Appendix G
PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of the 15th
day of September, 1997, is between Approved Financial Corp., a Virginia
Corporation ("Buyer"), and Xxxxx X. Xxxxxxx ("Seller").
Introductory Statements
Buyer desires to acquire Seller's Seventeen (17%) percent ownership
interest (the "Interest") in Armada Residential Mortgage, LLC ("Armada"). Buyer
and Seller desire to effect the purchase and sale of such Interest pursuant to
the terms of this Agreement.
Accordingly, for and in consideration of the foregoing and the mutual
agreements, representations, warranties, covenants and conditions set forth in
this Agreement, and other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE INTEREST
1.1 Purchase and Sale. Upon the terms and subject to the conditions set
forth in this Agreement, Seller shall sell to Buyer, free and clear of all
liens, security interests, pledges, charges, claims, options, rights, demands
and restrictions of every kind, character and description whatsoever
(collectively, "Encumbrances"), and buyer shall purchase from Seller on such
date, all of Seller's Interest in Armada.
1.2 Date and Place of Closing. Upon the terms and subject to the
conditions set forth in this Agreement, the purchase and sale of the Shares
provided for herein shall be consummated at a closing to be held (i) at the
offices of Payne, Gates, Xxxxxxxx & Radd, P.C., 15th Floor Dominion Tower, 000
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000 at 10:00 a.m., local time, Sept.
23, 1997, or (ii) at such other place, time and date as Seller and Buyer shall
mutually agree upon. The date and event of such purchase and sale are,
respectively, herein referred to as the "Closing Date" and the "Closing".
1.3 Purchase Price. The consideration to be paid by Buyer (the "Purchase
Price") to Seller for the Interest shall be Fifty Three Thousand and Seventy
Three (53,073.00) Shares of unissued common stock of Buyer (the "Shares") which
shall be delivered as follows: 1,000 Shares to be delivered at Closing and the
balance of 52,073 Shares to be delivered on January 5, 1998.
1.4 Deliveries at Closing. Subject to the conditions set forth in this
Agreement, at Closing.
(a) Seller shall deliver to Buyer:
(i) a certificate evidencing and representing the Interest in the
name of Buyer;
(ii) written approval by Armada for the transfer; and
(iii) all other previously undelivered documents, instruments and
writings required to be delivered by Seller at or prior to the
Closing pursuant to this Agreement or otherwise required in
connection herewith.
(b) Buyer shall deliver to Seller:
(i) 1,000 Shares as required and in the manner contemplated by
Section 1.3 hereof; and
(ii) all other previously undelivered documents, instruments and
writings required to be delivered by Buyer at or prior to the
Closing pursuant to this Agreement or otherwise required in
connection herewith.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
2.1 Organization and Qualification. Armada is (i) a limited liability
company validly existing and in good standing under the laws of the State of
Virginia; and (ii) duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction in which the character of the properties and
assets now owned or leased by it or the nature of the business transacted by it
requires it to be so qualified.
2.2 Authority. Seller has all requisite power and authority to enter
into, execute and deliver this Agreement and perform its obligations hereunder.
This Agreement has been duly executed and delivered by Seller and is a valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by Seller will not result
in a violation or breach of or and binding obligation of Seller enforceable
against Seller in accordance with its terms.
2.3 No Conflicts. The execution, delivery and performance of this
Agreement by Seller and consummation of the transactions contemplated hereby
will not
(a) result in the creation or imposition of any Encumbrance upon the
Interest, with or without the giving of notice and/or the
passage of time, or
(b) violate, conflict with, effect acceleration of, or result in
termination, cancellation or modification of, or constitute a
default under (i) any contract,
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agreement or other instrument to which Seller is a party or by
which either of it or its respective assets is bound or (ii) any
note, bond, mortgage, indenture, deed of trust, license, lease,
contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Seller is a party
or by which Seller may be bound or affected or to which any of
its respective assets may be subject, or
(c) violate any statute or law or any judgment, decree, order, writ,
injunction, regulation or rule of any court or local, state or
federal governmental or regulatory authority.
2.4 Consents and Approvals. Seller has obtained any necessary consent or
approval to transfer the Interest.
2.5 No Undisclosed or Contingent Liabilities. To the best of Seller's
knowledge there is no basis for the assertion against Armada of any liability or
obligation of any nature whatsoever (whether fixed, contingent or otherwise
inchoate) that may encumber or affect Seller, its assets or the transactions
contemplated hereby, other than obligations of Seller set forth on the balance
sheet.
2.6 Litigation. There are no material open and unresolved claims,
actions, suits, proceedings, investigations or inquiries pending against Armada
or to the best knowledge of Seller, threatened by or against, or otherwise
affecting or that would adversely affect Armada, its assets or the transactions
contemplated hereby at law or in equity or before or by any federal, state,
local, foregoing or other governmental department, commission, board, agency,
instrumentality or authority. To the best knowledge of Seller, there exists no
valid basis for any such claim, action, suit, proceeding, inquiry or
investigation.
2.7 Compliance with Law. Armada, to the best of Seller's knowledge, is
in substantial compliance with all federal state, foreign and local laws
(whether statutory or otherwise), ordinances, rules, regulations, orders,
judgments, decrees, writs and injunctions of any governmental authority
(collectively, "Laws") applicable to Armada.
2.8 Accredited Investor Status. Seller is an Accredited Investor under
Regulation D of the Securities Act of 1933.
2.9 Sophisticated Investor Status. Seller has such knowledge and
experience in financial and business maters that he is capable of evaluating the
merits and risks of this transaction and of an investment.
2.10 Investor Suitability; Illiquidity, Ability to Bear Loss. The
overall commitment of Seller to securities which are not readily marketable is
not disproportionate to his net worth and his investment in the Shares will not
cause his overall commitment to become excessive. Seller has adequate means of
providing for his current needs and personal contingencies, has no need for
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liquidity in his investment in the Shares, and can sustain a complete loss of
his investment in the Shares. Seller understands that this purchase is illiquid
and involves a high degree of speculative risk.
2.11 No Governmental Recommendation or Approval. Seller understands that
no federal or state agency has passed on or made any recommendation or
endorsement of the Shares.
2.12 Shares Not Registered, Indefinite Holding. Seller has been advised
by Buyer and understands, that he must bear the economic risk of an investment
in the Shares for an indefinite period of time because the Shares have not been
registered under the Securities Act. Therefore, the Shares must be held by the
buyer unless they are subsequently registered under the Securities Act or an
exemption from such registration is available for the transfer of the Shares.
Seller is familiar with Rule 144 of the Securities Act and the restrictions and
requirements thereunder as they relate to a public resale.
2.13 Shares Acquired for Own Account. Seller represents that the Shares
are being acquired solely for his own account for investment and not with a view
toward, or for resale in connection with, any "distribution" (as that term is
used in the Securities Act and the Rules and Regulations thereunder) of all or
any portion thereof.
2.14 No Disposition of Shares Without Securities Law Compliance. Seller
agrees not to offer, sell, pledge, hypothecate or otherwise transfer or dispose
of any of the Shares in the absence of an effective registration statement (or
an exemption from the requirements of registration) under the Securities Act
covering such disposition.
2.15 Stop-Transfer and Legends on Certificates. Seller further
understands that a stop-transfer order will be placed on the stock-transfer
books respecting the certificates evidencing the Shares, and such certificates
shall bear, until such time as the Shares shall have been registered under the
Securities Act or shall have been transferred in accordance with such an opinion
of counsel, the following legend or one substantially similar thereto
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID AT, OR AN AVAILABLE EXEMPTION THEREUNDER.
plus any legend that may be required under any applicable state law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
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3.1 Authority. Buyer has all requisite power and authority to enter
into, execute and deliver this Agreement and perform his obligations hereunder.
This Agreement has been duly executed and delivered by Buyer and is a valid and
binding obligation of Buyer enforceable against Buyer in accordance with its
terms.
3.2 Consents and Approvals. Buyer is not required to obtain, transfer or
cause to be transferred any consent, approval, license, permit or authorization,
or make any declaration, filing or registration with any third party or any
public body or authority in connection with (a) the execution and delivery by
Buyer of this Agreement of (b) the consummation of the transactions contemplated
hereby.
ARTICLE IV
INDEMNIFICATION
4.1 Representations and Warranties. The representations and warranties
of the parties contained in this Agreement and in any related agreements shall
be true and correct in all material respects as of the date of this agreement.
Each representation and warranty made hereunder shall survive any investigation
made by or on behalf of any party hereto and shall survive the Closing
hereunder.
4.2 Agreement to Indemnify. Subject to the terms and conditions of this
Article IV, the parties mutually agree to forever indemnify, defend and hold
harmless the other, at any time after the Closing, from and against all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses including, without limitation, interest, penalties and
reasonable attorneys' fees and expenses asserted against the other by reason of
or resulting from a breach of any representation, warranty or agreement of the
other contained in or made pursuant to this Agreement or other documents
prepared or delivered in connection with this Agreement, or any facts or
circumstances constituting such a breach.
ARTICLE V
MISCELLANEOUS
5.1 Commissions. Neither Buyer nor Seller has employed any investment
banker, broker, finder, or similar agent in connection with any transaction
contemplated by this Agreement.
5.2 Expenses, Taxes, Etc. Except as otherwise provided herein, each of
the parties hereto shall pay all fees, expenses and taxes incurred by it or any
of its affiliates in connection with the transactions contemplated by this
Agreement.
5.3 Further Assurances.
(a) From time to time (including after the Closing Date), at Buyer's
request and without further consideration, Seller shall execute and
deliver to Buyer such
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documents and take such other action as Buyer may reasonably request
in order to consummate or more effectively evidence the transactions
contemplated hereby.
(b) From time to time (including after the Closing Date), at Seller's
request and without further consideration, Buyer shall execute and
deliver such documents and take such other action as Seller may
reasonably request in order to consummate or more effectively
evidence the transactions contemplated hereby.
5.4 Successors and Assigns. No party shall have the right to assign all
or any part of its interest in this Agreement without the prior written consent
of the other parties, and any attempted transfer without such consent shall be
null and void. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and permitted assigns.
5.5 Definition of Knowledge. For the purpose of this Agreement, the
phrases "the best knowledge" of any party and "known" and words of like effect
shall mean to the knowledge of such party and any officer, director or manager
of any such party, as such knowledge has been obtained in the performance of
their duties in the ordinary course of business in a prudent and diligent
manner, which knowledge shall also include information existing in the files of
such party.
5.6 No Third-Party Benefit. Nothing in this Agreement shall be deemed to
create any right or obligation in any person or entity not a party hereto and
this Agreement shall not be construed in any respect to be a contract or
agreement in whole or in part for the benefit of or binding upon any person or
entity not a party hereto.
5.7 Entire Agreement: Amendment. This Agreement and the Schedules hereto
constitute the entire agreement among the parties hereto with respect to the
transactions contemplated herein and supersede all prior oral and written
agreements, memoranda, understandings and undertakings between the parties
hereto relating to the subject matter hereof. This Agreement may not be
modified, amended, altered or supplemented except by a written instrument
executed and delivered by each of the parties hereto.
5.8 Reformation and Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof:
(a) in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Agreement a provision
as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable;
and
(b) the legality, validity and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired
thereby.
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5.9 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally or mailed (registered or certified mail,
postage prepaid, return receipt requested) as follows:
If to Seller: Xxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
If to Buyer: Approved Financial Corp.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
with a copy to: Xxxxxx X. Xxxxx, Esquire
Payne, Gates, Xxxxxxxx & Radd, P.C.
15th Floor Dominion Tower
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
5.10 Governing Law. This Agreement was executed and accepted in the
state of Virginia and shall be governed by, and construed and enforced in
accordance with, the laws of the state of Virginia, without regard to its
conflicts of law rules.
5.11 Release. In consideration of this Agreement and the Employment
Agreement of even date herewith, Seller hereby releases Approved Financial
Corp., Approved Residential Mortgage, Inc., and Armada Residential Mortgage, LLC
(and all of those officers, directors, and employees of the foregoing entities)
from all debts, obligations or liabilities to Seller as of the date hereof,
except for those obligations contained in this Agreement, Seller's Employment
Agreement of even date herewith, and the Nonqualified Stock Option Agreement of
even date herewith.
5.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto on the date first above written.
SELLER:
/s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx
BUYER:
APPROVED FINANCIAL CORP.
By: /s/ Xxxxx X. Xxxxx, President
------------------------------
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NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, dated this 15th day of September 1997 between APPROVED FINANCIAL
CORP. (the Company) and XXXXX X. XXXXXXX (the Optionee).
WHEREAS, the Optionee is now affiliated with the Company as an employee of
a subsidiary of the Company and the Company desires to have the Optionee
continue to be to be so affiliated and to afford the Optionee the opportunity to
acquire stock ownership in the Company so that the Optionee may have a direct
proprietary interest in the Company's success; and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby
mutually covenant and agree as follows:
1. GRANT OF OPTION
(a) Subject to the terms and conditions set forth herein, the Company
may grant to Optionee at the end of each Company year and within
30 days after audited financials are prepared for the most recent
completed year, Nonqualified Stock Options to purchase from the
Company, shares of the Company's common stock (the "Stock") in
the amount and at the price specified on Exhibit A attached
hereto and incorporated herein.
2. EXERCISE OF OPTION. The Options granted in Paragraph 1 of this
Agreement shall be vested and exercisable upon issuance, subject to
compliance with all applicable securities laws during the Option
Period. The "Option Period" is defined herein to mean the period
commencing with the date of this Agreement and ending on the earlier
of the applicable date specified in Section 4 or the date 10 years
from the date of this Agreement unless such period is extended by the
written consent of all parties. No less than 100 shares may be
purchased upon any one exercise of the option granted hereby unless
the number of shares purchased at such time is the total number of
shares in respect of which the Option hereby granted is then
exercisable. In no event shall any Option granted hereby be
exercisable for a fractional share. From time to time, in its
discretion, the Board of Directors (the "Board") may offer the
Optionee the right to cancel any Options granted hereunder in exchange
for such consideration as the Board shall determine.
3. METHOD OF EXERCISING OPTION AND PAYMENT OF OPTION PRICE.
(a) The Option hereby granted shall be exercised by the Optionee by
delivering to the Secretary of the Company, from time to time, on
any business day (the Exercise Date), written notice specifying
the number of shares the Optionee then desires to purchase (the
Notice), and cash, certified check, bank draft, or
postal money order to the order of the Company for an amount in
United States Dollars equal to the option price for the number of
shares specified in the Notice (the total option Price), such
payment to be delivered with the notice. The Total Option Price
shall be delivered to the Secretary of the Company not later than
the end of the first business day after the Exercise Date. In
lieu of cash, the Option Price may be paid by the Company
reducing the amount of stock by the Option price, or by Optionee
paying with Company stock he already owns, subject to compliance
with all applicable securities, tax and other laws.
(b) The Notice shall be in the form of Exhibit B attached hereto.
(c) Within a reasonable time after the Exercise Date, the Company
shall, subject to the receipt of withholding tax, if any, issue
to the Optionee the number of shares with respect to which such
option shall be so exercised, and shall deliver to the Optionee a
certificate (or certificates) therefor. The certificate shall
bear the following legends:
(i) "THIS COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR APPLICABLE
STATE SECURITIES LAW AND MAY BE OFFERED, SOLD, OR
TRANSFERRED ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF
THE ACT OR APPLICABLE STATE SECURITIES LAW OR IF IN THE
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
(ii) "THE COMMON STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHTS OF PURCHASE
AND CERTAIN OTHER REQUIREMENTS THAT ARE FULLY SET FORTH IN
AN AGREEMENT BETWEEN THE SHAREHOLDER AND THE CORPORATION
AND, IF ANY, IN THE SHAREHOLDERS' AGREEMENT AMONG THE
CORPORATION AND ITS SHAREHOLDERS. ANY SUCH TRANSFER OR
ACQUISITION IN VIOLATION OF SUCH AGREEMENT(S) IS NULL AND
VOID, AND SUCH LATTER AGREEMENT IS AUTOMATICALLY BINDING ON
ANY PERSON WHO ACQUIRES THE SHARES. COPIES OF THE
AGREEMENT(S) ARE ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL BUSINESS OFFICE OF APPROVED FINANCIAL CORP."
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4. AFFILIATION. If for any reason, Optionee ceases to be affiliated with
the Company or a Subsidiary as an employee, the Options granted to
such Optionee shall expire on the earlier of the expiration dates
specified for said Options at the time of their grant, or three (3)
months after the Board of Directors notifies Optionee that it has
elected to accelerate its Option Period to three (3) months from such
notice.
5. OPTIONEE. Whenever the word Optionee is used in any provision of this
Agreement under circumstances where the provision should logically be
construed to apply to the estate, personal representative, or
beneficiary to whom this Option may be transferred by will or by the
laws of descent and distribution, the word Optionee shall be deemed to
include such person.
6. RIGHTS AS A STOCKHOLDER. The Optionee shall not be deemed for any
purpose to be a stockholder of the Company with respect to the shares
represented by this Option until this Option shall have been
exercised, payment and issue has been made as herein provided, and the
Optionee's name has been entered as a stockholder of record on the
books of the Company.
7. THE COMPANY'S RIGHTS. The existence of this Option shall not affect in
any way the right or power of the Company or it stockholders to make
or authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company's capital structure
or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or other stocks with preference
ahead of or convertible into, or otherwise affecting the Common Stock
of the Company or the rights thereof or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of the
Company's assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
8. RECAPITALIZATION; MERGER AND CONSOLIDATION. If the shares of the
Company's Stock as a whole are increased, decreased, or changed into
or exchanged for a different number or kind of shares or securities of
the Company, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate
structure, or the like, and appropriate and proportionate adjustment
shall be made in the number and kinds of shares of Stock subject to
the system and in the number, kinds, and per share exercise price of
shares subject to unexercised options or portions thereof granted
prior to any such change. Any such adjustment in an outstanding
Option, however, shall be made without a change in the total price
applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share of stock covered
by the option, not fractional shares shall be issued as a result of
any such adjustment.
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9. PREEMPTION BY APPLICABLE LAWS OR REGULATIONS. Anything in this
Agreement to the contrary notwithstanding it at any time specified
herein for the issuance of shares to the Optionee, any law,
regulation, or requirements of any governmental authority having
appropriate jurisdiction shall require either the Company or the
Optionee to take any action prior to or in connection with the shares
of Stock then to be issued, sold or repurchased, the issue, sale, or
repurchase of such shares of Stock shall be deferred until such action
shall have been taken.
10. RESOLUTION OF DISPUTES. Any dispute or disagreement that shall arise
under, or as a result of, or pursuant to, this Agreement shall be
determined by the Board in its absolute and uncontrolled discretion,
and any such determination or any other determination by the Board
under or pursuant to this Agreement and any interpretation by the
Board of the terms of this Agreement shall be final, binding, and
conclusive on all persons affected thereby.
11. TAX WITHHOLDING. The company shall have the right to deduct from any
payment hereunder any federal state, local or employment taxes that it
deems are required by law to be withheld. At the request of the
Optionee, or as required by law, such sums as may be required for the
payment of any estimated or accrued income tax liability may be
withheld and paid over to the governmental entity entitled to receive
the same. The Company shall have the right to satisfy the withholding
obligation by reducing the amount of options in an amount equal to the
withholding and simultaneously paying in cash the amount due in
withholding.
12. FRACTIONAL SHARES. Any fractional shares concerning this Option shall
be eliminated at the time of exercise by rounding down for fractions
of less than one half (1/2) and rounding up for fractions of equal to
or more than one half (1/2). No cash settlements shall be made with
respect to fractional shares eliminated by rounding.
13. GOVERNING LAW. All matters relating to this Agreement shall be
governed by the laws of the state of Virginia, without regard to the
principles of the conflict of laws, except to the extent preempted by
the laws of the United States.
14. CONSTRUCTION. This Agreement has been entered into in accordance with
the terms of the Plan, and wherever a conflict may arise between the
terms of this Agreement and the terms of the plan, the terms of the
plan shall control.
15. QUALIFIED NATURE OF AGREEMENT. This Agreement is intended to be an
agreement concerning a stock option arrangement that is not qualified
under Section 422 of the Internal Revenue Code, and this Agreement
shall be so construed.
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16. REGULATORY COMPLIANCE. No Stock shall be issued hereunder until the
Company has received all necessary regulatory approvals and has taken
all necessary steps to assure compliance with federal and state
securities laws or has determined to its satisfaction and the
satisfaction of its counsel that an exemption from the requirements of
the federal and applicable state securities laws are available.
17. NOTICES. All notices and demands of any kind which the Company,
Optionee, or other person may be required or desires to give shall be
in writing and shall be delivered in hand to the person or persons to
whom addressed (in the case of the Company, with the chief Executive
officer or Chief Financial officer, or Secretary of the Company), or
by mailing a copy thereof properly addressed by certified or
registered mail postage prepaid, with return receipt requested. Notice
to Optionee, if mailed, shall be mailed to the last known address of
Optionee.
18. LIMITATION ON OBLIGATIONS OF THE COMPANY. All obligations of the
Company arising under or as a result of the Options granted hereunder
shall constitute the general unsecured obligations of the Company, and
not of the Board of Directors of the Company, any member thereof, the
Committee, any member thereof, any officer of the Company, or any
other person or any Subsidiary, and none of the foregoing, except the
Company, shall be liable for any debt, obligation, cost or expense
hereunder.
19. SEVERABILITY. If any provision of this Plan is applied to any person
or to any circumstance shall be adjudged by a court of competent
jurisdiction to be void, invalid, or unenforceable, the same shall in
no way affect any other provision hereof, the application of any such
provision in any other circumstances, or the validity or
enforceability hereof.
20. HEADINGS. The headings of the several paragraphs herein are inserted
solely for convenience of reference and are not intended to form a
part of and are not intended to govern, limit or aid in the
construction of any term or provision hereof.
21. SUCCESSORS. This Plan shall be binding upon the respective successors,
assigns, heirs, executors, administrators, guardians and personal
representatives of the Company and Optionee.
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IN WITNESS WHEREOF, the parties have attached their signatures as follows:
APPROVED FINANCIAL CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------
OPTIONEE:
/s/ Xxxxx X. Xxxxxxx
----------------------------
Xxxxx X. Xxxxxxx
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EXHIBIT A
to Nonqualified Stock Option Agreement
between Approved Financial Corp. and Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx employment contract with Approved Residential Mortgage,
Inc. dated September 15, 1997, provides for an incentive payment of 5% of all
after-tax net profits for specified offices which are under the responsibility
of Xxxxx X. Xxxxxxx. To the extent that the amount under this provision to which
Xxxxx X. Xxxxxxx would be entitled exceeds annually $150,000 (herein called the
"Excess"), the Company may, in lieu of cash, issue Nonqualified Stock Options to
purchase a number of shares of the common stock of the Company which number
annually shall be equal to that number arrived at by dividing the Excess by one
half of the Average Fair Market Value per share of common stock of the Company
as of the close of business on the last trading day prior to the end of each
quarter during the year. Factional shares shall be rounded to the nearest whole
share.
The price per share shall be one half of the Average Fair Market Value. For
purposes of this exhibit the term Fair Market Value shall mean, on any given
date the arithmetical average between the bid and asked price of the common
Stock on the Bulletin Board of the over-the-counter market (or if trading on the
NASDAQ, then on the NASDAQ) on such date, or if the stock market is closed on
such date, the next preceding date on which it was open.
Exhibit B
NOTICE OF EXERCISE OF OPTION
----------------------------
The undersigned ("Optionee") hereby exercises his option for _____shares of
common stock of APPROVED FINANCIAL CORP. The Optionee hereby agrees to pay the
sum of $_______ per share.
The Optionee hereby represents and warrants that he is executing his option
and making the contribution provided herein for his own account for investment
purposes and not with any view toward or intention of resale or redistribution
of any part of the stock acquired in the Company.
The Optionee hereby acknowledges that he is acquiring an investment which
is not now nor anticipated to be registered under any federal or state
securities law and agrees that he shall not transfer, sell, assign, pledge or
otherwise dispose of his stock interest (or any rights under this Agreement)
unless the common stock is registered under the Securities Act of 1933 and
applicable state Blue Sky Laws, or, in the opinion of counsel for the Company,
prepared at the expense of the Optionee and the Optionee's future transferee,
there is available an exemption from such registration with respect to the
proposed transfer. The Optionee further acknowledges that there shall be no
obligation on the part of any Officer or Director to permit or cause such state
or federal registration.
The Optionee hereby consents to the following actions of the Company:
1. A legend shall be palced on any certificate issued referring to or
evidencing the stock interest stating that the common stock has not been
registered under the Securities Act of 1933 or any state Blue Sky Law and
setting forth the limitations on resale;
2. Appropriate records of the Company shall contain stop transfer
instructions reflecting the restrictions on transfer; and
3. The same actions shall be taken in connection with any cetificates
evidencing a stock interest issued in replacement of the Optionee's interest or
issued to any transferee of the Optionee.
The Optionee represents and warrants that he:
1. Has received and reviewed the most recent annual report of the Company;
2. Has executed his option relying solely on the information set forth in
the most recent annual report and information furnished by the Company pursuant
to Optionee's own request;
3. Is aware that with respect to such information, the Company warrants
only that it was assembled by it in good faith from sources which it deemed
reliable and it has no knowledge which would lead it to believe that any such
information is incorrect or misleading;
4. Is aware that the Company is willing upon request to provide to the
Optionee any additional information which the Company has access to in respect
to the Company and to answer any questions of Optionee;
5. Is aware that there is no public market for this investment and it may
not be possible to liquidate this investment.
6. Understands and acknowledges that under current interpretations of
relevant securities laws that an exemption from registration whereby the
Optionee could resell his shares does not exist but may only come into being
after the Optionee has held the investment for at least several years and the
potential for any exemption can change if applicable laws, regualtions or court
interpretations change;
7. Understands and acknowledges that no registration under federal or state
securities laws is planned, or assured, and that the Company has no intention of
ever attempting to register the common stock now or in the future;
8. Understands that counsel for the Comapny may file relevant forms with
the Securities and Exchange Commission within a specified time after receipt of
this letter and will cooperate in providing any necessary information to the
Company in that regard, promptly and that the Company shall have the absolute
right to defer the date of exercise until counsel for Company determines that
all laws and regulations are complied with including sufficient time to file the
appropriate forms or any other required filings or notices.
OPTIONEE INFORMATION (Type or Print):
Name of Optionee
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Address
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Zip
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Social Security/Fed. ID#
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Telephone No. ( )
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Date Executed:
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(Signature of Optionee)
