SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 4, 1997
MONACO FINANCE, INC.
(Exact Name of Registrant as Specified in Charter)
Colorado 0-18819 84-1088131
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
370 Seventeenth Street, Suite 5060
Denver, Colorado 80202
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (303) 592-9411
N/A
(Former Name or Former Address, if Changed Since Last Report)
Total number of pages is 33.
The exhibit index appears at sequential page no. 3
<PAGE>
ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
On or about December 4, 1997, Consumer Finance Holdings, Inc. ("CFH") and
Morris Ginsburg, Sandler Family Partners, Ltd., and Irwin L. Sandler
(collectively the "Shareholders") entered into an Option Agreement effective
as of that date. CFH is a wholly-owned subsidiary of Pacific USA Holdings
Corp. ("Pacific USA"). Messrs. Ginsburg and Sandler are executive officers and
directors of Monaco Finance, Inc. (the "Company"). Pursuant to the Option
Agreement, the Shareholders granted a three-year option to CFH (the "Call
Option") to purchase all, but not less than all, of the 830,000 shares of
Class B Common Stock owned by the Shareholders (the "Option Shares") at a
purchase price of $4.00 per share. Concurrently, CFH granted to each
Shareholder a three-year option (the "Put Option") to sell that portion of the
Option Shares held by each Shareholder at a price of $4.00 per share. The Put
Option is exercisable with respect to 50% of the Option Shares during the
30-day period following the second anniversary of the effective date and 50%
during the 30-day period following the third anniversary of the effective
date. The Call Option and Put Option both expire on the third anniversary date
of the effective date, or on December 4, 2000. In the event that CFH or any of
its affiliates exercises the Call Option, and within 180 days after closing
thereof, sells or agrees to sell any portion of the Option Shares to a person
who is not an affiliate of CFH for a price greater than $4.00 per share, the
seller shall be obligated to pay the Shareholders 50% of such excess. The
Shareholders agreed not to pledge, sell or otherwise transfer the Option
Shares at any time during the term of the Call Option except to the extent of
exercise of the Put Option. The obligation of CFH under the Put Option is
secured by funds in a segregated bank account.
Pursuant to the Option Agreement, each Shareholder granted CFH the right
to vote all Option Shares and to direct the exercise of all consensual or
other voting rights with respect to any additional shares of the Company's
capital stock as to which any Shareholder holds a proxy granted by a third
party, subject to any fiduciary duty owed to the grantor of any such proxy.
The Shareholders retain all other incidents of ownership with respect to the
Option Shares, including, but not limited to, the right to receive dividends.
The Option Agreement further provides that CFH shall vote or cause to be
voted shares of the Company's capital stock, including the Option Shares, to
maintain Messrs. Ginsburg and Sandler as directors of the Company. The
Shareholders agree to use their best efforts to provide CFH with the right to
designate four directors to the Company's board or such larger number as shall
then be sufficient to provide CFH with effective control of the board. As of
the date hereof, the board consists of four members.
Pacific USA is the record owner of 1,500,000 shares of Class A Common
Stock. As a result of the Option Agreement, it was granted the power to vote
the 830,000 shares of Class B Common Stock owned by the Shareholders and a
limited power to direct the voting of shares subject to proxies held by the
Shareholders. As of the date of this report, 7,203,379 shares of Class A
Common Stock are issued and outstanding and 1,273,715 shares of Class B Common
Stock are issued and outstanding. The Class A Common Stock has one vote per
share while the Class B Common Stock has three votes per share. The Class A
and Class B Common Stock vote together as one class. Accordingly, Pacific USA
may be deemed to be the beneficial owner of approximately 32.7% of the Class A
Common Stock and controls approximately 48.3% of the total voting power. Upon
exercise of either the Put Option or the Call Option, the Class B Common Stock
purchased by CFH will automatically convert into Class A Common Stock thereby
reducing the voting power of Pacific USA.
On or about May 14, 1993, the Company, Sandler Family Partners, and
Messrs. Ginsburg and Sandler entered into a Buy-Sell Agreement giving the
Company the right to buy all shares of its capital stock owned by Mr. Ginsburg
upon his death and all shares of its capital stock beneficially owned by Mr.
Sandler upon his death. In addition, the Company had a right of first refusal
to purchase any such stock desired to be sold by Mr. Ginsburg or Sandler
Family Partners. This right of first refusal was exercisable by either the
Issuer or the non-selling Shareholder. The parties to the Buy-Sell Agreement
have agreed that the purchase rights and obligations under the Option
Agreement shall supersede the purchase and right of first refusal provisions
contained in the Buy-Sell Agreement during the term of the Option Agreement.
Concurrently, the Company entered into Executive Employment Agreements
with Messrs. Ginsburg and Sandler (the "Executives") whereby Mr. Ginsburg is
<2>
<PAGE>
employed as president and chairman of the board and Mr. Sandler is employed as
executive vice president. He also presently serves as corporate secretary and
treasurer. The employment agreements each have a term of three years,
beginning December 4, 1997. The employment agreements provide for an annual
base salary for Messrs. Ginsburg and Sandler of $310,000 and $290,000,
respectively, and the same fringe benefits as are provided to other executive
level employees from time to time. Benefits include, without limitation, the
right to participate in stock option grants.
The employment agreements contain confidentiality, non-competition and
non-solicitation covenants by the Executives which apply for a period of two
years following expiration of the Executive's employment for any reason other
than death. As consideration for these covenants, the Company agreed to pay
each Executive the sum of $300,000 in two equal installments without interest,
with the first installment due on the first anniversary date of the
commencement of the two-year period and the second installment due on the
second anniversary date thereof.
The Company is in negotiations with Pacific USA, CFH and other
subsidiaries of Pacific USA regarding the acquisition from the subsidiaries of
a portfolio of sub-prime automobile loans. To date, the negotiations
contemplate that a portion of the purchase price will be paid in shares of the
Company's Class A Common Stock and in securities convertible into such shares.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
10.57 Option Agreement effective as of December 4, 1997, by and
between Consumer Finance Holdings, Inc. and Morris Ginsburg, Sandler Family
Partners, Ltd., and Irwin L. Sandler
10.58 Irrevocable Proxy and Power of Attorney dated December 4, 1997,
granted by Morris Ginsburg
10.59 Irrevocable Proxy and Power of Attorney dated December 4, 1997,
granted by Sandler Family Partners, Ltd.
10.60 Executive Employment Agreement between Registrant and Morris
Ginsburg
10.61 Executive Employment Agreement between Registrant and Irwin L.
Sandler
10.62 First Amendment to Buy-Sell Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONACO FINANCE, INC
Date: December 12, 1997 By: /s/ MORRIS GINSBURG
------------------ -------------------
<3>
<PAGE>
EXHIBIT 10.57
OPTION AGREEMENT
by and among
Consumer Finance Holdings, Inc.
and
Morris Ginsburg, Sandler Family Partners, Ltd.,
and Irwin L. Sandler
Effective as of
December 4, 1997
<3>
<PAGE>
OPTION AGREEMENT
This OPTION AGREEMENT (this "Agreement"), effective as of December 4,
1997 (the "Effective Date"), is made and entered into by and among Consumer
Finance Holdings, Inc., a Nevada corporation ("Optionee"), and each of Morris
Ginsburg ("Ginsburg"), Sandler Family Partners, Ltd., a Colorado limited
partnership ("Sandler Partners"), and Irwin L. Sandler ("Sandler" and,
together with Ginsburg and Sandler Partners, the "Shareholders").
WHEREAS, Ginsburg and Sandler Partners are the owners of 580,000 and
250,000 shares, respectively, of Class B Common Stock, par value $0.01 per
share ("Class B Common Stock" or the "Shares"), of Monaco Finance, Inc., a
Colorado corporation (the "Company");
WHEREAS, the Shareholders are willing to grant to Optionee an option to
purchase the Shares upon the terms of this Agreement, and to agree to the
additional terms and conditions of this Agreement, including the provisions
regarding voting of the Shares contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. DEFINITIONS. The following terms when used in this Agreement
shall have the following meanings:
"Affiliate" means, with respect to a person, any corporation or other
entity in which such person has a direct or indirect controlling interest or
by which such person is directly or indirectly controlled or which is under
direct or indirect common control with such person.
"Business Day" means any day which is not a Saturday or a Sunday, or a
day on which banks in the State of Colorado are not authorized or required to
close.
<4>
<PAGE>
"Common Stock" shall mean the Company's Class A Common Stock, par value
$0.01 per share, and the Class B Common Stock, par value $0.01 per share.
"Effective Date" shall mean December 4, 1997.
"Lien or Other Encumbrance" means any lien, pledge, mortgage, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement or
encumbrance.
"Shares" or "Option Shares" mean (i) the 830,000 shares of Class B
Common Stock owned by Shareholders, (ii) any shares of Common Stock issued in
respect of any subdivision, split or dividend on the shares of Class B Common
Stock described in subparagraph (i), and (iii) in the event the Company at any
time shall be a party to a recapitalization of the Class B Common Stock in
which the previously outstanding Class B Common Stock shall be changed into or
exchanged for different securities of the Company, any such other securities
received in respect of such shares of Class B Common Stock.
2. OPTION TO PURCHASE SHARES.
(a) Grant of Option; Exercise. Effective as of the Effective Date,
each of the Shareholders hereby grants to the Optionee an irrevocable option
(the "Option") to purchase that portion of the Shares held by such person at a
price of $4.00 per share, subject to adjustment as provided in Section 2(e)
(as adjusted, the "Option Price"). The Option shall be exercisable commencing
on the Effective Date and ending on the third anniversary of the Effective
Date (the "Option Term"). In the event the Optionee elects to exercise the
Option, the Optionee shall (i) notify the Shareholders of such election by
delivering a written notice to that effect setting forth the date for the
consummation of the purchase (such date being referred to as the "Option
Closing Date"), which date shall be not earlier than ten (10) days or later
than thirty (30) days from the date the notice is delivered and (ii) to the
extent one-half of the Security (hereinafter defined) has been released in
accordance with the last sentence of Paragraph 2(b) hereof, replenish the
Security, on the date of exercise of the Option, to an amount equivalent to
100% of the Option Price. The Optionee shall have the right to exercise the
Option as to all, but not less than all, of the Shares.
(b) Security. Simultaneously with the execution hereof, Optionee
shall provide as security for the full and prompt performance of its
obligations to pay the Put Price (as hereinafter defined) in the form of cash,
a letter of credit or other collateral reasonably acceptable to Shareholders
and sufficient, upon payment, collection or sale to pay the full amount due
from Optionee upon a full exercise of the Put (i.e. without regard to any
provisions for partial or installment exercise or installment payment) under
this Agreement (the "Security"), which Security will be pledged to the
Shareholders pursuant to the terms and conditions of a Pledge Agreement which
will be acceptable to Optionee and Shareholders. If the first Put is not
exercised in the First Put Period, then immediately following the expiration
of the First Put Period, one-half of the Security shall be released from the
pledge agreement. The Security shall initially be cash. The Shareholders
agree that the Optionee may, at its election, substitute a letter of credit
for the cash at any time by delivering to each of the Shareholders one or more
letters of credit, in form and substance acceptable to each such Shareholder,
aggregating the Put Price for each such Shareholder's Shares.
(c) Payment of Option Price. On the Option Closing Date, the
Optionee shall pay to each of the Shareholders an amount equal to the number
of Shares being sold by such person multiplied by the Option Price. Such
amount shall be paid by wire transfer of immediately available funds to such
account or accounts of the Shareholders as the Shareholders shall designate to
the Optionee, in the manner specified herein for the delivery of notices, not
less than three (3) Business Days prior to the Option Closing Date. In the
event that the Optionee defaults on its obligation to pay the Option Price on
the Option Closing Date, the Shareholders may elect to foreclose on the
Security and complete the sale of the Shares; provided, that if the
Shareholders elect not to so complete the sale of the Shares, Optionee shall
have no further rights pursuant to this Agreement.
<5>
<PAGE>
(d) Delivery of Shares. On the Option Closing Date, the
Shareholders shall deliver to the Optionee stock certificates representing all
of the Shares being purchased by the Optionee, duly endorsed in blank or
accompanied by duly executed instruments of transfer, or registered in the
name of the Optionee.
(e) Option Price Adjustments. In the event the Company shall at
any time subdivide or split its outstanding shares of Class B Common Stock
into a greater number of shares or declare any dividend on the Class B Common
Stock payable in shares of Common Stock, the Option Price in effect
immediately prior to such subdivision, split, or dividend shall be
proportionately decreased, and conversely, in case the outstanding shares of
Class B Common Stock shall be combined into a smaller number of shares, the
Option Price in effect immediately prior to such combination shall be
proportionately increased.
(f) Sale or Transfer of Shares by Optionee. In the event that the
Optionee or any Affiliate of Optionee exercises the Option and within 180 days
of the Option Closing Date, Optionee or any Affiliate of Optionee sells, or
agrees to sell, all or any portion of the Shares to a person who is not an
Affiliate of the Optionee for a price per share greater than $4.00 per share,
Optionee or its Affiliate shall be obligated to pay to the Shareholders, in
proportion to the number of shares previously held by them, 50% of such excess
purchase price per share. Such payment shall be made to the Shareholders
within two (2) business days after receipt of the purchase price by Optionee
or its Affiliate from such third party purchaser. Optionee shall notify the
Shareholders in writing at least ten (10) days prior to the consummation of
any such sale or agreement of the fact of such sale or agreement. Any sale of
Common Stock by Optionee or its Affiliate shall be deemed to include Shares in
the same proportion that the Shares bear to the aggregate amount of Common
Stock held by Optionee and its Affiliates immediately prior to such sale. The
provision of this Section 2(f) shall apply to any Affiliate of Optionee.
(g) Encumbrance on Shares. Until the expiration of the Option Term,
none of the Shareholders shall pledge or otherwise encumber the Shares or,
except as set forth in Section 3 hereof, sell, assign, transfer or grant any
other rights in the Shares or take any other action inconsistent with the
Option.
(h) Legend. On the Effective Date, the Shareholders shall deliver
the Shares to the Company and instruct the Company to place the following
legend on each certificate representing the Shares and record corresponding
stop transfer instructions to its transfer agent:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF AN
OPTION AGREEMENT DATED AS OF DECEMBER 4, 1997 BY AND AMONG CONSUMER FINANCE
HOLDINGS, INC., MORRIS GINSBURG, SANDLER FAMILY PARTNERS, LTD., AND IRWIN L.
SANDLER. COPIES OF SUCH AGREEMENT ARE ON FILE WITH THE SECRETARY OF MONACO
FINANCE, INC.
The Optionee shall instruct the Company to return the legended Shares as
promptly as practicable to the Shareholders.
(i) Release from Option. Upon any permitted sale by the
Shareholders under Section 3 hereof or upon expiration of the Option granted
hereunder, the Shares shall be released from the terms of this Option, and the
Shareholders shall be entitled to request the Company to remove the legend
called for by Section 2(h) from the certificates evidencing such shares and
terminate the stop transfer instructions in respect of such shares. Except as
herein expressly provided, none of the Shareholders shall take any action to
remove the legend described in Section 2(h) from the certificates evidencing
the Shares.
3. RIGHT TO SELL.
(a) Grant of Put. The Optionee hereby grants to each Shareholder
during the Option Term an irrevocable option, exercisable during the Option
Term (the "Put"), to sell that portion of the Shares held by each such
<6>
<PAGE>
Shareholder at a price of $4.00 per share, subject to adjustment as provided
in Section 3(d) (as adjusted, the "Put Price"). The Put shall be exercisable
by a Shareholder with respect to (i) up to 50% of the Shares held by such
Shareholder as of the date hereof during the 30-day period following the
second anniversary of the Effective Date (the "First Put Period"), and (ii) up
to 50% of the Shares held by such Shareholder as of the date hereof during the
30-day period following the third anniversary of the Effective Date (the
"Second Put Period"). In the event any Shareholder elects to exercise the
Put, such Shareholder shall notify the Optionee of such election by delivering
a written notice (the "Put Notice") to the Optionee during the First Put
Period or the Second Put Period, as the case may be, which shall set forth the
fact of such election.
(b) Payment of Put Price. On the date of the consummation of the
purchase of the Shares subject to a Put (such date being referred to as the
"Put Closing Date"), which date shall be not earlier than 10 days or later
than 30 days from the date a Put Notice is delivered, as determined by the
Optionee, the Optionee shall pay to the Shareholder who has delivered such Put
Notice an amount equal to the number of Shares being put by such person,
multiplied by the Put Price (the "Put Payment"). The Put Payment shall be
paid by wire transfer of immediately available funds to such account or
accounts of the Shareholder as the Shareholder exercising the Put shall
designate to the Optionee, in the manner specified herein for the delivery of
notices, not less than three (3) Business Days prior to the Put Closing Date.
(c) Delivery of Option Shares. On the Put Closing Date, the
Shareholder exercising the Put shall deliver to the Optionee stock
certificates representing all of the Shares being purchased by the Optionee,
duly endorsed in blank or accompanied by duly executed instruments of
transfer, or registered in the name of the Optionee.
(d) Put Price Adjustments. In the event the Company shall at any
time subdivide or split its outstanding shares of Class B Common Stock into a
greater number of shares or declare any dividend of the Class B Common Stock
payable in shares of Common Stock, the Put Price in effect immediately prior
to such subdivision, split, or divided shall be proportionately decreased, and
conversely, in case the outstanding shares of Class B Common Stock shall be
combined into a smaller number of shares, the Put Price in effect immediately
prior to such combination shall be proportionately increased.
4. VOTING AGREEMENTS.
(a) Voting Agreement. Each Shareholder hereby grants Optionee the
right, for a period commencing on the Effective Date and ending on the third
anniversary of the Effective Date (the "Voting Period"), to vote the Option
Shares (on the basis of three votes per share rather than one vote per share
of the Company Class A Common Stock, par value $0.01 per share), at all
meetings of shareholders of the Company, to cause such Option Shares, and such
additional shares of capital stock of the Company to which he or the
Shareholders hold a proxy granted by a third party, to be counted as present
at any such meetings for purposes of establishing a quorum and to exercise all
consensual or other voting rights with respect to the Option Shares and
additional shares, in each case in such manner as Optionee, in its sole
discretion, shall determine by written notice to the Shareholders, provided
that voting any shares of capital stock as to which he or the Shareholders
hold a proxy granted by a third party in the manner directed by Optionee shall
be consistent with any fiduciary duty owed by him or the Shareholder to the
grantor of such proxy. Each of the Shareholders hereby acknowledges that the
grant of rights under this Section 4(a): (i) is consistent with Section
7-107-302 of the Colorado Business Corporation Act, and (ii) is coupled with
an interest and is intended by all parties to this Agreement to be irrevocable
during the Voting Period.
(b) Irrevocable Proxies. To secure each Shareholder's obligation
to vote that person's Option Shares in accordance with the provisions of this
Agreement, each Shareholder shall, simultaneously with the execution of this
Agreement, execute one, and thereafter if need be more than one, irrevocable
proxy, substantially in the form attached hereto, pursuant to Section
7-107-203 of the Colorado Business Corporation Act, in favor of Optionee or
its designee, permitting Optionee or its designee to vote all Option Shares
owned by such Shareholder during the Voting Period, and each such Shareholder
shall deliver such proxies to Optionee.
(c) Deposit with the Company. A counterpart of this Agreement
shall be deposited with the Company at its principal office and shall be
subject to the same rights of examination by a shareholder of the Company, in
<7>
<PAGE>
person or by agent or attorney, as are the books and records of the Company.
The Shareholders covenant and agree that each certificate representing Option
Shares shall contain a statement that the shares represented by the
certificate are subject to the provisions of this Agreement, a counterpart of
which has been deposited with the Company at its principal office.
(d) Economic Rights to Option Shares. Except for the voting rights
provided in this Agreement, and subject to the option of Optionee set forth in
Section 2 hereof, the Shareholders shall retain all incidents of ownership
with respect to the Option Shares, including, but not limited to, the right to
receive dividends.
(e) Board of Directors. Until the earlier of termination of this
Agreement or acquisition by Optionee of all the Option Shares pursuant to this
Agreement, Optionee shall vote (and shall cause each of its Affiliates to
vote) its shares of capital stock of the Company, as well as the Option
Shares, to maintain Morris Ginsburg and Irwin L. Sandler as directors of the
Company. Following the Effective Date, the Shareholders shall use their best
efforts to provide the Optionee with the right to designate four directors to
the Company's Board of Directors, or such larger number as shall then be
sufficient to provide the Optionee with effective control of the Company's
Board of Directors. It is understood and agreed that this best efforts
commitment of the Shareholders may require them, among other things, to
procure resignations from directors currently sitting on the Company's Board
of Directors.
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS.
Each of the Shareholders hereby severally represents and warrants to
Optionee with respect to only those matters concerning such Shareholder that:
(a) Organization and Power. Sandler Partners is a partnership duly
organized, validly existing and in good standing under the laws of the State
of Colorado. Each of the Shareholders has all requisite power and authority
to execute and deliver this Agreement and to perform his or its obligations
hereunder (including, without limitation, the power to sell, transfer and
convey the Shares as provided by this Agreement).
(b) Execution, Delivery; Valid and Binding Agreements. The
execution, delivery and performance of this Agreement by Sandler Partners and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all requisite partnership action, and no other
partnership proceedings on its part are necessary to authorize the execution,
delivery and performance of this Agreement. This Agreement has been duly
executed and delivered by the Shareholders and constitutes the valid and
binding obligation of the Shareholders, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by general principles of equity.
(c) No Breach. The execution, delivery and performance of this
Agreement by the Shareholders and the consummation by the Shareholders of the
transactions contemplated hereby do not conflict with or result in any breach
of any of the provisions of, constitute a default under, result in a violation
of, result in the creation of a right of termination or acceleration or any
lien, security interest, charge or encumbrance upon any of the Shares, or
require any authorization, consent, approval, exemption or other action by or
notice to any court or other governmental body, under the provisions of the
partnership agreement of Sandler Partners or any agreement or instrument by
which any of the Shareholders is bound or affected, or any law, statute, rule
or regulation or order, judgment or decree to which any of Shareholders or the
Company is subject.
(d) Governmental Authorities; Consents. To the best of
Shareholders' knowledge, except for appropriate filings on Schedule 13D and
Form 4, none of the Shareholders is required to submit any notice, report or
other filing with any governmental authority in connection with the execution
or delivery by it of this Agreement or the consummation of the transactions
contemplated hereby. No consent, approval or authorization of any
<8>
<PAGE>
governmental or regulatory authority or any other party or person is required
to be obtained by the Shareholders or by the Company in connection with its
execution, delivery and performance of this Agreement or the transactions
contemplated hereby, except such as have been duly obtained or made, as the
case may be, and are in full force and effect on the date hereof and will
continue to be in full force and effect on the Closing Date.
(e) Ownership of Capital Stock. The Shareholders own, beneficially
and of record, all right, title and interest in and to the shares free and
clear of any Lien or Other Encumbrance (except the Buy-Sell Agreement dated
May 14, 1993 among the Company, Sandler Partners and Ginsburg, which will
remain in effect subject to the Option granted hereby and the Company, by its
execution of this Agreement, agrees that to the extent it becomes the owner of
any Shares pursuant to such Buy-Sell Agreement, such Shares shall remain
subject to this Agreement and the Company will substitute an Option Agreement
on similar terms) and have full power and authority to transfer good and valid
title to the Shares to Optionee, free and clear of any Lien or Other
Encumbrance, and, upon delivery of any payment of such Shares as provided
herein, Optionee will acquire good tile, thereto, free and clear of any Lien
or Other Encumbrance.
(f) Options or Other Rights. Except for the rights granted to
Optionee hereunder and the Buy-Sell Agreement dated May 14, 1993 among the
Company and the Shareholders, there is no outstanding right, subscription,
warrant, call, unsatisfied preemptive right, option or other agreement of any
kind to purchase or otherwise receive from any of the Shareholders any of the
Shares.
6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby
represents and warrants to Shareholders that:
(a) Organization and Power. Optionee is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada, with the requisite power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) Execution, Deliver; Valid and Binding Agreement. The
execution, delivery and performance of this Agreement by Optionee and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by al requisite action, and no other proceedings on its
part are necessary to authorize the execution, delivery or performance of this
Agreement. This Agreement has been duly executed and delivered by Optionee
and constitutes the valid and binding obligation of Optionee, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights or by general
principles of equity.
(c) No Breach. The execution, delivery and performance of this
Agreement by Optionee and the consummation by Optionee of the transactions
contemplated hereby do not conflict with or result in any breach of any of the
provisions of, constitute a default under, result in a violation of, result in
the creation of a right of termination or acceleration or any lien, security
interest, charge or encumbrance upon any assets of Optionee, or require any
authorization, consent, approval, exemption or other action by or notice to
any court of other governmental body, under the provisions of the articles of
organization of Optionee or any indenture, mortgage, lease, loan agreement or
other agreement or instrument by which Optionee is bound or affected, or any
law, statute, rule or regulation or order, judgment or decree to which
Optionee is subject;
(d) Governmental Authorities; Consents. To the best of Optionee's
knowledge, except for appropriate filings on Schedule 13D and Form 4, Optionee
is not required to submit any notice, report or other filing with any
governmental authority in connection with the execution or delivery by it of
this Agreement or the consummation of the transactions contemplated hereby. No
consent, approval or authorization of any governmental or regulatory authority
or any other party or person is required to be obtained by Optionee in
connection with its execution, delivery and performance of this Agreement or
the transactions contemplated hereby.
(e) Investment Intent. Upon exercise of the Option, Optionee shall
purchase the Shares for its own account with the present intention of holding
the Shares for investment purposes and not with a view to or for sale in
<9>
<PAGE>
connection with any distribution of the Shares in violation of any applicable
securities law. Optionee will refrain from transferring or otherwise
disposing of any of the Shares, or any interest therein, in such manner as to
cause Shareholders to be in violation of the registration requirements of the
Securities Act of 1933, as amended, or applicable state securities or blue sky
laws.
7. COVENANTS OF THE PARTIES.
(a) Covenants Pending Closing. From the date hereof through the
Closing Date, each of Optionee and the Shareholders shall conduct its or his
affairs in such a manner so that, except as otherwise contemplated or
permitted by this Agreement, all of its representations and warranties in this
Agreement remain true and correct on and as of the Closing Date as if made on
and as of the Closing Date, and all its covenants contained in this Agreement
remain capable of performance. Optionee and Shareholders shall promptly
advise the other parties of any action or event of which any of them become
aware that has, or could have, the effect of making incorrect any of its
representations or warranties in any material respect or which has the effect
of rendering any of its covenants incapable of performance.
(b) Regulatory Filings. As promptly as practicable after the
execution of this Agreement, Optionee and Shareholders shall, and shall cause
the Company to, make or cause to be made all filings and submissions under any
laws or regulations applicable to Optionee, Shareholders and the Company for
the consummation of the transactions contemplated herein. Optionee and
Shareholders will coordinate and cooperate with each other in exchanging such
information and will provide such reasonable assistance as any party may
request in connection with all of the foregoing.
8. CONDITIONS TO OPTIONEE'S OBLIGATIONS.
The obligation of Optionee to consummate the transactions contemplated by
this Agreement with respect to a particular Shareholder is subject to the
satisfaction of the following conditions on or before the Option Closing Date
or the Put Closing Date, as the case may be.
(a) Accuracy of Representations and Warranties. The
representations and warranties of such Shareholder set forth in Section 5
hereof shall be true and correct in all material respects at and as of the
Option Closing Date or the Put Closing Date, as the case may be as though then
made.
(b) Performance of Covenants. Such Shareholder shall have
performed in all material respects all of the covenants and agreements
required to be performed and complied with by such Shareholder under this
Agreement prior to the Option Closing Date or the Put Closing Date, as the
case may be.
(c) Approvals. Such Shareholder shall have obtained, or caused to
be obtained, each consent and approval required to be obtained by them to
effectuate the transactions contemplated hereby.
(d) Governmental Filings. All material governmental filings,
authorizations and approvals that are required by such Shareholder for the
effectuation of the transactions contemplated hereby shall have been duly made
and obtained.
(e) Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature against Optionee
issued by a court of competent jurisdiction directing that the transactions
provided for herein or any of them not be consummated as provided in this
Agreement.
(f) Evidence of Legending. The certificates representing the
Shares shall have been legended as required by Section 2(h) and corresponding
stop transfer instructions shall have been given to the Company's transfer
agent.
9. CONDITIONS TO SHAREHOLDERS' OBLIGATIONS.
<10>
<PAGE>
The obligation of the Shareholders to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following
conditions on or before the Option Closing Date or the Put Closing Date, as
the case may be:
(a) Accuracy of Representations and Warranties. The
representations and warranties set forth in Section 6 hereof shall be true and
correct in all material respects at and as of the Option Closing Date or the
Put Closing Date, as the case may be as though then made.
(b) Performance of Covenants. Opionee shall have performed in all
material respects all of the covenants and agreements required to be performed
and complied with by it under this Agreement prior to the Option Closing Date
or the Put Closing Date, as the case may be.
(c) Approvals. Optionee shall have obtained, or caused to be
obtained, each consent and approval required to be obtained by Optionee to
effectuate the transactions contemplated hereby.
(d) Governmental Filings. All material governmental filings,
authorizations and approvals that are required by Optionee for the
effectuation of the Transactions contemplated hereby shall have been duly made
and obtained.
(e) Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature against the
Shareholders issued by a court of competent jurisdiction directing that the
transactions provided for herein or any of them not be consummated as provided
in this Agreement.
10. MISCELLANEOUS.
(a) Waivers, Amendments and Approvals. This Agreement constitutes
the entire agreement among the Parties relating to the subject matter hereof.
This Agreement may be amended, superseded, canceled, renewed or extended, and
the terms hereof may be waived, only by a written instrument signed by the
parties or, in the case of waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver or, the part
of any party of any such right, power or privilege, nor any single or partial
exercise of such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
(b) Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall
be personally delivered, transmitted via facsimile or overnight courier
service or mailed first-class postage prepaid, registered or certified mail,
(i) if to any Shareholder, addressed to such holder at its address
below his/its signature hereon, or at such other address or to such facsimile
telephone number as such holder may specify by written notice to the Company,
or
(ii) if to Optionee, at 5999 Summerside Drive, Suite 112, Dallas,
Texas 75252, Attention: Bill C. Bradley with a copy to 3200 Southwest
Freeway, Suite 1220, Houston, Texas 77027, Attention: Cathryn L. Porter; or at
such other address as Optionee may specify by written notice to the
Shareholders,
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given on the date when
personally delivered, or when transmitted by facsimile (if confirmation of
facsimile receipt has been given), or on the date after being deposited with
an overnight courier service, or, if sent by mail, four days after deposit in
the United States mail, postage prepaid.
<11>
<PAGE>
(c) Specific Performance. Subsequent to the Effective Date, the
parties shall be entitled to specific enforcement of their respective rights
under this Agreernent, and to recover damages by reason of any breach of any
provision hereof by the other party hereto and to exercise all other rights
existing in their favor. The parties agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this
Agreement and that the other party may, in its sole discretion, apply to any
court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(d) Arbitration of Disputes.
(i) Any controversy or claim arising out of this Agreement other than
under Sections 2 or 4 of this Agreement, or any breach of this Agreement other
than under Sections 2 or 4 of this Agreement, shall be settled by arbitration
in accordance with the Rules of the American Arbitration Association then in
effect, as modified by this Section 10(d) or by the further agreement of the
parties.
(ii) Such arbitration shall be conducted in Denver, Colorado.
(iii) Any judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The arbitrators shall not,
under any circumstances, have any authority to award punitive, exemplary or
similar damages, and may not, in any event, make any ruling, finding or award
that does not conform to the terms and conditions of this Agreement.
(iv) Nothing contained in this Section 10(d) shall limit or restrict
in any way the right or power of a party at any time to seek injunctive relief
in any court and to litigate the issues relevant to such request for
injunctive relief before such court (A) to restrain the other party from
breaching this Agreement or (B) for specific enforcement of this Section
10(d). The parties agree that any legal remedy available to a party with
respect to a breach of this Section 10(d) will not be adequate and that, in
addition to all other legal remedies, each party is entitled to an order
specifically enforcing this Section 10(d).
(v) The parties to this Agreement hereby consent to the jurisdiction
of the federal, courts located within Denver, Colorado for all purposes.
(vi) Neither party nor the arbitrators may disclose the existence or
results of any arbitration under this Agreement or any evidence presented
during the course of the arbitration without the prior written consent of both
parties, except as required to fulfill applicable disclosure and reporting
obligations, or as otherwise required by law.
(vii) Each party shall bear its own costs incurred in the
arbitration, provided that, in any claim based on an allegation of fraud or
misrepresentation in connection with this Agreement, the attorneys' fees of
both parties shall be borne by the non-prevailing party. The arbitrator's
fees and expenses of any dispute submitted to arbitration hereunder shall be
allocated among the parties who are subject to the arbitration by the
arbitrator so as to charge such fees and expenses proportionately to the party
or parties whose positions are not sustained, which allocation shall be
determined by the arbitrator as part of his decision. The parties agree that
judgment may be entered in any court of competent jurisdiction upon any award
of the arbitrator.
(e) Parties in Interest; Assignment. All the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors of the parties hereto. Optionee may
freely assign this Agreement, provided that any such assignment will not
release Optionee its obligations under Section 3 hereof. Except as set forth
in the preceding sentence, no party may assign its rights or obligations under
this Agreement.
<12>
<PAGE>
(f) Headings. The headings of the articles and sections of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
34
(g) Choice of Law. The substantive laws of Colorado and applicable
federal law shall govern the validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties
hereunder.
(h) Counterparts. This Agreement may be executed concurrently in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the Optionee and the Shareholders has caused
this Agreement to be executed by its duly authorized representative.
CONSUMER FINANCE HOLDINGS, INC.,
a Nevada corporation
By:/s/BILL C. BRADLEY
Name: Bill C. Bradley
Title: Chief Executive Officer
MORRIS GINSBURG
MORRIS GINSBURG
Address:
5801 Happy Canyon Dr.________
Englewood, CO 80111_________________
/s/ Irwin L. Sandler________________
IRWIN L. SANDLER
Address:
9468 East Lak Avenue________________
Englewood, CO 80111_________________
SANDLER FAMILY PARTNERS, LTD.
By: /s/ Irwin L. Sandler________
Irwin L. Sandler, General Partner
Address:
9468 East Lak Avenue________________
Englewood, CO 80111_________________
<13>
<PAGE>
ACKNOWLEDGMENT OF COMPANY
The Company hereby acknowledges receipt of a copy of the foregoing Agreement
and agrees to be bound by the provisions of Paragraph 5(e) of the foregoing
Agreement.
MONACO FINANCE, INC.
By: /s/ Morris Ginsburg______
Name: Morris Ginsburg
Title:President
<14>
<PAGE>
EXHIBIT 10.58
IRREVOCABLE PROXY AND SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that I, MORRIS GINSBURG, in connection
with the execution of the Option Agreement , dated December 4, 1997 (the
"Option Agreement"), by and among Consumer Finance Holdings, Inc., Morris
Ginsburg, Sandler Family Partners, Ltd. and Irwin Sandler, hereby make,
constitute and appoint Consumer Finance Holdings, Inc., or its designee, with
full power of substitution, as my true and lawful attorney in fact and proxy
for me and in my name, place and stead, to vote all Option Shares (as defined
in the Option Agreement) owned by me, and such additional shares of capital
stock of Monaco Finance, Inc., a Colorado corporation, to which I hold a proxy
granted by a third party, as contemplated by Section 4(a) of the Option
Agreement. I hereby further grant and give to such attorney in fact full
power and authority to do and perform every act necessary, requisite or proper
to be done to effectuate such voting of the Option Shares and other shares of
capital stock as I might do were I personally present, with full power of
substitution and revocation.
This proxy is irrevocable during the Voting Period (as defined in the
Option Agreement) and is coupled with an interest. This proxy shall
automatically expire at 12:00 Midnight, Denver, Colorado time, on the last day
of the Voting Period.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of December,
1997.
by:/s/ Morris Ginsburg_______________
MORRIS GINSBURG
<15>
<PAGE>
EXHIBIT 10.59
IRREVOCABLE PROXY AND SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that I, SANDLER FAMILY PARTNERS, LTD., in
connection with the execution of the Option Agreement , dated December 4, 1997
(the "Option Agreement"), by and among Consumer Finance Holdings, Inc., Morris
Ginsburg, Sandler Family Partners, Ltd. and Irwin Sandler, hereby make,
constitute and appoint Consumer Finance Holdings, Inc., or its designee, with
full power of substitution, as my true and lawful attorney in fact and proxy
for me and in my name, place and stead, to vote all Option Shares (as defined
in the Option Agreement) owned by me, and such additional shares of capital
stock of Monaco Finance, Inc., a Colorado corporation, to which I hold a proxy
granted by a third party, as contemplated by Section 4(a) of the Option
Agreement. I hereby further grant and give to such attorney in fact full
power and authority to do and perform every act necessary, requisite or proper
to be done to effectuate such voting of the Option Shares and other shares of
capital stock as I might do were I personally present, with full power of
substitution and revocation.
This proxy is irrevocable during the Voting Period (as defined in the
Option Agreement) and is coupled with an interest. This proxy shall
automatically expire at 12:00 Midnight, Denver, Colorado time, on the last day
of the Voting Period.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of December,
1997.
SANDLER FAMILY PARTNERS, LTD.
By: /s/ Irwin L. Sandler
Irwin L. Sandler, General Partner
<16>
<PAGE>
EXHIBIT 10.60
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of December 4, 1997 (the "Effective Date") by and between MONACO FINANCE,
INC., a Colorado corporation ('Employer"), and MORRIS GINSBURG ("Executive").
RECITALS:
WHEREAS, the Employer desires to retain the services of Executive, and
Executive desires to be employed by the Employer, on the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the respective
undertakings of the employer and Executive set forth below, Employer and
Executive agree as follows:
1. Employment. Effective as of the Effective Date, the Employer
hereby employs Executive on a full- time basis as President and Chairman of
the Board until the Board shall appoint a new president, and thereafter as
Chairman of the Board, and Executive accepts such employment and agrees to
perform services for the Employer, for the period and upon the other terms and
conditions set forth in this Agreement. During the Term (as defined in Section
2), Executive's day-to-day employment duties and responsibilities, for so
long as he serves as President, shall be substantially similar to Executive's
duties and responsibilities prior to the execution of this Agreement, provided
that Executive agrees to perform such employment duties as the Board of
Directors shall reasonably assign to him from time to time for so long as he
is President, consistent with his senior executive position with Employer, and
thereafter, consistent with normal and customary duties of a chairman of the
board. Executive agrees that he shall at an times faithfully, and to the best
of his abilities, experience and talents, perform all the duties that may be
required of and from him pursuant to this Agreement. Employer and Executive
agree that upon the appointment of a new President, this Agreement shall
remain in full force and effect.
2. Term of Employment. Subject to the provisions of termination as
hereinafter provided, the term of this Agreement shall begin as of the
Effective Date and terminate on the third anniversary of the Effective Date
(the "Term").
3. Extent of Service. Unless otherwise approved in writing by
Employer, Executive shall exclusively devote his reasonable best efforts
during the Term of his duties in connection with Employer. Executive agrees
to serve Employer diligently and faithfully to advance its best interest.
Executive shall not, without the express permission of Employer, engage in any
substantial private business activities (whether not entered into for profit)
outside or separate from his employment with Employer in any field that would
interfere in any material respect with the Performance of his duties
hereunder.
4. Compensation. Unless otherwise increased by the Board of Directors
of Employer, Employer shall pay to Executive the following compensation:
(a) Base Salary. As base compensation for all services to be
rendered by the Executive under this Agreement during the Term, the Employer
shall pay to Executive a salary at an annual rate of $310,000 ("Base Salary"),
which Base Salary shall be paid in accordance with the Employer's normal
payroll procedures and policies.
(b) Participation in Benefit Plans. During the term, Executive
shall be entitled to receive such medical and hospitalization insurance and
other fringe benefits as are being provided to the Employer's other
executive-level employees from time to time to the extent that Executive's
age, position or other factors qualify him for such fringe benefits, which
<17>
<PAGE>
benefits shall in any case be no less favorable than the benefits currently
received by Executive, including the right to use a 1996 or newer model Jeep
Cherokee Limited (or substantial equivalent) and an annual allowance of $2,500
for the operation of such automobile. Without limiting the foregoing, during
the Term, Executive shall be eligible to participate in stock option grants on
a level commensurate with other senior executives of the Company.
(c) Expenses. The Employer shall pay or reimburse Executive for
all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers in accordance with the Employer's normal policies for
expense verification.
(d) Office. Executive shall have the use of his current or
similar, office, administrative assistant and other facilities and assistants
that he currently uses. Nothing herein shall prohibit the Employer from
relocating its offices or require Employer to maintain the employment of any
other employee.
5. Termination. The rights and obligations of the parties under this
Agreement are subject to termination prior to the expiration of the Term as
follows:
(a) Termination for Cause . Employer and Executive agree that no
further salary or other benefits shall be payable to the Executive by the
Employer, and the employment relationship between the parties shall terminate
immediately, upon written notice by the Company to Executive following the
occurrence of any one or more of the following events of termination
(hereinafter referred to as "Cause"):
(i) Executive willfully and materially fails to exercise good faith
efforts to perform his reasonably assigned duties as an executive officer of
the Employer, and such breach is not cured within 15 days after Executive has
received written notice of such breach from Employer.
(ii) Executive is convicted of (A) a felony, (B) gross misdemeanor,
or (C) an offense involving acts of dishonesty or moral turpitude that results
in damage to Employer.
The determination of "Cause," shall be made in good faith by the Board of
Directors of Employer after notice to Executive and after Executive has had
an opportunity to address the Board regarding the events giving rise thereto.
(b) Death or Disability. If Executive should die or be Disabled
(as defined below) during the Term, the parties agree that the employment
relationship between the parties shall terminate automatically. For purposes
of this Agreement, "Disabled" means that inability of Executive (as determined
in good faith by the Board of Directors of the Employer), resulting from
disease, injury or mental condition, to perform the essential functions of his
position, with or without reasonable accommodation by the Employer, required
under the terms of this Agreement for a period in excess of 90 consecutive
days or more than 180 calendar days in any consecutive twelve-month period.
If the Executive cannot perform his duties because he is Disabled, the
Executive shall receive from Employer disability payments equal to the Base
Salary during the remainder of the original Term, payable on a monthly basis.
If the Executive dies during the Term, Employer shall pay to Executive's
estate a death benefit equal to the remaining Base Salary that would have been
paid to Executive during the remainder of the original Term, payable on a
monthly basis.
(c) Voluntary Termination. Executive shall have the right to
voluntarily terminate his employment relationship with Employer without Good
Reason (as defined in Section 4(d) below) at any time upon ninety (90) days
written notice to Employer. Upon a termination by Executive
without Good Reason, Executive shall continue to render his services and shall
be paid his Base Salary, and be entitled to any other employment benefit(s)
received by Executive in the ordinary course pursuant to the Employer's
standard employee benefit plans, up to the date of termination pursuant the
terms of this Agreement. On and after such date, no salary or other benefits
shall be payable to the Executive by the Employer and the employment
relationship between the parties shall cease.
(d) Termination by Employer without Cause; Termination by Executive
for Good Reason
<18>
<PAGE>
(i) Employer shall have the right to terminate the employment
relationship between Employer and Executive without Cause upon ninety (90)
days written notice to Executive.
(ii) Executive shall have the right to terminate the employment
relationship between Employer and Executive upon ninety (90) days written
notice to Employer due to (A) a substantial diminution in the nature ro scope
of his duties from those contemplated by Section 1, (B) a reduction in
Executive's Base Salary or benefits without Executive's consent, (C) a
material breach by Employer of any provision of this Agreement which has not
been cured within 10 days after Employer has received written notice of such
breach from Executive, or (D) a requirement by Employer with Executive's
consent that Executive perform his service outside the Denver, Colorado
metropolitan area for more than twenty-five days in any 12-month period (each
such event referred to as "Good Reason").
(iii) Upon any termination of the employment relationship between
Employer and Executive (A) by Employer without Cause, or (B) by Executive for
Good Reason, (I) Employer shall continue to pay to Executive, as a severance
allowance, Executive's Base Salary until the end of the original Term, and
(II) Executive shall continue to receive his existing employee benefits during
the remainder of the original Term at Employer's expense, if Employer's
benefit plans permit Executive's continued enrollment subsequent to
termination of Executive's employment with Employer or, in the event such
plans do not permit Executive's continued enrollment, Employer shall provide
equivalent benefits to Executive. Any severance allowance payable under this
provision shall be paid on a monthly basis with appropriate withholdings.
6. Vacation. The executive shall be entitled to four weeks of paid
vacation each year during the first year of the Term, increasing to five weeks
during the second year of the Term and six weeks during the third year of the
Term.
7. Assistance in Litigation. During the Term and at any time
thereafter, the Executive shall, upon reasonable notice, furnish such
information and proper assistance to the Employer as it may reasonably require
in connection with any litigation in which it is, or may become, a party.
8. Confidential Information. Except as permitted of directed by
Employer's Board of Directors, during the Term or at any time thereafter,
Executive shall not divulge, furnish, make accessible to anyone, lay claim to,
attempt to lay claim to or use, or attempt to use, in any way (other than in
the ordinary course of the business of the Employer) any confidential or
secret knowledge or information of the Employer which Executive has acquired
or become acquainted with or will acquire or become acquainted with during the
period of his employment by the Employer, whether developed by himself or by
others, concerning any trade secrets, confidential or secret designs,
processes, formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the business of the
Employer, any customer or supplier lists of the Employer, or any other
confidential information or secret aspects of the business of the Employer
(collectively, "Confidential Information"). Executive acknowledges that the
Confidential Information constitutes a unique and valuable asset of the
Employer and represents a substantial investment of time and expense by the
Employer, and that any disclosure or other use of the Confidential Information
other than for the sole benefit of the Employer would be wrongful and would
cause irreparable harm to the Employer. The foregoing obligations of
confidentiality shall not apply to any knowledge or information in the public
domain, other than as a direct or indirect result of the breach of this
Agreement by Executive.
9. Ventures. If, during the term of this Agreement, Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Employer and a third party or parties, all
rights in such project, program or venture shall belong to the Employer.
Except as formally approved by the Employer's Board of Directors, Executive
shall not be entitled to any interest in such project, program or venture or
to any commission, finder's fee or other compensation in connection therewith
other than the salary to be paid to Executive as provided in this Agreement.
<19>
<PAGE>
10. Intellectual Property.
(a) Disclosure and Assignment. Executive shall promptly disclose
in writing to the Employer complete information concerning each and every
invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by Executive,
either solely or in collaboration with others, during the term of this
Agreement, or within six months thereafter, whether or not during regular
working hours, relating either directly to the business, products, practices
or techniques of the Employer (hereinafter referred to as "Developments").
Executive hereby acknowledges that any and all of such Developments, and any
Developments made, developed, perfected, devised, conceived or first reduced
to practice by Executive, either solely or in collaboration with others during
his employment with the Company prior to the Term, are the property of the
Employer and, in consideration of this Agreement and for no compensation other
that provided by this Agreement, hereby assigns and agrees to assign to the
Employer any and all of Executive's right, title and interest in and to any
and all of such Developments.
(b) Future Developments. As to any future Developments made by
Executive which relate to the business, products or practices of Employer and
which are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any
reason to belong to an entity or person other than the Employer, Executive
shall promptly disclose the same in writing to the Employer and shall not
disclose the same to others if the Employer, within 20 days thereafter, shall
claim ownership of such Developments under the terms of this Agreement. If
the Employer makes such claim, Executive agrees that, insofar as the rights
(if any) of Executive are involved, it shall be settled by arbitration in
accordance with the rules then obtaining of the American Arbitration
Association. The locale of the arbitration shall be Denver, Colorado (or
other locale convenient to the Employer's principal executive offices). If
the Employer makes no such claim, Executive hereby acknowledges that the
Employer has made no promise to receive and hold in confidence any such
information disclosed by Executive.
(c) Assistance of Executive. Upon request and without further
compensation therefor, but at no expense to Executive, and whether during the
term of this Agreement or thereafter, Executive shall do all lawful acts,
including, but not limited to, the execution of papers and lawful oaths and
the giving of testimony, that in the opinion of the Employer, its successors
and assigns, may be necessary of desirable in obtaining, sustaining,
reissuing, extending and enforcing United States and foreign Letters Patent,
inducing, but not limited to, design patents, on any and all of such
Developments, and for perfecting, affirming and recording the Employers'
complete ownership and title thereto, and to cooperate otherwise in all
proceedings and matters relating thereto.
(d) Records. Executive shall keep complete, accurate and authentic
accounts, notes, data and records of an Developments in the manner and form
requested by the Employer. Such accounts, notes, data and records shall be
the property of the Employer, and, upon its request, Executive shall promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, Executive shall surrender the same, and all copies thereof, to the
Employer upon the conclusion of his employment.
11. Noncompetition.
(a) Agreement not to Compete. Executive understands and agrees
that, in addition to Executive's exposure to Employer's Confidential
Information, Executive may, in his capacity as an Executive, at times meet
with companies or persons who do business with Employer, and that as a
consequence of using or associating himself with Employer's name, goodwill,
and professional reputation, Executive's employment shall place him in a
position where Executive can develop personal and professional relationships
of value to Employer. Executive understands and agrees that his goodwill and
reputation, as well as Executives knowledge of Confidential Information, could
be used unfairly in competition against Employer pursuant to this Agreement,
Executive agrees that, during the Noncom petition Period ( as defined below),
Executive shall not:
<20>
<PAGE>
(i) Directly or indirectly, individually or collectively in
conjunction with others, engage in activities that compete with Employer's
business as it is described in Employer's periodic reports filed with the
Securities and Exchange Commission pursuant to the Securities and Exchange Act
of 1934 or otherwise conducted at the expiration or earlier termination of
Executive's employment specifically agrees not to solicit, serve, contract
with or otherwise engage any existing or prospective customer, client, or
account who then has a relationship with Employer for current or prospective
business related in any manner to the -Business. Executive and Employer agree
that this provision is reasonably enforced with reference to whatever
geographic area Employer is then doing or planning to do business, it being
agreed and understood between the parties that Employer conducts a nation-wide
business and any such restriction might reasonably include the entire United
States.
(ii) Cause or attempt to cause any existing or prospective customer,
client or account who then has a relationship with Employer for current or
prospective business to divert, terminate, limit or in any manner modify, or
fail to enter into any actual or potential business relationship with
Employer. Executive and Employer agree that this provision is reasonably
enforced with reference to any geographic area applicable to such
relationships with Employer.
(iii) Directly or indirectly solicit for employment, employ or
conspire or act in concert with others to solicit for employment or employ any
of Employer's employees or otherwise interfere with Employer's relationships
with any of its Executives. The term "employ" for purposes of this paragraph
means to enter into an arrangement for services as a full-time or part-time
Executive, independent contractor, agent or otherwise. Executive and Employer
agree that this provision is reasonably enforced as to any geographic area.
Executive further agrees that, during the Noncompetition Period, to inform any
new employer or other person or entity with whim Executive enters into a
business relationship, before accepting employment or entering into a business
relationship, the existence to this Agreement and give such employer, person
other entity a copy of this Section 11.
(b) Noncompetition Period. As used in this Section 11,
"Noncompetition Period" means the period of two years following the expiration
of Executive's employment for any reason other than the death of Executive.
(c) Noncompetition Payment. Employer agrees to pay Executive
the sum of $300,000 in consideration of Executive entering into the
noncompetition covenants set forth in this Section 11(a). Such amount shall
be payable in two equal installments in arrears (without interest), with the
first such installment due on the first anniversary of the date of
commencement of the Noncompetition Period and the second installment due on
the second anniversary thereof. Upon execution of this Agreement, the
payments specified in this subsection 11(c) shall be deemed earned and payable
according to the terms hereof in all events.
12. General Provisions
(a) Notices. All notices, requests and other communications from any
of the parties hereto to another shall be in writing and shall be personally
served or sent by registered or certified mail, return receipt requested, and
shall be deemed to have been given on the day when deposited in the United
States mail addressed to the other party as follows , provided that either
party may from time to time change the address to which notices to it are to
be sent by giving written notice to the other in accordance herewith. Notices
to Employer shall be given to Employer at its corporate headquarters
which as of the date of this Agreement is: Monaco Finance, Inc., 370 17th
Street, Suite 5060, Denver, Colorado 80202. Notices to Executive shall be
addressed to Executive at Executive's residence address as the same appears on
Employer's records.
(b) Entirety of Agreement. This Agreement constitutes the final
expression of the parties' agreement and it is a complete and exclusive
statement of the terms of that agreement. There are no agreements or
<21>
<PAGE>
understandings between Employer and Executive with respect to the subject
matter hereof except as expressly herein stated. This Agreement supersedes
and replaces any prior employment agreement between the parties whether oral
or written relating generally to the same subject matter, any of which are
hereby terminated.
(c) Withholding Taxes; Offset . The Employer may withhold from
any
compensation or other benefits payable under this Agreement all federal
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling. The Employer may also offset any sums
that are owed by Executive to Employer against any of the amounts payable by
Employer to Executive under this Agreement.
(d) Amendments. This Agreement may be modified or rescinded only
by an instrument in writing signed by Employer and Executive. No amendment,
alteration or modification of the express terms of this Agreement shall be
binding unless set forth in an instrument in writing signed by the Employer
and Executive.
(e) Waiver. Waiver by either Employer or Executive of a breach of
any
provision, term or condition hereof shall not be deemed or construed as a
further or
continuing waiver thereof or a waiver of any breach of any other provision,
term or
condition of this Agreement.
(f) Assignment. In the event of a merger, sale, transfer,
consolidation, or reorganization involving Employer, this Agreement shall
continue in full force and effect. The rights and obligations of Employer
hereunder may be transferred or assigned to any successor, representative or
assign of Employer. Employer's obligations under this Agreement shall not be
affected or diminished by any such transfer or assignment or by any change in
the equity ownership of employer. No assignment of this Agreement shall be
made by Executive, and any purported assignment by Executive shall be null and
void. All obligations of Employer and Executive arising out of this Agreement
shall be binding upon their heirs, spouses, legal representatives, successors
and permitted assigns.
(g) Injunctive Relief. Executive agrees that it would be difficult
to compensate the Employer fully for damages for any violation of the
provisions of this Agreement, including, without limitation the provisions of
Sections 9, 10 and 11. Accordingly, Executive specifically agrees that the
Employer shall be entitled to temporary and permanent injunctive relief to
enforce the provisions of this Agreement and that such relief may be granted
without the necessity of proving actual damages. This provision with respect
to injunctive relief shall not, however, diminish the right of the Employer to
claim and recover damages in addition to injunctive relief.
(h) Agreement to Arbitrate; Expenses. Except with respect to the
provisions of Sections 8, 9, 10 and 11 of this Agreement, any controversy or
claim arising out of or relating to this Agreement or the formation, breach or
interpretation hereof, will be settled by arbitration before one arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in Denver, Colorado. Judgment upon the award rendered by the
arbitration may be entered and enforced in the court with jurisdiction over
the appropriate party. All controversies not subject to arbitration or
contesting any arbitration will be litigated in the State of Colorado, Denver
County District Court or a federal court in the State of Colorado (and each of
the parties hereto hereby consent to the exclusive jurisdiction of such courts
and waive any objections thereto). The expenses (including reasonable
attorneys' fees) incurred by the prevailing party in any arbitration or
litigation related to this Agreement shall be borne by the non-prevailing
party in such arbitration or litigation.
<22>
<PAGE>
(i) Severability. To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable, the invalid or
unenforceable portion of such provision shall be deleted from this Agreement,
and the validity and enforceability of the remainder of such provision and of
this Agreement shall be unaffected. In furtherance of and not in limitation
of the foregoing, it is expressly agreed that should the duration of or
geographical extent of, or business activities covered by, the Noncom petition
agreements contained in Section 11 to be determined to be in excess of that
which is valid or enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent, or those activities which
may validly or enforceably be covered. Executive acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement shall
be construed in a manner which renders its provisions valid and enforceable to
the maximum extent (not exceeding its express terms) possible under applicable
law.
(j) Captions. The captions contained in this Agreement are for
convenience of reference only and do not affect the meaning of any terms or
provisions.
(k) Prior Agreement. As of the Effective Date, the Executive
Employment Agreement dated July 9, 1990 between Employer and Executive (the
"Prior Agreement") shall be terminated and shall be of no further force or
effect (except with respect to compensation and benefits earned by Executive
prior to the Effective Date).
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first above written.
MONACO FINANCE, INC.
By:/s/ Irwin L. Sandler
--------------------------
Name: Irwin L. Sandler
Title: Executive Vice President
/s/ Morris Ginsburg
---------------------
MORRIS GINSBURG
<23>
<PAGE>
EXHIBIT 10.61
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of the 4th day of December, 1997 (the "Effective Date") by and between MONACO
FINANCE, INC., a Colorado corporation ('Employer"), and IRWIN L. SANDLER
("Executive").
RECITALS:
WHEREAS, the Employer desires to retain the services of Executive, and
Executive desires to be employed by the Employer, on the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the respective
undertakings of the employer and Executive set forth below, Employer and
Executive agree as follows:
1. Employment. Effective as of the Effective Date, the Employer
hereby employs Executive on a full- time basis as a senior executive officer,
and Executive accepts such employment and agrees to perform services for the
Employer, for the period and upon the other terms and conditions set forth in
this Agreement. During the Term (as defined in Section 2), Executive's
day-to-day employment duties and responsibilities shall be substantially
similar to Executive's duties and responsibilities prior to the execution of
this Agreement, provided that Executive agrees to perform such employment
duties as the Board of Directors or President of the Employer shall reasonably
assign to him from time to time, consistent with his senior executive position
with Employer. Executive agrees that he shall at an times faithfully, and to
the best of his abilities, experience and talents, perform all the duties that
may be required of and from him pursuant to this Agreement.
2. Term of Employment. Subject to the provisions of termination as
hereinafter provided, the term of this Agreement shall begin as of the
Effective Date and terminate on the third anniversary of the Effective Date
(the "Term").
3. Extent of Service. Unless otherwise approved in writing by
Employer, Executive shall exclusively devote his reasonable best efforts
during the Term of his duties in connection with Employer. Executive agrees
to serve Employer diligently and faithfully to advance its best interest.
Executive shall not, without the express permission of Employer, engage in any
substantial private business activities (whether not entered into for profit)
outside or separate from his employment with Employer in any field that would
interfere in any material respect with the Performance of his duties
hereunder.
4. Compensation. Unless otherwise increased by the Board of Directors
of Employer, Employer shall pay to Executive the following compensation:
(a) Base Salary. As base compensation for all services to be
rendered by the Executive under this Agreement during the Term, the Employer
shall pay to Executive a salary at an annual rate of $290,000 ("Base Salary"),
which Base Salary shall be paid in accordance with the Employer's normal
payroll procedures and policies.
(b) Participation in Benefit Plans. During the term, Executive
shall be entitled to receive such medical and hospitalization insurance and
other fringe benefits as are being provided to the Employer's other
executive-level employees from time to time to the extent that Executive's
age, position or other factors qualify him for such fringe benefits, which
benefits shall in any case be no less favorable than the benefits currently
received by Executive, including the right to use a 1996 or newer model Jeep
Cherokee Limited (or substantial equivalent) and an annual allowance of $2,500
for the operation of such automobile. Without limiting the foregoing, during
<24>
<PAGE>
the Term, Executive shall be eligible to participate in stock option grants on
a level commensurate with other senior executives of the Company.
(c) Expenses. The Employer shall pay or reimburse Executive for
all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers in accordance with the Employer's normal policies for
expense verification.
(d) Office. Executive shall have the use of his current or
similar, office, administrative assistant and other facilities and assistants
that he currently uses. Nothing herein shall prohibit the Employer from
relocating its offices or require Employer to maintain the employment of any
other employee.
5. Termination. The rights and obligations of the parties under this
Agreement are subject to termination prior to the expiration of the Term as
follows:
(a) Termination for Cause . Employer and Executive agree that no
further salary or other benefits shall be payable to the Executive by the
Employer, and the employment relationship between the parties shall terminate
immediately, upon written notice by the Company to Executive following the
occurrence of any one or more of the following events of termination
(hereinafter referred to as "Cause"):
(i) Executive willfully and materially fails to exercise good faith
efforts to perform his reasonably assigned duties as an executive officer of
the Employer, and such breach is not cured within 15 days after Executive has
received written notice of such breach from Employer.
(ii) Executive is convicted of (A) a felony, (B) gross misdemeanor,
or (C) an offense involving acts of dishonesty or moral turpitude that results
in damage to Employer.
The determination of "Cause," shall be made in good faith by the Board of
Directors of Employer after notice to Executive and after Executive has had
an opportunity to address the Board regarding the events giving rise thereto.
(b) Death or Disability. If Executive should die or be Disabled
(as defined below) during the Term, the parties agree that the employment
relationship between the parties shall terminate automatically. For purposes
of this Agreement, "Disabled" means that inability of Executive (as determined
in good faith by the Board of Directors of the Employer), resulting from
disease, injury or mental condition, to perform the essential functions of his
position, with or without reasonable accommodation by the Employer, required
under the terms of this Agreement for a period in excess of 90 consecutive
days or more than 180 calendar days in any consecutive twelve-month period.
If the Executive cannot perform his duties because he is Disabled, the
Executive shall receive from Employer disability payments equal to the Base
Salary during the remainder of the original Term, payable on a monthly basis.
If the Executive dies during the Term, Employer shall pay to Executive's
estate a death benefit equal to the remaining Base Salary that would have been
paid to Executive during the remainder of the original Term, payable on a
monthly basis.
(c) Voluntary Termination. Executive shall have the right to
voluntarily terminate his employment relationship with Employer without Good
Reason (as defined in Section 4(d) below) at any time upon ninety (90) days
written notice to Employer. Upon a termination by Executive
without Good Reason, Executive shall continue to render his services and shall
be paid his Base Salary, and be entitled to any other employment benefit(s)
received by Executive in the ordinary course pursuant to the Employer's
standard employee benefit plans, up to the date of termination pursuant the
terms of this Agreement. On and after such date, no salary or other benefits
shall be payable to the Executive by the Employer and the employment
relationship between the parties shall cease.
(d) Termination by Employer without Cause; Termination by Executive
for Good Reason
<25>
<PAGE>
(i) Employer shall have the right to terminate the employment
relationship between Employer and Executive without Cause upon ninety (90)
days written notice to Executive.
(ii) Executive shall have the right to terminate the employment
relationship between Employer and Executive upon ninety (90) days written
notice to Employer due to (A) a substantial diminution in the nature ro scope
of his duties from those contemplated by Section 1, (B) a reduction in
Executive's Base Salary or benefits without Executive's consent, (C) a
material breach by Employer of any provision of this Agreement which has not
been cured within 10 days after Employer has received written notice of such
breach from Executive, or (D) a requirement by Employer with Executive's
consent that Executive perform his service outside the Denver, Colorado
metropolitan area for more than twenty-five days in any 12-month period (each
such event referred to as "Good Reason").
(iii) Upon any termination of the employment relationship between
Employer and Executive (A) by Employer without Cause, or (B) by Executive for
Good Reason, (I) Employer shall continue to pay to Executive, as a severance
allowance, Executive's Base Salary until the end of the original Term, and
(II) Executive shall continue to receive his existing employee benefits during
the remainder of the original Term at Employer's expense, if Employer's
benefit plans permit Executive's continued enrollment subsequent to
termination of Executive's employment with Employer or, in the event such
plans do not permit Executive's continued enrollment, Employer shall provide
equivalent benefits to Executive. Any severance allowance payable under this
provision shall be paid on a monthly basis with appropriate withholdings.
6. Vacation. The executive shall be entitled to four weeks of paid
vacation each year during the first year of the Term, increasing to five weeks
during the second year of the Term and six weeks during the third year of the
Term.
7. Assistance in Litigation. During the Term and at any time
thereafter, the Executive shall, upon reasonable notice, furnish such
information and proper assistance to the Employer as it may reasonably require
in connection with any litigation in which it is, or may become, a party.
8. Confidential Information. Except as permitted of directed by
Employer's Board of Directors, during the Term or at any time thereafter,
Executive shall not divulge, furnish, make accessible to anyone, lay claim to,
attempt to lay claim to or use, or attempt to use, in any way (other than in
the ordinary course of the business of the Employer) any confidential or
secret knowledge or information of the Employer which Executive has acquired
or become acquainted with or will acquire or become acquainted with during the
period of his employment by the Employer, whether developed by himself or by
others, concerning any trade secrets, confidential or secret designs,
processes, formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the business of the
Employer, any customer or supplier lists of the Employer, or any other
confidential information or secret aspects of the business of the Employer
(collectively, "Confidential Information"). Executive acknowledges that the
Confidential Information constitutes a unique and valuable asset of the
Employer and represents a substantial investment of time and expense by the
Employer, and that any disclosure or other use of the Confidential Information
other than for the sole benefit of the Employer would be wrongful and would
cause irreparable harm to the Employer. The foregoing obligations of
confidentiality shall not apply to any knowledge or information in the public
domain, other than as a direct or indirect result of the breach of this
Agreement by Executive.
9. Ventures. If, during the term of this Agreement, Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Employer and a third party or parties, all
rights in such project, program or venture shall belong to the Employer.
Except as formally approved by the Employer's Board of Directors, Executive
shall not be entitled to any interest in such project, program or venture or
to any commission, finder's fee or other compensation in connection therewith
other than the salary to be paid to Executive as provided in this Agreement.
<26>
<PAGE>
10. Intellectual Property.
(a) Disclosure and Assignment. Executive shall promptly disclose
in writing to the Employer complete information concerning each and every
invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by Executive,
either solely or in collaboration with others, during the term of this
Agreement, or within six months thereafter, whether or not during regular
working hours, relating either directly to the business, products, practices
or techniques of the Employer (hereinafter referred to as "Developments").
Executive hereby acknowledges that any and all of such Developments, and any
Developments made, developed, perfected, devised, conceived or first reduced
to practice by Executive, either solely or in collaboration with others during
his employment with the Company prior to the Term, are the property of the
Employer and, in consideration of this Agreement and for no compensation other
that provided by this Agreement, hereby assigns and agrees to assign to the
Employer any and all of Executive's right, title and interest in and to any
and all of such Developments.
(b) Future Developments. As to any future Developments made by
Executive which relate to the business, products or practices of Employer and
which are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any
reason to belong to an entity or person other than the Employer, Executive
shall promptly disclose the same in writing to the Employer and shall not
disclose the same to others if the Employer, within 20 days thereafter, shall
claim ownership of such Developments under the terms of this Agreement. If
the Employer makes such claim, Executive agrees that, insofar as the rights
(if any) of Executive are involved, it shall be settled by arbitration in
accordance with the rules then obtaining of the American Arbitration
Association. The locale of the arbitration shall be Denver, Colorado (or
other locale convenient to the Employer's principal executive offices). If
the Employer makes no such claim, Executive hereby acknowledges that the
Employer has made no promise to receive and hold in confidence any such
information disclosed by Executive.
(c) Assistance of Executive. Upon request and without further
compensation therefor, but at no expense to Executive, and whether during the
term of this Agreement or thereafter, Executive shall do all lawful acts,
including, but not limited to, the execution of papers and lawful oaths and
the giving of testimony, that in the opinion of the Employer, its successors
and assigns, may be necessary of desirable in obtaining, sustaining,
reissuing, extending and enforcing United States and foreign Letters Patent,
inducing, but not limited to, design patents, on any and all of such
Developments, and for perfecting, affirming and recording the Employers'
complete ownership and title thereto, and to cooperate otherwise in all
proceedings and matters relating thereto.
(d) Records. Executive shall keep complete, accurate and authentic
accounts, notes, data and records of an Developments in the manner and form
requested by the Employer. Such accounts, notes, data and records shall be
the property of the Employer, and, upon its request, Executive shall promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, Executive shall surrender the same, and all copies thereof, to the
Employer upon the conclusion of his employment.
11. Noncompetition.
(a) Agreement not to Compete. Executive understands and agrees
that, in addition to Executive's exposure to Employer's Confidential
Information, Executive may, in his capacity as an Executive, at times meet
with companies or persons who do business with Employer, and that as a
consequence of using or associating himself with Employer's name, goodwill,
and professional reputation, Executive's employment shall place him in a
position where Executive can develop personal and professional relationships
of value to Employer. Executive understands and agrees that his goodwill and
reputation, as well as Executives knowledge of Confidential Information, could
be used unfairly in competition against Employer pursuant to this Agreement,
Executive agrees that, during the Noncom petition Period ( as defined below),
Executive shall not:
<27>
<PAGE>
(i) Directly or indirectly, individually or collectively in
conjunction with others, engage in activities that compete with Employer's
business as it is described in Employer's periodic reports filed with the
Securities and Exchange Commission pursuant to the Securities and Exchange Act
of 1934 or otherwise conducted at the expiration or earlier termination of
Executive's employment specifically agrees not to solicit, serve, contract
with or otherwise engage any existing or prospective customer, client, or
account who then has a relationship with Employer for current or prospective
business related in any manner to the -Business. Executive and Employer agree
that this provision is reasonably enforced with reference to whatever
geographic area Employer is then doing or planning to do business, it being
agreed and understood between the parties that Employer conducts a nation-wide
business and any such restriction might reasonably include the entire United
States.
(ii) Cause or attempt to cause any existing or prospective customer,
client or account who then has a relationship with Employer for current or
prospective business to divert, terminate, limit or in any manner modify, or
fail to enter into any actual or potential business relationship with
Employer. Executive and Employer agree that this provision is reasonably
enforced with reference to any geographic area applicable to such
relationships with Employer.
(iii) Directly or indirectly solicit for employment, employ or
conspire or act in concert with others to solicit for employment or employ any
of Employer's employees or otherwise interfere with Employer's relationships
with any of its Executives. The term "employ" for purposes of this paragraph
means to enter into an arrangement for services as a full-time or part-time
Executive, independent contractor, agent or otherwise. Executive and Employer
agree that this provision is reasonably enforced as to any geographic area.
Executive further agrees that, during the Noncompetition Period, to inform any
new employer or other person or entity with whim Executive enters into a
business relationship, before accepting employment or entering into a business
relationship, the existence to this Agreement and give such employer, person
other entity a copy of this Section 11.
(b) Noncompetition Period. As used in this Section 11,
"Noncompetition Period" means the period of two years following the expiration
of Executive's employment for any reason other than the death of Executive.
(c) Noncompetition Payment. Employer agrees to pay Executive
the sum of $300,000 in consideration of Executive entering into the
noncompetition covenants set forth in this Section 11(a). Such amount shall
be payable in two equal installments in arrears (without interest), with the
first such installment due on the first anniversary of the date of
commencement of the Noncompetition Period and the second installment due on
the second anniversary thereof. Upon execution of this Agreement, the
payments specified in this subsection 11(c) shall be deemed earned and payable
according to the terms hereof in all events.
12. General Provisions
(a) Notices. All notices, requests and other communications from any
of the parties hereto to another shall be in writing and shall be personally
served or sent by registered or certified mail, return receipt requested, and
shall be deemed to have been given on the day when deposited in the United
States mail addressed to the other party as follows , provided that either
party may from time to time change the address to which notices to it are to
be sent by giving written notice to the other in accordance herewith. Notices
to Employer shall be given to Employer at its corporate headquarters
which as of the date of this Agreement is: Monaco Finance, Inc., 370 17th
Street, Suite 5060, Denver, Colorado 80202. Notices to Executive shall be
addressed to Executive at Executive's residence address as the same appears on
Employer's records.
(b) Entirety of Agreement. This Agreement constitutes the final
expression of the parties' agreement and it is a complete and exclusive
statement of the terms of that agreement. There are no agreements or
understandings between Employer and Executive with respect to the subject
<28>
<PAGE>
matter hereof except as expressly herein stated. This Agreement supersedes
and replaces any prior employment agreement between the parties whether oral
or written relating generally to the same subject matter, any of which are
hereby terminated.
(c) Withholding Taxes; Offset . The Employer may withhold from
any
compensation or other benefits payable under this Agreement all federal
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling. The Employer may also offset any sums
that are owed by Executive to Employer against any of the amounts payable by
Employer to Executive under this Agreement.
(d) Amendments. This Agreement may be modified or rescinded only
by an instrument in writing signed by Employer and Executive. No amendment,
alteration or modification of the express terms of this Agreement shall be
binding unless set forth in an instrument in writing signed by the Employer
and Executive.
(e) Waiver. Waiver by either Employer or Executive of a breach of
any
provision, term or condition hereof shall not be deemed or construed as a
further or
continuing waiver thereof or a waiver of any breach of any other provision,
term or
condition of this Agreement.
(f) Assignment. In the event of a merger, sale, transfer,
consolidation, or reorganization involving Employer, this Agreement shall
continue in full force and effect. The rights and obligations of Employer
hereunder may be transferred or assigned to any successor, representative or
assign of Employer. Employer's obligations under this Agreement shall not be
affected or diminished by any such transfer or assignment or by any change in
the equity ownership of employer. No assignment of this Agreement shall be
made by Executive, and any purported assignment by Executive shall be null and
void. All obligations of Employer and Executive arising out of this Agreement
shall be binding upon their heirs, spouses, legal representatives, successors
and permitted assigns.
(g) Injunctive Relief. Executive agrees that it would be difficult
to compensate the Employer fully for damages for any violation of the
provisions of this Agreement, including, without limitation the provisions of
Sections 9, 10 and 11. Accordingly, Executive specifically agrees that the
Employer shall be entitled to temporary and permanent injunctive relief to
enforce the provisions of this Agreement and that such relief may be granted
without the necessity of proving actual damages. This provision with respect
to injunctive relief shall not, however, diminish the right of the Employer to
claim and recover damages in addition to injunctive relief.
(h) Agreement to Arbitrate; Expenses. Except with respect to the
provisions of Sections 8, 9, 10 and 11 of this Agreement, any controversy or
claim arising out of or relating to this Agreement or the formation, breach or
interpretation hereof, will be settled by arbitration before one arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in Denver, Colorado. Judgment upon the award rendered by the
arbitration may be entered and enforced in the court with jurisdiction over
the appropriate party. All controversies not subject to arbitration or
contesting any arbitration will be litigated in the State of Colorado, Denver
County District Court or a federal court in the State of Colorado (and each of
the parties hereto hereby consent to the exclusive jurisdiction of such courts
and waive any objections thereto). The expenses (including reasonable
attorneys' fees) incurred by the prevailing party in any arbitration or
litigation related to this Agreement shall be borne by the non-prevailing
party in such arbitration or litigation.
(i) Severability. To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable, the invalid or
unenforceable portion of such provision shall be deleted from this Agreement,
and the validity and enforceability of the remainder of such provision and of
this Agreement shall be unaffected. In furtherance of and not in limitation
of the foregoing, it is expressly agreed that should the duration of or
geographical extent of, or business activities covered by, the Noncom petition
agreements contained in Section 11 to be determined to be in excess of that
which is valid or enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent, or those activities which
<29>
<PAGE>
may validly or enforceably be covered. Executive acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement shall
be construed in a manner which renders its provisions valid and enforceable to
the maximum extent (not exceeding its express terms) possible under applicable
law.
<30>
<PAGE>
(j) Captions. The captions contained in this Agreement are for
convenience of reference only and do not affect the meaning of any terms or
provisions.
(k) Prior Agreement. As of the Effective Date, the Executive
Employment Agreement dated July 9, 1990 between Employer and Executive (the
"Prior Agreement") shall be terminated and shall be of no further force or
effect (except with respect to compensation and benefits earned by Executive
prior to the Effective Date).
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first above written.
MONACO FINANCE, INC.
By:/s/ Morris Ginsburg
---------------------
Name: Morris Ginsburg
Title: President
/s/ Irwin L. Sandler
-----------------------
IRWIN L. SANDLER
<31>
<PAGE>
EXHIBIT 10.62
FIRST AMENDMENT TO BUY-SELL AGREEMENT
THIS FIRST AMENDMENT TO BUY-SELL AGREEMENT is made and entered into as of
December 4, 1997, among Monaco Finance, Inc., a Colorado corporation (the
"Company"), Morris Ginsburg, Sandler Family Partners, Ltd. and Irwin Sandler.
WITNESSETH:
WHEREAS, the parties hereto have previously made and entered into a
Buy-Sell Agreement as of the 14th day of May, 1993 (the "Agreement"); and
WHEREAS, the parties hereto have entered into an Option Agreement, dated
as of December 4, 1997 (the "Option Agreement"), with Consumer Finance
Holdings, Inc. that provides for certain option and put rights with respect to
the Stock (as defined in the Agreement) owned by the Shareholders (as defined
in the Agreement); and
WHEREAS, the parties hereto wish to make certain modifications to the
Agreement;
NOW, THEREFORE, the parties hereto agree as follows (capitalized terms
used herein and not otherwise defined have the meanings set forth in the
Agreement):
Section 3(b) of the Agreement is hereby amended and restated in its
entirety as follows:
(b) Upon the occurrence of a Repurchase Event, the Company shall
repurchase all of the Repurchasable Shares of the Shareholder by delivering
written notice (the "Repurchase Notice") to the Shareholder, or his estate in
the case of Ginsburg, within 15 days of the Repurchase Event. The Repurchase
Notice will set forth the amount of Stock to be purchased by the Company, the
aggregate consideration to be paid for such Stock as determined in Section 4
below (the "Purchase Price") and the time and place for the closing of the
purchase transaction (the "Closing"); provided, however, that,
notwithstanding the foregoing, the Company's obligation to repurchase such
Repurchasable Shares shall not apply during the Option Term (as defined in the
Option Agreement) to any of such Repurchasable Shares that are the subject of
the Option Agreement; provided, further that in the event that any such
Repurchasable Shares are not repurchased for whatever reason in accordance
with a notice of option exercise pursuant to Section 2(a) of the Option
Agreement or a Put Notice (as defined in the Option Agreement) pursuant to
Section 3(a) of the Option Agreement, the failure of such repurchase shall be
deemed to be a new Repurchase Event and the Company's obligations under this
Section 3 with respect to such Repurchasable Shares shall apply.
Section 7(a) is hereby amended by inserting the following phrase in the
third line of Section 7(a) after the words "Securities Act of 1933": "or
pursuant to the Option Agreement"
Except as specifically amended hereby, the Agreement remains in full
force and effect.
This First Amendment to Buy-Sell Agreement shall be governed by and
construed in accordance with the laws of the state of Colorado.
<32>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Buy-Sell Agreement as of the date first written above.
MONACO FINANCE, INC.
By: /s/ Morris Ginsburg
----------------------
Morris Ginsburg, President
/s/ Morris Ginsburg
---------------------
MORRIS GINSBURG
SANDLER FAMILY PARTNERS, LTD.
By: /s/ Irwin L. Sandler
-----------------------
Irwin L. Sandler, General Partner
/s/ Irwin L. Sandler
-----------------------
IRWIN L. SANDLER
