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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) September 17, 1998
PACIFICAMERICA MONEY CENTER, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
California 0-20897 95-4465729
---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
</TABLE>
Ventura Boulevard, Suite 102
Woodland Hills, California 91364
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (818) 992-8999
<PAGE> 2
Item 5. Other Events
On September 17, 1998, PacificAmerica Money Center, Inc. (the
"Company") obtained a $3 million loan from Fremont Financial Corporation, a
subsidiary of Fremont General Corporation ("Fremont"). The loan is secured with
the pledge of 100% of the stock of Pacific Thrift and Loan Company, a
wholly-owned subsidiary of the Company.
On September 11, 1998, the Company and Fremont jointly announced
that Fremont had agreed to acquire the Company, subject to a number of
conditions, including completion of satisfactory due diligence, negotiation of a
satisfactory definitive agreement, receipt of a fairness opinion, receipt of
approval of a majority of PAMM stockholders and regulatory approval. On October
5, 1998, the Company announced that it had agreed to certain revised terms of
the acquisition, as described in a press release attached as an exhibit to
this Report.
The Company used $2 million of the loan proceeds to partially pay
down a $20.4 million debt owed to Merrill Lynch Mortgage Capital, Inc. ("MLMCI")
secured by certain of the Company's interest-only strip receivables, and intends
to use the remaining $1 million in loan proceeds for general corporate purposes.
MLMCI requested the pay down of the debt primarily in response to changes made
in the methodology used by MLMCI to value the pledged receivables which reduced
the value of such receivables. The agreement requires that the value of the
receivables, as determined by MLMCI, remain at a specified percentage of the
debt owed to MLMCI. The Company is not aware of any material changes in
performance of the loans held in the securitization trusts in which it holds
interest-only strip receivables which would require an adjustment in the
valuation of such receivables on the Company's books. However, the market
perception of the valuation of interest-only strip receivables may have
deteriorated due to increasing concerns regarding prepayment rates, illiquidity
and other factors impacting the performance of mortgage loans in general. There
can be no assurance that MLMCI will not make further adjustments in its
valuation methodology, or that loan performance will not change in the future,
in such a way as to require further pay downs on the debt owed to MLMCI and
adjustment in the valuation of interest-only strip receivables held by the
Company.
The loan matures upon the closing date of the acquisition by
Fremont or, if the acquisition is not closed, six months following the earlier
of: (i) the date that Fremont notifies the Company that it has withdrawn its
proposed acquisition or (ii) October 31, 1998 if the parties have not entered
into a definitive acquisition agreement by that date; or (iii) February 28, 1999
if the acquisition has not closed by that date; or (iv) the date on which the
parties are advised of the denial of any required regulatory approval of the
acquisition.
Except for historical information contained herein, statements in
this report are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. Such risks include, among others, risk that the
acquisition will not be completed; risk of further adjustment in valuation of
the interest-only strip receivables resulting from differences between actual
and assumed prepayment and/or loss experience; risk of decline of collateral
values for loans; fluctuations in interest rates; competition in the lending
industry; and possible regulatory
2
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enforcement actions and legislative action. For more complete information
concerning factors which could affect the Company's financial results, reference
is made to the Company's Annual Report on Form 10-K for the year ended December
31, 1997 and other reports filed with the Securities and Exchange Commission.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
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<S> <C>
10.1 Secured Promissory Note dated September 17, 1998
10.2 Stock Pledge Agreement between the Company and Fremont Financial
Corporation.
10.3 Press release dated October 5, 1998
</TABLE>
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 hereunto duly authorized.
Dated: October 5, 1998 PACIFICAMERICA MONEY CENTER, INC.
By: /s/ JOEL R. SCHULTZ
Joel R. Schultz
President and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
10.1 Secured Promissory Note dated September 17, 1998
10.2 Stock Pledge Agreement between the Company and Fremont Financial
Corporation.
10.3 Press release dated October 5, 1998
</TABLE>
<PAGE> 1
EXHIBIT 10.1
SECURED PROMISSORY NOTE
$3,000,000 September __, 1998
FOR VALUE RECEIVED, the undersigned, PACIFICAMERICA MONEY CENTER, INC.,
a Delaware corporation (Borrower), hereby promises to pay to FREMONT FINANCIAL
CORPORATION, a California corporation (Fremont), or order, at 2020 Santa Monica
Boulevard, Suite 500, Santa Monica, California 90404, or at such other address
as the holder hereof may specify in writing, the principal sum of Three Million
Dollars ($3,000,000) plus interest in the manner and upon the terms and
conditions set forth below.
1. RATE OF INTEREST. The outstanding principal balance of this Secured
Promissory Note (this Note) shall bear interest from time to time at the rate of
five (5) percentage points per annum above the LIBOR Rate (as defined below).
For the purpose of this Note, the following terms shall have the respective
meanings set forth below:
"Banking Day" shall mean a day other than a Saturday, Sunday or
legal holiday under the laws of the State of California.
"Interest Period" shall mean, with respect to the then
outstanding principal balance of this Note, (i) the period from and
including the date of this Note to but not including the three-month
anniversary of the date of this Note and (ii) thereafter, each
subsequent three-month period from and including the three-month
anniversary of the date of this Note. Notwithstanding the foregoing, any
Interest Period which would otherwise end on a day which is not a
Banking Day shall extend to the next succeeding Banking Day and interest
shall accrue during such extension. Any Interest Period that begins on
the last Banking Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Banking Day of a calendar
month. Interest shall be charged for each day of each Interest Period.
"LIBOR Rate" shall mean, with respect to any Interest Period, the
three-month rate of interest per annum at which deposits in United
States dollars are offered to major banks in the London interbank market
at approximately 11:00 a.m. (London time), as reported by the Telerate
Rate System page 3750 (or such other page as may replace such page 3750
on such system for the purpose of reporting the London Interbank Offered
Rate of major banks) under the heading for British Bankers Association
Interest Settlement Rates in the column designated "USD" (U.S. Dollar)
two (2) Banking Days before the first day of an Interest Period.
Fremont will advise Borrower of the current LIBOR Rate upon Borrower's request.
The interest rate to be applied to the unpaid principal balance of this Note
shall be recalculated as of the first day of each Interest Period and remain in
effect to but not including the first day of the succeeding Interest Period. Any
interest not paid when due may be compounded by adding it to the principal and
thereafter shall bear interest at the rate provided herein. Upon the occurrence
of an Event of Default (as defined below), at Fremont's option, the rate of
interest on this Note, without constituting a waiver of any such Event of
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Default, shall be increased to eight percentage points above the LIBOR Rate. All
interest payable under this Note shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.
Interest shall continue to accrue until this Note is paid in full.
2. PAYMENTS OF INTEREST AND PRINCIPAL. All interest accrued hereunder
and the entire principal balance of this Note shall be due and payable in one
lump sum payment on the Maturity Date. For the purpose of the immediately
preceding sentence, the term "Maturity Date" shall mean the following applicable
date:
(a) the date in which Borrower agrees to (i) be acquired by, or
merged with or into, a party other than Fremont Investment & Loan ("FIL") or one
of its subsidiaries, or (ii) commence a voluntary liquidation of Borrower or its
subsidiary, Pacific Thrift and Loan Company;
(b) six (6) months following the earlier of (i) the date FIL
notifies Borrower that FIL has withdrawn its proposed acquisition of all of
Borrower's common stock (the "Acquisition") or (ii) October 31, 1998, if by such
date Borrower and FIL have not entered into definitive documents ("Definitive
Acquisition Documents") for the Acquisition; or
(c) if the Definitive Acquisition Documents are entered into by
Borrower and FIL on or before October 31, 1998, the earlier of (i) the closing
of the Acquisition, (ii) six (6) months after February 28, 1999, if the
Acquisition has not closed by such date, or (iii) six (6) months after either
(A) February 28, 1999, if Borrower and FIL have not received all required
regulatory approvals of the Acquisition by such date, or (B) the date prior to
February 28, 1999 on which Borrower and FIL are advised of the denial of any
required regulatory approval of the Acquisition.
3. PREPAYMENT. Borrower may prepay this Note, in whole or in part, at
any time and from time to time, without premium or penalty.
4. EVENTS OF DEFAULT. The occurrence of either of the following events
shall constitute an "Event of Default" hereunder:
(a) Borrower's failure to make any payment when due and payable
hereunder; or
(b) The commencement of an Insolvency Proceeding by or against
Borrower. For purposes of this Section 4(b), the term Insolvency Proceeding
shall mean any proceeding commenced by or against Borrower under any provision
of the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as
amended, or any successor statute, or under any other bankruptcy or insolvency
law, including receiverships, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with its creditors or
proceedings seeking reorganization, liquidation, arrangement or other similar
relief.
5. RIGHT OF ACCELERATION. Upon the occurrence of an Event of Default
under Section 4(a) of this Note, Fremont may, at its election and without notice
to Borrower, declare the entire balance hereof, including principal, interest
and all other amounts, immediately due and payable in full. Upon the occurrence
of an Event of Default under Section 4(b) of this Note, the entire balance
hereof, including principal, interest and all other amounts, shall immediately
and automatically become due and payable.
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6. SECURITY. Borrower acknowledges and agrees that this Note is secured
by the Collateral under (and as defined in) the Stock Pledge Agreement, of even
date herewith, by and between Borrower and Fremont (the "Stock Pledge
Agreement"), and that this Note is subject to all of the terms and conditions of
the Stock Pledge Agreement, including, without limitation, the default remedies
specified therein.
7. WAIVERS. Borrower hereby waives presentment for payment, protest,
demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of
intent to accelerate, notice of acceleration, presentment for the purpose of
accelerating maturity and diligence in collection.
8. SUCCESSORS AND ASSIGNS. This Note shall bind and inure to the benefit
of the respective successors and assigns of Borrower and Fremont; provided,
however, that Borrower may not assign this Note or any rights or duties
hereunder without Fremont's prior written consent and any prohibited assignment
shall be void and of no effect as against Fremont. No consent to an assignment
by Fremont shall release Borrower from its obligations hereunder. Fremont and
its successors and assigns may assign this Note and its rights and duties
hereunder. Fremont reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in Fremont's rights
and benefits hereunder.
9. GENERAL PROVISIONS.
(a) If this Note is not paid when due, Borrower promises to pay
all costs of collection, foreclosure fees and reasonable attorneys fees incurred
by Fremont, whether or not suit is filed hereon.
(b) This Note may not be changed, modified, amended or terminated
except by a writing duly executed by Borrower and Fremont.
(c) No waiver of any rights under this Note is valid or effective
unless made in writing and signed by Fremont.
(d) No delay or omission on the part of Fremont in exercising any
right shall operate as a waiver thereof or of any other right.
(e) A waiver by Fremont upon any one occasion shall not be
construed as a bar or waiver of any right or remedy on any future occasion.
(f) Should any one or more of the provisions of this Note be
determined illegal or unenforceable, all other provisions shall nevertheless
remain effective.
(g) Section headings used in this Note are solely for convenience
of reference, shall not constitute a part of this Note for any other purpose and
shall not affect the construction of this Note.
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10. CHOICE OF LAW AND VENUE.
THE VALIDITY OF THIS NOTE, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
BORROWER AND FREMONT AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, THE
FEDERAL COURTS WHOSE VENUE INCLUDES THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, OR, AT THE SOLE OPTION OF FREMONT, IN ANY OTHER COURT IN WHICH
FREMONT SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND FREMONT
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN ANY SUCH COURT, AND BORROWER AND FREMONT HEREBY WAIVE
ANY OBJECTION WHICH THEY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION AND
HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY ANY SUCH COURT. FURTHERMORE, BORROWER AND FREMONT WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO ASSERT THE
DOCTRINE OF "FORUM NON CONVENIENS" OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 10.
11. WAIVER OF JURY TRIAL.
BORROWER AND FREMONT HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND
FREMONT REPRESENT TO EACH OTHER THAT THEY HAVE REVIEWED THIS WAIVER AND
KNOWINGLY AND VOLUNTARILY WAIVE THEIR JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered at Fremont's place of business in Santa Monica, California.
BORROWER:
PACIFICAMERICA MONEY CENTER, INC.,
a Delaware corporation
Signed By:______________________________
Print Name:
Title/Capacity:
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EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
September __, 1998, is entered into by and between PACIFICAMERICA MONEY CENTER,
INC., a Delaware corporation ("Pledgor"), and FREMONT FINANCIAL CORPORATION, a
California corporation ("Fremont"), in light of the following facts:
RECITALS
A. Pledgor has requested that Fremont provide Pledgor with a term
loan in the original principal amount of Three Million Dollars ($3,000,000) (the
"Loan") to be evidenced by and payable in accordance with the terms of that
certain Secured Promissory Note, of even date herewith, of like amount, executed
by Pledgor to the order of Fremont (the "Note").
B. Fremont is unwilling to make the Loan to Pledgor unless
Pledgor enters into this Agreement, by which Pledgor shall grant Fremont a
security interest in all of Pledgor's holdings of shares of common stock of
Pledgor's wholly-owned subsidiary, Pacific Thrift and Loan Company (the
"Company"), and the related "Collateral" described below as security for the
payment and performance of Pledgor's obligations to Fremont under the Note.
C. To induce Fremont to provide it with the Loan, Pledgor is
willing to enter into this Agreement with Fremont.
NOW, THEREFORE, in consideration of the above premises, the
parties hereby agree as follows:
1. Pledge. Pledgor hereby delivers, pledges and grants a
continuing security interest to Fremont in, and grants Fremont control over, all
of Pledgor's holdings of shares of common stock of the Company, together with
all proceeds, replacements, substitutions, newly issued stock, stock received by
reason of a stock split, bonus or any other form of issue, dividend or
distribution with respect to or arising from the stock (collectively, the
"Collateral"). Pledgor shall forthwith deliver to Fremont any and all stock
certificates or other written evidence of Pledgor's ownership of the Collateral,
effectively endorsed by stock powers in form and substance satisfactory to
Fremont duly executed in blank, with signatures guaranteed.
2. Obligations Secured. The pledge and security interest
effectuated hereby shall secure all of Pledgor's obligations to Fremont under
the Note (collectively, the "Obligations").
3. Representations And Warranties Regarding The Collateral.
Pledgor represents and warrants that: (i) all of the shares of stock described
in paragraph 1 hereinabove are fully paid, non-assessable and validly issued;
(ii) the Collateral was not issued in violation of any person's or entity's
preemptive rights; (iii) the Collateral is owned free and clear of any and all
security interests, pledges, options to purchase or sell, redemptions or liens;
(iv) Pledgor's pledge of the Collateral to Fremont does not violate any law or
regulation to which either Pledgor or the
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Company is subject; (v) Pledgor has full power to convey the Collateral; (vi) no
financing statements covering the Collateral are recorded with any cognizant
state official or recording office; and (vii) the Collateral is free and clear
of any claims, security interests or liens other than those in favor of Fremont.
4. Events Of Default. An Event of Default under (and as defined
in) the Note shall constitute an "Event of Default" under this Agreement.
Pledgor hereby appoints Fremont as Pledgor's attorney-in-fact to arrange, upon
the occurrence of an Event of Default, for a transfer of the Collateral on the
books of the Company to the name of Fremont or to the name of Fremont's nominee.
5. Voting Rights. During the term of this Agreement, so long as
no Event of Default has occurred, Pledgor shall have the right to vote the
Collateral on all corporate questions for all purposes not inconsistent with the
terms of this Agreement. Upon the occurrence of an Event of Default, Fremont
shall thereafter have, at Fremont's discretion, the option to exercise all
voting powers and other corporate rights pertaining to the Collateral, subject
to compliance with all applicable provisions of the Federal Deposit Insurance
Act and the Industrial Loan Act. For purposes of exercising its voting rights,
Fremont may, upon or at any time after the occurrence of an Event of Default, at
Fremont's option, transfer or register the Collateral or any part thereof into
Fremont's own or Fremont's nominee's name.
6. Stock Adjustments And Dividends. If during the term of this
Agreement, any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of the Company or any option included
within the Collateral is exercised, or both, all new, substituted and additional
shares, or other securities, issued to Pledgor by reason of any such change or
exercise shall be delivered to and held by Fremont under the terms of this
Agreement in the same manner as the Collateral originally pledged hereunder. If
during the term of this Agreement, any dividend or other distribution is made on
account of the Collateral, Pledgor shall immediately deliver all such dividends
or other distributions to Fremont in the same form received and in the same
manner as the Collateral pledged hereunder.
7. Warrants And Rights. If during the term of this Agreement,
subscription warrants or any other rights or options shall be issued in
connection with the Collateral, such warrants, rights and options shall be
immediately assigned by Pledgor to Fremont to be held under the terms of this
Agreement in the same manner as the Collateral originally pledged hereunder.
8. Remedies Upon Default. Upon the occurrence of an Event of
Default,
(a) Fremont may:
i) Exercise in respect of the Collateral, any one
or more of the rights and remedies available under the California Uniform
Commercial Code and other applicable law;
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ii) Sell or otherwise assign, give an option or
options to purchase or dispose of and deliver the Collateral (or contract to do
so), or any part thereof, in one or more parcels at public or private sale or
sales, at any exchange, broker's board or at any of the Fremont's offices or
elsewhere upon such terms and conditions as Fremont may deem advisable and at
such prices as Fremont may deem commercially reasonable, for cash, on credit or
for future delivery without assumption of any credit risk, free of any claim or
right of whatsoever kind (including any right or equity of redemption) of
Pledgor, which claim, right and equity are hereby expressly waived and released.
Fremont shall have the right to the extent permitted by applicable law, upon any
such sale or sales, public or private, to purchase the whole or any part of the
Collateral so sold; provided, however, that in the event the Collateral is sold
to a party other than Fremont, Pledgor shall not receive any net proceeds, if
any, of any such credit sale or future delivery until cash proceeds are actually
received by Fremont (which cash proceeds shall be applied by Fremont to the
Obligations) and after all Obligations have been paid in full. In case of any
sale to a party other than Fremont of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by Fremont
until the selling price is paid by the purchaser thereof, but Fremont shall
incur no liability in case of the failure of such purchaser to pay for the
Collateral so sold and, in case of such failure, the Collateral may again be
sold as herein provided.
(b) Fremont shall not be obligated to make any sale or
other disposition of the Collateral, or any part thereof, unless the terms
thereof shall, in Fremont's sole discretion, be satisfactory to Fremont. Fremont
may, if Fremont deems it reasonable, postpone or adjourn the sale of any of the
Collateral, or any part thereof, from time to time by an announcement at the
time and place of such sale or by announcement at the time and place of such
postponed or adjourned sale, without being required to give a new notice of
sale. Pledgor agrees that Fremont has no obligation to preserve rights against
prior parties to the Collateral.
(c) Pledgor acknowledges and agrees that Fremont may
comply with limitations or restrictions in connection with any sale of the
Collateral in order to avoid any violation of applicable law or in order to
obtain any required approval of the sale or of the purchase thereof by any
governmental regulatory authority or official and, without limiting the
generality of the foregoing, Pledgor acknowledges and agrees that Fremont may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the federal securities laws and applicable
state securities laws, but may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Pledgor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale.
Notwithstanding any such circumstances, Pledgor acknowledges and agrees that
such compliance shall not result in any such private sale for such reason alone
being deemed to have been made in a commercially unreasonable manner. Fremont
shall not be liable or accountable to Pledgor for any discount allowed by reason
of the fact that the Collateral is sold in compliance with any such limitation
or restriction. Fremont shall not be under any obligation to delay a sale of any
of the Collateral for the period of time necessary to permit the issuer of such
securities to
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register such securities for public sale under the federal securities laws, or
under applicable state securities laws, even if the issuer desires, requests or
would agree to do so.
(d) All cash proceeds received by Fremont in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Fremont, be held by Fremont as collateral
for the Obligations and/or then or at an time thereafter applied, without any
marshaling of rights, remedies or assets, and after payment of any amounts
payable to Fremont hereunder and, after deducting all reasonable costs and
expenses of every kind in connection with the care, safekeeping, collection,
sale, delivery or otherwise of any or all of the Collateral or in any way
relating to the rights of Fremont hereunder (including attorneys' fees and
disbursements), to the payment of reduction of the Obligations. Any surplus of
such cash or cash proceeds held by Fremont and remaining after payment in full
of all the Obligations shall be paid over to Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
9. Term. This Agreement shall remain in full force and effect
until Pledgor has satisfied all of the Obligations in full. At the expiration of
the term of this Agreement, Fremont shall return to Pledgor all stock
certificates and other documents relating to this Agreement, together with any
further documents necessary to establish that the within pledge is terminated.
10. Successors And Assigns. This Agreement shall be binding upon
and inure to the benefit of Pledgor, Fremont, and their respective successors,
heirs and assigns.
11. Applicable Law. This Agreement shall be governed by and
construed under the laws of the State of California. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but, if any provision of this
Agreement shall be held to be prohibited or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
12. Further Assurances. Pledgor covenants and agrees that: (i)
Pledgor will execute and deliver, or cause to be executed and delivered, all
such other stock powers, proxies, instruments and documents as Fremont may
reasonably request from time to time in order to carry out the provisions and
purposes hereof; (ii) Pledgor will take all such other action, as Fremont may
reasonably request from time to time in order to carry out the provisions and
purposes hereof; (iii) the Collateral will remain free and clear of all security
interests and liens throughout the term hereof; and (iv) Pledgor will forward to
Fremont, immediately upon receipt, copies of any information or documents
received by Pledgor in connection with the Collateral. For the purpose of
defining security interest perfection, Pledgor further agrees that any
Collateral which is in transit to Fremont shall be deemed to be in Fremont's
possession. Pledgor warrants and represents that none of the Collateral
constitutes margin securities for the purposes of Regulations T, U or X, and
also warrants and represents that none of the proceeds of any loans made by
Fremont to Pledgor will be used to purchase or carry any margin stock.
13. Integrated Agreement. This Agreement and the Note evidencing
the
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Obligations secured hereby set forth the entire understanding of the parties
with respect to the within matters and may not be modified except by a writing
signed by all parties.
14. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument and agreement.
15. Section Headings. The section headings herein are for
convenience of reference only and shall not affect in any way the interpretation
of any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of this _____ day of September, 1998.
PACIFICAMERICA MONEY CENTER, INC.,
a Delaware corporation
By:_____________________________________
Title:__________________________________
FREMONT FINANCIAL CORPORATION,
a California corporation
By:_____________________________________
Title:__________________________________
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EXHIBIT 10.3
PACIFICAMERICA MONEY CENTER, INC.
ANNOUNCES REVISED TERMS OF ACQUISITION
BY FREMONT GENERAL CORPORATION
WOODLAND HILLS, Calif.--(BUSINESS WIRE)--October 5, 1998--PacificAmerica
Money Center, Inc. (NASDAQ: PAMM) announced today that because of recent
adverse changes in the overall securities market as well as the secondary
market for subprime residential mortgage loans, it has agreed to certain
changes in the terms of its agreement to be acquired by Fremont General
Corporation (NYSE: FMT). The primary changes are that (1) the acquisition price
will be paid all in cash; (2) a portion of the base price may be subject to
adjustment; and (3) a portion of the purchase price will be subject to
achievement of certain target loan sale prices, as further described below. the
transaction is still subject to a number of conditions, including completion of
satisfactory due diligence, negotiation of a satisfactory definitive agreement,
receipt of a fairness opinion, receipt of approval of a majority of PAMM
stockholders and regulatory approval. The parties have agreed to proceed in
good faith to complete due diligence and the negotiation of a definitive merger
agreement by October 31, 1998, with an anticipated closing by the end of 1998
if all the conditions are met.
The new terms provide that stockholders of PAMM would receive up to $10
per share, of which $6 per share wold be paid in cash at closing. The initial
$6 payment would be subject to reduction by the amount, if any, by which the
proceeds from a sale of the interest-only strip receivable held by PAMM are
less than a mutually agreed upon amount. The sale of the receivable would be
required on or before the closing of the merger. Given the current uncertainty
of the securities market in general and the illiquidity of the market for these
assets in particular, the required sale of the receivable may delay or prevent
the closing of the transaction. If the merger is closed, the stockholders of
PAMM would also have the right to receive a total of up to an additional $4 per
share, subject to achievement of certain target loan sale prices, payable in
two installments over the two years following the closing. The first
installment would be payable if target loan sale prices are met for the 12
months following the closing, and the second installment would be payable if
target loan sale prices are met for the 13th through the 24th months following
the closing. General terms of the target loan sale prices have been discussed,
but not all of the details have been fixed. While historically PAMM has reached
the general target goals being discussed, no assurance can be given that these
goals will be met under current or future secondary market conditions for
loans. In addition, no assurance can be given that additional changes to the
transaction will not be made prior to signing a definitive agreement.
Except for historical information contained herein, statements in this
news release are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Such risks include, among others, risk that
the parties will be unable or unwilling to negotiate a definitive agreement;
risk that any of the conditions required to close the merger will not be met;
risk of further changes in market conditions which would make either party
unable or unwilling to complete the merger; risk of material adverse changes in
the financial conditions, results of operations or prospects of either party
which would make the other party unwilling to complete the merger; and possible
regulatory enforcement actions and legislative action.
Contact: PacificAmerica Money Center, Inc., Woodland Hills, California
Charles J. Siegel, Chief Financial Officer
(818) 992-8999
