Document:

exhibit10_3.htm

    
       

      Exhibit 10.3

      SECURITY
AGREEMENT

       

      PLEDGE
AND SECURITY AGREEMENT dated as of November 6, 2008 (as amended, restated,
replaced, supplemented, modified or otherwise changed from time to time, this
"Agreement"),
made by each of the Grantors referred to below, in favor of Ableco Finance LLC,
a Delaware limited liability company, in its capacity as collateral agent for
the Secured Parties referred to below (in such capacity, together with its
successors and assigns in such capacity, if any, the "Collateral
Agent").

       

      W I T N E S S E T H:

       

      WHEREAS,
Monaco Coach Corporation, a Delaware corporation ("Monaco"), each
subsidiary of Monaco listed as a "Borrower" on the
signature pages thereto (together with Monaco, each a "Borrower" and
collectively, the "Borrowers"), each
subsidiary of Monaco listed as a "Guarantor" on the
signature pages thereto (together with each other Person that becomes a
"Guarantor" thereunder or otherwise guaranties all or any part of the
Obligations (as defined in the Financing Agreement), each a "Guarantor" and
collectively, the "Guarantors", and
together with the Borrowers and each other Person that executes a supplement
hereto and becomes an "Additional Grantor" hereunder, each a "Grantor" and
collectively, the "Grantors"), the
lenders from time to time party thereto (each a "Lender" and
collectively, the "Lenders"), the
Collateral Agent, and Ableco, as administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, if any, the
"Administrative
Agent" and together with the Collateral Agent, each an "Agent" and
collectively, the "Agents") are parties
to a Financing Agreement, dated as of November 6, 2008 (such agreement, as
amended, restated, replaced, supplemented, modified or otherwise changed from
time to time, being hereinafter referred to as the "Financing
Agreement");

       

      WHEREAS,
pursuant to the Financing Agreement, the Lenders have agreed to make a term loan
(the "Loan") to
the Borrowers in an aggregate principal amount not to exceed the Total
Commitment (as defined in the Financing Agreement);

       

      WHEREAS,
it is a condition precedent to the Lenders making the Loan to the Borrowers
pursuant to the Financing Agreement that each Grantor shall have executed and
delivered to the Collateral Agent a pledge to the Collateral Agent, for the
benefit of the Secured Parties, and the grant to the Collateral Agent, for the
benefit of the Secured Parties, of (a) a security interest in and Lien on the
outstanding shares of Equity Interests (as defined in the Financing Agreement)
and indebtedness from time to time owned by such Grantor of each Person now or
hereafter existing and in which such Grantor has any interest at any time, and
(b) a security interest in all other personal property and fixtures of such
Grantor;

       

      WHEREAS,
the Grantors are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation, with credit needed from time
to time by each Grantor often being provided through financing obtained by the
other Grantors and the ability to obtain such financing being dependent on the
successful operations of all of the Grantors as a whole; and

       

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      WHEREAS,
each Grantor has determined that the execution, delivery and performance of this
Agreement directly benefit, and are in the best interest of, such
Grantor;

       

      NOW,
THEREFORE, in consideration of the premises and the agreements herein and in
order to induce the Collateral Agent and the Lenders to make and maintain the
Loan to the Borrowers pursuant to the Financing Agreement, the Grantors hereby
jointly and severally agree with the Collateral Agent, for the benefit of the
Secured Parties, as follows:

       

      SECTION
1. Definitions .

       

      (a) Reference
is hereby made to the Financing Agreement for a statement of the terms
thereof.  All capitalized terms used in this Agreement and the
recitals hereto which are defined in the Financing Agreement or in Article 8 or
9 of the Uniform Commercial Code as in effect from time to time in the State of
New York (the "Code") and which are
not otherwise defined herein shall have the same meanings herein as set forth
therein; provided that terms
used herein which are defined in the Code as in effect in the State of New York
on the date hereof shall continue to have the same meaning notwithstanding any
replacement or amendment of such statute except as the Collateral Agent may
otherwise determine.

       

      (b) The
following terms shall have the respective meanings provided for in the
Code:  "Accounts", "Account Debtor", "Cash Proceeds", "Certificate of
Title", "Chattel Paper", "Commercial Tort Claim", "Commodity Account",
"Commodity Contracts", "Deposit Account", "Documents", "Electronic Chattel
Paper", "Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments",
"Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash
Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Record",
"Security Account", "Software", "Supporting Obligations" and "Tangible Chattel
Paper".

       

      (c) As used
in this Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the singular and
plural forms of such terms:

       

      "Additional
Collateral" has the meaning specified therefor in Section 4(a)(i)
hereof.

       

      "Copyright Licenses"
means all licenses, contracts or other agreements, whether written or oral,
naming any Grantor as licensee or licensor and providing for the grant of any
right to use or sell any works covered by any Copyright (including, without
limitation, all Copyright Licenses set forth in Schedule II
hereto).

       

      "Existing Issuer" has
the meaning specified therefor in the definition of the term "Pledged
Shares".

       

      "Intellectual
Property" means all U.S and non-U.S. (i) published and unpublished works
of authorship (including, without limitation, computer software), copyrights
therein and thereto, and registrations and applications therefor, and all
renewals, extensions, restorations and reversions thereof, including, without
limitation, all copyright registrations and applications

       

      

      
        
          
             

          

          
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      listed in
Schedule II hereto (collectively, "Copyrights"); (ii)
inventions, discoveries, ideas and all patents, registrations, and applications
therefor, including, without limitation, divisions, continuations,
continuations-in-part and renewal applications, and all renewals, extensions and
reissues, including, without limitation, all patents and patent applications
listed in Schedule II hereto (collectively, "Patents"); (iii)
trademarks, service marks, brand names, certification marks, collective marks,
d/b/a's, Internet domain names, logos, symbols, trade dress, assumed names,
fictitious names, trade names, and other indicia of origin, all applications and
registrations for all of the foregoing, and all goodwill associated therewith
and symbolized thereby, and all extensions, modifications and renewals of same,
including, without limitation, all trademark registrations and applications
listed in Schedule II hereto (collectively, "Trademarks"); (iv)
confidential and proprietary information, trade secrets and know-how, including,
without limitation, processes, schematics, databases, formulae, drawings,
prototypes, models, designs and customer lists (collectively, "Trade Secrets"); and
(v) all other intellectual property or proprietary rights and claims or causes
of action arising out of or related to any infringement, misappropriation or
other violation of any of the foregoing, including, without limitation, rights
to recover for past, present and future violations thereof (collectively, "Other Proprietary
Rights").

       

      "Licenses" means the
Copyright Licenses, the Patent Licenses and the Trademark Licenses.

       

      "Patent Licenses"
means all licenses, contracts or other agreements, whether written or oral,
naming any Grantor as licensee or licensor and providing for the grant of any
right to manufacture, use or sell any invention covered by any Patent
(including, without limitation, all Patent Licenses set forth in Schedule II
hereto).

       

      "Pledged Debt" means
the indebtedness described in Schedule VII hereto and all indebtedness from time
to time owned or acquired by a Grantor, the promissory notes and other
Instruments evidencing any or all of such indebtedness, and all interest, cash,
Instruments, Investment Property, financial assets, securities, Equity
Interests, other equity interests, stock options and commodity contracts, notes,
debentures, bonds, promissory notes or other evidences of indebtedness and all
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such indebtedness.

       

      "Pledged Interests"
means, collectively, (a) the Pledged Debt, (b) the Pledged Shares and (c) all
security entitlements in any and all of the foregoing.

       

      "Pledged Issuer" has
the meaning specified therefor in the definition of the term "Pledged
Shares".

       

      "Pledged Shares" means
(a) the shares of Equity Interests described in Schedule VIII hereto, whether or
not evidenced or represented by any stock certificate, certificated security or
other Instrument, issued by the Persons described in such Schedule VIII (the
"Existing
Issuers"), (b) the shares of Equity Interests at any time and from time
to time acquired by a Grantor of any and all Persons now or hereafter existing
(such Persons, together with the Existing Issuers, being hereinafter referred to
collectively as the "Pledged Issuers" and
each individually as a "Pledged Issuer"),
whether or not evidenced or represented by any stock

       

      

      
        
          
             

          

          
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      certificate,
certificated security or other Instrument, and (c) the certificates representing
such shares of Equity Interests, all options and other rights, contractual or
otherwise, in respect thereof and all dividends, distributions, cash,
Instruments, Investment Property, financial assets, securities, Equity
Interests, other equity interests, stock options and commodity contracts, notes,
debentures, bonds, promissory notes or other evidences of indebtedness and all
other property (including, without limitation, any stock dividend and any
distribution in connection with a stock split) from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Equity Interests.

       

      "Secured Parties"
means, collectively, the Agents and the Lenders.

       

      "Secured Obligations"
has the meaning specified therefor in Section 3 hereof.

       

      "Shrink-Wrap License"
means a License for the use of generally commercially available software where
the user agrees to its terms by opening the package of or downloading such
software or similarly manifesting consent to the licensor's standard
terms.

       

      "Titled Collateral"
means all Collateral for which the title to such Collateral is governed by a
Certificate of Title or certificate of ownership, including, without limitation,
all motor vehicles (including, without limitation, all trucks, trailers,
tractors, service vehicles, automobiles and other mobile equipment) for which
the title to such motor vehicles is governed by a Certificate of Title or
certificate of ownership.

       

      "Trademark Licenses"
means all licenses, contracts or other agreements, whether written or oral,
naming any Grantor as licensor or licensee and providing for the grant of any
right concerning any Trademark, together with any goodwill connected with and
symbolized by any such trademark licenses, contracts or agreements (including,
without limitation, all Trademark Licenses described in Schedule II
hereto).

       

      SECTION
2. Grant of Security
Interest .  As collateral security for the payment,
performance and observance of all of the Secured Obligations, each Grantor
hereby pledges and assigns to the Collateral Agent (and its agents and
designees), and grants to the Collateral Agent (and its agents and designees),
for the benefit of the Secured Parties, a continuing security interest in, all
personal property and Fixtures of such Grantor, wherever located and whether now
or hereafter existing and whether now owned or hereafter acquired, of every kind
and description, tangible or intangible, including, without limitation, the
following (all being collectively referred to herein as the "Collateral"):

       

      (a) all
Accounts;

       

      (b) all
Chattel Paper (whether tangible or electronic);

       

      (c) the
Commercial Tort Claims specified on Schedule VI hereto;

       

      (d) all
Deposit Accounts, all cash, and all other property from time to time deposited
therein or otherwise credited thereto and the monies and property in the
possession or under the control of any Agent or any Lender or any affiliate,
representative, agent or correspondent of any Agent or any Lender;

       

      
        
          
          

        

        
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      (e) all
Documents;

       

      (f) all
General Intangibles (including, without limitation, all Payment Intangibles,
Intellectual Property and Licenses);

       

      (g) all
Goods, including, without limitation, all Equipment, Fixtures and
Inventory;

       

      (h) all
Instruments (including, without limitation, Promissory Notes);

       

      (i) all
Investment Property;

       

      (j) all
Letter-of-Credit Rights;

       

      (k) all
Pledged Interests;

       

      (l) all
Supporting Obligations;

       

      (m) all other
tangible and intangible personal property of such Grantor (whether or not
subject to the Code), including, without limitation, all bank and other accounts
and all cash and all investments therein, all proceeds, products, offspring,
accessions, rents, profits, income, benefits, substitutions and replacements of
and to any of the property of such Grantor described in the preceding clauses of
this Section 2 hereof (including, without limitation, any proceeds of insurance
thereon and all causes of action, claims and warranties now or hereafter held by
such Grantor in respect of any of the items listed above), and all books,
correspondence, files and other Records, including, without limitation, all
tapes, disks, cards, Software, data and computer programs in the possession or
under the control of such Grantor or any other Person from time to time acting
for such Grantor that at any time evidence or contain information relating to
any of the property described in the preceding clauses of this Section 2 hereof
or are otherwise necessary or helpful in the collection or realization thereof;
and

       

      (n) all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any
and all of the foregoing Collateral;

       

      in each
case howsoever such Grantor's interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).

       

      Notwithstanding
anything herein to the contrary, the term "Collateral" shall not include, and no
Grantor is pledging, nor granting a security interest hereunder in (i) any of
such Grantor's right, title or interest in any license, contract or agreement to
which such Grantor is a party or any of its right, title or interest thereunder
to the extent, but only to the extent, that such a grant would, under the
express terms of such license, contract or agreement result in a breach of the
terms of, or constitute a default under, such license, contract or agreement
(other than to the extent that any such term (A) has been waived or (B) would be
rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the Code or
other applicable provisions of the Uniform Commercial Code of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, that, the
foregoing exclusion shall in no way be construed so as to limit, impair or
otherwise affect the Collateral 

       

      

      
        
          
             

          

          
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      Agent's
unconditional continuing
security interest in and liens upon any rights or interests of a Grantor in or
to the proceeds of, or any monies due or to become due under, any such license,
contract or agreement, (ii) Equipment that is subject to a purchase money Lien
as permitted by Section 7.02(a) of the Financing Agreement, if under the terms
of the underlying lease or agreement, the grant of a security interest or Lien
in such Equipment to Agent is prohibited (other than to the extent that any such
restriction would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 or any other Section of the UCC); provided, that, in
the case of both clause (i) and (ii) above, immediately upon the
ineffectiveness, lapse, termination or waiver of any such provision, the
Collateral shall include, and such Grantor shall be deemed to have granted a
security interest in, all such right, title and interest as if such provision
had never been in effect or (iii) any intent-to-use United States trademark
applications for which an amendment to allege use or statement of use has not
been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d),
respectively, or if filed, has not been deemed in conformance with 15 U.S.C.
§ 1051(a) or examined and accepted, respectively, by the United States
Patent and Trademark Office, provided that, upon
such filing and acceptance, such intent-to-use applications shall be included in
the definition of Collateral.

       

      SECTION
3. Security for Secured
Obligations .  The
security interest created hereby in the Collateral constitutes continuing
collateral security for all of the following obligations, whether now existing
or hereafter incurred (the "Secured
Obligations"):

       

      (a) the
prompt payment by each Grantor, as and when due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), of
all amounts from time to time owing by it in respect of the Financing Agreement
and/or the other Loan Documents, including, without limitation, (i) all
Obligations, (ii) in the case of a Guarantor, all amounts from time to time
owing by such Grantor in respect of its guaranty made pursuant to Article XI of
the Financing Agreement or under any other Guaranty to which it is a party,
including, without limitation, all obligations guaranteed by such Grantor and
(iii) all interest (including, without limitation, the PIK Amount), fees,
commissions, charges, expense reimbursements, indemnifications and all other
amounts due or to become due under any Loan Document (including, without
limitation, all interest, the Applicable Prepayment Premium, fees, commissions,
charges, expense reimbursements (including reasonable attorneys' fees and
disbursements), indemnifications and other amounts that accrue after the
commencement of any Insolvency Proceeding of any Loan Party, whether or not the
payment of such interest, fees, commissions, charges, expense reimbursements,
indemnifications and other amounts are unenforceable or are not allowable, in
whole or in part, due to the existence of such Insolvency Proceeding); and
(b) the due
performance and observance by each Grantor of all of its other obligations from
time to time existing in respect of the Loan Documents.

       

      SECTION
4. Delivery of the Pledged
Interests.

       

      (a) (i)  All
promissory notes currently evidencing the Pledged Debt and all certificates, if
any, currently representing the Pledged Shares shall be delivered to the
Collateral Agent on or prior to the execution and delivery of this
Agreement.  All other promissory notes, certificates and Instruments
constituting Pledged Interests from time to time required to be pledged to the
Collateral 

       

      

      
        
          
             

          

          
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      Agent pursuant to the terms of this Agreement
or the Financing
Agreement (the "Additional
Collateral") shall be delivered to the Collateral Agent promptly upon,
but in any event within ten (10) days of, receipt thereof by or on behalf of any
of the Grantors.  All such promissory notes, certificates and
Instruments shall be held by or on behalf of the Collateral Agent pursuant
hereto and shall be delivered in suitable form for transfer by delivery or shall
be accompanied by duly executed instruments of transfer or assignment or undated
stock powers executed in blank, all in form and substance reasonably
satisfactory to the Collateral Agent.  If any Pledged Interests
consists of uncertificated securities, unless the immediately following sentence
is applicable thereto, such Grantor shall cause the Collateral Agent (or its
designated custodian or nominee) to become the registered holder thereof, or
cause each issuer of such securities to agree that it will comply with
instructions originated by the Collateral Agent with respect to such securities
without further consent by such Grantor.  If any Pledged Interests
consists of security entitlements, such Grantor shall transfer such security
entitlements to the Collateral Agent (or its custodian, nominee or other
designee), or cause the applicable securities intermediary to agree that it will
comply with entitlement orders by the Collateral Agent without further consent
by such Grantor.

       

      (ii) Within
ten (10) days of the receipt by a Grantor of any Additional Collateral, a Pledge
Amendment, duly executed by such Grantor, in substantially the form of Exhibit A
hereto (a "Pledge
Amendment"), shall be delivered to the Collateral Agent, in respect of
the Additional Collateral that must be pledged pursuant to this Agreement and
the Financing Agreement.  The Pledge Amendment shall from and after
delivery thereof constitute part of Schedules VII and VIII
hereto.  Each Grantor hereby authorizes the Collateral Agent to attach
each Pledge Amendment to this Agreement and agrees that all promissory notes,
certificates or Instruments listed on any Pledge Amendment delivered to the
Collateral Agent shall for all purposes hereunder constitute Pledged Interests
and such Grantor shall be deemed upon delivery thereof to have made the
representations and warranties set forth in Section 5 hereof (to the extent
applicable) with respect to such Additional Collateral.

       

      (b) If any
Grantor shall receive, by virtue of such Grantor's being or having been an owner
of any Pledged Interests, any (i) stock certificate (including, without
limitation, any certificate representing a stock dividend or distribution in
connection with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off), promissory note or other Instrument, (ii) option or right, whether
as an addition to, substitution for, or in exchange for, any Pledged Interests,
or otherwise, (iii) dividends payable in cash (except such dividends permitted
to be retained by any such Grantor pursuant to Section 7 hereof) or in
securities or other property or (iv) dividends, distributions, cash,
Instruments, Investment Property and other property in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, such Grantor shall receive such
stock certificate, promissory note, Instrument, option, right, payment or
distribution in trust for the benefit of the Collateral Agent, shall segregate
it from such Grantor's other property and shall deliver it forthwith to the
Collateral Agent, in the exact form received, with any necessary indorsement
and/or appropriate stock powers duly executed in blank, to be held by the
Collateral Agent as Pledged Interests and as further collateral security for the
Secured Obligations.

       

      
        
          
          

        

        
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      SECTION
5. Representations and
Warranties .  Each
Grantor jointly and severally represents and warrants as follows:

       

      (a) Schedule
I hereto sets forth (i) the exact legal name of each Grantor, (ii) the state or
jurisdiction of organization of each Grantor, (iii) the type of organization of
each Grantor and (iv) the organizational identification number of each Grantor
or states that no such organizational identification number
exists.  The Perfection Certificate, dated November 6, 2008, a copy of
which has been previously delivered to the Collateral Agent, is true, complete
and correct in all respects.

       

      (b) This
Agreement is, and each other Loan Document to which any Grantor is or will be a
party, when executed and delivered, will be, a legal, valid and binding
obligation of such Grantor, enforceable against such Grantor in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally.

       

      (c) There is
no pending or, to the best knowledge of any Grantor, threatened action, suit,
proceeding or claim before any court or other Governmental Authority or any
arbitrator, or any order, judgment or award by any court or other Governmental
Authority or any arbitrator, that, if adversely determined, may adversely affect
the grant by any Grantor, or the perfection, of the security interest purported
to be created hereby in the Collateral, or the exercise by the Collateral Agent
of any of its rights or remedies hereunder.

       

      (d) All
Equipment, Fixtures, Inventory and other Goods now existing are, and all
Equipment, Fixtures, Inventory and other Goods hereafter existing will be,
located at the addresses specified therefor in Schedule III hereto (as amended,
supplemented or otherwise modified from time to time in accordance with Section
6(b)).  Each Grantor's chief place of business and chief executive
office, the place where such Grantor keeps its Records concerning Accounts and
all originals of all Chattel Paper are located at the addresses specified
therefor in Schedule III hereto (as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof).  None of the
Accounts is evidenced by Promissory Notes or other Instruments.  Set
forth in Schedule IV hereto is a complete and accurate list, as of the date of
this Agreement, of each Deposit Account, Securities Account and Commodities
Account of each Grantor, together with the name and address of each institution
at which each such Account is maintained, the account number for each such
Account and a description of the purpose of each such Account.  Set
forth in Schedule II hereto is (i) a complete and correct list of each trade
name, business names, or similar appellations used by each Grantor and (ii) the
name of, and each trade name used by, each Person from which such Grantor has
acquired any substantial part of the Collateral within five years of the date
hereof.

       

      (e) Schedule
II hereto sets forth a true and complete list of all Licenses owned or used by
each Grantor as the date hereof (other than Shrink-Wrap
Licenses).  Each Grantor has delivered to the Collateral Agent
complete and correct copies of each such License, including all schedules and
exhibits thereto.  Each such License sets forth the entire agreement
and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or
oral, relating to the matters covered thereby or the rights of any 

       

      

      
        
          
             

          

          
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      Grantor
or any of its Affiliates in respect thereof.  Each License
now existing is, and each other License will be, the legal, valid and binding
obligation of the parties thereto, enforceable against such parties in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally.  No default under any License
by any such party has occurred, nor does any defense, offset, deduction or
counterclaim exist thereunder in favor of any such party.  No party to
any License has given any Grantor written notice of its intention to cancel,
terminate or fail to renew any License.

       

      (f) (i) The
Grantors own and control, or otherwise possess adequate rights to use, all
Intellectual Property necessary to conduct their business in substantially the
same manner as conducted as of the date hereof.  Schedule II hereto
sets forth a true and complete list of all issued, registered, renewed,
applied-for or otherwise material Intellectual Property owned or used by each
Grantor as of the date hereof.  All such Intellectual Property is
valid, subsisting and enforceable, has not been abandoned in whole or in part
and is not subject to any outstanding order, judgment or decree restricting its
use in any material respect or adversely affecting the Grantor's rights thereto
in any material respect.  There are no restrictions or other
limitations on the ability of any Grantor to assign its rights with respect to
any material intellectual property owned, licensed or otherwise used by
it.  Except as set forth in Schedule II hereto, no such
Intellectual Property is the subject of any licensing or franchising
agreement.

       

      (ii) To each
Grantor's knowledge, no such Grantor is violating any Intellectual Property
rights.  No Grantor has, within the last two years, received a written
notice that it has violated any Intellectual Property rights.  There
are no suits, actions, reissues, reexaminations, public protests, interferences,
arbitrations, mediations, oppositions, cancellations, Internet domain name
dispute resolutions or other proceedings (collectively, "Suits") pending,
decided, or to Grantor's knowledge, threatened or asserted concerning any claim
or position that a Grantor or any of its indemnitees have violated any
Intellectual Property rights.  There are no Suits or claims pending,
decided, or to the Grantor's knowledge, threatened or asserted concerning the
Intellectual Property owned or controlled by a Grantor, and, to such Grantor's
knowledge, no valid basis for any such Suits or claims exists.  There
are no Suits or claims pending, decided, or to the Grantor's knowledge,
threatened or asserted concerning the Licenses or the right of the Grantor to
use the Licenses, and no valid basis for any such Suits or claims
exists.

       

      (g) None of
the material Other Proprietary Rights or material Trade Secrets of any Grantor
have been used, divulged, disclosed or appropriated to the detriment of such
Grantor for the benefit of any other Person other than such Grantor; to such
Grantor's knowledge, no employee, independent contractor or agent of any Grantor
has misappropriated any Other Proprietary Rights or Trade Secrets of any other
Person in the course of the performance of his or her duties as an employee,
independent contractor or agent of such Grantor; and, to such Grantor's
knowledge, no employee, independent contractor or agent of any Grantor is in
default or breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement, or contract
relating an any way to the protection, ownership, development, use or transfer
of such Grantor's Intellectual Property Collateral.

       

       

      
        
          
          

        

        
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      (h) The
Existing Issuers set forth in Schedule VIII identified as a Subsidiary of a
Grantor are each such Grantor's only Subsidiaries existing on the date
hereof.  The Pledged Shares have been duly authorized and validly
issued and are fully paid and nonassessable and the holders thereof are not
entitled to any preemptive, first refusal or other similar
rights.  Except as noted in Schedule VIII hereto, the Pledged Shares
constitute 100% of the issued shares of Equity Interests of the Pledged Issuers
as of the date hereof.  All other shares of Equity Interests
constituting Pledged Interests will be duly authorized and validly issued, fully
paid and nonassessable.

       

      (i) The
promissory notes currently evidencing the Pledged Debt have been, and all other
promissory notes from time to time evidencing Pledged Debt, when executed and
delivered, will have been, duly authorized, executed and delivered by the
respective makers thereof, and all such promissory notes are or will be, as the
case may be, legal, valid and binding obligations of such makers, enforceable
against such makers in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditor's rights generally.

       

      (j) The
Grantors are and will be at all times the sole and exclusive owners of, or
otherwise have and will have adequate rights in, the Collateral free and clear
of any Lien except for the Permitted Liens.  No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording or filing office except such as may have
been filed to perfect or protect any Permitted Lien.

       

      (k) The
exercise by the Collateral Agent of any of its rights and remedies hereunder
will not contravene any law or any contractual restriction binding on or
otherwise affecting any Grantor or any of its properties and will not result in,
or require the creation of, any Lien upon or with respect to any of its
properties.

       

      (l) No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other Person, is required for (i) the due
execution, delivery and performance by any Grantor of this Agreement,
(ii) the grant by any Grantor of the security interest purported to be
created hereby in the Collateral or (iii) the exercise by the Collateral
Agent of any of its rights and remedies hereunder, except, in the case of this
clause (iii), as may be required in connection with any sale of any Pledged
Interests by laws affecting the offering and sale of securities
generally.  No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or any other Person, is
required for the perfection of the security interest purported to be created
hereby in the Collateral, except (A) for the filing under the Uniform
Commercial Code as in effect in the applicable jurisdiction of the financing
statements described in Schedule V hereto, all of which financing statements
have been duly filed and are in full force and effect, (B) with respect to
the perfection of the security interest created hereby in the United States
Intellectual Property and Licenses, for the recording of the appropriate Grant
of a Security Interest, substantially in the form of Exhibit B hereto in the
United States Patent and Trademark Office or the United States Copyright Office,
as applicable, (C) with respect to the perfection of the security interest
created hereby in foreign Intellectual Property and Licenses, for registrations
and filings in jurisdictions located 

       

      

      
        
          
             

          

          
            10

            
              

            

          

          
             

          

        

      

      

      outside
of the United
States and covering rights in such jurisdictions relating to such foreign
Intellectual Property and Licenses, (D) with respect to the perfection of
the security interest
created hereby in Titled Collateral with a book value in excess of $10,000, for
the submission of an appropriate application requesting that the Lien of the
Collateral Agent be noted on the Certificate of Title or certificate of
ownership, completed and authenticated by the applicable Grantor, together with
the Certificate of Title or certificate of ownership, with respect to such
Titled Collateral, to the appropriate Governmental Authority, (E) with respect
to any action that may be necessary to obtain control of Collateral constituting
Deposit Accounts, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Rights, the taking of such actions, (F) the Collateral Agent's
having possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral and (G) the Collateral Agent filing an amendment to
financing statements filed under the Uniform Commercial Code with respect to
Commercial Tort Claims arising after the date hereof (subclauses (A), (B), (C),
(D), (E), (F) and (G), each a "Perfection
Requirement" and collectively, the "Perfection
Requirements").

       

      (m) This
Agreement creates a legal, valid and enforceable security interest in favor of
the Collateral Agent, for the benefit of the Secured Parties, in the Collateral,
as security for the Secured Obligations.  The Perfection Requirements
result in the perfection of such security interests.  Such security
interests are, or in the case of Collateral in which any Grantor obtains rights
after the date hereof, will be, perfected, (i) in the case of any Liens granted
with respect to assets and property constituting Term Loan Priority Collateral,
first priority security interest and (ii) in the case of any Liens granted with
respect to any assets and property constituting Working Capital Priority
Collateral, second priority security interests (subject only to the Liens
granted pursuant to the Working Capital Loan Documents), and the recording of
such instruments of assignment described above.  Such Perfection
Requirements and all other action necessary or desirable to perfect and protect
such security interest have been duly made or taken, except for (i) the
Collateral Agent's having possession of all Instruments, Documents, Chattel
Paper and cash constituting Collateral after the date hereof, (ii) the
Collateral Agent's having control of all Deposit Accounts, Electronic Chattel
Paper, Investment Property or Letter-of-Credit Rights constituting Collateral
after the date hereof, and (iii) the other filings and recordations and actions
described in Section 5(l) hereof.

       

      (n) As of the
date hereof, no Grantor holds any Commercial Tort Claims or is aware of any such
pending claims, except for such claims described in Schedule VI.

       

      (o) With
respect to each Grantor and its Subsidiaries that is a partnership or a limited
liability company, the partnership interest or membership interest of each such
Person is not (A) dealt in or traded on securities exchanges or in securities
markets, (B) securities for purposes of Article 8 of any relevant Uniform
Commercial Code, (C) investment company securities within the meaning of
Section 8-103 of any relevant Uniform Commercial Code or (D) evidenced by a
certificate.  Such uncertificated partnership interest or membership
interest constitutes General Intangibles.

       

      SECTION
6. Covenants as to the
Collateral .  So
long as any of the Secured Obligations (whether or not due) shall remain unpaid
or any Lender shall have any Commitment under the Financing Agreement, unless
the Collateral Agent shall otherwise consent in writing:

       

      

      
        
          
             

          

          
            11

            
              

            

          

          
             

          

        

      

       

      
        (a) Further
Assurances.  Each Grantor will at its expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all
further action that may be necessary or reasonably desirable or that the
Collateral Agent may request in order (i) to perfect and protect, or
maintain the perfection of, the security interest and Lien purported to be
created hereby; (ii) to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder in respect of the Collateral; or
(iii) otherwise to effect the purposes of this Agreement, including,
without limitation:  (A) marking conspicuously all Chattel Paper,
Instruments and Licenses and, at the request of the Collateral Agent, all of its
Records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to the Collateral Agent, indicating that such Chattel
Paper, Instrument, License or Collateral is subject to the security interest
created hereby, (B) if any Account shall be evidenced by a Promissory Note
or other Instrument or Chattel Paper, delivering and pledging to the Collateral
Agent such Promissory Note, other Instrument or Chattel Paper, duly endorsed and
accompanied by executed instruments of transfer or assignment, all in form and
substance reasonably satisfactory to the Collateral Agent, (C) executing
and filing (to the extent, if any, that such Grantor's signature is required
thereon) or authenticating the filing of, such financing or continuation
statements, or amendments thereto, (D) with respect to Intellectual Property
hereafter existing and not covered by an appropriate security interest grant,
the executing and recording in the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, appropriate instruments
granting a security interest, as may be necessary or desirable or that the
Collateral Agent may reasonably request in order to perfect and preserve the
security interest purported to be created hereby, (E) delivering to the
Collateral Agent upon request irrevocable proxies in respect of the Pledged
Interests, (F) furnishing to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail, (G) if any Collateral with a
book value in excess of $100,000 (when aggregated with all other Collateral at
the same location) shall be in the possession of a third party, notifying such
Person of the Collateral Agent's security interest created hereby and obtaining
a written agreement, in form and substance reasonably satisfactory to the
Collateral Agent, providing access to such Collateral in order to remove such
Collateral from such premises during an Event of Default and acknowledging that
such Person holds possession of the Collateral for the benefit of the Collateral
Agent, (H) if at any time after the date hereof, any Grantor acquires or
holds any Commercial Tort Claim, involving a claim in excess of $100,000,
promptly notifying the Collateral Agent in a writing signed by such Grantor
setting forth a brief description of such Commercial Tort Claim and granting to
the Collateral Agent a security interest therein and in the proceeds thereof,
which writing shall incorporate the provisions hereof and shall be in form and
substance reasonably satisfactory to the Collateral Agent, (I) upon the
acquisition after the date hereof by any Grantor of any Titled Collateral (other
than Equipment that is subject to a purchase money security interest permitted
by Section 7.02(a) of the Financing Agreement), immediately notifying the
Collateral Agent of such acquisition, setting forth a description of the Titled
Collateral acquired and a good faith estimate of the current value of such
Titled Collateral, and, to the extent such Titled Collateral has a book value in
excess of $10,000, immediately causing the Collateral Agent to be listed as the
lienholder on such Certificate of Title or certificate of ownership and
delivering evidence of the same to the Collateral Agent, and (II) taking
all actions required by law in any relevant Uniform Commercial Code
jurisdiction, or by other law as applicable in any foreign
jurisdiction.  No Grantor shall take or fail to take any action which
would in any manner impair the validity or enforceability of the Collateral
Agent's security interest in and Lien on any Collateral.

      

       

      (b) Location of Equipment and
Inventory.  Each Grantor will keep the Equipment and Inventory
(other than Equipment and Inventory in transit or sold in the ordinary course of
business in accordance with Section 6(h) hereof) at the locations specified in
Schedule III hereto or, upon not less than thirty (30) days' prior written
notice to the Collateral Agent accompanied by a new Schedule III hereto
indicating each new location of the Equipment and Inventory, at such other
locations in the continental United States as the Grantors may elect, provided that (i) all
action has been taken to grant to the Collateral Agent a perfected, first
priority security interest in such Equipment and Inventory, and (ii) the
Collateral Agent's rights in such Equipment and Inventory, including, without
limitation, the existence, perfection and priority of the security interest
created hereby in such Equipment and Inventory, are not adversely affected
thereby.

       

      (c) Condition of
Equipment.  Each Grantor will maintain or cause the Equipment
which is necessary or useful in the proper conduct of its business to be
maintained and preserved in good condition, repair and working order as when
acquired and in accordance with any manufacturer's manual, ordinary wear and
tear excepted, and will forthwith, or upon the occurrence of any loss or damage
affecting the Equipment promptly commence and diligently prosecute the
restoration of the Equipment and make or cause to be made all repairs,
replacements and other improvements in connection therewith which are necessary
or desirable, consistent with past practice, or which the Collateral Agent may
request to such end, without regard to the availability or adequacy of insurance
proceeds and at its sole cost and expenses but in all events in a manner
approved by the Agents.  Each Grantor will promptly furnish to the
Collateral Agent a statement describing in reasonable detail any loss or
damage.

       

       

      
        
          
             

          

          
            12

            
              

            

          

          
             

          

        

      

      
         

        (d) Taxes,
Etc.  Each Grantor jointly and severally agrees to pay promptly
when due all property and other taxes, assessments and governmental charges or
levies imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Equipment and Inventory, except to the extent otherwise
provided in the Financing Agreement.

         

        (e) Insurance.  Each
Grantor will, at its own expense, maintain insurance with respect to the
Collateral in accordance with the terms of the Financing
Agreement.  Each Grantor will, if so requested by the Collateral
Agent, deliver to the Collateral Agent original or duplicate insurance policies
and, as often as the Collateral Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance.  Each
Grantor will also, at the request of the Collateral Agent, execute and deliver
instruments of assignment of such insurance policies and cause the respective
insurers to acknowledge notice of such assignment.

      

       

      
        (f) Provisions Concerning the
Accounts and the Licenses.

         

        (i) Each
Grantor will, except as otherwise provided in this subsection (f), continue
to collect, at its own expense, all amounts due or to become due under the
Accounts.  In connection with such collections, each Grantor may (and,
at the Collateral Agent's direction, will) take such action as such Grantor (or,
if applicable, the Collateral Agent) may deem necessary or advisable to enforce
collection or performance of the Accounts; provided, however, that the
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default, to notify the Account Debtors or
obligors
under any Accounts of the assignment of such Accounts to the Collateral Agent
and to direct such Account Debtors or obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Collateral Agent
or its designated agent and, upon such notification and at the expense of such
Grantor and to the extent permitted by law, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as such Grantor might have
done.  After receipt by any Grantor of a notice from the Collateral
Agent that the Collateral Agent has notified, intends to notify, or has enforced
or intends to enforce a Grantor's rights against the Account Debtors or obligors
under any Accounts as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including Instruments) received by
such Grantor in respect of the Accounts shall be received in trust for the
benefit of the Collateral Agent hereunder, shall be segregated from other funds
of such Grantor and shall be forthwith paid over to the Collateral Agent or its
designated agent in the same form as so received (with any necessary
endorsement) to be held as cash collateral and applied as specified in Section
9(d) hereof, and (B) such Grantor will not adjust, settle or compromise the
amount or payment of any Account or release wholly or partly any Account Debtor
or obligor thereof or allow any credit or discount thereon.  In
addition, upon the occurrence and during the continuance of an Event of Default,
to the extent set forth in Section 8.01 of the Financing Agreement, the
Collateral Agent may (in its sole and absolute discretion) direct any or all of
the banks and financial institutions with which any Grantor either maintains a
Deposit Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Collateral Agent or its designated agent by wire transfer (to
such account as the Collateral Agent shall specify, or in such other manner as
the Collateral Agent shall direct) all or a portion of such securities, cash,
investments and other items held by such institution.  Any such
securities, cash, investments and other items so received by the Collateral
Agent or its designated agent shall (in the sole and absolute discretion of the
Collateral Agent) be held as additional Collateral for the Secured Obligations
or distributed in accordance with Section 9 hereof.

      

       

      (ii) Upon the
occurrence and during the continuance of any breach or default under any
material License by any party thereto other than a Grantor, (A) the relevant
Grantor will, promptly after obtaining knowledge thereof, give the Collateral
Agent written notice of the nature and duration thereof, specifying what action,
if any, it has taken and proposes to take with respect thereto, (B) no Grantor
will, without the prior written consent of the Collateral Agent, declare or
waive any such breach or default or affirmatively consent to the cure thereof or
exercise any of its remedies in respect thereof, and (C) each Grantor will, upon
written instructions from the Collateral Agent and at such Grantor's expense,
take such action as the Collateral Agent may deem necessary or advisable in
respect thereof.

       

      (iii) Each
Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of
each notice or other communication received by it by which any other party to
any material License (A) declares a breach or default by a Grantor of any
material term thereunder, (B) terminates such License or (C) purports to
exercise any of its rights or affect any of its obligations thereunder, together
with a copy of any reply by such Grantor thereto.

       

      

      
        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

       

      
        (iv) Each
Grantor will exercise promptly and diligently each and every right which it may
have under each material License (other than any right of termination) and will
duly perform and observe in all respects all of its obligations under each material
License and will take all action necessary to maintain the material Licenses in
full force and effect.  No Grantor will, without the prior written
consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in
any material respect, or waive any provision of, any material
License.

         

      

      (g) Provisions Concerning the
Pledged Interests.  Each Grantor will

       

      (i) at the
Grantors' joint and several expense, promptly deliver to the Collateral Agent a
copy of each notice or other communication received by it in respect of the
Pledged Interests;

       

      (ii) at the
Grantors' joint and several expense, defend the Collateral Agent's right, title
and security interest in and to the Pledged Interests against the claims of any
Person;

       

      (iii) not make
or consent to any amendment or other modification or waiver with respect to any
Pledged Interests or enter into any agreement or permit to exist any restriction
with respect to any Pledged Interests other than pursuant to or to the extent
expressly permitted by the Loan Documents; and

       

      (iv) not
permit the issuance of (A) any additional shares of any class of Equity
Interests of any Pledged Issuer, (B) any securities convertible voluntarily by
the holder thereof or automatically upon the occurrence or non-occurrence of any
event or condition into, or exchangeable for, any such shares of Equity
Interests or (C) any warrants, options, contracts or other commitments entitling
any Person to purchase or otherwise acquire any such shares of Equity Interest,
in each case, unless otherwise expressly permitted by Sections 7.02(e) and (l)
of the Financing Agreement.

       

      (h) Transfers and Other
Liens.

       

      (i) Except to
the extent expressly permitted by Section 7.02(c) of the Financing Agreement, no
Grantor will sell, assign (by operation of law or otherwise), lease, license,
exchange or otherwise transfer or dispose of any of the Collateral.

       

      (ii) Except to
the extent expressly permitted by Section 7.02(a) of the Financing Agreement, no
Grantor will create, suffer to exist or grant any Lien upon or with respect to
any Collateral.

       

      (i) Intellectual
Property.

       

      (i) Each
Grantor has duly executed and delivered the applicable Grant of a Security
Interest in the form attached hereto as Exhibit B.

       

      (ii) Each
Grantor (either itself or through its licensees or its sublicensees) agrees that
it will not do any act or omit to do any act whereby any Patent that is material
to the conduct of such Grantor's business may become invalidated or dedicated to
the public, and agrees that it shall continue to mark any products covered by a
Patent with the relevant patent number as necessary to establish and preserve
its rights under applicable patent laws,
except where the failure to do so, together with all other such failures
hereunder since the Effective Date, could not reasonably be expected to result
in a material diminution in the value of the Collateral.

       

      

      
        
          
             

          

          
            14

            
              

            

          

          
             

          

        

      

       

      (iii) Each
Grantor (either itself or through its licensees or its sublicensees) will, for
each Trademark material to the conduct of such Grantor's business,
(i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such
Trademark with notice of U.S. or non-U.S. registration to the extent necessary
to establish and preserve its rights under applicable law, and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.

       

      (iv) Each
Grantor (either itself or through its licensees or sublicensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary to
establish and preserve its rights under applicable copyright laws, except where
the failure to do so, together with all other such failures hereunder since the
Effective Date, could not reasonably be expected to result in a material
diminution in the value of the Collateral.

       

      (v) Each
Grantor shall notify the Collateral Agent promptly if it knows or has reason to
know that any Intellectual Property material to the conduct of its business may
become abandoned, lost or dedicated to the public, or of any final materially
adverse determination (including the institution of, or any such determination
in, any proceeding in the United States Patent and Trademark Office, United
States Copyright Office or any court or similar office of any country) regarding
such Grantor's ownership of any Intellectual Property, its right to register the
same, or its right to keep and maintain the same.

       

      (vi) In the
event that any Grantor (i) files an application or registration for any
Intellectual Property with the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
either itself or through any agent, employee, licensee or designee or (ii)
obtains rights to or develops any new Intellectual Property or any reissue,
division, continuation, renewal, extension or continuation-in-part of any
existing Intellectual Property, in each case that is the subject of a
registration or a pending application with the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or political
subdivision thereof, or which is material to such Grantor business, whether
pursuant to any license or otherwise; the provisions of Section 2 hereof shall
automatically apply thereto and such Grantor shall give to the Collateral Agent
prompt notice thereof, and, upon request of the Collateral Agent, execute and
deliver any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Intellectual Property, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

       

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (vii) Each
Grantor will take all necessary steps that are consistent with the practice in
any proceeding before the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
to maintain and pursue each application relating to the Intellectual Property of
such Grantor (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights, in
each case that is material to the conduct of any Grantor's business as conducted
or proposed to be conducted, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancellation proceedings against third
parties.

       

      (viii) In the
event that any Grantor has reason to believe that any Collateral consisting of
Intellectual Property material to the conduct of any Grantor's business has been
infringed, misappropriated or diluted by a third party, such Grantor shall if
consistent with good business judgment, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Collateral and promptly
shall notify the Collateral Agent of the initiation of such suit.

       

      (ix) Upon and
during the continuance of an Event of Default, (i) no Grantor shall abandon or
otherwise permit any Intellectual Property to become invalid and (ii) each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each License that constitutes Collateral owned by such
Grantor to effect the assignment of all such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.

       

      (x) Each
Grantor shall execute, authenticate and deliver any and all assignments,
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest
hereunder in such Intellectual Property and the General Intangibles of such
Grantor relating thereto or represented thereby, each Grantor hereby appoints
the Collateral Agent as its attorney-in-fact to execute and file such writings
for the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is
irrevocable.

       

      (xi) Upon the
Collateral Agent's request, each Grantor agrees, at its own expense, as soon as
practicable after the date of such request, to make such filings and to take
such other actions as are reasonably necessary in each non-U.S. jurisdiction in
which such Grantor owns any Intellectual Property in order to perfect the
Security Interest with respect to such Intellectual Property in such
jurisdiction, provided that no Grantor shall be obligated to make any such
filing or to take any such other action where the Collateral Agent and the
Borrowers agree that the cost of such filing or action exceeds the value of the
security afforded thereby.

       

      

      
        
          
             

          

          
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        (j) Deposit, Commodities and
Securities Accounts.  On or prior to the Effective Date, each
Grantor shall, to the extent required by Section 8.01 of the Financing
Agreement, cause each bank and other financial institution with an account
referred to in Schedule IV hereto to execute and deliver to the Collateral Agent
(or its designee) a Cash Management
Agreement, or enter into other arrangements in form and substance reasonably
satisfactory to the Collateral Agent to the extent permitted by the Financing
Agreement, pursuant to which such institution shall irrevocably agree, among
other things, that (i) it will comply at any time with the instructions
originated by the Collateral Agent (or its designee) to such bank or financial
institution directing the disposition of cash, Commodity Contracts, securities,
Investment Property and other items from time to time credited to such account,
without further consent of such Grantor, which instructions the Collateral Agent
(or its designee) will not give to such bank or other financial institution in
the absence of a continuing Event of Default, (ii) all cash, Commodity
Contracts, securities, Investment Property and other items of such Grantor
deposited with such institution shall be subject to a perfected, first priority
security interest in favor of the Collateral Agent (or its designee),
(iii) any right of set off, banker's Lien or other similar Lien, security
interest or encumbrance shall, except as otherwise agreed by the Collateral
Agent, be fully waived as against the Collateral Agent (or its designee) and
(iv) upon receipt of written notice from the Collateral Agent during the
continuance of an Event of Default, such bank or financial institution shall
immediately send to the Collateral Agent (or its designee) by wire transfer (to
such account as the Collateral Agent (or its designee) shall specify, or in such
other manner as the Collateral Agent (or its designee) shall direct) all such
cash, the value of any Commodity Contracts, securities, Investment Property and
other items held by it.  Without the prior written consent of the
Collateral Agent, no Grantor shall make or maintain any Deposit Account,
Commodity Account or Securities Account except for the accounts set forth in
Schedule IV hereto.  The provisions of this Section 6(j) shall not
apply to (i) Deposit Accounts for which the Collateral Agent is the depositary,
(ii) Deposit Accounts specially and exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of a
Grantor's salaried employees, provided that the
funds on deposit in such Deposit Accounts shall at no time exceed the actual
payroll, payroll taxes and other employee wage and benefit payments then owing
by such Grantor for the immediately succeeding payroll period, and (iii) any
Deposit Account which at all times has a balance of less then $25,000, so long
as the aggregate balance at all Deposit Accounts excluded by this clause (iii)
does not exceed $100,000 at any time.

      

       

      (k) Titled
Collateral.  Each Grantor shall (a) cause all Collateral, now
owned or hereafter acquired by any Grantor, which under applicable law are
required to be registered, to be properly registered in the name of such
Grantor, (b) cause all Titled Collateral to be properly titled in the name of
such Grantor and, to the extent such Titled Collateral has a book value in
excess of $10,000, with the Collateral Agent's Lien noted thereon and (c) if
requested by the Collateral Agent, promptly deliver to the Collateral Agent (or
its custodian) originals of all such Certificates of Title or certificates of
ownership for such Titled Collateral, with the Collateral Agent's Lien noted
thereon, and take such other actions as may be reasonably required by the
Collateral Agent.  Each Grantor hereby appoints the Collateral Agent
as its attorney-in-fact, effective the date hereof and terminating upon the
termination of this Agreement, for the purpose of (A) executing on behalf of
such Grantor title or ownership applications for filing with appropriate
Governmental Authority to enable Titled Collateral now owned or hereafter
acquired by such Grantor to be retitled and the Collateral Agent listed as
lienholder thereof, (B) filing such applications with such Governmental
Authority, and (C) executing such other documents and instruments on behalf of,
and taking such other action in the name of, such Grantor as the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof
(including, without limitation, for the purpose of creating in favor of the
Collateral Agent a perfected Lien on such
Titled Collateral and exercising the rights and remedies of the Collateral Agent
hereunder).  This appointment as attorney-in-fact is coupled with an
interest and is irrevocable until the date on which all of the Secured
Obligations have been indefeasibly paid in full in cash after the termination of
each Lender's Commitment and each of the Loan Documents.

       

      

      
        
          
             

          

          
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      (l) Control.  Each
Grantor hereby agrees to take any or all action that may be necessary or
desirable or that the Collateral Agent may reasonably request in order for the
Collateral Agent to obtain control in accordance with Sections 9-104, 9-105,
9-106, and 9-107 of the Code with respect to the following
Collateral:  (i) except as otherwise provided in Section 6(J)
Deposit Accounts, (ii) Electronic Chattel Paper, (iii) Investment Property and
(iv) Letter of Credit Rights.  Each Grantor hereby acknowledges and
agrees that any agent or designee of the Collateral Agent shall be deemed to be
a "secured party" with respect to the Collateral under the control of such agent
or designee for all purposes.

       

      (m) Records; Inspection and
Reporting.

       

      (i) Each
Grantor shall keep adequate records concerning the Accounts, Chattel Paper and
Pledged Interests.  Each Grantor shall permit any Agent or any agents
or representatives thereof or such professionals or other Persons as any Agent
may designate (A)  to examine and make copies of and abstracts from such
Grantor's books and records, (B) to visit and inspect its properties,
(C) to verify materials, leases, notes, Accounts, Inventory and other
assets of such Grantor from time to time, (D) to conduct audits, physical
counts, appraisals and/or valuations, Phase I and Phase II Environmental Site
Assessments or examinations at the locations of such Grantor and (E) to discuss
such Grantor's affairs, finances and accounts with any of its directors,
officers, managerial employees, independent accountants or any of its other
representatives, in each case as provided in Section 7.01(f) of the Financing
Agreement.

       

      (ii) Except as
otherwise expressly permitted by Section 7.02(m) of the Financing Agreement, no
Grantor shall, without the prior written consent of the Collateral Agent, change
(A) its name, identity or type of organization, (B) its jurisdiction of
incorporation or organization as set forth in Schedule I hereto or (C) its chief
executive office as set forth in Schedule III hereto.  Each Grantor
shall immediately notify the Collateral Agent upon obtaining an organizational
identification number, if on the date hereof such Grantor did not have such
identification number.

       

      (n) Partnership and Limited
Liability Company Interest.  No Grantor that is a partnership
or a limited liability company shall, nor shall any Grantor with any Subsidiary
that is a partnership or a limited liability company, permit such partnership
interests or membership interests to (i) be dealt in or traded on securities
exchanges or in securities markets, (ii) become a security for purposes of
Article 8 of any relevant Uniform Commercial Code, (iii) become an investment
company security within the meaning of Section 8-103 of any relevant Uniform
Commercial Code or (iv) be evidenced by a certificate.  Each Grantor
agrees that such partnership interests or membership interests shall constitute
General Intangibles.

       

      (o) Collateral Assignment of
Leases.  To further secure the prompt payment and performance
of all Obligations, each Grantor hereby grants to the Collateral Agent a
security interest in, subject to the final paragraph of Section 2, for the
benefit of Secured Parties, all of such Grantor’s right, title and interest in,
to and under all now or hereafter existing leases of real property to which such
Grantor is a party, whether as lessor or lessee, and all extensions, renewals,
modifications and proceeds thereof.

       

      

      
        
          
             

          

          
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      SECTION
7. Voting Rights, Dividends,
Etc. in Respect of the Pledged Interests.

       

      (a) So long
as no Event of Default shall have occurred and be continuing:

       

      (i) each
Grantor may exercise any and all voting and other consensual rights pertaining
to any Pledged Interests for any purpose not inconsistent with the terms of this
Agreement, the Financing Agreement or the other Loan Documents; provided, however, that (A)
each Grantor will give the Collateral Agent at least five (5) Business Days'
written notice of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right that could reasonably be expected to
adversely affect in any material respect the value, liquidity or marketability
of any Collateral or the creation, perfection and priority of the Collateral
Agent's Lien; and (B) none of the Grantors will exercise or refrain from
exercising any such right, as the case may be, if the Collateral Agent gives a
Grantor written notice that, in the Collateral Agent's reasonable business
judgment, such action (or inaction) could reasonably be expected to adversely
affect in any material respect the value, liquidity or marketability of any
Collateral or the creation, perfection and priority of the Collateral Agent's
Lien; and

       

      (ii) each of
the Grantors may receive and retain any and all dividends, interest or other
distributions paid in respect of the Pledged Interests to the extent permitted
by the Financing Agreement; provided, however, that any and
all (A) dividends and interest paid or payable other than in cash in respect of,
and Instruments and other property received, receivable or otherwise distributed
in respect of or in exchange for, any Pledged Interests, (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Interests in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus, and (C) cash
paid, payable or otherwise distributed in redemption of, or in exchange for, any
Pledged Interests, together with any dividend, interest or other distribution or
payment which at the time of such payment was not permitted by the Financing
Agreement, shall be, and shall forthwith be delivered to the Collateral Agent,
to hold as, Pledged Interests and shall, if received by any of the Grantors, be
received in trust for the benefit of the Collateral Agent, shall be segregated
from the other property or funds of the Grantors, and shall be forthwith
delivered to the Collateral Agent in the exact form received with any necessary
indorsement and/or appropriate stock powers duly executed in blank, to be held
by the Collateral Agent as Pledged Interests and as further collateral security
for the Secured Obligations; and

       

      (iii) the
Collateral Agent will execute and deliver (or cause to be executed and
delivered) to a Grantor all such proxies and other instruments as such Grantor
may reasonably request for the purpose of enabling such Grantor to exercise the
voting and other rights which it is entitled to exercise pursuant to Section
7(a)(i) hereof and to receive the dividends,
interest and/or other distributions which it is authorized to receive and retain
pursuant to Section 7(a)(ii) hereof.

       

      
        
          
          

        

        
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      (b) Upon the
occurrence and during the continuance of an Event of Default:

       

      (i) all
rights of each Grantor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i) hereof,
and to receive the dividends, distributions, interest and other payments that it
would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
hereof, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as Pledged Interests
such dividends, distributions and interest payments;

       

      (ii) the
Collateral Agent is authorized to notify each debtor with respect to the Pledged
Debt to make payment directly to the Collateral Agent (or its designee) and may
collect any and all moneys due or to become due to any Grantor in respect of the
Pledged Debt, and each of the Grantors hereby authorizes each such debtor to
make such payment directly to the Collateral Agent (or its designee) without any
duty of inquiry;

       

      (iii) without
limiting the generality of the foregoing, the Collateral Agent may at its option
exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any of the Pledged Interests as if
it were the absolute owner thereof, including, without limitation, the right to
exchange, in its discretion, any and all of the Pledged Interests upon the
merger, consolidation, reorganization, recapitalization or other adjustment of
any Pledged Issuer, or upon the exercise by any Pledged Issuer of any right,
privilege or option pertaining to any Pledged Interests, and, in connection
therewith, to deposit and deliver any and all of the Pledged Interests with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and

       

      (iv) all
dividends, distributions, interest and other payments that are received by any
of the Grantors contrary to the provisions of Section 7(b)(i) hereof shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of the Grantors, and shall be forthwith paid over to the
Collateral Agent as Pledged Interests in the exact form received with any
necessary indorsement and/or appropriate stock powers duly executed in blank, to
be held by the Collateral Agent as Pledged Interests and as further collateral
security for the Secured Obligations.

       

      SECTION
8. Additional Provisions
Concerning the Collateral .

       

      (a) To the
maximum extent permitted by applicable law, and for the purpose of taking any
action that the Collateral Agent may deem necessary or advisable to accomplish
the purposes of this Agreement, each Grantor hereby (i) authorizes the
Collateral Agent to execute any such agreements, instruments or other documents
in such Grantor's name and to file such agreements, instruments or other
documents in such Grantor's name and in any appropriate filing office,
(ii) authorizes the Collateral Agent at any time and from time to time to
file, one or more financing or continuation 

       

      

      
        
          
             

          

          
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      statements and
amendments thereto, relating to the Collateral (including, without limitation,
any such financing statements that (A) describe the Collateral as "all assets"
or "all personal property" (or words of similar effect) or that describe or
identify the Collateral by type or in any other manner as the Collateral Agent
may determine, regardless of whether any particular asset of such Grantor falls
within the scope of Article 9 of the Uniform Commercial Code or whether any
particular asset of such Grantor constitutes part of the Collateral, and (B)
contain any other information required by Part 5 of Article 9 of the Code for
the sufficiency or filing office acceptance of any financing statement,
continuation statement or amendment, including, without limitation, whether such
Grantor is an organization, the type of organization and any organizational
identification number issued to such Grantor) and (iii) ratifies such
authorization to the extent that the Collateral Agent has filed any such
financing statements, continuation statements, or amendments thereto, prior to
the date hereof.  A photocopy or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

       

      (b) Each
Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact
and proxy, with full authority in the place and stead of such Grantor and in the
name of such Grantor or otherwise, from time to time in the Collateral Agent's
discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of a Grantor under Section 6 hereof and Section
7(a) hereof), including, without limitation, (i) to obtain and adjust insurance
required to be paid to the Collateral Agent pursuant to the Financing Agreement,
(ii) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any Collateral, (iii) to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper in connection with clause (i) or (ii)
above, (iv) to receive, indorse and collect all Instruments made payable to such
Grantor representing any dividend, interest payment or other distribution in
respect of any Pledged Interests and to give full discharge for the same, (v) to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem necessary or desirable for the collection of any
Collateral or otherwise to enforce the rights of the Collateral Agent and the
Lenders with respect to any Collateral, (vi) to execute assignments, licenses
and other documents to enforce the rights of the Collateral Agent and the
Lenders with respect to any Collateral, (vii) to pay or discharge taxes or Liens
levied or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by the Collateral Agent in its sole discretion, and such payments
made by the Collateral Agent to become Obligations of such Grantor to the
Collateral Agent, due and payable immediately without demand, and (viii) to sign
and endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, assignments, verifications and notices in connection with
Accounts, Chattel Paper and other documents relating to the
Collateral.  This power is coupled with an interest and is irrevocable
until the date on which all of the Secured Obligations have been indefeasibly
paid in full in cash after the termination of each Lender's Commitment and each
of the Loan Documents.

       

      (c) For the
purpose of enabling the Collateral Agent to exercise rights and remedies
hereunder, at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Grantor hereby
(i) grants to the Collateral Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to

       

      

      
        
          
             

          

          
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      any
Grantor) to use, assign, license or sublicense any Intellectual Property now or
hereafter owned by any Grantor, wherever the same may be located, including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for the compilation
or printout thereof; and (ii) assigns to the Collateral Agent, to the extent
assignable, all of its rights to any Intellectual Property now or hereafter
licensed or used by any Grantor.  Notwithstanding anything contained
herein to the contrary, but subject to the provisions of the Financing Agreement
that limit the right of a Grantor to dispose of its property and Section 6(i)
hereof, so long as no Event of Default shall have occurred and be continuing,
each Grantor may exploit, use, enjoy, protect, license, sublicense, assign,
sell, dispose of or take other actions with respect to the Intellectual
Property.  In furtherance of the foregoing, unless an Event of Default
shall have occurred and be continuing, the Collateral Agent shall from time to
time, upon the request of a Grantor, execute and deliver any instruments,
certificates or other documents, in the form so requested, which such Grantor
shall have certified are appropriate (in such Grantor's judgment) to allow it to
take any action permitted above (including relinquishment of the license
provided pursuant to this clause (c) as to any Intellectual
Property).  Further, upon the date on which all of the Secured
Obligations have been indefeasibly paid in full in cash after the termination of
each Lender's Commitment and each of the Loan Documents, the Collateral Agent
(subject to Section 13(e) hereof) shall release and reassign to the Grantors all
of the Collateral Agent's right, title and interest in and to the Intellectual
Property, and the Licenses, all without recourse, representation or warranty
whatsoever and at the Grantors' sole expense.  The exercise of rights
and remedies hereunder by the Collateral Agent shall not terminate the rights of
the holders of any licenses or sublicenses theretofore granted by any Grantor in
accordance with the second sentence of this clause (c).  Each Grantor
hereby releases the Collateral Agent from any claims, causes of action and
demands at any time arising out of or with respect to any actions taken or
omitted to be taken by the Collateral Agent under the powers of attorney granted
herein other than actions taken or omitted to be taken through the Collateral
Agent's gross negligence or willful misconduct, as determined by a final
determination of a court of competent jurisdiction.

       

      (d) If any
Grantor fails to perform any agreement or obligation contained herein, the
Collateral Agent may itself perform, or cause performance of, such agreement or
obligation, in the name of such Grantor or the Collateral Agent, and the
expenses of the Collateral Agent incurred in connection therewith shall be
jointly and severally payable by the Grantors pursuant to Section 10 hereof and
shall be secured by the Collateral.

       

      (e) The
powers conferred on the Collateral Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Other than the exercise of reasonable care to assure the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral and shall
be relieved of all responsibility for any Collateral in its possession upon
surrendering it or tendering surrender of it to any of the Grantors (or
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct).  The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
it being understood that the Collateral Agent shall not have
responsibility for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters.  The Collateral Agent shall not be liable
or responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.

       

      

      
        
          
             

          

          
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      (f) Anything
herein to the contrary notwithstanding (i) each Grantor shall remain liable
under the Licenses and otherwise in respect of the Collateral to the extent set
forth therein to perform all of its obligations thereunder to the same extent as
if this Agreement had not been executed, (ii) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor
from any of its obligations under the Licenses or otherwise in respect of the
Collateral, and (iii) the Collateral Agent shall not have any obligation or
liability by reason of this Agreement under the Licenses or otherwise in respect
of the Collateral, nor shall the Collateral Agent be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

       

      (g) The
Collateral Agent may at any time in its discretion (i) without notice to any
Grantor, transfer or register in the name of the Collateral Agent or any of its
nominees any or all of the Pledged Interests, subject only to the revocable
rights of such Grantor under Section 7(a) hereof, and (ii) exchange certificates
or Instruments constituting Pledged Interests for certificates or Instruments of
smaller or larger denominations.

       

      SECTION
9. Remedies Upon
Default .  If
any Event of Default shall have occurred and be continuing:

       

      (a) The
Collateral Agent may exercise in respect of the Collateral, in addition to any
other rights and remedies provided for herein or otherwise available to it, all
of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Collateral), and also may
(i) take absolute control of the Collateral, including, without limitation,
transfer into the Collateral Agent's name or into the name of its nominee or
nominees (to the extent the Collateral Agent has not theretofore done so) and
thereafter receive, for the benefit of the Collateral Agent and the Lenders, all
payments made thereon, give all consents, waivers and ratifications in respect
thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees
that it will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place or places to be designated
by the Collateral Agent that is reasonably convenient to both parties, and the
Collateral Agent may enter into and occupy any premises owned or leased by any
Grantor where the Collateral or any part thereof is located or assembled for a
reasonable period in order to effectuate the Collateral Agent's rights and
remedies hereunder or under law, without obligation to any Grantor in respect of
such occupation, and (iii) without notice except as specified below and
without any obligation to prepare or process the Collateral for sale,
(A) sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral Agent's
offices, at any exchange or broker's board or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon
such other terms as the Collateral Agent may deem commercially reasonable and/or
(B) lease, license or otherwise dispose of the 

       

      

      
        
          
             

          

          
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       Collateral
or any part thereof upon such terms as the Collateral Agent may deem
commercially reasonable.  Each Grantor agrees that, to the extent
notice of sale or any other disposition of the Collateral shall be required by
law, at least five (5) days prior written notice to the applicable Grantor of
the time and place of any public sale or the time after which any private sale
or other disposition of the Collateral is to be made shall constitute reasonable
notification.  The Collateral Agent shall not be obligated to make any
sale or other disposition of Collateral regardless of notice of sale having been
given.  The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.  Each Grantor hereby waives any claims against the
Collateral Agent and the Lenders arising by reason of the fact that the price at
which the Collateral may have been sold at a private sale was less than the
price which might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Collateral Agent
accepts the first offer received and does not offer the Collateral to more than
one offeree, and waives all rights that such Grantor may have to require that
all or any part of the Collateral be marshaled upon any sale (public or private)
thereof.  Each Grantor hereby acknowledges that (i) any such sale
of the Collateral by the Collateral Agent shall be made without warranty,
(ii) the Collateral Agent may specifically disclaim any warranties of
title, possession, quiet enjoyment or the like, (iii) the Collateral Agent may
bid (which bid may be, in whole or in part, in the form of cancellation of
indebtedness), if permitted by law, for the purchase, lease, license or other
disposition of the Collateral or any portion thereof for the account of the
Collateral Agent (on behalf of itself and the Lenders) and (iv) such
actions set forth in clauses (i), (ii) and (iii) above shall not adversely
affect the commercial reasonableness of any such sale of the
Collateral.  In addition to the foregoing, (i) upon written
notice to any Grantor from the Collateral Agent, each Grantor shall cease any
use of the Intellectual Property or any trademark, patent or copyright similar
thereto for any purpose described in such notice; (ii) the Collateral Agent may,
at any time and from time to time, upon five days prior written notice to any
Grantor, license, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any of the Intellectual Property, throughout
the universe for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (iii) the
Collateral Agent may, at any time, pursuant to the authority granted in Section
8 hereof (such authority being effective upon the occurrence and during the
continuance of an Event of Default), execute and deliver on behalf of a Grantor,
one or more instruments of assignment of the Intellectual Property (or any
application or registration thereof), in form suitable for filing, recording or
registration in any country.

       

      (b) In the
event that the Collateral Agent determines to exercise its right to sell all or
any part of the Pledged Interests pursuant to Section 9(a) hereof, each Grantor
will, at such Grantor's expense and upon request by the Collateral
Agent:  (i) execute and deliver, and cause each issuer of such Pledged
Interests and the directors and officers thereof to execute and deliver, all
such instruments and documents, and do or cause to be done all such other acts
and things, as may be necessary or, in the opinion of the Collateral Agent,
advisable to register such Pledged Interests under the provisions of the
Securities Act, and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the Collateral
Agent, are necessary or advisable, all in conformity with the requirements of
the 

       

      

      
        
          
             

          

          
            24

            
              

            

          

          
             

          

        

      

       

      Securities Act and the
rules and regulations of the SEC applicable thereto, (ii) cause each issuer of
such Pledged Interests to qualify such Pledged Interests under the state
securities or "Blue Sky" laws of each jurisdiction, and to obtain all necessary
governmental approvals for the sale of the Pledged Interests, as requested by
the Collateral Agent, (iii) cause each Pledged Issuer to make available to its
securityholders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or
cause to be done all such other acts and things as may be necessary to make such
sale of such Pledged Interests valid and binding and in compliance with
applicable law.  Each Grantor acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by the Collateral
Agent by reason of the failure by any Grantor to perform any of the covenants
contained in this Section 9(b) and, consequently, agrees that, if any Grantor
fails to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value of the Pledged Interests on the
date the Collateral Agent demands compliance with this Section 9(b); provided, however, that the
payment of such amount shall not release any Grantor from any of its obligations
under any of the other Loan Documents.

       

      (c) Notwithstanding
the provisions of Section 9(b) hereof, each Grantor recognizes that the
Collateral Agent may deem it impracticable to effect a public sale of all or any
part of the Pledged Shares or any other securities constituting Pledged
Interests and that the Collateral Agent may, therefore, determine to make one or
more private sales of any such securities to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such securities
for their own account, for investment and not with a view to the distribution or
resale thereof.  Each Grantor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices and
other terms which might have been obtained at a public sale and, notwithstanding
the foregoing, agrees that such private sales shall be deemed to have been made
in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to delay the sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act.  Each Grantor further
acknowledges and agrees that any offer to sell such securities which has been
(i) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation in the financial community of New York, New York (to the
extent that such an offer may be so advertised without prior registration under
the Securities Act) or (ii) made privately in the manner described above to not
less than fifteen bona fide offerees shall
be deemed to involve a "public disposition" for the purposes of Section 9-610(c)
of the Code (or any successor or similar, applicable statutory provision) as
then in effect in the State of New York, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act, and that the Collateral
Agent may, in such event, bid for the purchase of such securities.

       

      (d) Any cash
held by the Collateral Agent (or its agent or designee) as Collateral and all
Cash Proceeds received by the Collateral Agent (or its agent or designee) in
respect of any sale of or collection from, or other realization upon, all or any
part of the Collateral may, in the discretion of the Collateral Agent, be held
by the Collateral Agent (or its agent or designee) as collateral for, and/or
then or at any time thereafter applied (after payment of any amounts payable to
the Collateral Agent pursuant to Section 10 hereof) in whole or in part by the
Collateral Agent against, all or any part of the Secured Obligations in such
order as the Collateral
Agent shall elect, consistent with the provisions of the Financing
Agreement.  Any surplus of such cash or Cash Proceeds held by the
Collateral Agent (or its agent or designee) and remaining after the date on
which all of the Secured Obligations have been indefeasibly paid in full in cash
after the termination of each Lender's Commitment and each of the Loan
Documents, shall be paid over to whomsoever shall be lawfully entitled to
receive the same or as a court of competent jurisdiction shall
direct.

       

      

      
        
          
             

          

          
            25

            
              

            

          

          
             

          

        

      

       

      (e) In the
event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Collateral Agent and the Lenders
are legally entitled, the Grantors shall be jointly and severally liable for the
deficiency, together with interest thereon at the highest rate specified in any
applicable Loan Document for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees, costs, expenses and other client charges of any
attorneys employed by the Collateral Agent to collect such
deficiency.

       

      (f) Each
Grantor hereby acknowledges that if the Collateral Agent complies with any
applicable requirements of law in connection with a disposition of the
Collateral, such compliance will not adversely affect the commercial
reasonableness of any sale or other disposition of the Collateral.

       

      (g) The
Collateral Agent shall not be required to marshal any present or future
collateral security (including, but not limited to, this Agreement and the
Collateral) for, or other assurances of payment of, the Secured Obligations or
any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of the Collateral Agent's rights
hereunder and in respect of such collateral security and other assurances of
payment shall be cumulative and in addition to all other rights, however
existing or arising.  To the extent that any Grantor lawfully may,
such Grantor hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Collateral Agent's rights under this Agreement or under any other
instrument creating or evidencing any of the Secured Obligations or under which
any of the Secured Obligations is outstanding or by which any of the Secured
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, each Grantor hereby irrevocably waives the benefits
of all such laws.

       

      SECTION
10.  Indemnity and
Expenses .

       

      (a) Each
Grantor jointly and severally agrees to defend, protect, indemnify and hold
harmless each Agent and each other Indemnitee from and against any and all
claims, losses, damages, liabilities, obligations, penalties, fees, reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees,
costs, expenses and disbursements) incurred by such Agent or such Indemnitee to
the extent that they arise out of or otherwise result from or relate to or are
in connection with this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities resulting solely and
directly from such Agent's or any such Indemnitee's gross negligence or willful
misconduct, as determined by a final judgment of a court of competent
jurisdiction.

       

      
        (b) Each
Grantor jointly and severally agrees to pay to the Agents upon demand the amount
of any and all costs and expenses, including the reasonable fees, costs,
expenses and disbursements of counsel for the Agents and of any experts and
agents (including, without limitation, any collateral trustee which may act as
agent of the Agents), which the Agents may incur in connection with (i) the
preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any Collateral, (iii) the
exercise or enforcement of any of the rights of the Agents hereunder, or
(iv) the failure by any Grantor to perform or observe any of the provisions
hereof.

      

      

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      SECTION
11.  Notices, Etc.   All
notices and other communications provided for hereunder shall be given in
accordance with the notice provision of the Financing
Agreement.  

       

      SECTION
12.  Security Interest Absolute;
Joint and Several Obligations .

       

      (a) All
rights of the Secured Parties, all Liens and all obligations of each of the
Grantors hereunder shall be absolute and unconditional irrespective of (i) any
lack of validity or enforceability of the Financing Agreement or any other Loan
Document, (ii) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Secured Obligations, or any other
amendment or waiver of or consent to any departure from the Financing Agreement
or any other Loan Document, (iii) any exchange or release of, or non-perfection
of any Lien on any Collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations, or (iv) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any of the Grantors in respect of the
Secured Obligations.  All authorizations and agencies contained herein
with respect to any of the Collateral are irrevocable and powers coupled with an
interest.

       

      (b) Each
Grantor hereby waives (i) promptness and diligence, (ii) notice of acceptance
and notice of the incurrence of any Obligation by any Borrower, (iii) notice of
any actions taken by any Agent, any Lender, any Guarantor or any other Person
under any Loan Document or any other agreement, document or instrument relating
thereto, (iv) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Obligations, the
omission of or delay in which, but for the provisions of this subsection (b),
might constitute grounds for relieving such Grantor of any such Grantor's
obligations hereunder and (v) any requirement that any Agent or any Lender
protect, secure, perfect or insure any security interest or other lien on any
property subject thereto or exhaust any right or take any action against any
Grantor or any other Person or any collateral.

       

      (c) All of
the obligations of the Grantors hereunder are joint and several.  The
Collateral Agent may, in its sole and absolute discretion, enforce the
provisions hereof against any of the Grantors and shall not be required to
proceed against all Grantors jointly or seek payment from the Grantors
ratably.  In addition, the Collateral Agent may, in its sole and
absolute discretion, select the Collateral of any one or more of the Grantors
for sale or application to the Secured Obligations, without regard to the
ownership of such Collateral, and shall not be required to make such selection
ratably from the Collateral owned by all of the Grantors.  The release
or discharge of any Grantor by the Collateral Agent shall not release or
discharge any other Grantor from the obligations of such Person
hereunder.

       

      

      
        
          
             

          

          
            27

            
              

            

          

          
             

          

        

      

       

      SECTION
13. Miscellaneous.

       

      (a) No
amendment of any provision of this Agreement (including any Schedule attached
hereto) shall be effective unless it is in writing and signed by each Grantor
affected thereby and the Collateral Agent, and no waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
be effective unless it is in writing and signed by the Collateral Agent, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

       

      (b) No
failure on the part of the Secured Parties to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.  The rights and remedies of the Secured Parties provided herein
and in the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law.  The rights of
the Secured Parties under any Loan Document against any party thereto are not
conditional or contingent on any attempt by such Person to exercise any of its
rights under any other Loan Document against such party or against any other
Person, including but not limited to, any Grantor.

       

      (c) This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect, subject to paragraph (e) below, until
the date on which all of the Secured Obligations have been indefeasibly paid in
full in cash after the termination of each Lender's Commitment and each of the
Loan Documents and (ii) be binding on each Grantor all other Persons who become
bound as debtor to this Agreement in accordance with Section 9-203(d) of the
Code, and shall inure, together with all rights and remedies of the Secured
Parties hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns.  Without limiting the generality
of clause (ii) of the immediately preceding sentence, the Secured Parties may
assign or otherwise transfer their respective rights and obligations under this
Agreement and any other Loan Document to any other Person pursuant to the terms
of the Financing Agreement, and such other Person shall thereupon become vested
with all of the benefits in respect thereof granted to the Secured Parties
and  herein or otherwise.  Upon any such assignment or
transfer, all references in this Agreement to any Secured Party shall mean the
assignee of any such Secured Party.  None of the rights or obligations
of any Grantor hereunder may be assigned or otherwise transferred without the
prior written consent of the Collateral Agent, and any such assignment or
transfer shall be null and void.

       

      (d) Upon the
date on which all of the Secured Obligations have been indefeasibly paid in full
in cash after the termination of each Lender's Commitment and each of the Loan
Documents, (i) subject to paragraph (e) below, this Agreement and the security
interests, powers of attorney and licenses created hereby shall terminate and
all rights to the Collateral shall revert to the Grantors and (ii) the
Collateral Agent will, upon the Grantors' request and at the Grantors' expense,
without any representation, warranty or recourse whatsoever, (A) return to the
Grantors (or whomsoever shall be lawfully entitled to receive the same or as a
court of competent jurisdiction shall direct) such of the Collateral as shall
not have been sold or otherwise disposed of or applied pursuant to the terms
hereof and (B) execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such
termination.

       

      

      
        
          
             

          

          
            28

            
              

            

          

          
             

          

        

      

       

      (e) This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment or performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been
made.  In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

       

      (f) Upon the execution and delivery, or
authentication, by any Person of a security agreement supplement in
substantially the form of Exhibit C hereto
(each a "Security
Agreement Supplement"), (i) such Person shall be referred to as an "Additional Grantor"
and shall be and become a Grantor, and each reference in this Agreement to
"Grantor" shall also mean and be a reference to such Additional Grantor, and
each reference in this Agreement and the other Loan Documents to "Collateral"
shall also mean and be a reference to the Collateral of such Additional Grantor,
and (ii) the supplemental Schedules I-VIII
attached to each Security Agreement Supplement shall be incorporated into and
become a part of and supplement Schedules I-VIII,
respectively, hereto, and the Collateral Agent may attach such Schedules as
supplements to such Schedules, and each reference to such Schedules shall mean
and be a reference to such Schedules, as supplemented pursuant
hereto.

       

      (g) THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.  ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS.  EACH GRANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE

       

      

      
        
          
             

          

          
            29

            
              

            

          

          
             

          

        

      

      

      FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.  EACH GRANTOR
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAYBE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT, OR
IN ANY OTHER MANNER PROVIDED BY LAW.

       

      (h) In
addition to and without limitation of any of the foregoing, this Agreement shall
be deemed to be a Loan Document and shall otherwise be subject to all of terms
and conditions contained in Sections 12.10 and 12.11 of the Financing Agreement,
mutatis
mutandi.

       

      (i) Each
Grantor irrevocably and unconditionally waives any right it may have to claim or
recover in any legal action, suit or proceeding with respect to this Agreement
any special, exemplary, punitive or consequential damages.

       

      (j) Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

       

      (k) Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

       

      (l) So long
as the Working Capital Agent is acting as bailee and as agent for perfection on
behalf of the Collateral Agent pursuant to the terms of the Intercreditor
Agreement, any obligation of any Grantor in this Agreement that requires
delivery of Collateral to, or the possession or control of Collateral with, the
Collateral Agent shall be deemed complied with and satisfied if such delivery of
Collateral is made to, or such possession or control of Collateral is with, the
Working Capital Agent.

       

      (m) This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which shall be deemed an
original, but all of such counterparts taken together shall constitute one and
the same agreement.  Delivery of an executed counterpart of this
Agreement by facsimile or electronic mail shall be equally effective as delivery
of an original executed counterpart.

       

      

       

      [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

       

      

      
        
          
             

          

          
            30

            
              

            

          

          
             

          

        

      

       

      IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.

       

      

       

      
        	 
      	
                GRANTORS:

              
	 
      	 
      
	 
      	 
      
	 
      	
                MONACO
      COACH CORPORATION

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

       

      
        	 
      	
                SIGNATURE  MOTORCOACH
      RESORTS, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

       

      
        	 
      	
                NAPLES
      MOTORCOACH RESORT INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

       

      
        	 
      	
                PORT
      OF THE ISLES MOTORCOACH RESORT, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

      

      
        	 
      	
                OUTDOOR
      RESORTS OF LAS VEGAS, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

      
        
          
            
              
                	
                         

                      	
                        Sched.
      I-1

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      

      

        
          	 
      	
                  OUTDOOR
      RESORTS MOTORCOACH COUNTRY

                
	 
      	
                  CLUB,
      INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  LA
      QUINTA MOTORCOACH RESORT, INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  SIGNATURE  RESORTS
      OF MICHIGAN, INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  R-VISION
      HOLDINGS LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  R-VISION,
      INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

      

       

      
        
          
             2

          

          
             

            
              

               

            

          

          
             

          

        

      

      

       

      
        
          	 
      	
                  R-VISION
      MOTORIZED LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  BISON  MANUFACTURING,
      LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

        

        

        
          	 
      	
                  ROADMASTER
      LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ P. Martin Daley

                
	 
      	 
      	
                  Name:  P.
      Martin Daley

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

        

         

        
          
             
3

          

          
             

            
              

               

            

          

          
             

          

        

      

       

      EXHIBIT
A

       

      PLEDGE
AMENDMENT

       

      This
Pledge Amendment, dated _________ __, __ , is delivered
pursuant to Section 4 of the Pledge and Security Agreement referred to
below.  The undersigned hereby agrees that this Pledge Amendment may
be attached to the Pledge and Security Agreement, dated November 6, 2008, as it
may heretofore have been or hereafter may be amended, restated, supplemented,
modified or otherwise changed from time to time (the "Security Agreement")
and that the promissory notes or shares listed on this Pledge Amendment shall be
hereby pledged and assigned to the Collateral Agent and become part of the
Pledged Interests referred to in such Pledge Agreement and shall secure all of
the Secured Obligations referred to in such Security Agreement.

       

      
        	
                Pledged Debt

              
	
                Grantor

              	
                Name of Maker

              	
                Description

              	
                Principal
      Amount

                Outstanding as of

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

      

      

      
        	
                Pledged Shares

              
	
                Grantor

              	
                Name
      of

                Pledged Issuer

              	
                Number
      of

                Shares

              	
                Percentage
      of Outstanding

                Shares

              	
                Class

              	
                Certificate
      Number

              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

      

       

      
 

      
        	 
      	
                [GRANTOR]

              
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

       

       

      
        	
                ABLECO
      FINANCE LLC,

              
	
                as
      the Collateral Agent

              
	 
      
	
                By:

              	 	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    
      

      
        
          
            
              
                	
                         

                      	
                        Exh.
      A-1

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

      EXHIBIT
B

       

      GRANT OF
A SECURITY INTEREST --[TRADEMARKS] [PATENTS] [COPYRIGHTS]

       

      WHEREAS,
________________ (the "Grantor") [has
adopted, used and is using, and holds all right, title and interest in and to,
the trademarks and service marks listed on the attached Schedule A, which
trademarks and service marks are registered or applied for in the United States
Patent and Trademark Office (the "Trademarks")] [holds
all right, title and interest in the letter patents, design patents and utility
patents listed on the attached Schedule A,
which patents are issued or applied for in the United States Patent and
Trademark Office (the "Patents")] [holds all
right, title and interest in the copyrights listed on the attached Schedule A, which
copyrights are registered in the United States Copyright Office (the "Copyrights")];

       

      WHEREAS,
the Grantor has entered into a Pledge and Security Agreement, dated November 6,
2008 (as amended, restated, supplemented, modified or otherwise changed from
time to time, the "Security Agreement"),
in favor of Ableco Finance LLC, as the Collateral Agent for itself and certain
lenders (in such capacity, together with its successors and assigns, if any, the
"Grantee");
and

       

      WHEREAS,
pursuant to the Security Agreement, the Grantor has granted to the Grantee, and
granted to the Grantee for the benefit of the Secured Parties (each such term as
defined in the Security Agreement), a continuing security interest in all right,
title and interest of the Grantor in, to and under the [Trademarks, together
with, among other things, the goodwill of the business symbolized by the
Trademarks] [Patents] [Copyrights] and the applications and registrations
thereof, and all proceeds thereof, including, without limitation, any and all
causes of action which may exist by reason of infringement thereof and any and
all damages arising from past, present and future violations thereof (the "Collateral"), to
secure the payment, performance and observance of the Secured Obligations (as
defined in the Security Agreement).

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Grantor does hereby grant to the Grantee and
grant to the Grantee for the benefit of the Secured Parties, a continuing
security interest in the Collateral to secure the prompt payment, performance
and observance of the Secured Obligations.

       

      The
Grantor does hereby further acknowledge and affirm that the rights and remedies
of the Grantee with respect to the Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.

       

      

      
        
          
            
              
                	
                         

                      	
                        Exh.
      B-1

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

      IN
WITNESS WHEREOF, the Grantor has caused this Assignment to be duly executed by
its officer thereunto duly authorized as of ___________  ____,
200___.

       

       

      
        
          	 
      	
                  [GRANTOR]

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

       

       

      
        
          
            
              
                	
                         

                      	
                        Exh.
      B-2

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

      SCHEDULE A TO GRANT OF A
SECURITY INTEREST

       

      

       

      

      [Trademark
Registrations and Applications]

      [Patents
and Patent Applications]

      [Copyright
Registrations and Applications]

      

      

      

      

      
        
          
            
              
                	
                         

                      	
                        Exh.
      B-3

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      

       

      EXHIBIT
C

       

      

       

      FORM OF
SECURITY AGREEMENT SUPPLEMENT

       

      [Date of
Security Agreement Supplement]

       

      Ableco
Finance LLC, as Collateral Agent

       

      299 Park
Avenue

       

      23rd
Floor

       

      New York,
NY 10171

       

      Attention:
[                                           ]

       

      Ladies
and Gentlemen:

       

      Reference
hereby is made to (i) the Financing Agreement, dated as of November 6, 2008
(such agreement, as amended, restated, supplemented, modified or otherwise
changed from time to time, including any replacement agreement therefor, being
hereinafter referred to as the "Financing Agreement")
by and among Monaco Coach Corporation, a Delaware corporation ("Monaco"), each
subsidiary of Monaco listed as a "Borrower" on the
signature pages thereto (each a "Borrower" and
collectively, the "Borrowers"), each
subsidiary of Monaco listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) (each a "Guarantor" and
collectively, the "Guarantors"), the
lenders from time to time party thereto (each a "Lender" and
collectively, the "Lenders"), the
Collateral Agent, and Ableco, as administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, if any, the
"Administrative
Agent" and together with the Collateral Agent, each an "Agent" and
collectively, the "Agents") and (ii) the
Pledge and Security Agreement, dated as of November 6, 2008 (as amended,
restated, supplemented or otherwise modified from time to time, the "Security Agreement"),
made by the Grantors from time to time party thereto in favor of the Collateral
Agent.  Capitalized terms defined in the Financing Agreement or the
Security Agreement and not otherwise defined herein are used herein as defined
in the Financing Agreement or the Security Agreement.

       

      SECTION
1.                                Grant of
Security.  The undersigned hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in,
all of its right, title and interest in and to all of the Collateral (as defined
in the Security Agreement) of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Security Agreement.

       

      SECTION
2.                                Security for
Obligations.  The grant of a security interest in the
Collateral by the undersigned under this Security Agreement Supplement and the
Security Agreement secures the payment of all Secured Obligations of the
undersigned now or hereafter existing under or in respect of the Loan Documents,
whether direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or
otherwise.  Without limiting the generality of the foregoing, each of
this Security Agreement Supplement and the Security Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and that
would be owed by the undersigned to the Collateral Agent or any Secured Party
under the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Grantor.

       

      
        
          Exh.
C-1

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION
3.                                Supplements to Security
Agreement Schedules.  The undersigned has attached hereto
supplemental Schedules
I through VIII to Schedules I through
VIII,
respectively, to the Security Agreement, and the undersigned hereby certifies,
as of the date first above written, that such supplemental Schedules have been
prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement, and such supplemental Schedules include all
of the information required to be scheduled to the Security Agreement and do not
omit to state any information material thereto.

       

      SECTION
4.                                Representations and
Warranties.  The undersigned hereby makes each representation
and warranty set forth in Section 5 of the
Security Agreement (as supplemented by the attached supplemental Schedules) to
the same extent as each other Grantor.

       

      SECTION
5.                                Obligations Under the
Security Agreement.  The undersigned hereby agrees, as of the
date first above written, to be bound as a Grantor by all of the terms and
provisions of the Security Agreement to the same extent as each of the other
Grantors.  The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the
undersigned.

       

      SECTION
6.                                Governing
Law.  This Security Agreement Supplement shall be governed by,
and construed in accordance with, the laws of the State of New
York.

       

      
        SECTION
7.                                Loan
Document.  In addition to and without limitation of any of the
foregoing, this Security Agreement Supplement shall be deemed to be a Loan
Document and shall otherwise be subject to all of terms and conditions contained
in Sections 12.10 and 12.11 of the Financing Agreement, mutatis mutandi.

         

        

        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	 
      	
                  [NAME
      OF ADDITIONAL LOAN PARTY]

                
	 
      	 
      
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

         

        
          
            
              
                	
                         

                      	
                        Exh.
      C-2

                      	 
      

              

              

            

             

          

          
             

            
              

            

          

          
             

          

        

      
        
          	
                  Acknowledged
      and Agreed:

                	 
      
	 
      	 
      
	
                  ABLECO
      FINANCE LLC,

                	 
      
	
                  as
      Collateral Agent

                	 
      
	 
      	 
      
	
                  By:

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

       

      Exh. C-3exhibit10_4.htm

    

    Exhibit 10.4

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED TO AN "ACCREDITED INVESTOR" (AS SUCH
TERM IS DEFINED IN THE RULES AND REGULATIONS PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED) IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES, IF EFFECTED IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED.

     

    Monaco
Coach Corporation

     

    Warrant
To Purchase Common Stock

     

    

    Warrant
No.:  1

    Number of
Shares of Common Stock:  1,000,000

    Date of
Issuance:  November 7, 2008 ("Issuance Date")

    

     

    Monaco
Coach Corporation, a Delaware corporation, (the "Company"), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Ableco Holding LLC, the registered holder hereof or its
permitted assigns (the "Holder"), is entitled, subject
to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to purchase Common Stock issued in
exchange, transfer or replacement hereof, the "Warrant"), at any time or
times on or after the date hereof, but not after 11:59 p.m., New York Time, on
the Expiration Date (as defined below), One Million (1,000,000) fully paid
nonassessable shares of Common Stock (as defined below) (the "Warrant
Shares").  Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section
17.  This Warrant is one of the Warrants to purchase Common Stock (the
"SPA Warrants" and
holders of such SPA Warrants, the "Warrantholders") issued
pursuant to that certain Warrantholder Rights Agreement, dated as of the
Issuance Date by and among the Company and the Holder referred to therein (the
"Warrantholder Rights
Agreement").

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1. EXERCISE OF
WARRANT.

     

    (a) Mechanics of
Exercise.  Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant may be exercised by the Holder on any day on or after the date hereof in
whole or in part, by (i) delivery of a properly completed, written notice,
in the form attached hereto as Exhibit A (the "Exercise Notice"), of the
Holder's election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price") in
cash or by wire transfer of immediately available funds or (B) if the conditions
for Cashless Exercise (as defined in Section 1(d)) set forth in
Section 1(d) are satisfied, (by notifying the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as defined in Section
1(d)).  The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder.  Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the remaining number
of Warrant Shares.  On or before the second Trading Day following the
date on which the Company has received each of the Exercise Notice and the
Aggregate Exercise Price (or notice of a Cashless Exercise) (the "Exercise Delivery Documents"),
the Company shall transmit by facsimile an acknowledgment of confirmation of
receipt of the Exercise Delivery Documents to the Holder and the Company's
transfer agent (the "Transfer
Agent").  On or before the third Trading Day following the date
on which the Company has received all of the Exercise Delivery Documents (the
"Share Delivery Date"),
the Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder's or its designee's balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company's
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise.  Upon delivery of the Exercise Delivery Documents, the
Holder shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are credited to the
Holder's DTC account or the date of delivery of the certificates evidencing such
Warrant Shares, as the case may be.  If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable and in no event later than three Business
Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised.  No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock to
be issued shall be rounded up to the nearest whole number.  The
Company shall pay any and all taxes which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant; provided
that the Company
shall not be required to pay any income or transfer tax imposed on the issuance
or delivery of shares of Common Stock to any Holder other than the Holder as of
the Issuance Date to the extent such income or transfer tax would not have been
imposed if the Holder as of the Issuance Date had remained the
Holder.

     

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    (b) Exercise
Price.  For purposes of this Warrant, "Exercise Price" means $1.7197,
subject to adjustment as provided herein.

     

    (c) Company's Failure to Timely
Deliver Securities.  If the Company shall fail for any reason
or for no reason to issue to the Holder within three (3) Trading Days of receipt
of the Exercise Delivery Documents, a certificate for the number of shares of
Common Stock to which the Holder is entitled and register such shares of Common
Stock on the Company's share register or to credit the Holder's balance account
with DTC for such number of shares of Common Stock to which the Holder is
entitled upon the Holder's exercise of this Warrant, and if on or after such
Trading Day the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of
shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company (a "Buy-In"), then the Company
shall, within three Business Days after the Holder's request and in the Holder's
discretion, either (i) pay cash to the Holder in an amount equal to the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the "Buy-In Price"), at which point
the Company's obligation to deliver such certificate (and to issue such shares
of Common Stock) or credit such Holder's balance account with DTC shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common Stock or credit
such Holder's balance account with DTC and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Weighted Average Price on the
date of exercise.

     

    (d) Cashless Exercise.
 Notwithstanding
anything contained herein to the contrary, if a Registration Statement (as
defined in the Registration Rights Agreement) covering the resale of the Warrant
Shares that are the subject of the Exercise Notice (the "Unavailable Warrant Shares")
is not available for the resale of such Unavailable Warrant Shares, the Holder
may, in its sole discretion, exercise this Warrant in whole or in part and, in
lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless
Exercise"):

     

    Net Number = (A x B) - (A x
C)

                                                           B

     

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    For
purposes of the foregoing formula:

     

    A  =
the total number of shares with respect to which this Warrant is then being
exercised.

     

    B  =
the Closing Sale Price of the shares of Common Stock (as reported by Bloomberg)
on the date immediately preceding the date of the Exercise Notice.

     

    C  =
the Exercise Price then in effect for the applicable Warrant Shares at the time
of such exercise.

     

    (e) Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 12.

     

    (f) Limitations on
Exercises.

     

    (i) Beneficial
Ownership.  The Company shall not effect the exercise of this
Warrant, and the Holder shall not have the right to exercise this Warrant, to
the extent that after giving effect to such exercise, such Person (together with
such Person's affiliates) would beneficially own in excess of 4.99% (the "Maximum Percentage") of the
shares of Common Stock outstanding immediately after giving effect to such
exercise.  For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its affiliates and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange
Act").  For purposes of this Warrant, in determining the number
of outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Current Report on Form 8-K or
other public filing with the Securities and Exchange Commission, as the case may
be, (2) a more recent public announcement by the Company or (3) any other notice
by the Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding.  For any reason at any time, upon the
written or oral request of the Holder, the Company shall within two (2)
Business Days confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. For purposes of this Warrant, in determining
whether the Holder (together with its affiliates) will not have beneficial
ownership (together with the beneficial ownership of the Holder's

     

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    affiliates)
of a number of shares of Common Stock which exceeds the Maximum Percentage, the
Company may rely solely on the representation of the Holder contained in the
Exercise Notice.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including the SPA Warrants, by the Holder
and its affiliates since the date as of which such number of outstanding shares
of Common Stock was reported.  By written notice to the Company, the
Holder may from time to time increase or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% specified in such notice; provided that
(i) any such increase will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of SPA
Warrants.  The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section 1(f) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.

     

    (ii) Principal Market
Regulation.  The Company shall not be obligated to issue any
shares of Common Stock upon exercise of this Warrant and no Warrantholder shall
be entitled to receive any shares of Common Stock if the issuance of such shares
of Common Stock would exceed that number of shares of Common Stock which the
Company may issue upon exercise or conversion, as applicable, of the SPA
Warrants or otherwise without breaching the Company's obligations under the
rules or regulations of any applicable Eligible Market (the "Exchange Cap"), except that
such limitation shall not apply in the event that the Company (A) obtains the
approval of its shareholders as required by the applicable rules of the Eligible
Market for issuances of shares of Common Stock in excess of such amount or (B)
obtains a written opinion from outside counsel to the Company that such approval
is not required, which opinion shall be reasonably satisfactory to the Required
Holders.  Until such approval or written opinion is obtained, no
Warrantholder shall be issued in the aggregate, upon exercise or conversion, as
applicable, of any SPA Warrants, shares of Common Stock in an amount greater
than the product of the Exchange Cap multiplied by a fraction, the numerator of
which is the total number of shares of Common Stock underlying the SPA Warrants
issued to such Warrantholder pursuant to the Warrantholder Rights Agreement on
the Issuance Date and the denominator of which is the aggregate number of shares
of Common Stock underlying the SPA Warrants issued to the Warrantholders
pursuant to the Warrantholder Rights Agreement on the Issuance Date (with
respect to each Warrantholder, the "Exchange Cap
Allocation").  In the event that any Warrantholder shall sell
or otherwise transfer any of such Warrantholder's SPA Warrants, the transferee
shall be allocated a pro rata portion of such Warrantholder's Exchange Cap
Allocation, and the restrictions of the prior sentence shall apply to such
transferee with respect to the portion of the Exchange Cap Allocation allocated
to such transferee.  In the event that any holder of SPA Warrants
shall exercise all of such holder's SPA Warrants into a number of shares of
Common Stock which, in the aggregate, is less than such holder's Exchange Cap
Allocation, then the difference between such holder's Exchange Cap Allocation
and the number of shares of Common Stock actually issued to such holder shall be
allocated to the respective Exchange Cap Allocations of the remaining holders of
SPA Warrants on a pro rata basis in proportion to the shares of Common Stock
underlying the SPA Warrants then held by each such holder.

     

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    (g) Insufficient Authorized
Shares.  If at any time while this Warrant remains outstanding
the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon
exercise of this Warrant at least a number of shares of Common Stock equal to
130% (the "Required Reserve
Amount") of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of all of this Warrant then outstanding
(an "Authorized Share
Failure"), then the Company shall promptly use reasonable best efforts to
increase the Company's authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for this Warrant
then outstanding.  Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than ninety (90) days after
the occurrence of such Authorized Share Failure, the Company shall hold a
meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock.  In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use
its best efforts to solicit its stockholders' approval of such increase in
authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.

     

    2. ADJUSTMENT OF EXERCISE PRICE
AND NUMBER OF WARRANT SHARES.  The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as
follows:

     

    (a) Adjustment upon Issuance of
shares of Common Stock.  If and whenever on or after the
Issuance Date the Company issues or sells, or in accordance with this Section 2
is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock deemed to have been issued
by the Company in connection with any Excluded Securities) for a consideration
per share (the "New Issuance
Price") less than the Exercise Price (the "Applicable Price") in effect
immediately prior to such issue or sale or deemed issuance or sale (the
foregoing a "Dilutive
Issuance"), then immediately after such Dilutive Issuance, the Exercise
Price then in effect shall be reduced to an amount equal to the product of
(A) the Exercise Price in effect immediately prior to such Dilutive
Issuance and (B) the quotient determined by dividing (1) the sum of
(I) the product derived by multiplying the Exercise Price in effect immediately
prior to such Dilutive Issuance and the number of shares of Common Stock Deemed
Outstanding immediately prior to such Dilutive Issuance plus (II) the
consideration, if any, received by the Company upon such Dilutive Issuance, by
(2) the product derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of shares of
Common Stock Deemed Outstanding immediately after such Dilutive
Issuance.  Upon each such adjustment of the Exercise Price hereunder,
the number of Warrant Shares shall be adjusted to the number of shares of Common
Stock determined by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares acquirable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.  For
purposes of determining the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:

     

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    (i) Issuance of
Options.  If the Company in any manner grants any Options
(except in connection with the issuance of any Excluded Securities) and the
lowest price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For
purposes of this Section 2(a)(i), the "lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or upon
conversion, exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option.  No further adjustment
of the Exercise Price or number of Warrant Shares shall be made upon the actual
issuance of such shares of Common Stock or of such Convertible Securities upon
the exercise of such Options or upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible
Securities.

     

    (ii) Issuance of Convertible
Securities.  If the Company in any manner issues or sells any
Convertible Securities (except in connection with the issuance of any Excluded
Securities) and the lowest price per share for which one share of Common Stock
is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for such price per
share.  For the purposes of this Section 2(a)(ii), the "lowest price
per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible
Security.  No further adjustment of the Exercise Price or number of
Warrant Shares shall be made upon the actual issuance of such shares of Common
Stock upon conversion, exercise or exchange of such Convertible Securities, and
if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 2(a), no further adjustment of the
Exercise Price or number of Warrant Shares shall be made by reason of such issue
or sale.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    
       

      (iii) Change in Option Price or
Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any
Convertible Securities are convertible into or exercisable or exchangeable for
shares of Common Stock increases or decreases at any time (except in each case
in connection with the issuance of any Excluded Securities), the Exercise Price
and the number of Warrant Shares in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price and the number of Warrant
Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold.  For purposes
of this Section 2(a)(iii), if the terms of any Option or Convertible Security
that was outstanding as of the date of issuance of this Warrant are increased or
decreased in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease.  No
adjustment pursuant to this Section 2(a)(iii) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect or a decrease
in the number of Warrant Shares.

    

     

    (iv) Calculation of Consideration
Received.  In case any Option is issued (except in connection
with the issuance of any Excluded Securities) in connection with the issue or
sale of other securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such Options by
the parties thereto, the Options will be deemed to have been issued for a
consideration of $0.01.  If any shares of Common Stock, Options or
Convertible Securities are issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor will be deemed to be the net
amount received by the Company therefor.  If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of
consideration received by the Company will be the Closing Sale Price of such
security on the date of receipt.  If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be.  The fair value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and
the Required Holders.  If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the
"Valuation Event"), the
fair value of such consideration will be determined within five (5) Business
Days after the tenth day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required
Holders.  The determination of such appraiser shall be final and
binding upon all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (v) Record
Date.  If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase shares of Common
Stock, Options or Convertible Securities, then such record date will be deemed
to be the date of the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

     

    (b) Adjustment upon Subdivision
or Combination of shares of Common Stock.  If the Company at
any time on or after the Issuance Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of Warrant Shares will be proportionately increased.  If
the Company at any time on or after the Issuance Date  combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately
decreased.  Any adjustment under this Section 2(b) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

     

    (c) Voluntary Adjustment By
Company. The Company may at any time during the term of
this Warrant reduce the then current  Exercise Price to
any amount and for any period of time deemed appropriate by the Board of
Directors of the Company. 

     

    (d) Other
Events.  If any event occurs of the type contemplated by the
provisions of this Section 2 (except in connection with the issuance of any
Excluded Securities) but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors will make an appropriate adjustment in the Exercise Price and
the number of Warrant Shares so as to protect the rights of the Holder; provided
that no such adjustment pursuant to this Section 2(c) will increase the Exercise
Price or decrease the number of Warrant Shares as otherwise determined pursuant
to this Section 2.

     

    3. RIGHTS UPON DISTRIBUTION OF
ASSETS.  If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock generally, by way of return of capital or otherwise not
addressed by Section 2 above (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "Distribution"), at any time
after the issuance of this Warrant, then, in each such case:

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    
      (a) any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid
Price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in
good faith by the Company's Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the Closing Bid Price of the
shares of Common Stock on the Trading Day immediately preceding such record
date; and

    

     

    (b) the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided
that in the event that the Distribution is of shares of common stock ("Other Shares of Common Stock")
of a company whose common shares are traded on a national securities exchange or
a national automated quotation system, then the Holder may elect to receive a
warrant to purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the number of shares
of Other Shares of Common Stock that would have been payable to the Holder
pursuant to the Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price equal to the
product of the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately
preceding paragraph (a) and the number of Warrant Shares calculated in
accordance with the first part of this paragraph (b).

     

    4. PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS.

     

    (a) Purchase
Rights.  In addition to any adjustments pursuant to Section 2
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to all or substantially all of the record holders of any
class of shares of Common Stock (the "Purchase Rights"), then the
Holder will be entitled to acquire, upon the Holder's election and in lieu of
any adjustments to which the Holder is otherwise entitled under Section 2
above in respect to such Purchase Rights upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase
Rights.

     

     

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

     

    
      (b) Fundamental
Transactions.  The Company shall not enter into or be party to
a Fundamental Transaction unless (i)  the Successor Entity assumes in
writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section (4)(b)
pursuant to written agreements in form and substance reasonably satisfactory to
the Required Holders and approved by the Required Holders prior to such
Fundamental Transaction (which approval shall not be unreasonably withheld),
including agreements to deliver to each holder of Warrants in exchange for such
Warrants a security of the Successor Entity evidenced by a written instrument
substantially similar in form and
substance to this Warrant, including, without limitation, an adjusted exercise
price equal to the value for the shares of Common Stock reflected by the terms
of such Fundamental Transaction, and exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental Transaction, and
satisfactory to the Required Holders and (ii) the Successor Entity
(including its Parent Entity) is a publicly traded corporation whose common
stock is quoted on or listed for trading on an Eligible Market.  Upon
the occurrence of any Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring to the
"Company" shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such Successor Entity had
been named as the Company herein.  Upon consummation of the
Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of the publicly traded Common Stock (or its equivalent)
of the Successor Entity (including its Parent Entity) which the Holder would
have been entitled to receive upon the happening of such Fundamental Transaction
had this Warrant been converted immediately prior to such Fundamental
Transaction, as adjusted in accordance with the provisions of this
Warrant.  In addition to and not in substitution for any other rights
hereunder, prior to the consummation of any Fundamental Transaction pursuant to
which holders of shares of Common Stock are entitled to receive securities or
other assets with respect to or in exchange for shares of Common Stock (a "Corporate Event"), the Company
shall make appropriate provision to insure that the Holder will thereafter have
the right to receive upon an exercise of this Warrant at any time after the
consummation of the Fundamental Transaction but prior to the Expiration Date, in
lieu of the shares of the Common Stock (or other securities, cash, assets or
other property) purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had the Warrant been exercised immediately prior
to such Fundamental Transaction.  Provision made pursuant to the
preceding sentence shall be in a form and substance reasonably satisfactory to
the Required Holders.  The provisions of this Section shall apply
similarly and equally to successive Fundamental Transactions and Corporate
Events and shall be applied without regard to any limitations on the exercise of
this Warrant.

    

     

    (c) Notwithstanding
the foregoing and the provisions of Section 4(b) above, in the event of a
Fundamental Transaction, at the request of the Holder delivered before the
sixtieth (60th) day after the consummation of such Fundamental Transaction,
the Company (or the Successor Entity) shall purchase this Warrant from the
Holder by paying to the Holder, within five (5) Business Days of such request
(or, if later, on the effective date of the Fundamental Transaction), cash in an
amount equal to the Black-Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.

     

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    5. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER.  Except as otherwise specifically provided herein
and in the Warrantholder Rights Agreement, the Holder, solely in such Person's
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant.  In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.  Notwithstanding this Section 6, the Company shall provide
the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

     

    6. NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of
its Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities, or any other voluntary action, for the principal purpose of
avoiding or seeking to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and use reasonable best efforts to protect the rights
of the Holder.  Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as any of the SPA Warrants are outstanding, use reasonable
best efforts to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the
SPA Warrants, 130% of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of the SPA Warrants then outstanding
(without regard to any limitations on exercise).

     

    7. REISSUANCE OF
WARRANTS.

     

    (a) Transfer of
Warrant.  If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b) Lost, Stolen or Mutilated
Warrant.  Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

     

    (c) Exchangeable for Multiple
Warrants.  This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant
or Warrants (in accordance with Section 7(d)) representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given.

     

    (d) Issuance of New
Warrants.  Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and (iv)
shall have the same rights and conditions as this Warrant.

     

    8. NOTICES.  Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 8.14 of the
Warrantholder Rights Agreement.  The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant,
including in reasonable detail a description of such action and the reason
therefore.  Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) promptly after any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen days prior to the date
on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to
any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property generally to holders
of shares of Common Stock or (C) for determining rights to vote with respect to
any Fundamental Transaction, dissolution or liquidation, provided in each case
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.

     

    9. AMENDMENT AND
WAIVER.  Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Required Holders;
provided that no such action may increase
the exercise price of any SPA Warrant or decrease the number of shares or class
of stock obtainable upon exercise of any SPA Warrant without the written consent
of the Holder.  No such amendment shall be effective to the extent
that it applies to less than all of the holders of the SPA Warrants then
outstanding.

     

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

     

    10. GOVERNING
LAW.  This Warrant shall be governed by and construed and
enforced in accor­dance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

     

    11. CONSTRUCTION;
HEADINGS.  This Warrant shall be deemed to be jointly drafted
by the Company and all the Warrantholders and shall not be construed against any
person as the drafter hereof.  The headings of this Warrant are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.

     

    12. DISPUTE
RESOLUTION.  In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two Business Days of receipt of the Exercise Notice giving rise
to such dispute, as the case may be, to the Holder.  If the Holder and
the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three Business Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two Business Days submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company's independent,
outside accountant.  The Company shall use its reasonable best efforts
to cause at its expense the investment bank or the accountant, as the case may
be, to perform the determinations or calculations and notify the Company and the
Holder of the results no later than ten Business Days from the time it receives
the disputed determinations or calculations.  Such investment bank's
or accountant's determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.

     

    13. REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the right of the Holder right to pursue actual
damages for any failure by the Company to comply with the terms of this
Warrant.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being
required.

     

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    14. LEGENDS.  

     

    (a) Restrictive
Legends .  Except
as otherwise permitted by this Section 14, each Warrant (including each Warrant
issued upon the transfer of any Warrant) shall be stamped or otherwise imprinted
with a legend in substantially the following form:

     

    "THIS
WARRANT AND COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR
ANY STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR THE COMMON STOCK OR OTHER
SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT MAY BE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE
RULES AND REGULATIONS THEREUNDER AND APPLICABLE STATE SECURITIES
LAWS.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED TO
AN "ACCREDITED INVESTOR" (AS SUCH TERM IS DEFINED IN THE RULES AND REGULATIONS
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED) IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES, IF EFFECTED IN COMPLIANCE WITH THE ACT."

     

    Except as
otherwise permitted by this Section 14, each certificate for Common Stock (or
Other Securities) issued upon the exercise of any Warrant, and each certificate
issued upon the transfer of any such Common Stock (or Other Securities), shall
be stamped or otherwise imprinted with a legend in substantially the following
form:

     

    "THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER
AND APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED TO AN "ACCREDITED INVESTOR" (AS SUCH TERM IS DEFINED
IN THE RULES AND REGULATIONS PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED) IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES, IF EFFECTED IN COMPLIANCE WITH
THE ACT."

     

    (b) Termination of
Restrictions.  The restrictions imposed on the transferability
of Restricted Securities set forth in the legend of this Warrant shall cease and
terminate as to any particular Restricted Securities (i) when a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) when such securities are
sold pursuant to Rule 144 or Rule 144A (or any similar provision then in force)
under the Securities Act, or (iii) when such restrictions are no longer required
or necessary in order to protect the Company against a violation of the
Securities Act upon any sale or other disposition of such securities without
registration 

     

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

     

    thereunder.  Whenever such
restrictions shall cease and terminate as to any Restricted Securities, the
Holder shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing the legend
set forth in this Warrant.  If the Company shall fail for any reason
or for no reason to issue to the holder of the Securities within three (3)
Trading Days (as defined below) shares of Common Stock to deliver in
satisfaction of a sale by the holder of such Securities that the holder
anticipated receiving without legend from the Company, then the Company shall,
within three (3) Business Days after the holder's request and in the holder's
discretion, either (i) pay cash to the holder in an amount equal to the Buy-In
Price, at which point the Company's obligation to deliver such unlegended
Securities shall terminate, or (ii) promptly honor its obligation to deliver to
the holder such unlegended Securities as provided above and pay cash to the
holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Weighted
Average Price on the date of exercise.

     

    15. NOTICES OF CORPORATE
ACTION.

     

    In the
event of:

     

    (a) any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any Common Stock or any other securities or property, or to
receive any other right, or

     

    (b) any
capital reorganization of the Company, any reclassification or recapitalization
of the securities of the Company, any consolidation or merger involving the
Company and any other Person, any transaction or series of transactions in which
more than 50% of the voting securities of the Company are transferred to another
Person, or any transfer, sale or other disposition of all or substantially all
the assets of the Company to any other Person, or

     

    (c) any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
the Company shall mail to each Holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, disposition, dissolution, liquidation or winding-up is to take
place and the time, if any such time is to be fixed, as of which the holders of
Common Stock (or Other Securities) shall be entitled to exchange their Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up.  Such notice
shall be mailed at least 15 days prior to the date therein
specified.

     

    16. TRANSFER.  This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company, provided that any transfer shall comply with the
Securities Act and other applicable securities laws and
regulations.  Upon any partial transfer, the Company shall at its
expense issue and deliver to the Holder a new Warrant of like tenor, in the name
of the Holder, which shall be exercisable for such number of shares of Common
Stock with respect to which rights under this Warrant were not so
transferred.

    

     

    
      
        
        

      

      
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    17. SEVERABILITY. If any
provision of this Agreement is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    18. CERTAIN
DEFINITIONS.  For purposes of this Warrant, the following terms
shall have the following meanings:

     

    (a) "Approved Stock Plan" means any
employee benefit plan, stock grant, stock option plan or purchase plan, or stock
option exchange plan or other employee stock incentive or similar agreement
which has been approved by the Board of Directors of the Company, pursuant to
which the Company's securities may be issued to any employee, consultant,
officer or director for services provided to the Company, including, without
limitation, the Monaco Coach Corporation 1993 Stock Plan, as amended and
restated through May 17, 2006, and the Monaco Coach Corporation 2007 Employee
Stock Purchase Plan.

     

    (b) "Black-Scholes Value" means the
value of this Warrant based on the Black and Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the day of closing
of the applicable Fundamental Transaction for pricing purposes and reflecting
(i) a risk-free interest rate corresponding to the U.S. Treasury rate for a
period equal to the remaining term of this Warrant as of such date of request,
(ii) an expected volatility equal to the greater of 100% and the 100 day
volatility obtained from the HVT function on Bloomberg as of the day immediately
following the public announcement of the applicable Fundamental Transaction and
(iii) the underlying price per share used in such calculation shall be the sum
of the price per share being offered in cash, if any, plus the value of any non
cash consideration, if any, being offered in the Fundamental
Transaction.

     

    (c) "Bloomberg" means Bloomberg
Financial Markets.

     

    (d) "Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

     

    
      (e) "Closing Bid Price" and "Closing Sale Price" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to
4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal
Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.).  If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as
the case may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder.  If the Company and
the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12.  All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.

    

     

    (f) "Common Stock" means
(i) the Company's shares of Common Stock, par value $0.01 per share, and
(ii) any share capital into which such Common Stock shall have been changed
or any share capital resulting from a reclassification of such Common
Stock.

     

    (g) "Convertible Securities" means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.

     

    (h) "Eligible Market" means the
Principal Market, the American Stock Exchange, The NASDAQ Global Market., The
NASDAQ Capital Market or The NASDAQ Global Select Market.

     

    (i) "Excluded Securities" means any
Common Stock issued or issuable: (i) in connection with any Approved Stock Plan;
(ii) upon the exercise of the SPA Warrants; (iii) in connection with any stock
split, stock dividend, recapitalization or similar transaction by the Company
for which adjustment is made pursuant to Section 2(b); (iv) pursuant to a bona
fide firm commitment underwritten public offering with a nationally recognized
underwriter which generates gross proceeds to the Company in excess of
$4,000,000 (other than an "at-the-market offering" as defined in Rule 415(a)(4)
under the Securities Act and "equity lines"); (v) in connection with any
acquisition by the Company, whether through an acquisition of stock or a merger
of any business, assets or technologies the primary purpose of which is not to
raise equity capital (a "Qualifying Acquisition");
provided such amount does not exceed, in the aggregate 10% of the outstanding
shares of Common Stock in any twelve month period (the "10% Limit"); and provided
further that in the event that a Qualifying Acquisition exceeds the 10% Limit,
any anti-dilution adjustments made pursuant to Section 2(a) above shall only
apply to the extent that such Qualifying Acquisition exceeds the 10% Limit; (vi)
upon exercise of any Options or Convertible Securities which are outstanding on
the day immediately preceding the Issuance Date, provided that the terms of such
Options or Convertible Securities are not amended, modified or changed on or
after the Issuance Date; or (vii) in respect of subdivisions, stock dividends or
capital reorganizations affecting the Common Stock.

     

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

     

    (j) "Expiration Date" means the
date ten years after the Issuance Date or, if any such date falls on a day other
than a Business Day or on which trading does not take place on the Principal
market (a "Holiday"),
the next day that is not a Holiday.

     

    (k) "Fundamental Transaction" means
that the Company shall directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person (unless (A) the Company is the
surviving corporation, (B) the shareholders of the Company prior to such merger
or consolidation continue to hold immediately thereafter a majority of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock of such surviving corporation and (C) the aggregate value of such
consolidation or merger does not exceed $3,000,000); (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person; (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer); (iv) consummate a stock purchase agreement
or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than the 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock purchase agreement or other business
combination); (v) reorganize, recapitalize or reclassify its Common Stock; or
(vi) any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act), become the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock.

     

    (l) "Options" means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

     

    (m) "Parent Entity" of a Person
means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the
date of consummation of the Fundamental Transaction.

     

    (n) "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.

     

    (o) "Principal Market" means The
New York Stock Exchange, Inc.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (p) "Registration Rights Agreement"
means that certain Registration Rights Agreement dated as of the Issuance Date
by and among the Company and the Warrantholders.

     

    (q) "Required Holders" means the
holders of the SPA Warrants representing at least a majority of shares of Common
Stock underlying the SPA Warrants then outstanding.

     

    (r) "Restricted Securities" shall
mean (i) any Warrants bearing the applicable legend set forth in Section 14,
(ii) any Common Stock issued or issuable upon the exercise of Warrants which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section 14, and (ii) any Common Stock
issued subsequent to the exercise of any of the Warrants as a dividend or other
distribution with respect to, or resulting from a subdivision of the outstanding
Common Stock into a greater number of shares of Common Stock by
reclassification, stock splits or otherwise, or in exchange for or in
replacement of the Common Stock issued upon such exercise, which are evidenced
by a certificate or certificates bearing the applicable legend set forth in such
Section.

     

    (s) "Securities Act" shall mean the
Securities Act of 1933, as amended from time to time, and the rules and
regulations thereunder, or any successor statute.

     

    (t) "Successor Entity" means the
Person (or, if so elected by the Required Holders, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or, if so
elected by the Required Holders, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.

     

    (u) "Trading Day" means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that "Trading Day" shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
Time).

     

     

    

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

     

    
      (v) "Weighted Average Price" means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as the Principal Market publicly announces is the
official close of trading) as reported by Bloomberg through its "Volume at
Price" functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close
of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.).  If the Weighted Average Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Weighted Average Price of such security on such date shall be the
fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 12.  All such determinations are to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

    

     

    [Signature
Page Follows]

    

    

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

    

    IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.

     

     

    
       

      
        	 
      	
                MONACO
      COACH CORPORATION

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ P. Martin Daley

              
	 
      	 
      	
                Name:  P.
      Martin Daley

              
	 
      	 
      	
                Title:  Vice
      President

              

      

      

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     EXHIBIT
A

    EXERCISE
NOTICE

    TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    

    
      	
               
      

            	
              Monaco
      Coach Corporation

            

    

    

    To:           [___________]

    Fax:           [___________]

     

    The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock ("Warrant Shares") of Monaco
Coach Corporation, a Delaware corporation (the "Company"), evidenced by the
attached Warrant to Purchase Common Stock (the "Warrant").  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.

    

    1.           Form
of Exercise Price.  The Holder intends that payment of the Exercise
Price shall be made as:

    

    
      	
               
      

            	
              ____________

            	
              a
      "Cash
      Exercise" with respect to _________________ Warrant Shares;
      and/or

            

    

    

    
      	
               
      

            	
              ____________

            	
              a
      "Cashless
      Exercise" with respect to _______________ Warrant
      Shares.

            

    

     

    Notwithstanding
anything to the contrary contained herein, this Exercise Notice shall constitute
a representation by the holder of the Warrant submitting this Exercise Notice
that, after giving effect to the exercise provided for in this Exercise Notice,
such holder (together with its affiliates) will not have beneficial ownership
(together with the beneficial ownership of such Person's affiliates) of a number
of shares of Common Stock which exceeds the Maximum Percentage of the total
outstanding shares of Common Stock as determined pursuant to the provisions of
Section 1(f)(i) of this Warrant.

     

    2.           Payment
of Exercise Price.  In the event that the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the
Warrant.

    

    3.           Delivery
of Warrant Shares.  The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.

    

    4.           DTC
Balance Account.  If applicable, the Company shall deliver the Warrant
Shares to the following balance account with DTC through the Deposit Withdrawal
Agent Commission system: _______________.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Date:
_______________ ____, ______

    

     

    
      
        	 
      	 
      
	
                Name
      of Registered Holder

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:  

              	 
      	 
      
	 
      	
                Name:

              	 
      
	 
      	
                Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}]]