the account debtor with respect to such Account isnot located in the United States of America, unless (A) the account debtorhas delivered to Borrower an irrevocable letter of credit issued or confirmedby a bank satisfactory to Administrative Lender, sufficient to cover suchAccount, in form and substance satisfactory to Administrative Lender, and, ifrequired by Administrative Lender, the original of such letter of credit hasbeen delivered to Administrative Lender or Administrative Lender's agent andthe issuer thereof notified of the assignment of the proceeds of such letter ofcredit to Administrative Lender, (B) such Account is subject to creditinsurance payable to Administrative Lender issued by an insurer and on termsand in an amount acceptable to Administrative Lender, (C) the accountdebtor resides in a province of Canada that recognizes Administrative Lender'sperfection and enforcement rights as to Accounts by reason of the filing of aUCC financing statement in Oregon or by reason of other methods of perfectionthat have been completed, or (D) such Account is otherwise acceptable inall respects to Administrative Lender;

 

(vii)         Accountswith respect to which Administrative Lender does not have a valid and prior,fully perfected Lien or which are not free of all Liens or other claims(including, without limitation, claims for rebates, credits, allowances oradjustments, but "other claims" shall not include Approved Sales) ofall other Persons;

 

(viii)        Accountswith respect to which the account debtor is the subject of bankruptcy or asimilar insolvency proceeding, or has made an assignment for the benefit ofcreditors, or whose assets have been conveyed to a receiver or trustee, or whohas failed or suspended or gone out of business;

 

(ix)           Accountswith respect to which the account debtor's obligation to pay the Accounts isconditional upon the account debtor's approval to the extent such Accountsexceed $300,000 in the aggregate;

 

(x)            Accountsfrom an account debtor to the extent that the account debtor's indebtedness toBorrowers (whether evidenced by such Accounts or otherwise) exceeds an amountwhich is greater than 25% of the face amount (less maximum discounts, creditsand allowances which may be taken by or granted to account debtors inconnection therewith) of all then outstanding Eligible Accounts, but only tothe extent of the excess over 25%;

 

(xi)           Accountsowed by a particular account debtor if 25% or more of the aggregate Accountsthen owed to Borrowers by that account debtor and its affiliates are notEligible Accounts;

 

(xii)          Accountsthat represent a prepayment or progress payment or a partial payment under aninstallment contract;

 

(xiii)         Accountsthat are evidenced by a promissory note or other instrument; and

 

(xiv)        Accountswith respect to which the account debtor is located in any jurisdictionrequiring the timely filing by Borrower of a report or document before suchAccount is created in order to bring suit or otherwise enforce its remediesagainst such account debtor in the courts or through any judicial process ofsuch jurisdiction, unless Borrower has filed, or is exempt from filing, such areport.

 

Administrative Lender shall have the right, but notthe duty, to declare particular accounts ineligible.  The fact that Administrative Lender has not declared a particularaccount ineligible shall not be deemed to be a determination or representationby Administrative Lender or any Lender as to the creditworthiness or financialcondition of any account debtor. Because of banking relationships between account debtors of Borrower andAdministrative Lender or a Lender, Administrative Lender or a Lender may haveinformation about the creditworthiness of such account debtors; however,neither Administrative Lender nor any Lender shall have any duty to Borrowersto disclose information it may have about any of Borrowers' account debtors andBorrowers shall have no right to rely upon any action or inaction ofAdministrative Lender or any Lender concerning the creditworthiness orfinancial condition of Borrowers' account debtors.  **BORROWERS HEREBY COVENANT NOT TO SUE AND TO HOLD HARMLESS LENDERS ANDADMINISTRATIVE LENDER AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,SUCCESSORS AND ASSIGNS FOR AND FROM ANY AND ALL DAMAGES, LIABILITY, OR CLAIMSOF LIABILITY, WHETHER KNOWN OR UNKNOWN, OF ANY NATURE ARISING OUT OF OR BASEDIN WHOLE OR IN PART UPON ADMINISTRATIVE LENDER'S OR ANY LENDER'S FAILURE TODISCLOSE UNFAVORABLE INFORMATION ABOUT AN ACCOUNT DEBTOR OF BORROWER TOBORROWERS, OR ADMINISTRATIVE LENDER'S FAILURE TO TREAT AS INELIGIBLE THEACCOUNT OF AN ACCOUNT DEBTOR OF BORROWER ABOUT WHOM ADMINISTRATIVE LENDER ORANY LENDER HAS UNFAVORABLE INFORMATION.**

 

"**Eligible Inventory**" means inventorythat Administrative Lender determines in the Good Faith exercise of itsdiscretion to be eligible for inclusion in the Borrowing Base.  General criteria for Eligible Inventory maybe established and revised from time to time by Administrative Lender in GoodFaith.  Without limiting such discretionas to other inventory, the following inventory shall in any event notconstitute Eligible Inventory:

 

(i)            finishedgoods that are not held by Borrower for sale as inventory in the ordinarycourse of Borrower's business as presently conducted by it or that areobsolete, not in good condition, not of merchantable quality or not salable inthe ordinary course of Borrower's business or that are subject to defects thatwould affect their market value;

 

(ii)           inventorythat Administrative Lender, in the Good Faith exercise of its discretiondetermines to be unacceptable due to age, type, category or quantity;

 

(iii)          workin process;

 

(iv)          inventoryin the possession of any Person other than Borrower, except (subject to anyadditional requirements imposed by Administrative Lender, in the Good Faithexercise of its discretion to protect Borrower's title thereto orAdministrative Lender's Lien therein) goods held in storage solely for theaccount of Borrower, if the Person in possession has acknowledged in writingAdministrative Lender's Lien thereon and has not issued a negotiable documentof title as to the goods; provided, that notwithstanding the foregoing, (A) upto $500,000 of inventory located on premises of subcontractors and (B) up to$5,000,000 of finished goods inventory located at trade shows or rallies (or intransit for such purposes) shall not be excluded from Eligible Inventory byvirtue of this item (iv);

 

(v)           inventorywith respect to which Administrative Lender does not have a valid and prior,fully perfected Lien and that is not free of all other Liens, except PermittedLiens other than Permitted Liens described in items (g) or (n) of thedefinition of "Permitted Liens;"

 

(vi)          inventoryin the possession of a warehouseman or other bailee if Administrative Lenderhas not received a bailee letter acceptable to Administrative Lender from suchwarehouseman or bailee; and

 

(vii)         exceptas provided in item (iv), inventory located on premises leased by Borrower ifAdministrative Lender has not received a landlord's waiver acceptable toAdministrative Lender with respect to such premises to the extent the aggregatevalue of all such inventory exceeds $5,000,000.

 

"**Environmental Law**" means allapplicable federal, state and local laws, statutes, ordinances and regulations,and any applicable judicial or administrative interpretation, order, consentdecree or judgment, relating to the regulation and protection of theenvironment.  Environmental Laws includebut are not limited to the Comprehensive Environmental Response, Compensation,and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.);the Hazardous Material Transportation Act, as amended (49 U.S.C. § 180 etseq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended(7 U.S.C. § 136 et seq.); the Resource Conservation and RecoveryAct, as amended (42 U.S.C. § 6901 et seq.); the Toxic SubstanceControl Act, as amended (42 U.S.C. § 7401 et seq.); the Clean AirAct, as amended (42 U.S.C. § 740 et seq.); the Federal WaterPollution Control Act, as amended (33 U.S.C. § 1251 et seq.);and the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.),and their state and local counterparts or equivalents and any applicabletransfer of ownership notification or approval statutes.

 

"**Environmental Liabilities and Costs**"means, as to any Person, all liabilities, obligations, responsibilities,Remedial Actions, losses, damages, punitive damages, consequential damages,treble damages, costs and expenses (including, without limitation, all fees,disbursements and expenses of counsel, experts and consultants and costs ofinvestigation and feasibility studies), fines, penalties, sanctions andinterest incurred as a result of any claim or demand by any other Person, whetherbased in contract, tort, implied or express warranty, strict liability,criminal or civil statute, including, without limitation, any thereof arisingunder any Environmental Law, Permit, order or agreement with any GovernmentalAuthority or other Person, and which relate to any violation or allegedviolation of an Environmental Law or a Permit, or a Release or threatenedRelease.

 

"**Event of Default**" has the meaning setforth in Section 11.1 hereof.

 

"**Federal Funds Rate**" means, for anyday, the weighted average of the per annum rates on overnight Federal fundstransactions with member banks of the Federal Reserve System arranged byFederal funds brokers as published by the Federal Reserve Bank of New York forsuch day (or, if such rate is not so published for any day, the average ratequoted to Administrative Lender on such day by three Federal funds brokers ofrecognized standing selected by Administrative Lender).

 

"**Fee Percentage**" means the number ofbasis points determined in accordance with Schedule II.

 

"**Fixed Charge Coverage Ratio**" means, asof the end of a fiscal quarter, the ratio of (A) EBITDA, lessthe sum of the following for the twelve month period ending with such quarter:(i) Parent's consolidated income tax expense; (ii) cash dividends anddistributions paid in respect of Parent's Stock; and (iii) capitalexpenditures to the extent not financed with long-term debt, proceeds ofRevolving Loans and/or net cash proceeds from the sale of capital assets to(B) the sum of the following for the twelve month period ending with suchquarter: (i) Parent's consolidated interest expense; and(ii) scheduled principal payments of Debt of Parent and the Subsidiaries.

 

"**Fixed Rate Term**" means a period ofone, two, three or six months, as designated by Borrowers' Agent, during whicha Loan bears interest determined in relation to LIBOR; provided, however, thatno Fixed Rate Term for a Revolving Loan may extend beyond the Revolver MaturityDate, no Fixed Rate Term for a Term Loan may extend beyond the Maturity Date,and if the last day of a Fixed Rate Term is not a Business Day, such term shallbe extended to the next succeeding Business Day, or if the next succeedingBusiness Day falls in another calendar month, such term shall end on the nextpreceding Business Day.

 

"**Foreign Subsidiary**" means anySubsidiary that is a "controlled foreign corporation" as that term isused in the Internal Revenue Code.

 

"**GAAP**" means generally acceptedaccounting principles as in effect in the United States from time to time, consistentlyapplied.

 

"**General Intangibles**" means(i) all "general intangibles" as defined in the Code and(ii) all tax and duty refunds, registered and unregistered patents,trademarks, service marks, copyrights, trade names, applications for theforegoing, trade secrets, goodwill, processes, drawings, blueprints, customerlists, licenses, whether as licensor or licensee, choses in action, causes ofaction and other claims, judgments in favor of Borrower, leasehold interests inequipment, software and payment intangibles.

 

"**Good Faith**" means honesty in fact inthe conduct or transaction concerned, without regard to whether standards thatmight be deemed commercially reasonable have been observed.

 

"**Governmental Authority**" means anydomestic or foreign national, state or local government, any politicalsubdivision thereof, any department, agency, authority or bureau of any of theforegoing, or any other entity exercising executive, legislative, judicial,regulatory or administrative functions of or pertaining to government,including the Federal Deposit Insurance Corporation, the Federal Reserve Board,the Comptroller of the Currency, any central bank or any comparable authority.

 

"**Governmental Rule**" means anyapplicable law, rule, regulation, ordinance, order, code interpretation,judgment, decree, directive, guidelines, policy or similar form of decision ofany Governmental Authority.

 

"**Highest Lawful Rate**" means, at theparticular time in question, the maximum rate of interest which, underapplicable law, Lenders are then permitted to charge Borrowers on theapplicable Loan, and if the maximum rate changes at any time, the HighestLawful Rate shall increase or decrease, as the case may be, as of the effectivetime of each such change, without notice to Borrowers.

 

"**Indebtedness**" of any Person means,without duplication, (a) all liabilities of such Person as determined inaccordance with GAAP, (b) all obligations of such Person created orarising under any conditional sale or other title retention agreement with respectto property acquired by such Person (even though the rights and remedies of theseller or lender under such agreement in the event of default are limited torepossession or sale of such property), (c) all lease obligations of suchPerson (including, without limitation, operating leases, Capitalized Leases andOther Leases), (d) all Contingent Obligations of such Person, (e) allobligations of such Person to purchase, redeem, retire, defease or otherwiseacquire for value any Stock or Stock Equivalents of such Person with amandatory repurchase or redemption date of less than ten years from the date ofissuance thereof, (f) all obligations secured by (or for which the holderof such obligations has an existing right, contingent or otherwise, to be securedby) any Lien upon or in property owned by such Person, even though such Personhas not assumed or become liable for the payment of such obligations,(g) all liabilities of such Person in connection with the failure to makewhen due any contribution or payment pursuant to or under any Plan and(h) net liabilities of such Person under all Commodity Contracts, InterestRate Contracts and foreign exchange agreements.  For purposes of determining the amount of Indebtedness in acircumstance when the creditor has recourse only to specified assets, theamount shall be the lesser of (i) the amount of such obligation or(ii) the fair market value of such assets.

 

"**Indemnitees**" has the meaning set forthin Section 13.3 hereof.

 

"**Indemnified Liabilities**" has the meaningset forth in Section 13.3.

 

"**Interest Rate Contracts**" meansinterest rate swap agreements, interest rate cap agreements, interest ratecollar agreements, interest rate insurance, and other agreements orarrangements designed to provide protection against fluctuations in interestrates.

 

"**Investment**" means, relative to anyPerson, (a) any loan or advance made by such Person to any other Person(excluding commission, travel and similar advances to officers and employeesmade in the ordinary course of business) and (b) any ownership or similarinterest held by such Person in any other Person.  The amount of any Investment shall be the original principal orcapital amount thereof less all returns of principal or equity thereon (andwithout adjustment by reason of the financial condition of such other Person)and shall, if made by the transfer or exchange of property other than cash, bedeemed to have been made in an original principal or capital amount equal tothe fair market value of such property.

 

"**L/C Bank**" means U.S. Bank.

 

"**Lenders**" means, collectively, each ofthe financial institutions from time to time listed on Schedule I,L/C Bank and Swingline Lender, and "**Lender**" means any one of the Lenders.

 

"**Letter of Credit**" means a letter ofcredit listed on Schedule III or a letter of credit issued by L/C Bankpursuant to Section 3.4 hereof.

 

"**Letter of Credit Agreement**" means L/CBank's standard letter of credit application and documentation modified to suchextent, if any, as L/C Bank deems necessary.

 

"**Letter of Credit Obligations**" means,at any time, all liabilities at such time of Borrowers to L/C Bank with respectto Letters of Credit, whether or not any such liability is contingent.

 

"**Leverage Ratio**" means, as of the endof a fiscal quarter, the ratio of (i) Debt (exclusive of any ContingentObligations) as of the end of such quarter to (ii) EBITDA.

"**LIBOR**" means, for each Fixed RateTerm, the rate per annum (rounded upward if necessary to the nearest whole1/100 of 1%) and determined pursuant to the following formula:

 
|   |   | LIBOR = |   | Base LIBOR                      |   |   |
|--------|--------|---------|--------|---------------------------------|--------|--------|
|   |   |    |   | 100% - LIBOR Reserve Percentage |   |   |

 

As used herein, (a) "Base LIBOR" meansthe rate per annum determined by Administrative Lender to be the offered ratefor deposits in U.S. Dollars with a term comparable to such Fixed Rate Termthat appears on Dow Jones Markets Service, Page 3750 (or any successorpage) as the London interbank offered rate for deposits in U.S. Dollars atapproximately 11:00 AM (London time) two Business Days prior to the beginning ofsuch Fixed Rate Term, and (b) "LIBOR Reserve Percentage" means,for any day, the aggregate (without duplication) of the maximum rates(expressed as a decimal) of reserve requirements in effect on such day(including basic, supplemental, marginal and emergency reserves under anyregulations of the Federal Reserve Board or other Governmental Authority havingjurisdiction with respect thereto) dealing with reserve requirements prescribedfor eurocurrency funding (currently referred to as "Eurocurrency Liabilities"in Regulation D of the Federal Reserve Board) maintained by a member bank ofthe Federal Reserve System.

 

"**LIBOR Loan**" means any Loan that bearsinterest with reference to LIBOR.

 

"**LIBOR Margin**" means the number ofbasis points determined in accordance with Schedule II.

 

"**Lien**" means any mortgage, deed oftrust, pledge, hypothecation, assignment, deposit arrangement, encumbrance,lien (statutory or other), security interest, priority or other securityagreement or preferential arrangement of any kind or nature whatsoever,including, without limitation, any conditional sale or other title retentionagreement or the interest of a lessor under a Capitalized Lease Obligation orany Other Lease.

 

"**Loan**" means an advance made by aLender to Borrowers pursuant to Section 3.1, Section 3.2 orSection 3.3.

 

"**Loan Documents**" means this Agreement,the Notes, each Letter of Credit Agreement, each Swap Protection Agreement andeach other agreement, note, notice, document, contract or instrument to whichBorrower now or hereafter is a party and that is required by Lender inconnection with this Agreement, a Note, a Letter of Credit Agreement, a SwapProtection Agreement or any of the obligations arising under any of suchagreements or Notes.

 

"**Material Adverse Effect**" means amaterial adverse effect on (a) the condition (financial or otherwise),business, performance, operations or properties of Borrowers, (b) theability of Borrowers to perform their obligations under the Loan Documents, or(c) the rights and remedies of any Lender or Administrative Lender underthe Loan Documents.

 

"**Maturity Date**" means the earlier ofSeptember 28, 2005 or the due date determined pursuant toSection 11.2.

 

"**Note**" means any of a master promissorynote executed by Borrowers in favor of Administrative Lender for the ratablebenefit of Lenders evidencing Revolving Loans, a master promissory noteexecuted by Borrowers in favor of Administrative Lender for the ratable benefitof Lenders evidencing Term Loans or a promissory note executed by Borrowers infavor of Swingline Lender evidencing the Swing Loans, each substantially in theform of one of the forms attached as Exhibit B.

 

"**Notice of Authorized Representatives**"has the meaning set forth in Section 2.2 hereof.

 

"**Notice of Borrowing**" has the meaningset forth in Section 3.1(c) hereof.

 

"**Notice of Conversion or Continuation**"has the meaning set forth in Section 3.6(c) hereof.

 

"**ORA**" means any of Outdoor Resorts ofAmerica, Inc. and its subsidiaries.

 

"**Obligations**" means all of Borrowers'obligations under the Loan Documents, whether direct or indirect, absolute orcontingent, due or to become due, now existing or hereafter arising.

 

"**Obligor**" means any Borrower or otherPerson (other than Administrative Lender or any Lender) obligated under, or otherwisea party to, any Loan Document

 

"**Organic Documents**" means, relative toany Obligor, as applicable, its certificate or articles of incorporation, itsby–laws, its partnership agreement, its certificate of partnership,certificate of organization, operating agreement and other limited liabilitycompany organizational documents and all shareholder agreements, voting trustsand similar arrangements applicable to any of its Stock or Stock Equivalents.

 

"**Other Lease**" means any syntheticlease, tax retention operating lease, financing lease or any other lease havingsubstantially the same economic effect as a conditional sale, title retentionagreement or similar arrangement.

 

"**PBGC**" means the Pension BenefitGuaranty Corporation established pursuant to Title IV of ERISA.

 

"**Permit**" means any permit, approval,authorization, license, variance or permission required from a GovernmentalAuthority under an applicable Governmental Rule.

 

"**PermittedLiens**" means (a) Liens arising by operation of law fortaxes, assessments or governmental charges not yet due; (b) statutoryLiens of mechanics, materialmen, shippers, warehousemen, carriers, and othersimilar persons for services or materials arising in the ordinary course ofbusiness for which payment is not more than 30 days past due;(c) nonconsensual Liens incurred or deposits made in the ordinary courseof business in connection with workers' compensation, unemployment insuranceand other types of social security; (d) Liens for taxes or statutory Liensof mechanics, materialmen, shippers, warehousemen, carriers and other similarpersons for services or materials that are due but are being contested in goodfaith and by appropriate and lawful proceedings promptly initiated anddiligently conducted and for which reserves have been established to the extentrequired by GAAP; (e) Liens listed on the Disclosure Letter;(f) Liens granted in the Loan Documents; (g) purchase money Liensupon or in any property (other than chassis and real property) of Borrower andused by Borrower in the ordinary course of business and Liens to secureCapitalized Lease Obligations and Other Leases and any related payment andperformance obligations if, in each case, the incurrence of such Indebtednessis permitted by Section 9.2; provided, however, that: (A) any suchLien is created solely for the purpose of securing Indebtedness representing,or incurred to finance, refinance or refund, the cost (including, withoutlimitation, the cost of construction and the reasonable fees and expenses relatingto such Indebtedness) of the property subject thereto, (B) the principalamount of the Indebtedness secured by such Lien does not exceed such cost, and(C) such Lien does not extend to or cover any other property other thansuch item of property, any improvements on or replacements for such item, andthe proceeds from the disposition of such items; (h) zoning restrictions,easements, rights of way, survey exceptions, encroachments, covenants,licenses, reservations, leasehold interests, restrictions on the use of realproperty or minor irregularities incident thereto which do not in the aggregatematerially detract from the value or use of the property or assets of Borroweror impair, in any material manner, the use of such property for the purposes forwhich such property is held by Borrower; (i) the interests of lessors orlessees of property leased pursuant to leases permitted hereunder;(j) Liens of a depository institution arising solely by virtue of anystatutory or common law provision relating to banker's liens, rights of setoff,or similar rights and remedies as to deposit accounts or other funds maintainedwith such institution, provided that (A) such deposit account is not adedicated cash collateral account and is not subject to restrictions againstaccess by Borrower in excess of those set forth by regulations promulgated byany Government Authority, and (B) such deposit account is not intended byBorrower to provide collateral to the depository institution; (k) judgmentLiens to the extent the existence of such Liens is not an Event of Defaultunder Section 11.1(g); (l) any of the following arising in theordinary course of business: deposits or pledges to secure bids, tenders,contracts (other than contracts for the payment of money), leases, statutoryobligations, surety and appeal bonds and other obligations of like nature;(m) Liens on chassis purchased by Borrower in the ordinary course ofbusiness; and (n) Liens not otherwise included in items (a) through (m)that do not encumber real property, do not secure, in the aggregate, amounts inexcess of $5,000,000 and do not have priority over the Liens granted byBorrowers to Administrative Lender.

 

"**Person**" means an individual,partnership, corporation (including, without limitation, a business trust),joint stock company, limited liability company, trust, unincorporatedassociation, joint venture or other entity, or a Governmental Authority.

 

"**Plan**" means an employee benefit plan,as defined in Section 3(3) of ERISA, which Borrower maintains, contributesto or has an obligation to contribute to on behalf of participants who are orwere employed by any of them.

 

"**Prime Margin**" means the number ofbasis points determined in accordance with Schedule II.

 

"**Prime Rate**" means, for any day, aninterest rate per annum equal to the rate of interest most recently announcedwithin U.S. Bank at its principal office as its prime rate, with any change inthe prime rate to be effective as of the day such change is announced withinU.S. Bank and with the understanding that the prime rate is one of U.S. Bank'sbase rates used to price some loans and may not be the lowest rate at whichU.S. Bank makes any loan, and is evidenced by the recording thereof in suchinternal publication or publications as U.S. Bank may designate.

 

"**Prime Rate Loan**" means any Loan thatbears interest with reference to the Prime Rate.

 

"**Ratable Portion**" or "**ratably**"means, with respect to any Lender, the quotient obtained by dividing(i) the total of such Lender's Revolving Loan Commitment and Term LoanCommitment by (ii) the Total Commitments, and at all times when theTotal Commitments are zero, means, with respect to any Lender, the quotientobtained by dividing item (i) by item (ii) immediately before the TotalCommitments became zero.

 

"**Records**" means all of Borrowers'present and future records and books of account of every kind or nature,purchase and sale agreements, invoices, ledger cards, bills of lading and othershipping evidence, statements, correspondence, memoranda, credit files,electronically stored data and other data, together with the tapes, disks,diskettes, drives and other data and software storage media and devices, filecabinets or containers in or on which the foregoing are stored (including anyrights of Borrower with respect to the foregoing maintained with or by anyother Person).

 

"**Release**" means, as to any Person, anyunpermitted spill, emission, leaking, pumping, injection, deposit, disposal,discharge, dispersal, leaching or migration of a Contaminant into theenvironment, and any "release" as defined in the ComprehensiveEnvironmental Response, Compensation, and Liability Act of 1980, as amended (42U.S.C. § 9601 et seq.).

 

"**Remedial Action**" means all actionsrequired to clean up, remove, prevent or minimize a Release or threat ofRelease or to perform pre-remedial studies and investigations and post-remedialmonitoring and care.

 

"**Required Lenders**" means anynon-defaulting Lender or Lenders having more than two-thirds of the TotalCommitments.

 

"**Repurchase Obligations**" allobligations of Parent to its dealers incurred in the ordinary course ofParent's business to repurchase recreational vehicles.

 

"**Responsible Officer**" means anyexecutive officer of Borrower, including, without limitation, president, chiefexecutive officer, chief financial officer, treasurer, controller, generalcounsel, chief risk management officer, chief environmental officer or anyother person performing responsibilities customarily performed by suchofficers.

 

"**Revolver Maturity Date**" means theearlier of June 30, 2004 or the due date pursuant to Section 11.2.

 

"**Revolving Loan**" means a Loan made by aLender to Borrowers pursuant to Section 3.1.

 

"**Revolving Loan Commitment**" means, asto any Lender, the amount set opposite such Lender's name on Schedule Ias its "Revolving Loan Commitment," as such amount may be reducedfrom time to time pursuant to this Agreement or as such amount may be adjustedpursuant to Section 13.5(c).

 

"**Rights to Payment**" means all Accounts,General Intangibles, contract rights, chattel paper, documents, instruments,letters of credit, bankers acceptances and guaranties, and all present andfuture liens, security interests, rights, remedies, title and interest in, toand in respect of Accounts and other Collateral, and shall include withoutlimitation, (a) rights and remedies under or relating to guaranties,contracts of suretyship, letters of credit and credit and other insurancerelated to the Collateral, (b) rights of stoppage in transit, replevin,repossession, reclamation and other rights and remedies of an unpaid vendor,lienor or secured party, (c) goods described in invoices, documents,contracts or instruments with respect to, or otherwise representing orevidencing, Accounts or other Collateral, including without limitation,returned, repossessed and reclaimed goods, and (d) deposits by andproperty of account debtors or other persons securing the obligations ofaccount debtors, moneys, securities, credit balances, deposits, depositaccounts and other property of Borrower now or hereafter held or received by orin transit to Administrative Lender, any Lender or any of their affiliates orat any other depository or other institution from or for the account ofBorrower, whether for safekeeping, pledge, custody, transmission, collection orotherwise.

 

"**Stock**" means shares of capital stock,membership interests, beneficial or partnership interests, participations orother equivalents (regardless of how designated) of or in a corporation,limited liability company, partnership or other entity, whether voting ornonvoting, and includes, without limitation, common stock and preferred stock.

 

"**Stock Equivalents**" means allsecurities convertible into or exchangeable for Stock and all warrants, optionsor other rights to purchase or subscribe for any Stock, whether or notpresently convertible, exchangeable or exercisable.

 

"**Subsidiary**" means any Person requiredby GAAP to be included in the consolidated financial reporting of Borrower.

 

"**Swap Protection Agreement”**means an Interest Rate Contractbetween Borrower and a Lender which is entered into by Borrower for hedgingpurposes with respect to transactions engaged in by Borrower in the ordinarycourse of business and not for speculative purposes.

 

"**Swing Loan**" means a Loan made by theSwingline Lender to Borrowers pursuant to Section 3.2.

 

"**Swing Loan Available Credit**" means, atany time, the amount by which the outstanding balance of the Swing Loans isless than the lesser of (i) $10,000,000 or (ii) the Available Credit.

 

"**Swingline Lender**" means U.S. Bank.

** **

**"TangibleNet Worth"** means the total of Parent's shareholders'equity, plus Debt subordinated in writing to the Obligations on termsacceptable to Required Lenders in favor of the prior payment in full in cash ofthe Obligations, less consolidated intangible assets.

 

"**Term Loan**" means a Loan made by aLender to Borrowers pursuant to Section 3.3.

 

"**Term Loan Commitment**" means, as to anyLender, the amount set opposite such Lender's name on Schedule I asits "Term Loan Commitment," as such amount may be reduced from timeto time pursuant to this Agreement or as such amount may be adjusted pursuantto Section 13.5(c).

 

"**Total Commitments**" means the total ofall Revolving Loan Commitments and Term Loan Commitments.

 

"**Tranche**" means a collective referenceto all LIBOR Loans which have a Fixed Rate Term starting on the same day andending on the same day; providedthat if, notwithstanding that all such loans have the same interest term,Borrowers request that a group of such Loans be treated separately for LIBORcalculation purposes, then each such separate group of Loans shall be treatedas a separate Tranche.

## ** **

## **1.2                  ACCOUNTING AND FINANCIALDETERMINATIONS**

 

Any accountingterm used in this Agreement that is not specifically defined herein shall havethe meaning customarily given to it under GAAP, and all accountingdeterminations and computations under any Loan Document shall be made, and allfinancial statements required to be delivered under any Loan Document shall beprepared, in accordance with GAAP applied in the preparation of the financialstatements referred to in Section 6.5.

## ** **

## **1.3                  HEADINGS**

 

Headings in this Agreement and each of the other LoanDocuments are for convenience of reference only and are not part of the substancehereof or thereof.

## ** **

## **1.4                  ADDITIONAL DEFINITION PROVISIONS**

 

Whenever the terms "herein," "hereof,""hereto," "hereunder," "therein,""thereof," "thereto," "thereunder," and similarterms contained in this Agreement or any Loan Document refer to this Agreementor other Loan Document, such terms refer to the whole of this Agreement orother Loan Document and not to any particular section, paragraph orprovision.  All other terms contained inthis Agreement that are not defined herein shall, unless the context indicatesotherwise, have the meanings provided in the Code to the extent suchterms are defined therein.

 

# **ARTICLE II.                 APPOINTMENTOF BORROWERS' AGENT; JOINT AND SEVERAL LIABILITY**

# ** **

# **2.1                  APPOINTMENTOF AGENT**

 

In order to facilitate and insure prompt and accuratecommunication among Borrowers and Lenders and to insure the efficient andeffective distribution of proceeds of the Loans, each Borrower hereby appointsParent as its agent to perform the functions of Borrowers' Agent under the LoanDocuments, to take such actions and make such elections on such Borrower'sbehalf as are delegated to the Borrowers' Agent in the Loan Documents and forthe following purposes: (i) communicating to and receiving communications fromAdministrative Lender and Lenders; (ii) receiving all proceeds of the Loans andmaking all decisions regarding the distribution of such proceeds among theBorrowers as Borrowers' Agent, in the sole exercise of its discretion, deemsfair and appropriate; and (iii) making all decisions and elections withrespect to requests for advances of credit, issuance of Letters of Credit andelection of interest options.

## ** **

## **2.2                  AUTHORIZED REPRESENTATIVES**

 

On the Closing Date, and from time to time subsequentthereto at Borrowers' Agent's option, Borrowers' Agent shall deliver toAdministrative Lender a written notice in the form of Exhibit Cattached hereto, which designates by name one or more AuthorizedRepresentatives and includes each of their respective specimen signatures(each, a "Notice of Authorized Representatives").  Administrative Lender shall be entitled torely conclusively on the authority of each person designated as an AuthorizedRepresentative in the most current Notice of Authorized Representativesdelivered by Borrowers' Agent to Administrative Lender, to request borrowings,to select interest rate options hereunder, and to give to Administrative Lendersuch other notices as are specified herein as being made through an AuthorizedRepresentative, until such time as Borrowers' Agent has delivered toAdministrative Lender, and Administrative Lender has actual receipt of, a newwritten Notice of Authorized Representatives. Administrative Lender shall have no duty or obligation to Borrowers toverify the authenticity of any signature appearing on any Notice of Borrowing,Notice of Conversion or Continuation or any other notice from an AuthorizedRepresentative or to verify the authenticity of any person purporting to be anAuthorized Representative giving any telephonic notice permitted hereby.

## ** **

## **2.3          JOINT AND SEVERAL LIABILITY; RIGHTS OFCONTRIBUTION**

 

(a)           EachBorrower states and acknowledges that: (i) pursuant to this Agreement, Borrowers desire to utilize theirborrowing potential on a consolidated basis to the same extent possible if theywere merged into a single corporate entity; (ii) it has determined that itwill benefit specifically and materially from the advances of creditcontemplated by this Agreement; (iii) it is both a condition precedent tothe obligations of Lenders hereunder and a desire of Borrowers that eachBorrower execute and deliver to Lenders this Agreement; and (iv) Borrowershave requested and bargained for the structure and terms of the creditcontemplated by this Agreement.

 

(b)           EachBorrower hereby irrevocably and unconditionally:  (i) agrees that it is jointly and severally liable toLenders for the full and prompt payment of the Obligations and the performanceby each Borrower of its obligations hereunder in accordance with the terms ofthe Loan Documents; (ii) agrees to fully and promptly perform all of itsobligations under the Loan Documents with respect to each advance of credithereunder as if such advance had been made directly to it; and(iii) agrees as a primary obligation to indemnify Lenders on demand forand against any loss incurred by Lenders (other than a loss arising anyLender's willful misconduct or gross negligence) as a result of any of theobligations of any one or more of Borrowers under the Loan Documents being orbecoming void, voidable, unenforceable or ineffective for any reasonwhatsoever, whether or not known to Lenders or any other Person, the amount ofsuch loss being the amount which Lenders would otherwise have been entitled torecover from any one or more of Borrowers. Each Borrower hereby irrevocably and unconditionally accepts, not merelyas a surety but also as a co-debtor, joint and several liability with eachother Borrower with respect to the payment and performance of all of theObligations.  If and to the extent thatany Borrower fails to make any payment with respect to the Obligations as andwhen due or to perform any of its obligations in accordance with the terms ofthe Loan Documents, then in each such event the other Borrowers will make suchpayment with respect to, or perform, such obligations.

 

(c)           Thejoint and several liability of each Borrower for the Obligations shall beabsolute and unconditional irrespective of and shall not be subject to anyreduction, limitation, impairment or termination for any reason, including,without limitation, any claim of waiver, release, surrender, alteration orcompromise, and shall not be subject to any defense or setoff, counterclaim,recoupment or termination whatsoever by reason of the invalidity, illegality orunenforceability of any of the Obligations. Without limiting the generality of the foregoing, the obligations ofeach Borrower shall not be discharged or impaired or otherwise affected by:

 

(i)            anychange in the manner, place or terms of payment or performance and/or anychange or extension of the time of payment or performance of, renewal oralteration of, any Obligation, any security therefor, or any liability incurreddirectly or indirectly in respect thereof, or any rescission of, or amendment,waiver or other modification of, or any consent to departure from any LoanDocument, including any increase in the Obligations resulting from theextension of additional credit to any Borrower;

 

(ii)           anysale, exchange, release, surrender, realization upon any property at any timepledged or mortgaged to secure any of the Obligations, and/or any offsetagainst, or failure to perfect, or continue the perfection of, any lien in anysuch property, or delay in the perfection of any such lien, or any amendment orwaiver of or consent to departure from any other guaranty for any of theObligations;

 

(iii)          thefailure of Lenders to assert any claim or demand or to enforce any right orremedy against any Borrower or other Person under the provisions of any LoanDocument;

 

(iv)          anysettlement or compromise of any Obligation, any security therefor or anyliability incurred directly or indirectly in respect thereof, and anysubordination of the payment of any part thereof to the payment of anyobligation (whether due or not) of any other Borrower to creditors of suchother Borrower other than any other Borrower;

 

(v)           anymanner of application of any collateral for the Obligations or proceedsthereof, to any of the Obligations, or any manner of sale or other dispositionof any such collateral for all or any of the Obligations or any other assets ofany Borrower;

 

(vi)          anychange, restructuring or termination of the existence of any Borrower; or

 

(vii)         anyother agreement or circumstance of any nature whatsoever that might in anymanner or to any extent vary the risk of any Borrower, or that might otherwiseat law or in equity constitute a defense available to, or a discharge of, theobligations of any Borrower, or a defense to, or discharge of, any Borrower orother Person relating to any of the Obligations.

 

(d)           Thejoint and several liability of Borrowers shall continue in full force andeffect notwithstanding any absorption, merger, amalgamation or any other changewhatsoever in the name, membership, constitution or place of formation of anyBorrower.

 

(e)           Itis the intent of each Borrower that the indebtedness, obligations and liabilityhereunder of no one of them be subject to challenge on any basis.  Accordingly, as of the date hereof, theliability of each Borrower under the Loan Documents, together with all of itsother liabilities to all Persons as of the date hereof and as of any other dateon which a transfer is deemed to occur by virtue of this Agreement, calculatedin an amount sufficient to pay its probable net liabilities (includingContingent Obligations) as the same become absolute and matured ("DatedLiabilities") is, and is to be, less than the amount of the aggregate of afair valuation of its property as of such corresponding date ("DatedAssets").  To this end eachBorrower hereby (i) grants to and recognizes in each other Borrower,ratably, rights of subrogation and contribution in the amount, if any, by whichthe Dated Assets of such Borrower, but for the aggregate of subrogation andcontribution in its favor recognized herein, would exceed the Dated Liabilitiesof such Borrower or, as the case may be (ii) acknowledges receipt of andrecognizes its right to subrogation and contribution ratably from each of theother Borrowers in the amount, if any, by which the Dated Liabilities of such Borrower,but for the aggregate of subrogation and contribution in its favor recognizedherein, would exceed the Dated Assets of such Borrower.  In recognizing the value of the Dated Assetsand the Dated Liabilities, it is understood that Borrowers will recognize, toat least the same extent of their aggregate recognition of liabilitieshereunder, their rights to subrogation and contribution hereunder.  It is a material objective of this Sectionthat each Borrower recognizes rights to subrogation and contribution ratherthan be deemed to be insolvent (or in contemplation thereof) by reason of itsjoint and several obligations hereunder.

# ** **

# **ARTICLE III.                THECREDITS**

# ** **

# **3.1                  REVOLVING**LOANS

 

(a)           Onthe terms and subject to the conditions contained in this Agreement, eachLender severally agrees to make loans (each a "Revolving Loan") toBorrowers from time to time until the Revolver Maturity Date in an aggregateamount not to exceed at any time outstanding such Lender's Revolving LoanCommitment; provided, however, that at no time shall any Lender be obligated tomake a Revolving Loan in excess of such Lender's Ratable Portion of theAvailable Credit.  Borrowers may fromtime to time borrow, partially or wholly repay its outstanding borrowings, andreborrow, subject to all the limitations, terms and conditions containedherein.  The Revolving Loans shall beevidenced by a Note.

 

(b)           Ifat any time the Available Credit is negative, Borrowers, without demand ornotice, shall immediately repay that portion of the Revolving Loans necessaryto cause the Available Credit to be zero. Borrowers shall repay the outstanding principal balance of the RevolvingLoans, together with all accrued and unpaid interest and related fees on theRevolver Maturity Date.

 

(c)           Borrowers'Agent, through an Authorized Representative, shall request each advance of aRevolving Loan by giving Administrative Lender irrevocable written notice ortelephonic notice (confirmed promptly by fax or email), in the form of Exhibit Dattached hereto (each, a "Notice of Borrowing"), which specifies,among other things:

 

                    (i)        the aggregate principal amount of therequested advances (which amount must be a minimum of $1,000,000 and inintegral multiples of $100,000 if a LIBOR Loan);

 

                   (ii)        the proposed date of borrowing, whichshall be a Business Day;

 

                  (iii)        whether such advance is to be a PrimeRate Loan or a LIBOR Loan; and

 

                  (iv)        if such advance is to be a LIBOR Loan,the length of the Fixed Rate Term applicable thereto.

 

Each such Notice ofBorrowing must be received by Administrative Lender not later than 9:00 AM(Portland time) (x) on the date of borrowing if a Prime Rate Loan or(y) at least three Business Days prior to the date of borrowing if a LIBORLoan.  Administrative Lender shallpromptly notify each Lender of the contents of each Notice of Borrowing and ofthe amount of the advance to be made by such Lender no later than 10:00 AM(Portland time) on the Business Day of receipt for Prime Rate Loans and1:00 PM (Portland time) the Business Day after receipt with respect toLIBOR Loans.

 

(d)           Fromtime to time before 9:00 AM (Portland time) on any Business Day, Borrowers maymake a voluntary prepayment, in whole or in part, of the outstanding principalamount of any Revolving Loan(s) that are Prime Rate Loans.  From time to time before 9:00 AM(Portland time) on any Business Day, Borrowers may make a voluntary prepayment,in whole or in part, of the outstanding principal amount of any RevolvingLoan(s) that are LIBOR Loans; provided, however, that (i) Borrowers' Agentgives Administrative Lender notice of such prepayment before 2:00 PM (Portlandtime) on the third Business Day before the date of prepayment (which noticeshall be irrevocable), (ii) each voluntary partial prepayment must be in aminimum of $1,000,000 and in integral multiples of $100,000; and (iii) anyprepayment shall be subject to the provisions of Section 3.12 hereof.

## ** **

## **3.2                  SWING LOANS**

 

(a)           Inlieu of making Revolving Loans, the Swingline Lender, in its sole discretion,on the terms and subject to the conditions contained in this Agreement, maymake loans (each a "Swing Loan") to Borrowers from time to time untilthe Revolver Maturity Date as provided herein in an aggregate amount not toexceed at any time outstanding the Swing Loan Available Credit.  Each Swing Loan shall be made and prepaidupon such notice as the Swingline Lender and Borrowers' Agent shall agree;provided that in the absence of a written agreement to the contrary, SwinglineLender must receive each request for a Swing Loan not later than 2:00 PM(Portland time) on the Business Day of borrowing and any prepayment made after2:00 PM (Portland time) shall be credited on the next Business Day.  Further, Swingline Lender may make SwingLoans without notice from Borrowers' Agent or any Borrower(A) automatically pursuant to cash management arrangements, if any, madefrom time to time by Borrowers with Administrative Lender and/or (B) for thepurposes described in item (c) below. All Swing Loans shall be evidenced by a Note payable to the order of theSwingline Lender.  Borrower shall repaythe outstanding principal balance of the Swing Loans, together with all accruedand unpaid interest and related fees on the Revolver Maturity Date.

 

(b)           Ifthe aggregate outstanding balance of the Swing Loans exceeds $4,000,000 for tenconsecutive Business Days or at any time upon the request of the SwinglineLender to Administrative Lender that some or all of the Swing Loans beconverted to Revolving Loans, then, by not later than noon (Portland time) onthe next Business Day, Administrative Lender shall notify each Lender of theprincipal amount of Swing Loans outstanding as of 9:00 AM (Portland time)on such Business Day (or of the principal amount of the Swing Loans whichSwingline Lender desires to be converted) and each Lender's Ratable Portionthereof.  Each Lender shall, before9:00 AM (Portland time) on the next Business Day, make available toAdministrative Lender, in immediately available funds, the amount of itsRatable Portion of such principal amount of such Swing Loans.  Upon such payment by a Lender, such Lendershall be deemed to have made a Revolving Loan as a Prime Rate Loan toBorrowers, notwithstanding any failure by Borrowers to satisfy the conditionscontained in Section 7.2 (without regard to the minimum amount of PrimeRate Loans).  Administrative Lendershall use such funds to repay the principal amount of Swing Loans to theSwingline Lender.  All interest due onthe Swing Loans shall be payable to the Swingline Lender.  With respect to the Swing Loans, afterreceipt of payment of principal or interest thereon, Administrative Lender willpromptly distribute the same to the Swingline Lender at its Applicable LendingOffice.

 

(c)           Lendersand Borrowers agree that Swing Loans may be made to allow Administrative Lenderto pay each Lender its share of fees, interest and other amounts due hereunderto the extent such fees, interest and other amounts are then due and payable.

## ** **

## **3.3                  TERM LOAN**

 

(a)           Onthe terms and subject to the conditions contained in this Agreement, eachLender severally agrees to make a term loan (each a "Term Loan") in asingle advance on the Closing Date to Borrowers in the amount of such Lender'sTerm Loan Commitment.  The Term Loansshall be evidenced by a Note.

 

(b)           On the Maturity Date, Borrowers shallrepay the unpaid principal amount of each Term Loan, and prior thereto:

 

(i)            Borrowers shall, on the last day ofeach calendar quarter, beginning December 31, 2001, repay the outstandingprincipal balance of the Term Loans by making a payment in the aggregate amountof $2,500,000;

 

(ii)           Borrowers may, from time to time onany Business Day, make a voluntary prepayment, in whole or in part, of theoutstanding principal amount of the Term Loans; provided, however, that (A) nosuch prepayment of any LIBOR Loan may be made on any day other than the lastday of the Fixed Rate Term for such Loan; (B) all such voluntaryprepayments shall require at least three but no more than five Business Daysprior written notice to Administrative Lender; and (C) all such voluntarypartial prepayments shall be in an aggregate minimum amount of $1,000,000 andan integral multiple of $100,000;

(iii)          if as of the end of any fiscal quarterof Parent the net book value of Borrowers' property, plant and equipment isless than the total of (A) the net book value of Borrowers' property, plant andequipment as of September 29, 2001, less (B) the sum of all principal paymentsmade on the Term Loan and less (C) $5,000,000, Borrowers, within 60 days after the end of such quarter (110 days if thequarter is Parent's fourth fiscal quarter), shall prepay the outstandingprincipal amount of the Terms Loans by an amount equal to such difference;

 

(iv)          Borrowers shall, within 30 days ofreceipt by Borrowers of insurance or condemnation proceeds in excess of$1,000,000, prepay the outstanding principal amount of the Term Loans by anamount equal to such proceeds less the portion thereof to be utilized in therepair or replacement of the affected property (as determined by AdministrativeLender); and

 

(v)           Borrowers shall, upon receipt of netcash proceeds of any issuance of Stock or Stock Equivalents by Parent or anySubsidiary (other than proceeds not exceeding $3,000,000 in the aggregate sincethe Closing Date), prepay the outstanding principal amount of the Term Loans byan amount equal to such proceeds.

 

Each prepayment ofTerm Loans made pursuant to any of clauses (ii) through (v) shall be applied inthe inverse order of the scheduled repayments of Term Loans set forth in clause(i) and shall be applied ratably among the Term Loans.  Each prepayment of any Term Loans madepursuant to this Section shall be without premium or penalty, except for anyfunding loss indemnification required by Section 3.12.  No amounts paid or prepaid with respect toTerm Loans may be reborrowed.

## ** **

## **3.4                  LETTER OF CREDIT FACILITY**

 

(a)           On the terms and subject to theconditions contained in this Agreement, L/C Bank agrees promptly to issue oneor more Letters of Credit at the request of Borrowers' Agent for the account ofBorrowers from time to time until ten days before the Revolver Maturity Date;provided, however, that L/C Bank shall not issue any Letter of Credit if:

 

                    (i)        any order, judgment or decree of any Governmental Authority orarbitrator of which L/C Bank is aware shall purport by its terms to enjoin orrestrain L/C Bank from issuing such Letter of Credit or any Governmental Ruleapplicable to L/C Bank or any request or directive (whether or not having theforce of law) from any Governmental Authority with jurisdiction over L/C Bankshall prohibit, or request that L/C Bank refrain from, the issuance of lettersof credit generally or such Letter of Credit in particular or shall impose uponL/C Bank with respect to such Letter of Credit any restriction or reserve orcapital requirement (for which L/C Bank is not otherwise compensated) not ineffect on the date hereof or result in any loss, cost or expense which (A) wasnot applicable, in effect or known to L/C Bank on the Closing Date and whichL/C Bank in Good Faith deems material to it, and (B) the reimbursement of whichis not provided for hereunder;

 

                   (ii)        L/C Bank shall have received written notice fromAdministrative Lender or Borrowers' Agent, on or before the Business Day priorto the requested date of issuance of such Letter of Credit, that one or more ofthe applicable conditions contained in Article VII is not then satisfied;

 

                  (iii)        after giving effect to the issuance of such Letter of Credit,the Letter of Credit Obligations exceed $5,000,000;

 

                  (iv)        the amount of the Letter of Credit requested exceeds theAvailable Credit; or

 

                   (v)        fees due in connection with a requested issuance have notbeen paid.

 

None of theLenders (other than the Lender that is L/C Bank) shall have any obligation toissue any Letters of Credit.

 

(b)           In no event shall the expiry date ofany Letter of Credit be more than one year for a standby Letter of Credit orfall after ten days before the Revolver Maturity Date.

 

(c)           Prior to the issuance of each Letterof Credit, Borrowers' Agent shall have delivered to L/C Bank, if requested byL/C Bank, a Letter of Credit Agreement, signed by Borrowers, and such otherdocuments or items as L/C Bank may require pursuant to the terms thereof.

 

(d)           In connection with the issuance ofeach Letter of Credit, Borrowers' Agent shall give L/C Bank and AdministrativeLender at least three Business Days prior written notice of the requestedissuance of such Letter of Credit.  Suchnotice shall be irrevocable and binding on Borrowers and shall specify(i) whether the Letter of Credit is to be a standby or commercial(documentary) Letter of Credit, (ii) the stated amount of the Letter ofCredit requested, (iii) the date of issuance of such requested Letter ofCredit (which day shall be a Business Day), (iv) the date on which suchLetter of Credit is to expire (which date shall be a Business Day),(v) the Person for whose benefit the requested Letter of Credit is to beissued, and (vi) such other terms and conditions of the proposed Letter ofCredit as are requested by Borrowers' Agent and acceptable to L/C Bank.  Such notice, to be effective, must bereceived by L/C Bank and Administrative Lender not later than 10:00 AM(Portland time) on the last Business Day on which notice can be given under theimmediately preceding sentence.

 

(e)           Subject to the terms and conditionsof this Section 3.4 and provided that the applicable conditions set forth inArticle VII have been satisfied, L/C Bank shall, on the requested date, issue aLetter of Credit on behalf of Borrowers in accordance with the applicablerequest and L/C Bank's usual and customary business practices and in a finalform reasonably satisfactory to Borrowers' Agent.

 

(f)            Immediately upon L/C Bank's issuanceof a Letter of Credit, L/C Bank shall be deemed to have sold and transferred toeach Lender, and each Lender shall be deemed irrevocably and unconditionally tohave purchased and received from L/C Bank, without recourse or warranty, anundivided interest and participation, to the extent of such Lender's RatablePortion, in such Letter of Credit and the obligations of Borrowers with respectthereto (including, without limitation, all Letter of Credit Obligations withrespect thereto) and any security therefor and guaranty pertaining thereto andeach Lender's Revolving Loan Commitment shall be deemed used to the extent ofsuch Lender's Ratable Portion of such Letter of Credit Obligations.

 

(g)           In determining whether to pay underany Letter of Credit, L/C Bank shall not have any obligation relative toLenders other than to confirm that any documents required to be delivered undersuch Letter of Credit appear to have been delivered and that they appear tocomply on their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken byL/C Bank under or in connection with any Letter of Credit, if taken or omittedin the absence of gross negligence or willful misconduct, shall not put L/CBank under any resulting liability to any other Lender.

 

(h)           If L/C Bank makes any payment underany Letter of Credit, L/C Bank shall promptly notify Administrative Lender, whoshall promptly notify each Lender, and each Lender shall promptly andunconditionally pay to Administrative Lender for the account of L/C Bank theamount of such Lender's Ratable Portion of such payment in same day funds (andupon receipt, Administrative Lender shall promptly pay the same to L/C Bank),which payment shall be deemed to be and shall constitute a Revolving Loan thatis a Prime Rate Loan made by such Lender to Borrowers; provided, however, thatif the Swingline Lender so elects, and if a Swing Loan can be made in suchamount, Administrative Lender shall promptly notify the Swingline Lender ofsuch payment by L/C Bank, and the Swingline Lender shall, and Borrowers herebyauthorize the Swingline Lender to, pay to Administrative Lender for the accountof L/C Bank the amount of such payment in same day funds, which payment shallbe deemed to be and shall constitute a Swing Loan made by the Swingline Lenderto Borrowers.  The Revolving Loans shallbe made, or the Swing Loan may be made, as contemplated in the precedingsentence notwithstanding Borrowers' failure to satisfy the conditions set forthin Section 7.2.  If AdministrativeLender so notifies such Lender prior to 10:00 AM (Portland time) on anyBusiness Day, such Lender shall make available to Administrative Lender for theaccount of L/C Bank its Ratable Portion of the amount of such payment by 1:00PM (Portland time) on such Business Day in same day funds.  If and to the extent such Lender does notmake its Ratable Portion available to Administrative Lender for the account ofL/C Bank, such Lender agrees to repay to Administrative Lender for the accountof L/C Bank on demand such amount together with interest thereon at the FederalFunds Rate for each day from such date until the date paid.  The failure of any Lender to make availableto Administrative Lender for the account of L/C Bank its Ratable Portion of anysuch payment shall not relieve any other Lender of its obligations hereunder.

 

(i)            The obligations of Lenders to makepayments to Administrative Lender for the account of L/C Bank with respect toLetters of Credit shall be irrevocable and not subject to any qualification orexception whatsoever and shall be made in accordance with the terms andconditions of this Agreement under all circumstances (except as expresslyprovided in Section 3.4(g)), including, without limitation, any of thefollowing circumstances:

 

  (i)        any lack of validity or enforceabilityof any of the other Loan Documents;

 

(ii)        the existence of any claim, setoff,defense or other right which Borrowers may have at any time against abeneficiary named in a Letter of Credit, any transferee of any Letter of Credit(or any Person for whom any such transferee may be acting), AdministrativeLender, any Lender or any other Person, whether in connection with thisAgreement, any Letter of Credit, the transactions contemplated herein or anyunrelated transactions (including, without limitation, any underlyingtransaction between Borrower and the beneficiary named in any Letter ofCredit);

 

(iii)        anydraft, certificate or any other document presented under the Letter of Creditproving to be forged, fraudulent, invalid or insufficient in any respect or anystatement therein being untrue or inaccurate in any respect; or

 

(iv)        the occurrence of any Default.

 

## **3.5                 **INTEREST/FEES

 

(a)           **Interest**.  The outstanding principal balance of eachLoan shall bear interest at the Applicable Rate.  The foregoing notwithstanding, the rate of interest applicable atall times during the continuation of an Event of Default shall be a fluctuatingrate per annum equal to the Prime Rate in effect from time to time, plus 200basis points.  All fees, expenses andother amounts not paid when due shall bear interest (from the date due untilpaid) at the rate set forth in the preceding sentence.

 

(b)**           Letterof Credit Fees**.  With respectto each Letter of Credit, upon the issuance, renewal and/or amendment thereof,Borrowers shall pay to Administrative Lender, for the ratable benefit ofLenders, the following fees, each of which shall be nonrefundable even if anyLetter of Credit is terminated or canceled before its stated expiration date: 

 

                    (i)        with respect to each Letter of Creditthat is a standby letter of credit, a fee equal to the face amount thereof (or,with respect to an amendment increasing the face amount, the increase in theface amount only) multiplied by a rate per annum equal to the then applicableLIBOR Margin for Revolving Loans for a period equal to the term of such Letterof Credit (or, with respect to an amendment increasing the term, the increasein the term only); and 

 

                   (ii)        with respect to each Letter of Creditthat is a commercial (documentary) Letter of Credit, a fee equal to the greaterof $350 or a percentage of the face amount thereof equal to the then applicableLIBOR Margin for Revolving Loans for the period it is outstanding.  

 

In addition, upon the occurrence of any other activitywith respect to any Letter of Credit, Borrowers shall pay to L/C Bank a feedetermined in accordance with L/C Bank's standard fees and charges then ineffect for such activity.

 

(c)           **AdministrativeLender's Fees**.  Borrowersshall pay to Administrative Lender, for Administrative Lender's own account,the fees set forth in that certain fee letter from U.S. Bank to Borrowers'Agent dated September 28, 2001.

 

(d)           **UnusedLine Fee**.  On the lastday of each calendar quarter beginning September 30, 2001 and on theRevolver Maturity Date, Borrowers shall pay to Administrative Lender, for theratable benefit of Lenders, an unused line fee equal to (i) the amount bywhich the Revolving Loan Commitments are greater than the total of the averagedaily outstanding balance of the Revolving Loans and the average daily faceamount of outstanding Letters of Credit for such quarter or period multipliedby (ii) a per annum rate equal to the Fee Percentage.

 

(e)           **Computationand Payment**.  Allinterest and per annum fees shall be computed on the basis of a 360-day year,actual days elapsed, except interest on Prime Rate Loans shall be computed onthe basis of a 365/366-day year, actual days elapsed.  Interest on Prime Rate Loans shall be payable monthly, inarrears, on the first day of each month, on the Revolver Maturity Date (withrespect to the Revolving Loans) and on the Maturity Date.  Interest on LIBOR Loans shall be paid on thelast day of each Fixed Rate Term, at the end of the third month with respect toeach Fixed Rate Term of six months, on the Revolver Maturity Date (with respectto the Revolving Loans) and on the Maturity Date.

## ** **

## **3.6                  INTERESTOPTIONS**

 

(a)           **Election**.  Subject to the requirement that each LIBORLoan be in a minimum amount of $1,000,000 and in integral multiples of $100,000and the limitation in Section 3.6(b) regarding the number of Tranchesoutstanding at any time, (i) except as otherwise provided herein, at anytime when a Default is not continuing Borrowers' Agent may convert all or any portionof a Prime Rate Loan to a LIBOR Loan for a Fixed Rate Term designated byBorrowers' Agent, and (ii) at any time Borrowers' Agent may convert all ora portion of a LIBOR Loan at the end of the Fixed Rate Term applicable theretoto a Prime Rate Loan or, if no Default is continuing, to a LIBOR Loan for a newFixed Rate Term designated by Borrowers' Agent.  If Borrowers' Agent has not made the required interest rateconversion or continuation election prior to the last day of any Fixed RateTerm, Borrowers shall be deemed to have elected to convert such LIBOR Loan to aPrime Rate Loan.

 

(b)           **MaximumNumber of Tranches**.  Atno time shall there be more than ten Tranches outstanding at any time.

 

(c)           **Notice toAdministrative Lender**. Borrowers' Agent shall request each interest rate conversion orcontinuation by giving Administrative Lender irrevocable written notice ortelephonic notice (confirmed promptly in writing), in the form of Exhibit Eattached hereto (a "Notice of Conversion or Continuation"), thatspecifies, among other things: (i) the Loan to which such Notice of Conversion or Continuationapplies; (ii) the principal amount that is the subject of such conversionor continuation; (iii) the proposed date of such conversion orcontinuation, which shall be a Business Day; and (iv) if such Noticepertains to a LIBOR Loan, the length of the applicable Fixed Rate Term.  Any such Notice of Conversion orContinuation must be received by Administrative Lender not later than9:00 AM (Portland time) (i) at least one Business Day prior to theeffective date of any Prime Rate interest selection, and (ii) at leastthree Business Days prior to the effective date of any LIBOR interestselection.  Administrative Lender shallpromptly notify each Lender of the contents of each such Notice of Conversionor Continuation, or if timely notice is not received from Borrowers' Agentprior to the last day of any Fixed Rate Term, of the automatic conversion ofsuch LIBOR Loan to a Prime Rate Loan.

## ** **

## **3.7                  OTHERPAYMENT TERMS**

 

(a)           **AutomaticDebit**.  AdministrativeLender may, and Borrowers hereby authorize Administrative Lender to, debit anydeposit account of Borrower with Administrative Lender for all payments ofprincipal, interest, fees and other amounts due under the Loan Documents asthey become due, provided that Administrative Lender shall first debitBorrowers' Agent's account no. 1-536-9121-3752 with Administrative Lender,before debiting any other account.

 

(b)           **Place andManner**.  Borrowers shallmake all payments due to each Lender under the Loan Documents by payment toAdministrative Lender at Administrative Lender's Office, for the account ofsuch Lender, in lawful money of the United States and in same day orimmediately available funds not later than 11:00 AM (Portland time) on thedate due.  Administrative Lender shallpromptly disburse to each Lender at such Lender's Applicable Lending Officeeach such payment received by Administrative Lender for such Lender no laterthan 2:00 PM (Portland time) on the Business Day received if received before11:00 AM (Portland time), or if received later, by 2:00 PM (Portlandtime) on the next Business Day.

 

(c)           **Date**.  Whenever any payment due hereunder shallfall due on a day other than a Business Day, such payment shall be made on thenext succeeding Business Day, and such extension of time shall be included inthe computation of interest or fees, as the case may be.

 

(d)           **Applicationof Payments**.  Allpayments under the Loan Documents (including prepayments) shall be appliedfirst to unpaid fees, costs and expenses then due and payable under the LoanDocuments, second to accrued interest then due and payable under the LoanDocuments (applied first to interest due and payable on the Swing Loans andthen to the other Loans), third to the outstanding principal of the Swing Loansand finally to reduce the principal amount of the other outstanding Loans.

 

(e)           **Failureto Pay Administrative Lender**. Unless Administrative Lender shall have received notice from Borrowers'Agent at least one Business Day prior to the date on which any payment is dueto Lenders hereunder that Borrowers will not make such payment in full,Administrative Lender may assume that Borrowers have made such payment in fullto Administrative Lender on such date and Administrative Lender may, inreliance upon such assumption, cause to be distributed to each Lender on suchdue date an amount equal to the amount then due such Lender.  If and to the extent Borrowers shall nothave made such payment in full to Administrative Lender, such Lender shallrepay to Administrative Lender on demand the amount distributed to such Lendertogether with interest thereon at the Federal Funds Rate for each day from thedate distributed until the date repaid. A certificate of Administrative Lender submitted to any Lender withrespect to any amounts owing by such Lender under this Section shall bepresumptive evidence of such amounts.

## ** **

## **3.8                  FUNDING**

 

(a)           **LenderFunding and Disbursement**. Each Lender shall, by 11:00 AM (Portland time) on the date of eachborrowing under Section 3.1, Section 3.3 or Section 3.4, makeavailable to Administrative Lender at Administrative Lender's Office, in sameday or immediately available funds, such Lender's Ratable Portion thereof.  After Administrative Lender's receipt of suchfunds and upon fulfillment of the applicable conditions set forth inArticle VII hereof, Administrative Lender will promptly disburse suchfunds in same day or immediately available funds to Borrowers.  Unless otherwise directed by Borrowers'Agent in writing, Administrative Lender shall disburse the proceeds of eachborrowing to Parent by deposit to any demand deposit account maintained byParent with Administrative Lender designated by Borrowers' Agent in a notice toAdministrative Lender.

 

(b)           **Lender Failureto Fund**.  UnlessAdministrative Lender receives notice from a Lender on or before the date ofany borrowing hereunder that such Lender will not make available toAdministrative Lender such Lender's Ratable Portion thereof, AdministrativeLender may assume that such Lender has made such portion available toAdministrative Lender on the date of such borrowing in accordance withSection 3.8(a) hereof, and Administrative Lender may, in reliance uponsuch assumption, make available to Borrowers (or otherwise disburse) on suchdate a corresponding amount.  If anyLender does not make the amount of its Ratable Portion of any borrowingavailable to Administrative Lender on the date of such borrowing, such Lendershall pay to Administrative Lender, on demand, interest which shall accrue onsuch amount until made available to Administrative Lender at a rate equal tothe daily Federal Funds Rate.  Acertificate of Administrative Lender submitted to any Lender with respect toany amounts owing under this Section shall be presumptive evidence of suchamounts.  If any Lender's RatablePortion of any borrowing is not in fact made available to Administrative Lenderby such Lender within three Business Days after the date of such borrowing,Borrowers shall pay to Administrative Lender, on demand, an amount equal tosuch Ratable Portion together with interest thereon, for each day from the datesuch amount was made available to Borrowers until the date such amount isrepaid to Administrative Lender, at the rate of interest then applicablethereto.

 

(c)           **Lenders'Obligations Several**.  Theobligation of each Lender hereunder is several.  The failure of any Lender to make available its Ratable Portionof any borrowing shall not relieve any other Lender of its obligation hereunderto do so on the date requested, but no Lender shall be responsible for thefailure of any other Lender to make available the Ratable Portion to be fundedby such other Lender.

## ** **

## **3.9                  PRORATA TREATMENT**

 

(a)           **Borrowings**.  Each Loan, except a Swing Loan, shall bemade or shared among Lenders ratably.

 

(b)           **Sharingof Payments, Etc.**  Exceptas otherwise provided herein, each payment of principal, interest or fees shallbe made or shared among Lenders ratably. If any Lender obtains any payment (whether voluntary, involuntary,through the exercise of any right of setoff or otherwise) on account of a Loanin excess of its Ratable Portion of payments on the Loans obtained by allLenders, such Lender ("Purchasing Lender") shall forthwith purchasefrom the other Lenders sufficient participations to cause the PurchasingLender's interest in the Loans to be in the same proportionate relationshipwith all Loans as before such payment was received; provided, however, that ifall or any portion of such excess payment is thereafter recovered from thePurchasing Lender, the purchased participation shall be rescinded and eachother Lender shall repay to the Purchasing Lender (i) the purchase priceto the extent of such recovery together with (ii) an amount equal to suchother Lender's ratable share (according to the proportion of (A) theamount of such other Lender's required repayment to (B) the total amount sorecovered from the Purchasing Lender) of any interest or other amount paid orpayable by the Purchasing Lender in respect of the total amount sorecovered.  Borrowers agree that anyPurchasing Lender may, to the fullest extent permitted by law, exercise all itsrights of payment (including the right of setoff) with respect to suchparticipation as fully as if the Purchasing Lender were the direct creditor ofBorrowers in the amount of such participation.

## ** **

## **3.10                CHANGEOF CIRCUMSTANCES**

 

(a)           **Inabilityto Determine Rate**.  IfAdministrative Lender at any time determines that adequate and reasonable meansdo not exist for ascertaining LIBOR, or the Required Lenders determine at anytime that LIBOR does not accurately reflect the cost to Lenders of making ormaintaining LIBOR interest rates hereunder, then Administrative Lender shallgive telephonic notice (promptly confirmed in writing) to Borrowers' Agent andeach Lender of such determination.  Ifsuch notice is given and until such notice has been withdrawn in writing byAdministrative Lender, no LIBOR interest option may be selected by Borrowers'Agent and each LIBOR Loan, subsequent to the end of the Fixed Rate Termapplicable thereto, shall become a Prime Rate Loan.

 

(b)           **Illegality:  Termination of Commitment**.  Notwithstanding any other provisions herein,if any Change of Law shall make it unlawful for any Lender (i) to make aLIBOR interest rate available, or (ii) to maintain LIBOR interest rateshereunder, then, in the former event, any obligation of such Lender to makeavailable such unlawful LIBOR interest rate shall be suspended until such timeas it is once again lawful to make such rate available, and in the latterevent, any such unlawful LIBOR interest rate then outstanding shall beconverted so that interest is determined in relation to the Prime Rate pursuantto the terms of this Agreement; provided, however, if any such Change in Lawshall permit a LIBOR interest rate until the expiration of the Fixed Rate Termrelating thereto, then such permitted LIBOR interest rate shall continue assuch until the end of such Fixed Rate Term. If as a result of this Section a LIBOR interest rate is converted to alower interest rate, Borrowers shall pay to each Lender immediately upon demandsuch amount or amounts as may be necessary to compensate such Lender for anyloss in connection therewith.

 

(c)           **Charges:  Illegality**.  Upon the occurrence of any event describedin Section 3.10(b) hereof, Borrowers shall pay to each Lender, on demand,such amount or amounts as may be necessary to compensate such Lender for anyfines, fees, charges, penalties or other amounts payable by such Lender as aresult thereof and that are attributable to LIBOR interest rates made availableto Borrowers hereunder.  In determiningwhich amounts payable by any Lender and/or losses incurred by any Lender areattributable to LIBOR interest rates made available to Borrowers hereunder, anyreasonable allocation made by any Lender among its operations shall, in theabsence of manifest error, be conclusive and binding upon Borrowers.

 

(d)           **IncreasedLIBOR Loan Costs, etc**. Borrowers shall reimburse each Lender for any increase in the cost tosuch Lender of, or any reduction in the amount of any sum receivable by suchLender in respect of, making, continuing or maintaining (or of its obligationto make, continue or maintain) any Loans as, or of converting (or of itsobligation to convert) any Loans into, LIBOR Loans which results from anyChange of Law announced after the Closing Date.  Such Lender shall promptly notify Administrative Lender andBorrowers' Agent in writing of the occurrence of any such event, such notice tostate, in reasonable detail, the reasons therefor, that substantially allsimilarly situated borrowers are being treated similarly and the calculation ofthe additional amount required fully to compensate such Lender for suchincreased cost or reduced amount.  Suchadditional amounts shall be payable by Borrowers directly to such Lender withinfive days of Borrowers' Agent's receipt of such notice, and such notice shall,in the absence of manifest error, be conclusive and binding on Borrowers.

 

(e)           **CapitalRequirements**.  If anyLender determines that any Change of Law regarding capital adequacy which isannounced after the Closing Date has or shall have the effect of reducing therate of return on the capital of such Lender (or any entity controlling suchLender) as a consequence of such Lender's obligations hereunder to a levelbelow that which such Lender or such entity would have achieved but for suchChange of Law (taking into consideration such Lender's or such entity'spolicies with respect to capital adequacy), by an amount deemed by such Lenderto be material, then from time to time, within fifteen days after demand bysuch Lender (with a copy to Administrative Lender) to Borrowers' Agent,Borrowers shall pay to such Lender or such entity such additional amounts asshall compensate such Lender or such entity for such reduction.  Any request by a Lender under thisSection shall set forth in reasonable detail the basis of the calculationof such additional amounts, shall state that substantially all similarlysituated borrowers are being treated similarly and shall, in the absence ofmanifest error, be conclusive and binding on Borrowers for all purposes.

## ** **

## **3.11                TAXES ONPAYMENTS**

 

(a)           **PaymentsFree of Taxes**.  Allpayments made by Borrowers under the Loan Documents shall be made free andclear of, and without deduction or withholding for or on account of, anypresent or future income, stamp or other taxes, levies, imposts, duties,charges, fees, deductions or withholdings, now or hereafter imposed, levied,collected, withheld or assessed by any Governmental Authority (except taxesbased on overall net income imposed on Administrative Lender or any Lender)(with all such non-excluded taxes, levies, imposts, duties, charges, fees,deductions and withholdings being hereinafter referred to herein as"Taxes").  Except to theextent that withholding results from a failure of a  Lender to comply with Section 3.11(b), if any Taxes are requiredto be withheld from any amounts payable to Administrative Lender or any Lenderunder the Loan Documents, the amounts so payable to Administrative Lender orsuch Lender shall be increased to the extent necessary to yield toAdministrative Lender or such Lender (after payment of all Taxes) interest orany such other amounts payable hereunder at the rates or in the amountsspecified in the Loan Documents. Whenever any Taxes are payable by Borrowers, as promptly as possiblethereafter, Borrowers' Agent shall send to Administrative Lender for its ownaccount or for the account of such Lender, as the case may be, a certified copyof an original official receipt received by Borrowers showing paymentthereof.  If Borrowers fail to pay anyTaxes when due to the appropriate taxing authority or Borrowers' Agent fails toremit to Administrative Lender the required receipts or other requireddocumentary evidence, Borrowers shall indemnify Administrative Lender andLenders for any incremental taxes, interest or penalties that may becomepayable by Administrative Lender or any Lender as a result of any suchfailure.  This Section shall survive thepayment in full and performance of all of Borrowers' other Obligations.

 

(b)           **WithholdingExemption Certificates**. Each Lender agrees that it will deliver to Borrowers' Agent andAdministrative Lender, upon the reasonable request of Borrowers' Agent orAdministrative Lender, either (i) a statement that it is incorporatedunder the laws of the United States of America or a state thereof, or(ii) if it is not so incorporated, two duly completed copies of theapplicable United States Internal Revenue Service form(s) certifying that suchLender is entitled to receive payments under this Agreement without deductionor withholding of any United States federal income taxes.

## ** **

## **3.12                FUNDING LOSS INDEMNIFICATION**

 

Borrowers will indemnify Lenders upon demand againstany loss or expense which Lenders may sustain or incur as a consequence of(a) any payment of any portion of the principal of a LIBOR Loan before thelast day of the Fixed Rate Term applicable thereto (whether through voluntaryprepayment, acceleration or otherwise), or (b)  any failure to borrow thefull amount of a requested LIBOR Loan set forth in any Notice of Borrowing orto convert or continue at the LIBOR interest option any portion of a Loan inaccordance with a Notice of Conversion or Continuation (in either event,whether as a result of the failure to satisfy any applicable conditions orotherwise).  The determination byAdministrative Lender of the amount payable under this Section shall, in theabsence of manifest error, be conclusive and binding on Borrowers for allpurposes.  In determining such amount,Administrative Lender may use any reasonable averaging and attribution methodsand each Lender shall be deemed to have actually funded and maintained allLIBOR Loans during the applicable Fixed Rate Term through the purchase ofdeposits having a term corresponding to such Fixed Rate Term and bearinginterest at a rate equal to LIBOR for such Fixed Rate Term.  This Section shall survive the payment infull and performance of all of Borrowers' other Obligations.

# ** **

# **ARTICLE IV.                ADMINISTRATION**

## ** **

## **4.1                  STATEMENTS**

From time to time, Administrative Lender may render toBorrowers' Agent a statement setting forth the balance in the loan account(s)maintained by Administrative Lender for Borrowers pursuant to this Agreement,including principal, interest, fees, costs and expenses.  Each such statement shall be subject tosubsequent adjustment by Administrative Lender but shall, absent manifesterrors or omissions, be considered correct and deemed accepted by Borrowers andconclusively binding upon Borrowers as an account stated except to the extentthat Administrative Lender receives notice from Borrowers' Agent of anyspecific exceptions thereto within thirty days after the date such statementhas been mailed by Administrative Lender. Until such time as Administrative Lender shall have rendered toBorrowers' Agent a written statement as provided above, the balance in the loanaccount(s) shall be presumptive evidence of the amounts due and owing toLenders by Borrowers.

## ** **

## **4.2                  PAYMENTS**

All amounts due under any of the Loan Documents shallbe payable to such account as Administrative Lender may designate from time totime.  Borrowers shall make all paymentsdue hereunder free and clear of, and without deduction or withholding for or onaccount of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,fees, deductions, withholding, restrictions or conditions of any kind.  If after receipt of any payment of, orproceeds of Collateral applied to the payment of, any of the Obligations anyLender is required to surrender or return such payment or proceeds to anyperson or entity for any reason, then the Obligations intended to be satisfiedby such payment or proceeds shall be reinstated and continue and this Agreementshall continue in full force and effect as if such payment or proceeds had notbeen received by such Lender.  Borrowershereby indemnify and hold Lenders harmless for the amount of any payments orproceeds surrendered or returned.  ThisSection shall remain effective notwithstanding any contrary action whichmay be taken by any Lender in reliance upon such payment or proceeds.  This Section shall survive the payment infull and performance of all of Borrowers' other Obligations.

# ** **

# **ARTICLE V.                 SECURITY**

## ** **

## **5.1                  GRANT OF SECURITY INTEREST**

 

Borrowers hereby grant to Administrative Lender, forthe benefit of and on behalf of Lenders, a security interest in all of theCollateral as security for the full and prompt payment in cash and performanceof the Obligations.

## ** **

## **5.2                  PERFECTION;DUTY OF CARE**

 

(a)           Untilall the Obligations have been fully satisfied and paid in cash and theCommitments terminated, Borrowers shall perform all steps requested byAdministrative Lender to perfect, maintain and protect Administrative Lender'ssecurity interest in the Collateral, including, without limitation,(i) executing and filing financing and continuation statements in form andsubstance satisfactory to Administrative Lender, and (ii) delivering allCollateral in which Administrative Lender's security interest may be perfectedby possession together with such indorsements as Administrative Lender mayrequest.  Borrowers hereby authorizeAdministrative Lender to execute and file UCC financing statements signed onlyby Administrative Lender, except to the extent prohibited by law.

 

(b)           AdministrativeLender shall have the right at all times, and from time to time, to contactBorrowers' account debtors to verify Rights to Payment; provided that at alltimes when a Default is not continuing, verifications shall be made underreasonable procedures directly with the obligors thereon.

 

(c)           Borrowersshall pay or cause to be paid all taxes, assessments and governmental chargeslevied or assessed or imposed upon or with respect to the Collateral or anypart thereof; provided, however, Borrowers shall not be required to pay any taxif the validity and/or amount thereof is being contested in good faith and byappropriate and lawful proceedings promptly initiated and diligently conductedand for which appropriate reserves have been established and so long as levyand execution have been and continue to be stayed.  If Borrowers fail to pay or so contest and reserve for suchtaxes, assessments and governmental charges, Administrative Lender may (butshall not be required to) pay the same and add the amount of such payment tothe principal of the Revolving Loans.

 

(d)           Inorder to protect or perfect the security interest granted under the LoanDocuments, Administrative Lender may discharge any Lien that is not a PermittedLien or bond the same, pay for any insurance that Borrowers have failed tomaintain as required by this Agreement, maintain guards, pay any servicebureau, or obtain any record and add the same to the principal of the RevolvingLoans.

 

(e)           AdministrativeLender shall have no duty of care with respect to the Collateral, except toexercise reasonable care with respect to the Collateral in its custody, butshall be deemed to have exercised reasonable care if such property is accordedtreatment either (i) substantially equal to that which it accords its ownproperty or (ii) as Borrowers' Agent requests in writing, provided that nofailure to comply with any such request nor any omission to do any such actrequested by Borrowers' Agent shall be deemed a failure to exercise reasonablecare.  Administrative Lender's failureto take steps to preserve rights against any parties or property shall not bedeemed to be a failure to exercise reasonable care with respect to theCollateral in its custody.

# ** **

# **ARTICLEVI.                REPRESENTATIONS ANDWARRANTIES**

 

Borrower makes the following representations andwarranties to Administrative Lender and Lenders, subject to the exceptions setforth on the Disclosure Letter, which representations and warranties shallsurvive the execution of this Agreement and shall continue in full force andeffect until the performance and payment in full, in cash, of all Obligations:

## ** **

## **6.1                  LEGAL STATUS; SUBSIDIARIES**

 

Each Borrower andSubsidiary is a corporation validly organized and existing and in good standingunder the laws of the jurisdiction of its incorporation, is duly qualified todo business and is in good standing as a foreign corporation in eachjurisdiction where the nature of its business requires such qualification, andhas full power and authority and holds all Permits and other approvals to enterinto and perform the Obligations and to own and hold under lease its propertyand to conduct its business substantially as currently conducted by it, exceptwhere the failure to have so qualified or have such power and authority couldnot reasonably be expected to have a Material Adverse Effect.  Except as otherwise disclosed in Section 6.1of the Disclosure Letter, Borrower has no Subsidiaries other than those whichit is permitted to acquire in accordance with Section 9.4 and does nototherwise own or hold, directly or indirectly, any Stock or Stock Equivalents.

## ** **

## **6.2                  DUE AUTHORIZATION; NO VIOLATION**

 

The execution,delivery and performance by each Obligor of the Loan Documents executed or tobe executed by it are within such Obligor's powers, have been duly authorizedby all necessary action, and do not (a) contravene such Obligor's OrganicDocuments; (b) contravene any contractual restriction or Governmental Rulebinding on or affecting such Obligor; or (c) result in, or require thecreation or imposition of, any Lien on any Obligor's or Subsidiary's property,except Liens for the benefit of Lenders.

## ** **

## **6.3                  GOVERNMENT APPROVAL REGUALATION**

 

No authorizationor approval or other action by, and no notice to or filing with, anyGovernmental Authority or other Person is required for the due execution,delivery or performance by any Obligor of the Loan Documents to which it is aparty.  No Borrower or Subsidiary is an"investment company" within the meaning of the Investment Company Actof 1940, as amended, or a "holding company", or a "subsidiarycompany" of a "holding company", or an "affiliate" ofa "holding company" or of a "subsidiary company" of a"holding company", within the meaning of the Public Utility HoldingCompany Act of 1935, as amended.  NoBorrower or Subsidiary is engaged in the business of extending credit for thepurpose of purchasing or carrying margin stock, and no proceeds of any Loanswill be used for a purpose which violates, or would be inconsistent with,Regulation U or X of the Board of Governors of the Federal Reserve System

## ** **

## **6.4                  VALIDITY; ENFORCEABILITY**

 

The Loan Documentsexecuted by each Obligor constitute, the legal, valid and binding obligationsof such Obligor enforceable in accordance with their respective terms.

## ** **

## **6.5                  CORRECTNESS OF FINANCIAL STATEMENT**S

 

The consolidatedfinancial statements of Parent and each Subsidiary dated as of June 30,2001 heretofore delivered by Borrowers' Agent to Administrative Lender,(a) present fairly in all material respects the financial condition andresults of operations of Parent and the Subsidiaries; (b) disclose allliabilities of Parent and the Subsidiaries that are required to be reflected orreserved against under GAAP, whether liquidated or unliquidated, fixed orcontingent; and (c) have been prepared in accordance with GAAPconsistently applied.  Except asdisclosed to Administrative Lender pursuant to Section 8.3, since the dateof such financial statements there has been no change or changes that haveresulted in a Material Adverse Effect.

## ** **

## **6.6                  TAXES**

 

Each Borrower andSubsidiary has filed, or caused to be filed, all federal, state, local andforeign tax returns required to be filed by it, and has paid, or caused to bepaid, all taxes as are shown on such returns, or on any assessment received byit, to the extent that such taxes have become due, except as otherwisecontested in good faith.  Borrower hasset aside proper amounts on its books, determined in accordance with GAAP, forthe payment of all taxes for the years that have not been audited by therespective tax authorities and for taxes being contested by it.

## ** **

## **6.7                 **LITIGATION, LABOR CONTROVERSIES

 

There is nopending or, to the knowledge of Borrower, threatened litigation, action,proceeding, or labor controversy affecting any Borrower or Subsidiary, or anyof their respective properties, businesses, assets or revenues, which couldreasonably be expected to have a Material Adverse Effect.  As of the Closing Date, no Borrower orSubsidiary is a party to, and has no obligations under, any collectivebargaining agreement.

## ** **

## **6.8                  TITLE TOPROPERTY, LIENS**

 

Each Borrower andSubsidiary has good, indefeasible, and merchantable title to and ownership ofthe Collateral and its real property, free and clear of all Liens, exceptPermitted Liens.

## ** **

## **6.9                  ERISA**

 

Each Borrower andSubsidiary is in compliance in all material respects with the applicableprovisions of ERISA.  No Borrower orSubsidiary has violated any provision of any Plan maintained or contributed toby it in a manner that could reasonably be expected to result in a MaterialAdverse Effect.  No "reportableevent" (as defined in Title IV of ERISA) has occurred and iscontinuing with respect to any Plan initiated by it.

## ** **

## **6.10                OTHEROBLIGATIONS**

 

No Borrower orSubsidiary is in default with respect to (i) any of its ContractualObligations default of which could reasonably be expected to result in aMaterial Adverse Effect or (ii) any Debt in excess of $1,000,000.

## ** **

## **6.11                ENVIRONMENTALMATTERS**

 

Each Borrower andSubsidiary is in compliance in all material respects with all EnvironmentalLaws applicable to it, other than such noncompliance as in the aggregate couldnot reasonably be expected to have a Material Adverse Effect.  No Borrower or Subsidiary has receivednotice that it is the subject of any federal or state investigation evaluatingwhether any Remedial Action is needed, except for such notices received that inthe aggregate do not refer to Remedial Actions that could reasonably beexpected to result in a Material Adverse Effect.  There have been no Releases by any Borrower or Subsidiary thatcould result in a Material Adverse Effect.

## ** **

## **6.12                NO BURDENSOME RESTRICTIONS; NO DEFAULTS**

 

(a)           No Borrower or Subsidiary is a partyto any Contractual Obligation the compliance with which could reasonably beexpected to have a Material Adverse Effect or the performance of which, eitherunconditionally or upon the happening of an event, will result in the creationof a Lien (other than Permitted Liens) on its property or assets.

 

(b)           No facts or circumstances exist whichwould constitute a breach of any obligation, representation or warranty ofBorrower hereunder if this Agreement were in effect immediately prior toBorrower's execution hereof.

 

(c)           There is no Governmental Rule thecompliance with which by any Borrower or Subsidiary could reasonably beexpected to have a Material Adverse Effect.
 
**6.13                NO OTHERVENTURES**
 

No Borrower orSubsidiary is engaged in any joint purchasing arrangement, joint venture,partnership or other joint enterprise with any other Person.

 
**6.14               **INSURANCE
 

All currentpolicies of insurance of any kind or nature owned by or issued to Borrower andthe Subsidiaries, including, without limitation, policies of fire, theft,product liability, public liability, property damage, other casualty, employeefidelity, workers' compensation and employee health and welfare insurance, arein full force and effect and are of a nature and provide such coverage as issufficient and as is customarily carried by companies of its size andcharacter.  No Borrower or Subsidiaryhas any reason to believe that it will be unable to comply withSection 8.5.

 
**6.15               **FORCEMAJEURE
 

No Borrower's orSubsidiary's business or properties is currently suffering from the effects ofany fire, explosion, accident, strike, lockout or other labor dispute, drought,storm, hail, earthquake, embargo, act of God or of the public enemy or othercasualty (whether or not covered by insurance), other than those theconsequences of which in the aggregate could not reasonably be expected to havea Material Adverse Effect.

 
**6.16               **INTELLECTUALPROPERTY
 

Each Borrower andSubsidiary owns or licenses or otherwise has the right to use all materiallicenses, Permits, patents, patent applications, trademarks, trademarkapplications, service marks, trade names, copyrights, copyright applications,franchises, authorizations and other intellectual property rights and GeneralIntangibles that are necessary for the operation of its businesses, withoutinfringement upon or conflict with the rights of any other Person with respectthereto, including, without limitation, all trade names, which infringement orconflict could reasonably be expected to have a Material Adverse Effect.  No slogan or other advertising device,product, process, method, substance, part or other material now employed, ornow contemplated to be employed, by any Borrower or Subsidiary infringes uponor conflicts with any rights owned by any other Person, which infringement orconflict could reasonably be expected to have a Material Adverse Effect, and noclaim or litigation regarding any of the foregoing is pending or, to itsknowledge, threatened, the existence of which could reasonably be expected tohave a Material Adverse Effect.  Nopatent, invention, device, application, principle or any statute, law, rule,regulation, standard or code is pending or, to its knowledge, proposed, otherthan those the consequences of which in the aggregate could not have a MaterialAdverse Effect.

 
******6.17               **CERTAININDEBTEDNESS
 

The DisclosureLetter identifies as of the Closing Date all Indebtedness of Parent and theSubsidiaries which is either (a) Debt or (b) which is material to thecondition (financial or otherwise), business, performance, operations orproperties of Borrowers and which was incurred outside of the ordinary courseof the business.

 
**6.18               **SOLVENCY
 

EachObligor has received consideration that is the reasonably equivalent value ofthe obligations and liabilities that it has incurred to Lenders.  Each Obligor is not insolvent as defined inany applicable state or federal statute, nor will it be rendered insolvent by theexecution and delivery of this Agreement or the other Loan Documents.  No Obligor intends to, nor does it believethat it will, incur debts beyond its ability to pay them as they mature.  Each Obligor has capital sufficient to carryon its business and transactions and all business and transactions in which itis about to engage.

 
**6.19               **CHIEFEXECUTIVE OFFICE AND OTHER LOCATIONS
 

Borrower's chiefexecutive office and principal place of business is set forth inSection 6.19 of the Disclosure Letter. Borrower's books and records are located at its chief executive office,and the only other offices and/or locations where it keeps the Collateral(except for inventory which is in transit) or conducts any of its business areset forth in Section 6.19 of the Disclosure Letter.

 
**6.20               **FISCALYEAR
 

Parent's fiscalyear ends on the Saturday closest to December 31.

 
**6.21               **COMPLIANCEWITH LAW
 

Each Borrower andSubsidiary is in compliance with all Governmental Rules and law, except wherethe failure to do so could not reasonably be expected to have a Material AdverseEffect.

 
**6.22               **NOSUBORDINATION
 

There is noagreement, indenture, contract or instrument to which any Borrower orSubsidiary is a party or by which it may be bound that requires thesubordination in right of payment of any of the Obligations to any otherobligation of it.

 
**6.23               **TRUTH, ACCURACY OFINFORMATION
 

All factualinformation furnished by each Borrower and Subsidiary to Administrative Lenderor any Lender in connection with the Loan Documents is accurate in all materialrespects and does not contain any untrue statement of a material fact or omitto state a material fact necessary in order to make the information furnished,in light of the circumstances under which furnished, not misleading (it beingrecognized that the projections and forecasts provided by Borrowers are not tobe viewed as facts and that actual results during the period covered by anysuch projections and forecasts may differ from the projected or forecastedresults).

 
******ARTICLE VII.              CONDITIONS**** ****7.1                  CONDITIONS OF INITIAL EXTENSION OFCREDIT**
 

The obligation of Lenders to extend any creditcontemplated by this Agreement is subject to the fulfillment to AdministrativeLender's satisfaction of all of the following conditions:

 

(a)           **Documentation**.Administrative Lender shall have received, in form and substance satisfactoryto it, each of the following duly executed:

 

(i)            thisAgreement, the Notes and such mortgages, deeds of trust and other securityinstruments as Administrative Lender may require;

 

(ii)           fromeach Obligor, a certificate of its secretary or assistant secretary dated as ofthe Closing Date as to: (A) resolutions of its board of directors or other governing bodythen in full force and effect authorizing the execution, delivery andperformance of each of the Loan Documents to be executed by it; (B) itsOrganic Documents, a copy of each of which is attached; and (C) theincumbency and signatures of those of its officers authorized to act withrespect to the Loan Documents to be executed by it;

 

(iii)          withrespect to each Obligor:  (A) fromthe Secretary of State (or other appropriate governmental official) of itsjurisdiction of incorporation or organization, a good standing certificate orcertificate of existence, as applicable, and a certified copy of its filedOrganic Documents; and (B) a certificate of good standing as a foreigncorporation in each jurisdiction described in Section 6.1;

 

(iv)          theopinion of Wilson Sonsini Goodrich & Rosati, P.C., counsel to Borrowers,and of Richard Bond, Parent's general counsel, as to such matters asAdministrative Lender and each Lender shall reasonably require; and

 

(v)           suchother documents as Administrative Lender and each Lender may require.

 

(b)           **FinancialCondition**.  There is noevent or circumstance that can reasonably be expected to have a MaterialAdverse Effect.

 

(c)           **Fees andExpenses**.  Borrowersshall have paid all fees and invoiced costs and expenses then due pursuant tothe terms of this Agreement.

 

(d)           **Insurance**.  Borrowers' Agent shall have delivered toAdministrative Lender evidence of the insurance coverage, including losspayable endorsements, required pursuant to Section 8.5.
** ****7.2                  CONDITIONS OF EACH EXTENSION OF CREDIT**
 

The obligation ofeach Lender to make any credit available under the Loan Documents (includingany Loan being made by such Lender on the Closing Date) shall be subject to thefurther conditions precedent that:

 

(a)           the following statements shall betrue on the date such credit is advanced, both before and after giving effectthereto and to the application of the proceeds therefrom, and the acceptance byBorrowers' Agent of the proceeds of such credit shall constitute arepresentation and warranty by Borrowers that on the date such credit isadvanced such statements are true:

 

(i)            the representations and warrantiesof Borrowers contained in the Loan Documents are correct in all materialrespects on and as of such date as though made on and as of such date or, as tothose representations and warranties limited by their terms to a specifieddate, were correct in all material respects on and as of such date; and

 

(ii)           no Default is continuing or wouldresult from the credit being advanced;

 

(b)           advancing such credit on such datedoes not violate any Governmental Rule and is not enjoined, temporarily,preliminarily or permanently;

 

(c)           Administrative Lender shall havereceived such additional documents, information and materials as any Lender,through Administrative Lender, may reasonably request; and

 

(d)           no event or circumstance exists thatcould reasonably be expected to have a Material Adverse Effect.
** ****ARTICLE VIII.             AFFIRMATIVE COVENANTS**
 

Borrowers covenant that so long as Lenders remaincommitted to extend credit to Borrowers pursuant to the terms hereof and untilperformance and payment in full, in cash, of all Obligations and termination ofthe Commitments, Borrowers shall:
** ****8.1                  PAYMENTS**
 

Pay all principal, interest, fees and otherliabilities due under any of the Loan Documents at the times and place and inthe manner specified therein.
** ********8.2                  ACCOUNTING RECORDS**
 

Keep, and cause each Subsidiary to keep, accuratebooks and records of its financial affairs sufficient to permit the preparationof financial statements therefrom in accordance with GAAP.
** ****8.3                  INFORMATION AND REPORTS**
 

Provide to Administrative Lender all of the following,in form and detail reasonably satisfactory to Administrative Lender and withsufficient copies for distribution to all Lenders:

 

(i)            assoon as available but not later than 100 days after and as of the end of eachfiscal year of Parent, a copy of the annual unqualified audit report for suchfiscal year for Parent and the Subsidiaries, including therein consolidatedbalance sheets of Parent and the Subsidiaries as of the end of such fiscal yearand consolidated statements of earnings and cash flow of Parent and theSubsidiaries for such fiscal year, in each case certified in a manneracceptable to Administrative Lender by independent public accountantsacceptable to Administrative Lender, together with a report from suchaccountants to the effect that, in making the examination necessary for thesigning of such annual report by such accountants, they have not become awareof any Default that has occurred and is continuing, or, if they have becomeaware of such Default, describing such Default and the steps, if any, of whichthey are aware being taken to cure it;

 

(ii)           assoon as available but not later than 50 days after and as of the end of each ofParent's first three fiscal quarters, nor later than 100 days after and as ofthe end of each of Parent's fourth fiscal quarters, consolidated andconsolidating balance sheets of Parent and the Subsidiaries as of the end ofsuch fiscal quarter and consolidated and consolidating statements of earningsand cash flow of Parent and the Subsidiaries for such fiscal quarter and forfiscal year-to-date, together with a comparison of Parent's financial conditionfor such quarter and year-to-date with the corresponding quarter andyear-to-date in Parent's immediately preceding fiscal year;

 

(iii)          contemporaneouslywith the delivery of each financial statement required hereby, a certificate ofParent's principal financial officer substantially in the form of Exhibit Fattached hereto (A) certifying that such financial statements fairly present inaccordance with GAAP such balance sheet as of the end of such quarter/year andincome and cash flow for such quarter/year and year-to-date (subject to normalyear-end adjustments and the absence of footnotes in the case of quarterlyfinancial statements), (B) stating that no Default existed at any timeduring the period covered by such statement, except for those events orconditions, if any, described in such certificate in reasonable detail togetherwith a statement of any action taken or proposed to be taken with respectthereto, and (C) setting forth the calculations required to establishcompliance by Borrowers with the covenants set forth in Article X;

 

(iv)          notlater than the end of each of Parent's fiscal years beginning with the fiscalyear ending in 2001, or sooner if available, Borrowers' Agent shall furnish toAdministrative Lender detailed projections setting forth Parent's projectedconsolidated income and cash flow for Parent's next fiscal year and for each ofParent's fiscal years through the Maturity Date and Parent's projectedconsolidated balance sheet as of the end of each such fiscal year, togetherwith a certificate of Parent's principal financial officer setting forth theassumptions on which such projections are based;

 

(v)           promptlyafter the sending or filing thereof, copies of all reports which Borrower sendsto any of its securityholders, and all reports and registration statementswhich any Borrower or Subsidiary files with the Securities and ExchangeCommission or any national securities exchange;

 

(vi)          aBorrowing Base Certificate not later than 30 days after and as of the end ofeach of Parent's fiscal quarters and not later than 30 days after and as of theend of each month in which the outstanding principal balance of the RevolvingLoans at any time exceeds 50% of the Borrowing Base; and

 

(vii)         fromtime to time such other information as Administrative Lender may reasonablyrequest.

 
** ****8.4                  COMPLIANCE**
 

Comply in all material respects, and cause eachSubsidiary to comply in all material respects, with all Governmental Rules,Contractual Obligations, commitments, instruments, licenses, Permits andfranchises, other than such noncompliance the consequences of which in theaggregate could not reasonably be expected to have a Material Adverse Effect.
** ****8.5                  INSURANCE**
 

(a)           Maintain,and cause each Subsidiary to maintain, insurance with insurance companiesreasonably acceptable to Administrative Lender with respect to its propertiesand business (including business interruption and extra expense endorsements)against such casualties and contingencies and of such types, with suchdeductibles and in such amounts as is customary in the case of similarbusinesses.  With respect to theinsurance maintained by Borrower: (i) such insurance shall contain a lender's loss payableendorsement acceptable to Administrative Lender and shall name AdministrativeLender as an additional named insured; (ii) the policies or a certificatethereof signed by the insurer shall be delivered to Administrative Lender withinten Business Days after the issuance or renewal of the policies to Borrower;(iii) each such policy shall provide that such policy may not be amended(except to increase coverage) or canceled without thirty days prior notice toAdministrative Lender; and (iv) at least five days before the expirationof a policy, Borrowers' Agent shall deliver to Administrative Lender a binder(or other evidence reasonably acceptable to Administrative Lender) indicatingthat such policy has been renewed or that a substitute for such policy will beissued effective upon the expiration of such policy.  If Borrowers' Agent fails to comply with the foregoing,Administrative Lender may (but shall not be required to) procure such insuranceand add the cost thereof to the Revolving Loans.

 

(b)           Maintain,and cause each Subsidiary to maintain, in full force and effect such liabilityand other insurance with respect to its activities as is customary in the caseof similar businesses or as may be reasonably required by Administrative Lender.  Such liability insurance maintained byBorrower shall name Administrative Lender as an additional insured with respectto the activities of Borrower and shall be provided by insurer(s) reasonablyacceptable to Administrative Lender.

 

(c)           Thefollowing is inserted pursuant to ORS 746.201:

** **

**WARNING**

** **

**                UnlessBorrowers provide Administrative Lender with evidence of the insurance coverageas required by this Agreement, Administrative Lender may purchase insurance atBorrowers' expense to protect Administrative Lender's interest.  This insurance may, but need not, alsoprotect Borrowers' interest.  If thecollateral becomes damaged, the coverage Administrative Lender purchases may notpay any claim Borrowers make or any claim made against Borrowers.  Borrowers may later cancel this coverage byproviding evidence that Borrowers have obtained property coverage elsewhere.**

** **

**                Borrowersare responsible for the cost of any insurance purchased by AdministrativeLender.  The cost of this insurance maybe added to Borrowers' contract or loan balance.  If the cost is added to Borrowers' contract or loan balance, theinterest rate on the underlying contract or loan will apply to this addedamount.  The effective date of coveragemay be the date Borrowers' prior coverage lapsed or the date Borrowers failedto provide proof of coverage.**

 

                **The coverage Administrative Lender purchases may beconsiderably more expensive than insurance Borrowers can obtain on its own andmay not satisfy any need for property damage coverage or any mandatoryliability insurance requirements imposed by applicable law.**
** ****8.6                  FACILITIES**
 

Keep, and causeeach Subsidiary to keep, all properties useful or necessary to its business ingood repair and condition, and from time to time make necessary repairs, renewalsand replacements thereto so that such property shall be fully and efficientlypreserved and maintained, except where the failure to do so could notreasonably be expected to have a Material Adverse Effect.
** ********8.7                  TAXES AND OTHER LIABILITIES**
 

Pay and discharge,and cause each Subsidiary to pay and discharge, when due any and allindebtedness, obligations, assessments and taxes, both real or personal,including without limitation Federal and state income taxes and state and localproperty taxes and assessments, except such as Borrower may in good faithcontest or as to which a bona fide dispute may arise, and for which Borrowershave made provision for adequate reserves in accordance with GAAP, except wherethe failure to do so could not reasonably be expected to have a MaterialAdverse Effect.
** ****8.8                  LITIGATION**
 

Promptly givenotice in writing to Administrative Lender of any litigation pending orthreatened in writing against any Borrower or Subsidiary with a claim in excessof $5,000,000 in the aggregate for Parent and all Subsidiaries.
** ****8.9                  NOTICE TO ADMINISTRATIVE LENDER**
 

(a)           Promptly (but in no event more thantwo Business Days after a Responsible Officer has knowledge of the occurrenceof each such event or matter) cause Borrowers' Agent to give notice toAdministrative Lender in reasonable detail of: (i) the occurrence of any Default; (ii) any termination orcancellation of any insurance policy which any Borrower or Subsidiary isrequired to maintain, unless such policy is replaced without any break incoverage with an equivalent or better policy; (iii) any uninsured orpartially uninsured loss or losses through liability or property damage, orthrough fire, theft or any other cause affecting the property of any Borroweror Subsidiary in excess of an aggregate of $10,000,000 during any twelve monthperiod; (iv) any change in the Organic Documents of any Borrower orSubsidiary; (v) the occurrence of any adverse development with respect toany litigation, action, proceeding, or labor controversy described in Section6.7 or the commencement of any labor controversy, litigation, action,proceeding of the type described in Section 6.7 together with copies ofall documentation relating thereto; or (vi) the occurrence of any eventthat could have a Material Adverse Effect.

 

(b)           As soon as possible and in any eventwithin ten days after Borrower knows or has reason to know that any"reportable event" (as defined in Title IV of ERISA) thattriggers an obligation to file a notice with the PBGC with respect to any Planhas occurred, cause Borrowers' Agent to deliver to Administrative Lender astatement of the President or principal financial officer of Parent settingforth details as to such reportable event and the action which Borrowerspropose to take with respect thereto, together with a copy of the notice ofsuch reportable event to the PBGC.

 

(c)           Promptly, upon receipt (but in noevent more than ten Business Days after receipt) of a notice by Borrower, anyaffiliate of any Borrower or any administrator of any Plan that the PBGC hasinstituted proceedings to terminate a Plan or to appoint a trustee toadminister a Plan, cause Borrowers' Agent to provide to Administrative Lender acopy of such notice.
** ********8.10                CONDUCTOF BUSINESS**
 

Except asotherwise permitted by this Agreement, (a) conduct, and cause eachSubsidiary to conduct, its business in the ordinary course and (b) use,and cause each Subsidiary to use, its reasonable efforts in the ordinary courseand consistent with past practice to (i) preserve its business and thegoodwill and business of the customers, advertisers, suppliers and others withwhom it has business relations and (ii) keep available the services andgoodwill of its present employees. Notwithstanding the foregoing, any Borrower may liquidate or merge withand into Parent.
** ****8.11                PRESERVATIONOF CORPORATE EXISTENCE, ETC.**
 

Except to theextent that the failure to do so could not reasonably be expected to have aMaterial Adverse Effect, preserve and maintain, and cause each Subsidiary topreserve and maintain, all licenses, Permits, governmental approvals, rights,privileges, franchises and General Intangibles necessary for the conduct of itsbusiness, and its corporate existence and rights (charter and statutory).
** ****8.12                ACCESS**
 

(a)           At such reasonable times asdetermined by Administrative Lender and upon at least two Business Days priornotice from Administrative Lender (unless a Default shall have occurred and becontinuing, in which case no prior notice is necessary), permit Lender and/orany of Lender's agents or representatives, to (i) examine and make copiesof and abstracts from each Borrower's and Subsidiary's records and books ofaccount, (ii) visit each Borrower's and Subsidiary's properties, (iii)discuss each Borrower's and Subsidiary's affairs, finances and accounts withany of its officers or directors who may then be reasonably available,(iv) communicate directly with each Borrower's and Subsidiary'sindependent certified public accountants, (v) arrange for verification ofBorrower's Rights to Payment under reasonable procedures directly with theobligors thereon or by other methods, and (vi) examine and inspect eachBorrower's and Subsidiary's assets. Each Borrower and Subsidiary shall authorize its independent certifiedpublic accountants to disclose to Lender any and all financial statements andother information of any kind, including, without limitation, copies of anymanagement letter, work papers or the substance of any oral information thatsuch accountants may have with respect to the business, financial condition,results of operations or other affairs of each Borrower and Subsidiary.

 

(b)           Borrower shall execute and deliver atthe request of Administrative Lender such instruments as may be necessary forAdministrative Lender or any Lender to obtain such information concerning thebusiness of each Borrower and Subsidiary as Administrative Lender or any Lendermay reasonably require from accountants, service bureaus or others havingcustody of or maintaining records or assets of any Borrower or Subsidiary,provided that the foregoing shall not (and is not intended to) require anyBorrower or Subsidiary to take any action that would constitute a waiver of anyBorrower's or Subsidiary's attorney/client privilege.
** ********8.13                PERFORMANCE AND COMPLIANCE WITH OTHERCOVENANTS**
 

Perform andobserve, and cause each Subsidiary to perform and observe, all the terms,covenants and conditions required to be performed and observed by it under itsContractual Obligations, and do all things necessary to preserve and to keepunimpaired its rights under such Contractual Obligations, other than suchfailures the consequences of which in the aggregate could not reasonably beexpected to have a Material Adverse Effect.
** ****8.14                FISCAL YEAR; ACCOUNTING PRACTICES**
 

NotifyAdministrative Lender at least 30 days in advance of any action any Borrower orSubsidiary intends to take to change (i) its fiscal year or (ii) itsmethod of accounting, or any accounting practice used by it, or the applicationof GAAP in a manner inconsistent with the financial statements previouslydelivered by it to Administrative Lender.
** ****8.15                ENVIRONMENTAL**
 

(a)           Promptly give notice toAdministrative Lender upon a Responsible Officer obtaining knowledge of(i) any claim, injury, proceeding, investigation or other action,including a request for information or a notice of potential environmentalliability, by or from any Governmental Authority or any third-party claimantthat could result in any Borrower or Subsidiary incurring Environmental Liabilitiesand Costs that could reasonably be expected to have a Material Adverse Effector (ii) the discovery of any Release at, on, under or from any realproperty, facility or equipment owned or leased by any Borrower or Subsidiaryin excess of reportable or allowable standards or levels under any applicableEnvironmental Law, or in any manner or amount that could result in any Borroweror Subsidiary incurring Environmental Liabilities and Costs that couldreasonably be expected to have a Material Adverse Effect.

 

(b)           Upon discovery of the presence on anyproperty owned or leased by any Borrower or Subsidiary of any Contaminant thatreasonably could be expected to result in Environmental Liabilities and Coststhat could reasonably be expected to have a Material Adverse Effect, take allRemedial Action required by applicable Environmental Law.
** ****8.16               **LIENS
 

Keep theCollateral and all of its real property free and clear of all Liens, exceptPermitted Liens.
** ********8.17               **FUTURE SUBSIDIARIES
 

Upon any Personbecoming a Subsidiary after the Closing Date, notify Administrative Lender ofsuch event, and execute and deliver, and cause such Subsidiary to execute anddeliver, such additional Loan Documents as Administrative Lender may reasonablyrequire, including such as are necessary to cause any such Subsidiary which isnot a Foreign Subsidiary to become a "Borrower."
** ****8.18                USE OFPROCEEDS**
 

Use the proceedsof the Loans solely for Borrowers' general working capital and corporatepurposes.
** ****8.19                FURTHERASSURANCES**
 

AtAdministrative Lender's request at any time and from time to time, duly executeand deliver, and cause each Subsidiary to execute and deliver, such furtheragreements, documents and instruments, and do or cause to be done such furtheracts as may reasonably be necessary or proper to evidence, perfect, maintainand enforce the security interests and the priority thereof in the Collateraland to otherwise effectuate the provisions or purposes of the Loan Documents,at Borrowers' expense.  AdministrativeLender may at any time and from time to time request a certificate fromBorrowers' Agent representing that all conditions precedent to the advancementof credit contained herein are satisfied. In the event of such request by Administrative Lender, each Lender maycease to make any further advancements of credit until Administrative Lenderhas received such certificate and Administrative Lender has determined thatsuch conditions are satisfied.
** ****ARTICLE IX.                NEGATIVECOVENANTS**
 

Borrowers covenant that so long as Lenders remaincommitted to extend credit to Borrowers pursuant to the terms hereof and untilperformance and payment in full, in cash, of all Obligations and termination ofthe Commitments, Borrowers will not:
** ****9.1                  LIENS**
 

Create or suffer to exist, or permit any Subsidiary tocreate or suffer to exist, any Lien upon or with respect to any of itsproperties (including, without limitation any real property), whether now ownedor hereafter acquired, or assign any right to receive income, except PermittedLiens.
** ****9.2                  INDEBTEDNESS**
 

Create or suffer to exist, or permit any Subsidiary tocreate or suffer to exist, any Debt or other Indebtedness that is not Debt,except:

 

(a)           theObligations;

 

(b)           currentliabilities in respect of taxes, assessments and governmental charges or leviesincurred, or liabilities for labor, materials, inventory, services, suppliesand rentals incurred, or for goods or services purchased, in the ordinarycourse of business consistent with past practice and industry practice inrespect of arm's length transactions;

 

(c)           Debtoutstanding on the Closing Date and referenced on Section 6.17 of theDisclosure Letter and all renewals, extensions, refinancing or refunding ofsuch Indebtedness in a principal amount which does not exceed the principalamount outstanding immediately before such refinancing, together with allprepayment fees, penalties and expenses in respect of the Indebtedness beingrenewed, extended, refinanced or refunded, provided each such renewal,extension, refinancing or refunding is on terms and conditions no lessfavorable to the creditors than the Indebtedness being renewed, extended,refinanced or refunded;

 

(d)           Debtsubordinated in writing to the Obligations on terms acceptable to RequiredLenders in favor of the prior payment in full in cash of the Obligations;

 

(e)           purchasemoney Debt (including Capitalized Leases and Other Leases) to finance thepurchase of fixed assets (including equipment); provided that (i) thetotal of all such Indebtedness (exclusive of such Indebtedness for the purchaseof chassis and the Indebtedness referred to in clause (c) above) shall notexceed an aggregate principal amount of $5,000,000 at any one time outstanding;(ii) such Indebtedness when incurred shall not exceed the purchase priceof the assets financed; (iii) no such Indebtedness shall be refinanced for aprincipal amount in excess of the principal balance outstanding thereon at thetime of such refinancing; and (iv) no Default exists at the time suchIndebtedness is incurred;

 

(f)            Indebtednessunder Interest Rate Contracts, Commodity Contracts and foreign exchangeagreements permitted under Section 9.13;

 

(g)           RepurchaseObligations;

 

(h)           Debtof any Borrower to another Borrower to the extent such Debt is permitted underSection 9.5;

 

(i)            Indebtednessincurred in the ordinary course of business for the purchase of chassis;

 

(j)            otherIndebtedness not to exceed 20% of Tangible Net Worth at any time, provided thatno Default exists or is created by incurrence of such Indebtedness; and

 

(k)           Contingent Obligations in connectionwith Approved Dealer Financing Agreements.

The foregoing notwithstanding, in no event mayContingent Obligations of Borrowers in respect of ORA at any time exceed$11,500,000.
** ********9.3                  RESTRICTEDPAYMENTS, REDEMPTIONS**
 

Do any of thefollowing at any time a Default is continuing or if after giving effect to anysuch action a Default would be caused by such action:

 

(a)           declare or make any dividend paymentor other distribution of assets, properties, cash, rights, obligations or securitieson account or in respect of any of its Stock or Stock Equivalents except(i) dividends paid to Borrower or (ii) dividends paid by Parentsolely in Stock or Stock Equivalents of Parent; or

 

(b)           purchase, redeem or otherwise acquirefor value any of Parent's Stock or Stock Equivalents, except that(i) Parent may convert any of its convertible securities of the type inexistence on the Closing Date into other securities pursuant to the terms ofsuch convertible securities or otherwise in exchange therefor and (ii) forso long as a Default is not continuing and would not be caused by such action,Parent may repurchase stock from employees or former employees of Borrowers inaccordance with the terms of repurchase agreements between Borrowers and theiremployees or former employees.
** ****9.4                  MERGERS,STOCK ISSUANCES, SALE OF ASSETS, ETC.**
 

Except aspermitted in Section 9.5(h) and (i):

 

(a)           Merge or consolidate with, or permitany Subsidiary to merge or consolidate with, any Person or acquire all orsubstantially all of the Stock or Stock Equivalents of any Person; provided anyBorrower may liquidate or dissolve voluntarily into, and may merge with andinto, or have its stock otherwise acquired by Parent and any Subsidiary otherthan a Borrower may liquidate or dissolve voluntarily into, and may merge withand into, or have its stock otherwise acquired by Parent or any otherSubsidiary that is not a Foreign Subsidiary;

 

(b)           Acquire all or substantially all, orpermit any Subsidiary to acquire all or substantially all of (i) theassets of any Person or (ii) the assets constituting the business of adivision, branch or other unit operation of any Person; provided any Subsidiarymay acquire all or substantially all of the assets of (or the assets constitutingthe business of a division, branch or other unit operation of) any otherSubsidiary that is not a Foreign Subsidiary; or

 

(c)           Sell, convey, transfer, lease orotherwise dispose of, or permit any Subsidiary to sell, convey, transfer, leaseor otherwise dispose of, any of its assets or any interest therein to anyPerson, or permit or suffer any other Person to acquire any interest in any ofits assets, except (i) Permitted Liens, (ii) as otherwise permittedunder item (a) or (b) above, or (iii) the sale or disposition of inventoryin the ordinary course of business and/or assets which have become obsolete,unneeded or are replaced in the ordinary course of business.
** ****9.5                  INVESTMENTS**
 

Make, incur,assume or suffer to exist any Investment in any other Person, except, withoutduplication:

 

(a)           Investments existing on the ClosingDate and identified in Section 9.5 of the Disclosure Letter;

 

(b)           Cash Equivalent Investments (providedthat any Investment which when made complies with the requirements of thedefinition of the term "Cash Equivalent Investment" may continue tobe held notwithstanding that such Investment if made thereafter would notcomply with such requirements);

 

(c)           Investments permitted as Indebtednesspursuant to Section 9.2;

 

(d)           Investments consisting of employeerelocation loans and other loans to employees, officers or directors for thepurchase of equity securities of Parent;

 

(e)           in the ordinary course of business,Investments by Borrower or any Subsidiary in any Subsidiary that is not aForeign Subsidiary (or, with the prior written consent of Administrative Lender(which consent will not be unreasonably withheld), any Subsidiary that is aForeign Subsidiary), by way of contributions to capital or loans or advances,provided that immediately before and after giving effect thereto no Default iscontinuing;

 

(f)            Investments (including debtobligations) received in connection with the bankruptcy or reorganization ofcustomers or suppliers in settlement of obligations of, or disputes with, suchPersons arising in the ordinary course of business;

 

(g)           Investments arising under InterestRate Contracts, Commodity Contracts and foreign exchange agreements permittedhereunder;

(h)           subject to the dollar limitations setforth below, any acquisition of (1) all or substantially all of the Stockor Stock Equivalents of any Person (whether by purchase or merger),(2) all or substantially all of the assets of any Person or (3) allor substantially all of the assets constituting the business of a division, branchor other unit operation of any Person; provided that immediately before andafter giving effect thereto no Default is continuing and provided further, that(A) after combining Parent's consolidated actual and projected financialperformance with the actual and projected financial performance of the"Entity" (as defined below) on a pro forma, consolidated basis in amanner acceptable to Administrative Lender, Administrative Lender is satisfiedthat no Default would have occurred or will occur as a result of such acquisition,(B) the Entity is located in and organized under the laws of Canada, ajurisdiction in Canada, the United States or a jurisdiction in the UnitedStates, (C) the Entity is not a Foreign Subsidiary or, if it is or wouldbe a Foreign Subsidiary, not without first obtaining the written consent ofAdministrative Lender, which consent will not be unreasonably withheld and(D) such acquisition is a consensual acquisition and not a hostiletake-over or other non-negotiated acquisition. "Entity" means the entity which is the subject of suchacquisition or which is the seller of assets in connection with suchacquisition; and

 

(i)            subject to the dollar limitationsset forth below, other Investments provided that immediately before and aftergiving effect thereto no Default is continuing.

 

The aggregateconsideration paid in cash or property (other than common Stock and commonStock Equivalents of Parent) for all acquisitions and other Investmentspermitted under clauses (h) and (i) above shall not (after taking into accountany losses incurred on Investments made under clause (i)) at any time exceed20% of Tangible Net Worth.  Theforegoing notwithstanding, in no event may Investments of Borrowers in ORA atany time exceed $10,000,000.
** ****9.6                  CHANGE IN NATURE OF BUSINESS**
 

Directly orindirectly engage, or permit any Subsidiary to directly or indirectly engage,in any business activity other than the type of business activities in whichBorrowers are currently engaged and activities reasonably related thereto.
** ****9.7**                  PLANS
 

(a)           Adopt or become obligated tocontribute to, or permit any Subsidiary to adopt or become obligated tocontribute to, any Plan subject to Title IV or any multi-employer Plan orany other Plan subject to Section 412 of the Internal Revenue Code (exceptfor any such Plan listed on the Disclosure Letter on the Closing Date),(b) establish or become obligated with respect to, or permit anySubsidiary to establish or become obligated to contribute to, any new welfarebenefit Plan, or modify any existing welfare benefit Plan, which is reasonablylikely to result in an increase of the present value of future liabilities forpost-retirement life insurance and medical benefits, or (c) establish orbecome obligated to contribute to, or permit any Subsidiary to establish orbecome obligated to contribute to, any new unfunded pension Plan, or modify anyexisting unfunded pension Plan, which is reasonably likely to result in anincrease in the present value of future unfunded liabilities under all suchplans.
** ****9.8                  CANCELLATION OF INDEBTEDNESS OWED TO IT**
 

Cancel, or permitany Subsidiary to cancel, any claim or Indebtedness owed to it except forlegitimate business purposes in the reasonable judgment of Borrowers and in theordinary course of business.
** ****9.9                  MARGINREGULATIONS**
 

Use, or permit anySubsidiary to use, the proceeds of any Loan to purchase or carry any marginstock (within the meaning of Regulation U of the Board of Governors of theFederal Reserve System).
** ****9.10                ENVIRONMENTAL**
 

Permit any lesseeor any other Person to dispose of any Contaminant by placing it in or on theground or waters of any property owned or leased by any Borrower or Subsidiary,except in material compliance with Environmental Law or the terms of any Permitor other than those that in the aggregate could not reasonably be expected tohave a Material Adverse Effect.
** ********9.11                TRANSACTIONS WITH AFFILIATES**
 

Enter, or permitany Subsidiary to enter, into any transaction directly or indirectly with orfor any affiliate of Borrower (other than another Borrower or any Subsidiarythat is not a Foreign Subsidiary) except (a) in the ordinary course ofbusiness on a basis no less favorable to such affiliate than would be obtainedin a comparable arm's length transaction with a Person not an affiliate ofBorrower or (b) any transaction involving assets that are not material tothe business and operations of Borrowers or the Subsidiaries.
** ****9.12                NEW COLLATERAL LOCATION; NAME CHANGE**
 

Open any newlocation or change its name, or permit any Subsidiary to do so, unless(a) Borrowers' Agent gives Administrative Lender (i) 30 days priornotice of the intended name change, (ii) 30 days prior notice of theintended opening of such new location, and (b) Borrowers execute andBorrowers' Agent delivers to Administrative Lender such agreements, documentsand instruments as Administrative Lender deems reasonably necessary ordesirable to protect its interests in the Collateral.
** ****9.13                NO SPECULATIVE TRANSACTIONS**
 

Engage in, orpermit any Subsidiary to engage in, any Commodity Contract, Interest RateContract or foreign exchange agreement, except for hedging purposes withrespect to transactions engaged in by Borrowers in the ordinary course ofbusiness and not for speculative purposes.
** ****ARTICLE X.                 FINANCIALCOVENANTS**** ****10.1                LEVERAGERATIO**
 

As of the end of each fiscal quarter ending in 2001,Parent shall maintain a Leverage Ratio not greater than 2.00:1.  As of the end of each fiscal quarter endingafter 2001 and before July 1, 2002, Parent shall maintain a Leverage Rationot greater than 1.75:1.  As of the endof each fiscal quarter ending after June 30, 2002, Parent shall maintain aLeverage Ratio not greater than 1.50:1.
** ****10.2                CURRENTRATIO**
 

As of the end of each fiscal quarter, Parent shallmaintain a Current Ratio not less than 1.1:1.
** ********10.3                FIXED CHARGE COVERAGE RATIO**
 

As of the end of each fiscal quarter, Parent shallmaintain a Fixed Charge Coverage Ratio not less than 1.5:1.
** ****10.4                TANGIBLENET WORTH**
 

Parent will not permit its Tangible Net Worth as ofthe end of any fiscal quarter to be less than the total of (i) 90% of TangibleNet Worth as of September 29, 2001 plus (ii) 50% of the sum ofParent's consolidated net income for each fiscal quarter sinceSeptember 29, 2001 (exclusive of any fiscal quarter in which Parent'sconsolidated net income is less than zero).
** ****ARTICLE XI.                EVENTS OF DEFAULT**** ****11.1                EVENTS OF DEFAULT**
 

The occurrence ofany of the following shall constitute an "Event of Default" underthis Agreement:

 

(a)           any Obligor shall fail to pay whendue any principal amount payable under the Loan Documents, shall fail to payany interest payable under the Loan Documents within 10 days of the due datetherefor, or shall fail to pay any other amount payable under the LoanDocuments within 3 days of the due date therefor;

 

(b)           any financial statement orcertificate furnished to Administrative Lender or any Lender in connectionwith, or any representation or warranty made by any Obligor under any of theLoan Documents shall prove to be false or misleading in any material respectwhen furnished or made;

 

(c)           Borrowers or Borrowers' Agent shallfail to provide any certificate, report or other information which it isrequired to provide pursuant to Section 8.3 or Section 8.9 on thedate specified in Section 8.3 or Section 8.9; provided that unlessBorrowers and Borrowers' Agent have previously failed to provide any requiredcertificate, report or other information by the required date on two prioroccasions within the preceding 12 months such failure shall be considered anEvent of Default only if Borrowers and Borrowers' Agent fail to provide suchcertificate, report or other information within five Business Days (twoBusiness Days with respect to Section 8.9(a)) of the earlier of(i) the date an officer of Borrower has knowledge of the failure to soprovide such certificate, report or other information, or (ii) the dateAdministrative Lender, at the request of a Lender, notifies Borrowers' Agent ofsuch failure;

 

(d)           any default by Borrowers in theperformance of or compliance with any obligation, agreement or other provisioncontained in Sections 5.2(a), 8.5, 8.10, 8.11, 8.12, 8.14, 8.16, 8.17,9.1, 9.2, 9.3, 9.4, 9.5, 9.6 and 9.12 and contained in Article X;

 

(e)           any default by any Obligor in theperformance of or compliance with any obligation, agreement or other provisioncontained in any Loan Document (other than those referred to in subsections (a)through (d) above) for 30 days after notice thereof has been given toBorrowers' Agent by Administrative Lender;

 

(f)            any breach(es) by any Obligor in thepayment or performance of any other obligation(s) under the terms of anycontract(s) or instrument(s) (other than any of the Loan Documents) evidencingIndebtedness in excess of $5,000,000 in the aggregate if such breach(es)has/have not been cured to the satisfaction of the affected creditor(s) orwaived by such creditor(s) within any applicable cure period provided under thecontract(s) or instrument(s);

 

(g)           any judgment(s) or order(s) for thepayment of money in excess of $5,000,000 in the aggregate shall be renderedagainst one or more Obligors and Subsidiaries and either (i) enforcementproceedings shall have been commenced by any creditor upon any such judgment ororder; or (ii) there shall be any period of 10 consecutive days duringwhich a stay of enforcement of any such judgment or order, by reason of apending appeal or otherwise, shall not be in effect;

 

(h)           any Obligor becomes insolvent, orsuffers or consents to or applies for the appointment of a receiver, trustee,custodian or liquidator of itself or any of its property, or is generallyunable to or fails to pay its debts as they become due, or makes a generalassignment for the benefit of creditors; any Obligor files a voluntary petitionin bankruptcy, or seeks to effect a plan or other arrangement with creditors orany other relief under the Bankruptcy Code or under any state or other Federallaw granting relief to debtors, whether now or hereafter in effect; or anyinvoluntary petition or proceeding pursuant to the Bankruptcy Code or any otherapplicable state or Federal law relating to bankruptcy, reorganization or otherrelief for debtors is filed or commenced against any Obligor and is notdismissed, stayed or vacated within 60 days thereafter or any Obligor files ananswer admitting the jurisdiction of the court and the material allegations ofany such involuntary petition; any Obligor is adjudicated a bankrupt, or anorder for relief is entered by any court of competent jurisdiction under theBankruptcy Code or any other applicable state or Federal law relating tobankruptcy, reorganization or other relief for debtors; or any Obligor takesany corporate, partnership or company action authorizing, or in furtherance of,any of the foregoing;

(i)            if any of the following eventsoccur:  (1) any Plan incurs any"accumulated funding deficiency" (as defined in ERISA) whether waivedor not, (2) Parent or any affiliate of Parent engages in any "prohibitedtransaction" (as defined in ERISA), (3) any Plan is terminated,(4) a trustee is appointed by an appropriate United States district courtto administer any Plan, or (5) the PBGC institutes proceedings toterminate any Plan or to appoint a trustee to administer any Plan;

 

(j)            the dissolution or liquidation ofany Obligor, or any Obligor or its directors or stockholders shall take actionseeking to effect the dissolution or liquidation of any Obligor;

 

(k)           any Change in Control; or

 

(l)            any Loan Document, or any Liengranted thereunder, shall (except in accordance with its terms), in whole or inpart, terminate, cease to be effective or cease to be the legally valid,binding and enforceable obligation of any Obligor party thereto; any Obligorshall, directly or indirectly, contest in any manner such effectiveness, validity,binding nature or enforceability; or any Lien securing any Obligation shall, inwhole or in part, cease to be a perfected first priority Lien, subject only tothose exceptions expressly permitted by such Loan Document.
** ****11.2                REMEDIES**
(a)           During the continuance of any Eventof Default (other than an Event of Default referred to inSection 11.1(h)), Administrative Lender may, with the consent of theRequired Lenders, or shall, upon instructions from the Required Lenders, bynotice to Borrowers' Agent, (i) terminate the obligations of Lenders toextend any further credit under any of the Loan Documents, and(ii) declare all or any part of the Obligations to be immediately due andpayable without presentment, demand, protest or any other notice of any kind,all of which are hereby expressly waived by Borrowers, and/or take suchenforcement action as is permitted under this Section.  Upon the occurrence or existence of anyEvent of Default described in Section 11.1(h), immediately and withoutnotice, (A) the obligations, if any, of Lenders to extend any furthercredit under any of the Loan Documents shall automatically cease and terminate,and (B) all indebtedness of Borrowers under the Loan Documents shallautomatically become immediately due and payable, without presentment, demand,protest or any other notice of any kind, all of which are hereby expresslywaived by Borrowers.  Immediately aftertaking any action under this Section, Administrative Lender shall notify eachLender of such action.

(b)           During the continuance of an Event ofDefault, Administrative Lender, in addition to any other rights and remediescontained in the Loan Documents, shall have all of the rights and remedies of asecured party under the Code and all other applicable law, all of which rightsand remedies shall be cumulative and nonexclusive to the extent permitted bylaw.  Administrative Lender may causethe Collateral to remain on Borrower's premises, at Borrowers' expense, pendingsale or other disposition thereof. Administrative Lender shall have the right to conduct such sales onBorrower's premises or elsewhere, at Borrowers' expense, on such occasion(s) asAdministrative Lender may see fit, and Borrowers, at Administrative Lender'srequest, will, at Borrowers' expense, assemble the Collateral and make itavailable to Administrative Lender at such place(s) as Administrative Lendermay reasonably designate from time to time. Any sale, lease or other disposition by Administrative Lender of theCollateral, or any part thereof, may be for cash or other value.  Borrowers shall execute and deliver, orcause to be executed and delivered, such instruments, documents, assignments,deeds, waivers, certificates and affidavits and take such further action asAdministrative Lender shall reasonably require in connection with such sale,and Borrower hereby constitutes Administrative Lender as its attorney-in-factto execute any such instrument, document, assignment, deed, waiver, certificateor affidavit on behalf of Borrower and in its name.  At any sale of the Collateral, the Collateral to be sold may besold in one lot as an entirety or in separate lots as Administrative Lender maydetermine.  Administrative Lender shallnot be obligated to make any sale of any Collateral if it determines not to doso, regardless of the fact that notice of sale was given.  Administrative Lender may, without notice orpublication, adjourn any public or private sale or cause the sale to beadjourned from time to time by announcement at the time and place fixed forsale, and such sale may, without further notice, be made at the time and placeto which it is so adjourned.  In caseany sale of Collateral is made on credit or for future delivery, the Collateralso sold may be retained by Administrative Lender until the sale price is paid,but Administrative Lender shall not incur any liability if any purchaser failsto pay for any Collateral so sold and, in case of any such failure, suchCollateral may be sold again.  At any publicsale, any Lender (i) may bid for or purchase the Collateral offered for salefree (to the extent permitted by law) from any rights of redemption, stay orappraisal on the part of Borrower with respect to the Collateral, (ii) makepayment on account thereof by using any claim then due and payable to suchLender from Borrower as a credit against the purchase price, and (iii) uponcompliance with the terms of sale, hold, retain and dispose of such propertywithout further accountability to Borrower therefor.  Borrowers acknowledge that portions of the Collateral may bedifficult to preserve and dispose of and may be subject to complex maintenanceand management; accordingly, Administrative Lender shall have the widestpossible latitude in the exercise of its rights and remedies hereunder.

 

(c)           Administrative Lender is herebygranted a license and right to use, without charge upon the occurrence andduring the continuance of an Event of Default and until the Obligations arefully and finally paid in cash and the Commitments terminated, Borrowers' labels,patents, copyrights, rights of use of any name, trade secrets, trade names,trademarks, service marks, advertising material, General Intangibles and anyother property of a similar nature in completing the production, advertisingfor sale and sale of any Collateral.

(d)           Any notice required to be given byAdministrative Lender with respect to any of the Collateral, which notice isgiven pursuant to Section 13.1 and deemed received pursuant toSection 13.1 at least five Business Days before a sale, lease, dispositionor other intended action by Administrative Lender with respect to any of theCollateral, shall constitute fair and reasonable notice to Borrowers of anysuch action.  A public sale in thefollowing fashion shall be conclusively presumed to be reasonable:  (i) the sale is held in a county whereany part of the Collateral is located or in which Borrower has a place ofbusiness; (ii) the sale is conducted by auction, but it need not be by aprofessional auctioneer; (iii) any Collateral is sold as is and withoutany preparation for sale; and (iv) Borrowers' Agent is given notice ofsuch public sale pursuant to the preceding sentence.

(e)           Upon the occurrence and during thecontinuance of an Event of Default, Administrative Lender shall have, withrespect to Rights to Payment, all rights and powers to:  (i) direct any and all account debtorsto make all payments in respect of the Rights to Payment directly toAdministrative Lender or otherwise demand payment of any or all of the Rightsto Payment; (ii) enforce payment of any or all of the Rights to Payment bylegal proceedings or otherwise; (iii) exercise Borrower's rights and remedieswith respect to any actions or proceedings brought to collect a Right toPayment; (iv) sell or assign any Right to Payment upon such terms, forsuch amount and at such time or times as Administrative Lender deems advisable;(v) settle, adjust, compromise, extend or renew a Right to Payment; (vi)discharge or release any Right to Payment; and (vii) prepare, file and signBorrower's name on any proof of claim in bankruptcy or any similar documentagainst an account debtor, and to otherwise exercise the rights granted herein.

 

(f)            Administrative Lender shall have noobligation (i) to preserve any rights to the Collateral against anyPerson, (ii) to make any demand upon or pursue or exhaust any rights orremedies against Borrowers or others with respect to payment of theObligations, (iii) to pursue or exhaust any rights or remedies withrespect to any of the Collateral or any other security for the Obligations, or(iv) to marshal any assets in favor of Borrower or any other Personagainst or in payment of any or all of the Obligations.

(g)           Borrowers recognize that federaland/or state securities and other laws may limit the flexibility desired toachieve an otherwise commercially reasonable disposition of Collateral, and inthe event of potential conflict between such laws and what in othercircumstances might constitute commercial reasonableness, it is intended thatconsideration of such laws will prevail over attempts to achieve suchcommercial reasonableness.  Inconnection with any sale or other disposition of Collateral, compliance byAdministrative Lender with the written advice of its counsel concerning thepotential effect of any such law will not be cause for Borrower, or any otherPerson, to claim that such sale or other disposition was not commerciallyreasonable.

 

(h)           Borrowers shall pay to AdministrativeLender (for distribution to Lenders, as appropriate), on demand and as part ofthe Obligations, all costs and expenses, including court costs and costs ofsale, incurred by Administrative Lender or any Lender in exercising any of itsrights or remedies hereunder, and all costs and expenses incurred in connectionwith any review of any part of the Collateral.
** ****11.3                ADMINISTRATIVE LENDER AS BORROWERS'ATTORNEY**
Borrowerhereby appoints Administrative Lender or any other Person whom AdministrativeLender may designate, as Borrower's attorney, with power during the continuationof an Event of Default:  to indorseBorrower's name on any checks, notes, acceptances, money orders, drafts orother forms of payment or security that may come into Administrative Lender'spossession; to sign Borrower's name on any invoice or bill of lading relatingto any Right to Payment, on drafts against customers, on schedules andassignments of Rights to Payment, on notices of assignment, financingstatements and other public records, and on notices to customers; to notify thepost office authorities to change the address for delivery of Borrower's mailto an address designated by Administrative Lender; to receive, open and processall mail addressed to Borrower; to ask for, demand, sue for, collect, receive,receipt and give aquittance for any and all moneys due or to become due withrespect to any Collateral; to settle, compromise, prosecute or defend anyaction, claim or proceeding with respect to Collateral; to sell, assign,pledge, transfer and make any agreement with respect to or otherwise deal withthe Collateral; and to do all things necessary to perfect AdministrativeLender's security interest in the Collateral, to preserve and protect theCollateral and to otherwise carry out this Agreement; provided, however, thatnothing contained in this Section will be construed as requiring or obligatingAdministrative Lender to take any action. Provided Administrative Lender acts in a reasonable manner, Borrowerratifies and approves all acts of such attorney, and neither AdministrativeLender nor the attorney will be liable for any acts or omissions nor for anyerror of judgment or mistake of fact or law. This power being coupled with an interest is irrevocable until theObligations have been fully satisfied and indefeasibly paid in cash and theCommitments terminated.
** ********ARTICLE XII.              ADMINISTRATIVELENDER**** ****12.1               **ACTIONS
Each Lender hereby appoints U.S. Bank asAdministrative Lender and authorizes U.S. Bank to perform the functions ofAdministrative Lender under the Loan Documents.  Each Lender authorizes Administrative Lender to act on behalf ofsuch Lender under the Loan Documents and, in the absence of other writteninstructions from the Required Lenders received from time to time byAdministrative Lender (with respect to which Administrative Lender agrees thatit will comply, except as otherwise provided in this Section or as otherwiseadvised by counsel), to exercise such powers thereunder as are specificallydelegated to or required of Administrative Lender by the terms thereof,together with such powers as may be reasonably incidental thereto.  Each Lender hereby indemnifies (whichindemnity shall survive any termination of this Agreement) AdministrativeLender ratably from and against any and all liabilities, obligations, losses,damages, claims, costs or expenses of any kind or nature whatsoever which mayat any time be imposed on, incurred by, or asserted against AdministrativeLender in any way relating to or arising out of the Loan Documents, includingreasonable attorneys' fees (whether incurred at the trial or appellate level,in an arbitration or administrative proceeding, in bankruptcy, (including,without limitation, any adversary proceeding, contested matter or motion) orotherwise), and as to which Administrative Lender is not reimbursed byBorrowers; provided, however, that no Lender shall be liable for the payment ofany portion of such liabilities, obligations, losses, damages, claims, costs orexpenses which are determined by a court of competent jurisdiction in a finalproceeding to have resulted solely from Administrative Lender's grossnegligence or willful misconduct. Administrative Lender shall not be required to take any action under anyLoan Document, or to prosecute or defend any suit in respect of any LoanDocument, unless it is indemnified hereunder to its satisfaction.  If any indemnity in favor of AdministrativeLender shall be or become, in Administrative Lender's determination,inadequate, Administrative Lender may call for additional indemnification fromLenders and cease to do the acts indemnified against hereunder until suchadditional indemnity is given.
** ****12.2                RELIANCE BY ADMINISTRATIVE LENDER**
 

Administrative Lender shall be entitled to rely uponany certificate, notice or other document (including any cable, telegram, fax,or telex) or telephonic notice believed by it in Good Faith to be genuine andcorrect and to have been signed, sent or made by or on behalf of the properperson or persons, and upon advice and statements of legal counsel (includingBorrower's counsel), independent accountants and other experts selected byAdministrative Lender with reasonable care. As to any matters not expressly provided for by this Agreement,Administrative Lender shall not be required to take any action or exercise anydiscretion, but shall be required to act or to refrain from acting uponinstructions of the Required Lenders and shall in all cases be fully protectedby Lenders in acting, or in refraining from acting, under any Loan Document inaccordance with the instructions of the Required Lenders, and such instructionsof the Required Lenders and any action taken or failure to act pursuant theretoshall be binding on all Lenders.
** ********12.3               **EXCULPATION
Neither AdministrativeLender nor any of its directors, officers, employees or agents shall be liableto any Lender for any action taken or omitted to be taken by it under any LoanDocument, or in connection herewith or therewith, except for its own willfulmisconduct or gross negligence, nor responsible for any recitals or warrantiestherein, nor for the effectiveness, enforceability, validity or due executionof any Loan Document, nor for the creation, perfection or priority of any Lienspurported to be created by any Loan Document, or the validity, genuineness,enforceability, existence, value or sufficiency of any collateral security, norto make any inquiry respecting the performance by Obligors of their obligationsunder any Loan Document.  Any suchinquiry which may be made by Administrative Lender shall not obligate it to makeany further inquiry or to take any action. Administrative Lender shall be entitled to rely upon advice of counselconcerning legal matters and upon any notice, consent, certificate, statementor writing which Administrative Lender believes to be genuine and to have beenpresented by a proper Person.
** ****12.4               **SUCCESSOR
Administrative Lender mayresign as such at any time upon at least 30 days prior notice to Borrowers'Agent and all Lenders.  IfAdministrative Lender at any time shall resign, the Required Lenders mayappoint another Lender as a successor Administrative Lender which shallthereupon become Administrative Lender hereunder.  If no successor Administrative Lender shall have been soappointed by the Required Lenders, and shall have accepted such appointment,within 30 days after the retiring Administrative Lender's giving notice ofresignation, then the retiring Administrative Lender may, on behalf of Lenders,appoint a successor Administrative Lender, which shall be one of the Lenders ora commercial banking institution organized under the laws of the United States(or any State thereof) or a U.S. branch or agency of a commercial bankinginstitution, and having a combined capital and surplus of at least$500,000,000.  Upon the acceptance ofany appointment as Administrative Lender hereunder by a successorAdministrative Lender, such successor Administrative Lender shall giveBorrowers' Agent notice of such acceptance, shall be entitled to receive fromthe retiring Administrative Lender such documents of transfer and assignment assuch successor Administrative Lender may reasonably request, and shallthereupon succeed to and become vested with all rights, powers, privileges andduties of the retiring Administrative Lender, and the retiring AdministrativeLender shall be discharged from its duties and obligations under the LoanDocuments.  After any retiringAdministrative Lender's resignation hereunder as Administrative Lender, theprovisions of (a) this Article XII shall inure to its benefit as to any actionstaken or omitted to be taken by it while it was Administrative Lender underthis Agreement; and (b) Section 13.2 and Section 13.3 shall continue toinure to its benefit.
** ********12.5               **LOANS BY ADMINISTRATIVELENDER; OTHER ACTIONS
 

Administrative Lender shall have the same rights andpowers with respect to the Loans made by it or any of its affiliates as anyother Lender and may exercise such rights and powers as if it were notAdministrative Lender.  Administrative Lenderand each Lender and its respective affiliates may accept deposits from, lendmoney to, and generally engage in any kind of business with any Borrower orSubsidiary or affiliate of Borrower as if it were not the Administrative Lenderor a Lender, provided that the forgoing shall not be deemed to relieve Borrowerof any of its obligations under the Loan Documents.
** ****12.6               **CREDIT DECISIONS
 

Each Lender acknowledges that it has made its owncredit decision to extend its commitments hereunder independently ofAdministrative Lender and each other Lender, and based on such Lender's reviewof the financial information of Borrowers, this Agreement, the other LoanDocuments (the terms and provisions of which being satisfactory to such Lender)and such other documents, information and investigations as such Lender hasdeemed appropriate.  Each Lender alsoacknowledges that it will continue to make its own credit decisions as toexercising or not exercising from time to time any rights and privilegesavailable to it under the Loan Document independently of Administrative Lenderand each other Lender and based on such other documents, information andinvestigations as it shall deem appropriate at any time.
** ****ARTICLE XIII.             MISCELLANEOUS**** ****13.1                NOTICES**
Exceptas specified otherwise herein, all notices, requests and demands which anyparty is required or may desire to give to any other party under this Agreementmust be in writing.  Each notice to begiven to Administrative Lender or any Lender shall be addressed to AdministrativeLender and each Lender at its address or fax number set forth as the"Address for Notices" for Administrative Lender or such Lender inSchedule I hereto, or to such other address or fax number asAdministrative Lender or any Lender may designate for itself by notice to allother parties.  Each notice to be givento Borrowers' Agent or Borrower shall be addressed to Borrowers' Agent at thefollowing address or fax number:

 

To Borrowers' Agent:

 

Monaco Coach Corporation

 

 

91320 Industrial Way

 

 

Coburg, Oregon 97408

 

 

Attn:  Chief  Financial Officer Fax:  (541) 302-3835

or to such otheraddress or fax number as Borrowers' Agent may designate for itself by notice toall other parties.  Each such notice,request and demand shall be deemed given or made as follows:  (a) three Business Days following deposit inthe United States mails, with first class postage prepaid, (b) the nextBusiness Day after such notice was delivered to a regularly scheduled overnightdelivery, or (c) upon receipt of notice given by fax, mailgram, telegram,telex, or personal delivery.
** ********13.2                COSTS, EXPENSES, ATTORNEYS' FEES**
 

Borrowers shallpay immediately upon demand the full amount of all payments, advances, charges,costs and expenses, including reasonable attorneys' fees (whether incurred atthe trial or appellate level, in an arbitration or administrative proceeding,in bankruptcy (including, without limitation, any adversary proceeding,contested matter or motion) or otherwise), incurred by Administrative Lenderand/or any Lender in connection with (a) the negotiation and preparationof the Loan Documents, (b) the enforcement, preservation or protection (orattempted enforcement, preservation or protection) of Administrative Lender'sand/or any Lender's rights (except in a dispute solely between Lenders), including,without limitation, periodic collateral examinations, and/or the collection ofany amounts which become due under any of the Loan Documents, and (c) theprosecution or defense of any action in any way related to any of the LoanDocuments, including without limitation, any action for declaratory relief, andincluding any of the foregoing incurred in connection with any bankruptcyproceeding relating to Borrower.
** ****13.3                INDEMNIFICATION**
 

(a)           To the fullest extent permitted bylaw, Borrowers hereby agree to protect, indemnify, defend and hold harmlesseach of Administrative Lender and Lenders and each of their respectiveofficers, directors, shareholders, employees, agents, attorneys and affiliates(collectively, "Indemnitees") from and against any liabilities, losses,damages or expenses of any kind or nature and from any suits, claims or demands(including in respect of or for reasonable attorneys' fees (whether incurred atthe trial or appellate level, in an arbitration or administrative proceeding,in bankruptcy (including, without limitation, any adversary proceeding,contested matter or motion) or otherwise) and other expenses, including theallocated costs and expenses of internal counsel) arising on account of or inconnection with any matter or thing or action or failure to act by Indemnitees,or any of them, arising out of or relating to any Loan Document, includingwithout limitation any use by Borrower of any proceeds of credit advanced,except to the extent such liability arises from the willful misconduct or grossnegligence of the Indemnitees (collectively, the "IndemnifiedLiabilities").

 

(b)           Upon receiving knowledge of any suit,claim or demand asserted by a third party that Administrative Lender and/or anyLender believes is covered by this indemnity, such Indemnitee shall giveBorrowers' Agent notice of the matter and an opportunity to defend it, atBorrowers' sole cost and expense, with legal counsel satisfactory to suchLender.  Such Lender may also requireBorrowers to defend the matter.  Any failureor delay of such Lender to notify Borrowers' Agent of any such suit, claim ordemand shall not relieve Borrowers of their obligations under this Section, butshall reduce such obligations to the extent of any increase in thoseobligations caused solely by an unreasonable failure or delay in providing suchnotice.  Borrowers may not settle orotherwise compromise any claim with respect to any Indemnified Liability unlessthe settlement includes an unconditional release of the Indemnitee from allliability on claims that are the subject of such settlement and may not settleor otherwise compromise any claim with respect to any Indemnified Liability,other than a claim for money damages, without the prior written consent of theIndemnitee, which consent shall not be unreasonably withheld.

 

(c)           If and to the extent that theforegoing undertaking may be unenforceable for any reason Borrowers shall makethe maximum contribution permissible under applicable law to the payment andsatisfaction of each of the Indemnified Liabilities.

 

(d)           This Section shall survive thepayment in full and performance of all of Borrowers' other Obligations.
** ****13.4                WAIVERS, AMENDMENTS**
Anyterm, covenant, agreement or condition of any Loan Document may be amended orwaived if such amendment or waiver is in writing and is signed by the RequiredLenders (or by Administrative Lender with written consent of the RequiredLenders), Borrowers' Agent and any other party thereto; provided, however, thatany amendment, waiver or consent which affects the rights or duties ofAdministrative Lender, L/C Bank or Swingline Lender must be in writing and besigned also by the affected Administrative Lender, L/C Bank or SwinglineLender; and provided further, that any amendment, waiver or consent whicheffects any of the following changes must be in writing and signed by allLenders (or by Administrative Lender with the written consent of all Lenders):(a) increases the maximum amount of credit available hereunder;(b) extends the maturity date of any Loan; (c) reduces the principalof, or interest (including default rate interest) on, any Loan or any fees orother amounts payable for the account of Lenders hereunder; (d) postponesor conditions any date fixed for any payment of the principal of, or intereston, any Loan or any fees or other amounts payable for the account of Lendershereunder; (e) waives or amends this Section; (f) amends thedefinition of Required Lenders or any provision of this Agreement requiringapproval of the Required Lenders or some other specified amount of Lenders;(g) increases or decreases the commitment or the Ratable Portion of anyLender (other than through an assignment under Section 13.5);(h) waives any of the conditions set forth in Article VII; (i) releasesany material Collateral; or (j) amends any guaranty of the Obligations (orreleases any guarantor of its obligations thereunder).  The foregoing notwithstanding, any increaseor decrease in the Ratable Portion of any Lender and any increase in theRevolving Loan Commitment or Term Loan Commitment of any Lender must be inwriting and signed by such Lender. Unless otherwise specified in such waiver or consent, a waiver orconsent given hereunder shall be effective only in the specific instance andfor the specific purpose for which given.
******13.5               **SUCCESSORS AND ASSIGNS
 

(a)           **Binding Effect**.  The Loan Documents shall be binding upon andinure to the benefit of Borrowers, Administrative Lender, Lenders and theirrespective successors and permitted assigns, except that Borrower may notassign or transfer any of its rights or obligations under any Loan Documentwithout the prior written consent of Administrative Lender and eachLender.  All references in thisAgreement to any Person shall be deemed to include all successors and assignsof such Person.

 

(b)           **Participations**.  Any Lender may, in the ordinary course ofits business and in accordance with applicable law, at any time sell to one ormore banks or other financial institutions ("Participants")participating interests in any obligations owing to such Lender under the LoanDocuments.  In the event of any suchsale, (i) such Lender's obligations under the Loan Documents to the otherparties to the Loan Documents shall remain unchanged, (ii) such Lendershall remain solely responsible for the performance thereof and (iii)Borrowers, Borrowers' Agent and Administrative Lender shall continue to dealsolely and directly with such Lender in connection with such Lender's rightsand obligations under the Loan Documents. Participants shall have no rights under the Loan Documents except asprovided below.  No Lender shall sellany participating interest under which the Participant shall have any right tovote on any amendment, consent or waiver of this Agreement or any other LoanDocument; provided, however, that any agreement under which any Lender sells aparticipating interest to a Participant may require the selling Lender toobtain the consent of such Participant in order for such Lender to agree orconsent to any amendment of a type specified in items (a)-(j) ofSection 13.4.  No agreement underwhich any Lender sells a participating interest to a Participant may permit theParticipant to transfer, pledge, assign, sell participations in or otherwiseencumber its participating interest.  Ifany amount outstanding under the Loan Documents is due and unpaid, eachParticipant shall have all the rights of a "Lender" underSection 13.6 in respect of its participating interest in amounts owingunder the Loan Documents to the same extent as if the amount of itsparticipating interest were owing directly to it as a Lender under the LoanDocuments; provided, however, that such rights of setoff shall be subject tothe obligation of such Participant to share with Lenders, and Lenders agree to sharewith such Participant, as provided in Section 3.9(b) hereof.  Borrowers also agree that any Lender thathas transferred all or part of its interests in the Obligations to one or moreParticipants shall, notwithstanding any such transfer, be entitled to the fullbenefits accorded such Lender under Sections 3.10 and 3.12 hereof, as if suchLender had not made such transfer. Without limiting the foregoing, no Participant shall be entitled tocosts, expenses or attorneys' fees under Section 13.2 or Section 13.3.

 

(c)           **Assignments**.  Any Lender may, in the ordinary course ofits business and in accordance with applicable law, at any time, sell andassign to any Lender, any affiliate of a Lender or any other bank or financialinstitution (individually, an "Assignee") all or any portion of itsrights and obligations under the Loan Documents (such a sale and assignment tobe referred to herein as an "Assignment") pursuant to an Assignmentand Assumption Agreement in the form of Exhibit G attached hereto(an "Assignment Agreement") executed by each Assignee and suchassignor Lender (an "Assignor") and delivered to AdministrativeLender for its acceptance and recording in the Register (as defined below);provided, however, that:  (i) eachAssignment shall be in a minimum amount of $5,000,000; (ii) if theAssignment is not an assignment of Assignor's entire commitment, Assignormaintains a minimum commitment of $5,000,000; and (iii) each Assignment whichis not to a Lender or an affiliate thereof, shall be made only with the writtenconsent of Administrative Lender (and, in the absence of a Default, Borrowers'Agent), which consent(s) shall not be unreasonably withheld.  Upon the execution, delivery, acceptance andrecording of each Assignment Agreement, from and after the effective date setforth therein, (A) each Assignee shall be a Lender with a commitment as setforth in Section 1 of such Assignment Agreement and shall have the rights,duties and obligations of a Lender under the Loan Documents, and (B) the Assignorshall be a Lender with a commitment as set forth in Section 1 of suchAssignment Agreement, or, if the commitment of the Assignor has been reduced tozero, the Assignor shall cease to be a Lender; provided, however, that eachAssignor shall nevertheless be entitled to the indemnification rights containedin Section 13.3 hereof for any events, acts or omissions occurring beforethe effective date of its Assignment. Each Assignment Agreement shall be deemed to amend Schedule Ihereto to the extent necessary to reflect the addition of each Assignee and theresulting adjustment of commitments arising from the purchase by each Assigneeof all or a portion of the rights and obligations of an Assignor under thisAgreement and the other Loan Documents.

 

(d)           **Register**.  Administrative Lender shall maintain atAdministrative Lender's Office a copy of each Assignment Agreement delivered toand accepted by Administrative Lender and a register ("Register") forthe recordation of the names and addresses of Lenders and the commitment ofeach Lender from time to time.  Theentries in the Register shall be conclusive and binding for all purposes,absent manifest error, and Borrowers, Administrative Lender and Lenders maytreat each entity whose name is recorded in the Register as a Lender hereunderfor all purposes of this Agreement.  TheRegister shall be available for inspection by Borrowers' Agent or any Lender atany reasonable time and from time to time upon reasonable prior notice.

 

(e)           **Registration**.  Upon its receipt of an Assignment Agreementexecuted by an Assignor and an Assignee (and, in the case of an Assignee thatis not then a Lender or an affiliate of a Lender, by Borrowers' Agent andAdministrative Lender) together with payment by such Assignee to AdministrativeLender of a registration and processing fee of $3,500, Administrative Lendershall (i) promptly accept such Assignment Agreement and (ii) on theeffective date of such Assignment record the information contained therein inthe Register and give notice of such acceptance and recordation to Lenders andBorrowers' Agent.  Administrative Lendermay, from time to time at its election, prepare and deliver to Lenders andBorrowers' Agent a revised Schedule I reflecting the names,addresses and respective commitments of all Lenders then parties hereto.

 

(f)            **FederalReserve Bank**. Notwithstanding the foregoing provisions of this Section, any Lender mayat any time pledge or assign all or any portion of such Lender's rights underthis Agreement and the other Loan Documents to a Federal Reserve Bank; provided,however, that no such pledge or assignment will release such Lender fromsuch Lender's obligations hereunder or under any other Loan Document.
** ****13.6                SETOFF**
 

In addition to any rights and remedies of Lenders providedby law, each Lender shall have the right, with the prior consent ofAdministrative Lender (which consent will not be unreasonably withheld) butwithout prior notice to Borrower, any such notice being expressly waived byBorrower to the extent permitted by applicable law, during the continuance ofan Event of Default to setoff and apply against any indebtedness, whethermatured or unmatured, of Borrower to such Lender any amount owing from suchLender or any affiliate thereof to Borrower at any time during the continuationof an Event of Default.  This right ofsetoff may be exercised by such Lender against Borrower or against any trusteein bankruptcy, debtor in possession, assignee for the benefit of creditors, receiveror execution, judgment or attachment creditor of Borrower or against anyoneelse claiming through or against Borrower or such trustee in bankruptcy, debtorin possession, assignee for the benefit of creditors, receiver, or execution,judgment or attachment creditor, notwithstanding the fact that such right ofsetoff shall not have been exercised by such Lender prior to the occurrence ofan Event of Default.  Each Lender agreespromptly to notify Borrower after any such setoff and application made by suchLender, provided that the failure to give such notice shall not affect thevalidity of such setoff and application.
** ****13.7                NO WAIVER; CUMULATIVE REMEDIES**
 

No failure on the part of Administrative Lender or anyLender to exercise, and no delay in exercising, any right, power, privilege orremedy under any Loan Document shall operate as a waiver thereof; nor shall anysingle or partial exercise of any such right, power, privilege or remedypreclude any other or further exercise thereof or the exercise of any otherright, power, privilege or remedy.  Therights and remedies under the Loan Documents are cumulative and not exclusiveof any rights, powers, privileges and remedies that may otherwise be availableto Administrative Lender or any Lender.
** ****13.8                ENTIREAGREEMENT**
 

The Loan Documents constitute the entire agreementamong Borrowers, Administrative Lender and Lenders with respect to the Loansand the Letters of Credit and supersede all prior negotiations, communications,discussions, correspondence and agreements concerning the subject matterhereof.  This Agreement cannot bechanged orally or by the conduct of the parties and may be amended or modifiedonly in writing signed by the party against whom enforcement is sought.
** ********13.9                NO THIRD PARTY BENEFICIARIES**
 

This Agreement is made and entered into for the soleprotection and benefit of the parties hereto and their respective permittedsuccessors and assigns, and no other person or entity shall be a third partybeneficiary of, or have any direct or indirect cause of action or claim inconnection with, this Agreement or any other of the Loan Documents to which itis not a party.
** ****13.10              CONFIDENTIALITY**
 

Lenders shall holdall non–public information (which has been identified as such byBorrowers' Agent) obtained pursuant to the requirements of this Agreement inaccordance with their customary procedures for handling confidentialinformation of this nature and in accordance with safe and sound bankingpractices and in any event may make disclosure to any of their examiners,affiliates, outside auditors, counsel and other professional advisors inconnection with this Agreement or as reasonably required by any *bona fide*transferee,participant or assignee or as required or requested by any GovernmentalAuthority or pursuant to legal process; provided, however, that (a) unlessspecifically prohibited by applicable law or court order, each Lender shallnotify Borrowers' Agent of any request by any Governmental Authority (otherthan any such request in connection with an examination of the financial conditionof such Lender by such Governmental Authority) for disclosure of any suchnon-public information prior to disclosure of such information, (b) priorto any such disclosure pursuant to this Section, each Lender shall require anysuch *bonafide*transferee, participant and assignee receiving a disclosure ofnon–public information to agree in writing (i) to be bound by thisSection and (ii) to require such Person to require any other Person towhom such Person discloses such non–public information to be similarlybound by this Section, and (c) except as may be required by an order of acourt of competent jurisdiction and to the extent set forth therein, no Lendershall be obligated or required to return any materials furnished by anyBorrower or Subsidiary.
** ****13.11              TIME**
 

Time is of the essence of each and every provision ofthis Agreement and each other of the Loan Documents.
** ****13.12              SEVERABILITYOF PROVISIONS**
 

If any provision of thisAgreement shall be prohibited by or invalid under applicable law, such provisionshall be ineffective only to the extent of such prohibition or invaliditywithout invalidating the remainder of such provision or any remainingprovisions of this Agreement.
** ****13.13              GOVERNING LAW**
 

This Agreement shall be governed by and construed inaccordance with the laws of the State of Oregon.
** ********13.14              SUBMISSIONTO JURISDICTION**
 

EACH OF BORROWER, ADMINISTRATIVE LENDER AND LENDERSHEREBY:  (A) SUBMITS TO THE EXCLUSIVEJURISDICTION OF THE COURTS OF THE STATE OF OREGON AND THE FEDERAL COURTS OF THEUNITED STATES FOR THE DISTRICT OF OREGON FOR THE PURPOSE OF ANY ACTION ORPROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS; (B) AGREESTHAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD ANDDETERMINED IN SUCH COURTS; (C) IRREVOCABLY WAIVES (TO THE FULL EXTENT PERMITTEDBY APPLICABLE LAW) ANY OBJECTION WHICH IT NOW OR HEREAFTER MAY HAVE TO THELAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY OF THEFOREGOING COURTS, AND ANY OBJECTION ON THE GROUND THAT ANY SUCH ACTION ORPROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM; AND (D)AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BECONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENTOR IN ANY OTHER MANNER PERMITTED BY LAW.
** ****13.15              WAIVEROF JURY TRIAL**
 

EACH OF BORROWER, ADMINISTRATIVE LENDER AND LENDERS,TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVESALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR OTHERLITIGATION IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHEROF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS OR EVENTS REFERENCED HEREIN ORTHEREIN OR CONTEMPLATED HEREBY OR THEREBY, WHETHER WITH RESPECT TO CONTRACTCLAIMS, TORT CLAIMS OR OTHERWISE.  THISWAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS ORMODIFICATIONS TO THIS AGREEMENT AND/OR ANY OTHER OF THE LOAN DOCUMENTS.  A COPY OF THIS SECTION MAY BE FILED WITH ANYCOURT AS WRITTEN EVIDENCE OF THE WAIVER OF THE RIGHT TO TRIAL BY JURY AND THECONSENT TO TRIAL BY COURT.
** ****13.16              COUNTERPARTS**
 

This Agreement may be executed in any number ofidentical counterparts, any set of which signed by all the parties hereto shallbe deemed to constitute a complete, executed original for all purposes.  Delivery of an executed signature page ofthis Agreement by fax shall be effective as delivery of a manually executedcounterpart hereof.

 
******13.17             **OREGON STATUTORY NOTICE
** **

**UNDEROREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER AFTEROCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOTFOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'SRESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDERTO BE ENFORCEABLE.**

** **

[INTENTIONALLYLEFT BLANK]

 
****
**INWITNESS WHEREOF**, this Amended and Restated Credit Agreementhas been duly executed as of the date first written above.

 

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

ROYALE COACH BY MONACO,  INC

 

MCC ACQUISITION  CORPORATION

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

 

DEUTSCHE FINANCIAL  SERVICES CORPORATION

 

WELLS FARGO BANK,  NATIONAL ASSOCIATION

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

 

UNION BANK OF  CALIFORNIA, N.A

 

BANK OF AMERICA, N.A.

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

 

WASHINGTON MUTUAL BANK

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

By:

 

 

By:

 

Title:

 

 

Title:

 

 

 
****
**SCHEDULE I**

** **

**1. Revolving Loan Commitments:**

** **

U.S. Bank National  Association  -  $24,181,818.18 (34.54545455%)

 

Deutsche Financial  Services Corporation  -  $7,636,363.64 (10.90909091%)

 

Washington Mutual  Bank  -  $10,818,181.82 (15.45454545%)

 

Wells Fargo Bank,  National Association  -  $10,818,181.82 (15.45454545%)  

 

Union Bank of  California, N.A.  -  $8,909,090.91 (12.72727273%)

 

Bank of America,  N.A.  -  $7,636,363.64 (10.90909091%)

 

 

**2. Term Loan Commitments:**

** **

U.S. Bank National  Association  -  $13,818,181.82 (34.54545455%)

 

Deutsche Financial  Services Corporation  -  $4,363,636.36 (10.90909091%)

 

Washington Mutual  Bank  -  $6,181,818.18 (15.45454545%)

 

Wells Fargo Bank,  National Association  -  $6,181,818.18 (15.45454545%)  

 

Union Bank of  California, N.A.  -  $5,090,909.09 (12.72727273%)

 

Bank of America,  N.A.  -  $4,363,636.36 (10.90909091%)

 

 

**3. Applicable Lending Office and Address for Notices for each Lender:**

** **

U.S. Bank  National Association  Oregon Commercial Banking  800 Willamette Street, 3rd Floor  PO Box 10553  Eugene, Oregon  97440  Attn:  Ken Carson  Telephone:  (541) 465-4127  Fax:  (541) 342-6712  Email: kenneth.carson@usbank.com

 

 

Deutsche  Financial Services Corporation  2625 S. Plaza Drive, Suite 201  Tempe, AZ  85282  Attn: Timothy Wass, Vice President  Telephone:  (480) 449-7124  Fax:  (480) 829-3963  Email: timothy.wass@db.com

 

Wells Fargo  Bank, National Association  99 E. Broadway, 2nd Floor  Eugene, OR  97440  Attn: Kathy Lucier, Vice President  Telephone:  (541) 465-5965  Fax:  (541) 465-5764  Email: lucierki@wellsfargo.com

 

Washington  Mutual Bank  1201 Third Avenue, WMT 1445  Seattle, WA  98101  Attn: Bruce Kendrex, Vice President  Telephone:  (206) 377-3888  Fax:  (206) 377-3812  Email: bruce.kendrex@wamu.net

 

Union Bank of  California, N.A.  407 SW Broadway  Portland, OR  97205  Attn:  Tom Marks, Vice President  Telephone:  (503) 225-3693  Fax:  (503) 225-2846  Email: thomas.marks@uboc.com

 

Bank of America,  N.A.  121 SW Morrison, #1700  Portland, OR  97204  Attn: Robert Davison, Senior Vice President  Telephone:  (503) 279-2809  Fax:  (503) 275-1391  Email: robert.a.davison@bankofamerica.com

 

 
****
**SCHEDULE II**

** **

**Pricing Schedule**

 

 

 

**Level I**

 

**Level II**

 

**Level III**

 

**Level IV**

LIBOR Margin –  Revolving Loans

 

125

 

150

 

175

 

200

Prime Margin –  Revolving Loans

 

0

 

0

 

0

 

25

LIBOR Margin – Term  Loans

 

150

 

175

 

200

 

225

Prime Margin – Term  Loans

 

0

 

0

 

0

 

25

Fee Percentage

 

25

 

25

 

37.5

 

50

 

For purposes of this Pricing Schedule, the followingterms have the following meanings:

 

"**Level I**" applies on any day if, onsuch day, the applicable Leverage Ratio is less than 1.00:1.

 

"**Level II**" applies on any day if, onsuch day, the applicable Leverage Ratio is equal to or greater than 1.00:1 andless than 1.25:1.

 

"**Level III**" applies on any day if, onsuch day, the applicable Leverage Ratio is equal to or greater than 1.25:1 andless than 1.50:1.

 

"**Level IV**" applies on any day if, onsuch day, the applicable Leverage Ratio is 1.50:1 or greater.

 

For purposes of this Pricing Schedule, the LeverageRatio shall be calculated once every quarter based on the financial informationmost recently reported by Borrowers' Agent pursuant to Section 8.3 of theAgreement; provided, however, that the Leverage Ratio shall notbe computed on the financial information most recently reported by Borrowers'Agent until the later of the first day of the month after receipt of suchinformation or five Business Days after the receipt thereof, and if the mostrecent report required pursuant to Section 8.3 has not been delivered, orif Administrative Lender reasonably objects to the accuracy of such reportwithin five Business Days after the receipt thereof, the next higher Level fromthe Level then in effect shall apply until such time as the delinquent reportis delivered or Administrative Lender's objections are resolved toAdministrative Lender's reasonable satisfaction.

 

The foregoing notwithstanding, until such time as thefinancial information required by Section 8.3 of the Agreement has beenprovided for the quarter ending September 30, 2001 and the Leverage Ratioas of the end of such quarter determined, Level III shall apply.

 
****
**SCHEDULE III**

** **

**Existing Lettersof Credit**

 

L/C Number:  SLCPPDX00806 

Type: Irrevocable  Standby Letter of Credit 

Beneficiary: Hartford  Fire Insurance Company, Hartford CT 

Amount: $500,000.00 

Expiry: 8/28/02 

 

L/C Number:  SLCPPDX00807 

Type: Irrevocable  Standby Letter of Credit 

Beneficiary:  Connecticut Surety Insurance Agency, Inc., Hartford CT 

Amount: $149,975.00 

Expiry: 8/28/02 

 

 
****
**EXHIBIT A**TOAMENDED AND RESTATED CREDIT AGREEMENT

** **

**BorrowingBase CertificateofMonaco Coach Corporation et al.**

** **

**As of:___________________**

 

**Aggregate RV A/R balance**

**___________________**

 

 

 

 

**Ineligible RV A/R:**

 

 

**Over 60 days**

(_________________)

 

**Excess concentration**

(_________________)

 

**Cross-Ineligibles**

(_________________)

 

**Affiliates**

(_________________)

 

**International**

(_________________)

 

**Other**

(_________________)

 

**Eligible A/R**

___________________

 

**85% of Eligible A/R**

 

____________________

 

 

 

 

 

 

**50% of Eligible Raw Materials**

___________________

 

**Lesser of 90% of Eligible Finished  Goods or $50,000,000**

  ___________________

 

**Secured Chassis Accounts Payable**

(__________________)

 

**Inventory Availability**

___________________

___________________

 

 

**Borrowing Base**

 

____________________

**Outstanding Revolving Loans**

 

(_________________)

**Outstanding Swing Loans**

 

(_________________)

**Outstanding Letters of Credit**

 

(_________________)

**Available Credit**

 

____________________

** **

**CERTIFICATE**

 

                The undersignedChief Financial Officer of Monaco Coach Corporation hereby certifies toAdministrative Lender that: (i) the foregoing information is true, accurate and complete as ofthe close of business on ________, _____; (ii) the undersigned is familiarwith Borrowers' businesses and financial affairs and has access to all ofBorrowers' business records material to the compilation and determination of theinformation set forth above; and (iii) this Certificate is being deliveredto Administrative Lender pursuant to the Amended and Restated Credit Agreementamong Borrowers, U.S. Bank, National Association as Administrative Lender, andthe lenders named therein for the purpose of inducing Lenders to extend creditto Borrowers.

DATED:  __________, ______.

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

Chief Financial Officer

** **

**EXHIBIT B**TOAMENDED AND RESTATED CREDIT AGREEMENT

 

**FORM OF PROMISSORYNOTES**

 
****
**Revolving LoansPromissory Note**

 

$70,000,000

 

September 28,  2001

 

FOR VALUE RECEIVED, the undersigned, MONACO COACHCORPORATION, a Delaware corporation, ROYALE COACH BY MONACO, INC., an Indianacorporation, and MCC ACQUISITION CORPORATION, a Delaware corporation, (eachindividually referred to as "Borrower" and all collectively referredto as "Borrowers") hereby jointly and severally promise to pay to theorder of U.S. BANK NATIONAL ASSOCIATION as Administrative Lender for theratable benefit of the Lenders ("Administrative Lender") on the RevolverMaturity Date, or at such earlier time as is provided in that certain Amendedand Restated Credit Agreement among Borrowers, U.S. Bank National Association(as Administrative Lender) and the lenders named therein dated as ofSeptember 28, 2001, (as amended, modified or supplemented from time totime, the "Credit Agreement"), the principal sum of Seventy MillionDollars ($70,000,000), or such lesser amount as shall equal the aggregateoutstanding principal balance of all Revolving Loans made by Lenders toBorrowers pursuant to the Credit Agreement.

 

This promissory note is one of the promissory notesreferred to in, and subject to the terms of, the Credit Agreement.  Capitalized terms used herein shall have therespective meanings assigned to them in the Credit Agreement.

 

Borrower further promises to pay interest on theoutstanding principal balance hereof at the interest rates, and payable on thedates, set forth in the Credit Agreement. All payments of principal and interest hereunder shall be made toAdministrative Lender in lawful money of the United States and in same day orimmediately available funds.

 

Administrative Lender is authorized but not requiredto record the date and amount of each advance made hereunder, the date andamount of each payment of principal and interest hereunder, and the resultingunpaid principal balance hereof, in Administrative Lender's internal records,and any such recordation shall be prima facie evidence of the accuracy of theinformation so recorded; provided however, that Administrative Lender's failureto so record such amounts shall not limit or otherwise affect Borrower'sobligations hereunder and under the Credit Agreement to repay the principalhereof and interest hereon.

 

Borrowers shall pay all costs of collection, includingreasonable attorneys' fees (whether incurred at the trial or appellate level,in an arbitration or administrative proceeding, in bankruptcy (including,without limitation, any adversary proceeding, contested matter or motion) orotherwise).  No delay or failure on thepart of Administrative Lender to exercise any of its rights hereunder shall bedeemed a waiver of such rights or any other right of Administrative Lender norshall any delay, omission or waiver on any one occasion be deemed a bar to orwaiver of such rights or any other right on any future occasion.  Borrowers and every surety, indorser andguarantor of this Note waive presentment, demand, protest, notice of intentionto accelerate, notice of acceleration, notice of nonpayment and all othernotices of every kind, and agree that their liability under this Note shall notbe affected by any renewal, postponement or extension in the time of paymenthereof, by any indulgence granted by any holder hereof with respect hereto, orby any release or change in any security for the payment of this Note, and theyhereby consent to any and all renewals, extensions, indulgences, releases orchanges, regardless of the number of such renewals, extensions, indulgences,releases or changes.

 

The Credit Agreement provides, among other things, foracceleration (which in certain cases shall be automatic) of the maturity hereofupon the occurrence of certain stated events, in each case without presentment,demand, protest or further notice of any kind, all of which are herebyexpressly waived by Borrowers.

 

Borrowers' obligations evidenced by this promissorynote are secured by the collateral described in the Loan Documents.  The Loan Documents describe the rights ofAdministrative Lender with respect to the collateral.

 

In the event of any conflict between the terms of thispromissory note and the terms of the Credit Agreement, the terms of the CreditAgreement shall control.

 

This promissory note shall be governed by andconstrued in accordance with the laws of the State of Oregon.

** **

**UNDEROREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY ANY LENDER ORADMINISTRATIVE LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHERCREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES ORSECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESSCONSIDERATION AND BE SIGNED BY SUCH LENDER OR ADMINISTRATIVE LENDER TO BEENFORCEABLE.**

** **

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

ROYALE COACH BY MONACO,  INC.

 

MCC ACQUISITION  CORPORATION

 

 

 

By:

 

 

 

By:

 

Title:

 

 

 

Title:

 

 

** **
****
**Term LoansPromissory Note**

 

$40,000,000

 

September 28,  2001

 

FOR VALUE RECEIVED, the undersigned, MONACO COACHCORPORATION, a Delaware corporation, ROYALE COACH BY MONACO, INC., an Indianacorporation, and MCC ACQUISITION CORPORATION, a Delaware corporation, (eachindividually referred to as "Borrower" and all collectively referredto as "Borrowers") hereby jointly and severally promise to pay to theorder of U.S. BANK NATIONAL ASSOCIATION as Administrative Lender for theratable benefit of the Lenders ("Administrative Lender") in themanner and at the times provided in that certain Amended and Restated CreditAgreement among Borrowers, U.S. Bank National Association (as AdministrativeLender) and the lenders named therein dated as of September 28, 2001, (asamended, modified or supplemented from time to time, the "CreditAgreement"), the principal sum of Forty Million Dollars ($40,000,000).

 

This promissory note is one of the promissory notes referredto in, and subject to the terms of, the Credit Agreement.  Capitalized terms used herein shall have therespective meanings assigned to them in the Credit Agreement.

 

Borrower further promises to pay interest on theoutstanding principal balance hereof at the interest rates, and payable on thedates, set forth in the Credit Agreement. All payments of principal and interest hereunder shall be made toAdministrative Lender in lawful money of the United States and in same day orimmediately available funds.

 

Administrative Lender is authorized but not requiredto record the date and amount of each payment of principal and interesthereunder, and the resulting unpaid principal balance hereof, in AdministrativeLender's internal records, and any such recordation shall be prima facieevidence of the accuracy of the information so recorded; provided however, thatAdministrative Lender's failure to so record such amounts shall not limit orotherwise affect Borrower's obligations hereunder and under the CreditAgreement to repay the principal hereof and interest hereon.

 

Borrowers shall pay all costs of collection, includingreasonable attorneys' fees (whether incurred at the trial or appellate level,in an arbitration or administrative proceeding, in bankruptcy (including,without limitation, any adversary proceeding, contested matter or motion) orotherwise).  No delay or failure on thepart of Administrative Lender to exercise any of its rights hereunder shall bedeemed a waiver of such rights or any other right of Administrative Lender norshall any delay, omission or waiver on any one occasion be deemed a bar to orwaiver of such rights or any other right on any future occasion.  Borrowers and every surety, indorser andguarantor of this Note waive presentment, demand, protest, notice of intentionto accelerate, notice of acceleration, notice of nonpayment and all othernotices of every kind, and agree that their liability under this Note shall notbe affected by any renewal, postponement or extension in the time of paymenthereof, by any indulgence granted by any holder hereof with respect hereto, orby any release or change in any security for the payment of this Note, and theyhereby consent to any and all renewals, extensions, indulgences, releases or changes,regardless of the number of such renewals, extensions, indulgences, releases orchanges.

 

The Credit Agreement provides, among other things, foracceleration (which in certain cases shall be automatic) of the maturity hereofupon the occurrence of certain stated events, in each case without presentment,demand, protest or further notice of any kind, all of which are herebyexpressly waived by Borrowers.

 

Borrowers' obligations evidenced by this promissorynote are secured by the collateral described in the Loan Documents.  The Loan Documents describe the rights ofAdministrative Lender with respect to the collateral.

 

In the event of any conflict between the terms of thispromissory note and the terms of the Credit Agreement, the terms of the CreditAgreement shall control.

 

This promissory note shall be governed by andconstrued in accordance with the laws of the State of Oregon.

** **

**UNDEROREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY ANY LENDER ORADMINISTRATIVE LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHERCREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES ORSECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESSCONSIDERATION AND BE SIGNED BY SUCH LENDER OR ADMINISTRATIVE LENDER TO BE ENFORCEABLE.**

 

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

ROYALE COACH BY MONACO,  INC.

 

MCC ACQUISITION  CORPORATION

 

 

 

By:

 

 

 

By:

 

Title:

 

 

 

Title:

 

 

 
****
**Swing LoansPromissory Note**

 

$10,000,000

 

September 28,  2001

 

FOR VALUE RECEIVED, MONACO COACH CORPORATION, aDelaware corporation, ROYALE COACH BY MONACO, INC., an Indiana corporation, andMCC ACQUISITION CORPORATION, a Delaware corporation, (each individuallyreferred to as "Borrower" and all collectively referred to as"Borrowers") hereby jointly and severally promise to pay to the orderof U.S. BANK NATIONAL ASSOCIATION ("Lender") on the Revolver MaturityDate, or at such earlier time as is provided in that certain Amended andRestated Credit Agreement among Borrowers, U.S. Bank National Association (asAdministrative Lender and as Swingline Lender) and the lenders named thereindated as of September 28, 2001, (as amended, modified or supplemented fromtime to time, the "Credit Agreement"), the principal sum of TenMillion Dollars ($10,000,000), or such lesser amount as shall equal theaggregate outstanding principal balance of all Swing Loans made by Lender toBorrowers pursuant to the Credit Agreement.

 

This promissory note is one of the promissory notesreferred to in, and subject to the terms of, the Credit Agreement.  Capitalized terms used herein shall have therespective meanings assigned to them in the Credit Agreement.

 

Borrower further promises to pay interest on theoutstanding principal balance hereof at the interest rates, and payable on thedates, set forth in the Credit Agreement. All payments of principal and interest hereunder shall be made toAdministrative Lender in lawful money of the United States and in same day orimmediately available funds.

 

Lender is authorized but not required to record thedate and amount of each advance made hereunder, the date and amount of eachpayment of principal and interest hereunder, and the resulting unpaid principalbalance hereof, in Lender's internal records, and any such recordation shall beprima facie evidence of the accuracy of the information so recorded; providedhowever, that Lender's failure to so record such amounts shall not limit orotherwise affect Borrower's obligations hereunder and under the CreditAgreement to repay the principal hereof and interest hereon.

 

Borrowers shall pay all costs of collection, includingreasonable attorneys' fees (whether incurred at the trial or appellate level,in an arbitration or administrative proceeding, in bankruptcy (including,without limitation, any adversary proceeding, contested matter or motion) orotherwise).  No delay or failure on thepart of Lender to exercise any of its rights hereunder shall be deemed a waiverof such rights or any other right of Lender nor shall any delay, omission orwaiver on any one occasion be deemed a bar to or waiver of such rights or anyother right on any future occasion. Borrowers and every surety, indorser and guarantor of this Note waivepresentment, demand, protest, notice of intention to accelerate, notice ofacceleration, notice of nonpayment and all other notices of every kind, andagree that their liability under this Note shall not be affected by anyrenewal, postponement or extension in the time of payment hereof, by anyindulgence granted by any holder hereof with respect hereto, or by any releaseor change in any security for the payment of this Note, and they hereby consentto any and all renewals, extensions, indulgences, releases or changes,regardless of the number of such renewals, extensions, indulgences, releases orchanges.

 

The Credit Agreement provides, among other things, foracceleration (which in certain cases shall be automatic) of the maturity hereofupon the occurrence of certain stated events, in each case without presentment,demand, protest or further notice of any kind, all of which are herebyexpressly waived by Borrowers.

 

Borrowers' obligations evidenced by this promissorynote are secured by the collateral described in the Loan Documents.  The Loan Documents describe the rights ofAdministrative Lender, Lender and any other holder hereof with respect to thecollateral.

 

In the event of any conflict between the terms of thispromissory note and the terms of the Credit Agreement, the terms of the CreditAgreement shall control.

 

This promissory note shall be governed by andconstrued in accordance with the laws of the State of Oregon.

** **

**UNDEROREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER AFTEROCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOTFOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'SRESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDERTO BE ENFORCEABLE.**

** **

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

ROYALE COACH BY MONACO,  INC.

 

MCC ACQUISITION  CORPORATION

 

 

 

By:

 

 

 

By:

 

Title:

 

 

 

Title:

 

 

 
****
**EXHIBIT C**TOAMENDED AND RESTATED CREDIT AGREEMENT

** **

**Notice ofAuthorized Representatives**

 

U.S. Bank NationalAssociationOregon Commercial Banking800 Willamette Street, 3rd FloorPO Box 10553Eugene, Oregon  97440Attn:  Ken Carson

 

Reference is made to that certain Amended and RestatedCredit Agreement among Monaco Coach Corporation, a Delaware corporation, RoyaleCoach By Monaco, Inc., an Indiana corporation, and MCC Acquisition Corporation,a Delaware corporation, (each individually referred to as a"Borrower" and all collectively referred to as"Borrowers"), U.S. Bank National Association (as AdministrativeLender) and the lenders named therein dated as of September 28, 2001, (asamended, modified or supplemented from time to time, the "CreditAgreement").  Capitalized termsused herein shall have the respective meanings assigned to them in the CreditAgreement.

 

Borrowers' Agent hereby represents to AdministrativeLender that the following persons are the Authorized Representatives, asdefined in the Credit Agreement, and that the signatures opposite their namesare their true signatures:

 

Name and Office

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative Lender is authorized to rely on thisNotice of Authorized Representatives until such time, if any, as Borrowers'Agent has delivered to Administrative Lender, and Administrative Lender hasreceived, a duly executed Notice of Authorized Representatives in substitutionhereof.  This Notice of AuthorizedRepresentatives cancels and supersedes any Notice of Authorized Representativesat any time prior to the date hereof delivered by Borrowers' Agent toAdministrative Lender.

 

IN WITNESS WHEREOF, Borrowers' Agent hereby confirms thatit has caused this Notice of Authorized Representatives to be duly executed asof ______________.

 

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

 
****
**EXHIBIT D**TOAMENDED AND RESTATED CREDIT AGREEMENT

** **

**Notice ofBorrowing**

 

U.S. Bank National AssociationAgency Services Group1420 Fifth Ave., 9th FloorP.O. Box 720Seattle, WA.  98111-0720Attn:  Young HahnFax:  (206) 587-7022

 

Reference is made to that certain Amended and RestatedCredit Agreement among Monaco Coach Corporation, a Delaware corporation, RoyaleCoach By Monaco, Inc., an Indiana corporation, and MCC Acquisition Corporation,a Delaware corporation, (each individually referred to as a"Borrower" and all collectively referred to as"Borrowers"), U.S. Bank National Association (as AdministrativeLender) and the lenders named therein dated as of September 28, 2001, (asamended, modified or supplemented from time to time, the "CreditAgreement").  Capitalized termsused herein shall have the respective meanings assigned to them in the Credit Agreement.

 

1.             Pursuantto Section 3.1 of the Credit Agreement, Borrowers' Agent, on behalf ofBorrowers, hereby requests Revolving Loans upon the following terms:

 

(a)           Theaggregate principal amount is to be $___________.

 

(b)           Thedate of borrowing is to be _________.

 

(c)           $________of the Loans are to be Prime Rate Loans, and $________ of the Loans are to beLIBOR Loans with a Fixed Rate Term of _______________months.

 

2.             Borrowers'Agent, on behalf of Borrowers, hereby certifies to Administrative Lender andLenders that, on the date of this Notice of Borrowing and after giving effectto the requested disbursement (including the use of the proceeds thereof):

 

(a)           Borrowers'representations and warranties in the Loan Documents are correct in allmaterial respects as if made on the date hereof;

 

(b)           noDefault is continuing or would result from the requested Loans being made; and

 

(c)           noevent or circumstance exists that can reasonably be expected to have a MaterialAdverse Effect.

 

The party signing below on behalf of Borrowers' Agentis an Authorized Representative and has caused this Notice of Borrowing to beduly executed on behalf of Borrowers as of ______________.

 

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

 
****
**EXHIBIT E**TOAMENDED AND RESTATED CREDIT AGREEMENT

** **

**Notice ofConversion or Continuation**

 

U.S. Bank NationalAssociationAgency Services Group1420 Fifth Ave., 9th FloorP.O. Box 720Seattle, WA.  98111-0720Attn:  Young HahnFax:  (206) 587-7022

 

Reference is made to that certain Amended and RestatedCredit Agreement among Monaco Coach Corporation, a Delaware corporation, RoyaleCoach By Monaco, Inc., an Indiana corporation, and MCC Acquisition Corporation,a Delaware corporation, (each individually referred to as a"Borrower" and all collectively referred to as"Borrowers"), U.S. Bank National Association (as AdministrativeLender) and the lenders named therein dated as of September 28, 2001, (asamended, modified or supplemented from time to time, the "Credit Agreement").  Capitalized terms used herein shall have therespective meanings assigned to them in the Credit Agreement.

 

1.             Pursuantto Section 3.6 of the Credit Agreement, Borrowers' Agent, on behalf ofBorrowers, hereby requests [the continuation of all or part of outstandingLIBOR Loans with Fixed Rate Terms ending on ___________] [the conversion of allor part of its outstanding Prime Rate Loans], as follows:

 

(a)           TheLoans to which this Notice applies are $_______ of Revolving Loans and$_________ of Term Loans.

 

(b)           Theeffective date of continuation and/or conversion is to be ___________.

 

(c)           Theaggregate amount of [said outstanding LIBOR Loans that are Revolving Loans tobe continued as] [said outstanding Prime Rate Loans that are Revolving Loans tobe converted to] LIBOR Loans, and each requested Fixed Rate Term, are:

 

 

Amount

 

Fixed Rate Term

$

 

 

 

months

$

 

 

 

months

 

(d)           Theaggregate amount of said outstanding LIBOR Loans that are Revolving Loans to becontinued as Prime Rate Loans is $___________.

 

(e)           Theaggregate amount of [said outstanding LIBOR Loans that are Term Loans to becontinued as] [said outstanding Prime Rate Loans that are Term Loans to beconverted to] LIBOR Loans, and each requested Fixed Rate Term, are:

 

Amount

 

Fixed Rate Term

$

 

 

 

months

$

 

 

 

months

 

(d)           Theaggregate amount of said outstanding LIBOR Loans that are Term Loans to becontinued as Prime Rate Loans is $___________.

 

2.             Borrowers'Agent, on behalf of Borrowers, hereby certifies to Administrative Lender andLenders that, on the date of this Notice of Conversion or Continuation, noDefault has occurred and is continuing.

 

The party signing below on behalf of Borrowers' Agentis an Authorized Representative and has caused this Notice of Conversion orContinuation to be duly executed on behalf of Borrowers as of _____________.

 

 

 

MONACO COACH  CORPORATION

 

 

 

 

 

By:

 

 

 

Title:

 

 

 
****
**EXHIBIT F**TOAMENDED AND RESTATED CREDIT AGREEMENT

** **

**Certificate ofChief Financial Officer**

 

U.S. Bank NationalAssociationOregon Commercial Banking800 Willamette Street, 3rd FloorPO Box 10553Eugene, Oregon  97440Attn:  Ken Carson

and each Lender

 

This certificate is furnished pursuant to Section 8.3of that certain Amended and Restated Credit Agreement among Monaco CoachCorporation, a Delaware corporation, Royale Coach By Monaco, Inc., an Indianacorporation, and MCC Acquisition Corporation, a Delaware corporation, (eachindividually referred to as a "Borrower" and all collectivelyreferred to as "Borrowers"), U.S. Bank National Association (asAdministrative Lender) and the lenders named therein dated as ofSeptember 28, 2001, (as amended, modified or supplemented from time totime, the "Credit Agreement"). Capitalized terms used herein shall have the respective meaningsassigned to them in the Credit Agreement.

 

The undersigned hereby certifies that:

 

(1)           thefinancial statements of Borrowers attached hereto for the [quarter] [year]ending _________________, ____ were prepared in accordance with GAAP and fairlypresent in all material respects Borrowers' balance sheet as of the end of such[quarter] [year] and income and cash flow for such [quarter] [year] andyear-to-date (subject to normal year end adjustments and without notes); 

 

(2)           [noDefault existed at any time during such [quarter] [year]] [no Default existedat any time during such [quarter] [year] except for the events described belowand a detailed statement of the action which Borrowers [have taken] [propose totake] with respect to each such event is set forth the description of suchevent below]; and

 

(3)           thecalculation demonstrating Borrowers' compliance with the covenants set forth inArticle X is attached hereto.

 

Dated:__________, ____.

 

 

 

 

 

 

 

Name:

 

 

 

 

Chief Financial Officer

** **
****
**EXHIBIT G**TOAMENDED AND RESTATED CREDIT AGREEMENT

**Assignment andAssumption Agreement**

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT("Agreement") is entered into as of ____________, between___________________ ______________________ ("Assignor") and________________________ ("Assignee").

 

WHEREAS, Assignor is a Lender under that certainAmended and Restated Credit Agreement among Monaco Coach Corporation, aDelaware corporation, Royale Coach By Monaco Corporation, an Indianacorporation, and MCC Acquisition Corporation, a Delaware corporation, (eachindividually referred to as "Borrower" and all collectively referredto as "Borrowers"), U.S. Bank National Association (as AdministrativeLender) and the lenders named therein dated as of September 28, 2001, (asamended, modified or supplemented from time to time, the "CreditAgreement").  Capitalized termsused but not defined in this Agreement shall have the meanings set forth in theCredit Agreement.  

 

WHEREAS, it is the intention of Assignor and Assigneethat (a) Assignor assign to Assignee [all] [a portion] of Assignor's rights andobligations under the Credit Agreement, (b) Assignee assume all such assignmentobligations of Assignor, and (c) Assignor be released from such assignedobligations.

 

NOW, THEREFORE, in consideration of the mutualagreements herein contained, the parties hereto agree as follows:

 

1.             Assignment.** **Effective on the AssignmentEffective Date (as defined in Section 3 hereof), Assignor, without recourse andwithout representation or warranty (except as expressly provided in Section 6hereof), hereby assigns to Assignee the Assigned Rights and Obligations (asdefined below).

 

[The "Assigned Rights and Obligations" meansall of Assignor's rights and obligations under the Credit Agreement on theAssignment Effective Date.]

 

[The "Assigned Rights and Obligations"means:  [a $__________ portion][_________%] of Assignor's share of the Loans, Letter of Credit Obligations andTotal Commitments on the Assignment Effective Date; and all of Assignor's otherrights and obligations under the Credit Agreement that are attributable to suchshare.]

 

2.             Assumption.** **Effective on the AssignmentEffective Date, Assignee hereby accepts the foregoing assignment of, and herebyassumes from Assignor all of, the Assigned Rights and Obligations.

 

3.             Effectiveness.** **This Agreement shall becomeeffective on such date as shall be selected by Assignor (the "AssignmentEffective Date"), which date shall be on or as soon as practicable afterthe execution and delivery of counterparts of this Agreement by Assignor,Assignee, Administrative Lender and Borrowers' Agent on behalf ofBorrowers.  Assignor shall promptlynotify Assignee, Administrative Lender and Borrowers' Agent in writing of the Assignment Effective Date.

 

4.             Payments on Assignment EffectiveDate.  Inconsideration of the assignment by Assignor to, and the assumption by Assigneeof, the Assigned Rights and Obligations, on the Assignment Effective Date:  (a) Assignee shall pay to Assignor theprincipal amount of all Loans made by Assignor pursuant to the Credit Agreementthat are attributable to the Assigned Rights and Obligations and outstanding onthe Assignment Effective Date; (b) each of Assignor and Assignee shall pay tothe other such amounts (if any) as are specified in any written agreement orexchange of letters between them; and (c) Assignee shall pay to AdministrativeLender an assignment processing and recordation fee of $_________.

 

5.             Allocation and Payment of Interest and Fees.  

 

(a)           AdministrativeLender shall pay to Assignee all interest, commitment fees and other amountsnot constituting principal that are paid by or on behalf of Borrowers pursuantto the Loan Documents and are attributable to the Assigned Rights andObligations ("Borrower Amounts") which accrue on and after theAssignment Effective Date.  If Assignorreceives or collects any such Borrower Amounts, Assignor shall promptly paythem to Assignee.  

 

(b)           AdministrativeLender shall pay to Assignor all Borrower Amounts that accrue before theAssignment Effective Date.  If Assigneereceives or collects any such Borrower Amounts, Assignee shall promptly paythem to Assignor.

 

6.             Representations and Warranties.  

 

(a)           Eachof Assignor and Assignee represents and warrants to the other party as follows:

 

                (i)            ithas full power and authority, and has taken all action necessary, to executeand deliver this Agreement and to fulfill its obligations under, and toconsummate the transactions contemplated by, this Agreement;

 

                (ii)           themaking and performance of this Agreement and all documents required to be executedand delivered by it pursuant hereto do not and will not violate any law orregulation applicable to it;

 

                (iii)          thisAgreement has been duly executed and delivered by, and constitutes a legal,valid and binding obligation of, it, enforceable in accordance with its terms;and

 

                (iv)          allapprovals, authorizations or other actions by, or filings with, anygovernmental authority necessary for the validity or enforceability of itsobligations under this Agreement have been made or obtained.

 

(b)           Assignorrepresents and warrants to Assignee that Assignor owns the Assigned Rights andObligations, free and clear of all liens or other encumbrances.

 

(c)           Assigneerepresents and warrants to Assignor as follows:

 

                (i)            Assigneehas made and shall continue to make its own independent investigation of thefinancial condition, affairs and creditworthiness of Borrowers, and the valueof any Collateral now or hereafter securing any of the obligations,indebtedness, liabilities or undertakings under the Loan Documents, inconnection with Assignee's assumption of the Assigned Rights and Obligations;and

 

                (ii)           Assigneehas received a copy of the Loan Documents and such other documents, financialstatements and information as Assignee deems appropriate to make its own creditanalysis and decision to enter into this Agreement.

 

7.             No Assignor Responsibility.  Assignor makes no representation or warrantyand assumes no responsibility to Assignee for:

 

(a)           theexecution by any party other than Assignor, or the effectiveness, genuineness,validity, enforceability, collectibility or sufficiency of the Loan Documents;

 

(b)           anyrepresentations, warranties, recitals or statements made in the Loan Documentsor in any financial statement or other statement, instrument, report, certificateor any other document made or furnished or made available by or on behalf ofBorrowers to Assignor or Assignee in connection with the Loan Documents and thetransactions contemplated thereby;

 

(c)           theperformance or observance of any of the terms, conditions, provisions,covenants or agreements contained in any of the Loan Documents or the existenceor possible existence of any default or event of default under the LoanDocuments; or

 

(d)           theaccuracy or completeness of any information provided to Assignee, whether byAssignor or by or on behalf of Borrowers.

Assignor shall have no initial or continuing duty orresponsibility to make any investigation of the financial condition, affairs orcreditworthiness of Borrowers, or the value of any Collateral, in connectionwith the assignment of the Assigned Rights and Obligations hereunder, or toprovide Assignee with any credit or other information with respect thereto,whether coming into Assignor's possession before the date hereof or at any timeor times thereafter.

 

8.             Assignee Bound By CreditAgreement. Effective on the Assignment Effective Date, Assignee:  (a) shall be deemed to be a party to and"Lender" under the Credit Agreement; (b) agrees to be bound by the CreditAgreement to the same extent as it would have been if it had been an originalLender party thereto; and (c) agrees to perform in accordance with theirrespective terms all obligations which are required under the Loan Documents tobe performed by it as a Lender. Assignee appoints and authorizes Administrative Lender to take suchactions as Administrative Lender on Assignee's behalf and to exercise suchpowers under the Loan Documents as are delegated to Administrative Lender bythe terms thereof, together with such powers as are reasonably incidentalthereto.

 

9.             Assignor Released From CreditAgreement. Effective on the Assignment Effective Date, Assignor shall be releasedfrom the Assigned Rights and Obligations; provided, however, that Assignorshall retain all of its rights to indemnification under the Loan Documents forany events, acts or omissions occurring before the Assignment Effective Date.

 

[10.          Foreign Withholding.  

 

(a)           Assigneerepresents and warrants to Administrative Lender, Borrowers and Assignor that,under applicable law and treaties, Assignee is entitled to receive all paymentsunder the Loan Documents and this Agreement payable to it, without deduction orwithholding of any taxes imposed by the United States or any politicalsubdivision thereof.

 

(b)           Onor before the Assignment Effective Date, Assignee shall deliver to each ofBorrowers' Agent and Administrative Lender two executed copies of valid andproperly completed:  (i) United StatesInternal Revenue Service Form 1001 or 4224 certifying that Assignee is entitledto receive payments under the Credit Agreement and the Loan Documents payableto it, without deduction or withholding of any United States federal incometaxes; or (ii) Internal Revenue Service Form W-8 or W-9 establishing anexemption from United States backup withholding tax.  If any such form is found to be incomplete or incorrect, or mustbe replaced (on the same or a successor form) in order to maintain itseffectiveness, Assignee shall execute and deliver to each of Borrowers' Agentand Administrative Lender two executed copies of a valid, complete and correctreplacement form.]

[11.]        General.  

 

(a)           ThisAgreement constitutes the entire understanding of the parties with respect tothe subject matter hereof and supersedes all prior and current understandingsand agreements, whether written or oral (other than with respect to any feespayable as provided in Section 4 hereof).

 

(b)           Noterm or provision of this Agreement may be amended, waived or terminatedorally, but only by an instrument signed by the parties hereto.

 

(c)           ThisAgreement may be executed in one or more counterparts.  Each set of executed counterparts shall bean original.  Executed counterparts maybe delivered by facsimile transmission.

 

(d)           Assignormay at any time and from time to time grant to others pursuant to the LoanDocuments assignments of or participations in all or part of Assignor's shareof the Loans, Letter of Credit Obligations and Total Commitments, but not withrespect to the Assigned Rights and Obligations.

 

(e)           ThisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective successors and assigns. Neither Assignor nor Assignee may assign or transfer any of its rightsor obligations under this Agreement without the prior written consent of theother.  The preceding sentence shall notlimit the right of Assignee to grant to others assignments of or participationsin all or part of the Assigned Rights and Obligations to the extent permittedby the terms of the Loan Documents.

 

(f)            Allpayments to Assignor or Assignee hereunder shall, unless otherwise specified bythe party entitled thereto, be made in United States Dollars, in immediatelyavailable funds, and to the address or account specified on the signature pagesof this Agreement.  The address ofAssignee for notice purposes under the Credit Agreement shall be as specifiedon the signature pages of this Agreement.

 

(g)           Ifany provision of this Agreement is held invalid, illegal or unenforceable, theremaining provisions hereof will not be affected or impaired in any way.

 

(h)           Eachparty shall bear its own expenses in connection with the preparation andexecution of this Agreement.

 

(i)            ThisAgreement shall be governed by and construed in accordance with the laws of theState of Oregon.

 

IN WITNESS WHEREOF, the parties hereto have executedthis Agreement as of the date first above written.

 

 

 

ASSIGNOR:

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

Assignor's  Notice Instructions:

 

 

 

 

 

 

 

 

 

 

 

Attn:

 

 

 

Ref:

 

 

 

Telephone:

(___) __________

 

 

Facsimile:  

(___) __________

 

 

 

 

 

 

 

Assignor's Payment Instructions:

 

 

 

 

 

 

 

 

 

 

 

ABA No.

 

 

 

Account No.

 

 

 

 

Attn:

 

 

 

Ref:

 

 

 

 

 

 

ASSIGNEE:

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Assignee's  Notice Instructions:

 

 

 

 

 

 

 

 

 

 

 

Attn:

 

 

 

 

Ref:

 

 

 

 

Telephone: 

(___) __________

 

 

Facsimile:  

(___) __________

 

 

 

 

 

 

 

Assignee's  Payment Instructions:

 

 

 

 

 

 

 

 

 

 

 

ABA No.

 

 

 

Account No.

 

 

 

Attn:

 

 

 

Ref:

 

 

 

 

 

 

ACKNOWLEDGED  AND AGREED:

 

 

 

 

 

ADMINISTRATIVE LENDER:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title: