Document:

Exhibit 10.34

Exhibit 10.34

 

AMENDMENT #4 TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT #4 TO RECEIVABLES PURCHASE AGREEMENT, dated as of June 28, 2004 (this "Amendment"), is by and among PFG Receivables Corporation, a Florida corporation ("Seller"), Performance Food Group Company, a Tennessee corporation, as initial Servicer (together with Seller, the "Seller Parties"), Jupiter Securitization Corporation ("Conduit") and Bank One, NA (Main Office Chicago), individually (together with Conduit, the "Purchasers") and as agent for the Purchasers (in such capacity, the "Agent"), and pertains to the Receivables Purchase Agreement, dated as of July 3, 2001 (as heretofore amended, the "Existing Agreement").  Unless defined elsewhere herein, capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Existing Agreement.

W I T N E S S E T H:
WHEREAS, the parties desire to amend the Existing Agreement as hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.Amendments.

1.1.The definitions of the following defined terms set forth in Exhibit I to the Existing Agreement are hereby amended and restated in their entirety to read as follows:

"Concentration Limit" means, at any time, for any Obligor, 2.5% of the aggregate Outstanding Balance of all Eligible Receivables, or such other amount (a "Special Concentration Limit") for such Obligor designated by the Agent; provided that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that Conduit or the Required Financial Institutions may, upon not less than three Business Days' notice to Seller, cancel any Special Concentration Limit.  As of June 28, 2004, the Special Concentration Limit for Outback Steakhouse and its Affiliates (the "Outback Special Concentration Limit" shall equal the least of:  (1) $20,000,000, (2) the product of (a) the sum of (i) the Effective Loss Reserve Percentage, plus (ii) the Effective Dilution Reserve Percentage minus 4.0%, times (b) the aggregate Outstanding Balance of all Eligible Receivables, and (3) the sum of (a) the Loss Reserve, plus (b) the Dilution Reserve minus $1 million.

"Liquidity Termination Date" means June 27, 2005.

1.2Clauses (i), (ii) and (iv) of the "Eligible Receivables" definition set forth in Exhibit I to the Existing Agreement are hereby amended and restated to read, respectively, as follows:

(i)the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an Affiliate of any of the parties hereto; and (c) unless the applicable Originator and Seller have complied with the federal Assignment of Claims Act, is not the federal government or a subdivision or agency thereof; provided, however,  that (1) so long as Receivables of which the Obligor is the federal government or a subdivision or agency thereof as to which Seller has not complied with the federal Assignment of Claims Act do not exceed 3% of the aggregate Outstanding Balance of all Receivables, such Receivables may be included as Eligible Receivables hereunder, and (2) Receivables as to which the applicable Obligor does not meet the requirements of the foregoing clause (a) may be included as Eligible Receivables hereunder in an aggregate amount that does not exceed 1% of the total Outstanding Balance of all Receivables,

(ii)the Obligor of which is not the Obligor of (a) any Charged-Off Receivable or (b) any Defaulted Receivables which represent in the aggregate more than 35% of all Receivables of such Obligor,

(iv)which by its terms is due and payable within 60 days of the original billing date therefor and has not had its payment terms extended; provided, however, that "Extended Term Receivables" (hereinafter defined) may be included as Eligible Receivables hereunder in an aggregate amount that does not exceed 1% of the total Outstanding Balance of all Receivables,

1.3The following new definition is hereby inserted into Exhibit I to the Existing Agreement in its appropriate alphabetical order:

"Extended Term Receivables" means, on any date, Receivables as to which the payment terms are greater than 60 days of the original billing date but within 120 days of the original billing date therefor and has not had its payment terms extended.

1.4Exhibit IV to the Existing Agreement is hereby amended and restated in its entirety to read as set forth in Annex A hereto.

2.Representations and Warranties of the Seller Parties.  In order to induce the Agent and the Purchasers to enter into this Amendment, each Seller Party hereby represents and warrants to the Agent and the Purchasers (i) that as of the date hereof, each of such Seller Party's representations and warranties set forth in Section 5.1 of the Existing Agreement is true and correct as of the date hereof, and (ii) that, as to itself, each of the following representations and warranties is true and correct as of the date hereof:
(a) Power and Authority; Due Authorization, Execution and Delivery.  The execution and delivery by such Seller Party of this Amendment, and the performance of its obligations under the Existing Agreement as amended hereby, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part.  This Amendment has been duly executed and delivered by such Seller Party.

(b) No Conflict.  The execution and delivery by such Seller Party of this Amendment, and the performance of its obligations under the Existing Agreement as amended hereby do not contravene or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation could not reasonably be expected to have a Material Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(c) Governmental Authorization.  Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Seller Party of this Amendment and the performance of its obligations under the Existing Agreement as amended hereby.

(d) Binding Effect.  This Amendment and the Existing Agreement as amended hereby constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

3.  Conditions Precedent.  This Amendment shall become effective as of the date first above written upon (a) delivery to the Agent by each of the parties hereto of a counterpart hereof duly executed by such party and (b) payment to the Agent in immediately available funds of a fully-earned and non-refundable $35,000 renewal fee.

4.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

5.  CONSENT TO JURISDICTION.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE EXISTING AGREEMENT AS AMENDED HEREBY, AND EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AMENDMENT OR THE EXISTING AGREEMENT AS AMENDED HEREBY SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

6.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AMENDMENT OR THE EXISTING AGREEMENT AS AMENDED HEREBY OR THE RELATIONSHIPS ESTABLISHED THEREUNDER.

7.  Ratification.  Except as expressly amended hereby, the Existing Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed.

8.  Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized representatives as of the date hereof.

PFG RECEIVABLES CORPORATION

 

By: ______________________________

Name:

Title:

 

 

PERFORMANCE FOOD GROUP COMPANY

 

By: ______________________________

Name:

Title:

 

 

 

 

 

 

JUPITER SECURITIZATION CORPORATION

 

By: ___________________________________
Sherri Gerner, Authorized Signer

 

 

 

 

BANK ONE, NA (MAIN OFFICE CHICAGO), AS A FINANCIAL INSTITUTION AND AS AGENT

 

By: ___________________________________

Sherri Gerner, Director, Capital Markets

Annex A

EXHIBIT IV

NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS

	
ORIGINATOR NAME
	
FINANCIAL INSTITUTION
	
LOCK-BOX ADDRESS
	
RELATED COLLECTION ACCOUNT

	
Kenneth O. Lester Company, Inc. (A/K/A PFG-CDC) 
	
Wachovia Bank, NA
	
P.O. Box 932485

Atlanta, GA 31193-2485
	
2000013954358

	 	
Sun Trust Bank
	 	
7000000203

	 	 	 	 
	
Caro Foods, Inc.
	
Bank One, NA
	 	
8501229399

	 	
Hibernia National Bank
	
P.O. Box 54946

New Orleans, LA 70154-4946
	
812038540

	 	 	 	 
	
PFG-Lester Broadline, Inc.
	
Sun Trust Bank
	 	
7021161828

	 	 	 	 
	
Hale Brothers Summit, Inc.
	
Wachovia Bank, NA
	 	
2000005456686

	 	
Sun Trust Bank
	 	
5632927

	 	 	 	 
	
Performance Food Group of Georgia, Inc. (A/K/A PFG-Miltons) 
	
Wachovia Bank, NA
	
P.O. Box 931533

Atlanta, GA 31193-1533
	
2050000548523

	 	 	 	 
	
Performance Food Group of Georgia, Inc. (D/B/A W.J. Powell Foodservice)
	
Commercial Bank
	 	
2000404

	 	 	 	 
	
AFI Foodservice, LLC (f/k/a AFI Food Service Distributors, Inc.)
	
Wachovia Bank, NA
	 	
2050000548772

	 	 	 	 
	
Virginia Foodservice Group, Inc.
	
Wachovia Bank, NA 
	 	
2050000637353

	 	 	 	 
	
NorthCenter Foodservice Corporation
	
Peoples Heritage Bank
	 	
0240917742

	 	 	 	 
	
Performance Food Group of Texas, L.P. (A/K/A PFG-Temple)
	
Wachovia Bank, NA 
	
P.O. Box 951641

Dallas, TX 75395-1641
	
2000013957122

	 	 	 	 
	
Performance Food Group of Texas, L.P. (A/K/A PFG-Victoria)
	
Wachovia Bank, NA 
	
P.O. Box 951642

Dallas, TX 75395-1642
	
2000013957135

	 	 	 	 
	
PFG of Florida LLC
	
Wachovia Bank, NA 
	 	
2050000549548

	 	 	 	 
	
Thoms-Proestler Company
	
U.S. Bank National Association
	 	
47252

	 	 	 	 
	
Springfield Foodservice Corporation
	
BankNorth, N.A.
	 	
8240613790

	 	 	 	 
	
Middendorf Meat Company
	
UMB Bank
	
P.O. Box 790192

St. Louis, MO 63179-0192
	
9871459330EXHIBIT 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Agreement, made and dated as of May 4, 2004, with an effective date of
May 4, 2004 ("Effective Date"), by and between Starcraft Corporation, an Indiana
corporation  ("Employer"),  and  Michael H.  Schoeffler,  a resident  of Elkhart
County, Indiana ("Employee").

                               W I T N E S S E T H

     WHEREAS, Employee serves as a member of the Board of Directors of Employer,
and is employed by Employer as its President and Co-Chief Executive Officer, and
also  serves on the Board of  Directors  and on the Board of Managers of each of
its subsidiaries  and affiliates,  and also serves as an officer for each of its
subsidiaries and affiliates  (collectively "Job  Responsibilities") and Employee
has made valuable contributions to the strategic planning,  business operations,
and financial strength of Employer;

     WHEREAS,  Employer and Employee entered into an Employment  Agreement dated
as of October 1, 2003;

     WHEREAS,  Employer  desires  to  encourage  Employee  to  continue  to make
valuable  contributions  to Employer's  business  operations  and not to seek or
accept employment elsewhere;

     WHEREAS,  Employee  desires to be assured of a secure minimum  compensation
and Job Responsibilities with Employer for his continued services over a defined
term;

     WHEREAS,  Employer desires to assure the continued  services of Employee on
behalf of Employer on an objective and impartial  basis and without  distraction
or  conflict  of  interest  in the event of an  attempt  by any person to change
Employee's Job Responsibilities or to obtain control of Employer;

     WHEREAS,  Employer  recognizes that when faced with a proposal for a change
of control of Employer,  Employee  will have a  significant  role in helping the
Board of  Directors  assess the options and  advising  the Board of Directors on
what is in the  best  interests  of  Employer  and its  shareholders,  and it is
necessary  for  Employee to be able to provide  this advice and counsel  without
being influenced by the uncertainties of his own situation; and

     WHEREAS, Employer desires to amend and restate the employment agreement and
provide fair and reasonable benefits to Employee on the terms and subject to the
conditions set forth in this Agreement.

     NOW,  THEREFORE,  in consideration of these premises,  the mutual covenants
and undertakings  herein  contained and the continued  employment of Employee to
perform Job Responsibilities for Employer, Employer and Employee, each intending
to be legally bound, covenant and agree as follows:

     1.  Upon  the  terms  and  subject  to the  conditions  set  forth  in this
Agreement,  Employer  employs  Employee  to  perform  Job  Responsibilities  for
Employer,   its  subsidiaries,   and  affiliates,   and  Employee  accepts  such
employment. "Affiliate," for purposes of this Agreement, means an entity that is
controlled  by  Employer,  or 50% or more owned by  Employer,  and also means an
entity that adopts this Agreement with the Employer's consent.

     2. Employee's Job  Responsibilities  shall be, and Employee agrees to serve
as, a member of the Board and  President  and  Co-Chief  Executive  Officer  for
Employer,  and  as an  officer  of  each  of  its  affiliates  and  each  of its
subsidiaries, and as a member of the Board of Directors and/or Board of Managers
(as the case  may be) of each of its  affiliates  and each of its  subsidiaries;
provided,  however  that such duties  shall be  performed in or from the current
office of  Employee  in the  offices of  Employer

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<PAGE>

currently  located at Goshen,  Indiana,  and shall be of the same  character  as
those previously performed by Employee and generally associated with the offices
held by Employee.  Employee shall not be required to be absent from the location
of the  principal  executive  offices of Employer on travel  status or otherwise
more than ten (10) days in any calendar year.  Employer  shall not,  without the
written  consent of Employee,  relocate or transfer  Employee to a location more
than fifteen (15) miles from his principal residence. Employee shall perform Job
Responsibilities  for Employer and each of its  subsidiaries  and  affiliates in
substantially  the same manner and to substantially  the same extent as Employee
rendered such services to Employer and each of its  subsidiaries and each of its
affiliates before the date hereof. Although while employed by Employer, Employee
shall  devote  substantially  all his  business  time and efforts to  Employer's
business and shall not actively engage in any other business  related to that of
Employer,  Employee may use his  discretion  in fixing his hours and schedule of
work  consistent with the proper  discharge of his duties.  Employer shall cause
Employee to be nominated to successive  terms as a member of Employer's Board of
Directors  and shall use its best  efforts to cause  Employee  to be elected and
re-elected as a member of such Board, and the Board of Directors and/or Board of
Managers of each subsidiary and each affiliate of Employer.

     3. The term of this Agreement shall begin on the "Effective Date" and shall
end on the date  which is two (2) years  following  such date (the  "Anniversary
Date");  provided,  however, that such term shall be extended for additional two
(2) year terms on each  Anniversary  Date,  unless  either  party  hereto  gives
written notice to the other party not to so extend within ninety (90) days prior
to each such  Anniversary  Date, in which case no further  extension shall occur
and the term of this Agreement shall end on the Anniversary Date as of which the
notice not to extend is given (such term,  including any extension thereof shall
herein be referred to as the "Term").  A notice not to so extend given by either
party shall be a termination  of employment  prior to the expiration of the Term
of  this  Agreement,  for  all  purposes,  including  subsection  7(B)  of  this
Agreement.  Such  notice  not to extend  shall be in the form of the  "Notice of
Termination"  defined in Section 10 hereof and shall contain specific  reference
to specific  provisions of Section 7 hereof relied upon for any such termination
of the Term of this Agreement.

     4.  Employee  shall receive an annual salary of not less than Three Hundred
Thousand Dollars ($300,000) ("Base  Compensation")  payable at regular intervals
in  accordance  with  Employer's  normal  payroll  practices now or hereafter in
effect.  Employer may consider and declare from time to time  increases (but not
decreases)  in the salary it pays  Employee  and thereby  increases  in his Base
Compensation.  Employer shall review  Employee's Base  Compensation on an annual
basis  with the  intention  that such  review of the Base  Compensation  and the
Executive Bonus Plan, subject to the discretion,  responsibilities  and policies
of  the  Employer's  Compensation   Committee,   shall  cause  the  annual  Base
Compensation  and Bonus to increase from year to year.  Any and all increases in
Employee's  salary  pursuant  to this  section  shall  cause  the  level of Base
Compensation to be increased by the amount of each such increase for purposes of
this  Agreement.  The increased  level of Base  Compensation as provided in this
section  shall become the level of Base  Compensation  for the  remainder of the
Term of this Agreement until there is a further increase in Base Compensation as
provided herein.  "Base Compensation" means the total annual base salary payable
to the Employee at the rate in effect on the date of the termination of the Term
of Employment.  Base Compensation  shall not be reduced for any salary reduction
contributions (i) to cash or deferred  arrangements  under Section 401(k) of the
Code, (ii) to a Tax Sheltered Annuity under Section 403(b) of the Code, (iii) to
a  cafeteria  plan  under  Section  125 of the Code,  or (iv) to a  nonqualified
deferred  compensation  plan. Base Compensation  shall not take into account any
bonuses,  reimbursed expenses, credits or benefits (including benefits under any
plan  of  deferred  compensation),   or  any  additional  cash  compensation  or
compensation payable in a form other than cash. It shall not be a breach of this
Section 4 in the event that Employer and Employee shall mutually agree to reduce
Employee's  Base  Compensation  from  time to  time.  Such  reductions  shall be
immediately  restored  prior to the  occurrence of any  termination  of the Term
described  in Section 7 and shall be deemed  included  in the Base  Compensation
then in effect at the time of any such event of  termination.  Furthermore,  any
such  decrease  in Base  Compensation  from time to time  shall  not  disqualify
Employee from participation in Benefit Plans except as Employee shall agree.

                                       2
<PAGE>

     5. So long as Employee is employed by Employer  pursuant to this Agreement,
he shall be  included  as a  participant  in all  present  and  future  employee
benefit,  retirement, and compensation plans generally available to employees of
Employer,  consistent  with his  Base  Compensation,  his Job  Responsibilities,
including,  without limitation,  any Employer 401(k) plan, Stock Incentive Plan,
Executive  Bonus Plan,  split  dollar  life  insurance  program,  and group life
insurance plans (collectively,  "Benefit Plans"),  each of which Employer agrees
to continue in effect on terms no less favorable than those  currently in effect
as of the date hereof (as permitted by law) during the Term of this Agreement.

     6. In addition to the items of the Benefit  Plans  referred to in Section 5
hereof,  the following shall be additional  items included within the definition
of "Benefit Plans" for this Employee under this  Agreement.  So long as Employee
is employed  by Employer  pursuant to this  Agreement,  Employee  shall  receive
reimbursement from Employer for all reasonable business expenses incurred in the
course of his  employment  by Employer,  upon  submission to Employer of written
vouchers  and  statements  for  reimbursement.  Employee  shall  attend,  at his
discretion, those professional meetings,  conventions,  and/or similar functions
that he deems  appropriate and useful for purposes of keeping abreast of current
developments in the industry and/or promoting the interests of Employer. So long
as Employee is  employed  by Employer  pursuant to the terms of this  Agreement,
Employer shall continue in effect  vacation  policies  applicable to Employee no
less  favorable from his point of view than those written  vacation  policies in
effect on the date hereof.  So long as Employee is employed by Employer pursuant
to this  Agreement,  Employee  shall be entitled to Employee's  existing  office
space,  existing  executive  assistant,  and other  working  conditions  no less
favorable from his point of view than were in effect for him on the date hereof.
So long as Employee is employed by Employer pursuant to this Agreement, employee
shall be entitled to the use of a company car provided by the Employer.  So long
as Employee is employed by Employer  pursuant to this Agreement,  Employee shall
be entitled to membership in such country  clubs,  social clubs,  and golf clubs
that Employee deems  appropriate and useful,  and Employer shall continue to pay
the initiation fees,  membership fees, and dues and assessments for each of such
memberships.  So long as  Employee  is  employed  by  Employer  pursuant to this
Agreement,  Employee shall be entitled to personal tax preparation  services, an
annual physical  examination,  personal umbrella insurance coverage in an amount
not less than Ten Million Dollars  ($10,000,000.00),  and Employer shall pay and
continue to pay the fees, expenses, and premiums for each of the foregoing.

     7.  Subject  to the  respective  continuing  obligations  of  the  parties,
including  but not limited to those set forth in  Sections 8 hereof,  Employee's
employment by Employer may be terminated  effective on any  Anniversary  Date or
otherwise  prior to the  expiration of the Term of this  Agreement  upon written
notice as required by Section 10 hereof, and as follows:

     (A) Employer,  by action of its Board of Directors and upon written  notice
to Employee,  may terminate Employee's  employment with Employer at any time for
Reasonable Cause. For purposes of this subsection 7(A), "Reasonable Cause" shall
be defined as:

          (i) the willful,  flagrant and repeated failure of Employee to perform
     his  duties or to comply  with the  reasonable  directions  of the Board of
     Directors,  which failure  continues after the Board of Directors has given
     written  notice to Employee  specifying in reasonable  detail the manner in
     which  Employee  has  failed to  perform  such  duties or comply  with such
     directions,  together with a reasonable  opportunity to cure the failure to
     perform his duties;

          (ii) the  conviction  of the  Employee for a felony which the Board of
     Directors  determines in the exercise of its  reasonable  judgment could be
     expected to have a material adverse impact on the Employer.

     (B) Employer,  by action of its Board of Directors,  may fail to renew this
Agreement effective any Anniversary Date, or may terminate Employee's employment
with  Employer  at any time,  upon ninety  (90) days'  prior  written  notice to
Employee, without Reasonable Cause.

                                       3
<PAGE>

     (C) Employee,  at any time and upon ninety (90) days' prior written  notice
to Employer, may terminate his employment with Employer, and if in the Notice of
Termination the Employee  declares this Notice of Termination is the result of a
change in Job Responsibilities without Employee's consent, then in such an event
such a termination is a termination by Employer  without  Reasonable  Cause, for
purposes of Section 7(B) hereof.

     (D) Employee's  employment  with Employer  shall  terminate in the event of
Employee's death or permanent disability.  "Disability" means (i) if Employee is
covered by an individual or group long-term  disability  policy under Employer's
Benefit  Plans,  then as defined in such  policy  without  regard to any waiting
period, or (ii) if (i) is inapplicable,  then  "disability"  shall be defined as
Employee's  permanent inability by reason of illness or other physical or mental
incapacity  to perform  Job  Responsibilities  for any  consecutive  one hundred
eighty (180) day period, provided that Notice of Termination by Employer because
of Employee's  "disability"  shall have been given to Employee prior to the full
resumption by him of the performance of such duties.

     8. In the event of  termination  of  Employee's  employment  with  Employer
pursuant to Section 7 hereof, which shall include a nonrenewal of this Agreement
on any Anniversary Date as provided in Section 3 hereof or in Subsection 7(B) or
Subsection 7(C) hereof,  written Notice of Termination as required by Section 10
shall be given,  and,  compensation  shall  continue  to be paid by  Employer to
Employee as follows:

     (A) In the event of termination for Reasonable  Cause by Employer  pursuant
to  subsection   7(A),   compensation   provided  for  herein   (including  Base
Compensation)  shall  continue  to be  paid,  and  Employee  shall  continue  to
participate in the Benefit Plans and other perquisites as provided in Sections 5
and 6  hereof,  through  the date of  termination  specified  in the  Notice  of
Termination.  Any  benefits  payable  under  such  Benefit  Plans as a result of
Employee's  participation in such plans through such date shall be paid when due
under  those  plans.  The  date  of  termination  specified  in  any  Notice  of
Termination pursuant to subsection 7(A) shall be no later than the last business
day of the  month  following  the month in which  such  notice  is  provided  to
Employee.

     (B) In the  event of  termination  without  Reasonable  Cause  by  Employer
pursuant to  subsection  7(B),  or by  Employee  pursuant  to  subsection  7(C),
compensation provided for herein (including Base Compensation) shall continue to
be paid,  and Employee  shall  continue to  participate in the Benefit Plans and
other  perquisites  as provided in Sections 5 and 6 hereof,  through the date of
termination  specified in the Notice of Termination.  Any benefits payable under
such Benefit Plans as a result of Employee's participation in such plans through
such date shall be paid when due under those plans. In addition,  Employee shall
at his  option  exercised  effective  the date of  termination  of the Term,  be
entitled to receive one of the following:

          either,

          (i) Employee  shall be entitled to continue to receive  from  Employer
     his Base  Compensation at the rates in effect at the time of termination of
     the Term for two (2)  additional  twelve (12) month  periods.  In addition,
     during such  periods,  Employer  will maintain in full force and effect for
     the continued  benefit of Employee and his spouse and his  dependents  each
     Benefit  Plan  described  in Section 5 and Section 6 in which  Employee was
     entitled to participate  immediately  prior to the date of his termination,
     unless an essentially  equivalent and no less favorable benefit is provided
     by a  subsequent  employer of  Employee.  If the terms of any such  Benefit
     Plan, or  applicable  laws, do not permit  continued  participation  in the
     Benefit Plans by Employee and his spouse and his dependents,  Employer will
     arrange to provide to Employee and his spouse and his  dependents a benefit
     substantially  similar to, and no less  favorable  than, the benefit he and
     his spouse and his  dependents  were entitled to receive under such Benefit
     Plans;

               or,

                                       4
<PAGE>

          (ii)  Employee  shall be entitled to receive  from  Employer  his Base
     Compensation  at the rates in effect at the time of termination for two (2)
     additional twelve (12) month periods, payable in one lump sum payment on or
     before  thirty (30) days  following the date of  termination,  and Employer
     will not thereafter  maintain any Benefit Plan for the continued benefit of
     Employee and his spouse and his dependents.

     (C) In the event Employee's employment with Employer shall terminate in the
event of Employee's death,  pursuant to subsection 7(D),  compensation  provided
for herein (including Base  Compensation)  shall continue to be paid through the
date  of  death.   Employee's  spouse  and  his  dependents  shall  continue  to
participate in the Benefit Plans and other  perquisites as provided in Section 5
and Section 6 hereof. From and after the date of Employee's death, the spouse of
Employee (or if none surviving, the dependents of Employee) shall be entitled to
continue to receive from Employer the Employee's Base  Compensation  and Benefit
Plans  perquisites  at the rates in  effect  at the time of  death,  for two (2)
additional twelve (12) month periods. In addition, during such periods, Employer
will maintain in full force and effect for the  continued  benefit of the spouse
and  dependents  of Employee  each  Benefit Plan in which the spouse (or if none
surviving,  the dependents of Employee) was entitled to participate  immediately
prior to the date of death of Employee,  unless an essentially equivalent and no
less  favorable  benefit is provided by a  subsequent  employer of the spouse of
Employee.  If the terms of any Benefit Plan,  or applicable  laws, do not permit
continued  participation by the spouse (or if none surviving,  the dependents of
Employee), Employer will arrange to provide to spouse (or if none surviving, the
dependents  of  Employee)  a  benefit  substantially  similar  to,  and no  less
favorable than, the benefit the spouse (or if none surviving,  the dependents of
Employee)  was entitled to receive under such Benefit Plans at the date of death
of Employee.  Employer  reserves  the right to cause the  payments  provided for
herein to be funded and paid in whole or in part from life insurance, annuities,
or other such similar devices, in its sole discretion.

     (D) In the event Employee's employment with Employer shall terminate in the
event  of  Employee's  disability  pursuant  to  subsection  7(D),  compensation
provided for herein  (including  Base  Compensation)  shall  continue to be paid
through the date of disability as defined in subsection 7(D), and from and after
the date of  Employee's  disability  and during the  continuance  or  recurrence
thereof,  Employee  shall be entitled to continue to receive  from  Employer the
Employee's  Base  Compensation  and Benefit  Plans at the rates in effect at the
time of  termination  for five (5)  additional  twelve  (12) month  periods.  In
addition,  during such periods,  Employer will maintain in full force and effect
for the  continued  benefit of Employee and his spouse and his  dependents  each
Benefit Plan in which Employee was entitled to participate  immediately prior to
the date of disability of Employee, unless an essentially equivalent and no less
favorable benefit is provided by a subsequent employer of Employee. If the terms
of any Benefit Plan, or applicable laws, do not permit  continued  participation
by Employee and his spouse and his dependents,  Employer will arrange to provide
Employee and his spouse and his dependents a benefit  substantially  similar to,
and no  less  favorable  than,  the  benefit  Employee  and his  spouse  and his
dependents  were  entitled to receive  under such  Benefit  Plans at the date of
disability  of  Employee.  Employer  reserves  the right to cause  the  payments
provided  herein to be funded and paid in whole or in part from life  insurance,
annuities, or other such similar devices, in its sole discretion.

     (E)  Employer  will permit  Employee or his personal  representative(s)  or
heirs,  during a period of three  months  following  termination  of  Employee's
employment by Employer for any reason,  including  Reasonable  Cause, to require
Employer,   upon   written   request   and  at   Employee's   or  his   personal
representative's  or his  heirs'  option,  to  purchase  all or less than all of
outstanding  warrants or stock options  previously granted to Employee under any
Employer  warrant  or stock  option  plan then in  effect,  whether  or not such
warrants or options are then exercisable or have terminated,  at a cash purchase
price  equal to the amount by which the  aggregate  "fair  market  value" of the
shares  subject to such  options or warrants  exceeds the  aggregate  warrant or
option or warrant  price for such shares.  For purposes of this  Agreement,  the
term "fair market value" shall mean the higher of (i) the average of the highest
asked prices for Employer shares in the  over-the-counter  market as reported on
the NASDAQ  system or other  national  exchange if the shares are traded on such
system for the thirty (30) business days preceding

                                       5
<PAGE>

such termination, or (ii) the average per share price actually paid for the most
highly  priced one percent (1%) of the Employer  shares  acquired in  connection
with any Change of Control of the Employer by any person or group acquiring such
control.

     9. In order to  induce  Employer  to enter  into this  Agreement,  Employee
hereby agrees as follows:

     (A) Unless  otherwise  required to do so by law,  including  the order of a
court or  governmental  agency,  Employee shall not divulge or furnish any trade
secrets (as defined in IND. CODE ss.  24-2-3-2) of Employer or any  confidential
information  acquired by him while employed by Employer concerning the policies,
plans,  procedures or customers of Employer to any person,  firm or corporation,
other than Employer or upon its written request, or use any such trade secret or
confidential  information  directly or indirectly  for Employee's own benefit or
for the benefit of any person,  firm or corporation  other than Employer,  since
such trade secrets and  confidential  information are  confidential and shall at
all times  remain the  property of  Employer.  To that end,  Employee  agrees as
follows:

          (i)  That  all  drawings,   blueprints,   manuals,   letters,  reports
     memoranda,  notes,  notebooks,  customer  lists and all other  documents or
     materials whether or not of a secret or confidential nature (and all copies
     thereof) relating to Employer or any of its affiliates  business in any way
     obtained  by  Employee  while  employed  by  Employer  shall be  Employer's
     property and shall be delivered by Employee to Starcraft on  termination of
     Employee's  employment or at any time at Employer's  request  together with
     Employee's  written  certification of compliance.  This includes but is not
     limited to  documents or other  materials  concerning  customers,  pricing,
     marketing, and method or process, product or apparatus manufactured,  used,
     developed,  or investigated  by Employer or any of its  affiliates,  all of
     which are CONFIDENTIAL;

          (ii) To  disclose  to  Employer  promptly  and  fully  any  invention,
     discovery  or  improvement,  ("invention(s)")  whether  patentable  or not,
     hereafter made or conceived solely or jointly by Employee while employed by
     Employer and which  relates in any manner to the business or  activities of
     Starcraft or any of its  affiliates  or is suggested by or results from any
     duties  assigned to Employee or work performed by Employee for or on behalf
     of Employer;

          (iii) That when requested by Employer, whether during or subsequent to
     Employee's employment, to execute patent applications and other instruments
     considered  necessary by Employer to apply for any obtain Letters Patent of
     the United States and foreign countries with respect to inventions  covered
     by this  Agreement and to make  assignments  and execute other  instruments
     necessary  to convey to Employer  ownership  and  exclusive  rights in such
     inventions,  patent  applications  and  patents;  provided,  however,  that
     Employer  shall  bear all  expenses  connected  with such  patents,  patent
     applications  and  maintenance  of patent  protection,  and if  services in
     connection  therewith  are performed by Employee at the request of Employer
     after termination of Employee's  employment,  Employer shall pay reasonable
     compensation for such post-employment services.

     (B) For a period of two years after termination of Employee's employment by
Employer for reasons  other than those set forth in  subsections  7(B) or (C) of
this Agreement, Employee shall not (a) compete, directly or indirectly, with the
business of Employer as conducted during the term of this Agreement  (defined as
upfit   customization  of  specialized   packages,   and  second  stage  vehicle
manufacturing to General Motors),  or have any interest  (including any interest
or  association,  including  but not  limited  to,  that of owner,  part  owner,
partner, shareholder,  director, officer, employee, agent, consultant, lender or
advisor) in any  person,  firm or entity  which  competes  with  Employer in the
geographic area described on the attached  Exhibit A (each such person,  firm or
entity is referred to as "Competitor"); (b) solicit or accept business for or on
behalf of any  Competitor;  (c)  solicit,  induce or  persuade,  or  attempt  to
solicit,  induce or persuade,  any person to work for or provide  services to or
provide financial assistance to, any Competitor; or (d) solicit or accept for or
on behalf of or for the benefit of any Competitor, any business from any person,
firm or entity which during the term of this  Agreement

                                       6
<PAGE>

was a vendor or supplier to, or subcontractor for, or commercial purchaser from,
Employer.

     (C) If Employee's  employment  by Employer is terminated  for any reason by
either Employee or Employer,  Employee will turn over immediately  thereafter to
Employer all  business  correspondence,  letters,  papers,  reports,  customers'
lists,  financial  statements,   records,  drawings,  credit  reports  or  other
confidential  information  or  documents  of Employer or its  affiliates  in the
possession or control of Employee,  all of which  writings are and will continue
to be the sole and exclusive property of Employer or its affiliates.

     (D) If Employee's  employment by Employer is terminated  during the Term of
this  Agreement  for  reasons  set  forth  in  subsections  7(B)  or (C) of this
Agreement,  Employee  shall have no  obligations  to  Employer  with  respect to
noncompetition under subsections 9(A) and 9(B).

     10. Any termination of Employee's  employment with Employer as contemplated
by Section 3 and Section 7 hereof,  except in the  circumstances  of  Employee's
death,  shall  be  communicated  by  written  "Notice  of  Termination"  by  the
terminating  party to the other party hereto.  Any "Notice of Termination"  must
refer  to one or more of the  subsections  of  Section  7,  shall  indicate  the
specific  provisions of this  Agreement and one or more of such  subsections  of
Section 7 relied upon,  and shall set forth in  reasonable  detail the facts and
circumstances  claimed to provide a basis for such termination under one or more
of such subsections of Section 7.

     11. Anything in this Agreement to the contrary notwithstanding,  payment of
Base Compensation by the Employer to or for the benefit of the Employee pursuant
to  subsection  8(B) hereof shall be inclusive  of payment  attributable  to the
confidentiality  covenants of subsection  9(A), and shall be payable  whether or
not deductible by the Employer for federal income tax purposes.

     12. If a dispute arises  regarding  termination  of employment  pursuant to
Section 3 and  Section 7 hereof,  said  dispute  shall be  resolved  by  binding
arbitration  determined in accordance with the rules of the American Arbitration
Association  and if Employee  obtains a final award in his favor or his claim is
settled by Employer prior to the rendering of an award by such arbitration,  all
reasonable  legal fees and  expenses  incurred  by  Employee  in  contesting  or
disputing any such termination or otherwise  pursuing his claim shall be paid by
Employer,  to the extent  permitted by law. If a dispute arises  regarding other
provisions  of this  Agreement,  including  enforcement  of the  confidentiality
provisions hereof, then such shall be heard only by the judge and not by a jury,
in any court of general  jurisdiction in Elkhart County,  Indiana, to which such
sole and exclusive  jurisdiction  each party  irrevocably  consents.  Each party
agrees not to assert and hereby  waives any right of removal,  consolidation  or
joinder with any other action, or any transfer by reason of preferred venue. The
prevailing  party  shall be  entitled  to its  costs,  expenses  and  reasonable
attorney's  fees.  It is provided,  however,  that in either of  arbitration  or
judicial  proceedings,  if it is determined  that  Employer  breached any of the
material  terms or conditions  of this  Agreement,  then as liquidated  damages,
Employee  shall be entitled to receive not less than the Base  Compensation  and
Benefit Plan payments described in subsection 8(B) hereof.

     13. Should  Employee die after  termination of his employment with Employer
while any amounts are payable to him hereunder,  this  Agreement  shall inure to
the  benefit of and be  enforceable  by  Employee's  executors,  administrators,
heirs,  distributees,  devisees and legatees and all amounts  payable  hereunder
shall be paid in  accordance  with the  terms of this  Agreement  to  Employee's
devisee,  legatee or other  designee  or, if there is no such  designee,  to his
estate.

     14. For purposes of this  Agreement,  notices and all other  communications
provided  for herein  shall be in writing and shall be deemed to have been given
when sent by facsimile  confirmed  receipt and  simultaneously  mailed by United
States registered or certified mail, return receipt requested,  postage prepaid,
addressed as follows:

                                       7
<PAGE>

                  If to Employee:   Michael H. Schoeffler
                  1123 S. Indiana Avenue
                  Goshen, IN 46528
                  Phone: (574) 534-7827
                  Fax:  (574) 534-1238

                  If to Employer:   Starcraft Corporation
                  1123 S. Indiana Avenue
                  Post Office Box 1903
                  Goshen, IN  46527-1903
                  Attention:  Kelly L. Rose, Chairman of the Board
                  Phone: (574) 534-7827
                  Fax: (574) 534-1238

or to such address as either party hereto may have  furnished to the other party
in writing in  accordance  herewith,  except  that  notices of change of address
shall be effective only upon receipt.

     15. The validity,  interpretation,  and performance of this Agreement shall
be governed by the laws of the State of Indiana.

     16.  Employer shall require any successor,  assignee,  distributee or other
transferee  of all or  substantially  all  of  its  or  its  affiliates'  or its
subsidiaries' assets or business  ("Succession") (whether direct or indirect, by
purchase,  merger,  dissolution,  liquidation,  consolidation  or  otherwise) by
agreement in form and substance satisfactory to Employee to expressly assume and
agree to perform this Agreement in the same manner and same extent that Employer
would be required to perform it if no such  Succession had taken place.  As used
in this Agreement,  "Employer" shall mean Employer or any of its subsidiaries or
affiliates  from  time to time and any  successor  to its or their  business  or
assets as aforesaid.

     17. No provision of this  Agreement  may be modified,  waived or discharged
unless such waiver,  modification or discharge is agreed to in writing signed by
Employee  and  Employer.  No waiver by  either  party  hereto at any time of any
breach by the other  party  hereto of, or  compliance  with,  any  condition  or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of  dissimilar  provisions  or  conditions  at the same or any prior or
subsequent time. No agreements or representation,  oral or otherwise, express or
implied,  with  respect to the  subject  matter  hereof have been made by either
party which are not set forth expressly in this Agreement.

     18. The invalidity or  unenforceability of any provisions of this Agreement
shall not affect the validity or  enforceability of any other provisions of this
Agreement which shall remain in full force and effect.

                                       8
<PAGE>

     19. This  Agreement  may be executed in one or more  counterparts,  each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.

     20. This  Agreement is personal in nature and neither  party hereto  shall,
without consent of the other, assign or transfer this Agreement or any rights or
obligations  hereunder  except as  provided  in Section 13 and Section 16 above.
Without  limiting  the  foregoing,  Employee's  right  to  receive  compensation
hereunder shall not be assignable or transferable,  whether by pledge,  creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or  distribution  as set forth in Section 13 hereof,  and in the
event of any  attempted  assignment  or  transfer  contrary  to this  paragraph,
Employer  shall have no liability to pay any amounts so attempted to be assigned
or transferred.

     21. No benefit payable at any time under this Agreement shall be subject in
any manner to alienation, sale, transfer,  assignment, pledge, attachment, levy,
garnishment, or encumbrance of any kind.

     22. Employer shall withhold any applicable  income or employment taxes that
are required to be withheld from the benefits provided under this Agreement.

     23.  Employer  does not  guarantee  payment of benefits  payable  under any
insurance coverage described or referred to herein, and any benefits  thereunder
shall be the exclusive responsibility of the insurer that is required to provide
such benefits under such policy.

     24. If the Employee  transfers  employment from Employer to a subsidiary or
an  affiliate,  then  the  Employee  shall  not be  deemed  to  have  terminated
employment for any purpose under this Agreement.

     25. Employer shall  continuously  maintain its current liability  insurance
through the  termination  date in the Notice of  Termination,  with such current
coverage  for  Employee  as  they  relate  to  his  Job  Responsibilities,   and
thereafter,  Employer shall continue such coverage  whether on  "occurrence"  or
"claims  made"  basis  such that  Employee  does not incur a lapse in  coverage.
Employer  agrees not to materially  modify,  change or release (A) any insurance
coverages  inuring to the benefit of Employee for claims or circumstances  prior
to the  termination  date in the  Notice  of  Termination  such as:  errors  and
omissions,  antitrust,  defamation,  libel and/or slander,  officer and director
liability,  employment  practices,  and the like,  whether or not such claims or
circumstances are known, unknown, liquidated, or contingent, or (B) any right of
contribution,  indemnity,  hold  harmless,  or recoupment  under the  respective
Articles of Incorporation, Operating Agreement, and/or By-Laws of Employer, each
of its affiliates, and each of its subsidiaries.

     26. Commencing upon the termination date in the Notice of Termination,  the
Employee  shall cease to be an employee of the  Employer  for any  purpose.  The
payment of benefits under this Agreement shall be payments to a former employee.

     IN WITNESS  WHEREOF,  the parties have caused the  Agreement to be executed
and delivered this 4th day of May, 2004.

"Employee"                                    "Employer"
                                              STARCRAFT CORPORATION

/s/ Michael H. Schoeffler                     By:  /s/ Kelly L. Rose
-----------------------------                      -----------------------------
Michael H. Schoeffler                              Kelly L. Rose
                                              Its: Chairman of the Board

                                       9
<PAGE>

                                    EXHIBIT A

     In Japan,  Europe,  Mexico,  Canada, and any of the 48 contiguous States of
the United States of America; it being acknowledged by Employee that the Company
conducts  business in all such States,  and it is  acknowledged by Employee that
the Company presently  conducts a substantial amount of its business not only in
any and all of the  States,  but also where  facilities  are  located  (Indiana,
Michigan, Texas, New Jersey, Louisiana, and, the Province of Ontario, Canada.

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