Monaco Coach Corporation Announces Agreement With Outdoor Resorts of America

COBURG, Ore., Nov. 27, 2002; Monaco Coach Corporation announced that it has purchased from Outdoor Resorts of America (ORA) three luxury motorcoach resort properties being developed by ORA in Las Vegas, Nevada, Indio, California, and Naples, Florida. Monaco previously had loaned $8.0 million on the three projects and co-guaranteed $10 million in bank debt on the Las Vegas project.

According to Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley. "Since the assets of these projects are held in three distinct, wholly-owned subsidiary corporations of ORA, we completed the transaction as a stock purchase for each of the three subsidiaries."

Daley added, "We will add $31.6 million to our balance sheet as total property held for sale from these entities. The existing liabilities of these entities include approximately $3 million of accounts payable and accrued liabilities along with debt of $8.0 million owed to Monaco and $20.6 million owed to financial institutions. The $8.0 million note payable to Monaco will be eliminated against Monaco's corresponding $8.0 million note receivable as part of consolidating these new subsidiaries. We have financed the payoff of the $20.6 million notes payable by obtaining a $22 million three-year term loan as an amendment to our current credit agreement."

Monaco has reached a tentative agreement to sell the property in Naples, Florida (currently undeveloped) for net proceeds of approximately $7.0 million. If the sale is completed, $3.0 million of the net proceeds will pay down Monaco's new $22 million term loan and the remaining $4 million will reduce Monaco's borrowings on its revolving line of credit.

"Phase one lot development is complete in Las Vegas and Indio," stated Monaco Coach Corporation President John Nepute. "Our initial loan provided ORA with the resources to expand into these attractive locations, and we firmly believe in the need for these upscale resorts. Under a new management agreement, ORA will focus on lot sales at each location."

Headquartered in Coburg, Oregon, with additional manufacturing facilities in Indiana, Monaco Coach Corporation is one of the nation's leading manufacturers of recreational vehicles. The company offers customers luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and Royale Coach brand names.