Employment Agreement

      THIS AGREEMENT is made as of July 1, 1998, by and between APPROVED
FINANCIAL CORP. ("Employer" or "Company") and its successors and assigns, and
JEAN S. SCHWINDT, ("Employee"), who, in consideration of the mutual promises of
the parties and other good and valuable consideration, the receipt and adequacy
of which are acknowledged, the parties have agreed as follows:

      1. Definitions. Whenever the following words or phrases are used in the
Agreement, they shall have the meanings given in this Section, unless otherwise
indicated.

         (a) "Affiliate" means any Person owned by (greater than 10%), owning
(greater than 10%), under common ownership with, controlling, controlled by, or
under common control with, another Person, which includes a subsidiary and
parent organizations.

         (b) "Compete" shall mean in any way being in contest with or rivalry
with Employer, including directly or indirectly working with, being employed by,
or having any interest or involvement in any other Person which is involved in
selling, marketing or otherwise providing any of the services or products which
are provided or performed as part of the Primary Business Operation of Employer
during Employee's employment with Employer.

         (c) "Customer" shall mean individual borrowers, mortgage brokers or
other sources of business or referrals of business to Employer.

         (d) "Loans" means all residential real property loans, regardless of
lien position or classification as conforming or non-conforming.
"Non-conforming" Loans, means loans that do not conform to all applicable
Federal National Mortgage Association guidelines.

         (e) "Primary Business Operation" shall mean the origination of loans,
by any method and from any source, and the sale of Loans.

         (f) "Person" shall include both natural persons and entities.

         (g) "Territory" shall mean the area encompassed in a 35-mile radius
around any office of Employer or its Affiliates which are in the same Primary
Business Operation.

      2. Employment. Employer employees Employee for the position of Executive
Vice President, performing duties as indicated on Schedule A. Employee agrees to
comply with the general supervision and all current and future policies of
Employer.

      3. Duties. Employee shall perform the duties customarily performed by one
holding Employee's position in similar businesses, and such duties as may be
assigned by this Agreement as specified in Schedule A attached to and
incorporated herein, and such other duties as may be assigned from time to time
by Employer. Employee shall make available to Employer all information of which
Employee shall have any knowledge, and shall make all suggestions and
recommendations that will be of benefit to Employer.

      4. Best Efforts of Employee. Employee will at all times faithfully,
industriously, and to the best of the Employee's ability, perform all of
Employee's duties.

      5. Term and Renewal. The initial term of this agreement shall be from July
1, 1998 through December 31, 1998. On January 1, 1999 it will automatically
renew for a three (3) year term with each year running from January 1st through
December 31st. After December 31, 2001, this Agreement will be renewable on a
year to year basis. Either party must give ninety (90) days written notice if

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this Agreement is not going to be renewed after December 31, 2001. Upon failure
to give such notice, this Agreement will automatically renew for an additional
year on the same terms. This notice requirement shall continue of all subsequent
renewal periods.

      6. Compensation. Employer shall pay Employee in full payment for
Employee's services, compensation in accordance with the Compensation Schedule
attached to this Agreement as Schedule B and incorporated as part of this
Agreement, which shall remain in effect until supplemented or replaced by a new
Agreement between Employer and Employee.

      7. Other Activities. Employee shall devote all business time, attention,
knowledge, and skills solely to the business and interest of Employer, and
Employer shall be entitled to all of the benefits, profits or other issues
arising from or incident to all work, services, and advice of Employee. Employee
shall not, during the term of this Agreement, be employed by or contract to
provide services to any other person or engage in any other business or trade,
nor shall Employee use or take for Employee's personal benefit any position
which conflicts with or is contrary to any position which would be beneficial to
Employer. Nothing in this Agreement, however, shall limit Employee's right to
invest in publicly traded securities, to engage in any business with the written
consent of Employer, or to engage in civic and charitable activities. The
restrictions in section 7 shall exclude her activity as a registered investment
adviser and the income earned from these advisory services.

      8. Benefits. Employee shall be entitled to benefits according to
Employer's stated policy, as amended from time to time. Employee's tenure with
the Company, for the purpose of entitlement to current and future benefits
according to Employer's stated policy, shall begin on the date the Employee was
initially recommended for the Company's Board of Directors, which was in April
1992.

      9. Termination. Employer may terminate this Agreement at any time without
advance notice for cause. For the purpose of this Agreement "cause" is defined
as: (i) a breach of this Agreement or any policy, rule, instruction, or order of
Employer; (ii) any act or omission by Employee which involves moral turpitude,
gross negligence, dishonesty, bad faith, fraud, conflict of interest,
intentionally lying to Employer, taking action prohibited by Employer, or breach
of fiduciary duty; (iii) knowing violation of any law or regulation applicable
to the business of the Employer which has a material or adverse effect on the
Employer; or (iv) repeated neglect of duties. Furthermore, this Agreement shall
terminate immediately upon Employee's death or disability, but such termination
shall not affect any previously vested right of Employee to receive disability
payments in accordance with any applicable plan for a disability which arises
while this Agreement is in effect. To the extent that any act or omission in the
preceding clauses are capable of being remedied or cured (which determination
will be made by Employer at its sole discretion), then a violation will not be
grounds for immediate termination unless Employer first provides notice to
Employee which includes (a) the act or failure to act of Employee giving rise to
the proposed termination, (b) the corrective action which Employer reasonably
believes would cure the violation, and (c) twenty (20) days from receipt of the
notice to take such corrective action.

      10. Confidential and Proprietary Information. In the course of this
employment, Employee will be exposed to certain confidential and proprietary
information of Employer and its Customers. Employee shall not reproduce or
remove from any premises any such information without the express written
consent of Employer. Any such information acquired by Employee shall be promptly
delivered to Employer if in tangible form, unless specific written consent is
received from Employer. Employee shall not at any time or in any manner,
disclose to any Person, nor in any way use to his benefit or that of any other
person, any information concerning any matters affecting or relating to the
business of Employer, including any of its Customers, the prices it obtains or
at which it offers its products or services, or the sources of and/or prices it
pays for any supplies, material, services or technical assistance, or any other

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information concerning the finances or business of Employer or any of its
Customers, without regard to whether any of the foregoing matters would
otherwise be considered confidential or trade secrets, the parties agreeing that
these matters are important, material and confidential and gravely affect the
successful conduct of Employer's business and goodwill, and that any breach of
the terms of this Section shall be a material breach of this Agreement and
result in irreparable harm to Employer. Employee further agrees that upon
termination or expiration of this Agreement for any reason, Employee shall
immediately deliver to Employer any and all information, documents, agreements,
data, work product, customer lists, notes, and the like of Employer or relating
to Employer's business. The duties and restrictions on Employee in this Section
shall survive the expiration or termination of this Agreement and remain in full
force and effect for so long as Employer continues in business.

      11. Covenant Not to Compete. In consideration of the employment of
Employee or in the event Employee is entering into this Agreement after having
been an employee, either with a prior contract or no contract, then in
consideration of continued employment, the benefits of this Agreement and other
good and valuable consideration, the Employee independently covenants and agrees
with Employer, each of which said covenants shall be independent of and
severable from each other and each of which shall continue in force for the
specified duration irrespective of the completion and performance of all other
obligations between the parties hereto, that:

         (a) Employee will NOT, during the term of Employee's employment, nor
one (1) year immediately following the termination of employment, compete with
Employer within the geographical limits of the Territory.

         (b) Employee will NOT, during the term of Employee's employment, nor
for one (1) year immediately following termination of employment, compete with
employer within a 35-mile radius of any office which Employee worked at or
supervised during his employment with Employer.

         (c) Employee will NOT, during the term of Employee's employment, nor
for two (2) year immediately following termination of employment, directly or
indirectly, for Employee or in conjunction with any other Person, (by
disparagement of Employer's business or otherwise), do business with, divert,
take away or cause to leave any of the Customers of Employer.

         (d) Employee will NOT, during the term of Employee's employment, nor
two (2) years immediately following the termination thereof, directly or
indirectly, for Employee, or in conjunction with any other Person (by
disparagement of Employer's business or otherwise), employ, solicit, divert or
take away any of the employees of Employer.

         (e) If any of the preceding limitations on the Employee imposed by the
preceding subsection "(a)" through "(d)" exceed the maximum limitation
permissible under the statutes, laws or precedents of any state wherein it is
sought to be enforced against the Employee, then the parties hereto agree that
such limitation may and shall be deemed to be amended to conform to the maximum
limitation permissible under such statutes, laws or precedents, or in the
absence thereof, to such limitations deemed appropriate by any court of record
in the state wherein it is sought to be enforced.

         (f) The Employee acknowledges that a violation on Employee's part of
any of the covenants of this Section and its Subsections or Section 10 or 12
will cause such damage to the Employer as will be irreparable and the exact
amount of which will be impossible to ascertain, and for that reason, the
Employee further acknowledges that the Employer shall be entitled, as a matter
of course, to an injunction out of any Court of competent jurisdiction,
restraining any further violation of the covenant by the Employee, and, pending
the hearing and decision on the application for such injunction, the Employer
shall be entitled to a Temporary Restraining Order, and waives any request for a
bond, or the equivalent thereof, without prejudice to any other remedies
available to it. The Employee particularly agrees to the immediate issuance of
such Temporary Restraining Order and hereby waives and requirements of notice or
objection whatsoever to the issuance of such an Order.

         (g) It is mutually agreed that regardless of whether the Employee
leaves the employ of the Employer by Employee's own request or the request of
the Employer, or regardless of how or by what manner the employment relationship
is terminated (including whether with or without cause), or this contract is
terminated or expires, the independent covenants herein contained in this
Section and in Sections 10 and 12 shall survive and remain in full force and


<PAGE>

effect as INDEPENDENT COVENANTS. Should any provision or covenant in this
Agreement be breached by Employer, or be declared void or unenforceable by a
court of competent jurisdiction, the remaining covenants and provisions
including those in this Section 11 and Sections 10 and 12 shall nevertheless
remain in full force and effect, each being independent and severable.

         (h) During the term of the noncompetition covenant, Employee shall give
all of Employee's actual and prospective employers written notice of the
requirements of the noncompetition covenant. If Employer believes that Employee
has failed to provide any actual or prospective employer such notice, Employer
may provide such notice, including providing a copy of any or all of this
Agreement.

         (i) Employee acknowledges that (i) there was no duress involved in
signing this Agreement; (ii) other employment options were available to Employee
at the time of signing this Agreement; (iii) Employee's covenant not to compete
was a material and necessary inducement to Employer to employ or continue the
employment of Employee; (iv) Employee understands the policy of reasonableness
regarding restrictive covenants and agrees that the restrictions imposed upon
Employee by this Agreement are reasonable in scope and duration and are
necessary to serve a legitimate business interest of Employer; and (v) Employee
has had an opportunity to have this Agreement reviewed by legal counsel of
Employee's choice.

         (j) Employee represents and warrants that his employment by Employer
does not and will not breach any agreement or duty which Employee has to any
other Person to keep in confidence any confidential information belonging to
others or not to compete with others. Employee shall not disclose to Employer or
use on its behalf any confidential information belonging to others.

      12. Intellectual Property Rights. Employee acknowledges that the
proprietary rights to any original works, concepts, software, manuals, programs,
routines, inventions, trademarks, servicemarks, and tradenames developed, or
conceived by Employee, whether singularly or in conjunction with another Person,
during the term of this Agreement (collectively "Inventions") shall be the
property of Employer. Accordingly, Employee agrees as follows. Any "Inventions"
developed from Authorized Outside Employment Activities defined on Schedule C,
attached, shall not be subject to any of the provisions under this section,
Intellectual Property Rights.

         (a) Employee hereby assigns, and shall assign in the future, any and
all of Employee's rights in or to all Inventions.

         (b) Employee shall promptly disclose in writing to Employer any
invention. If requested by Employer, Employee will execute, file, and prosecute
any and all applications and assignments necessary or proper to vest in Employer
the complete rights in and to any Inventions.

         (c) If Employer chooses to pursue any patent or other application for
any Invention, Employer shall bear all costs and fees in connection with the
application.

         (d) If Employer declines in writing to pursue any patent or other
application for an Invention, Employee may with the written consent of Employer
pursue the application in Employee's own name and at Employee's own expense,
provided that Employer shall have a perpetual, world-wide, royalty-free license
and right to use, or to adapt and develop in any way, any and all Inventions,
whether or not protectable under any applicable law.

         (e) Upon the termination of this Agreement for any reason, Employee
shall deliver to Employer any and all notes, records, documents and other
material relating to any completed or incomplete Inventions which Employee
worked on prior to such termination.

         (f) Except as set forth on Schedule C attached to and incorporated in
this Agreement, Employee shall not assert any rights to any Inventions as having
been made or acquired by Employee prior to being employed by Employer, or since
then and not covered by this Agreement.

<PAGE>

         (g) Employee need not assign to Employer any rights to an invention,
etc. wholly conceived and developed by Employee after the termination of this
Agreement, unless the conception or development of such invention, etc. involves
the use of confidential or proprietary information obtained by Employee while
employed by Employer.

      13. Governing Law and Forum. All questions regarding this Agreement shall
be governed by the laws of Virginia, except that in the case of an issue
regarding the reasonableness of any restrictive covenants in Sections 10, 11 or
12 of this Agreement, the parties agree to apply the law of the state wherein
Employer files legal action to enforce any restrictive covenant. Any suit
relating to this Agreement must be brought in the Circuit or General District
Courts of the City of Virginia Beach, Virginia, provided, however, Employer may
file legal action in connection with the enforcement of any of the restrictive
covenants contained in this Agreement in any state or federal court where
Employer in its discretion deems it appropriate for its protection.

      14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their heirs, personal representatives,
successors and assigns.

      15. Assignability. The rights and obligations of Employee under this
Agreement may not be assigned or delegated. The rights and obligations of
Employer may be assigned or delegated without the consent of Employee.

      16. Offset Against Compensation. Upon termination of this Agreement
Employee authorizes Employer to offset against any compensation or other amounts
owing to Employee any sums that Employee owes to Employer and which are
evidenced in writing.

      17. Notices. Any notice or other communication required or permitted by
this Agreement shall be in writing and addressed to Employer at its
administrative headquarters and to Employee at his residence, as indicated by
the records of the Employer, and shall be deemed to have been given, made and
received only:

            (a)   upon deliver, if personally delivered to a party;

            (b)   one business  day after the date of dispatch,  if by facsimile
                  transmission;

            (c)   one business day after deposit, if delivered by a nationally
                  recognized courier service offering guaranteed, overnight
                  delivery; or

            (d)   Three days after deposit in the United States mail, certified
                  mail, postage prepaid, return receipt requested.

      18. Headings. The headings in this Agreement are for convenience only and
are not a part of the substantive agreement of the parties, nor shall the
headings be used in the interpretation or construction of this Agreement.

      19. Number and Gender. Whenever used in this Agreement, the singular shall
include the plural, and the plural shall include the singular. The masculine
gender shall include the feminine and the neuter.

      20. Severability. If any provision of this Agreement is determined to be
unenforceable, the remainder of this Agreement shall be construed and enforced
as if the unenforceable provision had not been contained in this Agreement, and
each provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.

      21. Entire Agreement. This Agreement is intended to be a complete,
exclusive, and final expression of the parties' agreements concerning Employee's
employment, merging and replacing all prior negotiations, offers,
representations, warranties and agreements, including but not limited to

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employment agreements. To the extent that Employee was employed by Employer
prior to the date of this Agreement, this Agreement is in confirmation of the
agreements previously reached and under which the parties have been working. No
course of prior dealing between the parties, no usage of trade, and no parole of
extrinsic evidence of any nature shall be used to supplement or modify any of
the terms of this Agreement.

      22. Modification and Waiver. The provisions of this Agreement may not be
modified or waived, including the waiver of the provisions of this Section,
except by a written instrument, signed by the party against whom such
modification or waiver is sought to be enforced.

      23. Survival. Any provision of this Agreement, which imposes any
obligation upon Employee, which may extend beyond the term of this Agreement,
shall survive the termination of this Agreement.

      24. Third Party Beneficiaries. The provisions of this Agreement are
intended to benefit only the parties to this Agreement. No person not a party to
this Agreement shall be deemed to be a third party beneficiary of this
Agreement, nor shall any such person be empowered to enforce the provisions of
this Agreement, except to the extent such a person becomes a permitted assignee
of one of the parties.

      25. Cost of Enforcement. In the event of the enforcement of any of the
terms of this Agreement by Employer, due to a breach or noncompliance by
Employee, Employee agrees to pay all expenses, including legal fees, incurred by
Employer in the enforcement of this Agreement and the pursuit of any other
remedies afforded Employer by law for damages or otherwise.

      26. Non-Waiver. The failure of the Employer at any time to require the
performance by the Employee of any of the provisions, covenants and conditions
hereof shall in no way affect its right thereafter to enforce the same; nor
shall the waiver by the Employer of any breach of this Agreement, term,
provision, covenant or condition. The failure by Employer to require performance
by any other employee of any provision, covenant or condition in that employee's
employment agreement shall in no way affect Employer's right to enforce this
Agreement or any covenant herein.

      WITNESS the following signatures and seals:

                              EMPLOYER:

                              APPROVED FINANCIAL CORP.


                              By: __________________________________
                              Title: _______________________________


                              EMPLOYEE:


                              --------------------------------------
                              Jean S. Schwindt



<PAGE>



                                   SCHEDULE A

                       ADDITIONAL SPECIFIC DUTIES ASSIGNED
                  UPON THE EXECUTION OF EMPLOYMENT AGREEMENT


      Jean S. Schwindt shall be responsible for all duties assigned to her by
the Board of Directors, Chairman of the Board, Chief Executive Officer or
President of the Company. Such duties will primarily relate to, but are not
restricted to, the areas of strategic planning, finance, investor relations and
security regulation.





<PAGE>




                                   SCHEDULE B


      1.    Base  Salary.  The  initial  monthly  base  salary  shall be $13,333
            commencing  on July 1, 1998,  and ending on December 31,  1999.  For
            each subsequent year of the Agreement, which will be January through
            December,  the base salary  will  increase  by 10%,  retroactive  to
            January 1 of the respective year, if the net income after tax of the
            Company  increases by 10% over the previous  year. In the event that
            the net  income  after  tax  increases  by less  than  10%  over the
            previous year, the base salary will increase by 6%.

            Net income after tax for the years 1999, 2000 and 2001, will exclude
            any dividend or capital gain income resulting from the Company's
            current investment in IMC Mortgage Company common stock will be
            excluded in the calculation of the percentage increase in year to
            year net income after tax.

      2.    Group Benefits. Employee shall be entitled to group benefits as
            contained in the stated written policy of Approved Financial Corp.,
            which may from time to time be revised by the Company.

      3.    Vacation. Employee shall be entitled to three (3) weeks paid
            vacation each year.

      4.    Bonus. Employee will participate in an Executive Bonus Pool, which
            was approved by the Compensation Committee of the Board of Directors
            of Approved Financial Corp on 11/3/98. The Executive Bonus Formula
            shall be as follows:

            That percent increase (in excess of a 10% threshold) of the current
            after tax net income per share over the prior year, multiplied by
            the Base Annual Salary for the current contract year, up to a
            maximum of 100% of the Base Salary. For example, if the after tax
            net income per share for fiscal 1999 is 1.20 and for 1998 is .80 and
            the Base Salary for that contract year ending December 31, 1999 is
            $160,000 then the bonus is $64,000.

            ($1.20-$.80)/$.80 = 50%

            50% - 10% = 40%

            $160,000 X 40% = $ 64,000



<PAGE>



            Method of Payment:

            50% of the bonus may be payable at the Employer's discretion in cash
            or unregistered shares of common stock of Approved Financial Corp.
            50% of the bonus may be payable at the Employee's discretion in cash
            or unregistered shares of common stock of Approved Financial Corp.

            Net income per share after tax for the years 1999, 2000 and 2001,
            will exclude any dividend or capital gain income resulting from the
            Company's current investment in IMC Mortgage Company common stock.
            will be excluded in the calculation of the percentage increase in
            year to year net income after tax.


      5. Compensation after termination. If Employee terminates her employment
or is terminated for cause as defined in the Agreement or either party elects
not to renew at the end of any term with the required notice, this contract
shall cease, and no further compensation or benefits in any form shall be paid
Employee. If this Agreement is terminated by Employer without cause prior to
December 31, 2000, then Employee in lieu of any other damages or compensation
shall be entitled to severance pay in an amount equal to the monthly Base Salary
multiplied by 12. If terminated without cause after December 31, 2000 then the
severance pay shall be the monthly Base Salary multiplied by 12, multiplied by a
percentage that is equal to the number of days remaining in the term of this
agreement (not to exceed 365) divided by 365. If terminated during a one year
renewal term after December 31, 2001, and termination is without cause, the
severance pay shall be equal to the base compensation for that renewal term
multiplied by a percentage equal to the number of days remaining in the renewal
term at termination divided by 365.



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                                     SCHEDULE C




                                      NONE.