Exhibit 10.23
PREFERRED MEMBERSHIP
INTEREST
UNIT SUBSCRIPTION
AGREEMENT
THIS PREFERRED MEMBERSHIP
INTEREST UNIT SUBSCRIPTION AGREEMENT (this “ Agreement ”) is made
as of March 24, 2005, by and between FreedomRoads Holding Company,
LLC, a Minnesota limited liability company (the “
Company ”) and CWFR Capital Corp., a Delaware
corporation (the “ Preferred Member
”).
WHEREAS , the Preferred Member is a subsidiary of CWI,
Inc., a Kentucky corporation (“ Camping World
”), the owner and operator of Camping World retail
supercenters throughout the United States which supercenters
provide, inter alia, parts, accessories and related goods
and service to recreational vehicle users;
WHEREAS , FreedomRoads, LLC, a Minnesota limited
liability company and a wholly-owned subsidiary of the Company
(“ FreedomRoads ”), owns and operates a
nationwide network of recreational vehicle dealerships and
proposes, inter alia, to expand such network with a view to
being the largest network of recreational vehicle dealerships in
the United States;
WHEREAS , Camping World seeks to locate its retail
supercenters next to recreational vehicle dealerships with a view
to enhancing Camping World’s retail traffic through a dealer
alliance program;
WHEREAS , the Company seeks funds to, inter alia
, expand its network of nationwide recreational vehicle
dealerships;
WHEREAS , the Preferred Member has determined that
making an investment in the Company is in the best interests of the
Preferred Member and the Preferred Member desires to make an
investment in the Company on the terms set forth in this
Agreement;
WHEREAS , the Articles of Organization of the Company
provide that the Board of Governors of the Company may establish or
designate one or more classes or series of units of membership
interest in the Company and may fix the relative rights and
preferences of each such class or series;
WHEREAS , the Board of Governors of the Company has
established a class of units of membership interest in the Company
having the rights and preferences set forth on Exhibit A attached
hereto (the “ Preferred Membership Interest ”)
and has authorized the issuance of the Preferred Units described in
such Exhibit A; and
WHERAS , the Company wishes to issue all of the
Preferred Units to the Preferred Member, and the Preferred Member
wishes to subscribe for and acquire all of the Preferred Units, all
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE
, in order to implement the
foregoing and in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties
hereto agree as follows:
1.
Definitions
.
1.1
Acquired Preferred
Units . The term
“Acquired Preferred Units” means 88,200 Preferred
Units, constituting all of the Preferred Units.
1.2
Amended Membership Interest
Schedule . The term
“Amended Membership Interest Schedule” is defined in
Section 2.3 (a) of this Agreement.
1.3
Agreement . The term “Agreement” has the
meaning set forth in the opening paragraph of this
Agreement.
1.4
Camping World
. The term “Camping
World” has the meaning set forth in the recitals to this
Agreement.
1.5
Closing . The term “Closing” means the
consummation of the issuance and acquisition of the Preferred
Membership Interest against payment of the Subscription Price by
the Preferred Member.
1.6
Closing Date
. The term “Closing
Date” means the date on which the Closing occurs.
1.7
Company . The term “Company” has the
meaning set forth in the opening paragraph of this
Agreement.
1.8
FreedomRoads
. The term
“FreedomRoads” has the meaning set forth in the
recitals to this Agreement.
1.9
GAAP . The term “GAAP” means
generally accepted accounting principles consistently applied as in
effect in the United States from time to time.
1.10
Material Adverse
Effect . The term
“Material Adverse Effect” has the meaning set forth in
Section 3.1(a) of this Agreement.
1.11
Member Control
Agreement . The
term “Member Control Agreement” means the Member
Control Agreement of the Company by and among the Company and the
members of the Company other than the Preferred Member.
1.12
Person . The term “Person” means any
individual, corporation, partnership, limited liability company,
trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other entity
of any nature whatsoever.
1.13
Preferred Member
. The term “Preferred
Member” has the meaning set forth in the opening paragraph of
this Agreement.
1.14
Preferred Unit
. The term “Preferred
Unit” is defined in Exhibit A attached hereto.
1.15
Preferred Membership
Interest . The term
“Preferred Membership Interest” has the meaning set
forth in the recitals to this Agreement.
1.16
Securities Act
. The term “Securities
Act” means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder, as the same may be
amended from time to time.
1.17
Subscription Price
. The term “Subscription
Price” is defined in Section 2.2 of this
Agreement.
2.
Subscription for and Issuance of
Preferred Units.
2.1
Issuance of the Preferred
Units . At the
Closing, upon the terms and subject to the conditions set forth in
this Agreement, the Company shall issue to the Preferred Member,
and the Preferred Member shall acquire from the Company, the
Acquired Preferred Units against payment at the Closing of the
Subscription Price by wire transfer of immediately available funds
to one or more accounts specified by the Company.
2.2
Subscription Price
. The aggregate price to be
paid by the Preferred Member for the Acquired Preferred Units (the
“ Subscription Price ”) is
$81,005,000.00.
2.3
Closing Events
. At the Closing, the parties
hereto shall consummate the following Closing
transactions:
(a)
The Company shall amend Schedule A
to the Member Control Agreement to reflect the issuance of the
Preferred Units to the Preferred Member (Schedule A to the Member
Control Agreement, as so amended, is referred to herein as the
“ Amended Membership Interest Schedule ”).
The Preferred Units are not certificated and the amendment of
Schedule A to the Member Control Agreement shall constitute
issuance of the Preferred Units; and
(b)
The Preferred Member shall pay the
Subscription Price to the Company as set forth in Section 2.1 of
this Agreement.
(c)
Each of the parties hereto shall
execute such other and further documents and certificates as the
other may reasonably request to vest the Preferred Membership
Interest in the Preferred Member and to otherwise effect the intent
hereof.
3.
Representations and
Warranties .
3.1
Representations and
Warranties of the Company . The Company
represents and warrants to and agrees with the Preferred Member
that:
(a)
The Company and
each of its subsidiaries has been duly formed and is validly
existing in good standing as a corporation, partnership or limited
liability company, as the case may be, under the laws of its
jurisdiction of organization or formation with the requisite
corporate or other power and authority to own its properties and
conduct its business as now conducted and is duly qualified to do
business as a foreign corporation in good standing in all
jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on the general
affairs, management, business, condition (financial or other),
properties, prospects or results of operations of the Company and
its subsidiaries, taken as a whole (any such event, a “
Material Adverse Effect ”); as of the Closing Date,
the Company will have the authorized, issued and outstanding
membership interests as set forth in the Amended Membership
Interest Schedule; all of the Acquired Preferred Units have been
duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights and are owned free and clear of all liens,
encumbrances, equities and restrictions (other than those imposed
by the Securities Act and the state securities or “Blue
Sky” laws); no options, warrants or other rights to purchase
from the Company or any subsidiary, agreements or other obligations
of the Company or any subsidiary to issue or other rights to
convert any obligation into, or exchange any securities for,
membership interests or other ownership interests in the Company or
any subsidiary are outstanding and no holder of membership
interests or other ownership interests in the Company or any
subsidiary is entitled to have such membership interest registered
under the Securities Act; and the Acquired Preferred Units
constitute all of the Preferred Units issued or authorized for
issuance.
(b)
The Company has
the requisite power and authority to execute, deliver and perform
its obligations under this Agreement. This Agreement has been
duly and validly authorized by the Company and constitutes a valid
and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms. The issuance of the
Acquired Preferred Units has been duly and validly authorized by
the Company and, when paid for by the Preferred Member in
accordance with the terms hereof, the Acquired Preferred Units will
have been duly issued and delivered and will constitute valid and
legally binding obligations of the Company, entitled to the
benefits of the Amended Membership Interest Schedule and
enforceable against the Company in accordance with its
terms.
(c)
No consent,
approval, authorization, license, qualification, exemption or order
of any court or governmental agency or body or third party is
required for the performance of this Agreement or for the
consummation by the Company of any of the transactions contemplated
hereby.
(d)
Neither the
Company nor any of its subsidiaries is (i) in violation of its
articles of organization, member control agreement, operating
agreement, limited liability company agreement (or similar
organizational document), (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to
it or any of its properties or assets, which breach or violation
would, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in default in (and no event has occurred that with
notice or passage of time, or both, would constitute a default),
has received any notice or claim of any such default or has
knowledge of any breach of or in the performance or observance of
any obligation, agreement, covenant or condition contained in this
Agreement or any other contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise
agreement, permit,
certificate or agreement or instrument to which it is a party or to
which it is subject, which default or breach would, individually or
in the aggregate, have a Material Adverse Effect.
(e)
The execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby
and the fulfillment of the terms hereof will not (i) violate,
conflict with or constitute or result in a breach of or a default
under (or an event that, with notice or lapse of time, or both,
would constitute a breach of or a default under) any of (A) the
terms or provisions of any contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which the Company
or any of its subsidiaries is a party or to which any of their
respective properties or assets are subject, (B) the articles of
organization, member control agreement, operating agreement,
limited liability company agreement (or similar organizational
document) of the Company or any of its subsidiaries, or
(C) any statute, judgment, decree, order, rule or regulation
of any court or governmental agency or other body applicable to the
Company or its subsidiaries or any of their respective properties
or assets or (ii) result in the imposition of any lien upon or
with respect to any of the properties or assets now owned or
hereafter acquired by the Company or any of its subsidiaries, which
violation, conflict, breach, default or lien would, individually or
in the aggregate, have a Material Adverse Effect.
(f)
The financial
statements of the Company and its subsidiaries provided to the
Preferred Member present fairly the consolidated financial
position, results of operations and cash flows of such entities at
the dates and for the periods to which they relate and have been
prepared in accordance with GAAP.
(g)
There is not
pending or, to the best knowledge of the Company, threatened any
action, suit, proceeding, inquiry or investigation, governmental or
otherwise, to which any of the Company or any of its subsidiaries
is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental
agency or body, that, if determined adversely to the Company or any
such subsidiary would, individually or in the aggregate, have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the transactions
contemplated hereby or the issuance of Preferred Units.
(h)
The Company and
its subsidiaries own or possess adequate licenses or other rights
to use all patents, trademarks, service marks, trade names,
copyrights and know-how that are necessary to conduct their
respective businesses. None of the Company or any of its
subsidiaries has received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how that, if such
assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse
Effect.
(i)
The Company and
each of its subsidiaries possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals
presently required or necessary to own or lease, as the case may
be, and to operate its respective properties and to carry on its
respective businesses as now or proposed to be conducted, except
where the failure to obtain such permits would not, individually or
in the aggregate, have a Material Adverse Effect; the Company and
each of its subsidiaries has fulfilled and
performed all of its
obligations with respect to such permits and no event has occurred
that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and
neither the Company nor any of its subsidiaries has received any
notice of any proceeding relating to revocation or modification of
any such permit, except where such revocation or modification would
not, individually or in the aggregate, have a Material Adverse
Effect.
(j)
The Company and
each of its subsidiaries has filed all necessary federal, state and
foreign income and franchise tax returns, except where the failure
to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and have paid all taxes
shown as due thereon; and other than tax deficiencies that the
Company or any subsidiary is contesting in good faith and for which
adequate reserves have been provided in accordance with generally
accepted accounting principles, there is no tax deficiency that has
been asserted against the Company or any subsidiary that would,
individually or in the aggregate, have a Material Adverse
Effect.
(k)
Neither the
Company nor any of its subsidiaries or any of such entities’
governors, directors, officers, employees, agents or controlling
persons has taken, directly or indirectly, any action designed, or
that might reasonably be e
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