EXHIBIT 10.23
EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is made and entered into as of
September 1, 1996, by and between PREFERRED CREDIT CORPORATION, a California
corporation (the "Company'), and XXXX XXXXXXXXX, an individual ("Executive").
W I T N E S S E T H:
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WHEREAS, Executive and the Company wish to provide for the terms and
conditions of Executive's employment as Chief Executive Officer of the Company.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive agree as
set forth below.
1. Employment and Duties. The Company hereby employs Executive to serve
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as Chief Executive Officer of the Company, with full authority and
responsibility to operate and manage, on a day-to-day basis, the business and
affairs of the Company. Executive shall perform such other duties and fulfill
such other responsibilities prescribed by the Bylaws of the Company and which
are customarily accorded to such position. Executive shall report directly to
the Board of Directors of the Company (the "Board"). Executive shall endeavor
in good faith to perform his duties in an efficient, faithful and business-like
manner. During the term of his employment, it is intended that Executive also
serve as a Director on the Board and the Company will take action within its
powers to include Executive among the slate of directors proposed to be
nominated by the Board at any applicable stockholders meeting. In the event
Executive shall not be elected to the Board or selected as a nominee for the
Board, such event shall constitute termination of Executive without cause under
Section 6(b)(iii). At such time that the Board forms any subcommittees of the
Board, the Board shall appoint Employee to serve on such subcommittee. If the
Company becomes a publicly held company, the Board shall not be obligated to
appoint Employee to either of the Compensation Committee or the Audit Committee,
or any committee serving like functions, to the extent such appointment would
violate the rules of any national securities exchange, the Nasdaq Stock Market
or the provisions of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code") or the rules and regulations promulgated thereunder.
In the event that the Company undergoes a reorganization pursuant to which
a holding company ("NewCo") for the common stock of the Company is formed, in
addition to serving as an employee of the Company, Employee shall be deemed an
employee of NewCo which additional employment also shall be governed pursuant to
the terms and conditions of this Agreement.
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2. Term. The initial term of this Agreement shall begin on September 1,
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1996 and expire on August 31, 2001 unless terminated earlier as set forth in
Section 6 hereof or by mutual agreement of the parties hereto (the "Initial
Term"). At the expiration of the Initial Term and each anniversary thereafter,
the term of this Agreement shall automatically be extended for an additional
year (the "Extension Term") unless either party shall have given written notice
to the other party at least six months prior to the end of the Initial Term or
the Extension Term, as the case may be, that it does not desire to extend the
term of this Agreement. If Executive's employment under this Agreement is
extended for an Extension Term, it shall thereafter or during any Extension Term
be terminable (other than upon expiration) only as provided in Section 6 or by
mutual agreement of the parties hereto.
3. Compensation.
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(a) Base Salary. During the term of this Agreement, Executive shall
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be paid a base salary (the "Base Salary"), payable in accordance with the
Company's normal payroll practice. During the first year of the term of this
Agreement, Executive's Base Salary shall be $420,000. The annual Base Salary
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payable to Executive shall be reviewed at least annually; provided, however,
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that Executive's Base Salary shall not be reduced below $420,000 per annum
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during the term of this Agreement.
(b) Bonus. Executive shall be entitled to an annual bonus (the
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"Bonus") equal to 2.5% of the Company's earnings before taxes, as set forth in
the Company's annual audited financial statements. For purposes of determining
the Bonus, earnings before taxes shall be determined exclusive of the Bonus.
The Bonus shall be paid to Executive prior to April 15 of each year.
4. Other Executive Benefits. During the term of this Agreement, the
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Company shall provide to Executive benefits commensurate with his position,
including each of the following benefits:
(a) Medical and Dental Coverage. The Company agrees to provide
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coverage to Executive and dependent members of his family under the same medical
and dental plans as may be maintained from time to time in the discretion of the
Board for the other executive officers of the Company.
(b) Vacation. Executive shall be entitled to four (4) weeks of paid
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vacation during Executive's first year of employment with the Company and shall
be entitled to five (5) weeks during each year of employment with the Company
thereafter for the term of this Agreement. In each case, such entitlement shall
accrue pro rata over the contract year and shall be taken at such time or times
as not to interfere with the necessary performance of Executive's duties and
obligations under this Agreement.
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(c) Business Expenses. The Company will pay or reimburse Executive
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for any out-of-pocket expenses incurred by Executive in the course of providing
his services hereunder, which comply with the Company's travel and expense
policies adopted from time to time by the Board for the executive officers.
Notwithstanding the foregoing, Executive shall be entitled to first class air
travel both within and outside the United States and to first-rate
accommodations. Such reimbursement shall be made by the Company in the same
manner and within the same time period as applicable to the other executive
officers of the Company.
(d) Automobile. The Company shall pay lease expenses in an amount up
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to $1,250 per month in connection with Executive's use of an automobile.
Alternatively, the Company shall purchase an automobile at a comparable monthly
cost for use by Executive (subject to the cost limitations described above). As
to such automobile, on the earlier of significant damage or destruction or
attaining three years of age, the Company shall replace such automobile with a
new automobile selected by Executive. The Company shall pay all costs of
insurance, repair, maintenance and operation of such automobile.
(e) Benefit Plans. Executive shall be entitled to participate in any
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pension, profit-sharing, stock option, stock purchase or other benefit plan of
the Company now existing or hereafter adopted for the benefit of employees
generally or the senior executives of the Company to the same extent as the
other senior executives of the Company.
(f) Life Insurance. Provided the following policies may be obtained
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at a reasonable cost, the Company shall provide Executive with a $1,000,000
standard term life insurance policy and a $1,000,000 standard term accidental
death policy.
(g) Disability. Provided the following policy may be obtained at a
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reasonable cost, the Company shall provide Executive with a long-term disability
policy which provides for an annual disability payment in an amount equal to
125% of Executive's Base Salary.
5. Confidential Information.
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(a) Non-Disclosure. Executive hereby agrees, during the term of this
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Agreement, he will not disclose to any person or otherwise use or exploit any
proprietary or confidential information, including, without limitation, trade
secrets, processes, records of research, proposals, reports, methods, processes,
techniques, computer software or programming, or budgets or other financial
information, regarding the Company, its business, properties, customers or
affairs (collectively, "Confidential Information") obtained by him at any time
during the term, except to the extent required by Executive's performance of
assigned duties for the Company. Notwithstanding anything herein to the
contrary, the term "Confidential Information" shall not include information
which (i) is or becomes generally available to the public other than as a result
of disclosure by Executive in violation of this Agreement, (ii) is or becomes
available to Executive on a non-confidential basis from a source other than the
Company, provided that such source is not known by Executive to be furnishing
such
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information in violation of a confidentiality agreement with or other obligation
of secrecy to the Company or (iii) has been made available, or is made
available, on an unrestricted basis to a third party by the Company, by an
individual authorized to do so. Executive may use and disclose Confidential
Information to the extent necessary to assert any right or defend against any
claim arising under this Agreement or pertaining to Confidential Information or
its use, to the extent necessary to comply with any applicable statute,
constitution, treaty, rule, regulation, ordinance or order, whether of the
United States, any state thereof, or any other jurisdiction applicable to
Executive, or if Executive receives a request to disclose all or any part of the
information contained in the Confidential Information under the terms of a
subpoena, order, civil investigative demand or similar process issued by a court
of competent jurisdiction or by a governmental body or agency, whether of the
United States or any state thereof, or any other jurisdiction applicable to
Executive.
(b) Injunctive Relief. Executive agrees that the remedy at law for
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any breach by him of the covenants and agreements set forth in this Section 5
may be inadequate and that in the event of any such breach, the Company may, in
addition to the other remedies that may be available to it at law, seek
injunctive relief prohibiting him (together with all those persons associated
with him) from the breach of such covenants and agreements.
6. Termination.
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(a) Termination by Company for "Cause." The Company may terminate
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this Agreement for "Cause" effective immediately upon written notice thereof to
Executive. For purposes of this Agreement, "Cause" shall mean and be limited to
the following events: (i) an act of fraud, embezzlement or similar conduct by
Executive involving the Company; (ii) any action by Executive involving the
arrest of Executive for violation of any criminal statute constituting a felony
if the Board reasonably determines that the continuation of Executive's
employment after such event would have a adverse impact on the operations or
reputation of the Company in the financial community; or (iii) a continuing,
repeated willful failure or refusal by Executive to perform his duties;
provided, however, that this Agreement may not be terminated under this
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subclause (iii) unless Executive shall have first received written notice signed
by all members of the Board (other than Executive) advising Executive of the
specific acts or omissions alleged to constitute a failure or refusal to perform
and such failure or refusal to perform continues after Executive shall have had
a reasonable opportunity (not less than 60 days) to correct the acts or
omissions cited in such notice.
In the event of termination for "Cause," Executive shall be entitled to
receive that portion of the Base Salary and all benefits accrued through the
date of termination.
(b) Termination by Company Other Than for "Cause."
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i) Death. Provided that notice of termination has not
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previously been given under any Section hereof, if Executive shall die during
the term of this Agreement, this
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Agreement and all of the Company's obligations hereunder shall terminate, except
that Executive's estate or designated beneficiaries shall be entitled to receive
(A) all earned and unpaid Base Salary through the date of termination; (B) the
Base Salary, Bonus, and all benefits with respect to the then current contract
year which would have been payable or provided to Executive had the term ended
one year following the last day of the month in which Executive's death
occurred; and (C) all other benefits that may be due to Executive or Executive's
estate or beneficiaries under the general provisions of any benefit plan, stock
incentive plan or other plan in which Executive is then a participant, which
benefits shall continue to be provided for a period of one year following the
date of death. In addition, all stock options that have become exercisable as
of the date of death shall remain so for a period of twelve (12) months. All
payments required to be made under this Section 6(b)(i) shall be made pursuant
to the payment schedule in effect at the date of Executive's death.
ii) Disability. Provided that notice of termination has not
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previously been given under any Section hereof, if Executive becomes ill or is
injured or disabled during the term such that Executive fails to perform all or
substantially all of the duties to be rendered hereunder and such failure
continues for a period in excess of 26 consecutive weeks (a "Disability"), the
Company shall continue to employ Executive under this Agreement for one year
from the date of the Disability (which one year period shall commence at the
beginning of the 26 week period referred to herein) and shall continue to pay
Executive the Base Salary in effect on the date of the Disability (determined at
the beginning of the 26 week period referred to herein), the Bonus, and all
benefits then in effect; provided, that (A) the Company may relieve Executive of
his duties and responsibilities hereunder to the extent permitted by law and (B)
any long-term disability payments received by Executive under any disability
insurance plan made available to Executive by the Company if the premiums were
paid by the Company shall be deducted from the salary and bonus payments
otherwise required to be paid to Executive hereunder. If during the term and
subsequent to the Disability commencement date (which shall be at any time
following the end of the 26 week period referred to herein) Executive shall
fully recover, the Company shall have the right (exercisable within 60 days
after receipt of notice from Executive of such recovery), but not the
obligation, to restore Executive to full-time service at full compensation. If
the Company elects not to restore Executive to full-time service, Executive
shall be entitled to obtain other employment. If Executive is not restored to
full-time employment with the Company, all stock options that have become
exercisable as of the date of Disability (determined at the end of the 26 week
period referred to herein) shall remain so for a period of twelve (12) months.
iii) Without Cause. If the Company elects to terminate Executive
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for any reason whatsoever (a "Severance Termination"), Executive shall receive
three times the greater of (i) Employee's Base Salary and Bonus received during
the immediately preceding year; and (ii) Employee's Base Salary and Bonus
(determined on a pro rata basis if employment is terminated pursuant to this
Section during the year) for the current year. In addition, all options
granted over the term shall become immediately exercisable and shall remain
exercisable for a period of twelve (12) months. In the event of a Severance
Termination, Executive will
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also be provided with reasonable office space and secretarial support as well as
the same mailing address and telephone number which Executive had during the
term for up to twelve months, and the Company shall pay the costs of
outplacement services with a provider of Executive's choice at a level
appropriate to Executive's title and position as requested by Executive.
The parties believe that the above payments do not constitute "Excess
Parachute Payments" under Section 280G of the Code. Notwithstanding such
belief, if any benefit under the preceding paragraph is determined to be an
"Excess Parachute Payment" the Company shall pay Executive an additional amount
("Tax Payment") such that (x) the excess of all Excess Parachute Payments
(including payments under this sentence) over the sum of excise tax thereon
under Section 4999 of the Code and income tax thereon under Subtitle A of the
Code and under applicable state law is equal to (y) the excess of all Excess
Parachute Payments (excluding payments under this sentence) over income tax
thereon under Subtitle A of the Code and under applicable state law.
(c) Prohibited Termination. Notwithstanding any other provision in
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this Section 6, so long as Executive beneficially owns 10% or more of the
outstanding shares of common stock of the Company (the "Common Stock"), or,
collectively with Xx. Xxxxxx Xxxxxxxx, beneficially owns 20% or more of the
outstanding shares of Common Stock, the Company may not terminate Employee under
any circumstances. For purposes of this paragraph, "beneficial ownership" shall
have the meaning set forth in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(d) Termination by Executive. Executive may (but shall not be
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obligated to) terminate this Agreement effective 30 days after the giving of
such notice given at any time within two years following a Change in Control (as
defined herein) or upon the occurrence of any of the following events: (i) the
Company shall fail to pay or shall reduce the Base Salary, Bonus or other
benefits provided herein, except as permitted hereunder, or shall otherwise
breach any material provision hereof which breach is not cured within 10 days
after receipt of notice thereof from Executive; (ii) the Company shall fail to
cause Executive to remain the Chief Executive Officer of the Company; (iii)
Executive shall not be continuously afforded the authority, powers,
responsibilities and privileges contemplated in Section 1 above (whether or not
accompanied by a change in title); (iv) the Company shall require Executive's
primary services to be rendered in an area other than the Company's principal
offices in the Irvine, California area; or (v) after a Change in Control, the
Company increases the base salary for senior executives of the Company generally
without similarly increasing the Base Salary of Executive. For purposes of
clause (iii), Executive shall be deemed not to have been continuously afforded
the authority, powers, responsibilities and privileges contemplated in Section 1
above if there shall occur any reduction in the scope, level or nature of
Executive's employment hereunder, or any demotion, any phasing out or assignment
to others, of the duties contemplated herein.
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As full payment of any amounts due and owing to Executive if
termination occurs under this Section, if Executive elects to terminate the
Agreement as a result of a Change in Control or for any other reason set forth
in clauses (i) through (v) above, then Executive shall have no further
obligation to perform services for the Company but shall be entitled to receive
from the Company the Severance Package (as defined above). In addition, all
options which would vest as of the next scheduled vesting date term shall become
immediately exercisable and all vested options shall remain exercisable for the
balance of their 10-year term.
(e) Payment of Termination Amounts. Executive may elect to have all
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amounts to be paid to Executive pursuant to this Section 6 payable (i) over the
remaining term of this Agreement or for such shorter period as expressly
provided for herein, as applicable, or (ii) in a lump sum within 30 days
following termination; provided, however, in each case, the Bonus component
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shall be payable as scheduled in Section 3(b) hereof. In the event Executive
elects to be paid pursuant to clause (i), Executive agrees promptly to notify
the Company in writing of Executive's acceptance of full-time employment; within
15 days after receipt of such notice, the Company shall pay Executive in a lump
sum any amounts which remain otherwise due to Executive hereunder.
(f) Stock and Similar Rights. Except with regard to the vesting and
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exercise dates of options as set forth in this Section 6, Executive's rights
under any other agreement or plan under which stock options, restricted stock or
similar awards are granted shall be determined in accordance with the terms and
provisions of such plans or agreements.
(g) No Mitigation or Offset. Payment of any sum under this Section 6
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shall not be subject to any claim of mitigation nor shall the Company be
entitled to any right of offset with respect thereto.
(h) Other Insurance Policies. Upon any termination of Executive's
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employment, and upon reimbursement of the Company of all amounts paid by the
Company in connection with such policies, Executive shall have the right to
purchase or otherwise direct the disposition or assignment of any disability
insurance policy on him held by the Company (excluding only group disability
insurance policies) upon the payment of One Dollar ($1.00) as the total
consideration for each such policy.
7. Change in Control. For purposes of this Agreement, a "Change in
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Control" shall mean the occurrence of any of the following events which occur
after the date hereof:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act ("Rule 13d-3")) of 20% or more of the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Voting Securities"); provided,
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however, that neither of the following acquisitions shall constitute a Change in
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Control; (i) any acquisition by the Company or (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
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the date hereof whose election, or nomination for election by the stockholders
of the Company, shall be approved by a vote of a least a majority of the
directors then compromising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board; or
(c) The election of a director absent the approval of both Executive
and Xxxxxx Xxxxxxxx; or
(d) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such reorganization,
merger or consolidation: (i) more than 60% of the combined voting power of the
then outstanding voting securities of the corporation resulting from such
reorganization, merger, or consolidation, which may be the Company (the
"Resulting Corporation") entitled to vote generally in the election of directors
(the "Resulting Corporation Voting Securities") shall then be owned
beneficially, directly or indirectly, by all or substantially all of the Persons
who were the beneficial owners of Outstanding Voting Securities immediately
prior to such reorganization, merger or consolidation, in substantially the same
proportions as their respective ownerships of Outstanding Voting Securities
immediately prior to such reorganization, merger, or consolidation; (ii) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company, the Resulting Corporation, and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 20% or more of the combined voting power of Outstanding Voting
Securities) shall own beneficially, directly or indirectly 20% or more of the
combined voting power of the Resulting Corporation Voting Securities; and (iii)
at least a majority of the members of the Board of the Resulting Corporation
shall have been members of the Incumbent Board at the time of the execution of
the initial agreement providing for such reorganization, merger or
consolidation; or
(e) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation (the "Buyer") with respect to which (x) following such sale or other
disposition, more than 60% of the combined voting power of securities of Buyer
entitled to vote generally in the election of directors ("Buyer Voting
Securities"), shall be owned beneficially, directly or indirectly, by all or
substantially all of the Persons who were the beneficial owners of the
Outstanding Voting Securities immediately prior to such sale or other
disposition, in substantially the same proportion as their respective ownership
of Outstanding Voting Securities, immediately prior to such sale or other
disposition; (y) no Person (excluding the Company and any employee benefit plan
(or related trust) of the
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Company or Buyer and any Person that shall immediately prior to such sale or
other disposition own beneficially, directly or indirectly, 20% or more of the
combined voting power of Outstanding Voting Securities), shall own beneficially,
directly or indirectly, 20% or more of the combined voting power or, Buyer
Voting Securities; and (z) at least a majority of the members of the board of
directors of Buyer shall have been members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board providing for such
sale or other disposition or assets of the Company.
8. Insurance. During the term, the Company shall maintain, at no cost to
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Executive, officers and directors liability insurance that would cover Executive
in an amount of no less than $5,000,000.
9. Registration Rights.
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(a) Piggyback Registration Rights. If at any time the Company shall
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propose to register any shares of Common Stock (but excluding any shares or
securities being registered pursuant to Form S-8 or Form S-4 or any successor
form thereto), the Company shall (i) give the Executive written notice, or
telegraphic, telecopy or telephonic notice followed as soon as practicable by
written confirmation thereof, of such proposed registration at least 20 business
days prior to the filing of such registration statement and, (ii) upon written
notice, or telegraphic or telephonic notice followed as soon as practicable by
written confirmation thereof, given to the Company by the Executive within 15
days after the giving of such written confirmation or written notice by the
Company, the Company shall include or cause to be included in any such
registration statement all or such portion of the shares of common stock of the
Company owned by Executive (the "Shares") as the Executive may request;
provided, however, that the Company may at any time withdraw or cease proceeding
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with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of the Common Stock originally proposed to be
registered; and provided further, that in connection with any registered public
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offering involving an underwriting, the managing underwriter may (if in its
reasonable opinion marketing factors so require) limit the number of securities
(including any Shares) included in such offering (other than securities of the
Company); and provided further, that the registration rights granted in this
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Section 9(a) are granted subject to the demand registration rights granted to CS
First Boston Corporation pursuant to that certain Warrant Agreement dated
October 2, 1996 between CS First Boston Corporation and the Company (the
"Warrant Agreement") which may serve to further limit or extinguish Executive's
right to include any portion of the Shares in certain registrations. In the
event of any such limitation, and to the extent the provisions of the Warrant
Agreement permit, the total number of Shares to be offered for the account of
Executive in the registration shall be reduced in proportion to the respective
number of shares requested to be included therein by all holders of the
Company's Common Stock (other than the Company) entitled to include shares of
Common Stock in the registration to the extent necessary to reduce the total
number of shares proposed to be registered to the number of shares recommended
by the managing underwriter.
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(b) Company's Obligations in Piggyback Registration. The following
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provisions shall also be applicable at the sole cost and expense of the Company
in the case of registrations under Section 7(a):
i) Following the effective date of such registration statement,
the Company shall, upon the request of Executive, forthwith supply such number
of prospectuses meeting the requirements of the Securities Act of 1933, as
amended (the "Securities Act") as shall be requested by Executive to permit
Executive to make a public distribution of all of the Shares, provided that
Executive shall from time to time furnish the Company with such appropriate
information (relating to the intentions of Executive) in connection therewith as
the Company shall request in writing.
ii) the Company shall bear the entire cost and expense of the
registration of securities provided for in this Section (but not the selling
expenses of Executive).
iii) the Company shall indemnify and hold harmless Executive from
and against any and all losses, claims, damages and liabilities (including
reasonable fees and expenses of counsel) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or any prospectus included therein required to be filed
or furnished by reason of this Section or otherwise or in any application or
other filing under, the Securities Act or any other applicable Federal or state
securities law, or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein (i.e., in any
such registration statement, prospectus, application or other filing) or
necessary to make the statements therein not misleading, to which such person
may become subject, or any violation or alleged violation by the Company to
which such Person may become subject, under the Securities Act, the Exchange Act
or other Federal or state laws or regulations, at common law or otherwise,
except to the extent that such losses, claims, damages or liabilities are caused
by any such untrue statement or alleged untrue statement or omission or alleged
omission based upon and in strict conformity with written information furnished
to the Company by such person expressly for use therein; provided however, that
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Executive shall at the same time indemnify the Company, its directors, each
officer signing the related registration statement, and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any and all losses, claims, damages and liabilities (including reasonable fees
and expenses of counsel) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or any prospectus included therein required to be filed or furnished
by reason of this Section, or otherwise or in any application or other filing
under, the Securities Act or any other applicable Federal or state securities
law, or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein (i.e., in any such
registration statement, prospectus, application or other filing) or necessary to
make the statements therein not misleading, to which such person may become
subject, or any violation or alleged violation by Executive to which the
Company, its directors, each officer signing the related registration statement,
and each person, if any, who controls the Company
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within the meaning of the Securities Act, may become subject, under the
Securities Act, the Exchange Act, or other Federal or state laws or regulations,
at common law or otherwise, to the extent that such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue statement
or omission or alleged omission based upon and in strict conformity with written
information furnished to the Company by Executive expressly for use therein.
iv) In the event any person entitled to indemnification hereunder
receives in writing a complaint, claim or other written notice of any loss,
claim, damage, liability or action giving rise to a claim for indemnification
under Section 10(b)(iii), the person claiming indemnification under Section
10(b)(iii) shall promptly notify the person or persons against whom
indemnification is sought (the "Indemnitor") of such complaint, notice, claim or
action, and the Indemnitor shall have the right to investigate and defend any
such loss, claim, damage, liability or action. The person claiming
indemnification shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Indemnitor. In no event shall
the Indemnitor be obligated to indemnify any person for any settlement of any
claim or action effected without the Indemnitor's consent, which consent shall
not be unreasonably withheld.
10. Waiver of Conflict.
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The Company hereby acknowledges that Employee had an equity interest in
Pacific Prime, a sole proprietorship, engaged in the origination of mortgage
loans and the subsequent sale of all or a portion of such loans to the Company.
The Company hereby waives any conflict of interest and/or claims for relief
relating to transactions that have occurred or may occur between Pacific Prime
and the Company.
11. General Provisions.
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(a) Notices. All notices, requirements, requests, demands, claims or
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other communications hereunder shall be in writing. Any notice, requirement,
request, demand, claim or other communication hereunder shall be deemed duly
given (i) if personally delivered, when so delivered, (ii) if mailed, two (2)
business days after having been set by registered or certified mail, return-
receipt requested, postage prepaid and addressed to the intended recipient as
set forth below, (iii) if given by telecopier, once such notice or other
communication is transmitted to the telecopier number specified below, and the
appropriate telephonic confirmation is received, provided that such notice or
other communication is promptly thereafter mailed in accordance with the
provisions of clause (ii) above or (iv) if sent through an overnight delivery
service under circumstances by which such service guarantees next day delivery,
the date following the date so sent:
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If to the Company, to:
---------------------
Preferred Credit Corporation
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
If to Executive to:
------------------
to the address set forth in
the records of the Company
Any party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
(b) Assignment. This Agreement and the benefits hereunder are
----------
personal to the Company and are not assignable or transferable, nor may be the
services to be performed hereunder be assigned by the Company to any person,
firm or corporation; provided however, that this Agreement and the benefits
-------- -------
hereunder may be assigned by the Company to any corporation into which the
Company may be merged or consolidated, and this Agreement and the benefits
hereunder will automatically be deemed assigned to any such corporation,
subject, however, to Executive's right to terminate this Agreement to the extent
provided in Section 6. In the event of any assignment of this Agreement to any
corporation acquiring all or substantially all of the assets of the Company or
to any other corporation into which the Company may be merged or consolidated,
the responsibilities and duties assigned to Executive by such successor
corporation shall be the responsibilities and duties of, and compatible with the
status of, a senior executive officer of such successor corporation. The
Company may delegate any of its obligations hereunder to any subsidiary of the
Company, provided that such delegation shall not relieve the Company of any of
its obligations hereunder. Executive may not assign its rights hereunder or
delegate his duties hereunder to any Person.
(c) Complete Agreement. This Agreement contains the entire agreement
------------------
among the parties hereto with respect to the subject matter hereof and
supersedes and cancels any and all previous written or oral negotiations,
commitments, understandings, agreements and any other writings or communications
in respect of such subject matter.
(d) Amendments. This Agreement may be modified, amended, superseded
----------
or terminated only by a writing duly signed by both parties.
(e) Severability. Any provision of this Agreement which is invalid,
------------
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such
12
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
(f) No Waiver. Any waiver by either party of a breach of any
---------
provisions of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of either party to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or to deprive such party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(g) Binding Effect. This Agreement shall be binding on, and shall
--------------
inure to the benefit of, the parties hereto and their permitted assigns,
successors and legal representatives.
(h) Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same document.
(i) Governing Law. This Agreement has been negotiated and entered
-------------
into in the State of California and shall be construed in accordance with the
laws of the State of California.
(j) Headings. The headings included in this Agreement are for the
--------
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer and Executive has executed the same as
of the day and year first above written.
PREFERRED CREDIT CORPORATION
-----------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
XXXX XXXXXXXXX
-----------------------------------------
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