UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1995
Commission file numbers 33-21775, 33-25070 and 33-33261
PREMIER ACCEPTANCE CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 41-1615279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Piper Jaffray Tower, 222 South 9th Street, Minneapolis, MN 55402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 612-342-6673
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
1,000 Common shares were outstanding as of March 31, 1995, and were wholly
owned by Piper Jaffray Companies Inc.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A)
AND (B) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
PREMIER ACCEPTANCE CORPORATION
(a wholly owned subsidiary of Piper Jaffray Companies Inc.)
TABLE OF CONTENTS
Page
Number
Part I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Statements of Financial Condition 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
PREMIER ACCEPTANCE CORPORATION
(a wholly owned subsidiary of Piper Jaffray Companies Inc.)
STATEMENTS OF FINANCIAL CONDITION
March 31, Sept. 30,
1995 1994
ASSETS (Unaudited)
Cash $ 362,878 $ 16,762
Interest receivable 437,906 13,400
Investments pursuant to
mortgage-backed bonds 52,663,458 1,575,444
Receivable from Parent - 3,328,341
Unamortized bond issuance costs 2,041,283 168,803
Deferred tax asset 62,707 50,591
------------ ------------
$55,568,232 $ 5,153,341
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
Mortgage-backed bonds payable $54,400,000 $ 1,600,916
Interest payable on bonds 663,966 26,513
Bond redemptions payable - 1,244
Notes payable to Parent 249,903 -
Other liabilities 13,571 119
------------ ------------
55,327,440 1,628,792
------------ ------------
Stockholder's equity:
Common stock, $1 par value,
1,000 shares authorized,
issued and outstanding 1,000 1,000
Additional paid-in capital 35,000 35,000
Retained earnings 204,792 3,488,549
------------ ------------
240,792 3,524,549
------------ ------------
$55,568,232 $ 5,153,341
============ ============
See accompanying notes to financial statements.
PREMIER ACCEPTANCE CORPORATION
(a wholly owned subsidiary of Piper Jaffray Companies Inc.)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
REVENUE:
Interest income $1,163,087 $ 62,439 $1,203,485 $140,349
Interest expense 1,233,908 54,076 1,272,124 123,022
----------- --------- ----------- ---------
Net interest income (70,821) 8,363 (68,639) 17,327
Gain on accretion
of discount on
investments 8,492 19,321 11,600 31,504
Gain on sale of
residual interest 205,632 - 205,632 -
Net gain related to
bond call 51,014 - 51,014 -
----------- --------- ----------- ---------
Total revenue 194,317 27,684 199,607 48,831
----------- --------- ----------- ---------
EXPENSES:
Amortization of bond
issuance costs on
redemptions 56 17,743 2,910 28,262
General and administrative 121,683 28,831 132,282 44,728
----------- --------- ----------- ---------
Total expenses 121,739 46,574 135,192 72,990
----------- --------- ----------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES 72,578 (18,890) 64,415 (24,159)
INCOME TAXES (BENEFIT) 28,306 (7,314) 25,512 (9,422)
----------- --------- ----------- ---------
NET INCOME (LOSS) $ 44,272 $(11,576) $ 39,293 $(14,737)
=========== ========= =========== =========
See accompanying notes to financial statements.
PREMIER ACCEPTANCE CORPORATION
(a wholly owned subsidiary of Piper Jaffray Companies Inc.)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
March 31,
1995 1994
OPERATING ACTIVITIES:
Net (loss) income $ 39,293 $ (14,737)
Adjustments to reconcile net (loss)
income to net cash provided (used)
by operating activities:
Amortization of bond issuance costs 2,910 28,262
Recognition of discount on investments (11,600) (20,824)
Change in:
Interest receivable (424,506) 8,445
Deferred tax asset (12,116) (232,558)
Interest payable on bonds 637,453 (16,342)
Bond redemptions payable (1,244) 56,162
Receivable from Parent 3,328,341 249,666
Other liabilities 13,452 (72)
------------- ------------
Net cash provided by (used in)
operating activities 3,571,983 58,002
------------- ------------
FINANCING ACTIVITIES:
Issuance of mortgage-backed bonds 54,400,000 -
Mortgage-backed bonds called (1,481,022) -
Redemption of mortgage-backed bonds (119,894) (1,023,280)
Purchase of investments pursuant to
mortgage-backed bonds (52,835,068) -
Principal redemption on investments
pursuant to mortgage-backed bonds 285,288 1,013,329
Sale of investments pursuant to
mortgage-backed bonds 1,473,266 -
Bond issuance costs incurred (1,875,390) -
Net issuance of notes payable to Parent 249,903 -
Dividends paid to Parent (3,323,050) -
------------- ------------
Net cash (used in) provided by
financing activities (3,225,967) (9,951)
------------- ------------
INCREASE IN CASH 346,116 48,051
CASH AT BEGINNING OF PERIOD 16,762 109,824
------------- ------------
CASH AT END OF PERIOD $ 362,878 $ 157,875
============= ============
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the six months for:
Interest $557,419 $139,364
Income taxes paid to Parent $ 37,238 $ 24,168
See accompanying notes to financial statements.
PREMIER ACCEPTANCE CORPORATION
(a wholly owned subsidiary of Piper Jaffray Companies Inc.)
NOTES TO FINANCIAL STATEMENTS
Six Months Ended March 31, 1995 and 1994
1. ORGANIZATION AND BUSINESS ACTIVITY
The Company is a wholly owned subsidiary of Piper Jaffray Companies Inc. The
Company's Certificate of Incorporation limits the business activities in
which it may engage to activities in connection with or related to the
issuance of mortgage-backed bonds, as described in Note 3.
The Company's activities include the issuance and sale of securities
collateralized by certain mortgage related investments (certificates),
directly or through trusts formed by the Company, and the investment of the
proceeds in such certificates. The Company or such trusts purchase the
certificates prior to or simultaneously with the issuance of the mortgage-
backed bonds.
The Company has filed Registration Statements under the Securities Act of
1933 (the Act) with the Securities and Exchange Commission, pursuant to which
$900,000,000 in aggregate principal amount of the Company's mortgage-backed
bonds were registered under the Act. The Company has issued thirty-four
series of bonds with an aggregate original principal amount of $529,950,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles and should be read in conjunction
with the Registrant's annual report on Form 10-K for the year ended September
30, 1994. The results of operations for the six months ended March 31, 1995,
are not necessarily indicative of the results to be expected for the year
ending September 30, 1995.
The statement of financial condition as of March 31, 1995 and the information
for the periods ended March 31, 1995 and 1994, is unaudited, but management
of the Registrant believes that all adjustments (consisting only of normal
recurring accruals) necessary for a fair statement of the results of
operations for the periods have been included.
3. MORTGAGE-BACKED BONDS
The Company periodically issues mortgage-backed bonds (the bonds) which are
collateralized by GNMA or FNMA certificates and guaranteed as to payment of
principal and interest by the Government National Mortgage Association or the
Federal National Mortgage Association. The bonds are obligations solely of
the Company and bondholders' only recourse is to the underlying series'
collateral. The collateral, which has been purchased with the issuance
proceeds, is held by a trustee and is carried at par value less unaccreted
discount. Principal and interest payments on the collateral are used to meet
the debt service of the respective bonds.
Bonds outstanding at March 31, 1995, have stated maturities ranging from 2019
through 2025 and stated interest rates ranging from 8% to 10%. The
collateral has contractual maturities ranging from 2019 through 2025 and
stated interest rates ranging from 8% to 10%.
During the quarter ended March 31, 1995, the outstanding bonds in Series
1989-A, aggregating approximately $1.5 million, were called and the related
collateral sold, resulting in a pre-tax net gain of $51,014.
At March 31, 1995 the market value of the underlying collateral for the
outstanding bonds was approximately $54,435,000.
The issuance of six series of bonds with an aggregate original principal
amount of $176,145,000 and the related purchase of collateral certificates
has been accounted for financial reporting purposes as a sale. Accordingly,
the assets, liabilities, interest income, and interest expense relating to
these series do not appear on the financial statements of the Company. At
March 31, 1995, and September 30, 1994, the aggregate amount outstanding was
approximately $31,639,000 and $34,380,000, respectively.
4. RELATED PARTY TRANSACTIONS
The Company is charged for certain expenses by the Parent based on
specifically identified cost allocations. Such cost allocations are
determined through negotiations between the Company and the Parent.
Management believes that the method of allocation, as so determined, is
reasonable. In addition, the Company's affiliate, Piper Jaffray Inc. (PJI),
provides the Company with accounting and administrative services, including
services of officers. For the six months ended March 31, 1995 and 1994, the
Company was charged $13,000 and $30,000, respectively, for such services.
The Company's costs are not necessarily indicative of the costs that would
have been incurred had the Company operated independently. During the
quarter ended March 31, 1995, the Company paid PJI a management fee of
$101,463 for additional services provided by officers of the Company.
The Company has notes payable to the Parent which bear interest at a rate of
one-half of one percent over the broker call rate and mature over the life of
the bonds.
In connection with the issuance of the mortgage-backed bonds recorded on the
financial statements, PJI, acting as underwriter, received underwriting
discounts of $468,337 for the six months ended March 31, 1995. These costs
are capitalized on the Company's statement of financial condition as
unamortized bond issuance costs.
The Company sold the collateral related to the called bonds for Series 1989-A
through PJI. The subsequent sale of the securities resulted in a gain of
approximately $15,000 for PJI.
During the quarter ended March 31, 1995, the Company paid PJI brokerage
commissions of $6,000 related to the sale of the residual interest holdings
from Series 27 to a non-affiliated third party.
On December 12, 1994, the Board of Directors declared and paid a dividend to
the Parent of $3,323,050, eliminating the balance of the receivable from
parent.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Resources and Liquidity
The Company's source of funds with respect to the mortgage-backed bonds is
the receipt of payments of principal and interest, including prepayments, on
the certificates securing the bonds, together with the reinvestment income
thereon. The Company expects that, at all times, the aggregate future
receipts of principal and interest on the certificates, together with
reinvestment income thereon, will exceed the aggregate of future amounts due
as payments of principal and interest on the mortgage-backed bonds, as well
as payments of other liabilities.
The deferred bond issuance costs and original issue discounts on the
collateral are amortized as bonds are redeemed.
Results of Operations
During the quarter ended March 31, 1995, the Company called mortgage-backed
bonds with an aggregate principal balance of approximately $1,500,000 and
liquidated the corresponding collateral. For the three months and six month
periods ended March 31, 1995, the Company incurred net interest expense
because the liquidation of collateral for called bonds occurred prior to the
date the bonds were actually called.
The Company's interest income and interest expense are directly related to
the issuance and sale of mortgage-backed bonds and have increased
significantly over fiscal 1994 due to the issuance of $54,400,000 in bonds
during the six months ended March 31, 1995.
General and administrative expenses include a management fee paid to PJI upon
sale of the Series 27 residual interest (see Note 4 to the financial
statements). Excluding this transaction, expenses decreased approximately
31% for the six months ended March 31, 1995 compared to the same period in
the previous year, and decreased 70% for the second quarter of 1995 versus
1994. This decrease was primarily due to a reassessment of the charges for
accounting and administrative services provided to the Company, including
services of officers of the Company's affiliate PJI. These charges are
subject to periodic reevaluation based on the number of outstanding series of
bonds.
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
3.1 Certificate of Incorporation (previously filed as Exhibit
3(a) to Form S-11 filed May 11, 1988) - filed herewith.
3.2 Certificate of Amendment to Certificate of Incorporation
(previously filed as Exhibit 3(c) to Amendment to Form S-11
filed June 6, 1988) - filed herewith.
3.3 Certificate of Amendment to Certificate of Incorporation
dated December 13, 1994 - filed herewith.
(b). Reports on Form 8-K:
The Company filed a report on Form 8-K dated February 23, 1995
reporting:
i) Issuance and sale of Mortgage-Backed bonds, Series 28
ii) Series Supplement dated February 23, 1995 to Indenture dated
June 28, 1991 between Premier Acceptance Corporation, as
issuer, and Norwest Bank Minnesota, National Association, as
trustee, relating to Series 28.
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.
PREMIER ACCEPTANCE CORPORATION
(Registrant)
Dated May 15, 1995 /s/ DEBORAH K. ROESLER
DEBORAH K. ROESLER
Treasurer (Principal Financial and
Accounting Officer)
EXHIBIT INDEX
Exhibit Description
3.1 Certificate of Incorporation (previously filed as Exhibit 3(a)
to Form 3-11 filed May 11, 1988).
3.2 Certificate of Amendment to Certificate of Incorporation
(previously filed as Exhibit 3 (c) to Amendment to Form S-11
filed June 6, 1988).
3.3 Certificate of Amendment to Certificate of Incorporation dated
December 13, 1994.
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
PREMIER MORTGAGE CORPORATION
ARTICLE I
Name
The name of the Corporation is Premier Mortgage Corporation.
ARTICLE II
Registered Office and Registered Agent
The registered office of the Corporation in the State of Delaware is to be
located at 1209 Orange Street, in the City of Wilmington, County of New Castle,
and the registered agent at that address will be The Corporation Trust Company.
ARTICLE III
Corporate Purposes; Limitations
1. The Corporation is formed for one or more of the following purposes:
A. To issue bonds ("Bonds") secured primarily by (i)
conventional mortgage loans, (ii) mortgage loans insured by the
Federal Housing Administration, (iii) mortgage loans partially
guaranteed by the Veterans Administration, (iv) pass-through,
mortgage-backed certificates as to which the Federal National
Mortgage Association guarantees the timely payment of interest at the
pass-through rate and the timely payment of principal, (v) pass-
through, mortgage-backed certificates as to which the Federal Home
Loan Mortgage Corporation guarantees timely payment at the
participation certificate rate and ultimate collection of all
principal, (vi) pass-through, mortgage-backed certificates as to
which the Government National Mortgage Association guarantees timely
payment of principal installments and interest fixed on the
certificate, and (vii) any other mortgage pass-through certificates
or mortgage-collateralized obligations (collectively, "Mortgage
Collateral") and in connection therewith to acquire, own, hold, sell,
transfer, assign, pledge, finance, refinance and otherwise deal with
Mortgage Collateral.
B. Subject to the limitations contained in Section 2 o f this
Article III, to engage in any activity that is incidental or
convenient to accomplish the foregoing and that is not prohibited by
law or required to be specifically set forth in this Certificate of
Incorporation.
2. The Corporation shall not perform any act in contravention of any of
the following clauses of this Section 2 of Article III without prior written
consent from time to time of the trustees under any indentures (the
"Indentures") pursuant to which Bonds that are then outstanding may have been
issued by the Corporation (the "Trustees").
A. The Corporation shall not incur, assume or guaranty any
indebtedness except for (i) such indebtedness as may be incurred by
the Corporation that at the time of issuance has been rated by
Standard & Poor's Corporation i n a rating category no lower than the
highest rating then assigned to any Bonds of t he Corporation then
outstanding by Standard & Poor's Corporation, and (ii) indebtedness
that by its terms is completely subordinated to the indebtedness of
the Corporation evidenced by Bonds, is non-recourse to the
Corporation and any assets of the Corporation other than cash flow in
excess of amounts necessary to pay holders of the Bonds and does not
constitute a claim against the Corporation to the extent that funds
are in sufficient to pay such additional debt.
B. The Corporation shall not engage in any business or activity
other than in connection with or relating to the issuance of Bonds.
C. The Corporation shall not consolidate or merge with or into
any other entity or convey or transfer its properties and assets
substantially as an entirety to any entity, unless:
(1) the entity (if other than the Corporation) formed or
surviving such consolidation or merger or that acquires by
conveyance or transfer the properties and assets of the
Corporation substantially as an entirety shall be organized and
existing under the laws of the United States of America or any
State or the District of Columbia, and shall expressly assume, by
supplemental indentures to the Indentures, executed and delivered
to the Trustees, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all Bonds
then outstanding under the Indentures and the performance of
every covenant of the Indentures on the part of the Corporation
to be performed or observed;
(2) immediately after giving effect to such transaction, no
default or event of default under the Indentures shall have
occurred and be continuing;
(3) the Corporation shall have delivered to the Trustee an
officers' certificate and an opinion of counsel each stating that
such consolidation, merger, conveyance or transfer and such
supplemental indentures comply with the Indentures and that all
conditions precedent provided for relating to such transaction
have been complied with; and
(4) the entity (if other than the Corporation) formed or
surviving such consolidation or merger or that acquires by
conveyance or transfer the properties and assets of the
Corporation must (i) have its senior long-term debt rated in a
rating category no lower than the highest rating then assigned to
any Bonds of the Corporation then outstanding by Standard &
Poor's Corporation, and (ii) be a corporation which has a
Certificate or Articles of Incorporation containing provisions
identical to this Article III.
Upon any consolidation or merger, or any conveyance or transfer
of the properties and assets of the Corporation substantially as
provided above, the entity formed by or surviving such consolidation
or merger (if other than the Corporation) or the entity to which such
conveyance or transfer is made shall succeed to, a nd be substituted
for, and may exercise every right and power of, the Corporation under
the Indentures with the same effect as if such entity had been named
as the "Issuer" in the Indentures. In the event of any such
conveyance or transfer, the entity named as the "Issuer" in the
Indentures or any successor which shall theretofore have become such
in the manner prescribed in the Indentures may be dissolved, wound-up
and liquidated at any time thereafter, and such entity thereafter
shall be released from its liabilities as obligor and maker on all
the Bonds, and from its obligations, under the Indentures.
D. The Corporation shall not amend, alter, change or repeal any
provision contained in this Article III of this Certificate of
Incorporation.
ARTICLE IV
Capital Stock
The total number of shares of capital stock which the Corporation shall
have authority to issue shall be One Thousand (1,000) shares, all of which
shall be designated common stock, with a par value of $1.00 per share.
ARTICLE V
Incorporator
The name and mailing address of the incorporator of the Corporation is as
follows:
James E. Nicholson 2300 Multifoods Tower
Minneapolis, Minnesota 55402
ARTICLE VI
Board of Directors
The names and mailing addresses of the individuals who shall constitute
the initial board of directors, to serve as directors until their successors
are elected and qualify, are as follows:
Richard A. Edstrom 222 South Ninth Street
Minneapolis, Minnesota 55402
Charles N. Hayssen 222 South Ninth Street
Minneapolis, Minnesota 55402
David B. Holden 222 South Ninth Street
Minneapolis, Minnesota 55402
Michael P. Jansen 222 South Ninth Street
Minneapolis, Minnesota 55402
G. Terry McNellis 222 South Ninth Street
Minneapolis, Minnesota 55402
Robert L. Sonnek 222 South Ninth Street
Minneapolis, Minnesota 55402
DeLos V. Steenson 222 South Ninth Street
Minneapolis, Minnesota 55402
ARTICLE VII
Duration of Corporation Existence
The Corporation is to have perpetual existence.
ARTICLE VIII
Limitation on Liability of Directors
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article shall
not eliminate or limit the liability of a director to the extent provided by
applicable law (i) for any breach of the direct or's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under section 174 of the General Corporation Law of the State of Delaware, or
(iv) for any transaction from which the director derived an improper personal
benefit. This Article shall not eliminate or limit the liability of any
director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.
The undersigned, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, does hereby make this Certificate, declaring and certifying
that this is his a ct and deed and the facts herein stated are true, and
accordingly, has hereunto set his hand as of the 19th day of May, 1988.
/S/ JAMES E. NICHOLSON
James E. Nicholson
RECEIVED FOR RECORD
May 12, 1988
William M. Honey, Recorder
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PREMIER MORTGAGE CORPORATION
We, DeLos V. Steenson, the President, and David E. Rosedahl, the
Secretary, of Premier Mortgage Corporation, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"), do hereby certify:
FIRST: That the Board of Directors of the Corporation, by unanimous
written consent of its members, filed with the minutes of the Board duly
adopted resolutions setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation, declaring said amendment to be advisable and
directing that such amendment be presented to the sole stockholder of the
Corporation for approval and consent in writing. The resolution setting forth
the proposed amendment is as follows:
"RESOLVED, that the Certificate of Incorporation of the Corporation
be amended by changing Article I thereof, which shall read as follows:
ARTICLE I
Name
The name of the Corporation is Premier Acceptance Corporation.
SECOND: That thereafter, pursuant to a resolution of the Board of
Directors of the Corporation, the amendment was submitted to the sole
stockholder of the Corporation for its approval and was approved in writing by
such sole stockholder.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Premier Mortgage Corporation has caused this
Certificate to be signed by DeLos V. Steenson, its President, and attested by
David E. Rosedahl, its Secretary, this 27th day of May, 1988.
PREMIER MORTGAGE CORPORATION
By: /S/DELOS V. STEENSON
DeLos V. Steenson
President
Attest:
By: /S/ DAVID EVANS ROSEDAHL
David E. Rosedahl,
Secretary
RECEIVED FOR RECORD
June 2, 1988
William M. Honey, Recorder
EXHIBIT 3.3
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/15/1994
944246371 - 2160318
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
This Certificate of Amendment to the Certificate of Incorporation of
Premier Acceptance Corporation, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Corporation") is made this 13th day of December, 1994 by the undersigned
Andrew J. Duff and David Evans Rosedahl, President and Secretary of the
Corporation, respectively. Pursuant to Section 242 of the General Corporation
Law of the State of Delaware, the undersigned do hereby certify:
FIRST: The Board of Directors of the Corporation, by unanimous vote of
its members a meeting duly noticed, called and with a quorum present and acting
throughout did, on December 12, 1994, duly adopt the following resolutions
regarding the amendment of the Certificate of Incorporation of the Corporation:
"WHEREAS, there has been presented to the Board of Directors of the
Corporation a proposed amendment to the Certificate of Incorporation to
add a new Article IIIA which reads in its entirety as follows:
ARTICLE IIIA
Additional Limitations; Independent Director
1. The Corporation shall not undertake any of the following without the
affirmative vote of a majority of the members of the Board of Directors, which
majority must include each Independent Director (defined below):
A. the actions described in Article III, paragraphs 2 (A), 2(B),
or 2(C) of this Certificate of Incorporation;
B. the commencement of any case, proceeding or other action
relating to bankruptcy, insolvency, reorganization or relief of debtors,
or seek to have an order for relief entered with respect to the
Corporation, or seek adjudication, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to the
Corporation or its debts or make a general assignment for the benefit of
creditors; or
C. the alteration, amendment or any change in the writ ten
procedures regarding transactions with affiliates of the Corporation.
2. Any of the actions described in paragraphs 1(A), 1(B) or 1(C) of this
Article IIIA taken or proposed to be taken at a meeting of the Board of
Directors, duly called and with a quorum throughout. No such action may be
taken without a meeting of the Board of Directors.
3. The written procedures regarding transactions with affiliates of the
Corporation referred to in paragraph 1(C) of this Article IIIA shall address
(i) the purchase or sale of any property or other assets of the Corporation,
(ii) the loan or advance of funds to or by the Corporation, (iii) the purchase
or sale of the capital stock of the Corporation or other securities issued by
the Corporation and the declaration of any dividend on the capital stock of the
Corporation, (iv) contracts for services and charges or allocation of expenses
for staff or overhead of the Corporation, and (v) such additional transactions
or proposed transactions as may be entered into between the Corporation and its
affiliates from time to time.
4. The Board of Directors of the Corporation shall have no fewer than
one and no more than eight members. At all times, at least one member of the
Board of Directors shall be an individual who is not (i) an officer, director
or employee of the Corporation or any affiliate of the Corporation; or (ii) the
spouse, sibling, child or parent o f any of the foregoing persons. Each such
member of the Board of Directors of the Corporation who meets the foregoing
requirements is, for purposes of this Certificate of Incorporation , an
"Independent Director".
5. Each Independent Director shall, in all actions taken by the Board of
Directors of the Corporation, have a duty to act in the best interests of the
Corporation, its creditors and stockholders.
6. The Corporation and its stockholders shall not amend, alter, change
or repeal any provision contained in this Article IIIA without the prior,
written confirmation from each national statistical rating agency (i) requested
by the Corporation on the date of issuance to rate and (ii) then rating any
outstanding securities issued by the Corporation that such amendment,
alteration, change or repeal shall not result in the termination or lowering
of its rating of such securities. Any attempted amendment in contravention of
the foregoing shall be invalid and shall have no force and effect.
NOW, THEREFORE, BE IT RESOLVED, that the foregoing proposed amendment
is in the best interest of the Corporation.
BE IT FURTHER RESOLVED, that the foregoing amendment be presented to
the sole stockholder of the Corporation for such stockholder's approval
thereof and consent thereto.
BE IT FURTHER RESOLVED, that upon receipt of the approval of the
foregoing amendment by the sole stockholder of the Corporation, the
President and Secretary of the Corporation are authorized and are hereby
directed to file a Certificate of Amendment to the Certificate of
Incorporation incorporating such amendment ."
SECOND: Thereafter, pursuant to the foregoing resolution, the amendment
was submitted to the sole stockholder of the Corporation and was approved by
written action in lieu of a meeting.
IN WITNESS WHEREOF, Premier Acceptance Corporation has caused this
Certificate to be signed by Andrew J. Duff, its President, and attested by
David Evans Rosedahl, its Secretary, as of the date first written above.
PREMIER ACCEPTANCE CORPORATION
By /S/ ANDREW J. DUFF
Attest:
By /S/ DAVID EVANS ROSEDAHL
David Evans Rosedahl
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF PREMIER ACCEPTANCE CORPORATION AS OF AND FOR
THE PERIODS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 362,878
<SECURITIES> 52,663,458
<RECEIVABLES> 437,906
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 55,568,232
<CURRENT-LIABILITIES> 663,966<F1>
<BONDS> 54,400,000
<COMMON> 1,000
0
0
<OTHER-SE> 239,792
<TOTAL-LIABILITY-AND-EQUITY> 55,568,232
<SALES> 0<F2>
<TOTAL-REVENUES> 1,471,731
<CGS> 0<F3>
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 135,192
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,272,124
<INCOME-PRETAX> 64,415
<INCOME-TAX> 25,512
<INCOME-CONTINUING> 39,293
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,293
<EPS-PRIMARY> 0<F4>
<EPS-DILUTED> 0<F4>
<FN>
<F1>NOT APPLICABLE - COMPANY DOES NOT HAVE A CLASSIFIED BALANCE SHEET
<F2>REVENUES CONSIST OF INTEREST INCOME ONLY
<F3>NOT APPLICABLE - THE COMPANY HAS NO SALES, ONLY INTEREST INCOME AS REVENUE
<F4>NOT APPLICABLE - COMPANY DOES NOT COMPUTE EARNINGS PER SHARE
</FN>
</TABLE>
