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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

LEE R. BOGDANOFF (State Bar No. 119542) JONATHAN S. SHENSON (State Bar No. 184250) DAVID M. GUESS (State Bar No. 238241) KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Bankruptcy Counsel for Debtors and Debtors In Possession Debtors' Mailing Address 3411 N. Perris Blvd. Perris, CA 92571 National R.V. Holdings, Inc.'s Tax I.D. #XX-XXX-1079 National R.V., Inc.'s Tax I.D. #XX-XXX-5022 UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION In re NATIONAL R.V. HOLDINGS, INC., a Delaware corporation; NATIONAL R.V., INC., a California corporation, Debtors. Case No.: Chapter 11 Jointly Administered with Case No.: 6:07-17937-PC NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING REJECTION OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF THOMAS J. MARTINI IN SUPPORT THEREOF No Hearing Required Local Bankruptcy Rule 9013-1(g) 6:07-17941-PC

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

TO THE HONORABLE PETER H. CARROLL, UNITED STATES BANKRUPTCY JUDGE; THE OFFICE OF THE UNITED STATES TRUSTEE; COUNSEL FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS; THE DEBTORS'

SECURED LENDERS; AND OTHER PARTIES INTEREST: PLEASE TAKE NOTICE THAT National R.V. Holdings, Inc. and National R.V., Inc., the debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors), hereby file this Notice of Motion and Motion for Order Authorizing the Rejection of Certain Executory Contracts and Unexpired Leases (the Motion). By the Motion, the Debtors request entry of an order authorizing the Debtors to reject the executory contracts and unexpired personal property leases described hereinbelow (the Rejected Leases), 1 effective as of March 31, 2008. As the Debtors are proceeding with an orderly liquidation of their assets, they have determined that the Rejected Leases no longer have any operational value to them. The Debtors also believe that the Rejected Leases have little, if any, assignable value, and that the cost and difficulty of locating potential assignees to the various, individual Rejected Leases does not justify such efforts. By rejecting these agreements, the Debtors are cutting off any further liability of the estates. The Debtors therefore move this Court for entry of an order approving their rejection of the Rejected Leases, effective as of the date of service of this Motion. As set forth in the annexed Memorandum of Points and Authorities, there is good and sufficient cause for granting this Motion. Bankruptcy Code section 365(a) permits a debtor in possessionsubject to court approvalto reject its unexpired leases and executory contracts whenever the debtor determines that they have no value to its estate. The Debtors have

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concluded that the Rejected Leases likely have no value to their estates and could expose the

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Notwithstanding the relief sought herein, the Debtors shall and do hereby reserve the right(s) to argue that the Rejected Leases are not executory contracts or unexpired personal property leases within the meaning of section 365 of the Bankruptcy Code in connection with any objection to any claim that may be asserted by any non-debtor party to such agreement or otherwise. Moreover, in the event there is a determination that any such agreement is not an executory contract or unexpired personal property lease, the Debtors reserve the right(s) to argue that the property subject to any such agreement was abandoned effective as of the date the subject agreement would have otherwise been deemed rejected.

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

Debtors to unnecessary administrative liabilities. PLEASE TAKE FURTHER NOTICE that the non-debtor parties to the Rejected Leases should immediately contact the Debtors to make arrangements for the return of any equipment or other property provided to the Debtors under the Rejected Leases. The Debtors may be contacted as follows: National R.V. Holdings, Inc., Attn: David Wilson,

dwilson@nationalrv.com, 3411 N. Perris Blvd., Perris, CA 92571; Telephone: (951) 943-6007 ext. 5376; Fax: (951) 943-8498. PLEASE TAKE FURTHER NOTICE THAT this Motion is based upon the annexed Memorandum of Points and Authorities, the annexed Declaration of Thomas J. Martini, the record in these cases, including all pleadings and documents filed by the Debtors, the arguments and representations of counsel, and any oral or documentary evidence presented at or prior to the time of the hearing on the Motion. PLEASE TAKE FURTHER NOTICE that pursuant to Local Bankruptcy Rule 9013-1(g)(1), the Debtors request that the Court grant the Motion without a hearing, unless a hearing is requested by a party in interest. Pursuant to Local Bankruptcy Rule 9013-1(g)(1) any response or opposition to the Motion or a request for a hearing on the Motion must be in writing, must otherwise comply with Local Bankruptcy Rule 9013-1(a)(7), and must be filed with the Court and served upon bankruptcy counsel for the Debtors at the address set forth in the upper left-hand corner of the first page hereof no later than fifteen (15) days from the date of service of this Motion (i.e., by no later than March 28, 2008). Pursuant to Local Bankruptcy Rule

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9013-1(a)(11), the failure to timely file and serve a written opposition may be deemed by the Court to be consent to the granting of the relief requested herein. [CONTINUED ON NEXT PAGE]

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

WHEREFORE, the Debtors respectfully request that this Court enter an order: (1) authorizing the Debtors to reject the Rejected Leases effective as March 31, 2008, and (2) granting to the Debtors any other relief that the Court deems necessary and appropriate.

DATED: March 13, 2008

/s/ David M. Guess DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Bankruptcy Counsel for Debtors and Debtors in Possession

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

MEMORANDUM OF POINTS AND AUTHORITIES I. BACKGROUND A. General Background.

The Debtors commenced these cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code on November 30, 2007 (the "Petition Date"). The Debtors filed these cases in order to conduct an orderly disposition of their assets, and to maximize the value of those assets for the benefit of the economic stakeholders of their estates. The Debtors' principal business is the manufacture and distribution of recreational vehicles throughout the United States and Canada. Since 1964, from their Perris, California facility, the Debtors have designed, manufactured, and marketed some of the industry's highest quality "Class A" gas and diesel RVs across several branded product lines, including Dolphin, Pacifica, Sea Breeze, Surf Side, Tradewinds, and Tropi-Cal. As of the Petition Date, the Debtors were the ninth largest manufacturer of "Class A" motor homes in the country. As the Debtors are proceeding with an orderly liquidation of their assets, they have determined that the Rejected Leases no longer have any operational value to them. The Debtors also believe that the Rejected Leases have little, if any, assignable value, and that the cost and difficulty of locating potential assignees to the various, individual Rejected Leases does not justify such efforts. By rejecting these agreements, the Debtors are cutting off any further liability of the estates. The Debtors therefore move this Court for entry of an order approving their rejection of the Rejected Leases, effective as of the date of service of this Motion. II. THE REJECTED LEASES

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By and through this Motion, the Debtors seek authority to reject the leases with Xerox for the following equipment:
o o o
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Model WC 55, Serial Number NWL033636 Model WC 55, Serial Number NWL052833 Model WC 55, Serial Number NWL052846

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

o o

WC M20i, Serial Number RYU416379 WC M20i, Serial Number RYU416381 III. ARGUMENT

Bankruptcy Code section 365(a) provides that, "subject to the court's approval [a debtor in possession] may assume or reject any executory contract or unexpired lease of the debtor." 11 U.S.C. 365(a). Courts apply the "business judgment test" in determining whether a debtor in possession's proposed assumption or rejection of an executory contract or unexpired lease is appropriate under Bankruptcy Code section 365. See, e.g., Robertson v. Pierce (In re Chi-Feng Huang), 23 B.R. 798, 799-800 (B.A.P. 9th Cir. 1982); Commercial Fin. Ltd. v. Hawaii Dimensions, Inc. (In re Hawaii Dimensions, Inc.), 47 B.R. 425, 427 (D. Haw. 1985); see also Group of Institutional Investors v. Chicago, Milwaukee, St. Paul & Pacific R.R. Co., 318 U.S. 523, 550 (1943) ("[T]he question whether a lease should be rejected . . . is one of business judgment."). Under the business judgment test, if assumption or rejection would benefit the debtor's estate, the court should approve the debtor's proposed assumption or rejection. In re Hawaii Dimensions, Inc., 47 B.R. at 427 ("Under the business judgment test, a court should approve a debtor's proposed rejection if such rejection will benefit the estate."); accord In re ChiFeng Huang, 23 B.R. at 801. In fact, in Summit Land Co. v. Allen (In re Summit Land Co.), 13 B.R. 310 (Bankr. D. Utah 1981), the court concluded that a debtor's decision to reject a lease should be granted as a matter of course: [C]ourt approval under Section 365(a), if required, except in extraordinary situations, should be granted as a matter of course. To begin, this rule places responsibility for administering the estate with the trustee, not the court, and therefore furthers the policy of judicial independence considered vital by the authors of the Code. Second, this rule expedites the administration of estates, another goal of the Bankruptcy Reform Act. Third, the rule encourages rehabilitation by permitting the replacement of marginal with profitable business arrangements . . . ." 13 B.R. at 315.

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

The Debtors have determined, in their business judgment, that it is in the best interests of their estates and creditors to reject the Rejected Leases. The Court should give this

determination considerable deference. Even without this deference, the Debtors' decision to reject the Rejected Leases should be approved given the fact that the Debtors shortly will have no ongoing business operations, and that the Rejected Leases therefore have no operational value to the estates. The Debtors also have determined that the Rejected Leases likely have no value or equity that could be realized from assignment. Absent rejection, the Debtors would simply accrue unnecessary administrative obligations which they today they cannot satisfy. The Debtors request that the Court approve rejection of the Rejected Leases under section 365(a) of the Bankruptcy Code effective as of March 31, 2008, regardless of whether an order approving the subject motion has been entered by such time. See, e.g., Pac. Shores Dev., LLC v. At Home Corp. (In re At Home Corp.), 392 F.3d 1064, 1072 (9th Cir. 2004) (" 365(d) confers on bankruptcy courts the equitable authority to approve the rejection of a lease retroactive to the motion filing date"); Thinking Machines Corp. v. Mellon Fin. Svc. Corp. (In Re: Thinking Machines Corp), 67 F.3d 1021, 1028 (1st Cir. 1995); Pac. Shores Dev., LLC v At Home Corp. (In re At Home Corp.), 292 B.R. 195 (N.D. Cal. 2003). As noted above, the Debtors are liquidating and shortly will have no ongoing business operations. Upon service of the Motion, the non-debtor parties to the Rejected Leases will notified of the Debtors' intended rejection and be directed to retrieve the equipment and property that is the subject of the Rejected Leases. Further, the property and/or services that are the subject of the Rejected Leases are of no value to the Debtors and failure to reject the Rejected Leases could result in unnecessary administrative expenses to the estates which, for the reasons already noted, these estates are likely to be unable to satisfy. Accordingly, the Debtors believe it is in the best interests of their estates and creditors to reject the Rejected Leases effective as March 31, 2008.

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

III. CONCLUSION WHEREFORE, the Debtors respectfully request that this Court enter an order: (1) authorizing the Debtors to reject the Rejected Leases effective as March 31, 2008 and (2) granting to the Debtors any other relief that the Court deems necessary and appropriate.

DATED: March 13, 2008

/s/ David M. Guess DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Bankruptcy Counsel for Debtors and Debtors in Possession

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067 TELEPHONE: (310) 407-4000

DECLARATION OF THOMAS J. MARTINI I, Thomas J. Martini, declare as follows: 1. I am the Chief Financial Officer and Treasurer of National R.V. Holdings, Inc.,

a Delaware corporation ("NRVH"), and the Chief Financial Officer and Treasurer of National R.V., Inc., a California corporation ("NRV"). NRVH and NRV (together, the "Debtors") are debtors and debtors in possession in the above-captioned chapter 11 cases. 2. In these capacities, and in conjunction with the efforts of other members of the

Debtors' senior management, I am involved on a day-to-day basis with all aspects of the Debtors' affairs, including business operations, strategic planning, financial reporting, human resources, legal affairs and other management activities, including the Debtors' efforts to address their current financial difficulties. 3. As a consequence, I review and work extensively with the books and records of

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the Debtors, including their business plans, financial statements and projections, business analyses and reports, contracts and other legal documents, notes and correspondence and the like. On a regular basis, I witness and/or participate in negotiations with lenders, vendors and other creditors of the Debtors, and have worked closely with personnel from all aspects of the Debtors' business operations. 4. Based upon all of the foregoing, I have developed an intimate familiarity with:

(a) the Debtors' books and records, which are maintained in the ordinary course of business under my supervision and control as custodian (and under the control of other members of senior management), (b) the Debtors' business and financial history, and their current business and financial situation, and (c) the financial and operational details of the Debtors' business operations, and (d) the recreation vehicle industry generally. 5. I submit this declaration in support of the accompanying Motion for Order

Authorizing the Rejection of Certain Executory Contracts and Unexpired Leases (the "Motion"). Except as otherwise stated herein, if called as a witness, I could and would competently testify to the matters set forth herein from my own personal knowledge.