14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 4, 1998
MONACO FINANCE, INC.
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(Exact Name of Registrant as Specified in Charter)
Colorado
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(State or Other Jurisdiction
of Incorporation or Organization)
0-18819 84-1088131
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(Commission File Number) (I.R.S. Employer Identification No.)
370 Seventeenth Street, Suite 5060
Denver, Colorado 80202
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(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (303) 592-9411
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Total number of pages is 14.
The exhibit index appears at sequential page no. 2.
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ITEM 5. OTHER EVENTS.
On March 4, 1998, the Company held a special meeting of its shareholders
to consider and vote upon the proposals set forth in the Company's Proxy
Statement dated February 3, 1998. Of the 7,203,479 shares of Class A Common
Stock entitled to notice of and to vote at the meeting, 6,851,165 shares, or
95.1%, of such class were represented in person or by proxy at the meeting. In
addition, of the 1,273,715 shares of Class B Common Stock entitled to notice
of and to vote at such meeting, all shares were represented in person or by
proxy at the meeting. Each share of Class A Common Stock is entitled to one
vote per share while each share of Class B Common Stock is entitled to three
votes per share. The following proposals were approved:
1. The issuance of (i) 2,433,457 shares of the Company's 8%
Cumulative Convertible Preferred Stock, Series 1998-1, (ii) 811,152 shares of
the Company's Class A Common Stock and (iii) a presently unknown number of
shares of Class A Common Stock, the issuance of which is contingent upon
future operations, to NAFCO Holding Company LLC, Advantage Funding Group,
Inc., and/or Pacific Southwest Bank, or their respective designees, all of
which are subsidiaries of Pacific USA Holdings Corp. ("Pacific USA"), as
partial consideration for certain of the transactions under the Amended and
Restated Asset Purchase Agreement among the Company, Pacific USA and those and
other of its affiliates dated January 8, 1998. Of the shares represented in
person or by proxy at the meeting, 3,195,006 shares of Class A Common Stock
(44.3%) and 1,273,715 shares of Class B Common Stock (100%) were voted in
favor of the proposal; 521,029 shares of Class A Common Stock voted against
the proposal; and 95,165 shares of Class A Common Stock abstained from voting.
The shares voting for the proposal represented 65.7% of the combined voting
power of the Class A and Class B Common Stock represented in person or by
proxy at the meeting.
2. An amendment to the Company's Articles of Incorporation (i)
increasing the number of authorized shares of Class A Common Stock to
30,000,000 shares, and (ii) increasing the number of authorized shares of
Preferred Stock to 10,000,000 shares having such preferences, limitations and
relative rights as may be determined by the Company's board of directors. Of
the shares represented in person or by proxy at the meeting, 6,032,167 shares
of Class A Common Stock (83.7%) and 1,273,715 shares of Class B Common Stock
(100%) were voted in favor of the proposal; 612,846 shares of Class A Common
Stock voted against the proposal; and 91,585 shares of Class A Common Stock
abstained from voting. The shares voting for the proposal represented 92.3% of
the combined voting power of the Class A and Class B Common Stock represented
in person or by proxy at the meeting.
No other matters were brought before the meeting. As a result of
shareholder approval of item no. 1, Pacific USA or its affiliates will own of
record 2,311,152 shares of Class A Common Stock (28.8% of that class) and will
be able to exercise approximately 51.8% of the combined voting power of the
Class A and Class B Common Stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
3.3 Articles of Amendment to the Articles of Incorporation increasing
the number of authorized shares of Class A Common Stock and Preferred Stock.
4.5 Preferences, Limitations and Relative Rights of 8% Cumulative
Convertible Preferred Stock, Series 1998-1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONACO FINANCE, INC.
Date: March 18, 1998 By:/s/ Irwin L. Sandler
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Irwin L. Sandler
Executive Vice President
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Exhibit 3.3
MAIL TO: SECRETARY OF STATE
CORPORATIONS SECTION
1560 BROADWAY, SUITE 200
DENVER, CO 80202
(303) 894-2251
MUST BE TYPED FAX (303) 894-2242
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
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ARTICLES OF AMENDMENT
PLEASE INCLUDE A TYPED TO THE
SELF-ADDRESSED ENVELOPE ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is MONACO FINANCE, INC.
----------------------
SECOND: The following amendment to the Articles of Incorporation was adopted
on March 4, 1998, as prescribed by the Colorado Business Corporation Act, in
the manner marked with an X below:
No shares have been issued or Directors Elected - Action by
Incorporators
No shares have been issued but Directors Elected - Action by Directors
Such amendment was adopted by the board of directors where shares have
been issued and shareholder action was not required.
X Such amendment was adopted by a vote of the shareholders. The number
- --
of shares voted for the amendment was sufficient for approval.
The Articles of Incorporation shall be amended by striking the existing first
sentence of Section 1 of Article IV and inserting in lieu thereof the
following new sentence:
The aggregate number of Common Shares which this Corporation shall have
authority to issue is thirty-two million two hundred fifty thousand
(32,250,000) shares, $.01 par value, of which 30,000,000 shall be designated
"Class A Common Stock," and 2,250,000 shares shall be designated "Class B
Common Stock."
The Articles of Incorporation shall be amended by striking the existing first
sentence of Section 2 of Article IV and inserting in lieu thereof the
following new sentence:
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The aggregate number of Preferred Shares which this Corporation shall have
authority to issue is ten million (10,000,000) shares, no par value, which
shares shall be designated "Preferred Stock."
THIRD: If changing corporate name, the new name of the corporation is
_________________________
FOURTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in
the amendment shall be effected, is as follows: None
If these amendments are to have a delayed effective date, please list that
date:
(Not to exceed ninety (90) days from the date of filing)
MONACO FINANCE, INC.
Signature: /s/ Morris Ginsburg
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Title: President
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Exhibit 4.5
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1
OF
MONACO FINANCE, INC.
MONACO FINANCE, INC., a Colorado corporation (the "Corporation"), does
hereby certify that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation, as amended, of the Corporation and
pursuant to Section 7-106-102 of the Colorado Business Corporation Act, said
Board of Directors, pursuant to a unanimous Statement of Consent effective as
of January 21, 1998, duly adopted the following resolution:
RESOLVED, that, pursuant to the authority expressly granted to and vested
in the Board of Directors of MONACO FINANCE, INC., a Colorado corporation (the
"Corporation"), by the Articles of Incorporation, as amended, of the
Corporation, the Board of Directors hereby creates out of the authorized
preferred stock, no par value per share, of the Corporation a series of
preferred stock to consist of not more than 2,433,457 shares, and this Board
of Directors hereby fixes the designation and the powers, preferences and
rights, and the qualifications, limitations or restrictions of the shares of
such series as follows:
0.1. DESIGNATION. This resolution shall provide for a single series
of preferred stock, the designation of which shall be "8% Cumulative
Convertible Preferred Stock-Series 1998-1" (hereinafter the "Preferred Shares"
or the "Preferred Stock") and the number of authorized shares constituting the
Preferred Stock is 2,433,457. The number of authorized Preferred Shares may be
reduced or increased by a further resolution duly adopted by the Board of
Directors of the Corporation and by the filing of an amendment to the
Corporation's Articles of Incorporation pursuant to the provisions of the
Colorado Business Corporation Act stating that such reduction or increase has
been so authorized.
0.2. VOTING; DIRECTOR. Except as provided herein or otherwise
expressly required by the laws of the State of Colorado, the holders of the
Preferred Shares shall have no voting rights and shall not be entitled to
notice of meetings of shareholders, and the exclusive voting power shall be
vested in the holders of the shares of the Corporation's Class A and Class B
Common Stock, $.01 par value per share (the "Common Stock"), and/or in any
other series of the Corporation's preferred stock now or at any time hereafter
issued and outstanding having voting rights. So long as not less than
1,500,000 Preferred Shares are issued and outstanding, the holders of the
outstanding Preferred Stock, voting separately as a class, shall be entitled
to elect one member of the Board of Directors of the Corporation to serve
until his or her successor shall have been duly elected and qualified. Any
corporate action that requires a vote of the holders of the Preferred Stock as
a class shall be deemed to have been approved by that class upon the
affirmative vote by the holders of a majority of the issued and outstanding
Preferred Shares unless a higher voting requirement is imposed by the Colorado
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Business Corporation Act. If any corporate action shall require a vote of the
holders of the Preferred Shares other than as a class, the Preferred Shares
shall vote as a group with the Common Stock.
0.2.1. VOTING PROCEDURES. Whenever holders of the Preferred
Stock are entitled to elect one director or otherwise vote as provided herein,
such holders shall, to the extent practicable, act by unanimous consent to
action without a meeting signed by all holders of the Preferred Stock to be
effective when actually received by the Corporation or on such later date as
may be specified in such consent When holders of the Preferred Stock are not
able to reach a consensus, the Corporation shall, upon the request made by any
holder(s) of ten percent or more of the number of outstanding Preferred
Shares, call a special meeting of holders of the Preferred Stock for the
election of the director or to take any other action upon not less than ten
nor more than 60 days notice to such holders. The holders of a majority of the
outstanding shares of Preferred Stock, present in person or by proxy, shall
constitute a quorum for all meetings of Preferred Stockholders. In the event
the election of such director or any other matter to be voted on shall be
subject to any laws, rules or regulations with respect to the solicitation of
proxies or otherwise, the holders of the Preferred Stock agree to timely
provide the Corporation with such information as it shall reasonably require
to comply therewith.
0.2.2. VACANCIES. Any vacancy in the office of the director
elected by the holders of the Preferred Stock shall be filled by them in the
manner provided in Section 2.1 herein; provided, however, that if the vacancy
shall not have been so filled within 30 days after the occurrence of such
vacancy, the vacancy shall be eliminated by reduction of the number of members
of the board of directors by one without action by the board of directors or
shareholders; provided, further, that if such vacancy shall not have been
filled and in the event of an emergency requiring action by the board of
directors during such 30-day period, the remaining members of the board of
directors may temporarily fill the vacancy or temporarily eliminate such
vacancy by reducing the number of members of the board of directors by one,
subject to the rights of the holders of the Preferred Stock as provided
herein. The director elected by the holders of the Preferred Stock may be
removed during the aforesaid term of office, whether with or without cause,
only by the affirmative vote of the holders of a majority of the Preferred
Stock.
0.2.3. OTHER VOTING RIGHTS. The affirmative vote by the holders
of a majority of the outstanding shares of Preferred Stock, voting separately
as a group, shall be required with respect to any amendment to the Articles
of Incorporation which would:
0.2.3.1. Increase or decrease the aggregate number of
authorized shares of Preferred Stock;
0.2.3.2. Effect an exchange or reclassification of all or part
of the shares of Preferred Stock into shares of another class;
0.2.3.3. Effect an exchange or reclassification, or create the
right of exchange, of all or part of the shares of another class into shares
of Preferred Stock;
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0.2.3.4. Change the designation, preferences, limitations, or
relative rights of all or part of the shares of Preferred Stock;
0.2.3.5. Change the shares of all or part of the Preferred Stock
into a different number of shares of the same class;
0.2.3.6. Create a new class of shares having rights or
preferences with respect to distributions or dissolution that are prior,
superior, or substantially equal to the shares of Preferred Stock;
0.2.3.7. Increase the rights, preferences, or number of
authorized shares of any class that, after giving effect to the amendment,
have rights or preferences with respect to distributions or to dissolution
that are prior, superior, or substantially equal to the shares of Preferred
Stock;
0.2.3.8. Cancel or otherwise affect rights to distributions
or dividends that have accumulated but have not yet been declared on all or
part of the shares of Preferred Stock;
0.2.3.9. Make the Preferred Stock redeemable either
mandatorily or at the option of the Corporation.
0.2.3.9.1. DIVIDENDS.
0.2.4. RATE. Holders of Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Directors out of any funds
of the Corporation legally available for that purpose, cumulative dividends
from the date of issuance at the rate of 8% ($.16 per share of Preferred
Stock) per year, payable quarterly (pro-rated for partial quarters) in
arrears, in shares of its Preferred Stock valued at $2.00 per share (or in
cash if no Preferred Shares are available for that purpose), on the first day
of April, July, October and January of each year commencing January 1, 1998
(each such date being hereinafter individually referred to as the "Dividend
Payment Date" and collectively as the "Dividend Payment Dates"). Each such
dividend shall be paid to the holders of record of the Preferred Shares as
they appear on the books of the Corporation on the record date which shall be
not less than 30 days prior to the related Dividend Payment Date. Dividends
on the Preferred Shares shall be cumulative whether or not the Corporation was
or is legally able to pay such dividends in whole or in part. Holders of
Preferred Shares shall not be entitled to any dividends whether payable in
cash, property or stock in excess of full dividends as herein provided on the
Preferred Shares.
0.2.5. DIVIDENDS ON COMMON STOCK. No dividends (other than
those payable solely in Common Stock) shall be paid with respect to the Common
Stock during any fiscal year of the Corporation unless all accumulated and
unpaid dividends and the quarterly dividend on the shares of Preferred Stock
for the then current dividend period shall have been declared and paid.
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0.3. CONVERSION.
0.3.1. VOLUNTARY CONVERSION. The Preferred Stock may be
converted in whole or in part at any time and from time to time into shares of
Class A Common Stock ("Voluntary Conversion") at the rate of one share of
Class A Common Stock for each two shares of Preferred Stock so converted (the
"Conversion Ratio").
0.3.2. AUTOMATIC CONVERSION. In the event the Current Market
Value (as defined in Section 4.6(a) herein) of the Class A Common Stock shall
equal or exceed $6.00 per share on each trading day during any period of 60
consecutive calendar days commencing on the date of original issuance of the
Preferred Stock, all of the Preferred Shares shall be automatically converted
("Automatic Conversion") into shares of Class A Common Stock at the Conversion
Ratio. All holders of Preferred Stock shall deliver or cause to be transferred
to the Corporation all of their Preferred Stock promptly upon Automatic
Conversion.
0.3.3. CONVERSION PROCEDURES AND CONDITIONS. Any holder of
Preferred Stock desiring to convert the same into shares of Class A Common
Stock shall surrender the certificate or certificates evidencing the shares of
Preferred Stock to be converted, duly endorsed, or otherwise deliver the
Preferred Stock desired to be converted, at the office of the Corporation or
of its transfer agent, if any, and shall give written notice signed by such
holder to the Corporation at such office stating that such holder elects to
convert the same and the number of Preferred Shares to be converted (which
requirements, together with the requirement stated in Section 4.4 herein,
shall be referred to as the "Conversion Conditions"). Upon Automatic
Conversion, the holders of the Preferred Stock and, upon satisfaction of the
Conversion Conditions with respect to Voluntary Conversion, the holders of the
Preferred Stock surrendered for conversion, shall be deemed to be the holders
of record of the shares of Class A Common Stock issu-able upon such
conversion, not-with-standing that the stock trans-fer books of the
Corporation shall then be closed or that the Class A Common Stock issuable
upon such conversion shall not actually have been issued. The Corporation
shall, as soon as practicable thereafter, issue in the name of such converting
holder and/or in the name of such holder's designee (and mail if issued in
certificated form to the last known address of the converting holder or such
holder's designee) the shares of Class A Common Stock to which such holder or
such designee shall be entitled. Upon Automatic Conversion, all outstanding
shares of Preferred Stock shall be deemed to have been canceled without any
requirement of action by the Corporation or by the holders of the Preferred
Stock and whether or not the Preferred Stock so converted has been surrendered
to the Corporation or its transfer agent; provided, however, that the
Corporation shall not be obligated to deliver the shares of Class A Common
Stock issuable upon such Automatic Conversion except to the extent the
Preferred Stock is either delivered to the Corporation or its transfer agent
as provided herein.
0.3.4. ADDITIONAL CONDITION. Notwithstanding anything herein
contained to the contrary, the Corporation shall not be obligated to issue the
shares of Class A Common Stock issuable upon conversion of Preferred Shares
until there shall have been delivered to the Corporation or to its transfer
agent, as applicable, an opinion of counsel reasonably satisfactory to the
Corporation to the effect that the issuance of such Class A Common Stock is
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exempt from registration under the Securities Act of 1933, as amended, and
from qualification under applicable state laws or that a registration
statement with respect thereto has been filed with the Securities and Exchange
Commission and with the appropriate state regulatory authorities and has
become effective.
0.3.5. RESERVATION OF SHARES. The Corporation hereby agrees
that at all times there shall be reserved for issuance upon conversion of the
Preferred Stock the maximum number of shares of its Class A Common Stock
issuable upon full conversion thereof.
0.3.6. NO FRACTIONAL SHARES; CURRENT MARKET VALUE. No
fractional shares or scrip rep-re-senting fractional shares shall be issued
upon conversion of the Preferred Stock. With respect to any fraction of a
share called for upon any conversion thereof, the Corporation shall pay to the
holder an amount in cash equal to such fraction multiplied by the "Current
Market Value" of the Class A Common Stock, determined as follows:
0.3.6.1. EXCHANGE OR NASDAQ LISTING. If the Class A Common
Stock is listed on a national securities exchange or admitted to unlisted
trading privileges on such exchange or listed on the Nasdaq Stock Market, the
Current Market Value shall be the last reported sale price of the Class A
Common Stock on the composite tape of such exchange or on Nasdaq on the last
trading day prior to the date of conversion or if no such sale is made on such
day, the average closing bid and asked prices for such day on the composite
tape of such exchange or on Nasdaq; or
0.3.6.2. OTHER MARKETS. If the Class A Common Stock is not
so listed or admitted to unlisted trading privileges, the Current Market Value
shall be the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc. or the OTC Bulletin Board on the last trading
day prior to the date of the conversion; or
0.3.6.3. BOARD VALUATION. If the Class A Common Stock is
not so listed or admitted to unlisted trading privileges and bid and asked
prices are not so reported, the Current Market Value shall be an amount, not
less than book value, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Corporation, such determination to
be final and binding on the Holder
0.3.7. RIGHTS OF THE HOLDER. The holder shall not, by virtue
hereof, be entitled to any rights of a holder of the Corporation's Class A
Common Stock, either at law or equity, and the rights of the holder are
limited to those expressed herein and are not enforceable against the
Corporation except to the extent set forth herein.
0.3.8. STOCK SPLITS AND STOCK DIVIDENDS. In case the Corporation
shall at any time issue Class A Common Stock by way of dividend or other
distribution on any stock of the Corporation or subdivide or combine the
outstanding shares of Class A Common Stock, the Conversion Ratio shall be
proportionately decreased in the case of such issuance (on the day following
the date fixed for determining shareholders entitled to receive such dividend
or other distribution) or decreased in the case of such subdivision or
increased in the case of such combination (on the date that such subdivision
or combination shall become effective).
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0.3.8.1 OFFICER'S CERTIFICATE. Whenever the Conversion Ratio
shall be adjusted as required herein, the Corporation shall forthwith file in
the custody of its Secretary or an Assistant Secretary at its principal
office, and with its stock transfer agent, if any, an officer's certificate
showing the adjusted Conversion Ratio determined as herein provided and
setting forth in reasonable detail the facts requiring such adjustment and the
calculation thereof. Each such officer's certificate shall be made available
at all reasonable times for inspection by the holder and the Corporation
shall, forthwith after each such adjustment, mail a copy of such certificate
to the holder.
0.3.9. NOTICES TO HOLDERS. So long as any Preferred Shares
shall be outstanding and unconverted (i) if the Corporation shall pay any
dividend or make any distribution upon the Class A Common Stock, or (ii) if
the Corporation shall offer to the holders of Class A Common Stock for
subscription or purchase by them any shares of stock of any class or any other
rights, or (iii) if any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation, consolidation or
merger of the Corporation with or into another cor-poration, sale, lease or
transfer of all or substantially all of the property and assets of the
Corporation to another corporation, or voluntary or involuntary dissolution,
liquidation or winding up of the Corporation shall be effected, then, in any
such case, the Corporation shall cause to be delivered to the Holder, at least
30 days prior to the date specified in (x) or (y) below, as the case may be, a
notice containing a brief description of the proposed action and stating the
date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding
up is to take place and the date, if any, is to be fixed, as of which the
holders of Class A Common Stock of record shall be entitled to exchange their
shares of Class A Common Stock for securities or other property deliverable
upon such reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
0.3.10. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of
any reclassification, capital reorganization or other change of outstanding
shares of Class A Common Stock of the Corporation (other than a change in par
value, or from par value to no par value, or as a result of an issuance of
Class A Common Stock by way of dividend or other distribution or of a
subdivision or combination), or in case of any consolidation or merger of the
Corporation with or into another corporation (other than a merger with a
subsidiary in which merger the Corporation is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Class A Common Stock of the class issuable
upon exercise of this Warrant) or in case of any sale or conveyance to another
corporation of the property of the Corporation as an en-tirety or
substantially as an entirety, the Corporation shall cause effective provision
to be made so that the holder shall have the right thereafter, by converting
the Preferred Shares, to purchase the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance as
if the holder had converted such Preferred Shares prior to such transaction.
Any such provision shall include provision for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for
herein. A copy of such provision shall be furnished to the holder(s) of
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Preferred Shares within ten days after execution of the appropriate agreement
pertaining to same and, in any event, prior to any consolidation, merger, sale
or conveyance subject to the provisions of this Section. The foregoing
provisions of this Section shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Class A
Common Stock and to successive consolidations, mergers, sales or conveyances.
0.3.11. DISSOLUTION. If, at any time prior to the conversion of
all Preferred Shares, any dissolution, liquidation or winding up of the
Corporation shall be proposed, the Corporation shall cause at least 30 days'
notice to be mailed by certified mail to the registered holders of the
Preferred Shares at their addresses as they appear on the books of the
Corporation. Such notice shall specify the date(s) as of which holders of
record of Common Stock and Preferred Stock shall participate in any
distribution or shall be entitled to exchange their Common Stock or Preferred
Stock for securities or other property, deliverable upon such dissolution,
liquidation or winding up, as the case may be; to the end that, during such
period of 30 days, the holders of the Preferred Stock may convert the
Preferred Stock and acquire Class A Common Stock (or other stock substituted
therefor as hereinbefore provided) and be entitled in respect of shares so
acquired to all of the rights of the other holders of Class A Common Stock of
the Corporation. In case of a dissolution, liquidation or winding up of the
Corporation, all conversion rights with respect to the Preferred Stock shall
terminate at the close of business on the date as of which holders of record
of the Preferred Stock shall be entitled to par-ticipate in a distribution of
the assets of the Corporation in connection with such dissolution, liquidation
or winding up (provided that in no event shall said date be less than 30 days
after completion of service by certified mail of notice as aforesaid).
0.3.12. SPIN-OFFS. In the event the Corporation spins-off a
subsidiary or stock held in another corporation as an investment by
distributing to the shareholders of the Corporation, as a dividend or
otherwise, the stock of the subsidiary or other corporation, the Corporation
shall reserve shares of the subsidiary or other corporation to be delivered to
the holders of the Preferred Shares upon conversion to the same extent as if
they were owners of record of the Class A Common Stock on the record date for
payment of the shares of the subsidiary or other corporation.
0.3.13. CLASS A COMMON STOCK DEFINED. Whenever reference is
made in this Section 4 to the issue or sale of shares of Class A Common Stock,
the term "Class A Common Stock" shall mean the Class A Common Stock of the
Corporation authorized as of the date hereof and any other class of stock
ranking on a parity with such Class A Common Stock, excluding the Class B
Common Stock. However, subject to the provisions of Section 4.11hereof,
shares issuable upon exercise hereof shall include only shares of the class
designated as Class A Common Stock of the Corporation as of the date hereof.
0.4 EXCHANGE, ASSIGNMENT OR LOSS OF PREFERRED SHARES. Subject to the
provisions of Section 6 hereof, the Preferred Stock is assignable and
exchangeable, without expense, at the option of the holder, upon presentation
and surrender of such Preferred Stock to the Corporation, together with
written instructions signed by the holder of such Preferred Stock with respect
to reissuance thereof and good funds sufficient to pay any transfer or similar
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tax; whereupon the Corporation shall, without charge, execute and deliver
Preferred Stock in the designated denominations and in the designated name(s)
and the Preferred Stock so surrendered promptly shall be canceled. Upon
receipt by the Corporation of evidence satisfactory to it of the loss, theft,
destruction or mutilation of Preferred Stock certificates, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification
including a surety bond, and upon surrender and cancellation of Preferred
Stock certificates, if mutilated, the Corporation will execute and deliver new
Preferred Stock certificates of like tenor and date. Any such new Preferred
Stock certificates executed and delivered shall constitute additional
contractual obligation on the part of the Corporation, whether or not the
Preferred Stock certificates so lost, stolen, destroyed, or mutilated shall be
at any time enforceable by anyone.
0.5 LEGENDS AND SECURITIES LAW COMPLIANCE.
0.5.1 SECURITIES LAW COMPLIANCE. Neither the Preferred Stock nor
the Class A Common Stock nor any other security issued or issuable upon
conversion of the Preferred Stock may be issued, offered or sold except in
conformity with the Securities Act of 1933, as amended, and applicable state
laws, and then only against receipt of an agreement of such person to whom
such offer of sale is made to comply with the provisions of this Section with
respect to any resale or other disposition of such securities.
0.5.2 SECURITIES LEGEND. The Corporation may cause the following
legend to be set forth on each certificate representing Preferred Stock or any
other security issued or issuable upon conversion of the Preferred Stock,
unless counsel for the Corporation is of the opinion as to any such
certificate that such legend is unnecessary:
The securities represented by this certificate may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration
statement made under the Securities Act of 1933 (the "Act"), or pursuant to an
exemption from registration under the Act the availability of which is to be
established to the satisfaction of the Corporation.
0.5.3 OTHER LEGENDS. All certificates representing the
Preferred Shares and any and all securities issued in replacement thereof or
upon conversion thereof shall bear such additional legends as shall be
required by law or contract.
0.6 RIGHTS ON LIQUIDATION. In the event of the liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, resulting in any distribution of its assets to its shareholders,
the holders of the Preferred Shares then issued and outstanding shall be
entitled to receive an amount equal to $2.00 per Preferred Share plus any
accumulated but unpaid dividends, and no more, before any payment or
distribution of the assets of the Corporation is made to or set apart for the
holders of Common Stock. If the assets of the Corporation distributable to
the holders of Preferred Shares are insufficient for the payment to them of
the full preferential amount described above, such assets shall be distributed
ratably among the holders of the Preferred Shares. The holders of the Common
Stock shall be entitled to the exclusion of the holders of the Preferred
Shares to share in all remaining assets of the Corporation in accordance with
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their respective interests. For purposes of this paragraph, a consolidation
or merger of the Corporation with any other corporation or corporations shall
not be deemed to be a liquidation, dissolution or winding up of the
Corporation.
0.7 NOTICE. Any notices or certificates by the Corporation to the
Holder and by the Holder to the Corporation shall be deemed to have been given
if in writing and upon the earlier of personal delivery (including by
messenger, facsimile or other receipted delivery during normal business hours
or, if delivered other than during normal business hours, at the beginning of
the first business day following such delivery) or three business days
following deposit in the United States mails, by registered or certified mail,
return receipt requested, addressed to the holder at such holder's address of
record on the books of the Corporation or to the Corporation at Monaco
Finance, Inc., 370 Seventeenth Street, Suite 5060, Denver, Colorado 80202.
Any person may change the address for the giving of notice by notice duly
given effective five (5) business days thereafter.
IN WITNESS WHEREOF, MONACO FINANCE, INC. has caused its corporate seal to
be affixed hereto and this certificate to be signed by its President and
Secretary this 9th day of March, 1998.
MONACO FINANCE, INC.
By: /s/ Morris Ginsburg
----------------------------
Morris Ginsburg, President
[S E A L]
ATTEST:
/s/ Irwin L. Sandler
- ------------------------------
Irwin L. Sandler, Secretary
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