8-K

UNITED STATES

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): July 25, 2008

United PanAm Financial Corp.

(Exact name of registrant as specified in its charter)

California	94-3211687
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)

Commission file number: 000-24051

18191 Von Karman Avenue, Suite 300

Irvine, California 92612

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (949) 224-1917

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02. Termination of a Material Definitive Agreement.

The information required by this Item 1.02 is included in Item 5.02 below and incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Chief Executive Officer

Effective July 25, 2008, Jim Vagim has been appointed Chief Executive Officer of United PanAm Financial Corp. (“UPFC” or the “Company”). The Company is negotiating the terms of the written contract with Mr. Vagim, but he will be paid a salary of $500,000 annually until a definitive written agreement is entered into.

Mr. Vagim, age 45, was formerly president and director of Westlake Services, Inc., a privately held near-prime to sub-prime automobile finance company. Mr. Vagim acted as president and director since 1997 until his resignation in February 2007. Since that time, Mr. Vagim has been consulting and pursuing private investment opportunities. Mr. Vagim has more than 20 years of experience in the automobile finance industry.

Termination of Chief Executive Officer

On July 25, 2008, Ray C. Thousand was terminated as Chief Executive Officer of UPFC. and as an officer of the Company’s affiliates and subsidiaries, including, but not limited to, United Auto Credit Corporation (“UACC”) Mr. Thousand also resigned as a director of UPFC effective as of July 25, 2008. This resignation as a director is not a result of any disagreement with the Company concerning any matter relating to the Company’s operations, policies or practices.

In connection with the termination, the Company has entered into a Severance Package and Release Agreement with Mr. Thousand dated July 29, 2008 (“Mr. Thousand’s Agreement”), under which Mr. Thousand will be entitled to receive (a) a lump sum payment in the aggregate amount of Eight Hundred Seventy-Eight Thousand and Nine Hundred Forty-Five Dollars ($878,945.00), less all applicable state and federal withholdings, and (b) the Company has agreed to pay six months of Mr. Thousands’ premiums in continuing group health insurance coverage pursuant to COBRA in the amount of Three Thousand, One-Hundred Forty-Nine and 48/100 Dollars ($3,149.48). Pursuant to Mr. Thousand’s Agreement, Mr. Thousand has agreed to, among other things, release any and all claims against the Company arising from or in any way related to his employment with the Company. As a result of Mr. Thousand’s Agreement, that certain Executive Employment Agreement effective as of January 1, 2007 by and among the Company, and Mr. Thousand has been terminated except for those provisions that have continuing obligations identified therein.

In accordance with the requirements of the Age Discrimination in Employment Act of 1967, as amended, Mr. Thousand may revoke Mr. Thousand’s Agreement at any time prior to August 5, 2008.

The foregoing description of Mr. Thousand’s Agreement is qualified in its entirety by reference thereto, a copy of which is attached to this current report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

Termination of Chief Operating Officer

On July 25, 2008, Stacy Friederichsen was terminated as Chief Operating Officer of UPFC. and as an officer of the Company’s affiliates and subsidiaries, including, but not limited to, UACC.

In connection with the termination, the Company has entered into a Severance Package and Release Agreement with Ms. Friederichsen dated July 30, 2008 (“Ms. Friederichsen’s Agreement”), under which Ms. Friederichsen will be entitled to receive (a) a lump sum payment in the aggregate amount of Three Hundred Sixty-Eight Thousand, Five Hundred Dollars ($368,500), less all applicable state and federal withholdings, and (b) the Company has agreed to pay six months of Ms. Friederichsen’s and her spouse’s premiums in continuing group health insurance coverage pursuant to COBRA in the amount of Six Thousand, Five Hundred Sixty-Five and 80/100 Dollars ($6,565.80). Pursuant to Ms. Friederichsen’s Agreement, Ms. Friederichsen has agreed to, among other things, release any and all claims against the Company arising from or in any way related to her employment with the Company. As a result of Ms. Friederichsen’s Agreement, that certain Executive Employment Agreement effective as of January 1, 2007, as amended on May 5, 2008, by and among the Company, and Ms. Friederichsen has been terminated except for those provisions that have continuing obligations identified therein.

The foregoing description of Ms. Friederichsen’s Agreement is qualified in its entirety by reference thereto, a copy of which is attached to this current report on Form 8-K as Exhibit 10.2 and incorporated herein by reference.

UPFC is restructuring its staffing at this time and does not intend to hire a replacement chief operating officer.

Item 7.01. Regulation FD Disclosure.

On July 29, 2008, the Company issued a press release announcing the termination of Mr. Thousand as Chief Executive Officer and Ms. Friederichsen as the Chief Operating Officer, and the appointment of Mr. Vagim as Chief Executive Officer. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished pursuant to Item 7.01 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 , as amended (the “Exchange Act”) or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, except as expressly stated by specific reference in such filing.

Item 8.01. Other Events

The termination of Mr. Thousand as the Company’s chief executive officer could adversely affect UPFC’s warehouse line of credit with Deutsche Bank and UPFC’s six outstanding securitizations. Unless Deutsche Bank approves the appointment of Mr. Vagim as the replacement chief executive officer, it could exercise its rights to terminate the warehouse line of credit and declare all amounts owed under UPFC’s warehouse facility as immediately due and payable. Additionally, unless Mr. Vagim is approved by the various insurance providers that insure UPFC’s six outstanding securitizations, the termination of Mr. Thousand is a potential insurance event of default and each insurance provider may elect to enforce the various rights and remedies that are governed by the different transaction documents for each securitization. UPFC has requested approval of Mr. Vagim as UPFC’s chief executive officer from Deutsche Bank and the insurance providers, but there is no assurance UPFC will obtain such approvals.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
10.1	Severance Package and Release Agreement dated July 29, 2008 by and between Ray C. Thousand and United PanAm Financial Corp.
10.2	Severance Package and Release Agreement dated July 30, 2008 by and between Stacy Friederichsen and United PanAm Financial Corp.
99.1	Press Release dated July 29, 2008 announcing the appointment of Jim Vagim as Chief Executive Officer and the termination of Ray C. Thousand as Chief Executive Officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	United PanAm Financial Corp.
	(Registrant)
Dated: July 31, 2008	By:	/s/ Arash Khazei
	Name:	Arash Khazei
	Title:	Chief Financial Officer

Exhibit Index

Exhibit Number	Description
10.1	Severance Package and Release Agreement dated July 29, 2008 by and between Ray C. Thousand and United PanAm Financial Corp.
10.2	Severance Package and Release Agreement dated July 30, 2008 by and between Stacy Friederichsen and United PanAm Financial Corp.
99.1	Press Release dated July 29, 2008 announcing the appointment of Jim Vagim as Chief Executive Officer and the termination of Ray C. Thousand as Chief Executive Officer.

EX-10.1

EXHIBIT 10.1

SEVERANCE PACKAGE AND RELEASE AGREEMENT

This Severance Package and Release Agreement (“Agreement”) is made and entered into between United PanAm Financial Corporation, United Auto Credit Corporation, and their officers, directors, shareholders, employees, representatives, attorneys, agents, affiliates and subsidiaries (hereinafter collectively referred to as “the Company”) and Ray Thousand (“Mr. Thousand”). The purpose of this Agreement is to settle and compromise any and all disputes and controversies of any nature existing between the parties, including, but not limited to, any claims arising out of Mr. Thousand’s employment with, and separation from, the Company.

Separation of Employment. The cessation of Mr. Thousand’s employment with the Company was effective July 25, 2008. Mr. Thousand has receivedall salary and benefits up to and including that date. Mr. Thousand has also received payment for all accrued and unused vacation as of July 25, 2008, less applicable state and federal taxes and withholdings. Mr. Thousand confirms that he has previously submitted any and all outstanding business related expenses for reimbursement and has received payment from the Company for such expenses. In addition, within 30 days of July 25, 2008, Mr. Thousand has the right to exercise One Million One-Hundred Seventy Thousand (1,170,000) options that have vested of Company common stock. Mr. Thousand has zero (0) shares of restricted Company common stock that have vested as of July 25, 2008. In selling any shares of Company common stock, Mr. Thousand shall be responsible for complying with Rule 144 of the Securities Act of 1933 for a period of 90 days from July 25, 2008. In addition, Mr. Thousand understands that any purchase or sale of Company common stock made by him for six months prior to July 25, 2008 could potentially be matched to a purchase or sale of Company common stock made by him for six months after July 25, 2008 pursuant to Section 16 of the Securities Exchange Act of 1934. Mr. Thousand shall also be responsible for complying with any reporting obligations under Section 16 of the Securities Exchange Act of 1934.

Termination of Positions. Effective as of July 25, 2008, Mr. Thousand has been terminated as an officer, trustee and any other position currently held at the Company and any subsidiary of the Company.

Resignation as Director. Effective as of July 25, 2008, Mr. Thousand hereby resigns as a director of the Company and any subsidiary of the Company. This resignation is not a result from any disagreement with the Company concerning any matter relating to the Company’s operations, policies or practices.

1.Severance Payment, Target and Discretionary Bonuses, and COBRA Payments. After execution of this Agreement and the expiration of the revocation period provided in Paragraph 13 below, provided that this Agreement has not been revoked by Mr. Thousand, and after the return of all Company property as described in Paragraph 2 below, the Company agrees to pay Mr. Thousand: (1) severance pay in an amount equivalent to twelve (12) months of his current base salary or Six Hundred Fifty Six Thousand and Two Hundred Fifty Dollars ($656,250), less applicable state and federal taxes and withholdings and (2) a prorated Target Bonus through the date of termination, in the amount of One Hundred Forty-Eight Thousand, Four Hundred and Sixty-Three Dollars ($148,463), less applicable state and federal taxes and withholdings, and (3) a prorated Discretionary Bonus, through the date of termination, in the amount of Seventy-Four Thousand, Two Hundred and Thirty-Two Dollars ($74,232). The severance pay, pro-rated Target Bonus and pro-rated Discretionary Bonus shall be wired to Mr. Thousand’s personal account. The Company further agrees to pay to the Company’s COBRA Administrator six (6) months of Mr. Thousand’s COBRA premium payments in the total amount of Three Thousand, One Hundred Forty-Nine and 58/100 Dollars ($3,149.48). Thereafter, Mr. Thousand shall be solely responsible for his COBRA payments should he choose to continue such benefits coverage. The Company shall not be providing Mr. Thousand any separate or additional notice with respect to this COBRA payment obligation.

2.Return of Property. Mr. Thousand agrees immediately to return to the Company all property of the Company which he has in his custody or control such as keys, key cards, passwords, office equipment, forms, manuals, customer files, personnel files, or other confidential or proprietary materials of the Company.

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3.Release of Known and Unknown Claims. In consideration of the payment outlined above and the further agreements set forth below, and excepting only the obligations created in this letter Agreement, Mr. Thousand hereby agrees unconditionally to release and discharge United Pan Am Financial Corporation, United Auto Credit Corporation, their respective current and former officers, directors, shareholders, employees, representatives, attorneys and agents, as well as their predecessors, parents, subsidiaries, affiliates, divisions, and successors in interest, of and from any and all claims, demands, liabilities, suits or damages of any type or kind, whether known or unknown, including, but not limited to, any claims or demands arising from or in any way related to Mr. Thousand’s employment with or separation from the Company on or before the date of the execution of this Agreement. Mr. Thousand also hereby releases the Company from any claims made to recover additional taxes paid under Internal Revenue Code Section 409A.

This release specifically includes, without limitation, all claims for wrongful discharge, breach of express or implied contract, defamation, fraud, misrepresentation, discrimination, harassment, breach of implied covenant of good faith and fair dealing, compensatory and/or other relief relating or in any way connected with the terms, conditions, and benefits of employment, discrimination based on race, color, sex, religion, national origin, age, marital status, handicap and medical condition, and/or all claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act, the California Fair Employment and Housing Act, the California Labor Code, the Family and Medical Leave Act, the California Family Rights Act, COBRA, the Employee Retirement Income Security Act of 1974 (“ERISA”), and/or violations of any other statutes, rules, regulations or ordinances whether federal, state or local.

It is understood and agreed that this release extends to all claims of whatever nature, known or unknown, and includes all rights under Section 1542 of the Civil Code of California, which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of all claims, Mr. Thousand expressly acknowledges that this Agreement also includes in its effect, without limitation, all claims that Mr. Thousand does not know or suspect to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any and all such claim(s). Notwithstanding the foregoing, nothing in this Agreement shall prevent Mr. Thousand from filing a charge with any federal, state or administrative agency, but Mr. Thousand agrees not to participate in, and waives any rights with respect to, any monetary or financial relief arising from any such proceeding that relates to the matters released by this Agreement.

4.No Admission of Liability. By entering into this Agreement, the Company and Mr. Thousand do not suggest or admit to any liability to each other or that they violated any law or any duty or obligation to the other party.

5.Confidentiality. Mr. Thousand agrees that neither he nor his agents or representatives will disclose, disseminate and/or publicize, or cause or permit to be disclosed, disseminated or publicized, the existence of this Agreement, any of the terms of this Agreement, or any claims or allegations which he believes could have been made or asserted against the Company, directly or indirectly, specifically or generally, to any person, corporation, association or governmental agency or other entity, or participate, cooperate or assist any person(s) with respect to any claim they may have against the Company, except: (1) to the extent necessary to report income to appropriate taxing authorities; (2) to members of his immediate family; (3) in response to an order of a court of competent jurisdiction or subpoena issued under the authority thereof; or (4) in response to any inquiry or subpoena issued by a state or federal governmental agency; provided, however, that notice of receipt of such judicial order or subpoena shall be immediately communicated to the Company telephonically, and confirmed immediately thereafter in writing, so that the Company will have the opportunity to assert what rights it has to non-disclosure prior to the response to the order, inquiry or subpoena. Mr. Thousand also agree to maintain all non-public information regarding the Company while at the Company, including but not limited to, information regarding the Company’s customers, officers, directors, employees, financial and business information, and internal Company policies or procedures as strictly confidential and shall not disclose them to third parties.

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In the event that the Human Resources Department of the Company receives an inquiry into Mr. Thousand’s employment with United Auto Credit Corporation related in any way to a future employment opportunity for Mr. Thousand, the Company will confirm, in writing, the dates of employment of Mr. Thousand, the last position he held with the Company, and if authorized in writing by Mr. Thousand, his last salary. In addition, the parties have agreed that the following statement will be provided with respect to Mr. Thousand’s separation from the Company: United PanAm Financial Corp. will announce the termination of Mr. Thousand as Chief Executive Officer of United PanAm Financial Corp. and United Auto Credit Corporation and any positions held with subsidiaries and will announce he has agreed to resign as a director. In return, Mr. Thousand will not provide or disclose any information, adverse or otherwise, regarding matters related to this Agreement or the Company to any other party or entity he is seeking employment with, nor with any current or past employees or vendors of the Company.

Any violation of the confidentiality provision contained in this Agreement by Mr. Thousand shall be considered a material breach of this Agreement.

7.Employee Contact. At no time shall Mr. Thousand contact any employee who is currently employed by United Auto Credit Corporation or United Pan Am Financial Corporation during normal business hours for any reason. Should Mr. Thousand maintain personal relationships with United Auto Credit Corporation or United Pan Am Financial Corporation employees outside of employment with the Company, Mr. Thousand shall at no time discuss the terms of this Agreement with current employees of the Company.

8.Arbitration. Any and all disputes, controversies or claims arising under or in any way relating to the interpretation, application or enforcement of this Agreement, Mr. Thousand’s employment with the Company, any claim for benefits, or his separation of employment from the Company, including without limitation any claim by him that he was fraudulently induced to enter into this Agreement, or regarding the enforceability or interpretation of this Agreement, shall be settled by final and binding arbitration under the auspices and rules of JAMS or other mutually agreeable alternative dispute resolution service in accordance with that service’s rules for the resolution of employment disputes. Any such arbitration must be filed in Orange, California, and the laws of the State of California shall control except where federal law governs. The prevailing party in any such arbitration proceeding shall be entitled to reasonable costs and attorney’s fees. The award of the arbitrator is to be final and enforceable in any court of competent jurisdiction.

9.Waiver and Modification. The failure to enforce any provision of this Agreement shall not be construed to be a waiver of such provision or to affect either the validity of this Agreement or the right of any party to enforce the Agreement. This Agreement may be modified or amended only by a written agreement executed by Mr. Thousand and a properly authorized designee of the Board of Directors of the Company.

10.Integration. This Agreement constitutes a single, integrated written contract expressing the entire agreement of the parties hereto relative to the subject matter hereof. No covenants, agreements, representations, or warranties of any kind whatsoever have been made by any party hereto. All prior discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.

11.Severability. In the event that any provision of this Agreement should be held to be void, voidable, or unenforceable, the remaining portions hereof shall remain in full force and effect.

12.Governing Law. This Agreement shall be construed in accordance with, and be governed by the laws of the State of California.

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13.Right to an Attorney, Time to Consider, Revocation. Mr. Thousand acknowledges and agrees that he was provided twenty-one (21) days to consider this Agreement and to consult with counsel and the Company has advised Mr. Thousand of his right to do so. To the extent that Mr. Thousand has taken less than twenty-one (21) days to consider this Agreement, Mr. Thousand acknowledges that he has had sufficient time to consider the Agreement and to consult with counsel and that he does not desire additional time. This Agreement is revocable by Mr. Thousand for a period of seven (7) calendar days following Mr. Thousand’s execution of this Agreement. The revocation by Mr. Thousand of this Agreement must be by registered letter addressed to the undersigned representative of the Company, must specifically revoke this Agreement, and must be received by the Company prior to the eighth (8th) day following the execution of this Agreement by Mr. Thousand. This Agreement becomes effective, enforceable and irrevocable on the eighth (8th) day following Mr. Thousand’s execution of this Agreement.

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

UNITED PANAM FINANCIAL CORPORATION

/S/ Giles H. Bateman	Dated: July 29,  2008
By: Giles H. Bateman

I have carefully read this Agreement and understand that it contains a release of known and unknown claims. I acknowledge and agree to all of the terms and conditions of this Agreement. I further acknowledge that I enter into this Agreement voluntarily with a full understanding of its terms.

/S/ Ray Thousand	Dated: July 29,  2008
Ray Thousand

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EX-10.2

EXHIBIT 10.2

SEVERANCE PACKAGE AND RELEASE AGREEMENT

This Severance Package and Release Agreement (“Agreement”) is made and entered into between United PanAm Financial Corporation, United Auto Credit Corporation, and their officers, directors, shareholders, employees, representatives, attorneys, agents, affiliates and subsidiaries (hereinafter collectively referred to as “the Company”) and Stacy M. Friederichsen (“Ms. Friederichsen”). The purpose of this Agreement is to settle and compromise any and all disputes and controversies of any nature existing between the parties, including, but not limited to, any claims arising out of Ms. Friederichsen’s employment with, and separation from, the Company.

Separation of Employment. The cessation of Ms. Friederichsen’s employment with the Company was effective July 25, 2008. Ms. Friederichsen has receivedall salary and benefits up to and including July 28, 2008. Ms. Friederichsen has also received payment for all accrued and unused vacation as of July 28, 2008, less applicable state and federal taxes and withholdings. Ms. Friederichsen confirms that she has previously submitted any and all outstanding business-related expenses for reimbursement and will receive payment from the Company for such expenses by close of business on July 30, 2008. In addition, within 30 days of July 25, 2008, Ms. Friederichsen has the right to exercise Twenty Thousand One Hundred (20,100) options that have vested of Company common stock. Ms. Friederichsen has zero (0) shares of restricted Company common stock that have vested as of July 25, 2008. In selling any shares of Company common stock, Ms. Friederichsen shall be responsible for complying with Rule 144 of the Securities Act of 1933 for a period of 90 days from July 25, 2008. In addition, Ms. Friederichsen understands that any purchase or sale of Company common stock made by her for six months prior to July 25, 2008 could potentially be matched to a purchase or sale of Company common stock made by her for six months after July 25, 2008 pursuant to Section 16 of the Securities Exchange Act of 1934. Ms. Friederichsen shall also be responsible for complying with any reporting obligations under Section 16 of the Securities Exchange Act of 1934.

Termination from Positions. Effective as of July 25, 2008, Ms. Friederichsen has been terminated from her positions as an officer, trustee and any other position currently held at the Company and any subsidiary of the Company without cause.

1.Severance Payment, Target Bonus and COBRA Payments. After execution of this Agreement, and after the return of all Company property as described in Paragraph 2 below, the Company agrees to pay Ms. Friederichsen: (1) severance pay in an amount equivalent to twelve (12) months of her current base salary or Three Hundred Thirty Five Thousand Dollars ($335,000), less applicable state and federal taxes and withholdings; and (2) the Target Bonus in the amount of Thirty-Three Thousand Five Hundred Dollars ($33,500), less applicable state and federal taxes and withholdings. The severance pay and Target Bonus amounts shall be wired to Ms. Friederichsen’s personal account. The Company further agrees to pay to the COBRA Administrator six (6) months of Ms. Friederichsen’s COBRA premium payments for her and her spouse in the total amount of Six Thousand, Five Hundred Sixty-Five and 80/100 ($6,565.80). Thereafter Ms. Friederichsen shall be solely responsible for her COBRA payments should she choose to continue such benefits coverage. The Company shall not be providing Ms. Friederichsen any separate or additional notice with respect to this COBRA payment obligation.

2.Return of Property. Except as otherwise discussed herein, Ms. Friederichsen agrees immediately to return to the Company all property of the Company which she has in her custody or control such as keys, key cards, passwords, office equipment, forms, manuals, customer files, personnel files, or other confidential or proprietary materials of the Company. The Company agrees to allow Ms. Friederichsen to keep the Dell PC purchased by the Company for Ms. Friederichsen that she has maintained at her residence. Ms. Friederichsen represents that there is no Company-related information and software on that computer.

3.Release of Known and Unknown Claims. In consideration of the payments outlined above and the further agreements set forth below, and excepting only the obligations created in this letter Agreement, Ms. Friederichsen hereby agrees unconditionally to release and discharge United Pan Am Financial Corporation, United Auto Credit Corporation, their respective current and former officers, directors, shareholders, employees, representatives, attorneys and agents, as well as their predecessors, parents, subsidiaries, affiliates, divisions, and successors in interest, of and from any and all claims, demands, liabilities, suits or damages of any type or kind, whether known or unknown, including, but not limited to, any claims or demands arising from or in any way related to Ms. Friederichsen’s employment with or separation from the Company on or before the date of the execution of this Agreement. Ms. Friederichsen also hereby releases the Company from any claims made to recover additional taxes paid under Internal Revenue Code Section 409A.

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This release specifically includes, without limitation, all claims for wrongful discharge, breach of express or implied contract, defamation, fraud, misrepresentation, discrimination, harassment, breach of implied covenant of good faith and fair dealing, compensatory and/or other relief relating or in any way connected with the terms, conditions, and benefits of employment, discrimination based on race, color, sex, religion, national origin, age, marital status, handicap and medical condition, and/or all claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act of 1967 as amended by the Older Workers Benefit Protection Act, the California Fair Employment and Housing Act, the California Labor Code, the Family and Medical Leave Act, the California Family Rights Act, COBRA, the Employee Retirement Income Security Act of 1974 (“ERISA”), and/or violations of any other statutes, rules, regulations or ordinances whether federal, state or local.

It is understood and agreed that this release extends to all claims of whatever nature, known or unknown, and includes all rights under Section 1542 of the Civil Code of California, which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in her or her favor at the time of executing the release, which if known by him or her must have materially affected her or her settlement with the debtor.

Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of all claims, Ms. Friederichsen expressly acknowledges that this Agreement also includes in its effect, without limitation, all claims that Ms. Friederichsen does not know or suspect to exist in her favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any and all such claim(s). Notwithstanding the foregoing, nothing in this Agreement shall prevent Ms. Friederichsen from filing a charge with any federal, state or administrative agency, but Ms. Friederichsen agrees not to participate in, and waives any rights with respect to, any monetary or financial relief arising from any such proceeding that relates to the matters released by this Agreement.

4.No Admission of Liability. By entering into this Agreement, the Company and Ms. Friederichsen do not suggest or admit to any liability to each other or that they violated any law or any duty or obligation to the other party.

5.Confidentiality. Ms. Friederichsen agrees that neither she nor her agents or representatives will disclose, disseminate and/or publicize, or cause or permit to be disclosed, disseminated or publicized, the existence of this Agreement, any of the terms of this Agreement, or any claims or allegations which she believes could have been made or asserted against the Company, directly or indirectly, specifically or generally, to any person, corporation, association or governmental agency or other entity, or participate, cooperate or assist any person(s) with respect to any claim they may have against the Company, except: (1) to the extent necessary to report income to appropriate taxing authorities; (2) to members of her immediate family; (3) in response to an order of a court of competent jurisdiction or subpoena issued under the authority thereof; or (4) in response to any inquiry or subpoena issued by a state or federal governmental agency; provided, however, that notice of receipt of such judicial order or subpoena shall be immediately communicated to the Company telephonically, and confirmed immediately thereafter in writing, so that the Company will have the opportunity to assert what rights it has to non-disclosure prior to the response to the order, inquiry or subpoena. Ms. Friederichsen also agree to maintain all non-public information regarding the Company while at the Company, including but not limited to, information regarding the Company’s customers, officers, directors, employees, financial and business information, and internal Company policies or procedures as strictly confidential and shall not disclose them to third parties.

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In the event that the Human Resources Department of the Company receives an inquiry into Ms. Friederichsen’s employment with United Auto Credit Corporation related in any way to a future employment opportunity for Ms. Friederichsen, the Company will confirm, in writing, the dates of employment of Ms. Friederichsen, the last position she held with the Company, and her last salary. United PanAm Financial Corp. will announce the termination of Ms. Friederichsen as Executive Vice President and Chief Operating Officer of the Company and any positions held with subsidiaries. The parties have agreed that the Company will provide the following information to the California Employment Development Department: “The Company terminated Ms. Friederichsen because it concluded it required a different skill set for the position on a going forward basis.” The Company will not contest Ms. Friederichsen’s receipt of unemployment. In return, Ms. Friederichsen will not provide or disclose any information, adverse or otherwise, regarding matters related to this Agreement or the Company to any other party or entity she is seeking employment with, nor with any current or past employees or vendors of the Company.

Any violation of the confidentiality provision contained in this Agreement by Ms. Friederichsen shall be considered a material breach of this Agreement.

7.Employee Contact. At no time shall Ms. Friederichsen contact any employee who is currently employed by United Auto Credit Corporation or United Pan Am Financial Corporation during normal business hours for any reason. Should Ms. Friederichsen maintain personal relationships with United Auto Credit Corporation or United Pan Am Financial Corporation employees outside of employment with the Company, Ms. Friederichsen shall at no time discuss the terms of this Agreement with current employees of the Company.

8.Arbitration. Any and all disputes, controversies or claims arising under or in any way relating to the interpretation, application or enforcement of this Agreement, Ms. Friederichsen’s employment with the Company, any claim for benefits, or her separation of employment from the Company, including without limitation any claim by her that she was fraudulently induced to enter into this Agreement, or regarding the enforceability or interpretation of this Agreement, shall be settled by final and binding arbitration under the auspices and rules of JAMS or other mutually agreeable alternative dispute resolution service in accordance with that service’s rules for the resolution of employment disputes. Any such arbitration must be filed in Orange, California, and the laws of the State of California shall control except where federal law governs. The prevailing party in any such arbitration proceeding shall be entitled to reasonable costs and attorney’s fees. The award of the arbitrator is to be final and enforceable in any court of competent jurisdiction.

9.Waiver and Modification. The failure to enforce any provision of this Agreement shall not be construed to be a waiver of such provision or to affect either the validity of this Agreement or the right of any party to enforce the Agreement. This Agreement may be modified or amended only by a written agreement executed by Ms. Friederichsen and a properly authorized designee of the Board of Directors of the Company.

10.Integration. This Agreement constitutes a single, integrated written contract expressing the entire agreement of the parties hereto relative to the subject matter hereof. No covenants, agreements, representations, or warranties of any kind whatsoever have been made by any party hereto. All prior discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.

11.Severability. In the event that any provision of this Agreement should be held to be void, voidable, or unenforceable, the remaining portions hereof shall remain in full force and effect.

12.Governing Law. This Agreement shall be construed in accordance with, and be governed by the laws of the State of California.

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13.Right to an Attorney, Time to Consider. Ms. Friederichsen has been advised of her right to consult with counsel of her choosing with respect to this Agreement. Ms. Friederichsen acknowledges that she has had sufficient time to consider the Agreement and to consult with counsel and that she does not desire additional time.

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

UNITED PANAM FINANCIAL CORPORATION

/S/ Giles H. Bateman	Dated: July 30, 2008
By: Giles H. Bateman

I have carefully read this Agreement and understand that it contains a release of known and unknown claims. I acknowledge and agree to all of the terms and conditions of this Agreement. I further acknowledge that I enter into this Agreement voluntarily with a full understanding of its terms.

/S/ Stacy Friederichsen	Dated: July 30, 2008
Stacy Friederichsen

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EX-99.1

Exhibit 99.1

Contact: Guillermo Bron Chairman of the Board United PanAm Financial Corp. Tel: 949.224.1288 e-mail: akhazei@upfc.com

News Release

UNITED PANAM FINANCIAL CORP. ANNOUNCES

APPOINTMENT OF CHIEF EXECUTIVE OFFICER

Irvine, California - July 29, 2008 - United PanAm Financial Corp. (Nasdaq: UPFC) and its subsidiaries announced today the appointment of Jim Vagim as chief executive officer of UPFC, and announced the termination of Ray Thousand as chief executive officer and Stacy Friederichsen as chief operating officer all effective as of July 25, 2008.

Mr. Vagim was formerly President of Westlake Financial, a non-prime automobile finance company of similar size to UPFC, where Mr. Vagim spent more than 20 years in various executive positions until his resignation in 2007.

Guillermo Bron, the Chairman of the Board, stated, “We want to recognize and thank Mr. Thousand for the contributions and accomplishments during his tenure as our chief executive officer and for assembling an outstanding management team.” Mr. Bron also stated, “UPFC is restructuring its staffing at this time and does not intend hire a replacement chief operating officer.”

The termination of Mr. Thousand could adversely affect UPFC’s warehouse line of credit with Deutsche Bank and UPFC’s six outstanding securitizations. Unless Deutsche Bank approves the appointment of Mr. Vagim as the replacement chief executive officer, it could exercise its rights to terminate the warehouse line of credit and declare all amounts owed under UPFC’s warehouse facility as immediately due and payable. Additionally, unless Mr. Vagim is approved by the various insurance providers that insure UPFC’s six outstanding securitizations, the termination of Mr. Thousand is a potential insurance event of default and each insurance provider may elect to enforce the various rights and remedies that are governed by the different transaction documents for each securitization. UPFC is in the process of obtaining approval of Mr. Vagim as UPFC’s chief executive officer from Deutsche Bank and the insurance providers, but there is no assurance UPFC will obtain such approvals. 

UPFC is a specialty finance company engaged in automobile finance, which includes the purchasing, warehousing, securitizing and servicing of automobile installment sales contracts originated by independent and franchised dealers of used automobiles. UPFC conducts its automobile finance business through its wholly-owned subsidiary, United Auto Credit Corporation, with branch offices in 36 states.

Forward Looking Statements

This press release may contain forward-looking statements as referenced in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, economic conditions, outcome of pending litigation, risks associated with credit quality and other factors discussed in the company’s filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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