WARRANTHOLDER RIGHTS AGREEMENT by and among MONACO COACH CORPORATION, KAY TOOLSON and ABLECO HOLDING LLC Dated as of November 6, 2008
WARRANTHOLDER
RIGHTS AGREEMENT
by
and among
MONACO
COACH CORPORATION,
▇▇▇
▇▇▇▇▇▇▇
and
ABLECO
HOLDING LLC
Dated as of November 6, 2008
WARRANTHOLDER
RIGHTS AGREEMENT
WARRANTHOLDER
RIGHTS AGREEMENT, dated as of November 6, 2008 (this "Agreement"), by and
between MONACO COACH CORPORATION, a company incorporated under the laws of the
State of Delaware (the "Company"), ▇▇▇
▇▇▇▇▇▇▇ (the "Stockholder") and
Ableco Holding LLC, a company incorporated under the laws of the State of
Delaware (the "Warrantholder", such
definition to include any and all of its assignees and
transferees). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned such terms in the Financing Agreement
(as defined below).
WHEREAS,
simultaneously herewith, the Company and certain of its Subsidiaries (each a
"Borrower" and
collectively, the "Borrowers"), and the
lenders from time to time party thereto (collectively, the "Lenders") have
entered into a Financing Agreement, dated as of November 6, 2008 (such
Agreement, as amended or otherwise modified from time to time, the "Financing
Agreement");
WHEREAS,
in order to induce the Lenders to enter into the Financing Agreement, the
Company is issuing and delivering to the Warrantholder or its nominees or
assigns a warrant (as amended or otherwise modified from time to time, the
"Warrant", and
together with any warrants issued in substitution therefor or replacement
thereof in accordance with the terms thereof, the "Warrants") to
purchase 1,000,000 shares of common stock, par value US$.01 per share, of the
Company (the "Common
Stock"; the shares of Common Stock issued or issuable upon exercise of
the Warrants are hereinafter referred to as the "Warrant Shares", and
together with the Warrants, the "Securities") as of
the date or dates such Warrant is exercised, subject to the terms, conditions
and adjustments set forth in the Warrant; and
WHEREAS,
in order to induce the Lenders to enter into the Financing Agreement, the
Company does hereby agree to enter into this Agreement pursuant to which the
Company shall provide certain rights and restrictions on the transfer of shares
of Common Stock of the Company.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ISSUANCE
AND FORM OF WARRANTS
SECTION
1.01 Issuance
of Warrant. The Company, for good and valuable
consideration, hereby agrees to issue to the Warrantholder on the date hereof or
such other date as mutually agreed among the parties hereto a Warrant entitling
such Warrantholder to purchase from the Company the shares of Common Stock of
the Company in accordance with the terms of the Warrant.
SECTION
1.02 Form of
Warrant. The certificate evidencing the Warrant to be
delivered pursuant to this Agreement shall be in the form attached hereto as
Exhibit A and
shall be in
registered form only. The Warrants shall be subject to the terms and
conditions set forth therein and in this Agreement.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to the Warrantholder as to itself, as
follows:
SECTION
2.01 Organization and Qualification. The
Company is duly organized and validly existing in good standing under the laws
of the State of Delaware, and has the requisite power and authority to own its
properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing could not
reasonably be expected to have a material adverse effect on the operations,
business, liabilities, assets, properties, or condition (financial or otherwise)
of the Company (a "Material Adverse
Effect").
SECTION
2.02 Authority Relative to This Agreement. The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by general principles of
equity (regardless of whether enforcement is sought in equity or law) or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
other laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
(a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company does not and shall not, (i)
conflict with or violate any federal, state or local law, statute, ordinance,
rule, regulation, order, judgment or decree applicable to the Company
(including, without limitation, the rules and regulations of The New York Stock
Exchange (the "Principal Market"))
or by which any property or assets of the Company is bound or affected or (ii)
conflict with, or constitute a default in any respect under any agreement,
indenture or instrument to which the Company is a party, except in each case
above as could not reasonably be expected to have a Material Adverse
Effect.
(b) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company does not and shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental entity, except (i) as may be required under the Securities
Act and the rules and regulations promulgated thereunder in connection with the
registration of the Warrant Shares issuable upon conversion of the Warrant
pursuant to the Registration Rights Agreement, (ii) as otherwise contemplated
by the Transaction Documents (as defined below), or (iii) as may be required
under the state securities or blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Warrant and Warrant Shares and any
such other approvals as have been obtained.
SECTION
2.04 Capitalization. On the Effective Date (as
defined in the Financing Agreement), after giving effect to the transactions
contemplated by the Transaction Documents to occur on the Effective Date, the
authorized Equity Interests (as defined in the Financing Agreement) of the
Company are as set forth on Schedule 6.01(e) to the Disclosure Schedule of the
Financing Agreement. All of the issued and outstanding shares of
Equity Interests of the Company have been validly issued and are fully paid and
nonassessable, and the holders thereof are not entitled to any preemptive, first
refusal or other similar rights. As of the Effective Date, a
sufficient number of shares of Common Stock has been reserved for issuance in
connection with the exercise of the Warrants and 1,300,000 shares of Common
Stock have been reserved for issuance under the terms of the Monaco Coach
Corporation 1993 Stock Option Plan, as amended and restated through May 17, 2006
(the "1993
Plan") and the Monaco Coach Corporation 2007 Employee Stock Purchase Plan
(the "2007
Plan"), copies of which plan have been delivered to the Warrantholder in
the form and on the terms in effect on the Effective Date. Except as
described on Schedule 6.01(e) to the Disclosure Schedule of the Financing
Agreement, as of the Effective Date and other than the Warrants, (i) the 1993
Plan and the 2007 Plan are the only plans or arrangements in existence relating
to the issuance of shares of Equity Interests of the Company and (ii) there are
no outstanding debt or equity securities of the Company or any of its
Subsidiaries (as defined in the Financing Agreement) and no outstanding
obligations of the Company or any of its Subsidiaries convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from the Company, or other obligations of the Company to issue,
directly or indirectly, any shares of Equity Interests of the
Company.
SECTION
2.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in
compliance in all respects with any and all applicable requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 that are effective as of the date hereof, except
where such noncompliance would not have, individually or in the aggregate, a
Material Adverse Effect.
SECTION
2.06 Internal
Accounting and Disclosure Controls. The Company and each
of its Subsidiaries (which for purposes of this Agreement means any a
"significant subsidiary" of the Company as such term is defined under Regulation
S-X) maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management's general or specific authorization and (iv)
the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-14 under
the Securities Exchange Act of 1934 (the "Exchange Act") that
are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the
SEC, including,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company's
management, including its principal executive officer or officers and its
principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure.
SECTION
2.07 SEC
Documents; Financial Statements. During the twenty-four
(24) months prior to the date hereof, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements, notes and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC
Documents"). As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
SECTION
2.08 Acknowledgement Regarding Warrantholder's Trading
Activity. Anything in this Agreement or elsewhere herein
to the contrary notwithstanding, but subject to compliance by the Warrantholder
with applicable law, it is understood and acknowledged by the Company (i) that
the Warrantholder has not been asked by the Company or its Subsidiaries to
agree, and the Warrantholder has not agreed with the Company or its
Subsidiaries, to desist from purchasing or selling, long and/or short,
securities of the Company, or "derivative" securities based on securities issued
by the Company or to hold the Warrant for any specified term; (ii) that past or
future open market or other transactions by the Warrantholder, including,
without limitation, short sales or "derivative" transactions, before or after
the closing of this or future private placement transactions, may negatively
impact the market price of the Company's publicly-traded securities; (iii) that
the Warrantholder, and counter parties in "derivative" transactions to which the
Warrantholder is a party, directly or indirectly, presently may have a "short"
position in the Common Stock, and (iv) that the Warrantholder shall not be
deemed to have any affiliation with or control over any arm's length counter
party in any "derivative" transaction. The Company further
understands and acknowledges that (a) the Warrantholder may engage in hedging
and/or trading activities at various times during the period that the Warrants
are outstanding, including, without limitation, during the periods that the
value of the Warrant Shares deliverable with respect to Warrants are being
determined and (b) such hedging and/or trading activities (if any) could reduce
the value of the existing stockholders' equity interests in the Company at and
after the time that the hedging and/or trading activities are being
conducted. Notwithstanding the foregoing, the Warrantholder shall not
be permitted to engage in short sales or transfer its Warrants or Warrant Shares
(other than to its Affiliates) from the date hereof until the date that is
ninety (90) days following the date hereof.
SECTION
2.09 No
Integrated Offering. None of the Company, its
Subsidiaries, any of their affiliates, and any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under
circumstances that would require registration of any of the Securities under the
Securities Act, whether through integration with prior offerings or otherwise,
or cause this offering of the Securities to require approval of stockholders of
the Company for purposes of any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are
listed or designated. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would (i) require registration of any
of the Securities under the Securities Act, except with respect to the
registration of Securities pursuant to the Registration Rights Agreement, or
(ii) cause the offering of the Securities to be integrated with other offerings
for purposes of any such applicable stockholder approval
provisions.
SECTION
2.10 Dilutive
Effect. The Company understands and acknowledges that the
number of Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances. The Company further acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is, in each case, absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company, subject to the
provisions of the Transaction Documents and applicable law.
SECTION
2.11 Issuance
of Warrant and Warrant Shares. The Warrants are duly
authorized, validly issued, fully paid and non-assessable, free from all taxes,
liens and charges with respect to the issue thereof, and shall not be subject to
preemptive rights or other similar rights of any holders of Common Stock or
other interests of the Company. The Warrant Shares have been duly
authorized and reserved for issuance upon exercise of the Warrants, and upon
such exercise in accordance with the terms thereof, will be validly issued,
fully paid and non-assessable, free from all taxes, liens and charges except
those created by the Warrantholder, and will not be subject to preemptive rights
or other similar rights of any holders of Common Stock or other interests of the
Company. Assuming the truth and accuracy of the representations and
warranties set forth in Article IV, the offer
and issuance by the Company of the Warrant is exempt from the registration
requirements of Section 5 of the Securities Act.
SECTION
2.12 Form S-3
Eligibility. The Company is eligible to register the
Warrant Shares for resale by the Warrantholder using Form S-3 promulgated under
the Securities Act pursuant to the terms and conditions contained in the
Registration Rights Agreement.
SECTION
2.13 Shell
Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).
SECTION
2.14 Disclosure. All disclosure provided to
the Warrantholder regarding the Company, or any of its Subsidiaries, their
business and the transactions contemplated hereby, including the disclosure
schedules to this Agreement, furnished by or on behalf of the Company is true
and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. Each press release issued by the Company or any of its
Subsidiaries
during the twelve (12) months preceding
the date of this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed. The Company acknowledges and agrees that no Warrantholder
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Article
IV.
REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDER
The
Stockholder hereby represents and warrants to the Warrantholder as to itself, as
follows:
SECTION
3.01 Authority Relative to This Agreement. The
Stockholder has all necessary power and authority to execute and deliver this
Agreement, to perform his respective obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Stockholder and constitutes a legal, valid and
binding obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or other laws relating to, or affecting
generally, the enforcement of creditors' rights and remedies.
(a) The
execution and delivery of this Agreement by the Stockholder does not, and the
performance of this Agreement by the Stockholder does not and shall not, (i)
conflict with or violate any federal, state or local law, statute, ordinance,
rule, regulation, order, judgment or decree applicable to the Stockholder, or by
which the shares of Common Stock owned by the Stockholder are bound or affected,
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) in any respect under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Stockholder is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree applicable to the Stockholder.
(b) The
execution and delivery of this Agreement by the Stockholder does not, and the
performance of this Agreement by the Stockholder does not and shall not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental entity.
REPRESENTATIONS
AND WARRANTIES OF THE WARRANTHOLDER
Each
Warrantholder hereby represents and warrants to the Company and the Stockholder
as to itself, as follows:
SECTION
4.01 Organization. Such Warrantholder is duly
organized and validly existing in good standing under the laws of its
jurisdiction of organization.
SECTION
4.02 Authority Relative to This
Agreement. Each Warrantholder has all necessary power and
authority to execute and deliver this Agreement, to perform its or his
respective obligations hereunder and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by such
Warrantholder and constitutes a legal, valid and binding obligation of such
Warrantholder, enforceable against such Warrantholder in accordance with its
terms, except as such enforceability may be limited by general principles of
equity (regardless of whether enforcement is sought in equity or law) or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
other laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
(a) The
execution and delivery of this Agreement by such Warrantholder do not, and the
performance of this Agreement by such Warrantholder does not and shall not, (i)
conflict with or violate any federal, state or local law, statute, ordinance,
rule, regulation, order, judgment or decree applicable to such Warrantholder or
by which any property or assets of the Warrantholder is bound or affected or
(ii) conflict with, or constitute a default in any respect under, any agreement,
indenture or instrument to which such Warrantholder is a party, except in each
case above as could not reasonably be expected to have a Material Adverse
Effect.
(b) The
execution and delivery of this Agreement by such Warrantholder does
not, and the performance of this Agreement by such Warrantholder does not and
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental entity.
SECTION
4.04 Accredited Investor. Such Warrantholder
is an "accredited investor" as that term is defined in Rule 501(a) of Regulation
D promulgated under the Securities Act. Such Warrantholder is a
sophisticated investor with such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of the
Warrant and the Warrant Shares and is capable of bearing the economic risks of
such Warrant and Warrant Shares. Such Warrantholder has relied solely
upon the advice of such Warrantholder's legal counsel and accountants or other
financial advisers with respect to the legal, financial, business, tax and other
considerations relating to the purchase of the Warrant and the Warrant Shares
and has been offered, during the course of discussions concerning the issuance
of the Warrant, the opportunity to ask such questions and inspect such documents
concerning the Company and its business and affairs as the Warrantholder has
requested so as to understand
more fully the nature of the investment and to verify the accuracy of the
information supplied.
SECTION
4.05 No Sale
or Distribution. Such Warrantholder is acquiring the
Warrants for its own account and not with a view towards, or for resale in
connection with, the sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act of 1933, as amended (the "Securities Act");
provided, however, that by
making the representations herein, such Warrantholder does not agree to hold any
of the Warrants or the Warrant Shares for any minimum or other specific term and
reserves the right to dispose of the Warrants or the Warrant Shares at any time
in accordance with or pursuant to a registration statement or an exemption under
the Securities Act and pursuant to the applicable terms of this Agreement, the
Warrants, the Registration Rights Agreement and the Financing Agreement and
related documents (collectively, the "Transaction
Documents").
TRANSFER
RIGHTS AND RESTRICTIONS
SECTION
5.01 General
Restrictions. If the Stockholder wishes to sell, assign,
transfer or otherwise dispose of any shares of Common Stock (such selling party
being referred to herein as the "Seller" and the
shares of Common Stock proposed to be sold hereunder being referred to herein as
the "Transferring
Shares"), either directly or indirectly, to any Person (as defined in the
Warrant), other than the Company, the Warrantholder or any of their respective
Affiliates (as defined in Rule 405 under the Securities Act) (such transferee
Person being hereinafter referred to as a "Third Party"), the
Seller must first comply with all of the provisions of Section
5.02.
(a) Tag
Along. Until the earlier to occur of (i) April 30, 2012 or
(ii) the date on which the Financing Agreement is no longer outstanding, if at
any time the Stockholder shall desire to sell, assign, transfer or otherwise
dispose of shares of Common Stock, that represent an amount during any twelve
(12)-month period equal to or greater than 25% of the shares of Common Stock
held by the Stockholder as of the date hereof, the Warrantholder shall have the
right, upon exercise of all or an appropriate portion of its Warrants, to
require the Third Party to purchase from the Warrantholder that number of
Transferring Shares (and, if necessary, the Seller shall reduce the number of
its Transferring Shares to be sold by a corresponding amount), which is equal to
the product of (i) the total number of Transferring Shares to be purchased or
repurchased by the Third Party and (ii) a fraction, the numerator of which is
(A) the total number of Transferring Shares owned by the Warrantholder
(including any Warrant Shares issued or issuable under the Warrants) and the
denominator of which is (B) the sum of (x) the number of Transferring Shares
owned by the Warrantholder (including any Warrant Shares issued or issuable
under the Warrants) plus (y) the number of Transferring Shares owned by the
Seller immediately before the transaction. Notwithstanding the
foregoing, for the duration of the term of the Financing Agreement, in no event
shall the Stockholder sell, assign, transfer or otherwise dispose of shares of
Common Stock that represent an amount equal to or greater than 50% of the shares
of Common Stock held by the Stockholder as of the date hereof.
(b) Terms of
Sale. All Transferring Shares purchased from the Warrantholder
pursuant to Section
5.02(a) shall be purchased at the same price and on the same terms and
conditions as the proposed transfer by the Seller (except that (i) the only
representation and warranty that the Warrantholder shall be required to make in
connection with any transfer is a warranty with respect to its own ownership of
the Transferring Shares to be sold by it and its ability to convey title thereto
free and clear of liens, encumbrances or adverse claims, and (ii) the
Warrantholder shall not be required to agree to any indemnity or contribution
provisions in excess of the Warrantholder's proceeds from such
transfer). If, however, the Third Party purchasing such Transferring
Shares refuses to purchase same subject to the indemnity or contribution
limitations set forth in clause (ii) of this Section 5.02(b), the
Warrantholder shall be entitled (in its sole and absolute discretion) to (x)
waive such limitations and thereby consummate the sale of such shares of Common
Stock to such third party or (y) withdraw its right of inclusion
hereunder.
(c) Notice
Requirements. If the Seller proposes to transfer any
Transferring Shares pursuant to Section 5.02(a), it
shall notify, or cause to be notified, the Warrantholder in writing of each such
proposed transfer not less than fifteen (15) Business Days nor more than thirty
(30) Business Days prior to the time of such proposed transfer (the "Transferor Tag-Along
Notice"). The Transferor Tag-Along Notice shall set forth: (i)
the name and address of the Third Party, (ii) the number of Transferring Shares
proposed to be transferred, (iii) the proposed amount and form of consideration
and terms and conditions of payment offered by the Third Party (the "Third Party Terms")
and (iv) that the Third Party has been informed of the tag-along right provided
for in this Section
5.02 and has agreed to purchase Transferring Shares in accordance with
the terms hereof. "Business Day" shall
mean any day other than a Saturday or a Sunday or any day on which national
banks are authorized or required by law to close. Any reference to
"days" (unless Business Days are specified) shall mean calendar
days.
(d) Exercise of Tag-Along
Right. The tag-along right provided for in this Section 5.02 may be
exercised by the Warrantholder by delivery of a written notice to the Company,
the Seller and the Third Party (the "Acceptance Notice")
within ten (10) Business Days following receipt of the Transferor Tag-Along
Notice (the "Tag-Along
Period"). The Acceptance Notice shall state the maximum number
of Transferring Shares that the Warrantholder wishes to include in such transfer
to the Third Party.
(e) Effect of Exercise of
Tag-Along Right. Upon the giving of the Acceptance Notice, the
Warrantholder shall be obligated to sell to the Third Party the number of
Transferring Shares set forth in the Acceptance Notice on the Third Party Terms
(or, if the Warrantholder is not entitled to sell such number of Transferring
Shares under the terms of this Section 5.02, the
Warrantholder shall be obligated to sell the maximum number of Transferring
Shares the Warrantholder is permitted to sell hereunder); provided, however, that neither
the Seller nor the Warrantholder shall consummate the sale of any Transferring
Shares owned by it unless the Third Party purchases all of the Transferring
Shares that the Warrantholder is entitled to sell under the terms of this Section
5.02. If the Third Party does not purchase the Transferring
Shares from the Warrantholder as required pursuant to this Section 5.02, then
any transfer by the Seller of its Transferring Shares to such Third Party shall
be null and void and of no effect whatsoever.
(f) Right to Transfer to Third
Party. After expiration of the Tag-Along Period, if the
provisions of this Section 5.02 have
been complied with in all respects and no Acceptance Notice has been given, the
Seller shall have the right for ninety (90) days after such expiration to
transfer such Transferring Shares to the Third Party on terms no more favorable
to the Seller than the Third Party Terms without further notice, but after such
ninety (90) days, no such transfer may be made without again giving notice to
the Warrantholder of the proposed transfer and complying with all of the
requirements of this Section
5.02. Notwithstanding anything herein to the contrary, nothing
in this Agreement shall permit the Seller to transfer any Transferring Shares to
any Person to the extent prohibited by the Financing Agreement or any other Loan
Document (as defined in the Financing Agreement), to the extent such provisions
of the Financing Agreement or other Loan Document are still in
effect.
SECTION
5.03 Pledge
of Securities. The Company acknowledges and agrees that
the Securities may be pledged to an “accredited investor” (as such term is
defined in the rules and regulations promulgated under the Securities Act of
1933, as amended (the “Securities Act”) by
any Warrantholder in connection with a bona fide margin agreement or other loan
or financing arrangement that is secured by the Securities, if effected in
compliance with the Securities Act. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Warrantholder effecting a pledge of Securities shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction
Document. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a
Warrantholder.
REGISTER
SECTION
6.01 Register. The Company shall maintain at
its principal executive offices (or such other office or agency of the Company
as it may designate by notice to each holder of Securities), a register for the
Warrants in which the Company shall record the name and address of the Person in
whose name the Warrants have been issued (including the name and address of each
transferee), the number of Warrant Shares issuable upon exercise of the Warrants
held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of any Warrantholder
or its legal representatives.
CORPORATE
GOVERNANCE
SECTION
7.01 Board
Observation. So long as the Warrantholder collectively
continue to own at least 1% of the shares of Common Stock, on a Fully Diluted
Basis (as adjusted for any share splits, subdivisions, consolidations or
recapitalizations), the Warrantholder shall be entitled to appoint one
non-voting observer (the "Senior Observer") to
the board of directors of the Company
(the
"Board"). The
Senior Observer shall have the right to attend all meetings of the Board
and any committees thereof (including, without limitation, the audit committee
and compensation committee), shall receive notices of all meetings of the Board
and/or any committees thereof and all written materials distributed to members
of the Board and/or any committees thereof, but shall not be entitled to vote on
any matters before the Board or any committees thereof; provided, however, that the
Company may exclude such Senior Observer from any meeting or portions thereof
and exclude such materials or portions thereof if the Company believes, in its
sole discretion, that such exclusion is reasonably necessary (i) to preserve the
attorney-client privilege, (ii) to prevent disclosure of confidential
proprietary information related to a transaction with other portfolio companies
of the Senior Observer, or (iii) to protect against disclosure of information
related to the topic of paying for or refinancing any obligations relating to
the Financing Agreement, dated as of November 6, 2008, by and among the Company
and the other parties thereto or other matters related thereto; and provided, further, that such
Senior Observer may be excluded from meetings of the independent directors of
the Board so long as such Senior Observer is provided with the opportunity to
meet with such independent directors of the Board;
and provided, further, that the
Senior Observer shall execute and deliver, upon his appointment and prior to any
attendance at the first such meeting or to being furnished the first such
written materials, a confidentiality and nondisclosure agreement in the form
agreed to prior to the date hereof.
MISCELLANEOUS
SECTION
8.01 Further
Assurances. The Company will execute and deliver all such
further documents and instruments and take all such further action as may be
reasonably necessary in order to consummate the transactions contemplated hereby
including, without limitation, the adoption of any amendments to the certificate
of incorporation or by-laws of the Company as may be reasonably necessary to
give effect to the intent of this Agreement and the Warrant.
SECTION
8.02 Disclosure of Transactions and Other Material
Information. The Company shall issue a press release and
file a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents on or before the date, and in the
form, required by the 1934 Act and attaching the material Transaction Documents
(including, without limitation, this Agreement, the form of Warrant and the form
of the Registration Rights Agreement) as exhibits to such filing (including all
attachments, the "8-K
Filing"); provided that such press release and Current Report will be
subject to reasonable approval from the Warrantholder. Subject to the
foregoing, neither the Company, its Subsidiaries nor the Warrantholder shall
issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of the Warrantholder, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case
of clause (i) the Warrantholder shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its
release).
SECTION
8.03 Variable
Securities; Dilutive Issuances. For so long as any
Warrants remain outstanding, the Company shall not, in any manner, issue or sell
any rights, warrants or options to subscribe for or purchase Common Stock or
directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the
Common Stock, including by way of one or more reset(s) to any fixed
price. For so long as any Warrants remain outstanding, the Company
shall not, in any manner, enter into or affect any Dilutive Issuances (as
defined in the Warrant) if the effect of such Dilutive Issuance is to cause the
Company to be required to issue upon exercise of any Warrant any shares of
Common Stock in excess of that number of shares of Common Stock which the
Company may issue upon exercise of the Warrants without breaching the Company's
obligations under the rules or regulations of the Principal Market.
(a) For
purposes of this Section 8.04, the
following definitions shall apply.
(1) "Convertible
Securities" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common
Stock.
(2) "Options" means any
rights, warrants or options to subscribe for or purchase shares of Common Stock
or Convertible Securities.
(3) "Common Stock
Equivalents" means, collectively, Options and Convertible
Securities.
(b) From the
date hereof until sixty (60) days after the Expiration Date (as defined below),
the Company will not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its Subsidiaries'
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents to any
Person.
SECTION
8.05 Specific
Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity. The Warrantholder shall be entitled to
its reasonable attorneys' fees in any action brought to enforce this Agreement
in which it is the prevailing party solely against the party over whom it has
prevailed.
SECTION
8.06 Entire
Agreement. This Agreement, the Warrant, the Registration
Rights Agreement, the Financing Agreement and the other Loan Documents (as
defined in the Financing Agreement) (collectively, the "Other Agreements")
are intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations,
warranties, covenants
or undertakings relating to such subject matter, other than those set forth or
referred to herein or in the Other Agreements. This Agreement and the
Other Agreements supersede all prior agreements and understandings between the
parties to this Agreement, both written and oral, with respect to such subject
matter.
SECTION
8.07 Amendments and Waivers. This Agreement
and any term hereof may not be amended, modified, supplemented or terminated,
and waivers or consents to departure from the provisions hereof may not be
given, except by written instrument duly executed by the
Warrantholder. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach or default of another party under this Agreement, shall impair any such
right, power or remedy of such party nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring.
SECTION
8.08 Severability. In the event that any one
or more of the provisions, paragraphs, words, clauses, phrases or sentences
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision, paragraph, word, clause,
phrase or sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law;
provided, that this Section 8.08 shall
not cause this Agreement to differ materially from the intent of the parties as
herein expressed.
SECTION
8.09 Governing Law; Jurisdiction; Jury
Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of Delaware, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
SECTION
8.10 Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors and permitted assigns (including any permitted
transferee of Warrants or Warrant Shares). Any holder of the Warrants
or Warrant Shares may assign to any permitted (as determined under the Warrant)
transferee of its Warrants or Warrant Shares, its rights and obligations under
this Agreement; provided, however, if any
permitted transferee shall take and hold Warrants or Warrant Shares, such
transferee shall promptly notify the Company and by taking and holding such
Warrants or Warrant Shares such permitted transferee shall automatically be
entitled to receive the benefits of and be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement as
if it were a party hereto (and shall, for all purposes, be deemed a holder of
Warrants or Warrant Shares under this Agreement). If the
Company shall so request any heir, successor or permitted assign (including any
permitted transferee) wishing to avail itself of the benefits of this Agreement
shall agree in writing to acquire and hold the Warrants or Warrant Shares
subject to all of the terms hereof. For purposes of this Agreement,
"successor" for any entity other than a natural person shall mean a successor to
such entity as a result of such entity's merger, consolidation, sale of
substantially all of its assets, or similar transaction. Except as
provided above or otherwise permitted by this Agreement, neither this Agreement
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by the Company or the Stockholder without the consent
of the other parties hereto other than assignment by the Company in the event of
a Fundamental Transaction (as defined in the Warrant) in accordance with the
terms of the Warrant.
SECTION
8.11 Counterparts. This Agreement may be
executed in counterparts, each of which, when so executed and delivered, shall
be deemed to be an original and enforceable, but all of which, taken together,
shall constitute one and the same instrument.
SECTION
8.12 Descriptive Headings, Etc. The headings
in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of terms contained herein. Unless the
context of this Agreement otherwise requires: (i) words of any gender
shall be deemed to include each other gender; (ii) words using the singular
or plural number shall also include the plural or singular number, respectively;
(iii) the words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and paragraph
references are to the Sections and paragraphs of this Agreement unless otherwise
specified; (iv) the word "including" and words of similar import when used in
this Agreement shall mean "including, without limitation," unless otherwise
specified; (v) "or" is not exclusive; and (vi) provisions apply to successive
events and transactions.
SECTION
8.13 Termination. This Agreement shall
terminate on the October 31, 2018 (the "Expiration
Date"). Notwithstanding the foregoing, this Agreement shall
terminate prior to the Expiration Date if all Warrants have been fully exercised
or cancelled pursuant to the terms herein and in the Warrants.
SECTION
8.14 Notices. All
notices and other communications (and deliveries) provided for or permitted
hereunder shall be made in writing by hand delivery, facsimile, any courier
guaranteeing overnight delivery or first class registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
|
If
to the Company:
|
Monaco
Coach Corporation
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
|
|
with
a copy to:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
If
to Warrantholder:
|
Ableco
Holding LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
|
|
with
a copy to:
|
Cerberus
California, Inc.
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
|
All such
notices and communications (and deliveries) shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when
transmitted with a receipt of successful transmission, if by facsimile; on the
next Business Day, if timely delivered to a courier
guaranteeing overnight delivery; and five days after being deposited in the
mail, if sent first class or certified mail, return receipt requested, postage
prepaid.
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
| COMPANY: | ||
|
MONACO
COACH CORPORATION
|
||
|
By:
|
/s/ P. ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Name: P.
▇▇▇▇▇▇ ▇▇▇▇▇
|
||
|
Title: Vice
President
|
||
|
STOCKHOLDER:
|
|
| /s/ ▇▇▇ ▇▇▇▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇▇▇▇ |
|
WARRANTHOLDER:
|
||
| ABLECO HOLDING LLC | ||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
||
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Title: Chief
Executive Officer
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||
EXHIBIT
A
Form
of Warrant