SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)
FINET HOLDINGS CORPORATION
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
317922201
(CUSIP Number)
John S. McClintic, Esq.
Bancroft & McAlister, P.C.
601 Montgomery Street, Suite 900
San Francisco, California 94111
(415) 788-8855
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this
statement [ ].
CUSIP No. 317922201
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
James W. Noack
James A. Umphryes
2. Check of the Appropriate Row if a Member of a Group*
a [ ]
b [ ]
The reporting persons are filing this Schedule 13D jointly
pursuant to Rule 13d-1(e)(1). Each reporting person
disclaims membership in a group and expressly disclaims
beneficial ownership of securities reported as beneficially
owned by the other reporting person in this filing.
3. SEC Use Only
4. Source of Funds
00; Exchange of shares in merger.
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States of America
Number of 7. Sole Voting Power
Shares Beneficially 4,200,000
Owned by Each
Reporting Person 8. Shared Voting Power
With 0
9. Sole Dispositive Power
4,200,000
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,200,000
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13. Percent of Class Represented in Amount in Row (11)
19.37%
14. Type of Reporting Person
IN (both reporting persons are individuals)
ITEM 1 Security and Issuer:
Finet Holdings Corporation
Executive Office Address:
2000 Crow Canyon Pl Suite 130
San Ramon CA 94583-1367
ITEM 2 Identity and Background
a. Name: James A. Umphryes and James W. Noack
b. Residence or Business Address:
James A. Umphryes James W. Noack
3741 Waterford Lane 854 Clifton Court
Walnut Creek, CA 94596 Benecia, CA 94510
c. Present principal occupation and name of employer:
James A. Umphryes James W. Noack
Self-employed President,
Consultant Monument Mortgage, Inc.
d. Criminal Convictions: None
e. Civil Judgments, etc.: None
f. Citizenship: United States of America
ITEM 3 Source and Amount of Funds or Other Consideration:
Pursuant to the merger, Mr. Umphryes and Mr. Noack each
exchanged 5,000 shares of Monument Mortgage, Inc. common
stock for 4,200,000 shares of Finet Holdings Corporation
common stock.
ITEM 4 Purpose of Transaction:
The purpose of the merger transaction was to have Finet
Holdings Corporation acquire and operate Monument Mortgage,
Inc. as a wholly owned subsidiary of Finet Holdings
Corporation. The reporting persons on this Schedule 13D
each acquired their beneficial ownership of the Finet
Holdings Corporation securities for investment purposes. As
part of the merger transaction, Finet Holdings Corporation
agreed to appoint a person chosen by the reporting persons
to the Company's Board of Directors. As of the date hereof,
the reporting persons have no present plans or proposals
with respect to any material change in the Company's
business or corporation structure or, generally, any other
action referred to in instructions (a) through (j) of Item 4
of Schedule 13D. Depending on market conditions and other
factors, the reporting persons may continue purchases of the
Company's securities or may sell or otherwise dispose of all
or portions of such securities, if such sales and purchases
would be desirable investments.
ITEM 5 Interest in Securities of Issuer
The following amounts apply to each reporting person:
a. Number of Shares: 4,200,000
Percentage Ownership of Class: 19.37%
b. Shares of Sole Power to Vote: 4,200,000
Shares of Joint Power to Vote: 0
Shares of Sole Power to Dispose: 4,200,000
Shares of Joint Power to Dispose: 0
c. Transfers during the last 60 days:
No transfers of Finet Holdings Corporation securities were
made by the reporting persons during the 60 days prior to
the merger transaction in which they obtained the Finet
Holdings Corporation securities reported in this Schedule
13D.
On February 12, 1997, Mr. Noack made gifts of 505,000 shares
to various individuals. On February 12, 1997, Mr. Noack
acquired 600,000 shares @ $.50 per share in repayment of an
outstanding loan to Mr. Umphryes.
On February 12, 1997, Mr. Umphryes made gifts of 380,000
shares to various individuals. On February 12, 1997, Mr.
Umphryes transferred 600,000 shares @ $.50 per share to Mr.
Noack in repayment of an outstanding loan.
d. Power to Direct: None
e. Not Applicable.
ITEM 6 Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer:
Section 13.2 of the Merger Agreement and Plan of
Reorganization dated December 20, 1996b among Finet Holdings
Corporation, Finet Correspondent, Inc., and Monument
Mortgage, Inc. provides demand registration rights and
piggyback registration rights to the reporting persons (the
sole shareholders of Monument Mortgage, Inc.) as to the
shares of Finet Holdings Corporation common stock to be
received by them pursuant to the merger.
ITEM 7 Material to be Filed as Exhibits:
1. Merger Agreement and Plan of Reorganization dated
December 20, 1997, among Finet Holdings Corporation, Finet
Correspondent, Inc., and Monument Mortgage, Inc.
2. Statement by reporting persons acknowledging that a
single filing is being made on behalf of each of them
pursuant to Rule 13d-1(e)(1).
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
June 23, 1997 s/ James W. Noack
James W. Noack
June 23, 1997 s/ James A. Umphryes
James A. Umphryes
148\c:\...\744313d1
EXHIBIT 1
FINET HOLDINGS CORPORATION AND MONUMENT MORTGAGE, INC.
MERGER AGREEMENT AND PLAN OF REORGANIZATION
This Merger Agreement and Plan of Reorganization
("Agreement") is made as of December 20, 1996, at San
Francisco, California, among Finet Holdings Corporation
("Finet"), a Delaware Corporation, having its principal
office at San Francisco, California; Finet Correspondent,
Inc. ("Ficor"), a California Corporation, having its
principal office at San Francisco, California; and Monument
Mortgage, Inc. ("MMI"), a California Corporation, having its
principal office at Walnut Creek, California.
RECITALS
A. Finet and MMI wish to combine their respective
businesses by means of MMI becoming a subsidiary of Finet.
B. The parties wish to effectuate such a
reorganization by means of a reverse subsidiary triangular
merger whereby Ficor, a wholly owned subsidiary of Finet,
will merge with MMI and Ficor will cease to exist.
C. The parties agree that after the merger and
reorganization, that MMI will be a wholly owned subsidiary
of Finet and shall indicate that it is a Finet company by
appropriate use of the Finet name and logo.
TERMS OF REORGANIZATION
1. Tax-Free Reorganization.
Finet, Ficor and MMI adopt this agreement as a merger
and plan of reorganization under Section 368(a)(2)(E) of the
Internal Revenue Code.
2. Effect of Merger.
On the Effective Date, as defined in this Agreement, a
merger shall take place ("the Merger") whereby Ficor shall
be merged with and into MMI, and MMI shall be the Surviving
Corporation. (The term "Surviving Corporation" appearing in
this Agreement denotes MMI after consummation of the
Merger.) MMI's corporate name, existence, and all its
purposes, powers, and objectives shall continue unaffected
and unimpaired by the Merger, and as the Surviving
Corporation it shall be governed by the laws of the State of
California and succeed to all of Ficor's rights, assets,
liabilities, and obligations in accordance with the
California General Corporation Law.
3. Closing Date; Effective Date.
Consummation of the Merger shall be effected as soon as
practicable after all the conditions established in this
Agreement have been satisfied. The closing shall be held
at 1:00 pm, December 31, 1996 at the offices of Miller,
Mailliard & Culver in San Francisco, California, or at such
other time and place as the parties may agree. The time and
date of closing are called the "Closing Date," and will be
the same day as the Effective Date.
4. Governance of Surviving Corporation.
4.1. Articles of Incorporation.
The articles of incorporation of MMI in effect on
the Effective Date of the Merger shall become the articles
of incorporation of the Surviving Corporation. From and
after the Effective Date of the Merger, said articles of
incorporation, as they may be amended from time to time as
provided by law, shall be, and may be separately certified
as, the articles of incorporation of the Surviving
Corporation.
4.2. Bylaws.
The bylaws of MMI in effect on the Effective Date
of the Merger shall be the bylaws of the Surviving
Corporation until they are thereafter duly altered, amended,
or repealed.
4.3. Directors and Officers.
The directors of MMI on the Effective Date of the
Merger shall be the directors of the Surviving Corporation.
They shall hold office until their successors have been
elected and qualified. The officers of MMI shall be the
officers on the effective date of the Merger shall be the
officers of Surviving Corporation. Each shall hold office
subject to the bylaws and the pleasure of the directors of
Surviving Corporation.
5. The Shares.
5.1. Capital Shares of MMI.
The authorized capital stock of MMI consists of
one million shares (1,000,000) of Common Stock of no par
value of which 10,000 shares are issued and outstanding.
All shares are validly issued, fully paid, and non-
assessable, and such shares have been so issued in
substantial compliance with all federal and state securities
laws.
5.2. Capital Shares of Finet.
The authorized capital stock of Finet consists of
thirty million, one hundred thousand shares (30,100,000),
which consists of thirty million shares (30,000,000) of
Common Stock (par value $.01) and one hundred thousand
(100,000) shares of Preferred Stock (par value $.01), of
which 13,037,719 common shares are currently issued and
outstanding. There are existing warrants that may result in
up to an additional 4,935,917 common shares being issued.
There are existing stock options that may result in up to an
additional 511,876 common shares being issued. There are
existing convertible debt instruments that may result in up
to an additional 2,000,000 shares being issued. All shares
are validly issued, fully paid, and non-assessable, and such
shares have been so issued in substantial compliance with
all federal and state securities laws.
5.3. Conversion of Shares.
5.3.1. Each share of Ficor's common stock
issued and outstanding shall be canceled and no shares of
MMI shall be issued in exchange therefor;
5.3.2. Each and every share of MMI's common
stock issued and outstanding immediately before the
Effective Date (the "Target Common Stock'), shall by virtue
of the Merger and without action on the part of MMI be
converted into the right to receive from and to be delivered
by Finet the following items per share: 840 shares of Finet
common stock and $100 cash, both items to be delivered upon
surrender to Finet for cancellation of the certificate
representing such share of MMI.
6. MMI Representations and Warranties.
MMI represents and warrants to Finet and Ficor as
follows:
a) MMI is duly organized, validly existing, and in
good standing under the laws of California, and has the
corporate power to own all of its properties and assets and
to carry on its business as it is now being conducted.
b) MMI's board of directors has authorized the
execution of this Reorganization Agreement, and MMI has the
corporate power and is duly authorized, subject to the
approval of this Reorganization Agreement by its
shareholders, to merge Ficor into MMI pursuant to this
Agreement.
c) MMI's issued and outstanding shares have been
validly issued in full compliance with all federal and state
securities law, are fully paid and nonassessable, and have
voting rights. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other
agreements or commitments obligating MMI to issue or to
transfer any additional shares of its stock.
7. Representations of Acquiring corporation.
Finet represents and warrants to MMI as follows:
a) Finet is duly organized, validly existing, and in
good standing as a Delaware corporation, and Ficor is a
wholly owned subsidiary of Finet and is duly organized,
validly existing, and in good standing under the laws of the
State of California.
b) Finet and Ficor have full corporate power and
authority to execute and deliver this Agreement and to
perform the obligations under, and consummate the
transactions contemplated by this Agreement. This Agreement
is a valid and binding agreement of Finet and Ficor in
accordance with its terms.
c) Finet's issued and outstanding shares have been
validly issued in full compliance with all federal and state
securities law, are fully paid and nonassessable, and have
voting rights. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other
agreements or commitments obligating Finet to issue or to
transfer any additional shares of its stock that are not
disclosed to MMI.
8. Entire Agreement; Modification; Waiver.
This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter contained in
said agreement and it supersedes all prior and
contemporaneous agreements, representations, and
undertakings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless
executed in writing by all the parties. No waiver of any of
the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
9. Prohibited Acts.
MMI agrees not to do any of the following things prior
the closing date, and Finet and Ficor agree that prior to
the closing date they will not request or permit MMI to do
any of the following things: Issue any stock or other
securities, including any right or option to purchase or
otherwise acquire any of its stock, or issue any notes or
other evidences of indebtedness not in the usual course of
business;
10. Employment Contracts.
Prior to the Effective Date, James Noack and James
Umphryes shall have entered into employment agreements on
terms satisfactory to such executives and their respective
counsel and to Finet and its counsel.
11. Delivery of records.
MMI agrees that on or before the Closing Date, it will
cause to be delivered to Finet such corporate records or
other documents of MMI in its possession or control as
Finet may reasonably request.
12. Successors.
This Agreement shall be binding upon and inure to the
benefit of the heirs, personal representatives, successors,
and assigns of the parties.
13. Post-Closing
13.1. Board Seats.
Finet shall nominate and use its best efforts to
elect James Noack and James Umphryes, currently officers at
MMI, or their designees, to the Board of Directors of Finet.
13.2. Share Registration.
Finet will, at Finet's expense, use its diligent
best efforts to cause the shares issued to the MMI
Shareholders pursuant to this Agreement ( and desired to be
sold by MMI Shareholders) to be registered with the
Securities and Exchange Commission so as to permit and
facilitate their sale and distribution to the public at the
earliest available opportunity in calendar year 1997. Finet
further agrees that it will, at Finet's expense, cause the
MMI Shareholders to be allowed to participate (on the most
favored basis permitted to any other Finet shareholder,
whether by separate registration rights agreement or
otherwise) in all other future registered public sales and
distributions of Finet shares. Finet further acknowledges
that the MMI Shareholders may transfer all or any part of
the shares issued to them by Finet pursuant to this
Agreement so long as such transfers are made in compliance
with applicable securities laws, including sales made
pursuant to Rules 144 and Regulation S as promulgated by the
Securities and Exchange Commission.
13.3. Indemnification of MMI Shareholders.
James Noack and James Umphryes ("MMI
Shareholders") are the sole shareholders of MMI. Finet
agrees to indemnify, defend, and hold harmless MMI
Shareholders against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, and deficiencies, including interest,
penalties, and reasonable attorneys' fees, that it shall
incur or suffer, which arises, result from, or relate to any
of the following:
a) Activities by Finet or its affiliates or
subsidiaries related to their obligations to perform under
this Agreement.
b) Activities by Finet or its affiliates or
subsidiaries prior to the closing of this Agreement.
13.4. Indemnification of Finet Shareholders.
MMI Shareholders agree to indemnify, defend, and
hold harmless Finet against and in respect of any and all
claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies,
including interest, penalties, and reasonable attorneys'
fees, that it shall incur or suffer, which arises, result
from, or relate to any of the following:
a) Activities by MMI Shareholders or its
affiliates related to their obligations to perform under
this Agreement.
b) Activities by MMI Shareholders or its
affiliates prior to the closing of this Agreement.
13.5. Releases.
Finet acknowledges that the MMI Shareholders
intend to revoke and terminate any personal guaranties
previously given by them on behalf of MMI and its
affiliates, and that Finet agrees to use its best efforts to
secure releases of those personal guaranties promptly
following the merger. In the event Finet, after reasonable
effort is not able to obtain the aforementioned release of
personal guaranties, then Finet shall agree to indemnify,
defend, and hold harmless MMI Shareholders against and in
respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, and
deficiencies, including interest, penalties, and reasonable
attorneys' fees, that it shall incur or suffer, which
arises, result from, or relate to any personal guaranties
given by MMI Shareholders in performance of their duties as
officers of MMI, after the closing date.
14. Remedies.
14.1 Mediation and Arbitration.
Initially all claims and controversies of any kind
relating to this Agreement shall be submitted to mediation
pursuant to the services of an established mediation service
with the venue of the mediation being San Francisco,
California.
In the event the matter cannot be disposed of by
mediation, all claims and controversies of any kind relating
to this Agreement shall be finally settled by arbitration
before a single arbitrator in San Francisco, in accordance
with rules then obtaining of the American Arbitration
Association. Said arbitration shall be subject to the laws
of the State of California and all parties to this Agreement
shall be bound by the decision in any such arbitration.
Judgment upon such arbitration may be entered by any court
of proper jurisdiction. In any such arbitration, the
arbitrators: (i) shall apply the provisions of this
Agreement without varying therefrom in any respect, and they
shall not have the power to add to, modify or change the
provisions of this Agreement; (ii) shall make specific
written findings of fact and law; and (iii) shall apply the
law of California to all substantive issued of law. The
foregoing shall not preclude the parties from seeking
injunctive or other equitable relief from any court of
proper jurisdiction pending the outcome of any arbitration.
Attorney fees and costs shall be allocated by
agreement in mediation and by the arbitrators in
arbitration. In the event of injunctive relief, the
prevailing party shall be entitled to reasonable attorney=s
fees and costs.
14.2. Litigation Costs.
If any legal action, or other proceeding is
brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in
connection with any of the provisions of this Agreement, the
successful or prevailing party or parties shall be entitled
to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled.
14.3. "As Is" Transaction; Disclaimer of Other
Representations and Warranties.
Except for the matters specifically provided for
in this Agreement, each party acknowledges and agrees that
it is entering into the transactions contemplated by this
Agreement solely in reliance on its own investigation and
that each party has had the opportunity to review such
information, books, and records concerning the other party
and its business as the party and its advisors have deemed
necessary or desirable for such investigation. Each party
further acknowledges that no representations or warranties
of any kind other than those expressly provided for in this
Agreement have been made by the other party. ALL OTHER
WARRANTIES, EITHER EXPRESS, IMPLIED OR STATUTORY, ARE
DISCLAIMED.
14.4. Limitation of Liability.
IN NO EVENT SHALL EITHER PARTY OR ITS
SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
SUCCESSORS, NOMINEES OR ASSIGNS BE LIABLE FOR INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES INCLUDING LOSS OF PROFITS,
OR FOR PUNITIVE DAMAGES ARISING OUT OF OR CONNECTED WITH
THIS AGREEMENT.
15. Governing Laws.
This Agreement shall be construed in accordance with,
and governed by, the laws of State of California as applied
to contracts that are executed and performed entirely in
California.
16. Severability.
If any provision of this Agreement is held invalid or
unenforceable by any court of final jurisdiction, it is the
intent of the parties that all other provisions of this
Agreement by construed to remain fully valid, enforceable,
and binding on the parties.
Executed in multiple counterparts, each of which shall be
deemed a duplicate original, as of the date first above
written.
Finet Holdings Corporation
By s/ L. Daniel Rawitch
Its Chief Executive Officer
Monument Mortgage, Inc.
By s/ James Noack and James Umphryes
Its President and Executive Vice President_
Finet Correspondent Inc.
By s/ Jan Hoeffel
Its Secretary
EXHIBIT 2
STATEMENT BY REPORTING PERSONS
AS TO JOINT FILING PURSUANT TO RULE 13d-1(e)(1)
James W. Noack and James A. Umphryes each hereby
confirm that the above Schedule 13D is filed on behalf of
each of them.
s/ James W. Noack
James W. Noack
s/ James A. Umphryes
James A. Umphryes
