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Exhibit 10.3    
    

MONACO COACH CORPORATION

1993 DIRECTOR OPTION PLAN

As amended and restated effective May 18, 2000  

    1.  Purposes of the Plan.  The purposes of this 1993 Director Option Plan are to attract and retain the
best available personnel for service as Outside Directors (as defined herein) of the Company, to provide additional incentive to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board. 

    All
options granted hereunder shall be "non-statutory stock options." 

    2.  Definitions.  As used herein, the following definitions shall apply: 

    (a)  "Board"  means the Board of Directors of the Company. 

    (b)  "Code"  means the Internal Revenue Code of 1986, as amended. 

    (c)  "Common Stock"means the Common Stock of the Company.  

    (d)  "Company"  means Monaco Coach Corporation, a Delaware corporation. 

    (e)  "Continuous Status as a Director"  means the absence of any interruption or termination of service
as a Director. 

    (f)  "Director"  means a member of the Board. 

    (g)  "Employee"  means any person, including officers and Directors, employed by the Company or any
Parent or Subsidiary of the Company. The payment of a Director's fee by the Company shall not be sufficient in and of itself to constitute "employment" by the Company. 

    (h)  "Exchange Act"  means the Securities Exchange Act of 1934, as amended. 

    (i)  "Fair Market Value"  means, as of any date, the value of Common Stock determined as follows: 

     (i) If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the exchange with the greatest volume of trading in Common Stock) on the date of grant, as reported in The Wall Street Journal
or such other source as the Board deems reliable; 

    (ii) If
the Common Stock is quoted on the NASDAQ System (but not on the National Market System thereof) or regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the bid and asked prices for the Common Stock on the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable, or; 

    (iii) In
the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board. 

    (j)  "Option"  means a stock option granted pursuant to the Plan. 

    (k)  "Optioned Stock"  means the Common Stock subject to an Option. 

    (l)  "Optionee"  means an Outside Director who receives an Option. 

    (m)  "Outside Director"  means a Director who is not an Employee. 

    (n)  "Parent"  means a "parent corporation", whether now or hereafter existing, as defined in
Section 424(e) of the Code. 

    (o)  "Plan"  means this 1993 Director Option Plan. 

     (i) "Share"
means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan. 

    (p)  "Subsidiary"  means a "subsidiary corporation", whether now or hereafter existing, as defined in
Section 424(f) of the Internal Revenue Code of 1986. 

    3.  Stock Subject to the Plan.  Subject to the provisions of Section 10 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is one hundred thirty five thousand (135,000) Shares (the "Pool") of Common Stock. The Shares may be authorized but unissued,
or reacquired Common Stock. 

    If
an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan. 

    4.  Administration of and Grants of Options under the Plan.  

    (a)  Administrator.  Except as otherwise required herein, the Plan shall be administered by the Board. 

    (b)  Procedure for Grants.  The provisions set forth in this Section 4(b) shall not be amended
more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. All grants of Options to
Outside Directors under this Plan shall be automatic and non-discretionary and shall be made strictly in accordance with the following provisions: 

     (i) No
person shall have any discretion to select which Outside Directors shall be granted Options or to determine the number of Shares to be covered by Options granted
to Outside Directors. 

    (ii) Each
Outside Director shall be automatically granted an Initial Option to purchase eight thousand (8,000) Shares (the "First Option") on the date on which the
later of the following events occurs: (A) the effective date of the Company's initial underwritten public offering of its Common Stock pursuant to a registration statement filed under the
Securities Act of 1933, as amended, or (B) the date on which such person first becomes a Director, whether through election by the stockholders of the Company or appointment by the Board to
fill a vacancy. 

    (iii) Commencing
on September 30, 1994, each Outside Director shall be automatically granted a subsequent Option to purchase three thousand five hundred (3,500)
Shares (a "Subsequent Option") on September 30 of each year after the date of the First Option grant, provided such Outside Director shall have served on the Board for at least six months prior
to the date of the Subsequent Option grant and remains an Outside Director on such date. 

    (iv) Notwithstanding
the provisions of subsections (ii) and (iii) hereof, any exercise of an Option made before the Company has obtained stockholder
approval of the Plan in accordance with Section 16 hereof shall be conditioned upon obtaining such stockholder approval of the Plan in accordance with Section 16 hereof. 

    (v) The
terms of a First Option granted hereunder shall be as follows: 

    (A) the
term of the First Option shall be ten (10) years. 

    (B) the First Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Section 8 hereof. 

    (C) the
exercise price per Share shall be 100% of the fair market value per Share on the date of grant of the First Option. 

    (D) the
First Option shall become exercisable in installments cumulatively as to twenty percent (20%) of the Shares subject to the First Option one (1) year from
its date of grant and as to twenty percent
(20%) each year thereafter if, on each such date, the Optionee has maintained his Continuous Status as a Director. 

    (vi) The
terms of a Subsequent Option granted hereunder shall be as follows: 

    (A) the
term of the Subsequent Option shall be ten (10) years. 

    (B) the
Subsequent Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Section 8 hereof. 

    (C) the
exercise price per Share shall be 100% of the fair market value per Share on the date of grant of the Subsequent Option. 

    (D) the
Subsequent Option shall become exercisable as to one hundred percent (100%) of the Shares subject to the Subsequent Option five (5) years from its date
of grant if, on such date, the Optionee has maintained his Continuous Status as a Director. 

   (vii) In
the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased
under Options to exceed the Pool, then the remaining Shares available for Option grant shall be granted under Options to the Outside Directors on a pro rata basis. No further grants shall be made
until such time, if any, as additional Shares become available for grant under the Plan through action of the stockholders to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted hereunder. 

    (c)  Powers of the Board.  Subject to the provisions and restrictions of the Plan, the Board shall have
the authority, in its discretion: (i) to determine, upon review of relevant information and in accordance with Section 2(i) of the Plan, the Fair Market Value of the Common Stock;
(ii) to interpret the Plan; (iii) to prescribe, amend and rescind rules and regulations relating to the Plan; (iv) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted hereunder; and (v) to make all other determinations deemed necessary or advisable for the administration of the Plan. 

    (d)  Effect of Board's Decision.  All decisions, determinations and interpretations of the Board shall be
final. 

    5.  Eligibility.  Options may be granted only to Outside Directors. All Options shall be automatically
granted in accordance with the terms set forth in Section 4(b) hereof. An Outside Director who has been granted an Option may, if he is otherwise eligible, be granted an additional Option or
Options in accordance with such provisions. 

    The
Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way
with any rights which the Director or the Company may have to terminate his or her directorship at any time. 

    6.  Term of Plan.  The Plan shall become effective upon the earlier to occur of its adoption by the Board
or its approval by the stockholders of the Company as described in Section 16 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan. 

    7.  Form of Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the Board and may consist entirely of (i) cash, (ii) check, (iii) promissory note, (iv) other shares which
(x) in the case of Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (v) delivery of a properly executed exercise notice together with
such other documentation as the Board and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the
exercise price, (vi) any combination of the foregoing methods of payment, or (vii) such other consideration and method of payment for the issuance of Shares to the extent permitted under
applicable law. 

    8.  Exercise of Option.  

    (a)  Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder shall be exercisable
at such times as are set forth in Section 4(b) hereof; provided, however, that no Options shall be exercisable until stockholder approval of the Plan in accordance with Section 16 hereof
has been obtained. 

    An
Option may not be exercised for a fraction of a Share. 

    An
Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment allowable under Section 7 of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee as soon as practicable after
exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10
of the Plan. 

    Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 

    (b)  Rule 16b-3.  Options granted to Outside Directors must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act or any successor thereto and shall contain such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. 

    (c)  Termination of Continuous Status as a Director.  In the event an Optionee's Continuous Status as a
Director terminates (other than upon the Optionee's death or total and permanent disability (as defined in Section 22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within three (3) months from the date of such termination, and only to the extent that the Optionee was entitled to exercise it at the date of such termination (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option at the date of such termination, and to the extent that the Optionee does not
exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate. 

    (d)  Disability of Optionee.  In the event Optionee's Continuous Status as a Director terminates as a
result of total and permanent disability (as defined in Section 22(e)(3) of the Code), the Option granted hereunder to such Optionee shall become vested and exercisable for the full number of
Shares covered by the Option. The Optionee may exercise his or her Option, at any time within twelve (12) months from the date of such termination (but in no 

event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, after termination, the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (e)  Death of Optionee.  In the event of the death of an Optionee, the Option shall become vested and
exercisable for the full number of Shares covered by the Option. The Option held by the Optionee at the time of death may be exercised at any time within twelve (12) months following the date
of death by the Optionee's estate or by a person who acquired the right to exercise the Option by bequest or
inheritance. In no event shall an Option be exercised later than the expiration of the term of the Option, as set forth in the Option agreement. If, after death, the Optionee's estate or a person who
acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan. 

    9.  Non-Transferability of Options.  The Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. 

    10.  Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset Sale or Change of Control.  

    (a)  Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the
number of Shares covered by each outstanding Option and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as the price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Option. In addition, a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued Shares effected without receipt of consideration by the Company shall not result in an adjustment to the number of shares granted to Outside Directors
pursuant to Section 4(b)(ii) and Section 4(b)(iii) of the Plan subsequent to such stock split, reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company. 

    (b)  Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company,
to the extent that an Option has not been previously exercised, it will terminate immediately prior to the consummation of such proposed action. The Board may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable. 

    (c)  Merger or Asset Sale.  In the event of a merger of the Company with or into another corporation, or
the sale of substantially all of the assets of the Company, each outstanding 

Option shall be assumed or an equivalent option shall be substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation
does not agree to assume the Option or to substitute an equivalent option, the Board shall, in lieu of such assumption or substitution, provide for the Optionee to have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be exercisable. If the Board makes an Option fully exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Board shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice, and the Option
will terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets was not solely common stock
of the successor corporation or its Parent, the Board may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon the exercise of the
Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in Fair Market Value to the per share consideration received
by holders of Common Stock in the merger or sale of assets. 

    11.  Amendment and Termination of the Plan.  

    (a)  Amendment and Termination.  Except as set forth in Section 4, the Board may at any time
amend, alter, suspend, or discontinue the Plan, but no amendment, alteration, suspension, or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore
made, without his or her consent. In addition, to the extent necessary and desirable to comply with Rule 16b-3 under the Exchange Act (or any other applicable law or regulation),
the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required. 

    (b)  Effect of Amendment or Termination.  Any such amendment or termination of the Plan shall not affect
Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated. 

    12.  Time of Granting Options.  The date of grant of an Option shall, for all purposes, be the date
determined in accordance with Section 4(b) hereof. Notice of the determination shall be given to each Outside Director to whom an Option is so granted within a reasonable time after the date of
such grant. 

    13.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such compliance. 

    As
a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law. 

    Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 

    14.  Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

    15.  Option Agreement.  Options shall be evidenced by written option agreements in such form as the Board
shall approve. 

    16.  Stockholder Approval.  Continuance of the Plan shall be subject to approval by the stockholders of
the Company at or prior to the first annual meeting of stockholders held subsequent to the granting of an Option hereunder. Such stockholder approval shall be obtained in the degree and manner
required under applicable state and federal law. 

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PROMISSORY NOTE
  (Revolving Note—Renewal)    

	$40,000,000	Eugene, Oregon	November 30, 2000

PARTIES:  

    MONACO COACH CORPORATION, a Delaware corporation (Borrower) 

    U.S.
BANK NATIONAL ASSOCIATION (Bank) 

RECITAL:  

    On August 25, 2000, Borrower executed and delivered to Bank a Promissory Note (the Original Note) in the principal amount of Forty Million United States
Dollars ($40,000,000). The entire balance of the Original Note, principal and interest, is due and payable no later than September 30, 2000. The parties previously extended that due date to
October 31, 2000 pursuant to a first renewal note and then to November 30, 2000 pursuant to a second renewal note (the Prior Renewal Notes). The parties desire to further extend that due
date to December 31, 2000, and this note is being executed for that purpose. This note renews the Original Note and the Prior Renewal Notes, and shall not be deemed payment or satisfaction of
the indebtedness evidenced by those notes. 

AGREEMENTS:  

    1.  PROMISE TO PAY.  Upon demand, for value received, Borrower promises to pay to Bank, or its order, the
principal amount of Forty Million United States Dollars ($40,000,000), or so much as may be outstanding, together with interest on the unpaid principal balance of each Advance at the rate
specified in this note. Interest shall be calculated from the date of each Advance until repayment of each Advance. 

    2.  PAYMENT OF PRINCIPAL.  Borrower shall pay the Principal Balance of this note on demand, or if no
demand, on December 31, 2000. 

    3.  INTEREST RATE AND PAYMENT OF INTEREST.  

    3.1.  DEFINITIONS.  As used in this note, the following terms have the following meanings: 

    a.  "Advance"
means any one or more of the loans made by Bank to Borrower pursuant to this note. 

    b.  "Business
Day" means any day other than a Saturday, Sunday or other day that commercial banks in Portland, Oregon, Minneapolis, Minnesota, or New York, New York,
are authorized or required by law to close; provided, however, that when determining a LIBOR Rate or the first day of a LIBOR Interest Period, or when obtaining LIBOR Borrowing Rate quotes, such term
shall also exclude any day on which dealings in U.S. dollar deposits are not carried on in the London interbank market. 

    c.  "Dow
Jones Page 3750" means the display designated as such on the Dow Jones Markets Service (formerly known as Telerate) (or such other page as may replace page
3750 on that service for the purpose of displaying London interbank offered rates of major banks for United States Dollar deposits). 

    d.  "Event
of Default" means an event described in Paragraph 6. 

    e.  "LIBOR
Borrowing Rate" means the LIBOR Rate plus one percent (1.0%) per annum. The LIBOR Borrowing Rate for each LIBOR Borrowing Rate Amount shall be determined
pursuant to Paragraph 3.3., as of the beginning of the applicable LIBOR Interest Period, based on the then current LIBOR Rate, and, except as provided in Paragraphs 3.3.c., 3.3.d. and
3.4., shall remain fixed during that LIBOR Interest Period. 

    f.   "LIBOR Borrowing Rate Amount(s)" means those portions of the Principal Balance that, at any time, are accruing interest at a LIBOR Borrowing Rate. 

    g.  "LIBOR
Interest Period" means, as to any LIBOR Borrowing Rate Amount, a period of two weeks or one month commencing on the date the LIBOR Borrowing Rate becomes
applicable thereto; provided, however, that (1) the first day of each LIBOR Interest Period must be a Business Day; (2) no LIBOR Interest Period shall be selected which would extend
beyond December 31, 2000; (3) any LIBOR Interest Period which would otherwise expire on a day which is not a Business Day, shall be extended to the next succeeding Business Day, unless
the result of such extension would be to extend such LIBOR Interest Period into another calendar month, in which event the LIBOR Interest Period shall end on the immediately preceding Business Day;
and (4) any LIBOR Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of
such LIBOR Interest Period) shall end on the last Business Day of a calendar month. 

    h.  "LIBOR
Rate" means, for any LIBOR Interest Period, the average offered rate for deposits in United States Dollars (rounded upwards, if necessary, to the nearest
1/16 of 1%) for delivery of such deposits on the first day of such LIBOR Interest Period, for the period thereof, which appears on Dow Jones Page 3750 as of 11:00 a.m., London
time (or such other time as of which such rate appears) on the day that is two Business Days preceding the first day of such LIBOR Interest Period; or the rate for such deposits determined by Bank at
such time based on such other published service of general application as shall be selected by Bank for such purpose; provided, that in lieu of determining the rate in the foregoing manner, Bank may
determine the rate based on the rates offered to Bank for deposits in United States Dollars (rounded upwards, if necessary, to the nearest 1/16 of 1%) in the interbank eurodollar market
at such time for delivery on the first day of such LIBOR Interest Period for the period thereof; provided, further, that because a two week LIBOR Rate is generally not quoted in the marketplace, if
Borrower requests a two week LIBOR Interest Period, Bank may determine and use the one month LIBOR Rate for that LIBOR Interest Period; and provided, further, that in any case the LIBOR Rate shall be
adjusted to take into account the maximum reserves required to be maintained for Eurocurrency liabilities by banks during each such LIBOR Interest Period as specified in Regulation D of the
Board of Governors of the Federal Reserve System or any successor regulation. 

    i.   "Maturity"
means the time when the entire unpaid Principal Balance of this note becomes due and payable, whether by agreement, acceleration, demand or otherwise. 

    j.   "Prime
Borrowing Rate" means a variable interest rate equal to the Prime Rate minus three-quarters of one percent (0.75%) per annum. The Prime Borrowing Rate shall
be adjusted without notice effective on each day the Prime Rate changes. 

    k.  "Prime
Rate" means the rate identified and publicly announced by Bank from time to time as its prime rate and does not necessarily mean, for example, the lowest
rate of interest which Bank collects for any borrower or group of borrowers. 

    l.   "Prime
Borrowing Rate Amount" means that portion of the Principal Balance that, at any time, is accruing interest at the Prime Borrowing Rate. 

    m.  "Principal
Balance" means, at any time, the unpaid principal balance of this note. 

    n.  "Related
Documents" means, without limitation, all loan agreements, mortgages, deeds of trust, security agreements, guaranties and all other instruments, agreements
and documents, whether now or hereafter existing, relating to the indebtedness evidenced by this note. 

    3.2.  PRIME BORROWING RATE.  Except for portions of the Principal Balance that are accruing interest at a
LIBOR Borrowing Rate, Borrower shall pay interest on the Principal 

Balance at the Prime Borrowing Rate. The Prime Borrowing Rate shall be adjusted without notice effective on each day the Prime Rate changes. 

    3.3.  LIBOR BORROWING RATE.  

    a.  Borrower
may obtain LIBOR Borrowing Rate quotes from Bank between 8:00 a.m. and 10:00 a.m. (Portland, Oregon, time) on any Business Day. Borrower may
request a new Advance as a LIBOR Borrowing Rate Amount, conversion of a portion of the Prime Borrowing Rate Amount to a LIBOR Borrowing Rate Amount, or a new LIBOR Interest Period for a LIBOR
Borrowing Rate Amount whose LIBOR Interest Period is expiring, only by giving Bank notice in accordance with Paragraph 3.3.b. not later than 10:00 a.m. on such date. 

    b.  Whenever
Borrower desires to use the LIBOR Borrowing Rate option, Borrower shall give Bank irrevocable notice (either in writing or orally) between 8:00 a.m.
and 10:00 a.m. (Portland, Oregon, time) two (2) Business Days in advance of the desired effective date of such rate. Any oral notice shall be given by, and any written notice or
confirmation of an oral notice shall be signed by, any officer of Borrower or any other authorized person, and shall specify the requested effective date of the rate, the LIBOR Interest Period and
LIBOR Borrowing Rate Amount, and whether Borrower is requesting a new Advance as a LIBOR Borrowing Rate Amount, conversion of a portion of the Prime Borrowing Rate Amount to a LIBOR Borrowing Rate
Amount, or a new LIBOR Interest Period for a LIBOR Borrowing Rate Amount whose LIBOR Interest Period is expiring. Bank may, but need not, require that all oral notices be confirmed in writing.
Notwithstanding any other term of this note, Borrower may elect a LIBOR Borrowing Rate Amount only in the minimum principal amount of Five Hundred Thousand Dollars ($500,000) and in larger integral
multiples of One Hundred Thousand Dollars ($100,000). Except as provided in Paragraphs 3.3.c., 3.3.d. and 3.4., the LIBOR Borrowing Rate for each LIBOR Borrowing Rate Amount shall remain fixed for the
applicable LIBOR Interest Period. 

    c.  If
at any time Bank's LIBOR Rate is unascertainable or unavailable to Bank or if LIBOR Rate loans become unlawful, the option to select the LIBOR Borrowing Rate
shall terminate immediately. If any LIBOR Borrowing Rates are then in effect (i) each shall terminate automatically with respect to the applicable LIBOR Borrowing Rate Amount (a) on the
last day of the applicable LIBOR Interest Period, if Bank may lawfully continue to maintain such loans, or (b) immediately if Bank may not lawfully continue to maintain such loans through such
day, and (ii) the Prime Borrowing Rate automatically shall become effective as to such amounts upon termination. 

    d.  If
at any time after the date of this note (i) any revision in or adoption of any applicable law, rule or regulation or in the interpretation or
administration thereof (a) shall subject Bank or its Eurodollar lending office to any tax, duty or other charge, or change the basis of taxation of payments to Bank with respect to any loans
bearing interest based on Bank's LIBOR Rate or (b) shall impose or modify any reserve, insurance, special deposit or similar requirements against assets of, deposits with or for the account of,
or credit extended by Bank or its Eurodollar lending office, or impose on Bank or its Eurodollar lending office any other condition affecting any such loans, and (ii) the result of the
foregoing is (x) to increase the cost to Bank of making or maintaining any such loans or (y) to reduce the amount of any sum receivable under this note by Bank or its Eurodollar lending
office, Borrower shall pay Bank within fifteen (15) days after demand by Bank such additional amount as will compensate Bank for such increased cost or reduction. The determination hereunder by
Bank of such additional amounts shall be conclusive in the absence of manifest error. If Bank demands compensation under this paragraph, Borrower may, upon three (3) Business Days' notice to
Bank, pay the accrued interest on all LIBOR Borrowing Rate Amounts as may be affected, together with any additional amounts payable under Paragraph 3.3.e. Upon Borrower's paying such accrued
interest and additional costs, the Prime 

Borrowing Rate immediately shall be effective with respect to the unpaid principal balance of such LIBOR Borrowing Rate Amounts. 

    e.  Borrower
will indemnify Bank upon demand against any loss or expense which Bank may sustain or incur (including, without limitation, any loss or expense sustained
or incurred in obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any portion of the loan or any Advance) as a consequence of: 

    (1) Any
failure of Borrower to make any payment when due; 

    (2) Any
failure of Borrower to borrow, continue or prepay any LIBOR Borrowing Rate Amount or to convert any portion of the Prime Borrowing Rate Amount to a LIBOR
Borrowing Rate Amount on a date specified in notice thereof; or 

    (3) Any
payment or prepayment of a LIBOR Borrowing Rate Amount, termination of the LIBOR Borrowing Rate or conversion of a LIBOR Borrowing Rate Amount to the Prime
Borrowing Rate on a
day other than the last day of the applicable LIBOR Interest Period (including as a result of acceleration or demand or pursuant to Paragraph 3.3.c. or 3.3.d.). 

Determinations
by Bank of the amount required to indemnify Bank shall be conclusive in the absence of manifest error. 

    f.   Notwithstanding
any provision of this note to the contrary, Bank shall be entitled to fund and maintain its funding of all or any part of the loan evidenced by this
note in any manner it elects; it being understood, however, that with respect to any LIBOR Borrowing Rate Amount, all determinations hereunder shall be made as if Bank had actually funded and
maintained each LIBOR Borrowing Rate Amount during the LIBOR Interest Period applicable to it through the purchase of deposits having a term corresponding to such LIBOR Interest Period and bearing an
interest rate equal to the LIBOR Rate for such LIBOR Interest Period (whether or not Bank shall have granted any participations in such LIBOR Amounts). 

    g.  Notwithstanding
any other term of this note, Borrower may not select the LIBOR Borrowing Rate if an event has occurred that constitutes an Event of Default or
which, with notice or lapse of time, or both, would be an Event of Default. 

    h.  Nothing
contained in this note, including without limitation the determination of any LIBOR Interest Period or Bank's quotation of any LIBOR Borrowing Rate, shall
be construed to prejudice Bank's right, if any, to decline to make any requested Advance or to require payment on demand. 

    3.4.  DEFAULT INTEREST RATE.  Notwithstanding anything in this note to the contrary, upon the occurrence
of an Event of Default, the Prime Borrowing Rate Amount shall thereafter accrue interest at a Prime Borrowing Rate equal to the Prime Rate plus five percent (5%), and each outstanding LIBOR Borrowing
Rate Amount shall accrue interest at a LIBOR Borrowing Rate equal to the LIBOR Rate previously determined by Bank for that LIBOR Borrowing Rate Amount plus six percent (6%). 

    3.5.  PAYMENT OF INTEREST.  Except for interest on LIBOR Borrowing Rate Amounts, Borrower shall pay
accrued interest on December 1, 2000, and at Maturity. With respect to all LIBOR Borrowing Rate Amounts, accrued interest shall be paid on the last day of the applicable LIBOR Interest Period,
and at Maturity. 

    3.6.  COMPUTATION OF INTEREST.  All interest will be computed at the applicable rate based on a three
hundred sixty (360) day year and applied to the actual number of days elapsed. 

    3.7.  USURY.  Notwithstanding anything in this note to the contrary, at no time shall the Prime Borrowing
Rate or any LIBOR Borrowing Rate exceed the maximum rate permitted by applicable law. 

    4.  LINE OF CREDIT.  This note evidences a revolving line of credit. Advances under this note may be
requested orally by Borrower, any officer of Borrower or any other authorized person. Bank may, but need not, require that all oral requests be confirmed in writing. All communications, instructions
or directions by telephone or otherwise to Bank are to be directed to the Eugene office of Bank's Commercial Banking Division. Borrower agrees to be liable for all sums either (a) advanced in
accordance with the instructions of an authorized person or (b) credited to any of Borrower's accounts with Bank, regardless of the fact that persons other than those authorized to borrow have
authority to draw against the accounts. The Principal Balance may be evidenced by endorsements on this note or by Bank's internal records, including daily computer printouts. Borrower agrees that Bank
is under no obligation and has not committed to make any Advances hereunder. Each Advance hereunder shall be made at the sole option of Bank. 

    5.  LATE CHARGE.  If a payment is nineteen (19) or more days past due, Borrower will pay a late
charge of five percent (5%) of the delinquent payment, but not more than the maximum amount authorized by law. 

    6.  DEFAULT.  Each of the following shall constitute an Event of Default under this note: 

    6.1. Borrower
fails to make any payment within five (5) days after it is due. 

    6.2. Any
default under any Related Document or under any other agreement between Bank and Borrower. 

    7.  FEE.  Contemporaneously with the execution of this note, Borrower shall pay to Bank a loan fee in the
amount of Four Thousand One Hundred Sixty-Seven Dollars ($4,167). 

    8.  NOTICES.  Any notices required or permitted to be given under the terms of this note shall be in
writing and may be given by personal delivery; first-class mail; certified mail, return receipt requested; or nationally recognized overnight courier; directed to the parties at the following
addresses, or such other address as any party may designate in writing prior to the time of the giving of such notice, or in any other manner authorized by law: 

	

Borrower:	
 	

91320 Industrial Way

Coburg, Oregon 97408

Attn: John Nepute, President
	

Bank:	
 	

Oregon Commercial Banking

800 Willamette Street, Third Floor

P.O. Box 10553

Eugene, Oregon 97440

Attn: Ken Carson

Any
notice given shall be effective when actually received; or if given by certified mail, then forty-eight (48) hours after deposit of such notice in the United States mail with postage
prepaid; or if given by overnight courier, then twenty-four (24) hours after the deposit of such notice with the overnight courier with delivery charges prepaid. 

    9.  ARBITRATION.  

    9.1. Either
Bank or Borrower may require that all disputes, claims, counterclaims and defenses, including those based on or arising from any alleged tort ("Claims")
relating in any way to this note or any transaction of which this note is a part (the "Loan"), be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and Title 9 of the U.S. Code. All Claims will be subject to the statutes of limitation applicable if they were litigated. This provision is void if the effect of the
arbitration procedure (as opposed to any Claims of Borrower) would be to materially impair Bank's ability to realize on any collateral securing the Loan. 

    9.2. If arbitration occurs and each party's Claim is less than $100,000, one neutral arbitrator will decide all issues; if any party's Claim is $100,000 or more, three
neutral arbitrators will decide all issues. All arbitrators will be active Oregon State Bar members in good standing. All arbitration hearings will be held in Eugene, Oregon. In addition to all other
powers, the arbitrator(s) shall have the exclusive right to determine all issues of arbitrability. Judgment on any arbitration award may be entered in any court with jurisdiction. 

    9.3. If
either party institutes any judicial proceeding relating to the Loan, such action shall not be a waiver of the right to submit any Claim to arbitration. In
addition, each has the right before, during and after any arbitration to exercise any number of the following remedies, in any order or concurrently: (i) setoff;
(ii) self-help repossession; (iii) judicial or non-judicial foreclosure against real or
personal property collateral; and (iv) provisional remedies, including injunction, appointment of receiver, attachment, claim and delivery and replevin. 

    10.  COLLECTION COSTS AND ATTORNEY FEES.  Borrower agrees to pay upon demand all of Bank's reasonable
costs and expenses, including attorneys' fees and Bank's legal expenses, incurred in connection with the enforcement of this note. Costs and expenses include Bank's attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (and including efforts to modify or vacate any automatic stay or injunction), appeals and any
anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 

    11.  REQUESTS FOR ADVANCES AND RATES.  Borrower agrees that Lender shall have no obligation to verify the
identity of any person making any request pursuant to this note, and Borrower assumes all risks of the validity and authorization of such requests. Borrower promises to pay Bank, in accordance with
the provisions of this note, the Principal Balance together with interest thereon and other sums due hereunder, although any requests may have been submitted by a person or persons not authorized to
do so. 

    12.  WAIVERS.  Each maker, co-maker, endorser or guarantor of this note waives diligence,
demand, presentment for payment, notice of non-payment, protest and notice of protest and consents to all extensions of time and renewals hereof, whether or not the extensions or renewals
are longer than the original period of the note, to any exchange or release of any security for the indebtedness evidenced by this note, and to any release of any party liable on this note. 

    13.  GENERAL PROVISIONS.  Time is of the essence of this note. All obligations of any maker,
co-maker, endorser or guarantor of this note are joint and several. This note shall be governed by and construed and enforced in accordance with the laws of the State of Oregon without
regard to conflicts of law principles. Bank's rights and remedies under this note are cumulative. 

    14.  EXECUTION BY FACSIMILE; COUNTERPARTS.  This note may be executed in several counterparts, each of
which will be deemed to be an original and all of which together constitute one and the same instrument. Delivery of an executed copy of this note by telecopy, telex or other means of electronic
communication producing a printed copy will be deemed to be an execution and delivery of this note on the date of such communication by the parties so delivering such a copy. The party so delivering
such a copy via electronic communication shall deliver an executed original of this note to the other party within one week of the date of delivery of the copy sent via electronic communication. 

    15.  WARRANTY OF AUTHORITY.  The person executing this note on behalf of Borrower personally represent
and warrant that he is duly authorized to do so, and that this note is enforceable against Borrower in accordance with its terms. 

    16.  UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK 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 BANK TO BE ENFORCEABLE.  

	 	 	MONACO COACH CORPORATION
	

 	
 	

By	
 	

/s/ KAY TOOLSON   
 Name: Kay Toolson

Title: Chairman and CEO

 
 

ALLONGE TO PROMISSORY NOTE    
  

    MONACO COACH CORPORATION, a Delaware corporation ("Borrower"), hereby amends its November 30, 2000 Promissory Note (Revolving Note—Renewal)
("Note") in the original principal amount of $40,000,000 payable to the order of U.S. Bank National Association by deleting "December 31, 2000" from Section 2 and replacing the deleted
date with "January 12, 2001." In all other respects, Borrower ratifies and confirms the Note and acknowledges that the Note remains in full force and effect. 

    Borrower
hereby requests that this Allonge to Promissory Note be fastened to the Note. 

    Signed
as of December 29, 2000. 

	 	 	 	 	MONACO COACH CORPORATION
	

 	
 	

By:	
 	

/s/ KAY TOOLSON   
 Kay L. Toolson, Chief Executive Officer and Chairman of the Board

    This
Allonge to Promissory Note is hereby accepted by U.S. Bank National Association as of December 29, 2000. 

	

 	

 	

U.S. Bank National Association

By: 
Title: 

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PROMISSORY NOTE (Revolving Note—Renewal)

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