EXHIBIT 10.1
 
 
EXECUTIVE EMPLOYMENT AGREEMENT
 
This Executive Employment Agreement (“Agreement”) is made effective as of August
13, 2008 (“Effective Date”), by and between James Vagim (“Executive”) and United
PanAm Financial Corp and its subsidiary United Auto Credit Corporation, both of
which may be referred to interchangeably hereinafter as “Company”. All
obligations of the Company hereunder shall be joint and several obligations of
United PanAm Financial Corp. and United Auto Credit Corporation.
 
The parties agree as follows:
 

1.
Employment. The Company hereby employs Executive, and Executive hereby accepts
such employment, upon the terms and conditions set forth herein.

 

2.
Duties.

 

2.1
Position. Executive is employed on a full-time basis as President and Chief
Executive Officer of the Company, shall report directly to the Board of
Directors of the Company (“the Board”), and shall have the duties and
responsibilities commensurate with such position as shall be reasonably and in
good faith determined from time to time by the Board.

 

2.2
Obligations. Executive shall: (i) abide by all federal, state and local laws,
regulations and ordinances and as applicable, all policies and charter documents
of the Company and its affiliates, and (ii) except for vacation and illness
periods, devote substantially all of his business time, energy, skill and
efforts to the performance of his duties hereunder in a manner that will
faithfully and diligently further the business interests of the Company.

 

3.
Term. The term of this Agreement shall commence on the Effective Date and shall
continue until December 31, 2009, unless earlier terminated as herein provided
(the “Initial Term”). As used herein, “Term” shall include the Initial Term and
any Extended Term, but the Term of this Agreement shall end upon any termination
of Executive’s employment with the Company as herein provided.

 

4.
Compensation.

 

4.1
Base Salary. As compensation for Executive’s performance of Executive’s duties
and subject to Executive’s continued employment pursuant to this Agreement , the
Company shall pay or cause to be paid to Executive an annual salary of Five
Hundred Thousand Dollars ($500,000.00) during the Term of Employment (“Base
Salary”), payable in accordance with the normal payroll practices of the Company
or the Company’s payroll services provider, less all legally required or
authorized payroll deductions and tax withholdings. During the Term of
Employment, the Base Salary amount set forth above may be increased from time to
time at the sole and absolute discretion of the Board.

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4.2
Discretionary Bonus. The Company may, from time to time, pay Executive a
discretionary bonus in an amount to be determined by the Board in its sole and
absolute discretion, less all legally required or authorized payroll deductions
and tax withholdings.

 

4.3
Equity Compensation. Concurrently with the execution of this Agreement,
Executive shall be granted an option pursuant to the Company’s [Amended and
Restated 1997 Employee Stock Incentive Plan] (“the Plan”) to purchase Five
Hundred Thousand (500,000) shares of the Company’s common stock (the “Shares”)
at an exercise price of $5.00 per share with a term of ten (10) years. So long
as Executive’s employment relationship with the Company continues, twenty
percent (20%) of the Shares underlying the option shall vest on the anniversary
of the execution date of this Agreement and upon each anniversary date
thereafter until the fifth anniversary, whereupon the option shall become
one-hundred percent (100%) vested. Notwithstanding the foregoing, the vesting
shall accelerate upon a change in control as defined in the Stock Option Award
Agreement. In addition, such options shall be subject to the terms and
conditions of the Plan and stock option agreement reflecting ( and not
inconsistent with) the terms set forth in this Agreement between the Company and
Executive, which documents are incorporated herein by reference.

 

5.
Health and Welfare Benefits. Executive shall be eligible for all health and
welfare benefits generally available to other full-time employees of the Company
of similar rank and status, subject to the terms and conditions of the Company’s
policies and benefit plan documents.

 

6.
Vacation. Executive shall be entitled to earn vacation at the rate of four (4)
weeks per year. Executive shall be allowed to use such vacation time at
Executive’s discretion, with reasonable advance notice to the Board, and taking
into account the business needs of the Company. In the event that Executive is
terminated before the end of the applicable calendar year, any vacation time
used by the Executive in excess of the pro rata vacation time corresponding to
the portion of the calendar year then elapsed shall not result in any offset
against any compensation owed to Executive, except in the case of termination of
Executive for Cause.

 

7.
Business Expenses. Executive shall be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of Executive’s
duties on behalf of the Company, provided that Executive furnishes to the
Company adequate records and other documentation as may be required for the
substantiation of such expenditures as a business expense of the Company.

 

8.
Termination of Employment. Subject to the terms and conditions of this Section
8, either the Company or Executive may terminate Executive’s employment at any
time, with or without Cause (as defined in Section 8.7), during the Term of
Employment. Any termination of Executive’s employment during the Term of
Employment shall be communicated by written notice of termination from the
terminating party to the other party (“Notice of Termination”). The Notice of
Termination shall indicate the specific provision(s) of this Agreement relied
upon in effecting the termination, if any. Termination shall be effective on the
date designated by the terminating party in the Notice of Termination. In the
event Executive’s employment is terminated by either party, for any reason,
during the Term of Employment, the Company shall pay the prorated Base Salary
earned as of the date of Executive’s termination of employment and the accrued
but unused vacation as of the date of Executive’s termination of employment to
Executive upon Executive’s termination of employment. Except as otherwise
provided in this Section 8, the Company shall have no further obligation to make
or provide to Executive, and Executive shall have no further right to receive or
obtain from the Company, any payments or benefits in respect of the termination
of Executive’s employment with the Company during the Term of Employment.

 
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8.1
Severance Upon Involuntary Termination without Cause and Termination by
Executive with Good Reason. In the event that the Company causes to occur an
involuntary termination without Cause (as defined in Section 8.7(a)) or in the
event that Executive resigns from employment with the Company for Good Reason
(as defined in Section 8.7(c)) during the Term of Employment, Executive shall be
entitled to a lump sum “Severance Payment” as set forth in Exhibit A; payable
within thirty (30) days of the events giving rise to the Severance Payment;
provided, however, that Executive executes a Separation Agreement that includes
a general release in favor of the Company, any successor company, and all
subsidiary and related entities, and their officers, directors, shareholders,
employees and agents to the fullest extent permitted by law, drafted by and in a
form reasonably satisfactory to the Company, and does not revoke the general
release within any legally required revocation period, if applicable. All
legally required and authorized deductions and tax withholdings shall be made
from the Severance Payment, including for wage garnishments, if applicable, to
the extent required or permitted by law. Effective immediately upon termination
of employment, Executive shall no longer be eligible to contribute to or to be
an active participant in any retirement or benefit plan covering employees of
the Company. All other Company obligations to Executive shall be automatically
terminated and completely extinguished; provided, however, that Executive shall
not forfeit any right to contributions previously made to any pension,
retirement or benefit plan.

 

8.2
Effect of Disability. In the event Executive’s employment is terminated on
account of Disability (as defined in Section 8.7), Executive shall be entitled
to payment of the difference between (a) any monthly disability payments
provided through insurance plans offered by the Company, if any, provided
Executive has enrolled in such plans, has paid the costs thereof and is
otherwise eligible, and (b) the monthly Base Salary effective immediately prior
to the date of termination, for a period of six (6) months following the date of
termination, Both (a) and (b) in the preceding sentence shall be paid in a lump
sum within thirty (30) days of Executive’s termination of employment due to
Disability. All legally required and authorized deductions and tax withholdings
shall be made from the payments described in the previous sentence, including
for wage garnishments, if applicable, to the extent required or permitted by
law.

 

8.3
Effect of Death. In the event Executive’s employment is terminated by reason of
death, this Agreement shall terminate without further obligations of Employer to
Executive (or his heirs or legal representatives) under this Agreement, other
than for payment of: (i) any unpaid base salary (as set forth in Section 4.1
hereof) through the date of termination; (ii) a prorated portion of any bonus,
described in Section 4.2. above, earned through the date of Executive’s death
that has not been paid, (iii) all compensation previously deferred by Executive,
if any; (iv) any accrued but unused vacation ; and (v) any amounts due pursuant
to the terms of any applicable welfare benefit plan. All of the foregoing
amounts shall be paid to Executive’s estate or beneficiary, as applicable, in a
lump sum cash payment within thirty (30) days after the date of termination or
earlier as required by applicable law.

 

8.4
Employment Reference. In the event Executive’s employment is terminated without
Cause, or Executive resigns for Good Reason, Executive and the Company will
negotiate in good faith to reach an agreement on a statement reflecting a benign
reason for termination or resignation. This statement will include, at minimum,
positions held, date of hire, employment period and confirmation of salary
history (if requested by Executive).

 

8.5
Ineligibility For Severance. Executive shall not be entitled to any Severance
Package under this Agreement, if at any time during the Term of Employment,
either (a) Executive voluntarily resigns or otherwise terminates employment with
the Company other than for Good Reason, or (b) the Company involuntarily
terminates Executive’s employment with Cause. Effective immediately upon
termination of employment, Executive shall no longer be eligible to contribute
to or to be an active participant in any retirement or benefit plan covering
employees of the Company; provided, however, that Executive shall not forfeit
any right to contributions previously made to any pension, retirement or benefit
plan. All other Company obligations to Executive shall be automatically
terminated and completely extinguished.

 
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8.6
Taxes and Withholdings. The Company may withhold from any amounts payable under
this Agreement, including any benefits or Severance Payment, such federal, state
or local taxes as may be required to be withheld pursuant to applicable law or
regulations, which amounts shall be deemed to have been paid to Executive.

 

8.7
Definitions.

 

(a)
“Cause” shall mean the occurrence during the Term of Employment of any of the
following: (i) indictment for, formal admission to (including a plea of guilty
or nolo contendere to), or conviction of a felony, (ii) a crime of moral
turpitude, dishonesty, breach of trust or unethical business conduct, or any
crime involving the Company, (iii) willful or knowing unauthorized dissemination
by Executive of Proprietary Company Information; (iv) failure by Executive to
perform Executive’s duties which are reasonably and in good faith requested in
writing by the Board; (v) failure of Executive to perform any lawful directive
of the Board communicated to Executive in the form of a written request from the
Board, and (vi) Executive’s breach of the Company’s Code of Conduct which would
normally result in termination of any Company employee.

 

(b)
“Disability” shall mean, to the extent consistent with applicable federal and
state law (including, without limitation Section 409A), Executive’s inability by
reason of physical or mental illness to fulfill his obligations hereunder for
ninety (90) consecutive days or for a total of one hundred and twenty (120) days
in any twelve (12) month period which, in the reasonable opinion of an
independent physician selected by the Company or its insurers and reasonably
acceptable to Executive or Executive’s legal representative, renders Executive
unable to perform the essential functions of his job, even after reasonable
accommodations are made by the Company. The Company is not, however, required to
make unreasonable accommodations for Executive or accommodations that would
create an undue hardship on the Company.

 

(c)
“Good Reason” shall mean the occurrence during the Term of Employment of any of
the following: (i) a material breach of this Agreement ; (ii) the Executive’s
Base Salary is materially reduced by the Company; (iii) a material reduction in
Executive’s duties and/or responsibilities; or (iv) relocation of the
Executive’s place of work to a location greater than 35 miles away from the
current location. In no event shall any of the foregoing constitute Good Reason
unless the Company receives notice from the Executive of the existence of the
condition constituting Good Reason within ninety (90) days of the occurrence of
such condition. Upon receipt of such notice, the Company shall be provided a
period of thirty (30) days during which it may remedy the condition and not be
required to pay the Severance Payment payable under Section 8 of this Agreement.

 

8.8
Non-duplication of Benefits. Notwithstanding any provision in this Agreement or
in any other Company benefit plan or compensatory arrangement to the contrary,
but at all times subject to Section 8.5, (a) any payments due under either
Section 8.2 or Section 8.3 shall be made not more than once, if at all, (b)
payments may be due under either Section 8.2 or Section 8.3, but under no
circumstances shall payments be made under both Section 8.2 and Section 8.3, (c)
no payments made under this Agreement shall be considered compensation for
purposes of any benefit plan or compensatory arrangement of the Company, and (d)
Executive shall not be entitled to severance benefits from the Company other
than as contemplated under this Agreement, unless such other severance benefits
offset and reduce the benefits due under this Agreement on a dollar-for-dollar
basis, but not below zero.

 

9.
No Conflict of Interest. Executive must not engage in any work, paid or unpaid,
that could create a conflict of interest with the interests of the Company
during Executive’s employment with the Company. Such work shall include, but is
not limited to, directly or indirectly competing or interfering with the Company
Business in any way. For purposes of this Agreement, the term “Company Business”
shall mean non-prime auto finance.

 
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10.
Confidentiality. During the Term of Employment, Executive has been and will
continue to be given access to a wide variety of information about the Company,
its affiliates and other related businesses that the Company considers
“Proprietary Company Information.” As a condition of continued employment,
Executive agrees to abide by the Company’s business policies and directives
including those on confidentiality and nondisclosure of “Proprietary Company
Information.” “Proprietary Company Information” shall mean all information
applicable to the business of the Company which confers or may confer a
competitive advantage upon the Company over one who does not possess the
information; and has commercial value in the business of the Company or any
other business in which the Company engages or is preparing to engage during
Executive’s employment with the Company. “Proprietary Company Information”
includes, but is not limited to, information regarding the Company’s business
plans and strategies; manuals, contracts and proposals; and other business
partners and the Company’s business arrangements and strategies with respect to
them; current and future marketing or advertising campaigns; software programs
whether owned or modified by third parties for the Company’s benefit; codes,
formulae or techniques; financial information; personnel information; and all
ideas, plans, processes or information related to the current, future and
proposed projects or other business of the Company whether or not such
information would be enforceable as a trade secret of the Company or enjoined or
restrained by a court or arbitrator as constituting unfair competition.
“Proprietary Company information” also includes confidential information of any
third party who may disclose such information to the Company or Executive in the
course of the Company’s business.

 

10.1
Nondisclosure. Executive acknowledges that Proprietary Company Information
constitutes valuable, special and unique assets of the Company’s business and
that the unauthorized disclosure of such information to competitors of the
Company, or to the general public, will be highly detrimental to the Company.
Executive therefore agrees to hold Proprietary Company Information in strictest
confidence. Except as shall occur as and to the extent that Executive performs
his duties to the Company, Executive agrees not to disclose or allow to be
disclosed to any individual or entity, other than those individuals or entities
authorized by the Company, any Proprietary Company Information that Executive
has or may acquire during Executive’s employment by the Company (whether or not
developed or compiled by Executive and whether or not Executive has been
authorized to have access to such Proprietary Company Information).

 

10.2
Continuing Obligation. Executive agrees that the agreement not to disclose
Proprietary Company Information will be effective during Executive’s employment
and continue even after Executive is no longer employed by the Company. Any
obligation not to disclose any portion of any Proprietary Company Information
will continue indefinitely unless Executive can demonstrate that such
information (a) has been developed independently without any reference to any
information obtained during Executive‘s employment with the Company; or (b) must
be disclosed in response to a valid order by a court or government agency or is
otherwise required by law.

 

10.3
Return of Company Property. On termination of employment with the Company for
whatever reason, or at the request of the Company before termination, Executive
agrees to promptly deliver to the Company all records, files, computer disks,
memoranda, documents, lists and other information regarding the Company and its
business or containing any Proprietary Company Information, including all
copies, reproductions, summaries or excerpts thereof, then in Executive’s
possession or control, whether prepared by Executive or others. Executive also
agrees to promptly return, on termination or the Company’s request, any and all
Company property issued to Executive, including but not limited to computers,
cellular phones, keys and credits cards. Executive further agrees that should
Executive discover any Company property or Proprietary Company Information in
Executive’s possession after the return of such property has been requested,
Executive agrees to return it promptly to the Company without retaining copies,
summaries or excerpts of any kind.

 
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10.4
No Violation of Rights of Third Parties. Executive warrants that the performance
of all the terms of this Agreement does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by
Executive prior to Executive’s employment with the Company. Executive agrees not
to disclose to the Company, or induce the Company to use, any confidential or
proprietary information or material belonging to any previous employers or
others. Executive warrants that Executive is not a party to any other agreement
that will interfere with Executive’s full compliance with this Agreement.
Executive further agrees not to enter into any agreement, whether written or
oral, in conflict with the provisions of this Agreement while such provisions
remain effective.

 

11.
Interference with Business Relations. 

 

11.1
Interference with Customers, Suppliers and Other Business Partners. Executive
acknowledges that the Company’s tenant and customer base and its other business
arrangements have been developed through substantial effort and expense, and its
nonpublic business information is confidential and constitutes trade secrets. In
addition, because of Executive’s position, Executive understands that the
Company will be particularly vulnerable to significant harm from Executive’s use
of such information for purposes other than to further the Company’s business
interests. Accordingly, Executive agrees that during Executive’s employment with
the Company and after Executive’s employment with the Company ends , Executive
will not, either directly or indirectly, separately or in association with
others, utilize the Company’s Proprietary Company Information to interfere with,
impair, disrupt or damage the Company’s relationship with any of its customers,
automobile dealers or other business partners of the Company.

 

11.2
Interference with the Company’s Employees. Executive acknowledges that the
services provided by the Company’s employees are unique and special, and that
the Company’s employees possess trade secrets and Proprietary Company
Information that is protected against misappropriation and unauthorized use. As
such, Executive agrees that during Executive’s employment with the Company, and
for a period of 12 months after Executive’s employment with the Company is
terminated for any reason, Executive will not, either directly or indirectly,
separately or in association with others, interfere with, impair, disrupt or
damage the Company’s business by contacting any Company employees for the
purpose of inducing or encouraging them to discontinue their employment with the
Company.

 

11.3
Negative Information. During the Term of Employment and thereafter, Executive
shall not disclose confidential or negative non-public information regarding, or
take any action materially detrimental to the reputation of the Company or its
directors, officers, employees, investors, shareholders or advisors and any
affiliates of any of the foregoing (collectively, the “Company Affiliates”);
provided, however, that nothing contained in this Section 12.3 shall affect any
legal obligation of Executive to respond to mandatory governmental inquiries
concerning the Company Affiliates or to act in accordance with, or to establish,
his rights under this Agreement.

 

11.4
Injunctive Relief. Executive acknowledges that Executive’s breach of the
covenants contained in Sections 9 through 11 of this Agreement inclusive
(collectively “Covenants”) would cause irreparable injury and continuing harm to
the Company for which there will be no adequate remedy at law, and agrees that
in the event of any such breach, the Company seek temporary, preliminary and
permanent injunctive relief to the fullest extent allowed by the California
Arbitration Act, without the necessity of proving actual damages or posting any
bond or other security.

 
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12.
Agreement to Arbitrate. Any dispute, controversy or claim arising out of or in
respect of this Agreement (or its validity, interpretation or enforcement), the
employment relationship or the subject matter hereof shall be addressed and
settled by arbitration conducted in Orange County under the auspices of JAMS or
other mutually agreeable alternative dispute resolution service in accordance
with that service’s rules for the resolution of employment disputes. Included
within this provision are any claims based on a violation of any local, state or
federal law, such as claims for discrimination or civil rights violations.
Executive understands that arbitration is in lieu of any and all other civil
legal proceedings. The aggrieved party can initiate arbitration by sending
written notice of any intention to arbitrate by registered or certified mail to
all parties and to the mutually agreed upon alternative dispute resolution
service. The notice must contain a description of the dispute, the amount
involved and the remedy sought. Any claim or controversy which may be arbitrated
under this section is subject to any applicable statute of limitations that
would apply if a lawsuit was being initiated. The arbitration shall provide for
written discovery and depositions adequate to give the parties access to
documents and witnesses that are essential to the dispute. The arbitrator shall
have no authority to add to or to modify this Agreement, shall apply all
applicable law, and shall have no lesser and no greater remedial authority than
would a court of law resolving the same claim or controversy. In addition to any
other form of relief to which the parties may be entitled, injunctive relief
will be available to enforce any provision of this Agreement including, without
limitation, Section 12 of this Agreement. The arbitrator shall issue a written
decision that includes the essential findings and conclusions upon which the
decision is based, and which shall be signed and dated. The decision of the
arbitrator shall be conclusive, final and binding upon the parties and may be
submitted to any authorized court of law to be confirmed and enforced. The
prevailing party (meaning the party that obtains substantially the relief sought
by it) in such proceeding will be entitled to the reasonable attorneys’ fees and
expenses of counsel and costs incurred by reason of such arbitration if such
would be available if the matter had been pursued in a court of law. Executive
and the Company shall each bear his/her or its own costs and attorneys’ fees
incurred in conducting the arbitration, and, except for such disputes where
Executive asserts a claim otherwise under a state or federal statute prohibiting
discrimination in employment or unless otherwise required by applicable law (“a
Statutory Claim”), shall split equally the fees and administrative costs charged
by the arbitrator and the alternative dispute resolution service. In disputes
where Executive asserts a Statutory Claim against the Company, Executive shall
be required to pay only the initial administrative filing fee to the extent such
filing fee does not exceed the fee to file a complaint in state or federal
court. The Company shall pay the balance of the arbitrator’s fees and
administrative costs.

 

13.
General Provisions.

 

13.1
Successors and Assigns. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) or assignee
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession or assignment had taken place. Executive shall not be entitled to
assign any of Executive’s rights or obligations under this Agreement without the
Company’s written consent.

 

13.2
Legal Protection Clause. The Company will defend, indemnify and hold harmless
the Executive from and against any claim or legal action taken against Executive
as a direct consequence of the discharge of Executive’s duties or obedience to
directions of the Company, in accordance with California Labor Code 2802 and
other applicable law . Such protection, if applicable, includes the cost of
legal defense and judgment, if any, against Executive to the fullest extent
permitted by applicable law and the Company’s by-laws and articles of
incorporation. The Company will maintain in force a directors’ and officers’
liability insurance policy. Executive shall have coverage under any directors’
and officers’ liability insurance policies obtained by the Company in an amount
not less than, and providing coverage no less comprehensive than, the coverage
applicable to any other director or officer of the Company.

 
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13.3
Non-exclusivity of Rights. Except as expressly provided in this Agreement,
Executive is not prevented from continuing or future participation in any
Company benefit, bonus, incentive or other plans, programs, policies or
practices provided by the Company subject to the terms and conditions of such
plans, programs, or practices.

 
13.4
Waiver. Either party’s failure to enforce any provision of this Agreement shall
not in any way be construed as a waiver of any such provision, or prevent that
party thereafter from enforcing each and every other provision of this
Agreement.

 

13.5
Attorneys’ Fees. Each side will bear its own attorneys’ fees in any dispute
unless a statutory section at issue, if any, authorizes the award of attorneys’
fees to the prevailing party, and the arbitrator awards such attorneys’ fees
accordingly.

 

13.6
Severability. In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such
provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment
of such arbitrator or court, the unenforceable provision shall be deemed
deleted, and the validity and enforceability of the remaining provisions shall
not be affected thereby.

 

13.7
Interpretation; Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has participated in the negotiation of its terms. Furthermore,
Executive acknowledges that Executive has had an opportunity to review and
revise the Agreement and have it reviewed by legal counsel, if desired, and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.

 

13.8
Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California. Where necessary to enforce the
provisions of Section 13 above, each party consents to the jurisdiction and
venue of the state or federal courts in Los Angeles County, California.

 

13.9
Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows with notice deemed given as indicated: (a) by
personal delivery when delivered personally; (b) by overnight courier upon
written verification of receipt; (c) by telecopy or facsimile transmission upon
acknowledgment of receipt of electronic transmission; or (d) by certified or
registered mail, return receipt requested, upon verification of receipt. Notice
shall be sent to the addresses set forth below, or such other address as either
party may specify in writing.

 

13.10
Survival. Section 8 (“Termination of Employment”), Section 9 (” No Conflict of
Interest”), Section 10 (“Confidentiality”), Section 11 (“Interference with
Business Relations”), Section 12 (“Agreement to Arbitrate”), Section 13
(“General Provisions”) and Section 14 (“Entire Agreement”) of this Agreement
shall survive Executive’s employment with the Company and the Term of this
Agreement as provided therein.

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14.
Entire Agreement. This Agreement, together with the other agreements and
documents governing the benefits described in this Agreement constitute the
entire agreement between the parties relating to this subject matter hereof and
supersede all prior or simultaneous representations, discussions, negotiations,
and agreements, whether written or oral. This Agreement may be amended or
modified only with the written consent of Executive and the Board of Directors
of the Company. No oral waiver, amendment or modification will be effective
under any circumstances whatsoever.

 
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
 

     
James Vagim
         
Dated:
8-15-08
 
/s/ James Vagim
     
Address:
            

       
United PanAm Financial Corporation
         
Dated:
8-15-08
 
By:
/s/ Mitch Lynn
       
Mitch Lynn
       
Director

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EXHIBIT A
Pursuant to Section 9
Executive Employment Agreement

The Severance Payment shall be equal to twelve (12) months salary at the then
current base salary plus the prorated Bonus described in Section 4.2 through the
date of termination.

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