SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 16, 1999
MONACO FINANCE, INC.
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(Exact Name of Registrant as Specified in Charter)
Colorado 0-18819 84-1088131
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(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction Identification No.)
of Incorporation)
370 Seventeenth Street, Suite 5060
Denver, Colorado 80202
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(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (303) 592-9411
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Total number of pages is 17.
The exhibit index appears at sequential page no. 2.
<PAGE>
ITEM 5. OTHER EVENTS.
Effective as of November 30, 1998, Pacific USA Holdings Corp. ("Pacific")
converted $536,750 of unsecured debt and $300,000 of secured debt into 418,375
shares of 8% Cumulative Subordinated Preferred Stock, Series 1999-1 (the
"1999-1 Preferred Stock") of Monaco Finance, Inc. (the "Company") valued at
$2.00 per share. Further, Pacific paid the Company $200,000 in cash and
Pacific and the Company entered into a Software License and Development
Agreement and a Data Licensing Agreement (the "License Agreements"). Pursuant
to the License Agreements, Monaco, as licensor, granted to Pacific, as
licensee, a perpetual, fully paid up, nontransferrable, exclusive license
covering certain proprietary software and historical data developed by the
Company with respect to consumer automobile loans, including risk analysis
(the "Monaco Software"). Pacific acquired the right to make modifications,
changes or improvements to the Monaco Software (referred to as the "Advanced
Software"). Pacific has the right to exploit the Advanced Software as it
deems fit in its sole discretion. Pacific granted to the Company a fully paid
up, nontransferrable, nonexclusive license limited to use of the Advanced
Software for the Company's internal business purposes only. This license will
terminate 90 days following any change in control of the Company. In addition,
Pacific has a right of first refusal to purchase the Monaco Software. The
purchase price shall be offset by the total costs Pacific actually incurred in
development of the Advanced Software.
The 1999-1 Preferred Stock is subordinate to the 8% Cumulative
Convertible Preferred Stock, Series 1998-1 (the "1998-1 Preferred Stock") with
respect to payment of dividends, redemption and upon any liquidation of the
Company. The 1999-1 Preferred Stock has no voting rights other than as
provided in the articles of incorporation or as required by law. The Company
has the right to redeem the 1999-1 Preferred Stock at any time and from time
to time, in whole or in part, for cash in the amount of $2.00 per share plus
accrued but unpaid dividends. However, the 1999-1 Preferred Stock shall not be
redeemed so long as any 1998-1 Preferred Stock is issued and outstanding.
Dividends on the 1999-1 Preferred Stock are at the annual rate of 9% ($.16 per
share) payable quarterly in shares of 1999-1 Preferred Stock. No dividends
other than those payable solely in common stock shall be paid with respect to
the common stock unless all accumulated and unpaid dividends on the 1999-1
Preferred Stock shall have been declared and paid in full.
On or about January 16, 1999, in connection with the June 26, 1997 Master
Financing Securitization, the Company's wholly-owned special purpose
corporation, MF Receivables Corp II ("MFII") redeemed the outstanding Class A
Certificates for a total redemption price of approximately $16.7 million. The
transaction was financed through the existing Warehouse Credit Facility with
Daiwa Finance Corporation and MF Receivables Corp III, also a wholly owned
special purpose corporation of the Company ("MFIII"). Following the
redemption, the Company, MFII and MFIII, entered into an arrangement whereby
the assets of MFII, consisting of $18.7 million of Automobile Backed Consumer
Contracts were transferred to MFIII.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
4.6 Preferences, Limitations and Relative Rights of 8% Cumulative
Convertible Preferred Stock, Series 1999-1.
10.72 Conversion and Rights Agreement
10.73 Software License and Development Agreement
10.74 Data License Agreement
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONACO FINANCE, INC.
Date:February 10, 1999 By:/s/ Irwin L. Sandler
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Its: Executive Vice President
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<PAGE>
EXHIBIT 4.6
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
8% CUMULATIVE SUBORDINATED PREFERRED STOCK, SERIES 1999-1
OF
MONACO FINANCE, INC.
MONACO FINANCE, INC., a Colorado corporation (the "Corporation"), does
hereby certify that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation, as amended, of the Corporation and
pursuant to Section 7-106-102 of the Colorado Business Corporation Act, said
Board of Directors, pursuant to a unanimous Statement of Consent effective as
of December 31, 1998, duly adopted the following resolution:
RESOLVED, that, pursuant to the authority expressly granted to and vested
in the Board of Directors of MONACO FINANCE, INC., a Colorado corporation (the
"Corporation"), by the Articles of Incorporation, as amended, of the
Corporation, the Board of Directors hereby creates out of the authorized
preferred stock, no par value per share, of the Corporation a series of
preferred stock to consist of not more than 585,725 shares, and this Board of
Directors hereby fixes the designation and the powers, preferences and rights,
and the qualifications, limitations or restrictions of the shares of such
series as follows:
1. DESIGNATION. This resolution shall provide for a single series
of preferred stock, the designation of which shall be "8% Cumulative
Subordinated Preferred Stock-SERIES 1999-1" (hereinafter the "Series 2
Preferred Shares" or the "Series 2 Preferred Stock") and the number of
authorized shares constituting the Series 2 Preferred Stock is 585,725. The
number of authorized Series 2 Preferred Shares may be reduced or increased by
a further resolution duly adopted by the Board of Directors of the Corporation
and by the filing of an amendment to the Corporation's Articles of
Incorporation pursuant to the provisions of the Colorado Business Corporation
Act stating that such reduction or increase has been so authorized. The Series
2 Preferred Stock shall be subordinate to the Corporation's 8% Cumulative
Convertible Preferred Stock-Series 1998-1 (the "Series 1 Preferred Shares" or
the "Series 1 Preferred Stock") with respect to payment of dividends and
redemption, and upon liquidation of the Corporation as provided herein.
2. VOTING. Except as provided herein or otherwise expressly
required by the laws of the State of Colorado, the holders of the Series 2
Preferred Stock shall have no voting rights and shall not be entitled to
notice of meetings of shareholders, and the exclusive voting power shall be
vested in the holders of the shares of the Corporation's Class A and Class B
Common Stock, $.01 par value per share (the "Common Stock"), and/or in any
other series of the Corporation's preferred stock now or at any time hereafter
issued and outstanding having voting rights including, without limitation, the
Series 1 Preferred Stock. Any corporate action that requires a vote of the
holders of the Series 2 Preferred Stock as a class shall be deemed to have
been approved by that class upon the affirmative vote by the holders of a
majority of the issued and outstanding Series 2 Preferred Shares unless a
higher voting requirement is imposed by the Colorado Business Corporation Act.
If any corporate action shall require a vote of the holders of the Series 2
Preferred Shares other than as a class, the Series 2 Preferred Shares shall
vote as a single voting group with all other shares of the Corporation's
capital stock having voting rights with respect to such action.
2.1 VOTING PROCEDURES. Whenever holders of the Series 2 Preferred
Stock are entitled to vote as provided herein, such holders shall, to the
extent practicable, act by unanimous consent to action without a meeting
signed by all holders of the Series 2 Preferred Stock to be effective when
actually received by the Corporation or on such later date as may be specified
in such consent. When holders of the Series 2 Preferred Stock are not able to
reach a consensus, the Corporation shall, upon the request made by any
holder(s) of ten percent or more of the number of outstanding Series 2
Preferred Shares, call a special meeting of holders of the Series 2 Preferred
Stock upon not less than ten nor more than 60 days notice to such holders. The
holders of a majority of the outstanding shares of Series 2 Preferred Stock,
present in person or by proxy, shall constitute a quorum for all meetings of
Series 2 Preferred Stockholders. In the event the matter to be voted on shall
be subject to any laws, rules or regulations with respect to the solicitation
of proxies or otherwise, the holders of the Series 2 Preferred Stock agree to
timely provide the Corporation with such information as it shall reasonably
require to comply therewith.
2.2 VOTING RIGHTS. The affirmative vote by the holders of a majority
of the outstanding shares of Series 2 Preferred Stock, voting separately as a
group, shall be required with respect to any amendment to the Articles of
Incorporation which would:
(a) Increase or decrease the aggregate number of authorized
shares of Series 2 Preferred Stock;
(b) Effect an exchange or reclassification of all or part of the
shares of Series 2 Preferred Stock into shares of another class;
(c) Effect an exchange or reclassification, or create the right of
exchange, of all or part of the shares of another class into shares of Series
2 Preferred Stock;
(d) Change the designation, preferences, limitations, or relative
rights of all or part of the shares of Series 2 Preferred Stock;
(e) Change the shares of all or part of the Series 2 Preferred Stock
into a different number of shares of the same class;
(f) Create a new class of shares having rights or preferences with
respect to distributions or dissolution that are prior, superior, or
substantially equal to the shares of Series 2 Preferred Stock;
(g) Increase the rights, preferences, or number of authorized shares
of any class that, after giving effect to the amendment, have rights or
preferences with respect to distributions or to dissolution that are prior,
superior, or substantially equal to the shares of Series 2 Preferred Stock;
(h) Cancel or otherwise affect rights to distributions or dividends
that have accumulated but have not yet been declared on all or part of the
shares of Series 2 Preferred Stock;
(i) Make the Series 2 Preferred Stock redeemable either mandatorily
or at the option of the Corporation.
(j) Be required in connection with any sale, lease, assignment,
transfer or other conveyance of all or substantially all of the assets of the
Corporation or any subsidiary of the Corporation; any consolidation or merger
involving the Corporation or any subsidiary of the Corporation; any
reclassification of any of the outstanding capital stock of the Corporation;
or any recapitalization of the Corporation.
2.3 VOLUNTARY REDEMPTION. Except as provided herein to the contrary,
and subject to requirements of the laws of the State of Colorado, the
Corporation shall have the right to redeem the Series 2 Preferred Stock at any
time and from time to time in whole or in part.
(a) The redemption price for each share of Series 2 Preferred Stock
shall be an amount in cash equal to the sum of $2.00 plus the amount of all
accrued and unpaid dividends thereon, whether or not earned or declared, to
and including the date fixed for redemption (the "Redemption Price"). In the
event of a redemption of only a part of the outstanding Series 2 Preferred
Stock, the Corporation shall effect such redemption ratably according to the
number of shares held by each holder of the Series 2 Preferred Stock.
(b) At least ten and not more than 60 days prior to the date fixed
for any such redemption of the Series 2 Preferred Stock (the "Redemption
Date"), written notice (the "Redemption Notice") shall be mailed, postage
prepaid, to each holder of record of the Series 2 Preferred Stock at his or
her post office address last shown on the records of the Corporation. The
Redemption Notice shall state:
(i) Whether all or less than all of the outstanding shares of Series
2 Preferred Stock are to be redeemed and the total number of shares being
redeemed.
(ii) The number of shares of Series 2 Preferred Stock held by the
holder that the Corporation intends to redeem.
(iii) The Redemption Date and the Redemption Price.
(iv) That the holder is to surrender to the Corporation, in the
manner and at the place designated, his or her certificate or certificates
representing the shares of Series 2 Preferred Stock to be redeemed.
(c) On or before the Redemption Date, each holder of Series 2
Preferred Stock to be redeemed shall surrender the certificate or certificates
representing such shares to the Corporation in the manner and at the place
designated in the Redemption Notice and, thereupon, the Redemption Price for
such shares shall be payable to the order of the person whose name appears on
such certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled and retired. In the event less than all the
shares represented by such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.
(d) If the Redemption Notice shall have been duly given and if on the
Redemption Date the Redemption Price is either paid or set apart for payment,
then, notwithstanding that the certificates evidencing any of the shares of
Series 2 Preferred Stock so called for redemption shall not have been
surrendered, the dividends with respect to such shares shall cease to accrue
after the Redemption Date and all rights with respect to such shares shall
forthwith after the Redemption Date terminate, except only the right of the
holders to receive the Redemption Price, without interest, upon surrender of
their certificate or certificates therefor.
(e) Notwithstanding anything contained herein to the contrary, the
Series 2 Preferred Stock shall not be redeemed in whole or in part so long as
any Series 1 Preferred Shares are issued and outstanding.
3. DIVIDENDS.
3.1 RATE. Holders of Series 2 Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Directors out of any funds
of the Corporation legally available for that purpose, cumulative dividends
from the date of issuance at the rate of 8% ($.16 per share of Series 2
Preferred Stock) per year, payable quarterly (pro-rated for partial quarters)
in arrears, in shares of its Series 2 Preferred Stock valued at $2.00 per
share (or in cash if no Series 2 Preferred Shares are available for that
purpose), on the first day of April, July, October and January of each year
commencing April 1,1999 (each such date being hereinafter individually
referred to as the "Dividend Payment Date" and collectively as the "Dividend
Payment Dates"). Each such dividend shall be paid to the holders of record of
the Series 2 Preferred Shares as they appear on the books of the Corporation
on the record date which shall be not less than 30 days prior to the related
Dividend Payment Date. Dividends on the Series 2 Preferred Shares shall be
cumulative whether or not the Corporation was or is legally able to pay such
dividends in whole or in part. Holders of Series 2 Preferred Shares shall not
be entitled to any dividends whether payable in cash, property or stock in
excess of full dividends as herein provided on the Series 2 Preferred Shares.
3.2 DIVIDENDS ON COMMON STOCK AND SERIES 1 PREFERRED STOCK. No
dividends (other than those payable solely in Common Stock) shall be paid with
respect to the Common Stock during any fiscal year of the Corporation unless
all accumulated and unpaid dividends and the quarterly dividend on the shares
of Series 2 Preferred Stock for the then current dividend period shall have
been declared and paid. No dividends shall be paid with respect to the Series
2 Preferred Stock during any fiscal year of the Corporation unless all
accumulated and unpaid dividends and the quarterly dividend on the shares of
Series 1 Preferred Stock for the then current dividend period shall have been
declared and paid.
4. EXCHANGE, ASSIGNMENT OR LOSS OF SERIES 2 PREFERRED SHARES. Subject
to the provisions of Section 6 hereof, the Series 2 Preferred Stock is
assignable and exchangeable, without expense, at the option of the holder,
upon presentation and surrender of such Series 2 Preferred Stock to the
Corporation, together with written instructions signed by the holder of such
Series 2 Preferred Stock with respect to reissuance thereof and good funds
sufficient to pay any transfer or similar tax; whereupon the Corporation
shall, without charge, execute and deliver Series 2 Preferred Stock in the
designated denominations and in the designated name(s) and the Series 2
Preferred Stock so surrendered promptly shall be canceled. Upon receipt by
the Corporation of evidence satisfactory to it of the loss, theft, destruction
or mutilation of Series 2 Preferred Stock certificates, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification
including a surety bond, and upon surrender and cancellation of Series 2
Preferred Stock certificates, if mutilated, the Corporation will execute and
deliver new Series 2 Preferred Stock certificates of like tenor and date. Any
such new Series 2 Preferred Stock certificates executed and delivered shall
constitute additional contractual obligation on the part of the Corporation,
whether or not the Series 2 Preferred Stock certificates so lost, stolen,
destroyed, or mutilated shall be at any time enforceable by anyone.
5. LEGENDS AND SECURITIES LAW COMPLIANCE.
5.1 SECURITIES LAW COMPLIANCE. The Series 2 Preferred Stock may not
be issued, offered or sold except in conformity with the Securities Act of
1933, as amended, and applicable state laws, and then only against receipt of
an agreement of such person to whom such offer of sale is made to comply with
the provisions of this Section with respect to any resale or other disposition
of such securities.
5.2 SECURITIES LEGEND. The Corporation may cause the following legend
to be set forth on each certificate representing Series 2 Preferred Stock,
unless counsel for the Corporation is of the opinion as to any such
certificate that such legend is unnecessary:
The securities represented by this certificate may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration
statement made under the Securities Act of 1933 (the "Act"), or pursuant to an
exemption from registration under the Act the availability of which is to be
established to the satisfaction of the Corporation.
5.3 OTHER LEGENDS. All certificates representing the Series 2
Preferred Shares and any and all securities issued in replacement thereof
shall bear such additional legends as shall be required by law or contract.
6. RIGHTS ON LIQUIDATION. In the event of the liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, resulting in any distribution of its assets to its shareholders,
(i) the holders of the Series 2 Preferred Shares then issued and outstanding
shall be entitled to receive an amount equal to $2.00 per Series 2 Preferred
Share plus any accumulated but unpaid dividends, and no more, before any
payment or distribution of the assets of the Corporation is made to or set
apart for the holders of Common Stock and (ii) the holders of the Series 1
Preferred Stock Shares then issued and outstanding shall be entitled to
receive an amount equal to $2.00 per Series 1 Preferred Share plus any
accumulated but unpaid dividends, and no more, before any payment or
distribution of the assets of the Corporation is made to or set apart for the
holders of Series 2 Preferred Shares. If the assets of the Corporation
distributable to the holders of Series 2 Preferred Shares are insufficient for
the payment to them of the full preferential amount described above, such
assets shall be distributed ratably among the holders of the Series 2
Preferred Shares. The holders of the Common Stock and the Series 1 Preferred
Stock shall be entitled to the exclusion of the holders of the Series 2
Preferred Shares to share in all remaining assets of the Corporation in
accordance with their respective interests. For purposes of this paragraph, a
consolidation or merger of the Corporation with any other corporation or
corporations shall not be deemed to be a liquidation, dissolution or winding
up of the Corporation.
7. NOTICE. Any notices or certificates by the Corporation to the
Holder and by the Holder to the Corporation shall be deemed to have been given
if in writing and upon the earlier of personal delivery (including by
messenger, facsimile or other receipted delivery during normal business hours
or, if delivered other than during normal business hours, at the beginning of
the first business day following such delivery) or three business days
following deposit in the United States mails, by registered or certified mail,
return receipt requested, addressed to the holder at such holder's address of
record on the books of the Corporation or to the Corporation at its principle
executive offices. Any person may change the address for the giving of notice
by notice duly given effective five (5) business days thereafter.
IN WITNESS WHEREOF, MONACO FINANCE, INC. has caused its corporate seal to
be affixed hereto and this certificate to be signed by its President and
Secretary this 30th day of December, 1998.
MONACO FINANCE, INC.
By: /s/ Joseph A. Cutrona
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Joseph A. Cutrona, Chief Executive Officer
[S E A L]
ATTEST:
/s/ Irwin L. Sandler
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Irwin L. Sandler, Secretary
<PAGE>
EXHIBIT 10.72
CONVERSION AND RIGHTS AGREEMENT
THIS CONVERSION AND RIGHTS AGREEMENT (the "Agreement") is made and
entered into this 31st day of December, 1998, 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 "First Loan")
evidenced by that certain promissory note dated June 30, 1998 (the "First
Note") in the principal amount of Five Million and No/100 Dollars
($5,000,000), a portion of which has been previously converted by Pacific into
shares of the Company's Class A Common Stock, par value $.01 per share ("Class
A Common Stock"), leaving an outstanding principal balance of Five Hundred
Thirty-Six Thousand Seven Hundred Fifty and No/100 Dollars ($536,750); and
WHEREAS, the Company and Pacific entered into a second loan arrangement,
pursuant to which Pacific made a loan to the Company (the "Second Loan")
evidenced by that certain promissory note dated September 30, 1998 (the
"Second Note") in the principal amount of One Million and No/100 Dollars
($1,000,000) as modified effective October 31, 1998, to increase the principal
amount to One Million Four Hundred Thousand Dollars ($1,400,000); and
WHEREAS, the Company and Pacific entered into separate Pledge and
Security Agreements dated as of June 30, 1998, and September 30, 1998, whereby
the Company pledged the Collateral (as defined therein) to secure the
obligations of the Company under the First Note and the Second Note,
respectively, the Pledge and Security Agreement dated as of June 30, 1998,
having been terminated and the Collateral referred to therein having been
released as of the date of conversion of the First Note.
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.
"Preferred Stock" shall mean the 8% Cumulative Subordinated Preferred
Stock, Series 1999-1, no par value of the Company, the Preferences,
Limitations and Relative Rights of which shall be in substantially the form of
Exhibit A attached hereto and by this reference made a part hereof.
"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, the
unpaid principal balance of the First Note shall be converted into Preferred
Stock. The number of shares of Preferred Stock to be delivered to Pacific by
the Company upon such conversion ("First Note Conversion Shares") shall be
determined by dividing the unpaid principal balance of the First Note by $2.00
(the "Loan Conversion Price").
(b) The parties further agree that as of the Effective Date, $300,000
of the unpaid principal balance of the Second Note shall be converted into
Preferred Stock. The number of shares of Preferred Stock to be delivered to
Pacific by the Company upon such conversion ("Second Note Conversion Shares")
shall be determined by dividing the principal amount of the Second Note to be
converted by the Loan Conversion Price. The First Note Conversion Shares and
the Second Note Conversion Shares shall be referred to herein as the
"Conversion Shares" and the principal amounts of the First Note and the Second
Note to be converted as provided herein shall be referred to as the
"Conversion Amount."
(c) 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 of Pacific. In such event, the term "Pacific" shall include such
wholly owned subsidiary.
SECTION 3. DISCHARGE AND RELEASE OF RIGHTS TO COLLATERAL.
Pacific hereby acknowledges that the conversion of the Conversion Amount
pursuant to Section 2 herein discharges any and all debts, liabilities and
obligations owing by the Company to Pacific pursuant to the First Note except
for interest accrued and unpaid on the Note through the Effective Date. In
connection therewith, Pacific agrees to deliver the Note to the Company for
cancellation, and the Company agrees to pay or cause to be paid,
simultaneously with such delivery, all such accrued and unpaid interest. The
Company acknowledges that the stock of MF Receivables Corp. I secures payment
of the Second Note pursuant to the related Pledge and Security Agreement.
SECTION 4. 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 laws 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.
(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 nonassessable, 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 approximately 2,554,571 shares are issued and outstanding, 2,250,000
shares of Class B Common Stock, of which 254,743 shares are issued and
outstanding, and 10,000,000 shares of preferred stock, no par value, of which
471,248 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 5 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 5. 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. The principal place of business of Pacific is located
in Texas.
(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.
(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 First Note and the
Second Note and has not sold, assigned or otherwise conveyed any interest in
either Note to any Person or entity.
(g) PRIVATE PLACEMENT. Pacific acknowledges that the Conversion
Shares will be when issued "restricted securities" as defined in Rule 144
under the Securities Act and subject to substantial restrictions on transfer.
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. Pacific acknowledges and agrees that certificates
evidencing the Conversion Shares will bear a legend restricting transfer
thereof as required by the Securities Act.
SECTION 6. EFFECTIVE DATE.
This Agreement shall become effective as of November 30, 1998.
SECTION 7. 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 firstclass
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) 2485023
With a Copy to:
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attn: Cathryn L. Porter, Chief General Counsel
Facsimile No. (713) 8710155
(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) 4056496
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 8. 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.
(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.
IN WITNESS WHEREOF, this CONVERSION AGREEMENT has been signed and
delivered by the parties as of the date first above written.
<PAGE>
MONACO FINANCE, INC.
By:_________________________________
Name: Joseph Cutrona
Title: Chief Executive Officer
PACIFIC USA HOLDINGS CORP.
By:___________________________________
Name: Bill C. Bradley
Title: Chief Executive Officer
<PAGE>
EXHIBIT 10.73
SOFTWARE LICENSE AND DEVELOPMENT AGREEMENT
This Agreement ("the Agreement"), effective as of December 31, 1998
("the Effective Date"), is by and between Pacific USA Holdings Corp.
("Pacific" or "LICENSEE"), a Texas corporation having offices at 5999
Summerside Drive, Suite 112, Dallas, Texas 77552, and Monaco Finance, Inc.
("Monaco" or "LICENSOR"), a Colorado corporation having offices at 370
Seventeenth Street, Suite 5060, Denver, Colorado 80202. LICENSOR and LICENSEE
may be referred to individually as a "Party" and collectively as the
"Parties".
RECITALS
WHEREAS, LICENSOR has acquired certain rights in (a) computer programs,
source code and related documentation that permits data entry, program
validation, credit bureau request, risk analysis, scorecard processing and
automatic approval/turndown faxback to automotive dealers regarding consumer
requested auto loans (collectively, the "Monaco Software") and (b) and certain
trade names, service marks and trademarks used in conjunction with the Monaco
Software (collectively, the "Trademarks"), including but not limited to
FUNDLOG, VALUE SEEK, and FAX BACK;
WHEREAS, LICENSOR and LICENSEE each possess certain expertise in the
field of risk management for consumer and/or commercial loans;
WHEREAS, LICENSOR and LICENSEE desire to collaborate in order to develop
advanced loan and risk management software based on the Monaco Software (the
"Advanced Software");
WHEREAS, LICENSOR is willing to grant and LICENSEE desires to obtain
certain rights in the Monaco Software and the ability to use the Trademarks in
order to facilitate development and marketing of the Advanced Software; and
WHEREAS, in furtherance of this Agreement, LICENSOR and LICENSEE have
entered into a Data License Agreement simultaneously with the execution
hereof.
IN CONSIDERATION OF THE PROMISES CONTAINED HEREIN, AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE ADEQUACY, RECEIPT AND SUFFICIENCY OF WHICH ARE
HEREBY ACKNOWLEDGED, THE PARTIES, INTENDING TO BE LEGALLY BOUND, AGREE AS
FOLLOWS:
ARTICLE 1
Definitions
-----------
1.0 Definitions. The following terms used in this Agreement shall have
-----------
the following meanings (unless otherwise expressly provided herein):
1.1.1 "Affiliate" means any person or entity that controls, is controlled
---------
by or is under common control with LICENSEE.
1.1.2 "Confidential Information" means any confidential information of a
------------------------
party, including the Monaco Software in the case of LICENSOR and the Advanced
Software in the case of LICENSEE, and information clearly marked as
confidential or information identified as confidential at the time of
disclosure and summarized as confidential in a written memorandum delivered to
the recipient within thirty (30) days of disclosure, and any third party
proprietary information provided to either Party, but does not include
information which:
(i) is known to or independently developed by the receiving Party without
access to or use of Confidential Information of the disclosing Party, as
evidenced by the receiving Party's written records;
(ii) is disclosed to the receiving Party in good faith by a third party
who had a right to make such disclosure; or
(iii) is made public by the disclosing Party, or is established to be a
part of the public domain otherwise than as a consequence of a breach by the
receiving Party of its obligations hereunder.
1.1.3 "Monaco Software" shall have the meaning set forth above and shall
-----------------
include (a) any software developed without the participation of Pacific by
Monaco to function in conjunction with or enhance the Monaco Software and (b)
any updated, improved or otherwise modified versions of the Monaco Software
created or developed without the participation of Pacific by Monaco, all
source code related thereto, all documentation associated therewith, as well
as all associated patent registrations and applications, copyrights, copyright
registrations and applications, trade secrets, know-how, and other proprietary
rights.
1.1.4 "Advanced Software" shall have the meaning set forth above and
-------------------
shall include (a) any software developed jointly by Monaco and Pacific or
otherwise developed independently by Pacific to function in conjunction with
or enhance the Monaco Software and (b) any enhanced, updated, improved,
modified or otherwise altered versions of the Monaco Software or the Advanced
Software to the extent such enhancements, updates, improvements, modifications
or alterations were developed jointly by Monaco and Pacific or were otherwise
developed independently by Pacific, all source code related thereto, all
documentation associated therewith, as well as all associated patent
registrations and applications, copyrights, copyright registrations and
applications, trade secrets, know-how, and other proprietary rights.
<PAGE>
ARTICLE 2
Ownership and Grant of Rights
---------------------------------
2.1 Monaco Software License. Subject to the terms and conditions of
------------------------
this Agreement, LICENSOR grants to LICENSEE a perpetual, fully paid up,
non-transferable, exclusive license limited to use of the Monaco Software (a)
for LICENSEE's internal business purposes and (b) in the development of the
Advanced Software, including but not limited to the right to change, modify,
improve or otherwise alter the source code of the Monaco Software. LICENSEE
agrees not to sell, publish, or otherwise transfer or distribute the Monaco
Software, in whole or in part, or sublicense its rights to the Monaco Software
under this Agreement, to any other party without the written permission of
LICENSOR; provided, however, the foregoing shall not restrict LICENSEE's
rights relating to the Advanced Software. LICENSOR shall retain all
copyrights, patent rights, and other intellectual property rights to the
Monaco Software and, except to the extent of the limited rights granted to it
herein, LICENSOR hereby disclaims all copyrights, patent rights, and other
intellectual property rights to the Advanced Software. LICENSOR agrees not
to sell or otherwise transfer the Monaco Software to any other party for any
other purpose unless it shall have complied with the provisions of Section 2.5
hereof. LICENSOR acknowledges that the license granted to LICENSEE is
exclusive and agrees not to license or distribute the Monaco Software to any
other party for any other purpose.
2.2 Trademarks. LICENSOR grants to LICENSEE a limited right to use
----------
the Trademarks in association with the Monaco Software and the Advanced
Software. This is not a trademark license and no other rights relating to the
Trademarks are granted herein. Specifically, but without limitation, the
rights granted herein do not include the right to sublicense use of the
Trademarks or to use the Trademarks with any other products other than the
Monaco Software and Advanced Software. Except to the extent of the limited
rights granted to it herein, LICENSEE hereby expressly disclaims any rights in
and to the Trademarks.
2.3 Ownership of Monaco Software and Advanced Software. LICENSEE
---------------------------------------------------
acquires the right to make modifications, changes or improvements to the
Monaco Software, as necessary, in the development of the Advanced Software.
The Parties agree and acknowledge that all Monaco Software shall be owned by
Monaco. The Parties agree and acknowledge that all Advanced Software shall be
owned by Pacific, and that, subject to the terms and conditions of this
Agreement, Pacific shall have the full, unencumbered right to exploit the
Advanced Software as Pacific deems fit in its sole discretion. LICENSOR
further agrees to and hereby does assign all rights in the Advanced Software
to LICENSEE.
2.4 Advanced Software License. Subject to the terms and conditions
-------------------------
of this Agreement, LICENSEE grants to LICENSOR a fully paid up,
non-transferable, non-exclusive license limited to use of the Advanced
Software for LICENSOR's internal business purposes only; provided, however,
the license shall terminate ninety (90) days following any change in control
of LICENSOR after the Effective Date. LICENSOR agrees not to sell, publish,
or otherwise transfer or distribute the Advanced Software, in whole or in
part, or sublicense its rights under this Agreement, to any other party
without the prior written permission of LICENSEE; provided, however, the
foregoing shall not restrict LICENSOR's rights relating to the Monaco
Software. LICENSEE shall retain all copyrights, patent rights, and other
intellectual property rights to the Advanced Software and, except to the
extent of the limited rights granted to it herein, LICENSEE hereby disclaims
all copyrights, patent rights, and other intellectual property rights to the
Monaco Software.
2.5 Right to Purchase Monaco Software. In the event LICENSOR elects
----------------------------------
to terminate or otherwise abandon use of the Monaco Software or LICENSOR
elects to sell or otherwise transfer the Monaco Software then the LICENSOR
shall first offer LICENSEE the right to purchase the Monaco Software,
including the source code, at the then current Fair Market Value of the Monaco
Software. Upon any sale or transfer of the Monaco Software, Monaco at its
sole discretion reserves the right to maintain the use of the Monaco Software
for its internal business purposes. Such offer shall be in writing and shall
include the current Fair Market Value of the Monaco Software and the basis for
this determination. The purchase price to be paid by LICENSEE (being the then
current Fair Market Value of the Monaco Software) shall be offset by the total
costs that LICENSEE has actually incurred in the development of the Advanced
Software from and after the date of this Agreement. LICENSEE shall have
thirty (30) following receipt of the offer (or forty-five (45) days following
the event which gives rise to the purchase right, if no notice is given by
LICENSOR) to exercise its right to purchase the Monaco Software.
(a) Any person or entity into which LICENSOR has been merged or
consolidated, or to whom LICENSOR has sold substantially all of its assets, or
any corporation resulting from any merger, conversion or consolidation to
which LICENSOR shall be a party, or any person or entity succeeding to the
business of LICENSOR shall have, among its other rights, the right to use the
Monaco Software for its internal business purposes, subject to the other terms
of this Agreement as same pertains to the processing of Monaco generated
business.
ARTICLE 3A
Obligations of LICENSOR
-------------------------
In addition to LICENSOR'S other obligations and responsibilities hereunder,
LICENSOR shall:
3A.1 Changes, Improvements, Modifications, and New Products by LICENSOR.
------------------------------------------------------------------
Notify LICENSEE of any changes, modifications or improvements to the Monaco
Software, as well as any new inventions developed by LICENSOR relating to the
Monaco Software, as soon as is practical.
3A.2 Notice of Infringement. Provide, written notice to LICENSEE of any
----------------------
infringement, threat of infringement or violation of any of the rights in the
Monaco Software or Advanced Software of which LICENSOR becomes aware.
3A.3 Best Efforts. Use its best efforts in assisting the LICENSEE in the
-------------
development of the Advanced Software, including but not limited to explaining
the function, structure, use, operation, limitations and potential
improvements in and to the Monaco Software or the Advanced Software; assisting
in the development of Advanced Software when requested by LICENSEE; and
participating in testing of the Advanced Software.
3A.4 Monaco Software. Provide, within ten (10) days of the Effective
----------------
Date, at least one copy of the Monaco Software to LICENSEE, including the
source code thereof.
3A.5 Notice of Abandonment of Monaco Software, Intention to Sell or Change
---------------------------------------------------------------------
in Control. Notify LICENSEE of (a) any change in control of LICENSOR, (b)
- ------------
LICENSOR's plans to terminate or otherwise abandon use of the Monaco Software,
- ---
or (c) LICENSOR's intention to sell or otherwise transfer the Monaco Software
ARTICLE 3B
Obligations of LICENSEE
-------------------------
In addition to LICENSEE'S other obligations and responsibilities hereunder,
LICENSEE shall:
3B.1 Changes, Improvements, Modifications, and New Products by LICENSEE.
------------------------------------------------------------------
During the term of the license of the Advanced Software to LICENSOR, notify
LICENSOR of any changes, modifications or improvements to the Advanced
Software, as well as any new inventions developed by LICENSEE relating to the
Advanced Software, as soon as is practical.
3B.2 Notice of Infringement. Provide, written notice to LICENSOR of any
----------------------
infringement, threat of infringement or violation of any of the rights in the
Monaco Software or Advanced Software of which LICENSEE becomes aware.
3B.3 Advanced Software. Provide, within thirty (30) days following the
------------------
testing, completion and incorporation of any changes, modifications or
improvements to the Advanced Software, at least one copy of the Advanced
Software to LICENSOR.
ARTICLE 4
Commercial Terms
-----------------
4.1 Fully Paid Up. This Agreement is fully paid up. No other payments,
-------------
including royalties, are due hereunder by LICENSEE or LICENSOR to the other
party.
ARTICLE 5
Disclaimer
----------
5.1 ALL EXPRESS OR IMPLIED COVENANTS, CONDITIONS, REPRESENTATIONS OR
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY FOR MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR CONDITIONS OF QUALITY AND THOSE ARISING BY STATUTE OR
OTHERWISE IN LAW, ARE HEREBY DISCLAIMED. THE OBLIGATIONS OF THE PARTIES
EXPRESSLY STATED HEREIN ARE IN LIEU OF ALL OTHER REPRESENTATIONS, WARRANTIES,
COVENANTS OR CONDITIONS EXPRESSED OR IMPLIED. THE PARTIES DO NOT REPRESENT,
WARRANT, OR COVENANT THAT ANY PRODUCTS MADE AND/OR DISTRIBUTED BY LICENSEE
HEREUNDER WILL BE FIT FOR A PARTICULAR PURPOSE.
ARTICLE 6
General Representations and Warranties
-----------------------------------------
6.1 Mutual Representations and Warranties. Each Party represents and
-------------------------------------
warrants to the other that:
(a) it is not a Party to any agreement, understanding or business
relationship that prevents it from carrying out its obligations under this
Agreement;
(b) it has the full right and corporate power to enter into and perform
its obligations under this Agreement;
(c) this Agreement creates legal, valid and binding obligations on it and
is enforceable against it in accordance with its terms; and
(d) it will discharge all of its duties and obligations hereunder in a
proper, efficient and business-like manner using persons with skills and
experience appropriate to their function.
6.2 Limitation on Damages. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
---------------------
ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGE IN
CONNECTION WITH OR RELATED TO THIS AGREEMENT (INCLUDING LOSS OF PROFITS, USE,
DATA, OR OTHER ECONOMIC ADVANTAGE), HOWSOEVER ARISING, EITHER OUT OF BREACH OF
THIS AGREEMENT, INCLUDING BREACH OF WARRANTY, OR IN TORT, EVEN IF THE OTHER
PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
ARTICLE 7
Confidentiality
---------------
7.1 Limitations on Disclosure or Use. Except to the extent permitted
--------------------------------
herein, the Parties agree that while this Agreement remains in effect, or at
any time after the termination of this Agreement, the receiving Party will not
disclose to any person, firm or corporation, any part of the Confidential
Information of the disclosing Party, except with the prior written consent of
the disclosing Party, and that access shall be limited to those of the
receiving Party's employees, agents and consultants, or the employees, agents
and consultants of its parent corporation (if any), its affiliates or
subsidiaries or third parties who have a legitimate need to know the
Confidential Information for performance under this Agreement and further,
that the Confidential Information shall be used strictly for the purposes
contemplated by this Agreement.
7.2 Injunctive Relief. Each of the Parties hereby acknowledges and
------------------
expressly agrees that any breach by it of this Agreement, which does or may
result in loss of confidentiality of the Confidential Information, would cause
irreparable harm to the other Party for which money damages would not be an
adequate remedy. Therefore, each of the Parties hereby agree, that in the
event of any breach of Article 8 of this Agreement by it, the non-breaching
Party will have the right to seek injunctive relief against continuing or
further breach by the breaching Party, without the necessity of proof of
actual damages, in addition to any other right which either Party may have
under this Agreement, or otherwise in law or in equity.
7.3 Required Disclosures Permitted. Notwithstanding any other provision
------------------------------
of this Agreement, the receiving Party will be permitted to disclose any
Confidential information if such disclosure:
(a) is in response to a valid order by a court or other governmental body
having jurisdiction; or
(b) is otherwise required by law or by the requirements of any competent
securities regulatory authority;
provided, however, that the receiving Party will make every effort to inform
the disclosing Party of the order, law or requirement such that the disclosing
Party will have a reasonable opportunity to seek an appropriate protective
order.
7.4 No Termination. This Article 7 will survive any termination of this
--------------
Agreement.
ARTICLE 8
Relationship of the Parties
------------------------------
8.1 No Liability for Acts of Other Party. Neither of the Parties will be
------------------------------------
responsible for or bound by any act of the other Party or such other Party's
agents, employees or any person in any capacity in its service or for any
default or misconduct of such person or persons.
8.2 No Ability to Bind Other Party. Neither Party will assume or create,
------------------------------
in writing or otherwise, any obligation, contract, term, condition or other
responsibility of any kind, expressed or implied, in the name of or on behalf
of the other Party or bind it in any manner whatsoever. Any such obligation
will be void.
8.3 Hold Harmless. Neither Party will be responsible for any statements,
-------------
representations, warranties or other claims made by other Party with respect
to the adequacy or performance of any of the Monaco Software or Advanced
Software licensed hereunder.
ARTICLE 9
Term and Termination
----------------------
9.1 Term. The term of this License Agreement shall commence on the
----
Effective Date and shall be perpetual unless terminated in accordance with
this Article 9 or Paragraph 10.2. In addition, the license granted in
Paragraph 2.4 shall terminate in the event of a change in control of LICENSOR
as described in Paragraph 2.4.
9.2 Material Breach and Cure. In the event that either Party hereto
-------------------------
defaults in the performance of any of its material duties or obligations
hereunder and such default is not cured within thirty (30) days after written
notice is given to the defaulting Party specifying the default, then the
Party not in default, after given written notice thereof to the defaulting
Party, may terminate this Agreement.
9.3 Continuing Obligations of LICENSOR after Termination. In the event of
----------------------------------------------------
termination of this Agreement, in whole or in part, for any reason, LICENSOR
will immediately:
(a) cease all further use of the Advanced Software;
(b) return to LICENSEE all copies of the Advanced Software, howsoever
recorded; and
(c) provide LICENSEE with written assurances of compliance with this
Paragraph 9.3.
9.4 Continuing Obligations of LICENSEE after Termination. In the event of
----------------------------------------------------
termination of this Agreement due to a breach by LICENSEE pursuant to the
terms of Paragraph 9.2, LICENSEE will immediately:
(a) cease all further use of the Monaco Software;
(b) return to LICENSOR all copies of the Monaco Software, howsoever
recorded; and
(c) provide LICENSOR with written assurances of compliance with this
Paragraph 9.4.
9.5 No Additional Compensation. Upon termination or expiration of this
--------------------------
Agreement, neither Party will be entitled to compensation under this Agreement
for its efforts in promoting or creating good will for the other Party.
9.6 Effect of Termination. With the exception of those rights and
-----------------------
obligations which by their nature should survive and further subject to
Article 7, all rights and obligations hereunder shall immediately terminate
and cease upon termination or expiration of this Agreement.
<PAGE>
ARTICLE 10
General
-------
10.1 Applicable Laws. The construction, validity and performance of this
---------------
Agreement will be governed by the laws of Texas, U.S.A., and both of the
Parties agree to the non-exclusive jurisdiction of the courts of the Texas,
with respect to any suit, action or proceeding arising out of or relating to
this Agreement.
10.2 Assignment Restrictions. Except as otherwise provided in this
------------------------
Agreement, LICENSOR shall not have the right to assign or transfer any of its
rights or to delegate any of its duties under this Agreement to any party
other than an Affiliate without the prior written consent of LICENSEE, which
consent shall not be unreasonably withheld or delayed. Any attempted
assignment or transfer without such consent will be void and of no effect, and
will automatically terminate all rights of the LICENSOR under this Agreement.
10.3 Survivorship. The Agreement will be binding upon and will inure to
------------
the benefit of the Parties hereto and their respective successors and
permitted assigns.
10.4 Headings and Context. Headings contained herein are for convenience
--------------------
of reference only and will not be considered substantive parts of this
Agreement. The use of the singular or plural will include the other form, and
the use of the masculine, feminine or neuter gender will include the other
genders as required by context.
10.5 Entire Agreement. This Agreement constitutes the entire Agreement
----------------
between the Parties pertaining to the subject matter hereof.
10.6 Severability. In the event any portion of this agreement is found to
------------
be unenforceable under the applicable laws, the remainder of this agreement
shall remain in force and such unenforceable portion shall be removed without
penalty to either Party.
10.7 Force Majeure. Subject to the terms and conditions of this
--------------
Agreement, neither Party will be responsible to the other for the
non-performance of or for delay in performance occasioned by any cause beyond
its reasonable control, including, without limitation, acts or omissions of
the other, acts of civil or military authority, strikes, lock-outs, embargoes,
acts of God, delay of suppliers or inability to obtain or shortages of
materials or supplies but, for greater certainty, the shortage of funds by a
Party hereto, thereby preventing it from discharging its obligations hereunder
will be deemed to be a cause within its control. However, the non-performing
Party shall use diligence in attempting to remove any such cause and shall
promptly notify the other Party of the extent and probable duration of such
cause.
10.8 Waiver Provisions. Failure by one Party to notify the other Party of
-----------------
a breach of any provision of this Agreement shall not constitute a waiver of
any continuing breach. Failure by one Party to enforce any of its rights
under this Agreement shall not constitute a waiver of those rights.
10.9 Notices. All notices required hereunder shall be given in writing and
-------
shall be deemed effective when delivered to the Party to be notified at the
following address or at such other address as shall have been specified in
written notice from the Party to be notified, mailed postage paid, first
class:
If to Pacific USA Holdings Corp., If to Monaco Finance, Inc.,
address to: address to:
5999 Summerside Dr., Suite 112 370 Seventeenth St., Suite 5060
Dallas, Texas 75252 Denver, Colorado 80202
Attention: Chief Executive Officer Attention: Chief Executive
Officer
with a copy to:
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attention: General Counsel
IN WITNESS WHEREOF the Parties hereto, through their duly authorized
officers, have executed this Agreement as of the date first noted above.
Pacific USA Holdings Corp. Monaco Finance, Inc.
By:/s/ Bill C. Bradley By: Joseph A. Cutrona Jr.
- ----------------------- -------------------------
Bill C. Bradley Joseph A. Cutrona Jr.
- ----------------------- -------------------------
Name Name
Chief Executive Officer Chief Executive Officer
- ----------------------- -------------------------
Title Title
<PAGE>
EXHIBIT 10.74
DATA LICENSE AGREEMENT
This Data License Agreement ("the Agreement"), effective as of December
__, 1998 (the "Effective Date"), is by and between Monaco Finance, Inc.
("Monaco" or "LICENSOR"), a Colorado corporation having offices at 370
Seventeenth St., Suite 5060, Denver, Colorado 80202; and Pacific USA Holdings
Corp., a Texas corporation having offices at 5999 Summerside Drive, Suite 112,
Dallas, Texas 77552, and each of its majority-owned subsidiaries
(collectively, "Pacific" or "LICENSEE"). LICENSOR and LICENSEE may be
referred to individually as a "Party" and collectively as the "Parties".
RECITALS
LICENSOR has acquired certain rights in proprietary databases relating to
historical information regarding sub-prime auto loans serviced by Licensor
including but not limited to (a) loan application input data from the dealer;
(b) vehicle data; (c) credit bureau data; (d) payment data; (e) collection
data; (f) recovery data; (g) risk analysis, and (h) Monaco's computerized
credit score, together with all updates to such information in Licensor's
possession from time to time (the "Product").
LICENSEE desires to obtain rights to use the Product to develop
statistical models and credit, collection and servicing strategies for itself,
its customers and clients (the "Derivative Information").
IN CONSIDERATION OF THE PROMISES CONTAINED HEREIN, AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE ADEQUACY, RECEIPT AND SUFFICIENCY OF WHICH ARE
HEREBY ACKNOWLEDGED, THE PARTIES, INTENDING TO BE LEGALLY BOUND, AGREE AS
FOLLOWS:
ARTICLE 1
Definitions
-----------
. Definitions. The following terms used in this Agreement shall have
-----------
the following meanings (unless otherwise expressly provided herein):
. "Confidential Information" shall mean the names of the borrowers, social
------------------------
security numbers of borrowers and credit information related to borrowers in
any information comprising the Product
<PAGE>
ARTICLE 2
Grant of License
------------------
2.1 Subject to the terms and conditions of this Agreement, LICENSOR grants
to LICENSEE a perpetual, fully paid up, non-transferable, non-exclusive
license in and to the Product. LICENSEE shall have exclusive rights to all
Derivative Information.
2.2 LICENSOR will deliver the initial Product and all updated information
relating to the Products due hereunder within thirty (30) days of the dates or
beginning of the time periods identified herein. Unless otherwise agreed by
the Parties, all Products will be delivered by LICENSOR to LICENSEE by either
permitting LICENSEE, at LICENSEE's option, on-line access to the Product or
by providing the Product on standard computer recording media to be identified
by LICENSEE.
ARTICLE 3
Obligations of LICENSOR
-------------------------
3.1 Product Updates. LICENSOR will deliver Product updates no less than
monthly in accordance with the terms of Section 2.2.
3.2 Product Support. LICENSOR shall provide Product support to LICENSEE
by explaining the fields of information contained in the Product from time to
time upon reasonable request by LICENSEE.
3.3 Notice. If LICENSOR becomes aware of any deficiencies or inaccuracies
in the Product or if LICENSOR becomes aware of any claims or causes of action
asserted by any third party with respect to the Product, LICENSOR shall
promptly notify LICENSEE in writing of any such occurrences.
ARTICLE 4
Commercial Terms
-----------------
4.1 Fully Paid Up. This License Agreement is fully paid up. No other
-------------
payments, including royalties, are due hereunder by LICENSEE to LICENSOR.
<PAGE>
ARTICLE 5
Disclaimer
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5.1 ALL EXPRESS OR IMPLIED COVENANTS, CONDITIONS, REPRESENTATIONS OR
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY FOR MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR CONDITIONS OF QUALITY AND THOSE ARISING BY STATUTE OR
OTHERWISE IN LAW, ARE HEREBY DISCLAIMED. THE OBLIGATIONS OF LICENSOR
EXPRESSLY STATED HEREIN ARE IN LIEU OF ALL OTHER REPRESENTATIONS, WARRANTIES,
COVENANTS OR CONDITIONS EXPRESSED OR IMPLIED. LICENSOR DOES NOT REPRESENT,
WARRANT, OR COVENANT THAT ANY PRODUCTS MADE AND/OR DISTRIBUTED BY LICENSEE
HEREUNDER WILL BE FIT FOR A PARTICULAR PURPOSE.
ARTICLE 6
General Representations and Warranties
-----------------------------------------
6.1 Mutual Representations and Warranties. Each party represents and
-------------------------------------
warrants to the other that:
(a) it is not a party to any agreement, understanding or business
relationship that prevents it from carrying out its obligations under this
Agreement;
(b) it has the full right and corporate power to enter into and perform
its obligations under this Agreement;
(c) this Agreement creates legal, valid and binding obligations on it and
is enforceable against it in accordance with its terms; and
(d) it will discharge all of its duties and obligations hereunder in a
proper, efficient and business-like manner using persons with skills and
experience appropriate to their function.
6.2 Limitation on Damages. EXCLUDING ARTICLE 7, IN NO EVENT WILL EITHER
---------------------
PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGE IN CONNECTION WITH OR RELATED TO THIS AGREEMENT
(INCLUDING LOSS OF PROFITS, USE, DATA, OR OTHER ECONOMIC ADVANTAGE), HOWSOEVER
ARISING, EITHER OUT OF BREACH OF THIS AGREEMENT, INCLUDING BREACH OF WARRANTY,
OR IN TORT, EVEN IF THE OTHER PARTY HAS BEEN PREVIOUSLY ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.
ARTICLE 7
Confidentiality
---------------
7.1 Limitations on Disclosure or Use. LICENSEE agrees that while this
--------------------------------
Agreement remains in effect, or at any time after the termination of this
Agreement, it will not disclose to any person, firm or corporation, any part
of the Confidential Information, except with the prior written consent of the
LICENSOR, and that access shall be limited to those of its employees, agents
and consultants, or the employees, agents and consultants of its parent
corporation (if any), its affiliates or subsidiaries or third parties who have
a legitimate need to know the Confidential Information for performance under
this Agreement.
7.2 Injunctive Relief. Each of the parties hereby acknowledges and
------------------
expressly agrees that any breach by LICENSEE of this Agreement, which does or
may result in loss of confidentiality of the Confidential Information, would
cause irreparable harm to the other party for which money damages would not be
an adequate remedy. Therefore, each of the parties hereby agree, that in the
event of any breach of Article 7 of this Agreement by LICENSEE, LICENSOR will
have the right to seek injunctive relief against continuing or further breach
by the LICENSEE, without the necessity of proof of actual damages, in
addition to any other right which LICENSOR may have under this Agreement, or
otherwise in law or in equity.
7.3 No Termination. This Article 7 will survive any termination of this
--------------
Agreement.
ARTICLE 8
Relationship of the Parties
------------------------------
8.1 No Liability for Acts of Other Party. Neither of the parties will be
------------------------------------
responsible for or bound by any act of the other party or such other party's
agents, employees or any person in any capacity in its service or for any
default or misconduct of such person or persons.
8.2 No Ability to Bind Other Party. Neither party will assume or create,
------------------------------
in writing or otherwise, any obligation, contract, term, condition or other
responsibility of any kind, expressed or implied, in the name of or on behalf
of the other party or bind it in any manner whatsoever. Any such obligation
will be void.
8.3 Hold Harmless. LICENSOR will not be responsible for any statements,
-------------
representations, warranties or other claims made by LICENSEE with respect to
the adequacy or performance of any of the Products licensed hereunder.
ARTICLE 9
Term and Termination
----------------------
9.1 Term. The term of this License Agreement shall commence on the
----
Effective Date and shall be perpetual unless terminated in accordance with
this Article 9 or Paragraph 10.2.
9.2 Material Breach and Cure. In the event that either party hereto
-------------------------
defaults in the performance of any of its material duties or obligations
hereunder and such default is not cured within thirty (30) days after written
notice is given to the defaulting party specifying the default, then the
party not in default, after given written notice thereof to the defaulting
party, may terminate this Agreement.
9.3 Continuing Obligations after Termination. In the event of termination
----------------------------------------
of this Agreement, in whole or in part, for any reason, LICENSEE will
immediately:
(a) cease all further use of the Product;
(b) return to LICENSOR all copies of the Product, howsoever recorded; and
(c) provide LICENSOR with written assurances of compliance with this
Paragraph 9.3.
9.4 No Additional Compensation. Neither party will be entitled to
----------------------------
compensation upon termination or expiration of this Agreement for its efforts
in promoting or creating good will for the other party.
9.5 Effect of Termination. With the exception of those rights and
-----------------------
obligations which by their nature should survive and further subject to
Article 7, all rights and obligations hereunder shall immediately terminate
and cease upon termination or expiration of this Agreement.
ARTICLE 10
General
-------
10.1 Applicable Laws. The construction, validity and performance of this
---------------
Agreement will be governed by the laws of Texas, U.S.A., and both of the
parties agree to the non-exclusive jurisdiction of the courts of the Texas,
with respect to any suit, action or proceeding arising out of or relating to
this Agreement.
10.2 Assignment Restrictions. Except as otherwise provided in this
------------------------
Agreement, LICENSEE shall not have the right to assign or transfer any of its
rights or to delegate any of its duties under this Agreement without the prior
written consent of LICENSOR. Any attempted assignment or transfer without
such consent will be void and of no effect, and will automatically terminate
all rights of the LICENSOR under this Agreement.
10.3 Survivorship. The Agreement will be binding upon and will inure to
------------
the benefit of the parties hereto and their respective successors and
permitted assigns.
10.4 Headings and Context. Headings contained herein are for convenience
--------------------
of reference only and will not be considered substantive parts of this
Agreement. The use of the singular or plural will include the other form, and
the use of the masculine, feminine or neuter gender will include the other
genders as required by context.
10.5 Entire Agreement. This Agreement constitutes the entire Agreement
----------------
between the parties pertaining to the subject matter hereof.
10.6 Severability. In the event any portion of this agreement is found to
------------
be unenforceable under the applicable laws, the remainder of this agreement
shall remain in force and such unenforceable portion shall be removed without
penalty to either party.
10.7 Force Majeure. Subject to the terms and conditions of this
--------------
Agreement, neither party will be responsible to the other for the
non-performance of or for delay in performance occasioned by any cause beyond
its reasonable control, including, without limitation, acts or omissions of
the other, acts of civil or military authority, strikes, lock-outs, embargoes,
acts of God, delay of suppliers or inability to obtain or shortages of
materials or supplies but, for greater certainty, the shortage of funds by a
party hereto, thereby preventing it from discharging its obligations hereunder
will be deemed to be a cause within its control. However, the non-performing
party shall use diligence in attempting to remove any such cause and shall
promptly notify the other party of the extent and probable duration of such
cause.
10.8 Waiver Provisions. Failure by one party to notify the other party of
-----------------
a breach of any provision of this Agreement shall not constitute a waiver of
any continuing breach. Failure by one party to enforce any of its rights
under this Agreement shall not constitute a waiver of those rights.
10.9 Notices. All notices required hereunder shall be given in writing and
-------
shall be deemed effective when delivered to the Party to be notified at the
following address or at such other address as shall have been specified in
written notice from the Party to be notified, mailed postage paid, first
class:
If to Pacific USA Holdings Corp., If to Monaco Finance, Inc.,
address to: address to:
5999 Summerside Dr., Suite 112 370 Seventeenth St., Suite 5060
Dallas, Texas 75252 Denver,Colorado 80202
Attention: Chief Executive Officer Attention: Chief Executive
Officer
with a copy to:
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attention: General Counsel
IN WITNESS WHEREOF the Parties hereto, through their duly authorized officers,
have executed this Agreement as of the date first noted above.
Pacific USA Holdings Corp. Monaco Finance, Inc.
By:/s/ Bill C. Bradley By: Joseph A. Cutrona Jr.
- ----------------------- -------------------------
Bill C. Bradley Joseph A. Cutrona Jr.
- ----------------------- -------------------------
Name Name
Chief Executive Officer Chief Executive Officer
- ----------------------- -------------------------
Title Title
