notice of motion and joint motion for an ...additional amounts, up to the $10,000,000 limit, may be...

UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA

In re: Genmar Holdings, Inc., et al.1 Debtors.

Chapter 11

Case No. 09-43537

Jointly Administered

Chapter 11

Case No. 09-43537


NOTICE OF MOTION AND JOINT MOTION FOR AN EXPEDITED HEARING AND FOR INTERIM AND FINAL ORDERS AUTHORIZING DEBTORS (I) TO ASSUME

VENDOR AGREEMENT WITH GE COMMERCIAL DISTRIBUTION FINANCE AND (II) OBTAIN CREDIT SECURED BY A JUNIOR LIEN ON PROPERTY OF THE

ESTATES

TO: The Office of the United States Trustee and Other Parties in Interest as Specified in Local

Rule 9013.

1. Debtors hereby move this Court for the relief requested below and give notice of

hearing.

2. The Court will hold a hearing seeking an interim order on this motion at 9:30

a.m. on June 16, 2009, in Courtroom No. 2B, United States Courthouse, 316 North Robert St.,

St. Paul, Minnesota. A hearing seeking a final order will be held on July 1, 2009, at 11:00 a.m.,

at the same location.

3. Local Rule 9006-1(b) provides deadlines for responses to this Motion. However,

given the expedited nature of the relief sought with respect to the portion of the Motion seeking

an interim order, Debtors do not object to written responses being served and filed two hours

1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, L.L.C., Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, L.L.C., Case No. 09-43547; Minstar, L.L.C., Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co. L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.

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prior to the hearing. Any response to the Motion for a final order must be filed and delivered

not later than June 26, 2009, which is three days before the time set for the hearing (excluding

Saturdays, Sundays, and holidays), or filed and served by mail not later than June 22, 2009,

which is seven days before the time set for the hearing (excluding Saturdays, Sundays, and

holidays). UNLESS A RESPONSE OPPOSING THE MOTION IS TIMELY FILED, THE

COURT MAY GRANT THE MOTION WITHOUT A HEARING.

4. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and

1334, Rule 5005 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and

Local Rules 1070-1 and 1073-1. This is a core proceeding pursuant to 28 U.S.C. § 157(b).

Venue of the Debtors’ chapter 11 cases and this motion in this district is proper pursuant to 28

U.S.C. §§ 1408 and 1409. The petitions commencing these chapter 11 cases were filed on June

1, 2009 (the “Filing Date”). The cases are currently pending in this Court.

5. This motion arises under 11 U.S.C. § 364(c) §§ 365 and 363(b). This motion is

filed under Local Rules 9013-1 through 3. Notice of the hearing on this motion is provided

pursuant to Bankruptcy Rule 2002(a) and Local Rules 9013-1 through 3 and 2002-1(b). Debtors

request interim and final orders authorizing them to assume an amended vendor agreement,

pursuant to the Third Amendment to Vendor Agreement described below (together with the

Vendor Agreement described below, the “Amended Vendor Agreement”), and to enter into a

Debtor-In-Possession Working Capital Finance Agreement (“GE DIP Loan”) to avoid immediate

and irreparable harm to the estates.

RULE 4001 STATEMENT

6. Pursuant to Fed. R. Bank. P. 4001, Debtors state that they request interim and

final orders authorizing and approving the GE DIP Loan as part of the Amended Vendor

Agreement with GE Commercial Distribution Finance Corporation and certain other affiliates

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(“CDF-US”), as described in detail below. The GE DIP Loan is to be secured by a second lien in

the same collateral of the Debtors that secures the first-priority pre-petition loan and DIP loan

provided by Wells Fargo, National Association and Fifth Third Bank, N.A. (together, the “Senior

DIP Lenders”) and approved by Interim Order entered June 5, 2009 at Docket # 23 (the “Senior

DIP Loan”).

7. Debtors will use funds available under the GE DIP Loan to continue their

operations and pursue a reorganization of their businesses. The Debtors request an interim order

approving the GE DIP Loan through July 1, 2009, and thereafter, a final order approving the GE

DIP Loan.

8. Debtors continue to negotiate the terms of the GE DIP loan with CDF-US and

Debtors contemplate modifications will be made. In compliance with Fed. R. Bankr. P. 4001(c)

and the Instructions for Filing a Chapter 11 Case promulgated by the United States Bankruptcy

Court for the District of Minnesota, Debtors state that the GE DIP Loan and proposed Order may

include the following terms:

a. DIP Availability: Up to $10,000,000. A portion of the $10,000,000 accrues at the rate of 23.9% of postpetition invoices for merchandise purchased by dealers and financed postpetition by CDF-US for any of the Debtors, up to $27,170,000 in total financing. As financing is provided to dealers, the Debtors will secure prepetition obligations, described as “Deficiency Amounts” in the GE DIP Loan and in Exhibit B to the Amended Vendor Agreement totaling up to $6,490,741.10. In addition, CDF-US will create a “Risk Reserve” equal to 10% of postpetition financing for merchandise purchased by dealers, but will contemporaneously lend an equal amount to Debtors under the GE DIP Loan. Additional amounts, up to the $10,000,000 limit, may be advanced to finance discounts granted to selected dealers in aid in the sale of such dealer inventory (“Short Sales”), described below, and for working capital purposes. Additional availability may be obtained when certain boats under repurchase obligations are sold and the proceeds are paid to CDF-US in reduction of the Deficiency Amounts. Of this amount, the 23.9% of the net invoice amount advanced constitute payment of cure obligations stemming from the contract assumption described below, with the remainder constituting a distinct post-petition cash loan. As described below, all Debtors will be parties to the GE DIP Loan. As described below, the GE DIP Loan will be used in part to pay these obligations incurred or to be incurred under the original Vendor Agreement.

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Depending on the interpretation of the original Vendor Agreement, the Debtors who are to become borrowers under the GE DIP Loan may be the same group as were parties to the original Vendor Agreement or may be a broader group.

b. DIP Maturity: This will be set to conform with the Senior DIP Loan. c. Interest Rates: Interest on the principal balance of the GE DIP Loan

shall accrue at a floating annual interest rate equal to the Three Month Libor rate plus five per cent (5%).

d. Second-Priority Lien and Administrative Expense: The GE DIP Loan

is secured by a second-priority perfected security interest and lien on all collateral owned by the Debtors in or upon which a lien is granted pursuant to any loan document, including the Senior DIP Loan. This secures both postpetition advances and specified prepetition amounts as described above. Further, advances under the GE DIP Loan will have superpriority administrative expense status, subordinate only to the interests of the Senior DIP Lenders, the carve-out described below, and non-avoidable prepetition contractual liens which are Permitted Liens, as defined in the Senior Credit Agreement which were duly perfected on the petition date.

e. Determination of Prepetition Claim Amount: Because the GE DIP

Loan is offered in conjunction with the assumption of the Amended Vendor Agreement, such assumption and modification requires determination of the prepetition claim for purposes of “cure” under 11 U.S.C. §365(G)(1)(A). The cure amounts are set out in an exhibit to the Amended Vendor Agreement (Exhibit D hereto).

f. Subordination: CDF-US and the Senior DIP Lenders will enter into a

Subordination Agreement to which the Debtors must consent (substantially in the form of Exhibit F hereto). Such Subordination Agreement must be in a form and substance acceptable to the Senior DIP Lenders.

g. Carveout: The GE Dip Loan is subject to the same “carveout” for

unpaid administrative expenses, in the amount of $250,000 for allowed fees and expenses, as the Senior DIP Loan.

h. Events of Default: There are numerous events of default which are set

out in paragraph 10 of the GE DIP Loan agreement. o. Rights and Remedies: Upon the occurrence of any Event of Default,

CDF-US has the right to take various actions, subject to the automatic stay and the Subordination Agreement.

GENERAL CASE BACKGROUND

9. On the Filing Date, the Debtors filed voluntary petitions for relief pursuant to

chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). The Debtors continue

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to operate their businesses as debtors in possession pursuant to sections 1107(a) and 1108 of the

Bankruptcy Code. No trustee or examiner has been appointed in the Debtors’ chapter 11 cases.

10. Genmar Holdings, Inc. (“Genmar”) was formed in 1994 to combine the

operations of IJ Holdings Corp. and Miramar Marine Corporation, each of which were under the

control of investor groups led by Irwin L. Jacobs (“Jacobs”). Jacobs later acquired other

companies in the marine industry that are now subsidiaries of Genmar. Genmar, through its

subsidiaries, is primarily engaged in the manufacture and/or sale of recreational power boats

under the brand names of Carver, Champion, Four Winns, Glastron, HydraSports, Larson,

Marquis, Ranger, Scarab, Seaswirl, Stratos, Triumph, Wellcraft, FinCraft, and Windsor Craft

Yachts. Debtors sell their products primarily through an established network of more than 1,000

independent dealers in the United States and throughout the world.

11. Overall, Debtors as a group are the second largest manufacturer and distributor of

fiberglass powerboats in the world, selling more than 24,000 units during its fiscal year ended

June 30, 2008. It estimates net revenues of approximately $460 million by the end of its fiscal

year June 30, 2009. As of May 1, 2009, Company and its subsidiaries had approximately 1,500

employees with an average monthly payroll of $4.6 million.

12. Genmar’s subsidiaries included in the filing are all borrowers under Genmar’s

senior credit facility. Genmar has subsidiaries who are not borrowers and who are not Debtors in

these cases. Genmar and its subsidiaries fall into the following categories:

Holding Companies

Genmar Holdings, Inc.—headquartered in Minneapolis, MN is the parent of wholly-owned Debtors subsidiaries Minstar, LLC, Marine Media, LLC, Windsor Craft Yachts, LLC, and Genmar Yacht Group, LLC. It employs corporate level professionals and staff to assist its subsidiaries in their operations.

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Minstar, LLC –headquartered in Minneapolis, MN is the parent of wholly-owned Debtors subsidiary Genmar Industries, Inc.

Genmar Industries, Inc.—headquartered in Minneapolis, MN is the parent of wholly-owned Debtors subsidiaries Genmar Minnesota, Inc., Genmar Michigan, LLC, Genmar Tennessee, Inc., Carver Industries, LLC, Genmar IP, LLC, Genmar Florida, Inc., Triumph Boats, Inc., Triumph Boat Rentals, LLC, Genmar Transportation, Inc., and VEC Technology, Inc. These are the majority of the Debtors group operating assets. It also owns real property in Florida and Minnesota, and certain patents and trademarks used in some subsidiaries’ manufacturing and sales.

Marine Media, LLC—headquartered in Minneapolis, MN is the owner of 37.75% of non-debtor Wave South Florida, LLC and 50% owner of non-debtor Boat Show Group, LLC. It is a holding company for small investments in start-up companies related to the marine industry.

VEC Technology, Inc—is a former operating company that is now inactive and holds the stock of Debtors subsidiaries VEC Management Co., LLC and VEC Leasing Services, Inc.

VEC Management Co., LLC and VEC Leasing Services, Inc.—headquartered in Minneapolis, MN are the majority owners of non-debtor VEC Technology, LLC.

Boat Manufacturing and Sales Companies

Carver Yachts International, LLC—headquartered in Pulaski, WI, this company engages in sales of Carver and Marquis yachts through an office in Monaco.

Genmar Michigan, LLC—headquartered in Cadillac, MI, and formerly known as Four Winns Boats, LLC, this company owns and operates a manufacturing facility for and sells Four Winns and Wellcraft boats.

Genmar Minnesota, Inc.–headquartered in Little Falls, MN, and formerly known as Larson/Glastron Boats, Inc., this company owns and operates a manufacturing facility for and sells Larson, Glastron, Seaswirl, and FinCraft boats.

Genmar Tennessee, Inc.—headquartered in Murfreesboro, TN, and formerly known as Stratos Boats, Inc., this company owns and operates a manufacturing facility for and sells Stratos, Champion, and HydraSports boats.

Genmar Yacht Group, LLC—headquartered in Pulaski, WI, and formerly known as Carver Boat Corporation, LLC, this company owns and operates a manufacturing facility for and sells Carver and Marquis yachts.

Triumph Boats, Inc.—headquartered in Durham, NC, this company leases and operates a manufacturing facility for and sells Triumph boats.

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Windsor Craft Yachts, LLC--headquartered in Minneapolis, MN, this company purchases, brands, and sells direct to the public wooden yachts that are manufactured on an exclusive basis by a third party in Turkey.

Wood Manufacturing Company, Inc.—headquartered in Flippin, AR, this company owns and operates a manufacturing facility for and sells Ranger boats.

Other Debtors Entities

Carver Industries, LLC and Genmar IP, LLC are headquartered in Minneapolis, MN. They own various items of intellectual property for the operating companies.

Genmar Transportation, Inc.–headquartered in Little Falls, MN, this company owns

real property adjacent to the Genmar Minnesota property and leases a fleet of semi-tractors and trailers to transport boats and other products for other subsidiaries and for third parties.

Carver Italia, LLC—now headquartered in Minneapolis, MN, this former operating company owns certain boat tooling and molds located in Fano, Italy and is liquidating its operating assets.

Genmar Florida, Inc. (f/k/a Wellcraft Marine Corp.), Genmar Manufacturing of Kansas, Inc., and Triumph Boat Rentals, LLC are inactive companies and borrowers under the Wells Fargo N.A. credit facility described below.

13. The marine industry began to be negatively impacted by a number of macro-

economic factors and other factors unique to the industry beginning in the fall of 2007. The

Debtors responded immediately to these market conditions with operational changes, and infused

additional equity, but conditions continued to erode as overall economic concerns led to falling

customer confidence and declines in retail sales. In addition, financing sources previously

available to Debtors and their dealers became more restrictive and, in some cases, unavailable.

The Debtors, therefore, concluded that financing would only be available through the debtor-in-

possession loan process, and sought relief through Chapter 11.

GE VENDOR AGREEMENT AND MODIFIED AGREEMENT

14. The Debtors seek to assume, with modifications to be described below, the

Vendor Agreement dated June 1, 2004 between CDF-US and Genmar Holdings, Inc. and the

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other Debtors, as described in the contract attached as Exhibit A, together with the Amendment

to Vendor Agreement dated August 18, 2006, attached as Exhibit B and the Second Amendment

to Vendor Agreement dated November 5, 2007, attached as Exhibit C (together “Vendor

Agreement”). The Vendor Agreement governs certain aspects of financing provided by CDF-US

to dealers of these Debtors enabling the dealers to purchase boats and other merchandise

manufactured and sold by Debtors. The purpose of the Vendor Agreement is to induce CDF-US

to finance the purchases by the dealers and to provide CDF-US with the protection of repurchase

obligations. The Vendor Agreement lists as parties “Genmar Holdings, Inc. (“Genmar”) on

behalf of their current and future groups, divisions, subsidiaries and affiliates, including, without

limitation, Carver Boat Corporation, L.L.C., Carver Italia, L.L.C., Champion Boats, a division of

Stratos Boats, Inc., Four Winns Boats, L.L.C., Genmar Industries, Inc., Larson/Glastron Boats,

Inc., Seaswirl Boats, Inc., Stratos Boats, Inc., Triumph Boats, Inc., Wellcraft Marine Corp.,

Wood Manufacturing Company, Inc. (collectively “Affiliates”).”

15. CDF-US has discretion to provide the financing and is not obligated under the

Vendor Agreement to issue any particular amount of financing. However, in the ordinary course

of business, CDF-US commits to finance specific purchases of the Debtors’ merchandise, subject

to the receipt of certain instruments. These commitments are evidenced by “approval number”

issued by CDF-US to the Debtors. Debtors rely on the receipt of the “approval numbers” as

evidence of CDF-US’s commitment to finance these specific sales of merchandise. Prior to the

Filing Date, CDF-US issued substantial amounts of financing of Debtors’ products such that it

has outstanding approximately $315 million of financing to dealers of Debtors’ merchandise.

16. Under the Vendor Agreement, there is an obligation to repurchase merchandise

that has been foreclosed upon by CDF-US from the dealers, subject to certain limits. They also

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have an obligation to assist with the resale of other merchandise which is not subject to the

repurchase obligation. As of the Filing Date, these contract obligations totaled $4,532,263.59.

17. The Vendor Agreement automatically renews on an annual basis unless either

party gives a notice of non-renewal sixty (60) days prior to June 30 of each year. No such notice

has been given in this case and thus the Vendor Agreement is in effect until June 30, 2010. The

Vendor Agreement may be terminated by CDF-US in the event of default.

18. This Vendor Agreement and the business relationship of which it is a part are

critical to the on-going operations of the Debtors. Since the withdrawal of Textron Financial

Corporation from the floor-plan financing market, CDF-US is the only company with the size

sufficient to provide the floor plan financing necessary for the Debtors to continue to operate at a

sustainable level. In addition to the practical importance of the Vendor Agreement to Debtors’

ongoing operations, the Senior DIP Loan terms require that Debtors and CDF-US continue their

relationship under the Vendor Agreement. Without this financing, dealers would be unable to

finance the purchase of Debtors’ boats and related merchandise and funding under the Senior

DIP Loan would cease. As an immediate result, the business of those Debtors would cease and

dealers would either go out of business or seek to contract with other manufacturers of

recreational power boats where such financing is available.

19. CDF-US has indicated that it is willing to continue its financing under certain

conditions described in this motion, provided that this court issues an order approving the

assumption of the Vendor Agreement with the modifications described herein and the related GE

DIP Loan.

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ASSUMPTION AND MODIFICATION OF THE VENDOR AGREEMENT

20. The terms by which the existing Vendor Agreement will be modified are set forth

in the Third Amendment to Vendor Agreement attached as Exhibit D (together with the Vendor

Agreement, the “Amended Vendor Agreement”).

21. Upon an assumption of the Amended Vendor Agreement, Debtors would agree to

cure contract defaults by paying the following amounts which are now due and owing, subject to

certain conditions: (a) repurchase obligations of approximately $4.5 million for boats returned to

Debtors under the repurchase provisions in the Vendor Agreement and resold, (b) obligations of

approximately $1.4 million for units sold on behalf of CDF-US where the proceeds have not yet

been transmitted to CDF-US, and (c) obligations for Debtors’ participation in certain discount

programs offered to dealers in the amount of approximately $600,000. Debtors’ obligation to

cure these existing defaults will be funded by the ongoing financing activity of CDF-US to the

level of $27,170,000 of dealer financing subsequent to the Filing Date.

22. The Amended Vendor Agreement will be assumed and is structured on the

expectation that in the twelve month period commencing June 1, 2009, CDF-US will provide

ongoing dealer financing for the purchase of the Debtors’ products by its dealers. It also

provides for CDF-US to provide DIP financing of up to $10,000,000 to finance operating needs

of the Debtors and to finance the “cure” and “adequate assurance of future performance”

requirements of the Bankruptcy Code, as described.

23. To continue their operations, Debtors require that they receive 100% of dealer

payments for products, financed by CDF-US. Debtors therefore do not have the ability to fund a

cure or a reserve for assurance of future performance. Therefore, the parties have agreed that to

effect Debtors’ cure of the approximately $6.5 million contract default, the Vendor Agreement is

modified to create an obligation of the Debtors to CDF-US equal to 23.9% of the net amount of

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all invoices financed, up to a maximum of $27,170,000 in invoices. This obligation will build as

Debtors receive payment for boats financed through CDF-US for their dealers, until—at

$27,170,000 of financed invoices—it reaches the $6.5 million cure amount.

24. Similarly, to effect Debtors’ obligation to assure future performance, the Vendor

Agreement is modified to create an “Risk Reserve” equal to 10% of the net amount of all

invoices financed so long as the Debtors are authorized to draw a like 10% amount against the

GE DIP Loan, thereby, in effect, funding Risk Reserve obligation through DIP financing.

25. The Amended Vendor Agreement makes clear that each of the Debtors will be

severally liable on obligations based on their sales of merchandise to dealers financed by CDF-

US under the Amended Vendor Agreement. In the event of later rejection of the Amended

Vendor Agreement by any Debtor, the claims of CDF-US under 11 U.S.C. §§ 503 and 507 are

waived. (However, obligations which will be incurred under the GE DIP Loan are joint and

several obligations.)

26. As boats that were presented by CDF-US for repurchase are sold, so long as CDF-

US and the Senior DIP Lenders continue to finance, the proceeds will be paid to CDF-US and

the balance owed on the GE DIP Loan will be reduced, creating more availability. CDF-US and

the Senior DIP Lenders are not in agreement on their relative rights as to such boats and

proceeds from these sales of such boats, and have reserved their rights with respect to that issue.

27. A new provision is added allowing approved dealers to engage in a Short Sale of

certain boat models at up to a 25% discount from the invoice amount and pay CDF-US only the

reduced amount. The Debtors may subsequently obtain advances from the GE DIP Loan equal

to 50% of the difference between the invoice amount and the short sale amount. Debtors will

also later receive a remarketing fee equal to 50% of the difference.

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28. The repurchase obligations for boats sold prepetition will continue for

approximately two years from the original date of sale of each of these, as is presently the case.

29. The termination date is twelve months, so long as a termination event has not

occurred, renewable for one year terms. However, there are numerous circumstances under

which CDF-US will be entitled to terminate the Amended Vendor Agreement.

AGREEMENT FOR GE DIP LOAN

30. In consideration of Debtors’ agreement to modify the terms of the Vendor

Agreement as described above, CDF-US has agreed to provide the Debtors with a DIP Loan of

up to $10 million (the “GE DIP Loan”). A copy of the GE DIP Loan agreement is attached

hereto as Exhibit E, and the related Subordination Agreement between CDF-US and the Senior

DIP Lenders is attached hereto as Exhibit F.

31. The GE DIP Loan will, in effect, fund the cure and adequate assurance

obligations described above. Availability under the GE DIP Loan will be tied to all future

merchandise financed by CDF-US and advances shall be funded at the same rates at which the

Debtors’ cure and adequate assurance obligations accrue. Specifically, 23.9% of the net invoice

amount advanced shall be allocated to the cure of the Deficiency Amounts described above, with

an additional 10% available to finance invoice amounts withheld by CDF-US to create the risk

reserve for assuring performance of going-forward obligations of the Debtors to CDF-US. In

addition, Debtors may draw against the GE DIP Loan to cover Short Sale losses or for working

capital purposes, upon the consent of CDF-US. The GE DIP Loan shall be treated as a post

petition DIP loan to Debtors which will be junior to the Senior DIP Loan. By this method,

Debtors will be meeting the cure and adequate assurance obligations upon deferred payment

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terms with the amount to be tied to the amount of financing actually supplied by CDF-US to

dealers for purchase of boats from the Debtors.

32. The Debtors are unable to obtain unsecured credit, even allowable as an

administrative expense, to fund their cure and adequate assurance obligations. It is therefore

necessary for them to incur debt under the GE DIP Loan, secured by a junior lien on property of

the estates.

REQUESTED RELIEF

33. Debtors request authority to assume the Amended Vendor Agreement on the

terms described herein, which provide for the cure of defaults and adequate assurance of future

performance. Debtors also request authority to incur debt under the GE DIP Loan, secured by a

junior lien on property of the estates. Continuing the financing relationships among CDF-US,

the dealers, and Debtors is critical. Dealers rely on floor plan financing to purchase inventory

from Debtors. By extension, Debtors rely on the dealers’ floor plan financing to sustain orders.

CDF-US relies on the Debtors’ repurchase obligations as an additional level of security for its

loans to dealers. CDF-US is one of the few remaining floor plan financing sources in the boat

market and the only one capable of financing the volume of boats Debtors sell to their dealers. It

is critical to Debtors’ on-going operations and the survival of the dealers that the CDF-US

continue to provide financing.

34. CDF-US is willing to continue financing on the conditions described above.

Debtors believe they have negotiated the best possible terms under the circumstances, and those

terms are reasonable and necessary. As an exercise of their sound business judgment, Debtors

have concluded that assumption of the Amended Vendor Agreement will permit them to

maintain sales and continue operations during the bankruptcy cases. In contrast, were the

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Debtors not to assume the Amended Vendor Agreement, their operations would cease and the

value of the estates’ assets would decline to the detriment of the estates and the creditors.

35. Debtors have also concluded that assumption of the Amended Vendor Agreement

on an expedited basis and within 20 days of the commencement of the cases is essential to avoid

immediate and irreparable harm to the estates. First, as described above, the financing is critical

to Debtors’ on-going operations and the going-concern value of their assets. Second, as a

condition to Debtors’ Senior DIP Loan financing, Debtors must obtain a commitment from CDF-

US to continue floor-plan financing as provided by the Amended Vendor Agreement. Without

this DIP financing, Debtors will also be unable to continue operations. Thus assumption of the

Amended Vendor Agreement and Debtors’ ability to obtain financing for operations during the

cases are inextricably linked. If Debtors cannot assume the Amended Vendor Agreement and

enter into the GE DIP Loan arrangement, Debtors will be unable to pay employees or continue

their operations; their dealers and customers will lose confidence and stop buying; Debtors’

assets will lose their going-concern values; and Debtors’ brands and business reputations will

suffer immediate and irreparable harm.

36. Pursuant to Local Rule 9013-2(a), this Motion is verified and is accompanied by a

Memorandum, a Proposed Order and proof of service. The Proposed Order was submitted by

CDF-US shortly before this motion was filed and the parties have not had a chance to review it

or negotiate changes.

37. Pursuant to Local Rule 9013-2(c), the Debtors give notice that they may, if

necessary, call David J. Huls, the Chief Financial Officer of Genmar Holdings, Inc., whose

business address is 2900 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402, to testify

regarding the facts underlying this motion.

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WHEREFORE, Debtors move the Court for interim and final orders

(a) granting expedited relief,

(b) authorizing them to assume the Amended Vendor Agreement and provide the

cure and adequate assurances of future performance provided therein,

(c) authorizing them to use property of the estates as necessary to consummate the

assumption of the Amended Vendor Agreement,

(d) authorizing them to enter into the GE DIP Loan agreement, grant the liens

required thereunder, and otherwise perform in accordance therewith; and

(e) granting such other and further relief as the court may deem just and equitable.

Dated: June 11, 2009

FREDRIKSON & BYRON, P.A. s/ James L. Baillie James L. Baillie (#3980) Faye Knowles (#56959) Ryan T. Murphy (#311972) 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Phone (612) 492-7000 Fax (612) 492-7077 [email protected] [email protected] [email protected] ATTORNEYS FOR DEBTORS

4568349_7.doc/042343.0887

EXHIBIT A

EXHIBIT B

EXHIBIT C

EXHIBIT D

K&S Draft June 11, 2009

THIRD AMENDMENT TO VENDOR AGREEMENT THIS THIRD AMENDMENT TO VENDOR AGREEMENT (“Third Amendment”) dated this 1st day of June, 2009 (the “Third Amendment Effective Date”), is an amendment to that certain Vendor Agreement dated June 1, 2004, as amended by that certain Amendment to Vendor Agreement, dated as of August 18, 2006 and that certain Second Amendment to Vendor Agreement, dated November 5, 2007 (as further amended from time to time, the “Agreement”), and is entered into by and among GE Commercial Distribution Finance Corporation, formerly known as Transamerica Commercial Finance Corporation, and successor by way of merger to Deutsche Financial Services Corporation ("CDF-US"), GE Commercial Distribution Finance Canada, as assignee of GE Commercial Distribution Finance Canada Inc. and Transamerica Commercial Finance Corporation, Canada (“CDF-Canada”), GE Commercial Corporation (Australia) Pty Ltd (“GECCA”) and GE Finance and Insurance ("GEFI") (CDF-US, CDF-Canada, GECCA and GEFI collectively "Lender") each having a principal place of business, or a place of business for receiving notices, at 5595 Trillium Boulevard, Hoffman Estates, Illinois 60192-3405; Genmar Holdings, Inc. (“Genmar”), Carver Yachts, a division of Genmar Yacht Group, L.L.C.; Marquis Yachts, a division of Genmar Yacht Group, L.L.C.; Carver Italia, L.L.C.; Champion Boats, a division of Genmar Tennessee, Inc.; Four Winns Boats, a division of Genmar Michigan, L.L.C.; Genmar Industries, Inc.; Larson Boats, a division of Genmar Minnesota, Inc.; Glastron Boats, a division of Genmar Minnesota, Inc.; Seaswirl Boats, a division of Genmar Minnesota, Inc.; Stratos Boats, a division of Genmar Tennessee, Inc.; Triumph Boats Inc.; Wellcraft Boats, a division of Genmar Michigan, L.L.C.; Wood Manufacturing Company, Inc., d/b/a Ranger Boats; Hydra-Sport Boats, a division of Genmar Tennessee, Inc.; Windsor Craft Yachts, L.L.C. (collectively “Affiliates”), each having a principal place of business, or a place of business for receiving notices, located at 2900 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402-2100). WHEREAS, on June 1, 2009, Genmar, the Affiliates and certain other subsidiaries of Genmar filed a voluntary petition under Chapter 11 with the United States Bankruptcy Court, District of Minnesota; WHEREAS, Genmar and its Affiliates desire that CDF-US and the other Lenders to continue to provide financing to dealers of Genmar and its Affiliates, and CDF-US and the other Lenders desire to continue to provide financing to dealers of Genmar and its Affiliates; WHEREAS, simultaneously with the execution of this Third Amendment, CDF-US, Genmar and the Affiliates are entering into that certain Debtor-in-Possession Working Capital Finance Agreement, among Genmar, the Affiliates and CDF-US (the “DIP Facility”); WHEREAS, Genmar and its Affiliates and CDF-US and other Lenders desire to amend the Agreement in certain respects only with respect to financing provided by CDF-US; and WHEREAS, the parties agree to amend the Agreement on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein and in the Agreement, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Paragraph 2 of the Agreement is hereby amended to read as follows:

“2. Financing of Merchandise. Lender will only be bound to finance any invoice for Merchandise which Lender has accepted to finance (such acceptances will be indicated by Lender’ issuance of an approval number, draft or other instrument to Genmar in payment of the invoice, less the amount of Lender’ charges as agreed upon from time to time) and only if: (a) the Merchandise is delivered to Dealer within ninety (90) days

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following Lender’ acceptance; (b) Lender has received Genmar’s invoice for such Merchandise within ten (10) days from the date of delivery of the Merchandise to Dealer; (c) Lender’s approval number is on the invoice; and (d) Lender has not revoked its acceptance prior to the shipment of ‘:he Merchandise to Dealer. With respect to any invoice, upon acceptance by the Lender, the amount financed shall be distributed as follows (i) ninety percent (90%) of the face amount of such invoice shall be advanced to Genmar, (ii) ten percent (10%) of the face amount of such invoice shall be deposited with CDF-US and held without interest (the “Risk Reserve”). With respect to any invoice, if Lender has not advanced funds within ninety (90) days of Lender’s issuance of an approval number for such invoice, the invoice shall be deemed not received by Lender and Lender shall not be bound to finance such Merchandise. The Risk Reserve may be applied by CDF-US to any and all obligations owed to it under this Agreement or the DIP Facility as CDF-US shall elect in its sole discretion, but no such application shall be deemed to have been made by operation of law or otherwise until actually made. In addition, GECCA and GEFI’s obligation to finance Merchandise is subject to receipt by GECCA or GEFI, as applicable, of the following: a. valid original bill of lading and other shipping documents as reasonably required by GECCA or GEFI noting the relevant Dealer as importer; and b. a valid tax invoice from the Dealer to GECCA or GEFI, as applicable, for the Merchandise noted on the bill of lading referred to in (a), in an amount and currency consistent with the invoice issued by Genmar for that Merchandise plus any goods and services tax in Australian dollars or New Zealand dollars, as applicable, together with instructions from the Dealer to pay the invoiced amount (less any goods and services tax) to Genmar. GECCA or GEFI, as applicable, will pay any goods and services tax noted on the invoice to the Dealer.”

2. Paragraph 3 c of the Agreement is hereby amended to read as follows:

“3 c. Notwithstanding Paragraph 3.a above, the aggregate purchase obligations during the 12-month period beginning as of June 1, 2009, and during any 12 month period beginning June 1 of each year thereafter so long as the Termination Date has not occurred, as set forth in this Paragraph 3 for Genmar for Merchandise sold to Dealers and financed by Lender, shall not exceed (i) an aggregate total of four percent (4%) of the average month end outstanding receivables due to Lender from Dealers for Merchandise during the twelve month period commencing the prior June 1, 2009, or (ii) fifteen million dollars ($15,000,000), whichever is greater.”

3. Paragraph 3 e. of the Agreement is hereby amended to read as follows:

“3 e. Genmar shall be liable for interest on all sums due Lender pursuant to Paragraph 3 of this Agreement which are outstanding past the due date for the payment thereof. Interest on purchases from CDF-US shall be calculated at the then current rate that Genmar is paying for the free floor subsidy amounts as shown on Exhibit A, and interest on purchases from CDF-Canada shall be calculated at the "Canadian Prime Rate" plus 2.00% per annum. "Canadian Prime Rate" shall be defined for any calendar month as the highest rates publicly announced by the Royal Bank of Canada (or its successor), as its reference, prime, corporate base or similar benchmark rate, whether or not such announced rate is the lowest rate charged by such bank. Such rates do not purport to be the most favorable rates offered to borrowers by Lender.”

4. The Agreement is hereby amended by adding the following new Paragraph 3 f.:

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“3 f. Simultaneously with the financing of any Merchandise by CDF-US hereunder after the Third Amendment Effective Date, Genmar and the Affiliates shall be obligated to make the following payments to CDF-US (all such payments being the “Deficiency Amounts”):

a. If the face amount of the invoice for such Merchandise plus the

aggregate face amount of all other invoices for all other Merchandise financed by the CDF-US after the Third Amendment Effective Date is less than or equal to $27,170,000, Genmar and the Affiliates shall pay to CDF-US:

(i) a payment in an amount equal to 5.0% of the face amount of

such invoice to be applied to all reimbursement obligations owed by Genmar and the Affiliates to the Lenders as shown on Exhibit B with respect to Merchandise that was remarketed prior to the Third Amendment Effective Date, and

(ii) a payment in an amount equal to 2.2% of the face amount of

such invoice to be applied to all reimbursement obligations owed by Genmar and the Affiliates to the Lenders as shown on Exhibit B with respect to Carver/Marquis Merchandise that was financed by the Lenders prior to the Third Amendment Effective Date but was not repaid in full by the applicable Dealer (each a “Short Sale”), and

(iii) a payment in an amount equal to 16.7% of the face amount of

such invoice to be applied to all obligations owed by Genmar and the Affiliates to the Lenders as shown on Exhibit B with respect to Merchandise that was repossessed prior to the Third Amendment Effective Date but has not yet been remarketed pursuant to Paragraph 4 of this Agreement.

b. All such payments owed by Genmar and the Affiliates under this

paragraph 3(f)) shall be financed with “Advances” (as defined in the DIP Facility) under the DIP Facility.”

5. The Agreement is hereby amended by adding the following new Paragraph 3 g.:

“3.g. Aged Merchandise Sell Through Assistance Program. Genmar and Affiliates and Lender hereby agree to participate in the Aged Merchandise Sell Through Assistance Program developed by Genmar (the “Program”) upon the following terms and conditions.

a. During the period from the Third Amendment Effective Date until the Termination Date (the “Program Period”), Lender agrees with Genmar and its Affiliates to allow any Dealer approved by Lender (each an “Eligible Dealer” and, collectively, the “Eligible Dealers”) to repay Lender, upon such Eligible Dealer’s sale of an item of Merchandise on or after June 1, 2009 but before June 12, 2009, consisting of acceptable Carver 2006, 2007 and 2008 model year items and consisting of such other items of Merchandise with such applicable discount amounts as Genmar and its Affiliates and the Lender shall agree in writing from time to time (“Eligible Merchandise”) financed by Lender, at up to 25% less than the invoice amount (including freight charges) owed to Lender by such Eligible Dealer with respect to such item of Eligible Merchandise (such discount amount is herein referred to as the “Short Sale

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Amount”). The exact percentage discount and discount amount applicable to each item of Eligible Merchandise shall be determined by Lender in its sole discretion. Each such sale of Eligible Merchandise by an Eligible Dealer under the Program after June 1, 2009, is herein referred to as a “Post-Petition Short Sale”. As between the Eligible Dealer and Lender, upon each Post-Petition Short Sale of an item of Eligible Merchandise, payment by the Eligible Dealer to Lender of the amount owing to Lender (less the Short Sale Amount) with respect to such item of Eligible Merchandise shall constitute payment in full of the amount owing by Eligible Dealer to Lender with respect to such item of Eligible Merchandise. In connection with any Post-Petition Short Sale, Genmar agrees to pay to Lender 100% of such Short Sale Amount, which funds are payable on the date of such Post-Petition Short Sale; provided, however, that Genmar is not obligated to pay more than $500,000 pursuant to this Section 3 g a on any single Business Day; if more than $500,000 is due at one time pursuant to this Section 3 g a, amounts in excess of $500,000 are due on the subsequent Business Day until the amount remaining to be paid under this Section 3 g a is less than $500,000.

b. Upon written notice from Lender to Genmar and its Affiliates, additional

Dealers may be added to as Eligible Dealers. Also, in the event that an Eligible Dealer is in default under its obligations to Lender, Lender reserves the right to provide written notice to Genmar and its Affiliates that any such Dealer shall no longer be an Eligible Dealer; provided, however, any such removal of an Eligible Dealer by Lender shall only be effective one (1) Business Day after Genmar has received such written notice of such removal. It being understood that Genmar and its Affiliates shall be liable for any required amounts not paid by such Eligible Dealer pursuant to Paragraph 3 hereof.

c. Subsequent to any Dealer’s Post-Petition Short Sale of an item of Eligible

Merchandise under the Program and payment to the Lender by Genmar or its Affiliate of the Short Sale Amount required with respect to such item of Eligible Merchandise under the Program, Genmar or its Affiliate may obtain an Advance (as defined in the DIP Facility) from CDF-US in an amount equal to one hundred percent (100%) of the Short Sale Amount applicable to such Post-Petition Short Sale. Each such Advance shall be made within one (1) Business Day after delivery of a Notice of Advance request to CDF-US for funding, and such Advances shall be made under, and be evidenced by the DIP Facility.

d. The unpaid Advances under the DIP Facility will not be allowed to exceed an

aggregate principal balance of ten million dollars ($10,000,000) at any one point in time. Should such $10,000,000 limit be reached at any time, Lender will not be required to participate in any additional Post-Petition Short Sales of Eligible Merchandise, nor will Lender be required to accept any further Post-Petition Short Sales of Eligible Merchandise from any Eligible Dealers, and neither Genmar nor its Affiliates will be permitted to obtain any further Advances under the DIP Facility.”

6. Paragraph 12 of the Agreement is hereby amended to read as follows:

“12. Termination. This Agreement will continue in full force and effect until June 30, 2010, after which time the Agreement will automatically renew for successive one year periods unless either party to the Agreement decides to terminate the Agreement. In such event the terminating party shall provide the other party one (1) day prior written notice of its intent to terminate the Agreement (such date being the “Termination Date”).

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Provided, however, this Agreement may be terminated by Lender immediately if an Event of Default has occurred. In any event, no termination of this Agreement will affect any of Genmar’s (or its assignees, whether permitted or unpermitted) or the Affiliates’ liability with respect to any financial transactions entered into by Lender with Dealer prior to the effective date of termination, including, without limitation, transactions that will not be completed until after the effective date of termination or any of Genmar’s (or its assignees, whether permitted or unpermitted) or the Affiliates obligations under paragraph 3 of this Agreement.”

7. Except as set forth expressly herein, all terms of the Agreement, as amended hereby, shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of Genmar and the Affiliates. The execution, delivery and effectiveness of this Third Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Agreement, nor constitute a waiver of any provision of the Agreement. 8. This Third Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Illinois and all applicable federal laws of the United States of America. 9. Genmar and the Affiliates agrees to pay on demand all costs and expenses of the Lenders in connection with the preparation, execution and delivery of this Third Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for the Lenders with respect hereto. 10. This Third Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this Third Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof. 11. Neither Genmar nor an Affiliate may transfer or assign this agreement without the prior written consent of the Lender. To the extent any such assignment or transfer is consented to by the Lender, this Third Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns. 12. This Third Amendment and the matters contained in the DIP Facility sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto. 13. (a) Notwithstanding anything herein to the contrary, Genmar and its Affiliates (collectively, the “Combined Companies” and each a “Combined Company”) each hereby waives promptness, diligence, notice of acceptance, and any other notices of any nature whatsoever with respect to any of the obligations hereunder, and any requirement that Lender protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against any other Combined Company any other person or any Collateral (as defined in the DIP Facility). Each Combined Company agrees that any rights of subrogation, indemnification, reimbursement or any similar rights it may have against any other Combined Company with respect to its liability hereunder or otherwise, whether such rights arise under an express or implied contract or by operation of law, shall be subject, junior and subordinate in all respect to all obligations of such Combined Company to Lender and that the enforcement of such rights shall be stayed until such time as the Combined Companies shall have indefeasibly paid in full all of the obligations hereunder. The liability of each Combined Company shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or in any other term of, any of the obligations, or any other amendment or waiver of or any consent to departure from this Agreement or the DIP Facility, (ii) any exchange, release or non-perfection of any Collateral or any release or amendment or waiver of or consent to departure from any other

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guaranty or any release of any guarantor or any other person liable in whole or in part for all or any of the obligations hereunder, (iii) the disallowance or avoidance of all or any portion of Lender’s claim(s) for repayment of the obligations hereunder of any guarantor to Lender or of Lender’s interest in any security for such obligations, or (iv) any other circumstance which might otherwise constitute a defense available to, or discharge of, a Combined Company or a guarantor or any other surety. (b) Each Affiliate which is a signatory hereto agrees to be severally liable for all obligations arising under the Agreement, as amended by this Third Amendment, from or related to the financing of invoices for Merchandise manufactured and sold by it. Each Affiliate which is a signatory hereto shall retain the right to reject the Agreement, as amended by this Third Amendment. If such Affiliate elects to reject the Agreement, as amended by this Third Amendment, pursuant to Section 365 of the Bankruptcy Code in connection with a sale of such Affiliate's assets, Lender shall waive any claim against such Affiliate it is permitted under Sections 503 and 507 of the Bankruptcy Code based on the Affiliates prior assumption of the Agreement, as amended by this Third Amendment. Notwithstanding the foregoing, Genmar shall be liable for all obligations arising under the Agreement, as amended by this Third Amendment, including the obligations of any Affiliate. 14. Subject to the rights of the Affiliates under clause 13(b) above, the Borrowers agree that they will seek to obtain an order from the Bankruptcy Court assuming, pursuant to Section 365 of the Bankruptcy Code, the Agreement as amended by this Third Amendment, within 15 days of the Third Amendment Effective Date.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Third Amendment on then date first above written. GENMAR HOLDINGS, INC. WINDSOR CRAFT YACHTS, LLC. By: By: Title: Title: GENMAR YACHT GROUP, L.L.C. CARVER ITALIA, L.L.C. By: By: Title: Title: GENMAR TENNESSEE, INC. GENMAR MICHIGAN, L.L.C. By: By: Title: Title: GENMAR MINNESOTA, INC. TRIUMPH BOATS, INC. By: By: Title: Title: WOOD MANUFACTURING COMPANY, INC. GENMAR INDUSTRIES, INC. By: By: Title: Title:

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GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION By: Title: GE COMMERCIAL DISTRIBUTION FINANCE CANADA By: Title: GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD By: ___________________________________ Title: __________________________________ GE FINANCE AND INSURANCE By: ___________________________________ Title: __________________________________


[Exhibit A to Third Amendment to Vendor Agreement]

EXHIBIT A

FREE FLOOR SUBSIDY AMOUNTS

BASE RATE Average 1-month LIBOR Adjusted Average 1-Month LIBOR

From To Adjustment From To >6.45% -0.25%

6.21% 6.45% -0.25% 5.96% 6.20% 5.96% 6.20% -0.20% 5.76% 6.00% 5.71% 5.95% -0.18% 5.53% 5.77% 5.46% 5.70% -0.15% 5.31% 5.55% 5.21% 5.45% -0.13% 5.08% 5.32% 4.96% 5.20% -0.10% 4.86% 5.10% 4.71% 4.95% -0.08% 4.63% 4.87% 4.46% 4.70% -0.05% 4.41% 4.65% 4.21% 4.45% -0.03% 4.18% 4.42% 3.96% 4.20% -0.00% 3.96% 4.20% 3.71% 3.95% 0.05% 3.76% 4.00% 3.46% 3.70% 0.10% 3.56% 3.80% 3.21% 3.45% 0.15% 3.36% 3.60% 2.96% 3.20% 0.20% 3.16% 3.40% 2.71% 2.95% 0.25% 2.96% 3.20% 2.46% 2.70% 0.25% 2.71% 2.95% 2.21% 2.45% 0.25% 2.46% 2.70% 1.96% 2.20% 0.25% 2.21% 2.45% 1.71% 1.95% 0.25% 1.96% 2.20% 1.46% 1.70% 0.25% 1.71% 1.95% 1.21% 1.45% 0.25% 1.46% 1.70% 0.96% 1.20% 0.25% 1.21% 1.45% 0.71% 0.95% 0.25% 0.96% 1.20% 0.46% 0.70% 0.25% 0.71% 1.00%

<0.46% 1.00% 1.00% Adjusted Average One Month LIBOR Rate shall be subject to a 1.00% minimum rate


[Exhibit B to Third Amendment to Vendor Agreement]

EXHIBIT B

DEFICIENCY AMOUNTS

CATEGORY SHORT SALE AMOUNT

AMOUNT OWED

Repos sold, within cap 2.2% $ 609,950.91

Repos sold, not within cap 2.8% $ 748,527.50

Short‐pay participation 2.2% $ 600,000.00

Boats not sold, within the cap 16.7% $ 4,532,263.59

[Exhibit C to Third Amendment to Vendor Agreement]

EXHIBIT C

REPOSSESSED MERCHANDISE

Brand Model Name Serial Number Original Invoice Amount

Current Location

Carver 36 MARINER CDRS8237E708 $201,105.36 Brewer Greenwich Bay Marina

Carver 43MOTORYAC CDRW1043I607 $427,822.52 Jerratt Bay Marquis MARQUIS55LS CDRK7025D708 $954,259.80 Jerratt Bay Carver 52VOYAGER CDRD2010C708 $731,614.00 Jerratt Bay Carver 43

SUPERSPOR CDRW2065I708 $405,083.83 Blackfish Canada

Marquis MARQUIS 40SC

CDRU3003F708 $532,487.53 Adventure Yachts

Marquis MARQUIS 55 CDRK7028F708 $887,892.20 Adventure Yachts Carver 52 VOYAGER CDRK2009B708 $699,133.91 Adventure Yachts Four Winns

274FS-2008 GFNMX006H708 $53,978.00 Phil Dill

Four Winns

224FS-2008 GFNMM032I708 $35,714.00 Phil Dill

Four Winns

244FS-2008 GFNMN052B808 $44,924.00 Phil Dill

Four Winns


EXHIBIT E


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THIS DEBTOR-IN-POSSESSION WORKING CAPITAL FINANCE AGREEMENT AND THE INDEBTEDNESS

EVIDENCED HEREBY AND ANY SECURITY INTEREST GRANTED HEREBY, AND THE RIGHTS AND REMEDIES OF LENDER HEREUNDER, ARE SUBORDINATED IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS THE SAME MAY BE AMENDED,

SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE PROVISIONS THEREOF, THE “SUBORDINATION AGREEMENT”) DATED AS OF JUNE __, 2009 BETWEEN LENDER AND WELLS FARGO BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE

AGENT (TOGETHER WITH ITS SUCCESSORS OR ASSIGNS, THE “SENIOR ADMINISTRATIVE AGENT”) UNDER THE SENIOR CREDIT AGREEMENT (AS DEFINED BELOW), AND ACKNOWLEDGED AND

AGREED BY THE BORROWERS; AND LENDER AND ANY SUBSEQUENT HOLDER OF THIS DEBTOR-IN-POSSESSION WORKING CAPITAL FINANCE AGREEMENT, BY ITS ACCEPTANCE HEREOF, SHALL BE

BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT

DEBTOR-IN-POSSESSION WORKING CAPITAL FINANCE AGREEMENT This Debtor-in-Possession Working Capital Finance Agreement (as from time to time amended, "DIP Facility") dated as of June __, 2009 (the “Closing Date”) is entered into among GE Commercial Distribution Finance Corporation ("Lender"), with its chief executive office and principal place of business at 5595 Trillium Boulevard, Hoffman Estates, Illinois 60192, and GENMAR HOLDINGS, INC., a Delaware corporation (“Genmar”), MINSTAR, LLC, a Delaware limited liability company (formerly known as Minstar, Inc., a Delaware corporation), TRIUMPH BOAT RENTALS, L.L.C., a Delaware limited liability company, GENMAR YACHT GROUP, L.L.C., a Delaware limited liability company (formerly known as Carver Boat Corporation, L.L.C., a Delaware limited liability company), GENMAR INDUSTRIES, INC., a Delaware corporation, WOOD MANUFACTURING COMPANY, INC., an Arkansas corporation, GENMAR MICHIGAN, L.L.C., a Delaware limited liability company (formerly known as Four Winns Boats, L.L.C., a Delaware limited liability company), GENMAR IP LLC, a Delaware limited liability company, GENMAR MANUFACTURING OF KANSAS, INC., a Delaware corporation, GENMAR MINNESOTA, INC., a Delaware corporation (formerly known as Larson/Glastron Boats, Inc., a Delaware corporation, and successor-by-merger to Seaswirl Boats, Inc., a Delaware corporation), GENMAR TENNESSEE, INC., a Delaware corporation (formerly known as Stratos Boats, Inc., a Delaware corporation), TRIUMPH BOATS, INC., a Delaware corporation, VEC TECHNOLOGY, INC., a Delaware corporation, GENMAR FLORIDA, INC., a Delaware corporation (formerly known as Wellcraft Marine Corp., a Delaware corporation), VEC MANAGEMENT CO., L.L.C., a Delaware limited liability company, VEC LEASING SERVICES, L.L.C., a Delaware limited liability company, GENMAR TRANSPORTATION, INC., a Delaware corporation, WINDSOR CRAFT YACHTS, L.L.C., a Delaware limited liability company, CARVER ITALIA, L.L.C., a Delaware limited liability company, CARVER YACHTS INTERNATIONAL, L.L.C., a Delaware limited liability company, MARINE MEDIA, LLC, a Delaware limited liability company, CARVER INDUSTRIES, L.L.C., a Delaware limited liability company (each, individually, a "Borrower" and collectively, the "Borrowers"), each having a principal place of business, or a place of business for receiving notices, located at 2900 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402-2100).

RECITALS WHEREAS, on June 1, 2009, Genmar and certain subsidiaries of Genmar filed voluntary petitions under Chapter 11 with the United States Bankruptcy Court, District of Minnesota; WHEREAS, Genmar, for itself and on behalf of certain of its subsidiaries, is a party to that certain Vendor Agreement with Lender and certain of its affiliates, dated as of June 1, 2004, as amended by that certain Amendment to Vendor Agreement dated as of August 18, 2006 and by that certain Second Amendment to Vendor Agreement, dated as of November 5, 2007, as further amended by that certain Third Amendment to Vendor Agreement among certain of the Borrowers, the Lender and certain of its affiliates dated as of the date hereof (as further amended from time to time, the “Vendor Agreement”);


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WHEREAS, the Borrowers have requested the Lender to provide this DIP Facility to finance certain obligations owed to Lender and its affiliates under the Vendor Agreement and to provide general working capital in accordance with the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: In addition to the terms defined elsewhere herein, the terms set forth on Annex A shall have the meanings as ascribed therein for purposes of this DIP Facility.

1. Extensions of Credit. (a) On the terms and subject to the conditions contained in this DIP Facility, Lender agrees to make advances (each an “Advance”, and collectively “Advances”) to or on behalf of one or more Borrowers from time to time in order to (i) provide working capital to such Borrower or Borrowers for Acceptable Proceed Uses in an amount equal to 10% of the face amount of all invoices attached to the Notice of Advance (as defined below) submitted in connection with each Advance, (ii) to enable such Borrower or Borrowers to finance the repayment to Lender of Deficiency Amounts (as defined in the Vendor Agreement), (iii) to fund 100% of any Short Sale Amount (as defined in the Vendor Agreement) which such Borrower is obligated to repay to Lender from time to time pursuant to the terms of the Vendor Agreement and (iv) in the Lender’s sole and absolute discretion, in such additional amounts and for such other purposes as the Lender shall determine in its sole and absolute discretion; with all such advances under clauses (i) (ii) (iii) and (iv) above in an aggregate amount not to exceed the Borrowing Availability. Lender may combine all of Lender's Advances under this DIP Facility to or on behalf of one or more Borrowers, together with all finance charges, fees and expenses related thereto, to make one debt owed jointly and severally by all Borrowers. This Agreement concerns the extension of credit, and not the provision of goods or services. The maximum aggregate amount of outstanding credit that Lender will advance to Borrowers under this DIP Facility at any one point in time shall be ten million dollars ($10,000,000) (the “Commitment”). Each Borrower’s ability to obtain Advances from Lender under the credit line established by this DIP Facility shall automatically expire on the Termination Date, unless extended by written agreement of both Lender and the Borrowers.

(b) Each Advance shall be made on notice given by any Borrower to the Lender not more than

once on any Business Day. Each such notice may be made in a writing substantially in the form of Exhibit A (a “Notice of Advance”) duly completed or by telephone if confirmed promptly, but in any event prior to such Advance with such a Notice of Advance. Each Advance (other than Advances for payment of Short Sale Amounts as provide in paragraph 1 a(iii) above) shall be made on the Business Day of receipt of such Notice of Advance if such notice is received before 1:00 p.m. (Chicago time). If such Notice of Advance is received after 1:00 p.m. (Chicago time), the corresponding Advance will be made on the next Business Day. All Advances for the payment of Short Sale Amounts shall be made on the following Business Day after receipt of the applicable Notice of Advance.

(c) The obligation of the Lender to make any Advance hereunder on the Closing Date is subject to

the satisfaction or due waiver of each of the conditions set forth on Part I of Annex B. The obligation of the Lender to make any Advance on any date is subject to the satisfaction or due waiver of each of the conditions set forth on Part II of Annex B. Notwithstanding the foregoing and anything elsewhere in this Agreement to the contrary, to the extent that the Lender is providing financing related to an invoice relating to Merchandise (as such term is defined in the Vendor Agreement) under the Vendor Agreement and attached to the applicable Notice of Borrowing, the Lender shall be obligated to continue to make Advances relating to such invoices to the Borrowers under this Agreement within the limits of the Commitment and the Borrowing Availability.

2. Financing and Payment Terms. Subject to the terms, conditions and provisions of the Subordination Agreement:

(a) The Borrowers agree to repay Lender for all Obligations on the Termination Date.


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(b) Upon receipt on or after the Closing Date by any Borrower of proceeds arising from any sale of merchandise set forth on Exhibit B hereto, such Borrower shall immediately pay or cause to be paid to the Lender an amount equal to 100% of such proceeds for deposit in the Contingency Reserve Account. (c) In the event that the aggregate amount of all Advances exceeds the Commitment, the Borrowers shall immediately pay to the Lender in reduction of the principal amount of the Advances an amount equal to such excess. (d) So long as no Default or Event of Default exists, any payments made to the Lender pursuant to this paragraph 2 shall be applied to the Obligations as follows: (i) first, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Lender, (ii) second, to pay interest then due and payable in respect of the Obligations, (iii) third, to repay the outstanding principal amounts of the Advances, (iv) fourth, to the payment of all other Obligations and (v) to fund contingency reserve account to be held with the Lender without interest (the “Contingency Reserve Account”). (e) The Borrowers hereby irrevocably waive the right to direct the application during the continuance of an Event of Default of any and all payments in respect of any Obligation and any proceeds of Collateral and agrees that, notwithstanding the provisions of paragraph (d) above, the Lender may apply all payments in respect of any Obligation, all funds on deposit in any Reserve Account and all other proceeds of Collateral to the Obligations in such manner as the Lender shall decide in its sole discretion. (g) Notwithstanding the provisions of paragraph 2(d), funds held in the Contingency Reserve Account shall only be applied by the Lender to Obligations as they arise under clauses (ii) and (iii) of paragraph (d). (f) Any payment hereunder which would otherwise be due on a day which is not a Business Day, shall be due on the next succeeding Business Day, with such extension of time included in any calculation of applicable finance charges. For purposes of this DIP Facility, "Business Day" means any day the Federal Reserve Bank of Chicago is open for the transaction of business. 3. Security Interest. Subject to the terms, conditions and provisions of the Subordination Agreement:

(a) Each Borrower hereby grants to Lender a security interest in all of the Collateral as security for all Obligations. The Borrowers agree to take all actions reasonably necessary to ensure the validity or continuing validity of any Lien securing any Obligation, to perfect, maintain, evidence or enforce any Lien securing any Obligation or to ensure such Liens have the same priority as that of the Liens on similar Collateral set forth in the Loan Documents (or, for Collateral located outside the United States, a similar priority reasonably acceptable to the Lender), including the filing of UCC financing statements in such jurisdictions as may be required by the Loan Documents or applicable requirements of law or as the Lender may otherwise reasonably request in form and substance reasonably acceptable to the Lender.

(b) "Collateral" means all property and interests in property and proceeds thereof now owned or

hereafter acquired by any Borrower in or upon which a Lien is granted or purported to be granted pursuant to any Loan Document, or pursuant to any Order, including without limitation, the Priority Collateral, all Accounts, Inventory, Equipment, other Goods, General Intangibles (including without limitation, Payment Intangibles), Chattel Paper (whether tangible or electronic), Instruments (including without limitation, Promissory Notes), Deposit Accounts, Investment Property and Documents, real property and all Products and Proceeds of the foregoing. Without limiting the foregoing, the Collateral includes all books and records, electronic or otherwise, which evidence or otherwise relate to any of the foregoing property, and all computers, disks, tapes, media and other devices in which such records are stored. For purposes of this definition only, capitalized terms used in this definition, which are not otherwise defined, shall have the meanings given to them in Article 9 of the Illinois Uniform Commercial Code.

(c) “Obligations” means all amounts, obligations, liabilities, covenants and duties of every type and description owing by any Borrower to the Lender or any participant arising out of, under, or in connection with, any Loan Document, whether direct or indirect (regardless of whether acquired by assignment), absolute or


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contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication, (a) all Advances, (b) all Charges, interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding, and (c) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to the Borrowers under any Loan Document; provided, however, that the term Obligations does not include any Pre-Petition debts, liabilities or obligations due and owing by any of the Borrowers to the Lender or any of its affiliates under the Vendor Agreement or otherwise. 4. Representations and Warranties. Each Borrower represents and warrants that at the time of execution of this DIP Facility and at the time of each approval and each Advance hereunder: (a) such Borrower is in good standing, does not conduct business under any trade styles or trade names except as disclosed by such Borrower to Lender in writing and has all the necessary authority to enter into and perform this DIP Facility and such Borrower will not violate its organizational documents, or any law, regulation or agreement binding upon it, by entering into or performing its obligations under this DIP Facility; (b) such Borrower keeps its records respecting accounts and chattel paper at its chief executive office identified below; (c) this DIP Facility correctly sets forth such Borrower’s true legal name, the type of its organization (if not an individual), the state in which such Borrower is incorporated or otherwise organized, and such Borrower’s organizational identification number, if any; (d) all information supplied by such Borrower to Lender, including any financial, credit or accounting statements or application for credit, in connection with this DIP Facility is true, correct and complete in all material respects; (e) all Advances and other transactions hereunder are for business purposes and not for personal, family, household or any other consumer purposes; (f) such Borrower has good title to all Collateral in which it purports to have any interest; (g) as of the date of this DIP Facility, there are no actions or proceedings pending or threatened against such Borrower which might result in any material adverse change in such Borrower's financial or business condition, other than the Chapter 11 Case; and (h) when requested by Lender, such Borrower will provide Lender with a copy of such Borrower's organizational documents, and will provide any subsequent amendments thereto bearing indicia of filing from the appropriate governmental authority, or such other documents verifying such Borrower's true and correct legal name as Lender may request from time to time. The Borrowers and Lender agree that the representations and warranties set for in the Senior DIP Loan Documents are incorporated by reference herein (with acknowledgement of the parties hereto that the references therein to “Administrative Agent” and “Lenders” shall refer to the Lender hereunder and references to “Closing Date” therein refer to the Closing Date hereunder). 5. Covenants. (a) Each Borrower will: (1) keep all Collateral in good order, repair and operating condition (ordinary wear and tear excepted) and insured as required herein; (2) promptly file all tax returns required by law and promptly pay all taxes, fees, and other governmental charges for which it is liable, including without limitation all governmental charges against the Collateral or this DIP Facility; (3) keep complete and accurate records of its business, including inventory, accounts and sales, and permit Lender and its designees to inspect and copy such records upon request; (4) furnish Lender with such additional information regarding the Collateral as Lender may from time to time reasonably request; (5) promptly notify Lender of any material adverse change in any material portion of any Collateral; (6) at all times be duly organized, existing, in good standing, qualified and licensed to do business in each jurisdiction in which the nature of its business or property so requires; (7) notify Lender of the commencement of any material legal proceedings against such Borrower; and (8) comply with all laws, rules and regulations applicable to such Borrower, including without limitation, the USA PATRIOT ACT and all laws, rules and regulations relating to import or export controls or anti-money laundering. (b) No Borrower will, without Lender’s prior written consent or except as authorized by an order of the Bankruptcy Court: (1) except as contemplated in the Subordination Agreement or the Budget, sell, transfer, consign or otherwise dispose of any Collateral other than except for sales of inventory in the ordinary course of such vendor’s business; (2) except as contemplated in the Subordination Agreement or the Budget, change its business in any material manner or its structure or be a party to a merger or consolidation or change its registration to a registered organization; (3) change its name or conduct business under a trade style or trade


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name other than those disclosed by such Borrower to Lender in writing without giving Lender at least thirty (30) days’ prior written notice thereof; (4) change its chief executive office or office where it keeps its records with respect to accounts or chattel paper (except upon thirty (30) days’ prior written notice to Lender); or (5) change the state in which it is incorporated or otherwise organized (except upon thirty (30) days’ prior written notice to Lender); provided, however, that except as contemplated in the Subordination Agreement, nothing in the foregoing shall limit Lender’s rights in respect of the Priority Collateral. (c) The Borrowers and Lender agree that the covenants set for in Article VI and Article VII the Senior Loan Documents are incorporated by reference herein (with acknowledgement of the parties hereto that the references therein to “Administrative Agent” and “Lenders” shall refer to the Lender hereunder and references to “Closing Date” therein refer to the Closing Date hereunder). Except as authorized by an order of the Bankruptcy Court or unless otherwise consented to in writing by the Lender, the Borrowers shall comply with such covenants. 6. Insurance. All risk of loss, damage to or destruction of Collateral shall at all times be on the Borrowers. Subject to the terms, conditions and provisions of the Subordination Agreement, each Borrower shall keep all of its tangible Collateral insured for full value against all insurable risks under policies (copies of which shall be delivered to Lender), and issued by insurers, satisfactory to Lender with Lender named as loss payee and additional insured. 7. Financial Statements. The Borrowers will deliver, cause to be delivered, or, with respect to subsection (m), make available or cause to be made available to Lender each of the following, which shall be in form and detail acceptable to Lender:

(a) Monthly Financial Statements. As soon as available and in any event within twenty-five (25) days after the end of each month, the Borrower Representative will deliver to the Lender an unaudited/internal balance sheet and statements of income, retained earnings and cash flows of Genmar and its subsidiaries as at the end of and for such month and for the year to date period then ended, prepared, on a consolidating and consolidated basis, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, all prepared in accordance with GAAP, subject to year-end audit adjustments and which fairly represent the financial position of Genmar and its subsidiaries and the results of their operations; and accompanied by a certificate of the Borrower Representative’s chief financial officer, stating (i) that such financial statements have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly represent the financial position and the results of the operations of Genmar and its Subsidiaries and (ii) whether or not such officer has knowledge of the occurrence of any Default or Event of Default not theretofore reported and remedied and, if so, stating in reasonable detail the facts with respect thereto.

(b) Collateral Reports. Within twenty (20) days after the end of each month, or more frequently if

the Lender so requires, the Borrower Representative will deliver to the Lender, or its designated agent, agings of the Borrowers’ accounts receivable and their accounts payable, an inventory certification report, and a calculation of the Accounts (each as of the end of such month or as of such other applicable date).

(c) Projections. No later than fifteen (15) days prior to the beginning of each fiscal year, the

Borrower Representative will deliver to the Lender the projected balance sheets, income statements, statements of cash flow and projected Availability for each month of the succeeding fiscal year, each in reasonable detail. Such items will be certified by the Borrower Representative’s chief financial officer as being the most accurate projections available and identical to the projections used by the Borrowers for internal planning purposes and be delivered with a statement of underlying assumptions and such supporting schedules and information as any Lender Party may in its discretion require.

(d) Litigation. Promptly upon knowledge thereof, the Borrower Representative will deliver to the

Lender notice in writing of all litigation and of all proceedings before any governmental or regulatory agency affecting any Borrower (i) of the type described in Section 5.14(c) of the Senior Credit Agreement or (ii) which seek a monetary recovery against such Borrower in excess of $2,500,000.


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(e) Defaults. When any of the chief executive officer, chairman, president or chief financial officer of Genmar becomes aware of the probable occurrence of any Default or Event of Default, the Borrower Representative will deliver to the Lender, no later than three (3) Business Days after such officer becomes aware of such Default or Event of Default, notice of such occurrence, together with a detailed statement by a responsible Officer of such Borrower of the steps being taken by the Borrowers to cure the effect thereof.

(f) Plans. As soon as possible, and in any event within thirty (30) days after any Borrower knows

or has reason to know that any Reportable Event with respect to any Pension Plan has occurred, such Borrower or the Borrower Representative will deliver to the Lender a statement of such Borrower’s chief financial officer setting forth details as to such Reportable Event and the action which such Borrower proposes to take with respect thereto, together with a copy of the notice of such Reportable Event to the Pension Benefit Guaranty Corporation. As soon as possible, and in any event within ten (10) days after any Borrower fails to make any quarterly contribution required with respect to any Pension Plan under Section 412(m) of the IRC, such Borrower or the Borrower Representative will deliver to the Lender a statement of such Borrower’s chief financial officer setting forth details as to such failure and the action which such Borrower proposes to take with respect thereto, together with a copy of any notice of such failure required to be provided to the Pension Benefit Guaranty Corporation. As soon as possible, and in any event within ten (10) days after any Borrower knows or has reason to know that it has or is reasonably expected to have any liability under Sections 4201 or 4243 of ERISA for any withdrawal, partial withdrawal, reorganization or other event under any Multiemployer Plan, the Borrowers will deliver to the Lender a statement of such Borrower’s chief financial officer setting forth details as to such liability and the action which such Borrower proposes to take with respect thereto.

(g) Disputes. Promptly upon knowledge thereof, the Borrower Representative will deliver to the

Lender notice of any disputes or claims by any Borrower’s customers exceeding $1,000,000 individually during any fiscal year.

(h) Officers and Directors. Promptly upon knowledge thereof, the Borrower Representative will

deliver to the Lender notice of any change in the persons who are the chief executive officer, chairman, president or chief financial officer of Genmar.

(i) Collateral. Promptly upon knowledge thereof, the Borrowers will deliver to the Lender notice of

any loss of or material damage to any material portion of the Collateral or of any substantial adverse change in any such Collateral or the prospect of payment thereof (for purposes of this subsection (j), material damage to a material portion of the Collateral means a damage or loss in the amount of $1,000,000 or more).

(j) Commercial Tort Claims. Promptly upon knowledge thereof, each Borrower will deliver to the

Lender notice of any commercial tort claims alleging damages equal to or in excess of $1,000,000 it may bring against any Person, including the name and address of each defendant, a summary of the facts, an estimate of the affected Borrower’s damages, copies of any complaint or demand letter submitted by such Borrower, and such other information as any Lender Party may request.

(k) Intellectual Property.

(i) The Borrower Representative will give the Lender written notice within thirty (30) days after any Borrower creates or acquires any Intellectual Property Rights having a fair market value of $250,000 or more; in addition, on or before June 30 of each year, the Borrower Representative will provide to the Lender a summary of all Intellectual Property Rights created or acquired by the Borrowers during the preceding year ended on such June 30;

(ii) except for transfers permitted under Section 6.16, the Borrowers will give the Lender

thirty (30) days written notice of any disposition of any Intellectual Property Rights having a fair market value of $250,000 or more and, upon request, shall provide the Lender with copies of all documents and agreements concerning such rights.

(iii) Promptly upon knowledge thereof, the Borrowers will deliver to the Lender notice of (A) any material Infringement of any Inventory Intellectual Property Rights by others, (B) claims that any


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Borrower, in the production, sale or distribution of its Inventory, is materially Infringing another Person’s Intellectual Property Rights, and (C) any threatened cancellation, termination or material limitation of its Intellectual Property Rights.

(iv) Upon any Lender Party’s request, the Borrowers will give the Lender copies of all registrations and filings with respect to any Borrower’s Intellectual Property Rights. (l) SEC Filings. Promptly after the sending or filing thereof, the Borrower Representative will

deliver to the Lender copies of all regular and periodic reports which any Borrower shall file with the Securities and Exchange Commission or any national securities exchange.

(m) Tax Returns of Borrowers. As soon as possible, and in any event no later than five (5) days

after they are due to be filed, copies of the state and federal income tax returns and all schedules thereto of the Borrowers.

(n) Violations of Law. Promptly upon knowledge thereof, the Borrower Representative will deliver

to the Lender notice of any Borrower’s violation of any law, rule or regulation, the non-compliance with which could have a Material Adverse Effect.

(o) Other Reports. From time to time, with reasonable promptness, the Borrower Representative

will deliver to the Lender any and all receivables schedules, collection reports, deposit records, copies of invoices to account debtors, shipment documents and delivery receipts for goods sold, and such other material, reports, records or information as the Lender may reasonably request. 8. Calculation of Charges. Subject to the terms, conditions and provisions of the Subordination Agreement, the Borrowers shall pay fees, charges and interest (collectively, "Charges") with respect to each Advance in accordance with the following. All Advances shall bear interest on the outstanding balance of each such Advance from the date such Advance is made until the date such Advance is repaid in full at a rate equal to the Three Month Libor rate plus five per cent (5.0%) per annum. The Borrowers shall pay Lender its customary charge for any check or other item which is returned unpaid to Lender. Unless otherwise provided in the Agreement, the following additional provisions shall be applicable to Charges: (i) the “Three Month Libor” rate shall mean for any calendar month, the Three month Libor rate published in the "Money Rates" column of the Wall Street Journal on the first Business Day of such month, provided however, that for the purposes of this Agreement the Three Month Libor rate shall at all times be subject to a minimum rate of three percent (3.0%), (ii) interest on each Advance and principal amount of the Obligations related thereto shall be computed each calendar month on the sum of the daily balances thereof during such month divided by thirty (30) and multiplied by one-twelfth of the annual rate provided for above; (iii) interest on an Advance shall begin to accrue on the date Lender makes such Advance; (iv) for the purpose of computing Charges, any payment will be credited pursuant to Lender’s payment recognition policy, as in effect from time to time; (v) Charges accrued shall be payable monthly in arrears on the last day of each calendar month, and (vi) Charges not paid when due, at the option of Lender, shall become part of the principal amount of the Obligations and Lender shall have deemed to have made an Advance in an amount equal to such Charges. (b) Lender intends to strictly conform to the usury laws governing this DIP Facility. Regardless of any provision contained herein, or in any other document, Lender shall never be deemed to have contracted for, charged or be entitled to receive, collect or apply as interest, any amount in excess of the maximum amount allowed by applicable law. If Lender ever receives any amount which, if considered to be interest, would exceed the maximum amount permitted by law, Lender will apply such excess amount to the reduction of the unpaid principal balance which any Borrower owes, and then will pay any remaining excess to such Borrower. In determining whether the interest paid or payable exceeds the highest lawful rate, the Borrowers and Lender shall, to the maximum extent permitted under applicable law, (1) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense or fee rather than as interest, (2) exclude voluntary pre-payments and the effect thereof, and (3) spread the total amount of interest throughout the entire term of this DIP Facility so that the interest rate is uniform throughout such term. Lender will recognize and credit payments made by check, ACH, federal wire, or other means, according to its payment recognition policies from time to time in effect, or as otherwise agreed. Information regarding Lender


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payment recognition policies is available from the Borrowers’ Lender representative, the Lender website, or will be communicated to any Borrower upon request. 9. Evidence of Debt. Lender shall maintain in accordance with its usual practice accounts evidencing the Obligations of the Borrowers to Lender resulting from each Advance, including the amounts of principal and interest payable and paid to Lender from time to time under this Agreement. 10. Default. The term “Default” and “Event of Default” wherever used herein, means any one of the following events: (a) Except as provided in subsection (j) below, the Borrowers shall default in the payment of any Obligations when they become due and payable; (b) The Borrowers shall default in the performance of, or breach, any covenant or agreement of the Borrowers contained in this Agreement or the Senior Credit Agreement; (d) A Change of Control shall occur; (e) Any representation or warranty made by any Borrower in this Agreement or the Senior Credit Agreement, or by any Borrower (or any of its officers) in any agreement, certificate, instrument or financial statement or other statement contemplated by or made or delivered pursuant to or in connection with this Agreement or the Senior Credit Agreement or any such guaranty shall prove to have been incorrect in any material respect when deemed to be effective; (f) The rendering against any Borrower or any subsidiary of an arbitration award, final judgment, decree or order for the payment of money in excess of $2,500,000 (if not fully covered by insurance, except for customary deductions) and the continuance of such arbitration award, judgment, decree or order unsatisfied and in effect for any period of thirty (30) consecutive days without a stay of execution; (g) A default under any bond, debenture, note or other evidence of material indebtedness of any Borrower or any Subsidiary owed to any Person exceeding $2,500,000 (other than the Obligations owed to the Lender Parties which is dealt with elsewhere in Section 7.1), or under any indenture or other instrument under which any such evidence of indebtedness has been issued or by which it is governed, or under any material lease or other contract, and the expiration of the applicable period of grace, if any, specified in such evidence of indebtedness, indenture, other instrument, lease or contract; (h) Any Reportable Event, which the Lender determine in good faith might constitute grounds for the termination of any Pension Plan or for the appointment by the appropriate United States District Court of a trustee to administer any Pension Plan, shall have occurred and be continuing thirty (30) days after written notice to such effect shall have been given to any Borrower by the Lender; or a trustee shall have been appointed by an appropriate United States District Court to administer any Pension Plan; or the Pension Benefit Guaranty Corporation shall have instituted proceedings to terminate any Pension Plan or to appoint a trustee to administer any Pension Plan; or any Borrower or any ERISA Affiliate shall have filed for a distress termination of any Pension Plan under Title IV of ERISA; or any Borrower or any ERISA Affiliate shall have failed to make any quarterly contribution required with respect to any Pension Plan under Section 412(m) of the IRC, which the Lender determines in good faith may by itself, or in combination with any such failures that the Lender may determine are likely to occur in the future, result in the imposition of a Lien on such Borrower’s assets in favor of the Pension Plan; or any withdrawal, partial withdrawal, reorganization or other event occurs with respect to a Multiemployer Plan which results or could reasonably be expected to result in a material liability of any Borrower to the Multiemployer Plan under Title IV of ERISA; (i) An event of default shall occur under any Security Document; (j) Default in the payment of any amount owed by any Borrower or Subsidiary to the Lender other than with respect to the Obligations, which default remains uncured for a period of twenty (20) days following written notice by the Lender;


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(k) Any event or circumstance occurs that the Senior Administrative Agent or the Lender shall believe in good faith would have a Material Adverse Effect, excluding the commencement of the Chapter 11 Case; (l) The indictment of the chief executive officer, chairman, president or chief financial officer of Genmar for a felony offense under state or federal law arising from fraud, embezzlement, misrepresentation or other criminal activity which the Senior Administrative Agent or the Lender determines in good faith would have a Material Adverse Effect; or (m) Any of the following shall occur: (i) a “default” (however defined) shall occur under the Textron Financing Agreement, (ii) Textron shall demand payment of any obligations under the Textron Financing Agreement or under the Textron Guaranty, (iii) Textron shall deliver an “expiration notice” (however defined) under the Textron Financing Agreement, or (iv) any of Textron, Genmar Holdings or Wood Manufacturing Company shall breach or default in any of its obligations or agreements under the Textron Subordination and Intercreditor Agreement. (n) The Final Order in form and content acceptable to the Lender shall not have been entered by the Bankruptcy Court within thirty (30) days after the Petition Date; or (o) Entry of an order of the Bankruptcy Court modifying, amending, reversing, vacating, or staying either the Interim Order or the Final Order, or the Borrowers shall violate any of the terms of the Interim Order or the Final Order; or (p) In connection with the Chapter 11 Case: (i) the Bankruptcy Court shall enter an order dismissing the Chapter 11 Case; (ii) any of the Chapter 11 Case shall be converted to a case under Chapter 7 of the Bankruptcy Code; or (iii) a trustee or an examiner with expanded powers shall be appointed in any of the Chapter 11 Case; or” (q) Any of the Lender’s Collateral is converted by the Borrowers, lost or stolen in any material amount, or not accounted for by the Borrowers; or (r) The Borrowers shall fail to allow the Lender or their consultants or agents to conduct audits or appraisals or do other due diligence or work with respect to the Collateral or the Borrowers’ businesses during regular business hours; or (s) The Borrowers shall at any time discontinue or shall be ordered to discontinue the conduct of their businesses; or (t) The Borrowers’ chief restructuring officer shall resign or be terminated by the Borrowers, or the chief restructuring officer shall no longer have all of the authority and responsibilities set forth in the pre-petition engagement letter between the Borrowers and the existing chief restructuring officer, including with respect to preparation of the Budget and the Restructuring Plan and control over all borrowing requests and disbursements of the Borrowers; or (u) The Borrowers shall breach or fail to perform any of their obligations under the Interim Order; or (v) Any “Event of Default” shall occur under the Vendor Agreement. 11. Rights and Remedies Upon Default. Upon the occurrence of a Default, Lender shall have all rights and remedies of a secured party under the UCC as in effect in any applicable jurisdiction and other applicable law and all the rights and remedies set forth in this DIP Facility. Lender may terminate any obligations it has under this DIP Facility and/or declare any and all Obligations immediately due and payable without notice or demand. All of the rights and remedies of Lender under this Section 11 and otherwise with respect to the DIP Facility, the Borrowers and the Collateral are subject to the terms, conditions and provisions set forth in the Subordination Agreement. In addition, upon the occurrence of any Default, the Lender may file an affidavit with the Bankruptcy Court certifying the occurrence of the Default. The Lender shall,


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contemporaneously with the filing of such an affidavit with the Bankruptcy Court, serve a copy of the affidavit on the Borrowers, and their counsel, via facsimile. If the Borrowers fail to file a response with the Bankruptcy Court, which response must be limited to whether or not a Default has occurred, within forty-eight (48) hours of the filing of such affidavit, the Bankruptcy Court may enter an order granting the Lender relief from the automatic stay and permitting the Lender to enforce its rights and remedies under this Agreement and the other Loan Documents and/or under applicable law. In the event the Borrowers timely file a response, the Lender shall be entitled to an expedited hearing on their motion from relief from the stay, such hearing to occur within two (2) Business Days of the filing of such response.

12. Power of Attorney. Each Borrower authorizes Lender to: (a) file financing statements describing Lender as “Secured Party,” such Borrower as “Debtor” and indicating the Collateral, provided that such financing statement has been submitted to the Borrowers and the Senior Administrative Agent for review and approval prior to filing; (b) authenticate, execute or endorse on behalf of such Borrower any financing statements and amendments thereto, or other notices or records comprising or related to Collateral or evidencing financing under the Agreement or evidencing or maintaining the perfection of the security interest granted hereby, as attorney-in-fact for such Borrower, provided that such financing statements, amendments, and records have been submitted to the Borrowers and the Senior Administrative Agent for review and approval prior to filing; and (c) supply any omitted information and correct errors in any documents between Lender and such Borrower. This power of attorney and the other powers of attorney granted herein are irrevocable and coupled with an interest. 13. Collection and Other Costs. The Borrowers shall pay to Lender on demand all reasonable attorneys' fees and legal expenses and other costs and expenses incurred by Lender in connection with protecting and enforcing its Lien on the Collateral and collecting any Obligations, or in connection with any amendment, modification, forbearance or waiver to the Loan Documents, or in connection with any Default or in connection with any action or proceeding under any bankruptcy or insolvency laws or incurred pursuant to an arbitration proceeding involving a Borrower or any Collateral or on connection with the enforcement of any of Lender’s rights under any Loan Document. All fees, expenses, costs and other amounts described in this Section shall constitute Obligations and shall be secured by the Collateral. 14. Binding Effect. This Agreement shall be binding upon the respective heirs, representatives, successors and assigns of the parties hereto; provided however none of the parties hereto may assign their respective interests under this DIP Facility without the other parties’ prior written consent. 15. Notices. Except as required by law or as otherwise provided herein, all notices or other communications to be given under the Agreement or under the UCC shall be in writing served either personally, by deposit with a reputable overnight courier with charges prepaid, or by deposit in the United States mail, first-class postage prepaid or provided for, addressed to such Borrower at its chief executive office shown below, or to Lender at its address shown in the preamble hereto, to the attention of its Credit Department, or at such other address designated by such party by notice to the other. Any such communication shall be deemed to have been given upon delivery in the case of personal delivery, one Business Day after deposit with an overnight courier or two (2) calendar days after deposit in the United States mail except that any notice of change of address shall not be effective until actually received. 16. Severability. If any provision of this DIP Facility or its application is invalid or unenforceable, the remainder of this DIP Facility will not be impaired or affected and will remain binding and enforceable. 17. Receipt of Agreement. Each Borrower acknowledges that it has received a true and complete copy of this DIP Facility. Each Borrower has read and understands this DIP Facility. Notwithstanding anything herein to the contrary, Lender may rely on any facsimile copy, electronic data transmission, or electronic data storage of: this DIP Facility, billing statement, financing statement, authorization to pre-file financing statements, invoice from a Borrower, financial statements or other reports, which will be deemed an original, and the best evidence thereof for all purposes. 18. Miscellaneous. Time is of the essence regarding each Borrower's performance of its obligations to Lender. Each Borrower's liability to Lender is direct and unconditional and will not be affected by


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the release or nonperfection of any security interest granted hereunder. Lender may refrain from or postpone enforcement of this DIP Facility or any other agreements between Lender and a Borrower without prejudice, and the failure to strictly enforce these agreements will not create a course of dealing which waives, amends or modifies such agreements. Any waiver by Lender of a Default or Event of Default shall only be effective if in writing signed by Lender and transmitted to a Borrower. The express terms of this DIP Facility will not be modified by any course of dealing, usage of trade, or custom of trade which may deviate from the terms hereof. If a Borrower fails to pay any taxes, fees or other obligations which may impair Lender's interest in the Collateral, or fails to keep any Collateral insured, Lender may, but shall not be required to, pay such amounts. Such paid amounts will be: (a) additional Obligations which the Borrowers owe to Lender, which are subject to finance charges as provided herein and shall be secured by the Collateral; and (b) due and payable immediately in full. Section titles used herein are for convenience only, and do not define or limit the contents of any Section. All words used herein shall be understood and construed to be of such number and gender as the circumstances may require. This Agreement may be validly executed in one or more multiple counterpart signature pages. This Agreement shall be construed without presumption for or against any party who drafted all or any portion of this DIP Facility. No modification of this DIP Facility shall bind any party unless in a writing signed by such party. Among other symbols, Lender hereby adopts “GE Commercial Distribution Finance Corporation,” “GE Commercial Distribution Finance,” or “Lender” as evidence of its intent to authenticate a record. 19. List of Borrowers. The following persons are parties to this DIP Facility as Borrowers: VENDOR NAME TYPE OF ENTITY JURISDICTION Genmar Holdings, Inc. Corporation Delaware Windsor Craft Yachts, L.L.C. LLC Delaware Wood Manufacturing Company, Inc. Corporation Arkansas Genmar Minnesota, Inc. Corporation Delaware Genmar Michigan, L.L.C. LLC Delaware Genmar Tennessee, Inc. Corporation Delaware Triumph Boats, Inc. Corporation Delaware Genmar Yacht Group, L.L.C. LLC Delaware 20. Limitation of Remedies and Damages. In the event there is any dispute under this DIP Facility, the aggrieved party shall not be entitled to exemplary or punitive damages so that the aggrieved party's remedy in connection with any action arising under or in any way related to this DIP Facility shall be limited to a breach of contract action and any damages in connection therewith are limited to actual and direct damages. 21. Governing Law, etc. (a) Governing Law. This Agreement, each other Loan Document that does not expressly set forth its applicable law, and the rights and obligations of the parties hereto and thereto shall be governed by, and construed and interpreted in accordance with, the law of the State of Illinois and the Bankruptcy Code. (b) Submission to Jurisdiction. THE BORROWERS HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES NOT HAVE OR ABSTAINS FROM JURISDICTION, TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS. THE BORROWERS IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. THE BORROWERS EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. (c) Service of Process. Each Borrower hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable Requirements of Law,


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including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of the Borrower specified in on the signature pages hereto (and shall be effective when such mailing shall be effective, as provided therein). Each Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (d) Waiver of Jury Trial. Each party hereto hereby irrevocably waives trial by jury in any suit, action or proceeding with respect to, or directly or indirectly arising out of, under or in connection with, any Loan Document or the transactions contemplated therein or related thereto (whether founded in contract, tort or any other theory). Each party hereto (A) certifies that no other party and no Related Person of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into the Loan Documents, as applicable, by the mutual waivers and certifications in this paragraph 21. 22. Multiple Borrowers; Joint and Several Liability. (a) All Advances by Lender to and all other Obligations of any Borrower shall constitute one general obligation of all of the Borrowers. Notwithstanding anything herein to the contrary, the Borrowers shall be primarily and jointly and severally liable for all Obligations of any Borrower to Lender. Notwithstanding the foregoing, if and to the extent a Borrower is deemed to be a guarantor of another Borrower hereunder, such Borrower’s liability for any credit extended to or for the benefit of such other Borrower shall be deemed to be a guaranty of payment and performance, and not merely a guaranty of collection. To the fullest extent permitted by law, each Borrower hereby waives promptness, diligence, notice of acceptance, and any other notices of any nature whatsoever with respect to any of the Obligations, and any requirement that Lender protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against any other Borrower any other person or any Collateral. Each Borrower agrees that any rights of subrogation, indemnification, reimbursement or any similar rights it may have against any other Borrower with respect to its liability hereunder or otherwise, whether such rights arise under an express or implied contract or by operation of law, shall be subject, junior and subordinate in all respect to all Obligations of such Borrower to Lender and that the enforcement of such rights shall be stayed until such time as the Borrowers shall have indefeasibly paid in full all of the Obligations and Lender shall be under no duty to extend credit to or for the benefit of any Borrower. The liability of each Borrower shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or in any other term of, any of the Obligations, or any other amendment or waiver of or any consent to departure from this DIP Facility or any other agreement between or among any one or more of the Borrowers and Lender, (ii) any exchange, release or non-perfection of any Collateral or any release or amendment or waiver of or consent to departure from any other guaranty or any release of any guarantor or any other person liable in whole or in part for all or any of the Obligations, (iii) the disallowance or avoidance of all or any portion of Lender’s claim(s) for repayment of the Obligations of any guarantor to Lender or of Lender’s interest in any security for such Obligations, or (iv) any other circumstance which might otherwise constitute a defense available to, or discharge of, a Borrower or a guarantor or any other surety. (b) Each Borrower (each, a “Principal”) hereby appoints each other Borrower (each, an “Agent”) as the Principal’s agent and attorney-in-fact (1) to take any action, (2) to execute any document or instrument, (3) to consent or agree to any amendment or other modification of this DIP Facility and/or any other agreements between or among any one or more of the Borrowers and Lender and/or any waiver of or departure from any of the terms hereof or thereof, (4) to perform any Obligation of the Principal, and (5) to give or receive any notice by or to any Borrower hereunder or thereunder; and in each case without regard to whether any such action is done in the name of an Agent or a Principal and, if done in the name of an Agent, without regard to whether such Agent’s capacity as agent or attorney-in-fact is so designated. Without limiting the generality of the foregoing, an Agent may request extensions of credit to or on behalf of any one or more of the Borrowers and/or incur any other Obligations for the account of any one or more of the Borrowers, and in any such event all of the Borrowers shall be fully and jointly and severally bound by and liable for the actions of such Agent. Lender shall be entitled to rely absolutely and without duty of inquiry or investigation upon any agreement, request, communication or other notice given by an Agent under this DIP Facility and/or any other agreements between or among any one or more of the Borrowers and Lender (including without limitation, any request by an Agent to


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make credit extensions to or on behalf of itself and/or any one or more other Borrowers) until three (3) Business Days after Lender shall have received written notice from each Principal of the revocation of this agency and power of attorney, which revocation shall constitute a Default. 23. Super Priority Nature of Obligations and Lenders’ Liens (a) Subject to the Subordination Agreement, the Borrowers hereby covenants, represents and warrants that, upon entry of the Interim Order (and the Final Order, as applicable), the Obligations of the Borrowers under the Loan Documents: (i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times constitute allowed administrative expense claims in the Chapter 11 Case having priority over all administrative expenses of the kind specified in Sections 503(b), 507(a) or 507(b) of the Bankruptcy Code (the “Superpriority Claims”); (ii) pursuant to Section 364(d)(1) of the Bankruptcy Code, shall be secured by a perfected second priority Lien on all of the tangible and intangible property of the Borrower; provided, however, that the Liens described in this subsection (ii) shall be junior and subordinate to (A) the Liens in the Senior Collateral in favor of the Senior Lender Parties securing the Senior Obligations except with for the Liens securing Lender’s Lien in the Priority Collateral, which shall be senior to the Liens of the Senior Lender Parties in the Priority Collateral, (B) the Carve-Out and (C) all non-avoidable Pre-Petition contractual Liens in assets of the Borrowers, which are Permitted Liens, as defined in the Senior Credit Agreement, which were duly perfected on the Petition Date;. (b) Subject in all respects to the terms of the Orders, the priorities set forth in paragraph (a) above and to the Carve-Out, the Borrowers grant to the Lender a security interest in, and mortgage on, all of the right, title and interest of the Borrowers in all real property owned by the Borrowers and the proceeds of all real property leased by the Borrowers, together in each case with all of the right, title and interest of the Borrowers in and to all buildings, improvements, and fixtures related thereto, all general intangibles relating thereto and all proceeds thereof. The Borrowers acknowledge that, pursuant to the Orders, the Liens in all of such real property shall be perfected without the recordation of any instruments of mortgage or assignment. The Borrowers agree that upon the reasonable request of the Lender, the Borrowers shall promptly enter into separate mortgages and assignments in recordable form with respect to such owned properties on terms reasonably satisfactory to the Lender. All such mortgages and assignments shall be submitted to the Senior Administrative Agent for review and approval before execution and shall be submitted for recording. Each Borrower agrees that (i) its obligations hereunder shall not be discharged by the entry of an order confirming any plan of reorganization (and the Borrowers, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and (ii) the Superpriority Claim granted to the Lenders pursuant to the Orders and described in subsection (a) hereof and the Liens granted to the Lender pursuant to the Orders and the Loan Documents shall not be affected in any manner by the entry of an order confirming any plan of reorganization 24. Indemnities. (a) Each Borrower agrees to indemnify, hold harmless and defend the Lender and its affiliates (each such Person being an “Indemnitee”) from and against all Liabilities (including brokerage commissions, fees and other compensation) that may be imposed on, incurred by or asserted against any such Indemnitee in any matter relating to or arising out of, in connection with or as a result of (i) any Loan Document, any Obligation (or the repayment thereof), the use or intended use of the proceeds of any Advance, (ii) any commitment letter, proposal letter or term sheet with any Person or any contractual obligation, arrangement or understanding with any broker, finder or consultant, in each case entered into by or on behalf of any Borrower or any affiliate of any of them in connection with any of the foregoing, (iii) any actual or prospective investigation, litigation or other proceeding, whether or not brought by any such Indemnitee or any of its Related Persons, any holders of securities or creditors (and including attorneys’ fees in any case), whether or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any securities or commercial law or regulation or any other requirement of law or theory thereof, including common law, equity, contract, tort or otherwise, or (iv) any other act, event or transaction related, contemplated in or attendant to any of the foregoing (collectively, the “Indemnified Matters”). Furthermore, the Borrowers waive and agree not to


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assert against any Indemnitee any right of contribution with respect to any Liabilities that may be imposed on, incurred by or asserted against any Related Person. (b) Without limiting the foregoing, “Indemnified Matters” includes all Environmental Liabilities, including those arising from, or otherwise involving, any property of any Related Person or any actual, alleged or prospective damage to property or natural resources or harm or injury alleged to have resulted from any release of hazardous materials on, upon or into such property or natural resource or any property on or, to the extent caused or alleged to have been caused by any Related Person, contiguous to any real property of any Related Person, whether or not, with respect to any such Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor-in-interest to any Related Person or the owner, lessee or operator of any property of any Related Person through any foreclosure action, in each case except to the extent such Environmental Liabilities (i) are incurred solely following foreclosure by any Lender or following any Lender having become the successor-in-interest to the Borrowers and (ii) are attributable solely to acts of such Indemnitee. 25. Right of Setoff. Subject to the terms of the Interim Order or the Final Order, as applicable, of the Lender and each of its affiliates (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by the Borrowers), at any time and from time to time during the continuance of any Event of Default and without further order of or application to the Bankruptcy Court, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) (other than payroll, trust or tax accounts) at any time held in the Reserve Accounts against any Obligation of the Borrowers incurred after the Petition Date, whether or not any demand was made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured. Lender agrees promptly to notify the Borrowers after any such setoff and application made by Lender or its affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this paragraph are in addition to any other rights and remedies (including other rights of setoff) that the Lender or its affiliates may have. The Lender acknowledges and agrees that the Lender and its affiliates have no right to set off any Advance made or to be made under this DIP Facility to the Borrowers or any proceeds of any refinancing provided or to be provided by the Lender or its affiliates under the Vendor Agreement on behalf of any dealer of the Borrower against any of the Obligations or any other debts, liabilities or obligations owing by the Borrowers or any of the Borrowers to the Lender or any affiliate of the Lender other than unpaid Charges (as such term is defined in the Vendor Agreement), Risk Reserves (as such term is defined in the Vendor Agreement) and Deficiency Amounts (as such term is defined in the Vendor Agreement). 26. Release. Each Borrower hereby absolutely and unconditionally releases and forever discharges the Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents, attorneys, consultants and employees of any of the foregoing, from any and all known claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Borrowers and/or any Borrower has had, now has or has made claim to have against any such Person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the Closing Date, whether such claims, demands and causes of action are matured or unmatured or known or unknown. 27. Remarketing Fee. As consideration for the remarketing of any Eligible Merchandise by Borrowers in connection with a Post Petition Short Sale, the Lender hereby agrees to pay to Genmar a remarketing fee (the “Remarketing Fee”) in the amount equal to 50% of the aggregate Short Sale Amounts for Post-Petition Short Sales of Eligible Merchandise. The Remarketing Fee shall be paid upon the Termination Date and payable by Lender to the Genmar.


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THIS CONTRACT CONTAINS JURY WAIVER AND PUNITIVE DAMAGE WAIVER PROVISIONS. Dated: June ___, 2009.

GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION

Chief Executive Office: 5595 Trillium Boulevard Hoffman Estates, IL 60192 Phone: 847-747-7569 Fax: 847-747-7455 Attn: Chief Risk Officer

By: Print Name: Title:

GENMAR HOLDINGS, INC.

Chief Executive Office: 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

MINSTAR, LLC Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR INDUSTRIES, INC. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

WOOD MANUFACTURING COMPANY, INC. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR MANUFACTURING OF KANSAS, INC. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR MINNESOTA, INC. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR TENNESSEE, INC.

Chief Executive Office: TRIUMPH BOATS, INC.

Chief Executive Office:


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c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

VEC TECHNOLOGY INC.

Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR FLORIDA, INC. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR TRANSPORTATION, INC.


TRIUMPH BOAT RENTALS L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR YACHT GROUP, L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR MICHIGAN, L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

GENMAR IP LLC Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

VEC MANAGEMENT CO., L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:


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VEC LEASING SERVICES, L.L.C.


WINDSOR CRAFT YACHTS, L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

CARVER ITALIA, L.L.C.


CARVER YACHTS INTERNATIONAL, L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

MARINE MEDIA, LLC


CARVER INDUSTRIES, L.L.C. Chief Executive Office: c/o Genmar Holdings, Inc. 2900 IDS Center 80 South Eighth Street Minneapolis, MN 55402 By Name: Title:

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Annex A

Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere in the Loan Documents) the following respective meanings: “Acceptable Proceed Uses” means payments for working capital and general corporate purposes in the ordinary course of business to the extent set forth in the Budget. “Accounts” means each of the terms “Borrowers’ Accounts”, “Eligible Accounts”, “Inventory”, “Eligible Inventory”, “Eligible Raw Materials Inventory”, “Eligible Engines Inventory”, “Eligible Finished Goods Inventory”, “Borrowing Base” and” Availability”, each as defined Senior Credit Agreement, in effect as of the Closing Date. “Availability” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Avoidance Actions” has the meaning specified in paragraph 23. “Bankruptcy Code” means 11 U.S.C 101 et seq. “Bankruptcy Court” means the United States Bankruptcy Court for the District of Minnesota. “Borrower Representative” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Borrowing Availability” means at any time, for the Borrowers in the aggregate, (i) the Commitment minus (ii) the aggregate amount of all outstanding Advances. “Budget” has the meaning given such term in the Senior Credit Agreement. “Carve-Out” means (i) the unpaid fees of the clerk of the Bankruptcy Court and of the United States Trustee pursuant to 28 U.S.C. § 1930(a) and (b); and (ii) the aggregate allowed unpaid fees and expenses payable under Sections 330 and 331 of the Bankruptcy Code to professional persons retained pursuant to an order of the Court by the Borrowers, or any statutory committee appointed in the Borrowers’ Cases (other than the fees and expenses, if any, of any such professional persons incurred, directly or indirectly, in respect of, arising from or relating to, the initiation or prosecution of any action for preferences, fraudulent conveyances, other avoidance power claims or any other claims or causes of action against the Senior Administrative Agent or any of the other Senior Lender Parties or with respect to the Senior Credit Agreement or any of the other Loan Documents or the Senior Obligations; provided, however, that the Carve-Out may be used to investigate such claims and causes of action), not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate. “Change of Control” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Chapter 11 Case” means the jointly administered Chapter 11 bankruptcy cases pending before the Bankruptcy Court, entitled In re Genmar Holdings, Inc., Case No. BKY 09 43537, In re Carver Industries, L.L.C., Case No. BKY 09 43538, In re Carver Italia, L.L.C., Case No. BKY 09 33773, In re Carver Yachts International, L.L.C., Case No. BKY 09 33774, In re Genmar Florida, Inc., Case No. BKY 09 43539, In re Genmar Industries, Inc., Case No. BKY 09 43540, In re Genmar IP LLC, Case No. BKY 09 43541, In re Genmar Manufacturing of Kansas, Inc., Case No. BKY 09 43542, In re Genmar Michigan, L.L.C., Case No. BKY 09 43543, In re Genmar Minnesota, Inc., Case No. BKY 09 33775, In re Genmar Tennessee, Inc., Case No. BKY 09 43544, In re Genmar Transportation, Inc., Case No. BKY 09 43545, In re Genmar Yacht Group, L.L.C., Case No. BKY 09 43546, In re Marine Media, LLC, Case No. BKY 09 43547, In re Minstar, LLC, Case No. BKY 09 43548, In re Triumph Boats, Inc., Case No. BKY 09 43550, In re Triumph Boat Rentals, L.L.C., Case No. BKY 09 43551, In re VEC Leasing Services, L.L.C., Case No. BKY 09 43552, In re VEC Management Co., L.L.C., Case No. BKY 09 43553, In re VEC Technology, Inc., Case No. BKY 09 43554, In re Windsor Craft Yachts, L.L.C., Case No.

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BKY 09 43555, and In re Wood Manufacturing Company, Inc., Case No. BKY 09 43556, including any adversary proceedings, jointly administered cases or other ancillary proceedings. “Committee” means the official committee of unsecured creditors appointed by the Office of the United States Trustee in the Chapter 11 Case. “Environmental Liabilities” means all Liabilities (including costs of remedial actions, natural resource damages and costs and expenses of investigation and feasibility studies) that may be imposed on, incurred by or asserted against any Borrower as a result of, or related to, any claim, suit, action, investigation, proceeding or written demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any environmental law or in connection with any environmental condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Borrower, whether on, prior or after the date hereof. “ERISA Affiliate” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Event of Default” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Existing Liens” means valid and perfected Liens in existence at the time of the commencement of the Chapter 11 Case and valid Liens in existence at the time of such commencement of the Chapter 11 Case that are perfected after such commencement as permitted by Section 546(b) of the Bankruptcy Code. “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined by the Lender in its sole discretion. “Final Order” means, collectively, the orders of the Bankruptcy Court entered in the Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2) or such other procedures as approved by the Bankruptcy Court which orders shall be satisfactory in form and substance to the Lender in its sole discretion, and which orders are in effect and not stayed, together with all extensions, modifications and amendments thereto, in form and substance satisfactory to the Lender in its sole discretion, which, among other matters but not by way of limitation, authorizes, on an interim basis, the Borrowers to execute and perform under the terms of this DIP Facility and the other Loan Documents. “First Day Orders” means the orders entered by the Bankruptcy Court in the Chapter 11 Case pursuant to motions and applications filed by the Borrowers on June 4, 2009. “Intellectual Property Rights” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Interim Order” means, collectively, the orders of the Bankruptcy Court entered in the Chapter 11 Case after an interim hearing (assuming satisfaction of the standards prescribed in Section 364 of the Bankruptcy Code and Bankruptcy Rule 4001 and other applicable law), together with all extension, modifications, and amendments thereto, in form and substance satisfactory to the Lender in its sole discretion, which, among other matters but not by way of limitation, authorizes, on an interim basis, the Borrowers to execute and perform under the terms of this DIP Facility and the other Loan Documents. “Liabilities” means all claims, actions, suits, judgments, damages, losses, liability, obligations and any related fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise. “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), claim, security interest or other security

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arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a capital lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing. “Loan Documents” means, collectively, this DIP Facility, any Notes, the Vendor Agreement, and, when executed, each document executed by the Borrowers and delivered to the Lender in connection with or pursuant to any of the foregoing or the Obligations, together with any modification of any term, or any waiver with respect to, any of the foregoing. “Material Adverse Effect” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Maturity Date” means June 1, 2010. “Multiemployer Plan” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Orders” means, collectively, the Interim Order and the Final Order. “Pension Plan” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Person” means and includes natural persons, corporations, limited liability companies, limited partnerships, limited liability partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof and their respective permitted successors and assigns (or in the case of a governmental person, the successor functional equivalent of such Person). “Petition Date” means June 1, 2009. “Pre-Petition” means the time period ending immediately prior to the Petition Date. “Priority Collateral” means the Reserve Accounts. “Related Person” means, with respect to any Person, each affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its affiliates. “Reportable Event” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Reserve Accounts” means the Contingency Reserve Account and the Risk Reserve (as defined in the Vendor Agreement), each of which is held by the Lender. “Restructuring Plan” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Security Document” has the meaning given such term in the Senior Credit Agreement, in effect as of the Closing Date. “Senior Administrative Agent” has the meaning given such term in the Subordination Agreement. “Senior Collateral” has the meaning given such term in the Subordination Agreement. “Senior Credit Agreement” has the meaning given such term in the Subordination Agreement.

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“Senior Lender Parties” has the meaning given such term in the Subordination Agreement. “Senior Loan Documents” has the meaning given such term in the Subordination Agreement. “Senior Obligations” has the meaning specified for such term in the Subordination Agreement. “Superpriority Claim” has the meaning specified in paragraph 23. “Termination Date” means the earliest of (i) the Maturity Date, (ii) the DIP Availability Amount Termination Date (as such term is defined in the Senior Credit Agreement in effect on the Closing Date), or (iii) the occurrence of an Event of Default. “Textron”, “Textron Financing Agreement”, “Textron Guaranty” and “Textron Subordination and Intercreditor Agreement” have the meaning given such term in the Senior Credit Agreement in effect on the Closing Date.

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Annex B

Part I

1. Loan Documents. Each Borrower shall have executed and delivered to the Lender this Agreement and the Third Amendment to Vendor Agreement. 2. Receipt of Business Plans. Lender shall have received (i) the pro forma balance sheet at the Petition Date after giving effect to the transactions contemplated by this Agreement, and (ii) the initial Budget for the 13-week period beginning on the Petition Date. 3. Interim Order. Entry by the Bankruptcy Court of the Interim Order in form and content acceptable to the Lender in its sole discretion, after adequate notice to all parties entitled to service, which, among other provisions, approves the Senior Credit Agreement, as amended by Second Amendment to Amended and Restated Credit And Security Agreement and the other Loan Documents and the financing contemplated therein, authorizes the Borrowers to enter into such documents and grants to the Administrative Agent, for the benefit of the Lender, a lien in all Collateral as defined in this Agreement. 4. Pleadings. No pleading or application seeking to amend or modify the provision of this Agreement and the credit facilities provided hereunder on the terms set forth herein shall have been filed in Bankruptcy Court by each Borrower which has not been withdrawn, dismissed or denied within 20 days after filing. 5. Fees and Expenses. The Borrowers shall have paid all fees payable on the Closing Date. In addition, each Borrower will have paid all fees and expenses of counsel to Lender and Lenders. 6. Senior Loan Documents. Lender shall have received duly executed copies of the Senior Loan Documents in form and substance satisfactory to Lender. 7. Short Sale Program. The Borrowers shall have provided Lender with a written summary describing its conversations with its dealers with respect to the short sale program, such summary to be in form and substance satisfactory to the Lender in its sole discretion.

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Part II 1. Advance Request. The Lender shall have received a written, timely and duly executed and completed request for an Advance. 2. Financing Orders. The Interim Order shall be in full force and effect and, by July 1, 2009, the Final Order shall be entered in the Chapter 11 Case, and shall be in full force and effect and shall not have been reversed, modified, amended or stayed.

[Exhibit A to Debtor-In-Possession Working Capital Finance Agreement]

EXHIBIT A

NOTICE OF ADVANCE

[the remainder of this page is intentionally left blank]

Notice of Advance [Exhibit A to Debtor-In-Possession Working Capital Finance Agreement]

[Date] GE Commercial Distribution Finance 5595 Trillium Boulevard Hoffman Estates, IL 60192 Ladies and Gentlemen: Reference is made to the Debtor-In-Possession Working Capital Finance Agreement, dated as of June __, 2009 (as amended and in effect on the date hereof, the “Agreement”), among the undersigned, as Borrowers, and GE Commercial Distribution Finance, as Lender. Terms defined in the Agreement are used herein with the same meanings. This notice constitutes a Notice of Advance, and the Borrowers hereby request an Advance under the Agreement, and in that connection the Borrowers specify the following information with respect to the Advance requested hereby:

(A) Amount of Advance: __________________ (B) The proceeds of the Advance shall be used for: (i) financing of invoices for Merchandise $_____________, (ii) finance Deficiency Amounts $________________, (iii) fund 100% of Short Sale Amounts $__________________, and/or (v) in the Lender’s sole and absolute discretion, in such additional amounts and for such

other purposes as the Lender shall determine in its sole and absolute discretion $_______________.

(C) Location and number of Borrower’s account to which proceeds of Advance are to be

disbursed:

Wells Fargo Bank, N.A. San Francisco, CA ABA: 121000248 Account No.: 6355010053 Beneficiary: Wells Fargo Business Credit, Minneapolis, MN Reference: Genmar Holdings

(D) Attached hereto are copies of all invoices for Merchandise that Lender has accepted to

finance pursuant to the Vendor Agreement in connection with this Notice of Advance and the current Advance being provided under paragraph 1 of the Agreement.

(E) All representations and warranties contained the Loan Documents are true and correct in

any material respect (without duplication of any materiality qualifier contained herein) as of the date hereof.

Very truly yours, _________________________________ [All borrowers must sign] By ______________________________

Notice of Advance [Exhibit A to Debtor-In-Possession Working Capital Finance Agreement]

Name: Title:

[Exhibit B to Debtor-In-Possession Working Capital Finance Agreement]

EXHIBIT B

REPOSSESSED MERCHANDISE


Current Location


Carver 43MOTORYAC CDRW1043I607 $427,822.52 Jerratt Bay Marquis MARQUIS55LS CDRK7025D708 $954,259.80 Jerratt Bay Carver 52VOYAGER CDRD2010C708 $731,614.00 Jerratt Bay Carver 43

SUPERSPOR CDRW2065I708 $405,083.83 Blackfish Canada



Marquis MARQUIS 55 CDRK7028F708 $887,892.20 Adventure Yachts Carver 52 VOYAGER CDRK2009B708 $699,133.91 Adventure Yachts Four Winns


Four Winns


Four Winns


Four Winns


EXHIBIT F

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FAEGRE & BENSON LLP DRAFT (6/11/09) (3rd)

SUBORDINATION AGREEMENT

This Subordination Agreement (this “Subordination Agreement”), dated as of June [__], 2009, is made by and between GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION (together with its respective successors and assigns, “GE Commercial Distribution Finance Corporation”), GE COMMERCIAL DISTRIBUTION FINANCE CANADA, GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD, and GE FINANCE AND INSURANCE (collectively, together with their respective successors and assigns, the “Subordinated Creditors” and each is a “Subordinated Creditor”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, acting through its Wells Fargo Business Credit operating division, in its capacity as administrative agent for the Senior Lender Parties defined below under the Senior Credit Agreement defined below (together with its successors and assigns, the “Senior Administrative Agent”).

RECITALS

Genmar Holdings, Inc., a Delaware corporation, Minstar, LLC, a Delaware limited liability company (formerly known as Minstar, Inc., a Delaware corporation), Triumph Boat Rentals, L.L.C., a Delaware limited liability company, Genmar Yacht Group, L.L.C., a Delaware limited liability company (formerly known as Carver Boat Corporation, L.L.C., a Delaware limited liability company), Genmar Industries, Inc., a Delaware corporation, Wood Manufacturing Company, Inc., an Arkansas corporation, Genmar Michigan, L.L.C., a Delaware limited liability company (formerly known as Four Winns Boats, L.L.C., a Delaware limited liability company), Genmar IP LLC, a Delaware limited liability company, Genmar Manufacturing of Kansas, Inc., a Delaware corporation, Genmar Minnesota, Inc., a Delaware corporation (formerly known as Larson/Glastron Boats, Inc., a Delaware corporation, and successor-by-merger to Seaswirl Boats, Inc., a Delaware corporation), Genmar Tennessee, Inc., a Delaware corporation (formerly known as Stratos Boats, Inc., a Delaware corporation), Triumph Boats, Inc., a Delaware corporation, VEC Technology, Inc., a Delaware corporation, Genmar Florida, Inc., a Delaware corporation (formerly known as Wellcraft Marine Corp., a Delaware corporation), VEC Management Co., L.L.C., a Delaware limited liability company, VEC Leasing Services, L.L.C., a Delaware limited liability company, Genmar Transportation, Inc., a Delaware corporation, Windsor Craft Yachts, L.L.C., a Delaware limited liability company, Carver Italia, L.L.C., a Delaware limited liability company, Carver Yachts International, L.L.C., a Delaware limited liability company, Marine Media, LLC, a Delaware limited liability company, Carver Industries, L.L.C., a Delaware limited liability company, and any other Person which now is or hereafter becomes a “Debtor” thereunder (collectively, the “Debtors” and each, a “Debtor”), the banks and other lenders from time to time party thereto as lenders, Wells Fargo Bank, National Association, a national banking association, acting through its Wells Fargo Business Credit operating division, in its capacity as letter of credit issuer, and the Senior Administrative Agent are parties to an Amended and Restated Credit and Security Agreement dated as of November 1, 2007, as amended by a Forbearance Agreement and First Amendment to Amended and Restated Credit and Security Agreement dated as of December 17, 2008.

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On June 1, 2009, the Debtors filed petitions under the Bankruptcy Code in the Cases. The Debtors are acting as debtors-in-possession in the Cases. The Senior Lender Parties are providing debtor-in-possession financing to the Debtors in the Cases under the terms and conditions of the Amended and Restated Credit and Security Agreement dated as of November 1, 2007, as amended by a Forbearance Agreement and First Amendment to Amended and Restated Credit and Security Agreement dated as of December 17, 2008, as amended by a Second Amendment to Amended and Restated Credit and Security Agreement dated as of June 4, 2009 (as the same may be further amended, restated, supplemented, modified, replaced or Refinanced from time to time, the “Senior Credit Agreement”), the Senior Secured Borrowing Stipulation, the Senior Secured Borrowing Interim Order, and when entered, the Senior Secured Borrowing Final Order. Capitalized terms used in these recitals have the meanings given to them in the Senior Credit Agreement and in Section 1 below unless otherwise specified.

The Debtors have requested that GE Commercial Distribution Finance Corporation provide subordinated debtor-in-possession financing to the Debtors in the Cases under the terms and conditions of that certain Debtor-in-Possession Working Capital Finance Agreement dated as of June [_], 2009, among the Debtors and GE Commercial Distribution Finance Corporation (as the same may be amended, restated, supplemented, modified, replaced or Refinanced from time to time, the “Subordinated Credit Agreement”) and that the Subordinated Creditors continue to provide financing to dealers of the Debtors for the purchase of boats, yachts and other merchandise from the Debtors under the Vendor Agreement and under the Factoring Agreement.

As a condition to continuing to extend debtor-in-possession financing to the Debtors and as a condition to allowing the Debtors to obtain subordinated debtor-in-possession financing from GE Commercial Distribution Finance Corporation, the Senior Lender Parties have required the Subordinated Creditors (i) to subordinate the payment of all debts, liabilities and obligations of such Debtors to the Subordinated Creditors under the Subordinated Credit Agreement and the other Subordinated Loan Documents to the payment of any and all debts, liabilities and obligations of the Debtors to the Senior Lender Parties, including, all debts, liabilities and obligations arising before the Petition Date and all debts, liabilities and obligations arising after the Petition Date, and (ii) to subordinate Liens obtained by the Subordinated Creditors in the assets of the Debtors to the Liens of the Senior Lender Parties in such assets. Assisting the Debtors in continuing to obtain debtor-in-possession financing from the Senior Lender Parties and subordinating its debtor-in-possession financing and related liens, rights and interests pursuant to the terms of this Subordination Agreement are in the Subordinated Creditors’ best interest.

ACCORDINGLY, in consideration of the loans and other financial accommodations that have been made and may hereafter be made by the Senior Lender Parties for the benefit of the Debtors and in consideration of allowing the Debtors to enter into the Subordinated Credit Agreement and the Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement, and for other good and valuable consideration, the

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receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. The following terms have the meanings set forth below:

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, a Person shall be deemed to “control” or be “controlled by” a Person if such Person possesses, directly or indirectly, power to direct or cause the direction of the management or policies of such Person whether through ownership of equity interests, by contract or otherwise.

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. sections 101 et seq., as from time to time amended, and any successor or similar statute. All references to articles, sections, subsections and clauses of the Bankruptcy Code shall include all amendments, modifications and renumberings thereof from time to time.

“Bankruptcy Court’ means the United States Bankruptcy Court for the District of Minnesota, including any judge presiding over the Cases.

“Bankruptcy Law” means the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, receivership or similar law affecting creditor’s rights generally.

“Debtor” and “Debtors” have the meanings specified in the Recitals.

“Cases” means the jointly administered Chapter 11 bankruptcy cases of the Debtors pending before the Bankruptcy Court, entitled In re Genmar Holdings, Inc., Case No. BKY 09-43537, In re Carver Industries, L.L.C., Case No. BKY 09-43538, In re Carver Italia, L.L.C., Case No. BKY 09-33773, In re Carver Yachts International, L.L.C., Case No. BKY 09-33774, In re Genmar Florida, Inc., Case No. BKY 09-43539, In re Genmar Industries, Inc., Case No. BKY 09-43540, In re Genmar IP LLC, Case No. BKY 09-43541, In re Genmar Manufacturing of Kansas, Inc., Case No. BKY 09-43542, In re Genmar Michigan, L.L.C., Case No. BKY 09-43543, In re Genmar Minnesota, Inc., Case No. BKY 09-33775, In re Genmar Tennessee, Inc., Case No. BKY 09-43544, In re Genmar Transportation, Inc., Case No. BKY 09-43545, In re Genmar Yacht Group, L.L.C., Case No. BKY 09-43546, In re Marine Media, LLC, Case No. BKY 09-43547, In re Minstar, LLC, Case No. BKY 09-43548, In re Triumph Boats, Inc., Case No. BKY 09-43550, In re Triumph Boat Rentals, L.L.C., Case No. BKY 09-43551, In re VEC Leasing Services, L.L.C., Case No. BKY 09-43552, In re VEC Management Co., L.L.C., Case No. BKY 09-43553, In re VEC Technology, Inc., Case No. BKY 09-43554, In re Windsor Craft Yachts, L.L.C., Case No. BKY 09-43555, and In re Wood Manufacturing

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Company, Inc., Case No. BKY 09-43556, including any adversary proceedings, jointly administered cases or other ancillary proceedings.

“Contingency Reserve Account” has the meaning specified in the Subordinated Credit Agreement.

“Enforcement Action” means, with respect to the Subordinated Creditors, any of the following acts (whether in or outside of the Cases or any other Proceeding) in respect of any Debtor, any other Obligor, the Subordinated Obligations or the Senior Collateral under the Subordinated Loan Documents, applicable law or otherwise: (a) the acceleration or demand for payment of any of the Subordinated Obligations; (b) the exercise of any right of setoff, recoupment or other similar right not expressly permitted by the terms of this Subordination Agreement; (c) the taking possession of or control of, or the levy, sale, lease, license, foreclosure or other realization on, or the other disposition or liquidation of, or the restriction or interference with, or the other exercise of any rights or remedies with respect to, any of the Senior Collateral; (d) the solicitation of bids from third parties to conduct the liquidation or disposition of any of the Senior Collateral or the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers or other third parties for the purpose of valuing, marketing, promoting and/or selling any of the Senior Collateral; (e) any collection, enforcement or other action of any kind against any Debtor or any other Obligor or any of the assets of any Debtor or any other Obligor (including in any of the Cases or in any other Proceeding) in any case seeking, directly or indirectly, to enforce any right or remedy, or to enforce any of the obligations of any Debtor or any other Obligor under or in connection with the Subordinated Obligations, the Senior Collateral or the Subordinated Loan Documents; (f) the commencement or pursuit of any judicial, arbitration or other proceeding or legal action of any kind (including in any of the Cases or in any other Proceeding) seeking injunctive or other equitable relief with respect to any Debtor or any other Obligor or any of the assets of any Debtor or any other Obligor; (g) the commencement or pursuit of any judicial, arbitration or other proceeding or legal action (including in any of the Cases or in any other Proceeding) to prohibit, limit or impair the commencement or pursuit by the Senior Administrative Agent or the Senior Lender Parties of any of their rights or remedies under or in connection with any Debtor or any other Obligor or any assets of any Debtor or any other Obligor under or in connection with the Senior Obligations, the Senior Loan Documents or otherwise; (h) the commencement or pursuit of any judicial, arbitration or other proceeding or legal action (including in any of the Cases or in any other Proceeding) to contest, protest or object to the forbearance or other decision by the Senior Administrative Agent or the Senior Lender Parties not to exercise any of their rights or remedies under or in connection with any Debtor or any other Obligor or any assets of any Debtor or other Obligor under or in connection with the Senior Obligations, the Senior Loan Documents, or otherwise; (i) the causing of any Debtor or any other Obligor to have any redemption or mandatory prepayment obligation, or the exercise of any put rights, with respect to any of the Subordinated Obligations; (j) the causing of the delivery of any notice, claim or demand relating to any of the Senior Collateral to any Person which is obligated with respect to

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any of the Senior Collateral or which is in possession or control of any of the Senior Collateral or which is acting as bailee, custodian or agent for any Person with respect to any of the Senior Collateral; (k) the commencement of any action (including in any of the Cases or in any other Proceeding) to retain, or direct or cause, any Debtor or any other Obligor to retain, a restructuring officer, crisis manager or similar person; or (l) the supporting or assisting of any other Person (other than the Senior Administrative Agent and the Senior Lender Parties) in pursuit of any of the acts described in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) or (k) above.

“Funding Stoppage” means any of the following: (a) GE Commercial Distribution Finance Corporation shall have (i) failed to make payment to a Debtor for more than two (2) Business Days after shipment with respect to GE Commercial Distribution Finance Corporation’s financing of any boat, yacht or other merchandise being purchased by a dealer from such Debtor for which GE Commercial Distribution has issued an approval number, or (ii) ceased, for more than five (5) Business Days, issuing approval numbers for financing requests with respect to boats, yachts and other merchandise to be purchased by dealers from the Debtors that the Debtors could reasonably have expected would be approved by GE Commercial Distribution Finance Corporation under its customary financing criteria or with respect to which GE Commercial Distribution Finance Corporation has previously provided an indication that it would approve such purchase, (b) GE Commercial Distribution Finance Corporation shall fail to make any advance which has been requested by the Debtors under the Subordinated Credit Agreement and which GE Commercial Distribution Finance Corporation is obligated to make under the terms of the Subordinated Credit Agreement within two (2) Business Days after the request for such advance by the Debtors, or (c) as a result of the occurrence of a Senior Default, the Senior Lender Parties shall fail to make any advance requested by the Debtors under the terms of the Senior Credit Agreement within two (2) Business Days after the request of such advance by the Debtors.

“Guarantor” means any Person which is or shall become a guarantor with respect to all or any portion of the Senior Obligations.

“Lien” means any lien (including, without limitation, any judgment liens and any lien arising by operation of law), claim, mortgage or deed of trust, pledge, hypothecation, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, call, trust, UCC financing statement or other preferential arrangement having the practical effect of any of the foregoing, including any right of setoff, recoupment or any similar right.

“Obligor” shall mean, collectively, the Debtors, the Guarantors and any other Person who now or hereafter is, or any of whose assets now or hereafter are, liable for all or any portion of the Senior Obligations, and each of the foregoing is an “Obligor”.

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“Paid in Full” or “Payment in Full” means, when used in connection with the Senior Obligations, the full and final payment in cash of all of the Senior Obligations (other than indemnification obligations not then asserted or due), the expiration, cancellation or cash collateralization (in a manner acceptable to the Senior Administrative Agent in an amount equal to 105% of the maximum amount of exposure as determined by the Senior Administrative Agent) of all letter of credit obligations, hedging obligations, interest rate swap obligations, interest rate cap obligations, interest rate collar obligations, cash management obligations or other similar obligations under the Senior Loan Documents, and the irrevocable termination of all commitments and obligations of the Senior Lender Parties to make loans or extend other credit accommodations to the Debtors under the Senior Loan Documents.

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or governmental authority.

“Permitted Subordinated Enforcement Action” means (a) the filing of any notice of claim and the voting of any such claim in the Cases or in any other Proceeding involving the Debtors or any of the Debtors if, and only if, such filing, such notice and such voting are not inconsistent with the provisions of this Agreement, (b) the filing of any motion in the Cases or in any other Proceeding involving the Debtors or a Debtor if, and only if, such filing and such motion are not inconsistent with the provisions of this Agreement, (c) the filing of any defensive pleading in the Cases or in any other Proceeding involving the Debtors or a Debtor if, and only if, such filing or such pleading are not inconsistent with the provisions of this Agreement, and (d) the taking of an Enforcement Action under clauses (a), (b), (c) or (e) of the definition of Enforcement Action with respect to the Subordinated Priority Collateral.

“Permitted Subordinated Obligation Payments” means (a) the application of any funds held by GE Commercial Distribution Finance Corporation in the Risk Reserve to the Subordinated Obligations, (b) prior to a Funding Stoppage, the application of any funds held in the Contingency Reserve Account to the outstanding principal balance of the advances under the Subordinated Credit Agreement and to accrued and unpaid interest thereon as provided in the Subordinated Credit Agreement (but not to any other Subordinated Obligations), and (c) (c) the payment upon the closing of the Subordinated Credit Agreement of not more than [$______] by the Debtors to GE Commercial Distribution Finance Corporation in respect of reasonable attorneys fees and disbursements incurred by GE Commercial Distribution Finance Corporation in connection with the preparation and negotiation of the Subordinated Credit Agreement.

“Petition Date” means June 1, 2009.

“Proceeding” shall mean the Cases and any other voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer

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with similar powers or any other proceeding for the reorganization, recapitalization, liquidation, dissolution or other winding up of a Person (including, without limitation, any such proceeding under the Bankruptcy Code).

“Proceeds” means, with respect to any given assets or properties, (a) all “Proceeds” as defined in Article 9 of the UCC with respect to such assets or properties, and (b) whatever is recoverable or recovered when any such assets or properties are sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“Refinance” means, in respect of any debts, liabilities and obligations, to refinance, replace, refund or repay, or to issue other indebtedness, in exchange or replacement for, such debts, liabilities and obligations, in whole or in part, whether with the same or different lenders, agents, or arrangers. “Refinanced” and “Refinancing” shall have correlative meanings.

“Reorganization Subordinated Securities” means any notes or other securities issued pursuant to a confirmed plan of reorganization in the Cases or in any other Proceeding involving the Debtors or a Debtor in substitution for all or any portion of the Subordinated Obligations that (a) are subordinated in right of the payment to the Senior Obligations (or any notes or other securities issued in substitution for all or any portion of the Senior Obligations) at least to the same extent that the Subordinated Obligations are subordinated to the Senior Obligations pursuant to the terms of this Agreement, (b) do not have the benefit of any obligation of any Person (whether as issuer, guarantor or otherwise) unless the Senior Obligations (or any notes or other securities issued in substitution for all or any portion of the Senior Obligations) has the senior benefit of the obligation of such Person, and (c) have maturities and other terms no less advantageous to the Debtors and the Senior Lender Parties than the terms contained in the Subordinated Loan Documents relating to the Subordinated Obligations being substituted.

“Reserve Accounts” has the meaning specified in the Subordinated Credit Agreement.

“Risk Reserve” has the meaning specified in the Subordinated Credit Agreement.

“Senior Administrative Agent” has the meaning specified in the preamble.

“Senior Default” means any Default or Event of Default (each as defined in the Senior Credit Agreement) under the Senior Credit Agreement.

“Senior Collateral” means all assets and properties of any kind whatsoever, whether real or personal, tangible or intangible, and wherever located, of each Debtor and of each other Obligor (including any stock of other equity interest), whether now owned or hereafter acquired, and upon which a Lien is now or hereafter granted by such Person as security for all or any part of the Senior Obligations, including, without limitation, the “Collateral” as defined in the Senior Credit Agreement, together, in each case, with (i) all substitutions and replacements for and any products of any of the foregoing; (ii) all

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accessories, attachments, parts, equipment and repairs now or hereafter attached or affixed to or used in connection with any tangible goods; (iii) all warehouse receipts, bills of lading and other documents of title now or hereafter covering such goods; and (iv) all Proceeds of any and all of the foregoing.

“Senior Credit Agreement” has the meaning specified in the Recitals.

“Senior Lender Parties” means the “Senior Lender Parties” as defined in the Senior Credit Agreement.

“Senior Loan Documents” means, collectively, the Senior Credit Agreement, the Senior Secured Borrowing Stipulation, the Senior Secured Borrowing Interim Order, the Senior Secured Borrowing Final Order, any related order issued by the Bankruptcy Court in the Cases with respect to the Senior Obligations, and each of the “Loan Documents” as defined in the Senior Credit Agreement, and each of the other agreements, documents and instruments providing for or evidencing any Senior Obligation, and any other document or instrument executed or delivered at any time in connection with any Senior Obligation, including any subordination or intercreditor agreement, as each of the foregoing may be amended, restated, supplemented, modified, replaced, renewed, extended or Refinanced from time to time.

“Senior Obligations” means each and every debt, liability and obligation of every type and description (including, without limitation, the Senior Superpriority Claims) which the Debtors or any one or more of the Debtors or any other Obligor may now or at any time hereafter owe to the Senior Lender Parties or any one or more of the Senior Lender Parties, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several, all interest thereon, and all fees, costs and other charges related thereto, all renewals, extensions and modifications thereof and any notes issued in whole or partial substitution therefor, including, without limitation, the Obligations (as defined in the Senior Credit Agreement), and any Refinancing of any of the foregoing, and including specifically, without limitation, all debts, liabilities and obligations of the Debtors or any one or more of the Debtors owing to the Senior Lender Parties or to any Senior Lender Party arising prior to the Petition Date and all debts, liabilities and obligations (including, without limitation, the Senior Superpriority Claims) owing by the Debtors or any one or more of the Debtors to the Senior Lender Parties or to any Senior Lender Party arising after the Petition Date. To the extent any payment with respect to the Senior Obligations (whether by or on behalf of any Debtor or any other Obligor, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential in any respect, set aside or required to be paid to a debtor-in-possession, trustee or similar Person, then the obligation or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

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“Senior Secured Borrowing Final Order” means the final order, in form and substance satisfactory to the Senior Administrative Agent, entered by the Bankruptcy Court, which, among other things, approves the Senior Secured Borrowing Stipulation, the Credit Agreement (including the Second Amendment to Amended and Restated Credit and Security Agreement dated as of June 4, 2009), and the other Senior Loan Documents, authorizes the Debtors to enter into the Senior Secured Borrowing Stipulation, the Credit Agreement (including the Second Amendment to Amended and Rested Credit and Security Agreement dated as of June 4, 2009) and the other Senior Loan Documents and the financing contemplated therein, and grants Senior Superpriority Claims to the Senior Lender Parties in the Cases.

“Senior Secured Borrowing Interim Order” means the interim order entered by the Bankruptcy Court on June 4, 2009, which, among other things, provides on an interim basis, approval for the Senior Secured Borrowing Stipulation, the Senior Credit Agreement (including the Second Amendment to Amended and Restated Credit and Security Agreement dated as of June 4, 2009) and the other Senior Loan Documents, authorizes the Debtors to enter into the Senior Secured Borrowing Stipulation, the Credit Agreement (including the Second Amendment to Amended and Restated Credit and Security Agreement dated as of June 4, 2009) and the other Senior Loan Documents and the financing contemplated therein, and grants Senior Superpriority Claims to the Senior Lender Parties in the Cases.

“Senior Secured Borrowing Stipulation” means that certain Stipulation for Secured Borrowing and Adequate Protection entered into among the Debtors and the Senior Lender Parties dated as of June 4, 2009, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Senior Superpriority Claims” means, collectively, all claims in favor of the Senior Lender Parties against the Debtors or any of the Debtors in the Cases or in any other Proceeding which are administrative expense claims having priority over any and all administrative expenses of the kind specified in section 503(b) and 507(b) of the Bankruptcy Code.

“Subordinated Borrowing Final Order” means the final order, in form and substance satisfactory to the Subordinated Creditor and the Senior Administrative Agent, entered by the Bankruptcy Court, which, among other things, approves the Subordinated Credit Agreement and the Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement, authorizes the Debtors to enter into the Subordinated Credit Agreement and the Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement and the financing contemplated therein, and grants Subordinated Superpriority Claims to GE Commercial Distribution Finance Corporation in the Cases.

“Subordinated Borrowing Interim Order” means the interim order, in form and substance satisfactory to the Subordinated Creditor and the Senior Administrative

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Agent, which, among other things, provides on an interim basis, approval for the Subordinated Credit Agreement and the Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement, authorizes the Debtors to enter into the Subordinated Credit Agreement and the Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement and the financing contemplated therein, and grants Subordinated Superpriority Claims to GE Commercial Distribution Finance Corporation in the Cases.

“Subordinated Credit Agreement” has the meaning specified in the Recitals.

“Subordinated Loan Documents” means, collectively, the Subordinated Credit Agreement, the Vendor Agreement, the Subordinated Borrowing Interim Order, the Subordinated Borrowing Final Order, any related order issued by the Bankruptcy Court in the Cases with respect to the Subordinated Obligations, and each of the documents referred to or contemplated by the Subordinated Credit Agreement, the Vendor Agreement and each of the other agreements, documents and instruments providing for or evidencing any Subordinated Obligation, and any other document or instrument executed or delivered at any time in connection with any Subordinated Obligation, including any subordination or intercreditor agreement, as each of the foregoing may be amended, restated, supplemented, modified, replaced, renewed, extended or Refinanced from time to time.

“Subordinated Obligations” means each and every debt, liability and obligation of every type and description (including, without limitation, the Subordinated Superpriority Claims) which the Debtors or any one or more of the Debtors or any other Obligor may now or at any time hereafter owe to the Subordinated Creditors or any one or more of the Subordinated Creditors under the Subordinated Loan Documents, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several, all interest thereon, and all fees, costs and other charges related thereto, all renewals, extensions and modifications thereof and any notes issued in whole or partial substitution therefor, and any Refinancing of any of the foregoing.

“Subordinated Priority Collateral” means (a) the cash of the Debtors held by GE Commercial Distribution Finance Corporation in the Risk Reserve, and (b) so long as no Funding Stoppage has occurred, the cash of the Debtors held by GE Commercial Distribution Finance Corporation in the Contingency Reserve Account, and (c) any item of merchandise which a Subordinated Creditor has financed for a dealer, repossessed from such dealer and delivered possession of such item to a Debtor (or, instead of having delivered possession of such item to a Debtor, such Subordinated Creditor has retained possession of such item) after the Petition Date pursuant to the Vendor Agreement until such time as such Debtor has repurchased such item of merchandise from such Subordinated Creditor pursuant to the terms of the Vendor Agreement.

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“Subordination Agreement” means this Subordination Agreement, as amended, restated, supplemented, modified or replaced from time to time.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“Vendor Agreement” means that certain Vendor Agreement dated as of June 1, 2004, among Genmar Holdings, for itself and on behalf of certain of the Debtors, and certain of the Subordinated Creditors, as amended by that certain Amendment to Vendor Agreement dated as of August 18, 2006, as amended by a Second Amendment to Vendor Agreement dated as of November 5, 2007, as amended by that certain Third Amendment to Vendor Agreement of even date with the Subordinated Credit Agreement among Genmar Holdings, certain of the Debtors, and certain of the Subordinated Creditors, as amended, supplemented, modified or replaced from time to time.

2. Subordination of Subordinated Obligations; Subordination of Liens in favor of the Subordinated Creditors Securing the Subordinated Obligations. The payment of all of the Subordinated Obligations is hereby expressly subordinated to the extent and in the manner hereinafter set forth to the Payment in Full of the Senior Obligations. The Subordinated Obligations shall continue to be subordinated to the Senior Obligations even if the Senior Obligations are subordinated, avoided or disallowed in the Cases, in any other Proceeding or otherwise under any Bankruptcy Law. Any Liens of any of the Subordinated Creditors in the Senior Collateral (other than Liens in the Subordinated Priority Collateral) are hereby expressly subordinated to the extent and in the manner hereinafter set forth to the Liens of the Senior Lender Parties in the Senior Collateral. Any Liens of any of the Subordinated Creditors in the Senior Collateral (other than in the Subordinated Priority Collateral) shall continue to be subordinated to the Liens of the Senior Lender Parties in the Senior Collateral even if the Liens of the Senior Lender Parties in the Senior Collateral are subordinated, avoided or disallowed in the Cases, in any other Proceeding or other under any Bankruptcy Law. Any Liens of the Senior Lender Parties in the Subordinated Priority Collateral are hereby expressly subordinated to the extent and in the manner hereinafter set forth to the Liens of GE Commercial Distribution Finance Corporation in the Subordinated Priority Collateral. Any Liens of the Senior Lender Parties in the Subordinated Priority Collateral shall continue to be subordinated to the Liens of GE Commercial Distribution Finance Corporation in the Subordinated Priority Collateral even if the Liens of GE Commercial Distribution Finance Corporation in the Subordinated Priority Collateral are subordinated, avoided or disallowed in the Cases, in any other Proceeding or under any other Bankruptcy Law.

3. Prohibited Payments in respect of the Subordinated Obligations. Until all of the Senior Obligations have been Paid in Full, none of the Subordinated Creditors shall demand, receive or accept any principal, interest or other payment from any Debtor or from any other Obligor in respect of any of the Subordinated Obligations, or exercise any right of or permit any setoff, recoupment or similar right in respect of the Subordinated Obligations; provided, however, (a) GE Commercial Distribution Finance Corporation may demand, receive or accept any Permitted Subordinated Obligation Payment, and (b) distributions of

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Reorganization Subordinated Securities may be made in connection with a confirmed plan of reorganization of the Debtors or a Debtor so long as (i) the applicable Subordinated Creditors shall have entered into such supplements or modifications to this Agreement as the Senior Administrative Agent shall reasonably request to reflect the continued subordination of such Reorganization Subordinated Securities to the Senior Obligations (or to any notes or other securities issued in substitution of all or any portion of the Senior Obligations) to the same extent as provided in this Agreement, and (ii) such Reorganization Subordinated Securities shall be delivered directly to the Senior Administrative Agent (to be held and/or applied by the Senior Administrative Agent to the Senior Obligations (or to any notes or other securities issued in substitution of all or any portion of the Senior Obligations) in such order of application as the Senior Lender Parties shall determine in its sole discretion) until all of the Senior Obligations (or any notes or other securities issued in substitution of all or any portion of the Senior Obligations) are Paid in Full.

4. Receipt and Turnover of Prohibited Payments in respect of the Subordinated Obligations. If any of the Subordinated Creditors receives any payment in respect of the Subordinated Obligations that the Subordinated Creditors are not entitled to receive under the provisions of this Subordination Agreement, such Subordinated Creditor will hold the amount so received in trust for the Senior Lender Parties and will forthwith turn over such payment to the Senior Administrative Agent in the form received (except for the endorsement of such Subordinated Creditor where necessary) for application to then-existing Senior Obligations (whether or not due), in such order and manner of application as the Senior Lender Parties may deem appropriate in their sole discretion. If any of the Subordinated Creditors exercises any right of setoff, recoupment or similar right which the Subordinated Creditors are not permitted to exercise under the provisions of this Subordination Agreement, such Subordinated Creditor will promptly pay over to the Senior Administrative Agent, in immediately available funds, an amount equal to the amount of the claims or obligations so setoff, recouped or otherwise obtained. If any of the Subordinated Creditors fails to make any endorsement required under this Subordination Agreement, the Senior Administrative Agent, or any of its officers, employees or agents on behalf of the Senior Administrative Agent, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest) for each of the Subordinated Creditors to make such endorsement in each such Subordinated Creditor’s name. If any Senior Lender Party receives any payment from the Debtors of any cash proceeds from the Debtors’ sale or other disposition of any of the merchandise identified on Exhibit A and contemporaneously with the Debtor’s payment of such cash proceeds to such Senior Lender Party the Debtors provide written notice to such Senior Lender Party that such cash proceeds are proceeds from the sale or other disposition of merchandise identified on Exhibit A, then such Senior Lender Party will hold the amount so received in trust and will forthwith turn over such amount to GE Commercial Distribution Finance Company for deposit into the Contingency Reserve Account.

5. Subordination of Liens in Senior Collateral held by the Subordinated Creditors. Each of the Subordinated Creditors agrees that it will not obtain, acquire or accept any Lien in the Senior Collateral or in any other assets or properties of any Debtor or any other Obligor other than the Lien expressly contemplated by the Subordinated Credit Agreement and

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the other Subordinated Loan Documents in effect as of the date of this Subordination Agreement. Any Liens now held or hereafter obtained, acquired or accepted by any of the Subordinated Creditors in any of the Senior Collateral (including, without limitation, the Lien expressly contemplated by the Subordinated Credit Agreement and the other Subordinated Loan Documents in effect as of the date of this Subordination Agreement) shall be subject and subordinate in all respects to the Liens which the Senior Lender Parties may now have or may hereafter obtain, acquire or accept in the Senior Collateral (other than the Lien of GE Commercial Distribution Finance Corporation with respect to the Subordinated Priority Collateral). Any Liens now held or hereafter obtained, acquired or accepted by any of the Senior Lender Parties in the Subordinated Priority Collateral (including, without limitation, the Lien expressly contemplated by the Senior Credit Agreement and the other Senior Loan documents in effect as of the date of this Subordination Agreement) shall be subject and subordinate in all respects to the Liens which GE Commercial Distribution Finance Corporation now has in the Subordinated Priority Collateral. The foregoing subordination shall be and remain effective at all times regardless of (a) the date, time, manner or order of grant, attachment or perfection of the respective Liens of the Senior Lender Parties and the Subordinated Creditors in the Senior Collateral, (b) any provision of the UCC or any other law or decision, (c) any provision of the Senior Loan Documents evidencing the Senior Obligations or any provision of the Subordinated Loan Documents evidencing the Subordinated Obligations, (d) the possession or control by any Senior Lender Party or by any Subordinated Creditor of all or any part of the Senior Collateral, (e) the manner by which either the Senior Lender Parties or any of the Subordinated Creditors obtained, acquired or accepted their respective Liens, whether by grant, possession, order, statute, operation of law, subrogation or otherwise, (f) any defect or deficiency in, or failure to perfect or lapse in perfection of, any Lien securing the Senior Obligations, (g) the provisions of any plan or plans of reorganization confirmed in any Proceeding, or (h) any other matter or circumstance whatsoever.

6. Prohibition on Enforcement Actions by the Subordinated Creditors; Prohibition on Contesting Senior Obligations or Liens in the Senior Collateral Securing the Senior Obligations. None of the Subordinated Creditors will commence or exercise any Enforcement Action unless and until the Senior Obligations have been Paid in Full; provided, however, a Subordinated Creditor may undertake a Permitted Subordinated Enforcement Action with respect to the Subordinated Priority Collateral without violating the foregoing provision. Each of the Subordinated Creditors agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any Case, any other Proceeding or any other action or proceeding, the validity, enforceability or priority of the Senior Obligations or the validity, enforceability, perfection or priority (as set forth in this Subordination Agreement) of any Lien held by the Senior Administrative Agent and/or the Senior Lender Parties in the Senior Collateral.

7. Senior Lender’s Rights and Remedies with respect to the Senior Collateral; Sales and Other Dispositions of the Senior Collateral; Release of Liens by Subordinated Creditors in the Senior Collateral; Etc..

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(a) Until the Senior Obligations have been Paid in Full, the Senior Administrative Agent and/or the Senior Lender Parties shall have the exclusive right to enforce rights and remedies with respect to the Senior Collateral (other than with respect to the Subordinated Priority Collateral) and to make determinations with respect to the release, disposition and/or restrictions with respect to the Senior Collateral without any notice to or consent of the Subordinated Creditors. In exercising rights and remedies with respect to the Senior Collateral (other than with respect to the Subordinated Priority Collateral), the Senior Administrative Agent and/or the Senior Lender Parties may enforce the provisions of the Senior Loan Documents, the Senior Secured Borrowing Interim Order, the Senior Secured Borrowing Final Order or any other order of the Bankruptcy Court in the Cases and exercise all rights and remedies available thereunder or otherwise available by law or agreement, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by the Senior Administrative Agent and/or the Senior Lender Parties to sell or otherwise dispose of the Senior Collateral (other than the Subordinated Priority Collateral), to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction. The Senior Administrative Agent and/or the Senior Lender Parties may take possession of, sell, dispose of, and otherwise deal with all or any part of the Senior Collateral (other than the Subordinated Priority Collateral), and may take or exercise any right or remedy available to the Senior Administrative Agent or the Senior Lender Parties with respect to the Senior Collateral (other than with respect to the Subordinated Priority Collateral), all without notice to or the consent of the Subordinated Creditors, except for any notice required by applicable law.

(b) The Senior Administrative Agent and the Senior Lender Parties shall have no duty to preserve, protect, care for, insure, take possession of, collect, dispose of, or otherwise realize upon any of the Senior Collateral, and in no event shall the Senior Administrative Agent or the Senior Lender Parties be deemed the agent of the Subordinated Creditors with respect to the Senior Collateral. All Proceeds received by the Senior Administrative Agent and the Senior Lender Parties with respect to the Senior Collateral may be applied by the Senior Lender Parties to the Senior Obligations, in such manner and order of application as the Senior Lender Parties shall determine in their sole discretion.

(c) Without limiting the generality of the foregoing, whether or not any of the Cases or any other Proceeding is then in effect, if (i) any Debtor or any other Obligor intends to sell or otherwise dispose of any of the Senior Collateral (other than the Subordinated Priority Collateral), whether in or outside the ordinary course of business, and (ii) the Senior Administrative Agent or the Senior Lender Parties consent to such sale or disposition, then the Subordinated Creditors shall be deemed to have automatically consented to such sale or disposition, to have automatically released any Lien any of the Subordinated Creditors may have in such Senior Collateral (other than in the Subordinated Priority Collateral) and to have irrevocably authorized the Senior

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Administrative Agent or its agents to file partial releases (and any related financing statements such as “in-lieu” financing statements under the UCC) with respect to any UCC financing statements of any of the Subordinated Creditors covering such Senior Collateral (other than the Subordinated Priority Collateral). In connection with any such sale or other disposition of any of the Senior Collateral (other than the Subordinated Priority Collateral), the applicable Debtor or Debtors shall retain the right to reject the Vendor Agreement as provided in the Vendor Agreement.

(d) Each of the Subordinated Creditors hereby irrevocably appoints the Senior Administrative Agent or any of its officers, employees or agents on behalf of the Senior Administrative Agent as attorney-in-fact for such Subordinated Creditor (which appointment is coupled with an interest) with the power, but not any duty, to prepare, execute, file and deliver any such release, termination, satisfaction or similar document with respect to any Lien of any of the Subordinated Creditors in any such Senior Collateral (other than the Subordinated Priority Collateral) which is being sold or otherwise disposed of as contemplated in this Section 7. In addition, upon request of the Senior Administrative Agent, each of the Subordinated Creditors will promptly execute and deliver to the Senior Administrative Agent any release, termination, satisfaction or similar document reasonably requested by the Senior Administrative Agent in connection with any such sale or disposition of the Senior Collateral (other than the Subordinated Priority Collateral).

(e) Each of the Subordinated Creditors agrees that (i) it will not take any action that would hinder or delay any exercise of any rights or remedies of the Senior Administrative Agent and/or the Senior Lender Parties under the Senior Loan Documents, the Senior Secured Borrowing Interim Order, the Senior Secured Borrowing Final Order or any other order of the Bankruptcy Court in the Cases, in any other Proceeding, or under this Subordination Agreement with respect to the Senior Collateral (other than with respect to the Subordinated Priority Collateral), (ii) it will not object to or challenge the manner in which the Senior Administrative Agent and/or the Senior Lender Parties seek to sell or otherwise dispose of the Senior Collateral (other than the Subordinated Priority Collateral), and (iii) no covenant, agreement or restriction contained in the Subordinated Loan Documents shall be deemed to restrict in any way the rights or remedies of the Senior Administrative Agent and/or the Senior Lender Parties with respect to the Senior Collateral (other than the Subordinated Priority Collateral) or to restrict in any way any sale or other disposition of the Senior Collateral (other than the Subordinated Priority Collateral) by the Senior Administrative Agent, the Senior Lender Parties, any Debtor or any other Obligor which is accomplished by, or consented to by, the Senior Administrative Agent or the Senior Lender Parties.

(f) In the event of a sale or other disposition of any of the Senior Collateral by any of the Senior Lender Parties as contemplated in this Section, the Senior Administrative Agent shall provide to the Subordinated Creditors an accounting of such sale or disposition and shall advise the Subordinated Creditors as to the Senior Lender

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Parties’ application of proceeds from such sale or other disposition to the Senior Obligations.

8. Cases and other Proceedings.

(a) In each of the Cases and in the event of any other Proceeding involving any Debtor or any other Obligor or any of their respective properties or assets, (i) all Senior Obligations shall be Paid in Full before any payment or distribution (whether made in cash, securities or other property) shall be made in any such Cases or other Proceeding with respect to or on account of any of the Subordinated Obligations (other than the Permitted Subordinated Obligation Payments), (ii) any payment or distribution which, but for this Subordination Agreement, otherwise would be payable or deliverable in any such Cases or other Proceeding in respect of the Subordinated Obligations (other than the Permitted Subordinated Obligation Payments), shall be paid or distributed directly to the Senior Administrative Agent to be held and/or applied to the Senior Obligations in such manner and order of application as the Senior Lender Parties shall determine in their sole discretion until all of the Senior Obligations have been Paid in Full, (iii) each of the Subordinated Creditors hereby irrevocably authorizes, empowers and directs the Debtors, all debtors-in-possession, receivers, trustees, liquidators, custodians, distribution agents, plan representatives, conservators or others having authority to make or otherwise effect any such payments or distributions to make such payments and distributions directly to the Senior Administrative Agent, and each of the Subordinated Creditors also hereby irrevocably authorizes and empowers the Senior Administrative Agent to demand, sue for, collect and receive each such payment or distribution, (iv) each of the Subordinated Creditors agrees to execute and deliver to the Senior Administrative Agent, for the benefit of the Senior Lender Parties, all such further documents or instruments as may be reasonably requested by the Senior Administrative Agent with respect to the authorizations described herein, and (v) each of the Subordinated Creditors hereby irrevocably authorizes, empowers and appoints the Senior Administrative Agent as its agent and attorney-in-fact (which appointment is coupled with an interest) with the power to execute, prepare, verify, deliver and file proofs of claim in respect of the Subordinated Obligations in connection with any Case or any other Proceeding upon the failure of the applicable Subordinated Creditor to do so prior to ten (10) days before the expiration of the time to file any such proof of claim; provided, however, the Senior Administrative Agent shall have no obligation or duty to execute, prepare, verify, deliver and/or file any such proof of claim and its action or inaction shall not give rise to any claims or liability against the Senior Administrative Agent or any of the Senior Lender Parties.

(b) The Senior Obligations shall continue to be treated as Senior Obligations and the provisions of this Subordination Agreement shall continue to govern the relative rights and priorities of the Senior Lender Parties and the Subordinated Creditors even if all or any part of the Senior Obligations is subordinated, set aside, avoided or disallowed in connection with any of the Cases or any other Proceeding or if any interest accruing on the Senior Obligations following the commencement of any of the Cases or any other

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Proceeding is otherwise disallowed or even if all or any part of the Liens in the Senior Collateral of the Senior Administrative Agent and/or the Senior Lender Parties securing the Senior Obligations are subordinated, set aside, avoided or disallowed in connection with any of the Cases or any other Proceeding. To the extent that any of the Senior Lender Parties receives any payments on or in respect of the Senior Obligations, including, without limitation, from proceeds of the Senior Collateral, which are subsequently invalidated, declared to be fraudulent or preferential, avoided, set aside and/or required to be repaid to a Debtor, trustee, receiver or any other party in any of the Cases, in any other Proceeding or otherwise under any Bankruptcy Law, state or federal law, common law, equitable cause, or otherwise, then, to the extent of such payments received, the Senior Obligations, or part thereof, intended to be satisfied shall not be or considered Paid in Full and such Senior Obligations and all related Liens in the Senior Collateral shall be revived and shall continue in full force and effect as if such payments had not been received by the Senior Lender Parties. This Subordination Agreement shall be reinstated in full force and effect if at any time any payment of any of the Senior Obligations is rescinded, invalidated, avoided or must otherwise be returned or set aside (including by settlement of any claim for such avoidance or rescission or similar recovery) by any holder of the Senior Obligations or any representative of such holder.

(c) In each of the Cases and in the event of any other Proceeding involving any Debtor or any other Obligor, each of the Subordinated Creditors agrees that it will:

(i) not object to, contest or oppose (or cause or support any other Person in objecting to, contesting or opposing), and hereby waives any right to object to, contest or oppose, any sale, transfer or other disposition of all or any part of the Senior Collateral (other than the Subordinated Priority Collateral) free and clear of Liens or other claims of the Subordinated Creditors under Section 363 of the Bankruptcy Code or any other law applicable to any such Cases or any other Proceeding if the applicable Senior Lender Parties having Liens in such Senior Collateral (other than the Subordinated Priority Collateral) have consented to or not otherwise opposed such sale, transfer or disposition and if (A) the net proceeds from any such sale, transfer or other disposition shall be applied by the Senior Lender Parties to the Senior Obligations in such order and manner of application as the Senior Lender Parties shall determine in their sole discretion, and (B) to the extent that the Senior Obligations are Paid in Full by the net proceeds from any such sale, transfer or other disposition, any Liens of any Subordinated Creditor shall attach to any such net proceeds remaining after Payment in Full of the Senior Obligations. In connection with any such sale, transfer or other disposition of any of the Senior Collateral (other than the Subordinated Priority Collateral), the applicable Debtor or Debtors shall retain the right to reject the Vendor Agreement as provided in the Vendor Agreement;

(ii) (A) at the request of the Senior Administrative Agent or the Senior Lender Parties, challenge, contest or otherwise object to any use of cash collateral or debtor-in-possession financing under Section 363 or 364 of the Bankruptcy

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Code or otherwise that is challenged, contested or otherwise objected to by the Senior Administrative Agent or the Senior Lender Parties, (B) not challenge, contest or otherwise object to (or support any other Person in challenging, contesting or otherwise objecting to) in any manner (1) any use of cash collateral or debtor-in-possession financing under Sections 363 or 364 of the Bankruptcy Code or otherwise (“DIP Financing”) that is consented to or provided by any Senior Lender Party, (2) any request by any Senior Lender Party for “adequate protection” under Section 361, 362, 363 or 364 of the Bankruptcy Code (or any other Bankruptcy Law), (3) any objection by any Senior Lender Party to any motion, relief, action or proceeding based on any claim by any of the Senior Lender Parties of lack of adequate protection, or (4) the filing or confirmation of any plan of reorganization or liquidation or similar dispositive restructuring plan which is supported by the Senior Lender Parties, (C) subordinate its Liens in the Senior Collateral (other than in the Subordinated Priority Collateral) to the Liens securing such DIP Financing (and all obligations relating thereto), to the extent the Liens securing the Senior Obligations are subordinated to or pari passu with such DIP Financing; provided, however, to the extent that the Senior Lender Parties obtain “adequate protection” under Section 361, 362, 363 or 364 of the Bankruptcy Code (or any other Bankruptcy Law) in connection with such DIP Financing, then such Subordinated Creditor shall be entitled to obtain corresponding, but subordinate, “adequate protection” under Section 361, 362, 363 or 364 of the Bankruptcy Code (or any other Bankruptcy Law) in connection with such DIP Financing;

(iii) not assert (or cause or support any other Person in asserting) in any manner any right any of the Subordinated Creditors may have to adequate protection of its interest in any Senior Collateral (other than in the Subordinated Priority Collateral) or to post-petition interest, absent written consent or direction of the Senior Administrative Agent or the Senior Lender Parties;

(iv) not seek (or cause or support any other Person seeking) to have the automatic stay of Section 362 of the Bankruptcy Code (or any similar stay under any other Bankruptcy Law) lifted, vacated or modified (in whole or in part) with respect to any Senior Collateral without the prior written consent of the Senior Administrative Agent or the Senior Lender Parties; provided, that, in the case of this clause (iv), if the Senior Administrative Agent or the Senior Lender Parties seek such aforementioned relief, each of the Subordinated Creditors hereby irrevocably consents thereto and shall join in any such motion or application seeking such relief if requested by the Senior Administrative Agent or the Senior Lender Parties;

(v) not assert or enforce (or cause any other Person to seek or support any other Person seeking), at any time when any Senior Obligation exists that has not been Paid in Full, any claim under Section 506(c) of the Bankruptcy Code

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senior to or on a parity with the Senior Obligations for costs or expenses of preserving or disposing of any Senior Collateral;

(vi) unless the Senior Administrative Agent or the Senior Lender Parties consent in writing, not seek (or cause any other Person, including any Debtor or any other Obligor, to seek or support any other Person, including any Debtor or any other Obligor seeking) the filing or confirmation of any plan of reorganization or liquidation or similar dispositive restructuring plan that (A) does not expressly provide for the Payment in Full of the Senior Obligations or (B) impairs in any way the rights and remedies of the Secured Senior Lender Parties under the Senior Loan Documents or under this Subordination Agreement;

(vii) not object to, contest or oppose (or cause any other Person to object to, contest or oppose or support any other Person in objecting to, contesting or opposing) in any manner the exercise by the Senior Lender Parties of the right (or amount) to “credit bid” any or all the Senior Obligations pursuant to Section 363(k) of the Bankruptcy Code or other Bankruptcy Law in any of the Cases or in any other Proceeding;

(viii) not request (or cause any other Person to request or support any other Person in requesting) judicial relief, in any of the Cases or in any other Proceeding or in any other court, that would in any manner hinder, impair, delay, limit or prohibit the exercise or enforcement of any right or remedy available to any Senior Lender Party or that would limit, impair, invalidate, avoid, set aside or subordinate any Senior Obligations or any Lien of any Senior Lender Party or any Senior Loan Document or grant the Liens of any of the Subordinated Creditors equal ranking to the Liens of the Senior Lender Parties in or to the Senior Collateral (other than with respect to the Subordinated Priority Collateral); and

(ix) not, directly or through an Affiliate, seek to provide DIP Financing to the Debtors (other than as contemplated in the Subordinated Credit Agreement) unless the Senior Administrative Agent or the Senior Lender Parties consent in writing.

The Senior Lender Parties agree that they will not object to, contest or oppose (or support any other Person in objecting to, contesting or opposing) the exercise by any of the Subordinated Creditors of the right to “credit bid” the Subordinated Obligations pursuant to Section 363(k) of the Bankruptcy Code or other applicable law in any of the Cases or in any other Proceeding if, and only if, such credit bid expressly includes Payment in Full of the Senior Obligations.

9. Subordinated Priority Collateral and Repossessed Merchandise. The Senior Lender Parties and the Subordinated Creditors are not in agreement as to their relative rights with respect to the repossessed merchandise identified on Exhibit A attached hereto. Each of the Senior Lender Parties and each of the Subordinated Creditors reserves all rights and claims it may have with respect to any of the items of merchandise identified on Exhibit A

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attached hereto and with respect to any funds in the Contingency Reserve Account in the event of the occurrence of a Funding Stoppage. Notwithstanding the foregoing, the Senior Administrative Agent agrees, on behalf of the Senior Lender Parties, that (i) none of the Senior Lender Parties shall have any right, title or interest in any funds in the Risk Reserve, and (ii) none of the Senior Lender Parties shall have any right, title or interest in any funds which were held in the Contingency Reserve Account and which were applied by GE Commercial Distribution Finance Corporation to the outstanding principal balance of advances under the Subordinated Credit Agreement or accrued interest thereon in accordance with the terms of the Subordinated Credit Agreement and this Subordination Agreement prior to the occurrence of a Funding Stoppage.

10. Insurance. The Senior Administrative Agent is entitled to instruct the Debtors to name the Senior Administrative as first loss payee and additional insured, and to instruct the Debtors to name GE Commercial Distribution Finance Corporation as second loss payee and additional insured, under any insurance policies maintained from time to time by any Debtor or any other Obligor. Unless and until the Senior Obligations are Paid in Full, the Senior Administrative Agent shall have the sole and exclusive right, subject to any rights of the Debtors or any other Obligor under the Senior Loan Documents, to adjust settlement for any insurance policy covering any Debtor, any other Obligor or any Senior Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any transfer in lieu of condemnation) affecting any Debtor, any other Obligor or any Senior Collateral. Unless and until the Senior Obligations have been Paid in Full, subject to any rights of the Debtors or any other Obligor under the Senior Loan Documents, all Proceeds of any such policy and any such award (or any payments with respect to a transfer in lieu of condemnation) if in respect of the Senior Collateral shall be paid directly to the Senior Administrative Agent for the benefit of the Senior Lender Parties for application to the Senior Obligations in such manner and order of application as the Senior Lender Parties shall determine in their sole discretion; provided, however, any Proceeds of such policy related solely to the Subordinated Priority Collateral shall be turned over by the Senior Administrative Agent to GE Commercial Distribution Finance Corporation. Until the Senior Obligations have been Paid in Full, if any of the Subordinated Creditors shall at any time receive any Proceeds of any such insurance policy or such award or payment in contravention of this Subordination Agreement, such Subordinated Creditor shall segregate and hold in trust and forthwith pay such Proceeds or such award or such payment to the Senior Administrative Agent in accordance with the terms of Section 4 of this Subordination Agreement.

11. Restrictive Legend; Deposit of Instruments with Senior Administrative Agent. The Subordinated Creditors will cause all notes, bonds, debentures, credit agreements, documents or other instruments evidencing the Subordinated Obligations or any part thereof to contain a specific legend thereon to the effect that the obligations thereby evidenced are subject to the provisions of this Subordination Agreement, and the Subordinated Creditors will mark their books conspicuously to evidence the subordination effected hereby.

12. Prohibition of Amendments to the Subordinated Obligations and the Subordinated Loan Documents; Prohibition of Transfer of the Subordinated Obligations.

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As of the date of this Subordination Agreement, the Subordinated Creditors are the lawful holder of the Subordinated Obligations and the Subordinated Loan Documents and have not transferred any interest therein to any other Person. Without the prior written consent of the Senior Administrative Agent, none of the Subordinated Creditors will assign, transfer or pledge to any other Person any of the Subordinated Obligations or any of its rights or obligations under or with respect to any of the Subordinated Obligations, the Subordinated Loan Documents or this Subordination Agreement. Without the prior written consent of the Senior Administrative Agent, none of the Subordinated Creditors shall agree to, or be a party to, any amendment, modification, supplement, extension, renewal, restatement, replacement, Refinancing, forgiveness or discharge of any of the Subordinated Obligations or of any of the Subordinated Loan Documents.

13. Amendments to Senior Obligations and Senior Loan Documents; Refinancing of Senior Obligations. The Senior Obligations and the Senior Loan Documents may be amended, restated, supplemented, modified, replaced, extended, renewed or Refinanced from time to time without any notice to or consent from any of the Subordinated Creditors, all without affecting the subordination and other provisions of this Subordination Agreement; provided, however, without the prior written consent of the Subordinated Creditors, the Senior Lender Parties shall not amend any of the Senior Loan Documents to (a) increase the interest rates applicable under the Senior Loan Documents to the Senior Obligations to an amount greater than three percent (3%) per annum above the interest rates applicable under the Senior Loan Documents to the Senior Obligations in effect as of the date of this Subordination Agreement (exclusive of fluctuations in the underlying indices for such rates and exclusive of the imposition of any default rate or default increment contemplated in the Senior Loan Documents in effect as of the date of this Subordination Agreement), and (b) add or amend any covenant, agreement or event of default under the Senior Loan Documents which directly restricts one or more of the Debtors from making Permitted Subordinated Obligation Payments to the extent permitted under the terms of this Subordination Agreement. If any of the Senior Obligations are being repaid in connection with a Refinancing, then such payments shall not be or be deemed to be a Payment in Full of such Senior Obligations, but instead, from and after the date of such Refinancing, all of the debts, liabilities and obligations of the Debtors or any other Obligor to the Senior Lender Parties under the Senior Loan Documents related to such Refinancing shall automatically be treated as Senior Obligations for purposes of this Subordination Agreement. If requested by any of the Senior Lender Parties providing any Refinancing of any of the Senior Obligations, each of the Subordinated Creditors shall promptly enter into an amended or replacement Subordination Agreement with such Senior Lender Parties with identical terms to this Subordination Agreement.

14. Waiver of Marshalling, Appraisal, Valuation and Other Similar Rights. Each of the Subordinated Creditors hereby agrees not to assert and hereby expressly waives any right which such Subordinated Creditor may have under applicable law or otherwise to demand, request, plead or otherwise assert or claim the benefit of any right of marshalling, appraisal, valuation or any other similar right with respect to the Senior Collateral. Each of the Subordinated Creditors also hereby agrees not assert and hereby expressly waives any right which such Subordinated Creditor may have under applicable law or otherwise to require the

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Senior Administrative Agent or the Senior Lender Parties to realize on the Senior Collateral or the Senior Obligations in any particular manner or order or to pursue collection or other rights and remedies against any Debtor, any other Obligor or any other Person in any particular manner or order.

15. Continuing Effect notwithstanding Changes in the Senior Obligations and the Senior Loan Documents. This Subordination Agreement shall constitute a continuing agreement of subordination, and the Senior Lender Parties may from time to time, without notice to or consent of any of the Subordinated Creditors, amend, restate, supplement, modify, replace, extend or renew any term of the Senior Obligations or of the Senior Loan Documents in reliance upon this Subordination Agreement. Without limiting the generality of the foregoing, the Senior Lender Parties may, at any time and from time to time, without notice to or consent of any of the Subordinated Creditors and without incurring responsibility to any of the Subordinated Creditors or impairing or releasing any of the Senior Lender Parties’ rights or benefits hereunder or any of the Subordinated Creditors’ liabilities and obligations hereunder:

(a) change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the amount of or the terms of any of the Senior Obligations or any Lien on any of the Senior Collateral or any other security or any guaranty thereof or any liability of any Debtor, any other Obligor or any other Person, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Senior Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Senior Obligations, any Liens held by any of the Senior Lender Parties or any of the Senior Loan Documents;

(b) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Senior Collateral (other than the Subordinated Priority Collateral) or any other security or any liability of any Debtor, any other Obligor or any other Person to the Senior Lender Parties, or any liability incurred directly or indirectly in respect thereof;

(c) settle or compromise any Senior Obligation or any other liability of any Debtor, any other Obligor or any other Person or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the Senior Obligations) in any manner and order determined by the Senior Lender Parties in their sole discretion;

(d) exercise or delay or refrain from exercising any right or remedy against any Debtor, any other Obligor or any other Person or any Senior Collateral (other than the Subordinated Priority Collateral) or any other security, or elect any right or remedy or otherwise deal freely with any Debtor, any other Obligor or any other Person or any Senior Collateral (other than the Subordinated Priority Collateral) or any other security or any liability incurred directly or indirectly in respect thereof; and

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(e) apply any sums received by the Senior Lender Parties, by whomsoever paid and however realized, to the Senior Obligations in such manner and order of application as the Senior Lender Parties shall deem appropriate in their sole discretion.

16. Obligations Unconditional. All rights, interests, agreements and obligations of the Senior Administrative Agent, the Senior Lender Parties and the Subordinated Creditors, respectively, under this Subordination Agreement shall remain in full force and effect irrespective of:

(a) any lack of validity, enforceability or priority of any of the Senior Obligations, any of the Senior Loan Documents, any of the Subordinated Obligations or any of the Subordinated Loan Documents;

(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations, the Senior Loan Documents, the Subordinated Obligations or the Subordinated Loan Documents, or any amendment, waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any of the Senior Obligations, the Senior Loan Documents, the Subordinated Obligations or the Subordinated Loan Documents;

(c) the commencement of the Cases or any other Proceeding in respect of any Debtor or any other Obligor;

(d) any other circumstance whatsoever which otherwise might constitute a defense available to, or a discharge of, any Debtor or any other Obligor in respect of any Senior Obligation, any Senior Lender Party, any Subordinated Obligation or any of the Subordinated Creditors.

17. No Commitment to Lend by the Senior Lender Parties. None of the provisions of this Subordination Agreement shall be deemed or construed to constitute or imply any commitment or obligation on the part of any of the Senior Lender Parties to make any future loans or other extensions of credit or financial accommodations to the Debtors, any Debtor or any other Obligor.

18. Notice. All notices and other communications hereunder shall be in writing and shall be (a) personally delivered, (b) transmitted by United States certified or registered mail, postage prepaid, (c) sent by overnight courier service, or (d) transmitted by telecopy, in each case addressed to the party to whom notice is being given at its address as set forth below:

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If to the Senior Administrative Agent:

Wells Fargo Bank, National Association MAC N9312-040 109 South Seventh Street 4th Floor Minneapolis, Minnesota 55402 Attention: Kimberly Leppanen Telecopier: (612) 673-8589 Telephone: (612) 673-8507 If to the Subordinated Creditors:

GE Commercial Distribution Finance Corporation 5595 Trillium Boulevard Hoffman Estates, Illinois 60192 Attention: Chief Risk Officer Telecopier (847)-747-7455 Telephone: (847) 747-7569

or at such other address as may hereafter be designated in writing by that party. All such notices or other communications shall be deemed to have been given (i) on the date received if delivered personally, (ii) four (4) business days after deposited in the United States mail, postage prepaid and properly addressed, if delivered by United States certified or registered mail, (iii) one (1) business day after delivery to such courier, postage prepaid and properly addressed for next day delivery, if delivered by overnight courier, or (iv) the date of transmission if delivered by telecopy transmitted on a business day before 3:00 p.m. (Minneapolis time) or, if not, on the next succeeding business day.

19. Conflict in Agreements. In the event of any conflict between the provisions of this Subordination Agreement and the provisions of the Senior Loan Documents or the Subordinated Loan Documents, the provisions of this Subordination Agreement shall govern and control.

20. Amendments; Waivers. No amendment, modification or waiver of any of the provisions of this Subordination Agreement by the parties hereto shall be deemed to be made unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the party making such waiver or the obligations of the other party to such party in any other respect or at any other time. None of the Debtors or any other Obligor shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Subordination Agreement.

21. Acknowledgments and Waivers.

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(a) Each of the Subordinated Creditors acknowledges and agrees that: (i) the Senior Administrative Agent and the Senior Lender Parties have not made any express or implied warranty or representation of any kind to any of the Subordinated Creditors, including with respect to the due execution, legality, validity, completeness, collectibility or enforceability of the Senior Credit Agreement, any of the other Senior Loan Documents, or of the Senior Obligations or the validity, perfection or priority of any Liens of the Senior Lender Parties in the Senior Collateral; (ii) the Senior Lender Parties shall be entitled to manage and supervise their loans and credit accommodations to the Debtors and the other Obligors in accordance with applicable law and as they deem appropriate in their sole discretion, without regard to the existence of any rights that any of the Subordinated Creditors may now or hereafter have; (iii) the Senior Lender Parties shall have no responsibility or duty of any kind to any of the Subordinated Creditors to act or refrain from acting in a manner which allows or results in the occurrence or continuance of a Senior Default; (iv) no right of the Senior Lender Parties to enforce the provisions of the Senior Loan Documents, the Senior Secured Borrowing Interim Order, the Senior Secured Borrowing Final Order or any other order of the Bankruptcy Court in the Cases or this Subordination Agreement shall at any time be impaired or prejudiced by any act or failure to act on the part of any Debtor or any Obligor or by any act or failure to act by any of the Senior Lender Parties or by any noncompliance by any Person of the provisions of this Subordination Agreement; and (v) the Senior Lender Parties shall not have any responsibility or liability to any of the Subordinated Creditors for, and each of the Subordinated Creditors hereby waives any claims which it may now or hereafter have against the Senior Lender Parties, arising out of any and all actions which any of the Senior Lender Parties takes or omits to take (including, without limitation, actions or omissions with respect to the creation, perfection or continuation of Liens in any Senior Collateral, actions or omissions with respect to the occurrence of any Senior Default, actions or omissions with respect to the foreclosure upon, sale, release, or disposition of, or failure to realize upon, any of the Senior Collateral, actions with respect to the pursuit or collection of any claim for all or any part of the Senior Obligations owing by the Debtors or any other Obligor under the Senior Credit Agreement, any other Senior Loan Document, the Senior Secured Borrowing Interim Order, the Senior Secured Borrowing Final Order or any other order of the Bankruptcy Court in the Cases or any other agreement related thereto, or actions or omissions with respect to the valuation, use, protection or release of any Senior Collateral or any of the Senior Obligations).

(b) The Senior Administrative Agent, for itself and on behalf of each of the Senior Lender Parties, acknowledges and agrees that: (i) the Subordinated Creditors have not made any express or implied warranty or representation of any kind to any of the Senior Lender Parties, including with respect to the due execution, legality, validity, completeness, collectibility or enforceability of the Subordinated Credit Agreement, any of the other Subordinated Loan Documents, or of the Subordinated Obligations or the validity, perfection or priority of any Liens of GE Commercial Distribution Finance Corporation in the Senior Collateral; and (ii) the Subordinated Creditors shall be entitled to manage and supervise their loans and credit accommodations to the Debtors and the other Obligors in accordance with applicable law and as they deem appropriate in their

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sole discretion, without regard to the existence of any rights that any of the Senior Lender Parties may now or hereafter have.

22. No Reliance by Subordinated Creditors on Senior Lender Parties. Each of the Subordinated Creditors acknowledges and agrees that such Subordinated Creditor, independently and without reliance on any of the Senior Lender Parties, and based on documents and information deemed by such Subordinated Creditor to be appropriate, has made its own credit analysis and decision to enter into the Subordinated Loan Documents and be bound by the terms of this Subordination Agreement. Each of the Subordinated Creditors further acknowledges and agrees that it will continue to make its own credit decision in taking or not taking any action under the Subordinated Loan Documents and this Subordination Agreement without any reliance on any of the Senior Lender Parties.

23. Binding Effect; Acceptance. This Subordination Agreement shall be binding upon, and shall inure to the benefit of, the Subordinated Creditors, the Senior Administrative Agent and the Senior Lender Parties, and their respective heirs, legal representatives, successors and assigns. If the Senior Administrative Agent resigns or is replaced, its successor shall be deemed to be the “Senior Administrative Agent” under this Subordination Agreement and to be party to this Subordination Agreement and shall have all of the rights of, and be subject to all of the obligations of, the “Senior Administrative Agent” under this Subordination Agreement. Notice of acceptance by the Senior Administrative Agent of this Subordination Agreement or of reliance by the Senior Administrative Agent or the other Senior Lender Parties upon this Subordination Agreement is hereby waived by the Subordinated Creditors.

24. Effectiveness; Continuing Nature of this Subordination Agreement; Severability. This Subordination Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of subordination and the Senior Lender Parties may continue, at any time and without notice to the Subordinated Creditors, to extend credit and other financial accommodations and lend monies to or for the benefit of the Debtors or any other Obligor constituting Senior Obligations in reliance hereon. Each of the Subordinated Creditors hereby waives any right it may have under applicable law to revoke or otherwise terminate this Subordination Agreement or any of the provisions of this Subordination Agreement. The terms of this Subordination Agreement shall survive, and shall continue in full force and effect, during and after the Cases and in any other Proceeding. Any provision of this Subordination Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions of this Subordination Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. All references to any Debtor or any other Obligor shall include such Debtor or such Obligor as debtor and debtor-in-possession and any receiver or trustee for such Debtor or such Obligor (as the case may be) in the Cases or during and after any other Proceeding. This Subordination Agreement shall terminate and be of no further force and effect on the date of Payment in Full of the Senior Obligations, subject to the provisions of Section 8(b) of this Subordination Agreement.

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25. Subrogation. With respect to the value of any payments or distributions in cash, property or other assets that any of the Subordinated Creditors pays over to the Senior Lender Parties under the terms of this Subordination Agreement, such Subordinated Creditor shall be subrogated to the rights of the Senior Lender Parties; provided, however, each Subordinated Creditor hereby waives all such rights of subrogation which it may acquire as a result of any such payment or distribution until the Senior Obligations have been Paid in Full.

26. Application of Payments by the Senior Lender Parties. All payments and proceeds received by the Senior Lender Parties in respect of the Senior Obligations may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Lender Parties shall determine in their sole discretion.

27. Further Assurances. Each of the Subordinated Creditors agrees that it shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form if requested) as the Senior Administrative Agent or the Senior Lender Parties may reasonably request to effectuate the terms of this Subordination Agreement.

28. SUBMISSION TO JURISDICTION; WAIVERS.

(a) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN THE BANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES NOT HAVE, OR ABSTAINS FROM, JURISDICTION, IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN HENNEPIN OR RAMSEY COUNTY, MINNESOTA. BY EXECUTING AND DELIVERING THIS SUBORDINATION AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:

(i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

(ii) WAIVES ANY DEFENSE OR FORUM NON CONVENIENS;

(iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 17; AND

(iv) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

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(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS SUBORDINATION AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFIED REFERRING TO THIS SECTION 27(b) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS SUBORDINATION AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(c) EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SUBORDINATION AGREEMENT OR ANY OTHER SENIOR LOAN DOCUMENTS OR SUBORDINATED LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO.

29. APPLICABLE LAW. THIS SUBORDINATION AGREEMENT, AND ANY CLAIM OR CONTROVERSY RELATING TO THE SUBJECT MATTER HEREOF WHETHER SOUNDING IN CONTRACT LAW OR TORT LAW, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MINNESOTA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

30. Specific Performance. The Senior Administrative Agent, the Senior Lender Parties and/or the Subordinated Creditors may demand specific performance of this Subordination Agreement. Each of the Senior Lender Parties and each of the Subordinated Creditors hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any

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action which may be brought by the Senior Administrative Agent, of the Senior Lender Parties or any of the Subordinated Creditors.

31. Headings. Section headings in this Subordination Agreement are included herein for convenience of reference only and shall not constitute a part of this Subordination Agreement for any other purpose or be given any substantive effect.

32. Counterparts. This Subordination Agreement may be executed in counterparts (and by different parties in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Subordination Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Subordination Agreement or such other document or instrument, as applicable.

33. Authorization. By its signature, each Person executing this Subordination Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Subordination Agreement.

34. No Impairment of Obligations of any Debtor or any other Obligor. Nothing in this Subordination Agreement shall impair, as between any Debtor or any other Obligor and the Senior Administrative Agent and the Senior Lender Parties, or as between any Debtor and any other Obligor and any of the Subordinated Creditors, the obligations as provided in the Senior Loan Documents and the Subordinated Loan Documents, respectively.

35. Provisions Solely to Define Relative Rights. The provisions of this Subordination Agreement are and are intended solely for the purpose of defining the relative rights of the Senior Administrative Agent and the Senior Lender Parties on the one hand and the Subordinated Creditors on the other hand. None of the Debtors, any other Obligor or any other creditor thereof shall have any rights hereunder and none of the Debtors nor any other Obligor may rely on the terms hereof.

Signature page follows

Signature Page to Subordination Agreement

IN WITNESS WHEREOF, the parties hereto executed this Subordination Agreement as of the date written above.

GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION By _______________________________________ Its ____________________________________ GE COMMERCIAL DISTRIBUTION FINANCE CANADA By _______________________________________ Its ____________________________________ GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD By _______________________________________ Its ____________________________________ GE FINANCE AND INSURANCE By _______________________________________ Its ____________________________________

Signature Page to Subordination Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent By _______________________________________ Its ____________________________________

Acknowledgment of Debtors

ACKNOWLEDGMENT BY THE DEBTORS

The undersigned, being the Debtors referred to in the foregoing Subordination Agreement, hereby (i) acknowledge receipt of a copy of the foregoing Subordination Agreement, (ii) agree to all of the terms and provisions of the foregoing Subordination Agreement, (iii) agree to and with the Senior Lender Parties that they shall make no payment in respect of the Subordinated Obligations that any of the Subordinated Creditors would not be entitled to receive under the provisions of the foregoing Subordination Agreement, (iv) agree that any such payment described in clause (iii) above will constitute an Event of Default under the Senior Obligations, (v) agree that the Debtors will not Refinance all or any part of the Subordinated Obligations without the prior written consent of the Senior Lender Parties, and (vi) agree to mark its books conspicuously to evidence the subordination of the Subordinated Obligations effected hereby.

GENMAR HOLDINGS, INC., MINSTAR, LLC, GENMAR INDUSTRIES, INC., WOOD MANUFACTURING COMPANY, INC., GENMAR MANUFACTURING OF KANSAS, INC., GENMAR MINNESOTA, INC., GENMAR TENNESSEE, INC. TRIUMPH BOATS, INC., VEC TECHNOLOGY, INC., GENMAR FLORIDA, INC., GENMAR TRANSPORTATION, INC., TRIUMPH BOAT RENTALS, L.L.C., GENMAR YACHT GROUP, L.L.C., GENMAR MICHIGAN, L.L.C., GENMAR IP LLC, VEC MANAGEMENT CO. L.L.C., VEC LEASING SERVICES,, L.L.C., WINDSOR CRAFT YACHTS, L.L.C., CARVER ITALIA, L.L.C., CARVER YACHTS INTERNATIONAL, L.L.C., MARINE MEDIA, LLC, and CARVER INDUSTRIES, L.L.C. By: _______________________________ Name: David J. Huls Title: Authorized Officer

fb.us.3937980.07

A-1

EXHIBIT A TO SUBORDINATION AGREEMENT

Schedule of Repossessed Merchandise


Current Location


Carver 43MOTORYAC CDRW1043I607 $427,822.52 Jerratt Bay

Marquis MARQUIS55LS CDRK7025D708 $954,259.80 Jerratt Bay

Carver 52VOYAGER CDRD2010C708 $731,614.00 Jerratt Bay

Carver 43 SUPERSPOR

CDRW2065I708 $405,083.83 Blackfish Canada



Marquis MARQUIS 55 CDRK7028F708 $887,892.20 Adventure Yachts

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Four Winns




Chapter 11

Case No. 09-43537


Case No. BKY 09-43537Chapter 11 Case


MEMORANDUM OF LAW IN SUPPORT OF JOINT MOTION FOR

AN EXPEDITED HEARING AND FOR AN ORDER AUTHORIZING DEBTORS TO ASSUME GE VENDOR AGREEMENT AND OBTAIN CREDIT SECURED BY A

JUNIOR LIEN ON PROPERTY OF THE ESTATES

INTRODUCTION

Debtors submit this Memorandum of Law in support of their joint motion for expedited

hearing and for an order authorizing them to assume their GE Vendor Agreement and to enter

into a DIP loan with GE Commercial Distribution Finance Corporation (“Motion”).

BACKGROUND

The facts in support of the relief requested are set forth in the verified Motion. All

capitalized terms have the meaning ascribed to them in the Motion.

1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, L.L.C., Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, L.L.C., Case No. 09-43547; Minstar, L.L.C., Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co. L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.

2

ARGUMENT

I. CAUSE EXISTS FOR AN EXPEDITED HEARING AND TO AUTHORIZE ASSUMPTION OF THE AGREEMENT THE THE DIP LOAN IN THE FIRST 20 DAYS OF THE CASES.

Local Rule 9006-1 provides that notice shall be given by delivery not later than 10 days

before the hearing date. Rule 2002(a)(2) provides, in pertinent part, “the clerk, or some other

person as the court may direct, shall give the debtor, the trustee, all creditors and indenture

trustees at least 20 days’ notice by mail of a proposed use, sale, or lease of property of the estate

other than in the ordinary course of business, unless the court for cause shown shortens the time

or directs another method of giving notice.” Local Rule 2002-1(b)(2) provides for limited

service on the service list unless debtor is selling all of or substantially all of its assets. Local

Rule 9006-1(e), however, provides that notice may be shortened for cause. With respect to relief

requested at the commencement of a case, Rule 6003 provides:

Except to the extent that relief is necessary to avoid immediate and irreparable harm, the court shall not, within 20 days after the filing of the petition, grant relief regarding the following:

(a) […] (b) a motion to use, sell, lease, or otherwise incur an obligation

regarding property of the estate, including a motion to pay all or part of a claim that arose before the filing of the petition, but not a motion under Rule 4001; and

(c) A motion to assume or assign an executory contract or unexpired lease in accordance with § 365.

(Emphasis added.)

Here, cause exists to reduce notice of the hearing to authorize assumption of the

Agreement because it is critical to the Debtors’ ability to obtain overall DIP financing and

preserve the going-concern value of the estates’ assets. The Debtors’ overall DIP financing with

Wells Fargo and Fifth Third Bank requires that Debtors reach agreement with GE Commercial

Distribution Finance Corporation (“GECDF”) under the Vendor Agreement. GECDF is only

3

willing to continue the Agreement if it is assumed and modified, as described in the Motion.

Thus assumption of the Agreement and Debtors’ ability to obtain financing for operations during

the case are inextricably linked. If Debtors cannot assume the Agreement and enter into a DIP

lending arrangement, Debtors will be unable to pay employees or continue their operations; their

dealers and customers will lose confidence and stop buying; Debtors’ assets will lose their going-

concern values; and Debtors’ brands and business reputations will suffer immediate and

irreparable harm.

II. ASSUMPTION OF THE AGREEMENT AND ENTERING INTO THE DIP LOAN ARE AN APPROPRIATE EXERCISE OF DEBTORS’ BUSINESS JUDGMENT.

The Agreement and is an executory contract within the meaning of Bankruptcy Code

§ 365, which authorizes assumption of an executory contract, subject to court approval. 11

U.S.C. § 365(a). In considering whether to approve a debtor’s request to assume an executory

contact, courts apply the business judgment test. In re Food Barn Stores, Inc., 107 F.3d 558, 567

n. 16 (8th Cir. 1996). The business judgment test considers whether the requested relief is in the

best interest of the debtor’s estate. Id.; see also In re Huff, 81 B.R. 531, 537 (Bankr. D. Minn.

1988).

Here, assumption of the Agreement is in the best interest of the Debtors’ estates. (1)

Debtors need the loans to their dealers provided under Agreement. (2) the GE DIP Loan allows

the Debtors to cure contract defaults and assure future performance while having access to 100%

of the revenue generated by sales to their dealers, which sales are financed by GECDF; and (3)

both allow Debtors to continue operations, which maximizes value of their assets and, by

extension, the return to the estates and to creditors.

4

III. USE OF ESTATES’ PROPERTY TO MODIFY AGREEMENT IS SUPPORTED BY SOUND BUSINESS JUSTIFICATION AND IS IN THE BEST INTEREST OF THE ESTATE AND ITS CREDITORS.

Section 363(b)(1) of the Bankruptcy Code requires court approval, after notice and

hearing, for sales outside of the ordinary course of business. 11 U.S.C. § 363(b)(1). In

interpreting section 363(b)(1), courts have held that a transaction involving property of the estate

generally should be approved so long as the debtor can demonstrate “some articulated business

justification for using, selling, or leasing property outside of the ordinary course of business.” In

re Continental Airlines, Inc., 780 F.2d 1223, 1226 (5th Cir. 1986); accord Four B. Corp. v. Food

Barn Stores, Inc. (In re Food Barn Stores, Inc.), 107 F.3d 558, 567 n.16 (8th Cir. 1997); In re

Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983); In re Crystalin LLC, 293 B.R. 455, 463-64

(B.A.P. 8th Cir. 2003). The court should give deference to a debtor’s application of its sound

business judgment in the use, sale or lease of property. In re Moore, 110 B.R. 924, 928 (Bankr.

C.D. Cal. 1990); In re Canyon Partnership, 55 B.R. 520, 524 (Bankr. S.D. Cal. 1985); In re

Curlew Valley Assocs., 14 B.R. 506, 513-14 (Bankr. D. Utah 1981).

To the extent that Debtors must use property of the estates to cure the defaults under the

Agreement, Debtors do so to preserve the going-concern value of the assets and maximize the

return to creditors, as described above. Accordingly, the use of property represents the sound

business judgment of Debtors and should be approved.

IV. THE COURT SHOULD AUTHORIZE THE DEBTORS TO ENTER INTO THE GE DIP LOAN.

The Debtors propose to obtain limited financing under the DIP Loan and to grant second

priority security interests and liens to GECDF to secure the Debtors’ obligations pursuant to

sections 364(c) and 364(d)(1) of the Bankruptcy Code. In addition, the Debtors request that the

5

Court grant GECDF superpriority administrative claim status over other administrative claims

pursuant to section 364(c)(1) of the Bankruptcy Code with respect to such postpetition financing.

Section 364(c) of the Bankruptcy Code provides:

If the trustee is unable to obtain unsecured credit allowable under section 503(b)(1) of this title as an administrative expense, the court, after notice and a hearing, may authorize the obtaining of credit or the incurring of debt – (1) with priority over any or all administrative expenses of the kind specified in section 503(b) or 507(b) of this title; (2) secured by a lien on property of the estate that is not otherwise subject to a lien; or (3) secured by a junior lien on property of the estate that is subject to a lien.

11 U.S.C. § 364(c).

Section 364(d) of the Bankruptcy Code provides:

(1) The court, after notice and a hearing, may authorize the obtaining of credit or the incurring of debt secured by a senior or equal lien on property of the estate that is subject to a lien only if (A) the trustee is unable to obtain such credit otherwise; and (B) there is adequate protection of the interest of the holder of the lien on the property of the estate on which such senior or equal lien is proposed to be granted.

11 U.S.C. § 364(d)(1).

When determining whether to approve financing secured under sections 364(c) and (d) of

the Bankruptcy Code, courts commonly considered four distinct factors:

1. whether the proposed financing represents an exercise of sound and reasonable business judgment;

2. whether alternative financing is available on any other basis;

3. whether the financing is in the best interests of the estate and its creditors; and

4. as a corollary to the first three points, whether any better offers, bids, or timely proposals are before the court.

In re Farmland Indus., Inc., 294 B.R. 855, 879 (Bankr. W.D. Mo. 2003); In re Phase-1 Molecular

Toxicology, Inc., 285 B.R. 494, 495 (Bankr. D.N.M. 2002); In re Western Pacific Airlines, Inc.,

223 B.R. 567, 572 (Bankr. D. Colo. 1997). Bankruptcy courts have also considered factors such

as whether (a) the proposed credit transaction is necessary to preserve the assets of the estate;

6

and (b) the terms of the transaction are fair, reasonable and adequate, given the circumstances.

See In re The Crouse Group, Inc., 71 B.R. 544, 549 (Bankr. E.D. Pa. 1987), accord, In re Sky

Valley, Inc., 100 B.R. 107, 112 (Bankr. N.D. Ga. 1988) (holding that debtor need not establish

that postpetition loan secured under section 364(d) is necessary to the preservation of the

debtor’s estate). The Debtors respectfully submit that they have satisfied all of these standards

under section 364(c) and (d), each of which is addressed separately below.

A. The DIP Loan Represents A Sound And Reasonable Business Judgment.

As detailed in the Motion, the value of the Debtors’ estates arises from the Debtors’

ability to continue to operate their businesses as a going concern. To maintain this going

concern value, the Debtor must assume the Modified Vendor Agreement, cure defaults, and

provide adequate assurance of future performance. The GE DIP Loan allows the Debtors to do

this. If the Debtors are unable to assume the agreement and continue financing for their dealers’

purchases of products, Debtors will be unable to continue operations, and the interest of creditors

and others in these cases will be irreparably harmed. Because the GE DIP Loan will allow the

Debtors to maintain their businesses as a going concern, the decision to enter into the GE DIP

Loan represents a sound business judgment that will ultimately inure to the benefit of the

Debtors and all of their creditors.

B. The Debtors Could Not Obtain Alternative Financing On Any Other Basis.

Sections 364(c) and (d) require that a debtor demonstrate that it was unable to obtain

credit otherwise. The courts have made clear that “[t]he statute imposes no duty to seek credit

from every possible lender before concluding that such credit is unavailable.” In re The

Snowshoe Co., Inc., 789 F.2d 1085, 1088 (4th Cir. 1986).

7

A facility for the uses proposed by the Debtors here cannot be obtained on an unsecured

basis when substantially all, if not all, of the Debtor's assets are subject to liens in favor of the

Senior DIP Lenders.

The Debtors would not be able to find sufficient funding to cure and assume the Modified

Vendor Agreement by obtaining or incurring additional unsecured credit even if the holder of

that unsecured debt would be entitled to an administrative expense and even if that debt would

have priority over any or all administrative expenses. Debtors do not believe that there is any

property of the Debtors that is not already subject to a lien. To the extent any such property

exists, Debtors do not believe it would be sufficient to secure the Debtors’ necessary financing.

Finally, it is the Debtors’ and their financial advisor’s opinion that no other lender would

lend to Debtors without receiving a senior lien on property of the Debtors. In today’s very

restricted credit market, it is highly unlikely that a lender is going to be willing to extend credit

under a secondary lien position.

Thus, Debtors are unable to obtain financing except if it is secured by a lien senior to all

other interests pursuant to 11 U.S.C. § 364(d)(1)(A).

C. Entry Into The GE DIP Loan Is In The Best Interests Of The Debtors’ Estates And Their Creditors.

Maintaining the Debtors’ businesses, which requires access to the GE DIP Loan is in the

best interests of the Debtors’ estates and their creditors because it allows Debtors to maintain the

going-concern value of their businesses. Conversely, failure to obtain the GE DIP Loan would

threaten ongoing operations.

D. There Are No Better Proposals Before the Court.

As detailed above, the Debtors have been unable to locate the type of financing needed

here on terms better than those offered pursuant to the GE DIP Loan. While the Debtors will

8

consider any additional financing proposals received prior to the hearing to consider entry of the

final order approving the GE DIP Loan, it is doubtful that any alternative will be available given

the facts and circumstances of this case.

E. The DIP Loan Is Necessary To Preserve Assets Of The Debtors’ Estates.

Obtaining credit under the GE DIP Loan is necessary to allow the Debtors to meet the

day-to-day costs associated with operating. Dealer financing is a Primary source of Debtor

operating funds, and without the Modified Vendor Agreement and GE DIP Loan, dealer

financing would cease. Where the purpose of a credit facility is to enable the debtor to maintain

the value of its estates, the facility should be approved. See In re Devlin, 185 B.R. 376, 378

(Bankr. M.D. Fla. 1995) (allowing chapter 11 debtor to incur secured debt pursuant to 364(d)(1)

to replace fixtures which would allow debtor’s hotel to continue operations to the benefit of all

creditors).

F. The Terms Of The GE DIP Loan Are Fair, Reasonable and Adequate.

The terms of the GE DIP Loan are fair, reasonable, and adequate under the circumstances

presented here. Where the purpose of a credit facility is to enable the debtor to maintain the

value of its estate, the facility should be approved. See In re First S. Sav. Ass’n, 820 F.2d 700,

710-15 (5th Cir. 1987). The GE DIP Loan is the product of extensive negotiations between the

GECDF, the Senior DIP Lenders, the Debtors and the Debtors’ professionals. Entry into the GE

DIP Loan does not materially prejudice the powers and rights that the Bankruptcy Code confers

for the benefit of all creditors, nor does it prevent motions by parties in interest from being

decided on their merits.

9

CONCLUSION

For the foregoing reasons, Debtor respectfully requests that this Court enter an order

granting the relief requested in the Motion.

Dated: June 11, 2009 /s/ James L. Baillie James L. Baillie (#3980) Faye Knowles (#56959) Ryan T. Murphy (#311972) 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Phone (612) 492-7000 Fax (612) 492-7077 [email protected] [email protected] [email protected] [email protected] ATTORNEYS FOR DEBTOR

4568361_1



Chapter 11

Case No. 09-43537


CERTIFICATE OF SERVICE

Ryan Murphy, under penalty of perjury, states that on June 11, 2009, he caused to be served the following:

1. Notice of Motion and Joint Motion for an Expedited Hearing and for Interim and Final Orders Authorizing Debtors to (I) Assume Vendor Agreement with GE Commercial Distribution Financing and (II) Obtain Credit Secured by a Junior Lien on Property of the Estates,

2. Memorandum of In Support of Joint Motion for an Expedited Hearing and for

Interim and Final Orders Authorizing Debtors to (I) Assume Vendor Agreement with GE Commercial Distribution Financing and (II) Obtain Credit Secured by a Junior Lien on Property of the Estates,

3. Proposed Order, and 4. Certificate of Service

by sending true and correct copies to all parties on the attached Service List as indicated therein. Dated: June 11, 2009 /s/ Ryan Murphy Ryan Murphy

1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case

No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, LLC, Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, LLC, Case No. 09-43547; Minstar, LLC, Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co., L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.

Genmar Holdings, Inc. and Related Debtors MASTER SERVICE LIST Bky No. 09-43537 NOTE: Served via Express Mail except those parties whose contact information includes an e-mail address were served via e-mail

4565297_3.doc

US Trustee and Other Required Parties

U.S. Trustee's Office 1015 US Courthouse 300 S Fourth St Minneapolis MN 55415 [email protected]

U.S. Trustee's Office 1015 US Courthouse 300 South Fourth Street Minneapolis MN 55415 [email protected]

IRS District Counsel 380 Jackson St, Ste 650 St Paul MN 55101-4804

Internal Revenue Service Wells Fargo Place 30 E 7th St, Mail Stop 5700 St Paul MN 55101

MN Department of Revenue Collection Enforcement 551 Bankruptcy Section 600 North Robert Street PO Box 64447 St Paul MN 55101-2228

US Attorney 600 US Courthouse 300 S Fourth St Minneapolis MN 55415

Minnesota Department of Economic Security 332 Minnesota Street St. Paul MN 55101-1351

Debtors

Genmar Holdings, Inc. and other Debtors Genmar Holdings, Inc. Attention: David Huls 2900 IDS Center 80 South Eighth Street Minneapolis MN 55402-2100 Fax: (612) 337-1930 [email protected]

Major Secured Creditors

Wells Fargo Bank, NA Michael R. Stewart Lyle Ward Sara Bruggeman Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh St Minneapolis MN 55402-3901 [email protected] [email protected] [email protected]

Fifth Third Bank James Markus 1700 Lincoln Suite 4000 Denver CO 80203 [email protected]

GE Commercial Distribution Finance Corporation Thomas J. Lallier Jeffrey D. Klobucar Foley & Mansfield, PLLP 250 Marquette Ave, Ste 1200 Minneapolis MN 55401 [email protected] [email protected]

GE Commercial Distribution Finance Michael C. Rupe King & Spalding LLP 1185 Avenue of the Americas New York NY 10036 [email protected]

Twin Lakes Community Bank PO Box 1229 301 South 1st St Flippin AR 72634

Textron Financial Corporation Attn: Bruce Keene PO Box 9354 Minneapolis MN 55440 [email protected]

Textron Financial Corporation Brian F. Leonard Leonard, O'Brien, Spencer, Gale & Sayre 100 South Fifth Street Suite 2500 Minneapolis MN 55402 [email protected]

Textron Financial Corporation Steven E. Fox Paul Traub Brett J. Nizzo Maura I. Russell Epstein Becker & Green PC 250 Park Ave New York NY 10177 [email protected] [email protected] [email protected] [email protected] Yamaha Motor Corporation USA Timothy D. Moratzka, Esq. 1400 AT&T Tower 901 Marquette Ave Minneapolis MN 55402 612-305-1414 (fax) [email protected]

Committee of Unsecured Creditors

Gary Potter EZ Loader Boat Trailers 6533 Hwy 126 N PO Box 270 Midway AR 42651 870-481-5138 (telephone) 870-481-5264 (fax) [email protected]

Timothy MacEachern Inland Plywood Company 375 N Cass Ave Pontiac MI 48342 248-334-4706 (telephone) 248-338-7407(Fax) [email protected]

Lester Turchin Dometic Corporation 2000 N Andrews Ave Pompano Beach FL 33069 954-633-3158 (telephone) 954-979-4414 (fax) [email protected]

Marcia M. Kull Volvo Penta of the Americas Inc. 1300 Volvo Penta Dr Chesapeake VA 23320 757-382-4024 (telephone) 757-382-4061 (fax)

[email protected]

Genmar Holdings, Inc. and Related Debtors MASTER SERVICE LIST Bky No. 09-43537 NOTE: Served via Express Mail except those parties whose contact information includes an e-mail address were served via e-mail

4565297_3.doc

John Pugh Marine Hardware Inc. 14560 NE 91st St PO Box 3099 Redmond WA 98052 425-883-0651 (telephone) 425-376-2811 (fax) [email protected]

Richard Schwenk Teleflex Inc 640 N Lewis Rd Limerick PA 19468 610-495-7011 (telephone) 610-495-2071 (fax) [email protected]

Rose Cardinal Tie Down Engineering Inc. 255 Villanova Dr Atlanta GA 30336 404-344-0000 x317 (telephone) 404-346-6814 (fax) [email protected]

Requests for Notice

Hagemeyer NA Cynthia J. Lowery Moore & Van Allen PLLC 40 Calhoun St, Ste 300 PO Box 22828 Charleston SC 29413-2828 [email protected]

Bombardier Recreational Products Kevin D. Hofman Halleland Lewis Nilan & Johnson PA 600 US Bank Plaza South 220 S Sixth St Minneapolis MN 55402 612-338-7858 (fax) [email protected]

Inland American Office Management Kevin M. Newman Menter Rudin & Trivelpiece PC 308 Maltbie St, Ste 200 Syracuse NY 13204-1498 315-474-4040 (fax) [email protected]

Volvo Penta of the Americas Inc./ Volvo Financial Service North America/ VFS Leasing Co. Cass S. Weil John K. Rossman Sarah E. Doerr Moss & Barnett PA 4800 Wells Fargo Center, 90 S 7th St Minneapolis MN 55402-4129 [email protected] [email protected] [email protected]

Lindy Lazar Gregory M. Luyt Bowerman Bowden Ford Clulo & Luyt 620-A Woodmere Traverse City MI 49686 231-941-8192 (fax) [email protected] [email protected]

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA

In re: Chapter 11 GENMAR HOLDINGS, INC., et al.,1 Case No. 09-43537 Debtors. Jointly Administered

AGREED INTERIM ORDER BY AND AMONG THE DEBTORS AND GE COMMERICAL DISTRBUTION FINANCE CORPORATION

PURSUANT TO 11 U.S.C. §§ 105, 363, 364, 365, 503 AND 507 (I) APPROVING ASSUMPTION OF VENDOR AGREEMENT AS MODIFIED (II) APPROVNG POSTPETITION FINANCING, (III) GRANTING LIENS AND PROVIDING

SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, AND (IV) SCHEDULING A FINAL HEARING

This matter having come before the Court (as defined below) upon the motion dated

June 11, 2009 (the “GE DIP Motion”) by the Debtors in the above-captioned Chapter 11 cases

(the “Chapter 11 Cases”), pursuant to Sections 105, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d),

365, 503 and 507 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq.

(the “Bankruptcy Code”), Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy

Procedure (the “Bankruptcy Rules”), [and Rule 4001-2 of the Local Rules of Bankruptcy

1 The Debtors consist of the following twenty-two (22) entities: (i) Genmar Holdings, Inc.,

Case No. 09-43537; (ii) Carver Industries, L.L.C., Case No. 09-43538; (iii) Carver Italia, L.L.C., Case No. 09-33773; (iv) Carver Yachts International, L.L.C., Case No. 09-33774; (v) Genmar Florida, Inc., Case No. 09-43539; (vi) Genmar Industries, Inc., Case No. 09-43540; (vii) Genmar IP, L.L.C., Case No. 09-43541; (viii) Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; (ix) Genmar Michigan, L.L.C., Case No. 09-43543; (x) Genmar Minnesota, Inc., Case No. 09-33775; (xi) Genmar Tennessee, Inc., Case No. 09-43544; (xii) Genmar Transportation, Inc., Case No. 09-43545; (xiii) Genmar Yacht Group, LLC, Case No. 09-43546; (xiv) Marine Media, L.L.C., Case No. 09-43547; (xv) Minstar, L.L.C., Case No. 09-43548; (xvi) Triumph Boats, Inc., Case No. 09-43550; (xvii) Triumph Boat Rentals, L.L.C., Case No. 09-43551; (xviii) VEC Leasing Services, L.L.C., Case No. 09-43552; (xix) VEC Management Co. L.L.C., Case No. 09-43553; (xx) VEC Technology, Inc., Case No. 09-43554; (xxi) Windsor Craft Yachts, L.L.C., Case No. 09-43555; (xxii) Wood Manufacturing Company, Inc., Case No. 09-43556 (each a “Debtor” and, collectively, the “Debtors” or each a “Borrower” and, collectively, the “Borrowers”).

2

Practice and Procedure of the United States Bankruptcy Court for the District of Minnesota

(“Local Rules”)], seeking, inter alia, entry of this interim order (“Interim Order”):

(i) authorizing the Debtors to obtain secured postpetition working capital financing

on a superpriority basis (the “DIP Facility”) pursuant to the terms and conditions of that certain

Debtors-In-Possession Working Capital Financing Agreement (as amended, supplemented,

restated, or otherwise modified from time-to-time, the “DIP Working Capital Finance

Agreement”) by and among the Borrowers, as borrower, and GE Commercial Distribution

Financing Corporation and certain affiliates, as lenders (collectively, the “Lenders”),

substantially in the form of Exhibit D annexed to the GE DIP Motion;

(ii) authorizing the Borrowers to execute and deliver the DIP Working Capital

Finance Agreement, by and among the Borrowers and the Lenders, and to perform such other

acts as may be necessary or desirable in connection with the DIP Working Capital Finance

Agreement;

(iii) authorizing the Debtors to assume, enter into and to execute and deliver the

Vendor Agreement dated August 18, 2006 (“Vendor Agreement”) as modified by the Second

Amendment To Vendor Agreement dated June [__], 20092 (the “Second Amended Vendor

Agreement” and, with the DIP Working Capital Finance Agreement, the “Transaction

Documents”), by and among the Borrowers and the Lenders, and to perform such other acts as

may be necessary or desirable in connection with the Transaction Documents;

(iv) granting the Transaction Documents and all obligations owing thereunder to the

Lenders (collectively, and including all “Obligations” as described in the DIP Working Capital

2 A copy of the Vendor Agreement is attached to the GE DIP Motion as Exhibit B and a copy of the

Second Amended Vendor Agreement is attached to the GE DIP Motion as Exhibit C.

3

Finance Agreement, the “DIP Obligations”) and granting the Lenders superpriority

administrative expense claim status in these Chapter 11 Cases;

(v) granting to the Lenders automatically and properly perfected security interests in

and liens on all of the DIP Collateral (as defined below), which liens, subject only to the

(a) Subordination Agreement;3 (b) Carve-Out (as defined below); and (c) properly perfected

Permitted Liens (as defined in the Senior Lending Parties’ Credit Agreement), are senior to all

pre- and postpetition liens in the DIP Collateral;

(vi) authorizing the Borrowers to pay the principal, interest, fees, expenses and other

amounts payable under the Transaction Documents as such become due, including, without

limitation, continuing commitment fees, closing fees, servicing fees, facility fees, administrative

agent’s fees, the reasonable fees and disbursements of the Lenders’ attorneys, advisors,

accountants, and other consultants, all to the extent provided in and in accordance with the terms

of the Transaction Documents;

(vii) providing for repayment in full in cash of all obligations owed to the Lenders

under the prepetition Vendor Agreement (as defined herein); and

(ix) scheduling a final hearing (the “Final Hearing”) to consider the relief requested in

the GE DIP Motion and approving the form of notice with respect to the Final Hearing.

The Court having considered the GE DIP Motion, the Affidavit of ____________, the

Debtors’ _______________________, in support of the Chapter 11 petitions and first day

motions (the “Affidavit”), the exhibits attached thereto, the Transaction Documents and the

evidence submitted at the interim hearing held on June 16, 2009 (the “Interim Hearing”); and

notice of the Interim Hearing having been given in accordance with Bankruptcy Rules 4001 and

3 Capitalized terms used but not defined herein shall have the meanings ascribed to them either in the

(i) GE DIP Motion or (ii) DIP Working Capital Finance Agreement.

4

9014; and the Local Rules; and all objections, if any, to the interim relief requested in the

GE DIP Motion having been withdrawn, resolved or overruled by the Court; and it appearing to

the Court that granting the interim relief requested is necessary to avoid immediate and

irreparable harm to the Debtors and their estates pending the Final Hearing, and otherwise is fair

and reasonable and in the best interests of the Debtors and their estates; and after due

deliberation and consideration, and for good and sufficient cause appearing therefor;

BASED UPON THE RECORD ESTABLISHED AT THE INTERIM HEARING BY THE DEBTORS, THE COURT HEREBY MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW:4

A. Commencement of Case. On June 1, 2009 (the “Petition Date”) the Debtors filed

voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy

Court for the District of Minnesota (the “Court”) commencing these Chapter 11 Cases. The

Debtors are continuing in the management and operation of their business and properties as

debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. No trustee

or examiner has been appointed in these Chapter 11 Cases and the United States Trustee (the

“U.S. Trustee”) has not yet appointed the official committee of unsecured creditors in these

Chapter 11 Cases (the “Statutory Committee”).

B. Jurisdiction and Venue. This Court has jurisdiction, pursuant to 28 U.S.C.

§§ 157(b) and 1334, over these proceedings, and over the persons and property affected hereby.

Consideration of the GE DIP Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2).

The statutory predicates for the relief sought herein are sections 105, 361, 362, 363, and 364 of

the Bankruptcy Code and Rules 2002, 4001 and 9014 of the Bankruptcy Rules. Venue for these

4 Where appropriate in this Agreed Interim Order, findings of fact shall be construed as conclusions of

law and conclusions of law shall be construed as findings of fact pursuant to Bankruptcy Rule 7052.

5

Chapter 11 Cases and proceedings on the GE DIP Motion is proper in this district pursuant to

28 U.S.C. §§ 1408 and 1409.

C. Findings Regarding Postpetition Financing.

(i) Request for Postpetition Financing. The Debtors seek authority to enter

into the DIP Facility on the terms described herein and in the Transaction Documents. At the

Final Hearing, the Debtors will seek final approval of the proposed postpetition financing

arrangements pursuant to one or more proposed final orders (collectively, the “Final Order”),

which shall be in form and substance acceptable to the Lenders in the case of any order

approving the DIP Facility, and notice of which Final Hearing and Final Order will be provided

in accordance with this Interim Order.

(ii) Priming of Liens. The priming of the liens on the prepetition collateral,

subordinate only to the Senior Lender Parties and the Permitted Liens (as defined in the Senior

Lender Parties’ Credit Agreement), under Section 364(d) of the Bankruptcy Code, as

contemplated by the DIP Facility and as more fully described below, will enable the Debtors to

obtain the DIP Facility and to continue to operate their respective businesses for the benefit of

their estates and creditors.

(iii) Need for Postpetition Financing. The Debtors’ need to obtain credit on an

interim basis pursuant to the DIP Facility is immediate and critical to enable the Debtors to

continue operations and to administer and preserve the value of their estates. The ability of the

Debtors to finance their operations, maintain business relationships with their vendors and

customers, and otherwise finance their operations requires the availability of working capital

from the DIP Facility, the absence of any one of which would immediately and irreparably harm

the Debtors, their estates and creditors, and the possibility for a successful reorganization.

6

(iv) No Credit Available on More Favorable Terms. Given the Debtors’

current financial condition, financing arrangements, and capital structure, and the present state of

the economy, and the limited availability of credit being provided by lenders in general, the

Debtors are unable to obtain financing to facilitate the purchase of their boats and related

merchandise from sources other than the Senior Lender Parties5 and the Lenders on terms more

favorable than provided for in the DIP Facility. The Debtors have been unable to obtain

unsecured credit allowable under Bankruptcy Code Section 364(b)(1) as an administrative

expense. The Debtors have also been unable to obtain sufficient credit: (a) having priority over

that of administrative expenses of the kind specified in Sections 503(b), 507(a) and 507(b) of the

Bankruptcy Code or (b) secured by a lien on property of the Debtors and their estates that is not

otherwise subject to a lien. Financing on a postpetition basis is not otherwise available without

granting the Lenders: (1) perfected security interests in and second priority liens on (each of

which is more fully described below) all of the tangible and intangible property of the Borrower;

(2) superpriority claims and liens; and (3) the other protections set forth in this Interim Order.

(v) Use of Proceeds of the DIP Facility. As a condition to entry into the DIP

Working Financing Agreement and the extension of credit under the DIP Facility, the Lenders

require, and the Debtors have agreed, that proceeds of the DIP Facility shall be used, in each case

in a manner consistent with the terms and conditions of the Transaction Documents, solely to

make advances (each an “Advance”, and collectively “Advances”) to or on behalf of one or more

Borrowers from time to time in order to: (i) provide working capital to such Borrower or

Borrowers for Acceptable Proceed Uses in an amount equal to 10% of the face amount of all

invoices attached to the Notice of Advance (as defined below) submitted in connection with each

5 By order of the Court entered on June 1, 2009, the Debtors entered into a debtor-in-possession financing

agreement with, among others, Wells Fargo, N.A., that addresses certain of the Debtors’ other financial needs.

7

Advance, (ii) to enable such Borrower or Borrowers to finance the repayment to Lender of

Deficiency Amounts (as defined in the Vendor Agreement), (iii) to fund 100% of any Short Sale

Amount (as defined in the Vendor Agreement) which such Borrower is obligated to repay to

Lender from time to time pursuant to the terms of the Vendor Agreement and (iv) in the Lenders’

sole and absolute discretion, in such additional amounts and for such other purposes as the

Lender shall determine (collectively, the “Interim Financing”).

D. Sections 506(c) and 552(b). In light of the Lenders’ agreement to subordinate

their liens and superpriority claims to the Carve-Out and Permitted Liens, and upon the entry of a

Final Order (a) the Lenders may be entitled to a waiver of any “equities of the case” claims under

Section 552(b) of the Bankruptcy Code, and (b) the Lenders may be entitled to a waiver of the

provisions of Section 506(c) of the Bankruptcy Code (which waiver shall be without prejudice to

the contention of the Lenders that Section 506(c) of the Bankruptcy Code does not apply to

secured claims incurred pursuant to Section 364 of the Bankruptcy Code).

E. Good Faith of the Agents and the Lenders.

(i) Willingness to Provide Financing. The Lenders have indicated a

willingness to provide financing to the Borrowers subject to: (a) the entry of this Interim Order

and the Final Order; (b) approval of the terms and conditions of the DIP Facility and the

Transaction Documents; and (c) entry of findings by this Court that such financing is essential to

the Debtors’ estates, that the Lenders are extending credit to the Debtors pursuant to the

Transaction Documents in good faith, and that the Lenders’ claims, superpriority claims, security

interests, liens, and other protections granted pursuant to this Interim Order and the Transaction

Documents will have the protections provided in Section 364(e) of the Bankruptcy Code and will

8

not be affected by any subsequent reversal, modification, vacatur, amendment, re-argument, or

reconsideration of this Interim Order or any other order.

(ii) Business Judgment and Good Faith Pursuant to Section 364(e). The

terms and conditions of the DIP Facility and the Transaction Documents and the fees paid and to

be paid thereunder are fair, reasonable, and the best available to the Debtors under the

circumstances, reflect the Debtors’ exercise of prudent business judgment consistent with thier

fiduciary duties, and are supported by reasonably equivalent value and consideration. The DIP

Facility was negotiated in good faith and at arms’ length among the Debtors and the Lenders.

Credit to be extended under the DIP Facility shall be deemed to have been so allowed, advanced,

made, used, or extended in good faith, and for valid business purposes and uses, within the

meaning of Section 364(e) of the Bankruptcy Code, and the Lenders are therefore entitled to the

protection and benefits of Section 364(e) of the Bankruptcy Code and this Interim Order.

F. Notice. Notice of the Interim Hearing and the emergency relief requested in the

GE DIP Motion has been provided by the Debtors, whether by facsimile, email, overnight

courier, or hand delivery, to certain parties in interest, including: (i) the U.S. Trustee; (ii) the

Securities and Exchange Commission; (iii) the Internal Revenue Service; (iv) the parties

included on the Debtors’ list of [twenty (20) largest unsecured creditors]; (v) counsel to the

Lenders; (vi) all other known parties with liens of record on assets of the Debtors as of the

Petition Date; (vii) all financial institutions at which the Debtors maintains deposit accounts;

(viii) [counsel to Debtors’ controlling shareholder]; and (ix) all other parties required to receive

notice pursuant to Bankruptcy Rules 2002, 4001 or 9014 or requesting to receive notice prior to

the date hereof. The Debtors have made reasonable efforts to afford the best notice possible

9

under the circumstances and such notice is good and sufficient to permit the interim relief set

forth in this Interim Order.

Based upon the foregoing findings and conclusions, the GE DIP Motion, and the record

before the Court with respect to the GE DIP Motion, and good and sufficient cause appearing

therefor,

IT IS HEREBY ORDERED THAT:

1. Interim Financing Approved. The GE DIP Motion is granted to the extent

provided herein, the Interim Financing is authorized and approved, subject to the terms and

conditions set forth in this Interim Order.

2. Objections Overruled. All objections to the interim relief sought in the GE DIP

Motion to the extent not withdrawn or resolved are hereby overruled.

3. Vendor Agreement Assumed. The Debtors are authorized, pursuant to Section

365 of the Bankruptcy Code, to assume the Vendor Agreement as modified by the Second

Amendment to Vendor Agreement. The Debtors must cure all defaults as part of their

assumption of the Vendor Agreement.

DIP Facility Authorization

4. Authorization of the DIP Financing. The Interim Financing is hereby approved.

The Debtors are expressly and immediately authorized and empowered to execute and deliver

the Transaction Documents and to incur and to perform the DIP Obligations in accordance with,

and subject to, the terms of this Interim Order and the Transaction Documents, and to deliver all

instruments and documents that may be required or necessary for the performance by the Debtors

under the DIP Facility and the creation and perfection of the DIP Liens (as defined below). The

Debtors are hereby authorized to pay, in accordance with this Interim Order, the principal,

10

interest, fees, expenses, legal fees, and other amounts described in the Transaction Documents

and all other documents comprising the DIP Facility as such become due and without need to

obtain further Court approval, including, without limitation, closing fees, letter of credit fees

(including issuance, fronting, and other related charges), unused facility fees, commitment fees,

servicing fees, audit fees, facility fees, administrative agent’s fees, the reasonable fees and

disbursements of the Lenders’ attorneys, advisors, financial advisors, accountants, and other

consultants, all to the extent provided in the Transaction Documents. Upon execution and

delivery, the Transaction Documents shall represent valid and binding obligations of the Debtors,

enforceable against the Debtors and their estates in accordance with their terms, provided,

however, that certain obligations of certain of the Debtors that arise as a result of the assumption

of the Vendor Agreement are limited to the extent set forth in the DIP Working Capital Finance

Agreement.

5. Authorization to Borrow. Until the DIP Termination Date (as defined below) and

to prevent immediate and irreparable harm to the Debtors’ estates, the Debtors are hereby

authorized to request Advances upon the entry of the Interim Order under the DIP Working

Capital Finance Agreement subject to the terms, conditions, limitations on availability and

reserves set forth in the DIP Working Capital Finance Agreement, as applicable, and this Interim

Order.

6. Postpetition Liens. To secure the DIP Obligations, effective immediately upon

entry of this Interim Order, pursuant to Sections 361, 364(c)(2), 364(c)(3), and 364(d) of the

Bankruptcy Code, the Lenders, are hereby granted valid, binding, enforceable, non-avoidable,

and automatically and properly perfected postpetition security interests in and second priority

liens (“DIP Liens”) on all present and future property of the Estate, including both real and

11

personal property, whether now held or hereafter acquired by the Estate, and including

specifically and without limitation (A) all of the Estate’s now owned or hereafter acquired

accounts, chattel paper and electronic chattel paper, deposit accounts, documents, equipment,

general intangibles, goods, instruments, investment property, intellectual property rights,

inventory intellectual property rights, inventory, letter-of-credit rights, letters of credit, and any

items in any restricted, lockbox or collateral accounts; together with (i) all substitutions and

replacements for and products of any of the foregoing; (ii) in the case of all goods, all accessions;

(iii) all accessories, attachments, parts, and repairs now or hereafter attached or affixed to or used

in connection with any goods; (iv) all warehouse receipts, bills of lading and other documents of

title now or hereafter covering any of the foregoing; (v) all collateral subject to the lien of any

security document in favor of the Lenders and the Senior Lender Parties; (vi) any money, or

other assets of any of the Debtors received by any of the Debtors or that may or hereafter come

into possession, custody, or control of the Lenders or the Senior Lender Parties; (vii) proceeds of

any and all of the foregoing; (viii) books and records of each Debtor, including all mail or

electronic mail addressed to each Debtor; (ix) all of the foregoing, whether now owned or

existing or hereafter acquired or arising or in which each Debtor now has or hereafter acquires

any rights; and (x) all proceeds and products of such collateral security acquired by the Estate,

(B) all real estate of the Estate, and (C) all proceeds, products, rents, issues and profits of all of

the foregoing (all herein referred to as the “DIP Collateral”), which lien and security interest

shall have priority over all other liens, claims, and expenses, including administrative expenses,

in these Chapter 11 Cases, except as otherwise set forth below or in DIP Working Capital

Finance Agreement and also subject to the Carve-Out (as defined below) and all other non-

12

avoidable pre-petition contractual security interests in assets of the Debtors which are Permitted

Liens, which were duly perfected on the Petition Date.

7. DIP Lien Priority. The DIP Liens are valid, automatically, and properly

perfected, non-avoidable, senior in priority, and superior to any security, mortgage, collateral

interest, lien, or claim to any of the DIP Collateral, except that the DIP Liens shall be, as

described above in paragraph 6, junior and subordinate only to (a) the Liens in favor of the

Senior Lender Parties securing the Senior Obligations except for the Liens securing the Lenders’

Lien in the Priority Collateral, which shall be senior to the Liens of the Senior Lender Parties in

the Priority Collateral, (b) the Carve-Out and (c) all non-avoidable Permitted Liens in assets of

the Borrowers which were duly perfected on the Petition Date. Pursuant to Section 364(d) of the

Bankruptcy Code, the DIP Liens shall be senior to prepetition liens on all DIP Collateral, with

the limited exception of the Permitted Liens. Except as expressly set forth herein, the DIP Liens

shall not be made subject to or pari passu with any lien or security interest heretofore or

hereinafter granted in these Chapter 11 Cases or any other subsequent proceedings under the

Bankruptcy Code, including, without limitation, any Chapter 7 proceeding if these Chapter 11

Cases are converted to a case under Chapter 7 of the Bankruptcy, and shall be valid and

enforceable against any trustee appointed in these Chapter 11 Cases, upon the conversion of

these Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, and/or upon the

dismissal of these Chapter 11 Cases. The DIP Liens shall not be subject to Sections 510, 549 (to

the extent a successful action is brought against any DIP Lender), or 550 of the Bankruptcy

Code. No lien or interest avoided and preserved for the benefit of the estates pursuant to Section

551 of the Bankruptcy Code shall be pari passu with or senior to the DIP Liens.

13

8. Superpriority Claims. Upon entry of this Interim Order, the Lenders are hereby

granted, pursuant to Section 364(c)(1) of the Bankruptcy Code, an allowed superpriority

administrative expense claim in these Chapter 11 Cases (collectively, the “DIP Superpriority

Claim”) for all DIP Obligations: (a) except as set forth herein, senior to and with priority over

any and all administrative expense claims and unsecured claims against the Debtors or their

estates in these Chapter 11 Cases, at any time existing or arising, of any kind or nature

whatsoever, including, without limitation, administrative expenses of the kinds specified in or

ordered pursuant to Bankruptcy Code Sections 105, 326, 328, 330, 331, 365, 503(a), 503(b),

507(a), 507(b) (except as set forth herein), 546(c), 546(d), 726 (to the extent permitted by law),

1113 and 1114, and any other provision of the Bankruptcy Code, as provided under Section

364(c)(1) of the Bankruptcy Code; and (b) which shall at all times be senior to the rights of the

Debtors and their estates, and any successor trustee or other estate representative to the extent

permitted by law. Notwithstanding the foregoing, the DIP Superpriority Claim shall be subject

only to the administrative expense claims of the Senior Lender Parties and the Carve Out.[ To

the limited extent that certain of the Debtors reject, pursuant to Section 365 of the Bankruptcy

Code, the Vendor Agreement in connection with a sale of such Debtor’s assets pursuant to

Section 363 of the Bankruptcy Code, the Lenders shall waive any administrative expense claim it

is permitted under Sections 503 and 507 of the Bankruptcy Code based on such Debtor’s prior

assumption of the Vendor Agreement, provided, however, the DIP Liens granted pursuant to this

Interim Order and the DIP Working Capital Finance Agreement shall in no way be altered by

this waiver.]

9. No Obligation to Extend Credit. The Lenders shall have no obligation to make

any loan or advance under the Transaction Documents, if the maximum amount of outstanding

14

credit to the Borrowers under this DIP Facility at any one point in time shall be ten million

dollars ($10,000,000) (the “Commitment”). Each Borrower’s ability to obtain Advances from

Lender under the credit established by this DIP Facility shall automatically expire on the DIP

Termination Date, unless extended by written agreement of both Lender and the Borrowers and

if the Borrower has not provided notice in writing of an Advance to the Lender not later than

1:00 p.m. ( Central Standard time) on any business day. Each Advance shall be made on the

business day of receipt of such Notice of Advance and the Borrowers may request only one

Advance per business day.

10. Use of Proceeds. From and after the entry of the Interim Order, the Debtors shall

use Advances under the DIP Facilities only for the purposes specifically set forth in this Interim

Order and the Transaction Documents. Immediately upon the entry of the Interim Order, the

Debtors are authorized to request Advances.

11. Section 507(b) Reservation. Nothing herein shall impair or modify the

application of Section 507(b) of the Bankruptcy Code in the event that the adequate protection

provided to the Lenders hereunder is insufficient to compensate for any loss in value of their

respective interests in the Pre-Petition Loans not constituting Senior Superprioity Claims.

Provisions Common to DIP Facility

12. Amendments. The Debtors are hereby authorized, without further notice, motion,

application to, order of, or hearing before, this Court, to enter into agreements with the Lenders

providing for any non-material modifications to the Transaction Documents or of any other

modifications to the Transaction Documents necessary to conform the Transaction Documents to

this Interim Order; provided, however, that notice of any material modification or amendment to

the Transaction Documents shall be provided to counsel for any Statutory Committee, counsel to

the U.S. Trustee, counsel to the Lenders, and any entity whose rights are affected by the

15

modification, each of whom shall have five (5) business days from the date of such notice within

which to object in writing to such modification or amendment. If a Statutory Committee, the

U.S. Trustee or an affected entity timely objects to any material modification or amendment to

the DIP Documents, then such modification or amendment shall only be permitted pursuant to

order of this Court. All material modifications shall be filed with the Bankruptcy Court.

13. Financial Statements. The Debtors shall provide the Lenders with the Financial

Statements as set forth in section 7 of the DIP Working Capital Financing Agreement.

14. Automatic Stay. The Lenders may file an affidavit with the Court certifying the

occurrence of an Event of Default. The Lenders shall, contemporaneously with the filing of such

affidavit with the Court, serve via facsimile or e-mail a copy of the affidavit on the Debtors, and

their counsel. If the Debtors fail to file a response with the Court, which response must be

limited to whether or not an Event of Default has occurred, within forty-eight (48) hours of the

filing of such affidavit, the Court may enter an order granting the Lenders relief from the

automatic stay and permitting the Lenders to enforce their rights and remedies under the DIP

Working Finance Agreement, Second Amendment to the Vendor Agreement and/or under

applicable law. In the event the Debtors timely file a response, the Lenders shall be entitled to an

expedited hearing on their motion for relief from the stay, such hearing to occur within two (2)

business days of the filing of such response.

15. Perfection of DIP Liens. This Interim Order shall be sufficient and conclusive

evidence of the validity, perfection, and priority of all liens granted herein, without the necessity

of filing or recording any financing statement, mortgage, notice, or other instrument or document

which may otherwise be required under the law or regulation of any jurisdiction or the taking of

any other action (including, for the avoidance of doubt, entering into any deposit account control

16

agreement) to validate or perfect (in accordance with applicable non-bankruptcy law) the DIP

Liens, or to entitle the Lenders to the priorities granted herein. Notwithstanding the foregoing,

the Lenders are authorized to file, it their sole discretion as they deem necessary, such financing

statements, mortgages, notices of liens, and other similar documents to perfect in accordance

with applicable non-bankruptcy law or to otherwise evidence the DIP Liens, and all such

financing statements, mortgages, notices, and other documents shall be deemed to have been

filed or recorded as of the Petition Date; provided, however, that no such filing or recordation

shall be necessary or required in order to create or perfect the DIP Liens. The Debtors are

authorized and directed to execute and deliver promptly upon demand to the Lenders all such

financing statements, mortgages, notices, and other documents as the Lenders may reasonably

request. The Lenders may file a photocopy of this Interim Order as a financing statement with

any filing or recording office or with any registry of deeds or similar office, in addition to or in

lieu of such financing statements, notice of lien or similar instrument.

16. Proceeds of Subsequent Financing. If the Debtors, any trustee, any examiner with

enlarged powers, or any responsible officer subsequently appointed in these Chapter 11 Cases,

shall obtain credit or incur debt pursuant to Bankruptcy Code Sections 364(b), 364(c) or 364(d)

or in violation of the Transaction Documents at any time prior to the indefeasible repayment in

full in cash of all DIP Obligations and the termination or the Lenders’ obligation to extend credit

under the DIP Facility, and such facility is secured by any DIP Collateral, then (i) all the cash

proceeds derived from such credit or debt shall immediately be turned over to the Lenders to be

applied pursuant to section 2 of the DIP Working Capital Facility Agreement.

17. Maintenance of DIP Collateral. Until the indefeasible payment in full in cash of

all DIP Obligations pursuant to the terms of the Transaction Documents, and the termination of

17

the Lenders’ obligation to extend credit under the DIP Facility, the Debtors are required to insure

the DIP Collateral as required under the DIP Facility or as otherwise required by the Transaction

Documents.

18. Disposition of DIP Collateral. The Debtors shall not sell, transfer, lease,

encumber or otherwise dispose of any portion of the DIP Collateral other than in the ordinary

course of business without the prior written consent of the Lenders (to the extent that consent is

required under the Transaction Documents or DIP Agreements), except as otherwise provided

for in the Transaction Documents or otherwise ordered by the Court.

19. DIP Termination Date. On the DIP Termination Date all DIP Obligations shall be

immediately due and payable, and all commitments to extend credit under the DIP Facility will

terminate pursuant to the terms of the Transaction Documents. For purposes of this Interim

Order, the “DIP Termination Date” shall mean the earliest of (i) the Maturity Date, (ii) the DIP

Availability Amount Termination Date (as such term is defined in the Senior Credit Agreement

in effect on the Closing Date), or (iii) the occurrence of an Event of Default.

20. Rights and Remedies Upon Event of Default. Subject to the terms of the

Subordination Agreement and the Transaction Documents, upon the occurrence of a Default, the

Lenders shall have all rights and remedies of a secured party under the UCC as in effect in any

applicable jurisdiction and other applicable law and all the rights and remedies set forth in this

DIP Facility. The Lenders may terminate any obligations it has under this DIP Facility and/or

declare any and all DIP Obligations immediately due and payable without notice or demand. In

addition, upon the occurrence of any Default, the Lenders may file an affidavit with the

Bankruptcy Court certifying the occurrence of the Default. The Lenders shall,

contemporaneously with the filing of such an affidavit with the Bankruptcy Court, serve a copy

18

of the affidavit on the Borrowers, and their counsel, via facsimile. If the Borrowers fail to file a

response with the Bankruptcy Court, which response must be limited to whether or not a Default

has occurred, within forty-eight (48) hours of the filing of such affidavit, the Bankruptcy Court

may enter an order granting the Lender relief from the automatic stay and permitting the Lender

to enforce its rights and remedies under this Agreement and the other Loan Documents and/or

under applicable law. In the event the Borrowers timely file a response, the Lender shall be

entitled to an expedited hearing on their motion from relief from the stay, such hearing to occur

within two (2) Business Days of the filing of such response.

21. Good Faith Under Section 364(e) of the Bankruptcy Code; No Modification or

Stay of this Interim Order. The Lenders have acted in good faith in connection with this Interim

Order and their reliance on this Interim Order is in good faith. Based on the findings set forth in

this Interim Order and the record made during the Interim Hearing, and in accordance with

Section 364(e) of the Bankruptcy Code, in the event any or all of the provisions of this Interim

Order are hereafter modified, amended or vacated by a subsequent order of this Court or any

other court, the Lenders are entitled to the protections provided in Section 364(e) of the

Bankruptcy Code. Any such modification, amendment, or vacatur shall not affect the validity

and enforceability of any advances previously made or made hereunder, or lien, claim, or priority

authorized or created hereby. Any liens or claims granted to the Lenders hereunder arising prior

to the effective date of any such modification, amendment or vacatur of this Interim Order shall

be governed in all respects by the original provisions of this Interim Order, including entitlement

to all rights, remedies, privileges and benefits granted herein.

22. DIP and Other Expenses. The Debtors are authorized to pay all reasonable out-

of-pocket expenses of the Lenders in connection with the DIP Facility, as provided in the

19

Transaction Documents, whether or not the transactions contemplated hereby are consummated,

including, without limitation, legal, accounting, collateral examination, monitoring and appraisal

fees, financial advisory fees, fees and expenses of other consultants, and indemnification and

reimbursement of fees and expenses. Payment of all such fees and expenses shall not be subject

to allowance by the Court. Professionals for the Lenders shall not be required to comply with the

U.S. Trustee fee guidelines.

23. Indemnification. The Borrowers agree to indemnify, hold harmless, and defend

the Lenders (each such Person being an “Indemnitee”) from and against all Liabilities (including

brokerage commissions, fees and other compensation) that may be imposed on, incurred by, or

asserted against any such Indemnitee in any matter relating to or arising out of, in connection

with or as a result of (i) any Loan Document, any Obligation (or the repayment thereof), or the

use or intended use of the proceeds of any Advance, (ii) any commitment letter, proposal letter or

term sheet with any Person or any contractual obligation, arrangement, or understanding with

any broker, finder, or consultant, in each case entered into by or on behalf of any Borrower or

any affiliate of any of them in connection with any of the foregoing, (iii) any actual or

prospective investigation, litigation, or other proceeding, whether or not brought by any such

Indemnitee or any of its Related Persons, any holders of securities or creditors (and including

attorneys’ fees in any case), whether or not any such Indemnitee, Related Person, holder, or

creditor is a party thereto, and whether or not based on any securities or commercial law or

regulation or any other requirement of law or theory thereof, including common law, equity,

contract, tort, or otherwise, or (iv) any other act, event or transaction related, contemplated in or

attendant to any of the foregoing (collectively, the “Indemnified Matters”). Furthermore, the

Borrowers waive and agree not to assert against any Indemnitee any right of contribution with

20

respect to any Liabilities that may be imposed on, incurred by, or asserted against any Related

Person.

24. Proofs of Claim. The Lenders will not be required to file proofs of claim in these

Chapter 11 Cases for any claim allowed herein. Notwithstanding any order entered by the Court

in relation to the establishment of a bar date in these Chapter 11 Cases to the contrary, the

Lenders are hereby authorized and entitled, in their sole discretion, but not required, to file (and

amend and/or supplement, as they see fit) a proof of claim and/or aggregate proofs of claim in

these Chapter 11 Cases for any claim allowed herein. Any order entered by the Court in relation

to the establishment of a bar date in these Chapter 11 Cases shall not apply to the Lenders.

25. Carve-Out. As used in this Interim Order, the “Carve-Out” means (i) the unpaid

fees of the clerk of the Bankruptcy Court and of the United States Trustee pursuant to 28 U.S.C.

§ 1930(a) and (b); and (ii) the aggregate allowed unpaid fees and expenses payable under

Sections 330 and 331 of the Bankruptcy Code to professional persons retained pursuant to an

order of the Court by the Borrowers (“Professionals”), or any statutory committee appointed in

the Borrowers’ Cases (other than the fees and expenses, if any, of any such professional persons

incurred, directly or indirectly, in respect of, arising from, or relating to, the initiation or

prosecution of any action for preferences, fraudulent conveyances, other avoidance power claims

or any other claims or causes of action against the Administrative Agent or any of the other

Lender Parties or with respect to the DIP Working Capital Finance Agreement or any of the

other Loan Documents, the Stipulation, the Obligations, or the Pre-Petition Indebtedness;

provided, however, that the Carve-Out may be used to investigate such claims and causes of

action), not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate.

21

26. No Direct Obligation to Pay Professional Fee and Disbursements. The Lenders

shall not be responsible for the payment or reimbursement of any fees or disbursements of any

Professionals incurred in connection with these Chapter 11 Cases under any chapter of the

Bankruptcy Code.

27. Payment of Allowed Professional Fees Prior to the Event of Default. Prior to the

DIP Termination Date, the Debtors shall be permitted to pay Professionals fees in accordance

with orders of this Court. The amounts so paid shall not reduce the Carve Out.

28. Payment of Carve Out After An Event of Default. Any payment or

reimbursement made on or after the DIP Termination Date in respect of any Professional fees

and disbursements to Professionals shall permanently reduce the Professionals Carve-Out on a

dollar-for-dollar basis. Any funding of the Carve-Out by the Lenders shall be added to and made

a part of the DIP Obligations and secured by the DIP Collateral and otherwise entitled to the

protections granted under this Interim Order, the Transaction Documents, the Bankruptcy Code

and applicable law.

29. Limitations on the DIP Facility and the Professionals Carve-Out. The DIP

Facility, the DIP Collateral, and the Carve-Out may not be used in connection with: (i)

preventing, hindering, or delaying any of the Lenders’ enforcement or realization upon any of the

DIP Collateral once an Event of Default (as defined in the DIP Working Capital Finance

Agreement) has occurred; (ii) selling or otherwise disposing of DIP Collateral without the

consent of the Lenders; (iii) except to the extent permitted by the terms of the Transaction

Documents, using or seeking to use any insurance proceeds constituting DIP Collateral without

the consent of the Lenders; or (iv) incurring further indebtedness without the prior consent of the

Lenders, except to the extent permitted under the Transaction Documents. Further, the DIP

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Facility, the DIP Collateral, and the Professionals Carve-Out may not be used in connection

with: (i) objecting, challenging, litigating, opposing, or seeking to subordinate or recharacterize

in any way any claims, liens, DIP Collateral held by the Lenders; (ii) asserting, commencing or

prosecuting any claims or causes of action, including, without limitation, any actions under

Chapter 5 of the Bankruptcy Code, against any of the Lenders or any of their respective

affiliates, agents, attorneys, advisors, professionals, officers, directors, and employees; or (iii)

prosecuting an objection to, contesting, or opposing in any manner, or raising any defenses to,

the validity, extent, amount, perfection, priority, character, or enforceability of any of the DIP

Obligations or the DIP Liens or any other rights or interests of any of the Lenders.

30. Payment of Compensation. Nothing herein shall be construed as a consent to the

allowance of any Professionals fees or expenses of any Professionals or shall affect the right of

the Lenders to object to the allowance and payment of such fees and expenses.

31. No Third Party Rights. Except as explicitly provided for herein, this Interim

Order does not create any rights for the benefit of any third party, creditor, equity holder or any

direct, indirect, or incidental beneficiary.

32. Section 506(c) Claims; Liens on Avoidance Actions. Upon entry of the Final

Order, to the extent such relief is granted, no costs or expenses of administration that have been

or may be incurred in these Chapter 11 Cases at any time shall be charged against the Lenders or

any of their respective claims, the DIP Collateral pursuant to Sections 105 or 506(c) of the

Bankruptcy Code, or otherwise, without the prior written consent, as applicable, of the Lenders,

and no such consent shall be implied from any other action, inaction, or acquiescence by any

such agents or lenders. Notwithstanding anything to the contrary contained herein, no liens on

Avoidance Actions are granted by this Interim Order.

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33. No Marshaling/Applications of Proceeds. The Lenders shall not be subject to the

equitable doctrine of “marshaling” or any other similar doctrine with respect to any of the DIP

Collateral.

34. Discharge Waiver. The Borrowers agree that (i) its obligations hereunder shall

not be discharged by the entry of an order confirming any plan of reorganization (and the

Borrowers, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waive any such

discharge) and (ii) the Superpriority Claim granted to the Lenders pursuant to the Orders and the

DIP Liens granted to the Lenders pursuant to the Orders and the Transaction Documents shall

not be affected in any manner by the entry of an order confirming any plan of reorganization.

35. Rights Preserved. Notwithstanding anything herein to the contrary, the entry of

this Interim Order is without prejudice to, and does not constitute a waiver of, expressly or

implicitly: (a) the Lenders’ right to seek any other or supplemental relief in respect of the

Debtors; (b) any of the rights of Lenders under the Bankruptcy Code or under non-bankruptcy

law, including, without limitation, the right to (i) request a modification of the automatic stay of

Section 362 of the Bankruptcy Code; (ii) request dismissal of these Chapter 11 Cases, conversion

of these Chapter 11 Cases to a case under Chapter 7, or appointment of a Chapter 11 trustee or

examiner with expanded powers; or (iii) propose, subject to the provisions of Section 1121 of the

Bankruptcy Code, a Chapter 11 plan or plans; or (c) any other rights, claims or privileges

(whether legal, equitable or otherwise) of the Lenders; provided, however, that the exercise of

the foregoing rights in subparagraphs (a), (b) and (c) shall be subject to the Subordination

Agreement. Notwithstanding anything herein to the contrary, the entry of this Interim Order is

without prejudice to, and does not constitute a waiver of, expressly or implicitly, the Debtors’,

the Statutory Committee’s or any party in interest’s right to oppose any of the relief requested in

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accordance with the immediately preceding sentence except as expressly set forth in this Interim

Order.

36. No Waiver by Failure to Seek Relief. The failure of the Lenders to seek relief or

otherwise exercise their rights and remedies under this Interim Order, the Transaction

Documents, or applicable law, as the case may be, shall not constitute a waiver of any of the

rights hereunder, thereunder, or otherwise of the Lenders.

37. Binding Effect of Interim Order. Immediately upon execution by this Court, the

terms and provisions of this Interim Order shall become valid and binding upon and inure to the

benefit of the Debtors and the Lenders, any Statutory Committee or any other committee,

appointed in these Chapter 11 Cases, and all other parties in interest and their respective

successors and assigns, including any trustee or other fiduciary hereafter appointed in these

Chapter 11 Cases or upon dismissal of these Chapter 11 Cases.

38. No Modification of Interim Order. Until and unless the DIP Obligations have

been indefeasibly paid in full in cash, the Debtors irrevocably waive the right to seek and shall

not seek or consent to, directly or indirectly: (a) without the prior written consent of the Lenders,

(i) any modification, stay, vacatur or amendment to this Interim Order; or (ii) a priority claim for

any administrative expense or unsecured claim against the Debtors (now existing or hereafter

arising of any kind or nature whatsoever, including, without limitation any administrative

expense of the kind specified in Sections 503(b), 506(c), 507(a) or 507(b) of the Bankruptcy

Code) in these Chapter 11 Cases, equal or superior to the Senior Superpriority Claim, other than

the Carve-Out; (b) without the prior written consent of the Lenders, any lien on any of the DIP

Collateral with priority equal or superior to the DIP Liens, except as specifically provided in the

Transaction Documents; or (c) without the prior written consent of the Lenders, any lien on any

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of the DIP Collateral with priority equal or superior to the prepetition liens. The Debtors

irrevocably waive any right to seek any amendment, modification or extension of this Interim

Order without the prior written consent, as provided in the foregoing, of the Lenders and no such

consent shall be implied by any other action, inaction or acquiescence of the Lenders.

39. Continuing Effect of Term Loan DIP Facility; Subordination Agreement. The

Debtors and the Lenders each shall be bound by, and in all respects of the DIP Facility shall be

governed by, and be subject to all the terms, provisions and restrictions of the Subordination

Agreement, except as may be expressly modified by this Interim Order.

40. Setoff and Recoupment. Notwithstanding anything to the contrary contained

herein, but subject to the terms of the Subordination Agreement, the Lenders (including each

branch office thereof) of any of them is hereby authorized, without notice or demand (each of

which is hereby waived by the Borrowers), at any time and from time-to-time during the

continuance of any Event of Default and without further order of or application to the

Bankruptcy Court, to set off and apply any and all deposits (whether general or special, time or

demand, provisional or final) (other than payroll, trust or tax accounts) at any time held in the

Reserve Accounts against any DIP Obligation of the Borrowers incurred after the Petition Date,

whether or not any demand was made under any of the Transaction Documents with respect to

such DIP Obligation and even though such DIP Obligation may be unmatured. The Lenders

agree to promptly to notify the Borrowers after any such setoff and application made by the

Lenders; provided, however, that the failure to give such notice shall not affect the validity of

such setoff and application. The Lenders acknowledge and agree that the Lenders have no right

to setoff any Advance made or to be made under this DIP Facility to the Borrowers or any

proceeds of any refinancing provided or to be provided by the Lenders the Vendor Agreement on

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behalf of any dealer of the Borrower against any of the DIP Obligations or any other debts,

liabilities or obligations owing by the Borrowers or any of the Borrowers to the Lenders or any

affiliate of the Lenders other than unpaid Charges (as such term is defined in the Vendor

Agreement), Risk Reserves (as such term is defined in the Vendor Agreement) and Deficiency

Amounts (as such term is defined in the Vendor Agreement). The rights under this paragraph are

in addition to any other rights and remedies (including other rights of setoff) that the Lenders

may have under Bankruptcy Code sections 546(c), 545 and 553 and/or the equitable doctrine of

recoupment.

41. Limits on Lender Liability. Nothing in this Interim Order or in any of the

Transaction Documents, or any other documents related to this transaction shall in any way be

construed or interpreted to impose or allow the imposition upon the Lenders of any liability for

any claims arising from any and all activities by the Debtors in the operation of its business in

connection with the Debtors’ post-petition restructuring efforts.

42. Interim Order Controls. In the event of any inconsistency between the terms and

conditions of the Transaction Documents and this Interim Order, the provisions of this Interim

Order shall govern and control.

43. Survival. The provisions of this Interim Order and any actions taken pursuant

hereto shall survive entry of any order which may be entered: (a) confirming any plan of

reorganization in these Chapter 11 Cases; (b) converting these Chapter 11 Cases to a case under

Chapter 7 of the Bankruptcy Code; (c) to the extent permitted by applicable law, dismissing

these Chapter 11 Cases; or (d) pursuant to which this Court abstains from hearing these Chapter

11 Cases. The terms and provisions of this Interim Order, including the claims, liens, security

interests and other protections granted to the Lenders pursuant to this Interim Order and/or the

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Transaction Documents, notwithstanding the entry of any such order, shall continue in these

Chapter 11 Cases or, to the extent permitted by applicable law following dismissal of these

Chapter 11 Cases, and shall maintain their priority as provided by this Interim Order until, in

respect of the DIP Facility, all the DIP Obligations, pursuant to the Transaction Documents and

this Interim Order, have been indefeasibly paid in full in cash and all commitments to extend

credit under the DIP Facility are terminated. The terms and provisions concerning the

indemnification of the Lenders shall continue in these Chapter 11 Cases, following dismissal of

these Chapter 11 Cases, following termination of the Transaction Documents and/or the

indefeasible repayment in full in cash of the DIP Obligations.

44. Final Hearing. The Final Hearing to consider entry of the Final Order and final

approval of the DIP Facility is scheduled for June 30, 2009 at 9:30 a.m. before the Honorable

Dennis D. O’Brien, United States Bankruptcy Judge, in Courtroom No. 2b, at the United States

Bankruptcy Court for the District of Minnesota. On or before [__________], 2009, the Debtors

shall serve, by United States mail, first-class postage prepaid, notice of the entry of this Interim

Order and of the Final Hearing (the “Final Hearing Notice”), together with copies of this Interim

Order and the GE DIP Motion, on: (a) the parties having been given notice of the Interim

Hearing; (b) any party which has filed prior to such date a request for notices with this Court; (c)

counsel for the Statutory Committee, if appointed by such date; (d) the Securities and Exchange

Commission; and (e) the Internal Revenue Service. The Final Hearing Notice shall state that any

party in interest objecting to the entry of the proposed Final Order shall file written objections

with the Clerk of the Court no later than on [____________], 2009 at 4:00 p.m. (prevailing

Central time), which objections shall be served so as to be received on or before such date by: (i)

counsel to the Debtors, attn: ______________________; (ii) counsel to the Statutory

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Committee; (iii) counsel to the Lenders, and [LOCAL COUNSEL]; (iv) and the Office of the

United States Trustee for the District of Minnesota, attn: [________________]

45. Nunc Pro Tunc Effect of this Interim Order. This Interim Order shall take effect

and be enforceable nunc pro tunc to the Petition Date immediately upon execution thereof.

46. Retention of Jurisdiction. The Court has and will retain jurisdiction to enforce

this Interim Order according to its terms.

SO ORDERED by the Court this ___ day of _____________, 2009.

Dennis D. O’Brien UNITED STATES BANKRUPTCY JUDGE

So stipulated and agreed this __ day of ___________, 2009: Counsel for the Debtors Counsel for the Lenders