10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

(MARK ONE)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

OR

(   ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________to__________________

Commission file number 1-7160

COACHMEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

INDIANA	35-1101097
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2831 Dexter Drive, Elkhart, Indiana	46514
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code      574-262-0123

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes X No  

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).   Yes X No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

       At October 31, 2004:

Common Shares, without par value 15,709,119 shares outstanding including an equivalent number of common share purchase rights.

FORM 10-Q

INDEX

Part I.  Financial Information	Page No.
Financial Statements:
Consolidated Balance Sheets-       September 30, 2004 and December 31, 2003	3-4
Consolidated Statements of Operations-       Three and Nine Months Ended September 30, 2004 and 2003	5
Consolidated Statements of Cash Flows-       Nine Months Ended September 30, 2004 and 2003	6
Notes to Consolidated Financial Statements	7-13
Management's Discussion and Analysis of Financial       Condition and Results of Operations	14-17
Quantitative and Qualitative Disclosures About Market Risk	18
Controls and Procedures	18
Part II.  Other Information
Item 6.  Exhibits	19
Signatures	20
Index to Exhibits	21

2

Coachmen Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)

		September 30, 2004 (Unaudited)			December 31, 2003
Assets
Current assets:
Cash and temporary cash investments	$	7,616		$	6,408
Marketable securities		3,415			5,667
Trade receivables, less allowance for
doubtful receivables 2004 - $873
and 2003 - $1,208		50,212			46,232
Other receivables		4,873			1,906
Refundable income taxes		560			642
Inventories		149,813			101,100
Prepaid expenses and other		4,865			4,622
Deferred income taxes		6,457			5,959
Total current assets		227,811			172,536
Property, plant and equipment, at cost		165,260			155,673
Less, accumulated depreciation		(81,330	)		(76,448	)
Property, plant and equipment, net		83,930			79,225
Goodwill		18,212			18,954
Cash value of life insurance		39,486			36,506
Real estate held for sale		60			-
Other		4,696			3,467
Total assets	$	374,195		$	310,688

See Notes to Consolidated Financial Statements.

3

Coachmen Industries, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)

		September 30, 2004 (Unaudited)			December 31, 2003
Liabilities
Current liabilities:
Accounts payable, trade	$	49,820		$	30,486
Accrued income taxes		3,846			2,511
Accrued expenses and other liabilities		43,104			37,586
Short-term borrowings and current portion
of long-term debt		26,560			5,990
Total current liabilities		123,330			76,573
Long-term debt		15,872			9,419
Deferred income taxes		3,903			4,089
Postretirement deferred compensation benefits		9,484			9,172
Other		346			284
Total liabilities		152,935			99,537
Shareholders' equity
Common shares, without par value: authorized
60,000 shares; issued 2004 - 21,102
shares and 2003 - 21,086 shares		91,762			91,539
Additional paid-in capital		8,746			7,616
Retained earnings		181,648			172,700
Treasury shares, at cost: 2004 - 5,396
shares and 2003 - 5,533 shares		(59,072	)		(59,858	)
Unearned compensation		(1,941	)		(1,136	)
Accumulated other comprehensive income		117			290
Total shareholders' equity		221,260			211,151
Total liabilities and shareholders' equity	$	374,195		$	310,688

See Notes to Consolidated Financial Statements.

4

Coachmen Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)

		Three Months Ended September 30,					Nine Months Ended September 30,
		2004			2003			2004			2003
Net sales	$	235,536		$	200,809		$	671,684		$	521,099
Cost of sales		197,685			167,679			572,607			443,389
Gross profit		37,851			33,130			99,077			77,710
Operating (income) expenses:
Delivery		11,515			8,896			30,651			24,256
Selling		8,662			8,047			24,509			20,160
General and administrative		9,051			8,216			28,024			24,604
Gain on sale of
properties, net		(189	)		(57	)		(1,268	)		(96	)
Total operating expenses		29,039			25,102			81,916			68,924
Operating income		8,812			8,028			17,161			8,786
Nonoperating (income) expense:
Interest expense		552			219			1,442			953
Investment income, net		(533	)		(275	)		(1,808	)		(175	)
Other income, net		(235	)		(44	)		(321	)		(144	)
Total nonoperating (income)
expense, net		(216	)		(100	)		(687	)		634
Income before income taxes		9,028			8,128			17,848			8,152
Income taxes		3,100			2,770			6,086			2,778
Net income	$	5,928		$	5,358		$	11,762		$	5,374
Earnings per common share:
Basic	$	.38		$	.35		$	.76		$	.35
Diluted	$	.38		$	.35		$	.76		$	.35
Number of common shares used in
computation of per common
share amounts:
Basic		15,479			15,427			15,469			15,436
Diluted		15,544			15,464			15,545			15,475
Cash dividends per common share	$	.06		$	.06		$	.18		$	.18

See Notes to Consolidated Financial Statements.

5

Coachmen Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

		Nine Months Ended September 30,
		2004			2003
Cash flows from operating activities:
Net income	$	11,762		$	5,374
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation		6,973			7,112
Provision for doubtful receivables		89			153
Gain on sale of properties, net		(1,268	)		(96	)
Increase in cash surrender value of
life insurance policies		(504	)		(726	)
Net realized and unrealized (gains) losses
on marketable securities and derivatives		147			(185	)
Deferred income taxes		(684	)		569
Tax benefit from stock options exercised		23			8
Other		1,969			1,839
Changes in certain assets and liabilities:
Receivables		(7,036	)		(20,722	)
Inventories		(48,514	)		(17,818	)
Prepaid expenses and other		(243	)		(2,246	)
Accounts payable, trade		19,334			27,970
Income taxes - accrued and refundable		1,417			4,287
Accrued expenses and other liabilities		5,518			(1,903	)
Net cash provided by (used in)
operating activities		(11,017	)		3,616
Cash flows from investing activities:
Proceeds from sales of marketable securities		1,932			25,215
Proceeds from sale of property and equipment		2,618			2,393
Investments in marketable securities		(2,476	)		(25,505	)
Purchases of property and equipment		(13,235	)		(10,520	)
Other		(1,281	)		215
Net cash used in investing activities		(12,442	)		(8,202	)
Cash flows from financing activities:
Proceeds from short-term debt		28,500			23,000
Payments of short-term debt		(8,917	)		(23,000	)
Proceeds from long-term debt		8,012			571
Payments of long-term debt		(572	)		(614	)
Issuance of common shares under stock
incentive plans		458			269
Purchases of common shares for treasury		-			(4,354	)
Cash dividends paid		(2,814	)		(2,787	)
Net cash provided by (used in)
financing activities		24,667			(6,915	)
Increase (decrease) in cash and temporary
cash investments		1,208			(11,501	)
Cash and temporary cash investments:
Beginning of period		6,408			16,549
End of period	$	7,616		$	5,048

See Notes to Consolidated Financial Statements.

6

Coachmen Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

1.      BASIS OF PRESENTATION

The consolidated balance sheet data as of December 31, 2003 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The interim financial statements should be read in connection with the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

In the opinion of management, the information furnished herein includes all adjustments of a normal and recurring nature necessary to reflect a fair presentation of the statements of the interim periods reported. The results of operations for the three and nine-month periods ended September 30, 2004 are not necessarily indicative of the results to be expected for the full year.

2.      SEGMENT INFORMATION

The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting, which disaggregates its business by product category. The Company’s two reportable segments are: recreational vehicles, including related parts and supplies, and housing and building. The Company evaluates the performance of its segments and allocates resources to them based on pretax income. Differences between reported segment amounts and corresponding consolidated totals represent corporate expenses for administrative functions and income or expenses relating to property and equipment that are not allocated to segments.

The table below presents information about segments used by the chief operating decision maker of the Company for the three and nine-month periods ended September 30, 2004 and 2003:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
	(in thousands)
Net sales:
Recreational vehicles	$	160,860		$	136,241		$	481,319		$	359,153
Housing and building		74,676			64,568			190,365			161,946
Consolidated total	$	235,536		$	200,809		$	671,684		$	521,099
Gross profit:
Recreational vehicles	$	17,974		$	15,892		$	51,594		$	36,745
Housing and building		19,877			17,614			47,281			40,966
Other reconciling items		-			(376	)		202			(1	)
Consolidated total	$	37,851		$	33,130		$	99,077		$	77,710
Operating expenses:
Recreational vehicles	$	14,709		$	12,947		$	41,194		$	34,277
Housing and building		15,201			12,167			40,985			33,661
Other reconciling items		(871	)		(12	)		(263	)		986
Consolidated total	$	29,039		$	25,102		$	81,916		$	68,924

7

		Three Months Ended September 30,					Nine Months Ended September 30,
		2004		2003			2004		2003
	(in thousands)
Operating income:
Recreational vehicles	$	3,265	$	2,945		$	10,400	$	2,468
Housing and building		4,676		5,447			6,296		7,305
Other reconciling items		871		(364	)		465		(987	)
Consolidated total	$	8,812	$	8,028		$	17,161	$	8,786
Pretax income (loss):
Recreational vehicles	$	3,252	$	2,872		$	10,363	$	2,270
Housing and building		4,899		5,528			6,655		7,284
Other reconciling items		877		(272	)		830		(1,402	)
Consolidated total	$	9,028	$	8,128		$	17,848	$	8,152

	September 30,		December 31,
		2004		2003
	(in thousands)
Total assets:
Recreational vehicles	$	183,304	$	126,157
Housing and building		112,151		105,056
Other reconciling items		78,740		79,475
Consolidated total	$	374,195	$	310,688

3.      INVENTORIES

Inventories consist of the following:

	September 30,		December 31,
		2004		2003
	(in thousands)
Raw materials	$	45,486	$	32,452
Work in process		27,744		15,256
Improved lots		2,318		2,314
Finished goods		74,265		51,078
Total	$	149,813	$	101,100

8

4.      ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

	September 30,		December 31,
		2004		2003
	(in thousands)
Wages, salaries, bonuses and commissions	$	10,118	$	4,953
Dealer incentives, including volume
bonuses, dealer trips, interest
reimbursement, co-op advertising and
other rebates		4,301		3,839
Warranty		10,420		8,658
Insurance-products and general liability,
workers compensation, group health and
other		5,523		6,361
Customer deposits and unearned revenues		3,688		7,000
Other current liabilities		9,054		6,775
Total	$	43,104	$	37,586

Changes in the Company’s warranty liability during the three and nine-month periods ended September 30 were as follows:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
					(in thousands)
Balance of accrued warranty
at beginning of period	$	10,510		$	7,530		$	8,658		$	8,796
Warranties issued during
the period and changes in
liability for pre-existing
warranties		5,024			4,502			16,862			11,194
Cash settlements made during
the quarter		(5,114	)		(4,178	)		(15,100	)		(12,136	)
Balance of accrued warranty
at September 30	$	10,420		$	7,854		$	10,420		$	7,854

5.      EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per common share is based on the weighted average number of shares outstanding during the period, after consideration of the dilutive effect of stock options and awards. Basic and diluted earnings per share for the three and nine months ended September 30, 2004 and 2003 were calculated as follows:

9

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
					(in thousands)
Numerator:
Net income applicable
to common stock	$	5,928		$	5,358		$	11,762		$	5,374
Denominator:
Number of shares outstanding,
end of period:
Common stock		15,706			15,535			15,706			15,535
Effect of weighted average
contingently issuable shares
outstanding during period		(202	)		(100	)		(167	)		(69	)
Effect of weighted average
shares outstanding during
period		(25	)		(8	)		(70	)		(30	)
Weighted average number of
common shares used in basic
EPS		15,479			15,427			15,469			15,436
Effect of dilutive securities,
stock options and awards		65			37			76			39
Weighted average number of
common shares used in
diluted EPS		15,544			15,464			15,545			15,475

For both the three and nine months ended September 30, 2004, 85,400 shares (295,875 and 286,875 shares for the three and nine months ended September 30, 2003, respectively), of outstanding stock options were not included in the computation of diluted earnings per share because their exercise price was greater than the average market prices for the periods and their inclusion would have been antidilutive.

The sum of the quarterly earnings per share for the three quarters may not equal year-to-date earnings per share due to rounding and changes in diluted potential common shares.

6.      COMPREHENSIVE INCOME (LOSS)

The changes in components of comprehensive income for the three and nine months ended September 30, 2004 and 2003 are as follows:

		Three Months Ended September 30,					Nine Months Ended September 30,
		2004			2003		2004			2003
					(in thousands)
Net income	$	5,928		$	5,358	$	11,762		$	5,374
Unrealized gains (losses)
on securities held for
sale, net of taxes		(58	)		199		(204	)		1,129
Unrealized gains (losses)
on cash flow hedges,
net of taxes		(44	)		30		31			(187	)
Comprehensive income	$	5,826		$	5,587	$	11,589		$	6,316

10

As of September 30, 2004 and 2003, the accumulated other comprehensive income, net of tax, relating to unrealized gains (losses) on securities available for sale was $246,000 and $468,000, respectively, and relating to deferred losses on cash flow hedges was ($129,000) and ($187,000), respectively.

7.      COMMITMENTS, CONTINGENCIES AND GUARANTEES

The Company was contingently liable at September 30, 2004 to banks and other financial institutions on repurchase agreements in connection with financing provided by such institutions to most of the Company’s independent dealers in connection with their purchase of the Company’s recreational vehicle products. These agreements provide for the Company to repurchase its products from the financing institution in the event that they have repossessed them upon a dealer’s default. Products repurchased from dealers under these agreements are accounted for as a reduction in revenue at the time of repurchase. Although the estimated contingent liability approximates $242 million at September 30, 2004 ($238 million at December 31, 2003), the risk of loss resulting from these agreements is spread over the Company’s numerous dealers and is further reduced by the resale value of the products repurchased. Based on losses previously experienced under these obligations, the Company has established a reserve for estimated losses under repurchase agreements. At September 30, 2004, $.3 million ($.3 million at December 31, 2003) was recorded as an accrual for estimated losses under repurchase agreements.

The Company was also contingently liable under guarantees to financial institutions of their loans to independent dealers for amounts totaling approximately $8.6 million at September 30, 2004 ($4.6 million at December 31, 2003). During 2003, the Company entered into an agreement with a financial institution to form a private-label financing program to provide wholesale inventory financing to the Company’s dealers in the recreational vehicle segment. The agreement provides for a preferred program that provides financing that is subject to the standard repurchase agreement described above. In addition, the agreement provides for a reserve pool whereby the financial institution makes available an aggregate line of credit not to exceed $40 million that will provide financing for dealers that may not otherwise qualify for credit approval under the preferred program. No dealer being provided financing from the reserve pool can receive an aggregate line of credit exceeding $5 million. Per each contract year, in addition to the standard repurchase agreement described above, the Company will be liable to the financial institution for the first $2 million of aggregate losses, as defined by the agreement, incurred by the financial institution on designated dealers with higher credit risks that are accepted into the reserve pool financing program. At September 30, 2004, the Company has recorded a loss reserve of $.1 million associated with these guarantees ($.1 million at December 31, 2003).

The Company was also contingently liable at September 30, 2004 to a financial institution on repurchase agreements in connection with financing provided by the institution to certain of the Company’s independent home builders in connection with their purchase of the Company’s housing products. This agreement provides for the Company to repurchase its products from the financing institution in the event that they have repossessed them upon a builder’s default. Products repurchased from builders under this agreement are accounted for as a reduction in revenue at the time of repurchase. Although the estimated contingent liability approximates $2.4 million at September 30, 2004, the risk of loss resulting from these agreements is spread over the Company’s numerous builders and is further reduced by the resale value of the products repurchased. The Company has evaluated the potential for losses under this agreement and has determined that the resolution of any claims that may arise in the future would not materially affect the Company’s financial statements.

During the first quarter of 2004, the Company entered into an agreement to guarantee the indebtedness incurred by a recreational vehicle dealer towards the purchase of a dealership facility. The guarantee is in the principal amount of $1 million for a period of five years or until all indebtedness has been fully paid, whichever occurs first. The Company has evaluated the potential for losses under this agreement and has determined that the resolution of any claims that may arise in the future would not materially affect the Company’s financial statements.

11

In addition, the Company is liable under a guarantee to a financial institution for model home financing provided to certain independent builders doing business with the Company’s housing and building segment. The amount outstanding under this agreement at September 30, 2004 is $1.2 million. Any losses incurred under this guarantee would be offset by the proceeds from the resale of the model home and losses are limited to 20% of the original contract price, and cannot exceed $2.0 million. As of September 30, 2004, no losses have been incurred by the Company under the model home financing program.

The Company obtains vehicle chassis for its recreational and specialized vehicle products directly from automobile manufacturers under converter pool agreements. The agreements generally provide that the manufacturer will provide a supply of chassis at the Company’s various production facilities under the terms and conditions as set forth in the agreement. Chassis are accounted for as consigned inventory until either assigned to a unit in the production process or 90 days have passed. At the earlier of these dates, the Company is obligated to purchase the chassis and it is recorded as inventory. At September 30, 2004, chassis inventory, accounted for as consigned inventory, approximated $23.3 million.

During the second quarter of 2004, the Company entered into an agreement to provide financing of up to $4.9 million to a developer for the construction of a hotel. The construction loan financing period extends through February 2005, after which, the construction loan may be converted to a term loan for a period of two years, provided the terms and conditions of the agreement are met. The loans are collateralized by a first priority interest in all tangible and intangible property of the borrower. As of September 30, 2004, the Company has provided $1.4 million in financing to the developer.

The Company is involved in various legal proceedings, most of which are ordinary disputes incidental to the industry and most of which are covered in whole or in part by insurance. Management believes that the ultimate outcome of these matters and any liabilities in excess of insurance coverage and self-insurance accruals will not have a material adverse impact on the Company’s consolidated financial position, future business operations or cash flows.

8.      STOCK-BASED COMPENSATION

On March 1, 2003, the Company adopted the Performance Based Restricted Stock Plan initiated to motivate and reward participants for superior achievement of the Company’s pre-established long-term financial performance goals. This new plan, effective as of January 1, 2003, utilizes variable plan accounting, meaning that the cost of the awards are expensed over the vesting period based upon the fair value of the estimated shares to be earned at the end of the vesting period. As of September 30, 2004, a total of 186,300 contingent shares awarded to key employees under the plan were outstanding. The amounts expensed during the three and nine-month periods ended September 30, 2004 were $216,000 and $651,000, respectively, while the amount expensed during the three and nine-month periods ended September 30, 2003 were $83,000 and $259,000.

The Company has stock option plans and an employee stock purchase plan. The Company accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. No stock-based employee compensation cost is reflected in net earnings for these plans, as all options granted under these plans have an exercise price equal to the market value of the underlying common stock at the date of grant. The table below illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.”

12

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
		(in thousands, except per share amounts)
Net income, as reported	$	5,928		$	5,358		$	11,762		$	5,374
Add: Stock-based compensation expense
under variable plan included in
reporting net income, net of taxes		141			56			429			171
Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of taxes		(206	)		(204	)		(621	)		(601	)
Pro forma net income	$	5,863		$	5,210		$	11,570		$	4,944
Earnings per share:
Basic - as reported	$	.38		$	.35		$	.76		$	.35
Basic - pro forma	$	.38		$	.34		$	.75		$	.32
Diluted - as reported	$	.38		$	.35		$	.76		$	.35
Diluted - pro forma	$	.38		$	.34		$	.75		$	.32

9.      RECLASSIFICATION

Certain information in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2003 has been reclassified to conform to the 2004 presentation. The reclassification had no effect on net income as previously reported.

10.    NEW ACCOUNTING PRONOUNCEMENTS

On March 31, 2004, the Financial Accounting Standards Board (FASB) issued an Exposure Draft, “Share-Based Payments,” which is a proposed amendment to SFAS No. 123, “Accounting for Stock-Based Compensation.” The Exposure Draft would require all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. The FASB recently announced that a final standard will be effective for public companies for fiscal periods beginning after June 15, 2005. The final standard offers the Company alternative methods of adopting this final rule. At the present time, the Company has not yet determined which alternative method it will use.

13

Coachmen Industries, Inc. and Subsidiaries
Management’s Discussion and Analysis
Of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors, which have affected the Company’s financial condition, results of operations and cash flows during the periods included in the accompanying consolidated financial statements.

A summary of the changes in the principal items included in the consolidated statements of operations is shown below.

	Comparison of
		Three Months						Nine Months
	Ended September 30, 2004 and 2003 Increases (Decreases)
	Amount			Percentage			Amount			Percentage
	($ in thousands)
Net sales	$	34,727			17	.3%	$	150,585			28	.9%
Cost of sales		30,006			17	.9		129,218			29	.1
Delivery expense		2,619			29	.4		6,395			26	.4
Selling expenses		615			7	.6		4,349			21	.6
General and
administrative expenses		835			10	.2		3,420			13	.9
(Gain) loss on sale of
properties, net		(132	)		n/m			(1,172	)		n/m
Interest expense		333			152	.1		489			51	.3
Investment income (loss)		(258	)		93	.8		(1,633	)		n/m
Other income, net		(191	)		n/m			(177	)		n/m
Income before income taxes		900			11	.1		9,696			118	.9
Income taxes		330			11	.9		3,308			119	.1
Net income		570			10	.6		6,388			118	.9

n/m – not meaningful

14

NET SALES

Consolidated net sales for the quarter ended September 30, 2004 were $235.5 million, an increase of $34.7 million, or 17.3%, from the $200.8 million reported for the corresponding quarter last year. Net sales for the nine months were $671.7 million, representing an increase of 28.9% from the $521.1 million reported for the same period in 2003. The Company’s recreational vehicle segment experienced a net sales increase of 18.1% for the quarter and an increase of 34% for the nine months. Wholesale unit shipments for the RV segment increased 3.4% during the third quarter of 2004 and 11.6% for the nine-month period ended September 30, 2004. Wholesale unit shipments of motorized products increased 22.7% and 40.9% for the three and nine-month periods ended September 30, 2004, respectively, while wholesale unit shipments of towable products were down 3.4% for the three-month period ended September 30, 2004 and were up 1.7% for the nine-month period then ended. Unit backlog for the RV Group was down 57.8% at September 30, 2004 compared to the same date in 2003.

The Company’s housing and building segment experienced a net sales increase for the quarter ended September 30, 2004 of 15.7% and an increase of 17.5% for the nine months. This increase in sales dollars was attributable to wholesale unit shipments being up 2.5% for the quarter and 5.9% for the nine-month period ended September 30, 2004, as well as an increase in the average sales price per unit. The increased sales price per unit was a result of product mix and sales price increases and surcharges related to increased cost of raw materials, particularly lumber. Unit backlogs, measured in floors for the housing and building segment, were up 34.1% at September 30, 2004 as compared to the same date in 2003.

COST OF SALES

Cost of sales increased 17.9%, or $30 million, for the three months and 29.1%, or $129.2 million, for the nine months ended September 30, 2004. As a percentage of net sales, cost of sales was 83.9% and 85.2% for the three and nine months ended September 30, 2004 compared to 83.5% and 85.1% for the three and nine months ended September 30, 2003. The increase in the dollar amount of cost of sales in the current quarter and year-to-date is attributable to the increase in sales dollars. The slight increase in the cost of sales percentage to net sales for the third quarter was primarily a result of the Company's continued investment in new business initiatives in both its recreational vehicle and housing and building segments.

OPERATING EXPENSES

As a percentage of net sales, operating expenses, which include delivery, selling, general and administrative expenses, were 12.4% for both the 2004 quarter and nine-month periods compared to 12.5% and 13.2% for the quarter and nine-month periods of 2003. As a percentage of sales, delivery expenses increased by .5 percentage points for the three-month period and decreased by .1 percentage point for the nine-month period as compared to the prior year three and nine-month periods. The increase in delivery dollars spent during the quarter was primarily related to variable delivery costs for the higher volume of units shipped, while the increase as a percentage of sales for the quarter was primarily the result of higher fuel costs. The .1 percentage point decrease for the nine-month period is the result of better utilization of the Company’s transportation equipment associated with the increase in sales volume. Selling expenses were 3.7% and 3.6% of net sales for the 2004 quarter and nine-month periods compared to 4.0% and 3.9% of net sales for the three and nine-month periods ended September 30, 2003. The increase in selling expense dollars during the quarter and nine months ended September 30, 2004 is related to increased personnel costs and increased expenses related to new product shows, seminars, and other promotional expenses. The decrease in selling expenses as a percentage of sales for the three and nine-month periods ended September 30 was primarily related to increased sales volume. General and administrative expenses were 3.8% of net sales for the third quarter compared to 4.1% for the 2003 corresponding quarter and 4.2% of net sales for the nine-month period compared to 4.7% for 2003. The decrease for the quarter and nine-month periods in general and administrative expenses as a percentage of net sales was related to the increased sales volume.

15

GAIN ON THE SALE OF PROPERTIES, NET

For the nine months ended September 30, 2004, the gain on the sale of properties was $1,268,000. The major component of the gain in 2004 was from the sale of the Goshen facility. In late March 2004, Coachmen RV Company sold its 70,000 square-foot facility in Goshen, Indiana, and moved production to a newly acquired replacement facility located five miles north of its Middlebury, Indiana complex. There were no significant gains or losses from property transactions for the three months ended September 30, 2004, nor were there any significant gains or losses from property transactions for the three or nine months ended September 30, 2003.

INTEREST EXPENSE

Interest expense was $552,000 and $1,442,000 for the quarter and nine-month periods in 2004 compared to $219,000 and $953,000 in the same periods last year. Interest expense varies with the amount of average outstanding long-term debt and borrowings on the Company’s revolving credit facility.

INVESTMENT INCOME (LOSS)

There was a net investment income of $533,000 for the quarter ended September 30, 2004 compared to $275,000 in the same quarter of 2003. For the nine-month period, the net investment income of $1,808,000 compared to an investment income of $175,000 the previous year. The investment income for the three-month period ended September 30, 2004 was principally attributable to earnings of the life insurance policies held and realized gains on the sale of preferred stock. Net investment income for the three-month period ended September 30, 2003 was principally attributable to realized gains incurred from the sale of preferred stocks. The investment income for the nine-month period ended September 30, 2004 was attributable to a cumulative preferred dividend of $536,000 from a utility company emerging from bankruptcy, earnings of the life insurance policies held and realized gains on the sale of preferred stock. The investment income of $175,000 for the nine months ended September 30, 2003 was attributable to the gains realized on the sale of preferred stocks in the third quarter of 2003 offset by an other-than-temporary impairment charge of $579,000 to adjust to market value the carrying cost of certain preferred stocks held by the Company.

OTHER INCOME, NET

Other income, net, represents income of $235,000 for the third quarter of 2004 and income of $44,000 for the same quarter of the previous year. For the nine-month period, other income, net for 2004 was $321,000 compared to income of $144,000 in 2003. No items of significance caused the variances between the comparable quarters.

INCOME TAXES

For the third quarter ended September 30, 2004, the effective tax rate was 34.3% and the year-to-date rate was 34.1% compared with a 2003 third quarter and year-to-date rate of 34.1%. The Company’s effective tax rate fluctuates based upon the states where sales occur, with the level of export sales and also with the amount of nontaxable dividend income on investments.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

The Company generally relies on funds from operations as its primary source of liquidity. In addition, the Company maintains a $35 million, unsecured revolving credit facility to meet its seasonal working capital needs. On July 30, 2004, the Company entered into an Amendment to the Credit Agreement, which provides for a term loan of $7.5 million. At September 30, 2004, primarily due to increases in inventories and accounts receivable, there were outstanding borrowings of $24.6 million against this bank line of credit. At September 30, 2003, there were no borrowings outstanding against the credit facilities. For the nine months ended September 30, 2004, the major use of cash was for operating activities, which primarily consisted of increases in receivables and inventories offset by an increase in accounts payable and other accrued expenses. The cash used in investing activities for the nine months ended September 30, 2004 was primarily the result of

16

acquisitions of property and equipment to increase manufacturing capacity to meet expected production needs. The cash provided by financing activities was primarily the result of net borrowings against credit facilities offset by the payment of cash dividends.

At September 30, 2004, working capital increased to $104.5 million from $96.0 million at December 31, 2003. The $55.3 million increase in current assets at September 30, 2004 versus December 31, 2003 was primarily due to increased trade receivables and inventories as a result of increased sales. The increase in current liabilities of $46.8 million was substantially due to increased trade payables, borrowings against credit facilities, and other accrued expenses.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain statements that are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks and uncertainties, and are dependent on various factors, many of which are outside the control of the Company. These uncertainties and other factors include, but are not limited to, the potential fluctuations in the Company’s operating results; the condition of the telecommunications industry which purchases modular structures; the impact of performance on the valuation of intangible assets; the availability and price of gasoline and diesel fuel, which can impact the sale of recreational vehicles; the availability of chassis and appliances, which are used in the production of many of the Company’s recreational vehicle products; interest rates, which affect the affordability of the Company’s products; the availability and cost of real estate for residential housing; potential liabilities under repurchase agreements and guarantees; changing government regulations, such as those covering accounting standards, environmental matters or product warranties and recalls, which may affect costs of operations, revenues, product acceptance and profitability; legislation governing the relationships of the Company with its recreational vehicle dealers, which may affect the Company’s options and liabilities in the event of a general economic downturn; the impact of consumer confidence and economic uncertainty on high-cost discretionary product purchases, which can hinder the sales of recreational vehicles; the demand for commercial structures in the various industries that the housing and building segment serves; the ability of the housing and building segment to perform in new market segments where it has limited experience; uncertainties related to the launch of a new brand product line of recreational vehicles; consolidation of distribution channels in the recreational vehicle industry, and also on the state of the recreational vehicle and housing industries in the United States. Other factors affecting forward-looking statements include the cyclical and seasonal nature of the Company’s businesses, adverse weather conditions affecting home deliveries, changes in property taxes and energy costs, changes in federal income tax laws and federal mortgage financing programs, changes in public policy, competition in these industries, the Company’s ability to maintain or increase gross margins which are critical to profitability whether there are or are not increased sales, further developments in the war on terrorism and related international crises; oil supplies, uncertainty surrounding the 2004 elections and their possible impact on tax policy adverse to discretionary income available for purchases of high-cost consumer durables, and other risks and uncertainties. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposure. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results may therefore appear to be volatile in certain accounting periods. The foregoing lists are not exhaustive, and the Company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.

At times, the Company’s actual performance differs materially from its projections and estimates regarding the economy, the recreational vehicle and building industries and other key performance indicators. Readers of this Report are cautioned that reliance on any forward-looking statements involves risks and uncertainties. Although the Company believes that the assumptions on which the forward-looking statements contained herein are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or nonoccurrence of future events. There can be no assurance that the forward-looking statements contained in this Report will prove to be accurate. The inclusion of a forward-looking statement

17

herein should not be regarded as a representation by the Company that the Company’s objectives will be achieved. For further discussion of the elements involved in this Report, see the notes and other materials included with the Company’s latest Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, operations of the Company are exposed to fluctuations in interest rates. These fluctuations can vary the costs of financing and investing yields. The Company has utilized its short-term revolving credit facility during the first nine months of 2004 for working capital needs resulting from an increase in inventories and accounts receivable. At September 30, 2004, the Company had $26.6 million of borrowings on the revolving credit facility and current maturities of long-term debt. Long-term debt at September 30, 2004 was $15.9 million and consisted mainly of industrial development revenue bonds that have variable or floating rates and a term loan. In January of 2003, the Company entered into various interest rate swap agreements that became effective in October of 2003. These swap agreements, which are designated as cash flow hedges for accounting purposes, effectively convert a portion of the Company’s variable-rate borrowings to a fixed-rate basis through November of 2011, thus reducing the impact of changes in interest rates on future interest expense. The fair value of the Company’s interest rate swap agreements represents the estimated receipts or payments that would be made to terminate the agreements.

The change in the fair value of interest rate swap agreements during the third quarter of 2004 was not significant. Total accumulated loss on the swap agreements as of September 30, 2004 was $.1 million. If in the future the interest rate swap agreements were determined to be ineffective or were terminated before the contractual termination dates, or if it became probable that the hedged variable cash flows associated with the variable-rate borrowings would stop, the Company would be required to reclassify into earnings all or a portion of the unrealized losses on cash flow hedges included in accumulated other comprehensive gain (loss).

At September 30, 2004, the Company had $3.4 million invested in marketable securities. The Company’s marketable securities consist of public utility preferred stocks, which typically pay quarterly fixed-rate dividends. These financial instruments are subject to market risk in that available energy supplies and changes in available interest rates would impact the market value of the preferred stocks. The Company utilizes U.S. Treasury bond futures options as a protection against the impact of increases in interest rates on the fair value of the Company’s investments in these fixed-rate preferred stocks. Outstanding options are marked to market with market value changes recognized in current earnings. The U.S. Treasury bond futures options generally have terms ranging from 90 to 180 days. Based on the Company’s overall interest rate exposure at September 30, 2004, including variable or floating rate debt and derivatives used to hedge the fair value of fixed-rate preferred stocks, a hypothetical 10 percent change in interest rates applied to the fair value of the financial instruments as of September 30, 2004, would have no material impact on earnings, cash flows or fair values of interest rate risk sensitive instruments over a one-year period.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2004. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2004.

During the period covered by this Report, there have been no material changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

18

PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS

See Index to Exhibits incorporated by reference herein.

19

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COACHMEN INDUSTRIES, INC.                  (Registrant)
Date: November 5, 2004	By: /s/ Claire C. Skinner
	Claire C. Skinner, Chairman of the        Board and Chief Executive Officer
Date: November 5, 2004	By: /s/ Joseph P. Tomczak
	Joseph P. Tomczak, Executive Vice        President and Chief Financial Officer
Date: November 5, 2004	By: /s/ Colleen A. Zuhl
	Colleen A. Zuhl, Vice President        and Controller

20

INDEX TO EXHIBITS

Number Assigned
In Regulation
S-K, Item 601          Description of Exhibit

3(a)(i)	Articles of Incorporation of the Company as amended on May 30, 1995 (incorporated by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995).
3(a)(ii)	Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 4.2 to the Company's Form S-3 Registration Statement, File No. 333-14579).
3(b)	By-Laws as modified through January 31, 2002 (incorporated by reference to the Company's Form 8-K filed February 20, 2002).
10.1	Amendment No. 4 to Credit Agreement dated July __, 2004 among Coachmen Industries, Inc., the Lenders named therein, and Bank One, Indiana, N.A.
10.2	Program Agreement and related Repurchase Agreement dated as of May 10, 2004 between Textron Financial Corporation and certain subsidiaries of Coachmen Industries, Inc.
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

21

EX-10.1

Exhibit 10.1

AMENDMENT NO. 4 TO
CREDIT AGREEMENT

        This Amendment No. 4 (the “Amendment”) is entered into as of July 30, 2004, by and among Coachmen Industries, Inc. (the “Borrower”), the undersigned lenders (each a “Lender” and collectively, the “Lenders”) and Bank One, Indiana, N.A., both as one of the Lenders and as Administrative Agent (the “Agent”) on behalf of itself and the other Lenders.

RECITALS:

        WHEREAS, the Borrower, the Agent and the Lenders are parties to that certain Credit Agreement dated as of June 30, 2003, as amended; and

        WHEREAS, Lenders and Borrower desire to amend the Credit Agreement as provided hereby.

        NOW, THEREFORE, in consideration of the premises herein contained and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

        Section 1. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to such terms in the Credit Agreement.

        Section 2. Amendments. Effective on the date of the effectiveness of this Amendment pursuant to Section 4 below (the “Effective Date”), the Credit Agreement shall be amended as set forth in this Section 2.

        2.1 Amendments to Definitions.

        (a) The definition of “Advance” in Article I is amended in its entirety to read as follows:

“Advance” means a borrowing hereunder (i) made by some or all of the Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same type and, in the case of Eurodollar Loans, for the same Interest Period. The term “Advance” shall include Alternative Line Loans and Term Loans unless otherwise expressly provided.

        (b) The definition of “Aggregate Commitment” in Article I is amended in its entirety to read as follows:

“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as increased or reduced from time to time pursuant to the terms hereof.

        (c) The definition of “Facility Terminate Date” in Article I is amended in its entirety to read as follows:

“Facility Termination Date” means, except as otherwise specified herein with respect to a Term Loan, June 30, 2006 or any earlier date on which the Aggregate Commitment is reduced to zero (other than amounts in respect of Facility LCs, if any, then outstanding, provided that Borrower shall have funded such amounts in cash in full into the Facility LC Collateral Account as provided in Section 2.2 herein) or otherwise terminated pursuant to the terms hereof.

        (d) The definition of “Loan” in Article I is amended in its entirety to read as follows:

“Loan” means a Revolving Loan, a Term Loan or an Alternative Line Loan.

        (e) The definition of “Outstanding Credit Exposure” in Article I is amended in its entirety to read as follows:

“Outstanding Credit Exposure” means, as to any Lender, the sum of (i) the aggregate principal amount of its Revolving Loans outstanding at such time, plus (ii) the aggregate principal amount of its Alternative Line Loans outstanding at any such time, plus (iii) the aggregate principal amount of its Term Loans outstanding at such time, plus (iv) an amount equal to its Pro Rata Share of LC Obligations at such time, plus (v) an amount equal to its Pro Rata Share of certain other issued and outstanding letters of credit described in Schedule III hereto.

        2.2 Additional Definitions.

        The following definitions are added to Article I in the appropriate alphabetical sequence:

“Aggregate Term Loan Commitment” means the aggregate of the Term Loan Commitments of all the Lenders. The Aggregate Term Loan Commitment is Seven Million Five Hundred Thousand and no/100 Dollars ($7,500,000.00).”

“Term Loan” is defined in Section 2.21 hereof.

“Term Loan Commitment” means, for each Lender, the obligation of such Lender to make its Term Loan pursuant to the terms and conditions of this Agreement, and which shall not exceed the principal amount set forth on Schedule I to this Agreement opposite its name thereon under the heading “Term Loan Commitment”, as such amount may be modified from time to time pursuant to the terms hereof.

2

Term Loan Pro Rata Share” means, at any particular time and with respect to any Lender, the percentage obtained by dividing (A) the outstanding principal balance of such Lender’s Term Loan by (B) the aggregate outstanding principal balance of all Term Loans.

“Term Loan Termination” means July 30, 2009.

“Term Note” means a promissory note, in substantially the form of Exhibit C-2 hereto, duly executed by the Borrower and payable to the order of a Lender in the amount of its Term Loan Commitment, including any amendment, restatement, modification, renewal or replacement of such Term Note.

         2.3 Amendment to Schedule I.Schedule I to the Credit Agreement is amended in its entirety to read as set forth in Attachment 1 to this Amendment.

         2.4 Amendment to Schedule II. Schedule II to the Credit Agreement is amended in its entirety to read as set forth in Attachment 2 to this Amendment.

        2.5 Amendment to Exhibit C. A new Exhibit C-2 is added to the Credit Agreement in that form as set forth in Attachment 3 to this Amendment.

         2.6 Amendment to Section 2.1. Section 2.1 is amended in its entirety to read as follows:

        2.1 Commitment. From and including the date of this Agreement and prior to the applicable Facility Termination Date or Term Loan Termination Date, each Lender severally agrees, on the terms and conditions set forth in this Agreement, to (i) make Loans to the Borrower and (ii) participate in Facility LCs issued upon the request of the Borrower, provided that after giving effect to the making of each such Loan and the issuance of each such Facility LC, such Lender’s Outstanding Credit Exposure shall not exceed its Commitment. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Facility Termination Date, the Commitments to extend credit hereunder shall expire on the respective Facility Termination Date or Loan Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.20.

         2.7 Amendment to Section 2.2. The first sentence of Section 2.2 is amended in its entirety to read as follows:

        The Aggregate Outstanding Credit Exposure and all other unpaid Obligations shall be paid in full by the Borrower on the Facility Termination Date except for Term Loans which shall be paid in full pursuant to the terms of Section 2.21(A).

3

        2.8 Amendment to Section 2.3. Section 2.3 is amended in its entirety to read as follows:

        2.3 Ratable Loans. Each Advance hereunder (other than any Alternative Line Loan) shall consist of either Revolving Loans made from the several Lenders ratably according to their Revolving Loan Pro Rata Share or Term Loans made from the several Lenders ratably according to their Term Loan Pro Rata Share.

         2.9 Amendment to Section 2.6. A new subsection (c) is added to Section 2.6 which reads, in its entirety, as follows:

        (c) Arrangement Fee. The Borrower agrees to pay the Agent and the Arranger the fees agreed to in the fee letter dated July 1, 2004, among the Agent, Arranger and the Borrower.

        2.10 Amendment to Section 2.7. Section 2.7 is amended in its entirety to read as follows:

        2.7 Minimum Amount of Each Advance. Except with respect to Terms Loans, each Eurodollar Advance shall be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof), and each Floating Rate Advance (other than an Advance on the Alternative Line Commitment) shall be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof), provided, however, that any Floating Rate Advance may be in the amount of the Available Aggregate Commitment.

        2.11 Amendment to Section 2.14. Noteless Agreement: Evidence of Indebtedness. Section 2.14(iv) is amended in its entirety to read as follows:

(iv) Any Lender may request that its Loans be evidenced by a promissory note, or, in the case of the Alternative Line Lender, promissory notes representing its Revolving Loans, Term Loans and Alternative Line Loans, respectively, substantially in the form of Exhibit C, C-1 and C-2, respectively (each a “Note”). In such event, the Borrower shall prepare, execute and deliver to such Lender such Note or Notes payable to the order of such Lender. Thereafter, the Loans evidenced by each such Note and interest thereon shall at all times (including after any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to Section 12.3, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (i) and (ii) above.

4

        2.12 Amendment to Section 2.21. A new Section 2.21 is added as follows:

        2.21 Term Loans. Upon the satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2 hereof, from and including the date of this Agreement and prior to the Term Loan Termination Date, each Lender severally and not jointly agrees, on the terms and conditions set forth in this Agreement, to make a term loan, in Dollars, to the Borrower in an aggregate amount equal to such Lender’s Term Loan Commitment (each individually, a “Term Loan”). The aggregate amount of the Term Loans shall not exceed the Aggregate Term Loan Commitment. The Term Loan shall be disbursed in a single draw on the Effective Date of this Amendment No. 4 to the Credit Agreement.

         (A)        Repayment of the Term Loans.

         (i)        The unpaid principal balance of the Term Loans shall be repaid in fifty-nine (59) consecutive monthly installments of principal payable on the 30th day of each month, commencing on August 30, 2004 and continuing thereafter until the Term Loan Termination Date, and the Term Loans shall be permanently reduced by the amount of each installment on the date payment thereof is made hereunder. Each installment will be in the amount of $62,500, plus accrued interest. Notwithstanding the foregoing, the final installment shall be in the amount of $3,812,500 or the then outstanding principal balance of the Term Loans. No installment of any Term Loan shall be reborrowed once repaid.

         (ii)        In addition to the scheduled payments on the Term Loan, the Borrower may make the voluntary prepayments described in Section 2.8 for credit against the scheduled payments on the Term Loans pursuant to Section 2.8.

         Section 3. Representations and Warranties. In order to induce the Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants to the Agent and each of the Lenders that the execution and delivery by the Borrower of this Amendment, and the performance by the Borrower of its obligations under the Credit Agreement as amended by this Amendment (the “Amended Credit Agreement”), (i) are within the powers of the Borrower, (ii) have been duly authorized by proper organizational actions and proceedings, and such approvals have not been rescinded and no other actions or proceedings on the part of the Borrower are necessary to consummate such transaction, (iii) do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by any Governmental Authority, or if not made, obtained or given individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect and (iv) do not and will not conflict with any Requirements of Law or Contractual Obligation, except such that could not reasonably be expected to have a Material Adverse Effect, or with the certificate or articles of incorporation and by-laws or the operating agreement of the Borrower or any Subsidiary, and (v) that the Amended Credit Agreement is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms (except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, or similar laws affecting the enforcement of creditors’ rights generally).

5

         Section 4. Effectiveness. The amendments set forth in Section 2 above shall become effective on the date when the Agent shall have received the following, all in a form satisfactory to Agent:

         4.1. Amendment. Counterparts of this Amendment signed by the Borrower, and each of the Lenders.

        4.2 Guaranty. A Reaffirmation of Subsidiary Guarantors and a Reaffirmation of Supplemental Subsidiary Guarantors signed by each of the Subsidiary Guarantors in favor of the Lenders.

        4.3 Corporate Documents. A certificate of the Secretary or an Assistant Secretary of the Borrower as to (a) resolutions of the Board of Directors of such entity authorizing the execution and delivery of this Amendment and the other documents contemplated hereby to which such entity is a party, (b) the incumbency and signatures of the officers of such entity which are to sign the documents referenced in clause (a) above, and (c) a certificate of existence certificate issued by the Indiana Secretary of State with respect to the Borrower.

        4.4 Other Documents. Such other documents as the Agent shall reasonably request.

        Section 5. Miscellaneous.

        5.1 Continuing Effectiveness, etc. The Credit Agreement, as amended, shall remain in full force and effect and is hereby ratified and confirmed in all respects. After the effectiveness hereof, all references in the Credit Agreement and each other Loan Document to the “Credit Agreement” or similar terms shall refer to the Credit Agreement, as previously amended and as modified hereby. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of (i) any right, power or remedy of any Lender or the Agent under the Credit Agreement or any of the other Loan Documents, or, (ii) any Default or unmatured Default under the Credit Agreement.

        5.2 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment.

        5.3 Expenses. The Borrower agrees to pay the reasonable costs and expenses of the Agent (including reasonable attorneys’ fees and charges) in connection with the negotiation, preparation, execution and delivery of this Amendment and the other documents contemplated hereby.

5.4 Governing Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF INDIANA.

        5.5 Successors and Assigns. This Amendment shall be binding upon the Borrower, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Lenders and the Agent and their respective successors and assigns, as permitted by the provisions of the Credit Agreement.

6

        5.6 Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

        IN WITNESS WHEREOF, the Borrower, the Agent and each of the Lenders have caused this Amendment to be duly executed by its officers thereunder duly authorized as of the date first written above.

[SIGNATURE PAGES FOLLOW]

7

COACHMEN INDUSTRIES, INC.

By:  /s/ Richard M. Lavers                                
Name:   Richard M. Lavers
Title:     Secretary

By:  /s/ Gary L. Near                                          
Name:   Gary L. Near
Title:     Treasurer

BANK ONE, INDIANA, N.A., as a Lender,
as the LC Issuer and as Administrative Agent

By:  /s/ Kurt E. Meibeyer                                    
Name:   Kurt E. Meibeyer
Title:     First Vice President

NATIONAL CITY BANK OF INDIANA,
as a Lender

By:  /s/ National City Bank of Indiana              
Name:   
Title:   

1st SOURCE BANK,
as a Lender

By:  /s/ 1st Source Bank                                     
Name:   
Title:   

8

Attachment 1

THIRD AMENDED SCHEDULE I
LENDER COMMITMENTS

REVOLVING LOAN COMMITMENTS

Lender	Revolving Loan Commitment	% of Aggregate Revolving Loan Commitment1
Bank One, Indiana, N.A.	$13,850,000	46.16%
National City Bank	$8,075,000	26.92%
1st Source Bank	$8,075,000	26.92%
Total	$30,000,000	100%

ALTERNATIVE LINE COMMITMENTS

Lender	Alternative Line Loan Commitment	% of Aggregate Alternative Line Loan Commitment2
Bank One, Indiana, N.A.	$5,000,000	100%
Total	$5,000,000	100%

FACILITY LC’S

Lender	Facility LC	% of Aggregate Facility LC's2
Bank One, Indiana, N.A.	$4,513,877.49	53.86%
National City Bank	$1,933,441.39	23.07%
1st Source Bank	$1,933,441.39	23.07%
Total	$8,380,760.27	100%

TERM LOAN COMMITMENT

Lender	Term Loan Commitment	% of Aggregate Term Loan Commitment3
Bank One, Indiana, N.A.	$4,039,500	53.86%
National City Bank	$1,730,250	23.07%
1st Source Bank	$1,730,250	23.07%
Total	$7,500,000	100%

¹ and such Lender’s Revolving Loan Pro Rata Share
² and such Lender’s Pro Rata Share
³ and such Lender’s Term Loan Pro Rata Share

Attachment 2

AMENDED SCHEDULE II

PRICING SCHEDULE

APPLICABLE MARGIN/APPLICABLE FEE	LEVEL I STATUS	LEVEL II STATUS	LEVEL III STATUS
RATE
Eurocurrency Rate (Revolver)	1.50%	1.75%	2.00%
Eurocurrency Rate (Term Loan)	1.75%	2.00%	2.25%
ABR	0.00%	0.00%	0.00%
Stand-by L/C Fee	1.50%	1.75%	2.00%
Commitment Fee	0.25%	0.38%	0.50%

For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

        “Financials” means the annual or quarterly financial statements of the Borrower delivered pursuant to the Credit Agreement.

        “Level I Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, the FD/EBITDA Ratio is less than or equal to 1.25 to 1.00.

        “Level II Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status and (ii) the FD/EBITDA Ratio is less than or equal to 1.50 to 1.00.

        “Level III Status” exists at any date if the Borrower has not qualified for Level I Status or Level II.

        “Status” means Level I Status, Level II Status or Level III Status.

        The Applicable Margin and Applicable Fee Rate shall be determined in accordance with the foregoing table based on the Borrower’s Status as reflected in the then most recent Financials. Adjustments, if any, to the Applicable Margin or Applicable Fee Rate shall be effective five Business Days after the Agent has received the applicable Financials. If the Borrower fails to deliver the Financials to the Agent at the time required pursuant to the Credit Agreement, then the Applicable Margin and Applicable Fee Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in the foregoing table until five days after such Financials are so delivered.

Attachment 3

EXHIBIT C-2
TO
AMENDED AND RESTATED CREDIT AGREEMENT

TERM NOTE

Elkhart, Indiana

July 30, 2004

        FOR VALUE RECEIVED, the undersigned, Coachmen Industries, Inc., an Indiana corporation (“Borrower”), hereby unconditionally promises to pay to the order of Bank One, Indiana, N.A. (the “Lender”), the principal sum of such Lender’s “Term Loan Commitment”, such amount representing the original aggregate principal amount of the Lender’s “Term Loan” (each as defined in the Credit Agreement referred to below) made by the Lender to the Borrower pursuant to the “Credit Agreement” (as defined below). Capitalized terms used herein and not otherwise defined herein are as defined in the Credit Agreement.

        Unless otherwise required to be paid sooner pursuant to the provisions of the Credit Agreement, the principal indebtedness evidenced hereby shall be payable in installments as set forth in the Credit Agreement with a final installment payable on the Term Loan Termination Date.

        The Borrower promises to pay interest on the unpaid principal amount of the Lender’s Term Loan from the date of such Term Loan until such principal amount is paid in full at a rate or rates per annum determined in accordance with the terms of the Credit Agreement. Interest hereunder is due and payable at such times and on such dates as set forth in the Credit Agreement.

        Both principal and interest are payable in lawful money of the United States of America to the Agent (as defined below), to such domestic account as the Agent may designate, in same day funds. At the time of each payment or prepayment of principal of the Lender’s Term Loan, the Lender shall make a notation either on the schedule attached hereto and made a part hereof, or in such Lender’s own books and records, in each case specifying the amount of principal paid or prepaid with respect to such Term Loan; provided that the failure of the Lender to make any such recordation or notation shall not affect the Obligations of the Borrower hereunder or under the Credit Agreement.

        This Amended and Restated Term Note (the “Term Note”) is one of the “Term Notes” referred to in, and is entitled to the benefits of, the Credit Agreement dated as of June 30, 2003, as amended, (and as may be further amended, restated, supplemented or modified from time to time, the “Credit Agreement”) among the Borrower, the financial institutions from time to time parties thereto as Lenders (such financial institutions being herein referred to collectively as the “Lenders”) and Bank One, Indiana, NA as one of the Lenders and as the contractual representative for the Lenders (the “Agent”). The Credit Agreement, among other things, (i) provides for the making of the Lender’s Term Loan in an aggregate amount equal to the U.S.

Dollar amount above, the indebtedness of the Borrower resulting therefrom being evidenced by this Term Note and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments of the principal hereof prior to the maturity hereof without penalty or premium, upon the terms and conditions therein specified.

        Demand, presentment, protest and notice of nonpayment are hereby waived by the Borrower. All amounts payable under the terms of this Term Note shall be payable with expenses of collection, including attorney’s fees, and without relief from valuation and appraisement laws.

        Whenever in this Term Note reference is made to the Agent, the Lender or Borrower, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns permitted pursuant to the Credit Agreement. The provisions of this Term Note shall be binding upon and shall inure to the benefit of said successors and assigns. Borrower’s successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for Borrower.

        This Term Note shall be governed by, interpreted and enforced, and the rights and liabilities of the parties hereto determined, in accordance with the internal laws (without regard to the conflicts of law provisions) of the State of Indiana.

COACHMEN INDUSTRIES, INC.
   as the Borrower

By:                                                      
Name:
Title:

2

EX-10.2

Exhibit 10.2

Textron Financial Corporation	11575 Great Oaks Way
Subsidiary of Textron Inc.	Suite 210 Alpharetta, Georgia  30022 (770) 360-9600

PROGRAM AGREEMENT

dated as of May 10, 2004

Attention:  General Managers

Ladies and Gentlemen:

Textron Financial Corporation (“Textron Financial”) is pleased to propose the following Builder Network Financing Facility Program (“Program”) to the following entities:

All American Homes of Colorado, LLC;
All American Homes of Indiana, LLC;
All American Homes of Iowa, LLC;
All American Homes of Kansas, LLC;
All American Homes of North Carolina, LLC;
All American Homes of Ohio, LLC;
All American Homes of Tennessee, LLC;
and Mod-U-Kraf Homes, LLC

(collectively referred to herein as “Company”), for its U.S. builders (the “Builders”). The above listed entities are independent of one another, and are not jointly or severally liable for the transactions of every other entity. The following Program provides the terms and conditions under which Textron Financial may be the provider of inventory financing to the Builders for their acquisition of modular housing inventory (“Homes”) from the Company. As hereinafter provided, for the term of this Program Agreement Textron Financial shall be the exclusive provider of inventory financing to the Builders of the Company for the acquisition of Homes to the extent that the Company provides interest free periods or other interest or interest rate subventions or equivalent incentive programs to such Builders. This Program (and any programs contemplated hereunder) are not committed lines of credit, and all financing shall be subject to Textron Financial’s credit and documentation requirements. Nothing contained herein shall limit Textron Financial’s right to provide or decline to provide inventory financing to Builders, in amounts and upon terms which shall be determined by Textron Financial, in its sole and absolute discretion, and without notice to the Company other than as set forth herein. Textron Financial will notify the Company in writing in the event it declines to provide a line of credit for inventory financing to any Builder which shall have applied for the same (however, the failure of Textron Financial to do so shall not affect Textron Financial’s decision not to extend credit to such Builder and shall not create any liability on the part of Textron Financial to the Company). The Company’s obligations hereunder will be guaranteed by All American Homes, LLC (the “Parent”) as provided for in that certain Guaranty Agreement of even date herewith (the “Guaranty”).

1.	Definitions
	A.	Homes shall be further sub-defined as follows:
		Model Home:   A Home at a permanent location used as a model for sales of Spec Homes;
		Spec Home:  A Home at a permanent location available for immediate sale; and
		Display Home:  A Home at a commercial sales location temporarily affixed to the land.
		References to the term Home herein, unless otherwise noted shall refer collectively to every type of modular floor plan available for financing.
	B.	Invoices funded by Textron Financial may consist of various types of costs. There may be more than one of the following types of cost on any one invoice:
		(i)   Unit Cost - the cost of the modular home, together with delivery and attachment of the Home to the foundation as evidenced on the invoice from the Company;
		(iii)   Soft Cost - the costs incurred by Builder for the foundation for the Home, utility connections, costs to increase curb and sales appeal including, but not limited to, driveway, decking, landscape and furniture, and the costs of labor associated therewith.
2.	Program Terms
	2.1	Payments and Funding:
		Payments shall be made to the Company for the Unit Cost unless it is a Builder buyout as outlined in section 2.6. Payments shall be made to the Builder, for Soft Costs. Payments shall be as follows:
		ALL PERCENTAGES ARE LISTED AFTER GIVING EFFECT TO AN INVOICE OR ADVANCE DISCOUNT OF 150 BASIS POINTS

A.	Model Home:
	Model Home:	Advance Amount:
	Unit Cost	100%
	Soft Costs	Lesser of actual costs or 50% of (Unit Cost)
	Textron Financial must have a first position, recorded mortgage on all Model Home lots.

-2-

B.	Spec Home:
	Spec Home:	Advance Amount:
	Unit Cost	100%
	Soft Costs	Lesser of actual costs or 50% of (Unit Cost)
	Textron Financial must have a first position, recorded mortgage on all Spec Home lots.

C.	Display Home:
	Display Home:	Advance Amount:
	Unit Cost	100%
	Soft Costs	Lesser of actual costs or 20% of (Unit Cost)
	Textron Financial requires that Builders do not allow any liens to be filed on Display Homes while financed by Textron Financial Builder must provide Textron Financial with sufficient information to enable Textron Financial to complete a fixture filing on Display Home and Display Home location.
	The parties acknowledge that Soft Costs invoices may be bundled; provided, however, that Textron Financial will do no more than three fundings on Soft Costs per Home. Soft Costs invoices may be presented to Textron Financial by Builder and Textron Financial will confirm with the presenter that it has reviewed the invoices for reasonableness and confirmed that the work has been completed in a satisfactory manner and that the invoices or the costs have not been submitted to Textron Financial for payment prior to the current submission. Textron Financial shall require Builder to have all contractor and other workman liens released upon payment. Payments shall be made by Textron Financial to the party designated by the presenter; provided, however that Textron Financial shall have the right to otherwise direct payment in the event it reasonably believes there is need to do so to protect Textron Financial's financial and collateral interests

2.2  Payment to
Company	100% of net Unit Cost (after giving effect to any discounts)
2.3  Interest Rate and
Payments:	(A)   Free Flooring Period:  A loan by Textron Financial to a Builder under an inventory line of credit to finance the acquisition of a Home by such Builder from the Company, shall be interest free to such Builder for a period not to exceed 90 days (the "Free Flooring Period") to be designated by the Company. In lieu of interest being paid to Textron Financial during the Free Flooring Period, Company agrees that Textron Financial shall discount each Invoice paid by 150 basis points. In the event the Prime Rate (as defined below) shall exceed

-3-

5.5%, then the discount on each Invoice purchased or advance of Unit Cost, or Soft Cost thereafter, and while the Prime Rate is in excess of 5.5% shall be increased by 6.25 basis points for every .25% increase in the Prime Rate over 5.5%. Unless otherwise agreed in writing by Textron Financial and the Company, interest shall be payable by the Builder monthly, in arrears, and shall be due and payable by the fifteenth (15th) day of the month following the month in which such interest accrues.

In the event the Company notifies Textron Financial that a home has not been set up by the Builder to the agreed upon specifications of the Company, the Company shall have the right to notify Textron Financial within 120 days from the original invoice date that they will not subsidize the first 90 days of interest. Textron Financial will then be responsible for collecting interest for that time period from the Builder and will refund the above referenced discount to the Company.

During the term of this Program Agreement the Company agrees to provide free flooring periods to Builders only with respect to Homes financed under lines of credit extended by Textron Financial and agrees not to provide (or permit any of its affiliates to provide) any interest free periods or other interest or interest rate subventions or equivalent incentive programs for any Builder in connection with such Builder's obtaining financing for Companies Modular Housing from sources other than Textron Financial.

(B)   Builder Rate:   Each Builder will pay interest to Textron Financial from the date any respective invoice or reimbursement of costs is paid by Textron Financial ("Invoice Purchase Date") in accordance with the agreements between such Builder and Textron Financial at a basic rate of interest as follows:

Interest Rate from: Invoice Purchase
Date:	Free flooring period	Day 1 - 90
	Prime Rate	Day 91 - 360
	Prime + .50%	Day 361 - 720
	Prime + 1.00%	Day 721 - 1080
	Minimum Prime 5.5%
Documentation Fee:	Generally, one time upfront fee of $500 per Home, although Textron reserves the right to increase the fee dependent upon state jurisdiction and costs of document filing.
Curtailments/
Maturity:	Based on original invoice date. Curtailments will be 1% per month starting day 361 and monthly thereafter until day 1051. Homes will be due in full day 1081.

Note that the above Builder Rates, Documentation Fees and Curtailments assume minimum outstandings to Textron Financial at the end of year one of this program of $25,000,000. In the event outstandings at that time do not meet or

-4-

	exceed $25,000,000, the parties agree to discuss alternative rate structures. At maturity of any loan in respect of a Home and irrespective of its credit limit, each Builder will pay a maturity rate of interest on such loan in accordance with the agreements between such Builder and Textron Financial, which shall be [Prime + 4.00%]. A default rate of interest may be as provided in the agreements between each Builder and Textron Financial and shall be instituted upon defaults of a Builderfor such actions which shall include but not be limited to non-payment of sold and unpaid and non-payment after demand of matured inventory. Unless otherwise agreed in writing by Textron Financial, interest shall be payable by each Builder monthly, in arrears, and shall be due and payable by the fifteenth (15th) day of the month following the month in which such interest accrues.
	(C)   Interest Rate Terms:   The interest rates set forth above are annual rates (interest to be calculated on the basis of a 360 day year for the actual number of days elapsed) and are variable and will be adjusted monthly. For any month, Prime shall be greater of: (i) the highest prime rate of interest announced during such month by the Wall Street Journal or such money center bank as Textron Financial shall select from time to time, or (ii) Minimum Prime of 5.5% ("Minimum Prime"). Application of payments to accrued interest and loan balances, other than as to immediately available funds, may occur up to two business days after such payments are deposited into Textron Financial's account to allow for clearance of checks and other similar instruments and the obtaining of good funds. Payments owing from the Company, the Parent or any affiliate to Textron Financial under this Program Agreement, the Repurchase Agreement (as defined below), the Risk Pool or under any other agreement between the Company and Textron Financial that are no paid, when due, shall bear interest at Prime + 4% until paid in full and such interest shall be payable upon demand.
	Textron Financial will send Builders monthly statements for the payment of interest, and will send billing statements to the Company monthly for any amounts to be paid by the Company.
2.4  Invoice Funding
Disbursement:	Textron Financial will fund the proceeds of any loan made in respect of a manufacturer's invoice for a Home the later of 10 days from Textron Financial's receipt of such invoice or 10 days from the invoice date (assuming such invoice and the line of credit of the applicable Builder are in order and Textron Financial has approved such invoice) with Automated Clearing House funds. All loans to Builders are booked by Textron Financial on the date on which the aforesaid invoice is received and approved by Textron Financial notwithstanding the Company's agreement to delay disbursement of proceeds of such loan as set forth above.
2.5  Repurchase Agreement [and
Risk Pool Indemnity]
from Company:	(A)   Repurchase Agreement:   The Company shall provide repurchase support through a repurchase agreement of even date herewith ("Repurchase

-5-

		Agreement") as more fully set forth in said Repurchase Agreement. The execution and delivery of the Repurchase Agreement is a condition precedent to this Program Agreement's becoming effective.
		(B)   Risk Pool Indemnity.   TFC shall provide inventory financing to certain Builders, to be determined through mutual written agreement of the parties, which may not otherwise qualify for credit approval under normal Textron Financial credit underwriting standards (the "Risk Pool"). From time to time the parties shall prepare a writing designating the Builders included in the Risk Pool. In addition to and separate from any obligations of the Company under the Repurchase Agreement, and on an annual calendar year basis ("Contract Year"), the maximum amount the Company shall be liable to Textron Financial for regarding this indemnity shall be the lesser of (i) 20% of the average annual net outstandings on all Textron Financial company Risk Pool accounts calculated on a past 12 full month rolling basis (beginning 12 months after the first outstandings are funded in the Risk Pool) or if such period is less than 12 months after the first outstandings are funded in the Risk Pool, then the monthly average for the total number of months that have passed since the initial funding of a Risk Pool account, or (ii) $2,000,000 (Risk Pool Indemnity Maximum"). Company will pay Textron Financial within thirty (30) days of request of such losses. Textron Financial will, in accordance with its internal company policies, charge losses against the Risk Pool within the time period that such losses are recognized by Textron Financial. Company's Risk Pool Indemnity liability shall be refreshed in full as of the first day of each Contract Year despite any losses that may or may not have been charged against the Risk Pool during the prior Contract Year. After the Risk Pool Indemnity Maximum has been incurred in any Contract Year, all remaining credit risk with respect to, and losses occurring from, the Risk Pool during that Contract Year will be assumed by Textron Financial (except for the obligations of Company and Coachman Industries, Inc. under the respective Repurchase Agreement and Guaranty. as agreed to in the Repurchase Agreement). In such event, the Risk Pool will be fully refreshed on the first day of the following Contract Year. The terms "loss" or "losses" as used in this Section shall be defined as any amount owed to Textron Financial by Builders. Textron Financial shall provide reasonable information and proof substantiating any loss submitted for reimbursement by Company hereunder. In the event Textron Financial subsequently recovers losses that were previously charged to the Company, these recoveries will be returned to the Company. If those recoveries were in the same Contract Year as the charge-off, that recovery amount will offset the charge-off for the calculation the Company's maximum obligation.
	2.6  Builder
	buyout:	The lesser of (i) the outstanding balance of any loan advanced in connection with a Home or (ii) the same advance percentage for Unit Costs, and Soft Costs in Model Homes, Display Homes or Spec Homes, provided that all amounts advanced shall be due in full upon the earlier of sale of the particular Home whose acquisition was financed by such loan, or 36 months from date of the original manufacturer's invoice for such Home, or funding of such Soft Costs after which the maturity or default rate of interest shall apply.
3.	Other General Terms:

-6-

3.1  Facility Limit:	Initially $65,000,000 (said facility limit to consist of unpaid outstanding principal of loans to Builders plus unpurchased invoice approvals issued by Textron Financial for Builders).
3.2  Initial Term and Renewal
Terms:	Initial three year term subject to automatic one year renewals thereafter unless, not less than 90 days prior to the last day of any then current term (including, without limitation, the initial term), either the Company or Textron Financial shall have given the other party hereto written notice of its decision not to have the term of this Program Agreement automatically extended; in any such case, the term of this Program Agreement shall terminate on the last day of the then current term hereof. The expiration of the initial three year term, or any renewal term, of this Program Agreement shall not relieve the Company of (a) any of its unperformed obligations hereunder or (b) any of its obligations under the Repurchase Agreement, any Risk Pool Indemnity, or any other agreement with Textron Financial in respect of loans made or any commitments issued pursuant to the Program prior to such expiration.
3.3  Textron Financial
Early Termination:	Textron Financial may terminate the term of this Program Agreement prior to its scheduled termination date by giving the Company not less than twenty (20) days' prior written notice of its intent to so terminate as a result of (a) any default by the Company under this Program Agreement, the Repurchase Agreements, or any Risk Pool Indemnity, which remains uncured for the greater of thirty (30) days after receipt by the Company of written notice of the existence thereof from Textron Financial or such other cure period provided for herein or therein, provided that no such thirty (30) day cure period shall be provided if such default or breach is not susceptible to being cured or, if curable, the Company shall have not promptly commenced efforts to effect such cure and diligently pursued the same during such 30-day period, (b) a reasonable determination by Textron Financial that the annual financial statements delivered to Textron Financial pursuant to Section 3.5 hereof reflect a material adverse change in the financial condition of the Company, (c) a reasonable determination by Textron Financial that the annual financial statements delivered to Textron Financial pursuant to Section 3.5 hereof reflect a material adverse change in the financial condition of the Parent, (d) the termination by the Company of the Repurchase Agreement in accordance with the terms thereof, and (e) any default by the Parent under the Guaranty (after the expiration of any applicable cure period) or the termination of the continuing nature of the Guaranty by the Parent. Notwithstanding such early termination, the Company shall be obligated in accordance with all the terms and conditions under the Program, including without limitation this Program Agreement, the Repurchase Agreement, any Risk Loss Indemnity, and any other agreement between the Company and Textron Financial, until such times as all obligations, monetary and otherwise, in respect of the Program and loans made or commitments/approvals issued prior to such early termination date are satisfied with Textron Financial. For the avoidance of doubt, upon the early termination date, Textron Financial shall have no obligations to advance any additional sums or make any additional loans under the Program.

-7-

	3.4  Company Early
	Termination:	The Company may terminate the term of this Program Agreement prior to its scheduled termination date by giving Textron Financial not less than twenty (20) days prior written notice of its intent to so terminate in the event of any material breach by Textron Financial of any of its material obligations under this Program Agreement or any of the other agreements contemplated herein to which Textron Financial is a party. Notwithstanding such early termination, the Company shall continue to be obligated in accordance with all of the terms and conditions under the Program, including without limitation this Program Agreement, the Repurchase Agreements, any Risk Loss Indemnity, and any other agreement between the Company and Textron Financial entered into in connection with the transactions contemplated by this Program Agreement, until such time as all obligations, monetary and otherwise, in respect of the Program and loans made or commitments/approvals issued prior to such early termination date are satisfied with Textron Financial. For the avoidance of doubt, upon the early termination date, Textron Financial shall have no obligations to advance any additional sums to Builders under the Program.
	3.5  Covenants:	Commencing with fiscal year ended December 31, 2004 and for each fiscal year during the term of this Program Agreement, the Company shall deliver (if not available by public records through SEC filings) to Textron Financial audited consolidated financial statements of (a) the Company and its consolidated subsidiaries and (b) the Parent and its consolidated subsidiaries (including among such consolidated subsidiaries the Company) for each such fiscal year, prepared in accordance with generally accepted accounting principles, immediately upon the submission of the same to its other lenders or 90 days after the end of each such fiscal year, whichever is earlier. The Parent shall deliver to Textron Financial unaudited, internally prepared consolidated financial statements of the Parent and its consolidated subsidiaries (including the Company) within thirty (30) days of the end of each fiscal quarter during the term of this Program Agreement.
	3.6  Documentation:	All legal documentation ("Lending Documents") entered into between the parties to this Program Agreement and any third parties as applicable must be satisfactory to Textron Financial and its counsel.
4.  Other Agreements:
	4.1  Default	Should Company fail to perform any act contemplated herein or any covenant contained herein, and the same shall continue after five (5) business days written notice to Company from Textron Financial regarding such failure, then the Company shall be in default under the Program. A default under the Program Agreement shall also be deemed a default under the Repurchase Agreement, any Risk Loss Indemnity, and any other agreement between the Company and Textron Financial and, upon default hereunder, Textron Financial shall have all of the rights and remedies provided for in this Program Agreement, in the Repurchase Agreement, any Risk Loss Indemnity, and any such other agreement and all of the rights and remedies afforded Textron Financial at law and in equity.
	4.2  Company

-8-

Disclaimers:	Solely as between Company and Textron Financial, Company hereby disclaims any present or future security interest or other interest in its favor in the collateral financed or refinanced for Builders by Textron Financial (and in any proceeds thereof), effective with respect to each Builder as of the date that Textron Financial first advances funds on behalf of such Builder, unless and until Company exercises its obligations, if any, under the Repurchase Agreement.
4.3  No Partnership
or Agency:	Textron Financial and Company agree that neither this Program Agreement nor the Repurchase Agreement, nor any Risk Loss Indemnity create any partnership, joint venture or agency relationship between them. In addition, this Agreement does not constitute either party hereto, or any of their officers, directors or employees, as the agent or legal representative of the other for any purpose whatsoever.
4.4  Entire
Agreement:	This Program Agreement, together with any other written agreements duly executed by the parties contemporaneously herewith or subsequent hereto addressing the same subject matter, contains the entire understanding of the parties with respect to the subject matter hereof.
4.5  Set-Off:	Company grants Textron Financial the right to set-off any amounts owed to Textron Financial by Company against any amounts that may otherwise be due Company, provided however that before Textron Financial exercises any such right it shall give Company five (5) days written notice of its intent to take such action.
4.6  No Third Party
Beneficiaries:	The provisions of this Program Agreement are for the exclusive benefit of the parties hereto, and nothing contained herein shall create any rights in any Builder or any other entity claiming to be a third party beneficiary, nor shall it affect or impair any rights which either party hereto may have against any Builder or any other party.
4.7  Negotiated
Document:	This Program Agreement is a negotiated document and shall not be construed to have meaning less favorable to one party merely because that party is deemed to be the draftsman of this Program Agreement or any part of it.
4.8  Assignments:	The Company may not assign any of its rights or obligations hereunder under the Repurchase Agreement or under any Risk Loss Indemnity without the prior written consent of Textron Financial, which consent shall not be unreasonably withheld.
4.9  Governing
Law:	THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF RHODE ISLAND, WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES. If any provision of this Agreement in any way contravenes the public policy of any

-9-

	state or jurisdiction where this Agreement is sought to be enforced, such provision shall be deemed not to be a part of this Agreement and this Agreement shall remain in full force and effect except as to the deletion of such provision.
4.10  Waiver of Jury
Trial:	THE PARTIES HERETO HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR RELATING TO THIS PROGRAM AGREEMENT OR THE SUBJECT MATTER HEREOF.
4.11  Counterparts:	This Agreement may be executed in counteparts.
4.12  No Committed
Line of Credit:	Nothing herein shall constitute a committed line of credit as to any particular Builder, and Textron Financial shall not be bound to finance any particular Builder or any particular goods or inventory.
4.13  Affiliate
Defined:	As used herein, any party which controls, is controlled by or under common control with another party shall be deemed an "affiliate" of such other party. As used in the preceding sentence, the term "control" means the possession, directly or indirectly, of the power to cause the direction of the management and policies of a party, whether through the ownership of voting securities, by contract or otherwise.
4.14  Further
Assurances:	Company further agrees to do, execute and deliver, or cause to be done, executed and delivered, and agrees to use its best efforts to cause its permitted successors and assigns to do, execute and deliver, or cause to be done, executed and delivered, all such further acts, transfers and assurances, for the better assuring, conveying and confirming unto Textron Financial and its successors and assigns, all and singular, the rights and benefits under this Program Agreement and otherwise implementing the intention of the parties under this Program Agreement, as Textron Financial and its successors and assigns reasonably shall request.
4.15  Notices:	All notices pursuant to this Program Agreement shall be in writing and shall be sent: (1) by certified mail, return receipt requested; or (2) via facsimile to the fax number below, provided a copy is sent the same day by nationally recognized overnight courier with receipt acknowledged. Notices shall be sent to the address of the applicable party set forth below, or such other address as such party may designate from time to time in a notice to the other party.

Upon due execution by Textron Financial and Company, this Agreement shall constitute a binding contract between Textron Financial and Company as of the date first set forth above.

-10-

Textron Financial Corporation

By:       ____________________________
Name:  ____________________________
Title:    ____________________________

Address for notices:	Textron Financial Corporation
	11575 Great Oaks Way Suite 210 Alpharetta, Georgia 30022

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

-11-

Attention to the following:

Thomas J. Low
Division President
Facsimile: (770) 777-3348

Thomas H. Kaiser
Vice President and Assistant General Counsel
Facsimile: (770) 360-1458

COMPANIES:
All American Homes of Colorado, LLC	All American Homes of Indiana, LLC
By:_______________________________	By:_______________________________
Name:_____________________________	Name:_____________________________
Title:______________________________	Title:______________________________
All American Homes of Iowa, LLC	All American Homes of Kansas, LLC
By:_______________________________	By:_______________________________
Name:_____________________________	Name:_____________________________
Title:______________________________	Title:______________________________
All American Homes of North Carolina, LLC	All American Homes of Ohio, LLC
By:_______________________________	By:_______________________________
Name:_____________________________	Name:_____________________________
Title:______________________________	Title:______________________________
All American Homes of Tennessee, LLC	Mod-U-Kraf Homes, LLC
By:_______________________________	By:_______________________________
Name:_____________________________	Name:_____________________________
Title:______________________________	Title:______________________________

-12-

Address for notices:	All American Homes of Colorado, LLC 3333 E. Center Drive Milliken, CO 80543	All American Homes of Indiana, LLC 1418 S. 13th Street Decatur, IN 46733
	Attention to the following: Asst. General Manager - Troy Biggs	Attention to the following: General Manager - Ryan Scott
	Facsimile: (970) 587-0545	Facsimile: (260) 724-8987
	All American Homes of Iowa, LLC P.O. Box 219 1551 15th Avenue SE Dyersville, IA 52040	All American Homes of Kansas, LLC P.O. Box 259 126 Nichols Road Osage City, KS 66523
	Attention to the following: General Manager - Del Herr	Attentino to the following: Asst. General Manager - Quintin Robert
	Facsimile: (563) 875-8381	Facsimile: (785) 528-4795
	All American Homes of North Carolina, LLC 2015 U.S. 221 South Hwy. P.O. Box 929 Rutherfordton, NC 28139	All American Homes of Ohio, LLC 4005 All American Way Zanesville, OH 43701
	Attention to the following: General Manager - Neil Sayers	Attention to the following: General Manager - David Johnson
	Facsimile: (828) 248-4188	Facsimile: (740) 450-2909
	All American Homes of Tennessee, LLC P.O. Box 890 102 Evergreen Drive Springfield, TN 37172	Mod-U-Kraf Homes, LLC P.O. Box 573 260 Weaver Street Rocky Mount, VA 24151
	Attention to the following: General Manager - Carel Whiteside	Attention to the following: General Manager - Jeff Powell
	Facsimile: (615)382-8303	Facsimile: (540) 483-2228
Cc:	Kathy Samovitz Corporate Counsel for All American Homes Coachmen Administrative Services, Inc. P.O. Box 3300 2831 Dexter Drive Elkhart, IN 46514

-13-

REPURCHASE AGREEMENT

This Repurchase Agreement (this “Agreement”) is entered into as of May, 10, 2004, between the undersigned Manufacturer (“Manufacturer”) and Textron Financial Corporation (“Textron Financial”).

RECITALS

A. Manufacturer sells various floor plans of modular homes (“Homes”) to Independent Builders (“Builders”) who frequently desire to finance such purchases;

B. Such Homes remain inventory of the Builder(s), typically for use as model homes, until sold by the Builder; and

C. Textron Financial is in the business of financing the acquisition of various types of inventory, including such Homes for Builders.

AGREEMENT

In order to induce Textron Financial to finance the acquisition of Homes by a Builder and/or to induce Textron Financial to refinance Homes already in the possession of a Builder, Manufacturer agrees with Textron Financial as follows:

1.      Sale of Homes; Warranties of Manufacturer. When a Builder orders Homes from Manufacturer and requests that Textron Financial finance the acquisition of such Homes, Manufacturer shall deliver or cause to be delivered to Textron Financial one or more invoices evidencing the Unit cost (“Unit Invoice”), which shall include delivery and attachment to the foundation; and Unit soft costs (“Soft Cost Invoice”). These costs and the invoices related thereto shall collectively be referred to as the Total Invoice Cost. By delivery of any Unit Invoice to Textron Financial, Manufacturer shall represent and warrant to Textron Financial that:

(a) Manufacturer has good title to such Homes and will, upon payment by Textron Financial of the net invoice cost therefor transfer title to such Homes to such Builder free and clear of liens, claims and encumbrances;

(b) Such Homes are current models, are in unused condition and are free of defects;

(c) The Unit cost of such Homes represents the true cost of such Homes to such Builder;

(d) Such Homes were ordered by such Builder from Manufacturer (the “Order”), the Order was accepted by Manufacturer and such Builder requested that Textron Financial finance its acquisition of such Homes as evidenced by the issuance of an approval number by Textron Financial, which has not been prior revoked and is no more than one hundred and eighty (180) days old;

(e) Such Homes conform in all respects to the Order and will not be shipped to such Builder prior to Textron Financial’s approval of such Unit Invoice for payment;

(f) All Unit Invoices comply with all applicable federal, state and local laws; and

(g) All Unit Invoices presented to Textron Financial have been reviewed by Manufacturer, and Manufacturer agrees that all Unit Invoice amounts are accurate and reasonable, and that no party other than Manufacturer or Builder has any ownership interest in the Unit Invoices at the time of presentation of the same to Textron Financial.

(h) Manufacturer shall further represent and warrant to Textron Financial that such Units are free and clear of liens, claims and encumbrances of all parties other than Textron Financial.

In the event that Textron Financial, with the approval of Manufacturer, refinances Homes or other costs associated with the Homes already in the possession of a Builder, Manufacturer shall execute a letter substantially in the form attached hereto as Exhibit A. Each such letter executed by Manufacturer shall be considered an Unit Invoice for purposes of Manufacturer’s obligations under this Agreement. By delivery of such an executed letter to Textron Financial, Manufacturer shall make to Textron Financial the representations and warranties set forth in Subparagraphs (b), (c), (f) and (g) of this Paragraph with respect to the Homes or Invoices identified thereon.

2.      Payment Obligations. Textron Financial will establish a credit limit for each Builder approved by Textron Financial for the extension of credit. Such credit limit shall not constitute a committed line of credit and Textron Financial shall not be bound to finance any particular Homes, Unit set-up costs or Unit Soft costs. Textron Financial shall be obligated to pay the Total Invoice Cost, less any discount applicable to Textron Financial from time to time (the “Net Invoice Cost”), for invoices which Textron Financial approves and pays. Payments for Set Up Invoices and Soft Cost Invoices shall not exceed those percentages set forth in that certain Program Agreement entered into between Textron Financial and Manufacturer dated _____________, as the same may be amended from time to time. Manufacturer will secure from Textron Financial an approval number for Homes to be delivered to a Builder before they are manufactured. Manufacturer may ship its Homes in reliance upon an approval number issued by an authorized Textron Financial employee, or through Textron Financial’s online automated approval system. Manufacturer will not seek an approval number for Invoices, nor deliver to a Builder, Homes for which it does not have a bona fide order from an authorized representative of the Builder. Manufacturer will not forward to Textron Financial its Invoice and certificate of origin for payment unless it has received an approval number from Textron Financial and unless the Homes have been shipped. Textron Financial agrees: (a) it shall pay to Manufacturer the Net Invoice Cost within ten (10) business days of an invoice date or Textron Financial’s receipt of the Invoice, whichever is later; (b) it will pay the Net Invoice Cost to Manufacturer for any Home that has a valid approval number from Textron Financial; (c) it will only request Manufacturer to repurchase a Home after it has made a legal repossession of same unless otherwise agreed to, in writing, by and between Textron Financial and Manufacturer.

3.      Repurchase Obligations of Manufacturer. Should Textron Financial at any time repossess or otherwise come into actual or constructive possession of any Homes financed or refinanced by Textron Financial for any Builder regardless of the manner or method of possession, within thirty-seven (37) months following the date of Textron Financial’s purchase date of such Invoice for such Homes or Soft Costs Invoices (the “Repurchase Period”), Manufacturer shall repurchase such Homes from Textron Financial and repay to Textron Financial the Total Invoice Costs upon the following terms and conditions:

(a) Manufacturer shall repurchase from Textron Financial all Homes and Invoices evidencing the Total Invoice Costs within thirty (30) calendar days upon receipt of notice (“Repurchase Notice”) from Textron Financial that such Homes are in Textron Financial’s possession, wherever located and in whatever condition. Beyond warranty of title or ability to transfer Builder’s title to Manufacturer, and Textron Financial’s representation that it is transferring all of its right, title and interest to Manufacturer, such transfer shall be without any express or implied warranties including merchantability or fitness for a particular purpose;

(b) The repurchase price for such Homes (the “Repurchase Price”) shall be equal to: (i) the outstanding principal balance, accrued interest and delinquency charges owing to Textron Financial by the applicable Builder with respect to the Total Invoice Cost, plus (ii) all reasonable expenses incurred by Textron Financial in connection with the repossession, foreclosure and/or maintenance of such Homes and Invoices related thereto.

(c) The Repurchase Price shall be determined as of the date of the Repurchase Notice.

(d)  In the event that a purported sale from Manufacturer to Builder is subject to a lien in favor of Manufacturer or anyone claiming under or through Manufacturer, or is not otherwise marketable or saleable upon delivery due to damage in shipment, defects or non-compliance with applicable federal, state or local rule, laws or regulations or if Manufacturer breaches any of its representations or warranties hereunder (collectively “Non-conforming Homes”), then upon written demand by Textron Financial, Manufacturer shall pay Textron Financial the Repurchase Price with respect to such item(s) of Non-conforming Homes regardless of whether Textron Financial comes into possession of such Non-conforming Homes and the provisions of paragraph 3 shall not apply and the time limitation on Manufacturer’s obligation to repurchase in paragraph 3 shall not apply; provided however, if such Homes are deemed to be Non-conforming Homes due to a manufacturing defect or damage in shipment, Manufacturer’s obligation to pay the Repurchase Price on account of such defect or damage shall be subject to notice from Textron Financial to Manufacturer of such non-conformance or damage, and Manufacturer shall be given a reasonable time to make satisfactory repairs. Accordingly, if Manufacturer corrects and/or repairs such damage or non-conformance, then such Homes shall no longer be deemed to be Non-conforming Homes, and Textron Financial shall not issue a repurchase demand on such Homes by virtue of such defect or non-conformance.

(e) If Manufacturer fails to pay the Repurchase Price within thirty (30) days from the date on which Textron Financial gives written notice that such Homes are in Textron Financial’s possession, then Textron Financial shall be entitled to interest on the Repurchase Price retroactive to the date of such notice at the Prime Rate as published in the Wall Street Journal (or as published in such other form as may be designated by Textron Financial from time to time), as such rate may change from time to time, plus four percent (4%) calculated on the outstanding average daily balance. Textron Financial shall have no obligation to deliver any item of Homes to any particular location in order to demand the Repurchase Price: provided, however, Manufacturer will not be liable for such Repurchase Price unless Textron Financial takes actual or constructive legal possession of the Homes.

4.      The passage of the Repurchase Period referenced above will be suspended temporarily for all affected Homes and Invoices comprising the Total Invoice Costs, as of the date any of the following events occur, and will not resume until the date Textron Financial obtains possession of the Homes by court order or consent of all relevant parties, and shall be automatically extended to 30 days after the date Textron Financial obtains such possession: (i) Textron Financial institutes any type of legal action to obtain possession of any Homes from Builder; (ii) any legal action is instituted as a result of a dispute with another creditor regarding priority rights in the Homes; (iii) a voluntary or involuntary bankruptcy action is filed by or on behalf of the Builder; or (iv) any legal proceeding is filed or any governmental proceedings or order which prevents Textron Financial from obtaining possession of the Homes.

5.      Events of Default. The following are events of default under this Agreement:

(a) Manufacturer fails in the performance of any obligation when due under this Agreement;

(b) Manufacturer sustains a materially adverse change in its financial condition, assets or prospects, as determined by Textron Financial in its sole discretion;

(c) Manufacturer fails to give Textron Financial at least fourteen (14) days advance written notice of Manufacturer’s intentions to sell, lease, transfer or otherwise dispose of substantially all of Manufacturer’s assets; or consolidate with or merge with any entity, or permit any other entity to consolidate or merge into Manufacturer, except where said merger involves the parent company or wholly owned subsidiary of the parent company; or

(d) Manufacturer or Textron Financial commences a case or an order of relief is entered under any bankruptcy, reorganization, insolvency, liquidation or similar law.

6.      Textron Financial’s Remedies After Default. Upon a default hereunder, and at any time thereafter, any Manufacturer obligation herein described and any other amounts then owing by Manufacturer to Textron Financial shall become immediately due and payable. In addition, in the case of a default as described above in section 5(c), Manufacturer will be liable for all obligations that arise as a result of any funding by Textron Financial to any party other than Manufacturer until such required written notice as described in section 5(c) is received by Textron Financial. Textron Financial shall have all other rights and remedies allowed by law.

7.      Waivers; Binding Effect; Governing Law. The obligations of Manufacturer under this Agreement are absolute and unconditional. Manufacturer shall not be released from such obligations for any reason, nor shall such obligations be reduced, diminished or discharged for any reason, including without limitation, (a) any instance of modification of, or indulgence granted by Textron Financial with respect to, the obligations of any Builder owing to Textron Financial (collectively, the “Obligations” and, individually, an “Obligation”), (b) any failure of Textron Financial to timely enforce any right or remedy available to Textron Financial in connection with the Obligations, (c) any modification of any agreement securing performance of any Obligation or the substitution or the release of collateral thereunder, (d) the invalidity of any agreement forming a part of the Obligations. Manufacturer waives: (i) any right to require Textron Financial to proceed against a Builder or to pursue any other remedy prior to exercising Textron Financial’s rights under this Agreement, other than as may be expressly set forth herein, (ii) notice of the acceptance of this Agreement by Textron Financial, the non-performance of any Obligation of any Builder owing to Textron Financial, or the amount of the Obligations outstanding at any time, (iii) demand and presentation for payment upon the applicable Builder, (iv) protest and notice of protest and diligence of bringing suit against any Builder,; and (vi) any other defense to Manufacturer’s obligations under this Agreement. Textron Financial’s failure to exercise any rights

granted hereunder shall not operate as a waiver of those rights. This Agreement shall be binding upon the parties hereto and shall inure to the benefit of their successors and assigns. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Rhode Island, without reference to applicable conflict of law principles.

8.      Termination by Manufacturer. This Agreement shall continue in full force and effect until terminated by either party by written notice to the other party. Such termination shall be effective thirty (30) days after receipt of such notice, but such termination shall not affect the liabilities of Manufacturer with respect to Invoices paid by Textron Financial and Invoices and Homes approved for payment and financing by Textron Financial prior to the effective date of such termination, even though such Invoices are paid by Textron Financial thereafter, and such termination shall not affect the rights and obligations of the parties as to any transaction entered into prior to the receipt of such notice of termination, including without limitation transactions for which approvals are pending or which will not be completed until after the effective date of termination. It is specifically agreed between the parties that termination shall not limit or relieve Manufacturer from its repurchase obligations hereunder for Homes and Invoices financed prior to the effective date of the termination notice which obligations shall survive termination of this Agreement.

9.      Miscellaneous.

(a) Textron Financial and Manufacturer acknowledge and agree that this Agreement does not create any partnership, joint venture or agency relationship between them.

(b) All remedies in this Agreement shall be cumulative and not alternative.

(c) If Textron Financial is required to enforce its rights hereunder through legal proceedings or otherwise, Manufacturer shall pay court costs and Textron Financial’s reasonable attorney fees.

(d) Textron Financial may assign this Agreement, but Manufacturer may not assign its rights or delegate its duties hereunder without the prior written consent of Textron Financial.

(e) This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. Neither this Agreement nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

(f) Any notice required or permitted hereunder shall be in writing, and shall be either delivered or mailed in the United States mail, certified or registered, return receipt requested with proper postage prepaid, to the party to be notified at the address for such party in this Agreement. Any such notice shall be deemed effectively given and received for all purposes upon the earlier of (i) the delivery of such notice to the address of the party notified; (ii) refusal to accept delivery by the party being notified; or (iii) two (2) days after the notice is deposited in the United States mail, certified or registered mail, return receipt requested, properly addressed to the party notified. Any party may change its address for notice by giving the other party written notice of change of address.

(g) The provisions of this Agreement are for the exclusive benefit of the parties hereto, and nothing contained herein shall affect or impair any rights which either party hereto may have against Builder or any other party.

Executed as of the date first set forth above.

Textron Financial: TEXTRON FINANCIAL CORPORATION	MANUFACTURER(S): ALL AMERICAN HOMES OF COLORADO, LLC
By:	By:
Print Name:  Don Poskus Print Title:  AVP, Credit Address:  P.O. Box 3090 Alpharetta, GA 30023	Print Name:   Print Title:   Address:

SIGNATURES CONTINUE ON FOLLOWING PAGE

ALL AMERICAN HOMES OF INDIANA, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

ALL AMERICAN HOMES OF IOWA, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

ALL AMERICAN HOMES OF KANSAS, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

ALL AMERICAN HOMES OF NORTH CAROLINA, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

ALL AMERICAN HOMES OF OHIO, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

ALL AMERICAN HOMES OF TENNESSEE, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

MOD-U-KRAF HOMES, LLC

By:                                                                                   

Print Name:  
Print Title:  
Address:

EXHIBIT A
(Form of Refinance Letter)

Address

, , 20

Re:    That certain Repurchase Agreement dated as of , , 20, between ("Manufacturer") and Textron Financial Corporation ("Textron Financial") (the "Repurchase Agreement")

Dear      :

Textron Financial desires to provide certain financial accommodations to (“Builder”) secured by those Homes identified on this Exhibit A incorporated herein by reference (“Homes”). As a condition of Textron Financial providing such financial accommodations to Builder, however, Manufacturer must agree that all of the Homes shall be subject to all of its liabilities and obligations under the Repurchase Agreement as if Textron Financial had originally financed the Builder’s acquisition of the Homes pursuant to and in reliance on the terms of the Repurchase Agreement.

Please acknowledge Manufacturer’s agreement that all of the Homes shall be subject to all of Manufacturer’s liabilities and obligations under the Repurchase Agreement as if Textron Financial originally financed the Builder’s acquisition of the Homes pursuant to and in reliance on the terms of the Repurchase Agreement by signing below and by signing Exhibit A, and return your original signatures to me via facsimile and U.S. Mail.

Thank you.

TEXTRON FINANCIAL CORPORATION

By:                                                                       
Print Name:               
Title:                  

Acknowledged and agreed to:

Address


By:                                          
Print Name:        
Title:
Date:

EXHIBIT A

Manufacturer                                              Invoice Date                                              Serial Number                                              Amount

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Claire C. Skinner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Coachmen Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

               Date: November 5, 2004

                    By:  /s/ Claire C. Skinner                           

Claire C. Skinner    

                                                   Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Joseph P. Tomczak, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Coachmen Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

        Date: November 5, 2004

                 By: /s/ Joseph P. Tomczak                 

Joseph P. Tomczak

                                                      Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Coachmen Industries, Inc. (the “Company”) for the quarterly period ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Claire C. Skinner, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

        (1)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

        (2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period(s) covered in the Report.

                    By:  /s/ Claire C. Skinner                           

Claire C. Skinner    

                                                   Chairman of the Board and Chief Executive Officer

Date:   November 5, 2004 EX-32.2 8 coa10qex322.htm CFO CERTIFICATION

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Coachmen Industries, Inc. (the “Company”) for the quarterly period ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph P. Tomczak, Executive Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

        (1)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

        (2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period(s) covered in the Report.

                 By: /s/ Joseph P. Tomczak                 

Joseph P. Tomczak

                                                      Executive Vice President and Chief Financial Officer

Date: November 5, 2004

EX-32.2