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Registration No. 333-44361
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 ON
FORM S-4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST SIERRA FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 6159 76-0438432
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or organization) Industrial Identification
Classification Number)
Code Number)
</TABLE>
600 TRAVIS STREET, SUITE 7050
HOUSTON, TEXAS 77002
(713) 229-6800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
THOMAS J. DEPPING
PRESIDENT
FIRST SIERRA FINANCIAL, INC.
600 TRAVIS STREET, SUITE 7050
HOUSTON, TEXAS 77002
(713) 229-6800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copy To:
Scott N. Gierke, P.C.
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
(312) 984-7521
(312) 984-3669 (fax)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE
OF THE SECURITIES TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined in light of market conditions.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [ ]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
4,370,501 Shares
FIRST SIERRA FINANCIAL, INC.
COMMON STOCK
____________________
The 4,370,501 shares of common stock, $.01 par value per share ("Common
Stock"), covered by this Prospectus may be offered and issued from time to time
by First Sierra Financial, Inc. (the "Company") in connection with acquisitions
of other businesses, assets, or securities in business combination transactions
in accordance with Rule 415(a)(1)(viii) of Regulation C under the Securities
Act of 1933, as amended (the "Securities Act"), or otherwise under Rule 415 or
upon exercise or conversion of warrants, options, convertible notes or other
similar instruments assumed or acquired by the Company in connection with any
such acquisitions. This Prospectus may also be used, with the Company's prior
consent, by persons who have received or will receive shares in connection with
acquisitions and who wish to offer and sell such shares under circumstances
requiring or making desirable its use. See "Securities Covered by this
Prospectus".
The Common Stock is included for quotation in the Nasdaq National
Market under the symbol "FSFH." On August 18, 1998, the last reported sale
price of the Common Stock was $24.00 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON
STOCK OFFERED HEREBY.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH OFFER. THE
DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
_________________________
The date of this Prospectus is _________, 1998
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The Company's
registration statement on Form S-4 (together with all amendments and exhibits,
the "Registration Statement") and the reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of
the Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and
Suite 1400, 500 West Madison, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Section of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy and information statements and other information filed by the Company at
http://www.sec.gov.
This Prospectus constitutes a part of the Registration Statement filed
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares offered hereby. This Prospectus
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Shares offered hereby, reference is made to the Registration
Statement and the documents incorporated therein by reference. Statements made
in the Prospectus as to the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission, and each such statement shall be deemed qualified in its entirety
by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission are incorporated herein by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997; (ii) the
Company's Quarterly Reports on Form 10-Q, for the quarterly periods ended March
31, 1998, and June 30, 1998; (iii) the Company's Current Reports on Form 8-K
dated July 16, 1998, July 27, 1998, and August 10, 1998; (iv) the Company's
Proxy Statement dated July 28, 1998; and (v) the description of the Company's
Common Stock contained in the Company's Form 8-A Registration Statement for
such securities.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in this Prospectus, or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Prospectus incorporates important business and financial
information about the Company that is not included in or delivered with the
Prospectus. The Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the documents incorporated by reference herein
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should
be directed to: First Sierra Financial, Inc., 600 Travis Street, Suite 7050,
Houston, Texas, 77002, Attention: Secretary. To obtain timely delivery, any
information must be requested no later than five business days before the date
an investment decision is made.
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THE COMPANY
The Company is a specialized finance company that acquires and
originates, sells and services equipment leases. The underlying leases
financed by the Company relate to a wide range of equipment, including
computers and peripherals, computer software, medical, dental and diagnostic,
telecommunications, office, automotive servicing, hotel security, food
services, tree service and industrial, as well as specialty vehicles. The
equipment generally has a purchase price of less than $250,000 (with an average
of approximately $22,000 from inception through June 30, 1998), and thus the
Company's leases are commonly refereed to as "small ticket leases." The
Company initially funds the acquisition or origination of its leases through
its warehouse facilities or from working capital and, upon achieving a
sufficient portfolio size, sells such receivables in the public and private
markets, principally through its securitization program. The Company focuses
on maximizing the spread between the yield received on it leases and its cost
of funds by obtaining favorable terms on its warehouse facilities,
securitizations and other structured finance transactions.
The Company has established strategic alliances with a network of
independent leasing companies, lease brokers and equipment vendors, each of
which acts as a source from which the Company obtains access to equipment
leases (collectively, "Sources"). The Company customizes lease financing
products to meet the specific equipment financing needs of its Sources and in
many cases provides such Sources with servicing and technological support via
on-line connections to the Company's state-of-the-art computer system.
The Company views acquisitions of equipment leasing companies as a
fundamental part of its growth strategy. Since July 1996, the Company has
completed nineteen acquisitions of equipment leasing companies. The Company's
acquisitions have substantially increased its ability to generate lease
origination volume and have allowed it to introduce new programs and enter new
markets. The Company intends to continue to seek acquisition opportunities in
additional markets to further expand its business.
The principal executive offices of the Company are located at 600
Travis Street, Suite 7050, Houston, Texas 77002 and the telephone number is
713-221-8822.
Additional information concerning the Company is included in the
Company's reports filed under the Exchange Act that are incorporated by
reference in this Prospectus. See "Available Information" and "Incorporation
of Certain Documents by Reference."
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RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective investors in evaluating
the Company and its business before purchasing the Shares offered hereby.
Except for historical information contained herein and in the documents
incorporated by reference herein, this Prospectus and the documents
incorporated by reference herein contain forward-looking statements that
involve risks and uncertainties, such as statements of the Company's plans,
objectives, expectations and intentions. The cautionary statements made in
this Prospectus and the documents incorporated by reference herein should be
read as being applicable to all related forward-looking statements wherever
they appear in this Prospectus and the documents incorporated by reference
herein. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include those discussed below, as well as those discussed elsewhere herein and
in the documents incorporated by reference herein and in the documents included
by reference herein.
DEPENDENCE ON SECURITIZATION TRANSACTIONS
The Company sells a large percentage of the equipment leases it
acquires and originates through the issuance of securities backed by such
leases in securitization transactions or other structured finance techniques.
In a securitization transaction, the Company sells and transfers a pool of
leases to a wholly-owned, special purpose subsidiary of the Company. The
special purpose subsidiary simultaneously sells and transfers an interest in
the leases to a trust, which issues beneficial interests in the leases in the
form of senior and subordinated securities and sells such securities through
public offerings and private placement transactions. The Company generally
retains the right to receive any excess cash flows of the trust, which right is
represented by a trust certificate (the "Trust Certificate"). The gain on sale
of leases sold through securitization transactions has in the past represented
a significant portion of the Company's revenues and is expected to comprise a
significant portion of the Company's revenues in future periods.
The Company is dependent on securitizations for refinancing of amounts
outstanding under its warehouse facilities, which the Company utilizes to
acquire and originate additional leases. Several factors affect the Company's
ability to complete securitizations, including conditions in the securities
markets generally, conditions in the asset- backed securities markets, the
credit quality of the Company's lease portfolio, compliance of the Company's
leases with the eligibility requirements established in connection with the
securitizations, the Company's ability to obtain third- party credit
enhancement, absence of any material downgrading or withdrawal of ratings given
to securities previously issued in the Company's securitizations. Any
substantial reduction in the availability of the securitization market for the
Company's leases or any adverse change in the terms of such securitizations
could have a material adverse effect on the Company's financial condition an
results of operations.
NON-REALIZATION OF INVESTMENT IN TRUST CERTIFICATES
The cash flows available to the Trust Certificates are calculated as
the difference between (a) cash flows received from the leases and (b) the sum
of (i) interest and principal payable to the holders of the senior and
subordinated securities, (ii) trustee fees, (iii) third-party credit
enhancement fees, (iv) service fees, and (v) backup service fees. The
Company's right to receive this excess cash flow is subject to certain
conditions specified in the related trust documents designed to provide
additional credit enhancement to holders of the senior and subordinated
securities issued in the securitization. The Company estimates the expected
levels of cash flows available to the Trust Certificate taking into
consideration estimated prepayments, defaults, recoveries and other factors
which may affect the cash flows available to the holder of the Trust
Certificate. The cash flows ultimately available to the Trust Certificate are
largely dependent upon the actual default rates and recovery levels experienced
on the leases sold to the Trust. Losses incurred on leases held by the Trust
are borne solely by the holder of the Trust Certificate. Because the Company,
as holder of the Trust Certificates issued in its securitization transactions,
is typically entitled to receive from 2.0% to 6.5% of the cash flows of the
Trust, yet bears the risk of loss on the entire portfolio of leases held by the
Trust, relatively small fluctuations in default rates, recovery levels and
other factors impacting cash flows of the leases could have a material adverse
effect on the Company's ability to realize its recorded basis in the Trust
Certificate. In such event, the Company would be required to reduce the
carrying amount of its Trust Certificate and record a charge to earnings in the
period in which the event occurred or became known to management.
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ACQUISITION RISKS
A key component of the Company's growth strategy is the acquisition of
other equipment leasing companies. The inability of the Company to identify
suitable acquisition candidates or to complete acquisitions on reasonable terms
could adversely affect the Company's ability to grow its business. In
addition, any acquisition made by the Company may result in potentially
dilutive issuances of equity securities, the incurrence of additional debt and
the amortization of expenses related to goodwill and other intangible assets,
any of which could have a material adverse effect on the Company's financial
condition and results of operations. The Company also may experience
difficulties in the assimilation of the operations, services, products and
personnel of acquired companies, an inability to sustain or improve the
historical revenue levels of acquired companies, the diversion of management's
attention from ongoing business operations, and the potential loss of key
employees of such acquired companies. There can be no assurance that any
future acquisitions will be consummated.
DEPENDENCE ON EXTERNAL FINANCING
The Company funds a large percentage of the equipment leases that it
acquires or originates through its warehouse facilities. The warehouse
facilities are available to fund leases which satisfy eligibility criteria for
inclusion in the Company's securitizations. Borrowings under the warehouse
facilities are repaid with the proceeds received by the Company from
securitization transactions. Any adverse impact on the Company's ability to
complete securitizations could have a material adverse effect on the Company's
ability to obtain or maintain warehouse facilities or the amount available
under such facilities. Any failure by the Company to renew its existing
warehouse facilities or obtain additional warehouse facilities or other
financings with pricing, advance rates and other terms consistent with its
existing facilities could have a material adverse effect on the Company's
financial condition and results of operations.
INTEREST RATE RISKS
Leases underwritten by the Company are non-cancelable and require
payments to be made by the lessee at fixed rates for specified terms. The
rates charged by the Company are based on interest rates prevailing in the
market at the time of lease approval. Until the Company's leases are
securitized or otherwise sold, the Company generally funds such leases under
its warehouse facilities or from working capital. Should the Company be unable
to securitize or otherwise sell leases with fixed rates within a reasonable
period of time after funding, the Company's operating margins could be
adversely affected by increases in interest rates. Moreover, increases in
interest rates which cause Company to raise the implicit rate charged to its
customers could cause a reduction in demand for the Company's lease funding.
The Company generally undertakes to hedge against the risk of interest rate
increases when its equipment lease portfolio exceeds $10.0 million. Such
hedging activities limit the Company's ability to participate in the benefits
of lower interest rates with respect to the hedged portfolio of leases. In
addition, there can be no assurance that the Company's hedging activities will
adequately insulate the Company from interest rate risks.
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DEPENDENCE ON CREDITWORTHINESS OF LESSEES
The Company specializes in acquiring and originating equipment leases
with a purchase price of less than $250,000, generally involving small and
mid-size commercial businesses located throughout the United States. Small
business leases generally entail a greater risk of non-performance and higher
delinquencies and losses than leases entered into with larger, more
creditworthy lessees. Because of the Company's short operating history, only
limited performance data is available with respect to leases funded by the
Company. Thus, historical delinquency and loss statistics are not necessarily
indicative of future performance. In addition, the vast majority of leases
acquired or originated by the Company through December 31, 1996 were funded
through the Company's Private Label program under which Sources provide the
Company with credit protection through a combination of recourse and purchase
price holdback features. Under the Company's Broker and Vendor programs, the
Sources do not provide any credit protection to the Company. Management
believes that increasingly larger percentages of the Company's lease
originations in the future will be derived through its Broker and Vendor
programs. The failure of the Company's lessees to comply with the terms of
their leases will result in the inability of such leases to qualify to serve as
collateral under the Company's warehouse facilities and securitization program
and may have a material adverse effect on the Company's liquidity.
Additionally, delinquencies and defaults experienced in excess of levels
estimated by management in determining the Company's allowance for credit
losses and in valuing the Company's right to receive excess cash flows under
its securitization program could have a material diverse effect on the
Company's ability to obtain financing and effect securitization transactions
which may, in turn, have a material adverse effect on the Company's financial
condition and results of operations.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company experiences significant fluctuations in quarterly operating
results due to a number of factors, including, among others, the interest rate
on the securities issued in connection with the Company's securitization
transactions, variations in the volume of leases funded by the Company,
differences between the Company's cost of funds and the average implicit yield
to the Company on its leases prior to being securitized or otherwise sold, the
effectiveness of the Company's hedging strategy, the degree to which the
Company encounters competition in its markets and general economic conditions.
As a result of these fluctuations, results for any one quarter should not be
relied upon as being indicative of performance in future quarters.
ABILITY TO SUSTAIN INCREASING VOLUMES OF RECEIVABLES
The Company's ability to sustain continued growth is dependent on its
capacity to attract, evaluate, finance and service increasing volumes of leases
of suitable yield and credit quality. Accomplishing this on a cost-effective
basis is largely a function of the Company's ability to market its products
effectively, to manage the credit evaluation process to assure adequate
portfolio quality, to provide competent, attentive and efficient servicing and
to maintain access to institutional financing sources to achieve an acceptable
cost of funds for its financing programs. Any failure by the Company to market
its products effectively, to maintain its portfolio quality, to effectively
service its leases or to obtain institutional financing at reasonable rates
would have a material adverse effect on the company's financial condition and
results of operations.
DEPENDENCE UPON KEY PERSONNEL
The Company depends to a large extent upon the experience, abilities
and continued efforts of its senior management, including the management of
companies it has acquired. The Company has entered into employment agreements
with its principal executive officers. The loss of the services of one or more
of the key members of the Company's senior management could have a material
adverse effect on the Company's financial condition and results of operations.
The Company's future success also will depend upon its ability to attract and
retain additional skilled management personnel necessary to support anticipated
future growth.
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COMPETITION
The financing of small ticket equipment is highly competitive. The
Company competes for customers with a number of national, regional and local
finance companies. In addition, the Company's competitors include those
equipment manufacturers that finance the sale or lease of their products
themselves and other traditional types of financial services companies, such as
commercial banks and savings and loan associations, all of which provide
financing for the purchase of equipment. Many of the Company's competitors and
potential competitors possess substantially greater financial, marketing and
operational resources than the Company. The Company's competitors and
potential competitors include many larger, more established companies which may
have a lower cost of funds than the Company and access to capital markets and
to other funding sources which may be unavailable to the Company.
CONCENTRATION OF LEASE SOURCES AND CREDIT RISKS
Although the Company's portfolio of leases includes lessees located
throughout the United States, the Company acquires or originates a majority of
its leases from Sources operating in five states: Texas, Florida, New York,
New Jersey and California. The ability of the Company's lessees to honor their
contracts may be substantially dependent on economic conditions in these
states. All such leases are collateralized by the related equipment. The
recourse and holdback provisions of the Private Label program mitigate, but do
not eliminate, a significant portion of any economic risk not recoverable
through the sale of the related equipment.
Additionally, a substantial portion of the Company's leases are
concentrated in certain industries, including the medical industry, the dental
industry and the veterinary industry. To the extent that the economic or
regulatory conditions prevalent in such industries change, the ability of the
Company's lessees to honor their lease obligations may be adversely impacted.
In the event that the Company's significant Sources were to
substantially reduce the number of leases sold to the Company, and the Company
was not able to replace the lost lease volume, such reduction could have a
material adverse effect on the Company's financial condition and results of
operations.
MANAGEMENT OF GROWTH
The Company has grown dramatically since its inception in June 1994.
This significant growth has placed, and if sustained will continue to place, a
burden on the administrative and financial resources of the Company.
Accordingly, the Company's future financial condition and results of operations
will depend on management's ability to effectively manage future growth, the
success of which cannot be assured.
RESIDUAL VALUE RISK
The Company retains a residual interest in the equipment covered by
certain of its leases. The estimated fair market value of the equipment at the
end of the contract term of the lease, if any, is reflected as an asset on the
Company's balance sheet. The company's results of operations depend, to some
degree, upon its ability to realize these residual values. Realization of
residual values depends on many factors, several of which are outside the
Company's control, including general market conditions at the time of
expiration of the lease, whether there has been unusual wear and tear on, or
use of, the equipment, the cost of comparable new equipment, the extent, if
any, to which the equipment has become technologically or economically obsolete
during the contract term and the effects of any additional or amended
government regulations. If, upon the expiration of a lease, the Company sells
or refinances the underlying equipment and the amount realized is less than the
recorded value of the residual interest in such equipment, a loss reflecting
the difference will be recognized. Any failure by the Company to realize
aggregate recorded residual values could have a material adverse effect on its
financial condition and results of operations.
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SECURITIES COVERED BY THIS PROSPECTUS
The shares of Common Stock covered by this Prospectus may be offered
and issued from time to time by the Company in connection with future
acquisitions of other businesses, assets or securities in business combination
transactions in accordance with Rule 415(a)(1)(viii) of Regulation C under the
Securities Act or otherwise under Rule 415 or upon the exercise or conversion
of warrants, options, convertible notes or similar instruments assumed or
acquired by the Company in connection with any such acquisitions. Such
acquisitions may be made directly by the Company or indirectly through a
subsidiary, may relate to businesses or securities of businesses similar or
dissimilar to the Company or to assets of a type which may or may not currently
be used by the Company, and may be made in connection with the settlement of
litigation or other disputes. The consideration offered by the Company in such
acquisitions, in addition to the shares of Common Stock offered by this
Prospectus, may include cash, debt, or other securities (which may be
convertible into shares of Common Stock covered by this Prospectus), or
assumption by the Company of liabilities associated with the business, assets,
or securities being acquired or of their owners, or a combination thereof. It
is contemplated that the terms of such acquisitions will be determined by
negotiations between the Company and the owners of the businesses, assets, or
securities to be acquired, with the Company taking into account such factors as
the quality of management, the past and potential earning power, growth and
appreciation of the businesses, assets, or securities acquired, and other
relevant factors, and it is anticipated that shares of Common Stock issued in
such acquisitions will be valued at a price reasonably related to the market
value of the Common Stock either at the time the terms of the acquisition are
tentatively agreed upon or at or about the time or times of delivery of the
shares.
The Company may from time to time, in an effort to maintain an orderly
market in the Common Stock, negotiate agreements with persons receiving Common
Stock covered by this Prospectus that will limit the number of shares that may
be sold by such persons at specified intervals. Such agreements may be more
restrictive than restrictions on sales made pursuant to the exemptions from
registration requirements of the Securities Act, including the requirements
under Rule 144 or Rule 145(d), and certain persons party to such agreements may
not otherwise be subject to such Securities Act requirements. The Company
anticipates that, in general, such negotiated agreements will be of limited
duration and will permit the recipients of Common Stock issued in connection
with acquisitions to sell up to a specified number of shares per business day
or days.
This Prospectus, as appropriately amended or supplemented, may, with
the consent of the Company, also be used from time to time by persons who have
received or will receive from the Company Common Stock covered by this
Prospectus or their transferees and who may wish to sell such stock under
circumstances requiring or making desirable its use (such persons herein
referred to as "Selling Stockholders"). The Company's consent to such use may
be conditioned upon such persons' agreeing not to offer more than a specified
number of shares following supplements or amendments to this Prospectus, which
the Company may agree to use its best efforts to prepare and file at certain
intervals. The Company may require that any such offering be effected in an
organized manner through securities dealers. There are presently no
arrangements or understandings pertaining to the distribution of any of the
shares of Common Stock offered hereby by Selling Stockholders. See "Manner of
Offering by Selling Stockholders."
Selling Stockholders may also offer shares of stock covered by this
Prospectus by means of prospectuses under other registration statements or
pursuant to exemptions from the registration requirements of the Securities
Act, including sales which meet the requirements of Rule 144 or Rule 145(d)
under the Securities Act, and stockholders should seek the advice of their own
counsel with respect to the legal requirements for such sales.
This Prospectus may be supplemented or amended from time to time to
reflect its use for resales by persons who have received shares of Common Stock
and for whom the Company has consented to the use of this Prospectus in
connection with resales of such shares.
MANNER OF OFFERING BY SELLING STOCKHOLDERS
This Prospectus, as appropriately amended or supplemented, may, with
the consent of the Company, also be used from time to time by a Selling
Stockholder, or its transferees, to offer and sell the shares of Common Stock
covered by this Prospectus in transactions in which the Selling Stockholder and
any broker-dealer through whom any of such shares are sold may be deemed to be
underwriters within the meaning of the Securities Act. The Company will
receive none of the proceeds from any
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<PAGE> 10
such sales. There presently are no arrangements or understandings pertaining to
the distribution of any shares of Common Stock offered hereby by Selling
Stockholders.
Agreements with Selling Stockholders permitting use of this Prospectus
may provide that any such offering be effected in an orderly manner through
securities dealers, acting as broker or dealer, selected by the Company; that
Selling Stockholders enter into custody agreements with one or more banks with
respect to such shares; and that sales be made only by one or more of the
methods described in this Prospectus, as appropriately supplemented or amended
when required.
Sales by means of this Prospectus may be made from time to time in
private transactions at prices to be individually negotiated with the
purchasers, or publicly through transactions on the exchange or automated
quotation system on which the Common Stock is then traded or in the
over-the-counter market (which may involve block transactions), at prices
reasonably related to market prices at the time of sale or at negotiated
prices. Broker-dealers participating in such transactions may act as agent or
as principal and, when acting as agent, may receive commissions from the
purchasers as well as from the sellers (if also acting as agent for the
purchasers). The Company may indemnify any broker-dealer participating in such
transactions against certain liabilities, including liabilities under the
Securities Act. Profits, commissions, and discounts on sales by persons who
may be deemed to be underwriters within the meaning of the Securities Act may
be deemed underwriting compensation under the Securities Act.
Upon the Company's being notified by a Selling Stockholder that a
particular offer to sell its shares of Common Stock is made, a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution, or secondary
distribution, or any block trade has taken place, to the extent required, a
supplement to this Prospectus will be delivered together with this Prospectus
and filed pursuant to Rule 424(b) under the Securities Act setting forth with
respect to such offer or trade the terms of the offer or trade; including (i)
the name of each Selling Stockholder, (ii) the number of shares of Common Stock
involved, (iii) the price at which the shares were sold, (iv) any participating
brokers, dealers or agents involved, (v) any discounts, commissions and other
items paid as compensation from, and the resulting net proceeds to, the Selling
Stockholder, (vi) that such broker-dealers did not conduct any investigation to
verify the information set out in this Prospectus, and (vii) other facts
material to the transaction.
Shares of Common Stock covered by this Prospectus may be sold directly
by the Selling Stockholder or through agents designated by the Selling
Stockholder from time to time. Unless otherwise indicated in the supplement to
this Prospectus, any such agent will be acting on a best efforts basis for the
period of its appointment.
The Selling Stockholder and any brokers, dealers, agents, or others
that participate with the Selling Stockholder in the distribution of shares of
Common Stock offered hereby may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions or fees received by such
persons and any profit on the resale of the shares purchased by such person may
be deemed to be underwriting commissions or discounts under the Securities Act.
The Company may agree to indemnify the Selling Stockholders under the
Securities Act against certain liabilities, including liabilities arising under
the Securities Act. Agents may be entitled under agreements entered into with
the Selling Stockholder to indemnification against certain civil liabilities,
including liabilities under the Securities Act.
The Selling Stockholders will be subject to the applicable provisions
of the Exchange Act and the rules and regulations thereunder, including without
limitation Regulation M, which provisions may limit the timing of purchases and
sales of any of the Common Stock by the Selling Stockholders. All of the
foregoing may affect the marketability of the Common Stock.
The Company will pay substantially all the expenses incident to the
offering of the Common Stock by the Selling Stockholders to the public other
than brokerage fees, commissions and discounts of underwriters, dealers or
agents, if any.
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock
may not be sold unless
-9-
<PAGE> 11
the Common Stock has been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied with.
EXPERTS
The audited consolidated financial statements of the Company included in
the Company's Current Report on Form 8-K, dated July 16, 1998, incorporated by
reference herein have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said report. It should be noted that the independent public accountant's
report on financial statements previously filed on Form 10-K and incorporated by
reference in this registration statement is no longer appropriate since restated
financial statements have been presented giving effect to business combinations
accounted for as poolings of interests.
The financial statements of Oliver-Allen Corporation, Inc. at June 30,
1997 and 1996, and for the year ended June 30, 1997 and the thirteen months
ended June 30, 1996, included in the Proxy Statement of First Sierra Financial,
Inc., which is referred to and made a part of this Prospectus and Registration
Statement, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
-10-
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company, a Delaware corporation, is empowered by Section 145 of the
Delaware General Corporation Law (the "DGCL"), subject to the procedures and
limitations stated therein, to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation
or other enterprise, against reasonable expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually incurred by him in
connection with such action, suit or proceeding, if such director, officer,
employee or agent acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The Company is required by Section 145 to indemnify any
person against reasonable expenses (including attorneys' fees) actually
incurred by him in connection with an action, suit or proceeding in which he is
a party because he is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or other enterprise, if he
has been successful, on the merits or otherwise, in the defense of the action,
suit or proceeding. Section 145 also allows a corporation to purchase and
maintain insurance on behalf of any such person against any liability asserted
against him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against such
liability under the provisions of Section 145. In addition, Section 145
provides that indemnification pursuant to its provisions is not exclusive of
other rights of indemnification to which a person may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors, or
otherwise.
Article XI of the Company's Restated Certificate of Incorporation (the
"Charter") provides that the Company shall indemnify and hold harmless any
person who was, is, or is threatened to be made a party to a proceeding by
reason of the fact that he or she (i) is or was a director or officer of the
Company or (ii) while a director or officer of the Company, is or was serving
at the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan, or other enterprise, to the fullest extent
permitted under the DGCL. The right to indemnification under Article XI of the
Charter is a contract right which includes, with respect to directors and
officers, the right to be paid by the Company the expenses incurred in
defending any such proceeding in advance of its disposition.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company incorporated herein by reference to Exhibit 3.1 to
Amendment No. 3 to Registrant's Registration Statement on Form S-1 (Registration No. 333-22629)
4.2 Amended and Restated By-Laws of the Company, incorporated herein by reference to the Exhibit 3.1 to Amendment
No. 3 to Registrant's Registration Statement on Form S-1, (Registration No. 333-22629)
5.1 Opinion of McDermott, Will & Emery regarding legality (previously filed)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of McDermott, Will & Emery (included in Exhibit 5.1)
24.1 Powers of Attorney (previously filed)
</TABLE>
II-1
<PAGE> 13
ITEM 22. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(2) The undersigned registrant hereby undertakes:
(a) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the information called for
by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other Items of the applicable form.
(b) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements
of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business
day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes
information contained in the documents filed subsequent to the
effective date of the registration statement through the date of
responding to such request.
(4) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject
of and included in the registration statement when it became effective.
II-2
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on the 19th day of August, 1998.
First Sierra Financial, Inc.
By: /s/ Sandy B. Ho
----------------------------
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the 19th day of August, 1998:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* President, Chief Executive
--------------------------------------------------------- Officer and Chairman of the
(Thomas J. Depping) Board of Directors (principal
executive officer)
/s/ SANDY B. HO Executive Vice President and
--------------------------------------------------------- Chief Financial Officer
(Sandy B. Ho) (principal financial officer)
* Senior Vice President and
--------------------------------------------------------- Chief Accounting Officer
(Craig M. Spencer) (principal accounting
officer)
* Director
---------------------------------------------------------
(David C. Shindeldecker)
* Director
---------------------------------------------------------
(David L. Solomon)
* Director
---------------------------------------------------------
(Richard J. Campo)
* Director
---------------------------------------------------------
(Norman J. Metcalfe)
Director
---------------------------------------------------------
(Robert Ted Enloe, III)
* By: /s/ SANDY B. HO
---------------------------------------------------------
Sandy B. Ho
Attorney-in-fact
</TABLE>
II-3
<PAGE> 15
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1 Restated Certificate of Incorporation of the Company incorporated herein
by reference to Exhibit 3.1 to Amendment No. 3 to Registrant's
Registration Statement on Form S-1 (Registration No. 333-22629)
4.2 Amended and Restated By-Laws of the Company, incorporated herein by
reference to the Exhibit 3.1 to Amendment No. 3 to Registrant's
Registration Statement on Form S-1, (Registration No. 333-22629)
5.1 Opinion of McDermott, Will & Emery regarding legality (previously filed)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of McDermott, Will & Emery (included in Exhibit 5.1)
24.1 Powers of Attorney (previously filed)
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 10, 1998
included in the Company's Current Report on Form 8-K on the consolidated
financial statements of First Sierra Financial, Inc. as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997
and to all references to our Firm included in this registration statement. It
should be noted that the independent public accountant's report on financial
statements previously filed on Form 10-K and incorporated by reference in this
registration statement is no longer appropriate since restated financial
statements have been presented giving effect to business combinations accounted
for as poolings-of-interests.
ARTHUR ANDERSEN LLP
Houston, Texas
August 19, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the Post
Effective Amendment No. 1 on Form S-4 to Form S-1 (No. 333-44361) of First
Sierra Financial, Inc. and to the use of our report dated June 12, 1998 with
respect to the financial statements of Oliver-Allen Corporation, Inc., included
in the Proxy Statement of First Sierra Financial, Inc. that is made a part of
the Post Effective Amendment No. 1 on Form S-4 to Form S-1 (No. 333-44361) of
First Sierra Financial, inc. for the registration of 4,370,501 shares of its
common stock.
/s/ Ernst & Young LLP
August 19, 1998
San Francisco, CA
