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Exhibit 10.65
August 20, 1997
▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇:
The purpose of this letter is to acknowledge, and set forth the terms
of our agreement with regard to your continued service on the Board of Directors
(the "Board") of Mego Mortgage Corporation (the "Company") and your retention by
the Company as a consultant.
1. This Agreement shall be for a term (the "Term") commencing on
September 1, 1997 and terminating upon the earlier of: (i) August 31, 1999, (ii)
your death, or (iii) your Disability (within the meaning of Section 72(m)(7) of
the Internal Revenue Code of 1986, as amended (the "Code")).
2. During the Term and while you are serving as a director of the
Company, you will continue to receive compensation for your services as a
director of the Company in accordance with the Company's then current practice.
3. Whether or not you continue to serve as a director during the
Term, you shall serve as a consultant as reasonably requested by the Company
with regard to matters you are or were involved with while a director, for the
remainder of the Term (the "Consultancy"). For your services as a consultant,
the Company will pay you an annual fee (the "Annual Fee") of Two Hundred Fifty
Thousand Dollars ($250,000). Such annual Fee shall be payable in monthly
installments and shall be prorated for any partial calendar years during the
Term. All amounts payable hereunder (and any amounts payable pursuant to Section
2) are, to the extent legally required, subject to withholding and deductions.
4. During the Consultancy, you will be an independent contractor of
the Company and, as a consultant, you will have no authority to bind the
Company. Subject to and in accordance with the Company's normal practices and
policies, you will be entitled to receive reimbursement for any reasonable
business expenses related to the Company incurred during the Term. The Company
shall indemnify you and hold you harmless, to the full extent permitted by law
as, to and from any and all costs, expenses or damages incurred by you as a
result of any claim, suit, action or judgment arising out of your activities as
a consultant to or a director of the Company and this right to indemnification
shall survive the termination of this Letter Agreement.
5. In the event of your Disability or death prior to August 31, 1999,
the Company shall pay you or your designated beneficiary (or, if none, your
estate), as the case may be, in a lump sum the Annual Fees you would have
received during the period commencing on the date of your Disability or death
and ending on August 31, 1999 and any unpaid Annual Fees accrued
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prior to your Disability or death. Upon payment of such amount the Company shall
have no further obligation to you hereunder.
6. Notwithstanding anything else herein, in the event of a Change in
Control of the Company (as defined in Exhibit A hereto) during the Term, the
Company may, in its sole and absolute discretion, pay you in a lump sum within
ten (10) days of the date of the Change in Control, in lieu of any other amounts
due hereunder, the Annual Fees you would have received during the period
commencing on the date of the Change in Control and ending on August 31, 1999.
Notwithstanding anything herein to the contrary, the payments under this Section
6 shall not be subject to any offset, counterclaim, recoupment, defense or other
right which the Company may have and you shall have no obligation to mitigate
with respect to such payments. Upon payment of the amounts specified in this
Section 6, the parties hereto will have no further rights or obligations under
this Agreement.
7. You acknowledge that during the Term you will not be an employee
of the Company and you will not be eligible to participate in, or receive
benefits under, any benefit plans or arrangements maintained, or contributed to,
by the Company, including without limitation, any fringe, welfare, retirement,
sick leave, vacation or incentive plans or arrangements, except in your capacity
as a director. This Section 7 will not apply to any stock options or stock
appreciation rights granted to you in your capacity as a director of the
Company.
8. This Agreement set forth the parties' entire agreement, and
supersedes any and all prior understandings, with respect to its subject matter.
This Agreement can be amended only by a writing signed by both you and the
Company.
9. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, heirs (in your case) and
permitted assigns. This Agreement is personal to you and neither this Agreement
nor any rights hereunder may be assigned by you. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or pursuant to a sale of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale as described in the preceding sentence, it
shall use its best efforts to cause such assignee or transferee to expressly
assume the liabilities, obligations and duties of the Company hereunder. If the
assignee or transferee does not expressly assume the liabilities, obligations
and duties of the Company hereunder, the Company shall pay you in a lump sum
within ten (10) days following the closing of the sale of all or substantially
all of the assets of the Company the amount set forth in Section 6.
10. All notices under this Agreement shall be given in writing and
shall be either delivered personally or sent by certified or registered mail,
return receipt requested, addressed to the other party at the appropriate
address first set forth above, or to such other address as such
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party shall designate by written notice as aforesaid. Notices shall be deemed
given when received or two (2) days after mailing, whichever is earlier.
11. This Agreement shall be governed by, and construed under and in
accordance with, the internal laws of the State of Delaware, without reference
to rules relating to conflicts of laws.
Please execute a copy of this Agreement and return it to me to
acknowledge your agreement to the foregoing.
MEGO MORTGAGE CORPORATION
By:
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Title:
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Agreed:
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EXHIBIT A
A "Change in Control" shall be deemed to have occurred
upon:
(a) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than
the Company, any trustee or other fiduciary holding securities under any
employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of Common Stock of the Company), is or becomes
the owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to the commencement of the Term), individuals who at
the beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in paragraph (a), (c) or (d) of
this Exhibit A) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board,
provided that a Change in Control shall not occur pursuant to this subsection
(b) if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Growth Realty, Inc.
And ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or any of them own, either directly or indirectly
(indirect ownership shall be determined in accordance with the constructive
ownership rules under Code Section 318 and amounts indirectly owned shall also
include any stock contributed by any of the foregoing to a private foundation
and/or trust), more than ten percent (10%) of the voting stock of the Company;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than thirty-three percent
(33%) of the combined voting power of the Company's then outstanding securities
shall not constitute a Change in Control of the Company; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or the closing of a sale or disposition by
the Company of all or substantially all of the assets of the Company other than
a sale of all or substantially all of the assets of the Company (other than in
the ordinary course of business) to a person or persons who beneficially own,
directly or indirectly, at least fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities.
