Exhibit 10.8


 


SECOND
AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of November 27
2002 by and among MONACO COACH CORPORATION, a Delaware corporation, ROYALE
COACH BY MONACO, INC., an Indiana corporation, MCC ACQUISITION CORPORATION, a
Delaware corporation (“MCC”), the Lenders and U.S. BANK NATIONAL ASSOCIATION as
the Administrative Lender.


RECITALS


Borrowers, Administrative
Lender and Lenders are parties to that certain Amended and Restated Credit
Agreement dated September 28, 2001 (as previously amended, the
“Agreement”).  In order to permit the
acquisition of ORN, ORLV and ORMCC, Borrowers, Administrative Lender and
Lenders desire to amend the Agreement in the manner set forth below.


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


1.             Definitions.   
All capitalized terms used herein and not otherwise defined herein shall
have the meaning attributed to them in the Agreement.


2.             Amendment
to Section 1.1.


(a)           The following defined terms are
amended in their entirety to read as follows:


“Borrower” shall mean each of
Monaco Coach Corporation, Royale Coach by Monaco, Inc., MCC Acquisition
Corporation, ORN, ORLV and ORMCC.


“Collateral” means all of
Borrowers’ assets (except real property), including, without limitation,
(a) all Accounts, Rights to Payment, General Intangibles, Records, goods,
fixtures, inventory, equipment, money, letter of credit rights, supporting
obligations, instruments, chattel paper, deposit accounts, documents,
investment property, and commercial tort claims; (b) all products,
proceeds, rents and profits of the foregoing; and (c) all of the
foregoing, whether now owned or existing or hereafter acquired or arising or in
which Borrower now has or hereafter acquires any rights.


 


1

















 


“Disclosure Letter” means the
Disclosure Letter from Borrowers’ Agent to Administrative Lender dated the
Closing Date, as amended with Lenders consent by amendments dated as of January
31, 2002 and November 27, 2002.


“Fixed Rate Term” means a
period of one, two, three or six months, as designated by Borrowers’ Agent,
during which a Loan bears interest determined in relation to LIBOR; provided,
however, that no Fixed Rate Term for a Revolving Loan may extend beyond the
Revolver Maturity Date, no Fixed Rate Term for a Term Loan or a Term Loan II
may extend beyond the Maturity Date, and if the last day of a Fixed Rate Term
is not a Business Day, such term shall be extended to the next succeeding
Business Day, or if the next succeeding Business Day falls in another calendar
month, such term shall end on the next preceding Business Day.


“Loan” means an advance made
by a Lender to Borrowers pursuant to any one of Sections 3.1, 3.2, 3.3 or
3.3A.


“Note” means any of (i) a
master promissory note executed by Borrowers in favor of Administrative Lender
for the ratable benefit of Lenders evidencing Revolving Loans, (ii) a
master promissory note executed by Borrowers in favor of Administrative Lender
for the ratable benefit of Lenders evidencing Term Loans, (iii) a master
promissory note executed by Borrowers in favor of Administrative Lender for the
ratable benefit of Lenders evidencing Term Loans II or (iv) a
promissory note executed by Borrowers in favor of Swingline Lender evidencing
the Swing Loans, each substantially in the form of one of the forms attached as
Exhibit B.


“Ratable Portion” means, with
respect to any Lender:  (i) with
respect to Revolving Loans, the quotient obtained by dividing the total of such
Lender’s Revolving Loan Commitment by the total Revolving Loan Commitments of
all Lenders; (ii) with respect to Term Loans, the quotient obtained by
dividing the total of such Lender’s Term Loan Commitment by the total Term Loan
Commitments of all Lenders; (iii) with respect to Term Loans II, the
quotient obtained by dividing the total of such Lender’s Term Loan II
Commitment by the total Term Loan II Commitments of all Lenders; and
(iv) with respect to all Loans, the quotient obtained by dividing the
total of such Lender’s Revolving Loan Commitment, Term Loan Commitment, Term
Loan II Commitment and Swing Loan Commitment by the Total
Commitments.  At all times when the
Total Commitments are zero, all references in the preceding sentence to
“Commitments” shall mean Commitments existing immediately before the Total
Commitments became zero.


“Total Commitments” means the
total of all Revolving Loan Commitments, Swing Loan Commitment, Term Loan
Commitments and Term Loan II Commitments.


(b)           The definition of “Permitted
Liens” is revised by deleting “and” before item (n) and adding
the following immediately before the period: “; and (o) the Liens 


 


2

















 


affecting the real
property of ORLV, ORMCC and ORN at the time of the closing of the ORA
Acquisition that are described on Exhibit B to the Second Amendment
hereto.”


(c)           The following additional defined
terms are added to Section 1.1:


“ORA Acquisition” means the
transactions contemplated by the following agreements:  (i) Stock Purchase Agreement dated as
of November 27, 2002 by and among Parent, MCC, ORA and ORLV;
(ii) Stock Purchase Agreement dated as of November 27, 2002 by and
among Parent, MCC, ORA and ORN; and (iii) Stock Purchase Agreement dated
as of November 27, 2002 by and among Parent, MCC, ORA and ORMCC.


“ORLV” means Outdoor Resorts
of Las Vegas, Inc., a Nevada corporation.


“ORMCC” means Outdoor Resorts
Motorcoach Country Club, Inc., a California corporation.


“ORN” means Outdoor Resorts of
Naples, Inc., a Florida corporation.


“Term Loan II” means a Loan
made by a Lender to Borrowers pursuant to Section 3.3A.


“Term Loan II Commitment”
means, as to any Lender, the amount set opposite such Lender’s name on Schedule I
as its “Term Loan II Commitment,” as such amount may be reduced from time
to time pursuant to this Agreement or as such amount may be adjusted pursuant
to Section 13.5(c).


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


(iii)          if as of the end of any fiscal quarter
of Parent the net book value of Borrowers’ property, plant and equipment
(exclusive of the property, plant and equipment acquired by Borrowers from ORA)
is less than the total of (A) $120,942,000, less (B) the sum
of all principal payments made on the Term Loans and less
(C) $5,000,000,  Borrowers, within
60 days after the end of such quarter (110 days if the quarter is Parent’s
fourth fiscal quarter), shall prepay the outstanding principal amount of the
Terms Loans by an amount equal to such difference;


4.             Addition
of Section 3.3A.  Section 3.3A is added to the Agreement
to read as follows:


3.3A       TERM
LOAN II


(a)           On the terms and subject to the
conditions contained in this Agreement, each Lender agrees to make  a term loan (each a “Term Loan II”) in
a single advance on the effective date of the Second Amendment hereto to Borrowers
in 


 


3

















 


the amount of such
Lender’s Term Loan II Commitment. 
Contemporaneously with the closing of the ORA Acquisition, Borrowers
shall use proceeds of Term Loans II to repay all of ORN’s, ORLV’s and
ORMCC’s then outstanding indebtedness for borrowed money owed to a Person other
than a Borrower.  The Term Loans II
shall be evidenced by a Note.


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


(i)            Borrowers shall, on the last day of
each calendar quarter, beginning December 31, 2002, repay the outstanding
principal balance of the Term Loans II by making a payment in the
aggregate amount of $1,833,333, provided that if on or before such day a
principal payment has been made pursuant to any of items (iii), (iv) or
(v) below, then the required principal payment due on such day shall be the
amount resulting from dividing the then outstanding principal balance of Term
Loans II by the number equal to one plus the number of full calendar quarters
remaining after such day through the Maturity Date;


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


(iii)          upon the sale of all or substantially
all of the real property located in Naples, FL owned by ORN, Borrowers shall
prepay the outstanding principal amount of the Term Loans II by
$3,000,000;


(iv)          upon the sale of all or substantially
all of the real property located in Las Vegas, NV owned by ORLV, Borrowers
shall prepay the outstanding principal amount of the Term Loans II by an
amount equal to $10,000,000 less 45.45% of the amount of all payments made
pursuant to Section 3.3A(b)(i); and


(v)           upon the sale of all or substantially
all of the real property located in Indio, CA owned by ORMCC, Borrowers shall prepay
the outstanding principal amount of the Term Loans II by an amount equal
to $9,000,000 less 40.9% of the amount of all payments made pursuant to
Section 3.3A(b)(i).


 


4

















 


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


5.             Addition
of Section 8.20.  Section 8.20 is added to the
Agreement to read as follows:


8.20        LIEN
IN REAL PROPERTY


Promptly upon
Administrative Lender’s request, Borrower shall execute and deliver to
Administrative Lender such mortgages, deeds of trust and other agreements and
documents, and take such actions, as Administrative Lender determines to be
reasonably necessary to grant Administrative Lender a first priority Lien
(subject only to Permitted Liens) in Borrower’s real property.


6.             Amendment
of Section 9.1.  Section 9.1 is amended in
its entirety to read as follows:


Create or suffer
to exist, or permit any Subsidiary to create or suffer to exist, any Lien upon
or with respect to any of its properties (including, without limitation any
real property), whether now owned or hereafter acquired, or assign any right to
receive income, except Permitted Liens and Liens subordinated to the
Administrative Lender’s Liens by Section 9.2(h).


7.             Amendment
of Section 9.2(h). 
Section 9.2(h) is amended in its entirety to read as follows:


(h)           Debt of any Borrower to another
Borrower, and each Borrower hereby agrees that if it has or hereafter acquires
a Lien in any Collateral in which Administrative Lender has or hereafter
acquires a perfected Lien, then Borrower’s Lien shall be junior in priority to
Administrative Lender’s Lien, notwithstanding the date, manner or order of
perfection of Borrower’s Lien and Administrative Lender’s Lien;


8.             Amendment
of Section 9.4.  The introductory clause to
Section 9.4 is amended in its entirety to read as follows:


Except as
permitted in Sections 9.5(h) and 9.5 (i) and except for (1) the
ORA Acquisition and (2) the sale by ORLV, ORMCC and ORN of their real
property assets:


9.             Amendment
of Section 9.6.  Section 9.6 is amended in
its entirety to read as follows:


 


5

















 


Directly
or indirectly engage, or permit any Subsidiary to directly or indirectly
engage, in any business activity other than (a) the type of business
activities in which Borrowers, other than ORLV, ORMCC and ORN, are engaged on
the Closing Date, (b) with respect to ORLV, ORMCC and ORN only, the type
of business activities in which ORLV, ORMCC and ORN are engaged on the closing
of the ORA Acquisition and (c) activities reasonably related thereto.


10.          Amendment
of Section 9.8.  Section 9.8 is amended in
its entirety to read as follows:


Cancel, or permit
any Subsidiary to cancel, any claim or Indebtedness owed to it except for
legitimate business purposes in the reasonable judgment of Borrowers and in the
ordinary course of business, provided that Parent may cancel any Indebtedness
owed to it by any of ORLV, ORMCC and ORN.


11.          Amendment
of Section 10.1.  Section 10.1 is amended in its
entirety to read as follows:


As of the end of each
fiscal quarter ending in 2001 and 2002, Parent shall maintain a Leverage Ratio
not greater than 2.00:1.  As of the end
of each fiscal quarter ending after 2002 and before July 1, 2003, Parent
shall maintain a Leverage Ratio not greater than 1.75:1.  As of the end of each fiscal quarter ending
after June 30, 2003, Parent shall maintain a Leverage Ratio not greater
than 1.50:1.


12.          Amendment
of Section 13.4.  The second sentence of Section 13.4 is
amended in its entirety to read as follows:


The foregoing
notwithstanding, any increase or decrease in the Ratable Portion of any Lender
and any increase in the Revolving Loan Commitment, Term Loan Commitment or Term
Loan II Commitment of any Lender must be in writing and signed by such
Lender.


13.          Schedule I.  Schedule I is amended in its entirety to read as
Schedule I attached hereto.


14.          Schedule II.  Schedule II is amended in its entirety to read as
Schedule II attached hereto.


15.          Exhibit B.  Exhibit B is amended to add the Note attached
hereto as Exhibit A to Second Amendment


16.          Exhibit E.  Exhibit E is amended in its entirety to read as
Exhibit E attached hereto.


 


6

















 


17.          ORA
Delinquent Taxes and Mechanics Liens. 
Lenders
hereby consent to the continuing existence for a period of sixty (60) days
after the closing of the ORA Acquisition of delinquent taxes and delinquent
mechanics liens (whether such liens have been perfected or not as of the
closing of the ORA Acquisition) by ORLV, ORMCC and ORN to the extent such
delinquent taxes and delinquent mechanics liens are with respect to obligations
incurred before the closing of the ORA Acquisition.


18.          Solvency.  Lenders acknowledge and consent to the circumstance
that the representation in Section 6.18 of the Agreement is correct with
respect to ORLV, ORMCC and ORN only if the obligations of such Borrowers to
Parent are disregarded and, for a period of sixty (60) days after the closing
of the ORA Acquisition, if $3,000,000 of trade accounts payable of such
Borrowers are disregarded.


19.          Amendment
Fee.  Contemporaneously with the execution of
this Second Amendment, Borrower shall pay to Administrative Lender, for the
ratable benefit of Lenders, an amendment fee of $55,000.


20.          Effective
Date.  This Second Amendment shall be effective
as of November 27, 2002 upon the payment of the amendment fee and
execution and delivery of the Term Loan II Promissory Note.


21.          No
Default.  Borrowers represent and warrant to Lenders
that (i) no Default exists and (ii) no Default will arise as a result
of consummation of the ORA Acquisition.


22.          Ratification. 
Except as otherwise provided in this Second Amendment, all of the
provisions of the Agreement are hereby ratified and confirmed and shall remain
in full force and effect.


23.          One
Agreement.  The Agreement, as modified by the
provisions of this Second Amendment, shall be construed as one agreement.


24.          Counterparts. 
This Second Amendment may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original,
and all of which when taken together shall constitute one and the same
agreement.  Delivery of an executed
signature page of this Second Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.


25.          Statutory
Notice.


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


 


7

















 


IN WITNESS WHEREOF, this Second Amendment to Amended and
Restated Credit Agreement has been duly executed as of the date first written
above.


 


	
   

  	
   

  	
  MONACO COACH
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John W. Nepute

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ROYALE COACH BY MONACO,
  INC.

  	
   

  	
  MCC ACQUISITION
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John W. Nepute

  	
   

  	
  By:

  	
  /s/ John W. Nepute

  
	
  Title:

  	
  Vice President and
  Treasurer

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GE COMMERCIAL
  DISTRIBUTION FINANCE CORPORATION

  	
   

  	
  WELLS FARGO BANK,
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Timothy Wass

  	
   

  	
  By:

  	
  /s/ Kathy Inman Lucier

  
	
  Title:

  	
  Director of
  Underwriting

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UNION BANK OF
  CALIFORNIA, N.A.

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas Marks

  	
   

  	
  By: 

  	
  /s/ Robert Davison

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WASHINGTON MUTUAL BANK

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bruce Kendrex

  	
   

  	
  By:

  	
  /s/ Kenneth S. Carson

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Vice President

  



 


8

















 


JOINDER OF PARTIES


 


For good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
each of the undersigned hereby becomes a “Borrower” under the above referenced
Amended and Restated Credit Agreement, as amended, with the same force and
effect as if the undersigned had executed and delivered the original Amended
and Restated Credit Agreement at the same time as Monaco Coach Corporation, Royale
Coach by Monaco, Inc. and MCC Acquisition Corporation.


Dated as of
November 27, 2002.


 


	
  OUTDOOR RESORTS OF
  NAPLES, INC.

  	
   

  	
  OUTDOOR RESORTS OF LAS
  VEGAS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John W. Nepute

  	
   

  	
  By: 

  	
  /s/ John W. Nepute

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OUTDOOR RESORTS
  MOTORCOACH COUNTRY CLUB, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John W. Nepute

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  	
   

  



 


 


9

















 


SCHEDULE
1


 


1.             Revolving
Loan Commitments:


U.S. Bank National
Association  —  $14,181,818.18     (23.636363633%)


GE Commercial
Distribution Finance Corporation  —  $7,636,363.64     (12.727272733%)


Washington Mutual
Bank  — 
$10,818,181.82    
(18.030303033%)


Wells Fargo Bank,
National Association  —  $10,818,181.82     (18.030303033%)


Union Bank of California,
N.A.  — 
$8,909,090.90     (14.848484833%)


Bank of America,
N.A.  — 
$7,636,363.64     (12.727272733%)


2.             Term
Loan Commitments:


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


GE Commercial
Distribution Finance 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.             Term
Loan II Commitments:


U.S. Bank National
Association  —  $7,600,000.00    
(34.54545455%)


GE Commercial
Distribution Finance Corporation  —  $2,400,000.00     (10.90909091%)


Washington Mutual
Bank  — 
$3,400,000.00     (15.45454545%)


Wells Fargo Bank,
National Association  —  $3,400,000.00     (15.45454545%)


Union Bank of California,
N.A.  — 
$2,800,000.00     (12.72727273%)


Bank of America,
N.A.  — 
$2,400,000.00     (10.90909091%)


4.             Swing
Loan Commitment:


U.S. Bank National
Association  —  $10,000,000     (100%)


 


1

















 


5.             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


 


GE Commercial
Distribution Finance 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


 


 


2

















 


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


 


3

















 


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 and Term Loans II

  	
   

  	
  150

  	
   

  	
  175

  	
   

  	
  200

  	
   

  	
  225

  	
   

  
	
  Prime Margin —
  Term Loans and Term Loans II

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  25

  	
   

  
	
  Fee Percentage

  	
   

  	
  25

  	
   

  	
  25

  	
   

  	
  37.5

  	
   

  	
  50

  	
   

  






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


“Level I”
applies on any day if, on such day, the applicable Leverage Ratio is less than
1.00:1.


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


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


“Level IV”
applies on any day if, on such day, the applicable Leverage Ratio is 1.50:1 or
greater.


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


 


1

















 


EXHIBIT A to SECOND AMENDMENT


Term
Loans II Promissory Note


 




	
  $22,000,000

  	
   

  	
  November 27,
  2002

  






 


FOR VALUE RECEIVED, the undersigned, MONACO COACH CORPORATION, a
Delaware corporation, ROYALE COACH BY MONACO, INC., an Indiana corporation, MCC
ACQUISITION CORPORATION, a Delaware corporation, OUTDOOR RESORTS OF NAPLES,
INC., a Florida corporation, OUTDOOR RESORTS OF LAS VEGAS, INC., a Nevada
corporation and OUTDOOR RESORTS MOTORCOACH COUNTRY CLUB, INC., a California
corporation (each individually referred to as “Borrower” and all collectively
referred to as “Borrowers”) hereby jointly and severally promise to pay to the
order of U.S. BANK NATIONAL ASSOCIATION as Administrative Lender for the
ratable benefit of the Lenders (“Administrative Lender”) in the manner and at
the times provided in that certain Amended and Restated Credit Agreement among
Borrowers, U.S. Bank National Association (as Administrative Lender) and the
lenders named therein dated as of September 28, 2001, (as amended,
modified or supplemented from time to time, the “Credit Agreement”), the
principal sum of Twenty-Two Million Dollars ($22,000,000).


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


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


Administrative Lender is authorized but not required to record the date
and amount of each payment of principal and interest hereunder, and the
resulting unpaid principal balance hereof, in Administrative Lender’s internal
records, and any such recordation shall be prima facie evidence of the accuracy
of the information so recorded; provided however, that Administrative Lender’s
failure to so record such amounts shall not limit or otherwise affect
Borrower’s obligations hereunder and under the Credit Agreement to repay the
principal hereof and interest hereon.


Borrowers shall pay all costs of collection, including reasonable
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) or
otherwise).  No delay or failure on the
part of Administrative Lender to exercise 


 


1

















 


any of its rights
hereunder shall be deemed a waiver of such rights or any other right of Administrative
Lender nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of such rights or any other right on any future occasion.  Borrowers and every surety, indorser and
guarantor of this Note waive presentment, demand, protest, notice of intention
to accelerate, notice of acceleration, notice of nonpayment and all other
notices of every kind, and agree that their liability under this Note shall not
be affected by any renewal, postponement or extension in the time of payment
hereof, by any indulgence granted by any holder hereof with respect hereto, or
by any release or change in any security for the payment of this Note, and they
hereby consent to any and all renewals, extensions, indulgences, releases or
changes, regardless of the number of such renewals, extensions, indulgences,
releases or changes.


The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence and during the continuation of certain stated events, in each case
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by Borrowers.


Borrowers’ obligations evidenced by this promissory note are secured by
the collateral described in the Loan Documents.  The Loan Documents describe the rights of Administrative Lender
with respect to the collateral.


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


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


UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY ANY LENDER OR
ADMINISTRATIVE LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY SUCH LENDER OR ADMINISTRATIVE LENDER TO BE
ENFORCEABLE.


 


2

















 


	
  MONACO COACH
  CORPORATION

  	
   

  	
  ROYALE COACH BY MONACO,
  INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Marty Daley

  	
   

  	
  By:

  	
  /s/ Marty Daley

  
	
  Title:

  	
  VP and CFO

  	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OUTDOOR RESORTS
  MOTORCOACH COUNTRY CLUB, INC.

  	
   

  	
  MCC ACQUISITION
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Marty Daley

  	
   

  	
  By:

  	
  /s/ Marty Daley

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OUTDOOR RESORTS OF
  NAPLES, INC.

  	
   

  	
  OUTDOOR RESORTS OF LAS
  VEGAS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Marty Daley

  	
   

  	
  By: 

  	
  /s/ Marty Daley

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  Treasurer

  



 


3

















 


EXHIBIT B to SECOND
AMENDMENT


 


Additional Permitted Liens


 


1.             The Deed of Trust
recorded as Document No. 02830 of the records of the Office of County Recorder
of Clark County, Nevada encumbering ORLV’s real property for the benefit of
Parent.


2.             The Deed of Trust
recorded as Instrument No. 2001-569395 of the records of the Office of the
Recorder of Riverside County, California encumbering ORMCC’s real property for
the benefit of Parent.


3.             The Deed of Trust
recorded in Book 2905, Page 743 of the records of the Office of the Recorder of
Collier County, Florida encumbering ORN’s real property for the benefit of
Parent to secure ORN’s indebtedness to Parent.


 


1

















 


EXHIBIT E


Notice
of Conversion or Continuation


 


U.S. Bank National Association

Agency Services Group

1420 Fifth Ave., 9th Floor

P.O. Box 720

Seattle, WA.  98111-0720

Attn:  Young Hahn

Fax:  (206) 587-7022


Reference is made to that certain Amended and Restated Credit Agreement
among Monaco Coach Corporation, Royale Coach By Monaco, Inc., MCC Acquisition
Corporation, Outdoor Resorts of Naples, Inc., Outdoor Resorts of
Las Vegas, Inc. and Outdoor Resorts Motorcoach Country Club, Inc. (each
individually referred to as a “Borrower” and all collectively referred to as
“Borrowers”), U.S. Bank National Association (as Administrative Lender) and the
lenders named therein dated as of September 28, 2001, (as amended,
modified or supplemented from time to time, the “Credit Agreement”).  Capitalized terms used herein shall have the
respective meanings assigned to them in the Credit Agreement.


1.             Pursuant to
Section 3.6 of the Credit Agreement, Borrowers’ Agent, on behalf of
Borrowers, hereby requests [the continuation of all or part of outstanding
LIBOR Loans with Fixed Rate Terms ending on
                          ]
[the conversion of all or part of its outstanding Prime Rate Loans], as
follows:


(a)           The
Loans to which this Notice applies are
$                 
of Revolving Loans,
$              
of Term Loans and
$                   
of Term Loans II.


(b)           The
effective date of continuation and/or conversion is to be
                    .


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


 


1

















 


 


	
  Amount

  	
   

  	
  Fixed Rate Term

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  



(d)           The
aggregate amount of said outstanding LIBOR Loans that are Revolving Loans to be
continued as Prime Rate Loans is
$              .


(e)           The
aggregate amount of [said outstanding LIBOR Loans that are Term Loans to be
continued as] [said outstanding Prime Rate Loans that are Term Loans to be
converted to] LIBOR Loans, and each requested Fixed Rate Term, are:


 


	
  Amount

  	
   

  	
  Fixed Rate Term

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  



(f)            The
aggregate amount of said outstanding LIBOR Loans that are Term Loans to be
continued as Prime Rate Loans is
$                  .


(g)           The
aggregate amount of [said outstanding LIBOR Loans that are Term Loans II
to be continued as] [said outstanding Prime Rate Loans that are Term Loans II
to be converted to] LIBOR Loans, and each requested Fixed Rate Term, are:


 


	
  Amount

  	
   

  	
  Fixed Rate Term

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  months

  	
   

  



(h)           The
aggregate amount of said outstanding LIBOR Loans that are Term Loans II to
be continued as Prime Rate Loans is
$                   .


2.             Borrowers’ Agent,
on behalf of Borrowers, hereby certifies to Administrative Lender and Lenders
that, on the date of this Notice of Conversion or Continuation, no Default has
occurred and is continuing.


 


 


2

















 


The party signing below
on behalf of Borrowers’ Agent is an Authorized Representative and has caused
this Notice of Conversion or Continuation to be duly executed on behalf of
Borrowers as of                             .


 


 


	
   

  	
   

  	
  MONACO COACH
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  



 


3