DEAL MEMORANDUM
This memorandum reflects the terms of the agreement reached by American
Financial Holding, Inc. ("American Financial Holding") and Tambora Financial
Corporation ("Tambora"), and effective as of September 25, 1997. This agreement
was approved by the American Financial Holding Board of Directors on September
23, 1997, and by the Tambora Board of Directors on September 23, 1997.
A. American Financial Holding represented that it held all issued and
outstanding shares of Income Builders, Inc., and that it would transfer all
issued and outstanding shares of Income Builders, Inc. to Tambora upon Xxxxxxx's
payment of the following consideration:
(1) $500,000 in cash; and
(2) issuance to American Financial Holding of an aggregate of
4,899,533 shares of Tambora stock as follows:
(a) 4,279,449 shares to be distributed to American
Financial Holding's stockholders at the rate of one share of
Tambora stock for each share of American Financial Holding
stock held as of the date of the agreement;
(b) 320,000 shares to satisfy American Financial
Holding's antidilution obligation to East Bay Trust in
connection with funding provided by it prior to December 31,
1997, and
(c) 300,084 shares in order for American Financial
Holding to offer shares in Tambora to certain unaffiliated
persons who had invested $300,084 in preferred stock of Triad
Financial Corporation, a previous subsidiary of American
Financial Holding. Triad Financial Corporation was
unsuccessful in obtaining the capital required to implement
its business plan and has been dissolved. Such 300,084 shares
will be distributed to such former investors in Triad in
satisfaction of their right to convert Triad preferred stock
into American Financial Holding common stock.
American Financial Holding acknowledges receipt of a stock certificate
representing all of the issued and outstanding shares of Income Builders, Inc.
B. American Financial Holding acknowledges receipt of a stock
certificate for 4,899,533 shares of Tambora.
C. The parties intend that this agreement shall be binding on the
parties as of the date first mentioned above, although the sale shall not close
until the entirety of Tambora's consideration has been paid to American
Financial Holding. Upon Xxxxxxx's payment of the agreed-upon consideration to
American Financial Holding, American Financial Holding shall transfer all issued
and outstanding shares of Income Builders, Inc. to Tambora.
ACCEPTED AND CONFIRMED:
AMERICAN FINANCIAL HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
October 24, 2000
TAMBORA FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
October 24, 2000