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): February 11, 1998
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SOURCE CAPITAL CORPORATION
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Exact name of registrant as specified in its charter)
Washington 0-12199 91-0853890
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(State or other (Commission (IRS Employer
jurisdiction of File Number Identification No.)
of incorporation)
1825 N. Hutchinson Road, Spokane, Washington 99212
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (509) 928-0908
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Not Applicable
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(Former name or former address,
if changed since last report)
ITEM 5. Other Events.
On February 11, 1998, Source Capital Corporation (the "Company")
completed a private placement of $6,000,000 in principal amount of its
7-1/2% Convertible Subordinated Debentures due March 1, 2008 (the
"Debentures"). The offering of the Debentures was not registered
under the Securities Act of 1933 (the "Act") and the Debentures were
sold in reliance upon exemptions available under the Act.
Subsequent to the earlier of September 30, 1998 or the effective
date of a registration statement to be filed with the Securities and
Exchange Commission for the registration of the no par value common
stock (the "Common Stock") to be issued upon the conversion of the
Debentures, the Debentures are convertible into shares of Common
Stock, unless previously redeemed, at a conversion price of $8.01 per
share, subject to adjustment in certain events. The Debentures are
redeemable, in whole or in part, at any time on or after March 1,
2001, at the redemption prices set forth in the Indenture, dated as of
February 11, 1998 (the "Indenture"), between the Company and Bankers
Trust Company, as Trustee (the "Trustee"), plus accrued interest. The
Debentures are required to be repurchased at the option of the holder
upon the occurrence of a "Designated Event" (as defined in the
Indenture) at 100% of their principal amount plus accrued interest.
The Debentures are unsecured and subordinate in right of payment
to all Senior Debt (as defined in the Indenture).
Pursuant to a Registration Rights Agreement, dated as of
February 11, 1998, between the Company and Pacific Crest Securities,
Inc., the placement agent for the Debenture private placement, the
Company is obligated to use its best efforts to file with the
Securities and Exchange Commission before July 31, 1998, and to use
its best efforts to cause to become effective on or prior to September
30, 1998, a shelf registration statement covering resales of the
shares of common stock issuable upon conversion of the Debentures and
to maintain the effectiveness of such registration statement until
February 11, 2000, subject to adjustment in certain circumstances.
The Company plans to use a portion of the estimated $5,470,000
net proceeds from the Debentures (after deduction of placement fees
and estimated expenses) to fund additional equity investments in its
leasing and accounts receivable factoring subsidiaries, which is
expected to allow those subsidiaries to increase their leasing and
lending portfolios. A portion of the net proceeds will also be used
by the Company to fund additional commercial loans made by it and for
general corporate purposes.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) The following exhibits are filed as Exhibits hereto:
Exhibit
Number Description
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4.1 Indenture, dated as of February 11, 1998, between the
Registrant and Bankers Trust Company, as Trustee, relating
to the Registrant's 7-1/2% Convertible Subordinated
Debentures due 2008.
10.3 Registration Rights Agreement, dated as of February 11,
1998, between the Registrant and Pacific Crest Securities,
Inc.
99.1 Press Release of the Registrant, dated February 12, 1998.
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.
SOURCE CAPITAL CORPORATION
(Registrant)
Dated: February 18, 1998 By: /s/ LESTER L. CLARK
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Lester L. Clark, Vice
President, Treasurer and
Secretary