UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. [3])*
MONACO FINANCE, INC.
-----------------------------------------------------------
(Name of Issuer)
Class A Common Stock
Class B Common Stock and
8% Cumulative Convertible Preferred Stock, Series 1998-1
-----------------------------------------------------------
(Title of Class of Securities)
Class A Common Stock - 608868-105
Class B Common Stock - None
8% Cumulative Convertible Preferred Stock, Series 1998-1 - None
-----------------------------------------------------------
(CUSIP Number)
Cathryn L. Porter, Chief General Counsel
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027 (713) 871-0111
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 1, 1998
-----------------------------------------------------------
(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-1(b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific USA Holdings Corp.
IRS Identification No. 75-2255876
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 7,009,309 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes per
share)
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,009,309 shares of Class A Common Stock
2,356,236 shares of 8% Cumulative Convertible Preferred
Stock, Series 1998-1
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 7,009,309 shares of Class A Common Stock (See Item 3)
- Option to purchase, coupled with an irrevocable proxy to
vote, 830,000 shares of Class B Common Stock (3 votes
per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per
share)
- 2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,178,118 shares
of Class A Common Stock
- Option to convert $536,750 of debt to 565,000 shares of Class A
Common Stock (See Item 3)
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.3%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Electric Wire & Cable Co., Ltd.
IRS Identification No. -- N/A -- Foreign Corporation
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Taiwan, Republic of China
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 7,009,309 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes per
share)
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,009,309 shares of Class A Common Stock
2,356,236 shares of 8% Cumulative Convertible Preferred
Stock, Series 1998-1
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 7,009,309 shares of Class A Common Stock
- Option to purchase, coupled with an irrevocable proxy to vote,
830,000 shares of Class B Common Stock (3 votes per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per
share)
- 2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,178,118 shares
of Class A Common Stock
- Option to convert $536,750 of debt to 565,000 shares of Class A
Common Stock (See Item 3)
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.3%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Consumer Finance Holdings, Inc.
IRS Identification No. 75-2704763
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 6,198,157 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes per
share)
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,198,157 shares of Class A Common Stock
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 6,198,157 shares of Class A Common Stock
- Option to purchase, coupled with an irrevocable proxy to vote,
830,000 shares of Class B Common Stock (3 votes per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per
share)
- Option to convert $536,750 of debt to 565,000 shares of Class A
Common Stock (See Item 3)
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60.4%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Southwest Bank
IRS Identification No. 74-2520389
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- 2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into
1,178,118 shares of Class A Common Stock
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Financial Group, Inc.
IRS Identification No. 51-0350769
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- 2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,178,118 shares
of Class A Common Stock
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
SCHEDULE 13D
-------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
-------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First CF Corp.
IRS Identification No. 75-2672933
-------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
-------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
-------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
2,356,236 shares of 8% Cumulative Convertible Preferred
Stock, Series 1998-1
-------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- 2,356,236 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,178,118 shares of
Class A Common Stock
-------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
-------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
-------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------------------------------------------------
<PAGE>
1. Security and Issuer.
This Statement relates to the Class A common stock, $.01 par value ("Class
A Common Stock"), the Class B common stock, $.01 par value ("Class B Common
Stock"), and the 8% Cumulative Convertible Preferred Stock, Series 1998-1
("Preferred Stock"), of Monaco Finance, Inc., a Colorado corporation ("Issuer"
or "Monaco"). The Class A Common Stock is registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended. Each share of Preferred
Stock is valued at $2.00 and is convertible into one-half share of Class A
Common Stock at any time. The address of the Issuer's principal executive
offices is 370 Seventeenth Street, Suite 5060, Denver, Colorado, 80202.
2. Identity and Background.
(a) Name: This Statement is being filed by Pacific USA Holdings Corp.,
a Texas corporation ("Pacific"), Pacific Electric Wire & Cable Co., Ltd., a
Taiwanese limited company ("Pacific Electric"), Consumer Finance Holdings, Inc.,
a Nevada corporation ("Consumer"), Pacific Southwest Bank, a federal savings
bank ("PSB"), First CF Corp., a Texas corporation ("First CF"), and Pacific
Financial Group, Inc., a Delaware corporation ("Pacific Financial") and is
intended to amend the prior Schedules 13D filed separately by Pacific, Pacific
Electric, and Consumer on or about May 6, 1997, an Amendment No. 1 to that
Schedule 13D filed jointly by Pacific, Pacific Electric, and Consumer on
December 4, 1997, and an Amendment No. 2 to that Schedule 13D filed jointly by
Pacific, Pacific Electric, Consumer, PSB, First CF, and Pacific Financial on
March 16, 1998. Pacific, directly and indirectly, is a wholly owned subsidiary
of Pacific Electric. Consumer is a wholly owned subsidiary of Pacific. Pacific
Financial is a wholly owned subsidiary of Pacific. PSB is a wholly owned
subsidiary of Pacific Financial. First CF is a wholly owned subsidiary of PSB.
The executive officers and directors of Pacific, Pacific Electric, Consumer,
PSB, Pacific Financial, and First CF (hereinafter collectively referred to as
"Reporting Person") are set forth in Item 2(c) of this Statement. The filing of
this Statement shall not be construed as an admission that Reporting Person, or
any executive officers or directors is, for the purposes of Section 13(d) or
13(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the beneficial owner of any securities covered by this Statement or that this
schedule is required to be filed by such persons.
(b) Business Address: The business address of Pacific and Consumer is
5999 Summerside Drive, Suite 112, Dallas, Texas 75252. The business address of
PSB is 800 N. Shoreline Blvd., Suite 200 South Tower, Corpus Christi, Texas
78401. The business address of Pacific Financial is c/o The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The business address of First CF is 4144 North Central Expressway, Suite
106, Dallas, Texas 75204. The business address of Pacific Electric is 4th Fl.,
285 Chung Hsiao East Road, Section 4, Taipei, Taiwan, Republic of China. The
business address of Reporting Person's respective executive officers and
directors are set forth in Item 2(c) of Reporting Person's previously filed
Schedule 13D and amendments thereto.
(c) Present Principal Occupation or Employment: Pacific is a
diversified holding company engaged in the financial services, real estate and
technology industries. Pacific Electric is a general business conglomerate
founded on the electric cable and wire industry, engaged in manufacturing,
telecommunications and technology. Consumer is a holding company engaged in
consumer finance. PSB is a federal savings bank. Pacific Financial is a
federal savings bank holding company. First CF is a financial services holding
company. The present principal occupation or employment of Pacific's, Pacific
Electric Consumer's, PSB's, Pacific Financial's, and First CF's respective
executive officers and directors and the name and address of any corporation or
other organizations in which such employment is conducted are listed in the
Reporting Person's previously filed Schedule 13D and amendments thereto.
(d) Criminal Convictions: During the last five years, neither
Reporting Person nor any of the respective executive officers or directors has
been convicted in a criminal proceeding, excluding traffic violations and
similar misdemeanors.
(e) Court or Administrative Proceedings: During the last five years,
neither Reporting Person nor any of the respective executive officers or
directors has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which any of them were or are
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
<PAGE>
(f) Citizenship: Pacific is a Texas corporation. Pacific Electric is
incorporated as a Taiwanese limited company. Consumer is a Nevada corporation.
PSB is a federal savings bank located in Texas. Pacific Financial is a Delaware
corporation. First CF is a Texas corporation. The citizenship of each director
and executive officer of Pacific, Pacific Electric and Consumer is set forth in
Item 2(c) of this Statement.
3. Source and Amount of Funds and Other Consideration:
On September 1, 1998, the Reporting Person entered into a Conversion and
Rights Agreement (the "Conversion Agreement") with the Issuer. In June and July
1998, Pacific USA loaned the Issuer the principal amount of $5,000,000.
Pursuant to the Conversion Agreement, $4,463,250 of the principal amount of the
loan was converted, effective July 1, 1998, into 4,698,157 shares of the
Company's Class A Common Stock at a conversion price of $.95 per share. The
conversion price is the book value per share of the Company's issued and
outstanding Common Stock as of June 30, 1998. The closing price of the Class A
Common Stock on the Nasdaq Stock Market was $.50 per share on June 30, 1998, and
$.38 per share on September 1, 1998. The unpaid principal balance of the loan,
$536,750, likewise is convertible into Class A Common Stock at a conversion
price of $.95 per share.
Concurrently, the Issuer and the Reporting Person agreed, subject to
shareholder approval, to reduce the price for conversion of the Preferred Stock
into Class A Common Stock by a factor of four thereby increasing the number of
shares of Class A Common Stock issuable upon full conversion of the Preferred
Stock from 1,178,118 shares to 4,712,472 shares, an increase of 3,534,354
shares.
4. Purpose of Transaction.
The purpose of the transaction for which this Statement is being prepared
is to convert a substantial debt obligation of the Issuer into a equity
investment by the majority shareholder. Prior to the consummation of the
transactions contemplated in the Conversion Agreement, the Reporting Person
controlled a majority of the votes of the Issuer. This conversion increases the
Reporting Person's percentage vote in the Issuer and maintains the Reporting
Person's control of a majority of the Issuer's votes.
Except as described below or reported on a previous Schedule 13D or an
amendment thereto, Reporting Person has no present plans or intentions to effect
any of the following:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of the
directors or to fill any existing vacancies of the board:
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person:
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of eligible equity securities of the issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Act; or
<PAGE>
(j) any action similar to those enumerated above.
5. Interest in Securities of the Issuer.
(a) Reporting Person has beneficial ownership of 7,009,309 shares of
Monaco Class A Common Stock, 1,273,715 shares of Class B Common Stock, and
2,356,236 shares of the Preferred Stock (see discussion below). The percentage
of Monaco Class A Common Stock beneficially owned by Reporting Person is 49.9%.
The percentage of Monaco Class B Common Stock beneficially owned by Reporting
Person is 100%. The percentage of Preferred Stock beneficially owned by
Reporting Person is 100%. The percentage of Issuer's total voting power
controlled by Reporting Person is 65.3%. The Reporting Person entered into an
Amended and Restated Asset Purchase Agreement (the "Purchase Agreement") dated
as of January 8, 1998, with the Issuer providing for, among other things, the
purchase by the company of sub-prime automobile loans having an unpaid principal
balance of approximately $81,115,233 for a purchase price of $77,870,623 of
which $73,003,709 was paid in cash. The balance of the purchase price,
$4,866,914, was paid by the issuance of 2,433,457 shares of Preferred Stock.
Each share of Preferred Stock is convertible at any time into one-half share of
Class A Common Stock or an aggregate of up to 1,216,728 shares of Class A Common
Stock. As of the Record Date and pursuant to the Purchase Agreement, the
Reporting Person had repurchased delinquent loans sold to the Issuer for the
Issuer's cost of $2.6 million. Also, pursuant to the Purchase Agreement, the
Reporting Person has surrendered 77,221 shares of Preferred Stock to the Issuer
for cancellation which, in turn, reduces the number of shares of Class A Common
Stock to 1,178,118 shares that Reporting Person will receive on conversion. In
connection with the Conversion Agreement, the Issuer and the Reporting Person
agreed, subject to shareholder approval, to reduce the price for conversion of
the Preferred Stock into Class A Common Stock by a factor of four thereby
increasing the number of shares of Class A Common Stock issuable upon full
conversion of the Preferred Stock from 1,178,118 shares to 4,712,472 shares, an
increase of 3,534,354 shares.
(b) Reporting Person has full voting power with respect to the shares
of the Class A Common Stock beneficially owned by it and has shared dispositive
power with respect to the shares of Class A Common Stock beneficially owned by
it. Reporting Person has full voting power with respect to the 830,000 Class B
Common Stock and has the right to direct the exercise of all consensual or other
voting rights with respect to 443,715 additional shares of Class B Common Stock
to which Pacific holds a proxy. The Preferred Stock held by Reporting Person
does not have any voting rights prior to conversion.
(c) Except as described above or in the Schedule 13D or an amendment
thereto, neither Reporting Person nor any person named in Section 2(c) hereto
owns beneficially any shares of Common Stock of Monaco or has effected any
transaction in shares of Common Stock of Monaco during the sixty (60) days
preceding the date of this Statement.
(d) No person other than Reporting Person is known to Reporting Person
to have the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, the shares of Class A Common Stock
beneficially owned by them; except that, during the term of the Option
Agreement, and prior to any exercise of the option or put contemplated therein,
the holders of the Class B Common Stock which are the subject of such Agreement
are entitled to retain any dividends received on such shares.
(e) Not applicable.
6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Other than as indicated elsewhere in this Statement or in the Schedule 13D
or the amendments thereto, to the best knowledge of Reporting Person, neither
Reporting Person nor any of the persons named in Section 2(c) hereto is a party
to any contract, arrangement, understanding, or relationship (legal or
otherwise) with any person with respect to any securities of the Issuer,
including but not limited to, the transfer or voting of any of the Issuer's
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies, except as follows:
<PAGE>
See Item 3.
7. Material to be Filed as Exhibits.
Exhibit 10.01: Conversion and Rights Agreement
Exhibit 99.03: Joint Filing Agreementar
<PAGE>
Signatures
After reasonable inquiry and to the best of each of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Date: October 6, 1998 Pacific USA Holdings Corp.
By: /s/ Bill C. Bradley
-------------------------
Bill C. Bradley
Chief Executive Officer
Pacific Electric Wire & Cable Co., Ltd.
By: /s/ Tung Ching-yun
-----------------------
Tung Ching-yun
Vice President
Consumer Finance Holdings, Inc.
By: /s/ Bill C, Bradley
-------------------------
Bill C. Bradley
Chief Executive Officer
Pacific Southwest Bank
By: /s/ Bobby Hashaway
-----------------------
Bobby Hashaway
Chief Financial Officer
Pacific Financial Group, Inc.
By: /s/ Sun Tao-tsun
---------------------
Sun Tao-tsun
Chief Executive Officer
First CF Corp.
By: /s/ Bobby Hashaway
-----------------------
Bobby Hashaway
President
<PAGE>
EXHIBIT 10.01
CONVERSION AND RIGHTS AGREEMENT
THIS CONVERSION AND RIGHTS AGREEMENT (the "Agreement") dated as of July 1,
1998, is made by and between Monaco Finance, Inc., a Colorado corporation (the
"Company") and Pacific USA Holdings Corp., a Texas corporation ("Pacific").
RECITALS
WHEREAS, the Company and Pacific entered into a loan arrangement, pursuant
to which Pacific made a loan to the Company (the "Loan") evidenced by that
certain promissory note dated June 30, 1998 (the "Note") in the principal amount
of Five Million and No/100 Dollars ($5,000,000.00); and
WHEREAS, the outstanding principal amount of the Loan as of the Effective
Date (as defined below) is Five Million and No/100 Dollars ($5,000,000,00) (the
"Outstanding Principal Amount"); and
WHEREAS, the Company and Pacific entered into a Pledge and Security
Agreement dated as of June 30, 1998 whereby the Company pledged the Collateral
(as defined therein) to secure the obligations of the Company under the Loan
Agreement; and
WHEREAS, the Company and Pacific desire to (i) convert $4,463,250.00 of the
Outstanding Principal Amount of the Note into shares of Class A Common Stock of
the Company and (ii) accomplish certain related purposes, all as set forth
herein.
AGREEMENT
NOW, THEREFORE, in exchange for good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the parties do hereby covenant
and agree as follows:
Section 1. Definitions
-----------
The following terms when used in this Agreement shall have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities and Exchange Act of 1934, and the rules
and regulations promulgated thereunder, as amended.
"Registrable Securities" means (i) the Conversion Shares and (ii) any
capital stock of the Company issued as a dividend or other distribution with
respect thereto, or in exchange for or in replacement of, the Conversion Shares.
<PAGE>
"Securities Act" means the Securities Act of 1933, and the rules and
regulations promulgated thereunder, as amended.
Section 2. Conversion
----------
(a) The parties hereby agree that as of the Effective Date,
$4,463,250.00 of the Outstanding Principal Amount of the Loan shall be converted
into Class A Common Stock of the Company, par value $.01 per share ("Common
Stock"). The number of shares of Common Stock to be delivered to Pacific by the
Company upon such conversion ("Conversion Shares") shall be determined by
dividing the $4,463,250.00 by $0.95.
(b) The Company hereby agrees to deliver, on the Effective Date, the
Conversion Shares to Pacific per its instructions. At Pacific's request, the
Company shall register the Conversion Shares in the name of a wholly owned
subsidiary. In such event, the term "Pacific" shall include such wholly owned
subsidiary.
Section 3. Request for Registration
--------------------------
(a) Pacific (so long as it or any of its affiliates own at least 25% of
the Registrable Securities) may request in a written notice that the Company
file a registration statement under the Securities Act covering the registration
of all or part of the Registrable Securities. Following receipt of any notice
under this Section 3(a) the Company shall use its best efforts to cause to be
registered under the Securities Act all Registrable Securities that Pacific has
requested be registered in accordance with the manner of disposition specified
in such notice by Pacific.
(b) If Pacific intends to have the Registrable Securities distributed
by means of an underwritten offering, then Pacific shall enter into an
underwriting agreement in customary form with the underwriter or underwriters.
An underwriter or underwriters shall be selected by Pacific and shall be
approved by the Company, which approval shall not be unreasonably withheld;
provided (i) that all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of Pacific, (ii) that any
or all of the conditions precedent to the obligations of such underwriters under
such underwriting agreement shall be conditions precedent to the obligations of
Pacific, and (iii) that Pacific shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties to or agreements regarding
Pacific, the Registrable Securities and Pacific's intended method of
distribution and any other representations required by law or reasonably
required by the underwriter.
(c) The Company shall not be obligated to effect more than two
registrations pursuant to this Section 3; provided that a registration requested
pursuant to this Section 3 shall not be deemed to have been effected for
purposes of this Section 3 unless (i) it has been declared effective by the
Commission, (ii) it has remained effective for the period set forth in Section
6(a), (iii) the offering of Registrable Securities pursuant to such registration
is not subject to any stop order, injunction or other order of requirement of
the Commission (other than any such stop order, injunction, or other requirement
of the Commission prompted by any act or omission of Pacific).
<PAGE>
(d) If the Board of Directors of the Company, in its good faith
judgment, determines that any registration of Registrable Securities should not
be made or continued due to a valid need not to disclose confidential
information or because it would materially interfere with any material
financing, acquisition, corporate reorganization or merger or other material
transaction involving the Company (collectively, a "Valid Business Reason"), the
Company may postpone filing a registration statement relating to a request for
registration under this Section 3 until such Valid Business Reason no longer
exists, but in no event for more than three months from the date of the notice
referred to below, and, in case any such registration statement has been filed
the Company may cause such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such
registration statement; and the Company shall give written notice (a "Delay
Notice") of its determination to postpone or withdraw a registration statement
and of the fact that the Valid Business Reason for such postponement or
withdrawal no longer exists, in each case, promptly after the occurrence
thereof. Upon the request of Pacific, the Company will disclose to Pacific the
nature of such Valid Business Reason in reasonable detail; provided that Pacific
executes a confidentiality agreement reasonably satisfactory to the Company;
provided further that any such confidentiality agreement shall terminate upon
the earlier of the public disclosure of such Valid Business Reason or three
months from the date of such Delay Notice. Notwithstanding the foregoing
provisions of this subparagraph (d), no registration statement filed and
subsequently withdrawn by reason of any existing or anticipated Valid Business
Reason as hereinabove provided shall count as one of the two registration
statements referred to in the limitation in Section 3(c) and the Company shall
be entitled to serve only one Delay Notice (i) within any period of 180
consecutive days, or (ii) with respect to any three consecutive registrations
requested pursuant to this Section 3 or Section 5.
(e) In the event that Pacific shall determine for any reason not to
proceed with a registration at any time before the registration statement has
been declared effective by the SEC, and (i) Pacific requests the Company to
withdraw such registration statement, if theretofore filed with the SEC, with
respect to the Registrable Securities covered thereby, or if the offering is not
consummated for any reason and (ii) Pacific agrees to bear its expenses incurred
in connection therewith and to reimburse the Company for the expenses incurred
by it attributable to the registration of such Registrable Securities, then
Pacific shall not be deemed to have exercised its right to require the Company
to register Registrable Securities pursuant to this Section 3.
(f) Without the written consent of Pacific, neither the Company nor any
other holder of securities of the Company may include securities in a
registration pursuant to this Section 3 if in the good faith judgment of the
managing underwriter of such public offering the inclusion of such securities
would interfere with the successful marketing of the Registrable Securities or
require the exclusion of any portion of the Registrable Securities to be
registered.
Section 4. Incidental Registration. Each time the Company shall determine to
-----------------------
proceed with the actual preparation and filing of a registration statement under
the Securities Act on any form (other than Form S-4 or Form S-8) that would
permit the inclusion of the Registrable Securities in connection with the
proposed offer and sale for money of any of its securities by it or any of its
security holders, the Company will give written notice of its determination to
Pacific. Upon the written request of Pacific given within 30 days after receipt
of any such notice from the Company, the Company will, except as herein
provided, cause all such shares of Registrable Securities for which Pacific has
so requested registration, to be included in such registration statement, all to
the extent requisite to permit the sale or other disposition by Pacific of the
Registrable Securities to be so registered; provided, however, that nothing
herein shall prevent the Company from, at any time, abandoning or delaying any
such registration initiated by it. If any registration pursuant to this Section
4 shall be underwritten in whole or in part, the Company may require that the
Registrable Securities requested for inclusion pursuant to this Section be
included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. If, in the written opinion of
the managing underwriter, the total amount of securities to be so registered,
including the Registrable Securities, will exceed the maximum amount of the
Company's securities that can be marketed (a) at a price reasonably related to
the then current market value of such securities, or (b) without otherwise
materially and adversely affecting the entire offering, then the Company shall
include in such registration (i) first, all the securities the Company proposes
to sell for its own account or is required to register on behalf of any third
party exercising rights similar to those granted in Section 3(a) and without
having the adverse effect referred to above, and (ii) second, to the extent that
the number of securities which the Company proposes to sell for its own account
pursuant to this Section 4 or is required to registered on behalf of any third
party exercising rights similar to those granted in Section 3(a) is less than
the number of equity securities which the Company has been advised can be sold
in such offering without having the adverse effect referred to above, all
Registrable Securities requested to be included in such registration by Pacific
pursuant to this Section 4; provided that if the number of Registrable
Securities requested to be included in such registration by Pacific pursuant to
this Section 4, together with the number of securities to be included in such
registration pursuant to clause (i) of this Section 4, exceeds the number which
the Company has been advised can be sold in such offering without having the
adverse effect referred to above, the number of such Registrable Securities
requested to be included in such registration by Pacific shall be limited to
such extent.
<PAGE>
Section 5. Registration on Form S-3. If at any time (a) Pacific requests in
------------------------
writing that the Company file a registration statement on Form S-3 or any
successor thereto for a public offering of all or any portion of the Registrable
Securities held by Pacific, the reasonably anticipated aggregate price to the
public of which would exceed $1,000,000, and (b) the Company is a registrant
entitled to use Form S-3 or any successor thereto, then the Company shall use
its best efforts to register as soon as practicable under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such request, the Registrable Securities specified
in such request. Whenever the Company is required by this Section 5 to use its
best efforts to effect the registration of Registrable Securities, each of the
limitations, procedures and requirements of Section 3(b) and (d) shall apply to
such registration; provided, however, that there shall be no limitation on the
number of registrations on From S-3 that may be requested and obtained under
this Section 5. The Company will use its best efforts to qualify and maintain
its qualification as a registrant entitled to use Form S-3 or any successor
thereto.
Section 6. Obligations of the Company. Whenever required under Section 3 or
--------------------------
Section 5 to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby determined as provided hereafter;
<PAGE>
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement, and furnish to Pacific copies of any such
amendments and supplements prior to their being used or filed with the
Commission;
(c) furnish to Pacific such numbers of copies of the registration
statements and the prospectus included therein (including each preliminary
prospectus and any amendments or supplements thereto in conformity with the
requirements of the Securities Act) and such other documents and information as
Pacific may reasonably request and make available for inspection by the parties
referred to in Section 6(d) below such financial and other information and books
and records of the Company, and cause the officers, directors, employees,
counsel and independent certified public accountants of the Company to respond
to such inquiries, as shall be reasonably necessary, in the judgment of the
respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
(d) provide (i) Pacific, (ii) the underwriters (which term, for
purposes of this Agreement, shall include a person deemed to be an underwriter
within the meaning of Section 2(11) of the Securities Act), if any, thereof,
(iii) the sales or placement agent, if any, therefor, (iv) counsel for such
underwriters or agent, and (v) not more than one counsel for Pacific the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;
(e) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
shall be reasonably appropriate for the distribution of the Registrable
Securities covered by the registration statement; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business in or to file a general consent to service of process
in any jurisdiction wherein it would not but for the requirements of this
paragraph (e) be obligated to do so; and provided further, that the Company
shall not be required to qualify such Registrable Securities in any jurisdiction
in which the securities regulatory authority requires that Pacific submit its
Registrable Securities to the terms, provisions and restrictions of any escrow,
lockup or similar agreement(s) for consent to sell Registrable Securities in
such jurisdiction unless Pacific agrees to do so;
(f) promptly notify Pacific, the sales or placement agent, if any, and
the managing underwriter or underwriters, if any, and confirm such advice in
writing (i) when such registration statement or the prospectus included therein
or any prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such registration statement or any post-effective
amendment, when the same has become effective, (ii) of any comments by the
Commission or by any Blue Sky securities commissioner or regulator of any state
with respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the initiation or
threatening of any proceedings for the purpose, (iv) if at any time the
representations and warranties of the Company contained in any underwriting
agreement or other customary agreement cease to be true and correct in all
material respects, or (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
the sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
<PAGE>
(g) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(h) promptly notify Pacific at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make, in light of the circumstances under which they were made, the statements
therein not misleading, and at the request of Pacific promptly prepare and
furnish to Pacific a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make, in light of the
circumstances under which they were made, the statements therein not misleading;
(i) furnish, at the request of Pacific, if the method of distribution
is by means of an underwriting on the date that the Registrable Securities are
delivered to the underwriters for sale pursuant to such registration or if such
Registrable Securities are not being sold through underwriters, on the date that
the registration statement with respect to such Registrable Securities becomes
effective, (1) a signed opinion, dated such date, of the independent legal
counsel representing the Company for the purpose of such registration, addressed
to the underwriters, if any, and if such Registrable Securities are not being
sold through underwriters, then to Pacific as to such matters as such
underwriters or Pacific, as the case may be, may reasonably request and as would
be customary in such a transaction; and (2) letters dated such date and the date
the offering is priced from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and if such Registrable
Securities are not being sold through underwriters, then to Pacific, and if such
accountants refuse to deliver such letters to Pacific, then to the Company (i)
stating that they are independent certified public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants, the
financial statements and other financial data of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereto, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and (ii) covering such other
financial matters (including information as to the period ending not more than
five (5) business days prior to the date of such letters) with respect to the
registration in respect of which such letter is being given as such underwriters
or Pacific, as the case may be, may reasonably request and as would be customary
in such a transaction;
(j) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(k) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which may be
required to effect registration or the offering or sale in connection therewith
or to enable Pacific to offer, or to consummate the disposition of, their
Registrable Securities;
<PAGE>
(l) use its best efforts to list the Registrable Securities covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed.
For purposes of Sections 6(a) and 6(b), and with respect to (i) registration
required pursuant to Section 3, (A) the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it and (B) the period of distribution of Registrable Securities in
any other registration shall be deemed to extend until the earlier of the sale
of all Registrable Securities covered thereby and six (6) months after the
effective date thereof, and (ii) registrations required pursuant to Section 5,
the period of distribution of Registrable Securities in any registration (firm
commitment underwritten or otherwise) shall be deemed to extend until the
earlier of the sale of all Registrable Securities covered thereby and three (3)
months after the effective date thereof.
Pacific agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in clause (h) of this Section 6,
Pacific will forthwith discontinue disposition of the Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until Pacific's receipt of the copies of the supplemented or amended prospectus
contemplated by clause (h) of this Section 6, and, if so directed by the
Company, Pacific will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in Pacific's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice; provided, however, that any period of time during which Pacific
must discontinue disposition of the Registrable Securities shall not be included
in the determination of a period of distribution for purposes of Sections 6(a)
and 6(b).
Section 7. Furnish Information. It shall be a condition precedent to the
---------------------
obligations of the Company to take any action pursuant to this Agreement, that
Pacific shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as the Company shall reasonably request and as shall be required
in connection with the action to be taken by the Company.
Section 8. Expenses of Registration. All expenses incurred in connection
--------------------------
with the first registration effected pursuant to Section 3, and each
registration pursuant to Section 4 and Section 5 of this Agreement, excluding
underwriter's discounts and commissions, but including without limitation all
registration, filing and qualification fees, word processing, duplicating,
printers' and accounting fees (including the expense of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance), fees of the National Association of Securities Dealers, Inc. (the
"NASD") or listing fees, messenger and deliver expenses, all fees and expenses
of complying with state securities or blue sky laws, and fees and disbursements
of counsel for the Company and Pacific, shall be paid by the Company; provided,
however, that if a registration request pursuant to Section 3 of this Agreement
is subsequently withdrawn at the request of Pacific, Pacific shall bear such
expenses; and provided further, that if a registration request pursuant to
Section 5 of this Agreement is subsequently withdrawn at the request of Pacific,
the Company shall not be required to pay any expenses of such registration
proceeding, and Pacific shall bear such expenses. Pacific shall bear and pay
the underwriting commissions and discounts applicable to securities offered for
their account in connection with any registration, filings, and qualifications
made pursuant to this Agreement. In addition, Pacific shall pay all expenses
incurred in connection with the second registration effected pursuant to Section
3.
<PAGE>
Section 9. Underwriting Requirements. In connection with any underwritten
-------------------------
offering, the Company shall not be required under Section 4 to include
Registrable Securities in such underwritten offering, unless Pacific accepts the
terms of the underwriting of such offering that have been reasonably agreed upon
between the Company and the underwriters selected by the Company.
Section 10. Rule 144 and Rule 144A Information. With a view to making
---------------------------------------
available the benefits of certain rules and regulations of the Commission which
may at any time permit the sale of the Registrable Securities to the public
without registration, at all times, the Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) furnish to Pacific forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of such
Rule 144 and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company as Pacific may reasonably request in
availing itself of any rule or regulation of the Commission allowing
Pacific to sell any Registrable Security without registration.
Notwithstanding anything contained in this Section 10, the Company may cease to
file reports with the Commission under Section 12 of the Exchange Act if it then
is permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder.
Section 11. Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless Pacific, its
directors and officers, each person who participates in the offering of such
Registrable Securities, including underwriters (as defined in the Securities
Act), and each person, if any, who controls Pacific or participating person
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) to which they may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of a material fact contained in such registration
statement, preliminary prospectus, final prospectus or amendments or supplements
thereto or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the indemnity
agreement contained in this Section 11(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld); provided, further, that the Company shall not be
liable to Pacific, its directors and officers, participating person or
controlling person in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus, final
prospectus or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by Pacific, its directors and officers, participating
person or controlling person; and provided, further, that the Company will not
be liable to Pacific, its directors and officers, participating person or
controlling person in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any registration statement or preliminary prospectus that is corrected in the
final registration statement and prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage, liability or
action purchased Registrable Securities but was not sent or given a copy of the
final prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Registrable Securities to such person in any
case where such delivery of the final registration statement and prospectus (as
amended or supplemented) is required by the Securities Act and such final
prospectus (as amended or supplemented) was previously delivered in a timely
manner to Pacific by the Company. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of Pacific, its
directors and officers, participating person or controlling person, and shall
survive the transfer of such securities by Pacific.
<PAGE>
(b) Pacific shall indemnify and hold harmless the Company, each of its
directors and officers, each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, and each agent and any underwriter for the Company (within the meaning of
the Securities Act) to the same extent as the foregoing indemnity from the
Company to Pacific but only with reference to written information relating to
Pacific furnished to the Company expressly for use in connection with such
registration; provided, however, that the indemnity agreement contained in this
Section 11(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of Pacific (which consent shall not be unreasonably withheld); and
provided further, that the liability of Pacific hereunder shall be limited to
the proportion of any such loss, claim, damage, liability or expense that is
equal to the proportion that the gross proceeds from the sale of the shares sold
by Pacific under such registration statement bears to the total gross proceeds
from the sale of all securities sold thereunder, but not in any event to exceed
the gross proceeds actually received by Pacific from the sale of Registrable
Securities by such registration statement.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
name parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to the actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Pacific, in the case of
parties indemnified pursuant to the second preceding paragraph, and by the
Company in the case of the parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reasons of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
<PAGE>
(d) If the indemnification provided for in the first or second
paragraph of this Section 11 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of material or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages or liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 11(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, Pacific shall not be required
to contribute any amount in excess of the amount of gross proceeds received by
Pacific from the sale of Registrable Securities covered by such registration
statement. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 11 are not exclusive and shall not limit
any right or remedies that may otherwise be available to any indemnified party
at law or in equity.
<PAGE>
Section 12. Transfer of Registration Rights.
----------------------------------
The registration rights of Pacific under this Agreement may be transferred
to (a) any transferee of such Registrable Securities who acquires all
Registrable Securities of Pacific or (b) any affiliate of Pacific.
Section 13. Intentionally Deleted.
-----------------------
Section 14. Intentionally Deleted.
-----------------------
Section 15. Representations and Warranties of the Company
--------------------------------------------------
(a) Organization and Good Standing. The Company is a corporation duly
-------------------------------
organized, validly existing and in good standing under the law of the State of
Colorado and each other State where the nature of its business requires it to
qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of the Company to perform its
obligations hereunder.
(b) Authorization. The Company has the power, authority and legal
-------------
right to execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly authorized
by the Company by all necessary corporate and shareholder action.
(c) Binding Obligation. This Agreement, assuming due authorization,
-------------------
execution and delivery by Pacific, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to creditors'
rights generally and (B) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceeding therefor may be
brought, whether a proceeding at law or in equity.
(d) No Violation. The consummation of the transactions contemplated by
------------
the fulfillment of the terms of this Agreement will not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under the organizational
documents or bylaws of the Company, or any indenture, agreement, mortgage, deed
of trust or other instrument to which the Company is a party or by which it is
bound, or in the creation or imposition of any lien upon any of its properties
pursuant to the terms of such indenture, agreement, mortgage, deed of trust or
other such instrument, or violate any law, or any order, rule or regulation
applicable to the Company of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Company or any of its properties.
<PAGE>
(e) Approvals. All approvals, authorizations, consents, orders or
---------
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Effective
Date.
(f) Conversion Shares. All of the Conversion Shares have been duly
------------------
authorized, and upon delivery thereof to Pacific in accordance with Section 2
hereof, shall be validly issued, fully paid and non-assessable, free and clear
of all pledges, liens, encumbrances and restrictions (other than as set forth in
this Agreement).
(g) Capital Stock. At the Effective Date, the authorized capital stock
-------------
of the Company consists of 30,000,000 shares of Class A Common Stock, of which
8,074,631 shares are issued and outstanding, 2,250,000 shares of Class B Common
Stock, of which 1,273,715 shares are issued and outstanding, and 10,000,000
shares of preferred stock, no par value, of which 2,356,236 shares are issued
and outstanding.
(h) Securities Laws. Under the circumstances contemplated by this
-----------------
Agreement and assuming the accuracy of the representations of Pacific in Section
16 of this Agreement, the offer, issuance, sale and delivery of the Conversion
Shares will not, under current laws and regulations, require compliance with the
prospectus delivery or registration requirements of the Securities Act.
(i) SEC Filings. The Company has made all filings that it is
-------------
required to make with the Commission under the Securities Act and the Exchange
Act (the "Company SEC Reports"). As of their respective dates, the Company SEC
Reports did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 16. Representations and Warranties of Pacific.
---------------------------------------------
(a) Organization and Good Standing. Pacific is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the State of
Texas and each other State where the nature of its business requires it to
qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of Pacific to perform its
obligations hereunder.
(b) Authorization. Pacific has the power, authority and legal
-------------
right to execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly authorized
by Pacific by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming due authorization,
-------------------
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Pacific, enforceable against Pacific in accordance with its terms
except that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory, regulatory
or decisional) now or hereafter in effect relating to creditors' rights
generally and (B) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought,
whether a proceeding at law or in equity.
<PAGE>
(d) No Violation. The consummation of the transactions contemplated by
------------
the fulfillment of the terms of this Agreement will not conflict with, result in
any breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the organizational documents or
bylaws of Pacific, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Pacific is a party or by which it is bound, or in the
creation or imposition of any lien upon any of its properties pursuant to the
terms of such indenture, agreement, mortgage, deed of trust or other such
instrument, or violate any law, or any order, rule or regulation applicable to
Pacific of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over Pacific or
any of its properties.
(e) Approvals. All approvals, authorizations, consents, orders or other
---------
actions of any person, or of any court, governmental agency or body or official,
required in connection with the execution and delivery of this Agreement have
been or will be taken or obtained on or prior to the Effective Date.
(f) Sole Owner. Pacific is the sole owner of the Note and has not
-----------
sold, assigned or otherwise conveyed any interest in the Note to any Person or
entity.
(g) Private Placement. Except as contemplated by this Agreement,
------------------
Pacific will acquire the Conversion Shares for investment, and not for the
interest of any other person, not for resale to any other person and not with a
view to or in connection with any sale or distribution.
Section 17. Opinion of the Company's Counsel. On or before the Effective
----------------------------------
Date, the Company shall have delivered to Pacific an opinion, satisfactory to
Pacific, of outside counsel to the Company, dated the Effective Date,
substantially to the effect that:
(a) The Company is a corporation duly organized and validly existing in
good standing under the laws of the state of its incorporation and has the
corporate power and authority to own and hold the properties owned and leased by
it and to carry on the business in which it is engaged. The Company has the
corporate power and authority to enter into this Agreement, to issue and sell
the Conversion Shares and to carry out the provisions of this Agreement.
(b) The Agreement has been duly authorized, executed and delivered by
the Company, is the legal, valid and binding agreement of the Company and is
enforceable against the Company in accordance with its terms, subject, as to the
enforcement of remedies, to (i) limitations under applicable, bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization, and other laws
affecting the rights of creditors generally and to judicial limitations on the
enforcement of the remedy of specific performance and other equitable remedies
and (ii) limitations as rights of indemnification or contribution may be limited
by principles of public policy.
(c) The Conversion Shares have been duly authorized, validly issued and
delivered by the Company. The Conversion Shares are fully paid and
nonassessable, and are entitled to the rights, preferences and provisions of the
Company's Articles of Incorporation and the benefits of the provisions of this
Agreement applicable thereto. The certificates evidencing the Conversion Shares
are in valid and sufficient form.
<PAGE>
(d) All corporate proceedings required by law or by the provisions of
this Agreement to be taken by the Board of Directors and shareholders of the
Company in connection with the execution and delivery of this Agreement, the
offer, issuance and sale of the Conversion Shares and the consummation of the
transactions contemplated by this Agreement, have been duly and validly taken.
(e) Assuming the accuracy of the representations made by Pacific in
Section 16 of this Agreement, the Company has obtained the approval or consent
of all governmental agencies or bodies required pursuant to the laws of the
State of Colorado or federal laws of the United States for the legal and valid
execution and delivery of this Agreement and the legal and valid offer, issuance
and sale of the Conversion Shares and for the performance of the obligations of
the Company under all provisions of this Agreement. The Company is not in
violation of any term, provision or condition of its Articles of Incorporation
or bylaws. Assuming the accuracy of the representations made by Pacific in
Section 16 of this Agreement, the execution, delivery and performance of this
Agreement, the offer, issuance and sale of the Conversion Shares and the
consummation of the transactions contemplated by this Agreement will not result
in any breach or violation of the terms or provisions of, or constitute a
default under, the Articles of Incorporation or the bylaws of the Company, any
laws of the State of Colorado or the federal laws of the United States affecting
the Company or its business or any agreement known to such counsel to which the
Company is a party with any of its shareholders.
(f) Assuming the accuracy of the representations made by Pacific in
Section 16 of this Agreement, the offer, sale, issuance and delivery of the
Conversion Shares to Pacific under the circumstances contemplated by this
Agreement are exempt from the registration and prospectus delivery requirements
of the Securities Act and applicable securities laws of the State of Colorado.
Section 18. Effective Date.
----------------
This Agreement shall become effective as of the date first above
written (the "Effective
Date") provided each of the parties hereto shall have executed this Agreement or
a counterpart
hereof on or before September 1, 1998.
Section 19. Notices. All notices, requests, consents and other
--------
communications required or permitted hereunder shall be in writing and shall be
personally delivered, transmitted via facsimile or overnight courier service or
mailed first-class postage prepaid, registered or certified mail,
(a) if to Pacific:
Pacific USA Holdings Corp.
5999 Summerside Drive, Suite 112
Dallas, Texas 75252
Attn: Bill C. Bradley, Chief Executive Officer
Facsimile No. (972) 248-5023
With a Copy to:
<PAGE>
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attn: Cathryn L. Porter, Chief General Counsel
Facsimile No. (713) 871-0155
(b) if to Company:
Monaco Finance, Inc.
370 Seventeenth Street, Suite 5060
Denver, Colorado 80202
Attn: Irwin L. Sandler, Executive Vice President
Facsimile No. (303) 405-6496
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given on the date when
personally delivered or when transmitted by facsimile (if confirmation of
facsimile receipt has been given), on the date after being deposited with an
overnight courier service, or, if sent by mail, four days after deposit in the
United States mail, postage prepaid. Any party may change its address for
notice by notifying the other party pursuant to the above notice provisions.
Section 20. Miscellaneous.
-------------
(a) Counterparts. This Agreement may be executed in two or more
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered will be deemed to be an original but all of
which together will constitute one and the same instrument.
(b) Governing Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of Colorado, without regard to the
application of choice of law principles, except to the extent that such laws are
superseded by federal law.
(c) Binding Agreement. This Agreement shall be binding upon and inure
------------------
to the benefit of the parties hereto and their respective successors and
assigns.
(d) Amendments; No Waivers. Any provision of this Agreement may be
------------------------
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Pacific and the Company, or in the case
of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
(e) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions be
consummated as originally contemplated to the fullest extent possible.
<PAGE>
(f) Specific Performance. The parties hereto agree that irreparable
---------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
<PAGE>
IN WITNESS WHEREOF, this CONVERSION AND RIGHTS AGREEMENT has been signed
and delivered by the parties as of the date first above written.
MONACO FINANCE, INC.,
a Colorado corporation
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
PACIFIC USA HOLDINGS CORP.,
a Texas corporation
By:
-------------------------------
Name: John Sloan
Title: Chief Operating Officer
<PAGE>
EXHIBIT 99.01
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(f) promulgated under the Securities Exchange Act
of 1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission, the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and all of which together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: October 6, 1998
Pacific Southwest Bank Pacific USA Holdings Corp.
By: /s/ Bobby Hashaway By: /s/ Bill C. Bradley
------------------------ ---------------------------------
Bobby Hashaway Bill C. Bradley
Chief Financial Officer Chief Executive Officer
Pacific Financial Group, Inc. Pacific Electric Wire & Cable
Co., Ltd.
By: /s/ Sun Tao-tsun By: /s/ Tung Ching-yun
---------------------- -------------------------------
Sun Tao-tsun Tung Ching-yun
Chief Executive Officer Vice President
First CF Corp. Consumer Finance Holdings, Inc.
By: /s/ Bobby Hashaway By: /s/ Bill C. Bradley
------------------------ --------------------------------
Bobby Hashaway Bill C. Bradley
President Chief Executive Officer
<PAGE>
