<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
Monaco Finance, Inc.
__________________
(Name of issuer)
Class A Common Stock, $.01 Par Value
___________________________
(Title of class of securities)
608868-105
--------------
(CUSIP number)
Stephen H. Deckoff James J. Zenni, Jr.
James E. Walker, III Black Diamond Capital Management L.L.C.
Black Diamond Advisors, Inc. 100 Field Drive, Suite 330
230 Park Avenue, Suite 635 Lake Forest, Illinois 60045
New York, New York 10169
(212) 687-1726
Lisa W. Zenni
c/o Black Diamond Capital
Management L.L.C.
100 Field Drive, Suite 330
Lake Forest, Illinois 60045
______________________________________________
(Name, address and telephone number of person
authorized to receive notices and communications)
COPY TO:
Scott C. Lewis, Esq.
Latham & Watkins
633 West 5th Street, Suite 4000
Los Angeles, California 90071
(213) 485-1234
June 28, 1996
__________________________________________________
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this statement because of Rule 13d-1(b)(3) or (4), check the
following box: [ ]
Check the following box if a fee is being paid with the statement: [ ]
Page 1 of 24 Pages
Exhibit Index is on Page 20
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- ----------------------- ---------------------
CUSIP NO. 608868-105 SCHEDULE 13D PAGE 2 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Black Diamond Advisors, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC, AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 2,328,434
(includes 43,243 shares presently issuable on
SHARES conversion of convertible notes and 2,285,192 shares
that would be issuable on conversion (assuming a
BENEFICIALLY conversion price of $2.188) of convertible notes that
the Reporting Person has the option to acquire.
OWNED BY
-----------------------------------------------------------
EACH SHARED VOTING POWER
8
REPORTING -0-
PERSON -----------------------------------------------------------
SOLE DISPOSITIVE POWER
WITH 9
2,328,434
(includes 43,243 shares presently issuable on
conversion of convertible notes and 2,285,192 shares
that would be issuable on conversion (assuming a
conversion price of $2.188) of convertible notes that
the Reporting Person has the option to acquire.
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,328,434
(includes 43,243 shares presently issuable on conversion of convertible
notes and 2,285,192 shares that would be issuable on converstion (assuming
a conversion price of $2.188) of convertible notes that the Reporting
Person has the option to acquire - see Item 5 below)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
29.2% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
2
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- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 3 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephen H. Deckoff
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF (For directly owned securities), WC (for indirectly onwed securities)
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 54,054
(includes 54,054 shares presently issuable upon
SHARES conversion of convertible notes)
BENEFICIALLY -----------------------------------------------------------
SHARED VOTING POWER
OWNED BY 8
183,784
EACH (includes 183,784 shares presently issuable upon
conversion of convertible notes)
REPORTING
-----------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
WITH 54,054
(includes 54,054 shares presently issuable upon
conversion of convertible notes)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
183,784
(includes 183,784 shares presently issuable upon
conversion of convertible notes)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
237,838
(includes 237,838 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
4.0% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
3
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 4 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James E. Walker, III
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF (For directly owned securities), WC (for indirectly onwed securities)
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 54,054
(includes 54,054 shares presently issuable upon
SHARES conversion of convertible notes)
BENEFICIALLY -----------------------------------------------------------
SHARED VOTING POWER
OWNED BY 8
183,784
EACH (includes 183,784 shares presently issuable upon
conversion of convertible notes)
REPORTING
-----------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
WITH 54,054
(includes 54,054 shares presently issuable upon
conversion of convertible notes)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
183,784
(includes 183,784 shares presently issuable upon
conversion of convertible notes)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
237,838
(includes 237,838 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
4.0% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
4
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 5 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BDC Partners I, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 183,784
(includes 183,784 shares presently issuable upon
SHARES conversion of convertible notes)
BENEFICIALLY -----------------------------------------------------------
SHARED VOTING POWER
OWNED BY 8
-0-
EACH
-----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9
183,784
WITH (includes 183,784 shares presently issuable upon
conversion of convertible notes)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
183,784
(includes 183,784 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
3.1% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
PN
- ------------------------------------------------------------------------------
5
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- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 6 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Black Diamond Capital Management L.L.C.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
183,784
OWNED BY (includes 183,784 shares presently issuable upon
conversion of convertible notes)
EACH
REPORTING
-----------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
WITH -0-
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
183,784
(includes 183,784 shares presently issuable upon
conversion of convertible notes)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
183,784
(includes 183,784 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
3.1% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
OO
- ------------------------------------------------------------------------------
6
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 7 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lisa W. Zenni
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 43,243
(includes 43,243 shares presently issuable upon
SHARES conversion of convertible notes)
BENEFICIALLY -----------------------------------------------------------
SHARED VOTING POWER
OWNED BY 8
-0-
EACH
-----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON 9
43,243
WITH (includes 43,243 shares presently issuable upon
conversion of convertible notes)
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
43,243
(includes 43,243 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
0.8% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
7
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- ----------------------- ---------------------
CUSIP NO. 608868-105 13D PAGE 8 OF 24 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James J. Zenni, Jr.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
227,027
OWNED BY (includes 227,027 shares presently issuable upon
conversion of convertible notes)
EACH
REPORTING
-----------------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
WITH -0-
-----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
227,027
(includes 227,027 shares presently issuable upon
conversion of convertible notes)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
227,027
(includes 227,027 shares presently issuable on conversion of convertible
notes)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
3.8% (see Item 1 below)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
8
<PAGE>
This Amendment No. 1 to Schedule 13D restates and amends the Statement
on Schedule 13D filed April 5, 1996 (the "Schedule 13D") by Black Diamond
Advisors, Inc., a New York corporation, Stephen H. Deckoff, James E. Walker,
III, BDC Partners I, L.P., a Delaware limited partnership, Black Diamond Capital
Management L.L.C., a Delaware limited liability company, James J. Zenni, Jr. and
Lisa W. Zenni, relating to the Class A Common Stock, par value $.01 per share,
of Monaco Finance, Inc., a Colorado corporation.
This Schedule 13D is subject to the provisions of Rule 101(a)(2) of
Regulation S-T under the Securities Exchange Act of 1934, as amended, relating
to the Securities and Exchange Commission's recently adopted electronic filing
requirements. Pursuant to Rule 101(a)(2), since this amendment is the first
amendment which the Reporting Persons are filing electronically, the Reporting
Persons are required to restate the entire Schedule 13D.
Item 1. Security and Issuer.
--------------------
This statement relates to shares of Class A common stock, par value
$.01 per share (the "Shares"), of Monaco Finance, Inc., a Colorado corporation
(the "Company"). The Company has two classes of common stock. The two classes
are identical in all respects except that each share of Class B common stock is
entitled to three votes while each Share is entitled to one vote. The
percentages reported in this statement are based on the outstanding amount of
Shares.
The principal executive offices of the Company are located at 370
Seventeenth Street, Suite 5060, Denver, Colorado 80202.
Item 2. Identity and Background.
------------------------
(a)-(c), (f). This statement is being filed by (i) Black Diamond
Advisors, Inc., a New York corporation ("BDA"), (ii) Stephen H. Deckoff, (iii)
James E. Walker, III, (iv) BDC Partners I, L.P., a Delaware limited partnership
("BDC Partners I"), (v) Black Diamond Capital Management L.L.C., a Delaware
limited liability company ("BDCM"), (vi) James J. Zenni, Jr. and (vii) Lisa W.
Zenni. BDA, Mr. Deckoff, Mr. Walker, BDC Partners I, BDCM, Mr. Zenni and Ms.
Zenni are sometimes collectively referred to herein as the "Reporting Persons."
BDA's principal business is merchant and investment banking. BDA is a
New York corporation, and its principal offices are located at 230 Park Avenue,
New York, New York 10169. Mr. Deckoff and Mr. Walker each own 50% of the
outstanding common stock of BDA.
The following sets forth as to each executive officer and director of
BDA (a) his name; (b) citizenship; (c) his business address; and (d) his
principal occupation and address where such employment is conducted.
9
<PAGE>
1A. (a) Stephen H. Deckoff
(b) United States of America
(c) 230 Park Avenue, New York, New York 10169
(d) Mr. Deckoff's principal occupation is President, director
and 50% shareholder of BDA. Mr Deckoff's principal business
address is at the address in (c) above.
2A. (a) James E. Walker, III
(b) United States of America
(c) 230 Park Avenue, New York, New York 10169
(d) Mr. Walker's principal occupation is Secretary, director and
50% shareholder of BDA. Mr Walker's principal business
address is at the address in (c) above.
Mr. Deckoff's citizenship, business address, principal occupation and
location of employment are as set forth in 1A(b)-(d) above. Mr. Deckoff also
has a membership interest in a member BDCM, the general partner of BDC Partners
I.
Mr. Walker's citizenship, business address, principal occupation and
location of employment are as set forth in 2A(b)-(d) above. Mr. Walker also has
a membership interest in BDCM.
BDC Partners I is a Delaware limited partnership. The principal
business of BDC Partners I is investing in, and the trading of, primarily non-
investment grade and fixed income securities. BDCM is the sole general partner
of BDC Partners I. BDCM's principal business is the management of discretionary
investment funds. Currently, BDCM's sole client is BDC Partners I. James J.
Zenni, Mr. Deckoff and Mr. Walker collectively own 100% of the membership
interests in BDCM.
The following sets forth as to each executive officer and director of
BDCM (a) his name; (b) citizenship; (c) his business address; and (d) his
principal occupation and address where such employment is conducted.
1B. (a) James J. Zenni
(b) United States of America
(c) 100 Field Drive, Suite 330, Lake Forrest, IL 60045
(d) Mr. Zenni's principal occupation is President, director and
member of BDCM. Mr. Zenni's principal business address is
at the address in (c) above.
Mr. Zenni's citizenship, business address, principal occupation and
location of employment are as set forth in 1B(b)-(d) above.
10
<PAGE>
Ms. Zenni is the spouse of James J. Zenni. Ms. Zenni does not have a
business address, but can be contacted c/o Black Diamond Capital Management, 100
Field Drive, Suite 330, Lake Forrest, IL 60045. Ms. Zenni is a citizen of the
United States of America.
(d) and (e). During the last five years, none of BDA or any executive
officer, director or controlling person of BDA has (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
During the last five years, Mr. Deckoff has not (i) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
During the last five years, Mr. Walker has not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
During the last five years, none of BDC Partners I, BDCM or any
executive officer, director or controlling person of BDCM has (i) been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
During the last five years, Mr. Zenni has not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
11
<PAGE>
During the last five years, Ms. Zenni has not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
As of the close of business on July 11, 1996, BDA owned $200,000
aggregate principal amount of 12% Convertible Senior Subordinated Notes due 2001
of the Company (the "Convertible Notes") convertible into 43,243 Shares. All of
such Convertible Notes were purchased by BDA from the Company on January 9, 1996
at par, which amount was provided from BDA's working capital and contributions
of personal funds of Mr. Deckoff and Mr. Walker. On January 9, 1996, BDA
purchased $700,000 aggregate principal amounts of Convertible Notes from the
Company at par, of which $250,000 aggregate principal amount was sold to Mr.
Deckoff and $250,000 aggregate principal amount was sold to Mr. Walker, in each
case at cost, on March 25, 1996.
Pursuant to the purchase agreement with respect to the Convertible
Notes (the "Purchase Agreement"), on January 9, 1996 BDA was granted an option
(the "Option") to purchase an additional $5,000,000 aggregate principal amount
of Convertible Notes at any time prior to January 9, 1998 at par, with a
conversion price equal to the closing price (as defined in section 10.06 of the
indenture governing the Notes)(the "Indenture") of the Shares on the trading day
prior to the exercise of such option or, if the closing of the transaction
occurs more than 10 days after exercise of the option, the closing price on the
trading day prior to the date 10 days prior to such closing. On June 28, 1996,
BDA and the Company entered into a letter agreement (the "Letter Agreement")
which, among other things, provides for (i) an extension of the term of the
Option to the date which is the later of (a) 24 months after the Company's S-3
Registration Statement (the "Registration Statement") for the Conversion Shares
(as defined in the Purchase Agreement) relating to Notes is declared effective
by the Securities and Exchange Commission, and (b) 24 months after the Company
has received requisite shareholder approval for the issuance of Notes pursuant
to the Option to the extent required in accordance with applicable NASDAQ
requirements, and (ii) effective upon the Company obtaining any necessary
shareholder approval thereof to the extent required by NASDAQ in connection with
Monaco's NASDAQ listing agreement, an adjustment to the conversion price of the
Notes issuable upon exercise of the Option and the conversion price of the
original $5,000,000 principal amount of Notes issued on January 9, 1996 (unless
and until such shareholder approval is obtained, the conversion price of the
Notes remains as set forth in the Purchase Agreement and the Indenture). The
Purchase Agreement, the Indenture and the Letter Agreement are filed herewith as
Exhibits 2, 3 and 5, respectively, and are incorporated herein by reference.
12
<PAGE>
As of the close of business on July 11, 1996, Mr. Deckoff directly
owned an aggregate of $250,000 principal amount of Convertible Notes convertible
into 54,054 Shares. All of such Convertible Notes were purchased from BDA for a
total consideration of the par value thereof, which amount was provided from his
personal funds. All of such Convertible Notes initially were acquired by BDA on
January 9, 1996 from the Company at par, and on March 25 were transferred by BDA
to Mr. Deckoff at cost.
As of the close of business on July 11, 1996, Mr. Walker directly
owned an aggregate of $250,000 principal amount of Convertible Notes convertible
into 54,054 Shares. All of such Convertible Notes were purchased from BDA for a
total consideration of the par value thereof, which amount was provided from his
personal funds. All of such Convertible Notes initially were acquired by BDA on
January 9, 1996 from the Company at par, and on March 25 were transferred by BDA
to Mr. Walker at cost.
As of the close of business on July 11, 1996, BDC Partners I owned
$850,000 aggregate principal amount of Convertible Notes convertible into
183,784 Shares. All of such Convertible Notes were purchased by BDC Partners I
on January 9, 1996 from the Company at par, which amount was provided from BDC
Partners I's investment funds.
As of the close of business on July 11, 1996, Ms. Zenni owned $200,000
aggregate principal amount of Convertible Notes convertible into 43,243 Shares.
All of such Convertible Notes were purchased by Ms. Zenni on January 9, 1996
from the Company at par, which amount was provided from her personal funds.
Item 4. Purpose of Transaction.
-----------------------
Each of the Reporting Persons acquired their respective beneficial
interests in the Shares for investment purposes. BDA in addition acquired its
beneficial interests for purposes of acquiring an equity interest in an issuer
of sub-prime automobile receivables-backed notes, which is related to the
principal business of BDA. Pursuant to the Purchase Agreement Mr. Deckoff and
Mr. Walker are entitled to attend meetings of the Company's board of directors
as observers. In addition, one of such persons is entitled to be appointed to
the Company's board of directors at BDA's option. To Mr. Deckoff's and Mr.
Walker's knowledge, the Company has not held any board meetings since the date
of the Purchase Agreement. Messrs Deckoff and Walker presently intend to attend
such board meetings when held. BDA has no present plans to exercise its right
to have one of Messrs Deckoff and Walker appointed to the Company's board of
directors, but reserves the right to do so at any time permitted by the Purchase
Agreement.
The Reporting Persons, individually or together, intend to review on a
continuing basis their respective investments in the Shares. Such continuing
review may result in the Reporting Persons acquiring additional Shares, or
selling all or a portion of their Shares, in the
13
<PAGE>
open market or in privately negotiated transactions with the Company or third
parties or maintaining their holdings at current levels. Such review also may
result in the Reporting Persons formulating plans or making proposals regarding
actions set forth in Item 4 of Schedule 13D (which are listed in clauses (i)
through (x) below). The Reporting Persons' decision to acquire or dispose of
Shares, hold the Shares or take such other actions will depend on market,
economic and other conditions, including an ongoing evaluation of the Company's
financial condition, operations and prospects, the actions of the Company's
management and the Board and other future developments, and the relative
attractiveness of alternative business and investment opportunities. Such
transactions or actions, if any, would be made at such times and in such manner
as the Reporting Persons, in their discretion, deem advisable.
The Reporting Persons reserve the right to formulate plans or make
proposals, and take such actions with respect to their investment in the
Company, including any or all of the items set forth in paragraphs (a) through
(j) of Item 4 of Schedule 13D (which are listed in clauses (i) through (x)
below) and any other actions, as they may determine.
Other than as described herein, the Reporting Persons have no present
plans or proposals which relate to or would result in: (i) the acquisition by
any person of additional securities of the Company, or the disposition of
securities of the Company; (ii) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries; (iii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (iv) any change in the present Board or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the Board; (v) any
material change in the present capitalization or dividend policy of the Company;
(vi) any other material change in the Company's business or corporate structure;
(vii) changes in the Company's certificate of incorporation or by-laws or other
actions which may impede the acquisition of control of the Company by any
persons; (viii) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(ix) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or (x) any action similar to those enumerated
above.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a)-(b) As of the close of business on July 11, 1996, BDA directly
owned $200,000 aggregate principal amount of Convertible Notes convertible into
43,243 Shares, as well as an option to acquire an additional $5,000,000
aggregate principal amount of Convertible Notes (the "Option Notes") at any time
prior to the date which is the later of (a) 24 months after the Registration
Statement is declared effective by the Securities and Exchange Commission, and
(b) 24 months after the Company has received requisite shareholder approval for
the issuance
14
<PAGE>
of Notes pursuant to the Option to the extent required in accordance with
applicable NASDAQ requirements. Unless and until approval of the terms of the
Letter Agreement by the Company's shareholders (in which case the conversion
price of the Option Notes shall be determined as set forth in Section 1 of such
Letter Agreement), the conversion price of the Option Notes will equal the
closing price of the Shares on the day prior to the exercise, if any, of the
option to purchase such Option Notes and therefore cannot be determined at this
time. Assuming a conversion price of $2.188 (the most current available closing
price of the Shares), the Option Notes would be convertible into 2,285,192
Shares, which, together with the 43,243 Shares issuable on conversion of the
$200,000 of Convertible Notes presently owned by BDA, represent approximately
29.2% of the 5,657,279 Shares outstanding as of March 31, 1996, as reported in
the Company's Form 10-QSB for the quarter ended March 31, 1996 (the "Outstanding
Shares"). BDA has the sole power to vote or direct the vote, and to dispose or
to direct the disposition of, the Shares which it owns directly.
As of the close of business on July 11, 1996, BDC Partners I directly
owned $850,000 aggregate principal amount of Convertible Notes convertible into
183,784 Shares, which represent approximately 3.1% of the Outstanding Shares.
BDC Partners I, acting through its general partner, BDCM, has the sole power to
vote or direct the vote, and to dispose or to direct the disposition of, the
Shares which it owns directly. BDCM, as the sole general partner of BDC
Partners I, may be deemed to own beneficially the Shares directly owned by BDC
Partners I. In addition, the members of BDCM each has shared power to vote or
to direct the vote, and to dispose or to direct the disposition of, Shares that
may be deemed to be beneficially owned by BDCM. Therefore, each of the members
of BDCM (Messrs. Deckoff, Walker and Zenni) may be deemed to own beneficially
Shares that BDCM may be deemed to own beneficially.
As of the close of business on July 11, 1996, Stephen H. Deckoff
directly owned $250,000 aggregate principal amount of Convertible Notes
convertible into 54,054 Shares, which represent approximately 0.8% of the
Outstanding Shares. Mr. Deckoff has the sole power to vote or direct the vote,
and to dispose or to direct the disposition of, the Shares which he owns
directly. In addition, as a member of BDCM, Mr. Deckoff may be deemed to
beneficially own the $850,000 amount of Convertible Notes that BDCM may be
deemed to beneficially own. Such Convertible Notes are presently convertible
into 183,784 Shares, which, together with the 54,054 Shares issuable on
conversion of the $250,000 of Convertible Notes directly owned by Mr. Deckoff,
represent approximately 4.0% of the Outstanding Shares. Mr. Deckoff, as the
owner of 50% of the outstanding common stock of BDA, may be deemed to share the
power to vote or direct the vote, and to dispose or to direct the disposition
of, the Shares which BDA owns, but disclaims beneficial ownership of such
Shares.
As of the close of business on July 11, 1996, James E. Walker, III
directly owned $250,000 aggregate principal amount of Convertible Notes
convertible into 54,054 Shares, which represent approximately 0.8% of the
Outstanding Shares. Mr. Walker has the sole power to
15
<PAGE>
vote or direct the vote, and to dispose or to direct the disposition of, the
Shares which he owns directly. In addition, as a member of BDCM, Mr. Walker may
be deemed to beneficially own the $850,000 amount of Convertible Notes that BDCM
may be deemed to beneficially own. Such Convertible Notes are presently
convertible into 183,784 Shares, which, together with the 54,054 Shares issuable
on conversion of the $250,000 of Convertible Notes directly owned by Mr. Walker,
represent approximately 4.0% of the Outstanding Shares. Mr. Walker, as the
owner of 50% of the outstanding common stock of BDA, may be deemed to share the
power to vote or direct the vote, and to dispose or to direct the disposition
of, the Shares which BDA owns, but disclaims beneficial ownership of such
Shares.
As of the close of business on July 11, 1996, James J. Zenni did not
directly own any Shares. As a member of BDCM, Mr. Zenni may be deemed to
beneficially own the $850,000 amount of Convertible Notes that BDCM may be
deemed to beneficially own. In addition, as the spouse of Lisa W. Zenni, Mr.
Zenni may be deemed to beneficially own the $200,000 amount of Convertible Notes
that she owns. Such Convertible Notes are presently convertible into 227,027
Shares which represent approximately 3.8% of the Outstanding Shares.
As of the close of business on July 11, 1996, Lisa W. Zenni directly
owned $200,000 aggregate principal amount of Convertible Notes convertible into
43,243 Shares, which represent approximately 0.8% of the Outstanding Shares.
Ms. Zenni has the sole power to vote or direct the vote, and to dispose or to
direct the disposition of, the Shares which she owns directly.
Other than the foregoing, no Reporting Person or any executive
officer, director or controlling person of BDA, BDC Partners I or BDCM
beneficially owns any Shares. Each of the persons named in this Item 5(a)-(b)
disclaims beneficial ownership of any Shares owned beneficially or of record by
any other person named in this Item 5(a)-(b). BDA, Mr. Deckoff, Mr. Walker, BDC
Partners I, BDCM, Mr. Zenni and Ms. Zenni may be deemed to be a group in
relation to their respective investments in the Company. BDA, Mr. Deckoff, Mr.
Walker, BDC Partners I, BDCM, Mr. Zenni and Ms. Zenni do not affirm the
existence of a group.
(c) Within the past 60 days, there have not been any transactions in
Shares effected by or for the account of or any executive officer, director or
controlling person of BDA, BDC Partners I or BDCM. The Reporting Persons have
not acquired any Shares since January 9, 1996 except as described in Item 3 of
this statement.
(d) Not applicable.
(e) Not applicable.
16
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to
Securities of the Issuer.
-------------------------------------------------------------
Pursuant to the Purchase Agreement, on January 9, 1996 BDA was granted
an option to purchase an additional $5,000,000 aggregate principal amount of
Convertible Notes at any time prior to January 9, 1998 at par, with a conversion
price equal to the closing price (as defined in section 10.06 of the Indenture)
of the Shares on the day prior to the exercise of such option or, if the closing
of such transaction occurs more than 10 days after exercise of the option, the
closing price of the Shares on the trading day ten days prior to such closing.
On June 28, 1996, BDA and the Company entered into the Letter Agreement which,
among other things, provides for (i) an extension of the term of the Option to
the date which is the later of (a) 24 months after the Registration Statement is
declared effective by the Securities and Exchange Commission, and (b) 24 months
after the Company has received shareholder approval for the issuance of Notes
pursuant to the Option to the extent required in accordance with applicable
NASDAQ requirements, and (ii) effective upon the Company obtaining any necessary
shareholder approval thereof to the extent required by NASDAQ in connection with
Monaco's NASDAQ listing agreement, an adjustment to the conversion price of the
Notes issuable upon exercise of the Option and the conversion price of the
original $5,000,000 principal amount of Notes issued on January 9, 1996 (unless
and until such shareholder approval is obtained, the conversion price of the
Notes remains as set forth in the Purchase Agreement and the Indenture).
The Company and the Reporting Persons are also parties to a
Registration Rights Agreement providing for the Registration Statement and, at
the request of the holders of the majority of the Convertible Notes,
registration of the Convertible Notes. The Purchase Agreement, the Indenture,
the Registration Rights Agreement and the Letter Agreement are filed herewith as
Exhibits 2, 3, 4 and 5, respectively, and are incorporated herein by reference.
At the time of the original purchase of the Convertible Notes from the
Company, BDA entered into an agreement with each of Ms. Zenni and two other
purchasers of the Convertible Notes (Guarantee Title and Trust Company ("GTTC")
and Heller Financial, Inc. ("HFI"), and together with Ms. Zenni, the
"Investors")) with respect to certain matters concerning their investment in the
Convertible Notes (such agreements, collectively, the "Agreements"). The
Investors own an aggregate of $3,450,000 principal amount of Notes.
Pursuant to the Agreements (other than the Agreement with Ms. Zenni),
to the extent that an Investor's profit on its investment in the Convertible
Notes exceeds a 20% annual rate of return, BDA is entitled to receive 50% of the
profits in excess of such amount. Such amount is payable to BDA in either cash
or Shares. BDA also has the right pursuant to the Agreements to purchase an
Investor's Notes in the following circumstances: (i) Except with respect to Ms.
Zenni's Notes, within 180 days of January 9, 2001 (the "Maturity Date") at the
higher of (a) par plus accrued interest and (b) the market value of the Shares
underlying such Notes, (ii) if there is a matter under the Indenture that
requires the vote or consent of Note
17
<PAGE>
holders and the Investor does not vote on such matter as recommended by BDA, at
not less than par value plus accrued interest, (iii) in connection with a
proposed transfer of Notes by the Investor, at the bona fide offer price, (iv)
with respect to Ms. Zenni's Agreement, on January 5, 2001, at the higher of (a)
par plus accrued interest and (b) the market value of the Shares underlying the
Convertible Notes, unless Ms. Zenni elects to convert her Notes on the Maturity
Date, in which case BDA thereafter shall have a right to purchase her Shares
upon any proposed transfer thereof at the bona fide offer price. The Agreements
also restrict the Investors' ability, without BDA's consent, to exercise their
registration rights with respect to the Convertible Notes, make acceleration
demands pursuant to the Indenture or convert their Notes into Shares and allow
BDA to purchase the Convertible Notes at a price not less than par plus accrued
interest in such instances. The Agreements also prohibit the transfer of Notes
unless the transferee executes an agreement with BDA substantially similar to
the Agreements. An Investor may not short sell Shares during the term of the
Agreement.
Except as described above, none of the Reporting Persons has any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any person with respect to any securities of the Company, including but not
limited to any contracts, arrangements, understandings or relationships
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1 Joint Filing Agreement *
Exhibit 2 Purchase Agreement dated as of January 9, 1996, by and among Monaco
Finance, Inc. and the purchasers on the signature pages thereto
relating to the Convertible Notes. *
Exhibit 3 Indenture date as of January 9, 1996 between Monaco Finance, Inc. and
Norwest Bank of Minnesota, N.A., relating to the Convertible Notes. *
Exhibit 4 Registration Rights Agreement dated as of January 9, 1996, by and
among Monaco Finance, Inc. and the other parties on the signatures
page thereto relating to the Convertible Notes. *
Exhibit 5 Letter Agreement dated as of June 28, 1996, between Monaco Finance,
Inc. and Black Diamond Advisors, Inc., and with respect to certain
matters, additionally among Morris Ginsburg and Irwin L. Sandler.
_________________
* Incorporated by reference to the same numbered exhibit in the Reporting
Persons Schedule 13D dated April 5, 1996.
18
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: July 12, 1996
Black Diamond Advisors, Inc.
By: /s/ Stephen H. Deckoff
-------------------------
Name: Stephen H. Deckoff
Its: President
/s/ Stephen H. Deckoff
----------------------------
Stephen H. Deckoff
/s/ James E. Walker, III
----------------------------
James E. Walker, III
BDC Partners I, L.P.
By: Black Diamond Capital Management, L.L.C.
Its: General Partner
By: /s/ James J. Zenni, Jr.
-------------------------
Name: James J. Zenni, Jr.
Its: President
Black Diamond Capital Management, L.L.C.
By: /s/ James J. Zenni, Jr.
-------------------------
Name: James J. Zenni, Jr.
Its: President
/s/ Lisa W. Zenni
----------------------------
Lisa W. Zenni
/s/ James J. Zenni, Jr.
----------------------------
James J. Zenni, Jr.
19
<PAGE>
EXHIBIT INDEX
-----------------
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
Exhibit 1 Joint Filing Agreement *
Exhibit 2 Purchase Agreement dated as of January 9,
1996, by and among Monaco Finance, Inc.
and the purchasers on the signature pages
thereto relating to the Convertible Notes. *
Exhibit 3 Indenture date as of January 9, 1996
between Monaco Finance, Inc. and Norwest
Bank of Minnesota, N.A., relating to the
Convertible Notes. *
Exhibit 4 Registration Rights Agreement dated as of
January 9, 1996, by and among Monaco
Finance, Inc. and the other parties on the
signatures page thereto relating to the
Convertible Notes. *
Exhibit 5 Letter Agreement dated as of June 28,
1996, between Monaco Finance, Inc. and
Black Diamond Advisors, Inc., and with
respect to certain matters, additionally
among Morris Ginsburg and Irwin L.
Sandler.
</TABLE>
- ------------
* Incorporated by reference to the same numbered exhibit in the Reporting
Persons Schedule 13D dated April 5, 1996.
20
<PAGE>
Exhibit 5 BLACK DIAMOND ADVISORS, INC.
- --------- 230 Park Avenue
Suite 635
New York, NY 10169
June 28, 1996
Monaco Finance, Inc.
370 17th Street, Suite 5060
Denver, Colorado 80202
Attention: Mr. Morris Ginsburg
and Irwin L. Sandler, Esq.
RE: 12% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2001
--------------------------------------------------
This letter agreement is in reference to the purchase agreement
("Purchase Agreement") dated January 9, 1996 between Black Diamond Advisors,
Inc. ("Black Diamond"), certain other purchasers, and Monaco Finance, Inc.
("Monaco"), and the related Indenture dated January 9, 1996 (the "Indenture").
Terms are used herein, unless otherwise defined, as defined in the Indenture.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Black Diamond and Monaco hereby agree as follows:
1. Notwithstanding anything contained to the contrary in the
Purchase Agreement, the Indenture, the Notes or any related agreements, the
initial Conversion Price for any Notes issued (i) on or prior to January 9, 1996
(the "Existing Notes") shall be $4 per share (without any adjustment pursuant to
Section 10.11 of the Indenture); and (ii) after January 9, 1996 (the "Additional
Notes") shall be $3 per share, subject in the case of this (ii) to the
Conversion Price adjustment set out in the proviso to Section 10.01(a)(ii) of
the Indenture, except that the price pursuant to sub-section (B) of said proviso
shall be $3 per share. It is understood and agreed that the preceding provisions
of this Section 1 shall not be effective (and the Conversion Prices provided as
of the date hereof in the relevant agreements shall remain applicable) unless
and until Monaco obtains any necessary shareholder approval therefor to the
extent required by NASDAQ in connection with Monaco's NASDAQ listing agreement.
Monaco agrees to immediately provide written notice to Black Diamond upon the
vote by its shareholders on the terms of this letter agreement. If the
shareholders approve such terms, the provisions of Section 1(i) and (ii) hereof
shall be automatically and fully effective upon such approval. If the
shareholders do not approve such terms, then the execution of this letter
agreement shall constitute notice by Black Diamond of its intent to purchase or
have Subsequent Purchasers purchase Additional Notes and the conversion price
for the Additional Notes shall be the closing price of Monaco's common stock on
the day immediately preceding the date of
<PAGE>
execution of this letter agreement by Monaco and Black Diamond; provided that
such conversion price shall only be effective if Black Diamond actually
exercises such purchase option within 15 days of the receipt by Black Diamond of
written notice of the disapproval by the shareholders. If Black Diamond does
not exercise such option within such period of time, Black Diamond's notice to
purchase shall be deemed to be revoked and thereafter Black Diamond shall
continue to have the right to exercise its option to purchase (or to have
Subsequent Purchasers purchase) Additional Notes, and the conversion price for
the Additional Notes shall be determined in accordance with the terms of the
Indenture and the related agreements including between Black Diamond and Monaco.
2. The option period during which Black Diamond may exercise its
rights to require Monaco to issue and sell additional Notes as contemplated by
Section 2.B of the Purchase Agreement and pursuant to any agreements between
Black Diamond and Monaco, shall be extended to the later of the date in (a) and
(b) of this Section 2. Section 2.B of the Purchase Agreement (and any necessary
provisions in any related agreements between Black Diamond and Monaco) shall as
soon as possible be amended to further document such extension including in the
case of such Section 2.B by (i) deleting the date "January 9, 1998" where it
appears in such Section 2.B and replacing it with "the date which is the later
-----
of (a) 24 months after Monaco's S-3 Registration Statement for the Conversion
Shares (as defined in the Purchase Agreement) relating to Notes is declared
effective by the Securities and Exchange Commission, and (b) 24 months after the
Company has received requisite shareholder approval for the issuance of Notes
contemplated by Section 1(ii) above to the extent required in accordance with
applicable NASDAQ requirements."
3. Except to the extent modified by Sections 1 and 2 above, all
terms of the Operative Documents (as defined in the Purchase Agreement) and the
Notes (and any related agreements between Black Diamond and Monaco) remain in
full force and effect.
4. Each of Monaco and Black Diamond agrees to diligently and in good
faith pursue to take such actions as may be necessary to accomplish the intent
of this letter agreement (including the implementation of Section 1(i) and
(ii)). Monaco hereby agrees to take any and all necessary and appropriate
corporate action (including properly presenting to its shareholders for any
required shareholder votes the documentation to effect (i) (X) below) and other
action, and to obtain any necessary consents, to (i) (X) authorize the issuance
of the Notes, if any, as contemplated by Section 2.B of the Purchase Agreement
and this letter agreement as soon as possible, and (Y) cause the aforesaid S-3
Registration Statement to be declared effective by the Securities and Exchange
Commission, as soon as practicable; all of the foregoing in this sub-section (i)
in accordance with all applicable law, NASDAQ requirements and agreements; and
(ii) subject to the receipt of any necessary Noteholder approval, to duly amend
the Notes and any related agreements including the Operative Documents and any
other agreements between Black Diamond and Monaco, as soon as practicable and
all in a manner and pursuant to amendment and modification documentation
satisfactory to Black Diamond and Monaco; it being understood, however, that
such amendment and modification shall not become effective until Monaco has
received requisite shareholder approval to the extent required in accordance
with applicable NASDAQ requirements. Monaco hereby agrees to advise Black
Diamond in writing as soon as each of (i)(X) or (Y) or (ii) of this section is
achieved, and to provide Black Diamond
-2-
<PAGE>
with evidence satisfactory to Black Diamond of compliance herewith (including
evidence of execution of any necessary amendments by all necessary parties
including Monaco and the Trustee).
5. Monaco hereby undertakes and agrees as follows with respect to
its management: Monaco shall ensure that its Board of Directors ("Board") have
Board meetings including by having telephonic Board meetings at least monthly,
have Board meetings with actual attendance at least quarterly, and reasonably
prior to each Board meeting, providing the Board members (and Jim Walker and
Steve Deckoff if Black Diamond notifies Monaco that it has determined to
exercise its rights to have any such person act as an observer at Board
meetings) with a monthly Board information package which includes reasonable
information requested by Board members (and Black Diamond if it determines to
exercise the aforesaid observer rights).
6. Each of Black Diamond and Monaco acknowledges and agrees that by
this letter agreement, Black Diamond and Monaco do not waive any of their
respective rights or remedies in connection with the Indenture or the other
Operative Documents, the Notes or otherwise all of which are expressly reserved.
Monaco hereby agrees, without limiting any other rights of Black Diamond under
the Indenture and the other Operative Documents or otherwise, on demand to pay
or reimburse Black Diamond for 50% of all of its counsel fees and disbursements
in connection herewith and any amendments contemplated by Section 4 hereof.
7. This letter agreement shall be governed by the laws of the State
of New York.
By signing below, Black Diamond hereby represents and warrants that
this letter agreement has been duly authorized by all necessary corporate action
on its part and Monaco hereby represents and warrants that within three business
days of the date of this Agreement, this letter agreement shall have been duly
authorized by all necessary corporate action (including Board approval) on its
part.
Kindly acknowledge Monaco's agreement to the provisions hereof by
having Monaco's duly authorized signatory sign this letter agreement where
indicated below and returning it to the undersigned by not later than June 28,
1996.
Very truly yours,
BLACK DIAMOND ADVISORS, INC.
By /s/ Stephen H. Deckoff
-----------------------
Name: Stephen H. Deckoff
Title: President
-3-
<PAGE>
The above terms of this letter agreement are hereby acknowledged and
agreed to in all respects by Monaco.
MONACO FINANCE, INC
By /s/ Irwin L. Sandler
----------------------
Name: Irwin L. Sandler
Title: Executive Vice President
Date: 6/28/96
By signing where indicated below, each of Morris Ginsburg and Irwin L.
Sandler agree to vote any and all of their shares or shares which they control
(including Milton Karsh's) of Monaco to approve the actions contemplated by
Section 4(i) of this letter agreement if Morris Ginsburg and Irwin Sandler
believe, at the time of the shareholder vote, that the same is in the best
interests of Monaco.
/s/ Morris Ginsburg /s/ Irwin L. Sandler
- --------------------------- ----------------------------
MORRIS GINSBURG IRWIN L. SANDLER
-4-
